As filed with the Securities and Exchange Commission on
August 13, 1999
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
EUROSOFT CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 22-3538310
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
703 LUCERNE AVENUE, SUITE 201, LAKE WORTH, FLORIDA 33460
(Address of principal executive offices)
Registrant's telephone number, including area code (561) 540-5886
Securities to be registered pursuant to Section 12(b) of the Act:
None
Title of each class Name of each exchange on which
to be so registered each class is to be registered
N/A N/A
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.0001 per share
(Title of class)
Certain statements made in this registration statement are not
based on historical facts, but are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933,
as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. These statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may,"
"will," "should," or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by
discussions of strategy. These statements reflect the reasonable
judgment of EuroSoft Corporation ("EuroSoft" or "We") with respect
to future events and are subject to risks and uncertainties that
could cause actual results to differ materially from those in the
forward-looking statements.
ITEM 1. BUSINESS.
INTRODUCTION
Headquartered in Lake Worth, Florida, we presently have 3 European
subsidiaries which are all involved in the information technology
area and 1 United States subsidiary which is presently inactive.
The first European subsidiary, NewSoft GmbH, is a German
corporation that operates as a systems integrator, information
technology consultant and a distributor of leading edge software
products in the datacenter security area. The second European
subsidiary, Millennium Three Solutions Limited is a Northern
Ireland company. It offers to its clients specialist Risk
Assessment and information technology services. For the past 2
years, it has devoted a significant amount of time assisting its
clients in achieving Year 2000 data compliance. It is also
developing a legal software product, distributes an information
and document management software product and a mainframe security
product. The third European subsidiary, Do it-Development
International Oy is an international consulting company that
focuses on the sustained development of the client organization.
Its mission is to develop behavior and management together with
the systems and methods, so that the work increases individual and
organizational performance. The United States subsidiary, Sicor,
Inc. was organized as an information technology company. It
presently is inactive.
As the Internet develops and moves away from the pioneer age, the
sweeping transition of the Internet from an information platform
to a medium for e-commerce is well under way. Web sites are no
longer perceived just for informational content or to simply
establish Internet presence. In order to fully capitalize on the
opportunity that the Internet represents, today's companies
require implementation of a proven Internet promotional strategy
to maintain traffic and develop sales. In order for companies to
fully realize the potential of the Internet, companies must
effectively market their web sites beyond standard prints and
media advertising. Our subsidiaries intend to capitalize on the
Internet growth.
FORMATION
We were formed in Florida on September 16, 1997 under the name
Strategic Information Management Incorporated. On July 11, 1998,
we filed an amendment to our incorporation document to change our
name to EuroSoft Corporation.
SUBSIDIARIES
1. Millennium Three Solutions Limited
a. Company Background
Millennium Three Solutions Limited ("MTS") was established
by Brian Doherty and Elaine Doherty. MTS is a specialist
computer services and consulting company and has for the
past two years devoted much time assisting organizations
around the World to achieve Year 2000 date compliance by
January 2000. MTS offers Specialist Consulting, Software
Development and Information Technology ("IT") Services. MTS
has devoted extensive time and effort over the past two
years to establishing an Internet Web-site development and
E-Commerce department, with considerable success. Many large
public organizations are already established clients.
MTS is an accredited IBM and Compaq Business Partner and is
able to supply a comprehensive range of Software tools,
Managed Services and Software Development Services.
As Year 2000 approaches MTS continue to offer a unique
solution for the problem as it relates to "Embedded Systems"
and large networks. All analysis and remediation work is
conducted within a well proven and tested Year 2000
methodology. As a result, we have developed a pragmatic
approach to addressing both IT and Non-IT Year 2000 business
survival. This framework, together with our own experience
in a variety of business functions (manufacturing, sales,
distribution, finance), working with many international
organizations has proven invaluable in assisting our
extensive client base.
2. Products and Services
LAW PLUS is an exciting product development from MTS.
Law Plus is a powerful, easy to use, flexible legal case
management software. It is a comprehensive Case
Management tool which permits effortless collation of
accurate client information. Accurate monitoring of
deadlines and secure conflict checking are among many
powerful features it contains. Law Plus is Windows compatible and
operates on a standalone or network environment. Law Plus
integrates fully with Microsoft Office and Word Perfect.
PEOPLE PLUS is a complete Year 2000 compliant Human
Resources system. The formal Year 2000 project need not be
a bottomless pit into which business casts large sums of
money for no apparent return. MTS seek to inform clients of
the collateral benefits to be accrued from such an exercise.
Organizations can use Year 2000 to improve business
practices, which will in turn increase efficiency and
competitiveness. An ideal example is the introduction of a
computerized Human Resource Management solution, which would
assist companies in the following ways:
. Improved recruitment methods.
. Better training procedures.
. Fast access to key employee information.
. Structured health and safety practices.
. FEC (Fair Employment Commission), Report Generation
People Plus assists in the management process by providing
personnel professionals with information to nurture the
total Human Resources strategy of their organization,
offering Human Resource professionals a complete
computerized personnel information system.
People Plus improves communications between departments and
encourages effective human resource decision making. People
Plus serves to significantly improve efficiency together
with providing up to the minute information regarding all
aspects of the workplace. This unique software solution may
be purchased in individual modules or as a total integrated
system. Based on Microsoft Windows Technology, the user
friendly Windows environment provides the interface for
People Plus.
System 400 is a System Administration/Clean Management tool-set
combining a comprehensive systems administration and
clean management tool set specifically tailored for the AS/400
platform. IT professionals gain valuable time saving
features during general administration tasks and preparing
for a Year 2000 or EMU project.
OCTDATE is a powerful software tool designed to give users
the ability to deal with the Year 2000 problem. OCTDATE
represents a cost effective IBM mid range conversion
solution that takes the users through the automated stages
of a Year 2000 project. Although designed to be flexible,
OCTDATE has a robust, structural approach that allows
project leaders to work according to their own parameters.
Check2000 PC/Server helps establish which PC's within
organizations are running programs that are capable of
generating non-compliant data. In addition to providing a
comprehensive audit of software applications, Check 2000
performs a number of BIOS (basic input/output systems)
checks.
Check 2000 Client Server version provides master
workstations with a comprehensive report, listing the risks
associated with impact of Year 2000 on PC's and application
software. Check 2000 provides practical advice and guidance
on how to best deal with these issues.
INVU is an information and document management software
system. Invu quickly organizes and manages all forms of
documents, faxes and e-mail from the desktop. Invu offers
fast and simple retrieval, robust functionality, quick
return on investment, ease of integration and can be
customized to meet the needs of a client's business.
NETPLAN 2000 helps establish which PC's within organizations
are running programs that are capable of generating non-compliant
data. In addition to providing a comprehensive
audit of software applications, NETPLAN 2000 performs a
number of BIOS (basic input/output systems) checks. NETPLAN
also provides master workstations with a comprehensive
report, listing the risks associated with the impact of Year
2000 on PC's and application software. NETPLAN also
provides practical advice on how to best deal with these issues.
ANALYSIS and CONSULTING SERVICES
MTS offers an analysis service for customers who have
purchased the appropriate software licenses. An MTS
consultant will conduct a systems analysis of each IS
Environment and recommend the most appropriate way forward
for the business.
TRAINING SERVICES
MTS offers a complete program of IT training services,
targeted at those organizations who have embarked upon
significant change within their organizational structure.
The degree of MTS involvement in this instance can vary from
training to hand holding or complete project management.
As Year 2000 approaches, MTS continues to offer Year 2000
training in Embedded Systems; Assess and Manage; Year 2000
and the Desktop.
3. Number of Employees
MTS currently employs 11 people including management. The
following table describes the breakdown of employees along
with the proposed increases for future operations.
<TABLE>
<S> <C> <C> <C>
Current 1999 September1999 December1999
------------ ------------- -------------
Management 3 1
Directs 5 2 2
Indirects 3 2 2
Total 11 13 18
</TABLE>
Directs refers to those technical staff involved directly
with IT services and software development. Indirects refers
to those administration staff and sales and marketing.
4. Organizational Chart
Organizational Chart
5. Markets
The Markets for MTS' products are as follows:
<TABLE>
<S> <C> <C>
Number of Employees Current Projected
- ------------------------ ------- ----------
11 18
Market (% sales )
N'Ireland 40% 10%
Republic of Ireland 20% 20%
Britain 0% 20%
Other 40% 50%
</TABLE>
6. Rationale for Company Development Program
The rationale for the program is to develop all employees by
using a more structured approach to training and development
therefore ensuring that MTS is best equipped to compete in
the highly competitive environment of information
technology.
MTS recognizes that to fully take advantage of the market
opportunities in the United Kingdom, Ireland and Mainland
Europe, South Africa, Australia and the USA, additional
human resources need to be recruited to provide innovative
development /creative solutions. It is the intention of MTS
to build a European sales channel and offer a dedicated
technical support center based in Derry, Northern Ireland to
service customers and resellers throughout Europe.
MTS considers that, in order to maximize market
opportunities and grow its business in export markets, a
more structured approach needs to be adopted to business
planning, new business development and staff development and
training. The firm has a committed management team with the
vision and the enthusiasm to exploit opportunities and
pursue a market led growth strategy.
To enable MTS to meet the needs of its potential customer
base, it is essential that MTS develop its current employee
base and expand its capacity. To do so will involve
investment in equipment and the recruitment and structured
training of new and existing staff.
7. Company Performance & Future Projections
The financial year of MTS is December 31. The financial
details of MTS (in Sterling Pounds) are as follows:
Y.E. 12/31/98
Actual
pound sterling
Sales Turnover 288,061
Pre-tax Profits -18,638
Salaries & Wages 161,148
MTS has shifted its focus from hardware to the products and
services. This move, essentially into software, will result
in increased turnover in the current year. Next year the
company conservatively expects turnover to rise to
approximately 3.750m (pounds). Profitability of the firm will
increase in the current year but will rise significantly
next year. However, these projections are all based on the
company having a trained and dedicated workforce.
8. Average Hourly Rates
Management 20.00(pounds)
Indirects 7.06(pounds)
Directs 7.24(pounds)
9. Current Training Practice
Training is an area of concern for management. Management is
aware that improving the skills and knowledge of employees
is essential if MTS is to satisfy demanding customers in
rapidly changing markets. Management is aware that a
structured approach to training and training evaluation will
be an asset that will enhance the company's development in
the future, producing clear business benefits, which in turn
will create business success.
10. MTS Commitment
An MTS objective is to introduce a more structured approach
to training and development for both management and
employees that will result in a team of skilled and
professional personnel who will have the ability to deliver
a quality service.
MTS is committed to providing training, which will develop
the skills of the workforce giving them a competitive edge,
enabling the production of a quality product and resulting
in the development of existing markets. Management realizes
the importance of training and development and is also
proposing to determine a management development program.
The introduction of training and development is linked
closely to the company's business objectives and future
development. MTS is determined to provide a more structured
approach to training and aims to build on this in the
future.
11. MTS Case for T & EA (Training &Employment Agency)
Support
The assistance from the T&EA will allow the company to
implement a sound training program for all employees
including management. In the past the company has carried
out an ad-hoc system of training where it was required. The
proposed system has enabled management to examine their
priorities for training and the impact it will have on the
overall business objectives.
The company's portion of training and development will be
met from funding from outside investment and profits.
The company has identified a training need for all employees
over the next two years and beyond as new software projects
evolve. As this happens, the company needs to become more
competitive and professional in our approach to all aspects
of our business. However without assistance from the T&EA
the company considers that due to the considerable cost of
training, it could only be provided when it is needed in an
ad hoc manner. Therefore, financial assistance would
stabilize the company and prepare it and its employees for
the competitive challenges that lie ahead. Furthermore
management considers that a more structured approach to
training will benefit the company's long term objectives.
12. Company Development Plan (Summary)
Millennium Three Solutions Ltd.
Planned Business Results
- ------------------------
To establish sales turnover to 1,250,000 (pounds) in the current
year.
Performance Improvement Indicators
- ----------------------------------
To increase the pre-tax profits from pound sterling-18k in the year ended
December 31,1999 to approximately pound sterling 150k in the current
financial year.
To increase the number of employees from 11 currently to 18
in the coming year.
To introduce a structured training program for all
employees.
To seek recognition of IIP (Investors In People) by June
2000.
IIP is the National standard which sets the level of good
practice for the training and development of people to
achieve business goals. IIP has a clear business purpose.
The standard provides the basis for a continuous improvement
cycle which helps make the organization more productive and
internationally competitive.
IIP enables both individuals and organizations to develop
and to experience major benefits including:
. Skilled, committed and flexible employees.
. Increased quality and productivity.
. More satisfied customers.
. Increased turnover and profit.
. Improved staff morale and motivation.
. Low staff turnover.
. Increased staff loyalty.
. Public recognition.
Increased Skills and Competence Indicators.
- -------------------------------------------
To develop the skills of management in:
Management Skills; PC Skills; E- Commerce; Sales/Customer
Care; Business Skills Training.
To develop the skills of in-directs in:
Administrative Skills; Sales/Customer Care; E- Commerce;
Business Skills Training.
To develop the skills of directs in:
Programming/Databases; PC Skills; E- Commerce; Technical
Skills; Business Skills Training.
To introduce the concept of IIP and seek recognition by June
2000.
13. Eligible
Costs
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Group Wages Wages Course Travel/& Other Total
On/job Off/job Fees Subsistence Costs
------ ------ ------- ------ ----------- ------ ------
Management 11,197.20 6,878.45 18,075.65
Directs 7,891.20 11,407.47 368.00 19,298.67
Indirects 7,728.17 6,986.59 15,082.76
Total 26,816.57 25,272.51 368.00 52,457.08
</TABLE>
14.Proportion of time spent on training over 2 years
<TABLE>
<S> <C> <C> <C> <C> <C>
Group (a) (b) (c) (d) (e)
Numbers to Working On/job Off/job (c) + (d)
be trained Days Training Training as % of (b)
---------- --------- -------- --------- ----------
Management 3 428 141
Indirects 3 428 156
Directs 5 428 198
Total 11 1284 495
</TABLE>
2. DO IT DEVELOPMENT INTERNATIONAL OY
DO IT Development International Oy ("Do It") was incorporated
under the laws of Finland. DO IT's executive offices are located in
Helsinki, Finland.
MISSION AND VALUES
DO IT is an international consulting company that focuses on the
sustained development of the client organization. The mission is
to develop behavior and management together with the systems and
methods, so that the work increases individual and organizational
performance.
DO IT creates an environment where innovation is a requirement,
not a surprise. The client staff are professionals in their
business, DO IT will help them achieve permanent development in
implementing their skills in new ways and directions. It is only
by gaining knowledge of the client's organization and
understanding their objectives that DO IT can plan and
successfully help them achieve their vision.
BUSINESS
Particularly in the consulting business, the overhead increases
much slower than the profit when business volume is increased. DO
IT has passed the initial stage, proving it can produce value to
the client, as most of the clients are very satisfied, even after
some time. However, more volume and thus growth is required in
order to make the company more profitable.
DO IT's business development strategy is to expand its existing
operations through internal growth, through present and new
businesses. This is the primary reason for searching international
ownership and background. It may also consider the acquisition of
other assets or businesses. During 1998 DO IT employed 4 people: 3
full time employees and a part time accountant. Growth and
increased production of services requires more professional staff.
As of the summer of 1999, the employees are 4. One of the
employee's costs has been covered by a European Union sponsored
project during 1998 and 1999. The part time accountant is employed
jointly with another company.
For the year ended December 31, 1998, management consulting and
human resources development operations provided the company's
revenues. At the same time the company was strongly investing in
IT related products and management services, especially Year 2000
consulting.
In April 1999 the company launched its own proprietary methodology
for an inexpensive, yet fast and efficient Year 2000 analysis and
preparation aimed for medium and large organizations. It was first
sold and tested with United Arab Shipping Company (UASC), the
largest in its business in the Middle East area (UASC is jointly
owned by the six Persian Gulf states and headquartered in Kuwait).
Other contracts were signed with Nokia and Helsinki City Metro
System. The new business and established position will be used in
order to create a stable client base in the Middle East.
Examples of the services and products provided:
STRATEGIC MANAGEMENT CONSULTING
Vision Creation
Strategy Process
Values Management
Change Management
Strategy Implementation
Leadership Skills Development
MANAGEMENT PRODUCTIVITY INCREASE
Management Audits
Organization Development
Leadership Training
Executive Coaching
Management Teams
Team Building
Compass
CLIENT FOCUS DEVELOPMENT
Market Research
Audits & Surveys
Customer Service
Training
MARKETING MANAGEMENT DEVELOPMENT
Marketing Information System
Research Warehouse
Marketing Strategy
Product Management
Business to Business Marketing
Change Management
Corporate Communications
Advertising & Media
SALES DEVELOPMENT
Sales Management Development
Sales Force Training
Individual Coaching
Helping Clients Prosper
Key Account Management
Presentation Skills
SEARCH & SELECTION
Search
Selection
Simulator
Compass
Evaluation
Team Building
YEAR 2000 CONSULTING AND SERVICES
Consulting
Technical Analysis
Rectification
- All Languages
- Embedded Systems
DO IT CLIENTS
The DO IT client base is very wide. There are major references
from several industries:
Pharmaceutical
Shipping
Telecommunications
Finance
Insurance
IT
Consulting
Government services
Manufacturing
PROPERTY
DO IT has no real property.
LEGAL PROCEEDINGS
DO IT has a litigation pending against its former employee and his
new employer for a breach of contract. Helsinki City District
Court ruled partly in favor of DO IT in November 1998. Both
parties have appealed to the Helsinki Court of Appeal.
CHANGES IN ACCOUNTING AND FINANCIAL DISCLOSURE
The Company has changed its Certified Public Accountant for its
reporting requirements in Finland after fiscal year 1997, when the
shareholders resolved to hire an international firm, Ernst &
Young. Also, the qualifications of the CPA were upgraded from HMT
to KHT, which is the highest level, approved for the largest
public companies in Finland. In the Finnish accounting system,
the CPA has to be highly qualified and accredited as the financial
institutions and government authorities respect his review and
depend on his Audit Statement.
DIRECTORS
The Board of Directors consists of Mr. Kari Sarvanto.
EXECUTIVE OFFICERS
The Managing Director is Kari Sarvanto, born 1961, appointed when
the Company was founded.
Mr. Sarvanto has experience as an Officer in the Navy, as a
business executive and as a management consultant. He has helped
companies in several countries with top management and strategy
issues. Industries he has worked with include pharmaceuticals,
consumer marketing, information technology, finance and
government. He was recently involved in a global product
development and sales strategies development of Pfizer, Inc. Mr.
Sarvanto has experience in real-time IT-based management systems
from both military and civilian applications since 1986, and he
has worked with business Executive Information Systems development
both as a client and as a management consultant.
Mr. Sarvanto is a graduate of the Naval Academy with leadership
and strategy as majors and with studies in the University of
Helsinki. His present rank is Lieutenant Commander. He has studied
both Law and Economics in the University of Turku.
Mr. Sarvanto is an authorized member of the LJK, the Association
of Management Consultants, which is a member of FEACO. Mr.
Sarvanto was elected LJK board of directors in 1998. He serves as
Chairman for the French-Finnish Chamber of Commerce, and is a
member of the Strategic Management Society.
EXECUTIVE COMPENSATION
The Managing Director's salary according to his employment
contract, 30,000 FIM per month plus normal employee benefits.
3. NewSoft GmbH
Company Profile
NewSoft GmbH is a system integration and consulting organization
as well as a distributor of leading edge software products in the
datacenter security area. Currently we also are very successfully
conducting projects to analyze integrated electronically
controlled systems - known as "Embedded Systems, Embedded Chips" -
of major companies throughout Europe. During such projects we do
not only create inventories of existing embedded systems, we also
provide rectification and repair services to make devices Year
2000 compliant.
NewSoft GmbH was founded in Germany and became a wholly owned
subsidiary of EuroSoft Corporation (OTC BB: ERST), when Eurosoft
acquired all of the issued and outstanding shares of NewSoft.
NewSoft GmbH's special quality lies in excellent contacts and
cooperation with software vendors, software service providers,
consulting firms and system integrators throughout Germany,
Europe, North America, South Africa and includes one of the top
Indian offshore development companies. These contacts give us the
ability of short reaction to customer demands, including but not
limited to, short term recruiting of big project teams for
software projects of every kind and complexity.
Management
The Managing Director of NewSoft GmbH is Jorg Zimmermann. After
graduating with a degree in Economics his experience comes from
more than 15 years in sales at various hardware and software
companies. His main activities in NewSoft GmbH are marketing and
sales. Mr. Zimmermann was previously employed by Legent for more
than four years prior to Computer Associates acquiring such
company.
Technical Director for NewSoft GmbH is Nigel Kaufman. He is
responsible for all technical activities and his experience is
drawn from over 20 years in the computer business mainly at
software companies and as a systems programmer. He was also last
employed by Legent for over three years prior to Computer
Associates acquiring such company.
Philosophy
The philosophy of NewSoft GmbH is distinctly customer oriented.
Quick, competent and dependable support for all customers and
prospects is our principle. As for the products and services we
offer, we continuously observe the market place, with the view to
offering only well chosen products of the highest quality to
enhance the current range of services/products. We also attempt
to concentrate on the system management sector and the services
thereby involved.
Areas of Operation
NewSoft GmbH operates in Germany, Austria and the German speaking
part of Switzerland. In conjunction with AVM SYSTEMS based in
Italy, we are able to extend the products and services to cover
Italy as well.
1. Year 2000
Existing projects are Year 2000 related, and have brought revenue
of approximately $900,000 TO DATE IN 1999. Such projects are with
major organizations, such as Cologne/Bonn International Airport,
Duesseldorf International Airport, Eupec (a subsidiary of
Siemens), Hochtief a large German building company, and Salzburg
International Airport.
All of the company's existing projects are Year 2000 oriented, but
the intention is to extend the services to include our other
services as the opportunities arise. It is not expected that many
more projects will be started in Germany, although there are a
number of prospects being pursued in Italy at this time. A
contract has been offered to Eupec, to cover the repair of a
machine used in its semi-conductor production. This project will
extend three months into 2000, and will be a direct result of our
Embedded System project.
2. ENABLE SOLUTION.
In July 1999, a distribution agreement was entered into with
Enable Solutions for the product line RAS. This agreement covered
Germany, Austria, Switzerland, England, Scotland and Ireland. We
are currently working on business leads supplied to us by Enable
Solutions. This product is a Security password control system, and
is aimed at all large online organizations.
It is hoped that the synergy effect with BSAFE and ENET will
result in multiple sales to clients.
3. BSAFE
In May 1999, a distribution agreement was entered into with
Israeli based Bsafe cooperation for their security product. This
product covers the platforms MVS/VSE and AS/400 lines. The
territories included in this agreement are Germany, Austria and
Switzerland, with options to extend to the United Kingdom.
4. ENET
In February 1999, a distribution agreement was entered into with
California based Enet cooperation for their database replication
product line. Their initial success with the Dresdner Bank in
Germany was a major factor in the decision to take on this
product, it is always far easier to sell to the German market if
you have a German reference you can quote. We have started
mailings and integration into our web site for this product, and
expect to be able to build for next year on this product.
As with most projects in Germany through 1999, we will see little
closure due to the Year 2000 problem taking up more and more time
and resources.
5. INVU
Through MTS, we have the ability to sell into the German market
INVU's documentation management product. This is an exclusive
agreement. The potential for this product in Germany is
limitless, and will require a great deal of re-thinking on our
behalf.
This product is a vital part of our business as it provides us
with a quick sale item.
X. FUTURE PLANS
We will continually evaluate new product opportunities targeting
domestic and European companies. It will be necessary in the
near future to expand the company, to include another full time
sales person. In addition, as the prospects for RAS turn into
clients it will be necessary to employee a full time support
person who will reside in MTS' office in Derry, Ireland.
NewSoft's business development strategy through Eurosoft is to
expand its existing operations through internal growth and
acquisitions. For the year ended December 31, 1998, Year 2000
business represented 100% of our revenues.
PERSONNEL
We currently employ 3 full time employees.
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and analysis of the results of the
operation.
Results of the operations- Year ended December 31,1998
compared to December 31,1997
The Company spent 1997 in the formative stages, however
its subsidiaries conducted their separate businesses.
The focus of the Company in 1998 was to complete a major
advertising and marketing blitz in an attempt to acquire
major Y2K compliance projects. The Company pursued this
project based on industry reports (The Gartner Group)
that the global market for Y2K compliance would be as
high as $600 Billion. Industry experts such as Mr. Peter
de Jager believed that a substantial percentage of that
revenue would go to outside service providers with
resources and technology similar to the ones available to
the Company. This marketing cost the Company
approximately $11,000,000, and failed to generate the
substantial real revenue, less than $1,000,000 where the
Company was expecting a $20,000,000 return on the
investment. The Sector was very disappointing and a vast
majority of the companies, including but not limited too
Accelr8 Technologies (NASD: ACLY), Data Dimensions (NASD:
DDIM) and Crystal Systems (NASD: CRYSF), in the sector
failed to meet analyst and self-imposed revenue and
profit estimates in 1998. The marketing project though
failing initially to generate significant revenues, did
establish a significant market identity as an Information
Technology Services provider in the overseas market,
predominantly in the UK, Germany and Finland. The Company
raised these funds as equity to complete this marketing
project overseas.
Overall, the Company's revenue slipped approximately 16%
as it began to expend its marketing efforts in all areas
to Y2K compliance project efforts. Its costs of goods
sold fell from 11% to 9% of net revenues, also due to
more smaller Y2K compliance projects which did not
include the sale of software or hardware. Other than the
Y2K marketing effort, the Company's operating expenses
remained relatively flat.
Liquidity
The Company has historically been able to approximately
break even on a cash flow basis. The Company raised the
funds independently for its Y2K marketing efforts. The
Company believes that on a going forward basis it can
continue to continue as in the past, however it
continually evaluates other funding opportunities in
order that it may grow faster than its cash flow will
otherwise follow.
ITEM 3. PROPERTIES
We presently occupy four facilities in the United States and
Europe.
CORPORATE OFFICE - UNITED STATES
Our corporate headquarters are located at 703 Lucerne Avenue,
Suite 201, Lake Worth, Florida. The office is approximately 200
square feet of executive space. It is a monthly rental at the
rate of $575 per month. The lease is in the name of our Officer
and Director, William H. Luckman, personally. He is responsible
for the monthly rental and does not charge us any rental fee.
SUBSIDIARIES
(1) NewSoft Gmbh - NewSoft leases approximately 260 square
meters at Im Leuschnerpark 1 in Griesheim, Germany. The total
monthly lease payments (including parking spaces and additional
rent) are 4,065 Deutsche Marks per month. The lease terminates on
September 30, 1999. NewSoft has entered into a new lease
agreement for 76 square meters at Boschstrasse 5 in Griesheim,
Germany. The total monthly lease payments (including parking
spaces and additional rent are 1,340 Deutsche Marks per month.
The lease commences on September 1, 1999.
(2) Millennium Three Solutions - Millennium Three Solution
entered into a lease agreement for 6,000 square feet on May 1,
1997 for the premises located at 32 and 35 Templemore Business
Park, Northland Road, Industrial Estate, Derry, Northern Ireland.
The base annual rental is 12,000 Sterling Pounds plus Value Added
Tax. The lease is for a 4 year period commencing May 1, 1997 and
terminating on April 30, 2001.
(3) Do it-Development International Oy - Do it entered into a
lease agreement on march 1, 1996 for 84 square meters located at
Sornaisten rantatie 27, Helsinki, Finland. The lease agreement
terminates on March 1, 2001. The lease agreement presently
provides for monthly rental payments of 3,780 Finnish Marks (not
including Value Added Tax).
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth, as of July 31, 1999, certain
information with respect to (i) those persons or groups known to
us to be the beneficial owners of more than five percent of our
common stock, (ii) each of our directors, (iii) each of our
executive officers and (iv) all of our directors and executive
officers as a group. The stockholders listed in the table have
sole voting and investment power with respect to our common stock
owned by each of them. As of July 31, 1999, there were 22,963,320
shares of Common Stock issued and outstanding.
Percent of
Number of Shares Common Stock
Name of Beneficial Owner(1) Beneficially Owned (2) Outstanding
- ------------------------ ------------------ --------------
William H. Luckman (3) 3,600,000 15.68%
David Yancy (4) 4,200,000 18.29%
Brian Doherty (5) 3,000,000 13.06%
Nigel Kaufman 1,075,000 4.68%
Jorg Zimmermann 1,075,000 4.68%
Kari Sarvanto (6) 1,000,000 4.35%
All executive officers
and directors 8,750,000 38.10%
as a group (4 persons)
(1) The address of each person and entity named in the above
table is c/o the Company, 703 Lucerne Avenue, Lake Worth, Suite
201, Florida 33460.
(2) The persons and entities named in this table have sole
voting and investment power with respect to all shares of common
stock reflected as beneficially owned by each.
(3) On October 16, 1997, Mr. Luckman was originally issued
1,000,000 shares of Common Stock in exchange for services valued
at $100. Thereafter, on January 30, 1998, Mr. Luckman returned
900,000 shares of Common Stock to Treasury. In addition, on
September 16, 1997, Sean P. O'Connor, the founder of the Company,
was originally issued 1,000,000 shares of Common Stock in exchange
for services valued at $100. On January 30, 1998, Mr. O'Connor
resigned as President and Director of the Company and returned his
1,000,000 shares of Common Stock to the Company in consideration
of an indemnification from the Company to Mr. O'Connor.
(4) Effective January 25, 1999, David Yancy was removed as our
officer and director. Notwithstanding his removal, he retained
his shares of our common stock.
(5) Mr. Doherty owns 2,040,000 of our Share of Common Stock.
His wife Elaine Doherty owns 960,000 of our Shares of Common
Stock. Therefore, Mr. Doherty's beneficial ownership of 3,000,000
Shares. In addition, when we purchased MTS on December 3, 1998
(see "Item 10. Recent Sales of Unregistered Securities"), Mr.
Doherty (51%), of his wife Elaine Doherty (24%) and Damian Kitson
(25%) were the owners of all of the issued and outstanding shares
of MTS. Mr. Kitson received 1,000,000 of our Shares of Common
Stock. Immediately after the closing of such transaction, Mr.
Kitson voluntarily left the employment of MTS and directly
competed against MTS. We are presently deciding whether to
contact our transfer agent and cancel Mr. Kitson's 1,000,000
shares and transfer 680,000 shares to Mr. Doherty and 320,000
shares to Mrs. Doherty (see "Item 8. Legal Proceedings"). If this
occurs, the beneficial; ownership of Mr. Doherty and the executive
officers and directors as a group will change accordingly.
(6) Mr. Sarvanto is not our officer or director. Therefore, his
shares of our common stock are not included in the group of
officers and directors. However, he operates our Finnish
subsidiary, Do it-Development International Oy and is being
included in this list for informational purposes.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS
Our executive officers and directors and their ages as of July 31,
1999 are as follows:
<TABLE>
<S> <C> <C>
Name Age Position
- -------------------- ---- --------------------------
Nigel Kaufman 41 President, Director and
Technical Director of
NewSoft GmbH
William H. Luckman 27 Senior Vice President,
Secretary and Director
Brain Doherty 41 Director and Managing
Director Millennium Three
Solutions
Jorg Zimmermann 44 Director and Operations
Director of NewSoft GmbH
Kari Sarvanto 38 Director of Do it-Development
International Oy
</TABLE>
Each of our directors will hold office until the next annual
meeting of our stockholders and until his or her successor is
elected and qualified or until his or her earlier resignation or
removal. Each officer serves at the discretion of our Board of
Directors.
Nigel Kaufman is the Technical Director of our German subsidiary,
NewSoft GmbH. He is responsible for all of the technical
activities of NewSoft. His experience is drawn from over 20 years
in the computer business mainly at software companies and as a
systems programmer. After leaving school in London, England, he
worked for various companies such as Trafalgar House, Whitbread's
American International Underwriters and DuPont. He then moved to
Germany to work for W.R. Grace. This position brought him into
direct contact with Computer Associates and was the VSE/VM (IBM
Operations System) group leader responsible for support in the
German speaking area. He worked for Computer Associates. Shortly
thereafter, Nigel founded NewSoft GmbH.
William H. Luckman has an established business management and
banking background. He established his background in business as
the owner and manager of a mortgage company, International
Mortgage, in Chicago, Illinois from June, 1992 until December,
1993. After selling his business, he worked for Lincoln Savings
Bank, FSB, located in Jericho, New York as a marketing consultant
and mortgage underwriter. He worked at Lincoln Savings Bank from
January, 1994 until April, 1994. He then worked for American Home
Mortgage of New York, one of the largest privately held mortgage
banks in the United States. He was given the responsibility for
out-of-region growth. As the youngest Vice President in company
history, he established satellite offices in New York, Florida and
Illinois. He worked for American Home Mortgage from April, 1994
until January, 1997. Mr. Luckman was the President, Treasurer and
Director of Premier Supplements Corp. from March, 1997 until
January, 1998. Premier Supplements Corp. is a publicly traded
company on the NASDAQ OTC Bulletin Board traded under the symbol,
PMSP. Mr. Luckman was the Treasurer and on the Board of Directors
of Optical Systems Inc., a publicly traded company listed on the
NASDAQ OTC Bulletin Board under the symbol OPSY, until his
resignation in 1998.
Brian Doherty operates our Northern Ireland subsidiary, Millennium
Three Solutions ("MTS"). He has been the managing director of MTS
since its inception. Over the past 3 years, he has focused his
attention on developing a network of channel partners throughout
Europe. At MTS, he retains overall responsibility for motivation
and achievement of sales targets, direct selling, new production
identification and strategic marketing planning. Prior to working
for MTS, Brain worked as a computer programmer of 3M in Dublin,
Ireland and a Cobol programmer for Dublin Computers in South
Africa.
Jorg Zimmermann is the Operations Director of our German
subsidiary, NewSoft GmBH focusing on marketing, sales and
administration. He started his career in the Information
technology business by attending a 1 year program at Unisys. His
18 years of experience in marketing and sales is derived from
various sales and account manager positions at companies such as
Computer Associates, VM Software (now Sterling), Pansophic and
Legent. Prior to founding NewSoft with Nigel Kaufman, he worked
for Legent for approximately 4 years. He received a degree in
Economics.
Kari Sarvanto operates our Finnish subsidiary, Do it-Development
International Oy. Mr. Sarvanto has experience as an Officer in the
Navy, as a business executive and as a management consultant. He
has helped companies in several countries with top management and
strategy issues. Industries he has worked with include
pharmaceuticals, consumer marketing, information technology,
finance and government. He was recently involved in a global
product development and sales strategies development for Pfizer,
Inc. Mr. Sarvanto has experience from real-time Information
Technology based management systems from both military and
civilian applications since 1986, and he has worked with business
Executive Information Systems development both as a client and as
a management consultant. Mr. Sarvanto is a graduate of the Naval
Academy majoring in leadership and strategy and has studied at the
University of Helsinki. His present rank in the Navy is as
Lieutenant Commander. He has also studied both Law and Economics
at the University of Turku in Finland. Mr. Sarvanto is an
authorized member of the LJK, the Association of Management
Consultants, which is member of FEACO. Mr. Sarvanto was elected
LJK board of directors in 1998. He serves as Chairman for the
French-Finnish Chamber of Commerce, and is member of the Strategic
Management Society.
Effective January 25, 1999, David Yancy, Denis Woodfield and Robert
Hoehl were removed as our directors by a majority shareholder vote.
Effective January 25, 1999, Mr. Yancy was removed as our Chief
Executive Officer by a unanimous directors vote.
ITEM 6. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
Annual Compensation
Name and
Principal
Position Year Salary Bonus
- -------- ----- --------- -------
Nigel Kaufman 1998 60,000 Deutsche
Marks (1) (2)
1999 90,000 Deutsche
Marks (1) (2)
William H. Luckman 1998 None None
1999 None None
Brian Doherty 1999 (3) 45,000 Pound
Sterling (3) None
Jorg Zimmermann 1998 60,000 Deutsche
Marks (1) (2)
1999 90,000 Deutsche
Marks (1) (2)
Kari Sarvanto 1999 (4) 360,000 Finnish
Marks (4) None
(1) Messrs. Kaufman and Zimmerman both entered into employment
agreements with us on March 21, 1998, the date that we acquired
NewSoft GmBh and it became our wholly owned subsidiary. The
$90,000 salaries are based on the employment agreements.
(2) The employment agreements described in (1) above provide
for a bonus to each of Messrs. Kaufman and Zimmermann equaling 20%
of gross earnings for each project of the NewSoft German
operations.
(3) Brian Doherty entered into an employment agreement with us
on December 3, 1998, the date that we acquired Millennium Three
Solutions and it became our wholly owned subsidiary. The 45,000
Pound Sterling salary is based on the employment agreement.
(4) Kari Sarvanto entered into an employment agreement with us on
December 3, 1998, the date that we acquired Do it-Development
International Oy and it became our wholly owned subsidiary. The
360,000 Finnish Marks salary is based on the employment agreement.
Compensation of Directors
The Directors of the Company do not receive compensation for their
services as directors but may be reimbursed for their reasonable
expenses for attending Board meetings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On February 1, 1998, we issued 2,800,000 shares of our common
stock to Sicor, Inc., a private company, in exchange for
$60,000.00 and possible additional consideration not to exceed
$350,000.00. Such shares issued to Sicor, Inc. are restricted for
a period of two (2) years from the date of issuance in accordance
with Rule 144 of the Securities Act of 1933. William H. Luckman ,
our officer and director was a beneficial owner, Secretary,
Treasurer and Director of Sicor, Inc. at the time of the
transaction.
On October 1, 1998, we issued to each of Nigel Kaufman and
Jorg Zimmerman, 300,000 of our common shares as performance
related bonuses for their work for us.
We presently occupy approximately 200 square feet as an
executive office, located at 703 Lucerne Avenue, Suite 201, Lake
Worth, Florida. It is a month to month rental at the rate of $575
per month. The lease is in the name of our Officer and Director,
William H. Luckman, personally. He is responsible for the monthly
rental and does not charge us any rental fee.
ITEM 8. LEGAL PROCEEDINGS
Except as set forth below, we are not presently a party to any
litigation of any kind or nature whatsoever, nor to our knowledge
and belief is any litigation threatened or contemplated.
I. Bank of East Asia v. Sicor, Inc. - Our wholly owned
subsidiary, Sicor, Inc. was sued by the Bank of East Asia in the
Supreme Court of the State of New York, New York County, Index No.
601057/99. The basis of the suit is that Sicor entered into a
sublease agreement to rent office space in New York City and
breached the terms of the sublease by wrongfully repudiating the
sublease and wrongfully stopping payment on checks. The Bank of
East Asia is requesting $85,000 in damages. Sicor's position is
that the sublease agreement was never executed and agreed to by
the Landlord and the Bank of East Asia, as tenant, prior to Sicor
notifying such parties that the sublease was null and void. Since
Sicor, Inc. is not an active operating subsidiary of ours, we
determined that the cost of litigation was not justified. The
time to answer the lawsuit has passed and Sicor has not answered
such lawsuit. Therefore, a default judgment will be entered
against Sicor.
II. TOCS v. Sicor, Inc. - In July, 1999, Turn of the Century
Solution, L.P. (TOCS) filed a patent infringement lawsuit against
Sicor, Inc. and other entities in the United States District Court
for the District of New Jersey (Civil Action No. 3:99-3170). The
lawsuit claimed that Sicor acted as a sales agent for Year
2000 Computer Bug remediation services and thereby infringed
patents issued to TOCS. On August 16, 1999 we were advised of
this lawsuit by David Yancy's attorney. The lawsuit was served on
Mr. Yancy in New Jersey in July 1999. Mr. Yancy had previously
been our Chief Executive Officer and operated in Princeton, New
Jersey. Mr. Yancy advised his attorney that the claim was
meritless. Since Sicor, Inc. is not an active operating
subsidiary of ours, we determined that the cost of litigation is
not justified.
III. Damian Kitson ( Millennium Three Solutions) - We are
presently involved in litigation with Mr. Kitson. However, Mr.
Kitson was a 25% shareholder of MTS, our wholly owned subsidiary.
We purchased MTS on December 3, 1998. As part of such
transaction, Mr. Kitson unilaterally terminated his employment
with MTS on March 15, 1999 and thereafter directly competed with
MTS. Mt. Kitson's attorney has sent our attorney a letter stating
that his client terminated his employment because he was not paid
his salary in his employment contract and claimed that Mr. Kitson
was personally entitled to 15% of the $500,000 of cash
consideration paid to MTS. Our attorney has responded to Mr.
Kitson's attorney by stating the following: (i) Mr. Kitson did
receive salary under his employment agreement; (ii) Mr. Kitson's
1,000,000 shares of our Common Stock will be canceled since Mr.
Kitson is directly competing with us and unilaterally terminated
his employment within a short period of time after closing; (iii)
the agreement with MTS clearly states that the $500,000
consideration is for MTS and its operations and not for any
shareholder of MTS.
ITEM 9. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS.
Our Common Stock, par value $0.0001, has been traded on the OTC
Electronic Bulletin Board under the symbol "ERST" since August,
1998, and there are currently 8 market makers for our common
stock.
The following table sets forth the high and low sale prices of our
common stock as reported on the OTC Electronic Bulletin Board.
These price quotations reflect inter-dealer prices, without retail
mark-up, mark-down or commission, and may not represent actual
transactions.
December 31, 1998 $ 7.25 $ 4.75
March 31, 1999 $10.50 $ 6.875
June 30, 1999 $ 8.75 $ 4.875
Number of Registered Holders
The number of registered holders of our common stock as of August
5, 1999 was 224, and we believe that there are a greater number of
beneficial owners of our shares of common stock.
Dividends
To date, we have not declared or paid any cash dividends on our
Common Stock. We currently anticipate that we will retain all
available funds for use in the operation and expansion of our
business, and we do not intend to pay cash dividends on our common
stock in the foreseeable future. Further, there can be no
assurance that the operations of our business will generate the
revenue and cash flow needed to declare cash dividends in the
foreseeable future.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
On September 23, 1997, we issued an offering pursuant to Rule 504
of Regulation D, promulgated pursuant to the Securities Act of
1933 ("Offering"). We offered through our Officers and Directors,
on a "best efforts" basis, a maximum of 2,000,000 of our Common
Shares at an offering price of $0.025 per share. We completed the
Offering on October 13, 1997 by selling the maximum 2,000,000
Common Shares and raised $50,000.00 from nine (9) investors.
In January, 1998, we determined it was in our best interest to
repurchase 1,000,000 of the 2,000,000 Common Shares sold in the
Offering from four (4) investors for the sum of $25,000.00. We
subsequently amended the Offering as of January 29, 1998 and
resold the 1,000,000 Common Shares repurchased at the same price
in the Offering ($0.025 per share) for $25,000.00 to twenty-six
(26) new investors.
In February 1998, we entered into an agreement with Sicor, Inc. whereby we
issued 2,800,000 of our common shares for
consideration in the amount of $211,412. Such shares are
restricted for a two (2) year period from the date of issuance in
accordance with Rule 144.
In August 1998, we issued a term sheet offering pursuant to Rule
504 of Regulation D whereby we offered 200,000 of our common
shares at $.50 per share or an aggregate of $100,000. As part of
such offering, the investors of the initial 200,000 common shares
received the following options: 400,000 shares at $.55 per share
(an aggregate of $220,000); and 170,000 shares at $4.00 per share
(an aggregate of $680,000). This offering was completed and we
issued 770,000 shares and raised $1,000,000.
No Commissions were paid on sales of Common Shares.
The following shares of the Company's common stock issued to: (a)
100,000 to William H. Luckman, an officer and director of the
Company; (b) 25,000 to Richard I. Anslow, Esq., the Company's
legal counsel; and (c) 2,800,000 to Sicor, Inc. is unregistered
and deemed "restricted securities" as defined by Rule 144 of the
Securities Act of 1933, as amended. All certificates representing
such securities bears a restrictive legend preventing their
transfer, except in accordance with the Securities Act of 1933, as
amended, and the regulations promulgated thereunder.
For each of the above transactions, the Company relied upon the
exemption from registration under the Securities Act of 1933, as
amended, as provided by Section 4(2) of the Act.
We believe that our common stock issued in the above Regulation D,
Rule 504 Offerings were issued in transactions not involving a
public offering in reliance upon an exemption from registration
provided by Section 4(2) of the Securities Act of 1933, as amended
and Rule 504 of Regulation D.
Effective March 21, 1998, we undertook a Stock Purchase Agreement
and Share Exchange("Stock Agreement") with NewSoft GmbH
("NewSoft"), a German Corporation. Pursuant to the terms of the
Stock Agreement, NewSoft became our wholly owned subsidiary. In
exchange for the shareholders of NewSoft tendering their shares to
us, both shareholders (Nigel Kaufman and Jorg Zimmermann) received
in the aggregate 550,000 of our "restricted" shares plus other
consideration.
Effective October 9, 1998, we undertook a Stock Purchase Agreement
and Share Exchange("Stock Agreement") with Sicor, Inc., our
majority shareholder "Sicor"), a Florida corporation. Pursuant to
the terms of the Stock Agreement, Sicor became our wholly owned
subsidiary and tendered to us 2,800,000 shares of our Common
Stock. In exchange for the shareholders of Sicor tendering their
shares to us, such shareholders received 2 of our shares for each
share of Sicor they owned. David Yancy, the majority shareholder
of Sicor held 8,100,000 of our shares and tendered 6,000,000
shares prior to the issuance. Therefore, he received 4,200,000 of
our shares based on his ownership of 2,100,000 Sicor shares. In
additional, we issued 9,722,070 of our shares. In the aggregate
we issued 13,922,070 of our "restricted" shares plus other
consideration.
Effective December 3, 1998, we undertook a Stock Purchase
Agreement and Share Exchange("Stock Agreement") with Millennium
Three Solutions ("MT3"), a Northern Ireland Corporation. Pursuant
to the terms of the Stock Agreement, MT3 became our wholly owned
subsidiary. In exchange for the shareholders of MT3 tendering
their shares to us, such shareholders received in the aggregate
4,000,000 of our "restricted" shares plus other consideration.
Effective December 3, 1998, we undertook a Stock Purchase
Agreement and Share Exchange("Stock Agreement") with Do it-
Development International Oy ("Do it"), a Finnnish Corporation.
Pursuant to the terms of the Stock Agreement, Do it became our
wholly owned subsidiary. In exchange for the shareholders of Do
it tendering their shares to us, such shareholders received in the
aggregate 1,000,000 of our "restricted" shares plus other
consideration.
We believe the shares issued in the Stock Agreement and Asset
Agreement did not involve a public offering and were made in
reliance upon an exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED
Our authorized capital stock is 50,000,000 shares of Common Stock,
par value $0.0001 per share and 10,000,000 shares of preferred
Stock, par value $.0001 per share. As of August 5, 1999, we had
issued 22,963,320 of our shares of Common Stock and none of our
Preferred Stock.
The following brief description of our common stock does not
purport to be complete and is subject in all respects to Florida
law and to the provisions of our Articles of Incorporation, as
amended (the "Articles") and our Bylaws, copies of which have been
filed as exhibits to this registration statement.
Each share of our common stock entitles the holder to one (1) vote
on all matters submitted to a vote of the stockholders. Our
common stock does not have cumulative voting rights, which means
that the holders of a majority of the outstanding shares of our
common stock voting for the election of directors can elect all
members of the Board of Directors. A majority vote is also
sufficient for other actions that require the vote or concurrence
of stockholders except in cases in which more than a simple
majority is required by law. Holders of our common stock are
entitled to receive dividends, when, as and if declared by the
Board of Directors, in its discretion from funds legally available
therefore. Holders of shares of our common stock are entitled to
share, on a ratable basis, such dividends as may be declared by
the Board of Directors out of funds, legally available therefor.
Upon our liquidation, dissolution or winding up, after payment to
creditors, the holders of our common stock are entitled to share
ratably in the assets of the Company, if any, legally available of
distribution to our common stockholders. Our Bylaws require that
only a majority of the issued and outstanding shares of our common
stock need be represented to constitute a quorum and to transact
business at a stockholders' meeting.
Our common stock has no preemptive rights or no subscription,
redemption or conversion privileges. All of the outstanding
shares of our common stock are fully paid and non assessable.
Our Board of Directors has total discretion as to the issuance and
the determination of the rights and privileges of any shares of
our common stock which may be issued in the future, which rights
and privileges may be detrimental to the rights and privileges of
the holders of our existing shares of our common stock now issued
and outstanding.
The transfer agent and registrar for our common stock is Interwest
Transfer Co., Inc., Salt Lake City, Utah.
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Florida law, a director is not personally liable for
monetary damages to the corporation or any other person for any
statement, vote, decision, or failure to act unless (i) the
director breached or failed to perform his duties as a director,
and (ii) a director's breach of, or failure to perform, those
duties constitutes (1) a violation of the criminal law, unless the
director had reasonable cause to believe his conduct was lawful or
had no reasonable cause to believe his conduct was unlawful; (2) a
transaction from which the director derived an improper personal
benefit, either directly or indirectly; (3) a circumstance under
which an unlawful distribution is made; (4) in a proceeding by or
in the right of the corporation or in a proceeding in which the
corporation procures a judgment in its favor or by or in the right
of a shareholder, conscious disregard for the best interest of the
corporation or willful misconduct; or (5) in a proceeding by or in
the right of someone other than the corporation or a shareholder,
recklessness or an act or omission which was committed in bad
faith or with malicious purpose or in a manner exhibiting wanton
and willful disregard of human rights, safety, or property. A
corporation may purchase and maintain insurance on behalf of any
director or officer against any liability asserted against him and
incurred by him in his capacity or arising out of his status as
such, whether or not the corporation would have the power to
indemnify under Florida law.
Our Bylaws limit, to the maximum extent permitted by Florida law,
the personal liability of our directors and officers for monetary
damages for breach of their fiduciary duties as directors and
officers. Our Bylaws provide further we shall indemnify to the
fullest extent permitted by Florida law any person made a party to
any action or proceeding by reason of the fact that such person
was our director, officer, employee or agent. Our Bylaws also
provide that our directors and officers who are entitled to
indemnification shall be paid their expenses incurred in
connection with any action, suit or proceeding in which such
director or officer is made a party by virtue of his being our
officer or director to the maximum extent permitted by Florida
law.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
For the information required by this Item, refer to the Index to
Financial Statements appearing on page F-1 of the registration
statement.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS
For the information required by this Item, refer to the Index to
Financial Statements appearing on page F-1 of the registration
statement.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
EUROSOFT CORPORATION
By: /s/ WILLIAM H. LUCKMAN
----------------------
WILLIAM H. LUCKMAN
Senior Vice President,
Secretary and Director
Dated: August , 1999
FINANCIAL STATEMENTS
- ---------------------
TABLE OF CONTENTS
Independent Auditors' Report.......................F-2
Consolidated Balance Sheets........................F-3
Consolidated Statements of Operations.............F-4
Consolidated Statements of Changes
in Stockholders' Equity............................F-5
Consolidated Statements of Cash Flows.............F-6
Consolidated Notes to the Financial Statements ...F-7
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Eurosoft Corporation
Lake Worth, Florida
We have audited the accompanying consolidated balance sheets
of Eurosoft Corporation, as of December 31, 1998 and 1997,
and the related consolidated statements of operations,
changes in stockholders' equity and cash flows for the years
then ended. These consolidated financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion of these
consolidated financial statements, based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of financial
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides
a reasonable basis for our opinion.
In our opinion, the consolidated financial statements
referred to above present fairly, in all material respect,
the financial position of Eurosoft Corporation as of
December 31, 1998 and 1997, and the results of its
operations and its cash flows for the years then ended, in
conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern.
As discussed in Note 8 to the financial statements, the
Company's significant operating losses, working capital
equity and stockholders' equity raise substantial doubt
about its ability to continue as a going concern. The
financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Durland & Company, CPAs, P.A.
Palm Beach, Florida
July 30, 1999
Eurosoft Corporation
Consolidated Balance Sheets
December 31,
<TABLE>
<S> <C> <C>
1998 1997
---- ----
ASSETS
CURRENT ASSETS
Cash $93,970 $370,367
Inventory 247,874 26,042
Accounts receivable 180,371 249,290
Accounts receivable - employees 3,234 4,106
Prepaid expenses and other current assets 84,225 4,497
------- --------
Total current assets 609,674 654,302
------- --------
PROPERTY AND EQUIPMENT
Automobiles 185,092 122,795
Computer equipment 126,110 64,906
Office furniture and equipment 58,465 38,181
------- -------
Total property and equipment 369,667 225,882
Less: accumulated depreciation (86,354) (40,012)
-------- --------
Total property and equipment 283,313 185,870
------- -------
OTHER ASSETS
Deposits 12,621 1,416
Total other assets 12,621 1,416
------ ------
Total Assets $905,608 $841,588
-------- ---------
-------- ---------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $243,149 $181,102
Accounts payable - related parties 94,857 0
Taxes payable 62,741 127,380
Current portion of long-term debt 10,691 15,754
Acquisition cost payable - accrued 0 479,365
Accrued expenses 22,691 4,542
-------- -------
Total current liabilities 434,129 808,143
--------- -------
LONG-TERM DEBT 87,723 97,896
Total Liabilities 521,852 906,039
--------- -------
STOCKHOLDERS' EQUITY
Common stock, $0.0001par value,
50,000,000 shares authorized;
27,587,070 and 22,887,070
outstanding at December 31,1998
and 4,000,000 at December 31, 1997. 2,289 400
Additional paid-in capital 12,034,936 49,800
Foreign currency translation gain (loss) (9,491) (10,052)
Accumulated deficit (11,643,978) (104,599)
------------ ----------
Total stockholders' equity 383,756 (64,451)
------------ ----------
Total Liabilities and Stockholders' Equity $905,608 $841,588
------------ ----------
------------ ----------
</TABLE>
The accompanying notes are an integral part of these
financial statements.
Eurosoft Corporation
Consolidated Statements of Operations
Years Ended December 31,
<TABLE>
<S> <C> <C>
1998 1997
-------- --------
REVENUE
Gross sales $1,325,905 $1,579,096
Less: returns and allowances (1,689) (318)
----------- -----------
Net sales 1,324,216 1,578,778
COST OF SALES
Cost of goods sold 118,087 178,907
Gross margin 1,206,129 1,399,871
---------- ----------
OPERATING EXPENSES
Selling expenses 10,964,535 436,974
General and administrative expenses 1,751,083 1,007,706
Depreciation 48,341 36,592
---------- ----------
Total operating expenses 12,763,959 1,481,272
----------- -----------
Net operating loss (11,557,830) (81,401)
OTHER INCOME (EXPENSES)
Gain (loss) on sale of property
and equipment 0 1,285
Other income 35,693 231
Interest expense (17,242) (10,541)
----------- ---------
Total other income (expenses) 18,451 (9,025)
----------- ---------
Net loss before foreign income tax (11,539,379) (90,426)
Foreign income tax 0 14,173
----------- ---------
Net loss $(11,539,379) $(104,599)
------------- ----------
Net loss per weighted average share $ (0.55) $ (0.03)
------------- ----------
Weighted average number of shares 20,975,391 3,140,185
-------------- ----------
</TABLE>
Eurosoft Corporation
Consolidated Statement of Changes in Stockholders' Equity
Common stock
------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Foreign
Currency
Additional Translation Total
Paid-In Gain Accumulated Stockhldrs'
Shares Amount Capital (Loss) Deficit Equity
------ ------ ---------- ------ -------- ---------- -------------
BEGINNING BALANCE,
September 15, 1997
(inception) 0 $ 0 $ 0 $ 0 $ 0 $ 0
4th quarter -
founders services 2,000,000 200 0 0 0 200
4th quarter - cash 2,000,000 200 49,800 0 0 50,000
Foreign currency
translation gain
(loss) 0 0 0 (10,052) 0 (10,052)
Net loss 0 0 0 0 (104,599) (104,599)
--------- ---- ------- ------- --------- ---------
BALANCE,
Dec. 31, 1997 4,000,000 400 49,800 (10,052) (104,599) (64,451)
Shares contributed
to Company 1,900,000 (190) 190 0 0 0
Services 625,000 63 15,562 0 0 15,625
Acquisitions 19,472,070 1,947 11,078,041 0 0 11,079,988
Shares cancelled 2,800,000 280 280 0 0 0
Cash 3,490,000 349 891,063 0 0 891,412
Foreign currency
translation gain
(loss) 0 0 0 561 0 561
Net loss 0 0 0 0(11,539,379)(11,539,379)
--------- ---- -------- ---- -------- ----------
BALANCE,
Dec. 31, 1998 22,887,070 2,289 12,034,936 9,491 11,643,978 383,756
---------- ------ ----------- ------- --------- ------------ ---------
---------- ------ ----------- ------- --------- ------------ ---------
</TABLE>
Eurosoft Corporation
Consolidated Statements of Cash Flows
<TABLE>
<S> <C> <C>
1998 1997
--------- ---------
CASH FLOWS PROVIDED (USED) BY OPERATING ACTIVITIES
Net loss $(11,538,411) $(104,599)
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation 48,341 36,592
Allowance for bad debt 47,524 0
Gain on sale of fixed assets 0 (1,285)
Changes in assets and liabilities
(Increase) decrease in inventory (221,832) (26,042)
(Increase) decrease in accounts receivable 21,395 (249,290)
(Increase) decrease in prepaid expenses
and other assets (80,495) (4,497)
(Increase) decrease in deposits (11,205) (1,416)
Increase (decrease) in accounts payable 62,047 181,102
Increase (decrease) in accounts payable
- Related parties 94,857 0
Increase (decrease) in taxes payable (64,639) 127,380
Increase (decrease) in accrued expenses 18,149 4,542
Increase (decrease) in foreign currency
translation gain (loss) 561 (10,052)
------------ -----------
Net cash provided (used) by operating activities (11,623,708) (47,565)
------------ -----------
CASH FLOWS PROVIDED (USED) BY INVESTING ACTIVITIES
Repayments of employees advances 872 0
Employee advances 0 (4,106)
Sale of property and equipment 0 14,355
Acquisition of property and equipment 0 (140,519)
------------- ------------
Net cash flows provided (used) by
investing activities 872 (130,270)
------------- ------------
CASH FLOWS PROVIDED (USED) BY FINANCING ACTIVITIES
Additional financing 0 113,650
Issuance of stock 156,000 50,000
Issuance of stock by subsidiary 11,190,400 374,500
------------- ------------
Net cash flows provided (used) by
financing activities 11,346,400 538,150
-------------- ------------
Net increase (decrease) in cash (276,436) 360,315
CASH, beginning of year 370,367 0
-------------- ------------
CASH, end of year $93,931 $360,315
-------------- ------------
-------------- ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid in cash
Non-cash investing and financing activities
Acquisition of property and equipment and
inventory by assumption of debt $143,785 $225,882
------------- ------------
------------- ------------
</TABLE>
Eurosoft Corporation
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Principles
- --------------------------------------------------
The Company Eurosoft Corporation (the Company) is an
Florida corporation specializing in the computer software,
consulting, training and Y2K repair. The Company maintains
its executive offices in Lake Worth, Florida and has
operating subsidiaries in Londonderry, Northern Ireland, Helsinki,
Finland, and Darmstadt, Germany. The Company was
incorporated on September 15, 1997, under the Laws of the
state of Florida.
The consolidated financial statements have been prepared in
conformity with generally accepted accounting principles.
In preparing the financial statements, management is
required to make estimates and assumptions that affect the
reported amounts of assets and liabilities as of the dates
to the statements of financial condition and revenues and
expenses for the years then ended. Actual results could
differ significantly from those estimates. The following
summarize the more significant accounting and reporting
policies and practices of the Company:
a) Basis of presentation The Company acquired NewSoft,
GmbH, a German corporation, Do It Development
International, OY, a Finnish corporation, Millennium Three
Solutions, Ltd, a Northern Ireland Corporation, and Sicor,
Inc. a Florida corporation, in stock for stock transactions,
in a multiple reverse merger accounted for as a
reorganization of the four operating subsidiaries.
The consolidated financial statements include the accounts
of Newsoft, Do It, Millennium Three and Sicor, its wholly
owned subsidiaries. Inter-company accounts and
transactions have been eliminated in the consolidation.
b) Net loss per share Basic is computed by dividing the
net loss by the weighted average number of common shares
outstanding during the period.
c) Inventory Inventory, consisting primarily of
prepackaged computer software, is stated at the lower of
cost (first-in, first-out method) or market.
d) Property and equipment All property and equipment
are recorded at cost and depreciated over their estimated
useful lives, using the straight-line method. Upon sale or
retirement, the costs and related accumulated depreciation
are eliminated from their respective accounts, and the resulting
gain or loss is included in the results of
operations. Repairs and maintenance charges which do not
increase the useful lives of the assets are charged to
operations as incurred.
e) Advertising costs The company expenses the costs of
advertising the first time the advertising takes place.
(2) Income Taxes
- ----------------
The Company has a consolidated net operating loss
carryforward for US income tax purposes, amounting to
$11,485,400 at December 31, 1998, expiring $109,400 at
December 31, 2014 and $11,376,000 at December 31, 2019.
There may be certain limitations on the Company's ability to
utilize the loss carryforwards due to the losses originated.
At December 31, 1998, the Company had approximately $21,300
in operating loss carryforward for Finnish income tax
purpose, $84,200 in Northen Ireland, and $65,000 in Germany.
(3) Stockholders' Equity
- -------------------------
The Company has 50,000,000 shares of $0.0001 par value
common stock authorized. At inception, the Company issued
2,000,000 shares to the founders for services valued at par.
The Company issued 2,000,000 shares in exchange for $50,000
in cash. The Company issued 625,000 shares for services
valued at $15,625. The Company issued 3,490,000 shares for
$891,412 in cash. The Company issued 550,000 shares in
connection with the acquisition of Newsoft, 1,000,000 shares
for Do It, 4,000,000 for Millennium Three, and 19,472,070
for Sicor. 1,900,000 shares were contributed back to the Company and 2,800,000
shares previously owned by Sicor were retired.
Eurosoft Corporation
Notes to Consolidated Financial Statements
(4) Significant Acquisitions
- ----------------------------
The Company acquired 100% of the issued and outstanding
common stock of Newsoft, in exchange for 550,000 shares of
the Company, 500,000 shares of Sicor, which became 1,000,000
shares of the Company, and a $300,000 cash investment in
Newsoft. The Company acquire 100% of the issued and
outstanding stock of Do It in exchange for 1,000,000 shares
of the Company, and $100,000 in cash. The Company acquired
100% of the issued and outstanding common stock of
Millennium Three in exchange for 4,000,000 shares of the
Company and a $500,000 cash investment in Millennium Three.
The Company acquired 100% of the issued and outstanding
common stock of Sicor in exchange for 19,472,070 shares of
the Company.
EXHIBITS
- --------
Exhibit No. Description
3.1 Articles of Incorporation of EuroSoft Corporation
(formerly known as Strategic Information
Management Incorporated) and Articles of Amendment
3.2 By-laws of EuroSoft Corporation
10.1 Stock Purchase Agreement dated March 21, 1998
between Strategic Information Management
Incorporated and NewSoft GMBH
10.2 Stock Purchase Agreement dated October 2, 1998
between EuroSoft Corp. and Sicor, Inc.
10.3 Stock Purchase Agreement and Share Exchange dated
December 3, 1998 between EuroSoft Corp. and Do it-
Development International Oy
10.4 Stock Purchase Agreement dated December 3, 1998
Between EuroSoft Corp. and Millennium Three
Solutions
10.5 Confidential Offering Circular Dated September 23,
1997, as amended January 29, 1998
10.6 Confidential Term Sheet dated August 6, 1998
21.0 Subsidiaries of the Registration
27.1 Financial Data Schedule
EXHIBIT 3.1 ARTICLES OF INCORPORATION AND ARTICLES OF AMENDMENT
- ---------------------------------------------------------------
ARTICLES OF INCORPORATION
OF
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
The undersigned incorporator hereby forms a corporation under
Chapter 607 of the laws of the State of Florida.
ARTICLE I. NAME
-----------------
The name of the corporation shall be:
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
The address of the principal office of this corporation shall be
660 Madison Avenue, New York, New York 10021 and the mailing
address of the corporation shall be the same.
ARTICLE II. NATURE OF BUSINESS
--------------------------------
This corporation may engage or transact in any or all lawful
activities or business permitted under the laws of the United
States, the State of Florida or any other state, country,
territory or nation.
ARTICLE III. CAPITAL STOCK
----------------------------
The maximum number of shares of stock that this corporation
is authorized to have outstanding at any one time is 50,000,000
shares of common stock having $0.0001 par value per share, and
10,000,000 shares of preferred stock.
ARTICLE IV. REGISTERED AGENT
------------------------------
The street address of the initial registered office of the
corporation shall be 1201 Hays Street, Tallahassee, Florida 32301,
and the name of the initial registered agent of the corporation at
that address is Corporation Service Company.
ARTICLE V. TERM OF EXISTENCE
-----------------------------
This corporation is to exist perpetually.
ARTICLE VI. INCORPORATOR
-------------------------
The name and street address of the incorporator to these
Articles of Incorporation:
Corporation Service Company
1201 Hays Street
Tallahassee, Florida 32301
The undersigned incorporator has executed these Articles of
Incorporation on September 15, 1997.
/S/ Karen B. Rozar
--------------------
Its Agent, Karen B. Rozar
Incorporator
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
ARTICLES I, III AND VII of the Articles of Incorporation of
STRATEGIC INFORMATION MANAGEMENT INCORPORATED shall be amended to
read as follows:
ARTICLE I. NAME
----------------
The name of the corporation shall be:
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
The address of principal office of this corporation shall be 4255
Route 9, Suite D, Freehold, New Jersey, 07728, and the mailing
address of the corporation shall be the same.
ARTICLE III. CAPITAL STOCK
--------------------------
The maximum number of shares of stock that this corporation
is authorized to have outstanding at any one time is 50,000,000
shares of common stock having .0001 par value per share and
10,000,000 shares of preferred stock having .0001 par value per
share.
ARTICLE VII. DIRECTORS
-----------------------
All corporate powers shall be exercised by or under the
authority of, and the business and affairs of the corporation
managed under the direction of its Board of Directors, subject to
any limitation set forth in these Articles of Incorporation. This
corporation shall have one Director, initially.
The names and addresses of the initial members of the Board of
Directors are:
William H. Luckman 4255 Route 9, Suite D
Dir. Freehold, New Jersey 07728
All other paragraphs and articles of the Articles of
Incorporation shall remain unchanged.
The foregoing amendment was adopted by the Incorporator
without shareholder action because shareholder action was not
required.
The forgoing amendment was adopted on the 18th day of
September, 1997.
Corporation Service Company
/s/ Gail Shelby
----------------------------
By: Its Incorporator
Its Agent, Gail Shelby
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
Pursuant to the provision of Chapter 607, Florida Statutes the
undersigned corporation adopts the following articles of amendment
to its articles of incorporation.
FIRST: The name of the corporation is:
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
SECOND: The following amendment(s) to the articles of
incorporation was (were) adopted by the corporation:
The name of the corporation shall be:
EUROSOFT CORPORATION
THIRD: The amendment(s) was (were) adopted by the Board of
Directors on the first day of June, 1998. Shareholder approval
was not required.
Dated:
/s/ William H. Luckman
-----------------------
William Luckman - Director
STATE OF
COUNTY OF
Before me, the undersigned authority, personally appeared William
Luckman to me well known to be the person(s) who executed the
foregoing articles of amendment to the articles of incorporation
and acknowledged before me, according to law, that he/she made and
subscribed the same for the purposes therein mentioned and set
forth.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 4th
day of June, 1998.
/s/ Stacie Lee Coppens
----------------------
Notary public
EXHIBIT 3.2 BYLAWS OF STRATEGIC INFORMATION MANAGEMENT INC.
- -----------------------------------------------------------
BYLAWS
OF
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
ARTICLE I
- ---------
SHAREHOLDERS
- ------------
1. SHARE CERTIFICATES. Certificates evidencing fully-
------------------
paid shares of the corporation shall set forth thereon the
statements prescribed by Section 607.0625 of the Florida Business
Corporation Act ("Business Corporation Act") and by any other
applicable provision of law, must be signed, either manually or in
facsimile, by any one of the following officers: the President, a
Vice President, the Secretary, an Assistant Secretary, the
Treasurer, an Assistant Secretary, or by an officer designated by
the Board of Directors, and may bear the corporate seal or its
facsimile. If the person who signed, either manually or in
facsimile, a share certificate no longer holds office when the
certificate is issued, the certificate is nevertheless valid.
2. FRACTIONAL SHARES OR SCRIP. The corporation may:
---------------------------
issue fractions of a share or pay in money the fair value of
fractions of share: make arrangements, or provide reasonable
opportunity, for any person entitled to or holding a fractional
interest in a share to sell such fractional interest or to
purchase such additional fractional interests as may be necessary
to acquire a full share; and issue scrip in registered or bearer
form, over the manual or facsimile signature of an officer of the
corporation or its agent, entitling the holder to receive a full
share upon surrendering enough scrip to equal a full share. Each
certificate representing scrip must be conspicuously labeled
"scrip" and must contain the information required by of Section
607.0625 of the Business Corporation Act. The holder of a
fractional share is entitled to exercise the rights of a
shareholder, including the right to vote, to receive dividends,
and to participate in the assets of the corporation upon
liquidation. The holder of scrip is not entitled to any of these
rights unless the scrip provides for them. The Board of Directors
may authorize the issuance of scrip subject to any condition
considered desirable, including (a) that the scrip will become
void if not exchanged for full shares before a specified date; and
(b) that the shares for which the scrip is exchangeable may be
sold and the proceeds paid to the scripholders.
3. SHARE TRANSFERS. Upon compliance with any provisions
----------------
restricting the transferability of shares that may be set forth in
the articles of incorporation, these Bylaws, or any written
agreement in respect thereof, transfers of shares of the
corporation shall be made only on the books of the corporation by
the registered holder thereof, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the
Secretary of the corporation, or with a agent or a registrar and
on surrender of the certificate or certificates for such shares properly
endorsed and the payment of all taxes thereon, if any.
Except as may be otherwise provided by law or these Bylaws, the
person in whose name shares stand on the books of the corporation
shall be deemed the owner thereof for all purposes as regards the
corporation; provided that whenever any transfer of shares shall
be made for collateral security, and not absolutely, such fact, if
known to the Secretary of the corporation shall be so expressed in
the entry of transfer.
4. RECORD DATE FOR SHAREHOLDERS. For the purpose of
-----------------------------
determining shareholders entitled to notice of or to vote any
meeting of shareholders to demand a special meeting, or to take
any other action, the Board of Directors, of the corporation may
fix a date as the record date for any such determination of
shareholders, such date in any case to be not more than seventy
days before the meeting or action requiring such determination of
shareholders. A determination of shareholders entitled to notice
of or to vote at a shareholders' meeting is effective for any
adjournment of the meeting unless the Board of Directors fixes a
new record date, which it must do if the meeting is adjourned to a
date more than one hundred twenty days (120) days after the date
fixed for the original meeting.
5. MEANING OF CERTAIN TERMS. As used herein in respect
-------------------------
of the right to notice of a meeting of shareholders or a waiver
thereof or to participate or vote thereat or to consent or dissent
in writing in lieu of a meeting, as the case may be, the term
"share" or "shares" or "shareholder" or "shareholders" refers
to an outstanding share or shares and to a holder or holders of
record of outstanding shares when the corporation is authorized to
issue only on a class of shares, and said reference is also
intended to include any outstanding share or shares and any holder
or holders of record of outstanding shares of any class upon which
or upon whom the articles of incorporation confer such rights
where there are two or more classes or series of shares or upon
whom the Business Corporation Act confers such rights
notwithstanding that the articles of incorporation may provide for
more than one class or series of shares, one or more of which are
limited or denied such rights thereunder.
6. SHAREHOLDER MEETING.
---------------------
-TIME. The annual meeting shall be held on the date fixed
from time to time by the directors. A special meeting shall be
held on the date fixed from time to time by the directors except
when the Business Corporation Act confers the right to call a
special meeting upon the shareholders.
-PLACE. Annual meetings and special meetings shall be held
at such place in or out of the State of Florida as the directors
shall from time to time fix.
-CALL. Annual meetings may be called by the directors or the
Chairman of the Board of Directors, the Vice Chairman of the Board
of Directors, the President , or the Secretary or by an officer
instructed by the directors or the President to call the meeting.
Special meetings may be called in like manner.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER OF NOTICE . The
corporation shall notify shareholders of the date, time, and place
of each annual and special shareholders' meeting. Such notice
shall be no fewer than ten or more than sixty days before the
meeting date. Unless the Business Corporation Act or the articles
of incorporation require otherwise, notice of an annual meeting
need not include a description of the purpose or purposes for
which the meeting need not include a description of the purpose or
purposes for which the meeting is called. Notice shall be given
in the manner provided in Section 607.0141 of the Business
Corporation Act, by or at the direction of the President, the
Secretary, or the officer or persons calling the meeting. Notice
of a special meeting must include a description of the purpose or
purposes for which the meeting is called. Unless the Business
Corporation Act or the articles of incorporation require
otherwise, the corporation is required to give notice only to
shareholders entitled to vote at the meeting. A shareholder may
waive any notice required by the Business Corporation Act, the
articles of incorporation, or the Bylaws before or after the date
and time stated in the notice. The waiver must be in writing, be
signed by the shareholder entitled to the notice, and be delivered
to the corporation for inclusion in the objection to lack of
notice or defective notice of the meeting, unless the shareholder
at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting; or waives objection to
consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice,
unless the shareholder objects to considering the matter when it
is presented.
-VOTING LIST FOR MEETING. After fixing a record date for a
meeting, the corporation shall prepare an alphabetical list of the
names of all its shareholders who are entitled to notice of a
shareholders' meeting, arranged by voting group, with the address
of and number and class and series, if any of shares held by each
shareholder. The shareholders' list must be available for
inspection by any shareholder, for a period of ten days prior to
the meeting or such sorter time as exists between the record date
and the meeting and continuing through the meeting at the
corporation's principal office, or at a place identified in the
meeting notice in the city where the meeting will be held, or at
the office, of the corporation's transfer agent or registrar. A
shareholder, his agent or attorney is entitled on written demand
to inspect the list subject to the requirements of Section
607.1602(3) of the Business Corporation Act, to copy the list,
during regular business hours and at his expense, during the
period it is available for inspection. The corporation shall make
the shareholders' list available at the meeting, and any
shareholder, or his agent or attorney is entitled
to inspect the list at any time during the meeting or any
adjournment.
-CONDUCT OF MEETING. Meetings of the shareholders shall be
presided over by one of the following officers in the order of
seniority and if present and acting - the Chairman of the Board,
if any, the Vice Chairman of the Board, if any, the President, a
Vice President, if any, or, if none of the foregoing is in office
and present and acting, by a chairman to be chosen by the
shareholders. The Secretary of the corporation, or his absence,
an Assistant Secretary, shall act as secretary of every meeting,
but, if neither the Secretary nor an Assistant Secretary is
present, the chairman of the meeting shall appoint a secretary of
he meeting.
-PROXY REPRESENTATION. A shareholder may appoint a proxy to
vote or otherwise act for him by signing an appointment from,
either personally or his attorney-in-fact. An appointment of a
proxy is effective when received by the Secretary or other officer
or agent authorized to tabulate votes. An appointment is valid
for up to eleven months, unless a longer period is expressly
provided in the appointment form. An appointment of a proxy is
revocable by the shareholder unless the anointment form
conspicuously states that it is irrevocable and the appointment is
coupled with an interest.
-SHARES HELD BY NOMINEES. The corporation may establish a
procedure by which the beneficial owner of shares that are
registered in the name of a nominee is recognized by the
corporation as the shareholder. The extent of this recognition
may be determined in the procedure.
-QUORUM . Unless the articles of incorporation or the
Business Corporation Act provides otherwise, a majority of the
votes entitled to be cast on a matter by a voting a group
constitutes a quorum o that voting group for action on that
matter. Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those
shares exists with respect to that matter. Once a share is
represented for any purpose at a meeting, it is deemed present for
quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record
date is or must be set for that adjourned meeting.
-VOTING. Directors are elected by a plurality of the votes
cast by the shares entitled to vote in the election at a meeting
at which a quorum is present. If a quorum exists, action on a
matter, other than the election of directors, by a voting group
is approved if the votes cast within the voting group favoring the
action exceed the votes cast opposing the action, unless the
articles of incorporation or the Business Corporation Act requires
a greater number of affirmative votes.
7. ACTION WITHOUT MEETING. Unless otherwise provided in
-----------------------
the articles of incorporation action required or permitted by the
provisions of the Business Corporation Act to be taken at an
annual or special meeting of shareholders may be taken without a
meeting, without prior notice, and without a vote if the action is
taken by the holders of outstanding stock of each voting group
entitled to vote thereon having not less than the minimum number
of votes with respect to each voting group that would be necessary
to authorize or take such action at a meeting at which all voting
groups and shares entitled to vote hereon were present and voted.
In order to be effective the action must be evidenced by one or
more written consents describing the action taken , dated and
signed by approving shareholders having the requisite number of
each voting group entitled to vote thereon, and delivered to the
corporation by delivery to its principal office in State of
Florida, its principal place of business, the corporate Secretary,
or another officer or agent of the corporation having custody of the
book in which proceedings of meetings of shareholders are
recorded. No written consent shall be effective to take the
corporate action referred to therein, unless within sixty days of
the date of the earliest dated consent delivered in the manner
require by Section 607.0704 of the Business Corporation Act,
written consents signed by holders of shares having the number of
votes required to take action are delivered to the corporation by
delivery as set forth in Section 607.0704 of the Florida Business
Corporation Act. Action under thus paragraph be subject to the
requirements of Section 607.0704 of the Business Corporation Act.
ARTICLE II
----------
BOARD OF DIRECTORS
------------------
1. FUNCTIONS GENERALLY - COMPENSATION. All corporate
-----------------------------------
powers shall be exercised by or under the authority of, and the
business and affairs of the corporation managed under the
direction of, a Board of Directors. The Board may fix the
compensation of directors.
2. QUALIFICATIONS AND NUMBER. A director need not be a
--------------------------
shareholder, a citizen of the United States, or a resident of the
State of Florida. The initial Board of Directors shall consist of
one person, which shall be the number of directors until changed.
Thereafter, the number of directors shall not be less than one (1)
nor more than ten (10). The number of directors may be fixed or
changed from time to time by the shareholders. The number shall
never be less than one.
3. TERMS AND VACANCIES. The Terms of the initial
--------------------
directors of the corporation expire at the first shareholders'
meeting at which directors are elected. The terms of all other
directors expire at the next annual shareholders' meeting
following their election. A decrease in the number of directors
does not shorten an incumbent director's term. The term of a
director elected to fill a vacancy expires at the next
shareholders' meeting at which directors are elected. Despite the
expiration of a director's term, the director continues to serve until his
successor is elected and qualifies or until there is a
decrease in the number of directors. Whenever a vacancy occurs on
the Board of Directors, including a vacancy resulting from an
increase in the numbers of directors, it may be filled by the
affirmative vote of a majority of the remaining directors, through
less than a quorum of the Board of Directors, or by the
shareholders, unless the articles of incorporation provide
otherwise.
4. MEETINGS.
---------
-TIME. Meetings shall be held at such time as the Board
shall fix, except that the first meeting of a newly elected Board
shall be held as soon after its election as the directors may
conveniently assemble.
-PLACE. The Board of Directors may hold regular or special
meetings in or out of the State of Florida at such place as shall
be fixed by the Board.
-CALL. No call shall be required for regular meetings for
which time and place have been fixed. Special meetings may be
called by or at the direction of the Chairman of the Board, if
any, the Vice Chairman of the Board, if any, of the President, or
of a unanimous decision by all of the directors in office.
-NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. Regular meetings
of the Board of Directors may be held without notice of the date,
time, place, or purpose of the meeting. Written, or oral, notice
of the time and place shall be given for special meetings in
sufficient time for the convenient assembly of the directors
thereat. The notice of a special meeting need not describe the
purpose of the meeting. Notice of a meeting of the Board of
Directors need not given to any director who signs a waiver of
notice of such meeting and a waiver of any and all objection to
the place of the meeting, the time of the meeting, or the manner
in which it has been called or convened, except when a director
states, at the beginning of the meeting or promptly upon arrival
at the meeting, any objection to the transaction of business
because the meeting is not lawfully called or convened.
-QUORUM AND ACTION. A quorum of the Board of Directors
consists of a majority of the number of directors prescribed in or
fixed in accordance with these Bylaws. If a quorum is present when
a vote is taken, the affirmative vote of a unanimous vote of
directors present is the act of the Board of Directors. The Board
of Directors may permit any or all directors to participate in a
regular or special meeting by, or conduct the meeting through use
of, any means of communication by which all directors
participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is
deemed to be present in person at the meeting.
-CHAIRMAN OF THE MEETING. Meetings of the Board of Directors
shall be presided over by the following directors in the order of
seniority and if present and acting the Chairman of the Board, if
any, the Vice Chairman of the Board, if any, the President, or any
other director chosen by the Board.
5. REMOVAL OF DIRECTORS . The shareholders may remove
----------------------
one or more directors with or without cause pursuant to the
provisions of Section 607.0808 of the Business Corporation Act.
6. COMMITTEES. The Board of Directors by resolution
-----------
adopted by a majority of the full Board of Directors, may
designate from among its members an executive committee and one or
more other committees each of which, to the extent provided in
such resolution or in the articles of incorporation or the Bylaws,
shall have and may exercise all the authority of the Board of
Directors, except such authority as may not be delegated under the
Business Corporation Act. Each committee may have two or more
members, who serve at the pleasure of the Board of Directors. The
provisions of Sections 607.082, 607.0823, and 607.0824 of the
Business Corporation Act, which govern meetings, notice and waiver
of notice, and quorum and voting requirements, apply to committees
and their members as well.
7. ACTION WITHOUT MEETING. Action required or permitted
-----------------------
by the Business Corporation Act to be taken at a Board of
Directors' meeting or committee meeting may be taken without a
meeting if the action is taken by all members of the Board or of
the committee. The action must be evidenced by one or more
written consents describing the action taken, signed by each
director or committee member. Action taken under this paragraph
is effective when the last director signs the consent, unless the
consent specifies a different effective date.
ARTICLE III
-----------
OFFICERS
--------
The corporation shall have a President, and a Secretary, and
such other officers as may be deemed necessary, who may be
appointed by the directors. The same individual may
simultaneously hold more than one office in the corporation.
A duly appointed officer may appoint one or more officers or
assistant officers is authorized by the Board of Directors.
Each officer of the corporation has the authority and shall
perform the duties prescribed by the Board of Directors or by
direction of an officer authorized by the Board of Directors to
prescribe the duties of other officers; provided, that the
Secretary shall have the responsibility for preparation and
custody of minutes of the directors' and shareholders' meetings
and for authenticating records of the corporation.
The Board of Directors may remove any officer at any time
with or without cause.
ARTICLE IV
----------
REGISTERED OFFICE AND AGENT
- ---------------------------
The address of the initial registered office of the
corporation and the name of the initial registered agent of the
corporation are set forth in the original articles of
incorporation.
EXHIBIT 10.1 - STOCK PURCHASE AGREEMENT BETWEEN STRATEGIC
INFORMATION MANAGEMENT INC. AND NEWSOFT GMBH
- -----------------------------------------------------------------
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
a Florida Corporation
and
NEWSOFT GMBH
a German Corporation
effective as of March 21, 1998
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and
entered into this 21st day of March, 1998, by and among Strategic
Information Management Incorporated, a Florida corporation with
its principal place of business located at 777 South Flagler
Drive, 8th Floor, West Tower, West Palm Beach, Florida 33401
("SIMI"), NewSoft GmbH, a German Corporation with its principal
place of business at Am Altenrod 7, D-35321, Laubach, Germany
("NewSoft") and the individuals listed on Exhibit "A" attached
hereto and specifically incorporated herein by this reference (the
"NewSoft Shareholders"), (NewSoft and NewSoft Shareholders jointly
referred to as the "NewSoft Parties") and Sicor, Inc., a Florida
corporation, with its principal place of business located at 777
South Flagler Drive, 8th Floor, West Tower, West Palm Beach,
Florida 33401 ("Sicor").
Premises
A. This Agreement provides for the acquisition of NewSoft
by SIMI whereby NewSoft shall become a wholly owned subsidiary of
SIMI and in connection therewith, the issuance of 275,000 ($
0.0001 par value per share) shares of restricted common stock of
SIMI to the NewSoft Shareholders as designated on Exhibit "A"
250,000 ($0.0001 par value per share) shares of restricted common
stock of Sicor and other consideration.
B. The boards of directors of NewSoft, SIMI and Sicor
have determined, subject to the terms and conditions set forth in
this Agreement, that the transaction contemplated hereby is
desirable and in the best interests of their stockholders,
respectively. This Agreement is being entered into for the
purpose of setting forth the terms and conditions of the proposed
acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
SIMI
As an inducement to and to obtain the reliance of NewSoft,
SIMI represents and warrants as follows:
Section 1.1 Organization. SIMI is a corporation duly
organized, validly existing, and in good standing under the laws
of Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification. Included in the SIMI Schedules (as
hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of SIMI
as in effect on the date hereof. The execution and delivery of
this Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of SIMI's articles of incorporation
or bylaws. SIMI has full power, authority and legal right and has
taken all action required by law, its articles of incorporation,
its bylaws or otherwise to authorize the execution and delivery of
this Agreement.
Section 1.2 Capitalization. The authorized
capitalization of SIMI consists of 50,000,000 Common Shares,
$0.0001 par value per share, and 10,000,000 Preferred Shares,
$0.0001 par value per share. As of the date hereof, SIMI has
4,925,000 common shares issued and outstanding, of which 2,000,000
are unrestricted. SIMI is not presently a public company. Within
ninety (90) days after the closing herein, it intends to file Form
211 for the purpose of being traded on the NASDAQ OTC Bulletin
Board.
As of the Closing Date hereof, no shares of Preferred Stock will
be issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person. SIMI
has no other securities, warrants or options authorized or issued.
Section 1.3 Subsidiaries and Predecessor Corporations.
SIMI does not have any other subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 1.4 Options and Warrants. There are no existing
options, warrants, calls or commitments of any character to which
SIMI is a party and by which it is bound.
Section 1.5 Financing. SIMI undertook a Regulation D,
504 Offering, whereby SIMI raised $50,000 and issued 2,000,000
shares of SIMI to such investors. Such shares are included in the
issued and outstanding shares as set forth in Section 1.2
hereinabove.
Section 1.6 Litigation and Proceedings. To the best of
SIMI's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
SIMI or affecting SIMI or its properties, at law or in equity,
before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that
would have a material adverse affect on the business, operations,
financial condition or income of SIMI. SIMI does not have any
knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality or of
any circumstances which, after reasonable investigation, would
result in the discovery of such a default.
Section 1.7 Material Contract Defaults. To the best of
SIMI's knowledge and belief, SIMI is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of SIMI, and
there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which SIMI has not taken adequate steps to prevent such a default
from occurring.
Section 1.8 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which SIMI is
a party or to which any of its properties or operations are
subject.
Section 1.9 Governmental Authorizations. To the best
of SIMI's knowledge, SIMI has all licenses, franchises, permits or
other governmental authorizations legally required to enable SIMI
to conduct its business in all material respects as conducted on
the date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by SIMI
of this Agreement and the consummation of SIMI of the transactions
contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES OF SICOR
As an inducement to and to obtain the reliance of NewSoft,
Sicor represents and warrants as follows:
Section 2.1 Organization. Sicor is a corporation duly
organized, validly existing, and in good standing under the laws
of Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification. Included in the Sicor Schedules (as
hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of Sicor
as in effect on the date hereof. The execution and delivery of
this Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of Sicor's articles of
incorporation or bylaws. Sicor has full power, authority and
legal right and has taken all action required by law, its articles
of incorporation, its bylaws or otherwise to authorize the
execution and delivery of this Agreement.
Section 2.2 Capitalization. The authorized
capitalization of Sicor consists of 50,000,000 Common Shares,
$0.0001 par value per share, and 10,000,000 Preferred Shares,
$0.0001 par value per share.
As of March 13, 1998, Sicor has 10,879,050 common shares issued
and outstanding. Sicor is not presently a public company.
As of the Closing Date hereof, no shares of Preferred Stock will
be issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person. Sicor
has no other securities, warrants or options authorized or issued.
Section 2.3 Subsidiaries and Predecessor Corporations.
Other than SIMI, Sicor does not have any other subsidiaries and
does not own, beneficially or of record, any shares of any other
corporation.
Section 2.4 Options and Warrants. There are no existing
options, warrants, calls or commitments of any character to which
Sicor is a party and by which it is bound.
Section 2.5 Litigation and Proceedings. To the best of
Sicor's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
Sicor or affecting Sicor or its properties, at law or in equity,
before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind that would
have a material adverse affect on the business, operations,
financial condition or income of Sicor. Sicor does not have any
knowledge of any default on its part with respect to any judgment,
order, writ, injunction, decree, award, rule or regulation of any
court, arbitrator or governmental agency or instrumentality or of
any circumstances which, after reasonable investigation, would
result in the discovery of such a default.
Section 2.6 Material Contract Defaults. To the best of
Sicor's knowledge and belief, Sicor is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of Sicor,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which Sicor has not taken adequate steps to prevent such a default
from occurring.
Section 2.7 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which Sicor is
a party or to which any of its properties or operations are
subject.
Section 2.8 Governmental Authorizations. To the best of
Sicor's knowledge, Sicor has all licenses, franchises, permits or
other governmental authorizations legally required to enable Sicor
to conduct its business in all material respects as conducted on
the date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by Sicor
of this Agreement and the consummation of Sicor of the
transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF NEWSOFT
As an inducement to, and to obtain the reliance of SIMI and
Sicor, NewSoft represents and warrants as follows:
Section 3.1 Organization. NewSoft is a corporation
duly organized, validly existing and in good standing under the
laws of Germany and has the corporate power and is duly
authorized, qualified, franchised and licensed under all
applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry
on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign
entity in the country or states in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the NewSoft
Schedules (as hereinafter defined) are complete and correct copies
of the articles of incorporation, bylaws and amendments (or German
equivalent documents) thereto of NewSoft as in effect on the date
hereof. The execution and delivery of this Agreement does not and
the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate
any provision of NewSoft's certificate of incorporation or bylaws
(or German equivalent documents). NewSoft has full power,
authority and legal right and has taken all action required by
law, its articles of incorporation, bylaws or otherwise to
authorize the execution and delivery of this Agreement.
Section 3.2 Capitalization. The authorized
capitalization of NewSoft consists of 500 votes. As of the date
hereof there are 500 votes issued and outstanding to the
following: Jorg Zimmermann - 400; Erika Zimmermann- 100. All
issued and outstanding NewSoft shares have been legally issued,
partially paid, are nonassessable and will be fully paid as of
April 15, 1998.
Section 3.3 Subsidiaries. NewSoft has no subsidiary
companies.
Section 3.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of
NewSoft are in all material respects complete and correct and have
been maintained in accordance with good business accounting
practices; and
(b) Except for income taxes\VAT due for the 1997 tax
year, NewSoft has no liabilities with respect to the payment of
any country, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
Section 3.5 Information. The information concerning
NewSoft as set forth in this Agreement and in the NewSoft
Schedules is complete and accurate in all material respects and
does not contain any untrue statement of a material fact or omit
to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not
misleading.
Section 3.6 Absence of Certain Changes or Events.
Except as described herein or in the NewSoft Schedules, since
December 31, 1997 :
(a) NewSoft has not: (i) amended its certificate of
incorporation or bylaws; (ii) waived any rights of value which in
the aggregate are extraordinary or material considering the
business of NewSoft; (iii) made any material change in its
method of management, operation or accounting; or (iv) made any
accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to
any present or former officer or employee;
(b) NewSoft has not: (i) granted or agreed to grant any
options, warrants or other rights for its certificates, bonds or
other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; and
(c) to the best knowledge of NewSoft, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of NewSoft.
Section 3.7 Title and Related Matters. NewSoft has
good and marketable title to and is the sole and exclusive owner
of all of its properties, inventory, interests in properties and
assets, real and personal (collectively, the "Assets") which are
reflected in the most recent NewSoft balance sheet and the NewSoft
Schedules or acquired after that date (except properties,
interests in properties and assets sold or otherwise disposed of
since such date in the ordinary course of business), free and
clear of all liens, pledges, charges or encumbrances. Except as
set forth in the NewSoft Schedules, NewSoft owns free and clear of
any liens, claims, encumbrances, royalty interests or other
restrictions or limitations of any nature whatsoever and all
procedures, techniques, marketing plans, business plans, methods
of management or other information utilized in connection with
NewSoft's business. Except as set forth in the NewSoft Schedules,
no third party has any right to, and NewSoft had not received any
notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade
secrets, know-how, proprietary techniques, trademarks, service
marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the
business, operations, financial conditions or income of NewSoft or
any material portion of its properties, assets or rights.
Section 3.8 Litigation and Proceedings. There are no
actions, suits or proceedings pending or, to the best of NewSoft's
knowledge and belief, threatened by or against or affecting
NewSoft, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind that would have a material
adverse effect on the business, operations, financial condition,
income or business prospects of NewSoft. NewSoft does not have
any knowledge of any default on its part with respect to any
judgement, order, writ, injunction, decree, award, rule or
regulation of any court, arbitrator or governmental
agency or instrumentality.
Section 3.9 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which
NewSoft is a party or by which it or any of its properties are
bound;
(b) NewSoft is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future may (as far as NewSoft can now foresee) materially and
adversely affect, the business, operations, properties, assets or
conditions of NewSoft; and
(c) NewSoft is not a party to any material oral or
written: (i) contract for the employment of any officer or
employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension, benefit or retirement plan,
agreement or arrangement covered by Title IV of the Employee
Retirement Income Security Act, as amended; (iii) agreement,
contract or indenture relating to the borrowing of money; (iv)
guaranty of any obligation for the borrowing of money or
otherwise, excluding endorsements made for collection and other
guaranties of obligations, which, in the aggregate exceeds $1,000;
(v) consulting or other similar contract with an unexpired term of
more than one year or providing for payments in excess of $10,000
in the aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments by it
for more than $10,000 in the aggregate.
Section 3.10 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which NewSoft
is a party or to which any of its properties or operations are
subject.
Section 3.11 Material Contract Defaults. To the best of
NewSoft's knowledge and belief, NewSoft is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of NewSoft,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which NewSoft has not taken adequate steps to prevent such a
default from occurring.
Section 3.12 Governmental Authorizations. To the best
of NewSoft's knowledge, NewSoft has all licenses, franchises,
permits and other governmental authorizations that are legally
required to enable it to conduct its business operations in all
material respects as conducted on the date hereof. Except for
compliance with federal and state securities or corporation laws,
no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by
NewSoft of the transactions contemplated hereby.
Section 3.13 Compliance With Laws and Regulations. To
the best of NewSoft's knowledge and belief, NewSoft has complied
with all applicable statutes and regulations of any federal, state
or other governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely
affect the business; operations, properties, assets or condition
of NewSoft or would not result in NewSoft's incurring any material
liability.
Section 3.14 Insurance. All of the insurable
properties of NewSoft are insured for NewSoft's benefit in
accordance with the insurance policies disclosed in the NewSoft
Schedules under valid and enforceable policy or policies
containing substantially equivalent coverage and will be
outstanding and in full force at the Closing Date.
Section 3.15 Approval of Agreement. The holders of a
majority of the Common Voting Shares outstanding of NewSoft have
authorized the execution and delivery of the Agreement by NewSoft
and have approved the transactions contemplated hereby.
Section 3.16 Material Transactions or Affiliations.
As of the Closing Date, there will exist no material contract,
agreement or arrangement between NewSoft and any person who was at
the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by NewSoft to own
beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of NewSoft and which is to be performed
in whole or in part after the date hereof. NewSoft has no
commitment, whether written or oral, to lend any funds to, borrow
any money from or enter into any other material transactions with,
any such affiliated person.
Section 3.17 Labor Relations. NewSoft has never had a
work stoppage resulting from labor problems.
Section 3.18 NewSoft Schedules. Upon execution
hereof, NewSoft shall deliver to SIMI the following schedules,
which are collectively referred to as the "NewSoft Schedules"
which are dated the date of this Agreement, all certified by an
officer of NewSoft to be complete, true and accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and amendment (or German equivalent) thereto
of NewSoft as in effect as of the date of this Agreement;
(b) copies of two (2) previous years financial statements
of NewSoft;
1. copies of two (2) previous years income and any other tax
returns of NewSoft;
2. all contracts of NewSoft presently in effect, including,
but not limited to, the Panorama Software contract;
3. Disclosure Statement, and Officers and Directors
Questionnaires, both required for filing Form 211 with the NASD
for purposes of applying to the NASDAQ OTC Bulletin Board;
(f) the description of any material adverse change in the
business, operations, property, assets, or condition of NewSoft
since December 31, 1997 required to be provided pursuant to
Section 2.5; and
(g) any other information, together with any required
copies of documents, required to be disclosed in the NewSoft
Schedules by Sections 3.1 through 3.17.
NewSoft shall cause the NewSoft Schedules and the instruments
to be delivered to SIMI hereunder to be updated after the date
hereof up to and including the Closing Date.
ARTICLE IV
----------
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 4.1 Share Exchange/Delivery of NewSoft
Securities.
On the Closing Date, the holders of NewSoft Common Shares (or
the German equivalent) shall deliver to SIMI (i) certificates or
other documents evidencing all of the issued and outstanding
NewSoft Common Shares, duly endorsed in blank or with executed
power attached thereto in transferrable form (or its German
equivalent). On the Closing Date, all previously issued and
outstanding Common Shares of NewSoft (or its German equivalent)
shall be canceled and all rights in respect thereof shall cease
and SIMI shall receive such shares in NewSoft, the German
corporation, so that NewSoft shall become a wholly owned
subsidiary of SIMI. NewSoft's German legal counsel shall take all
appropriate action in Germany to confirm such transaction.
Section 4.2 Issuance of NewSoft Common Shares. In
exchange for all of the NewSoft Common Shares tendered pursuant to
Section 4.1, SIMI shall issue an aggregate of 275,000 "restricted"
SIMI Common Shares as follows: Jorg Zimmermann 275,000 shares.
Such shares shall be "restricted" for two (2) years from issuance.
Section 4.3 Other Consideration. NewSoft shall receive the
following additional consideration:
(a) $60,000.00 payable at the Closing Date;
(b) $20,000.00 per month for a twelve (12) month period
commencing thirty (30) days after the Closing Date;
(c) Nigel Kaufman and Jorg Zimmermann shall each receive
twenty (20%) percent of the Earnings Before Income Tax (determined
in accordance with generally accepted accounting principles in the
United States) of SIMI.
(d) 250,000 "Restricted" Sicor, Inc. Common Shares
(restricted for a two year period from issuance) as follows:
250,000 to Jorg Zimmermann.
(e) Management Incentive Shares - Nigel Kaufman and Jorg
Zimmermann shall receive the following additional common shares of
SIMI (restricted for a two year period from the date of issuance):
(i) If for 1998, Gross Revenues (as determined in accordance with
generally accepted accounting principles in the United States) of
SIMI (based on this acquisition of NewSoft solely, specifically, the
NewSoft German operations) are in excess of $2,000,000 U.S.,
an additional 250,000 shares each of SIMI shall be issued to the
NewSoft Shareholders; (ii) If for 1998, Gross Revenues (as
determined in accordance with generally accepted accounting
principles in the United States) of SIMI (based on this
acquisition of NewSoft solely, specifically, the NewSoft German
operations) are in excess of $5,000,000 U.S., an additional
250,000 shares each of SIMI shall be issued to the NewSoft
Shareholders.
(f) NewSoft is presently negotiating a transaction with
Telekom regarding the ADABAS feature. If such transaction is
consummated, all profits regarding such transaction shall be
divided as follows: 40% - Kaufman; 40% - Zimmermann; 20% - SIMI.
(g) NewSoft presently has a contract with Panorama, Inc.
Pursuant to this agreement, NewSoft has agreed to give up its
exclusive contract with Panorama for 1998 for the following
consideration. Such contract provides for an initial payment of
$20,000 to each of Nigel Kaufman and Jorg Zimmermann and ten (10)
additional payments of $10,000 to each of Nigel Kaufman and Jorg
Zimmermann. The terms of the contract require that payments be
made to NewSoft directly. After this Agreement is completed, SIMI
shall be the sole shareholder of NewSoft. Therefore, SIMI hereby
agrees to pay Kaufman and Zimmermann equally such amounts after
received from Panorama, Inc.
Section 4.3 Events Prior to Closing. Upon execution
hereof or as soon thereafter as practical, management of NewSoft
and SIMI shall execute, acknowledge and deliver (or shall cause to
be executed, acknowledged and delivered) any and all certificates,
opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so
delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel
in order to effectuate or evidence the transactions contemplated
hereby, subject only to the conditions to Closing referenced
hereinbelow.
Section 4.4 Closing. The closing ("Closing") of the
transactions contemplated by this Agreement shall be on or about
March 21, 1998 ("Closing Date").
Section 4.5 Termination.
(a) This Agreement may be terminated by the board of
directors or majority interest of Shareholders of either SIMI,
Sicor or NewSoft, respectively, at any time prior to the Closing
Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of directors,
made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by
this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of
this Section 4.5, no obligation, right, or liability shall arise
hereunder and each party shall bear all of the expenses incurred
by it in connection with the negotiation, drafting and execution
of this Agreement and the transactions herein contemplated;
(b) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of SIMI or
Sicor if NewSoft shall fail to comply in any material respect with
any of its covenants or agreements contained in this Agreement or
if any of the representations or warranties of NewSoft contained
herein shall be inaccurate in any material respect, which
noncompliance or inaccuracy is not cured after 20 days written
notice thereof is given to NewSoft. If this Agreement is
terminated pursuant to this paragraph (b) of this Section 4.5,
this Agreement shall be of no further force or effect and no
obligation, right or liability shall arise hereunder.
Section 4.6 Directors of SIMI After Acquisition. Upon
the Closing, the Board of Directors of SIMI shall be the
following: William H. Luckman, Nigel Kaufman and Jorg Zimermann.
Each director shall hold office until his successor shall have
been duly elected and shall have qualified or until his earlier
death, resignation or removal. Notwithstanding same, Messrs.
Kaufman and Zimmermann shall be directors for at least a three (3)
year period from closing. The majority of shareholders can not
vote otherwise during such three (3) year period, unless each is
terminated in accordance with employment agreements based on "cause"
only.
Section 4.7 Officers of SIMI. Upon the closing, the
following persons shall be elected as officers of SIMI in
accordance with procedures set forth in the SIMI bylaws:
NAME OFFICE
- ----- ------
William H. Luckman Chief Executive Officer and
President
William H. Luckman Treasurer
William H. Luckman Secretary
Section 4.8 Post Closing Requirements of German Operation
Company. Subsequent to closing of this transaction, the German
operating company (wholly-owned subsidiary of SIMI) shall
undertake the following: (i) provide all financial information
to William H. Luckman on a bi-weekly basis; (ii) maintain a Year
2000 factory and operational facilities in Germany in a commercial
office space acceptable to William H. Luckman, in his sole and
absolute discretion; (iii) maintain a separate operating bank
account in the United States, in which William H. Luckman shall
have sole signatory authority and discretion; (iv) provide William
H. Luckman duplicate statements of the German bank account
immediately after receipt of same; and (v) after Closing, an audit
of NewSoft's previous financial statements shall be audited for
United States tax purposes, at the sole expense of SIMI. NewSoft
and the NewSoft Shareholders shall cooperate fully with SIMI
regarding same.
ARTICLE V
---------
SPECIAL COVENANTS
Section 5.1 Access to Properties and Records. Prior
to closing, NewSoft , SIMI and Sicor will each afford to the
officers and authorized representatives of the other full access
to the properties, books and records of NewSoft, SIMI and Sicor as
the case may be, in order that each may have full opportunity to
make such reasonable investigation as it shall desire to make of
the affairs of the other and each will furnish the other with such additional
financial and operating data and other information as
to the business and properties of NewSoft, SIMI and Sicor as the
case may be, as the other shall from time to time reasonably
request.
Section 5.2 Availability of Rule 144. Each of the
parties acknowledge that the stock of both SIMI and Sicor to be
issued pursuant to this Agreement will be "restricted securities,
" as that term is defined in Rule 144 promulgated pursuant to the
Securities Act. SIMI and Sicor are under no obligation to
register such shares under the Securities Act, or otherwise. The
stockholders of SIMI and Sicor holding restricted securities of
SIMI as of the date of this Agreement and their respective heirs,
administrators, personal representatives, successors and assigns,
are intended third party beneficiaries of the provisions set forth
herein. The covenants set forth in this Section 5.2 shall survive
the Closing and the consummation of the transactions herein
contemplated. All "restricted" shares issued in accordance with
this Agreement shall be restricted in accordance with Rule 144 for
two (2) years from the date of issuance.
Section 5.3 Special Covenants and Representations
Regarding the NewSoft Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of the
SIMI and Sicor Common Shares to the Shareholders of NewSoft as
contemplated hereby, constitutes the offer and sale of securities
under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under
which the NewSoft Shareholders acquire such securities.
Section 5.4 Third Party Consents. NewSoft, SIMI and
Sicor agree to cooperate with each other in order to obtain any
required third party consents to this Agreement and the
transactions herein contemplated.
Section 5.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the NewSoft Schedules or
as permitted or contemplated by this Agreement, NewSoft will each
use its best efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of good
repair and condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal
and state laws and all rules, regulations and orders imposed by
federal or state governmental authorities in Germany.
(b) From and after the date of this Agreement until the
Closing Date, NewSoft will not, without the prior consent of
SIMI and Sicor:
(i) except as otherwise specifically set forth herein,
make any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers;
(v) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date hereof
to acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
Section 5.6 Indemnification.
(a) NewSoft and Jorg Zimmermann and Nigel Kaufman,
individually, hereby agree to indemnify SIMI and Sicor each of the
officers, agents and directors of SIMI and Sicor as of the date of
execution of this Agreement including, but not limited to William
H. Luckman, against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending
against and litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject arising out of
or based on any inaccuracy appearing in or misrepresentation made
in this Agreement, including, but not limited to,
misrepresentations by Erika Zimmermann . The indemnification
provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and
termination of this Agreement; and
(b) SIMI and Sicor and its officers and directors hereby
agrees to indemnify NewSoft and each of the officers, agents,
directors and current shareholders of NewSoft as of the Closing
Date against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject arising out of
or based on any inaccuracy appearing in or misrepresentation made
in this Agreement and particularly the representation regarding
no liabilities referred to in Section 3.4 (b). The
indemnification provided for in this Section shall survive the
Closing and consummation of the transactions contemplated hereby
and termination of this Agreement.
ARTICLE VI
----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF SIMI
The obligations of SIMI and Sicor under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 6.1 Accuracy of Representations. The
representations and warranties made by NewSoft in this Agreement
were true when made and shall be true at the Closing Date with the
same force and effect as if such representations and warranties
were made at the Closing Date (except for changes therein
permitted by this Agreement), and NewSoft shall have performed or
compiled with all covenants and conditions required by this
Agreement to be performed or complied with by NewSoft prior to or
at the Closing. SIMI and Sicor shall be furnished with a
certificate, signed by a duly authorized officer of NewSoft and
dated the Closing Date, to the foregoing effect.
Section 6.2 Shareholder Approval. All of the
Shareholders of NewSoft shall have approved this Agreement and the
transactions contemplated herein.
Section 6.3 Officer's Certificate. SIMI and Sicor
shall have been furnished with a certificate dated the Closing
Date and signed by a duly authorized officer of NewSoft to the
effect that: (a) the representations and warranties of NewSoft
set forth in the Agreement and in all Exhibits, Schedules and
other documents furnished in connection herewith are in all
material respects true and correct as if made on the Effective
Date; (b) NewSoft has performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of
this Agreement to be performed, satisfied or complied with by it
as of the Effective Date; (c) since such date and other than as
previously disclosed to SIMI, Sicor and NewSoft have not entered
into any material transaction other than transactions which are
usual and in the ordinary course if its business; and (d) No
litigation, proceeding, investigation or inquiry is pending or, to
the best knowledge of NewSoft, threatened, which might result in
an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or,
to the extent not disclosed in the NewSoft Schedules, by or
against NewSoft which might result in any material adverse change
in any of the assets, properties, business or operations of
NewSoft.
Section 6.4 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change
in the financial condition, business or operations or NewSoft.
Section 6.5 Opinion of Counsel to NewSoft. SIMI and
Sicor shall receive an opinion dated the Closing date of March 21,
1998, counsel to NewSoft, in substantially the following form:
(a) NewSoft is a corporation duly organized, validly
existing, and in good standing under the laws of Germany and has
the corporate power and is duly authorized, qualified, franchised
and licensed under all material applicable laws, regulations,
ordinances and orders of public authorities to own all of its
properties and assets and to conduct its business as now
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by
it requires qualifications;
(b) To the best knowledge of such legal counsel, the
execution and delivery by NewSoft of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of NewSoft's certificate of
incorporation or Bylaws or violate any court order, writ,
injunction or decree applicable to NewSoft, or its properties or
assets;
(c) All issued and outstanding Share Certificates are
legally issued, fully paid and nonassessable. Except as set forth
in the NewSoft Schedules, to the best knowledge of such legal
counsel, there are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or
commitments obligating NewSoft to issue any additional Share
Certificates.
(d) This Agreement has been duly and validly authorized,
executed and delivered by NewSoft;
(e) To the best knowledge of such legal counsel, except
as set forth in the NewSoft Schedules, there are no actions, suits
or proceedings pending or threatened by or against or affecting
NewSoft or its properties, at laws or in equity, before any court
or other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind;
(f) NewSoft has taken all actions required by the
applicable laws of Germany to permit the acquisition of the
outstanding shares of NewSoft into SIMI.
Section 6.6 Other Items. SIMI shall have received
such further documents, certificates or instruments relating to
the transactions contemplated hereby as SIMI may reasonably
request.
ARTICLE VII
-----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF NEWSOFT
The obligations of NewSoft under this Agreement are subject
to the satisfaction, at or before the Closing date (unless
otherwise indicated herein), of the following conditions:
Section 7.1 Accuracy of Representations. The
representations and warranties made by SIMI and Sicor in this
Agreement were true when made and shall be true as of the Closing
Date (except for changes therein permitted by this Agreement) with
the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and SIMI and
Sicor shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied
with by SIMI and Sicor prior to or at the Closing. NewSoft shall
have been furnished with a certificate, signed by a duly
authorized executive officer of SIMI and Sicor and dated the
Closing Date, to the foregoing effect.
Section 7.2 Officer's Certificate. NewSoft shall be
furnished with a certificate dated the Closing date and signed by
a duly authorized officer of SIMI and Sicor to the effect that:
(a) the representations and warranties of SIMI and Sicor set
forth in the Agreement and in all Exhibits, Schedules and other
documents furnished in connection herewith are in all material
respects true and correct as if made on the Effective Date; and
(b) SIMI and Sicor had performed all covenants, satisfied all
conditions, and complied with all other terms and provisions of the
Agreement to be performed, satisfied or complied with by it as
of the Effective Date.
Section 7.3 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations or nor
shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of SIMI
or Sicor.
Section 7.4 Opinion of Counsel to SIMI. NewSoft
shall receive an opinion dated the Closing Date of Richard I.
Anslow & Associates, counsel to SIMI and Sicor, in substantially
the following form:
(a) SIMI (and Sicor) is a corporation duly organized,
validly existing, and in good standing under the laws of the state
of Florida and has the corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires
qualification;
(b) To the best knowledge of such legal counsel, the
execution and delivery by SIMI and Sicor of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of SIMI's or Sicor's
articles of incorporation or bylaws or constitute a default or
give rise to a right of termination, cancellation or acceleration
under any material mortgage, indenture, deed of trust, license
agreement or other obligation or violate any court order, writ,
injunction or decree applicable to SIMI or Sicor or its properties
or assets;
(c) The authorized capitalization of SIMI and Sicor
consists of 50,000,000 shares of Common Stock, par value $0.0001
per share and 10,000,000 shares of Preferred Stock, par value
$0.0001 per share. As of the Closing Date, there will be the
following issued and outstanding common shares of SIMI: 4,925,000 common
shares of which 2,925,000 are "restricted" shares. As of
February 18, 1998, the following issued and outstanding common
shares of Sicor were: 10,879,050 common shares of which 10,000,000
are "restricted" shares. In addition, in accordance with the
terms of this Agreement, the NewSoft Shareholders shall obtain
275,000 SIMI "restricted" common shares under Rule 144, restricted
for a two (2) year period.
There are no Preferred Shares issued and outstanding. All issued
and outstanding shares are legally issued, fully paid and
nonassessable and issued in violation of the preemptive rights of
any person;
(d) The SIMI and Sicor Common Shares to be issued to the
NewSoft Shareholders pursuant to the terms of this Agreement will
be, when issued in accordance with the terms hereof, legally
issued, fully paid and non-assessable;
(e) This Agreement has been duly and validly authorized,
executed, and delivered and constitutes the legal and binding
obligation of SIMI and Sicor, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of
creditors generally;
(f) To the best knowledge of such counsel, there are no
actions, suits or proceedings pending or threatened by or against
SIMI or Sicor or affecting SIMI's or Sicor's properties, at law or
in equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind; and
(g) SIMI and Sicor have taken all actions required by the
applicable laws of the state of Florida to permit the issuance of
the SIMI and Sicor Common Shares to the NewSoft Shareholders.
ARTICLE VIII
------------
MISCELLANEOUS
Section 8.1 Brokers and Finders. Each party hereto
hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the
bringing of the parties together in the negotiation, execution, or
consummation of this Agreement. The parties each agree to
indemnify the other against any claim by any third person not
listed in Schedule 7.1 for any commission, brokerage or finder's
fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third
person, whether express or implied from the actions of the
indemnifying party.
Section 8.2 Law. Forum and Jurisdiction. This
Agreement shall be construed and interpreted in accordance with
the laws of the State of New York, United States of America.
Section 8.3 Notices. Any notices or other
communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to SIMI and Sicor: Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
If to NewSoft: Jorg Zimmermann
NewSoft GmbH
Am Altenrod 7, D-35321
Laubach, Germany
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have given as of the
date so delivered, mailed or telegraphed.
Section 8.4 Attorneys' Fees. In the event that any
party institutes any action or suit to enforce this Agreement or
to secure relief from any default hereunder or breach hereof, the
breaching party or parities shall reimburse the non-breaching
party or parties for all costs, including reasonable attorneys'
fee, incurred in connection therewith and in enforcing or collecting
any judgment rendered therein.
Section 8.5 Confidentiality. Each party hereto agrees
with the other parties that, unless and until the reorganization
contemplated by this Agreement has been consummated, they and
their representatives will hold in strict confidence all data and
information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or
employee, or from any books or records or from personal
inspection, of such other party, and shall not used such data or
information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by
law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 8.6 Schedules; Knowledge. Each party is
presumed to have full knowledge of all information set forth in
the other party's schedules delivered pursuant to this Agreement.
Section 8.7 Third Party Beneficiaries. This contract
is solely among NewSoft, NewSoft Shareholders, SIMI and Sicor and
except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other
person or entity shall be deemed to be a third party beneficiary
of this Agreement.
Section 8.8 Entire Agreement. This Agreement
represents the entire agreement between the parties relating to
the subject matter hereof. This Agreement alone fully and
completely expresses the agreement of the parties relating to the
subject matter hereof.
There are no other courses of dealing, understanding, agreements,
representations or warranties, written or oral, except a set forth
herein. This Agreement may not be amended or modified, except by
a written agreement signed by all parties hereto.
Section 8.9 Survival; Termination. The
representations, warranties and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for 18 months.
Section 8.10 Counterparts. This Agreements may be
executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single
instrument.
Section 8.11 Amendment or Waiver. Every right and
remedy provided herein shall be cumulative with every other right
and remedy, whether conferred herein, at law, or in equity, and
may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time
prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
Section 8.12 Incorporation of Recitals. All of the
recitals hereof are incorporated by this reference and are made a
part hereof as though set forth at length herein.
Section 8.13 Expenses. Each party herein shall bear
all of their respective cost s and expenses incurred in connection
with the negotiation of this Agreement and in the consummation of
the transactions provided for herein and the preparation thereof.
Section 8.14 Headings; Context. The headings of the
sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in
no way modify, interpret or construe the meaning of this
Agreement.
Section 8.15 Benefit. This Agreement shall be binding
upon and shall insure only to the benefit of the parties hereto,
and their permitted assigns hereunder. This Agreement shall not
be assigned by any party without the prior written consent of the
other party.
Section 8.16 Public Announcements. Except as may be
required by law, neither party shall make any public announcement
or filing with respect to the transactions provided for herein
without the prior consent of the other party hereto.
Section 8.17 Severability. In the event that any
particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be
determined to be unenforceable, or in violation of any law,
governmental order or regulation, such unenforceability or
violation shall not affect the remaining provisions of such
agreements, which shall continue in full force and effect and be
binding upon the respective parties hereto.
Section 8.18 Failure of Conditions; Termination. In
the event of any of the conditions specified in this Agreement
shall not be fulfilled on or before the Closing Date, either of
the parties have the right either to proceed or, upon prompt
written notice to the other, to terminate and rescind this
Agreement without liability to any other party. The election to
proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
Section 8.19 No Strict Construction. The language of
this Agreement shall be construed as a whole, according to its
fair meaning and intendment, and not strictly for or against
wither party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.
Section 8.20 Execution Knowing and Voluntary. In
executing this Agreement, the parties severally acknowledge and
represent that each: (a) has fully and carefully read and
considered this Agreement; (b) has been or has had the
opportunity to be fully apprized of its attorneys of the legal
effect and meaning of this document and all terms and conditions
hereof; and (c) is executing this Agreement voluntarily, free from
any influence, coercion or duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
STRATEGIC INFORMATION MANAGEMENT
INCORPORATED
ATTEST:
/s/ William H. Luckman By:/s/ William H. Luckman
- ---------------------- -----------------------
William H. Luckman, William H. Luckman, President
Secretary
SICOR, INC.
ATTEST:
/s/ William H. Luckman By: /s/David E. Yancy
- ---------------------- --------------------
William H. Luckman, David E. Yancy, President
Secretary
ATTEST: NEWSOFT GMBH
/s/ Nigel Kaufman By: Jorg Zimmermann
- ----------------- -------------------
Nigel Kaufman Jorg Zimmermann
NEWSOFT SHAREHOLDERS:
WITNESS:
By: s/s Jorg Zimmerman
-----------------------
JORG ZIMMERMAN
Please see statement below
ERIKA ZIMMERMANN
Statement of Erika Zimmermann:
I - Erika Zimmermann - own 20% of NewSoft GmbH. From the very
beginning NewSoft GmbH was constructed in a way that I would not
have any influence on the ongoing business neither take any
responsibilities or liabilities for NewSoft. This was worked out
under German law. I am not and cannot be made responsible for any
activities of or misrepresentations made by the representatives
NewSoft GmbH. As this contract demands many obligations for the
future - which I cannot and will not influence - as well as it
demands to make specific information available which I cannot
provide I don't feel able to sign for the whole contents of this
agreement.
I hereby tender my shares according to the conditions described
hereinabove however, my signature is restricted to this purpose
only.
Laubach, March 21st, 1998
/s/ Erika Zimmermann
- ---------------------
ERIKA ZIMMERMANN
EXHIBIT "A"
LIST OF NEWSOFT SHAREHOLDERS *
Name % of Shares
------- ------------
Jorg Zimmermann 80%
Erika Zimmermann 20%
------------
TOTAL 100%
EXHIBIT 10.2 STOCK PURCHASE AGREEMENT BETWEEN EUROSOFT CORP. AND
SICOR, INC.
- ---------------------------------------------------------------
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
EUROSOFT CORP.
a Florida Corporation
and
SICOR, INC.
a Florida Corporation
effective as of October 2, 1998
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and
entered into this 2nd day of October, 1998, by and among Eurosoft
Corp., a Florida corporation with its principal place of business
located at 11300 U.S. Highway 1, Suite 400, North Palm Beach,
Florida 33408 ("Eurosoft") and Sicor, Inc., a Florida Corporation
with its principal place of business at 116 Village Boulevard,
Suite 200,Princeton, New Jersey 08540 ("Sicor").
Premises
A. This Agreement provides for the acquisition of Sicor,
presently, an approximately 49% shareholder of Eurosoft, by
Eurosoft whereby Sicor shall become a wholly owned subsidiary of
Eurosoft and in connection therewith, the issuance of two (2)
shares of Eurosoft to each Sicor Shareholder for each share of
Sicor owned.
B. The majority shareholders and boards of directors of
Eurosoft and Sicor have determined, subject to the terms and
conditions set forth in this Agreement, that the transaction
contemplated hereby is desirable and in the best interests of
their stockholders, respectively. This Agreement is being entered
into for the purpose of setting forth the terms and conditions of
the proposed acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
here from, it is hereby agreed as follows:
ARTICLE I
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REPRESENTATIONS, COVENANTS AND WARRANTIES OF
EUROSOFT
As an inducement to and to obtain the reliance of Sicor,
Eurosoft represents and warrants as follows:
Section 1.1 Organization. Eurosoft is a corporation duly
organized, validly existing, and in good standing under the laws
of Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification. Included in the Eurosoft Schedules (as
hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of
Eurosoft as in effect on the date hereof. The execution and
delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not violate any provision of Eurosoft's articles
of incorporation or bylaws. Eurosoft has full power, authority
and legal right and has taken all action required by law, its
articles of incorporation, its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized
capitalization of Eurosoft consists of 50,000,000 Common Shares,
$0.0001 par value per share, and 10,000,000 Preferred Shares,
$0.0001 par value per share. As of the date hereof, Eurosoft has
6,075,000 common shares issued and outstanding, of which
2,200,000 are unrestricted. Eurosoft is presently a public
company.
As of the Closing Date hereof, no shares of Preferred Stock
will be issued or outstanding. All issued and outstanding shares
are legally issued, fully paid and nonassessable and are not
issued in violation of the preemptive or other rights of any
person.
Eurosoft has no securities, warrants or options authorized or
issued, except for an option to purchase an additional 170,000
shares at $4.00 per share received through a Confidential Term
Sheet.
Section 1.3 Subsidiaries. Eurosoft has no
subsidiaries.
Section 1.4 Options and Warrants. There are no
existing options, warrants, calls or commitments of any character
to which Eurosoft is a party and by which it is bound.
Section 1.5 Litigation and Proceedings. To the best
of Eurosoft's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
Eurosoft or affecting Eurosoft or its properties, at law or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind that would have a material adverse affect on the
business, operations, financial condition or income of Eurosoft.
Eurosoft does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a
default.
Section 1.6 Material Contract Defaults. To the best
of Eurosoft's knowledge and belief, Eurosoft is not in default in
any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of Eurosoft,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which Eurosoft has not taken adequate steps to prevent such a
default from occurring.
Section 1.7 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which Eurosoft
is a party or to which any of its properties or operations are subject.
Section 1.8 Governmental Authorizations. To the best
of Eurosoft's knowledge, Eurosoft has all licenses, franchises,
permits or other governmental authorizations legally required to
enable Eurosoft to conduct its business in all material respects
as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter
provided, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and
delivery by Eurosoft of this Agreement and the consummation of
Eurosoft of the transactions contemplated hereby.
ARTICLE II
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REPRESENTATIONS, COVENANTS AND WARRANTIES
OF SICOR
As an inducement to, and to obtain the reliance of Eurosoft,
Sicor represents and warrants as follows:
Section 2.1 Organization. Sicor is a corporation duly
organized, validly existing and in good standing under the laws of
Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign entity in the country or
states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires
qualification. Included in the Sicor Schedules (as hereinafter
defined) are complete and correct copies of the articles of
incorporation, bylaws and amendments thereto of Sicor as in effect
on the date hereof. The execution and delivery of this Agreement
does not and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not,
violate any provision of Sicor's certificate of incorporation or
bylaws. Sicor has full power, authority and legal right and has
taken all action required by law, its articles of incorporation,
bylaws or otherwise to authorize the execution and delivery of
this Agreement.
Section 2.2 Capitalization. The authorized
capitalization of Sicor consists of 50,000,000 shares, $0 .0001
par value. As of the date hereof, there are 12,961,035 shares
issued and outstanding of which none are unrestricted.
As of the Closing date hereof, no shares of Preferred Stock
will be issued and outstanding. All issued and outstanding Sicor
shares have been legally issued, fully paid, are nonassessable and
not issued in violation of the preemptive rights of any other
person. Sicor has no other securities, warrants or options
authorized or issued.
Section 2.3 Subsidiaries. Sicor has no subsidiaries.
Section 2.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of Sicor
are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices;
and
(b) Sicor has no liabilities with respect to the payment
of any country, federal, state, county, local or other taxes
(including any deficiencies, interest or penalties).
Section 2.5 Information. The information concerning
Sicor as set forth in this Agreement and in the Sicor Schedules is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of
the circumstances under which they were made, not misleading.
Section 2.6 Absence of Certain Changes or Events.
Except as described herein or in the Sicor Schedules, since
September 30, 1997:
(a) Sicor has not: (i) amended its certificate of
incorporation or bylaws; (ii) waived any rights of value which in
the aggregate are extraordinary or material considering the
business of Sicor; (iii) made any material change in its method
of management, operation or accounting; or (iv) made any accrual
or arrangement for or payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or
former officer or employee;
(b) Sicor has not: (i) granted or agreed to grant any
options, warrants or other rights for its certificates, bonds or
other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; and
(c) to the best knowledge of Sicor, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of Sicor.
Section 2.7 Title and Related Matters. Sicor has good
and marketable title to and is the sole and exclusive owner of all
of its properties, inventory, interests in properties and assets,
real and personal (collectively, the "Assets") free and clear of
all liens, pledges, charges or encumbrances. Except as set forth
in the Sicor Schedules, Sicor owns free and clear of any liens,
claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management
or other information utilized in connection with Sicor's business.
Except as set forth in the Sicor Schedules, no third party has any
right to, and Sicor had not received any notice of infringement of
or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions
or income of Sicor or any material portion of its properties,
assets or rights.
Section 2.8 Litigation and Proceedings. There are no
actions, suits or proceedings pending or, to the best of Sicor's
knowledge and belief, threatened by or against or affecting Sicor,
at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind
that would have a material adverse effect on the
business, operations, financial condition, income or business
prospects of Sicor. Sicor does not have any knowledge of any
default on its part with respect to any judgement, order, writ,
injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality.
Section 2.9 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which
Sicor is a party or by which it or any of its properties are
bound;
(b) Sicor is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future may (as far as Sicor can now foresee) materially and
adversely affect, the business, operations, properties, assets or
conditions of Sicor; and
(c) Sicor is not a party to any material oral or written:
(i) contract for the employment of any officer or employee; (ii)
profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other contract with an unexpired term of more than
one year or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments by it
for more than $10,000 in the aggregate.
Section 2.10 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which Sicor is
a party or to which any of its properties or operations are subject.
Section 2.11 Material Contract Defaults. To the best
of Sicor's knowledge and belief, Sicor is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of Sicor,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which Sicor has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 Governmental Authorizations. To the best
of Sicor's knowledge, Sicor has all licenses, franchises, permits
and other governmental authorizations that are legally required to
enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance
with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by Sicor
of the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To
the best of Sicor's knowledge and belief, Sicor has complied with
all applicable statutes and regulations of any federal, state or
other governmental entity or agency thereof, except to the extent
that noncompliance would not materially and adversely affect the
business, operations, properties, assets or condition of Sicor or
would not result in Sicor's incurring any material liability.
Section 2.14 Insurance. All of the insurable
properties of Sicor are insured for Sicor's benefit under valid
and enforceable policy or policies containing substantially
equivalent coverage and will be outstanding and in full force at
the Closing Date.
Section 2.15 Approval of Agreement. The holders of a
majority of the Common Voting Shares outstanding of Sicor have
authorized the execution and delivery of the Agreement by Sicor
and have approved the transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations.
As of the Closing Date, there will exist no material contract,
agreement or arrangement between Sicor and any person who was at
the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by Sicor to own
beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of Sicor and which is to be performed in
whole or in part after the date hereof. Sicor has no commitment,
whether written or oral, to lend any funds to, borrow any money
from or enter into any other material transactions with, any such
affiliated person.
ARTICLE III
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of Sicor Securities.
On the Closing Date, the holders of Sicor Common Shares shall
deliver to Eurosoft (i) certificates or other documents evidencing
all of the issued and outstanding Sicor Common Shares, duly
endorsed in blank or with executed power attached thereto in
transferrable form. On the Closing Date, all previously issued
and outstanding Common Shares of Sicor shall be canceled and all
rights in respect thereof shall cease and Eurosoft shall receive
such shares in Sicor, so that Sicor shall become a wholly owned
subsidiary of Eurosoft.
Section 3.2 Issuance of Eurosoft Common Shares. In
exchange for all of the Sicor Common Shares tendered pursuant to
Section 3.1, Eurosoft shall issue to each Sicor shareholder an
amount equal to two (2) shares of Eurosoft for every share of
Sicor owned at the date of the merger. Such shares shall be
restricted under Rule 144 of the 1933 Securities Act.
Section 3.3 Events Prior to Closing. Upon execution
hereof or as soon thereafter as practical, management of Sicor and
Eurosoft shall execute, acknowledge and deliver (or shall cause to
be executed, acknowledged and delivered) any and all certificates,
opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so
delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel
in order to effectuate or evidence the transactions contemplated
hereby, subject only to the conditions to Closing referenced
hereinbelow.
Section 3.4 Closing. The closing ("Closing") of the
transactions contemplated by this Agreement shall be on or about
October 9, 1998 ("Closing Date").
Section 3.5 Termination.
(a) This Agreement may be terminated by the board of
directors or majority interest of Shareholders of either Eurosoft
or Sicor, respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of directors,
made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by
this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of
this Section 3.5, no obligation, right, or liability shall arise
hereunder and each party shall bear all of the expenses incurred
by it in connection with the negotiation, drafting and execution
of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of Eurosoft
if Sicor shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any
of the representations or warranties of Sicor contained herein
shall be inaccurate in any material respect, which noncompliance
or inaccuracy is not cured after 20 days written notice thereof is
given to Sicor. If this Agreement is terminated pursuant to this
paragraph (b) of this Section 3.5, this Agreement shall be of no
further force or effect and no obligation, right or liability
shall arise hereunder.
Section 3.6 Directors of Eurosoft After Acquisition.
Upon the Closing, the Board of Directors of Eurosoft shall be the
following: William H. Luckman, David E. Yancy, Nigel Kaufman, Jorg
Zimmermann and Dennis B. Woodfield and Robert C. Hoehl. Each
director shall hold office until his successor shall have been
duly elected and shall have qualified or until his earlier death,
resignation or removal.
Section 3.7 Officers of Eurosoft. Upon the closing,
the following persons shall be elected as officers of Eurosoft in
accordance with procedures set forth in the Eurosoft bylaws:
NAME OFFICE
David E. Yancy Chairman of the Board of Directors
and Chief Executive Officer
Nigel Kaufman President and Chief Operating Officer
William H. Luckman Senior Vice President/Treasurer
Secretary
Dennis B. Woodfield Vice President
Robert C. Hoehl Vice President
ARTICLE IV
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SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior
to closing, Sicor and Eurosoft will each afford to the officers
and authorized representatives of the other full access to the
properties, books and records of each other, in order that each
may have full opportunity to make such reasonable investigation as
it shall desire to make of the affairs of the other and each will
furnish the other with such additional financial and operating
data and other information as to the business and properties of
each other, as the other shall from time to time reasonably
request.
Section 4.2 Availability of Rule 144. Eurosoft and
Sicor shareholders holding "restricted securities, " as that term
is defined in Rule 144 promulgated pursuant to the Securities Act
will remain as "restricted securities". Eurosoft is under no
obligation to register such shares under the Securities Act, or
otherwise. The stockholders of Eurosoft and Sicor holding
restricted securities of Eurosoft and Sicor as of the date of this
Agreement and their respective heirs, administrators, personal
representatives, successors and assigns, are intended third party
beneficiaries of the provisions set forth herein. The covenants
set forth in this Section 4.2 shall survive the Closing and the
consummation of the transactions herein contemplated.
Section 4.3 Special Covenants and Representations
Regarding the Eurosoft Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of
the Eurosoft Common Shares to the Shareholders of Sicor as
contemplated hereby, constitutes the offer and sale of securities
under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under
which the Sicor Shareholders acquire such securities.
Section 4.4 Third Party Consents. Sicor and Eurosoft
agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein
contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the
Closing Date, except as permitted or contemplated by this
Agreement, Sicor will each use its best efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of good
repair and condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its relationship with its
material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal
and state laws and all rules, regulations and orders imposed by
federal or state governmental authorities.
(b) From and after the date of this Agreement until the
Closing Date, Sicor will not, without the prior consent of
Eurosoft:
(i) except as otherwise specifically set forth herein,
make any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or
agreements or arrangements with any directors or officers;
(v) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date hereof
to acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
Section 4.6 Indemnification.
(a) Sicor and David E. Yancy, individually, hereby agree
to indemnify Eurosoft and each of the officers, agents and
directors of Eurosoft as of the date of execution of this
Agreement against any loss, liability, claim, damage or expense
(including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject to or rising
out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement, including, but not
limited to, misrepresentations . The indemnification provided for
in this paragraph shall survive the Closing and consummation of
the transactions contemplated hereby and termination of this
Agreement; and
(b) Eurosoft and its officers and directors hereby agrees
to indemnify Sicor and each of the officers, agents, directors and
current shareholders of Sicor as of the Closing Date against any
loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in this Agreement. The
indemnification provided for in this Section shall survive the
Closing and consummation of the transactions contemplated hereby
and termination of this Agreement.
ARTICLE V
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CONDITIONS PRECEDENT TO OBLIGATIONS OF EUROSOFT
The obligations of Eurosoft under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 5.1 Accuracy of Representations. The
representations and warranties made by Sicor in this Agreement
were true when made and shall be true at the Closing Date with the
same force and effect as if such representations and warranties
were made at the Closing Date (except for changes therein
permitted by this Agreement), and Sicor shall have performed or
compiled with all covenants and conditions required by this
Agreement to be performed or complied with by Sicor prior to or at
the Closing. Eurosoft shall be furnished with a certificate,
signed by a duly authorized officer of Sicor and dated the Closing
Date, to the foregoing effect.
Section 5.2 Shareholder Approval. A majority of the
outstanding Common Shares of Sicor shall have approved this
Agreement and the transactions contemplated herein.
Section 5.3 Officer's Certificate. Eurosoft shall
have been furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of Sicor to the effect that:
(a) the representations and warranties of Sicor set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; (b) Sicor has performed all
covenants, satisfied all conditions, and complied
with all other terms and provisions of this Agreement to be
performed, satisfied or complied with by it as of the Effective
Date; (c) since such date and other than as previously disclosed
to Eurosoft, Sicor has not entered into any material transaction
other than transactions which are usual and in the ordinary
course if its business; and (d) no litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of
Sicor, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement or, to the extent not disclosed in the Sicor Schedules,
by or against Sicor which might result in any material adverse
change in any of the assets, properties, business or operations of
Sicor.
Section 5.4 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change
in the financial condition, business or operations or Sicor.
Section 5.5 Other Items. Eurosoft shall have received
such further documents, certificates or instruments relating to
the transactions contemplated hereby as Eurosoft may reasonably
request.
ARTICLE VI
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CONDITIONS PRECEDENT TO OBLIGATIONS OF SICOR
The obligations of Sicor under this Agreement are subject to
the satisfaction, at or before the Closing date (unless otherwise
indicated herein), of the following conditions:
Section 6.1 Accuracy of Representations. The
representations and warranties made by Eurosoft in this Agreement
were true when made and shall be true as of the Closing Date
(except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties
were made at and as of the Closing Date, and Eurosoft shall have
performed and complied with all covenants and conditions required
by this Agreement to be performed or complied with by Eurosoft
prior to or at the Closing. Sicor shall have been furnished with a
certificate, signed by a duly authorized executive officer of
Eurosoft and dated the Closing Date, to the foregoing effect.
Section 6.2 Shareholder Approval. A majority of the
outstanding Common Shares of Eurosoft shall have approved this
Agreement and the transactions contemplated herein.
Section 6.3 Officer's Certificate. Sicor shall be
furnished with a certificate dated the Closing date and signed by
a duly authorized officer of Eurosoft to the effect that: (a)
the representations and warranties of Eurosoft set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; and (b) Eurosoft had
performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of the Agreement to be
performed, satisfied or complied with by it as of the Effective
Date.
Section 6.4 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of
Eurosoft.
ARTICLE VII
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MISCELLANEOUS
Section 7.1 Brokers and Finders. Each party hereto
hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the
bringing of the parties together in the negotiation, execution, or
consummation of this Agreement. The parties each agree to
indemnify the other against any claim by any third person not
listed in Schedule 7.1 for any commission, brokerage or finder's
fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third
person, whether express or implied from the actions of the
indemnifying party.
Section 7.2 Law, Forum and Jurisdiction. This
Agreement shall be construed and interpreted in accordance with
the laws of the State of Florida, United States of America.
Section 7.3 Notices. Any notices or other
communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Eurosoft and : Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
If to Sicor: Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have been given as of
the date so delivered, mailed or telegraphed.
Section 7.4 Attorneys' Fees. In the event that any
party institutes any action or suit to enforce this Agreement or
to secure relief from any default hereunder or breach hereof, the
breaching party or parties shall reimburse the non-breaching party
or parties for all costs, including reasonable attorneys' fees,
incurred in connection therewith and in enforcing or collecting
any judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees
with the other party that, unless and until the transactions
contemplated by this Agreement have been consummated, they and
their representatives will hold in strict confidence all data and
information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or
employee, or from any books or records or from personal
inspection, of such other party, and shall not use such data or
information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by
law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 7.6 Schedules; Knowledge. Each party is
presumed to have full knowledge of all information set forth in
the other party's schedules delivered pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries. This contract
is solely between Sicor and Eurosoft and except as specifically
provided, no director, officer, stockholder, employee, agent,
independent contractor or any other person or entity shall be
deemed to be a third party beneficiary of this Agreement.
Section 7.8 Entire Agreement. This Agreement
represents the entire agreement between the parties relating to
the subject matter hereof. This Agreement alone fully and
completely expresses the agreement of the parties relating to the
subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written
or oral, except as set forth herein. This Agreement may not be
amended or modified, except by a written agreement signed by all
parties hereto.
Section 7.9 Survival; Termination. The
representations, warranties and covenants of the respective
parties shall survive the Closing Date and the consummation of the
transactions herein contemplated for 18 months.
Section 7.10 Counterparts. This Agreement may be
executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single
instrument.
Section 7.11 Amendment or Waiver. Every right and
remedy provided herein shall be cumulative with every other right
and remedy, whether conferred herein, at law, or in equity, and
may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time
prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
Section 7.12 Incorporation of Recitals. All of the
recitals hereof are incorporated by this reference and are made a
part hereof as though set forth at length herein.
Section 7.13 Expenses. Each party herein shall bear
all of their respective cost s and expenses incurred in connection
with the negotiation of this Agreement and in the consummation of
the transactions provided for herein and the preparation thereof.
Section 7.14 Headings; Context. The headings of the
sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in
no way modify, interpret or construe the meaning of this
Agreement.
Section 7.15 Benefit. This Agreement shall be binding
upon and shall inure only to the benefit of the parties hereto,
and their permitted assigns hereunder. This Agreement shall not
be assigned by any party without the prior written consent of the
other party.
Section 7.16 Public Announcements. Except as may be
required by law, neither party shall make any public announcement
or filing with respect to the transactions provided for herein
without the prior consent of the other party hereto.
Notwithstanding same, both parties agree that Eurosoft will be
issuing a press release regarding this transaction.
Section 7.17 Severability. In the event that any
particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be
determined to be unenforceable, or in violation of any law,
governmental order or regulation, such unenforceability or
violation shall not affect the remaining provisions of such
agreements, which shall continue in full force and effect and be
binding upon the respective parties hereto.
Section 7.18 Failure of Conditions; Termination. In
the event of any of the conditions specified in this Agreement
shall not be fulfilled on or before the Closing Date, either of
the parties have the right either to proceed or, upon prompt
written notice to the other, to terminate and rescind this
Agreement without liability to any other party. The election to
proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its efforts
to fulfill the unmet conditions.
Section 7.19 No Strict Construction. The language of
this Agreement shall be construed as a whole, according to its
fair meaning and intendment, and not strictly for or against
either party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 Execution Knowing and Voluntary; Conflict of
Interest. In executing this Agreement, the parties severally
acknowledge and represent that each: (a) has fully and carefully
read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprized by its attorneys of the legal
effect and meaning of this document and all terms and conditions
hereof; (c) is executing this Agreement voluntarily, free from
any influence, coercion or duress of any kind; and (d)
acknowledges and agrees that Richard I. Anslow & Associates shall
be representing both parties and waives such conflict of interest.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
EUROSOFT CORP.
ATTEST:
By: /s/ William H. Luckman
- ----------------------------- --------------------------
WILLIAM H. LUCKMAN, Secretary WILLIAM H. LUCKMAN, President
ATTEST: SICOR, INC
By:/s/ David E. Yancy
- ----------------------------- ---------------------------
WILLIAM H. LUCKMAN, Secretary DAVID E. YANCY,President
EXHIBIT 10.3 STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
BETWEEN EUROSOFT AND DO-IT DEVELOPMENT INTERNATIONAL OY
- ---------------------------------------------------------------
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
EUROSOFT CORP.
a Florida Corporation
and
Do it-DEVELOPMENT INTERNATIONAL OY
a Finnish Corporation
effective as of December 3, 1998
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and
entered into this 3rd day of December, 1998, by and among
EuroSoft Corp., a Florida corporation with its principal place of
business located at 11300 U.S. Highway 1, Suite 44, North Palm
Beach, Florida 33408 ("EuroSoft"), Do it-Development International
Oy, a Finnish Corporation with its principal place of business at
Sornaisten rantatie 27A, , FIN-00500, Helsinki, Finland ("Do it")
and the individual listed on Exhibit "A" attached hereto and
specifically incorporated herein by this reference (the "Do it
Shareholders"), (Do it and Do it Shareholders jointly referred to
as the "Do it Parties")
Premises
A. This Agreement provides for the acquisition of Do it
by EuroSoft whereby Do it shall become a wholly owned subsidiary
of EuroSoft and in connection therewith, the issuance of 1,000,000
($ 0.0001 par value per share) shares of restricted common stock
of EuroSoft to the Do it Shareholders as designated on Exhibit
"A", the payment of $100,000 and other consideration.
B. The boards of directors of Do it and EuroSoft have
determined, subject to the terms and conditions set forth in this
Agreement, that the transaction contemplated hereby is desirable
and in the best interests of their stockholders, respectively.
This Agreement is being entered into for the purpose of setting
forth the terms and conditions of the proposed acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
here from, it is hereby agreed as follows:
ARTICLE I
---------
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
EUROSOFT
As an inducement to and to obtain the reliance of Do it,
EuroSoft represents and warrants as follows:
Section 1.1 Organization. EuroSoft is a corporation duly
organized, validly existing, and in good standing under the laws
of Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification. Included in the EuroSoft Schedules (as
hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of
EuroSoft as in effect on the date hereof. The execution and
delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not violate any provision of EuroSoft's articles
of incorporation or bylaws. EuroSoft has full power, authority
and legal right and has taken all action required by law, its
articles of incorporation, its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized
capitalization of EuroSoft consists of 50,000,000 Common Shares,
$0.0001 par value per share, and 10,000,000 Preferred Shares,
$0.0001 par value per share. As of the date hereof, EuroSoft has
17,197,070 common shares issued and outstanding, of which
2,600,000 are unrestricted. EuroSoft is presently a public company
listed on the NASDAQ OTC Bulletin Board.
As of the Closing Date hereof, no shares of Preferred Stock will
be issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person.
EuroSoft has no other securities, warrants or options authorized
or issued.
Section 1.3 Subsidiaries and Predecessor Corporations.
EuroSoft does not have any other subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 1.4 Options and Warrants. There are no
existing options, warrants, calls or commitments of any character
to which EuroSoft is a party and by which it is bound.
Section 1.5 Litigation and Proceedings. To the best
of EuroSoft's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
EuroSoft, affecting EuroSoft or its properties, at law or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind that would have a material adverse affect on the
business, operations, financial condition or income of EuroSoft.
EuroSoft does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a
default.
Section 1.6 Material Contract Defaults. To the best
of SIMI's knowledge and belief, EuroSoft is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of EuroSoft,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which EuroSoft has not taken adequate steps to prevent such a
default from occurring.
Section 1.7 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which EuroSoft
is a party or to which any of its properties or operations are
subject.
Section 1.8 Governmental Authorizations. To the best
of EuroSoft's knowledge, EuroSoft has all licenses, franchises,
permits or other governmental authorizations legally required to
enable EuroSoft to conduct its business in all material respects
as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter
provided, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and
delivery by EuroSoft of this Agreement and the consummation of
EuroSoft of the transactions contemplated hereby.
ARTICLE II
----------
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF Do it
As an inducement to, and to obtain the reliance of EuroSoft,
Do it represents and warrants as follows:
Section 2.1 Organization. Do it is a corporation duly
organized, validly existing and in good standing under the laws of
Finland and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign entity in the country or
states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires
qualification. Included in the Do it Schedules (as hereinafter
defined) are complete and correct copies of the Articles of
Association and an Extract from the Trade Register of Do it as in
effect on the date hereof. The execution and delivery of this
Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of Do it's Articles of Association
and Extract from the Trade Register. Do it has full power,
authority and legal right and has taken all action required by
law, its Articles of Association and Extract from the Trade
Register or otherwise to authorize the execution and delivery of
this Agreement.
Section 2.2 Capitalization. The authorized
capitalization of Do it consists of 150 shares, FIM 100,-each. As
of the date hereof there are 150 Shares issued and outstanding to
the following: Kari Sarvanto - 150. All issued and outstanding Do
it shares have been legally issued, fully paid and are
nonassessable as of November 30, 1998.
Section 2.3 Subsidiaries. Do it has no subsidiary
companies.
Section 2.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of Do it
are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices;
and
(b) Except for income taxes\VAT due for the 1997 tax
year, Do it has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
Section 2.5 Information. The information concerning
Do it as set forth in this Agreement and in the Do it Schedules is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of
the circumstances under which they were made, not misleading.
Section 2.6 Absence of Certain Changes or Events.
Except as described herein or in the Do it Schedules, since
December 31, 1997:
(a) Do it has not: (i) amended its Articles of Association
or Extract from the Trade Register; (ii) waived any
rights of value which in the aggregate are extraordinary or
material considering the business of Do it; (iii) made any
material change in its method of management, operation or
accounting; or (iv) made any accrual or arrangement for or
payment of bonuses or special compensation of any
kind or any severance or termination pay to any present or former
officer or employee;
(b) Do it has not: (i) granted or agreed to grant any
options, warrants or other rights for its certificates, bonds or
other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; and
(c) to the best knowledge of Do it, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of Do it.
Section 2.7 Title and Related Matters. Do it has good
and marketable title to and is the sole and exclusive owner of all
of its properties, inventory, interests in properties and assets,
real and personal (collectively, the "Assets") which are reflected
in the most recent Do it balance sheet and the Do it Schedules or
acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such
date in the ordinary course of business), free and clear of all
liens, pledges, charges or encumbrances. Except as set forth in
the Do it Schedules, Do it owns free and clear of any liens,
claims, encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and all procedures,
techniques, marketing plans, business plans, methods of management
or other information utilized in connection with Do it's business.
Except as set forth in the Do it Schedules, no third party has any
right to, and Do it had not received any notice of infringement of
or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary
techniques, trademarks, service marks, trade names or copyrights
which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions
or income of Do it or any material portion of its properties,
assets or rights.
Section 2.8 Litigation and Proceedings. Except for a
lawsuit against Esa Kyto and Primalco Oy, there are no actions,
suits or proceedings pending or, to the best of Do it's knowledge
and belief, threatened by or against or affecting Do it, at law or
in equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind that would have a material adverse effect on the
business, operations, financial condition, income or business
prospects of Do it. Do it does not have any knowledge of any
default on its part with respect to any judgement, order, writ,
injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality. Any and all
liability relating to such lawsuit described above and further
described in Do it's attorney opinion letter of Matti Oksala
(which opinion letter is attached hereto and made a part hereof)
shall be the sole responsibility of Kari Sarvanto and Mr. Sarvanto
hereby provides indemnification regarding this matter pursuant to
Section 4.6(a) hereof. Specifically, judgment in such matter was
in favor of Do it in the amount of FIM 13,353 against Mr. Kyto;
and against Do it in the amount of FIM 20,000 in favor of Primalco
Oy. Do it shall be entitled to such sum stated above and be
responsible for such expenses. Notwithstanding same, all parties
to the lawsuit can appeal such judgment. Any additional expenses,
costs or judgments in excess of that stated above shall be the
sole responsibility of Kari Sarvanto, including, but not limited
to, expenses related to an appeal by Do it.
Section 2.9 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which Do
it is a party or by which it or any of its properties are bound;
(b) Do it is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future may (as far as Do it can now foresee) materially and
adversely affect, the business, operations, properties, assets or
conditions of Do it; and
(c) Do it is not a party to any material oral or written:
(i) contract for the employment of any officer or employee; (ii)
profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other similar contract with an unexpired term of
more than one year or providing for payments in excess of $10,000
in the aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments by it
for more than $10,000 in the aggregate.
Section 2.10 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which Do it is
a party or to which any of its properties or operations are
subject.
Section 2.11 Material Contract Defaults. To the best
of Do it's knowledge and belief, Do it is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of Do it,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which Do it has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 Governmental Authorizations. To the best
of Do it's knowledge, Do it has all licenses, franchises, permits
and other governmental authorizations that are legally required to
enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance
with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is
required in connection with the execution and delivery by Do it
of the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To
the best of Do it's knowledge and belief, Do it has complied with
all applicable statutes and regulations of any federal, state or
other governmental entity or agency thereof, except to the extent
that noncompliance would not materially and adversely affect the
business; operations, properties, assets or condition of Do it or
would not result in Do it's incurring any material liability.
Section 2.14 Insurance. All of the insurable
properties of Do it are insured for Do it's benefit in accordance
with the insurance policies disclosed in the Do it Schedules under
valid and enforceable policy or policies containing substantially
equivalent coverage and will be outstanding and in full force at
the Closing Date.
Section 2.15 Approval of Agreement. The holders of
all of the Common Voting Shares outstanding of Do it have
authorized the execution and delivery of the Agreement by Do it
and have approved the transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations.
As of the Closing Date, there will exist no material contract,
agreement or arrangement between Do it and any person who was at
the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by Do it to own
beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of Do it and which is to be performed in
whole or in part after the date hereof. Do it has no commitment,
whether written or oral, to lend any funds to, borrow any money
from or enter into any other material transactions with, any such
affiliated person.
Section 2.17 Labor Relations. Do it has never had a
work stoppage resulting from labor problems.
Section 2.18 Do it Schedules. Upon execution hereof, Do
it shall deliver to EuroSoft the following schedules, which are
collectively referred to as the "Do it Schedules" which are dated
the date of this Agreement, all certified by an officer of Do it
to be complete, true and accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and amendment (or Finnish equivalent)
thereto of Do it as in effect as of the date of this Agreement;
(b) copies of two (2) previous years financial statements
of Do it;
(c) copies of two (2) previous years income and any other
tax returns of Do it;
(d) all contracts of Do it presently in effect;
(e) Disclosure Statement, and Officers and Directors
Questionnaires;
(f) the description of any material adverse change in the
business, operations, property, assets, or condition of Do it
since December 31, 1997 required to be provided pursuant to
Section 2.5; and
(g) any other information, together with any required
copies of documents, required to be disclosed in the Do it
Schedules by Sections 2.1 through 2.17.
Do it shall cause the Do it Schedules and the instruments to
be delivered to EuroSoft hereunder to be updated after the date
hereof up to and including the Closing Date.
ARTICLE III
-----------
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of Do it Securities.
On the Closing Date, the holders of Do it Common Shares (or the
Finnish equivalent) shall deliver to EuroSoft (i) certificates or
other documents evidencing all of the issued and outstanding Do it
Common Shares, duly endorsed in blank or with executed power
attached thereto in transferrable form (or its Finnish
equivalent). On the Closing Date, all previously issued and
outstanding Common Shares of Do it (or its Finnish equivalent)
shall be canceled and all rights in respect thereof shall cease
and EuroSoft shall receive such shares in Do it, the Finnish
corporation, so that Do it shall become a wholly owned subsidiary
of EuroSoft. Do it's Finnish legal counsel shall take all
appropriate action in Finland to confirm such
transaction. Notwithstanding the above, at closing, EuroSoft
shall purchase ninety (90%) percent of the issued and outstanding
Do it Common Shares (or the Finnish equivalent) for $100,000 U.S.
The remaining ten (10%) percent of the issued and outstanding Do
it Common Shares shall be held in escrow by Okobank, a Finnish
bank located in Helsinki, Finland. Upon closing, Matti Oksala,
Esq. shall arrange for such escrow with Okobank and enter into an
escrow agreement based on the terms of this Agreement. Such
Common Shares shall remain in escrow until the EuroSoft Common
Shares tendered to Kari Sarvanto in accordance with Section 3.2
below are no longer restricted. At such time, EuroSoft shall
purchase the remaining ten (10%) percent of the issued and
outstanding Do it Common Shares (or the Finnish equivalent) for
1,000,000 EuroSoft Common Shares described in Section 3.2 hereof.
Section 3.2 Issuance of Do it Common Shares. In
exchange for all of the Do it Common Shares tendered pursuant to
Section 3.1, EuroSoft shall issue an aggregate of 1,000,000
"restricted" EuroSoft Common Shares to Kari Sarvanto. Such shares
shall be "restricted" for two (2) years from issuance. Such
shares shall be issued at closing and held in escrow by Okobank on
the same terms and conditions as set forth in Section 3.1
hereinabove, until such shares are no longer restricted.
Section 3.3 Other Consideration. Kari Sarvanto, the sole
shareholder of Do it, shall receive the following additional
consideration:
(a) $100,000.00 payable at the Closing Date;
(b) Kari Sarvanto shall be provided with an employment
agreement, attached hereto and made a part hereof, to operate the
wholly-owned Finnish subsidiary. In addition, Mr. Sarvanto shall
be provided with a Director Agreement, Profit Sharing Agreement
and Executive Compensation Agreement, all attached hereto and made
a part hereof.
Section 3.4 Events Prior to Closing. Upon execution
hereof or as soon thereafter as practical, management of Do it and
EuroSoft shall execute, acknowledge and deliver (or shall cause to
be executed, acknowledged and delivered) any and all certificates,
opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so
delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel
in order to effectuate or evidence the transactions contemplated
hereby, subject only to the conditions to Closing referenced
hereinbelow.
Section 3.5 Closing. The closing ("Closing") of the
transactions contemplated by this Agreement shall be on or about
December 3, 1998 ("Closing Date").
Section 3.6 Termination.
(a) This Agreement may be terminated by the board of
directors or majority interest of Shareholders of either EuroSoft
or Do it, respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of directors,
made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by
this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of
this Section 3.6, no obligation, right, or liability shall arise
hereunder and each party shall bear all of the expenses incurred
by it in connection with the negotiation, drafting and execution
of this Agreement and the transactions herein contemplated;
(b) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of EuroSoft
if Do it shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any
of the representations or warranties of Do it contained herein
shall be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days written notice thereof is
given to Do it. If this Agreement is terminated pursuant to this
paragraph (b) of this Section 3.6, this Agreement shall be of no
further force or effect and no obligation, right or liability
shall arise hereunder.
Section 3.7 Directors of Do it After Acquisition. Upon
the Closing, the Board of Directors of Do it shall be the
following: Kari Sarvanto. Each director shall hold office until
his successor shall have been duly elected and shall have
qualified or until his earlier death, resignation or removal.
Section 3.8 Officers of Do it. Upon the closing, the
following persons shall be elected as officers of Do it in
accordance with procedures set forth in the Do it bylaws (or
Finnish equivalent):
NAME OFFICE
------------- --------------------------
Kari Sarvanto Chief Executive Officer and
President
Section 3.9 Post Closing Requirements of Finnish
Operation
Company. Subsequent to closing of this transaction, Do it, the
Finnish operating company shall undertake the following: (i)
provide all financial information to William H. Luckman on a
quarterly basis; (ii) provide William H. Luckman duplicate
statements of the Finnish bank account immediately after receipt
of same; and (iii) after Closing, an audit of Do it's previous
financial statements shall be audited for United States tax
purposes, at the sole expense of EuroSoft. Do it and the Do it
Shareholders shall cooperate fully with EuroSoft regarding same.
ARTICLE IV
----------
SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior
to closing, Do it and EuroSoft will each afford to the officers and
authorized representatives of the other full access to the
properties, books and records of Do it and EuroSoft as the case
may be, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs
of the other and each will furnish the other with such additional
financial and operating data and other information as to the
business and properties of Do it and EuroSoft as the case may be,
as the other shall from time to time reasonably request.
Section 4.2 Availability of Rule 144. Each of the
parties acknowledge that the stock of EuroSoft to be issued
pursuant to this Agreement will be "restricted securities, " as
that term is defined in Rule 144 promulgated pursuant to the
Securities Act. EuroSoft is under no obligation to register such
shares under the Securities Act, or otherwise. The stockholders
of EuroSoft holding restricted securities of EuroSoft as of the
date of this Agreement and their respective heirs, administrators,
personal representatives, successors and assigns, are intended
third party beneficiaries of the provisions set forth herein. The
covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
Notwithstanding Rule 144, all "restricted" shares issued in
accordance with this Agreement shall be restricted for two (2)
years from the date of issuance.
Section 4.3 Special Covenants and Representations
Regarding the Do it Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of the
EuroSoft Common Shares to the Shareholders of Do it as
contemplated hereby, constitutes the offer and sale of securities
under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such
statutes which depend, inter alia, upon the circumstances under
which the Do it Shareholders acquire such securities.
Section 4.4 Third Party Consents. Do it and EuroSoft
agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein
contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the Do it Schedules or as
permitted or contemplated by this Agreement, Do it will each use
its best efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of good
repair and condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal
and state laws and all rules, regulations and orders imposed by
federal or state governmental authorities in Finland.
(b) From and after the date of this Agreement until the
Closing Date, Do it will not, without the prior consent of
EuroSoft:
(i) except as otherwise specifically set forth herein,
make any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers;
(v) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date hereof
to acquire any Common Shares; or
(vi) purchase or redeem any Common Shares.
Section 4.6 Indemnification.
(a) Do it and Kari Sarvanto, individually, hereby agree
to indemnify EuroSoft and each of the officers, agents and
directors of EuroSoft as of the date of execution of this
Agreement including, but not limited to William H. Luckman,
against any loss, liability, claim, damage or expense (including,
but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing or defending against and
litigation, commenced or threatened or any
claim whatsoever), to which it or they may become subject to
arising out of or based on any inaccuracy appearing in or
misrepresentation made in this Agreement. The indemnification
provided for in this paragraph shall survive the Closing and
consummation of the transactions contemplated hereby and
termination of this Agreement; and
(b) EuroSoft and its officers and directors hereby agrees
to indemnify Do it and each of the officers, agents, directors and
current shareholders of Do it as of the Closing Date against any
loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in this Agreement and
particularly the representation regarding no liabilities referred
to in Section 2.4 (b). The indemnification provided for in this
Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this
Agreement.
ARTICLE V
---------
CONDITIONS PRECEDENT TO OBLIGATIONS OF EUROSOFT
The obligations of EuroSoft under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 5.1 Accuracy of Representations. The
representations and warranties made by Do it in this Agreement
were true when made and shall be true at the Closing Date with the
same force and effect as if such representations and warranties
were made at the Closing Date (except for changes therein
permitted by this Agreement), and Do it shall have performed or
compiled with all covenants and conditions required by this
Agreement to be performed or complied with by Do it prior to or at
the Closing. EuroSoft shall be furnished with a certificate,
signed by a duly authorized officer of Do it and dated the Closing
Date, to the foregoing effect.
Section 5.2 Shareholder Approval. All of the
Shareholders of Do it shall have approved this Agreement and the
transactions contemplated herein.
Section 5.3 Officer's Certificate. EuroSoft shall
have been furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of Do it to the effect that:
(a) the representations and warranties of Do it set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; (b) Do it has
performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of this Agreement to be
performed, satisfied or complied with by it as of the Effective
Date; (c) since such date and other than as previously disclosed
to EuroSoft and Do it has not entered into any material
transaction other than transactions which are usual and in the
ordinary course if its business; and (d) No litigation,
proceeding, investigation or inquiry is pending or, to
the best knowledge of Do it, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in
the Do it Schedules, by or against Do it which might result in any
material adverse change in any of the assets, properties, business
or operations of Do it.
Section 5.4 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change
in the financial condition, business or operations or Do it.
Section 5.5 Opinion of Counsel to Do it. EuroSoft
shall receive an opinion dated the Closing date by Matti Oksala
Law Office, counsel to Do it, in substantially the following
form:
(a) Do it is a corporation duly organized, validly
existing, and in good standing under the laws of Finland and has
the corporate power and is duly authorized, qualified, franchised
and licensed under all material applicable laws, regulations,
ordinances and orders of public authorities to own all of its
properties and assets and to conduct its business as now
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by
it requires qualifications;
(b) To the best knowledge of such legal counsel, the
execution and delivery by Do it of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of Do it's certificate of
incorporation or Bylaws or violate any court order, writ,
injunction or decree applicable to Do it, or its properties or
assets;
(c) All issued and outstanding Share Certificates are
legally issued, fully paid and nonassessable. Except as set forth
in the Do it Schedules, to the best knowledge of such legal
counsel, there are no outstanding subscriptions, options, rights,
warrants, convertible securities or other agreements or
commitments obligating Do it to issue any additional Share
Certificates.
(d) This Agreement has been duly and validly authorized,
executed and delivered by Do it;
(e) To the best knowledge of such legal counsel, except
as set forth in the Do it Schedules, there are no actions, suits or
proceedings pending or threatened by or against or affecting Do
it or its properties, at laws or in equity, before any court or
other governmental agency or instrumentality, domestic or foreign
or before any arbitrator of any kind;
(f) Do it has taken all actions required by the
applicable laws of Finland to permit the acquisition of the
outstanding shares of Do it into EuroSoft.
Section 5.6 Other Items. EuroSoft shall have received
such further documents, certificates or instruments relating to
the transactions contemplated hereby as EuroSoft may reasonably
request.
ARTICLE VI
----------
CONDITIONS PRECEDENT TO OBLIGATIONS OF DO IT
The obligations of Do it under this Agreement are subject to
the satisfaction, at or before the Closing date (unless otherwise
indicated herein), of the following conditions:
Section 6.1 Accuracy of Representations. The
representations and warranties made by EuroSoft in this Agreement
were true when made and shall be true as of the Closing Date
(except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties
were made at and as of the Closing Date, and EuroSoft shall have
performed and complied with all covenants and conditions required
by this Agreement to be performed or complied with by EuroSoft
prior to or at the Closing. Do it shall have been furnished with
a certificate, signed by a duly authorized executive officer of
EuroSoft and dated the Closing Date, to the foregoing effect.
Section 6.2 Officer's Certificate. Do it shall be
furnished with a certificate dated the Closing date and signed by
a duly authorized officer of EuroSoft to the effect that: (a)
the representations and warranties of EuroSoft set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; and (b) EuroSoft had
performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of the Agreement to be
performed, satisfied or complied with by it as of the Effective
Date.
Section 6.3 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations or nor
shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of
EuroSoft.
Section 6.4 Opinion of Counsel to EuroSoft. Do it
shall receive an opinion dated the Closing Date of Richard I.
Anslow & Associates, counsel to EuroSoft, in substantially the
following form:
(a) EuroSoft is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
Florida and has the corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires
qualification;
(b) To the best knowledge of such legal counsel, the
execution and delivery by EuroSoft of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of EuroSoft's articles of
incorporation or bylaws or constitute a default or give rise to a
right of termination, cancellation or acceleration under any
material mortgage, indenture, deed of trust, license agreement or
other obligation or violate any court order, writ, injunction or
decree applicable to EuroSoft or Sicor or its properties or
assets;
(c) The authorized capitalization of EuroSoft consists of
50,000,000 shares of Common Stock, par value $0.0001 per share and
10,000,000 shares of Preferred Stock, par value $0.0001 per share.
(d) The EuroSoft Common Shares to be issued to the Do it
Shareholders pursuant to the terms of this Agreement will be, when
issued in accordance with the terms hereof, legally issued, fully
paid and non-assessable;
(e) This Agreement has been duly and validly authorized,
executed, and delivered and constitutes the legal and binding
obligation of EuroSoft, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of
creditors generally;
(f) To the best knowledge of such counsel, there are no
actions, suits or proceedings pending or threatened by or against
EuroSoft or affecting EuroSoft's properties, at law or in equity,
before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind; and
(g) EuroSoft have taken all actions required by the
applicable laws of the state of Florida to permit the issuance of
the EuroSoft Common Shares to the Do it Shareholder.
ARTICLE VII
-----------
MISCELLANEOUS
Section 7.1 Brokers and Finders. Each party hereto
hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the
bringing of the parties together in the negotiation, execution, or
consummation of this Agreement. The parties each agree to
indemnify the other against any claim by any third person not
listed in Schedule 7.1 for any commission, brokerage or finder's
fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third
person, whether express or implied from the actions of the
indemnifying party.
Section 7.2 Law. Forum and Jurisdiction. This
Agreement shall be construed and interpreted in accordance with
the laws of the State of New Jersey, United States of America.
Section 7.3 Notices. Any notices or other
communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to EuroSoft: Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
If to Do it: Do it-Development International Oy
Sornaisten rantatie 27A
FIN-00500
Helsinki, Finland
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have given as of the
date so delivered, mailed or telegraphed.
Section 7.4 Attorneys' Fees. In the event that any
party institutes any action or suit to enforce this Agreement or
to secure relief from any default hereunder or breach hereof, the
breaching party or parities shall reimburse the non-breaching
party or parties for all costs, including reasonable attorneys'
fee, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees
with the other parties that, unless and until the reorganization
contemplated by this Agreement has been consummated, they and
their representatives will hold in strict confidence all data and
information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or
employee, or from any books or records or from personal
inspection, of such other party, and shall not used such data or
information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by
law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 7.6 Schedules; Knowledge. Each party is
presumed to have full knowledge of all information set forth in
the other party's schedules delivered pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries. This contract
is solely among Do it, Do it Shareholders, EuroSoft and except as
specifically provided, no director, officer, stockholder,
employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.8 Entire Agreement. This Agreement
represents the entire agreement between the parties relating to
the subject matter hereof. This Agreement alone fully and
completely expresses the agreement of the parties relating to the
subject matter hereof.
There are no other courses of dealing, understanding, agreements,
representations or warranties, written or oral, except a set forth
herein. This Agreement may not be amended or modified, except by
a written agreement signed by all parties hereto.
Section 7.9 Survival; Termination. The
representations, warranties and covenants of the respective
parties shall survive the Closing Date and the consummation of the
transactions herein contemplated for 18 months.
Section 7.10 Counterparts. This Agreements may be
executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single
instrument.
Section 7.11 Amendment or Waiver. Every right and
remedy provided herein shall be cumulative with every other right
and remedy, whether conferred herein, at law, or in equity, and
may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time
prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
Section 7.12 Incorporation of Recitals. All of the
recitals hereof are incorporated by this reference and are made a
part hereof as though set forth at length herein.
Section 7.13 Expenses. Each party herein shall bear
all of their respective costs and expenses incurred in connection
with the negotiation of this Agreement and in the consummation of
the transactions provided for herein and the preparation thereof.
Section 7.14 Headings; Context. The headings of the
sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in
no way modify, interpret or construe the meaning of this
Agreement.
Section 7.15 Benefit. This Agreement shall be binding
upon and shall insure only to the benefit of the parties hereto,
and their permitted assigns hereunder. This Agreement shall not
be assigned by any party without the prior written consent of the
other party.
Section 7.16 Public Announcements. Except as may be
required by law, neither party shall make any public announcement
or filing with respect to the transactions provided for herein
without the prior consent of the other party hereto.
Section 7.17 Severability. In the event that any
particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be
determined to be unenforceable, or in violation of any law,
governmental order or regulation, such unenforceability or
violation shall not affect the remaining provisions of such
agreements, which shall continue in full force and effect and be
binding upon the respective parties hereto.
Section 7.18 Failure of Conditions; Termination. In
the event of any of the conditions specified in this Agreement
shall not be fulfilled on or before the Closing Date, either of
the parties have the right either to proceed or, upon prompt
written notice to the other, to terminate and rescind this
Agreement without liability to any other party. The election to
proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
Section 7.19 No Strict Construction. The language of
this Agreement shall be construed as a whole, according to its
fair meaning and intendment, and not strictly for or against
wither party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 Execution Knowing and Voluntary. In
executing this Agreement, the parties severally acknowledge and
represent that each: (a) has fully and carefully read and
considered this Agreement; (b) has been or has had the
opportunity to be fully apprized of its attorneys of the legal
effect and meaning of this document and all terms and conditions
hereof; and (c) is executing this Agreement voluntarily, free from
any influence, coercion or duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
ATTEST: EUROSOFT CORP.
- -------------------- By:/s/ William H. Luckman
-------------------------
DO IT-DEVELOPMENT INTERNATIONAL OY
ATTEST:
By:/s/ Kari Sarvanto
--------------------
Kari Sarvanto, President
WITNESS: DO IT Shareholder
By:/s/ Kari Sarvanto
---------------------
Kari Sarvanto
EXHIBIT "A"
LIST OF Do it SHAREHOLDER
Name % of Shares
Kari Sarvanto 100%
TOTAL 100%
EXHIBIT 3.4 STOCK PURCHASE AGREEMENT BETWEEN EUROSOFT CORP. AND
MILLENNIUM THREE SOLUTIONS
- ---------------------------------------------------------------
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
by and among
EUROSOFT CORP.
a Florida Corporation
and
MILLENNIUM THREE SOLUTIONS
a Northern Ireland Corporation
effective as of December 3, 1998
STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE
THIS STOCK PURCHASE AGREEMENT AND SHARE EXCHANGE, made and
entered into this 3rd day of December, 1998, by and among
EuroSoft Corp., a Florida corporation with its principal place of
business located at 11300 U.S. Highway 1, Suite 400 North Palm
Beach, Florida 33408 ("EuroSoft"), Millennium Three Solutions, a
Northern Ireland Corporation with its principal place of business
at 32-35 Templemore Business Park, Northland Road, L'Derry,
Northern Ireland BT 48 OLD ("MTS") and the individual listed on
Exhibit "A" attached hereto and specifically incorporated herein
by this reference (the "MTS Shareholders"), (MTS and MTS
Shareholders jointly referred to as the "MTS Parties")
Premises
A. This Agreement provides for the acquisition of MTS by
EuroSoft whereby MTS shall become a wholly owned subsidiary of
EuroSoft and in connection therewith, the issuance of 4,000,000 ($
0.0001 par value per share) shares of restricted common stock of
EuroSoft to the MTS Shareholders as designated on Exhibit "A", the
payment of $500,000 U.S. and other consideration.
B. The boards of directors of MTS and EuroSoft have
determined, subject to the terms and conditions set forth in this
Agreement, that the transaction contemplated hereby is desirable
and in the best interests of their stockholders, respectively.
This Agreement is being entered into for the purpose of setting
forth the terms and conditions of the proposed acquisition.
Agreement
NOW, THEREFORE, on the stated premises and for and in
consideration of the mutual covenants and agreements hereinafter
set forth and the mutual benefits to the parties to be derived
here from, it is hereby agreed as follows:
ARTICLE I
---------
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
EUROSOFT
As an inducement to and to obtain the reliance of MTS,
EuroSoft represents and warrants as follows:
Section 1.1 Organization. EuroSoft is a corporation duly
organized, validly existing, and in good standing under the laws
of Florida and has the corporate power and is duly authorized,
qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets
owned by it or the nature of the business transacted by it
requires qualification. Included in the EuroSoft Schedules (as
hereinafter defined) are complete and correct copies of the
articles of incorporation, bylaws and amendments thereto of
EuroSoft as in effect on the date hereof. The execution and
delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the
terms hereof will not violate any provision of EuroSoft's articles
of incorporation or bylaws. EuroSoft has full power, authority
and legal right and has taken all action required by law, its
articles of incorporation, its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section 1.2 Capitalization. The authorized
capitalization of EuroSoft consists of 50,000,000 Common Shares,
$0.0001 par value per share, and 10,000,000 Preferred Shares,
$0.0001 par value per share. As of the date hereof, EuroSoft has
17,197,070 common shares issued and outstanding, of which 2,600,000
are unrestricted. EuroSoft is presently a public company
listed on the NASDAQ OTC Bulletin Board.
As of the Closing Date hereof, no shares of Preferred Stock will
be issued or outstanding. All issued and outstanding shares are
legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person.
EuroSoft has no other securities, warrants or options authorized
or issued.
Section 1.3 Subsidiaries and Predecessor Corporations.
EuroSoft does not have any other subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 1.4 Litigation and Proceedings. To the best
of EuroSoft's knowledge and belief, there are no actions, suits,
proceedings or investigations pending or threatened by or against
EuroSoft, affecting EuroSoft or its properties, at law or in
equity, before any court or other governmental agency or
instrumentality, domestic or foreign or before any arbitrator of
any kind that would have a material adverse affect on the
business, operations, financial condition or income of EuroSoft.
EuroSoft does not have any knowledge of any default on its part
with respect to any judgment, order, writ, injunction, decree,
award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a
default.
Section 1.5 Material Contract Defaults. To the best
of EuroSoft's knowledge and belief, EuroSoft is not in default in
any material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of EuroSoft,
and there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which EuroSoft has not taken adequate steps to prevent such a
default from occurring.
Section 1.6 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which EuroSoft
is a party or to which any of its properties or operations are
subject.
Section 1.7 Governmental Authorizations. To the best
of EuroSoft's knowledge, EuroSoft has all licenses, franchises,
permits or other governmental authorizations legally required to
enable EuroSoft to conduct its business in all material respects
as conducted on the date hereof. Except for compliance with
federal and state securities and corporation laws, as hereinafter
provided, no authorization, approval, consent or order of, or
registration, declaration or filing with, any court or other
governmental body is required in connection with the execution and
delivery by EuroSoft of this Agreement and the consummation of
EuroSoft of the transactions contemplated hereby.
ARTICLE II
----------
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF MTS
As an inducement to, and to obtain the reliance of EuroSoft,
MTS represents and warrants as follows:
Section 2.1 Organization. MTS is a corporation duly
organized, validly existing and in good standing under the laws of
Northern Ireland and has the corporate power and is duly
authorized, qualified, franchised and licensed under all
applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry
on its business in all material respects as it is now being
conducted, including qualification to do business as a foreign
entity in the country or states in which the character and
location of the assets owned by it or the nature of the business
transacted by it requires qualification. Included in the MTS
Schedules (as hereinafter defined) are complete and correct copies
of the articles of incorporation, bylaws and amendments (or
Northern Ireland equivalent documents) thereto of MTS as in effect
on the date hereof. The execution and delivery of this Agreement
does not and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not,
violate any provision of MTS's certificate of incorporation or
bylaws (or Northern Ireland equivalent documents). MTS has full
power, authority and legal right and has taken all action required
by law, its articles of incorporation, bylaws or otherwise to
authorize the execution and delivery of this Agreement.
Section 2.2 Capitalization. The authorized paid up
share capitalization of MTS consists of 50,000 Pounds Sterling.
As of the date hereof there are 49,998 Shares issued and
outstanding to the following: Brian Doherty - 25,499; Elaine
Doherty - 11,999; and Damian Kitson - 12,500. All issued and
outstanding MTS shares have been legally issued, fully paid and
are nonassessable as of closing.
Section 2.3 Subsidiaries. MTS has no subsidiary
companies.
Section 2.4 Tax Matters; Books & Records
(a) The books and records, financial and others, of MTS
are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices;
and
(b) Except for income taxes\VAT due for the 1997 tax
year, MTS has no liabilities with respect to the payment of any
country, federal, state, county, local or other taxes (including
any deficiencies, interest or penalties).
Section 2.5 Information. The information concerning
MTS as set forth in this Agreement and in the MTS Schedules is
complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a
material fact required to make the statements made, in light of
the circumstances under which they were made, not misleading.
Section 2.6 Absence of Certain Changes or Events.
Except as described herein or in the MTS Schedules, since December
31, 1997:
(a) MTS has not: (i) amended its certificate of
incorporation or bylaws; (ii) waived any rights of value which in
the aggregate are extraordinary or material considering the
business of MTS; (iii) made any material change in its method of
management, operation or accounting; or (iv) made any accrual or
arrangement for or payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or
former officer or employee;
(b) MTS has not: (i) granted or agreed to grant any
options, warrants or other rights for its certificates, bonds or
other corporate securities calling for the issuance thereof, which
option, warrant or other right has not been canceled as of the
Closing Date; (ii) borrowed or agreed to borrow any funds or
incurred or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in
the ordinary course of business; and
(c) to the best knowledge of MTS, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of MTS.
Section 2.7 Title and Related Matters. MTS has good
and marketable title to and is the sole and exclusive owner of all
of its properties, inventory, interests in properties and assets,
real and personal (collectively, the "Assets") which are reflected
in the most recent MTS balance sheet and the MTS Schedules or
acquired after that date (except properties, interests in
properties and assets sold or otherwise disposed of since such
date in the ordinary course of business), free and clear of all
liens, pledges, charges or encumbrances. Except as set forth in
the MTS Schedules, MTS owns free and clear of any liens, claims,
encumbrances, royalty interests or other restrictions or
limitations of any nature whatsoever and
all procedures, techniques, marketing plans, business plans,
methods of management or other information utilized in connection
with MTS's business. Except as set forth in the MTS Schedules, no
third party has any right to, and MTS had not received any notice
of infringement of or conflict with asserted rights of others with
respect to any product, technology, data, trade secrets, know-how,
proprietary techniques, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a materially
adverse affect on the business, operations, financial conditions or
income of MTS or any material portion of its properties, assets
or rights.
Section 2.8 Litigation and Proceedings. There are no
actions, suits or proceedings pending or, to the best of MTS's
knowledge and belief, threatened by or against or affecting MTS,
at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator
of any kind that would have a material adverse effect on the
business, operations, financial condition, income or business
prospects of MTS. MTS does not have any knowledge of any default
on its part with respect to any judgement, order, writ,
injunction, decree, award, rule or regulation of any court,
arbitrator or governmental agency or instrumentality.
Section 2.9 Contracts. On the Closing Date:
(a) There are no material contracts, agreements,
franchises, license agreements, or other commitments to which MTS
is a party or by which it or any of its properties are bound;
(b) MTS is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other
corporate restriction or any judgment, order, writ, injunction,
decree or award which materially and adversely affects, or in the
future may (as far as MTS can now foresee) materially and
adversely affect, the business, operations, properties, assets or
conditions of MTS; and
(c) MTS is not a party to any material oral or written:
(i) contract for the employment of any officer or employee; (ii)
profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any
obligation for the borrowing of money or otherwise, excluding
endorsements made for collection and other guaranties of
obligations, which, in the aggregate exceeds $1,000; (v)
consulting or other similar contract with an unexpired term of
more than one year or providing for payments in excess of $10,000
in the aggregate; (vi) collective bargaining agreement; (vii)
contract, agreement, or other commitment involving payments by it
for more than $10,000 in the aggregate.
Section 2.10 No Conflict With Other Instruments. The
execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the
breach of any term or provision of, or constitute an event of
default under, any material indenture, mortgage, deed of trust or
other material contract, agreement or instrument to which MTS is a
party or to which any of its properties or operations are subject.
Section 2.11 Material Contract Defaults. To the best
of MTS's knowledge and belief, MTS is not in default in any
material respect under the terms of any outstanding contract,
agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of MTS, and
there is no event of default in any material respect under any
such contract, agreement, lease or other commitment in respect of
which MTS has not taken adequate steps to prevent such a default
from occurring.
Section 2.12 Governmental Authorizations. To the best
of MTS's knowledge, MTS has all licenses, franchises, permits and
other governmental authorizations that are legally required to
enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance
with federal and state securities or corporation laws, no
authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body
is required in connection with the execution and delivery by MTS
of the transactions contemplated hereby.
Section 2.13 Compliance With Laws and Regulations. To
the best of MTS's knowledge and belief, MTS has complied with all
applicable statutes and regulations of any federal, state or other
governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the
business; operations, properties, assets or condition of MTS or
would not result in MTS's incurring any material liability.
Section 2.14 Insurance. All of the insurable
properties of MTS are insured for MTS's benefit in accordance with
the insurance policies disclosed in the MTS Schedules under valid
and enforceable policy or policies containing substantially
equivalent coverage and will be outstanding and in full force at
the Closing Date.
Section 2.15 Approval of Agreement. The holders of
all of the Common Voting Shares outstanding of MTS have authorized
the execution and delivery of the Agreement by MTS and have
approved the transactions contemplated hereby.
Section 2.16 Material Transactions or Affiliations.
As of the Closing Date, there will exist no material contract,
agreement or arrangement between MTS and any person who was at the
time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by MTS to own
beneficially, ten percent (10%) or more of the issued and
outstanding Common Shares of MTS and which is to be performed in
whole or in part after the date hereof. MTS has no commitment,
whether written or oral, to lend any funds to, borrow any money
from or enter into any other material transactions with, any such
affiliated person.
Section 2.17 Labor Relations. MTS has never had a
work stoppage resulting from labor problems.
Section 2.18 MTS Schedules. Upon execution hereof,
MTS shall deliver to EuroSoft the following schedules, which are
collectively referred to as the "MTS Schedules" which are dated
the date of this Agreement, all certified by an officer of MTS to
be complete, true and accurate:
(a) complete and correct copies of the certificate of
incorporation, bylaws and amendment (or Northern Ireland
equivalent) thereto of MTS as in effect as of the date of this
Agreement;
(b) copies of two (2) previous years financial statements
of MTS;
(c) copies of two (2) previous years income and any other
tax returns of MTS;
(d) all contracts of MTS presently in effect;
(e) Disclosure Statement, and Officers and Directors
Questionnaires;
(f) the description of any material adverse change in the
business, operations, property, assets, or condition of MTS since
December 31, 1997 required to be provided pursuant to Section
2.6; and
(g) any other information, together with any required
copies of documents, required to be disclosed in the MTS Schedules
by Sections 2.1 through 2.17.
MTS shall cause the MTS Schedules and the instruments to be
delivered to EuroSoft hereunder to be updated after the date
hereof up to and including the Closing Date.
ARTICLE III
-----------
EXCHANGE PROCEDURE AND OTHER CONSIDERATION
Section 3.1 Share Exchange/Delivery of MTS Securities.
On the Closing Date, the holders of MTS Common Shares (or the
Northern Ireland equivalent) shall deliver to EuroSoft (i)
certificates or other documents evidencing all of the issued and
outstanding MTS Common Shares, duly endorsed in blank or with
executed power attached thereto in transferrable form (or its
Northern Ireland equivalent). On the Closing Date, all previously
issued and outstanding Common Shares of MTS (or its Northern
Ireland equivalent) shall be canceled and all rights in respect
thereof shall cease and EuroSoft shall receive such shares in MTS,
the Northern Ireland corporation, so that MTS shall become a
wholly owned subsidiary of EuroSoft. MTS's Northern Ireland legal
counsel shall take all appropriate action in Northern Ireland to
confirm such transaction.
Section 3.2 Issuance of MTS Common Shares. In
exchange for all of the MTS Common Shares tendered pursuant to
Section 3.1, EuroSoft shall issue an aggregate of 4,000,000
"restricted" EuroSoft Common Shares to Brian Doherty. Such shares
shall be "restricted" for two (2) years from the date of issuance.
Section 3.3 Other Consideration. MTS shall receive the
following additional consideration:
(a) $100,000.00 U.S. payable at the Closing Date;
$100,000.00 U.S. payable no later than January 7, 1999; $100,000
U.S. payable no later than March 15, 1999; $100,000.00 U.S.
payable no later than May 15, 1999; $100,000 U.S. payable no later
than July 15, 1999 . Eurosoft shall not have the ability to
withdraw such $500,000 from MTS. Such $500,000 shall be utilized
by MTS for its operations, including, but not limited to, salary
increases for the key employees of MTS. In the event that
Eurosoft breaches this Agreement by failing to make the full
payment as stated above by July 15, 1999, then MTS shall be
entitled to retain $200,000 U.S. and the MTS Shareholders shall be
entitled to the shares of MTS per their present share holdings as
stated on Exhibit "A.". Additionally, if such breach occurs, then
the 4,000,000 shares of EuroSoft which were tendered per Section
3.2 above, shall be returned to EuroSoft for no additional
consideration.
(b) Brian Doherty, Elaine Doherty and Damian Kitson shall be
provided with employment agreements, attached hereto and made a
part hereof, to operate the wholly-owned Northern Ireland
subsidiary.
(c) After closing herein, MTS shall be entitled to retain
fifty (50%) percent of the net profits from all work generated by
the MTS division. Eurosoft shall be entitled to the remaining
fifty (50%) percent of such net profits. Although Eurosoft shall
have the right to retain its 50% of net profits as stated above,
Eurosoft shall not have the ability to withdraw MTS' 50% of net
profits as stated above. Based on such retention of net profits
by MTS, it shall be allowed to utilize such net profits for
bonuses to key employees, provided such bonuses do not effect day
to day operations of MTS.
Section 3.4 Events Prior to Closing. Upon execution
hereof or as soon thereafter as practical, management of MTS and
EuroSoft shall execute, acknowledge and deliver (or shall cause to
be executed, acknowledged and delivered) any and all certificates,
opinions, financial statements, schedules, agreements, resolutions
rulings or other instruments required by this Agreement to be so
delivered, together with such other items as may be reasonably
requested by the parties hereto and their respective legal counsel
in order to effectuate or evidence the transactions contemplated
hereby, subject only to the conditions to Closing referenced
herein below.
Section 3.5 Closing. The closing ("Closing") of the
transactions contemplated by this Agreement shall be on or about
December 3, 1998 ("Closing Date").
Section 3.6 Termination.
(a) This Agreement may be terminated by the board of
directors or majority interest of Shareholders of either EuroSoft
or MTS, respectively, at any time prior to the Closing Date if:
(i) there shall be any action or proceeding before any
court or any governmental body which shall seek to restrain,
prohibit or invalidate the transactions contemplated by this
Agreement and which, in the judgement of such board of directors,
made in good faith and based on the advice of its legal counsel,
makes it inadvisable to proceed with the exchange contemplated by
this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is required
to consummate such transactions.
In the event of termination pursuant to this paragraph (a) of
this Section 3.5, no obligation, right, or liability shall arise
hereunder and each party shall bear all of the expenses incurred
by it in connection with the negotiation, drafting and execution
of this Agreement and the transactions herein contemplated;
(b) This Agreement may be terminated at any time prior to
the Closing Date by action of the board of directors of EuroSoft
if MTS shall fail to comply in any material respect with any of
its covenants or agreements contained in this Agreement or if any
of the representations or warranties of MTS contained herein shall
be inaccurate in any material respect, which noncompliance or
inaccuracy is not cured after 20 days written notice thereof is
given to MTS. If this Agreement is terminated pursuant to this
paragraph (b) of this Section 3.5, this Agreement shall be of no
further force or effect and no obligation, right or liability
shall arise hereunder.
Section 3.7 Directors of MTS After Acquisition. Upon the
Closing, the Board of Directors of MTS shall be the following:
Brian Doherty. Each director shall hold office until his
successor shall have been duly elected and shall have qualified or
until his earlier death, resignation or removal. All opinions and
expertise of the directors in the conduct of MTS shall receive due
consideration.
Section 3.8 Officers of MTS. Upon the closing, the
following persons shall be elected as officers of MTS in
accordance with procedures set forth in the MTS bylaws (or
Northern Ireland equivalent):
NAME OFFICE
Brian Doherty Chief Executive Officer and
President
Brian Doherty Treasurer
Brian Doherty Secretary
Section 3.9 Post Closing Requirements of Northern Ireland
Operation Company. Subsequent to closing of this transaction, the
Northern Ireland operating company (wholly-owned subsidiary of
EuroSoft) shall undertake the following: (i) provide all
financial information to William H. Luckman on a quarterly basis;
(ii) provide William H. Luckman duplicate statements of the
Northern Ireland bank account immediately after receipt of same;
and (iii) after Closing, an audit of MTS's previous financial
statements shall be audited for United States tax purposes, at the
sole expense of EuroSoft. MTS and the MTS Shareholders shall
cooperate fully with EuroSoft regarding same.
ARTICLE IV
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SPECIAL COVENANTS
Section 4.1 Access to Properties and Records. Prior
to closing, MTS and EuroSoft will each afford to the officers and
authorized representatives of the other full access to the
properties, books and records of MTS and EuroSoft as the case may
be, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs
of the other and each will furnish the other with such additional
financial and operating data and other information as to the
business and properties of MTS and EuroSoft as the case may be, as
the other shall from time to time reasonably request.
Section 4.2 Availability of Rule 144. Each of the
parties acknowledge that the stock of EuroSoft to be issued
pursuant to this Agreement will be "restricted securities, " as
that term is defined in Rule 144 promulgated pursuant to the
Securities Act. EuroSoft is under no obligation to register such
shares under the Securities Act, or otherwise. The stockholders
of EuroSoft holding restricted securities of EuroSoft as of the
date of this Agreement and their respective heirs, administrators,
personal representatives, successors and assigns, are intended
third party beneficiaries of the provisions set forth herein. The
covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
Notwithstanding Rule 144, all "restricted" shares issued in
accordance with this Agreement shall be restricted for two (2)
years from the date of issuance.
Section 4.3 Special Covenants and Representations
Regarding the MTS Common Shares to be Issued in the Exchange.
The consummation of this Agreement, including the issuance of the
EuroSoft Common Shares to the Shareholders of MTS as contemplated
hereby, constitutes the offer and sale of securities under the
Securities Act, and applicable state statutes. Such transaction
shall be consummated in reliance on exemptions from the
registration and prospectus delivery requirements of such statutes
which depend, inter alia, upon the circumstances under which the
MTS Shareholders acquire such securities.
Section 4.4 Third Party Consents. MTS and EuroSoft
agree to cooperate with each other in order to obtain any required
third party consents to this Agreement and the transactions herein
contemplated.
Section 4.5 Actions Prior and Subsequent to Closing.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the MTS Schedules or as
permitted or contemplated by this Agreement, MTS will use its best
efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
(ii) maintain and keep its properties in states of good
repair and condition as at present, except for depreciation due to
ordinary wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all federal
and state laws and all rules, regulations and orders imposed by
federal or state governmental authorities in Northern Ireland.
(b) From and after the date of this Agreement until the
Closing Date, MTS will not, without the prior consent of
EuroSoft:
(i) except as otherwise specifically set forth herein,
make any change in its articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
Common Shares, except as may otherwise be required by law, or
effect any stock split or otherwise change its capitalization,
except as provided herein;
(iii) enter into or amend any employment, severance or
similar agreements or arrangements with any directors or officers;
(iv) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date hereof
to acquire any Common Shares; or
(v) purchase or redeem any Common Shares.
(c) Eurosoft shall provide MTS with all support and
assistance as may be necessary for the prudent management of all
present or future operations of MTS. In addition, Eurosoft agrees
that it shall not conduct any of its future or existing businesses
in such a manner as may encroach upon the business of MTS.
Section 4.6 Indemnification.
(a) MTS and Brian Doherty, individually, hereby agree to
indemnify EuroSoft and each of the officers, agents and directors
of EuroSoft as of the date of execution of this Agreement
including, but not limited to William H. Luckman, against any
loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against and litigation,
commenced or threatened or any claim whatsoever), to which it or
they may become subject to arising out of or based on any
inaccuracy appearing in or conscious misrepresentation made in
this Agreement. The indemnification provided for in this
paragraph shall survive the Closing and consummation of the
transactions contemplated hereby and termination
of this Agreement; and
(b) EuroSoft and its officers and directors hereby agrees
to indemnify MTS and each of the officers, agents, directors and
current shareholders of MTS as of the Closing Date against any
loss, liability, claim, damage or expense (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation,
commenced or threatened or any claim whatsoever), to which it or
they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in this Agreement and
particularly the representation regarding no liabilities referred
to in Section 2.4 (b). The indemnification provided for in this
Section shall survive the Closing and consummation of the
transactions contemplated hereby and termination of this
Agreement.
Section 4.7 Repurchase
(a) In the event that Eurosoft shall decide to close
its operations and to remove its physical structures and material
conduct of its business in the United Kingdom (specifically, close
its MTS operation), then Brian Doherty, Elaine Doherty and Damian
Kitson shall have the first option to repurchase the operations of
MTS.
(b) The terms of such repurchase shall be determined by
an independent assessment by an arbitrator to be appointed by the
Northern Ireland Department of Economic Development, whose
decision in such reference shall be final and binding on the
parties. The cost of such appraisal shall be borne equally by the
parties.
ARTICLE V
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CONDITIONS PRECEDENT TO OBLIGATIONS OF EUROSOFT
The obligations of EuroSoft under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the
following conditions:
Section 5.1 Accuracy of Representations. The
representations and warranties made by MTS in this Agreement were
true when made and shall be true at the Closing Date with the same
force and effect as if such representations and warranties were
made at the Closing Date (except for changes therein permitted by
this Agreement), and MTS shall have performed or compiled with all
covenants and conditions required by this Agreement to be
performed or complied with by MTS prior to or at the Closing.
EuroSoft shall be furnished with a certificate, signed by a duly
authorized officer of MTS and dated the Closing Date, to the
foregoing effect.
Section 5.2 Shareholder Approval. All of the
Shareholders of MTS shall have approved this Agreement and the
transactions contemplated herein.
Section 5.3 Officer's Certificate. EuroSoft shall
have been furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of MTS to the effect that:
(a) the representations and warranties of MTS set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; (b) MTS has
performed all covenants, satisfied all conditions, and complied with
all other terms and provisions of this Agreement to be
performed, satisfied or complied with by it as of the Effective
Date; (c) since such date and other than as previously disclosed
to EuroSoft and MTS has not entered into any material transaction
other than transactions which are usual and in the ordinary
course if its business; and (d) No litigation, proceeding,
investigation or inquiry is pending or, to the best knowledge of
MTS, threatened, which might result in an
action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement or, to the extent not disclosed in
the MTS Schedules, by or against MTS which might result in any
material adverse change in any of the assets, properties, business
or operations of MTS.
Section 5.4 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations of nor
shall any event have occurred which, with the lapse of time or the
giving of notice, may cause or create any material adverse change
in the financial condition, business or operations or MTS.
Section 5.5 Opinion of Counsel to MTS. EuroSoft shall
receive an opinion dated the Closing date of December 3, 1998,
counsel to MTS, in substantially the following form:
(a) MTS is a corporation duly organized, validly existing,
and in good standing under the laws of Northern Ireland and has
the corporate power and is duly authorized, qualified, franchised
and licensed under all material applicable laws, regulations,
ordinances and orders of public authorities to own all of its
properties and assets and to conduct its business as now
conducted, including qualification to do business as a foreign
corporation in the states in which the character and location of
the assets owned by it or the nature of the business transacted by
it requires qualifications;
(b) To the best knowledge of such legal counsel, the
execution and delivery by MTS of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of MTS's certificate of
incorporation or Bylaws or violate any court order, writ,
injunction or decree applicable to MTS, or its properties or assets;
(c) All issued and outstanding Share Certificates are
legally issued, fully paid and nonassessable. Except as set forth
in the MTS Schedules, to the best knowledge of such legal counsel,
there are no outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or commitments
obligating MTS to issue any additional Share Certificates.
(d) This Agreement has been duly and validly authorized,
executed and delivered by MTS;
(e) To the best knowledge of such legal counsel, except
as set forth in the MTS Schedules, there are no actions, suits or
proceedings pending or threatened by or against or affecting MTS
or its properties, at laws or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind;
(f) MTS has taken all actions required by the applicable
laws of Northern Ireland to permit the acquisition of the
outstanding shares of MTS into EuroSoft.
Section 5.6 Other Items. EuroSoft shall have received
such further documents, certificates or instruments relating to
the transactions contemplated hereby as EuroSoft may reasonably
request.
ARTICLE VI
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CONDITIONS PRECEDENT TO OBLIGATIONS OF MTS
The obligations of MTS under this Agreement are subject to
the satisfaction, at or before the Closing date (unless otherwise
indicated herein), of the following conditions:
Section 6.1 Accuracy of Representations. The
representations and warranties made by EuroSoft in this Agreement
were true when made and shall be true as of the Closing Date
(except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties
were made at and as of the Closing Date, and EuroSoft shall have
performed and complied with all covenants and conditions required by
this Agreement to be performed or complied with by EuroSoft
prior to or at the Closing. MTS shall have been furnished with a
certificate, signed by a duly authorized executive officer of
EuroSoft and dated the Closing Date, to the foregoing effect.
Section 6.2 Officer's Certificate. MTS shall be
furnished with a certificate dated the Closing date and signed by
a duly authorized officer of EuroSoft to the effect that: (a)
the representations and warranties of EuroSoft set forth in the
Agreement and in all Exhibits, Schedules and other documents
furnished in connection herewith are in all material respects true
and correct as if made on the Effective Date; and (b) EuroSoft had
performed all covenants, satisfied all conditions, and complied
with all other terms and provisions of the Agreement to be
performed, satisfied or complied with by it as of the Effective
Date.
Section 6.3 No Material Adverse Change. Prior to the
Closing Date, there shall not have occurred any material adverse
change in the financial condition, business or operations or nor
shall any event have occurred which, with the lapse of time or
the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of
EuroSoft.
Section 6.4 Opinion of Counsel to EuroSoft. MTS
shall receive an opinion dated the Closing Date of Richard I.
Anslow & Associates, counsel to EuroSoft, in substantially the
following form:
(a) EuroSoft is a corporation duly organized, validly
existing, and in good standing under the laws of the state of
Florida and has the corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own
all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the
states in which the character and location of the assets owned by
it or the nature of the business transacted by it requires
qualification;
(b) To the best knowledge of such legal counsel, the
execution and delivery by EuroSoft of this Agreement and the
consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not conflict with or result
in the breach of any term or provision of EuroSoft's articles of
incorporation or bylaws or constitute a default or give rise to a
right of termination, cancellation or acceleration under any
material mortgage, indenture, deed of trust, license agreement or
other obligation or violate any court order, writ, injunction or
decree applicable to EuroSoft or Sicor or its properties or
assets;
(c) The authorized capitalization of EuroSoft consists of
50,000,000 shares of Common Stock, par value $0.0001 per share and
10,000,000 shares of Preferred Stock, par value $0.0001 per share.
(d) The EuroSoft Common Shares to be issued to the MTS
Shareholders pursuant to the terms of this Agreement will be, when
issued in accordance with the terms hereof, legally issued, fully
paid and non-assessable;
(e) This Agreement has been duly and validly authorized,
executed, and delivered and constitutes the legal and binding
obligation of EuroSoft, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of
creditors generally;
(f) To the best knowledge of such counsel, there are no
actions, suits or proceedings pending or threatened by or against
EuroSoft or affecting EuroSoft's properties, at law or in equity,
before any court or other governmental agency or instrumentality,
domestic or foreign or before any arbitrator of any kind; and
(g) EuroSoft have taken all actions required by the
applicable laws of the state of Florida to permit the issuance of
the EuroSoft Common Shares to the MTS Shareholder.
ARTICLE VII
-----------
MISCELLANEOUS
Section 7.1 Brokers and Finders. Each party hereto
hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the
bringing of the parties together in the negotiation, execution, or
consummation of this Agreement. The parties each agree to indemnify
the other against any claim by any third person not
listed in Schedule 7.1 for any commission, brokerage or finder's
fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or
understanding between the indemnifying party and such third
person, whether express or implied from the actions of the
indemnifying party.
Section 7.2 Law. Forum and Jurisdiction. This
Agreement shall be construed and interpreted in accordance with
the laws of the State of New Jersey, United States of America.
Section 7.3 Notices. Any notices or other
communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by
registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to EuroSoft: Richard I. Anslow & Associates
4255 Route 9, Suite D
Freehold, New Jersey 07728
If to MTS: Millennium Three Solutions
32-35 Templemore Business Park
Northland Road
L'Derry, Northern Ireland BT48 OLD
or such other addresses as shall be furnished in writing by any
party in the manner for giving notices hereunder, and any such
notice or communication shall be deemed to have given as of the
date so delivered, mailed or telegraphed.
Section 7.4 Attorneys' Fees. In the event that any
party institutes any action or suit to enforce this Agreement or
to secure relief from any default hereunder or breach hereof, the
breaching party or parities shall reimburse the non-breaching
party or parties for all costs, including reasonable attorneys'
fee, incurred in connection therewith and in enforcing or
collecting any judgment rendered therein.
Section 7.5 Confidentiality. Each party hereto agrees
with the other parties that, unless and until the reorganization
contemplated by this Agreement has been consummated, they and
their representatives will hold in strict confidence all data and
information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or
employee, or from any books or records or from personal
inspection, of such other party, and shall not used such data or
information or disclose the same to others, except: (i) to the
extent such data is a matter of public knowledge or is required by
law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 7.6 Schedules; Knowledge. Each party is
presumed to have full knowledge of all information set forth in
the other party's schedules delivered pursuant to this Agreement.
Section 7.7 Third Party Beneficiaries. This contract
is solely among MTS, MTS Shareholders, EuroSoft and except as
specifically provided, no director, officer, stockholder,
employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
Section 7.8 Entire Agreement. This Agreement
represents the entire agreement between the parties relating to
the subject matter hereof. This Agreement alone fully and
completely expresses the agreement of the parties relating to the
subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written
or oral, except a set forth herein. This Agreement may not be
amended or modified, except by a written agreement signed by all
parties hereto.
Section 7.9 Survival; Termination. The
representations, warranties and covenants of the respective
parties shall survive the Closing Date and the consummation of the
transactions herein contemplated for 18 months.
Section 7.10 Counterparts. This Agreements may be
executed in multiple counterparts, each of which shall be deemed
an original and all of which taken together shall be but a single
instrument.
Section 7.11 Amendment or Waiver. Every right and
remedy provided herein shall be cumulative with every other right
and remedy, whether conferred herein, at law, or in equity, and
may be enforced concurrently herewith, and no waiver by any party
of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then,
theretofore, or thereafter occurring or existing. At any time
prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the
terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be
extended by a writing signed by the party or parties for whose
benefit the provision is intended.
Section 7.12 Incorporation of Recitals. All of the
recitals hereof are incorporated by this reference and are made a
part hereof as though set forth at length herein.
Section 7.13 Expenses. Each party herein shall bear
all of their respective cost s and expenses incurred in connection
with the negotiation of this Agreement and in the consummation of
the transactions provided for herein and the preparation thereof.
Section 7.14 Headings; Context. The headings of the
sections and paragraphs contained in this Agreement are for
convenience of reference only and do not form a part hereof and in
no way modify, interpret or construe the meaning of this
Agreement.
Section 7.15 Benefit. This Agreement shall be binding
upon and shall insure only to the benefit of the parties hereto,
and their permitted assigns hereunder. This Agreement shall not
be assigned by any party without the prior written consent of the
other party.
Section 7.16 Public Announcements. Except as may be
required by law, neither party shall make any public announcement
or filing with respect to the transactions provided for herein
without the prior consent of the other party hereto.
Section 7.17 Severability. In the event that any
particular provision or provisions of this Agreement or the other
agreements contained herein shall for any reason hereafter be
determined to be unenforceable, or in violation of any law,
governmental order or regulation, such unenforceability or
violation shall not affect the remaining provisions of such
agreements, which shall continue in full force and effect and be
binding upon the respective parties hereto.
Section 7.18 Failure of Conditions; Termination. In
the event of any of the conditions specified in this Agreement
shall not be fulfilled on or before the Closing Date, either of
the parties have the right either to proceed or, upon prompt
written notice to the other, to terminate and rescind this
Agreement without liability to any other party. The election to
proceed shall not affect the right of such electing party
reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
Section 7.19 No Strict Construction. The language of
this Agreement shall be construed as a whole, according to its
fair meaning and intendment, and not strictly for or against
wither party hereto, regardless of who drafted or was principally
responsible for drafting the Agreement or terms or conditions
hereof.
Section 7.20 Execution Knowing and Voluntary. In
executing this Agreement, the parties severally acknowledge and
represent that each: (a) has fully and carefully read and
considered this Agreement; (b) has been or has had the
opportunity to be fully apprized of its attorneys of the legal
effect and meaning of this document and all terms and conditions
hereof; and (c) is executing this Agreement voluntarily, free from
any influence, coercion or duress of any kind.
IN WITNESS WHEREOF, the corporate parties hereto have caused
this Agreement to be executed by their respective officers,
hereunto duly authorized, and entered into as of the date first
above written.
ATTEST: EUROSOFT CORP.
/s/ William H. Luckman By: /s/ David Yancy
- --------------------------- -----------------------
William H. Luckman, Secretary David E. Yancy, President
MILLENNIUM THREE SOLUTIONS
ATTEST:
By: /s/ Brain Doherty
- --------------------------- ----------------------
, Secretary Brian Doherty, President
WITNESS: MTS Shareholders
/s/ Brain Doherty
-----------------
Brian Doherty
/s/ Elaine Doherty
-------------------
Elaine Doherty
/s/ Damian Kitson
------------------
Damian Kitson
EXHIBIT "A"
LIST OF MTS SHAREHOLDER
Name % of Shares
Brian Doherty 51%
Elaine Doherty 24%
Damian Kitson 25%
---------------
TOTAL 100%
EXHIBIT V CONFIDENTIAL OFFERING CIRCULAR
- --------------------------------------------
CONFIDENTIAL OFFERING CIRCULAR
Strategic Information Management Incorporated
2,000,000 Shares
Offering Price of $0.025
INVESTMENT IN THE SHARES OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK AND SHOULD BE CONSIDERED ONLY BY THOSE PERSONS WHO ARE ABLE
TO BEAR THE LOSS OF THEIR ENTIRE INVESTMENT. See "Risk Factors."
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON THE ADEQUACY OF THIS DOCUMENT.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Prior to this offering, there has been no market for the Common
Stock of Strategic Information Management Incorporated ("SIMI" or
the "Company"). Although the Company is hopeful that its Common
Stock will be traded on the OTC Bulletin Board in the near future,
there can be no assurance that any trading market in these
securities will develop or, if developed that it will be
sustained. The Company is not subject to the reporting
requirements of Section 13 or 15(d) of the Securities and Exchange
Act of 1934, and therefore is not required to file annual,
quarterly or other reports with the Securities and Exchange
Commission (the "Commission"). This offering is being conducted
pursuant to Rule 504 of Regulation D, promulgated pursuant to the
Securities Act of 1933, as amended (the "Act").
<TABLE>
<S> <C> <C>
Price to Proceeds to the
Investor(1)(2) Company (3)
-------------- ---------------
Per Share $ 0.025 $ 0.025
Total $ 50,000.00 $ 50,000.00
</TABLE>
(see notes on following page)
Strategic Information Management Incorporated
Freehold Office Plaza
4255 Route 9, Suite D
Freehold, NJ 07728
September 23, 1997
As Amended January 29, 1998
(footnotes from previous page)
(1) This offering is being made on a best-efforts basis with
respect to 2,000,000 Shares ($50,000), with an expiration date of
February 27, 1998, unless extended by the Company for an
additional period of ninety days, in its sole discretion.
(2) The Shares are being offered on behalf of the Company by
its directors and officers (who will not be compensated for doing
so), on a best efforts basis.
(3) The Company estimates that there will be expenses of
approximately $6,000 related to this offering, which shall
include, but not be limited to, legal fees, accounting fees,
filing fees and miscellaneous expenses.
BLUE SKY NOTICE
This offering will be made only to accredited investors and
up to 35 non-accredited investors, as that term is defined in the
Act.
- - - - - - - - -
THIS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER WOULD BE
UNLAWFUL. THE DELIVERY HEREOF SHALL NOT UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
- - - - - - - - -
THE SECURITIES ARE OFFERED BY THE COMPANY SUBJECT TO ACCEPTANCE OF
AN OFFER TO PURCHASE, WITHDRAWAL OR CANCELLATION OF THE OFFERING
WITHOUT NOTICE. THE COMPANY RESERVES THE RIGHT TO REJECT ANY
OFFER, IN WHOLE OR IN PART, FOR THE PURCHASE OF ANY OF THE
SECURITIES OFFERED HEREBY.
- - - - - - - - -
NOTICE TO NEW YORK RESIDENTS:
THIS DOCUMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL OF THE
STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY
GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
NOTICE TO FLORIDA RESIDENTS:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR THE FLORIDA SECURITIES ACT, BY
REASON OF SPECIFIC EXEMPTIONS THEREUNDER RELATING TO THE LIMITED
AVAILABILITY OF THE OFFERING. THESE SECURITIES CANNOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF TO ANY PERSON OR ENTITY
UNLESS SUBSEQUENTLY REGISTERED UNDER THE ACT OR THE LAWS OF THIS
STATE, IF SUCH REGISTRATION IS REQUIRED.
THE FLORIDA SECURITIES ACT PROVIDES, WHERE SALES ARE MADE TO FIVE
OR MORE PERSONS IN FLORIDA, ANY SALE MADE PURSUANT TO SUBSECTION
517.061 (11)(A)(5) OF THE FLORIDA SECURITIES ACT, SHALL BE
VOIDABLE BY SUCH FLORIDA PURCHASER EITHER WITHIN THREE DAYS AFTER
THE FIRST TENDER OF CONSIDERATION IS MADE BY SUCH PURCHASER TO THE
ISSUER OR AN ESCROW AGENT OR WITHIN THREE DAYS AFTER THE
AVAILABILITY OF THAT PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER,
WHICHEVER OCCURS FIRST.
THE AVAILABILITY TO THE PRIVILEGE TO VOID SALES PURSUANT TO
SECTION 517.061(11) IS HEREBY COMMUNICATED TO EACH FLORIDA
OFFEREE. EACH PERSON IS ENTITLED TO EXERCISE THE PRIVILEGE TO VOID
SALES GRANTED BY SECTION 517.061(11)(A)(5) AND WHO WISHES TO
EXERCISE SUCH RIGHT, MUST, WITHIN THREE DAYS AFTER THE TENDER OF
THE PURCHASE PRICE TO THE ISSUER, AN AGENT OF THE ISSUER
(INCLUDING ANY DEALER ON BEHALF OF THE COMPANY OR ANY SALES PERSON
OF SUCH DEALER) OR AN ESCROW AGENT, CAUSE A WRITTEN NOTICE OR
TELEGRAM TO BE SENT TO THE COMPANY AT THE ADDRESS PROVIDED IN THE
OFFERING CIRCULAR. SUCH LETTER OR TELEGRAM MUST BE SENT AND, IF
POSTMARKED, POSTMARKED ON OR PRIOR TO THE END OF THE
AFOREMENTIONED THIRD DAY. IF A PERSON IS SENDING A
LETTER, IT IS PRUDENT TO SEND SUCH A LETTER BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO ASSURE THAT IT IS RECEIVED AND ALSO
TO EVIDENCE THE TIME IT WAS MAILED. SHOULD A PERSON MAKE THIS
REQUEST ORALLY, THEY MUST ASK FOR WRITTEN CONFIRMATION THAT THIS
REQUEST HAS BEEN RECEIVED.
NOTICE TO ILLINOIS RESIDENTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECRETARY OF STATE OF ILLINOIS, NOR HAS THE SECRETARY OF STATE OF
ILLINOIS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
STRATEGIC INFORMATION MANAGEMENT INCORPORATED
CONFIDENTIAL OFFERING CIRCULAR
TABLE OF CONTENTS
- ------------------
<TABLE>
<S> <C>
TITLE PAGE NO.
- ------------------ ---------
SUMMARY............................................... 5
THE OFFERING.......................................... 6
RISK FACTORS.......................................... 7
THE COMPANY....................................... ... 10
USE OF PROCEEDS ...................................... 12
LITIGATION ........................................... 12
MANAGEMENT ........................................... 12
PRINCIPAL SHAREHOLDERS ............................... 13
DESCRIPTION OF SECURITIES ............................ 14
SUBSCRIPTION INFORMATION ............................. 15
EXHIBITS
Exhibit A -- Purchaser Questionnaire
Exhibit B -- Subscriber Agreement
</TABLE>
The Offering
Strategic Information Management Incorporated is offering on a
"best efforts" basis 2,000,000 Shares of Common Stock. The
Company's capital structure before and after the offering are
summarized below.
Securities Offered ....................................
Up to 2,000,000 Shares of Common Stock, $.0001 par value per share.
Offering Price ............................................
$0.025 per Share.
Common Stock Outstanding
Prior to the Offering ......................
1,000,000 shares
After the Offering ..........................
3,000,000 shares
Estimated Net Proceeds of the Offering
$50,000.00 (The Company estimates that there will be expenses of approximately
$6,000 related to this offering, which shall include, but not be
limited to, legal fees, accounting fees, filing fees and
miscellaneous expenses.)
Risk Factors ..............................................
Investment in the Shares involves a high degree of risk and
immediate and substantial dilution. Potential investors should
carefully consider the information presented under the caption
"Risk Factors" in this Confidential Offering Circular, and must be
able to bear the loss of their entire investment.
SUMMARY
The following is a summary of confidential information contained
in this CONFIDENTIAL OFFERING CIRCULAR and is qualified in its
entirety by the more detailed information appearing elsewhere
herein.
THE COMPANY
Strategic Information Management Incorporated (the "Company") is a
Florida corporation, and was incorporated in September of 1997
with its headquarters in Freehold, NJ.
The goal of this developmental stage corporation is to profit and
grow in the high- margin computer/information technology industry.
The intended focus will be to help small to mid-sized companies
and municipalities enhance their existing operating systems
through assessment and reconfiguration of both their automated
systems (networks, etc.) and their non-automated documents (files,
etc.). SIMI will conduct a study of the clients' operations and
prescribe a solution that is cost effective and efficient by using
the latest in software, hardware and date storage technology. The
Company intends to provide a long-term cost/savings analysis for
the client and a proposal for implementation. Following
installation of the new system, SIMI will provide training and
technical support through service contracts, and thus attempt to
establish a "partnership" with their clients by overseeing the
well being of the systems. The products that the Company will
offer will be established through vending arrangements with top
hardware and software providers, as well as through sub-contracting
work through specialized vendors.
The Company will in essence be a provider of information
management, with significant revenues not generated from margins
on product sold, but through hourly consulting fees and service
contracts.
Most businesses faced with exploding growth currently have a
difficult time staying lean and competitive due to costs related
to additional head-count or the misappropriation of capital
expenditure on the wrong equipment. By providing companies with
answers only a phone call away SIMI will se itself grow as
efficiently and quickly as its clients.
The principal office of Strategic Information Management
Incorporated, will be located in Freehold, NJ.
RISK FACTORS
The securities being offered hereby are speculative, involve a
high degree of risk and should be considered only by those persons
able to afford the loss of their entire investment. Accordingly,
prospective investors should carefully consider the following
factors, along with all of the other information contained in this
Confidential Offering Circular, before making any investment in
the Company.
New Products and Technological Changes. The market for the
Company's products and services is characterized by rapidly
changing technology, evolving industry standards and frequent
introduction of new products and services. The Company's success
will partially depend upon its ability to enhance its existing
products and services and to introduce new competitive products
and services with features that meet changing customer
requirements. In addition, there can be no assurance that
services or technologies developed by one or more of the Company's
present or potential competitors could not render obsolete both
present and future products and services of the Company. See "--
Competition."
Changing Customer Preferences. There can be no assurance that the
Company's services will receive or maintain substantial market
acceptance. Changes in customer preferences could adversely affect
levels of market acceptance of the Company's products and
services, and the Company's operating results.
Competition. There are many competitors entering and established
in the Information Services related market. Although the company
believes that it will be able to establish and maintain a sizable
market niche, there can be no assurance, that a competitor with
greater financial and human resources than the Company will not
enter the Company's market with products and services similar or
identical to those of the Company.
Absence of Patent Protection. The Company's ability to compete
successfully will depend in large part on its ability to protect any
proprietary technology it may develop. The Company has no
patents with respect to its product or service design or processes
and will attempt to protect its technology by limiting the people
with knowledge of its specifications to those with a need to know
and by having such persons execute confidentiality agreements.
There can be no assurance, however, that any intellectual property
protection or trade secret protection will be sufficient to
protect the Company and its business from others copying or
appropriating the Company's proprietary information.
Need for Additional Capital. Management expects that the net
proceeds of this offering, assuming all Shares are sold, will be
sufficient to meet the Company's working capital and other needs
for the immediate future. There can be no assurance that the
Company will not need to seek additional financing through the
public or private offering of debt and/or equity, or on what terms
it will need to do so, nor can there be any assurance that such
financing will be available on terms acceptable to the Company, if
at all. The Company's inability to raise capital beyond the
initial proceeds of this offering will have a material adverse
impact on the prospects of the Company and its business.
Dilution. The securities issued in this offering will suffer
immediate and substantial dilution in their net book value.
No Assurance of Public Market; Arbitrarily Determined Offering
Price. Prior to this offering, there has been no market for the
Company's securities. Consequently, the offering price of the
Shares has been determined arbitrarily by the Company and are not
necessarily related to the Company's asset value or net worth or
other established criteria of value. There can be no assurance
that a regular trading market will develop or that if developed,
will be sustained. In the absence of a trading market, an
investor may be unable to liquidate its investment. The market
price for the Common Stock may be significantly affected by such
factors as the introduction of new products or services by the
Company or its competitors, political or economic conditions in
the countries served by the Company or various factors affecting
international trade, marketing or communications, generally.
Additionally, in recent years the stock market has experienced a
high level of price and volume volatility, and market prices for
many companies, particularly small and emerging growth companies,
the securities of which trade in the over-the-counter market, have
experienced wide price fluctuations not necessarily related to the
operating performance of such companies.
Authorization of Preferred Stock and Other Anti-Takeover Devices.
The Board of Directors is authorized to issue shares of preferred
stock and to fix the relative voting, dividend, liquidation,
conversion, redemption and other rights, preferences and
limitations thereof without any further vote or action of the
shareholders. The issuance of preferred stock could adversely
affect the rights of the holders of Common Stock. In the event of
issuance, the preferred stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing
a change of control of the Company. Although the Company has no
present intention to issue any preferred stock, there can be no
assurance that the Company will not do so in the future.
Effect of Stock Options and Possible Impact on Future Financings;
Possible Dilution Although there are none, the holders of options
to purchase Common Stock that may be outstanding or issued in the
future have the opportunity to profit from any rise in the value
of the Common Stock, without assuming the risk of ownership. The
Company may find it more difficult to raise additional equity
capital if it should be needed for the business of the Company
while options are outstanding. At any time when the holders
thereof may be expected to exercise them, the Company probably
would be able to obtain additional equity capital on terms more
favorable than those provided by the options. To the extent that
any of the options granted by the Company are exercised, the
ownership interest of the Company's shareholders will be diluted.
Lack of Financial Statements; Absence of Underwriter. After the
completion of this Offering, the Company intends to retain an
independent certified public accounting firm to audit the
Company's financial statements. There presently are no such
audited financial statements available, and potential investors in
this Offering will be making their investment decision without
access to any financial information about the Company other than
that set forth in the text of this Confidential Offering Circular.
In addition, because this Offering will not be made through an
underwriter or placement agent, there is no independent agent
representing the interests of potential investors.
THE COMPANY
Strategic Information Management Incorporated was incorporated in
September 1997 in the State of Florida. SIMI is a developmental
stage company that has been formed with intention of providing
information technology services to small to mid-size businesses
facing the problem of inefficient growth due to the mismanagement
of their existing operating systems. In order to stay competitive
and continue to experience growth these companies must automate
properly and most companies will find financial advantages in
using an outsourcing firm, such as SIMI, to provide the proper
automation instead of hiring an entire information technology
department.
STRATEGY
SIMI's intended strategy, during its developmental stage, is to
establish a sound line of services and products it will offer, a
marketing plan to introduce those products to potential clients, a
revenue management scheme to promote sufficient cash flow for
growth, and a technical support until that will enable the Company
to ensure it maintains and grows its client base with sufficient
service. Management believes their existing skills and knowledge
coupled with sound strategy on these four points will successfully
launch SIMI towards a prosperous future.
The ideal product-line for the Company will be based on general
Informational Technology consulting. The Company intends to
achieve its initial clients through assessing existing operating
systems, and then offering solutions which will include both the
sale of hardware & software and consulting & support services to
ensure proper implementation. The hardware and software SIMI
intends to offer will be LAN/WAN networking solutions as well as
document management related products. The specifies of each
product will be determined by two factors, the first will be
determined by the needs of each individual client and second, the
ability of the Company to establish relationships with quality
providers of product. The Company does not intend, initially to
develop or manufacture any of its own products, therefore it will
act as a vendor for established providers.
With products and services to sell the next phase of this
developmental stage company will begin, the marketing stage.
Marketing of SIMI's products and services will initially be
through the efforts and contacts of management. The future
strategy for marketing includes advertising in trade and industry
publications, attending trade shows and possibly hiring an outside
marketing consultant or advertising firm, if revenues permit. The
Company also sees the possibility of establishing a sales force or
marketing department if revenues should permit. Though, it should
be stated that the Company will rely on the marketing experience of
management initially.
Much of the marketing efforts will depend greatly on adequate
funding which will be generated through sales. With sales
initiated the Company intends to implement a cash-flow management
strategy with allocation of funds based on growth in revenue.
Therefore, initial money generated will be used to lay a
foundation including capital equipment and head-count. The next
tier would include initial marketing and infrastructure
development, followed by more intensive marketing and research &
development. Finally, the Company would like to generate
considerable earnings to bolster its financial health.
Technical support will be not only the key to maintaining a solid
client-base, but also through service contracts, another solid
revenue stream. By allowing clients to achieve solutions to any
information technology problem they may encounter by simply
contacting SIMI, they will find that energy and expenses will be
more efficiently managed. The fee that each company will pay each
month will entitle them to access to an individual with
considerable problem solving knowledge and experience. This
service will hopefully make Strategic Information Management
Incorporated, a recognized solutions provider.
Conclusion
The four focus points of management will allow for SIMI to step
forward on the right foot. Management believes that its strength
and vision will see this plan to fruition and launch a successful
full-service solutions provider to launch its clients prosperously
into the 21st Century. The success of its clients is the answer
to the ultimate success of the Company.
USE OF PROCEEDS
The net proceeds that the Company expects to receive, from the
sale of the maximum Shares offered hereby, at an offering price of
$0.025, will be $50,000 (which includes approximately $6,000 of
legal fees, accounting fees, filing fees and other miscellaneous
expenses). These funds will be used primarily to finance marketing
efforts and working capital.
LITIGATION
The Company is not a party to any litigation, nor is the
Company aware of any claim or threat of litigation.
MANAGEMENT
The present officers and directors of the Company are as
follows:
NAME AGE TITLE
William H. Luckman 26 President/Secretary /
Treasurer/Director
Mr. Luckman has an established business management and banking
background. He established his background in business as the
owner and manager of a mortgage company in his native Chicago.
After selling his operation he accepted an offer as a marketing
consultant and mortgage underwriter with Lincoln Savings Bank, FSB
of Jericho, New York. Moving on to American Home Mortgage of New
York, one of the largest privately held mortgage banks in the
U.S., he was given the opportunity to spearhead out-of-region
growth. As the youngest vice-president in the company history he
established satellite offices in New York, Florida and Illinois.
His excellent management of staff and marketing plans provided the
opportunity for American Home Mortgage to attain its place in the
national mortgage originations market. Mr. Luckman's vision for
growth and proven management techniques will be key in the success
of the company. He is currently on the Board of Directors of
Stirus research & Development (NASD BB:SRDI), Premier Supplement
Corporation (NASD BB:PMSP) and Optical Systems Inc. (NASD BB:
OPSY).
PRINCIPAL SHAREHOLDERS
The following table sets forth information, as to the date of
this Confidential Offering Circular, with respect to the direct
and indirect beneficial ownership of Common Stock of the Company
by each person known by the Company to be the beneficial owner of
more than five percent of the outstanding Common Stock, and by
each director and executive officer of the Company.
<TABLE>
<S> <C> <C> <C>
Name of Beneficial Number of Percent of Class Percent of Class
Owner Shares Owned Before Offering After Offering(1)
- ------------------ ------------- ---------------- ----------------
William H. Luckman 1,000,000 100% 33.33%
Officers and Directors
as a Group 1,000,000 100% 33.33%
</TABLE>
3. Assumed the sale of all of the shares offered.
DESCRIPTION OF SECURITIES
Common Stock
- ------------
The Company is authorized to issue 50,000,000 shares of
Common Stock, $.0001 par value per share. As of the date of this
memorandum 1,000,000 shares were issued and outstanding. Each
outstanding share of Common Stock is entitled to one vote, either
in person or by proxy, on all matters that may be voted on by the
owners thereof at meetings of the Company's shareholders.
Assuming the maximum number of shares are sold upon the completion
of this offering, 3,000,000 shares will be issued and outstanding.
All shares of Common Stock that are offered hereby, when
issued, will be fully paid and non-assessable, with no personal
liability attaching to the ownership thereof. The holders of
shares of Common Stock do not have cumulative voting rights, which
means that the holders of more than 50% of such outstanding shares
can elect all of the directors of the Company.
Preferred Stock
- ---------------
The Company is authorized to issue 10,000,000 shares, $.0001
par value per share, of Preferred Stock with such rights and
preferences, and in such series, as the Board of Directors, in its
sole discretion, may determine from time to time. The Company has
not designated any series of Preferred Stock and presently has no
plans to do so.
EXHIBIT VI CONFIDENTIAL TERM SHEET
- -----------------------------------------------------------
EUROSOFT CORP.
CONFIDENTIAL TERM SHEET- DATED AUGUST 6, 1998
OFFERING TO INVESTORS PURSUANT TO RULE 504
Issuer: EUROSOFT CORP.(the "Company"), a Florida Corporation
(hereinafter the "Company") was incorporated on September 16,
1997. It was initially organized for the purpose of offering
information technology support for automated business and
enterprise.
Business of the Company:
The Company's intended focus is to help small to mid-sized
companies and municipalities enhance their existing
operating systems through assessment and reconfiguration of both
their automated systems and their non-automated documents. The
Company will undertake this process by conducting a study of each
client's operations and prescribe a solution that is cost
effective and efficient by using the latest software, hardware and
data storage technology. After installation of the new system for
the client, the Company will provide training and technical
support through service contracts to maintain an ongoing
relationship with each client. The Company will obtain its
revenues through hourly consulting fees and service contracts.
The products that the Company will offer to its clients will be
through vending arrangements with top hardware and software
providers, as well as through sub-contracting arrangements with
specialized vendors.
On March 21, 1998, the Company closed on a Stock Purchase
and Share Exchange Agreement with NewSoft GmbH, a German
corporation, whereby the Company purchased all of the issued and
outstanding stock of NewSoft.
Management: William H. Luckman- President, Secretary,
Treasurer and Director.
Mr. Luckman has an established business management and banking
background. He established his background in business as the
owner and manager of a mortgage company in his native Chicago.
After selling his business, he accepted an offer as a marketing
consultant and mortgage underwriter with Lincoln Savings Bank, FSB
of Jericho, New York. Moving on to American Home Mortgage of New
York, one of the largest privately held mortgage banks in the
U.S., he was given the opportunity to spearhead out-of-region
growth. As the youngest Vice-President in company history, he
established satellite offices in New York, Florida and Illinois.
His excellent management of staff and marketing plans provided the
opportunity for American Home Mortgage to attain its place in the
national mortgage origination market. Mr. Luckman's vision for
growth and proven management techniques will be key in the success
of the Company.
Placement Agent: Interwest Transfer Company, Inc. is presently
the transfer agent for the Company's shares.
Securities Offered: 200,000 Shares of Common Stock, $.0001 par
value per share at $.50 per Share or an aggregate of $100,000. In
addition, each investor shall receive an option through February
28, 1999, to purchase an additional four (4) Shares of the Company
at $0.55 per Share for each two (2) Shares purchased or an
aggregate of 400,000 Shares (or $220,000). In addition, each
investor shall receive an option which shall commence upon the
earlier of March 1, 1999 or upon the full exercise of the previous
option, to purchase 1.7 additional Shares of the Company for each
two (2) shares previously purchased at $4.00 per Share or an
aggregate of 170,000 Shares (or $680,000). Shares are being
offered on a "best efforts" basis. The minimum investment is
$5,000.00. All funds received shall be available for immediate
use by the Company. The Termination Date for the offering is
August 31, 1998. The Company reserves the right to extend the
Termination Date of this offering for a maximum of sixty days from
the Termination Date, or such later date in its sole discretion,
or to undertake separate additional offerings, provided that no
such actions shall affect the Company's right to rely on Rule 504
of the Act with respect to the conduct of its offering.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY ANY FEDERAL OR STATE SECURITIES AGENCY NOR HAS ANY AGENCY
REVIEWED OR PASSED UPON THE ACCURACY OF THIS TERM SHEET. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ACCORDINGLY
INVESTORS MUST RELY UPON THEIR OWN EXAMINATION OF THIS TERM SHEET
AND THE COMPANY IN MAKING AN INVESTMENT DECISION.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF
RISK AND SHOULD NOT BE PURCHASED BY INVESTORS WHO CANNOT AFFORD
THE LOSS OF THEIR ENTIRE INVESTMENT.
Subscription
Period: The shares will be offered during the Subscription
Period, which shall mean the period ending on August 31, 1998.
The Subscription Period may be extended in the sole discretion of
the Company without notice to subscribers for an additional sixty
(60) day period.
Subscription: All checks for the purchase of the Shares shall
be made payable to "EUROSOFT CORP." The proceeds from the sale of
the Shares, less legal fees and other expenses, will be released
to the Company upon clearance of such funds and acceptance of
subscriptions by the Company. This offering is being sold on a
"best efforts" basis. There is no minimum amount which must be
raised in order for funds to be released to the Company. The
Company has the right, in its sole discretion, to reject any
subscriptions.
Use of Proceeds: The net proceeds from the sale of the Shares
will be utilized primarily for working capital and any other
corporate purpose, including, legal and other fees related to the
Offering.
Commissions: The Company will not pay any commissions to its
Officers and Directors on the sale of the Shares.
Substantial Risk: An investment in the Company is subject to
substantial risks and is extremely speculative. An investment
should only be considered by an investor who can afford to lose
its entire investment.
Risk Factor: The undersigned acknowledges that the securities
offered hereby represent an extremely speculative investment and
an extremely high degree of risk. The undersigned acknowledges
that the Company: (i) requires additional funding in order to
continue to operate its business, which funding, if obtained, will
dilute purchasers in the Offering;(ii) has a limited operating
history upon which an investor can evaluate an investment in this
Company; (iii) the Offering herein is being made on a "best
efforts", no minimum basis. The funds available to the Company
from the proceeds of this offering will be reduced to the extent
that less than all the securities offered hereby are sold. Once a
subscription has been accepted, subscribers funds will be
non-refundable and will be immediately available for use by the
Company regardless of the aggregate number of securities sold
hereunder; and (iv) will face extreme competition from entities
which possess substantially greater financial and other resources
than the Company. In addition, investors should be aware that
there is no market for the Shares or Shares and, accordingly,
investors may not be able to sell any Shares or Shares purchased.
As a result of such risks, the loss of the undersigned's entire
investment is possible.
Independent
Verification: The subscriber will be required to acknowledge
that the subscriber has conducted its own investigation into the
business of the Company as well as the Company's future proposed
plans without the Company furnishing to such subscriber any
prospectus, offering memorandum or written description of the
Company, its plans and/or its future plans other than this Term
Sheet. Subscribers should verify directly with the Company any
information which subscribers intend to rely on in making an
investment in the Company.
Capital Structure: Upon the consummation of the Sale of the
Shares described in this Term Sheet, the Company will have
5,675,000 (6,245,000 if the options are exercised in full) shares
of Common Stock outstanding. Accordingly, the Shares sold in the
Offering will represent approximately 3.5% (12.3% if the options
are exercised in full) of the Company's issued and outstanding
shares of common stock. The Company anticipates that it will
require significant additional funding which, if obtained, will
result in substantial dilution to investors in this Offering.
Additional
Information: All potential subscribers should contact William
H. Luckman at (561) 820-9432 for further information regarding
the Company.
Exhibits: The following exhibit is included in this Term
Sheet:
Exhibit A: Subscription Agreement.
Exhibit B: Confidential Purchaser Questionnaire.
Jurisdictional Notices
FOR RESIDENTS OF ALL STATES: THE SECURITIES OFFERED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE
SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN
RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID
ACT AND SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER SAID LAWS AND SUCH LAWS PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE
FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THIS
OFFERING OR THE ACCURACY OR ADEQUACY OF THIS MEMORANDUM. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
INVESTORS MAY MAKE AN INDEPENDENT EXAMINATION OF ALL BOOKS,
RECORDS AND OTHER DOCUMENTS OF THE COMPANY TO THE EXTENT AN
INVESTOR DEEMS IT NECESSARY, AND SHOULD NOT RELY ON THE COMPANY OR
ANY OF THE COMPANY'S EMPLOYEES OR AGENTS WITH RESPECT TO
JUDGEMENTS RELATING TO AN INVESTMENT IN THE COMPANY. ANY OTHER
DOCUMENTS OR INFORMATION CONCERNING THE COMPANY WHICH A
PROSPECTIVE INVESTOR REASONABLY REQUESTS TO INSPECT OR HAVE
DISCLOSED TO HIM WILL BE MADE AVAILABLE OR DISCLOSED SUBJECT TO
RECEIPT OF REASONABLE ASSURANCE THAT SUCH MATTERS WILL BE
MAINTAINED IN CONFIDENCE.
EXHIBIT 21 - SUBSIDIARIES OF THE REGISTRATION
- --------------------------------------------
. Sicor, Inc. - State of New Jersey
. NewSoft GmbH - Republic of Germany
. Millennium Three Solutions Limited - Republic of Northern
Ireland
. Do it-Development International Oy - Country of Finland
EXHIBIT 27 FINANCIAL DATA SCHEDULE
- ----------------------------------------------------------
EUROSOFT CORPORATION
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE DECEMBER 31, 1998 BALANCE SHEET
AND THE STATEMENTS OF OPERATIONS FOR FISCAL YEAR
ENDED DECEMBER 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<TABLE>
<S> <C>
[PERIOD-TYPE] 12-MOS
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-END] DEC-31-1998
[CASH] 93,970
[SECURITIES] 0
[RECEIVABLES] 183,605
[ALLOWANCES] 0
[INVENTORY] 0
[CURRENT-ASSETS] 609,674
[PP&E] 369,667
[DEPRECIATION] 86,354
[TOTAL-ASSETS] 905,608
[CURRENT-LIABILITIES] 434,129
[BONDS] 0
[COMMON] 3,864
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] <379,892>
[TOTAL-LIABILITY-AND-EQUITY] 905,608
[SALES] 1,325,905
[TOTAL-REVENUES] 1,324,216
[CGS] 118,087
[TOTAL-COSTS] 0
[OTHER-EXPENSES] 12,763,959
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 17,242
[INCOME-PRETAX] <11,539,379>
[INCOME-TAX] <11,539,379>
[INCOME-CONTINUING] <11,539,379>
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] <11,539,379>
[EPS-BASIC] <0.55>
[EPS-DILUTED] 0
</TABLE>
