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As Filed with Securities and Exchange Commission on December 8, 1999
Registration No. 333-________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
BIOLYNX.COM, INC.
(Exact name of the registrant as specified in its charter)
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Texas 0073 74-2916627
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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5617 Grissom Road
San Antonio, Texas 78238
(210) 256-8300
(Address, including zip code and telephone number, including
area code, of the registrant's principal executive offices)
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John D. Walker II With a copy to:
President Norman T. Reynolds, Esq.
5617 Grissom Road Jackson Walker L.L.P.
San Antonio, Texas 78238 1100 Louisiana Street, Suite 4200
(210) 256-8300 Houston, Texas 77002
(Name, address, including zip code, and telephone number, (713) 752-4512
including area code, of agent for service for the registrant)
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this registration statement has been declared effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount To Offering Price Aggregate Registration
Securities To Be Registered Be Registered Per Share (1) Offering Price Fee
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Common Stock to be Newly Issued........... 1,000,000 $4.00 $4,000,000 $1,056.00
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
_____________
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
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BIOLYNX.COM, INC.
Cross-Reference Sheet
Showing Location in the Prospectus of
Information Required by Items of Form SB-2
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Form SB-2 Item Number and Caption Location In Prospectus
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1. Front of Registration Statement and
Outside Front Cover of Prospectus.................... Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus.................................. Inside Front Cover Page; Outside Back Cover Page
3. Summary Information and Risk Factors.................. Prospectus Summary; Risk Factors; Business
4. Use of Proceeds....................................... Use of Proceeds
5. Determination of Offering Price....................... Outside Front Cover Page; Risk Factors
6. Dilution.............................................. Risk Factors; Dilution
7. Selling Security Holders.............................. *
8. Plan of Distribution..................................
9. Legal Proceedings..................................... Plan of Distribution
10. Directors, Executive Officers, Promoters Business - Litigation
and Control Persons..................................
Business; Management - Executive Officers and Directors
11. Security Ownership of Certain Beneficial
Owners and Management................................ Principal Stockholders
12. Description of Securities............................. Description of Securities
13. Interest of Named Experts and Counsel................. *
14. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities....... Description of Securities - Certain Provisions of the
Articles of Incorporation and Bylaws
15. Organization Within Last Five Years................... Business
16. Description of Business............................... Business
17. Management's Discussion and Analysis
or Plan of Operation................................. Management's Discussion and Analysis of Financial
Condition and Results of Operations
18. Description of Property............................... Business - Patents and Intellectual Property, - Facilitie
19. Certain Relationships and Related Transactions........ Certain Transactions
20. Market for Common Equity and Related
Stockholder Matters.................................. Risk Factors; Price Range of Common Stock and
Dividend Policy; Description of Securities
21. Executive Compensation................................ Management - Executive Compensation
22. Financial Statements.................................. Financial Statements
23. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure........................................... *
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(*) None or Not Applicable
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this preliminary prospectus is not complete and may be +
+changed. We may not sell these securities until the registration statement +
+filed with the Securities and Exchange Commission is effective. This +
+preliminary prospectus is not an offer to sell these securities, and it is +
+not soliciting an offer to buy these securities in any jurisdiction where the +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED DECEMBER 8, 1999
Prospectus
, 2000
[LOGO OF BIOLYNX.COM, INC.]
1,000,000 Shares of Common Stock
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BioLynx.Com, Inc.: The Offering:
. We are a biometric technology . We are offering for sale 1,000,000
applications business that shares of our common stock.
designs and markets time and
attendance services to . This is our initial public offering, and
employers utilizing our own no market currently exits for our
designed software. shares. The initial public offering
price will be $4.00 per share.
. BioLynx.Com, Inc.
5617 Grissom Road . We plan to use the proceeds from this
San Antonio, Texas 78238 offering for acquisitions, working
(210) 256-8300 capital and other general corporate
purposes.
Proposed Symbol and Market:
. BLNX/OTC Bulletin Board
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Offering Fees and Proceeds to
Price (1) Expenses (2) the Company
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Per Share.................... $4.00 $0.66 (3) $3.34 (3)
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Total Minimum Offering....... $250,000 $43,725 $206,275
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Total Maximum Offering....... $4,000,000 $660,000 $3,340,000
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(1) Each share will cost $4.00, in cash. The shares will be sold on a "best
efforts" basis through Aurora Financial Services, L.L.C., and other
designated licensed selling agents. The selling agents for the shares
offered by this prospectus will be paid a commission on the shares sold by
them. See "Plan of Distribution." Until the Initial Closing Date, all cash
payments for the shares will be subject to an Escrow Agreement and held in
an escrow account at a bank. After the Initial Closing Date, all cash
payments for the shares will no longer be subject to the Escrow Agreement,
and will be immediately available for use by BioLynx.Com. See "Terms of the
Offering." This offering will terminate, if not sooner terminated, 180 days
from the date of this prospectus.
(2) Management does not anticipate that the fees and expenses relating to this
offering will exceed the amounts specified above; however, if such fees and
expenses do exceed the amounts specified above, any such excess will be
borne by BioLynx.Com and will be deducted from the proceeds to be delivered
to us.
(3) If all 1,000,000 of the shares are sold.
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This investment involves risks. See "Risk Factors" beginning on page 7 of this
prospectus.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
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AURORA FINANCIAL SERVICES, L.L.C.
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BioLynx.Com offers a time,
attendance and data integration
solution based on the biometric
technology of hand geometry.
[LOGO OF BIOMETRIC READER]
The BioLynx.Com Solution
By placing the user's hand on a platen, in less than one second, the biometric
reader used in the BioLynx.Com Time and Attendance System measures over 90
three-dimensional attributes--including the shape of the hand, the length and
width of the fingers, and the shape of the knuckles--to verify the person's
identity. As no two hands feature the exact same characteristics, the
BioLynx.Com Time and Attendance System is designed to reduce fraud and provide
data collection and integration as well as payroll accuracy by:
. Eliminating the possibility of "buddy punching."
. Eliminating the time and expense of administering and
replacing badges and timecards, plus the cost of these
items.
. Stopping losses due to payroll fraud.
. Precise payroll, time, and attendance data.
. Eliminating manual data entry errors.
. Streamlining time recording, attendance, and labor tracking functions.
. Providing an audit trail of personal activity for physical access
control.
Time and Cost-saving Features of the BioLynx.Com Solution Include:
. The ability to add or review employee punches over the
Internet.
. The entry of vacation hours and department transfers.
. Programming time restrictions to eliminate unscheduled overtime.
. Providing centralized computer data storage with optional networking.
. Securing against intrusions by unauthorized persons.
. The generation of time and attendance reports for
management review and evaluation on a daily or weekly basis
which can be received via the Web, e-mail or fax.
Accessing Data
BioLynx.Com provides multiple options for retrieving data including pre-set e-
mail and on-demand Web access. We can configure our system to update daily or
even during shift changes or break times which ensures that a client will have
access to the most up-to-date employee data. We can even configure our system
to integrate with a client's accounting program to automate its payroll data
entry.
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TABLE OF CONTENTS
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Page
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Prospectus Summary......................................................................... 4
Risk Factors............................................................................... 7
Forward-looking Statements................................................................. 14
Terms of the Offering...................................................................... 14
Plan of Distribution....................................................................... 15
Use of Proceeds............................................................................ 16
Price Range of Common Stock and Dividend Policy............................................ 16
Corporate Information...................................................................... 17
Capitalization............................................................................. 17
Dilution................................................................................... 18
Selected Financial Data.................................................................... 20
Management's Discussion and Analysis of Financial Condition and Results of Operations...... 21
Business................................................................................... 24
Management................................................................................. 29
Certain Transactions....................................................................... 32
Principal Stockholders..................................................................... 35
Description of Securities.................................................................. 37
Shares Eligible for Future Sale............................................................ 43
Legal Matters.............................................................................. 44
Experts.................................................................................... 44
Where You Can Find More Information........................................................ 44
Index to Financial Information............................................................. 45
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3
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PROSPECTUS SUMMARY
The following summary is qualified by the more detailed information
appearing in other sections of this prospectus. The other information is
important, so please read carefully this entire prospectus, including the "Risk
Factors," and the financial statements and all notes. Unless the context
otherwise suggests, "we," "our," "us," the "company," and similar terms, as well
as references to "BioLynx.Com," all refer to BioLynx.Com, Inc.
The Company
BioLynx.Com, Inc. is a biometric technology applications business that
designs and markets time and attendance services, utilizing our own copyrighted
software. We also plan to engage in employee leasing. We were incorporated on
April 29, 1999 in the State of Texas.
Biometrics is a technology that electronically measures, records, and
compares unique personal characteristics for identification. While the
technology is common in security and access control applications, it is new to
the time and attendance industry. There are two major categories of biometric
devices, behavioral and physiological.
Behavioral devices rely on learned traits that are unique to individuals.
Perhaps the most common example of a unique trait is a person's signature.
Society routinely uses this trait to verify the identity of an individual, such
as with the signature on a check. Another behavioral technology is voice
recognition, which records and compares vocal frequency and patterns.
Physiological biometric identification measures a distinct unique
characteristic of a person such as the size and shape of his hand, fingerprint
details, blood vessel patterns on the retina, and unique features of the iris.
A biometric device provides true identification of a person by comparing his
physical characteristics to a known pattern recorded during the enrollment
process. Carried identification, like a badge, personal identification number,
or password cannot truly identify an individual. A person can transfer any of
these to another person.
The primary benefit of using biometrics in a time and attendance system is
payroll accuracy. An accurate payroll requires accurate data entry. Tainted
data entered into a time and attendance system results in inaccurate paychecks.
A computerized time and attendance system eliminates many inaccuracies inherent
in a manual time keeping system. Badges and data terminals collect employee
punches electronically. This minimizes many data entry errors. Yet, if one
person can use another person's badge to punch in for him, inaccuracies in
payroll will persist. A biometric device eliminates that possibility, because
the employee has to be there. "Buddy punching" is a common abuse of time
keeping systems. We feel that with biometrics, "buddy punching" will be
eliminated.
In our opinion, 3-D Hand Geometry is the most accurate of all the biometric
identification techniques. We expect that high accuracy should guarantee user
satisfaction because of its very low level of false rejects.
Our primary market is the employee leasing industry, which employs over 20
million people. John D. Walker II, the Chairman, President, and a major
shareholder in BioLynx.Com, has over 10 years experience in the employee leasing
business. We plan to provide to our clients all of the information needed to
generate their payrolls using 3-D Hand Geometry. Subscribers to our service are
expected to realize substantial savings through increased workplace
accountability and reduced administrative costs associated with generating their
payrolls. Our software, which we designed over a two-year period, is adaptable
to any current existing payroll technology so that our clients do not have to
change their existing payroll software.
4
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Future Plans
Currently, BioLynx.Com anticipates acquiring all of the outstanding capital
stock of BioLynx Outsource Services, Inc. on December 31, 1999. BioLynx
Outsource Services is owned by an affiliate of John D. Walker II, our Chairman,
President, and a major shareholder. BioLynx Outsource Services is in the
employee leasing business and has increased its sales, and maintained a
consistent client base since its founding earlier this year. Moreover, on
December 31, 1999, BioLynx Outsource Services plans to acquire from Alamo
Commercial Group, Inc. (wholly-owned by Mr. Walker) all of its leased employees,
together with all contracts to furnish services and leasing. Given its past
experience in developing an employee leasing business, BioLynx.Com's management
believes that the ability to increase sales and revenue for both BioLynx.Com and
BioLynx Outsource Services will be improved as a result of the merger.
Additionally, the combination of the two companies will allow cross-selling and
better service to the clients of both companies. Even though both transactions
are scheduled to close on December 31, 1999, neither transaction will close
until after the effective date of this prospectus. Moreover, if a proposed
purchase agreement fails to close by April 1, 2000 because this prospectus has
not become effective, that particular agreement will be null and void. As for
the payment required at closing of either of the proposed purchases, we can pay
cash or give our promissory note due within 90 days thereof. If we utilize the
note option, we will have to ensure that we have the required cash to pay the
note on its due date. See "Risk Factors" and "Certain Transactions."
The Offering
The following information regarding shares outstanding is as of November
30, 1999. It excludes (1) 250,000 shares of common stock reserved for issuance
under our 1999 Stock Incentive Compensation Plan, (2) the shares which John D.
Walker II might receive upon the conversion of our Convertible Subordinated
Debenture, (3) shares which may be issued upon the exercise of any outstanding
warrant, or (4) any shares of our preferred stock which may be issued in
satisfaction of a debt which we have to Mr. Walker and two of his affiliated
companies, United Capital Investment Group, Inc. and Alamo Commercial Group,
Inc. See "Certain Transactions" and "Principal Stockholders." Except as
otherwise indicated, the information in this prospectus assumes that the common
stock being offered will be sold at $4.00 per share, and that all 1,000,000
shares being offered will be sold.
Common stock offered by BioLynx.Com.. 1,000,000 shares.
Common stock to be outstanding
after this offering................. 5,951,600 shares; includes 4,926,600
shares currently outstanding and 25,000
shares to be issued to the selling agent,
in consideration of services rendered in
connection with this offering.
Use of proceeds...................... We intend to use the estimated net
proceeds of $3,340,000 that we will
receive from this offering for
acquisitions, working capital and other
general corporate purposes.
Proposed OTC Bulletin Board Symbol... BLNX
5
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Summary Financial Data
You should read the summary financial and other data below in conjunction
with the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and our Financial Statements and Notes thereto included
elsewhere in this prospectus. The pro forma as adjusted balance sheet data
reflect (1) the additional sale between October 1, 1999 and November 24, 1999 of
319,500 shares of our common stock in a private placement at $2.00 per share
before considering offering costs, (2) the awarding between October 1, 1999 and
November 24, 1999 of 340,000 shares of our common stock to consultants,
advisers, selling agents, and a board member, and the corresponding charge to
expense of $680,000 (the shares of the common stock were valued at $2.00 per
share), and (3) the sale of 1,000,000 shares of our common stock in this
offering at an assumed offering price of $3.34 per share, after deducting the
estimated selling expenses and commissions, and the application of the net
proceeds therefrom. See "Capitalization" and "Use of Proceeds."
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Inception Nine Months
Through Ended
December 31, 1998 September 30, 1999
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Statement of Operations Data:
Total services revenues....................................... ---- $ 10,410
Total cost of operations...................................... ---- ----
------------------
Gross profit.................................................. ---- $ 10,410
Loss from operations.......................................... $ (799,998) $ (1,390,884)
Net loss...................................................... $ (799,998) $ (1,431,666)
Basic and diluted net loss per share.......................... $ (0.36) $ (0.46)
Weighted average common shares outstanding.................... 2,249,000 3,081,580
September 30, 1999 As Adjusted
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Balance Sheet Data:
Cash and cash equivalents..................................... $ 78,462 $ 3,978,274
Working capital (deficit)..................................... $ (132,743) $ 3,767,069
Total assets.................................................. $ 226,117 $ 4,125,929
Convertible subordinated debentures........................... $ 1,107,523 $ 1,107,523
Stockholders' equity (deficit)................................ $ (1,130,253) $ 2,769,559
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6
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RISK FACTORS
Before you invest in our common stock, you should be aware of various
risks, including those described below. You should carefully consider these
risk factors, together with all other information included in this prospectus,
before you decide whether to purchase shares of our common stock. The risks set
out below may not be exhaustive.
General Risks
Each purchaser of shares of our common stock will be subject to the risks
generally incident to the ownership and operation of a newly organized business
utilizing new technology as well as changes in general economic conditions,
operating expenses, governmental rules and fiscal policies, acts of God and
other factors which are beyond our control.
Limited Operating History
Although our predecessor, BioLynx, Inc., has been in business since
December 1998, we have no significant operating history.
Dilution
The initial public offering price of the common stock will be substantially
higher than the pro forma net tangible book value per share of the outstanding
common stock. As a result, we currently expect that you will incur an immediate
and substantial dilution of $3.53 per share based upon an assumed initial public
offering price of $4.00 per share. In the event we issue additional shares of
common stock in the future, you may experience further dilution. For example,
John D. Walker II, our Chairman, President, and a major shareholder, has the
right to convert our Convertible Subordinated Debenture held by him into 335,613
shares of the common stock at a price of $3.30, which amount is $0.70 below the
public offering price. Moreover, if we acquire all of the shares of the capital
stock of BioLynx Outsource Services, Inc., and all of the leased employees, and
all contracts to furnish services and leasing of Alamo Commercial Group, Inc.,
both of which are affiliates of Mr. Walker, the affiliates of Mr. Walker will
receive 3,551,883 shares of our preferred stock, which will be convertible at
any time into approximately 1,076,328 shares of our common stock, based upon a
conversion at the rate of the liquidation privilege with respect to the
preferred stock, together with any declared but unpaid dividends on the
preferred stock, divided by $3.30 per share of common stock.
Additionally, as of September 30, 1999, we were indebted in the amount of
$173,651, plus any additional amounts advanced to us since September 30, 1999
through November 19, 1999, to Mr. Walker and two of his affiliated companies,
United Capital Investment Group, Inc. and Alamo Commercial Group, Inc. We have
agreed with Mr. Walker and United Capital Investment Group, Inc. and Alamo
Commercial Group, Inc. that such debt can be satisfied at the election of Mr.
Walker and United Capital Investment Group, Inc. and Alamo Commercial Group,
Inc. by the issuance of our preferred stock, on the basis of one share of
preferred stock for every dollar of debt owed, which could be convertible at any
time into shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred stock, together with any
declared but unpaid dividends on the preferred stock, divided by $3.30 per share
of common stock. See "Certain Transactions" and "Principal Stockholders."
Further, pursuant to our 1999 Stock Incentive Compensation Plan, we could issue
up to 250,000 shares of the common stock. See "Management - Stock Options."
Finally, we have outstanding our warrant covering 7,500 shares of our common
stock in favor of Travis Morgan Securities, Inc., a member of the selling group
which participated in our private placement which concluded on November 24,
1999. To the extent such options or warrant are exercised, you would experience
further dilution.
7
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Anti-Takeover Provisions
Our Articles of Incorporation and Bylaws contain provisions that may have
the effect of discouraging certain transactions involving an actual or
threatened change of control of BioLynx.Com. In addition, the Board of
Directors has the authority to issue up to 20,000,000 shares of preferred stock
in one or more series and to fix the preferences, rights and limitations of any
such series without shareholder approval. If we acquire all of the shares of
the capital stock of BioLynx Outsource Services, Inc., and all of the leased
employees, and all contracts to furnish services and leasing of Alamo Commercial
Group, Inc., both of which are affiliates of Mr. Walker, the affiliates of Mr.
Walker will receive 3,551,883 shares of our preferred stock, which will be
convertible at any time into approximately 1,076,328 shares of our common stock
as discussed above. Moreover, pursuant to an agreement, we may be called upon
to issue shares of our preferred stock to Mr. Walker and his affiliated
companies in satisfaction of a debt. The ability to issue shares of preferred
stock could have the effect of discouraging unsolicited acquisition proposals or
making it more difficult for a third party to gain control of BioLynx.Com, or
otherwise could adversely affect the market price of our common stock.
No Dividends
BioLynx.Com has never paid dividends on the common stock and does not
expect to pay dividends thereon in the foreseeable future.
Control of BioLynx.Com
Our current shareholders, even if all of the shares are sold pursuant to
this offering, will own 83 percent of the issued and outstanding shares of our
common stock. Consequently, the current shareholders of BioLynx.Com will have
the power to control the composition of our Board of Directors. All
calculations of stock ownership described in this paragraph assume that all of
the shares being offered hereby will be purchased.
Proceeds Immediately Available after the Initial Closing Date
After the Initial Closing Date (as hereinafter defined on page 13), the
proceeds to be received by us from the sale of additional shares will be
immediately available for use by us, without the requirement of any escrow.
There is no assurance that we will be able to sell all 1,000,000 of the shares
offered hereby. As a result, those investors who purchase shares early in the
offering period will be more at risk than those investors who purchase shares
later in the offering period, inasmuch as the later investors will have more
knowledge with respect to the success of our sales efforts. Furthermore, if we
decide to terminate this offering before the sale of all 1,000,000 shares of the
common stock offered hereby, there can be no assurance that the proceeds raised
by us up to the date of termination will be sufficient for our projected
operations.
Adequacy of Working Capital
While we, through this offering, will raise what we feel is sufficient
working capital for the foreseeable future, there can be no assurance that the
resulting working capital to be available to us will be sufficient to enable us
to continue to develop our strategies for the marketplace.
Key Personnel
Our future financial success depends to a large degree upon the individual
efforts of our key personnel. As of the date of this prospectus, we have nine
employees. As we grow, we may need to add additional staff members. There can
be no certainty that we will be successful in attracting and retaining the
persons needed.
8
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Issuance of Additional Shares of the Common Stock
Should we issue additional shares of the common stock at a later time, each
investor's ownership interest in BioLynx.Com would be proportionally reduced.
No investor will have any preemptive right to acquire additional shares of the
common stock, or any other securities of BioLynx.Com.
Competition
Although there are no direct competitors with the biometrics portion of our
business, we feel that any company which offers payroll services may be viewed
as a potential competitor. There are many payroll service companies which are
larger, better financed and have greater market exposure than BioLynx.Com. As
for the employee leasing portion of our projected business, there are many
competitors. Among the largest are Administaff, Inc. and Staff Leasing, Inc.
Our competitors may be able to respond more quickly than we can to new or
emerging technologies and changes in client requirements. Competitive pressures
could reduce our market share or require us to reduce the price of our products,
either of which could have a material adverse effect on our business, operating
results, and financial condition.
Dependence on Contracts with Third Parties
BioLynx.Com does not manufacture the hardware components of the systems
used by it, but rather purchases those components from third parties in
accordance with specific design requirements. Currently, we only purchase
certain hardware components from one manufacturer. The failure of that
manufacturer to deliver its components in a timely manner could result in a loss
of business or time delays for the installation of our systems, until such time
as we could arrange for an alternative supplier.
A Public Market for Our Common Stock May Be Uncertain
Prior to this offering, there has been no public market for our common
stock. In the event that the common stock is ever quoted on the OTC Bulletin
Board, there can be no assurance that an active public market for the common
stock will be sustained. The initial public offering price of $4.00 per share
for our common stock was arbitrarily determined by BioLynx.Com, and you may be
unable to resell your shares at or above that initial offering price. Although
the offering price is based on what we regard the shares to be worth, the
offering price should not be considered an indication of the actual value of the
securities. After this offering, the market price of our common stock may be
subject to significant fluctuations in response to numerous factors, including:
. Variations in our annual or quarterly financial results or those of
our competitors.
. Changes by financial research analysts in their estimates of our
earnings or our failure to meet such estimates.
. Conditions in the economy in general or in the software and other
technology industries.
. Announcements of key developments by competitors.
. Loss of key personnel.
. Unfavorable publicity affecting our industry or us.
. Adverse legal events affecting us.
. Sales of BioLynx.Com common stock by existing shareholders.
9
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From time to time, the stock market experiences significant price and
volume fluctuations, which may affect the market price of our common stock for
reasons unrelated to our performance. Recently, such volatility has
particularly impacted the stock prices of publicly traded technology companies.
In the past, securities class action litigation has been instigated against
companies following periods of volatility in the market price of the companies'
securities. If similar litigation were instituted against us, it could result
in substantial costs and a diversion of our management's attention and
resources, which could have an adverse effect on our business.
"Penny Stock" Issues
The shares of the common stock will be "penny stocks" as defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). As a result,
an investor may find it more difficult to dispose of or obtain accurate
quotations as to the price of the shares of the common stock. In addition, the
"penny stock" rules adopted by the Securities and Exchange Commission (the
"SEC") under the Exchange Act subject the sale of the shares of the common stock
to certain regulations which impose sales practice requirements on broker-
dealers. For example, broker-dealers selling "penny stocks" must, prior to
effecting the transaction, provide their customers with a document which
discloses the risks of investing in "penny stocks." Furthermore, if the person
purchasing the securities is someone other than an accredited investor or an
established customer of the broker-dealer, the broker-dealer must also approve
the potential customer's account by obtaining information concerning the
customer's financial situation, investment experience and investment objectives.
The broker-dealer must also make a determination whether the transaction is
suitable for the customer and whether the customer has sufficient knowledge and
experience in financial matters to be reasonably expected to be capable of
evaluating the risk of transactions in "penny stocks." Accordingly, the SEC's
rules may limit the number of potential purchasers of the shares of the common
stock.
If BioLynx.Com cannot qualify for quotation on the OTC Bulletin Board, the
shares of the common stock will only be quoted in the less automated "Pink
Sheets," a system run by the National Quotation Bureau, L.L.C. We will be
obligated to make all filings required under the Exchange Act. If for some
reason we should fail in our registration efforts described in this prospectus
or not file our required reports pursuant to the Exchange Act, it is possible
that we would no longer be eligible for quotation on the OTC Bulletin Board and
we would be relegated to the "Pink Sheets." There can be no assurance that an
active trading market will develop for the shares of our common stock in the
"Pink Sheets" or if such market is developed that it will be sustained.
Moreover, various state securities laws impose restrictions on transferring
"penny stocks," and as a result, investors in the common stock may have their
ability to sell their shares of the common stock further impaired.
Shares Reserved for Issuance
BioLynx.Com has 335,613 shares of the common stock reserved for issuance
upon the exercise of BioLynx.Com's eight percent Convertible Subordinated
Debenture in the amount of $1,107,523 in favor of John D. Walker II, our
Chairman, President, and a major shareholder, and options for 250,000 shares
which may be granted pursuant to BioLynx.Com's 1999 Stock Incentive Compensation
Plan. The debt evidenced by the debenture is convertible into shares of our
common stock on the basis of 3.3 shares of common stock for every one dollar of
debt. The exercise price of the shares to be issued pursuant to the stock
option plan will not be less than 100 percent of the fair market value of the
shares on the date of grant. There can be no assurance that any of these
securities will be sold or converted or exercised, or that we will receive any
proceeds from the conversion or the exercise thereof. See "Management - Stock
Options" and "Certain Transactions." The exercise or conversion of these
securities, and the resale of the underlying shares of the common stock, could
have a dilutive effect on the prevailing market price of the common stock. If
we acquire all of the shares of the capital stock of BioLynx Outsource Services,
Inc., and all of the leased employees, together with all contracts to furnish
services and leasing of Alamo Commercial Group, Inc., both of which are
affiliates of Mr. Walker, the affiliates of Mr. Walker will receive 3,551,883
shares of our preferred stock, which will be convertible into approximately
1,076,328 shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred
10
<PAGE>
stock, together with any declared but unpaid dividends on the preferred stock,
divided by $3.30 per share of common stock.
Also, we have outstanding a warrant covering 7,500 shares of our common
stock in favor of Travis Morgan Securities, Inc., a member of the selling group
which participated in our private placement which concluded on November 24,
1999. Travis Morgan Securities, Inc. is likewise slated to be a selling agent
in connection with this offering. We have likewise reserved 7,500 shares of our
common stock against the possible exercise of the warrant. See "Description of
Securities."
Additionally, as of September 30, 1999, we were indebted in the amount of
$173,651, plus any additional amounts advanced to us since September 30, 1999
through November 19, 1999, to Mr. Walker and two of his affiliated companies,
United Capital Investment Group, Inc. and Alamo Commercial Group, Inc. We have
agreed with Mr. Walker, United Capital Investment Group, Inc., and Alamo
Commercial Group, Inc. that such debt can be satisfied at the election of Mr.
Walker, United Capital Investment Group, Inc., and Alamo Commercial Group, Inc.
by the issuance of our preferred stock which could be convertible at any time
into shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred stock, together with any
declared but unpaid dividends on the preferred stock, divided by $3.30 per share
of common stock. See "Certain Transactions" and "Principal Stockholders." We
will reserve enough shares of the common stock to satisfy the conversion rights
under the preferred stock, if the two anticipated acquisitions and the debt
conversion occur.
Possible Notes Payable
If the closings of the purchases with respect to BioLynx Outsource
Services, Inc. and Alamo Commercial Group, Inc. occur, we may pay the down
payment called for in each contract of purchase, totaling $1,500,000 in the
aggregate, by means of our promissory note due within 90 days of the date of the
note. If we have not been successful in selling all 1,000,000 shares expected
to be sold in this offering, or we cannot arrange alternative financing, we may
not be able to pay a note as it becomes due. In such event, we would have to
deal with a possible claim for non-payment, and/or lose the benefit of our
purchase. In either event, our business prospects would be adversely impacted,
inasmuch as we may not have the money to pay any such claim, or we might lose an
important element of our projected operations.
Our Financial Results May Be Affected by Factors Outside of Our Control
Our future operating results may vary significantly from quarter to quarter
due to a variety of factors, many of which are outside our control. Our expense
levels are based primarily on our estimates of future revenues and are largely
fixed. We may be unable to adjust spending rapidly enough to compensate for any
unexpected revenues shortfall. Accordingly, any significant shortfall in
revenues in relation to our planned expenditures would materially adversely
affect our business, operating results, and financial condition.
Due to the foregoing factors, we cannot predict with certainty our
quarterly revenues and operating results. Further, we believe that period-to-
period comparisons of our operating results are not necessarily a meaningful
indication of future performance. It is likely that in one or more future
quarters our results may fall below the expectations of securities analysts and
investors. If this occurs, the trading price of our common stock would likely
decline.
We May Not Successfully Manage Additional Growth
Our recent growth has placed significant demands on management as well as
on our administrative, operational and financial resources. To manage any
additional growth, we must:
. Expand our sales, marketing and client support organizations.
11
<PAGE>
. Invest in the development of enhancements to existing products and new
products that meet changing client needs.
. Further develop our technical expertise so that we can influence and
respond to emerging industry standards.
. Improve our operational processes and management controls.
Our inability to sustain or manage any additional growth could have a
material adverse effect on our business, operating results and financial
condition.
Rapid Technological Change Could Render Our Products Obsolete
Our markets are characterized by rapid technological changes, frequent new
product introductions and enhancements, uncertain product life cycles, changes
in client requirements, and evolving industry standards. The introduction of
new products embodying new technologies and the emergence of new industry
standards could render our existing products obsolete. Our future success will
depend upon our ability to continue to develop and introduce a variety of new
products and product enhancements to address the increasingly sophisticated
needs of our clients. We may experience delays in releasing new products and
product enhancements in the future. Material delays in introducing new products
or product enhancements may cause clients to forego purchases of our products
and purchase those of our competitors.
We May Be Unable to Enforce or Defend Our Ownership and Use of Proprietary
Technology
Our success depends to a significant degree upon our proprietary
technology. Companies in the software industry have experienced substantial
litigation regarding intellectual property. We rely on a combination of
trademark, trade secret and copyright law, and contractual restrictions and
passwords to protect our proprietary technology. However, these measures
provide only limited protection, and we may not be able to detect unauthorized
use or take appropriate steps to enforce our intellectual property rights,
particularly in foreign countries where the laws may not protect our proprietary
rights as fully as in the United States. Any litigation to enforce our
intellectual property rights would be expensive and time consuming, would divert
management resources, and may not be adequate to protect our business.
We could be subject to claims that we have infringed the intellectual
property rights of others. In addition, we may be required to indemnify our
distribution partners and end-users for similar claims made against them. Any
claims against us could require us to spend significant time and money in
litigation, pay damages, develop new intellectual property or acquire licenses
to intellectual properties that are the subject of the infringement claims.
These licenses, if required, may not be available on acceptable terms. As a
result, intellectual property claims against us could have a material adverse
effect on our business, operating results, and financial condition.
Our Products May Contain Undetected Software Errors
Our software products are complex and may contain undetected errors. We
have previously discovered software errors in certain of the products that we
have developed or sold. Despite testing, we cannot be certain that errors will
not be found in current versions, new versions or enhancements of our products
after commencement of commercial shipments. These undetected errors could
result in adverse publicity, loss of revenues, delay in market acceptance or
claims against us by clients, all of which could seriously damage our business,
operating results, and financial condition.
We May Become Subject to Product Liability Claims
Because our products provide critical database access, integration, and
management functions, we may receive significant liability claims if our clients
believe that our products have failed to perform their intended
12
<PAGE>
functions. Our agreements with clients typically contain provisions intended to
limit our exposure to liability claims. These contract provisions may not
preclude all potential claims. Liability claims could require us to spend
significant time and money in litigation or to pay significant damages. As a
result, any such claims, whether or not successful, could have a material
adverse effect on our reputation and business, operating results and financial
condition.
Year 2000 Issues May Expose Us to Liability
Some computers, software and other equipment include programming codes in
which calendar year data is abbreviated to only two digits. As a result of this
design decision, some of these systems could fail to operate or fail to produce
correct results if "00" is interpreted to mean 1900, rather than 2000. These
problems are widely expected to increase in frequency and severity as the year
2000 approaches and are commonly referred to as the "Year 2000 Problem."
The Year 2000 Problem presents us with several potential risks including,
but not limited to, the following:
. Software Sold to Clients. We believe that it is not possible to
determine with complete accuracy that all Year 2000 Problems affecting
our products and the software products that we sell for others have
been identified or corrected due to the complexity of these products.
. Internal Infrastructure. The Year 2000 Problem could affect computers,
software and other equipment that we use internally as well as divert
management's attention from ordinary business activities. In addition
to computers and related systems, the operation of our office and
facilities equipment, such as fax machines, photocopiers, telephone
switches, security systems, elevators and other common devices may be
affected by the Year 2000 Problem.
. Suppliers/Third-Party Relationships. There can be no assurance that
our suppliers or other third parties that we rely upon will resolve
any or all Year 2000 Problems with their systems on a timely basis.
. Strain on Information Technology Resources. The Year 2000 Problem is
currently placing a strain on organizations' information technology
budgets and resources. Some organizations may lack sufficient
resources to undertake the type of integration projects that the
BioLynx.Com product line enables at the same time that they are
addressing the Year 2000 Problem.
We are reasonably certain that we have identified and are in the process of
resolving all Year 2000 Problems that could materially adversely affect our
business, financial condition or results of operations. We have developed
contingency plans to be implemented as part of our efforts to identify and
correct Year 2000 Problems affecting our internal systems. However, we believe
that it is not possible to determine with complete certainty that all Year 2000
Problems affecting us will be identified or corrected in a timely manner. If we
fail to identify and correct all Year 2000 Problems affecting our internal
systems, or if we are forced to implement our contingency plans, our business,
financial condition, or results of operations could be materially adversely
affected. For additional information, see "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Year 2000 Issues."
Availability of Significant Amounts of Common Stock for Sale Could Adversely
Affect Its Market Price
If our shareholders sell substantial amounts of our common stock in the
public market following this offering, the market price of our common stock
could fall. A substantial number of sales, or the perception that such sales
might occur, also might make it more difficult for us to sell equity or equity
related securities in the
13
<PAGE>
future at a time and price that we deem appropriate. We have granted
registration rights to five of our shareholders, Texas Commercial Resources,
Inc., R. F. Bearden Associates, Inc., Jazbermaine, Aurora Financial Services,
L.L.C., the primary selling agent for our shares pursuant to this prospectus,
and John D. Walker II, our Chairman, President, and a major shareholder. Those
rights enable these shareholders to require that we register, at our expense,
resales of their shares of common stock under certain conditions. See "Principal
Stockholders - Registration Rights Agreements." As of the date of this
prospectus, Texas Commercial Resources, Inc., R. F. Bearden Associates, Inc.,
Jazbermaine, and Aurora Financial Services, L.L.C. own in the aggregate 295,000
shares of our common stock. Aurora Financial Services, L.L.C. will receive an
additional 25,000 shares of our common stock, in consideration of its services
with respect to this offering. However, such additional 25,000 shares are not
included within the number of outstanding shares of our common stock or covered
by a registration rights agreement. See "Plan of Distribution." Mr. Walker has
the right to convert our Convertible Subordinated Debenture into at least
335,613 shares of common stock, all of which shares are covered by his
Registration Rights Agreement. In addition, Mr. Walker and two of his affiliated
companies, United Capital Investment Group, Inc. and Alamo Commercial Group,
Inc., have the right to convert our debt to them into shares of our preferred
stock, which may in turn be converted into shares of our common stock. If a
conversion of the preferred stock into shares of our common stock occurs, Mr.
Walker and his two affiliates will have registration rights with respect to such
shares of common stock. See "Certain Transactions." If these shareholders sell a
large portion of their shares on the open market, our market price per share may
decline. You should read "Shares Eligible for Future Sale" for a more detailed
discussion of when and how many shares of our common stock may be sold after
this offering.
Our Use of Offering Proceeds May Not Prove Beneficial to Shareholders
Approximately 25 percent of the anticipated net proceeds of this offering
have not been designated for specific uses. We expect to use the net proceeds
for acquisitions, working capital and other general corporate purposes.
However, our Board of Directors will have broad discretion with respect to the
use of the net proceeds of this offering and could use the proceeds for other
purposes which may not prove to be beneficial to our shareholders.
FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that involve
substantial risks and uncertainties. You can identify these statements by
forward-looking words such as "may," "will," "expect," "anticipate," "believe,"
"estimate," and "continue," or similar words. You should read statements that
contain these words carefully because they discuss our future expectations,
contain projections of our future results of operations or of our financial
condition or state other "forward-looking" information. We believe that it is
important to communicate our future expectations to our investors. However,
there may be events in the future that we are not able to accurately predict or
control. The factors listed above in the section captioned "Risk Factors," as
well as any cautionary language in this prospectus, provide examples of risks,
uncertainties and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking statements. Before you
invest in our common stock, you should be aware that the occurrence of the
events described in these risk factors and elsewhere in this prospectus could
have a material adverse effect on our business, operating results and financial
condition.
TERMS OF THE OFFERING
The offering of the shares of the common stock will begin on the effective
date of this prospectus and will terminate, if not sooner terminated, at 5:00
p.m., San Antonio, Texas time, 180 days from the effective date hereof. When we
have received and accepted subscriptions for at least 62,500 of the shares
totaling $250,000 (the "Initial Closing Date"), we will receive all funds held
in escrow contributed by the investors. Following the Initial Closing Date, and
until the expiration of 180 days after the effective date of this prospectus,
the remaining shares will be offered and sold on the same terms as set forth in
this prospectus. However, at any time before or after the Initial Closing Date
and before the maximum number of the shares have been sold, BioLynx.Com may
terminate this offering. After the Initial Closing Date, upon the sale of any
of the shares, no part of the subscriptions proceeds
14
<PAGE>
shall be subject to the Escrow Agreement executed between us and a bank
(described below), but shall be immediately available for use by BioLynx.Com. If
the required minimum amount of the subscriptions is not received by 5:00 p.m.,
San Antonio, Texas time, 180 days from the effective date hereof, all
subscriptions will be returned to the investors with interest and without any
deduction or offset.
Company Subscription
Until the Initial Closing Date, all proceeds received from the sale of
shares will be deposited into an escrow account at a bank and will not be
commingled with the funds of BioLynx.Com or any other entity. The proceeds
deposited into the escrow account will be transferred to BioLynx.Com net of the
fees and expenses described herein on the Initial Closing Date. All
subscriptions will be held in escrow with a bank (the "Escrow Agent"), whose
deposits are insured by the Federal Deposit Insurance Corporation, until the
number of subscriptions having a value of $250,000 is received by us. Any
revenues which may be generated with respect to a subscription before the
Initial Closing Date will be held in a separate interest bearing escrow account
with the Escrow Agent. In the event that subscriptions for at least $250,000
have not been received on or before 5:00 p.m., San Antonio, Texas time, 180 days
from the effective date hereof, the Escrow Agent will promptly return all
subscriptions to the respective subscribers in full with interest and without
any deduction therefrom. All subscriptions received after the Initial Closing
Date, but before the expiration of 180 days from the effective date of this
prospectus, will no longer be subject to the Escrow Agreement and will be
immediately available for use by BioLynx.Com.
Subscriptions may be rejected in whole or in part by BioLynx.Com for any
reason and need not be accepted in the order received. All subscriptions are
subject to prior sale. Fully paid subscriptions for shares of the common stock
shall be irrevocable by the investors during the offering period.
PLAN OF DISTRIBUTION
Subscriptions for the shares offered hereby will be solicited on a "best
efforts" basis by our primary selling agent, Aurora Financial Services, L.L.C.,
and by other broker-dealers selected by Aurora as soliciting dealers, who shall
be members of the National Association of Securities Dealers, Inc., and licensed
to sell our shares in the various jurisdictions where the sales may be made.
There is no firm commitment on the part of Aurora or any soliciting dealer, and
they are under no obligation to take down or pay for any of the shares. Aurora
may reallow a portion of its fee as a commission to participating soliciting
dealers on the shares sold through it.
This offering may be terminated in the event that, among other things, (1)
BioLynx.Com determines, in its sole discretion before the sale of the minimum
amount of the shares, to terminate this offering, (2) certain specified actions,
usually associated with extremely adverse economic and market conditions, have
been taken by the principal national securities exchanges or by governmental
authorities, or (3) other events have occurred or are pending or threatened
which, in the judgment of BioLynx.Com, materially impair the investment quality
of the shares.
As compensation for its services for the sale of the shares offered hereby,
Aurora will receive from BioLynx.Com (1) a commission equal to 10 percent of the
cash proceeds of this offering, (2) an amount equal to three percent of the cash
proceeds of this offering, as a non-refundable and non-accountable investment
banking fee, and (3) 25,000 shares of BioLynx.Com's common stock. In addition,
Aurora will have a right of first refusal to place subsequent rounds of
financing for BioLynx.Com. There may be additional future relationships between
Aurora and BioLynx.Com which will result in the payment of compensation to
Aurora. Notwithstanding anything herein contained to the contrary, BioLynx.Com
will pay a selling agent a commission only in those jurisdictions in which the
selling agent is lawfully qualified to sell the shares.
Aurora and other soliciting dealers may be deemed "underwriters" as that
term is defined in the Securities Act of 1933, as amended (the "Securities
Act"), and any commissions payable to them may be deemed underwriting
compensation. BioLynx.Com has agreed to indemnify Aurora and the soliciting
dealers against certain civil liabilities, including liabilities arising under
the Securities Act.
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<PAGE>
USE OF PROCEEDS
Assuming an initial public offering price of $4.00 per share, we will
receive approximately $3,340,000 from our sale of 1,000,000 shares of the common
stock, after the payment of the expenses related to this offering. The
anticipated use of proceeds are set out in the table below. Pending these uses,
BioLynx.Com intends to invest the net proceeds of this offering in short-term,
interest-bearing, investment-grade securities.
Use of Proceeds if 1,000,000 Shares of the Common Stock are Sold
<TABLE>
<S> <C>
Acquisition of BioLynx Outsource Services, Inc.,
and the client base of Alamo Commercial Group, Inc. (1)............ $1,500,000
Offering expenses................................................... 140,000
Sales commissions (2)............................................... 520,000
General and administrative expenses................................. 740,000
Equipment and installations......................................... 850,000
Working capital..................................................... 250,000
----------
Total............................................................... $4,000,000
==========
</TABLE>
- ----------------
(1) BioLynx Outsource Services, Inc. is wholly-owned by United Capital
Investment Group, Inc., an affiliate of John D. Walker II, our Chairman,
President, and a major shareholder. Alamo Commercial Group, Inc. is wholly-
owned by Mr. Walker. See "Certain Transactions."
(2) Does not include 25,000 shares of the common stock to be issued to Aurora
Financial Services, L.L.C., which shares are valued at $100,000.
The above amounts reflect our present intentions for the use of the
proceeds of this offering. Actual expenditures may vary somewhat depending upon
circumstances arising hereafter which cannot presently be foreseen and future
opportunities which may arise.
If BioLynx.Com raises the minimum amount of $250,000, but less than the
$4,000,000 sought by this offering, we will have to alter our intended plan of
operations. In particular, we would have to slow down our planned acquisition
schedule because of capital requirements. Moreover, we would have fewer funds
available for working capital and other purposes. If we do not sell all of the
shares offered by this prospectus, our sales commissions will concomitantly
decrease, but the other expenses of this offering will remain the same.
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY
As of the date of this prospectus, our common stock is not publicly traded.
In the future, we hope to have the common stock quoted on the OTC Bulletin Board
under the symbol "BLNX."
As of November 30, 1999, there were 4,926,600 shares of our common stock
issued and outstanding. We believe that the common stock is held of record and
beneficially by approximately 72 persons on that date. The 25,000 shares of our
common stock to be issued to Aurora Financial Services, L.L.C. in connection
with this offering are not included within the total of our outstanding shares.
BioLynx.Com has not paid or declared any dividends with respect to the
common stock, nor does it anticipate paying any cash dividends or other
distributions on the common stock in the foreseeable future. Any future
dividends will be declared at the discretion of our Board of Directors and will
depend, among other things, on our earnings, if any, our financial requirements
for future operations and growth, and such other facts as we may then deem
appropriate.
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CORPORATE INFORMATION
BioLynx.Com's Internet's address is www.biolynx.com. Information contained
in BioLynx.Com's Internet site does not constitute part of this prospectus. Our
address is 5617 Grissom Road, San Antonio, Texas 78238, telephone number (210)
256-8300, fax number (210) 682-2137, and e-mail [email protected].
CAPITALIZATION
The following table sets forth BioLynx.Com's cash position and total
capitalization at September 30, 1999:
. On an actual basis.
. On a pro-forma basis to reflect the additional sale between
October 1, 1999 and November 24, 1999 of 319,350 shares of
the common stock of BioLynx.Com in a private placement at
$2.00 per share before considering offering costs, and the
awarding between October 1, 1999 and November 24, 1999 of
340,000 shares of the common stock of BioLynx.Com to
consultants, advisers, selling agents, and a board member,
and the corresponding charge to expense of $680,000 (the
stock was valued at $2.00 per share).
. On a pro forma as adjusted basis to reflect the sale of
1,000,000 shares of the common stock by BioLynx.Com in this
offering at an assumed initial public offering price of
$4.00 per share and the application of the estimated net
proceeds in the manner described in "Use of Proceeds."
. On a pro forma as adjusted basis to reflect the issuance of
25,000 shares of the common stock to Aurora Financial
Services, L.L.C., in consideration for its services as a
selling agent in connection with this prospectus.
You should read the following information in conjunction with BioLynx.Com's
Financial Statements and the Notes thereto beginning on page F-1 of this
prospectus. The following information regarding shares outstanding is as of
November 24, 1999. It excludes 250,000 shares of common stock reserved for
issuance under our 1999 Stock Incentive Compensation Plan, and 335,613 shares of
common stock reserved for conversion under our Convertible Subordinated
Debenture. It also excludes any shares of our preferred stock which may be
issued to satisfy our indebtedness to Mr. Walker and two of his affiliated
companies, United Capital Investment Group, Inc. and Alamo Commercial Group,
Inc., or any shares of our common stock which may be issued to Travis Morgan
Securities, Inc., if it elects to convert our warrant covering 7,500 shares. See
"Management - Stock Options," "Certain Transactions," "Principal Stockholders,"
and "Description of Securities."
INTENTIONALLY LEFT BLANK
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<TABLE>
<CAPTION>
Pro Forma
Actual Pro Forma As Adjusted
----------- ----------- -----------
<S> <C> <C> <C>
Convertible subordinated debenture................................... $ 1,107,523 $ 1,107,523 $ 1,107,523
Stockholders' equity (deficit):
Preferred stock, $1.00 par value, 20,000,000
shares authorized, 0 shares issued and
outstanding actual, pro forma, and
as adjusted...................................................... ---- ---- ----
Common stock, $0.001 par value,
50,000,000 shares authorized,
4,267,250 shares issued and
outstanding, actual; 4,926,600 shares
issued and outstanding, pro forma;
5,951,600 shares issued and
outstanding, as adjusted......................................... 4,267 4,927 5,952
Paid-in-capital...................................................... 1,098,393 2,337,545 5,726,520
Retained earnings (deficit).......................................... (2,232,913) (2,912,913) (2,962,913)
----------- ----------- -----------
Total stockholders' equity (deficit)................................. (1,130,253) (570,441) 2,769,559
----------- ----------- -----------
Total capitalization................................................. $ (22,730) $ 537,082 $ 3,877,082
=========== =========== ===========
</TABLE>
DILUTION
After the sale of all 1,000,000 of the shares of the common stock offered
hereby, the shareholders of BioLynx.Com on November 24, 1999 will own
approximately 83 percent of the issued and outstanding shares of the common
stock, and the investors as a result of this offering will own approximately 17
percent of the issued and outstanding shares of the common stock. All
calculations of stock ownership described in this section assume that all of the
shares being offered hereby will be purchased, and 25,000 shares of the common
stock will be issued to Aurora Financial Services, L.L.C., in consideration for
its services as a selling agent in connection with this offering. However, such
calculations do not provide for the exercise of our warrant covering 7,500
shares of our common stock in favor of Travis Morgan Securities, Inc., or the
issuance or conversion of shares of our preferred stock. See "Certain
Transactions," "Principal Stockholders," and "Description of Securities."
The actual net tangible book value of BioLynx.Com as of September 30, 1999
was ($1,130,253), or ($0.26) per share of the common stock. The unaudited net
tangible book value of BioLynx.Com on a pro forma basis as of September 30,
1999, after giving effect to the adjustments to reflect the additional sale
between October 1, 1999 and November 24, 1999 of 319,350 shares of the common
stock of BioLynx.Com in a private placement at $2.00 per share, before
considering offering costs, and the awarding between October 1, 1999 and
November 24, 1999 of 340,000 shares of the common stock of BioLynx.Com to
consultants, advisers, selling agents, and a board member, and the corresponding
charge to expense of $680,000 (the stock was valued at $2.00 per share), was
($570,441), or ($0.12) per share of the common stock. Also, on a pro forma
basis as of September 30, 1999, after giving effect to the sale by BioLynx.Com
of all 1,000,000 of the shares offered hereby and the receipt of the net
proceeds therefrom, and the issuance of 25,000 shares of the common stock to
Aurora Financial Services, L.L.C., in consideration for its services as a
selling agent in connection with this offering, the pro forma net tangible book
value would have been $2,769,559, or $0.47 per share of the common stock. This
represents an immediate increase in the pro forma net tangible book value of
$0.59 per share to our current shareholders immediately before this offering,
and an immediate dilution of ($3.53) per share of the common stock to the new
investors. The following table illustrates this per share dilution.
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<PAGE>
<TABLE>
<S> <C> <C>
Offering Price to New Investors........................................... $ 4.00
Net Tangible Book Value before the Offering............................. $(0.12)
Increase Per Share Attributable to Sale of the Shares................... 0.59
------
Pro Forma Net Tangible Book Value after the Offering...................... 0.47
------
Dilution of Net Tangible Book Value to New Investors (1).................. $ 3.53
======
</TABLE>
- --------------------
(1) Dilution is determined by subtracting pro forma net tangible book value
after this offering from the offering price.
The following table summarizes on a pro forma basis as of September 30,
1999, and after the sale of all 1,000,000 of the shares offered hereby, (1) the
total consideration paid, and the average price per share paid to BioLynx.Com
for shares held by our current shareholders and by investors purchasing shares
pursuant to this offering, (2) the sale of 586,600 shares of our common stock
pursuant to a private placement which closed on November 24, 1999, (3) the
awarding in 1999 of a total of 665,000 shares of our common stock to key
employees, consultants, advisers and a board member, and (4) the issuance of the
common stock to Aurora Financial Services, L.L.C., in consideration for its
services as a selling agent in connection with this offering. However, such
calculations do not provide for the exercise of our warrant covering 7,500
shares of our common stock in favor of Travis Morgan Securities, Inc., or the
issuance or conversion of shares of our preferred stock. See "Certain
Transactions," "Principal Stockholders," and "Description of Securities."
<TABLE>
<CAPTION>
Number of
Shares Percent Total Percent of Total
Purchased of Total Consideration Consideration Effective Price
or Owned Shares Paid Paid Per Share
------------ -------- ------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
Current Shareholders 4,926,600 (1) 83.00 $1,174,626 23.00 $0.24
New Investors 1,000,000 17.00 4,000,000 77.00 $4.00
Selling Agent 25,000 00.00 0 0.00 $0.00
------------ ----- ---------- ------
Total 5,951,600 100.0 $5,174,626 100.00
============ ===== ========== ======
</TABLE>
- --------------------
(1) The current shareholders of BioLynx.Com will receive no additional shares of
the common stock as a result of this offering, unless such shares are
purchased on the same terms as presented in this prospectus.
INTENTIONALLY LEFT BLANK
19
<PAGE>
SELECTED FINANCIAL DATA
The selected historical financial data for the period from inception
through December 31, 1998 and for the nine months ended September 30, 1999, have
been derived from the Financial Statements of BioLynx.Com, which have been
audited by John M. James, independent certified public accountant. The results
of operations for the period from inception through December 31, 1998 and for
the nine months ended September 30, 1999 are not necessarily indicative of
results to be expected for any future period. The information set forth below
should be read in conjunction with the Financial Statements and Notes thereto
and with "Management's Discussion and Analysis of Financial Condition and
Results of Operations" which are included elsewhere in this prospectus.
<TABLE>
<CAPTION>
Inception Nine Months
Through Ended
December 31, 1998 September 30, 1999
----------------- ------------------
<S> <C> <C>
Statement of Operations Data:
Total services revenues................................... $ ---- $ 10,410
Total cost of operations.................................. ---- ----
----------------- ------------------
Gross profit............................................ $ ---- $ 10,410
Research and development.................................. 403,042 982,371
Selling, general and administrative....................... 395,569 396,233
Depreciation and amortization............................. 1,387 22,690
----------------- ------------------
Total operating expenses................................ 799,998 1,401,294
----------------- ------------------
Loss from operations...................................... (799,998) (1,390,884)
Interest expense.......................................... ---- (40,782)
----------------- ------------------
Net loss................................................ $ (799,998) $ (1,431,666)
================= ==================
Basic and diluted net loss per share...................... $ (0.36) $ (0.46)
================= ==================
Weighted average common shares outstanding................ 2,249,000 $ 3,081,580
================= ==================
<CAPTION>
December 31, 1998 September 30, 1999
----------------- ------------------
<S> <C> <C>
Balance Sheet Data:
Cash and cash equivalents................................. $ ---- $ 78,462
Working capital (deficit)................................. $ ---- $ (132,743)
Total assets.............................................. $ 22,354 $ 226,117
Convertible subordinated debentures....................... $ 821,352 $ 1,107,523
Stockholders' equity (deficit)............................ $ (798,998) $ (1,130,253)
</TABLE>
INTENTIONALLY LEFT BLANK
20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion contains forward-looking statements that involve
risks and uncertainties. BioLynx.Com's actual results could differ materially
from those discussed in the forward-looking statements as a result of certain
factors including those set forth under "Risk Factors" and elsewhere in this
prospectus. The following discussion and analysis should be read in conjunction
with the Financial Statements and the Notes thereto appearing elsewhere in this
prospectus.
Plan of Operation
BioLynx.Com, Inc. is a newly organized company, having been incorporated on
April 29, 1999 by John D. Walker II. However, we are an outgrowth and
continuation of an employee leasing business of Mr. Walker, which he had owned
for over nine years when he sold the client base in July 1997. Later in 1997,
Mr. Walker founded Alamo Commercial Group, Inc. to provide employee leasing on a
smaller scale than he previously furnished. In December 1998, Mr. Walker
founded BioLynx, Inc. to furnish employee leasing and biometric technology with
respect to time and attendance of employees. BioLynx, Inc. developed our
business plan, and lined up the key people who were thought to be instrumental
in the projected business of our company. On May 12, 1999, BioLynx, Inc. and
BioLynx.Com, Inc. merged, with BioLynx.Com, Inc. being the surviving
corporation.
Following the expected acquisitions of BioLynx Outsource Services, Inc. and
Alamo Commercial Group, Inc. discussed below, we will have 16 employees. Other
than subsequent minimal fluctuations in our employee makeup, we do not expect
any significant change in the number of our employees over the next 12 months.
Research and Development Plans for 2000 and Beyond. Our plans include the
following for 2000 and beyond:
. Improve the functions/features of our Time and Attendance System to
include more payroll features such as adding time and annotating the
time for holidays, vacation, sick leave, etc.
. Add job-costing features to reflect a specific job or department so a
client can see not only the time and attendance data but job-costing
as well.
. Work to include more export functions to give a client the ability to
export the time and attendance data directly to its payroll from a
"drop down menu." This feature must be customized for a client today.
. Add more functions and features to our current Web site to give our
clients the ability to order products or services using the Internet.
. Be in a position to meet any unique client requirements for
programming or reporting as needed.
Liquidity and Capital Resources
On November 24, 1999, we completed a private placement of 586,600 shares of
our common stock, raising $1,173,200 in the process. This offering seeks to
raise an additional $4,000,000 by the further sale of our common stock. The
proceeds of both the private placement and this offering will be used to deepen
an operations framework to deliver our services, hire a dedicated sales force,
and continue to develop the capabilities of the BioLynx.Com Time and Attendance
System. Funds will also be used to further develop the corporate
infrastructure, capitalize equipment for rapid growth, and add management from
within the employee leasing industry. Other goals are expansion of the
development and support teams, and closing on numerous pending strategic
alliances, retirement of
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<PAGE>
debt, fund new product development, further the network infrastructure expansion
(including a second internal system for full redundancy), and finance an
intensive marketing program. The funds raised to date, as well as the funds to
be raised by this offering are expected to take care of our financial needs for
the next six months. Thereafter, we will rely on cash flow from operations to
satisfy our cash requirements. At this time, we do not anticipate raising any
more cash within the next 12 months.
We have earmarked approximately $1,500,000 of the cash expected to be
raised by this offering to purchase two employee leasing businesses owned or
controlled by Mr. Walker. BioLynx.Com anticipates purchasing from an affiliate
of Mr. Walker all of the outstanding capital stock of BioLynx Outsource
Services, Inc. on December 31, 1999. BioLynx Outsource Services is in the
employee leasing business and has expanded its client base since its
incorporation on May 25, 1999. Further, in an effort to augment its client
base, on December 31, 1999, BioLynx Outsource Services plans to acquire from
Alamo Commercial Group, Inc. (wholly-owned by Mr. Walker) all of its leased
employees, together with all contracts to furnish services and employee leasing.
Given its past experience in developing an employee leasing business, our
management believes that the ability to increase sales and revenue for both
BioLynx.Com and BioLynx Outsource Services will be improved as a result of the
two pending acquisitions. Additionally, the combination of the two companies
will allow cross-selling and better service to the clients of each company.
Even though both transactions are scheduled to close on December 31, 1999,
neither transaction will close until after the effective date of this
prospectus. Moreover, if a proposed purchase agreement fails to close by April
1, 2000 because this prospectus has not become effective or for any other
reason, that particular agreement will be null and void. As for the cash
payment required at the closing of either of the proposed purchases, we can give
our promissory note due within 90 days thereof. If we utilize the note option,
we will have to ensure that we have the required cash to pay the note on its due
date. See "Risk Factors" and "Certain Transactions."
Additionally, as of September 30, 1999, we were indebted in the amount of
$173,651, plus any additional amounts advanced to us since September 30, 1999
through November 19, 1999, to Mr. Walker and two of his affiliated companies,
United Capital Investment Group, Inc. and Alamo Commercial Group, Inc. We have
agreed with Mr. Walker and United Capital Investment Group, Inc. and Alamo
Commercial Group, Inc. that such debt can be satisfied at the election of Mr.
Walker and United Capital Investment Group, Inc. and Alamo Commercial Group,
Inc. by the issuance of our preferred stock, on the basis of one share of
preferred stock for every dollar of debt owed, which could be convertible at any
time into shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred stock, together with any
declared but unpaid dividends on the preferred stock, divided by $3.30 per share
of common stock. See "Certain Transactions" and "Principal Stockholders."
Year 2000 Issues
Background and Assessment. Some computers, software and other equipment
include programming code in which calendar year data is abbreviated to only two
digits. As a result of this design decision, some of these systems could fail
to operate or fail to produce correct results if "00" is interpreted to mean
1900, rather than 2000. These problems are widely expected to increase in
frequency and severity as the year 2000 approaches and are commonly referred to
as the "Year 2000 Problem."
In assessing the effect of the Year 2000 Problem on BioLynx.Com, management
determined that there existed three general areas that needed to be evaluated:
. Software products sold to clients.
. Internal infrastructure.
. Supplier/third-party relationships.
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<PAGE>
A discussion of the various activities related to assessment and actions
resulting from those evaluations is set forth below.
Software Products Sold to Clients. BioLynx.Com's products have been
designed to be Year 2000 compliant, and all of our products have been tested for
Year 2000 compliance. Our ongoing product development activities continually
consider and address the Year 2000 Problem in their development. However, once
licensed, our products interact with other non-BioLynx.Com developed products
and operate on computer systems that are not under our control. These factors
could affect the performance of our products if a Year 2000 Problem existed in a
different facet of a client's information technology infrastructure. BioLynx.Com
has not and will not assess the existence of these potential problems in its
clients' various environments. BioLynx.Com does not believe that the development
of Year 2000 compliant products has created or will create a significant
increase in the development costs of its software products.
Internal Infrastructure. BioLynx.Com has completed examining and verifying
that all of its personal computers, servers and software are Year 2000
compliant. We have replaced or upgraded all items noted that were not Year 2000
compliant. BioLynx.Com has researched and found that the vendors of all of its
critical applications have represented that their products are Year 2000
compliant. Moreover, we have upgraded our financial and accounting software.
This upgrade involved purchasing an upgraded version of a financial and
accounting software package that the vendor certifies to be free of Year 2000
Problems. The costs related to these efforts have not been material to
BioLynx.Com's business, financial condition, or results of operations.
BioLynx.Com has assessed potential problems associated with embedded
technology. These assessments indicate that, due to the nature of our
operations, the non-information technology systems (i.e., embedded technology
such as microcontrollers) do not represent a significant area of risk relative
to Year 2000 readiness. BioLynx.Com's operations do not include capital
intensive equipment with embedded microcontrollers.
BioLynx.Com has not utilized the resources of third parties to assess
and/or validate the reliability of its Year 2000 Problem. Additionally, we do
not expect to do so in the future. To date, the assessment and corrections of
the Year 2000 Problem have not led to the deferment of information technology
related projects.
Suppliers/Third-Party Relationships. As mentioned above, BioLynx.Com has
been gathering information from vendor Web sites and available compliance
statements and has initiated communications with third-party suppliers of the
major computers, software and other equipment used, operated, or maintained by
BioLynx.Com to identify and, to the extent possible, resolve issues involving
the Year 2000 Problem. There can be no assurance that such suppliers will
resolve any or all Year 2000 Problems with such systems before the occurrence of
a material disruption to the business of BioLynx.Com or any of its suppliers.
Any failure of these third-parties to resolve Year 2000 problems with their
systems in a timely manner could have a material adverse effect on our business,
financial condition, or results of operation.
Strain on Client's Information Technology Resources. Some organizations'
systems may be seriously disrupted as a result of the Year 2000 Problem.
Consequently, their attention and capital expenditures could shift away from the
need for applications addressed by BioLynx.Com's products to capital
expenditures required to resolve their Year 2000 Problems.
Contingency Plans. BioLynx.Com has developed contingency plans to be
implemented as part of its efforts to identify and correct Year 2000 Problems
affecting its internal systems. Depending on the systems affected, these plans
include:
. Accelerated replacement of affected equipment or software.
. Short to medium-term use of backup equipment and software.
23
<PAGE>
. Increased work hours for our personnel or use of contract personnel to
correct on an accelerated schedule any Year 2000 Problems which arise
or to provide manual workarounds for information systems.
. If BioLynx.Com is required to implement any of these contingency
plans, such plans could have a material adverse effect on
BioLynx.Com's business, financial condition or results of operations.
So far in calendar year 1999, BioLynx.Com has incurred no material expense
relating to identification and correction of Year 2000 Problems, and we do not
expect to incur any material expense for such activities for the remainder of
calendar year 1999.
Based on the actions taken to date as discussed above, BioLynx.Com is
reasonably certain that it has or will identify and resolve all Year 2000
Problems that could materially adversely affect its business and operations.
BUSINESS
General
BioLynx.Com, Inc. is a biometric technology applications business that
designs and markets time and attendance services, utilizing our own copyrighted
software. We also plan to engage in employee leasing. We were incorporated on
April 29, 1999 in the State of Texas. In May 1999, we merged with BioLynx,
Inc., a Texas corporation, with BioLynx.Com, Inc. being the surviving
corporation. As a result of the merger, we succeeded to all the rights and
properties and became subject to all the debts and liabilities of BioLynx, Inc.
At the time of the merger, BioLynx, Inc. had engaged in no business, but had put
into motion the basics of our business plan.
Our primary market is the employee leasing industry, which employs over 20
million people. John D. Walker II, our Chairman, President, and major
shareholder, has over 10 years experience in the employee leasing business, and
provides significant insight as to how we run our business. We plan to provide
our clients all of the information needed to generate payroll using 3-D Hand
Geometry. Subscribers to our service are expected to realize substantial
savings through increased workplace accountability and reduced administrative
costs associated with generating a payroll. Approximately one biometric hand
reader is necessary for every 62 workers at a given location, a very affordable
expenditure. Our software, which the management of BioLynx.Com designed over a
two-year period, is adaptable to any current existing payroll technology so that
our clients do not have to change their existing payroll software. We estimate
that we have spent approximately $1.75 million in developing our Time and
Attendance System.
A reasonable degree of socializing at work is acceptable, and being late
once in while is understandable. However, deliberate and continual time theft
poses a serious threat to individual companies and to the nation's economic
well-being. Time theft (where an employee claims to be at work, but is not)
occurs at every level of business. Based upon a study by Robert Half
International, Inc., the average office worker was estimated to be stealing four
hours and 21 minutes of time each week, versus three hours and 30 minutes per
week for manufacturing workers. At an average wage of $8.21 per hour, Half
arrived at an average weekly time-theft cost of $34 - $64 per worker. When
measured against an average check of $328.40 per week, this amounts to at least
10 percent. Ten percent is far greater than the entire profit margins of many
companies.
In our view, over the last 20 years, Americans have lead the resurgence in
worker productivity, which has probably been the driving force behind the
prosperity that has occurred in the industrialized world. We feel increased
productivity has most certainly allowed increased real wages and near full
employment, without causing the onset of inflation. The computer, software, and
the Internet are all making their contributions, but workers are increasingly
unable to harness all the tools with which they are provided. From where is the
next simple gain in productivity to come? More technology? Yes, but more
importantly, how about a simple solution that will help every worker provide
more value regardless of his level of training and computer skill?
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BioLynx.Com feels that it has a simple solution. Our proprietary software,
when linked with a biometric hand reader, provides a control feature for
business, which reasonably ensures that a business will pay an hourly paid
employee only for the hours he is actually on the job. This increases worker
productivity in a remarkably simple way. The copyrighted BioLynx software is
mated to a hand reader in order to ensure the accuracy of how many hours were
worked by any given employee. That same employee is afforded reasonable
certainty that he will not be the subject of human error which predominates in
businesses where time cards are hand written, and worse, calculated with a 10-
key calculator.
BioLynx.Com was conceived in its current form in 1998. The genesis of the
BioLynx.Com Time and Attendance System came about as a result of need. The
employee leasing business is extremely capital intensive, requires knowledge
skill sets in many industries, and often yields only one to three percent net
profit after taxes. As a result, management of employee leasing businesses have
continuously sought ways to improve employee efficiency, safety, and
productivity. The requirement of operating in an industry with such thin
margins has been the impetus behind numerous attempts to improve net profits.
The BioLynx.Com Time and Attendance System has been developed as an answer to
this quest.
The fact that we expect to have a mature and growing employee leasing
business segment in BioLynx Outsource Services, Inc. discussed below, gives us
some assurance that the market should accept this opportunity. Further note
should be taken concerning revenues from the time and attendance segment. As
each system is put in place and integrated with a client's existing payroll
processing, we feel that it is highly likely that it will stay in place.
Biometrics
Biometrics is a technology that electronically measures, records, and
compares unique personal characteristics for identification. While the
technology is common in security and access control applications, it is new to
the time and attendance industry. There are two major categories of biometric
devices, behavioral and physiological.
Behavioral devices rely on learned traits that are unique to individuals.
Perhaps the most common example of a unique trait is a person's signature.
Society routinely uses this trait to verify the identity of an individual, such
as with the signature on a check. Another behavioral technology is voice
recognition, which records and compares vocal frequency and patterns.
Physiological biometric identification measures a distinct unique
characteristic of a person such as the size and shape of his hand, fingerprint
details, blood vessel patterns on the retina, and unique features of the iris.
A biometric device provides true identification of a person by comparing his
physical characteristics to a known pattern recorded during the enrollment
process. Carried identification, like a badge, personal identification number,
or password cannot truly identify an individual. A person can transfer any of
these to another person.
The primary benefit of using biometrics in a time and attendance system is
payroll accuracy. An accurate payroll requires accurate data entry. Tainted
data entered into a time and attendance system results in inaccurate paychecks.
A computerized time and attendance system eliminates many inaccuracies inherent
in a manual time keeping system. Badges and data terminals collect employee
punches electronically. This minimizes many data entry errors. Yet, if one
person can use another person's badge to punch in for him, inaccuracies in
payroll will persist. A biometric device eliminates that possibility, because
the employee has to be there. "Buddy punching" is a common abuse of time
keeping systems. We feel that with biometrics, "buddy punching" will be
eliminated.
3-D Hand Geometry
There are a number of biometric identification readers on the market.
However, in our opinion, 3-D Hand Geometry is the most accurate of all the
biometric techniques. High accuracy is expected to enhance user satisfaction
because of low level of false rejects. We believe:
25
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. 3-D Hand Geometry has, by a wide margin, the highest level of user
acceptance of all of the biometric techniques.
. 3-D Hand Geometry has the lowest level of user concerns of all
biometric techniques.
. 3-D Hand Geometry is the most cost effective of all biometric
techniques.
. 3-D Hand Geometry is easiest to integrate into payroll systems.
Hand Readers
We purchase all of the hand readers used in our 3-D Hand Geometry Time and
Attendance Systems from Recognition Systems, Inc. located in Campbell,
California. Recognition Systems, Inc. is the sole manufacturer of the hand
reader we use. In the event that we cannot obtain hand readers from Recognition
Systems, Inc., we would utilize a different form of biometric reader. The other
forms of biometric readers are manufactured by several vendors, and employ
finger, retina, or voice recognition, instead of 3-D Hand Geometry. We do not
anticipate any significant problems in applying a different form of biometric
reader to our Time and Attendance System.
Employee Leasing
In the late 1980's, the employee leasing industry was introduced to many
states, including Texas. The most important factor contributing to the
successful introduction of employee leasing, as it is commonly known, was the
ability to provide workers compensation insurance coverage to client companies
at a rate below what they could purchase on their own. Leasing entities bought
at lower rates strictly because they were buying for many companies, not just
one.
After the Texas Legislature passed a law requiring leasing companies to be
licensed, insurance companies began to actively solicit leasing companies for
workers compensation and other insurance requirements. Competition among these
carriers created more competitive pricing and the industry grew.
As the leasing industry developed, it was apparent to us that keeping
workers compensation insurance rates low depended on the ability of the leasing
company to keep claims low. To enhance our ability to successfully manage
claims or perhaps prevent them, we would need to create an awareness of the need
for safety and a safe working environment. We have hired three individuals,
trained and educated in all aspects of safety from construction site safety to
office staff ergonomics. These individuals are now certified safety engineers.
One has just been elected President of the American Society of Safety Engineers.
Having control of client companies' workers compensation insurance is also
a valuable tool in the elimination of collection problems. At the beginning of
our relationship, a client company is made aware that failure to pay an invoice
in a timely manner will result in cancellation of coverage. This tool is
expected to keep account write-offs at very low levels. In the past, Mr. Walker
(through his previous employee leasing business) has been successful in keeping
his client companies and many thousands of employees in safe working
environments while controlling insurance costs. Recognizing the need for safety
programs and implementing these programs has set us a step above other leasing
companies. To our knowledge, we will be the only leasing company with accredited
safety engineers on staff.
The Acquisition Candidates - BioLynx Outsource Services, Inc. and Alamo
Commercial Group, Inc.
Currently, BioLynx.Com anticipates acquiring all of the capital stock of
BioLynx Outsource Services, Inc. as soon as this prospectus becomes effective,
as long as such effective date is before April 1, 2000. BioLynx Outsource
Services is wholly-owned by an affiliate of John D. Walker II, our Chairman,
President, and a major shareholder. BioLynx Outsource Services, founded on May
25, 1999, is in the employee leasing business and has
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<PAGE>
increased its client base since its organization. In addition, as soon as this
prospectus becomes effective, as long as such effective date is before April 1,
2000, BioLynx Outsource Services plans to acquire from Alamo Commercial Group,
Inc. (wholly-owned by Mr. Walker) all of its leased employees, together with all
contracts to furnish services and leasing. We feel that the ability to increase
sales and revenue for both BioLynx.Com and BioLynx Outsource Services will be
improved due to the acquisition of BioLynx Outsource Services and the purchase
of the assets of Alamo Commercial Group. Moreover, the combinations are expected
to allow cross-selling and better service to the clients of both BioLynx.Com and
BioLynx Outsource Services. See "Certain Transactions."
Current and Potential Business
We have Time and Attendance Systems in operation in the field. We are
currently negotiating contracts with a vendor to an employee leasing business.
It is anticipated that this vendor could generate substantial sales to other
leasing companies, and prospects for acquisitions in the leasing business. We
are also focusing on employers who have a large number of employees, where
accurate time and attendance records are sorely needed, and where labor is a
large component of cost.
We anticipate revenues from the following sources:
. Through service agreements with non-employee leasing employers for our
biometric Time and Attendance Systems.
. Outright sales of our Time and Attendance Systems to other employee
leasing companies. In our opinion, the employee leasing business
dictates that additional revenue streams could enhance the bottom
line of any leasing company. Currently, we have identified a number of
companies in the employee leasing business that could achieve
immediate results using the BioLynx.Com Time and Attendance System.
. Employee leasing. We intend to use a portion of the proceeds from this
offering as working capital to facilitate the growth of BioLynx
Outsource Services.
. New adaptations for our biometric technology.
During the next year, we plan to continue to improve our service bureau
software which will enhance our clients' ability to retrieve additional
information from the hand reader used in our 3-D Hand Geometry and to report
this information via the current BioLynx.Com Internet Web site such as job-
costing tips, etc. In addition, we will provide many current general ledger
functions on the Internet to include pay rates, deductions, garnishments, etc.
This will all be used to feed existing payroll/general ledger applications.
Further, we will produce a version of software which can be sold to clients
for a one-time charge. This will be for the potential clients who wish to own
the application and not utilize our services.
Patents and Intellectual Property
Patents. BioLynx.Com has filed a Provisional Patent Application with the
United States Patent and Trademark Office. The application seeks to protect the
BioLynx.Com method and apparatus for providing inexpensive integration of remote
biometric identification/verification/two-way communication units with
automated, centralized remote management of multiple clients having multiple
locations. We may additionally file patent applications in appropriate other
countries based upon the priority date of the pending United States application.
A patent application does not in and of itself grant exclusive rights. A patent
application must be reviewed by the Patent Office of each relevant country prior
to issuing as a patent and granting exclusive rights. We do not represent that
these rights are in and of themselves material to the value of BioLynx.Com.
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Trademarks. BioLynx.Com filed application Serial No. 75/666,219 for a
United States Trademark registration for the term "BIOLYNX" on March 15, 1999.
The application is pending. The application itself does not in and of itself
grant exclusive rights. A trademark application must be reviewed by the
Trademark Office prior to issuing as a federal trademark registration.
Additionally, we have certain common law trademark rights in our "BIOLYNX" word
mark and design marks. BioLynx.Com does not represent that these rights are in
and of themselves material to the value of BioLynx.Com.
Copyrights. BioLynx.Com has unregistered copyright rights in its software,
user manuals, and advertising materials. We are in the process of obtaining
copyright registrations upon our software. BioLynx.Com does not represent that
these rights are in and of themselves material to the value of BioLynx.Com. Our
BioLynx.Com software, which runs our time and attendance business, is
copyrighted.
Competition
BioLynx.Com competes in markets that are intensely competitive and
characterized by rapidly changing technology and evolving standards. Our
competitors are diverse and offer a variety of solutions directed at various
segments of the employee leasing markets. BioLynx.Com has experienced, and
expects to continue to experience, increased competition from current and
potential competitors, many of whom have greater name recognition, a larger
client base and significantly greater financial, technical, marketing, and other
resources than BioLynx.Com.
BioLynx.Com faces competition from:
. Other business applications vendors who may internally develop, or
attain through acquisitions and partnerships, a similar software
solution provided by BioLynx.Com.
. Internal development efforts by corporate information technology
departments.
. New entrants to the payroll services market, especially those
utilizing biometrics.
Some of our major competitors include ADP, Kronos, Robert Half
International, Inc., Administaff, Inc., and Staff Leasing, Inc. All of these
companies are engaged in either the employee leasing business, use biometric
ingress and egress equipment, or time and attendance linked software. However,
none of these companies provide time and attendance as a service without tying
it to their payroll or leasing activities, or without a large capital outlay for
the purchase of equipment.
Our competitors may be able to respond more quickly to new or emerging
technologies and changes in client requirements or devote greater resources to
the development, promotion and sale of their products than we can. Increased
competition could result in price reductions, fewer client orders, reduced gross
margins, longer sales cycles and loss of market share, any of which would
materially and adversely affect our business, operating results, and financial
condition.
Employees
Currently, we have nine employees, including two in sales, four in research
and development, two in finance and administration, and one in client services.
As we grow, we will need to attract additional qualified employees. There can
be no assurance that we will be successful in attracting and retaining the
persons needed. None of our employees are represented by a labor union. We have
experienced no work stoppages and believe our relationships with our employees
are good.
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Facilities
We lease from John D. Walker II, our Chairman, President and a major
shareholder, approximately 2,650 square feet of office space in San Antonio,
Texas for an annual rental of approximately $36,000. The lease expires in
November 2001. We believe that our facilities are adequate for our current
operations.
Litigation
We are not engaged in any litigation, and we are unaware of any claims or
complaints that could result in future litigation. We will seek to minimize
disputes with our clients but recognize the inevitability of legal action in
today's business environment as an unfortunate price of conducting business.
MANAGEMENT
Executive Officers and Directors
The following table sets forth certain information concerning the directors
and executive officers of BioLynx.Com as of September 30, 1999:
<TABLE>
<CAPTION>
Name Age Position Director Since
---- --- -------- --------------
<S> <C> <C> <C>
John D. Walker II (1) 55 Chairman of the Board and President 1999
Patrick E. Tolle 46 Vice President, Chief Operating Officer, 1999
Secretary, Treasurer, and Director
Andrew Fitch-Wallish 28 Vice President and Director 1999
Barbara A. Bean 52 Chief Financial Officer 1999
Louis A. Ross, Ph.D. (1), (2) 63 Director 1999
Wren Alexander (1), (2) 44 Director 1999
</TABLE>
______________
(1) Member of the Compensation Committee.
(2) Member of the Audit Committee.
Officers are elected annually by the directors. There are no family
relationships among the directors and officers of BioLynx.Com.
We may employ such additional management personnel as our Board deems
necessary. BioLynx.Com has not identified or reached an agreement or
understanding with any other individuals to serve in such management positions,
but does not anticipate any problem in employing qualified staff.
A description of the business experience during the past several years for
each of the directors and executive officers of BioLynx.Com is set forth below.
John D. Walker II has over 10 years experience in employee leasing. Prior
to that he successfully managed the Dealer Electric office in San Antonio,
Texas, and a family owned business, Walker Furniture Co. He built a private
$100 million employee leasing company, which he sold in 1997.
Patrick E. Tolle has over 20 years experience in information systems. This
experience includes expertise in various fields such as research and
development, systems engineering and sales with IBM. In addition, he has served
as an operations manager, managing technical personnel, project management and
consulting with IBM and Alcoa. Mr. Tolle has also completed various technical
and marketing classes offered by IBM.
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<PAGE>
Andrew Fitch-Wallish has worked for eight years in the field of software
development. During this time, he has built enterprise class client server and
Internet systems utilizing a variety of technologies including hand held
computers, infrared communication, n-tier architecture, distributed
architecture, virtual reality and Java. He has a Bachelors Degree in Computer
Science, has been published in WebReview magazine, and speaks 20 programming
languages. He chairs the San Antonio, Texas chapter of the International
Webmasters Association.
Barbara A. Bean currently serves as Chief Financial Officer of BioLynx.Com
as well as United Capital Investment Group, Inc., an affiliate of John D. Walker
II. From 1995 through August 1999, she was the Business Manager of H. J.
Group/Bufete Independent Joint Venture. From May 1985 to May 1997, she was the
President of the Board of Trustees of the East Central Independent School
District. Ms. Bean holds a Bachelor of Business Administration from the
University of Texas at San Antonio.
Louis A. Ross, Ph.D., has broad management and corporate development
experience in the petrochemical and thermoplastics industries derived from 30
years of increasingly responsible positions in technical, development,
commercial and operating functions. He is skilled in Business Unit Management,
Strategic Planning Budgeting and Project Management. Dr. Ross received a
Bachelor of Science from Loyola University, Chicago in 1957. He received his
Ph.D. in Inorganic Chemistry in 1962 from Indiana University and studied at
Harvard University Graduate School of Business in 1975 in its program for
Management Development.
Wren Alexander has spent his entire business career in the commercial
banking and mortgage businesses. Since 1990, he has been President of Alpha
Mortgage, Inc. in San Antonio, Texas. Mr. Alexander received a BBA in Finance
from the University of Texas at Austin in 1977. In addition, he also attended
the Texas Tech University School of Banking Advanced Program in 1979.
We have two other significant employees, Charles E. Pircher, Director of
Strategic Planning, and Margaret A. Rice, our Director of Training. Mr. Pircher
has over 20 years experience in sales and management, including insurance sales
and district management with Massachusetts Mutual Life Insurance Company, where
he was a consistent multi-million dollar producer. Ms. Rice joined us in
September 1999 as our corporate trainer. She has extensive experience in
various hardware and software applications. Ms. Rice has owned her own software
training and consulting firm, and was a contractor to a major San Antonio, Texas
software training provider.
Committees of the Board of Directors
The Board of Directors has created a Compensation Committee and an Audit
Committee. The Compensation Committee makes recommendations to the Board of
Directors concerning salaries and compensation for BioLynx.Com's officers and
employees and administers our 1999 Stock Incentive Compensation Plan. The
members of the Compensation Committee are Messrs. Walker, Ross and Alexander
(Chairman). The Audit Committee makes recommendations to the Board of Directors
regarding the selection of independent auditors, reviews the results and scope
of audits and other accounting related services, and reviews and evaluates
BioLynx.Com's internal control functions. The members of the Audit Committee
are Messrs. Ross (Chairman) and Alexander.
INTENTIONALLY LEFT BLANK
30
<PAGE>
Executive Compensation
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------------------- --------------------------
Securities
Underlying
Name and Principal Fiscal All Other Options and
Position Year Salary Bonus Compensation (1) Warrants (3)
-------- ---- ------ ----- ---------------- ------------
<S> <C> <C> <C> <C> <C>
John D. Walker II 1999 $ 208,000 (1) -0- -0- -0-
Patrick E. Tolle 1999 $ 130,000 -0- -0- -0-
Andrew Fitch-Wallish 1999 $ 85,800 -0- -0- -0-
</TABLE>
________________
(1) One-half of Mr. Walker's salary reflected above is paid by an affiliated
company owned by Mr. Walker.
Employment Contracts
BioLynx.Com has entered into employment contracts with several of our
officers and other key personnel. Currently, BioLynx.Com has employment
agreements with the following individuals: John D. Walker II, Patrick E. Tolle,
Andrew Fitch-Wallish, Charles E. Pircher, Gregory W. Schlather, Larry Roy,
Barbara A. Bean, and Margaret A. Rice. Each employment agreement provides that:
. The employee shall be paid a monetary compensation in return for the
employee's faithful performance.
. All proprietary items and inventions developed by the employee, or in
conjunction with other employees, shall belong to BioLynx.Com.
. The employee shall not, for a period of two years following the
termination of the employee's employment with BioLynx.Com, engage in
the business of developing, publishing, or marketing of products in
direct competition with BioLynx.Com anywhere within BioLynx.Com's
trade territory.
. A confidentiality agreement prohibiting the disclosure to any third
party of any confidential information received from BioLynx.Com.
Director Compensation
We do not currently compensate our directors for their services as
directors, although we may consider doing so in the future.
Stock Options
BioLynx.Com anticipates reserving warrants or options for future issuance
to our senior management, employees, and consultants as incentive compensation
for services to be rendered in connection with their efforts on our behalf. In
that regard, our Board of Directors and shareholders have adopted our 1999 Stock
Incentive Compensation Plan. We have reserved 250,000 shares of the common
stock for issuance pursuant to the plan. These options will be issued on a case-
by-case basis. We reserve the right to issue the options from time to time, in
such amounts, as we may, in our sole discretion, deem advisable. As of the date
of this prospectus, we have issued no options pursuant to the plan.
The exercise price for shares purchased under an option shall be as
determined by the Plan Administrator, but shall not be less than 100 percent of
the fair market value of the common stock on the grant date. The term of
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each option shall be as established by the Plan Administrator or, if not so
established, shall be 10 years from the grant date. The Plan Administrator shall
establish and set forth in each instrument that evidences an option the time at
which or the installments in which the option shall vest and become exercisable,
which provisions may be waived or modified by the Plan Administrator at any
time. If not so established in the instrument evidencing the option, the option
will vest and become exercisable over a schedule of four years, which may be
waived or modified by the Plan Administrator at any time. The exercise price for
shares purchased under an option shall be paid in full to BioLynx.Com by
delivery of consideration equal to the product of the option exercise price and
the number of shares purchased.
CERTAIN TRANSACTIONS
Martex Trading Co., Inc. On May 7, 1999, Martex Trading Co., Inc., a Texas
corporation ("Martex"), acquired 400,000 shares of our common stock. Martex,
which was formerly known as Whitsitt Oil Company, Inc., is a wholly-owned
subsidiary of Auto Axzpt.Com, Inc., a Nevada corporation, which has its shares
of common stock traded in the over-the-counter market on the OTC Bulletin Board.
The President and a director of Martex is Henry A. Schulle, the sole
shareholder, officer and director of Texas Commercial Resources, Inc., which has
a Financial Advisory Agreement with BioLynx.Com. See "Principal Stockholders -
Texas Commercial Resources, Inc. Financial Advisory Agreement." One of our
directors, Louis A. Ross, Ph.D., is also a director of Martex.
Pursuant to an agreement between Martex and Auto Axzpt.Com, Inc., all of
the shares of the common stock of Martex owned by Auto Axzpt.Com, Inc. are
expected to be distributed to the shareholders of Auto Axzpt.Com, Inc. as a
stock dividend. Thereafter, Martex is expected to register its shares pursuant
to the Exchange Act. Following the distributions of Martex shares to the
shareholders of Auto Axzpt.Com, Inc. and the subsequent registration under the
Exchange Act, the shares of Martex are expected to be quoted on the OTC Bulletin
Board. After the stock distributions and registration with respect to the shares
of Martex, and after the registration of the resale of our common stock held by
Martex, the management of Martex is expected to then declare a stock dividend of
some of BioLynx.Com's shares of common stock owned by Martex to the Martex
shareholders. The distribution of our shares to the shareholders of Martex will
place our shares into the hands of approximately 900 Martex shareholders. The
result would be to increase the public float in the market of our shares. There
can be no guarantee that Martex will be able to effectuate the proposed stock
distributions or filings with the SEC.
Merger of BioLynx, Inc. and BioLynx.Com, Inc. On May 12, 1999, BioLynx,
Inc., a Texas corporation, pursuant to Section 368(a)(1)(A) of the Internal
Revenue Code of 1986, as amended, merged with and into BioLynx.Com, Inc. The
surviving corporation was BioLynx.Com, Inc. John D. Walker II, our Chairman,
President, and a major shareholder, was the sole shareholder of BioLynx, Inc.
Mr. Walker received 10 shares of our common stock for every share of the common
stock in BioLynx, Inc. held by him. At the time of the merger, Mr. Walker was
the only officer of BioLynx, Inc. The directors of BioLynx, Inc. were John D.
Walker II, Patrick E. Tolle, and Andrew Fitch-Wallish, three of our current
directors. As a result of the merger, the separate existence of BioLynx, Inc.
ceased and BioLynx.Com, Inc. succeeded, without other transfer, to all the
rights and properties of BioLynx, Inc., and became subject to all the debts and
liabilities of BioLynx, Inc. in the same manner as if BioLynx.Com, Inc. had
itself incurred them. All rights of creditors and all liens upon the property
of each constituent corporation was preserved unimpaired, limited in lien to the
property affected by such liens immediately prior to the merger.
Acquisition of BioLynx Outsource Services, Inc. On October 1, 1999, later
amended on December 1, 1999, BioLynx.Com and United Capital Investment Group,
Inc. (an affiliate of John D. Walker II) executed that certain Option to
Purchase Stock Agreement, whereby BioLynx.Com was granted an option to purchase
from United Capital all of its common stock in BioLynx Outsource Services, Inc.
BioLynx Outsource Services is an employee leasing firm 100 percent owned by
United Capital. Pursuant to the terms of the agreement, the purchase price for
the BioLynx Outsource Services stock will be $1,446,347.76. Other pertinent
provisions of the agreement are as follows:
. The purchase price will be paid to United Capital as follows: (1)
$500,000, on the Closing Date thereof (as therein defined), in cash or
by means of a promis-
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sory note due within 90 days from the date thereof; and (2)
BioLynx.Com will deliver to United Capital our convertible preferred
stock with a liquidation privilege equal to its face amount, issued in
$100.00 increments, bearing an eight percent non-cumulative dividend.
The preferred stock will, at the holder's option, be convertible into
BioLynx.Com's common stock at the rate of the liquidation privilege,
together with any declared but unpaid dividends, divided by $3.30 per
share of common stock.
. In consideration of the payment of $100.00 paid by BioLynx.Com to
United Capital, we have the option to terminate the agreement at any
time by giving written notice to United Capital.
. The Closing Date of the agreement shall be December 31, 1999, or such
other date thereafter as the parties shall mutually agree. Provided,
however, notwithstanding anything therein contained to the contrary,
the Closing Date shall not occur before the effective date of our
registration statement with respect to this offering. Provided,
further, if the Closing Date shall not have occurred before April 1,
2000, the agreement shall be null and void and of no further force or
effect. In such event, neither the BioLynx.Com nor United Capital
Investment Group, Inc. shall have any liability to the other.
The $500,000 payment for the shares of BioLynx Outsource Services is
expected to be provided out of the proceeds of this offering. After the closing
of the purchase, BioLynx Outsource Services will be a wholly-owned subsidiary of
BioLynx.Com. As for the cash payment required at the closing, we can give our
promissory note due within 90 days thereof. If we utilize the note option, we
will have to ensure that we have the required cash to pay the note on its due
date.
The primary reasons for the acquisition of BioLynx Outsource Services are:
. Revenue Generation. BioLynx Outsource Services is expected to generate
substantial revenue and net profits through its employee leasing
business which will be reflected in our consolidated income statement.
. BioLynx Outsource Services is a natural fit for the marketing of our
services.
. Cross selling of our respective services.
. BioLynx Outsource Services has over 350 current or former client
companies.
Acquisition of Employee/Customer Base of Alamo Commercial Group, Inc. On
October 1, 1999, later amended on December 1, 1999, BioLynx Outsource Services,
Inc. (an affiliate of John D. Walker II) and Alamo Commercial Group, Inc.
(wholly-owned by John D. Walker II) executed that certain Option to Purchase
Employee/Client Base, whereby BioLynx Outsource Services was granted an option
to purchase from Alamo Commercial all of its leased employees, together with all
contracts to furnish services and leasing. The purchase price is $3,605,535.38.
The pertinent provisions of the agreement are as follows:
. The purchase price will be paid with (1) $1,000,000, on the Closing
Date thereof (as therein defined), in cash or by means of a promissory
note due within 90 days from the date thereof; and (2) convertible
preferred stock issued by BioLynx.Com, with a liquidation privilege
equal to its face amount, issued in increments of $100.00 and bearing
an eight percent non-cumulative dividend. Such preferred stock will be
convertible into common stock of BioLynx.Com at
33
<PAGE>
the rate of liquidation privilege, with any declared but unpaid
dividends, divided by $3.30 per share of common stock.
. The Closing Date of the agreement shall be December 31, 1999, or such
other date thereafter as the parties shall mutually agree. Provided,
however, notwithstanding anything therein contained to the contrary,
the Closing Date shall not occur before the effective date of our
registration statement with respect to this offering. Provided,
further, if the Closing Date shall not have occurred before April 1,
2000, the agreement shall be null and void and of no further force or
effect. In such event, neither BioLynx Outsource Services, Inc. nor
Alamo Commercial Group, Inc. shall have any liability to the other.
After the Closing all liabilities and obligations subsequent to that
date, relating to leased employees and contracts, will be liabilities
and obligations of BioLynx Outsource Services. At the time of the
closing, BioLynx Outsource Services is expected to be a wholly-owned
subsidiary of BioLynx.Com.
. The agreement provides for termination for cause, which is the failure
of any condition precedent, and termination without cause with mutual
consent. In addition, for $100.00, with written notice, BioLynx
Outsource Services has the option to terminate the agreement at any
time.
The $1,000,000 cash payment by BioLynx Outsource Services (expected to then
be a wholly-owned subsidiary of BioLynx.Com) for the designated assets of Alamo
Commercial is anticipated to be provided out of the proceeds of this offering.
The primary reason for this proposed acquisition is to give us a ready-made
client base for our employee leasing business. As for the cash payment required
at the closing, we can give our promissory note due within 90 days thereof. If
we utilize the note option, we will have to ensure that we have the required
cash to pay the note on its due date.
Debt Obligation to John D. Walker II and His Affiliates. As of
September 30, 1999, we were indebted in the amount of $173,651, plus any
additional amounts advanced to us since September 30, 1999 through November 19,
1999, to Mr. Walker and two of his affiliated companies, United Capital
Investment Group, Inc. and Alamo Commercial Group, Inc. On December 1, 1999, we
executed an agreement with Mr. Walker, United Capital Investment Group, Inc.,
and Alamo Commercial Group, Inc. that such debt can be satisfied at the election
of Mr. Walker, United Capital Investment Group, Inc., and Alamo Commercial
Group, Inc. by the issuance of our preferred stock, on the basis of one share of
preferred stock for every dollar of debt owed, which could be convertible at any
time into shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred stock, together with any
declared but unpaid dividends on the preferred stock, divided by $3.30 per share
of common stock. If a conversion of the preferred stock into shares of our
common stock occurs, Mr. Walker and his two affiliates will have registration
rights with respect to such shares. See "Principal Stockholders - Registration
Rights Agreements."
INTENTIONALLY LEFT BLANK
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<PAGE>
PRINCIPAL STOCKHOLDERS
The following table presents certain information regarding the beneficial
ownership of all shares of the common stock at November 30, 1999 by (1) each
person who owns beneficially more than five percent of the outstanding shares of
the common stock, (2) each director of BioLynx.Com, (3) each named executive
officer, and (4) all directors and officers as a group.
Shares Beneficially Owned
-------------------------
Name of Beneficial Owner (1) Number Percent
---------------------------- ------ -------
John D. Walker II (2)................ 2,298,521 43.06
Patrick E. Tolle..................... 450,000 8.43
Andrew Fitch-Wallish................. 300,000 5.62
Louis A. Ross, Ph.D.................. 10,000 0.19
Wren Alexander....................... 100,000 1.87
All directors and officers
as a group (five persons).......... 3,158,521 59.17
Martex Trading Co., Inc.............. 400,000 7.49
__________________
(1) Unless otherwise indicated, each person named in the above-described table
has the sole voting and investment power with respect to his shares of the
common stock beneficially owned. The business address of each individual is
the same as the address of BioLynx.Com's principal executive offices, except
for Martex Trading Co., Inc., whose address is 1800 Bering Drive, Suite 400,
Houston, Texas 77057.
(2) BioLynx.Com has issued its eight percent Convertible Subordinated Debenture
due April 16, 2002 in the amount of $1,107,523 to John D. Walker II, the
Chairman, President, and a major shareholder of BioLynx.Com, in
consideration for Mr. Walker's providing financing to BioLynx.Com in such
amount. The debenture is convertible at $3.30 per share into 335,613 shares
of the common stock at any time before its maturity. The shares shown as
being owned by Mr. Walker are actually owned by United Capital Investment
Group, Inc., a company wholly-owned by Mr. Walker, which owns 1,650,000
shares, and several members of Mr. Walker's family which own, in the
aggregate, 237,500 shares. Also, as of September 30, 1999, we were indebted
in the amount of $173,651, plus any additional amounts advanced to us since
September 30, 1999 through November 19, 1999, to Mr. Walker and two of his
affiliated companies, United Capital Investment Group, Inc. and Alamo
Commercial Group, Inc. We have agreed with Mr. Walker, United Capital
Investment Group, Inc., and Alamo Commercial Group, Inc. that such debt can
be satisfied at the election of Mr. Walker, United Capital Investment Group,
Inc., and Alamo Commercial Group, Inc. by the issuance of our preferred
stock, on the basis of one share of preferred stock for every dollar of debt
owed, which could be convertible at any time into shares of our common
stock, based upon a conversion at the rate of the liquidation privilege with
respect to the preferred stock, together with any declared but unpaid
dividends on the preferred stock, divided by $3.30 per share of common
stock. Inasmuch as only $173,651 of such debt has been identified as of the
date of this prospectus, we can only treat such $173,651 as being
convertible at any time into 173,651 shares of our preferred stock, which is
further convertible at any time into 52,622 shares of our common stock.
R. F. Bearden Associates, Inc. Financial Advisory Agreement
On May 7, 1999, BioLynx.Com and R. F. Bearden Associates, Inc. ("Bearden")
executed a Financial Advisory Agreement which resulted in the purchase of
400,000 shares of our common stock by Martex Trading Co., Inc. In consideration
of the Financial Advisory Agreement, we sold 37,500 shares of our common stock
to Bearden. The services performed under the Financial Advisory Agreement
included the structure, negotiation and advice by Bearden and Texas Commercial
Resources, Inc. described below with respect to the purchase of our common stock
by Martex Trading Co., Inc., and the anticipated spin off of the common stock of
Martex Trading Co., Inc. to the shareholders of its parent, Auto Axzpt.Com, Inc.
All of our shares of the common stock issued to Bearden have standard
"piggyback" registration rights at no cost to Bearden. See " - Registration
Rights Agreements." Bearden is also a shareholder of Auto Axzpt.Com, Inc.
Texas Commercial Resources, Inc. Financial Advisory Agreement
On May 7, 1999, BioLynx.Com and Texas Commercial Resources, Inc. ("Texas
Commercial") executed a Financial Advisory Agreement which resulted in the
purchase of 400,000 shares of our common stock by Martex Trading Co., Inc. In
consideration of the Financial Advisory Agreement, we sold 37,500 shares of our
common stock to Texas Commercial. The services performed under the Financial
Advisory Agreement included the structure, negotiation and advice by Texas
Commercial and Bearden with respect to the purchase of our common
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<PAGE>
stock by Martex Trading Co., Inc., and the anticipated spin off of the common
stock of Martex Trading Co., Inc. to the shareholders of its parent, Auto
Axzpt.Com, Inc. All of our shares of the common stock issued to Texas Commercial
have standard "piggyback" registration rights at no cost to Texas Commercial.
See " -Registration Rights Agreements." Texas Commercial is also a shareholder
of Auto Axzpt.Com, Inc.
Jazbermaine Consulting Agreement
On May 7, 1999, BioLynx.Com and Jazbermaine executed that certain
Consulting Agreement whereby BioLynx.Com engaged Jazbermaine to perform services
associated with the development of a comprehensive business plan, future
acquisition strategies, and any other ancillary services relating to the
foregoing. In consideration of such services, BioLynx.Com sold 200,000 shares
of its common stock to Jazbermaine, all of which have standard "piggyback"
registration rights at no cost to Jazbermaine. See " - Registration Rights
Agreements." Jazbermaine is also a shareholder of Auto Axzpt.Com, Inc.
Registration Rights Agreements
On May 7, 1999, BioLynx.Com executed a Registration Rights Agreement with
each of R. F. Bearden Associates, Inc., Texas Commercial Resources, Inc., and
Jazbermaine. In addition, if John D. Walker II, our Chairman, President, and a
major shareholder, elects to convert any portion of our Convertible Subordinated
Debenture into shares of our common stock (up to 335,613 shares), the shares he
will receive upon any such conversion will be governed by a Registration Rights
Agreement executed on April 16, 1999. Likewise, on April 16, 1999, BioLynx.Com
and Aurora Financial Services, L.L.C. executed a Registration Rights Agreement
covering the 20,000 shares of the common stock that Aurora received in
connection with a private placement of our common stock. On December 1, 1999,
we also executed a Registration Rights Agreement with Mr. Walker and United
Capital Investment Group, Inc. and Alamo Commercial Group, Inc. covering any
shares of the common stock which might be received upon the conversion of any
such shares of preferred stock into shares of our common stock, as a result of
the conversion of our debt to them. Each agreement provides the following:
. The right to "piggyback" on a firm commitment underwritten offering
with respect to our common stock.
. If the managing underwriter determines that marketing factors require
a limitation of the number of shares to be underwritten, the managing
underwriter may limit some or all of the shares that may be included
in the registration.
. BioLynx.Com agrees to use its best lawful efforts to make and keep
public information available, as those terms are understood and
defined in Rule 144 at all times during which BioLynx.Com is subject
to the reporting requirements of the Exchange Act, and file with the
SEC in a timely manner all reports and other documents required of
BioLynx.Com under the Securities Act and the Exchange Act (at all
times during which BioLynx.Com is subject to such reporting
requirements).
. All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the shareholder's attorneys) will be
paid by BioLynx.Com.
. Each party agrees to indemnity and hold harmless the other against any
and all claims, demands, losses, costs, expenses, obligations,
liabilities, joint or several, damages, recoveries and deficiencies,
including interest, penalties and attorneys' fees, to which a party
may become subject under the Securities Act as a result of any untrue
statement or alleged untrue statement of any material fact.
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<PAGE>
DESCRIPTION OF SECURITIES
The following is a summary of the material provisions of BioLynx.Com's
Articles of Incorporation (the "Articles") and Bylaws (the "Bylaws") as they are
currently in effect, but may not contain all of the information that is
important to you. See "Where You Can Find More Information" for information
about how to obtain a copy of the documents referred to in this section. The
rights described below are subject to any rights that may be granted to any
holder of preferred shares.
Capital Stock
The authorized capital stock of BioLynx.Com consists of 50,000,000 shares
of common stock, par value $0.001 per share (the "common stock") and 20,000,000
shares of preferred stock, par value $1.00 per share (the "preferred stock").
As of November 30, 1999, there were 4,926,600 shares of the common stock issued
and outstanding, while no shares of the preferred stock were issued or
outstanding. In addition, BioLynx.Com has outstanding its eight percent
Convertible Subordinated Debenture in the amount of $1,107,523 in favor of John
D. Walker II, the Chairman, President, and a major shareholder of BioLynx.Com,
in consideration of Mr. Walker's providing financing to BioLynx.Com. The
debenture is convertible at any time before its maturity on April 16, 2002 into
335,613 shares of the common stock. BioLynx.Com has reserved 335,613 shares of
the common stock for issuance upon the conversion of the debenture, and 250,000
shares of the common stock in connection with the BioLynx.Com, Inc. 1999 Stock
Incentive Plan. If we acquire all of the shares of the capital stock of BioLynx
Outsource Services, Inc., and all of the leased employees, together with all
contracts to furnish services and leasing of Alamo Commercial Group, Inc., both
of which are affiliates of Mr. Walker, the affiliates of Mr. Walker will receive
3,551,883 shares of our preferred stock, which will be convertible into
approximately 1,076,328 shares of our common stock, based upon a conversion at
the rate of the liquidation privilege with respect to the preferred stock,
together with any declared but unpaid dividends on the preferred stock, divided
by $3.30 per share of common stock. We will reserve enough shares of the common
stock to satisfy the conversion rights under the preferred stock, if the two
anticipated acquisitions occur. See "Certain Transactions."
Also, we have outstanding a warrant covering 7,500 shares of our common
stock in favor of Travis Morgan Securities, Inc., a member of the selling group
which participated in our private placement which concluded on November 24,
1999. Travis Morgan Securities, Inc. is likewise slated to be a selling agent
in connection with this offering. We have likewise reserved 7,500 shares of our
common stock against the possible exercise of the warrant.
Additionally, as of September 30, 1999, we were indebted in the amount of
$173,651, plus any additional amounts advanced to us since September 30, 1999
through November 19, 1999, to Mr. Walker and two of his affiliated companies,
United Capital Investment Group, Inc. and Alamo Commercial Group, Inc. We have
agreed with Mr. Walker, United Capital Investment Group, Inc., and Alamo
Commercial Group, Inc. that such debt can be satisfied at the election of
Mr. Walker, United Capital Investment Group, Inc., and Alamo Commercial Group,
Inc. by the issuance of our preferred stock which could be convertible at any
time into shares of our common stock, based upon a conversion at the rate of the
liquidation privilege with respect to the preferred stock, together with any
declared but unpaid dividends on the preferred stock, divided by $3.30 per share
of common stock. We will reserve enough shares of the common stock to satisfy
the conversion rights under the preferred stock, if the debt conversion occurs.
The following description of certain matters relating to the common stock
and the preferred stock is a summary and is qualified in its entirety by the
provisions of our Articles and Bylaws.
Common Stock. The holders of the common stock are entitled to one vote per
share on all matters submitted to a vote of our shareholders. The holders of
the common stock have the sole right to vote, except as otherwise provided by
law or by our Articles, including provisions governing any shares of the
preferred stock. In addition, our shareholders are entitled to receive ratably,
dividends, if any, as may be declared from time to time by
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our Board of Directors out of funds legally available therefor, subject to the
payment of preferential dividends with respect to any shares of the preferred
stock that from time to time may be outstanding. In the event of the
dissolution, liquidation or winding up of BioLynx.Com, the holders of the common
stock are entitled to share ratably in all assets remaining after payment of all
liabilities of BioLynx.Com and subject to the prior distribution rights of the
holders of any shares of the preferred stock that may be outstanding at that
time.
The holders of the common stock do not have cumulative voting rights or
preemptive rights to acquire or subscribe for additional, unissued or treasury
shares in accordance with the laws of the State of Texas. Accordingly, the
holders of more than 50 percent of the issued and outstanding shares of the
common stock voting for the election of directors can elect all of the directors
if they choose to do so, and in such event, the holders of the remaining shares
of the common stock voting for the election of the directors will be unable to
elect any person or persons to the Board of Directors. All outstanding shares
of the common stock are fully paid and nonassessable.
The laws of the State of Texas provide that the affirmative vote of two-
thirds (2/3) of the holders of the outstanding shares of the common stock is
required to authorize any amendment to our Articles, any merger or consolidation
of BioLynx.Com with any corporation, or any liquidation or disposition of any
substantial assets of BioLynx.Com.
Preferred Stock. The Board of Directors is authorized, without action by
the holders of the common stock, to provide for the issuance of the preferred
stock in one or more series, to establish the number of shares to be included in
each series and to fix the designations, powers, preferences and rights of the
shares of each such series and the qualifications, limitations, or restrictions
thereof. This includes, among other things, voting rights, conversion
privileges, dividend rates, redemption rights, sinking fund provisions and
liquidation rights which shall be superior to the common stock. The issuance of
one or more series of the preferred stock could adversely affect the voting
power of the holders of the common stock and could have the effect of
discouraging or making more difficult any attempt by a person or group to attain
control of BioLynx.Com. The holders of the preferred stock do not have
cumulative voting rights or preemptive rights to acquire or subscribe for
additional, unissued or treasury shares. As of the date of this prospectus,
there are no shares of the preferred stock issued and outstanding, although we
do plan on issuing shares of preferred stock in connection with the proposed
transactions regarding BioLynx Outsource Services, Inc. and Alamo Commercial
Group, Inc. We may be called upon to issue shares of our preferred stock if the
debt to Mr. Walker, United Capital Investment Group, Inc., and Alamo Commercial
Group, Inc. is converted in accordance with its terms.
Debenture
General. On April 16, 1999, BioLynx.Com issued to John D. Walker II, our
Chairman, President, and a major shareholder, its eight percent Convertible
Subordinated Debenture due April 16, 2002 in the principal amount of $1,107,523.
The debenture is subordinated to the general obligations of BioLynx.Com and will
mature three years from the date of its issuance. The debenture is convertible
into 335,613 shares of the common stock. The principal and all accrued interest
on the debenture will be due and payable on its maturity.
Sinking Fund. BioLynx.Com will not be required to establish a sinking fund
with respect to the debenture.
Subordination of the Debenture. The indebtedness evidenced by the
debenture is subordinated to the prior payment in full of all Senior Debt of
BioLynx.Com (as hereinafter defined). Upon maturity of any Senior Debt, payment
in full must be made on the Senior Debt before any payment is made on or in
respect of the debenture. During the continuance of any default with respect to
Senior Debt entitling the holders thereof to accelerate the maturity thereof, or
if any default would be caused by any payment upon or in respect of the
debenture, no payment may be made by BioLynx.Com upon or in respect of the
debenture. Upon any distribution of assets of BioLynx.Com in any dissolution,
winding up, liquidation or reorganization of BioLynx.Com, payment of the
principal of and interest on the debenture will be subordinated, to the extent
and in the manner set forth in the debenture, to the prior payment in full of
all Senior Debt. Because of these subordination provisions, unless holders
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of the debenture and holders of Senior Debt are paid in full, holders of Senior
Debt will recover more, ratably, than holders of the debenture.
Senior Debt. As used herein, the term "Senior Debt" means (1) the
principal of and premium, if any, and interest on all indebtedness of
BioLynx.Com, whether currently outstanding or hereafter created (other than any
indebtedness of BioLynx.Com hereafter created which is, when created,
specifically designated by BioLynx.Com as not constituting Senior Debt with
respect to the debenture), for money borrowed by BioLynx.Com or by others
guaranteed by BioLynx.Com, and indebtedness constituting purchase money
indebtedness of BioLynx.Com or of others and guaranteed by BioLynx.Com, (2) any
other indebtedness, liability or obligation, contingent or otherwise, of
BioLynx.Com and any guaranty, endorsement of other contingent obligation in
respect of any indebtedness, liability or obligation of another, created,
assumed or incurred by BioLynx.Com after the date of the issuance of the
debenture, which is, when created, assumed or incurred, specifically designated
by BioLynx.Com as Senior Debt with respect to the debenture, and (3) any
refunding, renewals or extensions of any indebtedness or other obligation
described as Senior Debt or other indebtedness or other obligation described as
Senior Debt in (1) or (2) above. It is expressly understood that the term
Senior Debt does not include any amounts owing by BioLynx.Com to any shareholder
or employee of BioLynx.Com. The debenture does not limit Senior Debt or other
indebtedness which may be incurred by BioLynx.Com, whether secured or unsecured.
As of the date of this prospectus, there was no Senior Debt. However,
BioLynx.Com could incur Senior Debt at any time.
Successor Entity. BioLynx.Com may not consolidate with or merge into, or
transfer all or substantially all of its assets to another corporation unless
the successor corporation assumes all of the obligations of BioLynx.Com under
the debenture and immediately after the transaction no default exists.
Thereafter, all such obligations of BioLynx.Com will terminate.
Defaults and Remedies. An event of default will be if any default shall be
made in due observance and performance of any covenant, agreement or condition
in the debenture (including, but not limited to the payment of any interest or
principal) and such default shall continue for a period of 30 days after written
notice thereof to BioLynx.Com by the holders of at least two-thirds (2/3) of the
then unpaid principal amount of the debenture, as well as various acts of
bankruptcy. If an event of default occurs and is continuing, the holders of at
least 51 percent in principal amount of the debenture then outstanding may
declare the principal of and accrued interest on the outstanding debenture to be
due and payable. Holders of the debenture may not enforce the debenture except
as provided in the debenture.
No Recourse. Directors, officers, employees or shareholders of BioLynx.Com
do not have any liability for any obligations of BioLynx.Com under the debenture
or for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each holder of a debenture, by accepting a debenture, will
waive and release all such liability. The waiver and release will be part of
the consideration for the issuance of the debenture.
Warrant
On October 6, 1999, we issued to Travis Morgan Securities, Inc. our warrant
for the purchase of 50,000 shares of our common stock at a purchase price of
$1.00 per share. The warrant was issued in connection with our private
placement of our shares which closed on November 24, 1999. The warrant was
designed to compensate Travis Morgan Securities, Inc. for its services in the
private placement of our shares. The warrant expired on November 5, 1999
without being exercised., and consequently, no shares were issued pursuant to
the warrant. On December 1, 1999, we issued to Travis Morgan Securities, Inc.
our warrant for the purchase of 7,500 shares of our common stock at a purchase
price of $1.00 per share, which expires on January 31, 2000. The warrant was
issued in connection with our private placement of our shares which closed on
November 24, 1999. The warrant was designed to compensate Travis Morgan
Securities, Inc. for its additional services in the private placement of our
shares.
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Certain Provision of the Articles of Incorporation and Bylaws
General. A number of provisions of our Articles and Bylaws concern matters
of corporate governance and the rights of shareholders. Certain of these
provisions, as well as the ability of our Board of Directors to issue shares of
the preferred stock and to set the voting rights, preferences and other terms
thereof, may be deemed to have an anti-takeover effect and may discourage
takeover attempts not first approved by the Board of Directors (including
takeovers which certain shareholders may deem to be in their best interests).
To the extent takeover attempts are discouraged, temporary fluctuations in the
market price of the common stock, which may result from actual or rumored
takeover attempts, may be inhibited. These provisions, together with the
ability of the Board of Directors to issue preferred stock without further
shareholder action, also could delay or frustrate the removal of incumbent
directors or the assumption of control by the shareholders, even if such removal
or assumption would be beneficial to the shareholders of BioLynx.Com. These
provisions also could discourage or make more difficult a merger, tender offer
or proxy contest, even if they could be favorable to the interests of the
shareholders, and could potentially depress the market price of the common
stock. The Board of Directors believes that these provisions are appropriate to
protect the interests of BioLynx.Com and all of its shareholders.
Meetings of Shareholders. The Articles provide that a special meeting of
the shareholders may be called only by (1) the President, (2) the holders of at
least 10 percent of all of the shares entitled to vote at the proposed special
meeting, or (3) the Board of Directors pursuant to a resolution adopted by a
majority of the then authorized number of directors of BioLynx.Com. Special
shareholder meetings may not be called by any other person or persons or in any
other manner. Our Bylaws provide that only those matters set forth in the
notice of the special meeting may be considered or acted upon at the special
meeting. Our Articles do not permit actions to be taken by written consent,
unless approved by the Board of Directors.
The first annual meeting of our shareholders will be held in 2000, on a
date and at a time designated by the Board.
Indemnification and Limitation of Liability. Our Articles provide that any
person who at any time shall serve or shall have served, as a director, officer,
employee, or agent of BioLynx.Com, or of any other enterprise at the request of
BioLynx.Com, and the heirs, executors, and administrators of such person, shall
be indemnified by us against all costs and expenses (including but not limited
to counsel fees, amounts or judgments paid, and amounts paid in settlement)
reasonably incurred in connection with the defense of any claim, action, suit,
or proceeding, whether civil, criminal, administrative, or other, in which he
may be involved by virtue of such person being or having been such director,
officer, employee, or agent, provided, however, that such indemnity shall not be
operative with respect to:
. Any matter as to which such person shall have been finally adjudged in
such action, suit, or proceeding to be liable for negligence or
misconduct in the performance of his duties as such director, officer,
employee, or agent; or
. Any matter settled or compromised, unless in he opinion of independent
counsel selected by or in a manner determined by the Board of
Directors, there is not reasonable ground for such person being
adjudged liable for negligence or misconduct in the performance of his
duties as such director, officer, employee, or agent; or
. Any amount paid or payable to BioLynx.Com or such other enterprise.
The foregoing indemnification shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, agreement,
vote of shareholders, or otherwise. By its terms, and in accordance with
applicable state law, however, this provision does not eliminate or limit the
liability of a director of BioLynx.Com for any breach of duty based upon an act
or omission (1) involving appropriation in violation of duty of any business
opportunity of BioLynx.Com, (2) involving acts or omissions that are not in good
faith or which
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involve intentional misconduct or a knowing violation of the law, or (3)
involving unlawful distributions or transactions from which the director derived
an improper personal benefit.
Our Bylaws contain similar indemnification and limitation of liability
provisions. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, or persons controlling
BioLynx.Com pursuant to the foregoing provisions, or otherwise, BioLynx.Com is
aware that, in the opinion of the SEC, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
Amendment of Bylaws. The Articles provide that the Bylaws may be amended
either (1) by the Board of Directors by the affirmative vote of at least a
majority of the then authorized number of directors, or (2) by the shareholders
by the affirmative vote of the holders of at least two-thirds (2/3) of the
combined voting power of the then outstanding voting shares of the capital stock
of BioLynx.Com, voting together as a single class.
Certain Effects of Authorized but Unissued Stock
Until the issuance of all of the shares of the common stock offered hereby,
and covered by our Convertible Subordinated Debenture and our 1999 Stock
Incentive Compensation Plan, our authorized but unissued capital stock will
consist of approximately 45,073,400 shares of the common stock and 20,000,000
shares of the preferred stock. One of the effects of the authorized but
unissued capital stock may be to enable our Board to render more difficult or to
discourage an attempt to obtain control of BioLynx.Com by means of a tender
offer, proxy contest or otherwise, and thereby to protect the continuity of
BioLynx.Com's management. If, in the due exercise of its fiduciary obligations,
for example, the Board were to determine that a takeover proposal was not in
BioLynx.Com's best interests, shares of our capital stock could be issued by the
Board without shareholder approval in one or more private or public offerings or
other transactions. The effect of issuing more shares might prevent or render
more difficult or costly the completion of the proposed takeover transaction by
diluting the voting or other rights of the proposed acquirer or insurgent
shareholder or shareholder group, by creating a substantial voting block of
institutional or other investors that might undertake to support the position of
the incumbent Board, by effecting an acquisition that might complicate or
preclude the takeover, or otherwise. In this regard, our Articles grant the
Board broad power to establish the rights and preferences of the authorized, but
unissued preferred stock, one or more series of which would be issued entitling
holders to vote separately as a class on any proposed merger or consolidation,
to convert preferred stock into a larger number of shares of the common stock or
other securities, to demand redemption at a specified price under prescribed
circumstances related to a change in control, or to exercise other rights
designed to impede a takeover.
The issuance of shares of the preferred stock pursuant to the Board's
authority described above could decrease the amount of earnings and assets
available for distribution to holders of the common stock, and adversely affect
the rights and powers, including voting rights, of such holders and may have the
effect of delaying, deferring or preventing a change in control of BioLynx.Com.
The Board of Directors does not currently intend to seek shareholder approval
prior to any issuance of authorized, but unissued stock, unless otherwise
required by law.
As discussed above, we do plan to issue shares of our preferred stock in
connection with two acquisitions, and the possible conversion of our debt to
Mr. Walker, United Capital Investment Group, Inc., and Alamo Commercial Group,
Inc. See "- Capital Stock."
Quotation on the OTC Bulletin Board
Our shares of common stock are expected to be quoted on the OTC Bulletin
Board. There is currently no trading market for our shares. While our shares
of common stock are offered at a price of $4.00 per share, prices at which our
shares will trade may be higher or lower and will depend on many factors. Until
our shares are fully distributed and an orderly market develops, the prices at
which trading in our shares occur may fluctuate significantly. The prices at
which our stock trades will be determined by the marketplace and may be
influenced by many factors, including, among others, the depth and liquidity of
the market for our stock, investor perception of us and
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our businesses, our dividend policy, interest rates and general economic and
market conditions. See "Risk Factors -A Public Market for Our Common Stock May
Be Uncertain."
The OCT Bulletin Board is a regulated quotation service that displays real-
time quotes, last-sale prices, and volume information in over-the-counter
("OTC") equity securities. An OTC equity security generally is any equity that
is not listed or traded on Nasdaq or a national securities exchange. The OTC
Bulletin Board is a quotation medium for subscribing members, not an issuer
listing service, and should not be confused with The Nasdaq Stock Market. OTC
Bulletin Board securities are traded by a community of market makers that enter
quotes and trade reports through a highly sophisticated, closed computer
network. The OTC Bulletin Board is unlike The Nasdaq Stock Market in that it
does not (1) impose listing standards, (2) provide for automated trade
executions, (3) maintain relationships with quoted issuers, and (4) have the
same obligations for market makers.
The OTC Bulletin Board is distinct from the "Pink Sheets" which are
operated by the National Quotation Bureau, L.L.C. The "Pink Sheets" are a
static paper quotation medium printed weekly and distributed to broker-dealers.
An electronic version of the "Pink Sheets" is updated once a day and
disseminated over market vendor terminals.
There can be no guarantee that we will be able to effectuate the quotation
of our shares of the common stock on the OTC Bulletin Board. If we do not
satisfy all of the requirements in order for us to be eligible for quotation on
the OTC Bulletin Board, we would have to face the prospect of having our shares
being quoted in the "Pink Sheets." Even if the shares of the common stock are
quoted in any public venue, there can be no assurance that an active trading
market will develop, or if a market is developed that it will be sustained.
Additional Corporate Governance and Takeover Related Matters
Board of Directors. The business and affairs of BioLynx.Com are managed
under the direction of our Board, which consists of five members. The number of
directors that shall constitute the whole Board shall be fixed by, and may be
increased or decreased from time to time by, the affirmative vote of a majority
of the members at any time constituting the Board. Newly created directorships
resulting from any increase in the number of directors and any vacancies on the
Board resulting from death, resignation, disqualification, removal or other
cause shall be filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified or until his earlier
death, resignation or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director. The Board may not have fewer than one member.
Our Board of Directors is divided into three classes, Class A, Class B and
Class C. The classes are as nearly equal in number of directors as possible.
Each director shall serve for a term expiring at the third annual meeting
following the annual meeting at which such director was elected; provided,
however, that the directors first elected to Class A shall serve for an initial
term expiring at the annual meeting following the end of our 1999 fiscal year,
the directors first elected to Class B shall serve for an initial term expiring
at the second annual meeting next following the end of our 1999 fiscal year, and
the directors first elected to Class C shall serve for an initial term expiring
at the third annual meeting next following the end of our 1999 fiscal year. The
persons named as directors in this prospectus are all Class C directors.
Moreover, directors who are elected at an annual meeting of shareholders, and
directors elected in the interim to fill vacancies and newly created
directorships, shall hold office for the term for which elected and until their
successors are elected and qualified or until their earlier death, resignation
or removal. Whenever the holders of any class or classes of stock or any series
thereof shall be entitled to elect one or more directors pursuant to any
resolution or resolutions of the Board of Directors designating a series of the
preferred stock, vacancies and newly created directorships of such class or
classes or series thereof may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, by a sole remaining
director so elected or by the unanimous written consent or the affirmative vote
of a majority of the outstanding shares of the class or classes or series
entitled to elect the director or directors.
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Any director may be removed from office only by the affirmative vote of the
holders of two-thirds (2/3) or more of the combined voting power of the then
outstanding shares of capital stock of BioLynx.Com entitled to vote at a meeting
of shareholders called for that purpose, voting together as a single class.
Nominations of persons for election to the Board of Directors may be made
at a meeting of the shareholders at which directors are to be elected (1) by
or at the direction of the Board of Directors, or (2) by any shareholder of
BioLynx.Com who is a shareholder of record at the time of the giving of notice,
who shall be entitled to vote at such meeting in the election of directors and
who complies with the requirements of the Bylaws. Nominations, other than those
made by or at the direction of the Board of Directors, shall be preceded by
timely advance notice in writing to the Secretary. To be timely, a
shareholder's notice shall be delivered to, or mailed and received at, the
principal executive offices of BioLynx.Com (A) with respect to an election to be
held at the annual meeting of the shareholders of BioLynx.Com, not later than
the close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that with respect to the
annual meeting of shareholders to be held in 2000 or in the event that the date
of the annual meeting is more than 30 days before or more than 60 days after
such anniversary date, notice by the shareholder to be timely must be so
delivered not later than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement of the date of such meeting is first made by BioLynx.Com; and (B)
with respect to an election to be held at a special meeting of shareholders of
BioLynx.Com for the election of directors not later than the close of business
on the 10th day following the day on which notice of the date of the special
meeting was mailed to shareholders of BioLynx.Com as provided in the Bylaws or
public disclosure of the date of the special meeting was made, whichever first
occurs. The presiding officer of the meeting of shareholders shall determine
whether the requirements of the Bylaws have been met with respect to any
nomination or intended nomination. If the presiding officer determines that any
nomination was not made in accordance with the requirements of the Bylaws, he
shall so declare at the meeting and the defective nomination shall be
disregarded. A shareholder is also required to comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in the Bylaws regarding nominations of persons
as directors.
Anti-Takeover Effects. All of the provisions discussed in this section
might make it more difficult for someone to obtain control of us unless the
transaction is approved by our Board. Certain of these provisions could also
make it more difficult for a third party to replace our management or Board
without the approval of our Board of Directors.
Transfer Agent and Registrar
BioLynx.Com will apply for quotation of its common stock on the OTC
Bulletin Board under the symbol "BLNX." The Transfer Agent and Registrar for
the common stock will be American Stock Transfer & Trust Company, Stock Transfer
Department, 40 Wall Street, 46th Floor, New York, New York 10005, telephone
(212) 936-5100.
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no public market for our common
stock. Upon completion of this offering and assuming (1) the issuance of
1,000,000 shares of our common stock pursuant to this offering, (2) the issuance
of 25,000 shares of our common stock to Aurora Financial Services, L.L.C. in
consideration of its services in connection with this offering, (3) no
conversion of our Convertible Subordinated Debenture by John D. Walker II, (4)
no conversion of any of our debt to Mr. Walker and his affiliates, United
Capital Investment Group, Inc. and Alamo Commercial Group, Inc., and (5) no
exercise of the warrant in favor of Travis Morgan Securities, Inc. covering
7,500 shares of our common stock, there will be an aggregate of 5,951,600 shares
of BioLynx.Com's common stock outstanding. Of these shares, all of the shares
sold in this offering will be freely transferable without restriction or
limitation under the Securities Act, unless purchased by "affiliates" of
BioLynx.Com, as defined under the Securities Act. The remaining 4,951,600
shares are "restricted shares" within the meaning of Rule 144 under the
Securities Act, and are subject to restrictions under the Securities Act.
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In general, under Rule 144, as currently in effect, a person (or persons
whose shares are required to be aggregated) who has beneficially owned, for at
least one year, shares of common stock that have not been registered under the
Securities Act or that were acquired from an "affiliate" of BioLynx.Com is
entitled to sell within any three-month period the number of shares of common
stock that does not exceed the greater of (1) one percent of the number of then
outstanding shares, or (2) the average weekly reported trading volume during the
four calendar weeks preceding the sale. Sales under Rule 144 are also subject
to certain notice and manner of sale requirements and to the availability of
current public information about BioLynx.Com and must be made in unsolicited
brokers' transactions or to a market maker. A person who is not an "affiliate"
of BioLynx.Com under the Securities Act during the three months preceding a sale
and who has beneficially owned such shares for at least two years is entitled to
sell such shares under Rule 144 without regard to the volume, notice,
information and manner of sale provisions of such rule. Affiliates of
BioLynx.Com must comply with the restrictions and requirements of Rule 144 when
transferring restricted shares even after the two year holding period has
expired and must comply with the restrictions and requirements of Rule 144 other
than the one-year holding period in order to sell unrestricted shares. Rule 144
does not require the same person to have held the securities for the applicable
period.
Any employee, officer or director of, or consultant to BioLynx.Com who
purchased or was awarded shares or options to purchase shares pursuant to a
written compensatory plan or contract is entitled to rely on the resale
provisions of Rule 701 under the Securities Act, which permits affiliates and
non-affiliates to sell such shares without having to comply with the holding
period restrictions of Rule 144, in each case commencing 90 days after the date
of this prospectus. In addition, non-affiliates may sell such shares without
complying with the public information, volume and notice provisions of Rule 144.
Prior to this offering, there has been no market for the BioLynx.Com common
stock. No predictions can be made of the effect, if any, that market sales of
shares of common stock or the availability of such shares for sale will have on
the market price prevailing from time to time. Nevertheless, sales of
significant amounts of BioLynx.Com's common stock could adversely affect the
prevailing market price of the common stock, as well as impair the ability of
BioLynx.Com to raise capital through the issuance of additional equity
securities. See "Risk Factors - Availability of Significant Amounts of Common
Stock for Sale Could Adversely Affect Its Market Price."
LEGAL MATTERS
Certain legal matters relating to the issuance of the shares of the common
stock will be passed upon for us by Jackson Walker L.L.P., Houston, Texas.
EXPERTS
The Financial Statements and schedules for the periods from inception
through December 31, 1998 and the nine months ended September 30, 1999 included
in this prospectus and in the registration statement have been audited by John
M. James, independent certified public accountant, to the extent and for the
periods set forth in his report appearing elsewhere herein and in the
registration statement, and are included in reliance upon such report given upon
the authority of said firm as an expert in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
BioLynx.Com has not been previously subject to the reporting requirements
of the Exchange Act, although it will become subject to the reporting
requirements of the Exchange Act following the registration of the securities
described herein. In accordance with the Exchange Act, we will file reports,
proxy statement, and other information with the SEC. In addition, we intend to
furnish our shareholders with annual reports containing audited financial
statements and such interim reports as we deem appropriate. No person is
authorized by BioLynx.Com to give any information or to make any representations
other than those contained in this prospectus, and, if given or made, you should
not rely upon such information.
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We have filed with the SEC a registration statement under the Securities
Act on Form SB-2 to register the shares of BioLynx.Com's common stock to be sold
pursuant to this prospectus. As allowed by SEC rules, this prospectus does not
contain all the information contained in the registration statement or in the
exhibits to the registration statement. For further information you may read
and copy documents at the principal office of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the SEC at 7 World Trade
Center, Suite 1300, New York, New York 10048, and at Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. The SEC
charges a fee for copies. Copies of this material should also be available
through the Internet by using the Quick Forms Lookup at the SEC EDGAR Archive,
the address of which is http://www.sec.gov.
<TABLE>
<CAPTION>
INDEX TO FINANCIAL INFORMATION
<S> <C>
Report of Independent Certified Public Accountant ................................... F-1
Audited Financial Statements:
Balance Sheets .................................................................... F-2
Statements of Operations .......................................................... F-3
Statement of Changes in Stockholders' Equity (Deficit) ............................ F-4
Statements of Cash Flows .......................................................... F-5
Notes to the Financial Statements ................................................ F-6/9
</TABLE>
45
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
To the Board of Directors and Shareholders
of BioLynx.Com, Inc.
I have audited the accompanying balance sheets of BioLynx.Com, Inc. (a
development stage corporation) at December 31, 1998 and September 30, 1999, and
the related statements of operations, changes in stockholders' equity (deficit),
and cash flows for the period from inception through December 31, 1998, the nine
months ended September 30, 1999, and the period from Inception through September
30, 1999. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted the audits in accordance with generally accepted accounting
standards. Those standards require that I plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
As discussed in Note 1 to the financial statements, the Company is a
development stage enterprise with no significant revenues to date. The ability
of the Company to complete the development and other activities necessary to
commercialize its assets is dependent upon many factors, including continued
financial support from its existing and new stockholders and significant and
timely sales of its services to customers.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of BioLynx.Com, Inc. at
December 31, 1998 and September 30, 1999, and the results of its operations and
its cash flows for the period from its inception through December 31, 1998, the
nine month period ended September 30, 1999, and the period from Inception
through September 30, 1999, in conformity with generally accepted accounting
principles.
/s/ John M. James
JOHN M. JAMES
Houston, Texas
November 19, 1999
F-1
<PAGE>
BIOLYNX.COM, INC.
(a development stage corporation)
Balance Sheets
<TABLE>
<CAPTION>
ASSETS
December 31, September 30,
1998 1999
------------ -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents........................................ $ -- $ 78,462
Trade accounts receivable........................................ -- 10,410
Stock subscriptions receivable................................... -- 3,839
Component parts inventory........................................ -- 19,393
Prepaid expenses................................................. -- 4,000
------------ -------------
Total Current Assets................................... -- 116,104
Property and equipment, net ( Note 3)................................. 22,354 79,237
Deferred offering costs, net.......................................... -- 27,792
Other assets (Deposit)................................................ -- 2,984
------------ -------------
Total Assets........................................... $ 22,354 $ 226,117
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable and accrued liabilities......................... $ -- $ 75,196
Amounts payable to affiliate of majority stockholder............. -- 173,651
------------ -------------
Total Current Liabilities.............................. -- 248,847
Convertible subordinated debenture (Note 4)........................... 821,352 1,107,523
Commitments and contingencies (Note 8)................................ -- --
Stockholders' Equity (Deficit):.......................................
Preferred stock, $1.00 par value, 20,000,000 shares
authorized, 0 shares issued and outstanding.................... -- --
Common stock, $0.001 par value, 50,000,000 shares
authorized, 2,249,000 and 4,267,250 shares issued
and outstanding, respectively.................................. 2,249 4,267
Paid-in-capital.................................................. -- 1,098,393
Retained earnings (deficit)...................................... (801,247) (2,232,913)
------------ -------------
Total Stockholders' Equity (Deficit)................... (798,998) (1,130,253)
------------ -------------
Total Liabilities and Stockholders' Equity (Deficit)... $ 22,354 $ 226,117
============ =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
BIOLYNX.COM, INC.
(a development stage corporation)
Statements of Operations
<TABLE>
<CAPTION>
Inception Nine Months Inception
Through Ended Through
Dec. 31, 1998 Sept. 30, 1999 Sept. 30, 1999
------------- -------------- --------------
<S> <C> <C> <C>
Revenues:
Services revenues................................. $ -- $ 10,410 $ 10,410
Costs and expenses:
Cost of operations................................ -- -- --
Research and development (Note 5)................. 403,042 982,371 1,385,413
Selling, general and administrative (Note 5)...... 395,569 396,233 791,802
Depreciation and amortization..................... 1,387 22,690 24,077
------------- -------------- --------------
Total costs and expenses..................... 799,998 1,401,294 2,201,292
------------- -------------- --------------
Operating income (loss)................................ (799,998) (1,390,884) (2,190,882)
Other income (expense):
Interest expense.................................. -- (40,782) (40,782)
Other............................................. -- -- --
------------- -------------- --------------
Net Income (Loss)............................ $ (799,998) $ (1,431,666) $ (2,231,664)
============= ============== ==============
Basic and Diluted Net (Loss) Per Share................. $ (0.36) $ (0.46) $ (0.74)
============= ============== ==============
Weighted average common shares outstanding............. 2,249,000 3,081,580 2,999,146
============= ============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
BIOLYNX.COM, INC.
(a development stage corporation)
Statement of Changes in Stockholders' Equity (deficit)
<TABLE>
<CAPTION>
Retained
Common Paid-In- Earnings
stock Capital (Deficit)
------ -------- ---------
<S> <C> <C> <C>
Capital contribution on December 2, 1998 $ 2,249 $ -- $ (1,249)
Net income (Loss) for the period -- -- (799,998)
--------- ---------- -----------
Balance at December 31, 1998 2,249 -- (801,247)
Sales of common stock, net of offering costs 2,018 1,098,393 --
Net income (Loss) for the period -- -- (1,431,666)
--------- ---------- -----------
Balance at September 30, 1999 $ 4,267 $1,098,393 $(2,232,913)
========= ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
BIOLYNX.COM, INC.
(a development stage corporation)
Statements of Cash Flows
<TABLE>
<CAPTION>
Inception Nine Months Inception
Through Ended Through
Dec. 31, 1998 Sept. 30, 1999 Sept. 30, 1999
------------- -------------- --------------
<S> <C> <C> <C>
Operating activities:
Net income (Loss).................................................... $ (799,998) $ (1,431,666) $ (2,231,664)
Adjustment to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization................................... 1,387 22,690 24,077
Recognition of compensation for stock awards.................... -- 650,000 650,000
Increase in accounts receivable, net............................ -- (10,410) (10,410)
Increase in component parts inventory........................... -- (19,393) (19,393)
Increase in prepaid expenses.................................... -- (4,000) (4,000)
Increase in accounts payable & accrued liabilities.............. -- 75,196 75,196
Increase in amounts payable to affiliates....................... -- 173,651 173,651
Net cash paid by stockholder for the Company.................... 798,611 -- 798,611
------------- -------------- --------------
Net cash (used in) operating activities.................... -- (543,932) (543,932)
------------- -------------- --------------
Investing activities:
Capital expenditures............................................ (23,741) (79,573) (103,314)
Other assets (deposit).......................................... -- (2,984) (2,984)
Net cash paid by stockholder for the Company.................... 23,741 -- 23,741
------------- -------------- --------------
Net cash used in investing activities...................... -- (82,557) (82,557)
------------- -------------- --------------
Financing activities:
Proceeds from advances from stockholder (later.................. 821,352 286,171 1,107,523
converted to subordinated debentures)
Stockholder contributions....................................... 1,000 535,926 536,926
Increase in stock subscriptions receivable...................... -- (3,839) (3,839)
Private placement offering costs incurred....................... -- (113,307) (113,307)
Net non-cash benefit received by stockholder for
payments made on behalf of the Company.......................... (822,352) -- (822,352)
------------- -------------- --------------
Net cash provided by financing activities.................. -- 704,951 704,951
------------- -------------- --------------
Net increase in cash and cash equivalents............................ -- 78,462 78,462
Cash and cash equivalents at the beginning of the period........ -- -- --
------------- -------------- --------------
Cash and cash equivalents at the end of the period.............. $ $ 78,462 $ 78,462
============= ============== ==============
Supplemental disclosure of cash flow information:
Cash paid during the period for interest........................ $ -- $ -- $ --
============= ============== ==============
Cash paid during the period for income taxes.................... $ -- $ -- $ --
============= ============== ==============
Supplemental schedule of non-cash investing and
financing information:
Issuance of common stock for services rendered.................. $ 1,000 $ 650,000 $ 651,000
============= ============== ==============
Issuance of amounts payable to stockholder for expenditures
paid outside the Company....................................... $ 821,352 $ $ 821,352
============= ============== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
BIOLYNX.COM, INC.
Notes To The Financial Statements
1. ORGANIZATION
BioLynx.Com, Inc. (the "Company") is a Texas corporation incorporated on
April 29, 1999 for the purpose of merging with BioLynx, Inc. (the "Predecessor
Company"), and carrying on and expanding their business operations. BioLynx,
Inc. was a Texas corporation incorporated on December 2, 1998 to offer biometric
payroll services to employers. The Company's principal business activity is the
installation of a biometric device (which logs employees in and out for the
employer) and applicable software which records, summarizes, and inputs payroll
time information into the employer's payroll system.
The merger of BioLynx.Com, Inc. and BioLynx, Inc. occurred on May 7, 1999,
and was accounted for as a reorganization, due to the common ownership of the
two companies. Under this accounting treatment for the merger, the assets and
liabilities of BioLynx, Inc. were transferred to BioLynx.Com, Inc. and accounted
for at historical cost in a manner similar to that in pooling-of-interests
accounting.
The Company is currently a development stage enterprise. Development of
the Predecessor Company's products began in the first quarter of 1996, and
continued until and after the Predecessor Company's incorporation in December
1998. Costs of approximately $750,000 incurred prior to the date of
incorporation were included in the Predecessor Company's financial statements,
primarily recorded as development costs. From inception through March 31, 1999,
all expenditures related to the Predecessor Company, including payroll related
expenses, were funded and paid directly by its shareholder (and affiliates of
the shareholder). The Predecessor Company did not itself open a bank account
until April 21, 1999. The amount of the funds advanced by the Company's
shareholder has been recorded to reflect the liabilities to the shareholder for
the advances. Management has stated that additional advances from shareholders
subsequent to September 30, 1999 will also be recorded in this fashion. (See
Note 4).
At December 31, 1998, September 30, 1999 and as of the date of the audit
report, the Company is entirely dependent on continued funding by the
shareholders. Substantial resources will be required in the future to complete
development efforts, acquire other companies and customer bases (see Note 11),
design and implement marketing and sales efforts, purchase equipment, fund
installations at customer locations, and set up administrative departments. At
September 30, 1999, management was in the process of selling shares of common
stock of the Company under a private placement memorandum. The private
placement offering was completed on November 24, 1999, with a total of 586,600
shares sold at $2.00 per share (including 319,350 shares sold after September
30, 1999. Significant sales are expected to begin in the first quarter of 2000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property and Equipment. Property and equipment is recorded at cost and is
depreciated using the straight-line method over their useful lives as follows:
Computer hardware and other electronic equipment ........ 3 years
Purchased software....................................... 3 years
Expenditures for maintenance, repairs and minor replacements are charged to
operations when incurred. Expenditures for major replacements and betterments
are capitalized to the property and equipment account and depreciated over the
remaining life of the asset. The cost and accumulated depreciation of property
and equipment retired or sold is removed at the time of disposition, and the
resulting gain or loss is reflected in operations.
Income Taxes. The Company has adopted the method of accounting for income
taxes promulgated by Statement of Financial Accounting Standards No. 109.
F-6
<PAGE>
BIOLYNX.COM, INC.
Notes To The Financial Statements
Advertising Costs. The cost of advertising is expensed as incurred. The
Company did not incur advertising expenses during the period ended December 31,
1998. The Company incurred $24,998 of advertising expense during the nine month
period ended September 30, 1999.
Use of Estimates in Financial Statement Preparation. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from those estimates.
Concentration of Credit Risk. The Company maintains cash deposits in a
single financial institution. During the periods ended December 31, 1998 and
September 30, 1999, there were no occasions when the $100,000 FDIC account
insurance limit was exceeded.
Cash and Cash Equivalents. Cash and highly liquid investments with
maturities of three months or less when purchased are included in cash and cash
equivalents in these financial statements. The carrying amount reported in the
balance sheet for cash and cash equivalents approximates its fair value.
Fair Value of Financial Instruments. The carrying amounts of the Company's
financial instruments, which include accounts receivable, accounts payable and
convertible subordinated debentures, approximate their fair values at December
31, 1998 and at September 30, 1999.
3. PROPERTY AND EQUIPMENT
The components of property and equipment at December 31, 1998 and at September
30, 1999 are as follows:
December 31, September 30,
1998 1999
---- ----
Computer equipment.............. $ 2,446 $ 67,625
Other equipment................. 21,295 21,295
Purchased software.............. -- 14,394
------- --------
Total cost...................... 23,741 103,314
Less accumulated depreciation... (1,387) (24,077)
------- --------
Net property and equipment...... $22,354 $ 79,237
======= ========
4. SUBORDINATED CONVERTIBLE DEBENTURE
Amounts payable to the shareholder outstanding at December 31, 1998 and
September 30, 1999 amounted to $821,352 and $1,107,523, respectively. On April
16, 1999, the balance of the amounts payable to the shareholder account was
converted to a subordinated convertible debenture of the Company. This
debenture, which is unsecured, bears interest at 8%, and the principal along
with all accrued interest is due on April 16, 2002. The holder of the debenture
has the right, but not the obligation, to convert the debenture into one share
of common stock for every $3.30 of debenture held. Interest accrued on this
debenture during the nine month period ended September 30, 1999 amounted to
$40,782.
F-7
<PAGE>
BIOLYNX.COM, INC.
Notes To The Financial Statements
5. RELATED PARTY TRANSACTIONS
At December 31, 1998 and at June 30, 1999, the Company leased its employees
from an employee leasing Company owned by one of the Company's shareholders
under an informal arrangement under which the Company is billed 12% over the
gross wages of each employee. The 12% mark-up covers the employer payroll
taxes, employee benefit costs, and workers compensation costs, as well as profit
margin to the leasing Company.
At December 31, 1998 and at September 30, 1999, the Company subleased
office space from a Company owned by one of the Company's shareholders at a cost
of $3,000 per month, beginning in November 1998. See Footnote 7 for further
details.
At December 31, 1998 and at September 30, 1999, the Company shared its
executive staff with an affiliated company. As a consequence, one-half of the
total payroll costs of the Company's two executives were charged to the Company
by the affiliate.
6. RECOGNITION OF COMPENSATION FOR STOCK AWARDS
In July and also in September 1999, the Company awarded a combined total of
340,000 shares of common stock to consultants as compensation for their
services. A total of $680,000 has been charged to development expense to
account for these issued shares (at $2.00 per share).
In November 1999, the Company awarded an additional 265,000 shares of
common stock to consultants as compensation for their services. In November
1999, a total of $530,000 will be charged to administrative expense to account
for these issued shares (at $2.00 per share).
7. RISKS AND UNCERTAINTIES
The "Year 2000" problem refers to the inability of computer programs to
correctly interpret the century from a date in which the year is represented by
only two digits. A computer system that is not Year 2000 compliant ("Y2K
compliant") would not be able to correctly process certain data, or in extreme
situations, could disable an entire system.
Since inception, the Company has purchased various types of computer
hardware and software to meet its operational needs. The Company has stated it
has undertaken a feasibility study in 1999 to identify any changes necessary in
its computer systems to assure they will be Y2K compliant. During the remainder
of 1999, the Company has stated that its outside consultants will upgrade, to
the extent necessary, any of the software and hardware systems necessary to
assure their Y2K compliance.
8. COMMITMENTS AND CONTINGENCIES
Employment Agreements. Effective March 12, 1999, the Company entered into
employment contracts with eight employees. The agreements also contain
provisions that the employees will not compete with the Company in certain
geographic territories for a period of two years beyond the terms of the
employment contracts.
Consulting Agreements. In April 1999, the Company entered into a
consulting agreement with one organization and financial advisory agreements
with two Texas corporations. These agreements included a provision for an
aggregate of 275,000 shares of the restricted common stock of the Company to be
sold to these three organizations at the par value of the stock. These shares
were sold in May 1999.
F-8
<PAGE>
BIOLYNX.COM, INC.
Notes To The Financial Statements
Lease Agreement. Effective November 9, 1998, the Company entered into a
lease for approximately 2,650 square feet of office space with a related party
for $3,000 per month. The term of the lease is 36 months. Lease expense for
the periods ended December 31, 1998 and September 30, 1999 were $6,000 and
$27,000, respectively.
9. STOCK OPTION PLAN
At its organizational meeting on May 7, 1999, the Company set up the 1999
stock incentive compensation plan. Under the provisions of the Plan, the
maximum number of shares of common stock which shall be available for issuance
under the Plan shall not exceed in the aggregate the greater of 250,000 shares
of the common stock or 15% of the issued shares of common stock as of the first
day of the preceding calendar quarter. There have been no grants of stock
options as of September 30, 1999.
10. NEW ACCOUNTING STANDARD
In June, 1997, the Financial Accounting standards Board issued Statement of
Financial Accounting Standards Number 130, Reporting Comprehensive Income ("SFAS
No. 130"). SFAS No. 130 established standards for reporting and presentation of
comprehensive income and its components. Comprehensive income is defined as the
change in equity of a business enterprise during a period from transactions and
other events and circumstances from non-owner sources and includes all changes
in equity during a period, except those resulting from investments by owners and
distributions to owners. SFAS No. 130 was adopted by the Company at its
inception. Initial adoption of this standard had no impact on the Company's
financial statements.
11. SUBSEQUENT EVENTS
In October 1999, the Company's management signed an option agreement to
acquire BioLynx Outsource Services, Inc. (Outsource) from an affiliate of the
Company's majority shareholder. Outsource is a professional employer
organization which offers small and midsize companies such services as payroll
and benefits administration, health and workers' compensation insurance
programs, personnel records management, and employee recruiting. The proposed
purchase price is to be based on a multiple of the average gross profit earned
by the Company during the four weeks prior to closing of this transaction, and
is expected to be approximately $1.5 million, with a cash down payment due at
closing of $500,000 and the remainder paid in convertible preferred stock of the
Company bearing an 8% non-cumulative annual dividend. The preferred stock will,
at the option of the shareholder, be convertible into common stock at face value
plus unpaid dividends at the rate of $3.30 per share of common stock. This
transaction could close as early as December 31, 1999.
In addition, Outsource has signed an option agreement to acquire all of the
leased employee contracts of Alamo Commercial Group, Inc. (Alamo), another
affiliate of the Company's majority shareholder. Alamo is a professional
employer organization which offers small and midsize companies such services as
payroll and benefits administration, health and workers' compensation insurance
programs, personnel records management, and employee recruiting. The proposed
purchase price is to be based on a multiple of the average gross profit earned
by the Company during the four weeks prior to closing of this transaction, and
is expected to be approximately $3,400,000 million, with a cash down payment due
at closing of $1 million, and the remainder paid in convertible preferred stock
of the Company bearing an 8% non-cumulative annual dividend. The preferred
stock will, at the option of the shareholder, be convertible into common stock
at face value plus unpaid dividends at the rate of $3.30 per share of common
share. This transaction could close as early as December 31, 1999.
Also in November 1999, the Company granted an option to affiliates of its
majority shareholder whereby the affiliates would have the option to convert all
unrepaid advances made by the affiliates through November 19, 1999 to preferred
stock, which could be convertible into common stock at a rate of $3.30 per
common share. This option agreement expires on March 31, 1999. At
September 30, 1999, unrepaid advances from the affiliates amounted to $173,651.
F-9
<PAGE>
- -------------------------------------------------------------------------------
, 2000
[LOGO OF BIOLYNX.COM, INC.]
1,000,000 Shares of Common Stock
----------------
PROSPECTUS
----------------
AURORA FINANCIAL SERVICES, L.L.C.
- -------------------------------------------------------------------------------
We have not authorized any dealer, sales person or other person to give you
written information other than this prospectus or to make representations as
to matters not stated in this prospectus. You must not rely on unauthorized
information. This prospectus is not an offer to sell these securities or our
solicitation of your offer to buy the securities in any jurisdiction where
that would not be permitted or legal. Neither the delivery of this prospectus
nor any sales made hereunder after the date of this prospectus shall create an
implication that the information contained herein or the affairs of
BioLynx.Com, Inc. have not changed since the date hereof.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Until , 2000, all dealers that effect transactions in these shares of
common stock may be required to deliver a prospectus. This is in addition to
the dealer's obligation to deliver a prospectus when acting as an underwriter
and with respect to their unsold allotments or subscriptions.
- -------------------------------------------------------------------------------
<PAGE>
PART II
Information Not Required in prospectus
Item 24. Indemnification of Directors and Officers
BioLynx.Com's Articles provide that any person who at any time shall serve
or shall have served, as a director, officer, employee, or agent of BioLynx.Com,
or of any other enterprise at the request of BioLynx.Com, and the heirs,
executors, and administrators of such person, shall be indemnified by
BioLynx.Com against all costs and expenses (including but not limited to counsel
fees, amounts or judgments paid, and amounts paid in settlement) reasonably
incurred in connection with the defense of any claim, action, suit, or
proceeding, whether civil, criminal, administrative, or other, in which he may
be involved by virtue of such person being or having been such director,
officer, employee, or agent, provided, however, that such indemnity shall not be
operative with respect to (1) any matter as to which such person shall have been
finally adjudged in such action, suit, or proceeding to be liable for negligence
or misconduct in the performance of his duties as such director, officer,
employee, or agent, or (2) any matter settled or compromised, unless in the
opinion of independent counsel selected by or in a manner determined by the
Board of Directors, there is not reasonable ground for such person being
adjudged liable for negligence or misconduct in the performance of his duties as
such director, officer, employee, or agent, or (3) any amount paid or payable to
BioLynx.Com or such other enterprise. The foregoing indemnification shall not
be deemed exclusive of any other rights to which those indemnified may be
entitled under any Bylaw, agreement, vote of shareholders, or otherwise. By its
terms, and in accordance with applicable state law, however, this provision does
not eliminate or limit the liability of a director of BioLynx.Com for any breach
of duty based upon an act or omission (A) involving appropriation in violation
of duty of any business opportunity of BioLynx.Com, (B) involving acts or
omissions that are not in good faith or which involve intentional misconduct or
a knowing violation of the law, or (C) involving unlawful distributions or
transactions from which the director derived an improper personal benefit. The
Bylaws contain similar indemnification and limitation of liability provisions.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers, or persons controlling BioLynx.Com pursuant
to the foregoing provisions, or otherwise, BioLynx.Com is aware that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
Item 25. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the securities being registered. The
expenses shall be paid by the registrant. No expenses will be paid by the
security holders.
SEC Registration Fee.............................. $ 1,056
Printing and Engraving Expenses................... 25,000
Selling Commissions (1)........................... 520,000
Legal Fees and Expenses........................... 60,000
Accounting Fees and Expenses...................... 23,000
Blue Sky Fees and Expenses........................ 15,845
Transfer Agent Fees............................... 3,500
Miscellaneous..................................... 11,599
--------
Total........................................... $660,000
========
_______________
(1) Does not include 25,000 shares of the common stock to be issued to Aurora
Financial Services, L.L.C., which shares are valued at $100,000.
II-1
<PAGE>
Item 26. Recent Sales of Unregistered Securities
Set forth below is certain information regarding securities that
BioLynx.Com has sold in the past three years to directors ("D"), officers ("O"),
employees ("E"), consultants ("C"), institutional investors ("I"), affiliates
("A"), and non-affiliates ("N").
On May 7, 1999, in connection with the organization of BioLynx.Com, Inc.
and the merger with BioLynx, Inc., the company issued an aggregate of 3,000,000
shares of the common stock to Patrick E. Tolle (D, O), Andrew Fitch-Wallish (D,
O), and John D. Walker II (D, O). Messrs. Tolle and Fitch-Wallish paid to the
company, in the aggregate, $750 in cash for their shares. Mr. Walker paid
$1.00, in cash to the company, plus services previously rendered to BioLynx,
Inc. in the amount of $1,000 for his shares. At the same time, an aggregate of
675,000 shares of BioLynx.Com common stock (for a total consideration of $675
paid in cash) were issued to Whitsitt Oil Company, Inc. (I), R. F. Bearden, Inc.
(C), Texas Commercial Resources, Inc. (C), and Jazbermaine (C).
Beginning on May 12, 1999 and ending on November 24, 1999, pursuant to a
private placement conducted in conformity with Rule 506 of Regulation D
promulgated under the Securities Act, BioLynx.Com sold 586,600 shares of the
common stock, including 525,250 shares to 39 Accredited Investors and 61,350
shares to 19 Non-Accredited Investors. The purchase price for each share was
$2.00, and the total amount raised by the company as a result of the private
placement was $1,173,200. The shares were offered for sale by Aurora Financial
Services, L.L.C., a registered broker-dealer, and its affiliated broker-dealers,
as selling agents, which received a commission from the company in the amount of
$93,888 and 20,000 shares of the common stock for their services in the
placement of the shares.
In addition to the foregoing, since May 12, 1999, the company has issued
665,000 shares of the common stock to seven shareholders (including 10,000
shares issued to Louis A. Ross, Ph.D., a director of the company, and 20,000
shares issued to Aurora Financial Services, L.L.C. in connection with the above
described private placement), in exchange for consulting and financial advisory
services rendered to the company having a value of $1,180,000, in the aggregate.
Unless otherwise indicated above, the issuance of securities were exempt
from registration under the Securities Act pursuant to Section 4(2) as
transactions by an issuer not involving any public offering. In each instance,
the purchaser had a pre-existing relationship with BioLynx.Com, was provided
with, and/or had access to, current information regarding BioLynx.Com, and
management reasonably believed that each purchaser had sufficient investment
knowledge and experience to understand the risks and merits of investing in the
securities of the company, or was represented by a person with such knowledge
and experience. Moreover, all offers and sales of the securities were made
without public solicitation, the certificates bear restrictive legends, and
appropriate stop-transfer orders have been given to the company's transfer
agent. No underwriter was involved in the transactions and no commissions were
paid.
II-2
<PAGE>
Item 27. Exhibits
The following exhibits are filed as part of this registration statement:
Exhibit No. Identification of Exhibit
---------- -------------------------
1.1* Agreement between Aurora Financial Services, L.L.C. and
BioLynx.Com, Inc. dated October 15, 1999.
2.1* Agreement and Plan of Merger between BioLynx, Inc. and
BioLynx.Com, Inc. dated May 7, 1999.
2.2* Articles of Merger between BioLynx, Inc. and BioLynx.Com,
Inc. filed May 12, 1999.
3.1* Articles of Incorporation of BioLynx, Inc. filed December
2, 1998.
3.2* Articles of Incorporation of BioLynx.Com, Inc. filed April
29, 1999.
3.3* Amendment to Articles of Incorporation of BioLynx.Com, Inc.
filed October 7, 1999.
3.4* Bylaws.
4* See Exhibits 3.1, 3.2, 3.3, and 3.4.
5* Opinion Regarding Legality.
10.1* Employment Contract dated March 15, 1999 between BioLynx,
Inc. and John D Walker II.
10.2* Employment Contract dated March 12, 1999 between BioLynx,
Inc. and Patrick E. Tolle.
10.3* Employment Contract dated March 12, 1999 between BioLynx,
Inc. and Andrew Fitch-Wallish.
10.4* Employment Contract dated March 12, 1999 between BioLynx,
Inc. and Charles E. Pircher.
10.5* Employment Contract dated March 12, 1999 between BioLynx,
Inc. and Gregory W. Schlather.
10.6* Employment Contract dated March 12, 1999 between BioLynx,
Inc. and Larry Roy.
10.7* Confidentiality Agreement dated November 1, 1999 between
BioLynx.Com, Inc and Barbara A. Bean.
10.8* Employment Contract dated November 1, 1999 between BioLynx.
Com, Inc. and Barbara A. Bean.
10.9* Employment Contract dated November 11, 1999 between BioLynx.
Com, Inc. and Margaret A. Rice.
10.10* Confidentiality Agreement dated November 11, 1999 between
BioLynx.Com, Inc. and Margaret A. Rice.
10.11* BioLynx.Com, Inc. 1999 Stock Incentive Compensation Plan
dated May 7, 1999
10.12* Letter Agreement dated March 31, 1999 between Aurora
Financial Services, L.L.C. and BioLynx, Inc. with respect to
a private placement of 500,000 shares of common stock.
10.13* Registration Rights Agreement between BioLynx, Inc. and
Aurora Financial Services, L.L.C. dated April 16, 1999.
10.14* Convertible Subordinated Debenture dated April 16, 1999 in
the amount of $1,107,523, in favor of John D. Walker II.
10.15* Consulting Agreement dated May 7, 1999 between BioLynx.Com,
Inc. and Jazbermaine.
10.16* Financial Advisory Agreement dated May 7, 1999 between
BioLynx.Com, Inc. and R. F. Bearden Associates, Inc.
10.17* Financial Advisory Agreement dated May 7, 1999 between
BioLynx.Com, Inc. and Texas Commercial Resources, Inc.
II-3
<PAGE>
10.18* Letter Agreement between BioLynx.Com, Inc. and Recognition
Systems, Inc dated November 18, 1999 with respect to the
sale of biometric hand readers.
10.19* Option to Purchase Stock Agreement dated October 1, 1999
between BioLynx.Com, Inc., BioLynx Outsource Services, Inc.,
and United Capital Investment Group, Inc.
10.20* Option to Purchase Employee/Customer Base dated October 1,
1999 between BioLynx Outsource Services, Inc. and Alamo
Commercial Group, Inc.
10.21* Amended Option to Purchase Stock Agreement dated December 1,
1999 between BioLynx.Com, Inc., BioLynx Outsource Services,
Inc., and United Capital Investment Group, Inc.
10.22* Amended Option to Purchase Employee/Customer Base dated
December 1, 1999 between BioLynx Outsource Services, Inc. and
Alamo Commercial Group, Inc.
10.23* Stock Purchase Warrant dated October 6, 1999 between
BioLynx.Com, Inc. an Travis Morgan Securities, Inc.
10.24* Stock Purchase Warrant dated December 1, 1999 between
BioLynx.Com, Inc. a Travis Morgan Securities, Inc.
10.25* Acknowledgment of Debt dated December 1, 1999 between
BioLynx.Com, Inc., John D. Walker, II, United Capital
Investment Group, Inc., and Alamo Commercial Group, Inc.
10.26* Escrow Agreement dated December 1, 1999 between BioLynx.Com,
Inc. and Sterling Bank.
11* Computation of Per Share Earnings.
15* See Exhibit 23.2.
23.1* Consent of Counsel (included in Exhibit 5).
23.2* Consent of John M. James, CPA.
27* Financial Data Schedule.
______________
* Filed herewith.
Item 28. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required in Section 10(a)(3) of
the Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
II-4
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of this offering.
(4) That for purposes of determining any liability under the
Securities Act, (i) the information omitted from the prospectus filed as part
of this registration statement, as permitted by Rule 430A of the Securities Act
and to be contained in the form of prospectus to be filed by the registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act, shall be
deemed to be incorporated by reference into this registration statement at the
time it is declared effective, and (ii) each post-effective amendment that
contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on the registration statement on Form SB-2 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Antonio, State of Texas, on the 6th day of December, 1999.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
----------------------------
John D. Walker II, President
and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John D. Walker II Chairman of the Board and December 6, 1999
- --------------------------
JOHN D. WALKER II President
/s/ Patrick E. Tolle Vice President, Chief Operating December 6, 1999
- --------------------------
PATRICK E. TOLLE Officer, Secretary,
Treasurer, and Director
/s/ Andrew Fitch-Wallish Vice President and Director December 6, 1999
- --------------------------
ANDREW FITCH-WALLISH
/s/ Barbara A. Bean Chief Financial Officer December 6, 1999
- --------------------------
BARBARA A. BEAN
/s/ Louis A. Ross, Ph.D. Director December 6, 1999
- --------------------------
LOUIS A. ROSS, Ph.D.
/s/ Wren Alexander Director December 6, 1999
- -------------------------
WREN ALEXANDER
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
Sequentially
Exhibit No. Identification of Exhibit Numbered Pages
- ----------- ------------------------- --------------
1.1* Agreement between Aurora Financial
Services, L.L.C. and BioLynx.Com, Inc.
dated October 15, 1999.
2.1* Agreement and Plan of Merger between
BioLynx, Inc. and BioLynx.Com, Inc.
dated May 7, 1999.
2.2* Articles of Merger between BioLynx,
Inc. and BioLynx.Com, Inc. filed May
12, 1999.
3.1* Articles of Incorporation of BioLynx,
Inc. filed December 2, 1998.
3.2* Articles of Incorporation of BioLynx.
Com, Inc. filed April 29, 1999.
3.3* Amendment to Articles of Incorporation
of BioLynx.Com, Inc. filed
October 7, 1999.
3.4* Bylaws.
4* See Exhibits 3.1, 3.2, 3.3, and 3.4.
5* Opinion Regarding Legality.
10.1* Employment Contract dated March 15,
1999 between BioLynx, Inc. and
John D. Walker II.
10.2* Employment Contract dated March 12,
1999 between BioLynx, Inc. and
Patrick E. Tolle.
10.3* Employment Contract dated March 12, 1999
between BioLynx, Inc. and
Andrew Fitch-Wallish.
10.4* Employment Contract dated March 12, 1999
between BioLynx, Inc. and
Charles E. Pircher.
10.5* Employment Contract dated March 12, 1999
between BioLynx, Inc. and
Gregory W. Schlather.
10.6* Employment Contract dated March 12, 1999
between BioLynx, Inc. and Larry Roy.
10.7* Confidentiality Agreement dated November 1,
1999 between BioLynx.Com, Inc.
and Barbara A. Bean.
10.8* Employment Contract dated November 1,
1999 between BioLynx.Com, Inc. and
Barbara A. Bean.
10.9* Employment Contract dated November 11,
1999 between BioLynx.Com, Inc. and
Margaret A. Rice.
10.10* Confidentiality Agreement dated November 11,
1999 between BioLynx.Com, Inc.
and Margaret A. Rice.
10.11* BioLynx.Com, Inc. 1999 Stock Incentive
Compensation Plan dated May 7, 1999.
10.12* Letter Agreement dated March 31, 1999 between
Aurora Financial Services, L.L.C. and BioLynx,
Inc. with respect to a private placement of
500,000 shares of common stock.
10.13* Registration Rights Agreement between
BioLynx, Inc. and Aurora Financial
Services, L.L.C. dated April 16, 1999.
10.14* Convertible Subordinated Debenture dated
April 16, 1999 in the amount of
$1,107,523, in favor of John D. Walker II.
<PAGE>
Sequentially
Exhibit No. Identification of Exhibit Numbered Pages
- ----------- ------------------------- --------------
10.15* Consulting Agreement dated May 7, 1999
between BioLynx.Com, Inc. and Jazbermaine.
10.16* Financial Advisory Agreement dated May 7,
1999 between BioLynx.Com, Inc. and
R. F. Bearden Associates, Inc.
10.17* Financial Advisory Agreement dated May 7,
1999 between BioLynx.Com, Inc. and Texas
Commercial Resources, Inc.
10.18* Letter Agreement between BioLynx.Com, Inc.
and Recognition Systems, Inc. dated
November 18, 1999 with respect to
the sale of biometric hand readers.
10.19* Option to Purchase Stock Agreement dated
October 1, 1999 between BioLynx.Com, Inc.,
BioLynx Outsource Services, Inc., and
United Capital Investment Group, Inc.
10.20* Option to Purchase Employee/Customer Base
dated October 1, 1999 between BioLynx Outsource
Services, Inc. and Alamo Commercial Group, Inc.
10.21* Amended Option to Purchase Stock Agreement
dated December 1, 1999 between BioLynx.Com,
Inc., BioLynx Outsource Services, Inc.,
and United Capital Investment Group, Inc.
10.22* Amended Option to Purchase Employee/Customer
Base dated December 1, 1999 between BioLynx
Outsource Services, Inc. and Alamo Commercial
Group, Inc.
10.23* Stock Purchase Warrant dated October 6, 1999
between BioLynx.Com, Inc. and Travis Morgan
Securities, Inc.
10.24* Stock Purchase Warrant dated December 1, 1999
between BioLynx.Com, Inc. and Travis Morgan
Securities, Inc.
10.25* Acknowledgment of Debt dated December 1, 1999
between BioLynx.Com, Inc., John D. Walker, II,
United Capital Investment Group, Inc., and Alamo
Commercial Group, Inc.
10.26* Escrow Agreement dated December 1, 1999
between BioLynx.Com, Inc. and Sterling Bank.
11* Computation of Per Share Earnings.
15* See Exhibit 23.2.
23.1* Consent of Counsel (included in Exhibit 5).
23.2* Consent of John M. James, CPA.
27* Financial Data Schedule.
* Filed herewith.
<PAGE>
Exhibit 1.1
Agreement Between Aurora Financial Services, L.L.C. and
BioLynx.Com, Inc. Dated October 15, 1999
<PAGE>
Exhibit 1.1
AURORA FINANCIAL SERVICES, L.L.C.
INVESTMENT SECURITIES
1800 Bering, Suite 400
Houston, TX 77057
October 15, 1999
BioLynx.Com, Inc.
5617 Grissom Road
San Antonio, Texas 78238
Re: Equity Placement by Aurora Financial Services, L.L.C. for BioLynx.com,
Inc.
Gentlemen:
Aurora Financial Services, L.L.C., (hereinafter referred to as "Aurora") hereby
agrees to attempt to raise certain amounts (hereinafter referred to as "the
Required Capital") for BioLynx.com, Inc. (herein referred to as "BioLynx" and as
the "Issuer"). BioLynx hereby agrees to be bound by this agreement. The required
capital to be raised is as follows:
Aurora agrees to attempt to raise a minimum of $250,000 up to a maximum of
$4,000,000 for the Issuer which will pertain to providing biometric automation
for the control of employees time and attendance for employers.
The efforts of Aurora to raise the required capital are based upon the
following terms and conditions.
1. Engagement. For a period of 180 days from the effective date of the
----------
Registration Statement under the Securities Act of 1933 (hereinafter
referred to as the ("Prospectus"), related to sale of equity
securities of the Issuer, BioLynx shall grant to Aurora the exclusive
right to raise the Required Capital in the manner to be described in
the Prospectus. Provided, however, notwithstanding anything herein
obtained to the contrary, Aurora shall be entitled to employ other
broker-dealers selected by it to sell all or any portion of the
Required Capital. In that regard, Aurora shall be entitled to reallow
a portion of its commission to such participating broker-dealers
resulting from any of the Required Capital raised by them. Aurora may
terminate the Offering to be described in the Prospectus in the event
that, among other things, (a) certain specified actions, usually
associated with extremely adverse economic and market conditions, have
been taken by the principal national securities exchanges or by
governmental authorities, or (b) other events have occurred or are
pending or threatened which, in the judgement of Aurora, materially
impair the investment quality of an investment in the Issuer.
2. Termination. If the Offering fails to have an Initial Closing
-----------
resulting in the raising of the minimum of the Required Capital to be
described in the Prospectus within 180 days following the effective
date of the Prospectus, this Agreement shall terminate with respect to
the provisions which relate to the failure to have such Initial
Closing. Likewise, if the said offering shall fail to close by the
"Extended Subscription Period" (and/or terms of similar import) as
described in the Prospectus, this agreement shall terminate with
respect to the provisions which relate to the Issuer. As used herein,
the terms "Initial Closing", "Subsequent Closings" and "Extended
Subscription Period" shall have the meanings fairly ascribed to them
in the Prospectus. Notwithstanding anything herein contained to the
contrary, in the event that either party hereto violates the terms of
this Agreement or the securities laws of the United States any state
wherein interests in the Issuer are to be offered for sale, or if
either party shall furnish to the other party hereunder information
which is untrue or misleading or fails to state the facts which make
any such information so supplied misleading, then the other party may
terminate this Agreement without any further liability hereunder.
1
<PAGE>
3. The Offering. The Required Capital shall be raised by Aurora pursuant
------------
to an offering involving the public sale of securities (hereinafter
referred to as the "Offering"). The Offering shall be conducted in
conformity with the securities Act of 1933, as amended (herein
referred to as the "1933 Act"). The Offering documents shall be
prepared at the direction of BioLynx by parties selected by and who
are acceptable to Aurora. The work on the Prospectus with respect to
the Offering shall begin upon the effective date of this Agreement.
4. Best Efforts. The Offering will be on a "best effort" only basis,
------------
with no guarantees by Aurora that any or all of the Required Capital
shall be raised.
5. Compensation. As its compensation in connection with the raising of
------------
the Required Capital, Aurora shall be entitled to receive the
following:
(a) A sales commission equal to 10% of the Required Capital raised by
Aurora or any broker-dealer selected by Aurora and acting
pursuant to the terms of this Agreement for the Issuer. Any sales
commissions shall be paid upon any Initial, Subsequent or Final
Closing of the Offering.
(b) Aurora will receive a 3% non refundable and non accountable
investment banking fee.
(c) In addition, Aurora will receive 25,000 shares of common stock in
BioLynx.Com, Inc.
(d) The agreement of BioLynx evidenced by its execution hereof that
should BioLynx or any of its affiliates undertake within the
first 60 month period following the date hereof, an offering or
offerings of securities for the purpose of raising capital from
third party investors, then Aurora (or any successor to Aurora)
will be tendered a right of first refusal to act as selling agent
or dealer manager, as then appropriate, in respect to any such
offering or offerings.
(e) In the event BioLynx (or any successor or successors or
subsidiary of BioLynx) shall determine within the first 60 month
period following the date hereof to undertake a program or plan
to issue common stock or other form of equity security whether or
not in furtherance of a contemplated public offering, then
BioLynx agrees to tender to Aurora (i) a right of first refusal
in general accord with Subparagraph (c) of this Paragraph 5, and
(ii) the right to purchase for a nominal consideration a generous
number, giving effect to the then existing circumstances, of
rights or warrants to acquire at a favorable exercise price a
recognizable percentage of equity in the entity resulting from
any such offering, reorganization or recapitalization.
6. Indemnification. Each of the parties hereto shall indemnify and hold
---------------
the other harmless against any losses, claims, damages or liability,
joint or several, to which the indemnified party may become subject
under the 1933 Act or otherwise, by the other party by reason of any
representation, warranty or covenant contained in this Agreement or
resulting from any untrue statements of a material fact or omission
thereof with respect to the information concerning the parties to be
contained in any Prospectus relating to the Offering made in reliance
upon and in conformity with the information furnished to the
indemnified party. Insofar as this indemnity agreement relates to any
untrue statement or omission made in any such Prospectus, this
indemnity agreement shall not inure to the benefit of the indemnified
party if (i) the other party shall have furnished to the indemnified
party an amendment or supplement to the Prospectus which corrected
such untrue statement or omission which is the basis for the loss,
liability, claim, damage or expense for which indemnification is
sought and (ii) the indemnified party failed to send or give a copy of
such corrective amendment or supplement to the person asserting any
such loss, liability, claim, damage or expense at such time as the
Prospectus as so amended or supplemented, is required under the 1933
Act to be delivered by the indemnified party to such person.
(a) BioLynx agrees to indemnify and hold harmless Aurora and each
person, if any, who controls Aurora within the meaning of the
1933 Act, from and against any and all losses, claims, damages or
liabilities, joint or several (including, without limitation, any
and all expenses whatsoever reasonably
2
<PAGE>
incurred in investigating, preparing, or defending against the
same), which arise out of or are based upon (i) any untrue
statement or alleged untrue statement of a material fact
contained in the Prospectus, or any amendment or supplement
thereto, or any application or other document filed in any state
or jurisdiction in order to qualify the Offering under the Blue
Sky or securities laws thereof ("Blue Sky Application"), if
necessary, or to secure an exemption therefrom, or which arise
out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein in light of the
circumstances under which they were made not misleading and (ii)
any actions, direct or indirect, in connection with the offering
and sale of the securities by BioLynx or any of their respective
agents or employee (other than by Aurora its employees or
affiliates), employees or affiliates in violation of the 1933
Act, or any other applicable federal or state securities laws or
regulations.
BioLynx agrees to promptly notify Aurora of the commencement of
any litigation or proceedings against BioLynx or any of their
respective officers, directors, employees, agents or affiliates
in connection with the Offering.
(b) Aurora agrees to indemnify BioLynx and their respective
affiliates, and hold each of them harmless against any losses,
claims, damages or liabilities to which they or either of them
may become subject, under the 1933 Act or the Securities Exchange
Act of 1934, as amended, or otherwise, insofar as such losses,
claims damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or
alleged untrue statement of any material fact made by Aurora or
arising out of any violation or alleged violation by Aurora or
any of Aurora's representations, warranties, covenants or
agreements contained in this Agreement, (ii) any misuse or
unauthorized use in any jurisdiction of any supplemental sales
literature (whether designed solely for broker-dealer use or
otherwise) by Aurora or (iii) any delivery, distribution or
furnishing by Aurora, either orally or in writing, of information
not contained in or materially inconsistent with, the Prospectus
or supplemental sales literature (as they, respectively, may be
amended or supplemented).
(c) Promptly after receipt by an indemnified party under subparagraph
(a) or (b) above of notice of the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under such subparagraph,
notify the indemnifying party in writing of the commencement
thereof; but the omission to so notify the indemnifying party
shall not relieve it from any liability which it may have to any
indemnified party otherwise than under such subparagraph. In case
any such action shall be brought against any indemnified party,
and it shall notify the indemnifying party, of the commencement
thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, to jointly participate
with any other indemnifying party, similarly notified, in the
defense thereof with the indemnified party. The indemnifying
party shall pay all legal fees and expenses of the indemnified
party in the defense of such claims and actions, provided,
however, that the indemnifying party shall not be obliged to pay
legal expenses and fees to more than one law firm in connection
with the defense of similar claims arising out of the same
alleged acts or omissions giving rise to such claims,
notwithstanding that such actions or claims are alleged or
brought by one or more parties against more than one indemnified
party. In case such claims or actions are alleged or brought
against more than one indemnified party, then the indemnifying
party shall only be obliged to reimburse the expenses and fees of
the one law firm which has been selected by a majority of the
indemnified parties against which such action as finally brought
and, in the event a majority of such indemnified parties are
unable to agree on which law firm or which expenses or fees will
be reimbursed by the indemnifying party. The payments shall be
made to the first law firm of record representing an indemnified
party against the action or claim. Such law firm shall be paid
only to the extent of services performed by such law firm and no
reimbursement shall be payable to law firm on account of legal
services performed by another law firm. Notwithstanding anything
contained herein to the contrary, an indemnified party may,
without the prior consent of the indemnifying party, settle or
compromise any action brought against such indemnified party.
3
<PAGE>
(d) The provisions of this Paragraph 6 shall remain in full force and
effect after the termination of this Agreement.
7. Effective Date. The effective date of this Agreement is the last date
--------------
that a party hereto executes same.
8. Further Acts. Each party hereto recognizes that this Agreement is not
------------
complete in every detail with respect to the Offering, and that it may
be necessary to amend this Agreement from time to time in order to
carry out the intent hereof. However, each party will proceed in good
faith to arrive at whatever necessary adjustments are needed in order
to carry out the terms of this Agreement. Further, each party agrees
to provide in a timely and complete manner all information needed to
complete the preparation of the Offering documents and to supplement
any such information as needed during the course of the Offering or
thereafter. In this connection, the Issuer undertakes and agrees to
provide Aurora with all such information and data as it may reasonably
require to comply with its statutory and regulatory obligations in
connection with the Offering, the application of proceeds, the
operations of the Issuer and the like.
9. Attorney's fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this
Agreement for enforcement of the covenants herein contained, the
parties hereby covenant and agree that the party who is found to be in
violation of said covenants shall also be liable for all reasonable
attorney's fees and costs of court incurred by the other parties
hereto.
10. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the
parties hereto, and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns.
11. Notices. All notices, requests, demands and other communications
-------
hereunder shall be in writing and delivered personally or sent by
registered or certified United States mail, return receipt requested
with postage prepaid, if to Aurora addressed to Mr. David Hayden at
1800 Bering, Suite 400, Houston, TX 77057, and if to BioLynx,
addressed to John D Walker II President and CEO 5617 Grissom Road, San
Antonio, Texas 78238. Any party hereto may change its address upon 10
days written notice to any other party hereto.
12. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular
number shall be held to include the plural, and vice versa, unless the
context requires otherwise. In addition, the pronouns used in this
Agreement shall be understood and construed to apply whether the party
referred to is an individual, partnership, joint venture, corporation
or an individual or individuals doing business under a firm or trade
name, and the masculine, feminine and neuter pronouns shall each
include the other and may be used interchangeably with the same
meaning.
13. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to
exercising any right, power or privilege of such party under this
Agreement or any instrument referred to herein shall operate as a
waiver thereof, and any single or partial exercise of any such right,
power or privilege shall not preclude any later exercise thereof or
any exercise of any other right, power or privilege hereunder or
thereunder.
14. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection
herewith, or any of them, shall be cumulative and the exercise or
partial exercise of any such right or remedy shall not preclude the
exercise of any other right or remedy.
15. Invalidity. In the event any one or more of the provisions contained
----------
in this Agreement or in any instrument referred to herein or executed
in connection herewith shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect the other provisions of this
Agreement or any such other instrument.
4
<PAGE>
16. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, amplify or describe the
scope or intent of this Agreement, and in no way effect or constitute
a part of this Agreement.
17. Excusable Delay. None of the parties shall be obligated to perform and
---------------
none shall be deemed to be in default hereunder, if the performance of
a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the
party obligated to perform: acts of God, strikes, lock-outs, other
industrial disturbances, acts of a public enemy, war or war-like
action (whether actual, impending or expected and whether de jure or
de facto), arrest or other restraint of governmental (civil or
military) blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, hurricanes, storms, floods, washouts,
sink holes, civil disturbances, explosions, breakage or accident to
equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive
contamination or other causes, whether of the kind herein enumerated
or otherwise, that are not reasonably within the control of the party
claiming the right to delay performance on account of such occurrence.
18. Multiple counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19. Law Governing. This Agreement shall be construed and governed by the
-------------
laws of the State of Texas, and all obligations hereunder shall be
deemed performable in Harris County, Texas.
20. Further Acts. The parties hereto shall do all other acts and things
------------
that may be reasonably necessary or proper, full or more fully, to
evidence, complete or perfect this Agreement, and to carry out the
intent of this Agreement.
21. Entire Agreement. This instrument contains the entire Agreement of the
----------------
parties and may not be changed orally, but only by instrument in
writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought.
If the foregoing meets your approval, please sign and date the enclosed
copies of this letter in the space provided below, and return same to us as
soon as possible.
Very truly yours,
AURORA FINANCIAL SERVICES, L.L.C.
By: /s/ David Hayden
-----------------------------------------
David Hayden, President
Date Executed: 10/15/99
------------------------------
This Letter Agreement is accepted and
agreed to this 20th day of October, 1999
BioLynx.Com, Inc.
By: /s/ John D. Walker II
--------------------------------------
John D Walker II
5
<PAGE>
Exhibit 2.1
Agreement and Plan of Merger Between BioLynx, Inc.
and BioLynx.Com, Inc. Dated May 7, 1999
<PAGE>
Exhibit 2.1
PLAN AND AGREEMENT OF REORGANIZATION
BY MERGER OF BIOLYNX, INC.
WITH AND INTO BIOLYNX.COM, INC.
UNDER THE NAME OF
BIOLYNX.COM, INC.
BIOLYNX, INC., a Texas corporation, and BIOLYNX.COM, INC., a Texas
corporation, sometimes hereinafter referred to as the "Surviving Corporation,"
agree as follows:
1. Plan Adopted. A plan of reorganization of BioLynx, Inc. and
------------
BioLynx.Com, Inc. (the "Plan of Merger") pursuant to the provisions of Articles
5.01 et seq. of the Texas Business Corporation Act and Section 368(a)(1)(A) of
the Internal Revenue Code of 1986, as amended, is adopted as follows:
a. BioLynx, Inc. shall be merged with and into BioLynx.Com, Inc., to
exist and be governed by laws of the State of Texas.
b. The name of the Surviving Corporation shall be BioLynx.Com, Inc.
c. When this Plan of Merger shall become effective, the separate
existence of BioLynx, Inc. shall cease and the Surviving Corporation shall
succeed, without other transfer, to all the rights and properties of BioLynx,
Inc. and shall be subject to all the debts and liabilities of such corporation
in the same manner as if the Surviving Corporation had itself incurred them.
All rights of creditors and all liens upon the property of each constituent
corporation shall be preserved unimpaired, limited in lien to the property
affected by such liens immediately prior to the merger (the "Merger").
d. The Surviving Corporation will carry on business with the assets
of BioLynx, Inc., as well as with the assets of BioLynx.Com, Inc.
e. The shareholders of BioLynx, Inc. will surrender all of their
shares in the manner hereinafter set forth.
f. In exchange for the shares of BioLynx, Inc. surrendered by its
shareholders, the Surviving Corporation will issue and transfer to such
shareholders on the basis hereinafter set forth, shares of its common stock.
g. The shareholders of BioLynx.Com, Inc. will retain their shares of
the Surviving Corporation.
2. Effective Date. The effective date of the Merger (the
--------------
"Effective Date") shall be the date when a Certificate of Merger is issued by
the Secretary of State of Texas.
3. Submission to Shareholders. This Plan of Merger shall be submitted for
--------------------------
approval separately to the shareholders of the constituent corporations in the
manner provided by the laws of the State of Texas.
4. Manner of Exchange. On the Effective Date of the Merger, the holders
------------------
of shares of BioLynx, Inc. shall surrender their shares to BioLynx.Com, Inc. in
exchange for shares of the Surviving Corporation to which they are entitled.
5. Basis of Exchange. The shareholders of BioLynx, Inc. shall be entitled
-----------------
to receive 10 shares of the common stock of the Surviving Corporation, par value
$0.001 per share, for each share of the common stock of BioLynx, Inc., no par
value per share.
1
<PAGE>
6. Shares of the Surviving Corporation. The presently outstanding 1,462
-----------------------------------
shares of the common stock of BioLynx.Com. Inc., par value $0.001 per share,
shall remain outstanding as common stock of the Surviving Corporation.
7. Directors and Officers. The directors and officers of the Surviving
----------------------
Corporation will be as follows:
a. The present Board of Directors of BioLynx.Com, Inc. shall
continue to serve as the Board of Directors of the Surviving Corporation until
the next annual meeting or until such time as their successors have been elected
and qualified.
b. If a vacancy shall exist on the Board of Directors of the
Surviving Corporation on the Effective Date of the Merger, such vacancy may be
filled by the Board of Directors as provided in the Bylaws of the Surviving
Corporation.
c. All persons who on the Effective Date of the Merger shall be
executive or administrative officers of BioLynx.Com, Inc. shall remain as
officers of the Surviving Corporation until the Board of Directors of the
Surviving Corporation shall otherwise determine. The Board of Directors of the
Surviving Corporation may elect or appoint such additional officers as it may
determine.
8. Articles of Incorporation. The Articles of Incorporation of
-------------------------
BioLynx.Com, Inc. as existing on the Effective Date of the Merger shall continue
in full force as the Articles of Incorporation of the Surviving Corporation
until altered, amended, or repealed as provided therein or as provided by law.
9. Bylaws. The Bylaws of BioLynx.Com, Inc. as existing on the Effective
------
Date of the Merger shall continue in full force as the Bylaws of the Surviving
Corporation until altered, amended, or repealed as provided therein or as
provided by law.
10. Copies of the Plan of Merger. A copy of this Plan of Merger is on file
----------------------------
at 5617 Grissom Road, San Antonio, Texas 78238, which is the principal office of
both of the constituent corporations. A copy of this Plan of Merger will be
furnished to any shareholder of a constituent corporation, on written request
and without cost.
11. Legal Construction. In case any one or more of the provisions
------------------
contained in this Plan of Merger shall for any reason be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions hereof, and this Plan of
Merger shall be construed as if such invalid, illegal, or unenforceable
provision had never been contained herein.
12. Benefit. All the terms and provisions of this Plan of Merger shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their successors and permitted assigns.
13. Law Governing. This Plan of Merger shall be construed and governed by
-------------
the laws of the of Texas, and all obligations hereunder shall be deemed
performable in Bexar County, Texas.
14. Perfection of Title. The parties hereto shall do all other acts and
-------------------
things that may be reasonably necessary or proper, fully or more fully, to
evidence, complete or perfect this Plan of Merger, and to carry out the intent
of this Plan of Merger.
15. Cumulative. The rights and remedies of any party under this Plan of
----------
Merger and the instruments executed or to be executed in connection herewith, or
any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
16. Waiver. No course of dealing on the part of any party hereto or its
------
agents, nor any failure or delay by any such party with respect to exercising
any right, power or privilege of such party under this Plan of Merger or any
instrument referred to herein shall operate as a waiver thereof, and any single
or partial exercise of any such right, power or
2
<PAGE>
privilege shall not preclude any later exercise thereof or any exercise of any
other right, power or privilege hereunder or thereunder.
17. Construction. Whenever used herein, the singular number shall include
------------
the plural, the plural number shall include the singular, and the masculine
gender shall include the feminine.
18. Multiple Counterparts. This Plan of Merger may be executed in one or
---------------------
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Plan of Merger on the
7/th/ day of May, 1999, at San Antonio, Texas.
BIOLYNX, INC.
By: /s/ John D. Walker II
-----------------------------------
John D. Walker II, President
BIOLYNX.COM, INC.
By: /s/ John D. Walker II
-----------------------------------
John D. Walker II, President
3
<PAGE>
Exhibit 2.2
Articles of Merger Between BioLynx, Inc. and
BioLynx.Com, Inc. Filed May 12, 1999
<PAGE>
Exhibit 2.2
ARTICLES OF MERGER
Pursuant to the provisions of Article 5.04 of the Texas Business
Corporation Act, BIOLYNX, INC., a Texas corporation, and BIOLYNX.COM, INC., a
Texas corporation, adopt the following Articles of Merger:
1. The Plan of Merger that has been approved by each of the parties to
the merger in the manner prescribed by their constituent documents and the Texas
Business Corporation Act is set forth in the attached Exhibit A, and
---------
incorporated by reference into these Articles as if fully set forth herein.
2. The name of the surviving corporation is BIOLYNX.COM, INC.
3. For each of the parties to the Plan of Merger, the number of shares
outstanding and the designation and number of outstanding shares of each class
or series of stock that are entitled to vote as a class on the Plan of Merger
are as follows:
Entitled to Vote as a Class or Series
-------------------------------------
Number of Shares Designation of Class
Name of Corporation Outstanding or Series Number of Shares
- ------------------- ----------- --------- ----------------
BioLynx, Inc. 224,900 Common 224,900
BioLynx.Com, Inc. 1,426,000 Common 1,426,000
4. For each party to the merger, the number of shares that voted for and
against the Plan of Merger, and the number of shares of each class or series
that voted for and against the Plan of Merger, are as follows:
Number of Shares Number of Shares
Not Entitled to Vote as a Class Entitled to Vote as a Class
------------------------------- ---------------------------
Voted Voted Class or Voted Voted
Name of Corporation For Against Series For Against
- ------------------- --- ------- ------ --- -------
BioLynx, Inc. -0- -0- Common 224,900 -0-
BioLynx.Com, Inc. -0- -0- Common 1,426,000 -0-
Dated: May 7, 1999.
BIOLYNX, INC.
By /s/ John D. Walker II
-----------------------------------------
John D. Walker II, President
BIOLYNX.COM, INC.
By /s/ John D. Walker II
-----------------------------------------
John D. Walker II, President
<PAGE>
Exhibit 3.1
Articles of Incorporation of BioLynx, Inc.
Filed December 2, 1998
<PAGE>
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
BIOLYNX, INC.
ARTICLE ONE
-----------
The name of the Corporation is BioLynx, Inc.
ARTICLE TWO
-----------
The period of its duration is perpetual.
ARTICLE THREE
-------------
The purpose for which the Corporation is organized is the transaction of
any and all lawful business for which corporations may be incorporated under the
Texas Business Corporation Act.
ARTICLE FOUR
------------
The aggregate number of shares which the Corporation shall have the
authority to issue is 1,000,000 with no par value.
ARTICLE FIVE
------------
No holder of any shares of any class of stock of the Corporation shall, as
such holder, have any preemptive or preferential right to receive, purchase or
subscribe to (1) any unissued or treasury shares of any class of stock (whether
now or hereafter authorized) of the Corporation, (2) any obligations, evidences
of indebtedness, or other securities of the Corporation convertible into or
exchangeable for, or carrying or accompanied by any rights to receive, purchase,
or subscribe to, any such unissued or treasury shares, (3) any right of
subscription to or to receive, or any warrant or option for the purchase of, any
of the foregoing securities, (4) any other securities that may be issued or sold
by the Corporation, other than such (if any) as the Board of Directors of the
Corporation, in its sole and absolute discretion, may determine from time to
time.
ARTICLE SIX
-----------
The Corporation will not commence business until it has received for the
issuance of shares consideration of the value of ONE THOUSAND DOLLARS
($1,000.00), consisting of money, labor done or property actually received.
1
<PAGE>
ARTICLE SEVEN
-------------
The street address of its initial registered office is 601 N.W. Loop 410,
Suite 240, San Antonio, Texas 78216 and the name of its initial registered agent
at such address is Ronald F. Ederer.
ARTICLE EIGHT
-------------
The number of directors constituting the initial Board of Directors is two
(2) and the names and addresses of the persons who are to serve as directors
until the first annual meeting of the shareholders or until their successors are
elected and qualified are:
John D. Walker, II 6391 DeZavala, Suite 221
San Antonio, Texas 78249
Ronald F. Ederer 601 N.W. Loop 410, Suite 240
San Antonio, Texas 78216
ARTICLE NINE
------------
Pursuant to Article 2.01-1, Texas Business Corporation Act, the liability
of members of the Board of Directors shall be limited and the number of the
Board of Directors, officers and Employees shall be indemnified as follows:
(a) No Director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a Director; provided that this provision shall not eliminate or limit
the liability of a Director (i) for any breach of the Director's duty of loyalty
to the Corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Article 2.41 of the Business Corporation Act of the State of Texas,
or (iv) for any transaction from which the Director derived an improper personal
benefit. If the Business Corporation Act of the State of Texas is amended after
approval by the stockholders of this paragraph (a) to authorize corporate action
further limiting or eliminating the personal liability of Directors, then the
liability of a Director shall be limited or eliminated to the fullest extent
permitted by the Business Corporation Act of the State of Texas, as so amended.
No amendment or repeal of this paragraph (a) shall apply to or have any effect
on the liability or alleged liability of any Director or the Corporation for or
with respect to any acts or omissions of such Director occurring prior to such
amendment or repeal.
(b) The corporation shall, to the fullest extent permitted by Texas
law, as in effect from time to time, indemnify all persons who are or were
Directors, Officers and Employees of the Corporation or any wholly owned
subsidiary, and all such Directors, Officers, and Employees who, at the request
of the Corporation, are or were at any time serving any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity. The corporation may also indemnify all other persons to the
fullest extent permitted by Texas Law.
(c) The Corporation shall, to the full extent permitted by the
business Corporation Act of the State of Texas, as amended from time to time,
indemnify all persons whom the Corporation may indemnify pursuant thereto.
ARTICLE TEN
-----------
The name and address of the incorporator of the Corporation is:
Ronald F. Ederer 601 N.W. Loop 410, Suite 240
San Antonio, Texas 78216
2
<PAGE>
ARTICLE ELEVEN
--------------
The shareholders of the corporation shall not be entitled to cumulate their
votes in the election of directors.
IN WITNESS WHEREOF, I have hereunto set my hand this the 1/st/ day of
December, 1998.
/s/ Ronald Ederer
---------------------------------------
Ronald F. Ederer
STATE OF TEXAS (S)
(S)
COUNTY OF BEXAR (S)
I, Teresa Cruz, a Notary Public in and for Bexar County, Texas, do hereby
certify that on this the 1st day of December, 1998, personally appeared before
me Ronald F. Ederer who being by me first duly sworn, declared that he is the
person who signed the foregoing document as incorporator and that the statements
therein contained are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the day and
year first written above.
/s/ Teresa Cruz
---------------------------------------
Notary Public, State of Texas
My Commission expires: 8-11-2001
-----------------
3
<PAGE>
Exhibit 3.2
Articles of Incorporation of BioLynx.Com, Inc.
Filed April 29, 1999
<PAGE>
Exhibit 3.2
ARTICLES OF INCORPORATION
OF
BIOLYNX.COM, INC.
Pursuant to Section 3.01 of the Texas Business Corporation Act (the
"TBCA"), the undersigned, being of the age of 18 years or more and acting as the
incorporator of BioLynx.Com, Inc. (the "Company") under the laws of the State of
Texas, hereby adopts these Articles of Incorporation:
ARTICLE I
Name
The name of the Company is BioLynx.Com, Inc.
ARTICLE II
Business
The purpose of the Company is to transact any and all lawful business for
which corporations may be incorporated under the TBCA.
ARTICLE III
Authorized Capital Stock
1. Authorized Stock. The total number of shares of stock which the
----------------
Company shall have authority to issue is 23,000,000, consisting of 20,000,000
shares of common stock, par value $0.001 per share (the "Common Stock"), and
3,000,000 shares of preferred stock, par value $1.00 per share (the "Preferred
Stock").
2. Preferred Stock. The Preferred Stock may be issued from time to time
---------------
in one or more series. The Board of Directors is hereby authorized to create and
provide for the issuance of shares of the Preferred Stock in series and, by
filing a statement pursuant to Article 2.13 of the TBCA (the "Preferred Stock
Designation"), to establish from time to time the number of shares to be
included in each such series, and to fix the designations, powers, preferences
and rights of the shares of each such series and the qualifications, limitations
or restrictions thereof. The authority of the Board of Directors with respect to
each series shall include, but not be limited to, determination of the
following:
(a) The designation of the series, which may be by distinguishing
number, letter or title.
(b) The number of shares of the series, which number the Board of
Directors may thereafter (except where otherwise provided in the Preferred Stock
Designation) increase or decrease (but not below the number of shares thereof
then outstanding).
(c) Whether dividends, if any, shall be cumulative or noncumulative
and the dividend rate of the series.
(d) The dates at which dividends, if any, shall be payable.
(e) The redemption rights and price or prices, if any, for shares of
the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on, and the preferences, if any, of shares of
the series in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Company.
1
<PAGE>
(h) Whether the shares of the series shall be convertible into shares
of any other class or series, or any other security, of the Company or any other
corporation, and, if so, the specification of such other class or series of such
other security, the conversion price or prices or rate or rates, any adjustments
thereof, the date or dates at which such shares shall be convertible and all
other terms and conditions upon which such conversion may be made.
(i) Restrictions on the issuance of shares of the same series or of
any other class or series.
(j) The voting rights, if any, of the holders of shares of the
series.
(k) Such other powers, preferences and relative, participating,
optional and other special rights, and the qualifications, limitations and
restrictions thereof as the Board of Directors shall determine.
3. Common Stock. The Common Stock shall be subject to the express terms
------------
of the Preferred Stock and any series thereof. Each share of the Common Stock
shall be equal to each other share of the Common Stock. The holders of shares
of the Common Stock shall be entitled to one vote for each such share upon all
questions presented to the shareholders.
4. Voting Rights. Except as may be provided in these Articles of
-------------
Incorporation or in a Preferred Stock Designation, or as may be required by
applicable law, the Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes, and holders of shares of the
Preferred Stock shall not be entitled to receive notice of any meeting of
shareholders at which they are not entitled to vote. At each election for
directors every shareholder entitled to vote at such election shall have the
right to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose election he has
a right to vote. It is expressly prohibited for any shareholder to cumulate his
votes in any election of directors.
5. Denial of Preemptive Rights. No shareholder of the Company shall by
---------------------------
reason of his holding shares of any class have any preemptive or preferential
right to purchase or subscribe to any shares of any class of the Company now or
hereafter to be authorized or any notes, debentures, bonds, or other securities
convertible into or carrying options or warrants to purchase shares of any
class, now or hereafter to be authorized, whether or not the issuance of any
such shares, or such notes, debentures, bonds or other securities would
adversely affect dividend or voting rights of such shareholder, other than such
rights, if any, as the Board of Directors in its discretion may fix; and the
Board of Directors may issue shares of any class of the Company, or any notes,
debentures, bonds, or other securities convertible into or carrying options or
warrants to purchase shares of any class, without offering any such shares of
any class, either in whole or in part, to the existing shareholders of any
class.
ARTICLE IV
Initial Consideration for Issuance of Shares
The Company will not commence business until it has received for the
issuance of its shares consideration of the value of $1,000.00, consisting of
money, labor done, or property actually received.
ARTICLE V
Initial Registered Office
The address of the initial registered office of the Company in the State of
Texas is 5617 Grissom Road, San Antonio, Texas, 78238. The name of its
registered agent at such address is John D. Walker II.
ARTICLE VI
Election of Directors
1. Number. The number of directors constituting the initial Board of
------
Directors is three. The names and addresses of the persons who are to serve as
directors until the first annual meeting of the shareholders, or until their
successors have been elected and qualified are:
2
<PAGE>
Name: Address:
John D. Walker II 5617 Grissom Road
San Antonio, Texas 78238
Patrick E. Tolle 5617 Grissom Road
San Antonio, Texas 78238
Andy Fitz-Wallish 5617 Grissom Road
San Antonio, Texas 78238
The business and affairs of the Company shall be conducted and managed by,
or under the direction of, the Board of Directors. The total number of directors
constituting the entire Board of Directors shall be fixed and may be altered
from time to time by or pursuant to a resolution passed by the Board of
Directors.
2. Classes of Directors. The Board of Directors shall be divided into
--------------------
three classes, Class A, Class B and Class C. Such classes shall be as nearly
equal in number of directors as possible. Each director shall serve for a term
expiring at the third annual meeting following the annual meeting at which such
director was elected; provided, however, that the directors first elected to
Class A shall serve for an initial term expiring at the annual meeting following
the end of the Company's 1999 fiscal year, the directors first elected to Class
B shall serve for an initial term expiring at the second annual meeting next
following the end of the Company's 1999 fiscal year, and the directors first
elected to Class C shall serve for an initial term expiring at the third annual
meeting next following the end of the Company's 1999 fiscal year.
Notwithstanding anything herein contained to the contrary, the persons named in
subparagraph 1 of this Article VI to these Articles of Incorporation shall be
Class C directors. Moreover, except as otherwise provided in these Articles of
Incorporation or any resolution or resolutions of the Board of Directors
designating a series of the Preferred Stock, directors who are elected at an
annual meeting of shareholders, and directors elected in the interim to fill
vacancies and newly created directorships, shall hold office for the term for
which elected and until their successors are elected and qualified or until
their earlier death, resignation or removal. Whenever the holders of any class
or classes of stock or any series thereof shall be entitled to elect one or more
directors pursuant to any resolution or resolutions of the Board of Directors
designating a series of the Preferred Stock, and except as otherwise provided
herein or therein, vacancies and newly created directorships of such class or
classes or series thereof may be filled by a majority of the directors elected
by such class or classes or series thereof then in office, by a sole remaining
director so elected or by the unanimous written consent or the affirmative vote
of a majority of the outstanding shares of such class or classes or series
entitled to elect such director or directors.
3. Vacancies. Except as otherwise provided for herein, newly created
---------
directorships resulting from any increase in the authorized number of directors,
and any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause, may be filled only by the affirmative
vote of a majority of the remaining directors then in office, even though less
than a quorum of the Board of Directors. Any director elected in accordance
with the preceding sentence shall hold office for the remainder of the full term
of the newly created directorship or for the directorship in which the vacancy
occurred, and until such director's successor shall have been duly elected and
qualified, subject to his earlier death, disqualification, resignation or
removal. Subject to the provisions of these Articles of Incorporation, no
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
4. Removal of Directors. Except as otherwise provided in any resolution
--------------------
or resolutions of the Board of Directors designating a series of the Preferred
Stock, any director may be removed from office only by the affirmative vote of
the holders of two-thirds (2/3) or more of the combined voting power of the then
outstanding shares of capital stock of the Company entitled to vote at a meeting
of shareholders called for that purpose, voting together as a single class.
ARTICLE VII
The name and mailing address of the incorporator is as follows:
3
<PAGE>
Name: Address:
----- --------
Norman T. Reynolds 1300 Post Oak Blvd., Suite 2000
Houston, Texas 77056
ARTICLE VIII
Meetings of Shareholders
Meetings of shareholders of the Company (the "Shareholder Meetings") may be
held within or without the State of Texas, as the Bylaws of the Company (the
"Bylaws") may provide. Except as otherwise provided in any resolution or
resolutions of the Board of Directors designating a series of the Preferred
Stock, special Shareholder Meetings may be called only by (a) the President, (b)
the holders of at least 10 percent of all of the shares entitled to vote at the
proposed special meeting, or (c) the Board of Directors pursuant to a resolution
adopted by a majority of the then authorized number of directors of the Company.
Special Shareholder Meetings may not be called by any other person or persons or
in any other manner. Elections of directors need not be by written ballot
unless the Bylaws shall so provide.
ARTICLE IX
Shareholder Consent
Except as otherwise provided in any resolution or resolutions of the Board
of Directors designating a series of the Preferred Stock, no action that is
required or permitted to be taken by the shareholders of the Company at any
annual or special meeting of shareholders may be effected by written consent of
shareholders in lieu of a meeting of shareholders, unless the action to be
effected by written consent of shareholders and the taking of such action by
such written consent have expressly been approved in advance by the Board of
Directors.
ARTICLE X
Limitation of Liability
A director of the Company shall not be personally liable to the Company or
the shareholders for monetary damages for breach of fiduciary duty as a
director; provided, however, that this Article shall not eliminate or limit the
liability of a director: (a) for any breach of the director's duty of loyalty to
the Company or shareholders, (b) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) under
Section 2.41 of the TBCA, or (d) for any transaction from which the director
derived an improper personal benefit.
If the TBCA is amended after the date of filing of these Articles of
Incorporation to authorize corporate action further limiting or eliminating the
personal liability of a director, then the liability of the directors of the
Company shall be limited or eliminated to the fullest extent permitted by the
TBCA, as so amended, or a similar successor provision. Any repeal or
modification of this Article by the shareholders of the Company or otherwise
shall not adversely affect any right or protection of a director of the Company
existing at the time of such repeal or modification.
ARTICLE XI
Indemnification
Any person who at any time shall serve or shall have served, as a director,
officer, employee, or agent of the Company, or of any other enterprise at the
request of the Company, and the heirs, executors, and administrators of such
person, shall be indemnified by the Company against all costs and expenses
(including but not limited to counsel fees, amounts or judgments paid, and
amounts paid in settlement) reasonably incurred in connection with the defense
of any claim, action, suit, or proceeding, whether civil, criminal,
administrative, or other, in which he may be involved by virtue of such person
being or having been such director, officer, employee, or agent, provided,
however, that such indemnity shall not be operative with respect to (a) any
matter as to which such person shall have been finally adjudged in such action,
suit, or proceeding to be liable for negligence or misconduct in the performance
of his duties as such
4
<PAGE>
director, officer, employee, or agent, or (b) any matter settled or compromised,
unless in the opinion of independent counsel selected by or in a manner
determined by the Board of Directors, there is not reasonable ground for such
person being adjudged liable for negligence or misconduct in the performance of
his duties as such director, officer, employee, or agent, or (c) any amount paid
or payable to the Company or such other enterprise. The foregoing
indemnification shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any Bylaw, agreement, vote of shareholders, or
otherwise.
ARTICLE XII
Amendment of Corporate Documents
1. Articles of Incorporation. Whenever any vote of the holders of voting
-------------------------
shares of the capital stock of the Company is required by law to amend, alter,
repeal or rescind any provision of these Articles of Incorporation, then in
addition to any affirmative vote required by applicable law and in addition to
any vote of the holders of any series of the Preferred Stock, as provided in any
resolution or resolutions of the Board of Directors designating a series of the
Preferred Stock, such alteration, amendment, repeal or rescission (a "Change")
of any provision of these Articles of Incorporation must be approved by at least
a majority of the then authorized number of directors and by the affirmative
vote of the holders of at least a majority of the combined voting power of the
then outstanding voting shares of capital stock of the Company, voting together
as a single class; provided, however, that if any such Change relates to
Articles III, VIII, IX, X or to this Article XII, such Change must also be
approved by the affirmative vote of the holders of at least two-thirds (2/3) of
the combined voting power of the then outstanding voting shares of capital stock
of the Company, voting together as a single class; provided further, however,
that the votes required by the immediately preceding clause shall not be
required if such Change has been first approved by at least two-thirds (2/3) of
the then authorized number of directors.
Subject to the provisions hereof, the Company reserves the right at any
time, and from time to time, to amend, alter, repeal or rescind any provision
contained in these Articles of Incorporation in the manner now or hereafter
prescribed by law, and other provisions authorized by the laws of the State of
Texas at the time in force may be added or inserted, in the manner now or
hereafter prescribed by law; and all rights, preferences and privileges of
whatsoever nature conferred upon shareholders, directors or any other persons
whomsoever by and pursuant to these Articles of Incorporation in their present
form or as hereafter amended are granted subject to the rights reserved in this
Article.
2. Bylaws. In addition to any affirmative vote required by law, any
------
Change of the Bylaws may be adopted either (a) by the Board of Directors by the
affirmative vote of at least a majority of the then authorized number of
directors, or (b) by the shareholders by the affirmative vote of the holders of
at least two-thirds (2/3) of the combined voting power of the then outstanding
voting shares of capital stock of the Company, voting together as a single
class.
ARTICLE XIII
Existence
The Company is to have perpetual existence.
IN WITNESS HEREOF, the undersigned has hereunto set his hand this 28/th/
day of April, 1999.
/s/ Norman T. Reynolds
------------------------------------------
NORMAN T. REYNOLDS, Incorporator
5
<PAGE>
THE STATE OF TEXAS (S)
(S)
COUNTY OF HARRIS (S)
BEFORE ME, the undersigned authority, on this day personally appeared
Norman T. Reynolds, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes therein expressed and in the capacity therein stated.
Given under my hand and seal of office this the 28/th/ day of April, 1999.
/s/ Connie G. Hill
-----------------------------------------------
Notary Public in and for the State of Texas
6
<PAGE>
Exhibit 3.3
Amendment to Articles of Incorporation of
BioLynx.Com, Inc. Filed October 7, 1999
<PAGE>
Exhibit 3.3
ARTICLES OF AMENDMENT BY THE SHAREHOLDERS
TO THE ARTICLES OF INCORPORATION
OF
BIOLYNX.COM, INC.
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned Company adopts the following Articles of
Amendment to its Articles of Incorporation:
ARTICLE I
The name of the Company is BioLynx.Com, Inc.
ARTICLE II
The following amendments to the Articles of Incorporation were adopted by
the shareholders of the Company on October 5, 1999:
Article I of the Articles of Incorporation is hereby amended so as to read
as follows:
The name of the Company is BioLynx.com, Inc.
Paragraph 1 of Article III of the Articles of Incorporation is hereby
amended so as to read as follows:
1. Authorized Stock. The total number of shares of stock which the
----------------
Company shall have authority to issue is 70,000,000, consisting of
50,000,000 shares of common stock, par value $0.001 per share (the
"Common Stock"), and 20,000,000 shares of preferred stock, par value
$1.00 per share (the "Preferred Stock").
ARTICLE THREE
The number of shares of the Company outstanding at the time of such
adoption was 4,092,000 and the number of shares entitled to vote thereon was
4,092,000.
ARTICLE FOUR
The number of shares voted for such amendments was 3,497,000 the number of
shares voted against such amendments was zero.
Dated the 6/th/ day of October, 1999.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
-----------------------------------------
John D. Walker II, President
<PAGE>
Exhibit 3.4
BYLAWS OF
BIOLYNX.COM, INC.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I Offices................................................................................................ 1
1.1. Registered Office...................................................................................... 1
1.2. Other Offices.......................................................................................... 1
ARTICLE II Meetings of Shareholders.............................................................................. 1
2.1. Place of Meetings...................................................................................... 1
2.2. Annual Meeting......................................................................................... 1
2.3. Special Meetings....................................................................................... 1
2.4. Notice of Meeting...................................................................................... 1
2.5. Registered Holders of Shares; Closing of Share Transfer Records; and Record Date....................... 2
2.6. Quorum of Shareholders; Adjournment.................................................................... 2
2.7. Voting by Shareholders................................................................................. 3
2.8. Business to be Conducted at Annual or Special Shareholder Meetings..................................... 4
2.9. Proxies................................................................................................ 5
2.10. Approval or Ratification of Acts or Contracts by Shareholders.......................................... 5
2.11. Inspectors of Election................................................................................. 5
ARTICLE III Directors............................................................................................ 6
3.1. Powers, Number, Classification and Tenure.............................................................. 6
3.2. Qualifications......................................................................................... 6
3.3. Nomination of Directors................................................................................ 6
3.4. Place of Meeting; Order of Business.................................................................... 7
3.5. Regular Meetings....................................................................................... 7
3.6. Special Meetings....................................................................................... 8
3.7. Attendance at and Notice of Meetings................................................................... 8
3.8. Quorum of and Action by Directors...................................................................... 8
3.9. Board and Committee Action Without a Meeting........................................................... 8
3.10. Board and Committee Telephone Meetings................................................................. 8
3.11. Compensation........................................................................................... 8
3.12. Removal................................................................................................ 8
3.13. Committees of the Board of Directors................................................................... 9
ARTICLE IV Officers.............................................................................................. 11
4.1. Designation............................................................................................ 11
4.2. Chairman of the Board.................................................................................. 11
4.3. President.............................................................................................. 11
4.4. Chief Operating Officer................................................................................ 12
4.5. Vice President......................................................................................... 12
4.6. Secretary.............................................................................................. 12
4.7. Treasurer.............................................................................................. 12
4.8. Controller............................................................................................. 13
4.9. Assistant Secretaries.................................................................................. 13
4.10. Assistant Treasurers................................................................................... 13
4.11. Assistant Controllers.................................................................................. 13
4.12. Other Officers......................................................................................... 13
4.13. Vacancies.............................................................................................. 14
4.14. Removal................................................................................................ 14
4.15. Action with Respect to Securities of Other Corporations................................................ 14
ARTICLE V Capital Stock.......................................................................................... 14
5.1. Certificates for Shares................................................................................ 14
5.2. Multiple Classes of Stock.............................................................................. 14
5.3. Transfer of Shares..................................................................................... 15
5.4. Ownership of Shares.................................................................................... 15
5.5. Regulations Regarding Certificates..................................................................... 15
5.6. Lost or Destroyed Certificates......................................................................... 15
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI Indemnification....................................................................................... 15
6.1. General................................................................................................ 15
6.2. Expenses............................................................................................... 15
6.3. Advances............................................................................................... 16
6.4. Request for Indemnification............................................................................ 16
6.5. Nonexclusivity of Rights............................................................................... 16
6.6. Insurance and Subrogation.............................................................................. 16
6.7. Severability........................................................................................... 17
6.8. Certain Actions Where Indemnification Is Not Provided.................................................. 17
6.9. Definitions............................................................................................ 17
6.10. Notices................................................................................................ 18
6.11. Contractual Rights..................................................................................... 18
6.12. Change in Governing Law................................................................................ 18
ARTICLE VII Miscellaneous Provisions............................................................................. 18
7.1. Bylaw Amendments....................................................................................... 18
7.2. Books and Records...................................................................................... 18
7.3. Notices; Waiver of Notice.............................................................................. 19
7.4. Resignations........................................................................................... 19
7.5. Seal................................................................................................... 19
7.6. Fiscal Year............................................................................................ 19
7.7. Facsimile Signatures................................................................................... 19
7.8. Reliance upon Books, Reports and Records............................................................... 19
ARTICLE VIII Adoption of Initial Bylaws.......................................................................... 19
8.1. Initial Adoption....................................................................................... 19
</TABLE>
-ii-
<PAGE>
BYLAWS OF
BIOLYNX.COM, INC.
ARTICLE I
Offices
1.1. Registered Office. The registered office of BioLynx.Com, Inc. (the
-----------------
"Company") required by Section 2.09 of the Texas Business Corporation Act or any
successor statute (the "TBCA") to be maintained in the State of Texas shall be
the registered office named in the Articles of Incorporation of the Company, as
it may be amended or restated in accordance with the TBCA from time to time (the
"Articles of Incorporation"), or such other office as may be designated from
time to time by the Board of Directors of the Company (the "Board of Directors")
in the manner provided by applicable law.
1.2. Other Offices. The Company may also have offices at such other places
-------------
both within and without the State of Texas as the Board of Directors may
determine from time to time or as the business of the Company may require.
ARTICLE II
Meetings of Shareholders
2.1. Place of Meetings. Meetings of shareholders shall be held at such
-----------------
place within or without the State of Texas as may be designated by the Board of
Directors or the officer calling the meeting, or, in the absence of such
designation, at the registered office of the Company in the State of Texas.
2.2. Annual Meeting. An annual meeting of the shareholders, for the
--------------
election of directors to succeed those whose terms expire or to fill vacancies
and for the transaction of such other business as may properly come before the
meeting, shall be held on such date and at such time as the Board of Directors
shall fix and set forth in the notice of the meeting, which date shall be within
13 months subsequent to the last annual meeting of shareholders. At the annual
meeting of the shareholders, only such business shall be conducted as shall have
been properly brought before the annual meeting as set forth in Paragraph 2.8
hereof. Failure to hold the annual meeting at the designated time shall not
work a dissolution of the Company.
2.3. Special Meetings. Special meetings of the shareholders may be called
----------------
at any time by those persons set forth in the Articles of Incorporation. Upon
written request of any person or persons who have duly called a special meeting,
it shall be the duty of the Secretary to fix the date of the meeting to be held
not less than 10 nor more than 60 days after the receipt of the request and to
give due notice thereof. If the Secretary shall neglect or refuse to fix the
date of the meeting and give notice thereof, the person or persons calling the
meeting may do so.
2.4. Notice of Meeting. Written or printed notice of all meetings stating
-----------------
the place, day and hour of the meeting and, in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered not
less than 10 nor more than 60 days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board or
Secretary, to each shareholder entitled to vote at such meeting. If mailed,
such notice shall be deemed to be delivered to a shareholder when deposited in
the United States mail addressed to such shareholder at such shareholder's
address as it appears on the stock transfer records of the Company, with postage
thereon prepaid.
2.5. Registered Holders of Shares; Closing of Share Transfer Records; and
--------------------------------------------------------------------
Record Date.
- -----------
(a) Registered Holders as Owners. Unless otherwise provided under
----------------------------
Texas law, the Company may regard the person in whose name any shares issued by
the Company are registered in the stock transfer records of the Company at any
particular time (including, without limitation, as of a record date fixed
pursuant to subparagraph (b) of this Paragraph 2.5) as the owner of those shares
at that time for purposes of voting those shares, receiving distributions
thereon or notices in respect thereof, transferring those shares, exercising
rights of dissent with respect to those shares, entering into agreements with
respect to those shares, or giving proxies with respect to those shares; and
neither the Company nor any of its officers, directors, employees or agents
shall be liable for regarding that person as the owner of those shares at that
time for those purposes, regardless of whether that person possesses a
certificate for those shares.
1
<PAGE>
(b) Record Date. For the purpose of determining shareholders entitled
-----------
to notice of or to vote at any meeting of shareholders or any adjournment
thereof, or entitled to receive a distribution by the Company (other than a
distribution involving a purchase or redemption by the Company of any of its own
shares) or a share dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors may fix in advance a date
as the record date for any such determination of shareholders, such date in any
case to be not more than 60 days and, in the case of a meeting of shareholders,
not less than 10 days, prior to the date on which the particular action
requiring such determination of shareholders is to be taken. The Board of
Directors shall not close the books of the Company against transfers of shares
during the whole or any part of such period.
If the Board of Directors does not fix a record date for any meeting of the
shareholders, the record date for determining shareholders entitled to notice of
or to vote at such meeting shall be at the close of business on the day next
preceding the day on which notice is given, or, if in accordance with Paragraph
7.3 of these Bylaws notice is waived, at the close of business on the day next
preceding the day on which the meeting is held.
2.6. Quorum of Shareholders; Adjournment. Unless otherwise provided in the
-----------------------------------
Articles of Incorporation, a majority of the outstanding shares of capital stock
of the Company entitled to vote, present in person or represented by proxy,
shall constitute a quorum at any meeting of the shareholders, and the
shareholders present at any duly convened meeting may continue to do business
until adjournment notwithstanding any withdrawal from the meeting of holders of
shares counted in determining the existence of a quorum. Unless otherwise
provided in the Articles of Incorporation or these Bylaws, any meeting of the
shareholders may be adjourned from time to time by the chairman of the meeting
or the holders of a majority of the issued and outstanding stock, present in
person or represented by proxy, whether or not a quorum is present, without
notice other than by announcement at the meeting at which such adjournment is
taken, and at any such adjourned meeting at which a quorum shall be present any
action may be taken that could have been taken at the meeting originally called;
provided that if the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each shareholder of record entitled to
vote at the adjourned meeting.
2.7. Voting by Shareholders.
----------------------
(a) Voting on Matters Other than the Election of Directors. With
------------------------------------------------------
respect to any matters as to which no other voting requirement is specified by
the TBCA, the Articles of Incorporation or these Bylaws, the affirmative vote
required for shareholder action shall be that of a majority of the shares
present in person or represented by proxy at the meeting (as counted for
purposes of determining the existence of a quorum at the meeting). In the case
of a matter submitted for a vote of the shareholders as to which a shareholder
approval requirement is applicable under the shareholder approval policy of any
stock exchange or quotation system on which the capital stock of the Company is
traded or quoted, the requirements under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any provision of the Internal Revenue Code, in
each case for which no higher voting requirement is specified by the TBCA, the
Articles of Incorporation or these Bylaws, the vote required for approval shall
be the requisite vote specified in such shareholder approval policy, the
Exchange Act or Internal Revenue Code provision, as the case may be (or the
highest such requirement if more than one is applicable). For the approval of
the appointment of independent public accountants (if submitted for a vote of
the shareholders), the vote required for approval shall be a majority of the
votes cast on the matter.
(b) Voting in the Election of Directors. Unless otherwise provided
-----------------------------------
in the Articles of Incorporation or these Bylaws in accordance with the TBCA,
directors shall be elected by a plurality of the votes cast by the holders of
outstanding shares of capital stock of the Company entitled to vote in the
election of directors at a meeting of shareholders at which a quorum is present.
(c) Consents in Lieu of Meeting. Pursuant to Article IX of the
---------------------------
Articles of Incorporation, no action that is required or permitted to be taken
by the shareholders of the Company at any annual or special meeting of
shareholders may be effected by written consent of shareholders in lieu of a
meeting of shareholders, unless, subject to certain exceptions contained in the
Articles of Incorporation, the action to be effected by written consent of
shareholders and the taking of such action by such written consent have
expressly been approved in advance by the Board of Directors.
2
<PAGE>
(d) Other. The Board of Directors, in its discretion, or the officer
-----
of the Company presiding at a meeting of shareholders of the Company, in his
discretion, may require that any votes cast at such meeting shall be cast by
written ballot.
2.8. Business to be Conducted at Annual or Special Shareholder Meetings.
------------------------------------------------------------------
(a) At an annual meeting of shareholders, only such business shall be
conducted, and only such proposals shall be acted upon, as shall have been
brought before the annual meeting (i) by or at the direction of the Board of
Directors, or (ii) by any shareholder of the Company who is a shareholder of
record at the time of the giving of such shareholder's notice provided for in
this Paragraph 2.8, who shall be entitled to vote at such meeting and who
complies with the requirements of this Paragraph 2.8 and as shall otherwise be
proper subjects for shareholder action and shall be properly introduced at the
meeting. For a proposal to be properly brought before an annual meeting by a
shareholder, in addition to any other applicable requirements, the shareholder
must have given timely advance notice thereof in writing to the Secretary. To
be timely, a shareholder's notice must be delivered to, or mailed and received
at, the principal executive offices of the Company not later than the 90th day
prior to the first anniversary of the preceding year's annual meeting; provided,
however, that with respect to the annual meeting of shareholders to be held in
2000 or in the event that the date of the annual meeting is more than 30 days
before or more than 60 days after such anniversary date, notice by the
shareholder to be timely must be so delivered not later than the close of
business on the later of the 90th day prior to such annual meeting or the 10th
day following the day on which public disclosure of the date of such meeting is
first made by the Company. Any such shareholder's notice to the Secretary shall
set forth as to each matter the shareholder proposes to bring before the annual
meeting (1) a description of the proposal desired to be brought before the
annual meeting and the reasons for conducting such business at the annual
meeting, (2) the name and address, as they appear on the Company's books, of the
shareholder proposing such business and any other shareholders known by such
shareholder to be supporting such proposal, (3) the class and number of shares
of the Company's stock which are beneficially owned by the shareholder on the
date of such notice, (4) any financial interest of the shareholder in such
proposal, and (5) a representation that the shareholder intends to appear in
person or by proxy at the meeting to bring the proposed business before the
annual meeting. The presiding officer of the annual meeting shall determine
whether the requirements of this subparagraph (a) have been met with respect to
any shareholder proposal. If the presiding officer determines that a
shareholder proposal was not made in accordance with the terms of this
subparagraph (a), he shall so declare at the meeting and any such proposal shall
not be acted upon at the meeting. At a special meeting of shareholders, only
such business shall be acted upon as shall have been set forth in the notice
relating to the meeting required by Paragraph 2.4 hereof or as shall constitute
matters incident to the conduct of the meeting as the presiding officer of the
meeting shall determine to be appropriate. For this subparagraph (a), public
disclosure shall be deemed to first be given to shareholders when disclosure of
such date of the meeting of shareholders is first made in a press release
reported by the Dow Jones News Services, Associated Press or comparable national
news service, or in a document publicly filed by the Company with the Securities
and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange
Act.
(b) Notwithstanding the foregoing provisions of this Paragraph 2.8, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Paragraph 2.8.
2.9. Proxies. Each shareholder entitled to vote at a meeting of
-------
shareholders may authorize another person or persons to act for him by proxy.
Proxies for use at any meeting of shareholders shall be filed with the
Secretary, or such other officer as the Board of Directors may from time to time
determine by resolution, before or at the time of the meeting. All proxies
shall be received and taken charge of and all ballots shall be received and
canvassed by the secretary of the meeting who shall decide all questions
relating to the qualification of voters, the validity of the proxies, and the
acceptance or rejection of votes, unless an inspector or inspectors shall have
been appointed by the chairman of the meeting, in which event such inspector or
inspectors shall decide all such questions.
2.10. Approval or Ratification of Acts or Contracts by Shareholders. The
-------------------------------------------------------------
Board of Directors in its discretion may submit any act or contract for approval
or ratification at any annual meeting of the shareholders, or at any special
meeting of the shareholders called for the purpose of considering any such act
or contract, and any act or contract that shall be approved or be ratified by
the vote of the shareholders holding a majority of the issued and outstanding
shares of stock of the Company entitled to vote and present in person or by
proxy at such meeting (provided
3
<PAGE>
that a quorum is present), shall be as valid and as binding upon the Company and
upon all the shareholders as if it has been approved or ratified by every
shareholder of the Company.
2.11. Inspectors of Election. The Company shall, in advance of any meeting
----------------------
of shareholders, appoint one or more inspectors of election, who may be
employees of the Company, to act at the meeting or any adjournment thereof and
to make a written report thereof. The Company may designate one or more persons
as alternate inspectors to replace any inspector who fails to act. If no
inspector so appointed or designated is able to act at a meeting of
shareholders, the chairman or the person presiding at the meeting shall appoint
one or more inspectors to act at the meeting. Each inspector, before entering
upon the discharge of his duties, shall take and sign an oath to execute
faithfully the duties of inspector with strict impartiality and according to the
best of his ability.
The inspector or inspectors so appointed or designated shall: (a) ascertain
the number of shares of capital stock of the Company outstanding and the voting
power of each such share; (b) determine the shares of capital stock of the
Company represented at the meeting and the validity of proxies and ballots; (c)
count all votes and ballots; (d) determine and retain for a reasonable period a
record of the disposition of any challenges made to any determination by the
inspectors; and (e) certify their determination of the number of shares of the
capital stock of the Company represented at the meeting and such inspectors'
count of all votes and ballots. Such certification and report shall specify
such other information as may be required by law. In determining the validity
and counting of proxies and ballots cast at any meeting of shareholders of the
Company, the inspectors may consider such information as is permitted by
applicable law. No person who is a candidate for an office at an election may
serve as an inspector at such election.
ARTICLE III
Directors
3.1. Powers, Number, Classification and Tenure.
-----------------------------------------
(a) The powers of the Company shall be exercised by or under the
authority of, and the business and affairs of the Company shall be managed under
the direction of, the Board of Directors. The Board of Directors shall be
divided into three classes as provided in the Articles of Incorporation. Each
director shall hold office for the full term for which such director is elected
and until such director's successor shall have been duly elected and qualified
or until his earlier death or resignation or removal in accordance with the
Articles of Incorporation or these Bylaws.
(b) Within the limits specified in the Articles of Incorporation, the
number of directors that shall constitute the whole Board of Directors shall be
fixed by, and may be increased or decreased from time to time by, the
affirmative vote of a majority of the members at any time constituting the Board
of Directors. Except as provided in the Articles of Incorporation, newly
created directorships resulting from any increase in the number of directors and
any vacancies on the Board of Directors resulting from death, resignation,
disqualification, removal or other cause shall be filled by the affirmative vote
of a majority of the remaining directors then in office, even though less than a
quorum of the Board of Directors. Any director elected in accordance with the
preceding sentence shall hold office for the remainder of the full term of the
class of directors in which the new directorship was created or the vacancy
occurred and until such director's successor shall have been elected and
qualified or until his earlier death, resignation or removal. No decrease in
the number of directors constituting the Board of Directors shall shorten the
term of any incumbent director.
3.2. Qualifications. Directors need not be residents of the State of Texas
--------------
or shareholders of the Company.
3.3. Nomination of Directors. Subject to such rights of the holders of one
-----------------------
or more outstanding series of the Preferred Stock of the Company to elect one or
more directors in case of arrearages in the payment of dividends or other
defaults as shall be prescribed in the Articles of Incorporation or in the
resolutions of the Board of Directors providing for the establishment of any
such series, only persons who are nominated in accordance with the procedures
set forth in this Paragraph 3.3 shall be eligible for election as, and to serve
as, directors. Nominations of persons for election to the Board of Directors
may be made at a meeting of the shareholders at which directors are to be
elected (a) by or at the direction of the Board of Directors, or (b) by any
shareholder of the Company who is a shareholder of record at the time of the
giving of such shareholder's notice provided for in this Paragraph 3.3, who
shall be entitled to vote at such meeting in the election of directors and who
complies with the requirements of this Paragraph 3.3. Such nominations, other
than those made by or at the direction of the Board of Directors, shall be
preceded by timely advance notice in
4
<PAGE>
writing to the Secretary. To be timely, a shareholder's notice shall be
delivered to, or mailed and received at, the principal executive offices of the
Company (1) with respect to an election to be held at the annual meeting of the
shareholders of the Company, not later than the close of business on the 90th
day prior to the first anniversary of the preceding year's annual meeting;
provided, however, that with respect to the annual meeting of shareholders to be
held in 2000 or in the event that the date of the annual meeting is more than 30
days before or more than 60 days after such anniversary date, notice by the
shareholder to be timely must be so delivered not later than the close of
business on the later of the 90th day prior to such annual meeting or the 10th
day following the day on which public announcement of the date of such meeting
is first made by the Company; and (2) with respect to an election to be held at
a special meeting of shareholders of the Company for the election of directors
not later than the close of business on the 10th day following the day on which
notice of the date of the special meeting was mailed to shareholders of the
Company as provided in Paragraph 2.4 hereof or public disclosure of the date of
the special meeting was made, whichever first occurs. Any such shareholder's
notice to the Secretary shall set forth (x) as to each person whom the
shareholder proposes to nominate for election or re-election as a director, (i)
the name, age, business address and residence address of such person, (ii) the
principal occupation or employment of such person, (iii) the number of shares of
each class of capital stock of the Company beneficially owned by such person,
(iv) the written consent of such person to having such person's name placed in
nomination at the meeting and to serve as a director if elected, and (v) any
other information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required,
pursuant to Regulation 14A under the Exchange Act, and (y) as to the shareholder
giving the notice, (i) the name and address, as they appear on the Company's
books, of such shareholder, and (ii) the number of shares of each class of
voting stock of the Company which are then beneficially owned by such
shareholder. The presiding officer of the meeting of shareholders shall
determine whether the requirements of this Paragraph 3.3 have been met with
respect to any nomination or intended nomination. If the presiding officer
determines that any nomination was not made in accordance with the requirements
of this Paragraph 3.3, he shall so declare at the meeting and the defective
nomination shall be disregarded. Notwithstanding the foregoing provisions of
this Paragraph 3.3, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Paragraph 3.3. For this Paragraph 3.3,
public disclosure shall be deemed to first be given to shareholders when
disclosure of such date of the meeting of shareholders is first made in a press
release reported by the Dow Jones News Services, Associated Press or comparable
national news service, or in a document publicly filed by the Company with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Exchange Act.
3.4. Place of Meeting; Order of Business. Except as otherwise provided by
-----------------------------------
law, meetings of the Board of Directors, regular or special, may be held either
within or without the State of Texas, at whatever place is specified by the
person or persons calling the meeting. In the absence of specific designation,
the meetings shall be held at the principal office of the Company. At all
meetings of the Board of Directors, business shall be transacted in such order
as shall from time to time be determined by the Chairman of the Board, or in his
absence by the President, or by resolution of the Board of Directors.
3.5. Regular Meetings. Regular meetings of the Board of Directors shall be
----------------
held, in each case, at such hour and on such day as may be fixed by resolution
of the Board of Directors, without further notice of such meetings. The time or
place of holding regular meetings of the Board of Directors may be changed by
the Chairman of the Board by giving written notice thereof as provided in
Paragraph 3.7 hereof.
3.6. Special Meetings. Special meetings of the Board of Directors shall be
----------------
held, whenever called by the Chairman of the Board or by resolution adopted by
the Board of Directors, in each case, at such hour and on such day as may be
stated in the notice of the meeting.
3.7. Attendance at and Notice of Meetings. Written notice of the time and
------------------------------------
place of, and general nature of the business to be transacted at, all special
meetings of the Board of Directors, and written notice of any change in the time
or place of holding the regular meetings of the Board of Directors, shall be
given to each director personally or by mail or by telegraph, telecopier or
similar communication at least one day before the day of the meeting; provided,
however, that notice of any meeting need not be given to any director if waived
by him in writing, or if he shall be present at such meeting. Participation in
a meeting of the Board of Directors shall constitute presence in person at such
meeting, except where a person participates in the meeting for the express
purpose of objecting to the transaction of any business on the ground that the
meeting is not lawfully called or convened.
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3.8. Quorum of and Action by Directors. A majority of the directors in
---------------------------------
office shall constitute a quorum of the Board of Directors for the transaction
of business; but a lesser number may adjourn from day to day until a quorum is
present. Except as otherwise provided by law or in these Bylaws, all questions
shall be decided by the vote of a majority of the directors present.
3.9. Board and Committee Action Without a Meeting. Unless otherwise
--------------------------------------------
restricted by the Articles of Incorporation or these Bylaws, any action required
or permitted to be taken at a meeting of the Board of Directors or any committee
thereof may be taken without a meeting if a consent in writing, setting forth
the action so taken, is signed by all the members of the Board of Directors or
such committee, as the case may be, and shall be filed with the Secretary.
3.10. Board and Committee Telephone Meetings. Subject to the provisions
--------------------------------------
required or permitted by the TBCA for notice of meetings, unless otherwise
restricted by the Articles of Incorporation or these Bylaws, members of the
Board of Directors, or members of any committee designated by the Board of
Directors, may participate in and hold a meeting of such Board of Directors or
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and participation in a meeting pursuant to this Paragraph 3.10 shall constitute
presence in person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.
3.11. Compensation. Directors shall receive such compensation for their
------------
services as shall be determined by the Board of Directors.
3.12. Removal. Directors may be removed from office in the matter set forth
-------
in the Articles of Incorporation.
3.13. Committees of the Board of Directors.
------------------------------------
(a) The Board of Directors, by resolution adopted by a majority of
the full Board of Directors, may designate from among its members one or more
committees (in addition to those listed below), each of which shall be comprised
of one or more of its members, and may designate one or more of its members as
alternate members of any committee, who may, subject to any limitations by the
Board of Directors, replace absent or disqualified members at any meeting of
that committee. Any such committee, to the extent provided in such resolution or
in the Articles of Incorporation or these Bylaws, shall have and may exercise
all of the authority of the Board of Directors to the extent permitted by the
TBCA, including, without limitation, the power and authority to declare a
dividend, to authorize the issuance of stock or to adopt a plan of merger
pursuant to Section 5.12 of the TBCA.. Any such committee may authorize the seal
of the Company to be affixed to all papers which may require it. In addition to
the above, such committee or committees shall have such other powers and
limitations of authority as may be determined from time to time by resolution
adopted by the Board of Directors.
(b) The Board of Directors shall have the power at any time to change
the membership of any such committee and to fill vacancies in it. A majority of
the number of members of any such committee shall constitute a quorum for the
transaction of business unless a greater number is required by a resolution
adopted by the Board of Directors. The act of the majority of the members of a
committee present at any meeting at which a quorum is present shall be the act
of such committee, unless the act of a greater number is required by a
resolution adopted by the Board of Directors. Each such committee may elect a
chairman and appoint such subcommittees and assistants as it may deem necessary.
Except as otherwise provided by the Board of Directors, meetings of any
committee shall be conducted in accordance with Paragraphs 3.5, 3.6, 3.7, 3.8,
3.9, 3.10 and 7.3 hereof. In the absence or disqualification of a member of a
committee, the member or members present at any meeting and not disqualified
from voting, whether or not constituting a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
the absent or disqualified member. Any member of any such committee elected or
appointed by the Board of Directors may be removed by the Board of Directors
whenever in its judgment the best interests of the Company will be served
thereby, but such removal shall be without prejudice to the contract rights, if
any, of the person so removed. Election or appointment of a member of a
committee shall not of itself create contract rights.
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(c) Any action taken by any committee of the Board of Directors shall
promptly be recorded in the minutes and filed with the Secretary.
(d) Notwithstanding anything herein contained to the contrary, the
composition and powers of any committee of the Board of Directors are expressly
subject to the requirements of any stock exchange or quotation system on which
the capital stock of the Company is traded or quoted, or the Exchange Act.
(e) Executive Committee. The Board of Directors may create an
-------------------
Executive Committee of the Board of Directors, which committee shall have and
may exercise all the powers and authority of the Board of Directors between
regular or special meetings of the Board in the management of the business and
affairs of the Company, except to the extent limited by Texas law. Without
limiting the generality of the foregoing, the Executive Committee shall have the
power and authority to (i) declare dividends on any class of capital stock of
the Company, (ii) authorize the issuance of capital stock of the Company, (iii)
adopt plans of merger pursuant to Section 2.13 of the TBCA, and (iv) in
reference to amending the Articles of Incorporation, to the extent authorized in
the resolution or resolutions providing for the issuance of shares of stock
adopted by the Board of Directors as provided in Section 2.13 of the TBCA, fix
the designations and any of the preferences or rights of such shares relating to
dividends, redemptions, dissolution, any distribution of assets of the Company
or the conversion into, or the exchange of such shares for, shares of any other
class or classes or any other series of the same or any other class or classes
of stock of the Company or fix the number of shares of any series of stock or
authorize the increase or decrease of the shares of any series.
(f) Audit Committee. The Board of Directors may create an Audit
---------------
Committee of the Board of Directors whose members shall consist solely of
directors who are not employees or affiliates of the Company and have no
relationship with the Company that would, in the judgment of the Board of
Directors, interfere with their exercise of independent judgment as a member of
such Committee. The Audit Committee shall have and may exercise the power and
authority to recommend to the Board of Directors the accounting firm to be
selected by the Board or to be recommended by it for shareholder approval, as
independent auditor of the financial statements of the Company and its
subsidiaries, and to act on behalf of the Board in meeting and reviewing with
the independent auditors, the chief accounting officer, the chief internal
auditor, if any, and the appropriate corporate officers, matters relating to
corporate financial reporting and accounting procedures and policies, adequacy
of financial, accounting and operating controls and the scope of the respective
audits of the independent auditors and the internal auditor, if any. The Audit
Committee shall also review the results of such audits with the respective
auditors and shall report the results of those reviews to the Board of
Directors. The Audit Committee shall submit to the Board of Directors any
recommendations it may have from time to time with respect to financial
reporting and accounting practices and policies and financial, accounting and
operational controls and safeguards. The Audit Committee may submit to the
Compensation Committee any recommendations it may have with respect to the
compensation of the chief accounting officer and the chief internal auditor, if
any. The Board of Directors shall, by resolution adopted by a majority of the
Board of Directors, designate not less than two of its qualifying members from
time to time to constitute members of the Audit Committee.
(g) Nominating Committee. The Board of Directors may create a
--------------------
Nominating Committee of the Board of Directors, which committee shall have and
may exercise the power and authority to recommend to the Board of Directors
prior to each annual meeting of the shareholders of the Company: (i) the
appropriate size and composition of the Board of Directors; and (ii) nominees:
(1) for election to the Board of Directors for whom the Company should solicit
proxies; (2) to serve as proxies in connection with the annual shareholders'
meeting; and (3) for election to all committees of the Board of Directors other
than the Nominating Committee. The Board of Directors shall, by resolution
adopted by a majority of the Board, designate one or more of its members from
time to time to constitute members of the Nominating Committee.
(h) Compensation Committee. The Board of Directors may create a
----------------------
Compensation Committee of the Board of Directors, whose members shall consist
solely of directors who are not employees or affiliates of the Company and have
no relationship with the Company that would, in the judgment of the Board of
Directors, interfere with their exercise of independent judgment as a member of
such committee. The Compensation Committee shall have and may exercise all the
power and authority to (i) establish a general compensation policy for officers
and employees of the Company, including to establish and at least annually
review officers' salaries and levels of officers' participation in the benefit
plans of the Company, (ii) prepare any reports that may be required by the
regulations of the Securities and Exchange Commission or otherwise relating to
officer compensation, (iii) approve any increases in directors' fees, and
7
<PAGE>
(iv) exercise all other powers of the Board of Directors with respect to matters
involving the compensation of employees and the employee benefits of the Company
as shall be delegated by the Board of Directors to the Compensation Committee
from time to time. Without limiting the generality of the foregoing, the
Compensation Committee shall have the power and authority to authorize the
issuance of capital stock of the Company pursuant to any compensation or benefit
plan or arrangement adopted or entered into by the Company. The Board of
Directors shall, by resolution adopted by a majority of the Board, designate two
or more of its qualifying members from time to time to constitute members of the
Compensation Committee.
ARTICLE IV
Officers
4.1. Designation. The officers of the Company shall consist of a Chairman
-----------
of the Board, President, Chief Operating Officer, Secretary, Treasurer,
Controller and such Executive, Senior or other Vice Presidents, Assistant
Secretaries, Assistant Treasurers, Assistant Controllers and other officers as
may be elected or appointed by the Board of Directors from time to time. Any
number of offices may be held by the same person.
4.2. Chairman of the Board. The Chairman of the Board shall preside at all
---------------------
meetings of the shareholders and of the Board of Directors. Except where by law
the signature of the President is required, the Chairman of the Board shall
possess the same power as the President to sign all contracts, certificates and
other instruments of the Company which may be authorized by the Board of
Directors. The Chairman of the Board shall also perform such other duties and
may exercise such other powers as from time to time may be assigned to him by
these Bylaws or by the Board of Directors. In the absence or incapacity to act
of the President, the Chairman of the Board shall serve as acting President, and
when so acting, shall have all the powers of and be subject to the restrictions
of such office.
4.3. President. The President shall be the Chief Executive Officer of the
---------
Company and shall have general supervision and control of the business, affairs
and properties of the Company and its general officers, and shall see that all
orders and resolutions of the Board of Directors are carried into effect. He
shall have the power to appoint and remove all subordinate officers, agents and
employees, except those elected or appointed by the Board of Directors, and
shall execute all bonds, mortgages, contracts and other instruments of the
Company requiring a seal, under the seal of the Company, except where required
or permitted by law to be otherwise signed and executed and except that the
other officers of the Company may sign and execute documents when so authorized
by these Bylaws, the Board of Directors or the President. The President shall
also perform such other duties and may exercise such other powers as from time
to time may be assigned to him by these Bylaws or by the Board of Directors. In
the incapacity to act of the Chairman of the Board, the President shall serve as
acting Chairman of the Board, and when so acting, shall have all the powers of
and be subject to the restrictions of such office.
4.4. Chief Operating Officer. The Chief Operating Officer, if there is
-----------------------
one, shall have general charge and supervision of the day to day operations of
the Company (subject to the direction of the President and the Board of
Directors), and, in general, shall perform such other duties as are incident to
the office of a chief operating officer of a corporation, including those duties
customarily performed by persons occupying such office, and shall perform such
other duties as, from time to time, may be assigned to him by the Board of
Directors or the President.
4.5. Vice President. The Board of Directors may appoint such Vice
--------------
Presidents as may be recommended by the President or as they deem necessary or
appropriate. Vice Presidents may be designated as Senior Vice Presidents,
Executive Vice Presidents or some other designation as the Board of Directors
deems appropriate (each a "Vice President"). Each Vice President shall perform
such duties as the Board of Directors may from time to time prescribe and have
such other powers as the President may from time to time prescribe.
4.6. Secretary. The Secretary shall attend the meetings of the Board of
---------
Directors and all meetings of shareholders and record the proceeding thereat in
a book or books to be kept for that purpose; the Secretary shall also perform
like duties for the standing committees when required. The Secretary shall
give, or cause to be given, notice of all meetings of the shareholders and
special meetings of the Board of Directors, and shall perform such other duties
as may be prescribed by the Board of Directors or President, under whose
supervision he shall be. If the Secretary shall be unable or shall refuse to
cause to be given notice of all meetings of the shareholders and special
meetings of the Board of Directors, and if there be no Assistant Secretary, then
the Chairman of the Board may choose another officer to cause
8
<PAGE>
such notice to be given. The Secretary shall have custody of the seal of the
Company and the Secretary or any Assistant Secretary, if there be one, shall
have authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Company and to
attest the affixing by his signature. The Secretary shall see that all books,
reports, statements, certificates and other documents and records required by
law to be kept or filed are properly kept or filed, as the case may be.
4.7. Treasurer. The Treasurer, if there is one, shall have the custody of
---------
the corporate funds and securities and shall keep full and accurate accounts of
receipt and disbursements in books belonging to the Company and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the Company as may be ordered by the
Board of Directors, taking proper vouchers for such disbursements, and shall
render to the Chairman of the Board and the Board of Directors, at its regular
meeting, or when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the Company. If
required by the Board of Directors, the Treasurer shall give the Company a bond
in such sum and with such surety or sureties as shall be satisfactory to the
Board of Directors for the faithful performance of the duties of his office and
for the restoration to the Company, in case of his death, resignation,
retirement or removal from office, of all books papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Company.
4.8. Controller. The Controller, if there is one, shall be the chief
----------
accounting officer of the Company, shall maintain records of all assets,
liabilities, and transactions of the Company and shall be responsible for the
design, installation and maintenance of accounting and cost control systems and
procedures for the Company and shall perform such other duties and have such
other powers as from time to time may be assigned to him by the Board of
Directors, the Audit Committee or the President.
4.9. Assistant Secretaries. Except as may be otherwise provided in these
---------------------
Bylaws, Assistant Secretaries, if there be any, shall perform such duties and
have such powers as from time to time may be assigned to them by the Board of
Directors, the President, any Vice President, or the Secretary, and in the
absence of the Secretary or in the event of his disability or refusal to act,
shall perform the duties of the Secretary, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Secretary.
4.10. Assistant Treasurers. Assistant Treasurers, if there be any, shall
--------------------
perform such duties and have such powers as from time to time may be assigned to
them by the Board of Directors, the President or the Treasurer, and in the
absence of the Treasurer or in the event of his disability or refusal to act,
shall perform the duties of the Treasurer, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Company a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the Company, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the Company.
4.11. Assistant Controllers. Except as may be otherwise provided in these
---------------------
Bylaws, Assistant Controllers, if there be any, shall perform such duties and
have such powers as from time to time may be assigned to them by the Board of
Directors, the President, any Vice President, or the Controller, and in the
absence of the Controller or in the event of his disability or refusal to act,
shall perform the duties of the Controller, and when so acting, shall have all
the powers of and be subject to all the restrictions upon the Controller.
4.12. Other Officers. Such other officers as the Board of Directors may
--------------
choose shall perform such duties and have such powers, subordinate to those
powers specifically delegated to certain officer in these Bylaws, as from time
to time may be assigned to them by the Board of Directors. The President of the
Company shall have the power to choose such other officers and to prescribe
their respective duties and powers, subject to control by the Board of
Directors.
4.13. Vacancies. Whenever any vacancies shall occur in any office by death
---------
resignation, increase in the number of offices of the Company, or otherwise, the
same shall be filled by the Board of Directors (or the President, in accordance
with Paragraph 4.3 of these Bylaws, subject to control by the Board of
Directors), and the officer so
9
<PAGE>
appointed shall hold office until such officer's successor is elected or
appointed in accordance with these Bylaws or until his earlier death,
resignation or removal.
4.14. Removal. Any officer or agent of the Company may be removed by the
-------
Board of Directors whenever in its judgment the best interests of the Company
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of
an officer or agent shall not of itself create contract rights.
4.15. Action with Respect to Securities of Other Corporations. Unless
-------------------------------------------------------
otherwise directed by the Board of Directors, the Chairman of the Board, the
President, any Vice President and the Treasurer of the Company shall each have
power to vote and otherwise act on behalf of the Company, in person or by proxy,
at any meeting of security holders of or with respect to any action of security
holders of any other corporation in which the Company may hold securities and
otherwise to exercise any and all rights and powers which the Company may
possess by reason of its ownership of securities in such other corporation.
ARTICLE V
Capital Stock
5.1. Certificates for Shares. The certificates for shares of the capital
-----------------------
stock of the Company shall be in such form as may be approved by the Board of
Directors or may be uncertificated shares. In the case of certificated shares,
the Company shall deliver certificates representing shares to which shareholders
are entitled. Certificates representing such certificated shares shall be
signed by the Chairman of the Board, the President or a Vice President and
either the Secretary or an Assistant Secretary, and may bear the seal of the
Company or a facsimile thereof. The signatures of such officers upon a
certificate may be facsimiles. The stock record books and the blank stock
certificate books shall be kept by the Secretary, or at the office of such
transfer agent or transfer agents as the Board of Directors may from time to
time by resolution determine. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Company with the same effect as if such person were such officer at the date of
its issuance.
5.2. Multiple Classes of Stock. If the Company shall be authorized to
-------------------------
issue more than one class of capital stock or more than one series of any class,
a statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualification, limitations or restrictions of such preferences
and/or rights shall, unless the Board of Directors shall by resolution provide
that such class or series of stock shall be uncertificated, be set forth in full
or summarized on the face or back of the certificate which the Company shall
issue to represent such class or series of stock; provided that, to the extent
allowed by law, in lieu of such statement, the face or back of such certificate
may state that the Company will furnish a copy of such statement without charge
to each requesting shareholder.
5.3. Transfer of Shares. The shares of stock of the Company shall be
------------------
transferable only on the books of the Company by the holders thereof in person
or by their duly authorized attorneys or legal representatives upon surrender
and cancellation of certificates for a like number of shares.
5.4. Ownership of Shares. The Company shall be entitled to treat the
-------------------
holder of record of any share or shares of capital stock of the Company as the
holder in fact thereof and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by the laws of the State of Texas.
5.5. Regulations Regarding Certificates. The Board of Directors shall have
----------------------------------
the power and authority to make all such rules and regulations as they may deem
expedient concerning the issue, transfer and registration or the replacement of
certificates for shares of capital stock of the Company.
5.6. Lost or Destroyed Certificates. The Board of Directors may determine
------------------------------
the conditions upon which a new certificate of stock may be issued in place of a
certificate which is alleged to have been lost, stolen or destroyed; and may, in
its discretion, require the owner of such certificate or his legal
representative to give bond, with sufficient surety,
10
<PAGE>
to indemnify the Company and each transfer agent and registrar against any and
all losses or claims that may arise by reason of the issue of a new certificate
in the place of the one so lost, stolen or destroyed.
ARTICLE VI
Indemnification
6.1. General. The Company shall, to the fullest extent permitted by
-------
applicable law in effect on the date of effectiveness of these Bylaws, and to
such greater extent as applicable law may thereafter permit, indemnify and hold
harmless an Indemnitee (as this and all other capitalized words used in this
Article VI not previously defined in these Bylaws are defined in Paragraph 6.9
hereof) from and against any and all judgments, penalties, fines (including
excise taxes), amounts paid in settlement and, subject to Paragraph 6.2,
Expenses whatsoever arising out of any event or occurrence related to the fact
that the Indemnitee is or was a director or officer of the Company. The Company
may, but shall not be required to, indemnify and hold harmless an Indemnitee
from and against any and all judgments, penalties, fines (including excise
taxes), amounts paid in settlement and, subject to Paragraph 6.2, Expenses
whatsoever arising out of any event or occurrence related to the fact that the
Indemnitee is or was an employee or agent of the Company or is or was serving in
another Corporate Status (other than as an officer or director of the Company).
6.2. Expenses. If the Indemnitee is, by reason of his serving as a
--------
director, officer, employee or agent of the Company, a party to and is
successful, on the merits or otherwise, in any Proceeding, the Company shall
indemnify him against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith. If any such Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to any Matter in such Proceeding, the Company shall indemnify such Indemnitee
against all Expenses actually and reasonably incurred by him or on his behalf
relating to such Matter. The termination of any Matter in such a Proceeding by
dismissal, with or without prejudice, shall be deemed to be a successful result
as to such Matter. If the Indemnitee is, by reason of any Corporate Status
other than his serving as a director, officer, employee or agent of the Company,
a party to and is successful, on the merits or otherwise, in any Proceeding, the
Company may, but shall not be required to, indemnify him against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith. To the extent that the Indemnitee is, by reason of his Corporate
Status, a witness in any Proceeding, the Company may, but shall not be required
to, indemnify him against all Expenses actually and reasonably incurred by him
or on his behalf in connection therewith.
6.3. Advances. In the event of any threatened or pending action, suit or
--------
proceeding in which the Indemnitee is a party or is involved and that may give
rise to a right of indemnification under this Article VI, following written
request to the Company by the Indemnitee, the Company shall promptly pay to the
Indemnitee amounts to cover expenses reasonably incurred by the Indemnitee in
such proceeding in advance of its final disposition upon the receipt by the
Company of (a) a written undertaking executed by or on behalf of the Indemnitee
providing that the Indemnitee will repay the advance if it shall ultimately be
determined pursuant to the provisions of this Article VI or by final judgment or
other final adjudication under the provisions of any applicable law that the
Indemnitee is not entitled to be indemnified by the Company as provided in these
Bylaws, and (b) satisfactory evidence as to the amount of such expenses.
6.4. Request for Indemnification. To request indemnification, the
---------------------------
Indemnitee shall submit to the Secretary a written claim or request. Such
written claim or request shall contain sufficient information to reasonably
inform the Company about the nature and extent of the indemnification or advance
sought by the Indemnitee. The Secretary shall promptly advise the Board of
Directors of such request.
6.5. Nonexclusivity of Rights. The rights of indemnification and
------------------------
advancement of Expenses as provided by this Article VI shall not be deemed
exclusive of any other rights to which the Indemnitee may at any time be
entitled to under applicable law, the Articles of Incorporation, these Bylaws,
any agreement, a vote of shareholders or a resolution of directors of the
Company, or otherwise. No amendment, alteration or repeal of this Article VI or
any provision hereof shall be effective as to any Indemnitee for acts, events
and circumstances that occurred, in whole or in part, before such amendment,
alteration or repeal. The provisions of this Article VI shall continue as to an
Indemnitee whose Corporate Status has ceased for any reason and shall inure to
the benefit of his heirs, executors and administrators. Neither the provisions
of this Article VI nor those of any agreement to which the Company is a party
shall be deemed to preclude the indemnification of any person who is not
specified in this Article VI as having the right to receive indemnification
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or is not a party to any such agreement, but whom the Company has the power or
obligation to indemnify under the provisions of the TBCA.
6.6. Insurance and Subrogation. The Company shall not be liable under this
-------------------------
Article VI to make any payment of amounts otherwise indemnifiable hereunder if,
but only to the extent that, the Indemnitee has otherwise actually received such
payment under any insurance policy, contract, agreement or otherwise. In the
event of any payment hereunder, the Company shall be subrogated to the extent of
such payment to all the rights of recovery of the Indemnitee, who shall execute
all papers required and take all action reasonably requested by the Company to
secure such rights, including execution of such documents as are necessary to
enable the Company to bring suit to enforce such rights.
6.7. Severability. If any provision or provisions of this Article VI shall
------------
be held to be invalid, illegal or unenforceable for any reason whatsoever, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby; and, to the fullest extent possible,
the provisions of this Article VI shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or unenforceable.
6.8. Certain Actions Where Indemnification Is Not Provided.
-----------------------------------------------------
Notwithstanding any other provision of this Article VI, no person shall be
entitled to indemnification or advancement of Expenses under this Article VI
with respect to any Proceeding, or any Matter therein, brought or made by such
person against the Company.
6.9. Definitions. For purposes of this Article VI:
-----------
(a) "Corporate Status" describes the status of a person who is or was
a director, officer, employee or agent of the Company or of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person is or was serving at the written request of the
Company. For purposes of this Agreement, "serving at the written request of the
Company" includes any service by the Indemnitee which imposes duties on, or
involves services by, the Indemnitee with respect to any employee benefit plan
or its participants or beneficiaries.
(b) "Expenses" shall include all reasonable attorney's fees,
retainers, court costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting, defending, preparing
to prosecute or defend, investigating, or being or preparing to be a witness in
a Proceeding.
(c) "Indemnitee" includes any person who is, or is threatened to be
made, a witness in or a party to any Proceeding as described in Paragraph 6.1 or
6.2 hereof by reason of his Corporate Status.
(d) "Matter" is a claim, a material issue or a substantial request
for relief.
(e) "Proceeding" includes any action, suit, alternate dispute
resolution mechanism, hearing or any other proceeding, whether civil, criminal,
administrative, arbitrative, investigative or mediative, any appeal in any such
action, suit, alternate dispute resolution mechanism, hearing or other
proceeding and any inquiry or investigation that could lead to any such action,
suit, alternate dispute resolution mechanism, hearing or other proceeding,
except one (i) initiated by an Indemnitee to enforce his rights under this
Article VI, or (ii) pending on or before the date of this Agreement.
6.10. Notices. Promptly after receipt by the Indemnitee of notice of the
-------
commencement of any action, suit or proceeding, the Indemnitee shall, if he
anticipates or contemplates making a claim for expenses or an advance pursuant
to the terms of this Article VI, notify the Company of the commencement of such
action, suit or proceeding; provided, however, that any delay in so notifying
the Company shall not constitute a waiver or release by the Indemnitee of rights
hereunder and that any omission by the Indemnitee to so notify the Company shall
not relieve the Company from any liability that it may have to the Indemnitee
otherwise than under this Article VI. Any communication required or permitted
to the Company shall be addressed to the Secretary and any such communication to
the Indemnitee shall be addressed to the Indemnitee's address as shown on the
Company's records unless he specifies otherwise and shall be personally
delivered or delivered by overnight mail delivery. Any such notice shall be
effective upon receipt.
6.11. Contractual Rights. The right to be indemnified or to the advancement
------------------
or reimbursement of Expenses (a) is a contract right based upon good and
valuable consideration, pursuant to which the Indemnitee may sue as if these
12
<PAGE>
provisions were set forth in a separate written contract between the Indemnitee
and the Company, (b) is and is intended to be retroactive and shall be available
as to events occurring prior to the adoption of these provisions, and (c) shall
continue after any rescission or restrictive modification of such provisions as
to events occurring prior thereto.
6.12. Change in Governing Law. Upon any amendment or addition to Section
-----------------------
2.02-1 of the TBCA or the addition of any other section to such law which shall
limit indemnification rights thereunder, the Company shall, to the extent
permitted by the TBCA, indemnify to the fullest extent authorized or permitted
hereunder, any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (including an action by or in
the right of the Company) because he is or was a director or officer of the
Company or, while a director or officer of the Company, is or was serving at the
request of the Company as a director, officer, employee, trustee or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding.
ARTICLE VII
Miscellaneous Provisions
7.1. Bylaw Amendments. In addition to any affirmative vote required by
----------------
law, any Change of the Bylaws may be adopted either (a) by the Board of
Directors by the affirmative vote of at least a majority of the then authorized
number of directors, or (b) by the shareholders by the affirmative vote of the
holders of at least two-thirds (2/3) of the combined voting power of the then
outstanding voting shares of capital stock of the Company, voting together as a
single class.
7.2. Books and Records. The Company shall keep books and records of
-----------------
account and shall keep minutes of the proceedings of its shareholders, its Board
of Directors and each committee of its Board of Directors.
7.3. Notices; Waiver of Notice. Whenever any notice is required to be
-------------------------
given to any shareholder, director or committee member under the provisions of
the TBCA or under the Articles of Incorporation, as amended, or these Bylaws,
said notice shall be deemed to be sufficient if given (a) by telegraphic,
facsimile, cable or wireless transmission, or (b) by deposit of the same in the
United States mail, with postage paid thereon, addressed to the person entitled
thereto at his address as it appears on the records of the Company, and such
notice shall be deemed to have been given on the day of such transmission or
mailing, as the case may be.
Whenever any notice is required to be given to any shareholder, director or
committee member under the provisions of the TBCA or under the Articles of
Incorporation, as amended, or these Bylaws, a waiver thereof in writing signed
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be equivalent to the giving of such notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
shareholders, directors, or members of a committee of directors need be
specified in any written waiver of notice unless so required by the Articles of
Incorporation or these Bylaws.
7.4. Resignations. Any director or officer may resign at any time. Such
------------
resignations shall be made in writing and shall take effect at the time
specified therein, or, if no time be specified, at the time of its receipt by
the President or the Secretary. The acceptance of a resignation shall not be
necessary to make it effective, unless expressly so provided in the resignation.
7.5. Seal. The seal of the Company shall be in such form as the Board of
----
Directors may adopt.
7.6. Fiscal Year. The fiscal year of the Company shall end on the 31st day
-----------
of December of each year or as otherwise provided by a resolution adopted by the
Board of Directors.
7.7. Facsimile Signatures. In addition to the provisions for the use of
--------------------
facsimile signatures elsewhere specifically authorized in these Bylaws,
facsimile signatures of any officer or officers of the Company may be used
whenever and as authorized by the Board of Directors.
13
<PAGE>
7.8. Reliance upon Books, Reports and Records. Each director and each
----------------------------------------
member of any committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
books of account or reports made to the Company by any of its officers, or by an
independent certified public accountant, or by an appraiser selected with
reasonable care by the Board of Directors or by any such committee, or in
relying in good faith upon other records of the Company.
ARTICLE VIII
Adoption of Initial Bylaws
8.1. Initial Adoption. These Bylaws were adopted by the Board of Directors
----------------
effective as of May 7, 1999.
14
<PAGE>
Exhibit 5
Opinion Regarding Legality
<PAGE>
Exhibit 5
JACKSON WALKER L.L.P.
Attorneys and Counselors
1100 Louisiana Street
Suite 4200
Houston, Texas 77002
Telephone (713) 752-4200
Fax (713) 752 -4221
December 6, 1999
BioLynx.Com, Inc.
5617 Grissom Road
San Antonio, Texas 78238
Re: Form SB-2 Registration Statement
Gentlemen:
We have acted as counsel for BioLynx.Com, Inc. (the "Company") in
connection with the registration by the Company of 1,000,000 shares of its
common stock, par value $0.001 per share (the "Securities"), as contemplated by
the Company's Registration Statement on Form SB-2 filed on the date hereof with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended.
In connection therewith, we have examined, among other things, the Articles
of Incorporation and Bylaws, as amended, of the Company, the corporate
proceedings of the Company with respect to the issuance and registration of the
Securities, the Registration Statement, certificates of public officials,
statutes and other instruments and documents, as a basis for the opinions
expressed herein.
Based upon and subject to the foregoing, and upon such other matters as we
have determined to be relevant, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Texas.
2. All of the Securities, upon issuance and delivery thereof, will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement.
Very truly yours,
JACKSON WALKER L.L.P.
By /s/ Norman T. Reynolds
-----------------------------------------------
Norman T. Reynolds, Partner
<PAGE>
Exhibit 10.1
Employment Contract Dated March 15, 1999 Between
BioLynx, Inc. and John D. Walker II
<PAGE>
Exhibit 10.1
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas,
and JOHN D. WALKER II ("Employee") of 5617 Grissom Road, San Antonio, Texas
78238.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee
hereby accepts and agrees to such employment, subject to the general supervision
and pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees
that, except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be
developed under the terms of this agreement, whether by Employee alone or in
cooperation with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her
interest, if any, in any Proprietary Item or Invention to the Company. Employee
further agrees to (1) disclose promptly to the Company in confidence and in
writing all Proprietary Items or Inventions conceived or made during the term of
employment, and (2) comply with the Company's reasonable instructions and
execute any documents necessary for vesting, registering or recording the
Company's interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding,
or improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions
(whether copyrightable or not copyrightable), and inventions, including
development of existing Confidential Information or Materials, conceived or made
by Employee alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will
receive special training, knowledge, and access to confidential information and
trade secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are
reasonable and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 15 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
JOHN D. WALKER II By: PATRICK E. TOLLE
Its: Vice President
----------------------------------------
(Printed Title of Officer)
/s/ JOHN D. WALKER II /s/ PATRICK E. TOLLE
- ----------------------------- --------------------------------------------
3-15-99 3-29-99
- ----------------------------- --------------------------------------------
Date Date
4
<PAGE>
Exhibit 10.2
Employment Agreement Dated March 12, 1999 Between
BioLynx, Inc. and Patrick E. Tolle
<PAGE>
Exhibit 10.2
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas, and
PATRICK E. TOLLE ("Employee") of BioLynx, Inc.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 12 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
PATRICK E. TOLLE By: JOHN D. WALKER II
Its: Pres.
----------------------------------------
(Printed Title of Officer)
/s/ PATRICK E. TOLLE /s/ JOHN D. WALKER II
- -------------------- --------------------------------------------
3-12-99 3-12-99
- -------------------- --------------------------------------------
Date Date
4
<PAGE>
Exhibit 10.3
Employment Agreement Dated March 12, 1999 between
BioLynx, Inc. and Andrew Fitch-Wallish
<PAGE>
Exhibit 10.3
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") and ANDREW FITCH-WALLISH
("Employee") of San Antonio, Texas.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 12 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
ANDREW FITCH-WALLISH By: JOHN D. WALKER II
Its: Pres.
---------------------------------
(Printed Title of Officer)
/s/ ANDREW FITCH-WALLISH /s/ JOHN D. WALKER II
- ------------------------ -------------------------------------
3-20-99 3-20-99
- ------------------------ -------------------------------------
Date Date
4
<PAGE>
Exhibit 10.4
Employment Agreement Dated March 12, 1999 Between
BioLynx, Inc. and Charles E. Pircher
<PAGE>
Exhibit 10.4
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas, and
CHARLES E. PIRCHER ("Employee") of BioLynx, Inc.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 12 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
CHARLES E. PIRCHER By: JOHN D. WALKER II
Its: Pres.
-----------------------------------
(Printed Title of Officer)
/s/ CHARLES E. PIRCHER /s/ JOHN D. WALKER II
- ---------------------- -----------------------------------
3-12-99 3-12-99
- ---------------------- -----------------------------------
Date Date
4
<PAGE>
Exhibit 10.5
Employment Agreement Dated March 12, 1999 Between
BioLynx, Inc. and Gregory W. Schlather
<PAGE>
Exhibit 10.5
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas, and
GREGORY W. SCHLATHER ("Employee") of BioLynx.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all copyrightable
material shall be a work for hire as defined by the United States copyright
laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 12 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
GREGORY W. SCHLATHER By: JOHN D. WALKER II
Its: Pres.
---------------------------------
(Printed Title of Officer)
/s/ GREGORY W. SCHLATHER /s/ JOHN D. WALKER II
- ------------------------ --------------------------------------
3-12-99 3-12-99
- ------------------------ ---------------------------------------
Date Date
4
<PAGE>
Exhibit 10.6
Employment Agreement Dated March 12, 1999 Between
BioLynx, Inc. and Larry Roy
<PAGE>
Exhibit 10.6
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas,
and LARRY ROY ("Employee") of BioLynx, Inc.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee
hereby accepts and agrees to such employment, subject to the general supervision
and pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees
that, except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be
developed under the terms of this agreement, whether by Employee alone or in
cooperation with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her
interest, if any, in any Proprietary Item or Invention to the Company. Employee
further agrees to (1) disclose promptly to the Company in confidence and in
writing all Proprietary Items or Inventions conceived or made during the term of
employment, and (2) comply with the Company's reasonable instructions and
execute any documents necessary for vesting, registering or recording the
Company's interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding,
or improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions
(whether copyrightable or not copyrightable), and inventions, including
development of existing Confidential Information or Materials, conceived or made
by Employee alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will
receive special training, knowledge, and access to confidential information and
trade secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are
reasonable and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 12 day of March, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
LARRY ROY By: JOHN D. WALKER II
Its: Pres.
-----------------------------
(Printed Title of Officer)
/s/ LARRY ROY /s/ JOHN D. WALKER II
- ------------- ----------------------------------
3-12-99 3-12-99
- ------------- ----------------------------------
Date Date
4
<PAGE>
Exhibit 10.7
Confidentiality Agreement Dated November 1, 1999 Between
BioLynx.Com, Inc. and Barbara A. Bean
<PAGE>
Exhibit 10.7
CONFIDENTIALITY AGREEMENT
PARTIES
This Confidentiality Agreement, is between BioLynx, Inc., a business located
at 5617 Grissom Road, San Antonio, Texas 78238 (and hereinafter "BioLynx") and
Barbara A. Bean (hereinafter "Receiving Party").
RECITALS
Whereas, in connection with certain proposed business transactions
("Projects") products or information in the nature of product designs,
illustrations, prototypes and software may be provided by BioLynx to Receiving
Party and certain of Receiving Party's affiliates for the purposes of
manufacturing, tooling, mold designing, advertising, marketing and other means
in furtherance of or including, but not limited to, product sales, production,
licensing or other rights thereto;
Whereas preliminary to a Project, or during the course of a Project certain
proprietary works may be produced or disclosed;
Whereas, all proprietary works produced by Receiving Party at the direction of
BioLynx are conveyed to BioLynx and are not made available to third parties, or
used for personal gain by Receiving Party regardless of whether such works were
produced or disclosed to Receiving Party, or any other party, before or after
the date hereof; and
Whereas, it is agreed that Receiving Party is willing to covenant not to make
available any works disclosed by BioLynx or produced for BioLynx at the
direction of BioLynx.
NOW, THEREFORE, BioLynx and Receiving Party hereby agree as follows:
1. OWNERSHIP OF DISCLOSED PROPRIETARY ITEMS
By disclosing information (including, but not limited to, product designs,
illustrations, prototypes and software), BioLynx does not grant any express or
implied license or other rights to or under patents, copyrights, trademarks,
service marks or trade secret information of BioLynx.
1
<PAGE>
2. CONFIDENTIAL INFORMATION
Receiving Party shall not divulge or communicate to any person (other than
those whose province it is to know the same or with proper authority) any of the
trade secrets or other confidential information of BioLynx, BioLynx's
subsidiaries and/or affiliated persons or entities which may have been received
or obtained during the course of this Agreement. This restriction shall continue
to apply after the termination of this Agreement without limit in point of time
but shall cease to apply to information or knowledge which may come into the
public domain.
For purposes of this Agreement, the term "Confidential Information" shall
include, without limitation, information (including product designs,
illustrations, prototypes, and software), records, know-how, technology,
business plans, policies, strategies and/or practices, trade secrets, written
documentation, electronic files, computer programs, illustrations, edited works,
and financial and/or operating data relating to BioLynx or BioLynx's existing or
potential Business policies or practices.
3. FAILURE OF TRANSACTION
All information and all copies of information (including all product designs,
illustrations, prototypes and software) will either be destroyed or returned to
BioLynx upon request, in the event negotiations for Project are terminated.
Receiving Party agrees not to retain any copy, summary or extract of Information
provided to it by BioLynx. Upon request of BioLynx, Receiving Party shall
provide a certification from an appropriate officer that the requirements of
this paragraph have been satisfied in full.
4. MANDATORY DISCLOSURE
In the event that Receiving Party or anyone to whom Receiving Party transmits
Information pursuant to this Agreement becomes compelled by law or by any court
or governmental agency to disclose any of the Information, Receiving Party will
provide BioLynx with prompt notice prior to the disclosure so that BioLynx may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Agreement. In the event that such protective order or
other remedy is not obtained, or that BioLynx waives compliance with the
provisions of this Agreement, Receiving Party will furnish only that portion of
the Information which is believed to be legally required and will exercise its
best efforts to obtain assurance that confidential treatment will be accorded
the Information.
2
<PAGE>
5. ADDITIONAL NONDISCLOSURE
Receiving Party agrees that, without the prior written consent of BioLynx, it
will not disclose to any other person or entity the fact that Information has
been made available by BioLynx, that discussion or negotiations are taking place
concerning a possible transaction involving either BioLynx or Receiving Party,
or any of the terms, conditions or other facts with respect to such possible
transaction.
6. CHOICE OF LAW
The laws of the State of Texas govern any interpretation of the provisions of
this Agreement without regard to Conflict of Law principles.
7. INJUNCTIVE RELIEF
Receiving Party acknowledges that in the event of any breach of this Agreement
by Receiving Party, Receiving Party affiliates, agents representatives or
employees, BioLynx shall be irreparably harmed, and remedies at law may be
inadequate to protect against breach of this Agreement, and Receiving Party
hereby agrees in advance to the granting of injunctive relief in favor of
BioLynx without proof of actual damages, in addition to any right at law to
damages (including reasonable attorneys' fees and costs) arising out of or
resulting from such breach.
IN WITNESS WHEREOF, the parties hereto confirm, Accept and Agree to the
foregoing Agreement by executing herein below.
BioLynx, Inc.: RECEIVING PARTY:
- ------------- ---------------
Barbara A. Bean
/s/ PATRICK E. TOLLE /s/ BARBARA A. BEAN
- -------------------------------- ---------------------------------
By: PATRICK E. TOLLE By: BARBARA A. BEAN
--------------------------- -------------------------
Title: Chief Operations Officer Title: Chief Financial Officer
------------------------ ---------------------------
Date: 11/01/99 Date: 11/01/99
------------------------- -----------------------
3
<PAGE>
Exhibit 10.8
Employment Agreement Dated November 1, 1999 Between
BioLynx.Com, Inc. and Barbara A. Bean
<PAGE>
Exhibit 10.8
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas, and
BARBARA A. BEAN ("Employee") of BioLynx, Inc.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 1/st/ day of November, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
BARBARA A. BEAN By: PATRICK E. TOLLE
Its: Chief Operations Office
------------------------------------
/s/ BARBARA A. BEAN /s/ PATRICK E. TOLLE
- ----------------------------- -----------------------------------------
11-01-99 11-01-99
- ----------------------------- -----------------------------------------
Date Date
4
<PAGE>
Exhibit 10.9
Employment Contact Dated November 11, 1999 Between
BioLynx.Com, Inc. and Margaret A. Rice
<PAGE>
Exhibit 10.9
EMPLOYMENT CONTRACT
This agreement is between BioLynx, Inc. ("Company") of San Antonio, Texas, and
MARGARET RICE ("Employee") of BioLynx.Com, Inc.
In consideration of Employee's employment with or continued employment with
the Company, the Company and Employee agree as follows:
I. SERVICES AND COMPENSATION
The Company hereby employs, engages, and hires Employee, and Employee hereby
accepts and agrees to such employment, subject to the general supervision and
pursuant to the orders, advice, and direction of the Company.
The Employee agrees that he or she will at all times faithfully and to the
best of his or her ability, experience, and talents perform all of the duties
that may be required of or from him or her to the reasonable satisfaction of the
Company. The duties shall be rendered at all place or places as the Company
shall in good faith require.
The Company shall pay Employee a monetary compensation, and Employee shall
accept such compensation from the Company for Employee's services.
II. CONFIDENTIALITY AND NON-DISCLOSURE
During and after his or her employment with the Company, Employee agrees that,
except as directed by the Company, he or she will not use or disclose
Confidential Information to any person or organization or permit any person to
examine or copy Confidential Materials. Upon termination of employment with the
Company, Employee will deliver to the Company all confidential Materials in his
or her possession or control. At all times during and after employment with the
Company, Employee will take reasonable precautions to prevent unintentional
disclosures of Confidential Information.
1
<PAGE>
"Confidential Information" means information: (1) disclosed to or known by
Employee as a consequence of his or her employment with the Company; (2) not
generally known outside the Company; and (3) which relates to the Company's
business. "Confidential Information" is intended to include trade secrets as
defined in the Restatement of Torts. Specifically, without limitation,
"Confidential Information" includes information relating to products developed
for or used by the Company.
"Confidential Materials" are tangible materials containing Confidential
Information, including, without limitation, software, letters, books, records,
notes, memoranda, research materials, artwork, and drawings.
III. PROPRIETARY RIGHTS
All rights to Proprietary Items and Inventions, existing and to be developed
under the terms of this agreement, whether by Employee alone or in cooperation
with others, shall belong to the Company. Employee agrees that all
copyrightable material shall be a work for hire as defined by the United States
copyright laws, to be developed as part of a collective work.
Employee agrees to assign, without further compensation, his or her interest,
if any, in any Proprietary Item or Invention to the Company. Employee further
agrees to (1) disclose promptly to the Company in confidence and in writing all
Proprietary Items or Inventions conceived or made during the term of employment,
and (2) comply with the Company's reasonable instructions and execute any
documents necessary for vesting, registering or recording the Company's
interests in Proprietary Items or Inventions.
"Invention" means any new or useful art, discovery, contribution, finding, or
improvement whether or not patentable, and all related know-how.
"Proprietary Items" are ideas and information and their expressions (whether
copyrightable or not copyrightable), and inventions, including development of
existing Confidential Information or Materials, conceived or made by Employee
alone or with others during his or her employment at the Company.
2
<PAGE>
IV. NON-COMPETITION
The Employee recognizes and agrees that he or she has received or will receive
special training, knowledge, and access to confidential information and trade
secrets through his or her employment with the Company.
The Employee further recognizes and agrees that this industry in which the
Company is engaged is extremely competitive and the Company would suffer
irreparable harm if the Employee were to engage in activities directly in
competition with the Company.
In consideration of the valuable training, knowledge, and access to
confidential information and trade secrets provided to the Employee by the
Company, the Employee agrees that for a reasonable period, deemed by the parties
to be two years, after the termination of the Employee's employment for any
reason, the Employee will not engage in the business of developing, publishing,
or marketing of products in direct competition with the Company anywhere within
the Company's trade territory, the extent of the trade territory being
determined as of the time the Employee ends his or her employment with the
Company.
It is further understood that the geographic restrictions above are reasonable
and necessary to protect the business and interests of the Company.
V. ENFORCEMENT AND GENERAL CONDITIONS
It is agreed that all damages shall be an inadequate remedy for breach or
threatened breach by Employee of any of his or her covenants herein and that any
such breach by Employee will cause the Company irreparable damage. Accordingly,
Employee agrees that the Company shall be entitled, without waiving any
additional remedies otherwise available to it, to injunctive and other equitable
relief in the event of a breach or threatened breach. The validity and
interpretation of this agreement and legal relations of the parties shall be
governed by the laws of the State of Texas.
3
<PAGE>
The parties have signed this agreement the 11/th/ day of November, 1999, to be
effective as of the day of first employment of Employee with Company.
EMPLOYEE: COMPANY: BioLynx, Inc.
MARGARET RICE By: JOHN D. WALKER
Its: President
--------------------------------------
/s/ Margaret Rice /s/ John D. Walker
- -------------------------- ------------------------------------------
November 11, 1999 11-12-99
- -------------------------- -----------------------------------------------
Date Date
4
<PAGE>
Exhibit 10.10
Confidentiality Agreement Dated November 11, 1999 Between
BioLynx.Com, Inc. and Margaret A. Rice
<PAGE>
Exhibit 10.10
CONFIDENTIALITY AGREEMENT
PARTIES
This Confidentiality Agreement, is between BioLynx, Inc., a business located
at 5617 Grissom Road, San Antonio, Texas 78238 (and hereinafter "BioLynx") and
Margaret Rice (hereinafter "Receiving Party").
RECITALS
Whereas, in connection with certain proposed business transactions
("Projects") products or information in the nature of product designs,
illustrations, prototypes and software may be provided by BioLynx to Receiving
Party and certain of Receiving Party's affiliates for the purposes of
manufacturing, tooling, mold designing, advertising, marketing and other means
in furtherance of or including, but not limited to, product sales, production,
licensing or other rights thereto;
Whereas preliminary to a Project, or during the course of a Project certain
proprietary works may be produced or disclosed;
Whereas, all proprietary works produced by Receiving Party at the direction of
BioLynx are conveyed to BioLynx and are not made available to third parties, or
used for personal gain by Receiving Party regardless of whether such works were
produced or disclosed to Receiving Party, or any other party, before or after
the date hereof; and
Whereas, it is agreed that Receiving Party is willing to covenant not to make
available any works disclosed by BioLynx or produced for BioLynx at the
direction of BioLynx.
NOW, THEREFORE, BioLynx and Receiving Party hereby agree as follows:
1. OWNERSHIP OF DISCLOSED PROPRIETARY ITEMS
By disclosing information (including, but not limited to, product designs,
illustrations, prototypes and software), BioLynx does not grant any express or
implied license or other rights to or under patents, copyrights, trademarks,
service marks or trade secret information of BioLynx.
1
<PAGE>
2. CONFIDENTIAL INFORMATION
Receiving Party shall not divulge or communicate to any person (other than
those whose province it is to know the same or with proper authority) any of the
trade secrets or other confidential information of BioLynx, BioLynx's
subsidiaries and/or affiliated persons or entities which may have been received
or obtained during the course of this Agreement. This restriction shall
continue to apply after the termination of this Agreement without limit in point
of time but shall cease to apply to information or knowledge which may come into
the public domain.
For purposes of this Agreement, the term "Confidential Information" shall
include, without limitation, information (including product designs,
illustrations, prototypes, and software), records, know-how, technology,
business plans, policies, strategies and/or practices, trade secrets, written
documentation, electronic files, computer programs, illustrations, edited works,
and financial and/or operating data relating to BioLynx or BioLynx's existing or
potential Business policies or practices.
3. FAILURE OF TRANSACTION
All information and all copies of information (including all product designs,
illustrations, prototypes and software) will either be destroyed or returned to
BioLynx upon request, in the event negotiations for Project are terminated.
Receiving Party agrees not to retain any copy, summary or extract of Information
provided to it by BioLynx. Upon request of BioLynx, Receiving Party shall
provide a certification from an appropriate officer that the requirements of
this paragraph have been satisfied in full.
4. MANDATORY DISCLOSURE
In the event that Receiving Party or anyone to whom Receiving Party transmits
Information pursuant to this Agreement becomes compelled by law or by any court
or governmental agency to disclose any of the Information, Receiving Party will
provide BioLynx with prompt notice prior to the disclosure so that BioLynx may
seek a protective order or other appropriate remedy and/or waive compliance with
the provisions of this Agreement. In the event that such protective order or
other remedy is not obtained, or that BioLynx waives compliance with the
provisions of this Agreement, Receiving Party will furnish only that portion of
the Information which is believed to be legally required and will exercise its
best efforts to obtain assurance that confidential treatment will be accorded
the Information.
2
<PAGE>
5. ADDITIONAL NONDISCLOSURE
Receiving Party agrees that, without the prior written consent of BioLynx, it
will not disclose to any other person or entity the fact that Information has
been made available by BioLynx, that discussion or negotiations are taking place
concerning a possible transaction involving either BioLynx or Receiving Party,
or any of the terms, conditions or other facts with respect to such possible
transaction.
6. CHOICE OF LAW
The laws of the State of Texas govern any interpretation of the provisions of
this Agreement without regard to Conflict of Law principles.
7. INJUNCTIVE RELIEF
Receiving Party acknowledges that in the event of any breach of this Agreement
by Receiving Party, Receiving Party affiliates, agents representatives or
employees, BioLynx shall be irreparably harmed, and remedies at law may be
inadequate to protect against breach of this Agreement, and Receiving Party
hereby agrees in advance to the granting of injunctive relief in favor of
BioLynx without proof of actual damages, in addition to any right at law to
damages (including reasonable attorneys' fees and costs) arising out of or
resulting from such breach.
IN WITNESS WHEREOF, the parties hereto confirm, Accept and Agree to the
foregoing Agreement by executing herein below.
BioLynx, Inc.: RECEIVING PARTY:
- ------------- ---------------
/s/ John D. Walker /s/ Margaret Rice
- ----------------------------- ------------------------------------
By: JOHN D. WALKER By: MARGARET RICE
--------------------- ---------------------------------------
Title: President Title: Corporate Trainer
---------------- ------------------------------
Date: 11/12/99 Date: 11/11/99
------------------------ -------------------------------
3
<PAGE>
Exhibit 10.11
BioLynx.Com, Inc. 1999 Stock Incentive Compensation Plan
Dated May 7, 1999
<PAGE>
Exhibit 10.11
BIOLYNX.COM, INC.
1999 STOCK INCENTIVE COMPENSATION PLAN
SECTION 1
Purpose
The purpose of the BioLynx.Com, Inc. 1999 Stock Incentive Compensation Plan
(the "Plan") is to enhance the long-term shareholder value of BioLynx.Com, Inc.,
a Texas corporation (the "Company"), by offering opportunities to employees,
directors, officers, consultants, agents, advisers and independent contractors
of the Company and its Subsidiaries (as defined in Section 2 hereof) to
participate in the Company's growth and success, and to encourage them to remain
in the service of the Company and its Subsidiaries and to acquire and maintain
stock ownership in the Company.
SECTION 2
Definitions
For purposes of the Plan, the following terms shall be defined as set forth
below:
2.1. "Award" means an award or grant made pursuant to the Plan, including,
-----
without limitation, awards or grants of Options and Stock Awards, or any
combination of the foregoing.
2.2. "Board" means the Board of Directors of the Company.
-----
2.3. "Cause" means dishonesty, fraud, misconduct, unauthorized use or
-----
disclosure of confidential information or trade secrets, or conviction or
confession of a crime punishable by law (except minor violations), in each case
as determined by the Plan Administrator, and its determination shall be
conclusive and binding.
2.4. "Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
2.5. "Common Stock" means the common stock of the Company, par value $0.001
------------
per share.
2.6. "Corporate Transaction" means any of the following events:
---------------------
(a) Consummation of any merger or consolidation of the Company in
which the Company is not the continuing or surviving corporation, or pursuant to
which shares of the Common Stock are converted into cash, securities or other
property, if following such merger or consolidation the holders of the Company's
outstanding voting securities immediately prior to such merger or consolidation
own less than a majority of the outstanding voting securities of the surviving
corporation;
(b) Consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all of
the Company's assets other than a transfer of the Company's assets to a
majority-owned subsidiary corporation (as the team, "subsidiary corporation" is
defined in Section 8.3 hereof) of the Company;
(c) Approval by the holders of the Common Stock of any plan or
proposal for the liquidation or dissolution of the Company.
Ownership of voting securities shall take into account and shall include
ownership as determined by applying Rule 13d-3(d)(1)(i) (as in effect on the
date of adoption of the Plan) under the Exchange Act.
2.7. "Disability" means disability as that term is defined for purposes of
----------
Section 22(e)(3) of the Code.
1
<PAGE>
2.8. "Early Retirement" means early retirement as that term is defined by
----------------
the Plan Administrator from time to time for purposes of the Plan.
2.9. "Exchange Act" means the Securities Exchange Act of 1934, as amended.
------------
2.10. "Fair Market Value" shall be as established in good faith by the Plan
-----------------
Administrator or (a) if the Common Stock is listed on an exchange, the average
of the high and low per share sales prices for the Common Stock as such price is
officially quoted in the composite tape of transactions on such exchange for a
single trading day or (b) if the Common Stock is listed on the Nasdaq National
Market, the average of the high and low per share sales prices for the Common
Stock as reported by the Nasdaq National Market for a single trading day. If
there is no such reported price for the Common Stock for the date in question,
then such price on the last preceding date for which such price exists shall be
determinative of Fair Market Value.
2.11. "Good Reason" means the occurrence of any of the following events or
-----------
conditions and the failure of the Successor Corporation to cure such event or
condition within 30 days after receipt of written notice by the Holder:
(a) A change in the Holder's status, title, position or responsibilities
(including reporting responsibilities) that, in the Holder's reasonable
judgment, represents a substantial reduction in the status, title, position or
responsibilities as in effect immediately prior thereto; the assignment to the
Holder of any duties or responsibilities that, in the Holder's reasonable
judgment, are materially inconsistent with such status, title, position or
responsibilities; or any removal of the Holder from or failure to reappoint or
reelect the Holder to any of such positions, except in connection with the
termination of the Holder's employment for Cause, for Disability or as a result
of his death, or by the Holder other than for Good Reason as defined in this
Section 2.11 hereof;
(b) A reduction in the Holder's annual base salary;
(c) The Successor Corporation's requiring the Holder (without the Holder's
consent) to be based at any place outside a 35-mile radius of his place of
employment prior to a Corporate Transaction, except for reasonably required
travel on the Successor Corporation's business that is not materially greater
than such travel requirements prior to the Corporate Transaction;
(d) The Successor Corporation's failure to (i) continue in effect any
material compensation or benefit plan (or the substantial equivalent thereof) in
which the Holder was participating at the time of a Corporate Transaction,
including, but not limited to, the Plan, or (ii) provide the Holder with
compensation and benefits substantially equivalent (in terms of benefit levels
and/or reward opportunities) to those provided for under each material employee
benefit plan, program and practice as in effect immediately prior to the
Corporate Transaction;
(e) Any material breach by the Successor Corporation of its obligations to
the Holder under the Plan or any substantially equivalent plan of the Successor
Corporation; or
(f) Any purported termination of the Holder's employment or services for
Cause by the Successor Corporation that does not comply with the terms of the
Plan or any substantially equivalent plan of the Successor Corporation.
2.12. "Grant Date" means the date the Plan Administrator adopted the
----------
granting resolution or a later date designated in a resolution of the Plan
Administrator as the date an Award is to be granted.
2.13. "Holder" means (a) the person to whom an Award is granted; (b) for a
------
Holder who has died, the personal representative of the Holder's estate, the
person(s) to whom the Holder's rights under the Award have passed by will or by
the applicable laws of descent and distribution, or the beneficiary designated
in accordance with Section 10 hereof; or (c) person(s) to whom an Award has been
transferred in accordance with Section 10 hereof.
2
<PAGE>
2.14. "Incentive Stock Option" means an Option to purchase Common Stock
----------------------
granted under Section 7 hereof with the intention that it qualify as an
"incentive stock option" as that term is defined in Section 422 of the Code.
2.15. "Nonqualified Stock Option" means an Option to purchase Common Stock
-------------------------
granted under Section 7 hereof other than an Incentive Stock Option.
2.16. "Option" means the right to purchase Common Stock granted under
------
Section 7 hereof.
2.17. "Plan Administrator" means the Board or any committee of the Board
------------------
designated to administer the Plan under Section 3.1 hereof.
2.18. "Restricted Stock" means shares of Common Stock granted under Section
----------------
9 hereof, the rights of ownership of which are subject to restrictions
prescribed by the Plan Administrator.
2.19. "Retirement" means retirement as of the individual's normal retirement
----------
date as that term is defined by the Plan Administrator from time to time for
purposes of the Plan.
2.20. "Securities Act" means the Securities Act of 1933, as amended.
--------------
2.21. "Stock Award" means an Award granted under Section 9 hereof.
-----------
2.22. "Subsidiary" except as provided in Section 8.3 hereof in connection
----------
with Incentive Stock Options, means any entity that is directly or indirectly
controlled by the Company or in which the Company has a significant ownership
interest, as determined by the Plan Administrator, and any entity that may
become a direct or indirect parent of the Company.
2.23. "Successor Corporation" has the meaning set forth in Section 11.2
---------------------
hereof.
SECTION 3
Administration
3.1. Plan Administrator. The Plan shall be administered by the Board or a
------------------
committee or committees (which term includes subcommittees) appointed by, and
consisting of two or more members of, the Board. If and so long as the Common
Stock is registered under Section 12(b) or 12(g) of the Exchange Act, the Board
shall consider in selecting the Plan Administrator and the membership of any
committee acting as Plan Administrator, with respect to any persons subject or
likely to become subject to Section 16 of the Exchange Act, the provisions
regarding (a) "outside directors" as contemplated by Section 162(m) of the Code,
and (b) "nonemployee directors" as contemplated by Rule 16b-3 under the Exchange
Act. The Board may delegate the responsibility for administering the Plan with
respect to designated classes of eligible persons to different committees
consisting of two or more members of the Board, subject to such limitations as
the Board deems appropriate. Committee members shall serve for such term as the
Board may determine, subject to removal by the Board at any time. To the extent
consistent with applicable law, the Board may authorize a senior executive
officer of the Company to grant Awards, within limits specifically prescribed by
the Board.
3.2. Administration and Interpretation by the Plan Administrator. Except
-----------------------------------------------------------
for the terms and conditions explicitly set forth in the Plan, the Plan
Administrator shall have exclusive authority, in its discretion, to determine
all matters relating to Awards under the Plan, including the selection of
individuals to be granted Awards, the type of Awards, the number of shares of
Common Stock subject to an Award, all terms, conditions, restrictions and
limitations, if any, of an Award and the terms of any instrument that evidences
the Award. The Plan Administrator shall also have exclusive authority to
interpret the Plan and may from time to time adopt, and change, rules and
regulations of general application for the Plan's administration. The Plan
Administrator's interpretation of the Plan and its rules and regulations, and
all actions taken and determinations made by the Plan Administrator pursuant to
the Plan, shall be conclusive and binding on all parties involved or affected.
The Plan Administrator may delegate administrative duties to such of the
Company's officers as it so determines.
3
<PAGE>
SECTION 4
Stock Subject to the Plan
4.1. Authorized Number of Shares. Subject to adjustment from time to time
---------------------------
as provided in Section 11.1 hereof, the maximum number of shares of Common Stock
which shall be available for issuance under the Plan shall not exceed in the
aggregate the greater of 250,000 shares of the Common Stock or 15 percent of the
issued shares of Common Stock as of the first day of the preceding calendar
quarter; provided that, if the number of issued shares of Common Stock is
increased during any calendar quarter, the maximum number of shares of Common
Stock which shall be available for issuance under the Plan shall be increased by
15 percent of such increase.
4.2. Limitations. Subject to adjustment from time to time as provided in
-----------
Section 11.1 hereof, not more than 250,000 shares of Common Stock may be made
subject to Awards under the Plan to any individual in the aggregate in any one
fiscal year of the Company, except that the Company may make additional one-time
grants of up to 250,000 shares to newly hired individuals, such limitation to be
applied in a manner consistent with the requirements of, and only to the extent
required for compliance with, the exclusion from the limitation on deductibility
of compensation under Section 162(m) of the Code.
4.3. Reuse of Shares. Any shares of Common Stock that have been made
---------------
subject to an Award that cease to be subject to the Award (other than by reason
of exercise or payment of the Award to the extent it is exercised for or settled
in shares) shall again be available for issuance in connection with future
grants of Awards under the Plan; provided, however, that for purposes of Section
4.2 hereof, any such shares shall be counted in accordance with the requirements
of Section 162(m) of the Code.
SECTION 5
Eligibility
Awards may be granted under the Plan to those officers, directors and
employees of the Company and its Subsidiaries as the Plan Administrator from
time to time selects. Awards may also be made to consultants, agents, advisers
and independent contractors who provide services to the Company and its
Subsidiaries.
SECTION 6
Awards
6.1. Form and Grant of Options. The Plan Administrator shall have the
-------------------------
authority, in its sole discretion, to determine the type or types of Awards to
be made under the Plan. Such Awards may consist of Incentive Stock Options,
Nonqualified Stock Options and Stock Awards. Options may be granted singly or
in combination.
6.2. Acquired Company Awards. Notwithstanding anything in the Plan to the
-----------------------
contrary, the Plan Administrator may grant Awards under the Plan in substitution
for awards issued under other plans, or assume under the Plan awards issued
under other plans, if the other plans are or were plans of other acquired
entities ("Acquired Entities") (or the parent of the Acquired Entity) and the
new Award is substituted, or the old award is assumed, by reason of a merger,
consolidation, acquisition of property or of stock, reorganization or
liquidation (the "Acquisition Transaction"). In the event that a written
agreement pursuant to which the Acquisition Transaction is completed is approved
by the Board and said agreement sets forth the terms and conditions of the
substitution for or assumption of outstanding awards of the Acquired Entity,
said terms and conditions shall be deemed to be the action of the Plan
Administrator without any further action by the Plan Administrator, except as
may be required for compliance with Rule 16b-3 under the Exchange Act, and the
persons holding such Awards shall be deemed to be Holders.
SECTION 7
Awards of Options
7.1. Grant of Options. The Plan Administrator is authorized under the
----------------
Plan, in its sole discretion, to issue Options as Incentive Stock Options or as
Nonqualified Stock Options, which shall be appropriately designated.
4
<PAGE>
7.2. Option Exercise Price. The exercise price for shares purchased under
---------------------
an Option shall be as determined by the Plan Administrator, but shall not be
less than 100 percent of the Fair Market Value of the Common Stock on the Grant
Date with respect to Incentive Stock Options and not less than 100 percent of
the Fair Market Value of the Common Stock on the Grant Date with respect to
Nonqualified Stock Options.
7.3. Term of Options. The term of each Option shall be as established by
---------------
the Plan Administrator or, if not so established, shall be 10 years from the
Grant Date.
7.4. Exercise of Options. The Plan Administrator shall establish and set
-------------------
forth in each instrument that evidences an Option the time at which or the
installments in which the Option shall vest and become exercisable, which
provisions may be waived or modified by the Plan Administrator at any time. If
not so established in the instrument evidencing the Option, the Option will vest
and become exercisable according to the following schedule, which may be waived
or modified by the Plan Administrator at any time:
<TABLE>
<CAPTION>
Period of Holder's Continuous Employment or Service
With the Company or Its Subsidiaries Percent of Total Option
From the Option Grant Date That is Vested and Exercisable
-------------------------- ------------------------------
<S> <C>
After 1 year 25%
After 2 years 50%
After 3 years 75%
After 4 years 100%
</TABLE>
To the extent that the right to purchase shares has accrued thereunder, an
Option may be exercised from time to time by written notice to the Company, in
accordance with procedures established by the Plan Administrator, setting forth
the number of shares with respect to which the Option is being exercised and
accompanied by payment in full as described in Section 7.5 hereof. The Plan
Administrator may determine at any time that an Option may not be exercised as
to less than 100 shares at any one time (or the lesser number of remaining
shares covered by the Option).
7.5. Payment of Exercise Price. The exercise price for shares purchased
-------------------------
under an Option shall be paid in full to the Company by delivery of
consideration equal to the product of the Option exercise price and the number
of shares purchased. Such consideration must be paid in cash or by check or,
unless the Plan Administrator in its sole discretion determines otherwise,
either at the time the Option is granted or at any time before it is exercised,
a combination of cash and/or check (if any) and/or one or both of the following
alternative forms: (a) tendering (either actually or, if and so long as the
Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act, by
attestation) Common Stock already owned by the Holder for at least six months
(or any shorter period necessary to avoid a charge to the Company's earnings for
financial reporting purposes) having a Fair Market Value on the day prior to the
exercise date equal to the aggregate Option exercise price, or (b) if and so
long as the Common Stock is registered under Section 12(b) or 12(g) of the
Exchange Act, delivery of a properly executed exercise notice, together with
irrevocable instructions, to (x) a brokerage firm designated by the Company to
deliver promptly to the Company the aggregate amount of sale or loan proceeds to
pay the Option exercise price and any withholding tax obligations that may arise
in connection with the exercise, and (y) the Company to deliver the certificates
for such purchased shares directly to such brokerage firm, all in accordance
with the regulations of the Federal Reserve Board. In addition, the exercise
price for shares purchased under an Option may be paid, either singly or in
combination with one or more of the alternative forms of payment authorized by
this Section 7.5, by such other consideration as the Plan Administrator may
permit.
7.6. Post-Termination Exercises. The Plan Administrator shall establish
--------------------------
and set forth in each instrument that evidences an Option whether the Option
will continue to be exercisable, and the terms and conditions of such exercise,
if a Holder ceases to be employed by, or to provide services to, the Company or
its Subsidiaries, which provisions may be waived or modified by the Plan
Administrator at any time. If not so established in the instrument evidencing
the Option, the Option will be exercisable according to the following terms and
conditions, which may be waived or modified by the Plan Administrator at any
time.
5
<PAGE>
In case of termination of the Holder's employment or services other than by
reason of death or Cause, the Option shall be exercisable, to the extent of the
number of shares purchasable by the Holder at the date of such termination, only
(a) within one year if the termination of the Holder's employment or services is
coincident with Retirement, Early Retirement at the Company's request or
Disability, or (b) within three months after the date the Holder ceases to be an
employee, director, officer, consultant, agent, adviser or independent
contractor of the Company or a Subsidiary if termination of the Holder's
employment or services is for any reason other than Retirement, Early Retirement
at the Company's request or Disability, but in no event later than the remaining
term of the Option. Any Option exercisable at the time of the Holder's death
may be exercised, to the extent of the number of shares purchasable by the
Holder at the date of the Holder's death, by the personal representative of the
Holder's estate, the person(s) to whom the Holder's rights under the Option have
passed by will or the applicable laws of descent and distribution or the
beneficiary designated pursuant to Section 10 hereof at any time or from time to
time within one year after the date of death, but in no event later than the
remaining term of the Option. Any portion of an Option that is not exercisable
on the date of termination of the Holder's employment or services shall
terminate on such date, unless the Plan Administrator determines otherwise. In
case of termination of the Holder's employment or services for Cause, the Option
shall automatically terminate upon first notification to the Holder of such
termination, unless the Plan Administrator determines otherwise. If a Holder's
employment or services with the Company are suspended pending an investigation
of whether the Holder shall be terminated for Cause, all the Holder's rights
under any Option likewise shall be suspended during the period of investigation.
A transfer of employment or services between or among the Company and its
Subsidiaries shall not be considered a termination of employment or services.
The effect of a Company approved leave of absence on the terms and conditions of
an Option shall be determined by the Plan Administrator, in its sole discretion.
SECTION 8
Incentive Stock Option Limitations
To the extent required by Section 422 of the Code, Incentive Stock Options
shall be subject to the following additional terms and conditions:
8.1. Dollar Limitation. To the extent the aggregate Fair Market Value
-----------------
(determined as of the Grant Date) of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time during any calendar
year (under the Plan and all other stock option plans of the Company) exceeds
$100,000, such portion in excess of $100,000 shall be treated as a Nonqualified
Stock Option. In the event the Holder holds two or more such Options that
become exercisable for the first time in the same calendar year, such limitation
shall be applied on the basis of the order in which such Options are granted.
8.2. 10 Percent Shareholders. If an individual owns more than 10 percent
-----------------------
of the total voting power of all classes of the Company's stock, then the
exercise price per share of an Incentive Stock Option shall not be less than 110
percent of the Fair Market Value of the Common Stock on the Grant Date and the
Option term shall not exceed five years. The determination of 10 percent
ownership shall be made in accordance with Section 422 of the Code.
8.3. Eligible Employees. Individuals who are not employees of the Company
------------------
or one of its parent corporations or subsidiary corporations may not be granted
Incentive Stock Options. For purposes of this Section 8.3, "parent corporation"
and "subsidiary corporation" shall have the meanings attributed to those terms
for purposes of Section 422 of the Code.
8.4. Term. The term of an Incentive Stock Option shall not exceed 10
----
years.
8.5. Exercisability. To qualify for Incentive Stock Option tax treatment,
--------------
an Option designated as an Incentive Stock Option must be exercised within three
months after termination of employment for reasons other than death, except
that, in the case of termination of employment due to total disability, such
Option must be exercised within one year after such termination. Employment
shall not be deemed to continue beyond the first 90 days of a leave of absence
unless the Holder's reemployment rights are guaranteed by statute or contract.
For purposes of this Section 8.5, "total
6
<PAGE>
disability" shall mean a mental or physical impairment of the Holder that is
expected to result in death or that has lasted or is expected to last for a
continuous period of 12 months or more and that causes the Holder to be unable,
in the opinion of the Company and two independent physicians, to perform his
duties for the Company and to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first day after the
Company and the two independent physicians have furnished their opinion of total
disability to the Plan Administrator.
8.6. Taxation of Incentive Stock Options. In order to obtain certain tax
-----------------------------------
benefits afforded to Incentive Stock Options under Section 422 of the Code, the
Holder must hold the shares issued upon the exercise of an Incentive Stock
Option for two years after the Grant Date of the Incentive Stock Option and one
year from the date of exercise. A Holder may be subject to the alternative
minimum tax at the time of exercise of an Incentive Stock Option. The Plan
Administrator may require a Holder to give the Company prompt notice of any
disposition of shares acquired by the exercise of an Incentive Stock Option
prior to the expiration of such holding periods.
SECTION 9
Stock Awards
9.1. Grant of Stock Awards. The Plan Administrator is authorized to make
---------------------
Awards of Common Stock on such terms and conditions and subject to such
restrictions, if any (which may be based on continuous service with the Company
or the achievement of performance goals related to profits, profit growth,
profit-related return ratios, cash flow or total shareholder return, where such
goals may be stated in absolute terms or relative to comparison companies), as
the Plan Administrator shall determine, in its sole discretion, which terms,
conditions and restrictions shall be set forth in the instrument evidencing the
Award. The terms, conditions and restrictions that the Plan Administrator shall
have the power to determine shall include, without limitation, the manner in
which shares subject to Stock Awards are held during the periods they are
subject to restrictions and the circumstances under which forfeiture of
Restricted Stock shall occur by reason of termination of the Holder's services.
9.2. Issuance of Shares. Upon the satisfaction of any terms, conditions
------------------
and restrictions prescribed in respect to a Stock Award, or upon the Holder's
release from any terms, conditions and restrictions of a Stock Award, as
determined by the Plan Administrator, the Company shall release, as soon as
practicable, to the Holder or, in the case of the Holder's death, to the
personal representative of the Holder's estate or as the appropriate court
directs, the appropriate number of shares of Common Stock.
9.3. Waiver of Restrictions. Notwithstanding any other provisions of the
----------------------
Plan, the Plan Administrator may, in its sole discretion, waive the forfeiture
period and any other terms, conditions or restrictions on any Restricted Stock
under such circumstances and subject to such terms and conditions as the Plan
Administrator shall deem appropriate.
SECTION 10
Assignability
No Option or Stock Award granted under the Plan may be assigned, pledged or
transferred by the Holder other than by will or by the applicable laws of
descent and distribution, and, during the Holder's lifetime, such Awards may be
exercised only by the Holder or a permitted assignee or transferee of the Holder
(as provided below). Notwithstanding the foregoing, and to the extent permitted
by Section 422 of the Code, the Plan Administrator, in its sole discretion, may
permit such assignment, transfer and exercisability and may permit a Holder to
designate a beneficiary who may exercise the Award after the Holder's death;
provided, however, that any Award so assigned or transferred shall be subject to
all the same terms and conditions contained in the instrument evidencing the
Award.
SECTION 11
Adjustments
11.1. Adjustment of Shares. In the event that, at any time or from time to
--------------------
time, a stock dividend, stock split, spin-off, combination or exchange of
shares, recapitalization, merger, consolidation, distribution to shareholders
other than a normal cash dividend, or other change in the Company's corporate or
capital structure results in (a) the
7
<PAGE>
outstanding shares, or any securities exchanged therefor or received in their
place, being exchanged for a different number or class of securities of the
Company or of any other corporation, or (b) new, different or additional
securities of the Company or of any other corporation being received by the
holders of shares of Common Stock of the Company, then the Plan Administrator
shall make proportional adjustments in (x) the maximum number and kind of
securities subject to the Plan as set forth in Section 4.1 hereof, (y) the
maximum number and kind of securities that may be made subject to Awards to any
individual as set forth in Section 4.2 hereof, and (z) the number and kind of
securities that are subject to any outstanding Award and the per share price of
such securities, without any change in the aggregate price to be paid therefor.
The determination by the Plan Administrator as to the terms of any of the
foregoing adjustments shall be conclusive and binding. Notwithstanding the
foregoing, a Corporate Transaction shall not be governed by this Section 11.1
but shall be governed by Section 11.2 hereof.
11.2. Corporate Transaction.
---------------------
(a) Except as otherwise provided in the instrument that evidences the
Award, in the event of any Corporate Transaction, each Award that is at the time
outstanding shall automatically accelerate so that each such Award shall,
immediately prior to the specified effective date for the Corporate Transaction,
become 100 percent vested and exercisable.
(b) Such Award shall not so accelerate, however, if and to the extent that
such Award is, in connection with the Corporate Transaction, either to be
assumed by the successor corporation or parent thereof (the "Successor
Corporation") or to be replaced with a comparable award for the purchase of
shares of the capital stock of the Successor Corporation. The determination of
Award comparability shall be made by the Plan Administrator, and its
determination shall be conclusive and binding. Any such Awards that are assumed
or replaced in the Corporate Transaction and do not otherwise accelerate at that
time shall be accelerated in the event that the Holder's employment or services
should subsequently terminate within two years following such Corporate
Transaction, unless such employment or services are terminated by the Successor
Corporation for Cause or by the Holder's voluntarily without Good Reason.
(c) All such Awards shall terminate and cease to remain outstanding
immediately following the consummation of the Corporate Transaction, except to
the extent assumed by the Successor Corporation.
(d) The acceleration will not occur if, in the opinion of the Company's
outside accountants, it would render unavailable "pooling of interest"
accounting for a Corporate Transaction that would otherwise qualify for such
accounting treatment.
11.3. Further Adjustment of Options. Subject to Section 11.2 hereof, the
-----------------------------
Plan Administrator shall have the discretion, exercisable at any time before a
sale, merger, consolidation, reorganization, liquidation or change in control of
the Company, as defined by the Plan Administrator, to take such further action
as it determines to be necessary or advisable, and fair and equitable to
Holders, with respect to Awards. Such authorized action may include (but shall
not be limited to) establishing, amending or waiving the type, terms, conditions
or duration of, or restrictions on, Awards so as to provide for earlier, later,
extended or additional time for exercise and other modifications, and the Plan
Administrator may take such actions with respect to all Holders, to certain
categories of Holders or only to individual Holders. The Plan Administrator may
take such action before or after granting Awards to which the action relates and
before or after any public announcement with respect to such sale, merger,
consolidation, reorganization, liquidation or change in control that is the
reason for such action.
11.4. Limitations. The grant of Awards will in no way affect the Company's
-----------
right to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
8
<PAGE>
SECTION 12
Withholding
The Company may require the Holder to pay to the Company the amount of any
withholding taxes that the Company is required to withhold with respect to the
grant, vesting or exercise of any Award. Subject to the Plan and applicable
law, the Plan Administrator may, in its sole discretion, permit the Holder to
satisfy withholding obligations, in whole or in part, by paying cash, by
electing to have the Company withhold shares of Common Stock or by transferring
shares of Common Stock to the Company, in such amounts as are equivalent to the
Fair Market Value of the withholding obligation. The Company shall have the
right to withhold from any Award or any shares of Common Stock issuable pursuant
to an Award or from any cash amounts otherwise due or to become due from the
Company to the Holder an amount equal to such taxes. The Company may also
deduct from any Award any other amounts due from the Holder to the Company or a
Subsidiary.
SECTION 13
Amendment and Termination of Plan
13.1. Amendment of Plan. The Plan may be amended only by the Board in such
-----------------
respects as it shall deem advisable; however, to the extent required for
compliance with Section 422 of the Code or any applicable law or regulation,
shareholder approval will be required for any amendment that will (a) increase
the total number of shares as to which Options may be granted under the Plan or
that may be issued as Stock Awards, (b) modify the class of persons eligible to
receive Options, or (c) otherwise require shareholder approval under any
applicable law or regulation.
13.2. Termination Plan. The Board may suspend or terminate the Plan at any
----------------
time. The Plan will have no fixed expiration date; provided, however, that no
Incentive Stock Options may be granted more than 10 years after the earlier of
the Plan's adoption by the Board and approval by the shareholders.
13.3. Consent of Holder. The amendment or termination of the Plan shall
-----------------
not, without the consent of the Holder of any Award under the Plan, impair or
diminish any rights or obligations under any Award theretofore granted under the
Plan. Any change or adjustment to an outstanding Incentive Stock Option shall
not, without the consent of the Holder, be made in a manner so as to constitute
a "modification" that would cause such Incentive Stock Option to fail to
continue to qualify as an Incentive Stock Option.
SECTION 14
General
14.1. Award Agreements. Awards granted under the Plan shall be evidenced by
----------------
a written agreement that shall contain such terms, conditions, limitations and
restrictions as the Plan Administrator shall deem advisable and that are not
inconsistent with the Plan.
14.2. Continued Employment or Services; Rights in Awards. None of the Plan,
--------------------------------------------------
participation in the Plan or any action of the Plan Administrator taken under
the Plan shall be construed as giving any person any right to be retained in the
employ of the Company or limit the Company's right to terminate the employment
or services of any person.
14.3. Registration. The Company shall be under no obligation to any Holder
------------
to register for offering or resale or to qualify for exemption under the
Securities Act, or to register or qualify under state securities laws, any
shares of Common Stock, security or interest in a security paid or issued under,
or created by, the Plan, or to continue in effect any such registrations or
qualifications if made. The Company may issue certificates for shares with such
legends and subject to such restrictions on transfer and stop transfer
instructions as counsel for the Company deems necessary or desirable for
compliance by the Company with federal and state securities laws.
Inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any shares hereunder or the unavailability of an
9
<PAGE>
exemption from registration for the issuance and sale of any shares hereunder
shall relieve the Company of any liability in respect of the nonissuance or sale
of such shares as to which such requisite authority shall not have been
obtained.
14.4. No Rights as a Shareholder. No Option shall entitle the Holder to any
--------------------------
dividend, voting or other right of a shareholder unless and until the date of
issuance under the Plan of the shares that are the subject of such Option, free
of all applicable restrictions.
14.5. Compliance With Laws and Regulations. Notwithstanding anything in the
------------------------------------
Plan to the contrary, the Board, in its sole discretion, may bifurcate the Plan
so as to restrict, limit or condition the use of any provision of the Plan to
Holders who are officers or directors subject to Section 16 of the Exchange Act
without so restricting, limiting or conditioning the Plan with respect to other
Holders. Additionally, in interpreting and applying the provisions of the Plan,
any Option granted as an Incentive Stock Option pursuant to the Plan shall, to
the extent permitted by law, be construed as an "incentive stock option" within
the meaning of Section 422 of the Code.
14.6. No Trust or Fund. The Plan is intended to constitute an "unfunded"
----------------
plan. Nothing contained herein shall require the Company to segregate any
monies or other property, or shares of Common Stock, or to create any trusts, or
to make any special deposits for any immediate or deferred amounts payable to
any Holder, and no Holder shall have any rights that are greater than those of a
general unsecured creditor of the Company.
14.7. Severability. If any provision of the Plan or any Award is determined
------------
to be invalid, illegal or unenforceable in any jurisdiction, or as to any
person, or would disqualify the Plan or any Award under any law deemed
applicable by the Plan Administrator, such provision shall be construed or
deemed amended to conform to applicable laws, or, if it cannot be so construed
or deemed amended without, in the Plan Administrator's determination, materially
altering the intent of the Plan or the Award, such provision shall be stricken
as to such jurisdiction, person or Award, and the remainder of the Plan and any
such Award shall remain in full force and effect.
SECTION 15
Effective Date
The Plan's effective date is the date on which it is adopted by the Board, so
long as it is approved by the Company's shareholders at any time within 12
months of such adoption.
Adopted by the Board of Directors on May 7, 1999, and approved by the
Company's shareholders on May 7, 1999.
/s/ Partick E. Tolle
-------------------------------
PATRICK E. TOLLE, Secretary
10
<PAGE>
PLAN ADOPTION AND AMENDMENTS/ADJUSTMENTS
Date of
Adoption/
Amendment/ Date of Shareholder
Adjustment Section Effect of Amendment Approval
------------- -------------- ------------------- -------------------
May 7, 1999 Plan Adopted May 7, 1999
11
<PAGE>
Exhibit 10.12
Letter Agreement Dated March 31, 1999 Between
Aurora Financial Services, L.L.C. and BioLynx, Inc.
With Respect to a Private Placement of 500,000
Shares of Common Stock
<PAGE>
Exhibit 10.12
LETTER AGREEMENT
This AGREEMENT is made and entered into this the 31/st/ day of March, 1999 by
and between BioLynx, Inc. ("BIOLYNX"), a Texas Corporation, and Aurora Financial
Services, LLC., ("AURORA") and/or assigns.
WITNESSETH
----------
WHEREAS, BIOLYNX is engaged in the business of providing biometric automation
for the control of employees time and attendance for employers and wishes to
engage Aurora for the purpose of raising capital;
NOW, THEREFORE, it is hereby agreed as follows:
1. As compensation for raising equity/debt capital for BIOLYNX, AURORA shall
receive the following:
a. Eight (8%) percent of investor proceeds in the form of cash payable upon
the delivery of funds.
b. Two (2%) percent of the total equity position in common stock after the
investment is made.
c. Right of first refusal for subsequent financings.
2. BIOLYNX shall defend, indemnify and hold harmless AURORA from any claim,
suit, liability or other damages, direct or indirect, including but not
limited to all payments, expenses, potential injuries, or costs involving
the development or operation of its products. The parties agree that any
liability arising for any reason at any time as a result of the subject
matter of this section of the Agreement shall be completely borne,
represented and paid for by BIOLYNX.
3. The parties acknowledge that this Agreement does not create a partnership
relationship between the parties and that BIOLYNX will not refer to AURORA
as a partner or joint venturer, or as a member of a partnership, or joint
venture, with BIOLYNX. BIOLYNX agrees to maintain in strictest confidence
the identity of any and all parties acting on behalf of AURORA.
4. The parties understand and agree that BIOLYNX holds certain patents and
copywrites and that the plans and descriptions of the business, and the
rights thereto, are trade secrets and the parties warrant not to disclose
to anyone else such information without the prior written consent of
BioLynx, Inc.
5. This Agreement contains the entire understanding and agreement of the
parties as of the date hereof, and this Agreement may be amended or
modified only by an instrument in writing properly made and duly executed
by all parties hereto.
6. If litigation is commenced between the parties relative to this Agreement
or any of the rights or duties hereunder, the prevailing party shall be
entitled in addition to such relief as may be granted, to reasonable
attorney's fees and court costs as determined by the court in such action.
7. If any provision of this Agreement is declared by a court of competent
jurisdiction to be void, invalid or unenforceable, such provisions shall be
deemed severed from the Agreement and the remaining portions and provisions
shall remain in full force and effect.
8. Any notices required to be made pursuant to this Agreement in writing shall
be deemed made, when delivered personally to the party or an officer of the
party, five (5) days after being mailed by certified mail, postage prepaid,
to the following addresses:
1
<PAGE>
If to BIOLYNX: If to AURORA:
BioLynx, Inc. Aurora Financial Services, LLC
John D. Walker II 2401 Fountainview
President and CEO Suite 1010
5617 Grissom Road Houston, Texas 77057
San Antonio, Texas 78238
Either party may change its address for the purpose hereof by giving
notice of such change to the other party in the manner herein
provided, such change to become effective on the tenth (10/th/) day
after such notice is received.
9. This Agreement shall be construed and governed by the laws of the State of
Texas, and all obligations hereunder shall be deemed performable in Harris
County, Texas.
10. Subject to the provisions of this Agreement, this Agreement shall be
binding upon and inure to benefit of the parties signatory hereto, and
their respective distributees, successors, assigns and heirs.
11. This Agreement may be executed in a number of counterparts, each of which
shall be deemed an original and all of which shall constitute one and the
same Agreement.
12. In connection with this Agreement, as well as all transactions
contemplated by this Agreement, the parties agree to execute, deliver and
cause to be executed and delivered such additional documents and
instruments and to perform and cause to be performed such additional acts
as may be necessary or appropriate to effectuate, carry out and perform
all of the terms, provisions and conditions of this Agreement, and all
such transactions.
13. This Agreement is made solely and specifically between and for the benefit
of the parties hereto, and their respective successors, assigns and heirs,
subject to any express provisions hereof relating to the successors,
assigns and heirs, and no other person or entity whatsoever shall have any
rights, interest or claims hereunder or be entitled to any benefits under
or on account of this Agreement as a third party beneficiary or otherwise.
14. The respective rights duties and obligations of the parties hereto as set
forth herein shall survive the dissolution of either party hereto.
IN WITNESS HEREOF, this Agreement has been executed as of this the 6/th/ day
of April, 1999.
BioLynx, Inc,
By: /s/ JOHN D. WALKER II
------------------------------------
John D. Walker II
Aurora Financial Services, LLC
By: /s/ DAVID A. HAYDEN
------------------------------------
David A. Hayden
2
<PAGE>
Exhibit 10.13
Registration Rights Agreement Between BioLynx, Inc.
and Aurora Financial Services, L.L.C. Dated April 16, 1999
<PAGE>
Exhibit 10.13
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of April 16,1999, by and between BIOLYNX,
INC., a Texas corporation (the "Company"), and AURORA FINANCIAL SERVICES, LLC, a
Texas limited liability company having its principal office in Harris County,
Texas (the "Holder").
WHEREAS, on even date herewith the Company executed and delivered to the
Holder that certain Letter Agreement (the "Letter Agreement") whereby the
Company has agreed to issue to the Holder up to 20,000 shares of the Company's
common stock, par value $0.001 per share (the "Common Stock"), upon the
performance by the Holder as described in the Letter Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Letter Agreement, the Company agrees to provide the
Holder or any permitted assignee of the Holder (collectively, the "Holder") with
the right to "piggyback" (the "Registration Rights") on a firm commitment
underwritten offering with respect to the Common Stock and any other securities
issued or issuable at any time or from time to time in respect of the Common
Stock as a result of a merger, consolidation, reorganization, stock split, stock
dividend, recapitalization or other similar event involving the Company
(collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the parties
-------------------
agree as follows:
a. Subject to Paragraph 2(b), the Company will (i) promptly give to the
Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
b. The right of the Holder to registration pursuant to the Registration
Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
1
<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
a. The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
b. With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
i. Make and keep public information available, as those ten-ns are
understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
ii. File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
iii. So long as the Holder owns any Restricted Securities, to furnish
to the Holder upon request a written statement from the Company as to its
compliance with the reporting requirements of Rule 144 and with regard to the
Securities Act and the Exchange Act (at all times during which the Company is
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
c. The Company agrees that it will furnish to the Holder such number of
prospectuses meeting the requirements of Section 10(a)(3) of the Securities Act,
offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
d. All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
e. In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
f. The Company shall notify each Holder of Registrable Securities covered
by a Registration Statement, during the time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the Registration
---------------
Statement, if the Company gives to the Holder a notice pursuant to Paragraph
3(f) hereof and stating that the Company requires the suspension by the Holder
of the distribution of any of the Registrable Securities, then the Holder shall
cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Holder that the Blackout Period has been terminated.
Upon notice by the Company to the Holder of such determination, the Holder will
(a) keep the fact of any such notice strictly confidential, (b) promptly halt
any offer, sale, trading or transfer of any of the Registrable Securities for
the duration of the Blackout Period, and (c) promptly halt any use, publication,
dissemination or distribution of each prospectus included within the
Registration Statement, and any amendment or supplement thereto by it and any of
its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the Holder
-------
agrees, if requested, to execute a lock-up letter addressed to the managing
underwriter in customary form agreeing not to sell or otherwise dispose of the
Registrable Securities owned by the Holder (other than any that may be included
in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or seek an
---------------------
injunction restraining or otherwise delaying any registration of the Registrable
Securities as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of the
------------------------------
Registrable Securities of the Company under the Securities Act, pursuant to the
terms of this Agreement, the Company agrees to indemnity and hold harmless the
Holder and each other person who participates as an underwriter in the offering
or sale of the Registrable Securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys' fees
(collectively the "Claims"), to which the Holder or any such underwriter may
become subject under the Securities Act or otherwise, insofar as the Claims or
actions or proceedings, whether commenced or threatened, in respect thereto
arise out of or are based on any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which the
Holder's Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Holder and each such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Claim or action or proceeding in respect thereto; provided that the Company
shall not be liable in any such case to the extent that any Claim or action or
proceeding in respect thereof or expense arises out of or is based on an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a condition to
-----------------------------
including the Registrable Securities in any Registration Statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the Holder, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Paragraph 7 hereof) the Company,
each director and officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement or alleged statement in or omission or
alleged omission from the Registration Statement, any preliminary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation of
3
<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of notice
----------------
of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified arty of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this Agreement
------------------------
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities who shall, upon such
transfer or assignment, be deemed a Holder under this Agreement; provided that
the Company is furnished with written notice of the name and address of such
transferee or assignee and the Registrable Securities with respect to which the
Registration Rights are being assigned; provided, further, that such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and that such transferee or assignee is either (a) a member
of the immediate family or a trust for the benefit of any Holder that is an
individual or (b) a transferee or assignee that after the transfer or assignment
holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Letter Agreement or this
Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Holder, addressed to Mr.
David A. Hayden at 2401 Fountainview, Suite 1010, Houston, Texas 77057,
telephone (713) 268-1010, and fax (713) 268-1014; provided, however, that if
either party shall have designated a different address by notice to the other
given as provided above, then any subsequent notice shall be addressed to such
party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
23. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
5
<PAGE>
24. Relationship of Parties. The Holder is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Holder shall
not be deemed to be an employee of the Company for any reason. The Company and
the Holder acknowledge that the Holder shall not be entitled to any insurance,
pension, profit sharing, retirement or other fringe benefits which the Company
may provide to its employees during the term of this Agreement.
25. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
26. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
27. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
28. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
29. Time of the Essence. Time is of the essence of this Agreement.
-------------------
30. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
31. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32. Entire Agreement. This instrument, together with the Letter Agreement,
----------------
contains the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX, INC.
By /s/ John D. Walker II
----------------------------------
John D. Walker II, President
AURORA FINANCIAL SERVICES, LLC
By /s/ David A. Hayden
----------------------------------
David A. Hayden, President
7
<PAGE>
Exhibit 10.14
Convertible Subordinated Debenture Dated April 16, 1999
in the Amount of $1,107,523, in Favor of John D. Walker II
<PAGE>
Exhibit 10.14
BIOLYNX, INC.
CONVERTIBLE SUBORDINATED DEBENTURE
$1,107,523.00 April 16, 1999
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. WITHOUT SUCH
REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO BIOLYNX, INC. (THE "COMPANY") OF
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER
EVIDENCE AS MAY BE SATISFACTORY TO IT TO THE EFFECT THAT ANY SUCH TRANSFER SHALL
NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE OR FOREIGN SECURITIES LAWS OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.
BIOLYNX, INC., a Texas corporation (the "Company"), for value received hereby
promises to pay to JOHN D. WALKER II, or registered assigns (the "Holder"), the
principal amount of $1,107,523.00 with interest on the unpaid principal of this
Debenture, from the date hereof, at the rate of eight percent per annum, except
as otherwise may be provided herein. All payments hereunder are payable in
lawful money of the United States of America at the place the Holder may
designate in writing to the Company.
Interest on this Debenture shall be computed for the actual number of days
elapsed and on the basis of a year consisting of 360 days, unless the maximum
legal interest rate would thereby be exceeded, in which event, to the extent
necessary to avoid exceeding such maximum rate, interest shall be computed on
the basis of the actual number of days elapsed in the applicable calendar year
in which it accrued. It is the intention of the Company and the Holder to
conform strictly to applicable usury laws. It is therefore agreed that (i) the
aggregate of all interest and other charges constituting interest under
applicable law and contracted for, chargeable or receivable under this Debenture
or otherwise in connection with this loan transaction, shall never exceed the
maximum amount of interest, nor produce a rate in excess of the maximum contract
rate of interest the Holder may charge the Company under applicable law and in
regard to which the Company may not successfully assert the claim or defense of
usury, and (ii) if any excess interest is provided for, it shall be deemed a
mistake and the same shall be refunded to the Company or credited on the unpaid
principal balance hereof and this Debenture shall be automatically deemed
reformed so as to permit only the collection of the maximum legal contract rate
and amount of interest.
The unpaid principal and all accrued interest of this Debenture shall be due
and payable on April 16, 2002.
Except as provided herein, the Company and each surety, endorser, and
guarantor waives all demands for payment, presentations for payment, notices of
intention to accelerate maturity, notices of acceleration of maturity, protests,
notices of protest, grace, and diligence in the collection of this Debenture,
and in filing suit hereon, and agrees that its liability for the payment hereof
shall not be affected or impaired by any release or change in the security or by
any extension or extensions of time of payment.
The undersigned hereby agrees to pay all expenses incurred by the Holder,
including reasonable attorney's fees, all of which shall become a part of the
principal hereof, if this Debenture is placed in the hands of an attorney for
collection, or if it is collected by suit or through any probate, bankruptcy or
any other legal proceedings.
If this Debenture is not paid at maturity, however maturity may be brought
about, all principal due on the date of such maturity shall bear interest from
the date of such maturity at the maximum contract rate of interest which the
Holder may charge the Company under applicable law.
1
<PAGE>
Any check, draft, money order or other instrument given in payment of all or
any portion of this Debenture may be accepted by the Holder or any other holder
hereof and handled in collection in the customary manner, but the same shall not
constitute payment hereunder or diminish any rights of the Holder or any other
holder hereof, except to the extent that actual cash proceeds of such instrument
are unconditionally received by the Holder or any other holder hereof and
applied to the indebtedness as herein provided.
This Debenture shall be governed by and construed in accordance with the laws
of the State of Texas and applicable federal law.
If any payment of principal or interest on this Debenture shall become due on
a Saturday, Sunday or any other day on which national banks are not open for
business, such payment shall be made on the next succeeding business day.
No provision of this Debenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Debenture at the times, places and rates, and in the coin or
currency, herein prescribed.
SECTION ONE
Covenants
The Company covenants that so long as this Debenture shall be outstanding:
1.1. Address. The Company shall maintain an office at 5617 Grissom Road,
-------
San Antonio, Texas 78238, or at such other place in Bexar County, Texas as the
Company may designate by written notice given pursuant to the terms hereof,
where notices, presentations and demands to or upon the Company in respect of
this Debenture may be made or given.
1.2. Payment of Taxes. The Company shall promptly cause to be paid and
----------------
discharged all lawful taxes, assessments and governmental charges or levies
imposed upon the Company or upon the income and profits of, or upon any property
belonging to the Company before the same shall become in default, as well as all
lawful claims for labor, materials and supplies which, if unpaid, might become a
lien or charge upon such property or any part thereof; provided, however, that
the Company shall not be required to cause to be paid and discharged any such
tax, assessment, charge, levy or claim so long as the amount or validity thereof
shall be contested in good faith by appropriate proceedings, and the Company
shall set aside on its books reserves with respect thereto which the Company and
the independent public accountants who are at the time employed to audit the
books and accounts of the Company consider adequate.
1.3. Insurance. The Company shall at all times cause its physical property
---------
used or desirable in the conduct of its business to be maintained, preserved,
protected and kept in good repair, working order and condition, and from time to
time cause to be made all needful and proper repairs, replacements, betterments
and improvements thereto, so that the business carried on in connection
therewith may in the opinion of the Company be properly and advantageously
conducted at all times; provided, however, that nothing in this Section 1.3
shall require the Company to maintain, preserve, protect or keep in good repair,
working order or condition any physical property which, in the sole discretion
of the Company, is obsolete or surplus or unfit for use or may not be used
advantageously in the conduct of the business of the Company.
1.4. Books and Records. The Company shall at all times keep true and
-----------------
complete books of record and accounts in accordance with generally accepted
accounting principles and practices.
1.5. Corporate Actions. The Company shall at all times cause to be done
-----------------
all things necessary to preserve and keep in full force and effect its corporate
existence, rights, and franchises, and comply with all laws and governmental
requirements applicable to the Company; provided, however, that nothing in this
Section 1.5 shall (a) require the Company to maintain, preserve or renew any
right or franchise which in the opinion of the Board of Directors of the Company
is not necessary or desirable in the conduct of the business of the Company; or
(b) prevent any consolidation or merger involving the Company.
2
<PAGE>
1.6. Corporate Existence. The Company is (a) a corporation duly organized,
-------------------
validly existing, and in good standing under the laws of the State of Texas; (b)
has all requisite corporate powers to own assets and carry on its business as
now being or as proposed to be conducted; and (c) is qualified to do business in
all jurisdictions in which the nature of its business make such qualifications
necessary and where failure to so qualify would have a material adverse effect
on its business, financial condition, or operations.
1.7. Information. No documents furnished to the Holder in connection with
-----------
the negotiation of this Debenture contain any misstatement of a material fact or
omit to state any material fact necessary to be stated therein or necessary in
order to make the statements therein not misleading.
1.8. Due Authorization. This Debenture has been duly and validly
-----------------
authorized by all requisite corporate proceedings and when executed and
delivered will be valid and legally binding obligations of the Company
enforceable against the Company in accordance with their terms except as
enforceability is limited by bankruptcy, insolvency, reorganization, moratorium,
or other laws relating to or affecting generally the enforcement of creditors'
rights, and except to the extent that the availability of equitable remedies are
subject to the discretion of courts before which any proceeding therefor may be
brought and this Debenture is not subject to any preemptive or similar rights on
the part of any holder or holders of shares of the capital stock of the Company,
or any holder of rights to shares of the capital stock of the Company.
1.9. Compliance with Other Instruments. Neither the authorization,
---------------------------------
execution and delivery of this Debenture, or the issuance and delivery of shares
of the common stock of the Company, par value $0.001 per share (the "Common
Stock") upon the conversion of this Debenture, the consummation of the
transactions herein and therein contemplated, nor the fulfillment of or
compliance with the terms hereof and thereof, will conflict with or result in a
breach of any of the terms of the Company's Articles of Incorporation or Bylaws,
or of any material statute, law, rule or regulation, or of any judgment, decree,
writ, injunction, order or award of any arbitrator, court or governmental
authority, or of any instrument which is applicable to the Company or by which
the Company is bound, or result in the imposition of any lien upon any of the
properties or assets of the Company, except as permitted hereunder.
1.10. Offering of the Securities. This Debenture has not been registered
--------------------------
under the Securities Act of 1933, as amended (the "Securities Act") or the
securities laws of any state in reliance upon certain exemptions from the
registration requirements contained therein which the Company believes are
available in connection with this transaction. Since this Debenture has not
been registered, it is a "restricted security" as defined in Rule 144
promulgated pursuant to the Securities Act. As a "restricted security," the
Holder of this Debenture must hold it indefinitely (or until maturity or the
conversion thereof), and may not sell, transfer, pledge or otherwise dispose of
it without registration under the Securities Act or any applicable state
securities laws or unless an exemption from registration is available. Moreover,
in the event the Holder desires to sell or otherwise dispose of this Debenture,
the Holder will be required to furnish the Company with an opinion of counsel
reasonably acceptable to the Company that the transfer would not violate the
registration requirements of the Securities Act or any applicable state
securities acts. Accordingly, the Holder must be willing to bear the economic
risks of the investment in this Debenture for an indefinite period of time.
Rule 144 allows sales, without registration under the Securities Act, of limited
amounts of securities that have been held for one or two years, in certain
circumstances in accordance with specific guidelines. In order for Rule 144 to
be available, the Company must have on file with the Securities and Exchange
Commission certain information. The Company does not have any present plans to
make any filings which may be required in order for Rule 144 to be available to
the Holder.
1.11. Registration Rights. The Company has not agreed to file and the
-------------------
Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of this Debenture. However, pursuant to
that certain Registration Rights Agreement described in Exhibit A attached
---------
hereto and incorporated herein by this reference, the Company has agreed to
registration rights with respect to the resale of the shares of the Common Stock
issuable upon the conversion of this Debenture.
1.12. No Avoidance. The Company will not, by amendment of its Articles of
------------
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, share exchange, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or
3
<PAGE>
performed hereunder by the Company, but will at all times in good faith assist
in the carrying out of all the provisions of this Debenture and in the taking of
all such action as may be necessary or appropriate in order to protect the
conversion rights of the Holder against impairment.
1.13. Statement Regarding Adjustments. Upon the occurrence of each
-------------------------------
adjustment or readjustment of the conversion price of the Common Stock, the
Company at its expense shall promptly compute such adjustment or readjustment in
accordance with the terms hereof, and prepare and furnish to the Holder of this
Debenture a certificate signed by the chief financial officer of the Company
setting forth (a) such adjustment or readjustment, (b) this Debenture Conversion
Price at the time in effect, and (c) the number of shares of the Common Stock
and the amount, if any, of other property which at the time would be received
upon the conversion of this Debenture.
SECTION TWO
Representations and Covenants of the Holder
The Holder represents and covenants as follows:
2.1. Purchase for Investment. The Holder has purchased this Debenture for
-----------------------
investment only and agrees that this Debenture may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, unless and
until either (a) this Debenture has been duly and effectively registered for
resale under the Securities Act, and under any then applicable state securities
laws; or (b) the Holder delivers to the Company a written opinion reasonably
satisfactory to the Company's counsel that an exemption from such registration
requirements is then available with respect to any such proposed sale or
disposition. Any transfer otherwise permissible hereunder shall be made only at
the principal office of the Company upon surrender of this Debenture for
cancellation or in exchange for a new Debenture.
2.2. Sale of this Debenture. The Holder agrees that he will not directly
----------------------
or indirectly sell or otherwise dispose of this Debenture held by him unless, at
the time of such sale or other disposition, he complies with Section 2.1 hereof.
2.3. Reliance on Information Provided. The Holder has received and
--------------------------------
carefully reviewed certain documents from the Company and will rely solely upon
the information contained therein and herein, upon the representations and
warranties included herein, upon his independent investigation of the Company,
and upon information otherwise provided in writing by the Company and is not
relying upon any oral representations of any person in making his decision to
purchase this Debenture.
2.4. No Registration. The Holder recognizes that this Debenture has not
---------------
been registered under the Securities Act, or under the securities laws of any
state and, therefore, cannot be resold unless this Debenture is registered under
the Securities Act or unless an exemption from registration is available; and
that he has no right to require such registration.
SECTION THREE
Conversion of Debenture
3.1. Conversion. At any time the Holder of this Debenture may convert the
----------
remaining principal balance of this Debenture into shares of the Common Stock.
Any portion of this Debenture so converted into shares of the Common Stock shall
be converted at the rate of one share of the Common Stock for every $3.30 of the
principal amount of this Debenture then remaining unpaid. This Debenture, when
surrendered for conversion, shall be duly endorsed, or be accompanied by a
written instrument of transfer in a form satisfactory to the Company duly
executed by the Holder of this Debenture. For convenience, the conversion of all
or a portion, as the case may be, of the principal of this Debenture into the
Common Stock is hereinafter sometimes referred to as the conversion of this
Debenture. In the event that this Debenture is converted in part only, upon such
conversion, the Company shall execute and deliver to the Holder, without service
charge, a new Debenture, of any authorized denomination or denominations as
requested by the Holder, in aggregate principal amount equal to and in exchange
for the unconverted portion of the principal of this Debenture so surrendered.
4
<PAGE>
3.2. Delivery of Certificates. As promptly as practicable after the
------------------------
surrender, as herein provided, of this Debenture in proper form for conversion,
the Company shall deliver a certificate or certificates representing the number
of fully paid and nonassessable shares of the Common Stock into which this
Debenture (or portion thereto) may be converted in accordance with the
provisions of this Section Three. Subject to the following provisions of this
Section Three and of Section 3.4, such conversion shall be deemed to have been
made immediately prior to the close of business on the date that this Debenture
shall have been surrendered for conversion, accompanied by written notice, so
that the rights of the Holder of this Debenture as a holder thereof shall cease
with respect to this Debenture (or the portion thereof being converted) at such
time, and the person or persons entitled to receive the shares of the Common
Stock upon conversion of this Debenture shall be treated for all purposes as
having become the record holder or holders of such shares of the Common Stock at
such time. Provided, however, that no such surrender on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the person or persons entitled to receive the shares of the Common Stock upon
such conversion as the record holder or holders of such shares of the Common
Stock on such date, but such surrender shall be effective to constitute the
person or persons entitled to receive such shares of the Common Stock as the
record holder or holders thereof for all purposes immediately prior to the close
of the business on the next succeeding day on which such stock transfer books
are open.
3.3. Interest. No payment or adjustment in respect of interest accrued on
--------
this Debenture or in respect of dividends on the Common Stock shall be made upon
the conversion of this Debenture.
3.4. Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of this Debenture. If the
conversion of this Debenture results in a fraction, an amount equal to such
fraction multiplied by the conversion price of the Common Stock shall be paid to
the Holder in cash by the Company.
3.5. Adjustments. In case of any reclassification or change of outstanding
-----------
shares of the Common Stock (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination), or in case of any consolidation or merger in which
the Company is the continuing corporation and which does not result in any
reclassification or change of outstanding shares of the Common Stock), or in
case of any sale or conveyance to another corporation of the property of the
Company as an entirety or substantially as an entirety, the Holder of this
Debenture shall have the right thereafter to convert this Debenture into the
kind and amount of shares of stock of the Company or of such successor or
purchasing corporation and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale, or conveyance by a holder
of the number of shares of Common Stock of the Company into which this Debenture
might have been converted immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. The provisions of this Section shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, sales, or conveyances.
3.6. Reservation of Shares. The Company covenants that it will at times
---------------------
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon conversion of this Debenture as herein provided, such
number of shares of the Common Stock as shall then be issuable upon the
conversion of this Debenture. The Company covenants that all shares of the
Common Stock which shall be so issuable shall, when issued, be duly and validly
issued and fully paid and nonassessable.
The Company covenants that upon conversion of this Debenture as herein
provided, there will be credited to the Common Stock stated capital from the
consideration for which the shares of the Common Stock issuable upon such
conversion are issued an amount per share of the Common Stock so issued as
determined by the board of directors, which amount shall not be less than the
amount required by law and by the Company's Articles of Incorporation, as
amended, as in effect on the date of such conversion. For the purposes of this
covenant, the principal amount of this Debenture converted, less the amount of
cash paid in lieu of the issuance of fractional shares of such conversion, shall
be deemed to be the amount of consideration for which the shares of the Common
Stock issuable upon such conversion are issued.
5
<PAGE>
SECTION FOUR
Redemption of Debenture
4.1. Redemption. This Debenture may be redeemable by the Company in whole
----------
or in part at any time in an amount equal to such part or all of the then
remaining unpaid principal balance of this Debenture. Less than all of this
Debenture at any time outstanding may not be redeemed until all interest accrued
and in arrears upon all of this Debenture outstanding shall have been paid for
all past interest payment periods and until full payment of the interest for the
then current interest period on this Debenture shall have been paid or declared
and the full amount thereof set apart for payment. At least 60 days' previous
notice by mail, postage prepaid, shall be given to the Holder of this Debenture,
such notice to be addressed to the Holder at his post office address as shown by
the records of the Company. On or after the date fixed for redemption and stated
in such notice, the Holder of this Debenture shall surrender his certificates
evidencing this Debenture to the Company at the place designated in such notice
and shall thereupon be entitled to receive payment of the redemption price. In
case less than all this Debenture represented by any such surrendered
certificate are redeemed, a new certificate shall be issued representing the
unredeemed Debenture. If such notice of redemption shall have been duly given,
and if on the date fixed for redemption funds necessary for the redemption shall
be available therefor, then notwithstanding that the certificates evidencing any
of this Debenture so called for redemption shall not have been surrendered, the
interest with respect to this Debenture so called for redemption shall cease to
accrue after the date fixed for redemption and all rights with respect to this
Debenture so called for redemption shall forthwith after such date cease and
determine, except only the right of the Holder to receive the redemption price
thereof without interest upon surrender of its certificates therefor.
Notwithstanding anything herein contained to the contrary, at any time during
said 60 days, the Holder of this Debenture may convert any part or all of his
then remaining unpaid Debenture into shares of the Common Stock pursuant to the
provisions of this Debenture.
SECTION FIVE
Subordination of Debenture
5.1. Subordination of Debenture. The Company, for itself, its successors
--------------------------
and assigns, covenants and agrees, and the Holder of this Debenture by his
acceptance thereof likewise covenants and agrees, that the payment of the
principal of and interest on this Debenture shall be subordinate and subject, to
the extent and in the manner hereinafter set forth, in right of payment to the
prior payment in full of all Senior Debt.
5.2. Distribution of Assets. Upon any distribution of assets of the
----------------------
Company upon any dissolution, winding up, liquidation or reorganization of the
Company, whether in bankruptcy, insolvency or receivership proceedings or upon
an assignment for the benefit of creditors or any other dissolution, winding up,
liquidation or reorganization of the Company:
(a) All Senior Debt shall first be paid in full, or provision made for
such payment in full of the principal thereof, and premium, if any, and interest
thereon, before any payment is made on account of the principal of, or interest
on, this Debenture;
(b) Any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (other than stock of the
Company as reorganized or readjusted or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in this Section Five
with respect to this Debenture, to the payment of all Senior Debt at the time
outstanding and to any securities issued in respect thereof under any such plan
of reorganization of readjustment), to which the Holder of this Debenture would
be entitled except for the provisions of this Section Five shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Debt or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any such Senior Debt may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of, and premium, if any, and interest on, the Senior
Debt held or represented by each, to the extent necessary to make payment in
full of all Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to the holders of such Senior
Debt; and
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<PAGE>
(c) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (other than stock of the Company as reorganized or
readjusted or securities of the Company or any other corporation provided for by
a plan of reorganization or readjustment the payment of which is subordinate, at
least to the extent provided in this Section Five with respect to this
Debenture, to the payment of all Senior Debt at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment), shall be received by the Holder of this Debenture before all
Senior Debt is paid in full, or provision made for its payment, such payment or
distribution shall be paid over to the holders of Senior Debt remaining unpaid
or not provided for or their representative or representatives or to the trustee
or trustees under any indenture under which any instruments evidencing any of
such Senior Debt may have been issued, as provided in the foregoing Section
5.2(b), for application to the payment of such Senior Debt until all such Senior
Debt shall have been paid in full, after giving effect to any concurrent payment
or distribution, or provision therefor, to the holders of such Senior Debt.
5.3. Relative Rights. Subject to the payment in full of all Senior Debt,
---------------
the Holder of this Debenture shall be subrogated to the rights of the holders of
Senior Debt to receive payments or distributions of cash, property or securities
of the Company applicable to the Senior Debt until the principal of and interest
on this Debenture shall be paid in full, and no such payments or distributions
in respect of this Debenture of cash, property or securities distributable to
the Senior Debt under the provisions hereof shall, as between the Company, its
creditors other than the holders of Senior Debt, and the Holder of this
Debenture, be deemed to be a payment by the Company to or on account of this
Debenture. It is understood that the provisions of this Section Five are and are
intended solely for the purposes of defining the relative rights of the Holder
of this Debenture, on the one hand, and the holders of the Senior Debt, on the
other hand. Nothing contained in this Section Five is intended to or shall
impair, as between the Company, its creditors other than the holders of Senior
Debt, and the Holder of this Debenture, the absolute and unconditional
obligation of the Company to pay to the Holder of this Debenture the principal
of and interest on this Debenture as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holder of this Debenture and creditors of the Company
other than the holders of the Senior Debt; nor shall anything herein or therein
prevent the Holder of this Debenture from exercising all remedies otherwise
permitted by applicable law upon default under this Debenture, subject to the
rights, if any, under this Section Five of the holders of Senior Debt in respect
of cash, property or securities of the Company received upon the exercise of any
such remedy.
5.4. Distribution of Assets. Upon any distribution of assets of the
----------------------
Company referred to in this Section Five, the Holder of this Debenture shall be
entitled to rely upon a certificate of the liquidating trustee or agent or other
person making any distribution to such holders for the purpose of ascertaining
the persons entitled to participate in such distribution, the holders of the
Senior Debt and other indebtedness of the Company, the amount thereof or payable
thereon and all other facts pertinent thereto or to this Section Five.
5.5. Consequences of Default. If there shall have occurred a default in
-----------------------
the payment of the principal of (or premium, if any) or interest on any Senior
Debt, then, unless and until such default shall have been cured or waived, no
payment of principal or interest shall be made by the Company on this Debenture,
and the Holder of this Debenture shall not be entitled to receive any such
payment. Nothing contained in this Section Five shall, however (a) affect the
obligation of the Company to make, or prevent the Company from making, at any
time, except during the pendency of any dissolution, winding up, liquidation or
reorganization proceedings or except as provided in the first sentence of this
Section 5.5, payments of principal of or interest on this Debenture, or (b)
prevent the application by any paying agent of any monies deposited with it by
the Company to the payment of or on account of the principal of, or interest on,
this Debenture, if, at the time of such deposit, the payment agent did not have
written notice of any event prohibiting the making of such payment or deposit by
the Company, or (c) be construed as preventing the occurrence of any Event of
Default hereunder.
5.6. Failure to Act. No right of any present or future holder of any
--------------
Senior Debt of the Company to enforce subordination as herein provided shall at
any time or in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company with the terms, provisions
and covenants of this Debenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with having.
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<PAGE>
5.7. Renewal. Any renewal or extension of the time of payment of any
-------
Senior Debt or the exercise by the holders of Senior Debt of any of their rights
under the Senior Debt, including without limitation the waiver of default
thereunder or the release of any security therefor, may be made or done all
without notice to or assent from the Holder of this Debenture. No compromise,
alteration, amendment, modification, extension, renewal or other change of, or
waiver, consent or other action in respect of, any liability or obligation under
or in respect of, or of any of the terms, covenants or conditions of any
indenture or other instrument under which any Senior Debt is outstanding or of
such Senior Debt, and no release of property securing any Senior Debt, whether
or not such release is in accordance with the provisions of any applicable
document, shall in any way alter or affect any of the provisions of this Section
Five.
5.8. Senior Debt. "Senior Debt" shall mean (a) the principal of and
-----------
premium, if any, and interest on all indebtedness of the Company, whether
currently outstanding or hereafter created (other than any indebtedness of the
Company hereafter created which is, when created, specifically designated by the
Company as not constituting Senior Debt with respect to this Debenture), for
money borrowed by the Company or by others and guaranteed by the Company, and
indebtedness constituting purchase money indebtedness of the Company or of
others and guaranteed by the Company, (b) any other indebtedness, liability or
other contingent obligation in respect of any indebtedness, liability or
obligation of another, created, assumed or incurred by the Company after the
date of the issuance of this Debenture, which is, when created, assumed or
incurred, specifically designated by the Company as Senior Debt with respect to
this Debenture, and (c) any refundings, renewals or extensions of any
indebtedness or other obligation described as Senior Debt or other indebtedness
or other obligation described as Senior Debt in (a) or (b) above of this Section
5.8. It is expressly understood that the term Senior Debt does not include any
amounts owing by the Company to any shareholder or employee of the Company.
Notwithstanding anything herein contained to the contrary, the Company shall not
be limited from incurring additional Senior Debt or other indebtedness from and
after the date hereof, whether secured or unsecured. Further, the amount of the
Senior Debt may be changed from time to time at the discretion of the Company.
SECTION SIX
Registration and Transfer of this Debenture
6.1. Register: Ownership. The Company will cause to be kept at its
-------------------
principal office a register in which the Company will provide for the
registration of this Debenture. The Company shall treat the Holder in whose
name this Debenture is registered on such register as the owner thereof for the
purpose of receiving payment of the principal of, and interest on, this
Debenture and for all other purposes, and the Company shall not be affected by
any notice to the contrary. All references in this Debenture to a "Holder" of
this Debenture shall mean the holder in whose name such registered Debenture is
at such time registered on such register.
6.2. Transfer and Exchange. Upon surrender of this Debenture for
---------------------
registration of transfer or for exchange, the Company, at its expense, will
execute and deliver in exchange therefor a new Debenture, and which, in the case
of this Debenture, aggregate the unpaid principal amount of such surrendered
Debenture. Any such new Debenture shall, at the option of such Holder or
transferee, be registered in the name or made payable to such person as such
Holder or transferee may request, dated so that there will be no loss of
interest on such surrendered Debenture and otherwise of like tenor.
6.3. Replacement of this Debenture. Upon receipt of evidence reasonably
-----------------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Debenture and, in the case of any such loss, theft or destruction of this
Debenture, upon delivery of an indemnity bond in such reasonable amount as the
Company may determine, or, in the case of such mutilation, upon the surrender of
this Debenture for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new
Debenture of like tenor, dated so that there will be no loss of interest on such
lost, stolen, destroyed or mutilated Debenture. Any Debenture in lieu of which
any such new Debenture has been so executed and delivered by the Company shall
not be deemed to be an outstanding Debenture for any purpose of this Debenture.
6.4. Payment of this Debenture. The Holder of this Debenture will promptly
-------------------------
notify the Company of any sale or other disposition of this Debenture held by it
or its nominee, specifying the name and address of the transferee, so long
8
<PAGE>
as such disposition was effected in accordance with the terms of this Debenture.
Provided that maturity has not been accelerated by reason of default, upon the
scheduled maturity date of this Debenture, the Company will tender funds for the
payment in full of the unpaid principal amount of this Debenture and all accrued
interest thereon to the Holder of this Debenture.
SECTION SEVEN
Events of Default
7.1. Events of Default. An Event of Default means any of the following
-----------------
events, whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any Court or any order, rule or regulation of any
administrative governmental body:
(a) Default shall be made in the payment of any principal or interest
due on this Debenture.
(b) Default shall be made in the due observance and performance of any
representation, covenant, warranty, agreement or condition in this Debenture,
other than the default in the payment of any principal or interest due on this
Debenture, and such default shall continue for a period of 20 days after written
notice thereof to the Company by the Holder, then, at the option of the Holder,
this Debenture shall thereupon become due and payable without any other
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived.
(c) The Company shall (i) apply for or consent to the appointment of a
receiver, trustee, or liquidator of the Company or any of its respective assets,
(ii) make a general assignment for the benefit of creditors, (iii) be
adjudicated a bankrupt or insolvent, or (iv) file a voluntary petition of
bankruptcy, or a petition or answer seeking reorganization or an arrangement
with creditors to take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, moratorium, dissolution, liquidation, or debtor relief
law, or any chapter of any such law, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such law
or chapter, or corporate action shall be taken by the Company for the purpose of
effecting any of the foregoing; or an order, judgment, or decree shall be
entered, without the application, approval, or consent of the Company, by any
court of competent jurisdiction, approving a petition seeking liquidation or
reorganization of the Company, as applicable, of all or a substantial part of
the assets of the Company; and provided that such order, judgment, or decree
remains in effect for more than 60 days, whether or not consecutive, then, at
the option of the Holder, this Debenture shall thereupon become due and payable
without any other presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived.
7.2. Notice of Default. If any event shall occur that constitutes, or
-----------------
after continuance for a specified period would constitute, an Event of Default
hereunder, the Company will at once give notice to the Holder specifying the
nature of such event.
7.3. Remedies. In case any one or more of the Events of Default shall have
--------
happened and be continuing, the Holder of this Debenture may proceed to protect
and enforce his rights either by suit in equity and/or by action at law, or by
other appropriate proceeding, whether for the specific performance (to the
extent permitted by law) of any covenant or agreement contained in this
Debenture or in aid of the exercise of any power granted in this Debenture, or
proceed to enforce the payment of this Debenture or to enforce any other legal
or equitable right of the Holder of this Debenture.
SECTION NINE
Miscellaneous
9.1. Limitation on Consolidation, Merger and Sale. The Company may not
--------------------------------------------
consolidate with or merge into any other corporation (unless the Company is the
continuing corporation), or convey, or transfer or lease its properties and
assets substantially as an entirety to any person, unless (a) the successor
corporation shall assume the Company's obligations under this Debenture, and (b)
immediately after giving effect to such transaction, no default in the
performance or observance of any of the terms, covenants and conditions of this
Debenture shall have occurred and be continuing.
9
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In case of any consolidation or merger of the Company with or into any other
corporation (other than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any reclassification or
change other than a change in par value or as a result of a subdivision or
combination in the Common Stock) or any sale or transfer of all or substantially
all the assets of the Company, the Holder of each Debenture will after such
consolidation, merger, sale or transfer have the right to convert this Debenture
into the kind and amount of securities, cash and other property which such
Holder would have been entitled to receive upon such consolidation, merger, sale
or transfer if he had held the Common Stock issuable upon the conversion of this
Debenture immediately prior to such consolidation, merger, sale or transfer.
9.2. No Sinking Fund. The Company is not required to establish any sinking
---------------
fund with respect to this Debenture.
9.3. No Recourse. This Debenture is the obligation of the Company only,
-----------
and except for wilful fraud or misconduct, no recourse shall be had for the
payment hereof or the interest hereon against any incorporator, shareholder,
director or officer as such (whether past, present or future) of the Company or
any successor entity whether by virtue of any constitution, statue or rule of
law or equity, or by the enforcement of any assessment or penalty, or otherwise,
all such liability of the incorporators, shareholders, directors and officers as
such being expressly waived and released by the Holder by the acceptance of this
Debenture.
9.4. Headings. The headings used in this Debenture are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Debenture, and in no way effect or constitute a part of this
Debenture.
9.5. Survival. All agreements, representations and warranties contained
--------
herein or made in writing by or on behalf of the Company in connection with the
transactions contemplated hereby shall survive the execution and delivery of
this Debenture, any investigation at any time made by any Holder, the purchase
of this Debenture by any Holder and any disposition or payment of this
Debenture.
9.6. Arbitration. All disputes arising or related to this Debenture must
-----------
exclusively be resolved by binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time the
arbitration proceeding commences; except that (a) Texas law and the Federal
Arbitration Act must govern construction and effect, (b) the locale of any
arbitration must be in San Antonio, Texas, and (c) the arbitrator must with the
award provide written findings of fact and conclusions of law. Any party may
seek from a court of competent jurisdiction any provisional remedy that may be
necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator's determination of the merits of the controversy.
The exercise of such arbitration rights by any party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights. An arbitration award
may be entered in any court having jurisdiction.
IN WITNESS WHEREOF, the Company has duly executed this Debenture as of the
date first above written.
BIOLYNX, INC.
By /s/ John D. Walker II
------------------------------------
John D. Walker II, President
Attachment
- ----------
Exhibit A - Registration Rights Agreement
10
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Exhibit A
Registration Rights Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of April 16, 1999, by and between BIOLYNX,
INC., a Texas corporation (the "Company"), and JOHN D. WALKER II, a resident of
Bexar County, Texas (the "Holder").
WHEREAS, on even date herewith the Company executed and delivered to the
Holder that certain Convertible Subordinated Debenture (the "Debenture") whereby
the Company has agreed to issue to the Holder up to 335,613 shares of the
Company's common stock, par value $0.001 per share (the "Common Stock"), upon
the conversion of the Debenture as described in the Debenture;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Debenture, the Company agrees to provide the Holder
or any permitted assignee of the Holder (collectively, the "Holder") with the
right to "piggyback" (the "Registration Rights") on a firm commitment
underwritten offering with respect to the Common Stock and any other securities
issued or issuable at any time or from time to time in respect of the Common
Stock as a result of a merger, consolidation, reorganization, stock split, stock
dividend, recapitalization or other similar event involving the Company
(collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the parties
-------------------
agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to the
Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the Registration
Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
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<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms are
understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to furnish
to the Holder upon request a written statement from the Company as to its
compliance with the reporting requirements of Rule 144 and with regard to the
Securities Act and the Exchange Act (at all times during which the Company is
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number of
prospectuses meeting the requirements of Section 10(a)(3) of the Securities Act,
offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities covered
by a Registration Statement, during the time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the Registration
---------------
Statement, if the Company gives to the Holder a notice pursuant to Paragraph
3(f) hereof and stating that the Company requires the suspension by the Holder
of the distribution of any of the Registrable Securities, then the Holder shall
cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Holder that the Blackout Period has been terminated.
Upon notice by the Company to the Holder of such determination, the Holder will
(a) keep the fact of any such notice strictly confidential, (b) promptly halt
any offer, sale, trading or transfer of any of the Registrable Securities for
the duration of the Blackout Period, and (c) promptly halt any use, publication,
dissemination or distribution of each prospectus included within the
Registration Statement, and any amendment or supplement thereto by it and any of
its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the Holder
-------
agrees, if requested, to execute a lock-up letter addressed to the managing
underwriter in customary form agreeing not to sell or otherwise dispose of the
Registrable Securities owned by the Holder (other than any that may be included
in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or seek an
---------------------
injunction restraining or otherwise delaying any registration of the Registrable
Securities as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of the
------------------------------
Registrable Securities of the Company under the Securities Act, pursuant to the
terms of this Agreement, the Company agrees to indemnity and hold harmless the
Holder and each other person who participates as an underwriter in the offering
or sale of the Registrable Securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys' fees
(collectively the "Claims"), to which the Holder or any such underwriter may
become subject under the Securities Act or otherwise, insofar as the Claims or
actions or proceedings, whether commenced or threatened, in respect thereto
arise out of or are based on any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which the
Holder's Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Holder and each such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Claim or action or proceeding in respect thereto; provided that the Company
shall not be liable in any such case to the extent that any Claim or action or
proceeding in respect thereof or expense arises out of or is based on an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a condition to
-----------------------------
including the Registrable Securities in any Registration Statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the Holder, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Paragraph 7 hereof) the Company,
each director and officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement or alleged statement in or omission or
alleged omission from the Registration Statement, any preliminary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation of
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<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this Agreement
------------------------
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities who shall, upon such
transfer or assignment, be deemed a Holder under this Agreement; provided that
the Company is furnished with written notice of the name and address of such
transferee or assignee and the Registrable Securities with respect to which the
Registration Rights are being assigned; provided, further, that such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and that such transferee or assignee is either (a) a member
of the immediate family or a trust for the benefit of any Holder that is an
individual or (b) a transferee or assignee that after the transfer or assignment
holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Debenture or this Agreement,
the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax
(210) 256-1992, and e-mail [email protected]; and if to the Holder, addressed
to Mr. John D. Walker II at 5617 Grissom Road, San Antonio, Texas 78238,
telephone (210) 256-8300, fax (210) 256-1992, and e-mail [email protected];
provided, however, that if either party shall have designated a different
address by notice to the other given as provided above, then any subsequent
notice shall be addressed to such party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
5
<PAGE>
23. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
24. Relationship of Parties. The Holder is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Holder shall
not be deemed to be an employee of the Company for any reason. The Company and
the Holder acknowledge that the Holder shall not be entitled to any insurance,
pension, profit sharing, retirement or other fringe benefits which the Company
may provide to its employees during the term of this Agreement.
25. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
26. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
27. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
28. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
29. Time of the Essence. Time is of the essence of this Agreement.
-------------------
30. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
31. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32. Entire Agreement. This instrument, together with the Debenture, contains
----------------
the entire understanding of the parties and may not be changed orally, but only
by an instrument in writing signed by the party against whom enforcement of any
waiver, change, modification, extension, or discharge is sought.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX, INC.
By /s/ John D. Walker II
----------------------------------
John D. Walker II, President
/s/ John D. Walker II
------------------------------------
JOHN D. WALKER II
7
<PAGE>
Exhibit 10.15
Consulting Agreement Dated May 7, 1999 Between
BioLynx.Com, Inc. and Jazbermaine
<PAGE>
Exhibit 10.15
CONSULTING AGREEMENT
THIS AGREEMENT is made this 7/th/ day of May, 1999 by and between BIOLYNX.COM,
INC., a Texas corporation (the "Company") and JAZBERMAINE (the "Consultant").
WHEREAS, the Company wishes to obtain the advice, contacts and expert judgment
of the Consultant with respect to the conduct of the Company's business; and
WHEREAS, the Company desires to have the Consultant act as an independent
contractor for the purpose of providing such services to the Company; and
WHEREAS, the Consultant is qualified and willing to provide such services
pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Services. The Company hereby engages and retains the Consultant as an
--------
independent contractor to provide the services set forth herein. The Consultant
hereby agrees to provide all reasonable and necessary services associated with
the following: (a) the development of a comprehensive business plan; (b) future
acquisition strategies; (c) capital development and fund raising; and (d) any
other ancillary services relating to the aforementioned (collectively, the
"Services"). The Consultant has fully performed all of the Services hereunder.
2. Representations. The Consultant hereby agrees to use its best efforts in
---------------
providing the Services and loyally representing the interests of the Company in
accordance with the Company's reasonable requirements and objectives. The
Consultant and the Company acknowledge that Consultant is experienced in
providing the Services and will provide the Services with the diligence and care
of others in the industry. The Consultant further represents that it has not,
and shall not, enter into any agreement during the term of this Agreement which
might prevent it from performing its obligations hereunder.
3. Fees. In full consideration of the Services provided hereunder, the
----
Company hereby grants to the Consultant 200,000 shares of the restricted common
stock of the Company, par value $0.001 per share (the "Common Stock") for a
consideration of $200, to be issued within a reasonable time after the execution
of this Agreement.
4. Restrictions on Transfer. The Consultant understands and agrees that the
------------------------
following restrictions and limitations are applicable to the shares of the
Common Stock issued to the Consultant hereunder:
(a) The shares shall not be sold, pledged, hypothecated or otherwise
transferred unless the shares are registered under the Securities Act of 1933,
as amended, and the securities laws of any state or foreign jurisdiction, or are
exempt therefrom;
(b) A legend in substantially the following form has been or will be placed
on any certificate or other document evidencing the shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY
STATE OR FOREIGN JURISDICTION. WITHOUT SUCH REGISTRATION, SUCH
SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
1
<PAGE>
REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE OR FOREIGN
JURISDICTION, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
(c) Stop transfer instructions to the transfer agent of the shares have
been or will be placed with respect to the shares so as to restrict the resale,
pledge, hypothecation or other transfer thereof, subject to the further items
hereof, including the provisions of the legend set forth in subparagraph (b)
above; and
(d) The legend and stop transfer instructions described in subparagraphs
(b) and (c) above will be placed with respect to any new certificate or other
document issued upon presentment by the Consultant of certificates or other
documents for transfer.
5. Registration Rights Agreement. On even date herewith the parties have
-----------------------------
executed that certain Registration Rights Agreement with respect to the Common
Stock issued to the Consultant hereunder, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference for all purposes.
- ---------
6. Expenses. All expenses, including travel and lodging, incurred by the
--------
Consultant in the performance of the Services shall be the sole responsibility
of the Consultant, unless otherwise agreed to in writing. During the continuance
of this Agreement, the Consultant shall certify as regular and guarantee the
Consultant's situation towards all relevant tax authorities, social
administrations and professional organizations, if applicable, as being in
conformity with the Consultant's status as an independent contractor.
7. Insurance. The parties agree that the Company shall not be required to
---------
carry insurance or in any way insure the activities of the Consultant, its
agents, servants or employees, nor shall the Company be liable for any of the
acts or omissions of the Consultant, its agents, servants or employees. The
Consultant further agrees to indemnify, defend, and hold harmless the Company
from any and all claims, penalties, fines, causes of action, liabilities, or
threats of such actions which arise out of or relate to this Agreement or the
performance of the Services. This provision shall survive the termination of
this Agreement.
8. Duration. This Agreement shall remain in effect for a period of one year
--------
commencing on the date hereof, but shall automatically renew, if not terminated
as provided for herein, for successive one year periods. Notwithstanding the
foregoing, the Company or the Consultant may terminate this Agreement at any
time upon 10 days' written notice.
9. Confidentiality. All information relating to the business and affairs of
---------------
the Company shall be treated as Confidential Information, as hereinafter
defined, by the Consultant both during and after the term hereof. Except with
the prior approval of the Company, the Consultant shall not disclose any of the
Confidential Information at any time to any person except authorized personnel
of the Company and its affiliated corporations. The Consultant further agrees
not to use any information made available to or coming into its possession or
knowledge in a manner that is adverse to the business of the Company. All data,
records and written material prepared or compiled by the Consultant or furnished
to the Consultant during the term hereof shall be the sole and exclusive
property of the Company, and none of such data, records or written materials, or
copies thereof, shall be retained by the Consultant after the term of this
Agreement.
As used herein, the term "Confidential Information" includes, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Company and its affiliated corporations and dealers, distributors,
customers, clients, suppliers and others who have had or will have had business
dealings with the Company and its affiliated corporations. The term
"Confidential Information" does not include information which (a) becomes
generally available to the public through no wrongful act on the part of the
Consultant, (b) can be shown to have been previously available to the Consultant
on a non-confidential basis prior to its disclosure to the Consultant by the
Company, or
2
<PAGE>
its representatives, (c) becomes available to the Consultant on a non-
confidential basis from a source other than the Company or its representatives,
or (d) is required to be disclosed by order of a court of competent
jurisdiction.
Notwithstanding anything herein contained to contrary, the above described
obligation with respect to confidentiality shall survive any termination of the
Consultant's engagement hereunder or the termination of this Agreement.
10. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Registration Rights Agreement
or this Agreement, the terms of the Registration Rights Agreement shall control.
11. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
12. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.
13. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
14. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Consultant.
15. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Consultant, addressed to Mr.
Britt Brooks at _____, Houston, Texas 770__, telephone (713) 888-1906, fax (713)
888-1947, and e-mail _____; provided, however, that if either party shall have
designated a different address by notice to the other given as provided above,
then any subsequent notice shall be addressed to such party at the last address
so designated.
3
<PAGE>
16. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
18. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
19. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
20. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
21. Relationship of Parties. The Consultant is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Consultant
shall not be deemed to be an employee of the Company for any reason. The Company
and the Consultant acknowledge that the Consultant shall not be entitled to any
insurance, pension, profit sharing, retirement or other fringe benefits which
the Company may provide to its employees during the term of this Agreement.
22. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
23. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
24. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
25. Time of the Essence. Time is of the essence of this Agreement.
-------------------
26. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
4
<PAGE>
27. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
28. Entire Agreement. This instrument, together with the Registration Rights
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
--------------------------------
John D. Walker II, President
JAZBERMAINE
By /s/ Britt Brooks
--------------------------------
Britt Brooks, Owner
Attachment
- ----------
Exhibit A - Registration Rights Agreement
5
<PAGE>
Exhibit A
Registration Rights Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of May 7/th/, 1999, by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company"), and JAZBERMAINE (the
"Shareholder").
WHEREAS, on even date herewith the parties executed that certain Consulting
Agreement (the "Consulting Agreement") whereby the Company has agreed to issue
to the Shareholder 200,000 shares of the Company's common stock, par value
$0.001 per share (the "Common Stock"), for the Services rendered as described in
the Consulting Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Consulting Agreement, the Company agrees to provide
the Shareholder or any permitted assignee of the Shareholder (collectively, the
"Holder") with the right to "piggyback" (the "Registration Rights") on a firm
commitment underwritten offering with respect to the Common Stock and any other
securities issued or issuable at any time or from time to time in respect of the
Common Stock as a result of a merger, consolidation, reorganization, stock
split, stock dividend, recapitalization or other similar event involving the
Company (collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the parties
-------------------
agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to the
Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the Registration
Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
1
<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms are
understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to furnish
to the Holder upon request a written statement from the Company as to its
compliance with the reporting requirements of Rule 144 and with regard to the
Securities Act and the Exchange Act (at all times during which the Company is
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number of
prospectuses meeting the requirements of Section 10(a)(3) of the Securities Act,
offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities covered
by a Registration Statement, during the time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the Registration
---------------
Statement, if the Company gives to the Holder a notice pursuant to Paragraph
3(f) hereof and stating that the Company requires the suspension by the Holder
of the distribution of any of the Registrable Securities, then the Shareholder
shall cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Holder that the Blackout Period has been terminated.
Upon notice by the Company to the Holder of such determination, the Holder will
(a) keep the fact of any such notice strictly confidential, (b) promptly halt
any offer, sale, trading or transfer of any of the Registrable Securities for
the duration of the Blackout Period, and (c) promptly halt any use, publication,
dissemination or distribution of each prospectus included within the
Registration Statement, and any amendment or supplement thereto by it and any of
its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the Holder
-------
agrees, if requested, to execute a lock-up letter addressed to the managing
underwriter in customary form agreeing not to sell or otherwise dispose of the
Registrable Securities owned by the Holder (other than any that may be included
in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or seek an
---------------------
injunction restraining or otherwise delaying any registration of the Registrable
Securities as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of the
------------------------------
Registrable Securities of the Company under the Securities Act, pursuant to the
terms of this Agreement, the Company agrees to indemnity and hold harmless the
Holder and each other person who participates as an underwriter in the offering
or sale of the Registrable Securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys' fees
(collectively the "Claims"), to which the Holder or any such underwriter may
become subject under the Securities Act or otherwise, insofar as the Claims or
actions or proceedings, whether commenced or threatened, in respect thereto
arise out of or are based on any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which the
Holder's Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Holder and each such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Claim or action or proceeding in respect thereto; provided that the Company
shall not be liable in any such case to the extent that any Claim or action or
proceeding in respect thereof or expense arises out of or is based on an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a condition to
-----------------------------
including the Registrable Securities in any Registration Statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the Holder, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Paragraph 7 hereof) the Company,
each director and officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement or alleged statement in or omission or
alleged omission from the Registration Statement, any preliminary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation of
3
<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this Agreement
------------------------
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Shareholder to a transferee or assignee of such securities who shall, upon
such transfer or assignment, be deemed a Holder under this Agreement; provided
that the Company is furnished with written notice of the name and address of
such transferee or assignee and the Registrable Securities with respect to which
the Registration Rights are being assigned; provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and that such transferee or assignee is
either (a) a member of the immediate family or a trust for the benefit of any
Holder that is an individual or (b) a transferee or assignee that after the
transfer or assignment holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Consulting Agreement or this
Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax
(210) 256-1992, and e-mail [email protected]; and if to the Holder, addressed
to Mr. Britt Brooks at _____, Houston, Texas 770__, telephone (713) 888-1906,
fax (713) 888-1947, and e-mail _____; provided, however, that if either party
shall have designated a different address by notice to the other given as
provided above, then any subsequent notice shall be addressed to such party at
the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
23. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
5
<PAGE>
24. Relationship of Parties. The Holder is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Holder shall
not be deemed to be an employee of the Company for any reason. The Company and
the Holder acknowledge that the Holder shall not be entitled to any insurance,
pension, profit sharing, retirement or other fringe benefits which the Company
may provide to its employees during the term of this Agreement.
25. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
26. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
27. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
28. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
29. Time of the Essence. Time is of the essence of this Agreement.
-------------------
30. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
31. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32. Entire Agreement. This instrument, together with the Consulting
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
---------------------------------------
John D. Walker II, President
JAZBERMAINE
By /s/ Britt Brooks
----------------------------------------
Britt Brooks, Owner
7
<PAGE>
Exhibit 10.16
Financial Advisory Agreement Dated May 7, 1999 Between
BioLynx.Com, Inc. and R. F. Bearden Associates, Inc.
<PAGE>
Exhibit 10.16
FINANCIAL ADVISORY AGREEMENT
THIS AGREEMENT is made this 7/th/ day of May, 1999 by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company") and R. F. BEARDEN
ASSOCIATES, INC., a Texas corporation (the "Consultant").
WHEREAS, the Company wishes to obtain the advice, contacts and expert judgment
of the Consultant with respect to finding a "public corporate shell" and to take
all necessary steps to cause the shareholders of the "public corporate shell" to
become shareholders of the Company; and
WHEREAS, the Company desires to have the Consultant act as an independent
contractor for the purpose of providing such services to the Company; and
WHEREAS, the Consultant is qualified and willing to provide such services
pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Services. The Company hereby engages and retains the Consultant as an
--------
independent contractor to provide the services set forth herein. The Consultant
hereby agrees to provide all reasonable and necessary services associated with
the following: (a) to locate an acceptable "public corporate shell"; and (b) to
arrange the acquisition of the common stock of the Company by the "public
corporate shell" with the ultimate strategy that the public shareholders of the
public corporate shell will become shareholders of the Company (collectively,
the "Services"). The Consultant has located the desired "public corporate
shell" and has fully performed all of the Services hereunder.
2. Representations. The Consultant hereby agrees to use its best efforts in
---------------
providing the Services and loyally representing the interests of the Company in
accordance with the Company's reasonable requirements and objectives. The
Consultant and the Company acknowledge that Consultant is experienced in
providing the Services and will provide the Services with the diligence and care
of others in the industry. The Consultant further represents that it has not,
and shall not, enter into any agreement during the term of this Agreement which
might prevent it from performing its obligations hereunder.
3. Fees. In full consideration of the Services provided hereunder, the
----
Company hereby grants to the Consultant the right to purchase 37,500 shares of
the restricted common stock of the Company, par value $0.001 per share (the
"Common Stock") for a consideration of $37.50, to be issued within a reasonable
time after the execution of this Agreement.
4. Restrictions on Transfer. The Consultant understands and agrees that the
------------------------
following restrictions and limitations are applicable to the shares of the
Common Stock issued to the Consultant hereunder:
(a) The shares shall not be sold, pledged, hypothecated or otherwise
transferred unless the shares are registered under the Securities Act of 1933,
as amended, and the securities laws of any state or foreign jurisdiction, or are
exempt therefrom;
(b) A legend in substantially the following form has been or will be placed
on any certificate or other document evidencing the shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAW OF ANY STATE OR FOREIGN JURISDICTION.
1
<PAGE>
WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER
EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED,
THE SECURITIES LAW OF ANY STATE OR FOREIGN JURISDICTION, OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
(c) Stop transfer instructions to the transfer agent of the shares have
been or will be placed with respect to the shares so as to restrict the resale,
pledge, hypothecation or other transfer thereof, subject to the further items
hereof, including the provisions of the legend set forth in subparagraph (b)
above; and
(d) The legend and stop transfer instructions described in subparagraphs
(b) and (c) above will be placed with respect to any new certificate or other
document issued upon presentment by the Consultant of certificates or other
documents for transfer.
5. Registration Rights Agreement. On even date herewith the parties have
-----------------------------
executed that certain Registration Rights Agreement with respect to the Common
Stock issued to the Consultant hereunder, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference for all purposes.
- ---------
6. Expenses. All expenses, including travel and lodging, incurred by the
--------
Consultant in the performance of the Services shall be the sole responsibility
of the Consultant, unless otherwise agreed to in writing. During the
continuance of this Agreement, the Consultant shall certify as regular and
guarantee the Consultant's situation towards all relevant tax authorities,
social administrations and professional organizations, if applicable, as being
in conformity with the Consultant's status as an independent contractor.
7. Insurance. The parties agree that the Company shall not be required to
---------
carry insurance or in any way insure the activities of the Consultant, its
agents, servants or employees, nor shall the Company be liable for any of the
acts or omissions of the Consultant, its agents, servants or employees. The
Consultant further agrees to indemnify, defend, and hold harmless the Company
from any and all claims, penalties, fines, causes of action, liabilities, or
threats of such actions which arise out of or relate to this Agreement or the
performance of the Services. This provision shall survive the termination of
this Agreement.
8. Duration. This Agreement shall remain in effect for a period of one year
--------
commencing on the date hereof, but shall automatically renew, if not terminated
as provided for herein, for successive one year periods. Notwithstanding the
foregoing, the Company or the Consultant may terminate this Agreement at any
time upon 10 days' written notice.
9. Confidentiality. All information relating to the business and affairs of
---------------
the Company shall be treated as Confidential Information, as hereinafter
defined, by the Consultant both during and after the term hereof. Except with
the prior approval of the Company, the Consultant shall not disclose any of the
Confidential Information at any time to any person except authorized personnel
of the Company and its affiliated corporations. The Consultant further agrees
not to use any information made available to or coming into its possession or
knowledge in a manner that is adverse to the business of the Company. All data,
records and written material prepared or compiled by the Consultant or furnished
to the Consultant during the term hereof shall be the sole and exclusive
property of the Company, and none of such data, records or written materials, or
copies thereof, shall be retained by the Consultant after the term of this
Agreement.
As used herein, the term "Confidential Information" includes, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Company and its affiliated corporations and dealers, distributors,
customers, clients, suppliers and others who have had or will have had business
dealings with the Company and its affiliated corporations. The term
"Confidential Information" does not include information which (a) becomes
generally
2
<PAGE>
available to the public through no wrongful act on the part of the Consultant,
(b) can be shown to have been previously available to the Consultant on a non-
confidential basis prior to its disclosure to the Consultant by the Company, or
its representatives, (c) becomes available to the Consultant on a non-
confidential basis from a source other than the Company or its representatives,
or (d) is required to be disclosed by order of a court of competent
jurisdiction.
Notwithstanding anything herein contained to contrary, the above described
obligation with respect to confidentiality shall survive any termination of the
Consultant's engagement hereunder or the termination of this Agreement.
10. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Registration Rights Agreement
or this Agreement, the terms of the Registration Rights Agreement shall control.
11. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
12. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.
13. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
14. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Consultant.
15. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Consultant, addressed to Ron
F. Bearden, Ph.D. at 2800 Post Oak Boulevard, Suite 5260, Houston, Texas 77056,
telephone (713) 621-0577, fax (713) 621-6432, and e-mail [email protected]; provided,
3
<PAGE>
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
16. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
18. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
19. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
20. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
21. Relationship of Parties. The Consultant is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Consultant
shall not be deemed to be an employee of the Company for any reason. The
Company and the Consultant acknowledge that the Consultant shall not be entitled
to any insurance, pension, profit sharing, retirement or other fringe benefits
which the Company may provide to its employees during the term of this
Agreement.
22. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
23. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
24. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
25. Time of the Essence. Time is of the essence of this Agreement.
-------------------
26. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
4
<PAGE>
27. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
28. Entire Agreement. This instrument, together with the Registration Rights
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
--------------------------------------
John D. Walker II, President
R. F. BEARDEN ASSOCIATES, INC.
By /s/ R. F. Bearden
---------------------------------------
Ron F. Bearden, Ph.D., President
Attachment
- ----------
Exhibit A - Registration Rights Agreement
5
<PAGE>
Exhibit A
Registration Rights Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of May 7/th/, 1999, by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company"), and R. F. BEARDEN
ASSOCIATES, INC., a Texas corporation (the "Shareholder").
WHEREAS, on even date herewith the parties executed that certain Financial
Advisory Agreement (the "Financial Advisory Agreement") whereby the Company has
agreed to issue to the Shareholder 37,500 shares of the Company's common stock,
par value $0.001 per share (the "Common Stock"), for the Services rendered as
described in the Financial Advisory Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Financial Advisory Agreement, the Company agrees to
provide the Shareholder or any permitted assignee of the Shareholder
(collectively, the "Holder") with the right to "piggyback" (the "Registration
Rights") on a firm commitment underwritten offering with respect to the Common
Stock and any other securities issued or issuable at any time or from time to
time in respect of the Common Stock as a result of a merger, consolidation,
reorganization, stock split, stock dividend, recapitalization or other similar
event involving the Company (collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the parties
-------------------
agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to the
Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the Registration
Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
1
<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms are
understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to furnish
to the Holder upon request a written statement from the Company as to its
compliance with the reporting requirements of Rule 144 and with regard to the
Securities Act and the Exchange Act (at all times during which the Company is
subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number of
prospectuses meeting the requirements of Section 10(a)(3) of the Securities Act,
offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities covered
by a Registration Statement, during the time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the Registration
---------------
Statement, if the Company gives to the Holder a notice pursuant to Paragraph
3(f) hereof and stating that the Company requires the suspension by the Holder
of the distribution of any of the Registrable Securities, then the Shareholder
shall cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Holder that the Blackout Period has been terminated.
Upon notice by the Company to the Holder of such determination, the Holder will
(a) keep the fact of any such notice strictly confidential, (b) promptly halt
any offer, sale, trading or transfer of any of the Registrable Securities for
the duration of the Blackout Period, and (c) promptly halt any use, publication,
dissemination or distribution of each prospectus included within the
Registration Statement, and any amendment or supplement thereto by it and any of
its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the Holder
-------
agrees, if requested, to execute a lock-up letter addressed to the managing
underwriter in customary form agreeing not to sell or otherwise dispose of the
Registrable Securities owned by the Holder (other than any that may be included
in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or seek an
---------------------
injunction restraining or otherwise delaying any registration of the Registrable
Securities as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of the
------------------------------
Registrable Securities of the Company under the Securities Act, pursuant to the
terms of this Agreement, the Company agrees to indemnity and hold harmless the
Holder and each other person who participates as an underwriter in the offering
or sale of the Registrable Securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys' fees
(collectively the "Claims"), to which the Holder or any such underwriter may
become subject under the Securities Act or otherwise, insofar as the Claims or
actions or proceedings, whether commenced or threatened, in respect thereto
arise out of or are based on any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which the
Holder's Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Holder and each such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Claim or action or proceeding in respect thereto; provided that the Company
shall not be liable in any such case to the extent that any Claim or action or
proceeding in respect thereof or expense arises out of or is based on an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a condition to
-----------------------------
including the Registrable Securities in any Registration Statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the Holder, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Paragraph 7 hereof) the Company,
each director and officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement or alleged statement in or omission or
alleged omission from the Registration Statement, any preliminary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation of
3
<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this Agreement
------------------------
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Shareholder to a transferee or assignee of such securities who shall, upon
such transfer or assignment, be deemed a Holder under this Agreement; provided
that the Company is furnished with written notice of the name and address of
such transferee or assignee and the Registrable Securities with respect to which
the Registration Rights are being assigned; provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and that such transferee or assignee is
either (a) a member of the immediate family or a trust for the benefit of any
Holder that is an individual or (b) a transferee or assignee that after the
transfer or assignment holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Financial Advisory Agreement
or this Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Holder, addressed to Ron F.
Bearden, Ph.D. at 2800 Post Oak Boulevard, Suite 5260, Houston, Texas 77056,
telephone (713) 621-0577, fax (713) 621-6432, and e-mail [email protected]; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
23. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
5
<PAGE>
24. Relationship of Parties. The Holder is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Holder shall
not be deemed to be an employee of the Company for any reason. The Company and
the Holder acknowledge that the Holder shall not be entitled to any insurance,
pension, profit sharing, retirement or other fringe benefits which the Company
may provide to its employees during the term of this Agreement.
25. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
26. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
27. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
28. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
29. Time of the Essence. Time is of the essence of this Agreement.
-------------------
30. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
31. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32. Entire Agreement. This instrument, together with the Financial Advisory
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
--------------------------------------
John D. Walker II, President
R. F. BEARDEN ASSOCIATES, INC.
By /s/ R. F. Bearden
--------------------------------------
Ron F. Bearden, Ph.D., President
7
<PAGE>
Exhibit 10.17
Financial Advisory Agreement Dated May 7, 1999 Between
BioLynx.Com, Inc. and Texas Commercial Resources, Inc.
<PAGE>
Exhibit 10.17
FINANCIAL ADVISORY AGREEMENT
THIS AGREEMENT is made this 7/th/ day of May, 1999 by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company") and TEXAS COMMERCIAL
RESOURCES, INC., a Texas corporation (the "Consultant").
WHEREAS, the Company wishes to obtain the advice, contacts and expert judgment
of the Consultant with respect to finding a "public corporate shell" and to take
all necessary steps to cause the shareholders of the "public corporate shell" to
become shareholders of the Company; and
WHEREAS, the Company desires to have the Consultant act as an independent
contractor for the purpose of providing such services to the Company; and
WHEREAS, the Consultant is qualified and willing to provide such services
pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Services. The Company hereby engages and retains the Consultant as an
--------
independent contractor to provide the services set forth herein. The Consultant
hereby agrees to provide all reasonable and necessary services associated with
the following: (a) to locate an acceptable "public corporate shell"; and (b) to
arrange the acquisition of the common stock of the Company by the "public
corporate shell" with the ultimate strategy that the public shareholders of the
public corporate shell will become shareholders of the Company (collectively,
the "Services"). The Consultant has located the desired "public corporate
shell" and has fully performed all of the Services hereunder.
2. Representations. The Consultant hereby agrees to use its best efforts in
---------------
providing the Services and loyally representing the interests of the Company in
accordance with the Company's reasonable requirements and objectives. The
Consultant and the Company acknowledge that Consultant is experienced in
providing the Services and will provide the Services with the diligence and care
of others in the industry. The Consultant further represents that it has not,
and shall not, enter into any agreement during the term of this Agreement which
might prevent it from performing its obligations hereunder.
3. Fees. In full consideration of the Services provided hereunder, the
----
Company hereby grants to the Consultant 37,500 shares of the restricted common
stock of the Company, par value $0.001 per share (the "Common Stock") for a
consideration of $37.50, to be issued within a reasonable time after the
execution of this Agreement.
4. Restrictions on Transfer. The Consultant understands and agrees that the
------------------------
following restrictions and limitations are applicable to the shares of the
Common Stock issued to the Consultant hereunder:
(a) The shares shall not be sold, pledged, hypothecated or otherwise
transferred unless the shares are registered under the Securities Act of 1933,
as amended, and the securities laws of any state or foreign jurisdiction, or are
exempt therefrom;
(b) A legend in substantially the following form has been or will be placed
on any certificate or other document evidencing the shares:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAW OF ANY STATE OR FOREIGN JURISDICTION.
1
<PAGE>
WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE COMPANY OF
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT
REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER
EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE EFFECT THAT ANY SUCH
TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS AMENDED,
THE SECURITIES LAW OF ANY STATE OR FOREIGN JURISDICTION, OR ANY RULE OR
REGULATION PROMULGATED THEREUNDER.
(c) Stop transfer instructions to the transfer agent of the shares have
been or will be placed with respect to the shares so as to restrict the resale,
pledge, hypothecation or other transfer thereof, subject to the further items
hereof, including the provisions of the legend set forth in subparagraph (b)
above; and
(d) The legend and stop transfer instructions described in subparagraphs
(b) and (c) above will be placed with respect to any new certificate or other
document issued upon presentment by the Consultant of certificates or other
documents for transfer.
5. Registration Rights Agreement. On even date herewith the parties have
-----------------------------
executed that certain Registration Rights Agreement with respect to the Common
Stock issued to the Consultant hereunder, a copy of which is attached hereto as
Exhibit A and incorporated herein by reference for all purposes.
- ---------
6. Expenses. All expenses, including travel and lodging, incurred by the
--------
Consultant in the performance of the Services shall be the sole responsibility
of the Consultant, unless otherwise agreed to in writing. During the
continuance of this Agreement, the Consultant shall certify as regular and
guarantee the Consultant's situation towards all relevant tax authorities,
social administrations and professional organizations, if applicable, as being
in conformity with the Consultant's status as an independent contractor.
7. Insurance. The parties agree that the Company shall not be required to
---------
carry insurance or in any way insure the activities of the Consultant, its
agents, servants or employees, nor shall the Company be liable for any of the
acts or omissions of the Consultant, its agents, servants or employees. The
Consultant further agrees to indemnify, defend, and hold harmless the Company
from any and all claims, penalties, fines, causes of action, liabilities, or
threats of such actions which arise out of or relate to this Agreement or the
performance of the Services. This provision shall survive the termination of
this Agreement.
8. Duration. This Agreement shall remain in effect for a period of one year
--------
commencing on the date hereof, but shall automatically renew, if not terminated
as provided for herein, for successive one year periods. Notwithstanding the
foregoing, the Company or the Consultant may terminate this Agreement at any
time upon 10 days' written notice.
9. Confidentiality. All information relating to the business and affairs of
---------------
the Company shall be treated as Confidential Information, as hereinafter
defined, by the Consultant both during and after the term hereof. Except with
the prior approval of the Company, the Consultant shall not disclose any of the
Confidential Information at any time to any person except authorized personnel
of the Company and its affiliated corporations. The Consultant further agrees
not to use any information made available to or coming into its possession or
knowledge in a manner that is adverse to the business of the Company. All data,
records and written material prepared or compiled by the Consultant or furnished
to the Consultant during the term hereof shall be the sole and exclusive
property of the Company, and none of such data, records or written materials, or
copies thereof, shall be retained by the Consultant after the term of this
Agreement.
As used herein, the term "Confidential Information" includes, without
limitation, information and knowledge pertaining to products, inventions,
innovations, designs, ideas, plans, trade secrets, proprietary information,
manufacturing, packaging, advertising, distribution and sales methods and
systems, sales and profit figures, customer and client lists, and relationships
between the Company and its affiliated corporations and dealers, distributors,
customers, clients, suppliers and others who have had or will have had business
dealings with the Company and its
2
<PAGE>
affiliated corporations. The term "Confidential Information" does not include
information which (a) becomes generally available to the public through no
wrongful act on the part of the Consultant, (b) can be shown to have been
previously available to the Consultant on a non-confidential basis prior to its
disclosure to the Consultant by the Company, or its representatives, (c) becomes
available to the Consultant on a non-confidential basis from a source other than
the Company or its representatives, or (d) is required to be disclosed by order
of a court of competent jurisdiction.
Notwithstanding anything herein contained to contrary, the above described
obligation with respect to confidentiality shall survive any termination of the
Consultant's engagement hereunder or the termination of this Agreement.
10. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Registration Rights Agreement
or this Agreement, the terms of the Registration Rights Agreement shall control.
11. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
12. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.
13. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
14. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Consultant.
15. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Consultant, addressed to Mr.
Henry A. Schulle at 12166 Metric Boulevard, Suite
3
<PAGE>
133, Austin, Texas 78758, telephone (512) 837-9122, fax (512) 728-8063, and e-
mail [email protected]; provided, however, that if either party shall have
designated a different address by notice to the other given as provided above,
then any subsequent notice shall be addressed to such party at the last address
so designated.
16. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
18. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
19. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
20. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
21. Relationship of Parties. The Consultant is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Consultant
shall not be deemed to be an employee of the Company for any reason. The
Company and the Consultant acknowledge that the Consultant shall not be entitled
to any insurance, pension, profit sharing, retirement or other fringe benefits
which the Company may provide to its employees during the term of this
Agreement.
22. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
23. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
24. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
25. Time of the Essence. Time is of the essence of this Agreement.
-------------------
4
<PAGE>
26. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
27. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
28. Entire Agreement. This instrument, together with the Registration Rights
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
------------------------------
John D. Walker II, President
TEXAS COMMERCIAL RESOURCES, INC.
By /s/ Henry A. Schulle
--------------------------------
Henry A. Schulle, President
Attachment
- ----------
Exhibit A - Registration Rights Agreement
5
<PAGE>
Exhibit A
Registration Rights Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of May 7/th/, 1999, by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company"), and TEXAS COMMERCIAL
RESOURCES, INC., a Texas corporation (the "Shareholder").
WHEREAS, on even date herewith the parties executed that certain Financial
Advisory Agreement (the "Financial Advisory Agreement") whereby the Company has
agreed to issue to the Shareholder 37,500 shares of the Company's common stock,
par value $0.001 per share (the "Common Stock"), for the Services rendered as
described in the Financial Advisory Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Financial Advisory Agreement, the Company agrees to
provide the Shareholder or any permitted assignee of the Shareholder
(collectively, the "Holder") with the right to "piggyback" (the "Registration
Rights") on a firm commitment underwritten offering with respect to the Common
Stock and any other securities issued or issuable at any time or from time to
time in respect of the Common Stock as a result of a merger, consolidation,
reorganization, stock split, stock dividend, recapitalization or other similar
event involving the Company (collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the parties
-------------------
agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to the
Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the Registration
Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
1
<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms are
understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to
furnish to the Holder upon request a written statement from the Company as to
its compliance with the reporting requirements of Rule 144 and with regard to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number of
prospectuses meeting the requirements of Section 10(a)(3) of the Securities Act,
offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts and
commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities covered
by a Registration Statement, during the time when a prospectus relating thereto
is required to be delivered under the Securities Act, of the happening of any
event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the Registration
---------------
Statement, if the Company gives to the Holder a notice pursuant to Paragraph
3(f) hereof and stating that the Company requires the suspension by the Holder
of the distribution of any of the Registrable Securities, then the Shareholder
shall cease distributing the Registrable Securities for such period of time (the
"Blackout Period"), not to exceed 120 days from the time notice is sent until
the Company informs the Holder that the Blackout Period has been terminated.
Upon notice by the Company to the Holder of such determination, the Holder will
(a) keep the fact of any such notice strictly confidential, (b) promptly halt
any offer, sale, trading or transfer of any of the Registrable Securities for
the duration of the Blackout Period, and (c) promptly halt any use, publication,
dissemination or distribution of each prospectus included within the
Registration Statement, and any amendment or supplement thereto by it and any of
its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the Holder
-------
agrees, if requested, to execute a lock-up letter addressed to the managing
underwriter in customary form agreeing not to sell or otherwise dispose of the
Registrable Securities owned by the Holder (other than any that may be included
in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or seek an
---------------------
injunction restraining or otherwise delaying any registration of the Registrable
Securities as the result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of the
------------------------------
Registrable Securities of the Company under the Securities Act, pursuant to the
terms of this Agreement, the Company agrees to indemnity and hold harmless the
Holder and each other person who participates as an underwriter in the offering
or sale of the Registrable Securities against any and all claims, demands,
losses, costs, expenses, obligations, liabilities, joint or several, damages,
recoveries and deficiencies, including interest, penalties and attorneys' fees
(collectively the "Claims"), to which the Holder or any such underwriter may
become subject under the Securities Act or otherwise, insofar as the Claims or
actions or proceedings, whether commenced or threatened, in respect thereto
arise out of or are based on any untrue statement or alleged untrue statement of
any material fact contained in any Registration Statement under which the
Holder's Registrable Securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse the Holder and each such underwriter for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
Claim or action or proceeding in respect thereto; provided that the Company
shall not be liable in any such case to the extent that any Claim or action or
proceeding in respect thereof or expense arises out of or is based on an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance on and in conformity
with written information furnished to the Company through an instrument duly
executed by the Holder specifically stating that it is for use in the
preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Holder or any such
underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a condition to
-----------------------------
including the Registrable Securities in any Registration Statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the Holder, to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Paragraph 7 hereof) the Company,
each director and officer of the Company and each other person, if any, who
controls the Company within the meaning of the Securities Act, with respect to
any statement or alleged statement or alleged statement in or omission or
alleged omission from the Registration Statement, any preliminary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation of
3
<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this Agreement
------------------------
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Shareholder to a transferee or assignee of such securities who shall, upon
such transfer or assignment, be deemed a Holder under this Agreement; provided
that the Company is furnished with written notice of the name and address of
such transferee or assignee and the Registrable Securities with respect to which
the Registration Rights are being assigned; provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and that such transferee or assignee is
either (a) a member of the immediate family or a trust for the benefit of any
Holder that is an individual or (b) a transferee or assignee that after the
transfer or assignment holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary, in
--------
the event of any conflict between the terms of the Financial Advisory Agreement
or this Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to this
-----------
Agreement, or the breach, termination, or validity thereof, shall be settled by
final and binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA Rules") in effect as of the
effective date of this Agreement. The American Arbitration Association shall be
responsible for (a) appointing a sole arbitrator, and (b) administering the case
in accordance with the AAA Rules. The situs of the arbitration shall be San
Antonio, Texas. Upon the application of either party to this Agreement, and
whether or not an arbitration proceeding has yet been initiated, all courts
having jurisdiction hereby are authorized to: (x) issue and enforce in any
lawful manner, such temporary restraining orders, preliminary injunctions and
other interim measures of relief as may be necessary to prevent harm to a
party's interest or as otherwise may be appropriate pending the conclusion of
arbitration proceedings pursuant to this Agreement; and (y) enter and enforce in
any lawful manner such judgments for permanent equitable relief as may be
necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be binding
-------
upon and inure to the benefit of and be enforceable by the parties hereto, and
their respective heirs, executors, administrators, personal representatives,
successors and permitted assigns. Notwithstanding anything herein contained to
the contrary, the Company shall have the right to assign this Agreement to any
party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given at the time of receipt
if delivered by hand or communicated by electronic transmission, or, if mailed,
three days after deposit in the United States mail, registered or certified,
return receipt requested, with postage prepaid and addressed to the party to
receive same, if to the Company, addressed to Mr. John D. Walker II at 5617
Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210) 256-
1992, and e-mail [email protected]; and if to the Holder, addressed to Henry A.
Schulle at 12166 Metric Boulevard, Suite 133, Austin, Texas 78758, telephone
(512) 837-9122, fax (512) 728-8063, and e-mail [email protected]; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree that
-------------------------
neither this Agreement nor any of the other documents executed in connection
herewith shall be construed more favorably in favor of one than the other based
upon which party drafted the same, it being acknowledged that each of the
parties hereto contributed substantially to the negotiation and preparation of
this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
23. Incorporation by Reference. Any agreement referred to herein is hereby
--------------------------
incorporated into this Agreement by this reference.
5
<PAGE>
24. Relationship of Parties. The Holder is providing services on an
-----------------------
independent contractor basis. Notwithstanding anything to the contrary herein,
this Agreement shall not in any manner be construed to create a joint venture,
partnership, agency or other similar form of relationship, and neither party
shall have the right or authority to: (a) commit the other party to any
obligation or transaction not expressly authorized by such other party, or (b)
act or purport to act as agent or representative of the other, except as
expressly authorized in writing by such other party. Further, the Holder shall
not be deemed to be an employee of the Company for any reason. The Company and
the Holder acknowledge that the Holder shall not be entitled to any insurance,
pension, profit sharing, retirement or other fringe benefits which the Company
may provide to its employees during the term of this Agreement.
25. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
26. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
27. Invalidity. In the event any one or more of the provisions contained in
----------
this Agreement or in any instrument referred to herein or executed in connection
herewith shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect the other provisions of this Agreement or any such other instrument.
28. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
29. Time of the Essence. Time is of the essence of this Agreement.
-------------------
30. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
31. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
32. Entire Agreement. This instrument, together with the Financial Advisory
----------------
Agreement, contains the entire understanding of the parties and may not be
changed orally, but only by an instrument in writing signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge is
sought.
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
written above.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
-----------------------------------------
John D. Walker II, President
TEXAS COMMERCIAL RESOURCES, INC.
By /s/ Henry A.Schulle
-----------------------------------------
Henry A. Schulle, President
7
<PAGE>
Exhibit 10.18
Letter Agreement Between BioLynx.Com, Inc. and
Recognition Systems, Inc. Dated November 18, 1999
With Respect to the Sale of Biometric Hand Readers
<PAGE>
Exhibit 10.18
RECOGNITION SYSTEMS, INC.
- -------------------------
1520 Dell Avenue, Campbell, California 95008
PHONE: 408-364-6960 FAX: 408-370-3679
Mr. Pat Tolle
BioLynx
5617 Grissom Road
San Antonio, TX 78238
Dear Pat:
We at Recognition Systems, Inc. would like to thank BioLynx for deciding to
become a "Level 2 Business Partner with Recognition Systems, Inc. The following
will formalize our pricing arrangement and Business Partnership policies
including: Pricing, Order Conditions, and Sales/Marketing Issues. After
reviewing the following items an acknowledgment and agreement from both parties
is necessary to begin the Business Partner Program.
A. From Recognition Systems ("RSI" or "we"):
1. The pricing for BioLynx is shown in Exhibit A, BioLynx HandPunch(R) Prices
and Conditions.
2. When BioLynx has fully integrated our reader with their Time and Attendance
application we will recommend BioLynx as a source of time and attendance
software solution to end users who come to us for information in your area.
RSI understands that BioLynx is an international company that provides
services across the United States and abroad.
3. Through our company, we can provide HandPunch(R) training material for you to
reproduce and to distribute to your sales force. This would cover its
operation and benefits of using it as an input data collector. We will offer
BioLynx a special demo Unit at $ 800. This offer is valid at one per sales
office. BioLynx is responsible for providing a list of locations of
operation.
4. We can make our security dealers aware of our relationship with BioLynx so
they can provide referrals to you, when appropriate, for time and attendance
applications.
5. We will provide our HandPunch data sheet to BioLynx at no cost. BioLynx may
duplicate this data sheet and the HandPunch training materials for internal
use and for distribution to clients and potential clients. Any materials
copied by BioLynx will bear any copyright, trademark and other intellectual
property protections, if any, contained in the originals.
6. RSI agrees to indemnify BioLynx and to hold it harmless from and against any
and all claims, costs, fees and expenses (including reasonable legal fees)
relating to actual or alleged infringement of any patent, copyrights,
trademark or trade secret asserted against BioLynx by virtue of Customer's
use of RSI's standard terminals and associated documentation ("Units") as
delivered to BioLynx, provided that RSI is given prompt written notice of any
such claim and has sole control over the investigation, preparation, defense
and settlement of such claim, and further provided that BioLynx reasonably
cooperates with RSI in connection with the foregoing and provides RSI with
all information in BioLynx possession related to such claim and further
assistance as reasonably requested by RSI.
1
<PAGE>
Should any or all of the Units as delivered by RSI become, or in RSI's
reasonable opinion be likely to become, the subject of any such claim, RSI
may at its option procure for BioLynx the right to continue to use the
affected Units as contemplated hereunder or may replace or modify the
affected Units to make their use non-infringing, or should such options not
be available at reasonable expense, then RSI may terminate this Agreement
with respect to the affected Units upon thirty (30) days prior written notice
to BioLynx. In such event of termination, BioLynx shall be entitled to a pro-
rata refund of all fees paid to RSI for the affected Units, which refund
shall be calculated using a five year straight-line depreciation commencing
with the date of the Agreement. All equipment will be returned to RSI.
B. From BioLynx:
1. BioLynx understands that in order to obtain the preferred pricing set forth
in Exhibit A to this Agreement, it must purchase 250 HandPunch(R) Units in a
12-month period of time. The 12 month period starts at the beginning of the
following month of the signing date, plus a start up period of 6 months.
2. BioLynx agrees to add the HandPunch(R) terminal to its own catalog if
provided, and promote the HandPunch(R) terminal as an available time and
attendance terminal. BioLynx recognizes the HandPunch(R) time and attendance
terminal as a biometric solution. As of the date of this Agreement, BioLynx
is not developing, manufacturing or marketing any products that incorporate
biometrics and is entering into this Agreement so that it can broaden its
product line to include a biometric offering. Notwithstanding the forgoing,
RSI understands that BioLynx acquires and/or develops other technologies from
time to time and may acquire and/or develop software and/or equipment that
perform similar functions to RSI's products. RSI agrees that entering into
this Agreement shall not preclude BioLynx from acquiring and/or developing
software and/or equipment that performs similar functions to RSI's products
without obligation to RSI, provided that BioLynx does not reverse compile
RSI's software or otherwise use RSI's proprietary or confidential information
for developing, manufacturing or commercializing such software and/or
equipment and that BioLynx complies with the paragraph below.
BioLynx shall notify RSI in writing of its intent to manufacture or market
products that incorporate biometrics (other than the HandPunch(R) terminal)
thirty (30) days prior to the first shipment of Units. Specifically excluded
are Units shipped as part of the development process for testing, including
those Units shipped to customers for the purpose of assessing product
suitability for the market (unless BioLynx acquires another company that is
engaged in the manufacturing or marketing of products that incorporate
biometrics, in which case BioLynx shall notify RSI within (5) business days
after the first to occur of the execution of a binding letter or agreement
regarding such acquisition or the closing of such acquisition).
3. BioLynx agrees to provide primary technical support to its clients, and to
maintain an appropriate quantity of spare Units for its client base. RSI
agrees to provide technical training to BioLynx at no charge, at RSI's
facility. Training consists of one to two days of training covering trouble
shooting, repairs, and technical procedures. Three to four technical
representatives from BioLynx are able to be trained per session. RSI uses
the "train the trainer" method and the intent of our training sessions is
that the trained BioLynx representatives will become BioLynx primary source
for additional training.
4. BioLynx agrees to create and maintain software that allows the HandPunch(R)
to be a data collection device for end user application(s) such as a time and
attendance software package. RSI will provide to BioLynx the communication
protocol needed to communicate to the HandPunch(R) terminal. Software
created by BioLynx is retained (owned) solely by BioLynx.
5. BioLynx agrees to provide RSI with information defining where, by state, each
HandPunch(R) Unit sold to BioLynx is eventually installed. This information
will be provided on a quarterly bases. RSI needs this information because
our manufacturer representatives are paid a commission by us, based on Units
sold and shipped into their territories. The information you provide will
allow us to pay commissions to our appropriate manufacturer representatives.
2
<PAGE>
6. This agreement is valid from the date of signing until the end of the 12
month period time defined in paragraph B1. The Agreement can be renewed upon
the mutual agreement of BioLynx and Recognition Systems, Inc. This Agreement
can be terminated by either party upon 120 days' prior written notice to the
other party.
7. RSI Agrees to provide the Warranty specified in Exhibit B.
CONFIDENTIALITY. The parties named within this Agreement understand that
information received from the other party, and labeled as "Confidential
Information" by stamp, legend, or notice, will not be disclosed to any other
party, and will hold such Confidential Information in confidence and will
disclose it only to those employees of the receiving party having a need to know
and will advise each such employee of the terms of this Agreement and their duty
to hold the information in confidence as provided herein.
Neither this Agreement nor any disclosure of Confidential Information hereunder
shall be construed to grant the receiving party any rights, license or immunity,
either directly or by implication, estoppel or otherwise, in or under any
pending, issued or after-acquired patents or patent applications or copyrights
or other intellectual property rights, except as expressly required for the
restricted activities of the receiving party under this Agreement. The
receiving party agrees that the Confidential Information furnished under this
Agreement will be accepted and used on an "as is" basis. The receiving party
will bear all risk and liability for the use of such Confidential Information
and will not make any claim or charges against the other party.
RELATIONSHIP OF THE PARTIES. The parties acknowledge that they are independent
contractors. Neither BioLynx nor RSI shall in any way represent itself as a
partner, joint-venturer, agent, employee or general representative of the other.
NOTICES. All notices, requests, consents, demands and other communications
provided for by this Agreement shall be in writing and shall (unless otherwise
specifically provided herein) be deemed given when mailed at any general branch
United States Post Office enclosed in a registered or certified postpaid
envelope, addressed to the parties at the addresses set forth below or to such
changed address as each party may designate by notice to the other.
If to BioLynx: If to Recognition Systems, Inc.
Biolynx.Com, Inc. 1520 Dell Avenue
5617 Grissom Road Campbell, California 95008
San Antonio, Texas 78238 Attention: Scott Grabowski
Attention: Pat Tolle
Provided, however, that any notice of change of address shall be effective only
upon receipt.
MODIFICATION: This Agreement shall not be modified in any way except by a
writing signed by both BioLynx and RSI.
3
<PAGE>
Acceptance of Business Partner Program
If the Business Partner Agreement is satisfactory to BioLynx, please sign in the
appropriate sections below. We at Recognition Systems look forward to a long
and lasting relationship with BioLynx.
Agreed:
For: BioLynx Recognition Systems
Name: John D. Walker II Lou Tilton
Signed: /s/ John D. Walker II /s/ Lou Tilton
Title: Pres. President
Date 11-19-99 11-18-99
4
<PAGE>
Exhibit A
BUSINESS PARTNER PRICING
Business Partner 2 HandPunch Prices and Conditions
HandPunch 2000, 3000, 4000
Quantity: Up to 199 200-399 400-799 800-1599
HP-2000: $900.00* all quantities
HP-3000: $1200. $1100. $1050. $1000.
HP-4000: $1500. $1400. $1300. $1250.
HandPunch RR/RS/RT/RW or HandPunch Plug & Punch
HP-RR/RS: $1500. $1400. $1300. $1200
HP-RT: $1400. $1325. $1275. $1200.
HP-RW: $2000. All quantities.
Plug N Punch
HP-RSD: $1500. $1400. $1300. $1200.
HP-RSM: $1650. $1550. $1450. $1350.
Quantities are calculated as the sums of HP-3000 and HP-4000 or the sums of
RR/RS/RT/RW
Once the Business Partner's cumulative deliveries are greater than the upper
quantity value for a given column, the next column pricing will take effect for
subsequent purchases made in the remainder of the 12 month term.
*HP-2000 does not apply to cumulative quantity discounts.
5
<PAGE>
BUSINESS PARTNER PRICE LIST
TIME AND ATTENDANCE
April 1999
<TABLE>
<CAPTION>
ITEM BUSINESS PARTNER ONLY
==================================================================================================================================
Business Partner List Price
---------------- ----------
HandPunch Terminals All Quantities
- ------------------- --------------
<S> <C> <C>
HP-2000 HandPunch 2000 750 1595
Power Supply (Must Specify)
PS-100 (110V AC to 13.5 DC)
PS-220 (220V AC to 13.5 DC)
Includes: . Memory for 512 Users
. One Year Parts and Labor Warranty
. Installation/Operation Manual
==================================================================================================================================
<CAPTION>
Business Partner Dealer ListPrice
---------------- ------ ---------
HandPunch Terminals
- -------------------
<S> <C> <C> <C>
1-199 200+ 400+ 1-24 25+
----- ---- ---- ---- ----
HP-3000 HandPunch 3000 950 900 875 1450 1400 2295
Power Supply (Must Specify)
PS-100 (110V AC to 13.5 DC)
PS-220 (220V AC to 13.5 DC)
Includes: . Memory for 512 Users
. One Year Parts and Labor Warranty
. Installation/Operation Manual
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
ITEM BUSINESS PARTNER ONLY
================================================================================
Quantities are calculated as the sums of HP-3000 and HP-4000 only.
Once the Business Partner's cumulative deliveries are greater than the upper
quantity value for a given column, the next column pricing will take effect for
subsequent purchases made in the remainder of the 12 month term.
*HP-2000 does not apply to cumulative quantity discounts.
<TABLE>
<CAPTION>
Business Partner Dealer ListPrice
---------------- ------ ---------
HandPunch Terminals
- -------------------
<S> <C> <C> <C>
1-199 200+ 400+ 1-25 25+
----- ---- ---- ---- ----
HP-4000 HandPunch 4000 1300 1250 1225 1800 1750 2995
Power Supply (Must Specify)
PS-100 (110V AC to 13.5 DC)
PS-220 (220V AC to 13.5 DC)
Includes: . Memory for 530 Users
. One Year Parts and Labor Warranty
. Installation/Operation Manual
</TABLE>
Quantities are calculated as the sums of HP-3000 and HP-4000 only.
Once the Business Partner's cumulative deliveries are greater than the upper
quantity value for a given column, the next column pricing will take effect for
subsequent purchases made in the remainder of the 12 month term.
*HP-2000 does not apply to cumulative quantity discounts.
7
<PAGE>
BUSINESS PARTNER PRICE LIST
April 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
2000 3000 4000 Option BP Dealer List
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
System Options
--------------
- ------------------------------------------------------------------------------------------------------------------------------------
X EM-801 Memory Expansion 125 150 225
9,728 Users
- ------------------------------------------------------------------------------------------------------------------------------------
X EM-803 Memory Expansion 275 350 450
32,512 Users
- ------------------------------------------------------------------------------------------------------------------------------------
X EM-805 Memory Expansion 150 175 250
3,498 Users
- ------------------------------------------------------------------------------------------------------------------------------------
System Accessories
------------------
- ------------------------------------------------------------------------------------------------------------------------------------
X X KP-201 Request for Exit Keypad 160 175 250
- ------------------------------------------------------------------------------------------------------------------------------------
X BC-100 Barcode Reader Wall Mount-Swipe 315 350 500
- ------------------------------------------------------------------------------------------------------------------------------------
X X X BB-200 Operational Battery Backup 65 90 140
W/Power Management Board
- ------------------------------------------------------------------------------------------------------------------------------------
Networking Accessories
----------------------
- ------------------------------------------------------------------------------------------------------------------------------------
X X EN-200 Ethernet Communications Module 325 400 495
- ------------------------------------------------------------------------------------------------------------------------------------
X X X MD-500 Internal 14.4K Dial Up Model 150 200 250
- ------------------------------------------------------------------------------------------------------------------------------------
X X X DC-101P Data Converter w/power supply 80 90 120
- ------------------------------------------------------------------------------------------------------------------------------------
Spare Parts
-----------
- ------------------------------------------------------------------------------------------------------------------------------------
X X X 80100-5002 Power Supply 120 VAC to 13.5 VDC 20 30 45
W/connector
- ------------------------------------------------------------------------------------------------------------------------------------
X X X 80100-5004 Power Supply 220 VAC to 13.5 VDC 20 30 45
W/connector
- ------------------------------------------------------------------------------------------------------------------------------------
Interface Software
------------------
- ------------------------------------------------------------------------------------------------------------------------------------
X X X PNET-G Punch Net Software N/C 100 150
HandPunch Communications Software
- ------------------------------------------------------------------------------------------------------------------------------------
X X X DLL-X RSI DLL for Windows operating N/C N/C N/A
systems
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: A DC-101 P is required at the computer to communicate with
HandPunch units hard wired to it. A user supplied modem is
required at the computer to communicate with HandPunch units with
internal modems.
8
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
2000 3000 4000 Option BP Dealer List
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Manuals
-------
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 21-MAN HandPunch 2000 Operations Manual 10 15 25
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 22-MAN HandPunch 2000 Installation 10 15 25
Manual
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 23-MAN HandPunch 2000 Quick Reference 2 3 5
Card
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 31-MAN HandPunch 3000 Operations Manual 10 15 25
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 32-MAN HandPunch 3000 Installation 10 15 25
Manual
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 33-MAN HandPunch 3000 Quick Reference 2 3 5
Card
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 41-MAN HandPunch 4000 Operations Manual 10 15 25
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 42-MAN HandPunch 4000 Installation 10 15 25
Manual
- ------------------------------------------------------------------------------------------------------------------------------------
X HP 43-MAN HandPunch 4000 Quick Reference 2 3 5
Card
- ------------------------------------------------------------------------------------------------------------------------------------
X X PN-MAN PunchNet Interface Software 10 15 25
Manual
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Items cannot be Field Installed
TERMS: Domestic: Net 30 on credit approval, F.O.B. Factory
Prices Subject to Change. All prices are shown in U.S.
Dollars
Wire Transfer Information
Beneficiary: Recognition Systems, Inc.
Account No.: 5800047200
Receiving Bank: LaSalle National Bank, Chicago, IL
Bank Routing: # 0710 0050 5
SWIFT CODE (for international transfers): LASLUM44
9
<PAGE>
Exhibit B
LIMITED WARRANTY
Recognition Systems, Inc. (the "Company") warrants to the original user the
products manufactured by the Company (the "Product") to be free of defects in
material and workmanship and perform in accordance with RSI's published
specification for a period of one year from the date of purchase by such user or
15 months from the date of shipment from the factory, whichever is sooner,
provided:
a. The Company has been notified within such period by return of any alleged
defective product, free and clear of all liens and encumbrances, to the
Company or its authorized dealer, transportation prepaid; and
b. The Product has not been abused, misused or improperly maintained and/or
repaired during such period; and
c. Such defect has not been caused by ordinary wear and tear; and
d. Such defect is not the result of acts of nature such as, but not limited
to, voltage surges/brownouts, lightning, water damage/flooding, fire,
explosion, earthquakes, tornadoes, acts of aggression/war or similar
phenomenon; and
e. Accessories used as integral to the Product have been approved by the
Company.
The company shall, at its option, either repair or replace, free of charge, the
Product found, upon the Company's inspection, to be so defective, or if agreed
upon, refund the purchase price, less a reasonable allowance for depreciation,
in exchange for the product.
THE COMPANY MAKES NO OTHER WARRANTY AND ALL IMPLIED WARRANTIES INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE ARE LIMITED TO
THE DURATION OF THE EXPRESSED WARRANTY PERIOD AS SET FORTH ABOVE.
THE COMPANY'S MAXIMUM LIABILITY THEREUNDER IS LIMITED TO THE PURCHASE PRICE OF
THE PRODUCT, IN NO EVENT SHALL THE COMPANY BE LIABLE FOR ANY CONSEQUENTIAL,
INDIRECT, INCIDENTAL OR SPECIAL DAMAGES OF ANY NATURE ARISING FROM THE SAME OR
THE USE OF THE PRODUCT, EXCEPT AS OTHERWISE PROVIDED IN THE LETTER AGREEMENT.
Recognition Systems reserves the right to make changes in the design of any of
its products without incurring any obligation to make the same change on units
previously purchased.
10
<PAGE>
Exhibit 10.19
Option to Purchase Stock Agreement Dated October 1, 1999 Between
BioLynx.Com, Inc., BioLynx Outsource Services, Inc., and
United Capital Investment Group, Inc.
<PAGE>
Exhibit 10.19
OPTION TO PURCHASE STOCK AGREEMENT
----------------------------------
This Agreement ("Agreement") is entered into this date, is by and among
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BioLynx.Com, Inc., a Texas corporation and ("Purchaser"), BioLynx Outsource
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Services, Inc., a Texas corporation ("Corporation"), and United Capital
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Investment Group, Inc. ("Seller").
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WHEREAS, the Corporation presently has outstanding a single class of common
stock ("Shares"), of which 1,000 Shares have been issued to Seller; and
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WHEREAS, said Shares are the only issued and outstanding capital stock of
the Corporation; and
WHEREAS, Purchaser desires an option to purchase from Seller and Seller
desires to grant Purchaser an option to purchase all of the Shares owned by
Seller on the terms and subject to the conditions set forth herein.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Purchase of Shares.
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1.1 Purchase of Shares. Subject to the terms and conditions set forth
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herein, at the Closing (as defined below) Seller will sell all of the Shares
owned by Seller to Purchaser and Purchaser will purchase all of the Shares owned
by Seller from Seller, said Shares constituting one hundred percent (100%) of
all of the issued and outstanding capital stock of the Corporation as of the
Closing.
1.2 Purchase Price. Purchaser will pay to Seller, subject to the
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adjustment noted below, the sum of $1,446,347.76 for the Seller's Shares.
1.3 Adjustments to Purchase Price. At Closing, the following adjustments
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will be made to the Purchase Price:
The Purchase Price will be calculated on the basis of the average
Gross Profit per week for BioLynx Outsource Services, Inc. for each of
the last four weeks (October 8, 1999, October 15, 1999, October 22, 1999
and October 29, 1999) in October, 1999 (the "Average Gross Profit").
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Gross Profit is defined as: (invoiced amounts for the week plus
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miscellaneous deductions) less (Employer's portion of FICA/Medicare
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payable, plus the Employer's portion of the federal and state
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unemployment taxes [FUTA, SUTA at .24 SUTA rate], plus Gross Wages).
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Average Gross Profit will then be multiplied by 78 to determine the
Purchase Price (referred to herein as the "Purchase Price". The Purchase
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Price will then be adjusted to reflect this proper amount.
1.4 Payment of Purchase Price. The Purchase Price will be paid to the
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Seller as follows: (i) the Purchaser will pay the Seller the sum of $500,000.00
on or before December 1, 1999; and (ii) the Purchaser will deliver to the Seller
Convertible Preferred Stock for the balance of the Purchase Price with a
liquidation privilege equal to $946,347.76 (this amount may change based upon
the calculation in paragraph 1.3 above), bearing an eight percent (8%) non-
cumulative dividend. The Preferred Stock will, at the option of the holder of
the stock, be convertible into Common Stock of the Corporation at the recited
amount for the liquidation privilege, together with any declared but unpaid
dividend, divided by $3.30 per share of common stock.
1.5 Option. In consideration of the non-refundable sum of $100.00, paid
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by the Purchaser directly to the Seller, independent of any other consideration
required by this Agreement, Purchaser and the Seller agree as follows: Purchaser
shall have the option to terminate this Agreement at any time by giving written
notice of termination to the
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Seller. On such termination, all of Purchaser's obligations hereunder shall be
terminated. If the Purchaser does not give notice of termination, Purchaser's
right of termination shall be waived.
Section 2. Representations and Warranties of the Corporation and Seller.
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As a material inducement to Purchaser to enter into this Agreement and purchase
the Shares, Seller and the Corporation, jointly and severally, represent and
warrant that:
2.1 Organization and Corporate Power. The Corporation is a corporation
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duly incorporated and validly existing under the laws of the state of Texas and
the Corporation is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. The
Corporation has all requisite corporate power and authority and all material
licenses, permits, and authorizations necessary to own and operate its
properties and to carry on its business as now conducted. The copies of the
Corporation's charter documents and bylaws have been furnished to Purchaser's
counsel reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
2.2 Capital Stock and Related Matters. The authorized capital stock of
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the Corporation consists of 3,000,000 shares of preferred stock and 20,000,000
shares of common stock, 1,000 of which are issued and outstanding and are owned,
beneficially and of record, by Seller and no other stock of the Corporation is
issued and outstanding. The Corporation does not have outstanding and has not
agreed, orally or in writing, to issue any stock or securities convertible or
exchangeable for any shares of its stock, nor does it have outstanding nor has
it agreed, orally or in writing, to issue any options or rights to purchase or
otherwise acquire its stock. The Corporation is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its stock. The Corporation has not violated any applicable securities
laws or regulations in connection with the offer or sale of its securities other
than violations that have been, or will before the Closing have been, corrected
by post-issuance filings. All of the outstanding shares of the Corporation's
capital stock are validly issued, fully paid, and non-assessable. Seller has,
and upon purchase thereof pursuant to the terms of this Agreement Purchaser will
have, good and marketable title to the Shares, free and clear of all security
interests, liens, encumbrances, or other restrictions or claims, subject only to
restrictions as to marketability imposed by securities laws. Assuming that the
representations in Section 3.6 are true and correct, neither Seller nor the
Corporation has violated or will violate any applicable securities laws in
connection with the offer or sale of the Shares to Purchaser hereunder.
2.3 Subsidiaries. The Corporation does not own or hold any rights to
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acquire any shares of stock or any other security or interest in any other
corporation or entity.
2.4 Conduct of Business; Liabilities. The Corporation is not in default
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under, and no condition exists that with notice or lapse of time would
constitute a default of the Corporation under (i) any mortgage, loan agreement,
evidence of indebtedness, or other instrument evidencing borrowed money to which
the Corporation is a party or by which the Corporation or the properties of the
Corporation are bound or (ii) any judgment, order, or injunction of any court,
arbitrator, or governmental agency that would reasonably be expected to affect
materially and adversely the business, financial condition, or results of
operations of the Corporation taken as a whole.
2.5 Financial Statements. The audited balance sheet and income statement
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of the Corporation as of July 31, 1999, and the income statement for the period
ending July 31, 1999 (collectively the "July 31, 1999 Financial Statements"),
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fairly presents the financial position of the Corporation as at July 31, 1999,
and has been prepared in accordance with generally accepted accounting
principles, consistently applied, and in a manner substantially consistent with
prior financial statements of the Corporation. Except as contemplated by or
permitted under this Agreement, there are no adjustments that would be required
on review of the July 31, 1999 Financial Statements that would, individually or
in the aggregate, have a material negative effect upon the Corporation's
reported financial condition.
2.6 No Undisclosed Liabilities. Except for liabilities and obligations
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incurred in the ordinary course of business since July 31, 1999 ("Statement
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Date"), neither the Corporation nor any of the property of the Corporation is
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subject to any material liability or obligation that was required to be included
or adequately reserved against in the July 31, 1999 Financial Statements or
described in the notes thereto and was not so included, reserved against, or
described.
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2.7 Absence of Certain Changes. Except as contemplated or permitted by
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this Agreement, since the Statement Date there has not been:
2.7.1 any material adverse change in the business, financial
condition, operations, or assets of the Corporation;
2.7.2 Any damage, destruction, or loss, whether covered by insurance
or not materially adversely affecting the properties or business of the
Corporation;
2.7.3 Any sale or transfer by the Corporation of any tangible or
intangible asset other than in the ordinary course of business, any
mortgage or pledge or the creation of any security interest, lien, or
encumbrance on any such asset, or any lease of property, including
equipment, other than tax liens with respect to taxes not yet due and
contract rights of customers in inventory;
2.7.4 Any declaration, setting aside, or payment of a distribution in
respect of or the redemption or other repurchase by the Corporation of any
stock of the Corporation;
2.7.5 Any material transaction not in the ordinary course of business
of the Corporation;
2.7.6 The lapse of any material trademark, assumed name, trade name,
service mark, copyright, or license or any application with respect to the
foregoing;
2.7.7 The grant of any increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing, or other plan) other than customary increases on a periodic
basis or required by agreement or understanding in the ordinary course of
business and in accordance with past practice;
2.7.8 The discharge or satisfaction of any material lien or
encumbrance or the payment of any material liability other than current
liabilities in the ordinary course of business;
2.7.9 The making of any material loan, advance, or guaranty to or for
the benefit of any person except the creation of accounts receivable in the
ordinary course of business; or
2.7.10 An agreement to do any of the foregoing.
2.8 Title and Related Matters. The Corporation has good and marketable
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title to all of its property, real and personal, and other assets included in
the July 31, 1999 Financial Statements (except properties and assets sold or
otherwise disposed of subsequent to the Statement Date in the ordinary course of
business or as contemplated in this Agreement), free and clear of all security
interests, mortgages, liens, pledges, charges, claims, or encumbrances of any
kind or character, except (i) statutory liens for property taxes not yet
delinquent or payable subsequent to the date of this Agreement and statutory or
common law liens securing the payment or performance of any obligation of the
Corporation, the payment or performance of which is not delinquent, or that is
payable without interest or penalty subsequent to the date on which this
representation is given, or the validity of which is being contested in good
faith by the Corporation; (ii) the rights of customers of the Corporation with
respect to inventory under orders or contracts entered into by the Corporation
in the ordinary course of business; (iii) claims, easements, liens, and other
encumbrances of record pursuant to filings under real property recording
statutes; and (iv) as described in the Unaudited Statements or the notes
thereto.
2.9 Litigation. There are no material actions, suits, proceedings,
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orders, investigations, or claims pending or, to the best of Seller' and the
Corporation's knowledge, overtly threatened against the Corporation or any
property of either, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency, or instrumentality; the
Corporation is not subject to any arbitration proceedings under collective
bargaining agreements or otherwise or, to the best of Seller' and the
Corporation's knowledge, any governmental investigations or inquiries;
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and, to the best knowledge of Seller' and the directors and responsible officers
of the Corporation, there is no basis for any of the foregoing.
2.10 Tax Matters. (i) the Corporation has prepared in a substantially
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correct manner and has filed all federal, state, local, and foreign tax returns
and reports heretofore required to be filed by them and have paid all taxes
shown as due thereon; and (ii) no taxing authority has asserted any deficiency
in the payment of any tax or informed the Corporation that it intends to assert
any such deficiency or to make any audit or other investigation of the
Corporation for the purpose of determining whether such a deficiency should be
asserted against the Corporation.
2.11 Compliance with Laws. To the best of Seller's knowledge, the
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Corporation is, in the conduct of its business, in substantial compliance with
all laws, statutes, ordinances, regulations, orders, judgments, or decrees
applicable to them, the enforcement of which, if the Corporation was not in
compliance therewith, would have a materially adverse effect on the business of
the Corporation, taken as a whole. Neither the Seller nor the Corporation have
received any notice of any asserted present or past failure by the Corporation
to comply with such laws, statutes, ordinances, regulations, orders, judgments,
or decrees.
2.12 No Brokers. There are no claims for brokerage commissions, finders'
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fees, or similar compensation in connection with the purchase based on any
arrangement or agreement binding upon any of the parties hereto.
2.13 Insurance. Each insurance policy maintained by the Corporation with
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respect to its properties, assets, and businesses is in full force and effect.
The Corporation is not in material default with respect to its obligations under
any such policy maintained by it. Neither Seller nor the Corporation have been
notified of the cancellation of any of the insurance policies or of any material
increase in the premiums to be charged for such insurance policies.
2.14 Employees and Labor Relations Matters. Except as provided in this
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Agreement:
2.14.1 Neither Seller nor the Corporation is aware that any executive
or key employee of the Corporation or any group of employees of the
Corporation has any plans to terminate employment with the Corporation;
2.14.2 To the best of Seller' knowledge, the Corporation has
substantially complied in all material respects with all labor and
employment laws, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining, Americans With Disabilities Act,
and the payment of social security and other taxes;
2.14.3 There is no unfair labor practice charge, complaint, or other
action against the Corporation pending or, to Seller' and the Corporation's
best knowledge, threatened before the National Labor Relations Board and
the Corporation is not subject to any order to bargain by the National
Labor Relations Board;
2.14.4 No questions concerning representation have been raised or, to
Seller' and the Corporation's best knowledge, are threatened with respect
to employees of the Corporation;
2.14.5 No grievance that might have a material adverse effect on the
Corporation and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the best knowledge of
Seller and the directors and responsible officers of the Corporation, no
basis exists for any such grievance or arbitration proceeding; and
2.14.6 To the best knowledge of Seller and the directors and
responsible officers of the Corporation, no employee of the Corporation is
subject to any non-competition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with persons other than the Corporation
relating to the present business activities of the Corporation.
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2.15 Disclosure. Neither this Agreement nor any of the schedules,
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attachments, written statements, documents, certificates, or other items
prepared or supplied to Purchaser by or on behalf of the Corporation or Seller
with respect to this purchase contain any untrue statement of a material fact or
omit a material fact necessary to make each statement contained herein or
therein not misleading. No Seller or any responsible officer or director has
intentionally concealed any fact known by such person to have a material adverse
effect upon the Corporation's existing or expected financial condition,
operating results, assets, customer relations, employee relations, or business
prospects taken as a whole.
2.16 Power of Attorney. No material power of attorney or similar
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authorization given by the Corporation is presently in effect.
2.17 Accounts Receivable. All accounts receivable of the Corporation
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reflected in the July 31, 1999 Financial Statements represent bona fide sales
actually made in the ordinary course of business.
2.17.1 Corporation has no collective bargaining or union contracts
agreement in effect or being negotiated;
2.17.2 There is no labor strike, dispute, request for representation,
slowdown, or stoppage pending or, to Seller' and the Corporation's best
knowledge, threatened against the Corporation;
2.17.3 Corporation is not in material default under any Third Party
Agreements, nor, to Seller' and the Corporation's best knowledge, does
there exist any event that, with notice or the passage of time or both,
would constitute a material default or event of default by the Corporation
under any Third Party Agreements.
Section 3. Representations and Warranties of Purchaser. As a material
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inducement to Seller to enter into this Agreement and sell the Shares, Purchaser
hereby represents and warrants to Seller as follows:
3.1 Organization; Power. Purchaser is a corporation duly incorporated and
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validly existing under the laws of the state of Texas, and has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser
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of this Agreement and all other agreements contemplated hereby to which
Purchaser is a party have been duly and validly authorized by all necessary
corporate action of Purchaser, and this Agreement and each such other agreement,
when executed and delivered by the parties thereto, will constitute the legal,
valid, and binding obligation of Purchaser enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, and similar statutes affecting creditors' rights
generally and judicial limits on equitable remedies.
3.3 No Conflict with Other Instruments or Agreements. The execution,
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delivery, and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not result in
a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which Purchaser is a party
or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
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notice, report, or other filing with any governmental or regulatory authority in
connection with the execution and delivery by Purchaser of this Agreement and
the consummation of the purchase and (ii) no consent, approval, or authorization
of any governmental or regulatory authority is required to be obtained by
Purchaser or any affiliate in connection with Purchaser's execution, delivery,
and performance of this Agreement and the consummation of this purchase.
3.5 Litigation. There are no actions, suits, proceedings, or governmental
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investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
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3.6 Investment Representations
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3.6.1 Purchaser is acquiring the Shares for its own account for
purposes of investment and without expectation, desire, or need for resale
and not with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
3.6.2 During the course of the negotiation of this Agreement,
Purchaser has reviewed all information provided to it by the Corporation
and has had the opportunity to ask questions of and receive answers from
representatives of the Corporation concerning the Corporation, the
securities offered and sold hereby, and this purchase, and to obtain
certain additional information requested by Purchaser.
3.6.3 Purchaser understands that the Shares to be purchased have not
been registered under Securities Act of 1933 ("1933 Act"), or under any
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state securities law.
3.6.4 Purchaser understands that the Shares cannot be resold in a
transaction to which the 1933 Act and state securities laws apply unless
(i) subsequently registered under the 1933 Act and applicable state
securities laws or (ii) exemptions from such registrations are available.
Purchaser is aware of the provisions of Rule 144 promulgated under the 1933
Act which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
3.6.5 Purchaser understands that no public market now exists for the
Shares and that it is uncertain that a public market will ever exist for
the Shares.
3.6.6 Purchaser understands that the certificates for the Shares will
bear the following legend:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE CORPORATION WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS CERTIFICATE
UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES LAWS,
(ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD
OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY THE
PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER
IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
3.7 Brokerage. There are no claims for brokerage commissions, finders'
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fees, or similar compensation in connection with this purchase based on any
arrangement or agreement entered into by Purchaser and binding upon any of the
parties hereto.
Section 4. Conduct of the Corporation's Business Pending the Closing.
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From the date hereof until the Closing, and except as otherwise consented to or
approved by Purchaser, Seller and the Corporation covenant and agree with
Purchaser as follows:
4.1 Regular Course of Business. The Corporation will operate its business
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in accordance with the reasonable judgment of its management diligently and in
good faith, consistent with past management practices, and the Corporation will
continue to use its reasonable efforts to keep available the services of present
officers and employees (other than planned retirements) and to preserve its
present relationships with persons having business dealings with it.
4.2 Distributions. The Corporation will not declare, pay, or set aside
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for payment any dividend or other distribution in respect of its capital stock.
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4.3 Capital Changes. The Corporation will not issue any shares of its
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stock, or issue or sell any securities convertible into, or exchangeable for, or
options, warrants to purchase, or rights to subscribe to, any shares of its
stock or subdivide or in any way reclassify any shares of its capital stock, or
repurchase reacquire, cancel, or redeem any such shares.
4.4 Assets. The assets, property, and rights now owned by the Corporation
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will be used, preserved, and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as said assets,
property, and rights are on the date of this Agreement, and no unusual or novel
methods of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation or valuation of inventory will be made or
instituted. Without the prior consent of Purchaser, the Corporation will not
encumber any of its assets or make any commitments relating to such assets,
property, or business, except in the ordinary course of its business.
4.5 Insurance. The Corporation will keep or cause to be kept in effect
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and undiminished the insurance now in effect on its various properties and
assets, and will purchase such additional insurance, at Purchaser's cost, as
Purchaser may request.
4.6 Employees. The Corporation will not grant to any employee any
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promotion, any increase in compensation, or any bonus or other award other than
promotions, increases, or awards that are regularly scheduled in the ordinary
course of business or contemplated on the date of this Agreement or that are, in
the reasonable judgement of management of the Corporation, in the Corporation's
best interest.
4.7 No Violations. The Corporation will comply in all material respects
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with all statutes, laws, ordinances, rules, and regulations applicable to it in
the ordinary course of business.
4.8 Public Announcements. No press release or other announcement to the
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employees, customers, or suppliers of the Corporation related to this Agreement
or this purchase will be issued without the joint approval of the parties,
unless required by law, in which case Purchaser and Seller will consult with
each other regarding the announcement.
Section 5. Covenants of the Corporation and Seller. Corporation and
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Seller covenant and agree with Purchaser as follows:
5.1 Satisfaction of Conditions. The Corporation will use reasonable
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efforts to obtain as promptly as practicable the satisfaction of the conditions
to Closing set forth in Section 7 and any necessary consents or waivers under or
amendments to agreements by which the Corporation is bound.
5.2 No Solicitation. Until the Closing or termination pursuant to Section
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10 of this Agreement, neither Seller nor the Corporation, nor any of their
respective directors, officers, employees, or agents shall, directly or
indirectly, encourage, solicit, initiate, or enter into any discussions or
negotiations concerning any disposition of any of the capital stock or all or
substantially all of the assets of the Corporation (other than pursuant to this
Agreement), or any proposal therefor, or furnish or cause to be furnished any
information concerning the Corporation to any party in connection with any
transaction involving the acquisition of the capital stock or assets of the
Corporation by any person other than Purchaser. Seller or the Corporation will
promptly inform Purchaser of any inquiry (including the terms thereof and the
person making such inquiry) received by any responsible officer or director of
the Corporation or Seller after the date hereof and believed by such person to
be a bona fide, serious inquiry relating to any such proposal.
5.3 Action After the Closing. Upon the reasonable request of any party
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hereto after the Closing, any other party will take all action and will execute
all documents and instruments necessary or desirable to consummate and give
effect to this purchase. These include, by way of illustration and not by way
of limitation, the following:
5.3.1 Various conditions relating to filing, payment, and collecting
of refunds relating to taxes;
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5.3.2 Resignations of each of the directors of the Corporation;
5.3.3 Provisions relating to delivery of Corporate books and records;
5.3.4 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and if Purchaser is
concerned that Seller is not getting corporate approval in due time (or
vice versa), the following covenant may be considered.
Seller will cause a meeting of its shareholder to be called and held as
soon as practicable, will recommend approval of the transaction to its
shareholder, and will use its best efforts to obtain shareholder approval.
Section 6. Covenant of Purchaser. Purchaser will use its best efforts to
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cause the conditions set forth in Section 8 to be satisfied.
Section 7. Conditions Precedent to the Obligations of Purchaser. Each and
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every obligation of Purchaser under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
7.1 Representations and Warranties; Performance. Each of the
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representations and warranties made by the Corporation herein will be true and
correct in all material respects as of the Closing with the same effect as
though made at that time except for changes contemplated, permitted, or required
by this Agreement; Seller and the Corporation will have performed and complied
with all agreements, covenants, and conditions required by this Agreement to be
performed and complied with by them prior to the Closing; and Purchaser will
have received, at the Closing, a certificate of the Corporation and Seller,
signed by the President and the Chief Financial Officer of the Corporation and
Seller, stating that each of the representations and warranties made by the
Corporation herein is true and correct in all material respects as of the
Closing except for changes contemplated, permitted, or required by this
Agreement and that Seller and the Corporation have performed and complied with
all agreements, covenants, and conditions required by this Agreement to be
performed and complied with by them prior to the Closing.
7.2 Litigation. No material action, suit, or proceeding before any court,
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governmental or regulatory authority will have been commenced and be continuing,
and no investigation by any governmental or regulatory authority will have been
commenced and be continuing, and no action, investigation, suit, or proceeding
will be threatened at the time of Closing, against Seller, the Corporation, or
Purchaser or any of their affiliates, associates, officers, or directors,
seeking to restrain, prevent, or change this purchase, questioning the validity
or legality of this purchase, or seeking damages in connection with this
purchase.
7.3 Legal Opinion. Purchaser will have received an opinion of Seller's
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legal counsel, in form and content reasonably acceptable to Purchaser and its
legal counsel, to the effect that (i) the Corporation's organization, existence,
valid existence, and authorized and issued stock are as stated herein, that this
Agreement has been authorized, is enforceable, and is consistent with law and
the agreements of the Corporation and Seller as stated herein, and that, except
as specified in the opinion, such counsel does not know of any litigation,
claim, proceeding, or governmental investigation pending or threatened against
the Corporation, any Subsidiary, or their respective properties; (ii) the
execution, delivery, and performance of this Agreement and all other agreements
contemplated hereby to which the Corporation or Seller are a party have been
duly authorized by the Corporation or Seller, as the case may be; (iii) this
Agreement and each other agreement contemplated hereby, when executed and
delivered by the parties thereto, will constitute the legal, valid, and binding
obligation of the Corporation, Seller, or both as the case may be, enforceable
against Seller or the Corporation, as the case may be, in accordance with its
terms except as the enforceability thereof may be limited by the application of
bankruptcy, insolvency, moratorium, or similar laws affecting the rights of
creditors generally or judicial limits on the right of specific performance; and
(iv) the execution and delivery by the Corporation and Seller of this Agreement
and all other agreements contemplated hereby to which the Corporation or Seller
are a party, the offering and sale of the Shares hereunder and the fulfillment
of and compliance with the respective terms hereof and thereof by the
Corporation and Seller, do not and will not (a) conflict with or result in a
breach of the terms,
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conditions or provisions of, (b) constitute a default under, (c) result in the
creation of any lien, security interest, charge, or encumbrance upon the capital
stock or assets of Seller, or the Corporation pursuant to, (d) give any third
party the right to accelerate any obligation under, (e) result in a violation
of, or (f) require any authorization, consent, approval, exemption, or other
action by or notice to any court or administrative or governmental body pursuant
to the charter or bylaws of Seller or the Corporation, or any law, statute,
rule, or regulation to which Seller or the Corporation are subject, or any
agreement, instrument, order, judgment, or decree to which Seller or the
Corporation are subject.
7.4 Material Change. From the date of this Agreement to the Closing, the
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Corporation shall not have suffered any material adverse change (whether or not
such change is referred to or described in any supplement to this Agreement) in
its business prospects, financial condition, working capital, assets,
liabilities (absolute, accrued, contingent, or otherwise), or operations.
7.5 Corporate Action. Seller will have furnished to Purchaser:
----------------
7.5.1 The corporate charter and all amendments thereto and
restatements thereof of the Corporation certified by the official having
custody over corporate records in the jurisdiction of incorporation of the
corporation in question;
7.5.2 The current bylaws and minutes of all meetings and consents of
shareholders and directors of the Corporation;
7.5.3 Each certificate of qualification to do business as a foreign
corporation of the Corporation;
7.5.4 All stock transaction records of the Corporation; and
7.5.5 A certificate of the Secretary or Assistant Secretary of the
Corporation as to the accuracy, currency, and completeness of each of the
above documents, the incumbency and signatures of officers of the
Corporation, the absence of any amendment to the charter documents of the
Corporation, and the absence of any proceeding for dissolution or
liquidation of the Corporation.
Section 8. Conditions Precedent to the Obligations of the Corporation and
---------- --------------------------------------------------------------
Seller. Each and every obligation of Seller and the Corporation under this
- ------
Agreement is subject to the satisfaction, at or before the Closing, of each of
the following conditions:
8.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by Purchaser herein will be true and correct
in all material respects as of the Closing with the same effect as though made
at that time except for changes contemplated, permitted, or required by this
Agreement; Purchaser will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Seller will have received, at the
Closing, a certificate of Purchaser, signed by the President and the Chief
Financial Officer of Purchaser, stating that each of the representations and
warranties made by Purchaser herein is true and correct in all material respects
as of the Closing except for changes contemplated, permitted, or required by
this Agreement and that Purchaser has performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by it prior to the Closing.
8.2 No Proceeding or Litigation. No action, suit, or proceeding before
---------------------------
any court (other than suits seeking monetary damages only and in the aggregate
sum of less than $10,000) and any governmental or regulatory authority will have
been commenced and be continuing, and no investigation by any governmental or
regulatory authority will have been commenced and be continuing, and no action,
investigation, suit, or proceeding will be threatened at the time of Closing,
against Seller, the Corporation, or Purchaser or any of their affiliates,
associates, officers, or directors, seeking to restrain, prevent, or change this
purchase, questioning the validity or legality of this purchase, or seeking
damages in connection with this purchase.
9
<PAGE>
8.3 Corporate Action. Purchaser will have furnished to Seller a copy,
----------------
certified by the Secretary of an Assistant Secretary of Purchaser, of the
resolutions of Purchaser authorizing the execution, delivery, and performance of
this Agreement.
Section 9. Closing.
---------- -------
9.1 Time, Place, and Manner of Closing. Unless this Agreement has been
----------------------------------
terminated and this purchase has been abandoned pursuant to the provisions of
Section 2 or Section 10, the closing ("Closing") will be held at the offices of
-------
the Corporation, 5617 Grissom Road, San Antonio, Texas 78238, or such other
place as the parties may agree, ten (10) days after notice is given to the
Seller that the Purchaser desires to consummate this transaction, or as soon as
practicable after the satisfaction of the various conditions precedent to the
Closing set forth herein. At the Closing the parties to this Agreement will
exchange certificates, Notes, Guaranties, and other instruments and documents in
order to determine whether the terms and conditions of this Agreement have been
satisfied. Upon the determination of each party that its conditions to
consummate this purchase have been satisfied or waived, Seller shall deliver to
Purchaser the certificate(s) evidencing the Shares, duly endorsed for transfer,
and Purchaser shall deliver to Seller the Notes and Guaranties referred to in
Section 1.3, in a manner to be agreed upon by the parties. After the Closing,
Seller, at Purchaser's cost, will execute, deliver, and acknowledge all such
further instruments of transfer and conveyance and will perform all such other
acts as Purchaser may reasonably request to effectively transfer the Shares.
9.2 Consummation of Closing. All acts, deliveries, and confirmations
-----------------------
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with
the close of business at the principal office of the Corporation and, regardless
of when the last act, delivery, or confirmation of the Closing shall take place,
the transfer of the Shares shall be deemed to occur as of the close of business
at the principal office of the Corporation on the date of the Closing.
Section 10. Termination.
----------- -----------
10.1 Termination for Cause. If, pursuant to the provisions of Section 7 or
---------------------
8 of this Agreement, Seller or Purchaser is not obligated at the Closing to
consummate this Agreement, then the party who is not so obligated may terminate
this Agreement.
10.2 Termination Without Cause. Anything herein or elsewhere to the
-------------------------
contrary notwithstanding, this Agreement may be terminated and abandoned at any
time without further obligation or liability on the part of any party in favor
of any other by mutual consent of Purchaser and Seller.
10.3 Termination Procedure. Any party having the right to terminate this
---------------------
Agreement due to a failure of a condition precedent contained in Sections 7 or 8
hereto may terminate this Agreement by delivering to the other party written
notice of termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
Section 11. Miscellaneous Provisions.
----------- ------------------------
11.1 Amendment and Modification. Subject to applicable law, this Agreement
--------------------------
may be amended, modified, or supplemented only by a written agreement signed by
Purchaser and Seller.
11.2 Waiver of Compliance; Consents
------------------------------
11.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party
entitled to the performance of such obligation, covenant, or agreement or
who has the benefit of such condition, but such waiver or failure to insist
upon strict compliance with such
10
<PAGE>
obligation, covenant, agreement, or condition will not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
11.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth
above.
11.3 Notices. All notices, requests, demands, and other communications
-------
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid:
If to Purchaser, or to the Corporation
after the Closing, to:
BioLynx.Com
5617 Grissom Road
San Antonio, TX 78238
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to the Corporation before the
Closing, to:
BioLynx Outsource Services, Inc.
5617 Grissom Road
San Antonio, TX 78238
If to Seller, to:
United Capital Investment Group, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other address as Seller furnishes to Purchaser pursuant to the above.
11.4 Titles and Captions. All section titles or captions contained in this
-------------------
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
11.5 Entire Agreement. This Agreement contains the entire understanding
----------------
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
11.6 Agreement Binding. This Agreement shall be binding upon the heirs,
-----------------
executors, administrators, successors and assigns of the parties hereto.
11.7 Attorney Fees. In the event an arbitration, suit or action is brought
-------------
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
11.8 Computation of Time. In computing any period of time pursuant to this
-------------------
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday, or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
11.9 Pronouns and Plurals. All pronouns and any variations thereof shall
--------------------
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
11
<PAGE>
11.10 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Texas.
11.11 Arbitration. If at any time during the term of this Agreement any
-----------
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof.
11.12 Presumption. This Agreement or any section thereof shall not be
-----------
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
11.13 Further Action. The parties hereto shall execute and deliver all
--------------
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
11.14 Parties in Interest. Nothing herein shall be construed to be to the
-------------------
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
11.15 Savings Clause. If any provision of this Agreement, or the
--------------
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Dated: October 1, 1999.
PURCHASER:
BioLynx.Com, Inc.
a Texas corporation
By: /s/ John D. Walker II
---------------------------------
John D. Walker II, President
CORPORATION:
BioLynx Outsource Services, Inc.,
a Texas corporation
By: /s/ John D. Walker II
---------------------------------
John D. Walker II, President
SELLER:
UNITED CAPITAL INVESTMENT GROUP, INC.
By: /s/ John D. Walker II
---------------------------------
John D. Walker II, President
12
<PAGE>
Exhibit 10.20
Option to Purchase Employee/Customer Base
Dated October 1, 1999 Between
BioLynx Outsource Services, Inc. and
Alamo Commercial Group, Inc.
<PAGE>
Exhibit 10.20
OPTION TO PURCHASE EMPLOYEE/CUSTOMER BASE
-----------------------------------------
This Agreement ("Agreement") is entered into this date, is by and between
---------
BioLynx Outsource Services, Inc., a Texas corporation ("Purchaser") and Alamo
---------
Commercial Group, Inc. ("Seller").
------
RECITALS:
--------
WHEREAS, the Seller is in the business of providing business staffing to
its customers by way of leasing employees; and
WHEREAS, the Purchaser desires to acquire all of the leased employees of
the Seller, together with all contracts to furnish services and staffing for the
customers and clients of the Seller (collectively hereinafter referred to as the
"Employee Customer Base"); and
----------------------
WHEREAS, Purchaser is expected to become a wholly owned subsidiary of
BioLynx.Com, Inc. and will cause BioLynx.Com, Inc. to issue stock, as
hereinafter provided, in partial payment for the purchase price for the Employee
Customer Base.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Purchase of Employee/Customer Base.
---------- ----------------------------------
1.1 Purchase of Employee/Customer Base. Subject to the terms and
----------------------------------
conditions set forth herein, at the Closing (as defined below) Seller will sell
its Employee/Customer Base to Purchaser and Purchaser will purchase all of its
Employee/Customer Base from Seller. This purchase and sale will be effective
January 1, 2000.
1.2 Purchase Price. Purchaser will pay to Seller, subject to the
--------------
adjustment noted below, the sum of $3,400,000.00 for the Seller's Employee
Customer Base.
1.3 Adjustments to Purchase Price. At Closing, the following adjustments
-----------------------------
will be made to the Purchase Price:
The Purchase Price will be calculated on the basis of the average
Gross Profit per week for Alamo Commercial Group, Inc. for each of the
weeks ending as follows: (October 8, 1999, October 15, 1999, October 22,
1999 and October 29, 1999) (the "Average Gross Profit"). Gross Profit is
--------------------
defined as: (invoiced amounts for the week plus miscellaneous
----
deductions) less (Employer's portion of FICA/Medicare payable, plus the
---- ----
Employer's portion of the federal and state unemployment taxes [FUTA,
SUTA at .24 SUTA rate], plus Gross Wages). Average Gross Profit will
----
then be multiplied by 78 to determine the Purchase Price (referred to
herein as the "Purchase Price". The Purchase Price will then be adjusted
--------------
to reflect this proper amount.
1.4 Payment of Purchase Price. The Purchase Price will be paid to the
-------------------------
Seller as follows: (i) the Purchaser will pay the Seller the sum of
$1,000,000.00 on or before January 1, 2000; and (ii) the Purchaser will deliver
to the Seller Convertible Preferred Stock issued by BioLynx.Com, Inc. for the
balance of the Purchase Price, with a liquidation privilege equal to its face
amount, issued in increments of $1,000.00, bearing an eight percent (8%) non-
cumulative dividend (the "Preferred Stock"). The Preferred Stock will, at the
---------------
option of the holder of the stock, be convertible into Common Stock of
BioLynx.Com, Inc. at the rate of the liquidation privilege, together with any
declared but unpaid dividend, divided by $3.30 per share of common stock.
1
<PAGE>
1.5 Option. In consideration of the non-refundable sum of $100.00, paid
------
by the Purchaser directly to the Seller, independent of any other consideration
required by this Agreement, Purchaser and the Seller agree as follows: Purchaser
shall have the option to terminate this Agreement at any time by giving written
notice of termination to the Seller. On such termination, all of Purchaser's
obligations hereunder shall be terminated. If the Purchaser does not give
notice of termination, Purchaser's right of termination shall be waived.
1.6 Closing. The closing of this matter is effective as of January 1,
-------
2000. As of that date, all employees of the Seller will become the employees of
the Purchaser and all contracts to provide staffing and services which are owned
by the Seller will be transferred to the Purchaser concurrently with such
employees. All liability related to such employees and contracts prior to the
effective date of the transfer will be retained by the Seller. All liabilities
and obligations subsequent to the date of transfer related to the leased
employees and contracts will be the liabilities and obligations of the
Purchaser.
Section 2. Representations and Warranties of the Corporation and Seller.
---------- ------------------------------------------------------------
As a material inducement to Purchaser to enter into this Agreement and purchase
the Employee Customer Base, Seller represents and warrants that:
2.1 Organization and Corporate Power. The Seller is a corporation duly
--------------------------------
incorporated and validly existing under the laws of the state of Texas and the
Seller is qualified to do business in every jurisdiction in which its ownership
of property or conduct of business requires it to qualify. The Seller has all
requisite corporate power and authority and all material licenses, permits, and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. The copies of the Seller's charter documents and
bylaws have been furnished to Purchaser's counsel reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
2.2 Conduct of Business; Liabilities. The Seller is not in default under,
--------------------------------
and no condition exists that with notice or lapse of time would constitute a
default of the Seller under any contract to which the Seller is a party or by
which the Seller or the properties of the Seller are bound.
2.3 Compliance with Laws. To the best of Seller's knowledge, the Seller
--------------------
is, in the conduct of its business, in substantial compliance with all laws,
statutes, ordinances, regulations, orders, judgments, or decrees applicable to
them, the enforcement of which, if the Seller was not in compliance therewith,
would have a materially adverse effect on the business of the Seller, taken as a
whole. The Seller has not received any notice of any asserted present or past
failure by the Seller to comply with such laws, statutes, ordinances,
regulations, orders, judgments, or decrees.
2.4 No Brokers. There are no claims for brokerage commissions, finders'
----------
fees, or similar compensation in connection with the purchase based on any
arrangement or agreement binding upon any of the parties hereto.
2.5 Employees and Labor Relations Matters. Except as provided in this
-------------------------------------
Agreement:
2.5.1 The Seller is not aware that any executive or key employee of
the Seller or any group of employees of the Seller has any plans to
terminate employment with the Seller;
2.5.2 To the best of Seller's knowledge, the Seller has substantially
complied in all material respects with all labor and employment laws,
including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining, Americans With Disabilities Act, and the payment of
social security and other taxes;
2.5.3 There is no unfair labor practice charge, complaint, or other
action against the Seller pending or, to Seller's best knowledge,
threatened before the National Labor Relations Board and the Seller is not
subject to any order to bargain by the National Labor Relations Board;
2.5.4 No questions concerning representation have been raised or, to
Seller' and the Seller's best knowledge, are threatened with respect to
employees of the Seller;
2
<PAGE>
2.5.5 No grievance that might have a material adverse effect on the
Seller and no arbitration proceeding arising out of or under any collective
bargaining agreement is pending and, to the best knowledge of Seller and
the directors and responsible officers of the Seller, no basis exists for
any such grievance or arbitration proceeding; and
2.5.6 To the best knowledge of Seller and the directors and
responsible officers of the Seller, no employee of the Seller is subject to
any non-competition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with persons other than the Seller
relating to the present business activities of the Seller.
2.6 Disclosure. Neither this Agreement nor any of the schedules,
----------
attachments, written statements, documents, certificates, or other items
prepared or supplied to Purchaser by or on behalf of the Seller with respect to
this purchase contain any untrue statement of a material fact or omit a material
fact necessary to make each statement contained herein or therein not
misleading. No Seller or any responsible officer or director has intentionally
concealed any fact known by such person to have a material adverse effect upon
the Seller's existing or expected financial condition, operating results,
assets, customer relations, employee relations, or business prospects taken as a
whole.
2.7 Investment Representations
--------------------------
2.7.1 Seller is acquiring the Shares for its own account for purposes
of investment and without expectation, desire, or need for resale and not
with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
2.7.2 During the course of the negotiation of this Agreement, Seller
has reviewed all information provided to it by BioLynx.Com, Inc. and has
had the opportunity to ask questions of and receive answers from
representatives of BioLynx.Com, Inc. concerning BioLynx.Com, Inc., the
securities offered and sold hereby, and this purchase, and to obtain
certain additional information requested by Seller.
2.7.3 Seller understands that the Shares to be purchased have not been
registered under Securities Act of 1933 ("1933 Act"), or under any state
--------
securities law.
2.7.4 Seller understands that the Shares cannot be resold in a
transaction to which the 1933 Act and state securities laws apply unless
(i) subsequently registered under the 1933 Act and applicable state
securities laws or (ii) exemptions from such registrations are available.
Seller is aware of the provisions of Rule 144 promulgated under the 1933
Act which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
2.7.5 Seller understands that no public market now exists for the
Shares and that it is uncertain that a public market will ever exist for
the Shares.
2.7.6 Seller understands that the certificates for the Shares will
bear the following legend:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE Seller WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS CERTIFICATE
UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES LAWS,
(ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD
OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY THE
PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER
IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
3
<PAGE>
Section 3. Representations and Warranties of Purchaser. As a material
---------- -------------------------------------------
inducement to Seller to enter into this Agreement and sell the Shares, Purchaser
hereby represents and warrants to Seller as follows:
3.1 Organization; Power. Purchaser is a Seller duly incorporated and
-------------------
validly existing under the laws of the state of Texas, and has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser
-------------
of this Agreement and all other agreements contemplated hereby to which
Purchaser is a party have been duly and validly authorized by all necessary
corporate action of Purchaser, and this Agreement and each such other agreement,
when executed and delivered by the parties thereto, will constitute the legal,
valid, and binding obligation of Purchaser enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, and similar statutes affecting creditors' rights
generally and judicial limits on equitable remedies.
3.3 No Conflict with Other Instruments or Agreements. The execution,
------------------------------------------------
delivery, and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not result in
a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which Purchaser is a party
or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
------------------------
notice, report, or other filing with any governmental or regulatory authority in
connection with the execution and delivery by Purchaser of this Agreement and
the consummation of the purchase and (ii) no consent, approval, or authorization
of any governmental or regulatory authority is required to be obtained by
Purchaser or any affiliate in connection with Purchaser's execution, delivery,
and performance of this Agreement and the consummation of this purchase.
3.5 Litigation. There are no actions, suits, proceedings, or governmental
----------
investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
3.6 Brokerage. There are no claims for brokerage commissions, finders'
---------
fees, or similar compensation in connection with this purchase based on any
arrangement or agreement entered into by Purchaser and binding upon any of the
parties hereto.
Section 4. Conduct of the Seller's Business Pending the Closing. From the
---------- ----------------------------------------------------
date hereof until the Closing, and except as otherwise consented to or approved
by Purchaser, Seller covenants and agrees with Purchaser as follows:
4.1 Regular Course of Business. The Seller will operate its business in
--------------------------
accordance with the reasonable judgment of its management diligently and in good
faith, consistent with past management practices, and the Seller will continue
to use its reasonable efforts to keep available the services of present officers
and employees (other than planned retirements) and to preserve its present
relationships with persons having business dealings with it.
4.2 Assets. The assets, property, and rights now owned by the Seller will
------
be used, preserved, and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as said assets,
property, and rights are on the date of this Agreement, and no unusual or novel
methods of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation or valuation of inventory will be made or
instituted. Without the prior consent of Purchaser, the Seller will not
encumber any of its assets or make any commitments relating to such assets,
property, or business, except in the ordinary course of its business.
4.3 Insurance. The Seller will keep or cause to be kept in effect and
---------
undiminished the insurance now in effect on its various properties and assets,
and will purchase such additional insurance, at Purchaser's cost, as Purchaser
may request.
4
<PAGE>
4.4 Employees. The Seller will not grant to any employee any promotion,
---------
any increase in compensation, or any bonus or other award other than promotions,
increases, or awards that are regularly scheduled in the ordinary course of
business or contemplated on the date of this Agreement or that are, in the
reasonable judgement of management of the Seller, in the Seller's best interest.
4.5 No Violations. The Seller will comply in all material respects with
-------------
all statutes, laws, ordinances, rules, and regulations applicable to it in the
ordinary course of business.
Section 5. Covenants of the Seller. Seller covenants and agrees with
---------- -----------------------
Purchaser as follows:
5.1 Satisfaction of Conditions. The Seller will use reasonable efforts to
--------------------------
obtain as promptly as practicable the satisfaction of the conditions to Closing
set forth in Section 7 and any necessary consents or waivers under or amendments
to agreements by which the Seller is bound.
5.2 No Solicitation. Until the Closing or termination pursuant to Section
---------------
10 of this Agreement, neither Seller nor any of its respective directors,
officers, employees, or agents shall, directly or indirectly, encourage,
solicit, initiate, or enter into any discussions or negotiations concerning any
disposition of any of the capital stock or all or substantially all of the
assets of the Seller (other than pursuant to this Agreement), or any proposal
therefor, or furnish or cause to be furnished any information concerning the
Seller to any party in connection with any transaction involving the acquisition
of the capital stock or assets of the Seller by any person other than Purchaser.
Seller will promptly inform Purchaser of any inquiry (including the terms
thereof and the person making such inquiry) received by any responsible officer
or director of the Seller after the date hereof and believed by such person to
be a bona fide, serious inquiry relating to any such proposal.
5.3 Action After the Closing. Upon the reasonable request of any party
------------------------
hereto after the Closing, any other party will take all action and will execute
all documents and instruments necessary or desirable to consummate and give
effect to this purchase. These include, by way of illustration and not by way
of limitation, the following:
5.3.1 Various conditions relating to filing, payment, and collecting
of refunds relating to taxes;
5.3.2 Provisions relating to delivery of Corporate books and records;
5.3.3 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and if Purchaser is
concerned that Seller is not getting corporate approval in due time (or
vice versa), the following covenant may be considered.
Seller will cause a meeting of its shareholder to be called and held as
soon as practicable, will recommend approval of the transaction to its
shareholder, and will use its best efforts to obtain shareholder approval.
Section 6. Covenant of Purchaser. Purchaser will use its best efforts to
---------- ---------------------
cause the conditions set forth in Section 8 to be satisfied.
Section 7. Conditions Precedent to the Obligations of Purchaser. Each and
---------- ----------------------------------------------------
every obligation of Purchaser under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
7.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by the Seller herein will be true and
correct in all material respects as of the Closing with the same effect as
though made at that time except for changes contemplated, permitted, or required
by this Agreement; Seller will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Purchaser will have received, at
the Closing, a certificate of the Seller, signed by the President and the Chief
Financial Officer of the Seller, stating that each of the representations and
warranties made by
5
<PAGE>
the Seller herein is true and correct in all material respects as of the Closing
except for changes contemplated, permitted, or required by this Agreement and
that Seller has performed and complied with all agreements, covenants, and
conditions required by this Agreement to be performed and complied with by them
prior to the Closing.
7.2 Litigation. No material action, suit, or proceeding before any court,
----------
governmental or regulatory authority will have been commenced and be continuing,
and no investigation by any governmental or regulatory authority will have been
commenced and be continuing, and no action, investigation, suit, or proceeding
will be threatened at the time of Closing, against Seller, or Purchaser or any
of their affiliates, associates, officers, or directors, seeking to restrain,
prevent, or change this purchase, questioning the validity or legality of this
purchase, or seeking damages in connection with this purchase.
7.3 Material Change. From the date of this Agreement to the Closing, the
---------------
Seller shall not have suffered any material adverse change (whether or not such
change is referred to or described in any supplement to this Agreement) in its
business prospects, financial condition, working capital, assets, liabilities
(absolute, accrued, contingent, or otherwise), or operations.
7.4 Corporate Action. Seller will have furnished to Purchaser:
----------------
7.4.1 The corporate charter and all amendments thereto and
restatements thereof of the Seller certified by the official having custody
over corporate records in the jurisdiction of incorporation of the Seller
in question;
7.4.2 The current bylaws and minutes of all meetings and consents of
shareholders and directors of the Seller;
7.4.3 Each certificate of qualification to do business as a foreign
corporation of the Seller;
7.4.4 A certificate of the Secretary or Assistant Secretary of the
Seller as to the accuracy, currency, and completeness of each of the above
documents, the incumbency and signatures of officers of the Seller, the
absence of any amendment to the charter documents of the Seller, and the
absence of any proceeding for dissolution or liquidation of the Seller.
Section 8. Conditions Precedent to the Obligations of the Seller and
---------- ---------------------------------------------------------
Seller. Each and every obligation of Seller and the Seller under this Agreement
- ------
is subject to the satisfaction, at or before the Closing, of each of the
following conditions:
8.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by Purchaser herein will be true and correct
in all material respects as of the Closing with the same effect as though made
at that time except for changes contemplated, permitted, or required by this
Agreement; Purchaser will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Seller will have received, at the
Closing, a certificate of Purchaser, signed by the President and the Chief
Financial Officer of Purchaser, stating that each of the representations and
warranties made by Purchaser herein is true and correct in all material respects
as of the Closing except for changes contemplated, permitted, or required by
this Agreement and that Purchaser has performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by it prior to the Closing.
8.2 No Proceeding or Litigation. No action, suit, or proceeding before
---------------------------
any court (other than suits seeking monetary damages only and in the aggregate
sum of less than $10,000) and any governmental or regulatory authority will have
been commenced and be continuing, and no investigation by any governmental or
regulatory authority will have been commenced and be continuing, and no action,
investigation, suit, or proceeding will be threatened at the time of Closing,
against Seller, the Seller, or Purchaser or any of their affiliates, associates,
officers, or directors, seeking to restrain, prevent, or change this purchase,
questioning the validity or legality of this purchase, or seeking damages in
connection with this purchase.
6
<PAGE>
8.3 Corporate Action. Purchaser will have furnished to Seller a copy,
----------------
certified by the Secretary of an Assistant Secretary of Purchaser, of the
resolutions of Purchaser authorizing the execution, delivery, and performance of
this Agreement.
Section 9. Closing.
---------- -------
9.1 Time, Place, and Manner of Closing. Unless this Agreement has been
----------------------------------
terminated and this purchase has been abandoned pursuant to the provisions of
Section 2 or Section 10, the closing ("Closing") will be held at the offices of
-------
the Corporation, 5617 Grissom Road, San Antonio, Texas 78238, or such other
place as the parties may agree, effective January 1, 2000 but within ten (10)
days after notice is given to the Seller that the Purchaser desires to
consummate this transaction, or as soon as practicable after the satisfaction of
the various conditions precedent to the Closing set forth herein. At the
Closing the parties to this Agreement will exchange certificates, other
instruments and documents in order to determine whether the terms and conditions
of this Agreement have been satisfied. Upon the determination of each party
that its conditions to consummate this purchase have been satisfied or waived,
Purchaser shall deliver to Seller the certificate(s) evidencing the Shares, and
Purchaser shall deliver to Seller the cash referred to in Section 1.3, in a
manner to be agreed upon by the parties. After the Closing, Seller, will
execute, deliver, and acknowledge all such further instruments of transfer and
conveyance and will perform all such other acts as Purchaser may reasonably
request to effectively transfer the employees and customers to Purchaser.
9.2 Consummation of Closing. All acts, deliveries, and confirmations
-----------------------
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with
the close of business at the principal office of the Seller and, regardless of
when the last act, delivery, or confirmation of the Closing shall take place,
the transfer of the employees shall be deemed to occur as of the close of
business at the principal office of the Seller on January 1, 2000.
Section 10. Termination.
----------- -----------
10.1 Termination for Cause. If, pursuant to the provisions of Section 7 or
---------------------
8 of this Agreement, Seller or Purchaser is not obligated at the Closing to
consummate this Agreement, then the party who is not so obligated may terminate
this Agreement.
10.2 Termination Without Cause. Anything herein or elsewhere to the
-------------------------
contrary notwithstanding, this Agreement may be terminated and abandoned at any
time without further obligation or liability on the part of any party in favor
of any other by mutual consent of Purchaser and Seller.
10.3 Termination Procedure. Any party having the right to terminate this
---------------------
Agreement due to a failure of a condition precedent contained in Sections 7 or 8
hereto may terminate this Agreement by delivering to the other party written
notice of termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
Section 11. Miscellaneous Provisions.
----------- ------------------------
11.1 Amendment and Modification. Subject to applicable law, this Agreement
--------------------------
may be amended, modified, or supplemented only by a written agreement signed by
Purchaser and Seller.
11.2 Waiver of Compliance; Consents
------------------------------
11.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party
entitled to the performance of such obligation, covenant, or agreement or
who has the benefit of such condition, but such waiver or failure to insist
upon strict compliance with such
7
<PAGE>
obligation, covenant, agreement, or condition will not operate as a waiver
of, or estoppel with respect to, any subsequent or other failure.
11.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth
above.
11.3 Notices. All notices, requests, demands, and other communications
-------
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid:
If to Purchaser, or to the Seller
after the Closing, to:
BioLynx Outsource Services, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to the Seller, to
Alamo Commercial Group, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other address as Seller furnishes to Purchaser pursuant to the above.
11.4 Titles and Captions. All section titles or captions contained in
-------------------
this Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
11.5 Entire Agreement. This Agreement contains the entire understanding
----------------
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
11.6 Agreement Binding. This Agreement shall be binding upon the heirs,
-----------------
executors, administrators, successors and assigns of the parties hereto.
11.7 Attorney Fees. In the event an arbitration, suit or action is
-------------
brought by any party under this Agreement to enforce any of its terms, or in any
appeal therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
11.8 Computation of Time. In computing any period of time pursuant to
-------------------
this Agreement, the day of the act, event or default from which the designated
period of time begins to run shall be included, unless it is a Saturday, Sunday,
or a legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
11.9 Pronouns and Plurals. All pronouns and any variations thereof shall
--------------------
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
11.10 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Texas.
11.11 Arbitration. If at any time during the term of this Agreement any
-----------
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference,
8
<PAGE>
and disagreement shall be referred to a single arbiter agreed upon by the
parties, or if no single arbiter can be agreed upon, an arbiter or arbiters
shall be selected in accordance with the rules of the American Arbitration
Association and such dispute, difference, or disagreement shall be settled by
arbitration in accordance with the then prevailing commercial rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction thereof.
11.12 Presumption. This Agreement or any section thereof shall not be
-----------
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
11.13 Further Action. The parties hereto shall execute and deliver all
--------------
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
11.14 Parties in Interest. Nothing herein shall be construed to be to the
-------------------
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
11.15 Savings Clause. If any provision of this Agreement, or the
--------------
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Dated: October 1, 1999.
PURCHASER:
BIOLYNX OUTSOURCE SERVICES, INC.,
a Texas corporation
By: /s/ John D. Walker II
------------------------------
John D. Walker II, President
SELLER:
ALAMO COMMERCIAL GROUP, INC.
By: /s/ John D. Walker II
------------------------------
John D. Walker II, President
9
<PAGE>
Exhibit 10.21
Amended Option to Purchase Stock Agreement Dated
December 1, 1999 Between BioLynx.Com, Inc., BioLynx Outsource
Services, Inc. and United Capital Investment Group, Inc.
<PAGE>
Exhibit 10.21
AMENDED OPTION TO PURCHASE STOCK AGREEMENT
------------------------------------------
This Agreement ("Agreement") is entered into this date, is by and among
---------
BioLynx.Com, Inc., a Texas corporation and ("Purchaser"), BioLynx Outsource
---------
Services, Inc., a Texas corporation ("Corporation"), and United Capital
-----------
Investment Group, Inc. ("Seller").
------
WHEREAS, the Corporation presently has outstanding a single class of common
stock ("Shares"), of which 1,000 Shares have been issued to Seller; and
------
WHEREAS, said Shares are the only issued and outstanding capital stock of
the Corporation; and
WHEREAS, Purchaser desires an option to purchase from Seller and Seller
desires to grant Purchaser an option to purchase all of the Shares owned by
Seller on the terms and subject to the conditions set forth herein.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Purchase of Shares.
---------- ------------------
1.1 Purchase of Shares. Subject to the terms and conditions set forth
------------------
herein, at the Closing (as defined below) Seller will sell all of the Shares
owned by Seller to Purchaser and Purchaser will purchase all of the Shares owned
by Seller from Seller, said Shares constituting one hundred percent (100%) of
all of the issued and outstanding capital stock of the Corporation as of the
Closing.
1.2 Purchase Price. Purchaser will pay to Seller, the sum of
--------------
$1,446,347.76 for the Seller's Shares.
1.3 Payment of Purchase Price. The Purchase Price will be paid to the
-------------------------
Seller as follows: (i) the Purchaser will pay the Seller the sum of $500,000.00
on the Closing Date hereof (as hereinafter defined), in cash or by means of a
promissory note due within 90 days from the date thereof; and (ii) the Purchaser
will deliver to the Seller Convertible Preferred Stock for the balance of the
Purchase Price with a liquidation privilege equal to $946,347.76, bearing an
eight percent (8%) non-cumulative dividend. The Preferred Stock will, at the
option of the holder of the stock, be convertible into Common Stock of the
Corporation at the recited amount for the liquidation privilege, together with
any declared but unpaid dividend, divided by $3.30 per share of common stock.
1.4 Option. In consideration of the non-refundable sum of $100.00, paid
------
by the Purchaser directly to the Seller, independent of any other consideration
required by this Agreement, Purchaser and the Seller agree as follows: Purchaser
shall have the option to terminate this Agreement at any time before the Closing
Date by giving written notice of termination to the Seller. On such
termination, all of Purchaser's obligations hereunder shall be terminated. If
the Purchaser does not give notice of termination, Purchaser's right of
termination shall be waived.
1.5 Closing Date. The Closing Date of this Agreement shall be December
------------
31, 1999, or such other date thereafter as the parties shall mutually agree.
Provided, however, notwithstanding anything herein contained to the contrary,
the Closing Date shall not occur before the effective date of the Purchaser's
registration statement filed with the Securities and Exchange Commission with
respect to the sale of 1,000,000 shares of the Purchaser's common stock.
Provided, further, if the Closing Date shall not have occurred before April 1,
2000, this Agreement shall be null and void and of no further force or effect.
In such event, neither the Purchaser nor the Seller shall have any liability to
the other.
Section 2. Representations and Warranties of the Corporation and Seller.
---------- ------------------------------------------------------------
As a material inducement to Purchaser to enter into this Agreement and purchase
the Shares, Seller and the Corporation, jointly and severally, represent and
warrant that:
1
<PAGE>
2.1 Organization and Corporate Power. The Corporation is a corporation
--------------------------------
duly incorporated and validly existing under the laws of the state of Texas and
the Corporation is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify. The
Corporation has all requisite corporate power and authority and all material
licenses, permits, and authorizations necessary to own and operate its
properties and to carry on its business as now conducted. The copies of the
Corporation's charter documents and bylaws have been furnished to Purchaser's
counsel reflect all amendments made thereto at any time prior to the date of
this Agreement and are correct and complete.
2.2 Capital Stock and Related Matters. The authorized capital stock of
---------------------------------
the Corporation consists of 3,000,000 shares of preferred stock and 20,000,000
shares of common stock, 1,000 of which are issued and outstanding and are owned,
beneficially and of record, by Seller and no other stock of the Corporation is
issued and outstanding. The Corporation does not have outstanding and has not
agreed, orally or in writing, to issue any stock or securities convertible or
exchangeable for any shares of its stock, nor does it have outstanding nor has
it agreed, orally or in writing, to issue any options or rights to purchase or
otherwise acquire its stock. The Corporation is not subject to any obligation
(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of its stock. The Corporation has not violated any applicable securities
laws or regulations in connection with the offer or sale of its securities other
than violations that have been, or will before the Closing have been, corrected
by post-issuance filings. All of the outstanding shares of the Corporation's
capital stock are validly issued, fully paid, and non-assessable. Seller has,
and upon purchase thereof pursuant to the terms of this Agreement Purchaser will
have, good and marketable title to the Shares, free and clear of all security
interests, liens, encumbrances, or other restrictions or claims, subject only to
restrictions as to marketability imposed by securities laws. Assuming that the
representations in Section 3.6 are true and correct, neither Seller nor the
Corporation has violated or will violate any applicable securities laws in
connection with the offer or sale of the Shares to Purchaser hereunder.
2.3 Subsidiaries. The Corporation does not own or hold any rights to
------------
acquire any shares of stock or any other security or interest in any other
corporation or entity.
2.4 Conduct of Business; Liabilities. The Corporation is not in default
--------------------------------
under, and no condition exists that with notice or lapse of time would
constitute a default of the Corporation under (i) any mortgage, loan agreement,
evidence of indebtedness, or other instrument evidencing borrowed money to which
the Corporation is a party or by which the Corporation or the properties of the
Corporation are bound or (ii) any judgment, order, or injunction of any court,
arbitrator, or governmental agency that would reasonably be expected to affect
materially and adversely the business, financial condition, or results of
operations of the Corporation taken as a whole.
2.5 Financial Statements. The audited balance sheet and income statement
--------------------
of the Corporation as of July 31, 1999, and the income statement for the period
ending July 31, 1999, (collectively the "July 31, 1999 Financial Statements"),
----------------------------------
fairly presents the financial position of the Corporation as at July 31, 1999,
and has been prepared in accordance with generally accepted accounting
principles, consistently applied, and in a manner substantially consistent with
prior financial statements of the Corporation. Except as contemplated by or
permitted under this Agreement, there are no adjustments that would be required
on review of the July 31, 1999 Financial Statements that would, individually or
in the aggregate, have a material negative effect upon the Corporation's
reported financial condition.
2.6 No Undisclosed Liabilities. Except for liabilities and obligations
--------------------------
incurred in the ordinary course of business since July 31, 1999 ("Statement
---------
Date"), neither the Corporation nor any of the property of the Corporation is
subject to any material liability or obligation that was required to be included
or adequately reserved against in the July 31, 1999 Financial Statements or
described in the notes thereto and was not so included, reserved against, or
described.
2.7 Absence of Certain Changes. Except as contemplated or permitted by
--------------------------
this Agreement, since the Statement Date there has not been:
2.7.1 Any material adverse change in the business, financial
condition, operations, or assets of the Corporation;
2
<PAGE>
2.7.2 Any damage, destruction, or loss, whether covered by
insurance or not materially adversely affecting the properties or
business of the Corporation;
2.7.3 Any sale or transfer by the Corporation of any tangible or
intangible asset other than in the ordinary course of business, any
mortgage or pledge or the creation of any security interest, lien, or
encumbrance on any such asset, or any lease of property, including
equipment, other than tax liens with respect to taxes not yet due and
contract rights of customers in inventory;
2.7.4 Any declaration, setting aside, or payment of a
distribution in respect of or the redemption or other repurchase by
the Corporation of any stock of the Corporation;
2.7.5 Any material transaction not in the ordinary course of
business of the Corporation;
2.7.6 The lapse of any material trademark, assumed name, trade
name, service mark, copyright, or license or any application with
respect to the foregoing;
2.7.7 The grant of any increase in the compensation of officers
or employees (including any such increase pursuant to any bonus,
pension, profit-sharing, or other plan) other than customary increases
on a periodic basis or required by agreement or understanding in the
ordinary course of business and in accordance with past practice;
2.7.8 The discharge or satisfaction of any material lien or
encumbrance or the payment of any material liability other than
current liabilities in the ordinary course of business;
2.7.9 The making of any material loan, advance, or guaranty to
or for the benefit of any person except the creation of accounts
receivable in the ordinary course of business; or
2.7.10 An agreement to do any of the foregoing.
2.8 Title and Related Matters. The Corporation has good and
-------------------------
marketable title to all of its property, real and personal, and other assets
included in the July 31, 1999 Financial Statements (except properties and assets
sold or otherwise disposed of subsequent to the Statement Date in the ordinary
course of business or as contemplated in this Agreement), free and clear of all
security interests, mortgages, liens, pledges, charges, claims, or encumbrances
of any kind or character, except (i) statutory liens for property taxes not yet
delinquent or payable subsequent to the date of this Agreement and statutory or
common law liens securing the payment or performance of any obligation of the
Corporation, the payment or performance of which is not delinquent, or that is
payable without interest or penalty subsequent to the date on which this
representation is given, or the validity of which is being contested in good
faith by the Corporation; (ii) the rights of customers of the Corporation with
respect to inventory under orders or contracts entered into by the Corporation
in the ordinary course of business; (iii) claims, easements, liens, and other
encumbrances of record pursuant to filings under real property recording
statutes; and (iv) as described in the Unaudited Statements or the notes
thereto.
2.9 Litigation. There are no material actions, suits, proceedings,
----------
orders, investigations, or claims pending or, to the best of Seller's and the
Corporation's knowledge, overtly threatened against the Corporation or any
property of either, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency, or instrumentality; the
Corporation is not subject to any arbitration proceedings under collective
bargaining agreements or otherwise or, to the best of Seller's and the
Corporation's knowledge, any governmental investigations or inquiries; and, to
the best knowledge of Seller's and the directors and responsible officers of the
Corporation, there is no basis for any of the foregoing.
2.10 Tax Matters. The Corporation has prepared in a substantially
-----------
correct manner and has filed all federal, state, local, and foreign tax returns
and reports heretofore required to be filed by them and have paid all taxes
shown as due thereon; and (ii) no taxing authority has asserted any deficiency
in the payment of any tax or informed the
3
<PAGE>
Corporation that it intends to assert any such deficiency or to make any audit
or other investigation of the Corporation for the purpose of determining whether
such a deficiency should be asserted against the Corporation.
2.11 Compliance with Laws. To the best of Seller's knowledge, the
--------------------
Corporation is, in the conduct of its business, in substantial compliance with
all laws, statutes, ordinances, regulations, orders, judgments, or decrees
applicable to them, the enforcement of which, if the Corporation was not in
compliance therewith, would have a materially adverse effect on the business of
the Corporation, taken as a whole. Neither the Seller nor the Corporation have
received any notice of any asserted present or past failure by the Corporation
to comply with such laws, statutes, ordinances, regulations, orders, judgments,
or decrees.
2.12 No Brokers. There are no claims for brokerage commissions, finders'
----------
fees, or similar compensation in connection with the purchase based on any
arrangement or agreement binding upon any of the parties hereto.
2.13 Insurance. The Corporation maintains insurance policies with respect
---------
to its assets, and businesses, and each such policy is in full force and effect.
The Corporation is not in material default with respect to its obligations under
any such policy maintained by it. Neither Seller nor the Corporation have been
notified of the cancellation of any of the insurance policies or of any material
increase in the premiums to be charged for such insurance policies.
2.14 Employees and Labor Relations Matters. As provided in this Agreement:
-------------------------------------
2.14.1 Neither Seller nor the Corporation is aware that any executive
or key employee of the Corporation or any group of employees of the
Corporation has any plans to terminate employment with the Corporation;
2.14.2 To the best of Seller's knowledge, the Corporation has
substantially complied in all material respects with all labor and
employment laws, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining, Americans With Disabilities Act,
and the payment of social security and other taxes;
2.14.3 There is no unfair labor practice charge, complaint, or other
action against the Corporation pending or, to Seller's and the
Corporation's best knowledge, threatened before the National Labor
Relations Board and the Corporation is not subject to any order to bargain
by the National Labor Relations Board;
2.14.4 No questions concerning representation have been raised or, to
Seller's and the Corporation's best knowledge, are threatened with respect
to employees of the Corporation;
2.14.5 No grievance that might have a material adverse effect on the
Corporation and no arbitration proceeding arising out of or under any
collective bargaining agreement is pending and, to the best knowledge of
Seller and the directors and responsible officers of the Corporation, no
basis exists for any such grievance or arbitration proceeding; and
2.14.6 To the best knowledge of Seller and the directors and
responsible officers of the Corporation, no employee of the Corporation is
subject to any non-competition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with persons other than the Corporation
relating to the present business activities of the Corporation.
2.15 Disclosure. Neither this Agreement nor any of the schedules,
----------
attachments, written statements, documents, certificates, or other items
prepared or supplied to Purchaser by or on behalf of the Corporation or Seller
with respect to this purchase contain any untrue statement of a material fact or
omit a material fact necessary to make each statement contained herein or
therein not misleading. No Seller or any responsible officer or director has
intentionally concealed any fact known by such person to have a material adverse
effect upon the Corporation's existing or expected financial condition,
operating results, assets, customer relations, employee relations, or business
prospects taken as a whole.
4
<PAGE>
2.16 Accounts Receivable. All accounts receivable of the Corporation
-------------------
reflected in the July 31, 1999 Financial Statements represent bona fide sales
actually made in the ordinary course of business.
2.17 Patents, Trademarks, Trade Names, etc. To Seller's and the
-------------------------------------
Corporation's best knowledge, the Corporation has not operated and is not
operating its business in a manner that infringes the proprietary rights of any
other person in any patents, trademarks, trade names, service marks, copyrights,
or confidential information. The Corporation has not received any written
notice of any infringement or unlawful use of such property.
2.18 ERISA and Related Matters. The Corporation does not maintain any
-------------------------
retirement or deferred compensation plan, savings, incentive, stock option or
stock purchase plan, vacation pay, severance pay, bonus or benefit arrangement,
consultant or agent of the Corporation, whether pursuant to contract,
arrangement, custom or informal understanding, which does not constitute an
"Employee Benefit Plan" (as defined in (S) 3(3) of ERISA), for which the
- ----------------------
Corporation may have any ongoing material liability after Closing. The
Corporation does not maintain nor has it ever contributed to any Multi employer
Plan as defined by (S) 3(37) of ERISA. The Corporation does not currently
maintain any Employee Pension Benefit Plan subject to Title IV of ERISA. There
have been no "prohibited transactions" (as described in (S) 406 of ERISA or (S)
-----------------------
4975 of the Code) with respect to any Employee Pension Benefit Plan or Employee
Welfare Benefit Plan maintained by the Corporation as to which the Corporation
has been party a party. As to any employee pension benefit plan subject to
Title IV of ERISA, there have been no reportable events (as such term is defined
in (S) 4043 of ERISA).
Section 3. Representations and Warranties of Purchaser. As a material
---------- -------------------------------------------
inducement to Seller to enter into this Agreement and sell the Shares, Purchaser
hereby represents and warrants to Seller as follows:
3.1 Organization; Power. Purchaser is a corporation duly incorporated and
-------------------
validly existing under the laws of the state of Texas, and has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser
-------------
of this Agreement and all other agreements contemplated hereby to which
Purchaser is a party have been duly and validly authorized by all necessary
corporate action of Purchaser, and this Agreement and each such other agreement,
when executed and delivered by the parties thereto, will constitute the legal,
valid, and binding obligation of Purchaser enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, and similar statutes affecting creditors' rights
generally and judicial limits on equitable remedies.
3.3 No Conflict with Other Instruments or Agreements. The execution,
------------------------------------------------
delivery, and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not result in
a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which Purchaser is a party
or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
------------------------
notice, report, or other filing with any governmental or regulatory authority in
connection with the execution and delivery by Purchaser of this Agreement and
the consummation of the purchase and (ii) no consent, approval, or authorization
of any governmental or regulatory authority is required to be obtained by
Purchaser or any affiliate in connection with Purchaser's execution, delivery,
and performance of this Agreement and the consummation of this purchase.
3.5 Litigation. There are no actions, suits, proceedings, or governmental
----------
investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
5
<PAGE>
3.6 Investment Representations
--------------------------
3.6.1 Purchaser is acquiring the Shares for its own account for
purposes of investment and without expectation, desire, or need for resale
and not with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
3.6.2 During the course of the negotiation of this Agreement,
Purchaser has reviewed all information provided to it by the Corporation
and has had the opportunity to ask questions of and receive answers from
representatives of the Corporation concerning the Corporation, the
securities offered and sold hereby, and this purchase, and to obtain
certain additional information requested by Purchaser.
3.6.3 Purchaser understands that the Shares to be purchased have not
been registered under Securities Act of 1933 ("1933 Act"), or under any
--------
state securities law.
3.6.4 Purchaser understands that the Shares cannot be resold in a
transaction to which the 1933 Act and state securities laws apply unless
(i) subsequently registered under the 1933 Act and applicable state
securities laws or (ii) exemptions from such registrations are available.
Purchaser is aware of the provisions of Rule 144 promulgated under the 1933
Act which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
3.6.5 Purchaser understands that no public market now exists for the
Shares and that it is uncertain that a public market will ever exist for
the Shares.
3.6.6 Purchaser understands that the certificates for the Shares will
bear the following legend:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE CORPORATION WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS CERTIFICATE
UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES LAWS,
(ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD
OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY THE
PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER
IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
3.7 Brokerage. There are no claims for brokerage commissions, finders'
---------
fees, or similar compensation in connection with this purchase based on any
arrangement or agreement entered into by Purchaser and binding upon any of the
parties hereto.
Section 4. Conduct of the Corporation's Business Pending the Closing.
---------- ---------------------------------------------------------
From the date hereof until the Closing, and except as otherwise consented to or
approved by Purchaser, Seller and the Corporation covenant and agree with
Purchaser as follows:
4.1 Regular Course of Business. The Corporation will operate its business
--------------------------
in accordance with the reasonable judgment of its management diligently and in
good faith, consistent with past management practices, and the Corporation will
continue to use its reasonable efforts to keep available the services of present
officers and employees (other than planned retirements) and to preserve its
present relationships with persons having business dealings with it.
4.2 Distributions. The Corporation will not declare, pay, or set aside
-------------
for payment any dividend or other distribution in respect of its capital stock.
6
<PAGE>
4.3 Capital Changes. The Corporation will not issue any shares of its
---------------
stock, or issue or sell any securities convertible into, or exchangeable for, or
options, warrants to purchase, or rights to subscribe to, any shares of its
stock or subdivide or in any way reclassify any shares of its capital stock, or
repurchase reacquire, cancel, or redeem any such shares.
4.4 Assets. The assets, property, and rights now owned by the Corporation
------
will be used, preserved, and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as said assets,
property, and rights are on the date of this Agreement, and no unusual or novel
methods of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation or valuation of inventory will be made or
instituted. Without the prior consent of Purchaser, the Corporation will not
encumber any of its assets or make any commitments relating to such assets,
property, or business, except in the ordinary course of its business.
4.5 Insurance. The Corporation will keep or cause to be kept in effect
---------
and undiminished the insurance now in effect on its various properties and
assets, and will purchase such additional insurance, at Purchaser's cost, as
Purchaser may request.
4.6 Employees. The Corporation will not grant to any employee any
---------
promotion, any increase in compensation, or any bonus or other award other than
promotions, increases, or awards that are regularly scheduled in the ordinary
course of business or contemplated on the date of this Agreement or that are, in
the reasonable judgement of management of the Corporation, in the Corporation's
best interest.
4.7 No Violations. The Corporation will comply in all material respects
-------------
with all statutes, laws, ordinances, rules, and regulations applicable to it in
the ordinary course of business.
4.8 Public Announcements. No press release or other announcement to the
--------------------
employees, customers, or suppliers of the Corporation related to this Agreement
or this purchase will be issued without the joint approval of the parties,
unless required by law, in which case Purchaser and Seller will consult with
each other regarding the announcement.
Section 5. Covenants of the Corporation and Seller. Corporation and
---------- ---------------------------------------
Seller covenant and agree with Purchaser as follows:
5.1 Satisfaction of Conditions. The Corporation will use reasonable
--------------------------
efforts to obtain as promptly as practicable the satisfaction of the conditions
to Closing set forth in Section 7 and any necessary consents or waivers under or
amendments to agreements by which the Corporation is bound.
5.2 Supplements. From time to time prior to the Closing, Seller and the
-----------
Corporation will promptly supplement or amend any matter hereafter arising that,
if existing or occurring at the date of this Agreement, would have been required
to be set forth or described in this Agreement, and will promptly notify
Purchaser of any breach by either of them that either of them discovers of any
representation, warranty, or covenant contained in this Agreement. No
supplement or amendment pursuant to this section will be deemed to cure any
breach of any representation of or warranty made in this Agreement unless
Purchaser specifically agrees thereto in writing; provided, however, that if
this purchase is closed, Purchaser will be deemed to have waived its rights with
respect to any breach of a representation, warranty, or covenant or any
supplement which it shall have been notified pursuant to this Section 5.2.
5.3 No Solicitation. Until the Closing or termination pursuant to Section
---------------
10 of this Agreement, neither Seller nor the Corporation, nor any of their
respective directors, officers, employees, or agents shall, directly or
indirectly, encourage, solicit, initiate, or enter into any discussions or
negotiations concerning any disposition of any of the capital stock or all or
substantially all of the assets of the Corporation (other than pursuant to this
Agreement), or any proposal therefor, or furnish or cause to be furnished any
information concerning the Corporation to any party in connection with any
transaction involving the acquisition of the capital stock or assets of the
Corporation by any person other than Purchaser. Seller or the Corporation will
promptly inform Purchaser of any inquiry (including the terms thereof and the
person making such inquiry) received by any responsible officer or director of
the Corporation
7
<PAGE>
or Seller after the date hereof and believed by such person to be a bona fide,
serious inquiry relating to any such proposal.
5.4 Action After the Closing. Upon the reasonable request of any party
------------------------
hereto after the Closing, any other party will take all action and will execute
all documents and instruments necessary or desirable to consummate and give
effect to this purchase. These include, by way of illustration and not by way
of limitation, the following:
5.4.1 Various conditions relating to filing, payment, and collecting
of refunds relating to taxes;
5.4.2 Resignations of each of the directors of the Corporation;
5.4.3 Provisions relating to delivery of Corporate books and records;
5.4.4 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and if Purchaser is
concerned that Seller is not getting corporate approval in due time (or
vice versa), the following covenant may be considered.
Seller will cause a meeting of its shareholder to be called and held as
soon as practicable, will recommend approval of the transaction to its
shareholder, and will use its best efforts to obtain shareholder approval.
Section 6. Covenant of Purchaser. Purchaser will use its best efforts to
---------- ---------------------
cause the conditions set forth in Section 8 to be satisfied.
Section 7. Conditions Precedent to the Obligations of Purchaser. Each and
---------- ----------------------------------------------------
every obligation of Purchaser under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
7.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by the Corporation herein will be true and
correct in all material respects as of the Closing with the same effect as
though made at that time except for changes contemplated, permitted, or required
by this Agreement; Seller and the Corporation will have performed and complied
with all agreements, covenants, and conditions required by this Agreement to be
performed and complied with by them prior to the Closing; and Purchaser will
have received, at the Closing, a certificate of the Corporation and Seller,
signed by the President and the Chief Financial Officer of the Corporation and
Seller, stating that each of the representations and warranties made by the
Corporation herein is true and correct in all material respects as of the
Closing except for changes contemplated, permitted, or required by this
Agreement and that Seller and the Corporation have performed and complied with
all agreements, covenants, and conditions required by this Agreement to be
performed and complied with by them prior to the Closing.
7.2 Litigation. No material action, suit, or proceeding before any court,
----------
governmental or regulatory authority will have been commenced and be continuing,
and no investigation by any governmental or regulatory authority will have been
commenced and be continuing, and no action, investigation, suit, or proceeding
will be threatened at the time of Closing, against Seller, the Corporation, or
Purchaser or any of their affiliates, associates, officers, or directors,
seeking to restrain, prevent, or change this purchase, questioning the validity
or legality of this purchase, or seeking damages in connection with this
purchase.
7.3 Legal Opinion. Purchaser will have received an opinion of Seller's
-------------
legal counsel, in form and content reasonably acceptable to Purchaser and its
legal counsel, to the effect that (i) the Corporation's organization, existence,
valid existence, and authorized and issued stock are as stated herein, that this
Agreement has been authorized, is enforceable, and is consistent with law and
the agreements of the Corporation and Seller as stated herein, and that, except
as specified in the opinion, such counsel does not know of any litigation,
claim, proceeding, or governmental investigation pending or threatened against
the Corporation, any Subsidiary, or their respective properties; (ii) the
execution, delivery, and performance of this Agreement and all other agreements
contemplated hereby to which the
8
<PAGE>
Corporation or Seller are a party have been duly authorized by the Corporation
or Seller, as the case may be; (iii) this Agreement and each other agreement
contemplated hereby, when executed and delivered by the parties thereto, will
constitute the legal, valid, and binding obligation of the Corporation, Seller,
or both as the case may be, enforceable against Seller or the Corporation, as
the case may be, in accordance with its terms except as the enforceability
thereof may be limited by the application of bankruptcy, insolvency, moratorium,
or similar laws affecting the rights of creditors generally or judicial limits
on the right of specific performance; and (iv) the execution and delivery by the
Corporation and Seller of this Agreement and all other agreements contemplated
hereby to which the Corporation or Seller are a party, the offering and sale of
the Shares hereunder and the fulfillment of and compliance with the respective
terms hereof and thereof by the Corporation and Seller, do not and will not (a)
conflict with or result in a breach of the terms, conditions or provisions of,
(b) constitute a default under, (c) result in the creation of any lien, security
interest, charge, or encumbrance upon the capital stock or assets of Seller, or
the Corporation pursuant to, (d) give any third party the right to accelerate
any obligation under, (e) result in a violation of, or (f) require any
authorization, consent, approval, exemption, or other action by or notice to any
court or administrative or governmental body pursuant to the charter or bylaws
of Seller or the Corporation, or any law, statute, rule, or regulation to which
Seller or the Corporation are subject, or any agreement, instrument, order,
judgment, or decree to which Seller or the Corporation are subject.
7.4 Material Change. From the date of this Agreement to the Closing, the
---------------
Corporation shall not have suffered any material adverse change (whether or not
such change is referred to or described in any supplement to this Agreement) in
its business prospects, financial condition, working capital, assets,
liabilities (absolute, accrued, contingent, or otherwise), or operations.
7.5 Corporate Action. Seller will have furnished to Purchaser:
----------------
7.5.1 The corporate charter and all amendments thereto and
restatements thereof of the Corporation certified by the official having
custody over corporate records in the jurisdiction of incorporation of the
corporation in question;
7.5.2 The current bylaws and minutes of all meetings and consents of
shareholders and directors of the Corporation;
7.5.3 Each certificate of qualification to do business as a foreign
corporation of the Corporation;
7.5.4 All stock transaction records of the Corporation; and
7.5.5 A certificate of the Secretary or Assistant Secretary of the
Corporation as to the accuracy, currency, and completeness of each of the
above documents, the incumbency and signatures of officers of the
Corporation, the absence of any amendment to the charter documents of the
Corporation, and the absence of any proceeding for dissolution or
liquidation of the Corporation.
Section 8. Conditions Precedent to the Obligations of the Corporation and
---------- --------------------------------------------------------------
Seller. Each and every obligation of Seller and the Corporation under this
- ------
Agreement is subject to the satisfaction, at or before the Closing, of each of
the following conditions:
8.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by Purchaser herein will be true and correct
in all material respects as of the Closing with the same effect as though made
at that time except for changes contemplated, permitted, or required by this
Agreement; Purchaser will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Seller will have received, at the
Closing, a certificate of Purchaser, signed by the President and the Chief
Financial Officer of Purchaser, stating that each of the representations and
warranties made by Purchaser herein is true and correct in all material respects
as of the Closing except for changes contemplated, permitted, or required by
this Agreement and that Purchaser has performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by it prior to the Closing.
9
<PAGE>
8.2 No Proceeding or Litigation. No action, suit, or proceeding before
---------------------------
any court (other than suits seeking monetary damages only and in the aggregate
sum of less than $10,000) and any governmental or regulatory authority will have
been commenced and be continuing, and no investigation by any governmental or
regulatory authority will have been commenced and be continuing, and no action,
investigation, suit, or proceeding will be threatened at the time of Closing,
against Seller, the Corporation, or Purchaser or any of their affiliates,
associates, officers, or directors, seeking to restrain, prevent, or change this
purchase, questioning the validity or legality of this purchase, or seeking
damages in connection with this purchase.
8.3 Corporate Action. Purchaser will have furnished to Seller a copy,
----------------
certified by the Secretary of an Assistant Secretary of Purchaser, of the
resolutions of Purchaser authorizing the execution, delivery, and performance of
this Agreement.
Section 9. Closing.
---------- -------
9.1 Time, Place, and Manner of Closing. Unless this Agreement has been
----------------------------------
terminated and this purchase has been abandoned pursuant to the provisions of
Section 2 or Section 10, the closing ("Closing") will be held at such time as
-------
the parties may agree on the Closing Date at the offices of the Corporation,
5617 Grissom Road, San Antonio, Texas 78238, or such other place as the parties
may agree. At the Closing the parties to this Agreement will exchange
certificates, Notes, Guaranties, and other instruments and documents in order to
determine whether the terms and conditions of this Agreement have been
satisfied. Upon the determination of each party that its conditions to
consummate this purchase have been satisfied or waived, Seller shall deliver to
Purchaser the certificate(s) evidencing the Shares, duly endorsed for transfer,
and Purchaser shall deliver to Seller the Notes and Guaranties referred to in
Section 1.3, in a manner to be agreed upon by the parties. After the Closing,
Seller, at Purchaser's cost, will execute, deliver, and acknowledge all such
further instruments of transfer and conveyance and will perform all such other
acts as Purchaser may reasonably request to effectively transfer the Shares.
9.2 Consummation of Closing. All acts, deliveries, and confirmations
-----------------------
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with
the close of business at the principal office of the Corporation and, regardless
of when the last act, delivery, or confirmation of the Closing shall take place,
the transfer of the Shares shall be deemed to occur as of the close of business
at the principal office of the Corporation on the date of the Closing.
Section 10. Termination.
----------- -----------
10.1 Termination for Cause. If, pursuant to the provisions of Section 7 or
---------------------
8 of this Agreement, Seller or Purchaser is not obligated at the Closing to
consummate this Agreement, then the party who is not so obligated may terminate
this Agreement.
10.2 Termination Without Cause. Anything herein or elsewhere to the
-------------------------
contrary notwithstanding, this Agreement may be terminated and abandoned at any
time without further obligation or liability on the part of any party in favor
of any other by mutual consent of Purchaser and Seller.
10.3 Termination Procedure. Any party having the right to terminate this
---------------------
Agreement due to a failure of a condition precedent contained in Sections 7 or 8
hereto may terminate this Agreement by delivering to the other party written
notice of termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
Section 11. Miscellaneous Provisions.
----------- ------------------------
11.1 Amendment and Modification. Subject to applicable law, this Agreement
--------------------------
may be amended, modified, or supplemented only by a written agreement signed by
Purchaser and Seller.
10
<PAGE>
11.2 Waiver of Compliance; Consents
------------------------------
11.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party
entitled to the performance of such obligation, covenant, or agreement or
who has the benefit of such condition, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement, or
condition will not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
11.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth
above.
11.3 Notices. All notices, requests, demands, and other communications
-------
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid:
If to Purchaser, or to the Corporation
after the Closing, to:
BioLynx.Com
5617 Grissom Road
San Antonio, TX 78238
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to the Corporation before the
Closing, to:
BioLynx Outsource Services, Inc.
5617 Grissom Road
San Antonio, TX 78238
If to Seller, to:
United Capital Investment Group, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other address as Seller furnishes to Purchaser pursuant to the above.
11.4 Titles and Captions. All section titles or captions contained in this
-------------------
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
11.5 Entire Agreement. This Agreement contains the entire understanding
----------------
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
11.6 Agreement Binding. This Agreement shall be binding upon the heirs,
-----------------
executors, administrators, successors and assigns of the parties hereto.
11.7 Attorney Fees. In the event an arbitration, suit or action is brought
-------------
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
11.8 Computation of Time. In computing any period of time pursuant to this
-------------------
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday, or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday,
11
<PAGE>
or legal holiday, in which event the period shall run until the end of the next
day thereafter which is not a Saturday, Sunday, or legal holiday.
11.9 Pronouns and Plurals. All pronouns and any variations thereof shall
--------------------
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
11.10 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Texas.
11.11 Arbitration. If at any time during the term of this Agreement any
-----------
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof.
11.12 Presumption. This Agreement or any section thereof shall not be
-----------
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
11.13 Further Action. The parties hereto shall execute and deliver all
--------------
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
11.14 Parties in Interest. Nothing herein shall be construed to be to the
-------------------
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
11.15 Savings Clause. If any provision of this Agreement, or the
--------------
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Dated: December 1, 1999.
PURCHASER:
BioLynx.Com,
a Texas corporation
By /s/ John D. Walker II
-------------------------------------
John D. Walker II, President
CORPORATION:
BioLynx Outsource Services, Inc.,
a Texas corporation
By /s/ John D. Walker II
-------------------------------------
John D. Walker II, President
12
<PAGE>
SELLER:
UNITED CAPITAL INVESTMENT GROUP, INC.
By /s/ John D. Walker II
-------------------------------------
John D. Walker, II, President
13
<PAGE>
Exhibit 10.22
Amended Option to Purchase Employee/Customer Base Dated
December 1, 1999 Between BioLynx Outsource Services, Inc.
and Alamo Commercial Group, Inc.
<PAGE>
Exhibit 10.22
AMENDED OPTION TO PURCHASE EMPLOYEE/CUSTOMER BASE
-------------------------------------------------
This Agreement ("Agreement") is entered into this date, is by and between
---------
BioLynx Outsource Services, Inc., a Texas corporation ("Purchaser") and Alamo
---------
Commercial Group, Inc. ("Seller").
------
RECITALS:
--------
WHEREAS, the Seller is in the business of providing business staffing to
its customers by way of leasing employees; and
WHEREAS, the Purchaser desires to acquire all of the leased employees of
the Seller, together with all contracts to furnish services and staffing for the
customers and clients of the Seller (collectively hereinafter referred to as the
"Employee Customer Base"); and
----------------------
WHEREAS, Purchaser is expected to become a wholly owned subsidiary of
BioLynx.Com, Inc. and will cause BioLynx.Com, Inc. to issue stock, as
hereinafter provided, in partial payment for the purchase price for the Employee
Customer Base.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
Section 1. Purchase of Employee/Customer Base.
---------- ----------------------------------
1.1 Purchase of Employee/Customer Base. Subject to the terms and
----------------------------------
conditions set forth herein, at the Closing (as defined below) Seller will sell
its Employee/Customer Base to Purchaser and Purchaser will purchase all of its
Employee/Customer Base from Seller. This purchase and sale will be effective
January 1, 2000.
1.2 Purchase Price. Purchaser will pay to Seller, the sum of
--------------
$3,605,535.38 for the Seller's Employee Customer Base.
1.3 Payment of Purchase Price. The Purchase Price will be paid to the
-------------------------
Seller as follows: (i) the Purchaser will pay the Seller the sum of
$1,000,000.00 on or before the Closing Date hereof (as hereinafter defined), in
cash or by means of a promissory note due within 90 days from the date thereof;
and (ii) the Purchaser will deliver to the Seller Convertible Preferred Stock
issued by BioLynx.Com, Inc. for the balance of the Purchase Price, with a
liquidation privilege equal to its face amount, issued in increments of
$1,000.00, bearing an eight percent (8%) non-cumulative dividend (the "Preferred
---------
Stock"). The Preferred Stock will, at the option of the holder of the stock, be
- -----
convertible into Common Stock of BioLynx.Com, Inc. at the rate of the
liquidation privilege, together with any declared but unpaid dividend, divided
by $3.30 per share of common stock.
1.4 Option. In consideration of the non-refundable sum of $100.00, paid
------
by the Purchaser directly to the Seller, independent of any other consideration
required by this Agreement, Purchaser and the Seller agree as follows: Purchaser
shall have the option to terminate this Agreement at any time by giving written
notice of termination to the Seller. On such termination, all of Purchaser's
obligations hereunder shall be terminated. If the Purchaser does not give
notice of termination, Purchaser's right of termination shall be waived.
1.5 Closing. The Closing Date of this Agreement shall be December 31,
-------
1999, or such other date thereafter as the parties shall mutually agree.
Provided, however, notwithstanding anything herein contained to the contrary,
the Closing Date shall not occur before the effective date of the registration
statement of BioLynx.Com, Inc. filed with the Securities and Exchange Commission
with respect to the sale of 1,000,000 shares of BioLynx.Com, Inc.'s common
stock. Provided, further, if the Closing Date shall not have occurred before
April 1, 2000, this Agreement shall be null and void and of no further force or
effect. In such event, neither the Purchaser nor the Seller shall have any
liability to the other. As of the Closing Date, all employees of the Seller
will become the employees of the Purchaser
1
<PAGE>
and all contracts to provide staffing and services which are owned by the Seller
will be transferred to the Purchaser concurrently with such employees. All
liability related to such employees and contracts prior to the effective date of
the transfer will be retained by the Seller. All liabilities and obligations
subsequent to the date of transfer related to the leased employees and contracts
will be the liabilities and obligations of the Purchaser.
Section 2. Representations and Warranties of the Corporation and Seller.
---------- ------------------------------------------------------------
As a material inducement to Purchaser to enter into this Agreement and purchase
the Employee Customer Base, Seller represents and warrants that:
2.1 Organization and Corporate Power. The Seller is a corporation duly
--------------------------------
incorporated and validly existing under the laws of the state of Texas and the
Seller is qualified to do business in every jurisdiction in which its ownership
of property or conduct of business requires it to qualify. The Seller has all
requisite corporate power and authority and all material licenses, permits, and
authorizations necessary to own and operate its properties and to carry on its
business as now conducted. The copies of the Seller's charter documents and
bylaws have been furnished to Purchaser's counsel reflect all amendments made
thereto at any time prior to the date of this Agreement and are correct and
complete.
2.2 Compliance with Laws. To the best of Seller's knowledge, the Seller
--------------------
is, in the conduct of its business, in substantial compliance with all laws,
statutes, ordinances, regulations, orders, judgments, or decrees applicable to
them, the enforcement of which, if the Seller was not in compliance therewith,
would have a materially adverse effect on the business of the Seller, taken as a
whole. The Seller has not received any notice of any asserted present or past
failure by the Seller to comply with such laws, statutes, ordinances,
regulations, orders, judgments, or decrees.
2.3 No Brokers. There are no claims for brokerage commissions, finders'
----------
fees, or similar compensation in connection with the purchase based on any
arrangement or agreement binding upon any of the parties hereto.
2.4 Employees and Labor Relations Matters.
-------------------------------------
2.4.1 The Seller is not aware that any executive or key employee of
the Seller or any group of employees of the Seller has any plans to
terminate employment with the Seller;
2.4.2 To the best of Seller's knowledge, the Seller has substantially
complied in all material respects with all labor and employment laws,
including provisions thereof relating to wages, hours, equal opportunity,
collective bargaining, Americans With Disabilities Act, and the payment of
social security and other taxes;
2.4.3 There is no unfair labor practice charge, complaint, or other
action against the Seller pending or, to Seller's best knowledge,
threatened before the National Labor Relations Board and the Seller is not
subject to any order to bargain by the National Labor Relations Board;
2.4.4 No questions concerning representation have been raised or, to
Seller's and the Seller's best knowledge, are threatened with respect to
employees of the Seller;
2.4.5 No grievance that might have a material adverse effect on the
Seller and no arbitration proceeding arising out of or under any collective
bargaining agreement is pending and, to the best knowledge of Seller and
the directors and responsible officers of the Seller, no basis exists for
any such grievance or arbitration proceeding; and
2.4.6 To the best knowledge of Seller and the directors and
responsible officers of the Seller, no employee of the Seller is subject to
any non-competition, nondisclosure, confidentiality, employment,
consulting, or similar agreements with persons other than the Seller
relating to the present business activities of the Seller.
2.5 Disclosure. Neither this Agreement nor any of the schedules,
----------
attachments, written statements, documents, certificates, or other items
prepared or supplied to Purchaser by or on behalf of the Seller with respect to
this purchase contain any untrue statement of a material fact or omit a material
fact necessary to make each statement
2
<PAGE>
contained herein or therein not misleading. No Seller or any responsible officer
or director has intentionally concealed any fact known by such person to have a
material adverse effect upon the Seller's existing or expected financial
condition, operating results, assets, customer relations, employee relations, or
business prospects taken as a whole.
2.6 Investment Representations
--------------------------
2.6.1 Seller is acquiring the Shares for its own account for purposes
of investment and without expectation, desire, or need for resale and not
with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
2.6.2 During the course of the negotiation of this Agreement, Seller
has reviewed all information provided to it by BioLynx.Com, Inc. and has
had the opportunity to ask questions of and receive answers from
representatives of BioLynx.Com, Inc. concerning BioLynx.Com, Inc., the
securities offered and sold hereby, and this purchase, and to obtain
certain additional information requested by Seller.
2.6.3 Seller understands that the Shares to be purchased have not been
registered under Securities Act of 1933 ("1933 Act"), or under any state
--------
securities law.
2.6.4 Seller understands that the Shares cannot be resold in a
transaction to which the 1933 Act and state securities laws apply unless
(i) subsequently registered under the 1933 Act and applicable state
securities laws or (ii) exemptions from such registrations are available.
Seller is aware of the provisions of Rule 144 promulgated under the 1933
Act which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
2.6.5 Seller understands that no public market now exists for the
Shares and that it is uncertain that a public market will ever exist for
the Shares.
2.6.6 Seller understands that the certificates for the Shares will
bear the following legend:
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THE Seller WILL NOT TRANSFER THIS CERTIFICATE UNLESS (i) THERE IS AN
EFFECTIVE REGISTRATION COVERING THE SHARES REPRESENTED BY THIS CERTIFICATE
UNDER THE SECURITIES ACT OF 1933 AND ALL APPLICABLE STATE SECURITIES LAWS,
(ii) IT FIRST RECEIVES A LETTER FROM AN ATTORNEY, ACCEPTABLE TO THE BOARD
OF DIRECTORS OR ITS AGENTS, STATING THAT IN THE OPINION OF THE ATTORNEY THE
PROPOSED TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933 AND UNDER ALL APPLICABLE STATE SECURITIES LAWS, OR (iii) THE TRANSFER
IS MADE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT OF 1933.
Section 3. Representations and Warranties of Purchaser. As a material
---------- -------------------------------------------
inducement to Seller to enter into this Agreement and sell the Shares, Purchaser
hereby represents and warrants to Seller as follows:
3.1 Organization; Power. Purchaser is a Seller duly incorporated and
-------------------
validly existing under the laws of the state of Texas, and has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser
-------------
of this Agreement and all other agreements contemplated hereby to which
Purchaser is a party have been duly and validly authorized by all necessary
corporate action of Purchaser, and this Agreement and each such other agreement,
when executed and delivered by the parties thereto, will constitute the legal,
valid, and binding obligation of Purchaser enforceable against it in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, and similar statutes affecting creditors' rights
generally and judicial limits on equitable remedies.
3
<PAGE>
3.3 No Conflict with Other Instruments or Agreements. The execution,
------------------------------------------------
delivery, and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not result in
a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which Purchaser is a party
or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
------------------------
notice, report, or other filing with any governmental or regulatory authority in
connection with the execution and delivery by Purchaser of this Agreement and
the consummation of the purchase and (ii) no consent, approval, or authorization
of any governmental or regulatory authority is required to be obtained by
Purchaser or any affiliate in connection with Purchaser's execution, delivery,
and performance of this Agreement and the consummation of this purchase.
3.5 Litigation. There are no actions, suits, proceedings, or governmental
----------
investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
3.6 Brokerage. There are no claims for brokerage commissions, finders'
---------
fees, or similar compensation in connection with this purchase based on any
arrangement or agreement entered into by Purchaser and binding upon any of the
parties hereto.
Section 4. Conduct of the Seller's Business Pending the Closing. From the
---------- ----------------------------------------------------
date hereof until the Closing, and except as otherwise consented to or approved
by Purchaser, Seller covenants and agrees with Purchaser as follows:
4.1 Regular Course of Business. The Seller will operate its business in
--------------------------
accordance with the reasonable judgment of its management diligently and in good
faith, consistent with past management practices, and the Seller will continue
to use its reasonable efforts to keep available the services of present officers
and employees (other than planned retirements) and to preserve its present
relationships with persons having business dealings with it.
4.2 Assets. The assets, property, and rights now owned by the Seller will
------
be used, preserved, and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as said assets,
property, and rights are on the date of this Agreement, and no unusual or novel
methods of manufacture, purchase, sale, management, or operation of said
properties or business or accumulation or valuation of inventory will be made or
instituted. Without the prior consent of Purchaser, the Seller will not
encumber any of its assets or make any commitments relating to such assets,
property, or business, except in the ordinary course of its business.
4.3 Insurance. The Seller will keep or cause to be kept in effect and
---------
undiminished the insurance now in effect on its various properties and assets,
and will purchase such additional insurance, at Purchaser's cost, as Purchaser
may request.
4.4 Employees. The Seller will not grant to any employee any promotion,
---------
any increase in compensation, or any bonus or other award other than promotions,
increases, or awards that are regularly scheduled in the ordinary course of
business or contemplated on the date of this Agreement or that are, in the
reasonable judgement of management of the Seller, in the Seller's best interest.
4.5 No Violations. The Seller will comply in all material respects with
-------------
all statutes, laws, ordinances, rules, and regulations applicable to it in the
ordinary course of business.
Section 5. Covenants of the Seller. Seller covenants and agrees with
---------- -----------------------
Purchaser as follows:
5.1 Satisfaction of Conditions. The Seller will use reasonable efforts to
--------------------------
obtain as promptly as practicable the satisfaction of the conditions to Closing
set forth in Section 7 and any necessary consents or waivers under or amendments
to agreements by which the Seller is bound.
4
<PAGE>
5.2 Supplements. From time to time prior to the Closing, Seller will
-----------
promptly supplement or amend any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in this Agreement and will promptly notify Purchaser of any
breach by either of them that either of them discovers of any representation,
warranty, or covenant contained in this Agreement. No supplement or amendment
made pursuant to this section will be deemed to cure any breach of any
representation of or warranty made in this Agreement unless Purchaser
specifically agrees thereto in writing; provided, however, that if this purchase
is closed, Purchaser will be deemed to have waived its rights with respect to
any breach of a representation, warranty, or covenant or any supplement of which
it shall have been notified pursuant to this Section 5.2.
5.3 No Solicitation. Until the Closing or termination pursuant to Section
---------------
10 of this Agreement, neither Seller nor any of its respective directors,
officers, employees, or agents shall, directly or indirectly, encourage,
solicit, initiate, or enter into any discussions or negotiations concerning any
disposition of any of the capital stock or all or substantially all of the
assets of the Seller (other than pursuant to this Agreement), or any proposal
therefor, or furnish or cause to be furnished any information concerning the
Seller to any party in connection with any transaction involving the acquisition
of the capital stock or assets of the Seller by any person other than Purchaser.
Seller will promptly inform Purchaser of any inquiry (including the terms
thereof and the person making such inquiry) received by any responsible officer
or director of the Seller after the date hereof and believed by such person to
be a bona fide, serious inquiry relating to any such proposal.
5.4 Action After the Closing. Upon the reasonable request of any party
------------------------
hereto after the Closing, any other party will take all action and will execute
all documents and instruments necessary or desirable to consummate and give
effect to this purchase. These include, by way of illustration and not by way
of limitation, the following:
5.4.1 Various conditions relating to filing, payment, and collecting
of refunds relating to taxes;
5.4.2 Provisions relating to delivery of Corporate books and records;
5.4.3 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and if Purchaser is
concerned that Seller is not getting corporate approval in due time (or
vice versa), the following covenant may be considered.
Seller will cause a meeting of its shareholder to be called and held as
soon as practicable, will recommend approval of the transaction to its
shareholder, and will use its best efforts to obtain shareholder approval.
Section 6. Covenant of Purchaser. Purchaser will use its best efforts to
---------- ---------------------
cause the conditions set forth in Section 8 to be satisfied.
Section 7. Conditions Precedent to the Obligations of Purchaser. Each and
---------- ----------------------------------------------------
every obligation of Purchaser under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
7.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by the Seller herein will be true and
correct in all material respects as of the Closing with the same effect as
though made at that time except for changes contemplated, permitted, or required
by this Agreement; Seller will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Purchaser will have received, at
the Closing, a certificate of the Seller, signed by the President and the Chief
Financial Officer of the Seller, stating that each of the representations and
warranties made by the Seller herein is true and correct in all material
respects as of the Closing except for changes contemplated, permitted, or
required by this Agreement and that Seller has performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by them prior to the Closing.
5
<PAGE>
7.2 Litigation. No material action, suit, or proceeding before any court,
----------
governmental or regulatory authority will have been commenced and be continuing,
and no investigation by any governmental or regulatory authority will have been
commenced and be continuing, and no action, investigation, suit, or proceeding
will be threatened at the time of Closing, against Seller, or Purchaser or any
of their affiliates, associates, officers, or directors, seeking to restrain,
prevent, or change this purchase, questioning the validity or legality of this
purchase, or seeking damages in connection with this purchase.
7.3 Material Change. From the date of this Agreement to the Closing, the
---------------
Seller shall not have suffered any material adverse change (whether or not such
change is referred to or described in any supplement to this Agreement) in its
business prospects, financial condition, working capital, assets, liabilities
(absolute, accrued, contingent, or otherwise), or operations.
7.4 Corporate Action. Seller will have furnished to Purchaser:
----------------
7.4.1 The corporate charter and all amendments thereto and
restatements thereof of the Seller certified by the official having custody
over corporate records in the jurisdiction of incorporation of the Seller
in question;
7.4.2 The current bylaws and minutes of all meetings and consents of
shareholders and directors of the Seller;
7.4.3 Each certificate of qualification to do business as a foreign
corporation of the Seller;
7.4.4 A certificate of the Secretary or Assistant Secretary of the
Seller as to the accuracy, currency, and completeness of each of the above
documents, the incumbency and signatures of officers of the Seller, the
absence of any amendment to the charter documents of the Seller, and the
absence of any proceeding for dissolution or liquidation of the Seller.
Section 8. Conditions Precedent to the Obligations of the Seller and
---------- ---------------------------------------------------------
Seller. Each and every obligation of Seller and the Seller under this Agreement
- ------
is subject to the satisfaction, at or before the Closing, of each of the
following conditions:
8.1 Representations and Warranties; Performance. Each of the
-------------------------------------------
representations and warranties made by Purchaser herein will be true and correct
in all material respects as of the Closing with the same effect as though made
at that time except for changes contemplated, permitted, or required by this
Agreement; Purchaser will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be performed and
complied with by it prior to the Closing; and Seller will have received, at the
Closing, a certificate of Purchaser, signed by the President and the Chief
Financial Officer of Purchaser, stating that each of the representations and
warranties made by Purchaser herein is true and correct in all material respects
as of the Closing except for changes contemplated, permitted, or required by
this Agreement and that Purchaser has performed and complied with all
agreements, covenants, and conditions required by this Agreement to be performed
and complied with by it prior to the Closing.
8.2 No Proceeding or Litigation. No action, suit, or proceeding before
---------------------------
any court (other than suits seeking monetary damages only and in the aggregate
sum of less than $10,000) and any governmental or regulatory authority will have
been commenced and be continuing, and no investigation by any governmental or
regulatory authority will have been commenced and be continuing, and no action,
investigation, suit, or proceeding will be threatened at the time of Closing,
against Seller, the Seller, or Purchaser or any of their affiliates, associates,
officers, or directors, seeking to restrain, prevent, or change this purchase,
questioning the validity or legality of this purchase, or seeking damages in
connection with this purchase.
8.3 Corporate Action. Purchaser will have furnished to Seller a copy,
----------------
certified by the Secretary of an Assistant Secretary of Purchaser, of the
resolutions of Purchaser authorizing the execution, delivery, and performance of
this Agreement.
6
<PAGE>
Section 9. Closing.
---------- -------
9.1 Time, Place, and Manner of Closing. Unless this Agreement has been
----------------------------------
terminated and this purchase has been abandoned pursuant to the provisions of
Section 2 or Section 10, the closing ("Closing") will be held at such time as
-------
the parties may agree on the Closing Date at the offices of the Corporation,
5617 Grissom Road, San Antonio, Texas 78238, or such other place as the parties
may agree. At the Closing the parties to this Agreement will exchange
certificates, other instruments and documents in order to determine whether the
terms and conditions of this Agreement have been satisfied. Upon the
determination of each party that its conditions to consummate this purchase have
been satisfied or waived, Purchaser shall deliver to Seller the certificate(s)
evidencing the Shares, and Purchaser shall deliver to Seller the cash referred
to in Section 1.3, in a manner to be agreed upon by the parties. After the
Closing, Seller, will execute, deliver, and acknowledge all such further
instruments of transfer and conveyance and will perform all such other acts as
Purchaser may reasonably request to effectively transfer the employees and
customers to Purchaser.
9.2 Consummation of Closing. All acts, deliveries, and confirmations
-----------------------
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with
the close of business at the principal office of the Seller and, regardless of
when the last act, delivery, or confirmation of the Closing shall take place,
the transfer of the employees shall be deemed to occur as of the close of
business at the principal office of the Seller on January 1, 2000.
Section 10. Termination.
----------- -----------
10.1 Termination for Cause. If, pursuant to the provisions of Section 7 or
---------------------
8 of this Agreement, Seller or Purchaser is not obligated at the Closing to
consummate this Agreement, then the party who is not so obligated may terminate
this Agreement.
10.2 Termination Without Cause. Anything herein or elsewhere to the
-------------------------
contrary notwithstanding, this Agreement may be terminated and abandoned at any
time without further obligation or liability on the part of any party in favor
of any other by mutual consent of Purchaser and Seller.
10.3 Termination Procedure. Any party having the right to terminate this
---------------------
Agreement due to a failure of a condition precedent contained in Sections 7 or 8
hereto may terminate this Agreement by delivering to the other party written
notice of termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
Section 11. Miscellaneous Provisions.
----------- ------------------------
11.1 Amendment and Modification. Subject to applicable law, this Agreement
--------------------------
may be amended, modified, or supplemented only by a written agreement signed by
Purchaser and Seller.
11.2 Waiver of Compliance; Consents
------------------------------
11.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party
entitled to the performance of such obligation, covenant, or agreement or
who has the benefit of such condition, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement, or
condition will not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
11.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner
consistent with the requirements for a waiver of compliance as set forth
above.
7
<PAGE>
11.3 Notices. All notices, requests, demands, and other communications
-------
required or permitted hereunder will be in writing and will be deemed to have
been duly given when delivered by hand or two days after being mailed by
certified or registered mail, return receipt requested, with postage prepaid:
If to Purchaser, or to the Seller
after the Closing, to:
BioLynx Outsource Services, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other person or address as Purchaser furnishes to Seller pursuant to
the above.
If to the Seller, to
Alamo Commercial Group, Inc.
5617 Grissom Road
San Antonio, TX 78238
or to such other address as Seller furnishes to Purchaser pursuant to the above.
11.4 Titles and Captions. All section titles or captions contained in this
-------------------
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
11.5 Entire Agreement. This Agreement contains the entire understanding
----------------
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
11.6 Agreement Binding. This Agreement shall be binding upon the heirs,
-----------------
executors, administrators, successors and assigns of the parties hereto.
11.7 Attorney Fees. In the event an arbitration, suit or action is brought
-------------
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
11.8 Computation of Time. In computing any period of time pursuant to this
-------------------
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday, or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
11.9 Pronouns and Plurals. All pronouns and any variations thereof shall
--------------------
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
11.10 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Texas.
11.11 Arbitration. If at any time during the term of this Agreement any
-----------
dispute, difference, or disagreement shall arise upon or in respect of the
Agreement, and the meaning and construction hereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed upon
by the parties, or if no single arbiter can be agreed upon, an arbiter or
arbiters shall be selected in accordance with the rules of the American
Arbitration Association and such dispute, difference, or disagreement shall be
settled by arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award rendered by
the arbiter may be entered in any court having jurisdiction thereof.
8
<PAGE>
11.12 Presumption. This Agreement or any section thereof shall not be
-----------
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
11.13 Further Action. The parties hereto shall execute and deliver all
--------------
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
11.14 Parties in Interest. Nothing herein shall be construed to be to the
-------------------
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
11.15 Savings Clause. If any provision of this Agreement, or the
--------------
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Dated: December 1, 1999.
PURCHASER:
BIOLYNX OUTSOURCE SERVICES, INC.,
a Texas corporation
By /s/ John D. Walker II
-------------------------------
John D. Walker II, President
SELLER:
ALAMO COMMERCIAL GROUP, INC.
By /s/ John D. Walker II
--------------------------------
John D. Walker II, President
9
<PAGE>
Exhibit 10.23
Stock Purchase Warrant Dated October 6, 1999 Between
BioLynx.Com, Inc. and Travis Morgan Securities, Inc.
<PAGE>
Exhibit 10.23
BIOLYNX.COM, INC.
STOCK PURCHASE WARRANT
Expiring November 5, 1999
50,000 Shares San Antonio, Texas
THIS IS TO CERTIFY that, for value received, TRAVIS MORGAN SECURITIES, INC.
(the "Holder") is entitled at any time from the date hereof, but prior to 2:00
p.m., San Antonio, Texas time on November 5, 1999, subject to and upon the terms
and conditions contained herein, to purchase up to 50,000 fully paid and non-
assessable shares of the common stock, par value $0.001 per share (the "Shares")
of BIOLYNX.COM, INC., a Texas corporation (the "Company"), at a purchase price
of $1.00 per Share (such number of the Shares and the purchase price being
subject to adjustment as provided herein). This Warrant shall be void and of no
effect and all rights hereunder shall cease at 2:00 p.m., San Antonio, Texas
time on November 5, 1999, except to the extent theretofore exercised; provided
that in the case of the earlier dissolution of the Company, this Warrant shall
become void on the date fixed for such dissolution.
1. Warrant. This Warrant has been issued by the Company pursuant to that
-------
certain Letter Agreement dated October 6, 1999 between the Holder and the
Company (the "Letter Agreement") and that certain Confidential Private Placement
Memorandum dated May 12, 1999 in connection with the offering of the Shares of
the Company (the "Memorandum"). The Letter Agreement and the Memorandum are
expressly incorporated herein by reference for all purposes. This Warrant is
expressly subject to and shall be governed by all of the terms of the Letter
Agreement and the Memorandum. All terms used in this Warrant which are defined
in the Letter Agreement and the Memorandum shall have the meanings assigned to
them in the Letter Agreement and the Memorandum. The Holder, by the acceptance
of this Warrant agrees to and shall be bound by all of the provisions of the
Letter Agreement and the Memorandum. In the event of any conflict between the
terms of this Warrant and the Letter Agreement or the Memorandum, the terms of
the Memorandum shall control.
2. Covenants of the Company. The Company covenants that, while this
------------------------
Warrant is exercisable (a) it will reserve from its authorized and unissued
Shares a sufficient number of Shares to provide for the delivery of the Shares
pursuant to the exercise of this Warrant, and (b) that all Shares which may be
issued upon the exercise of this Warrant will upon issue be fully paid and non-
assessable.
3. Protection Against Dilution, Etc. In any of the following events,
--------------------------------
occurring after the date of the issuance of this Warrant, appropriate adjustment
shall be made in the number of Shares to be deliverable upon the exercise of
this Warrant and the purchase price per share to be paid, so as to maintain the
proportionate interest of the Holder as of the date hereof: (a) recapitalization
of the Company through a split-up or reverse split of the outstanding Shares
into a greater or lesser number, as the case may be, or (b) declaration of a
dividend on the Shares, payable in Shares or other securities of the Company
convertible into Shares, or (c) any of the events described in Paragraph 4
hereof.
4. Merger, Etc. In case the Company, or any successor, shall be
-----------
consolidated or merged with another company, or substantially all of its assets
shall be sold to another company in exchange for stock, cash or other property
with the view to distributing such stock, cash or other property to its
shareholders, each of the Shares purchasable by this Warrant shall be replaced
for the purposes hereof by the securities of the Company or cash or property
issuable or distributable in respect of one Share of the Company, or its
successors, upon such consolidation, merger, or sale, and adequate provision to
that effect shall be made at the time thereof. Provided, however,
notwithstanding anything herein contained to the contrary, in the event that the
terms of any such consolidation, merger or sale call for the distribution of any
cash or property to the shareholders of the Company, no such cash or property
shall be distributable to the Holder of this Warrant in connection with any
unexercised portion of this Warrant, unless the Holder of this Warrant shall
have exercised this Warrant pursuant to the terms of Paragraph 7 hereof and all
other terms of this Warrant.
1
<PAGE>
5. Notice of Certain Events. Upon the happening of any event requiring
------------------------
an adjustment of the Warrant purchase price hereunder, the Company shall
forthwith give written notice thereof to the Holder of this Warrant stating the
adjusted Warrant purchase price and the adjusted number of Shares purchasable
upon the exercise hereof resulting from such event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. The Board of Directors of the Company shall determine the
computation made hereunder. In the case of (a) any consolidation, merger, or
sale affecting the Company and calling for the payment of cash or the delivery
of property to shareholders of the Company, or (b) any voluntary or involuntary
dissolution, liquidation, or winding up of the Company shall at any time be
proposed, the Company shall give at least 20 days' prior written notice thereof
to the Holder stating the date on which such event is to take place and the date
(which shall be at least 20 days after the giving of such notice) as of which
the holders of record of Shares shall be entitled to participate in any such
event. If the Holder does not elect to exercise any part of this Warrant as a
result of any such notice, the Holder shall have no right with respect to any
portion of this Warrant which shall remain unexercised to participate in (i) any
such cash or other property resulting from any such consolidation, merger or
sale, or (ii) any voluntary or involuntary dissolution, liquidation, or winding
up of the Company.
6. Shareholders' Rights. Until the valid exercise of this Warrant, the
--------------------
Holder shall not be entitled to any rights of a shareholder; but immediately
upon the exercise of this Warrant and upon payment as provided herein, the
Holder shall be deemed a record holder of the Shares.
7. Manner of Exercise. In order to exercise this Warrant, the Holder
------------------
shall surrender this Warrant, duly endorsed or assigned to the Company or in
blank, at the office of the Company, accompanied by (a) written notice to the
Company that the Holder elects to exercise this Warrant or, if less than the
entire amount thereof is to be exercised, the portion thereof to be exercised,
and (b) payment of the purchase price of the Shares to be purchased on such
exercise, in cash or by cashier's or certified check.
This Warrant shall be deemed to have been exercised immediately prior to
the close of business on the day of surrender of this Warrant for exercise in
accordance with the foregoing provisions, and at such time the person or persons
entitled to receive the Shares issuable upon exercise shall be treated for all
purposes as the record holder or holders of the Shares at such time. As
promptly as practicable on or after the exercise date, the Company shall issue
and shall deliver to the Holder a certificate or certificates for the number of
full Shares issuable upon exercise.
In case this Warrant is exercised in part only, upon such exercise the
Company shall execute and deliver to the Holder thereof, at the expense of the
Company, a new Warrant to purchase, in the aggregate, in the number of Shares
covered by the unexercised portion of this Warrant.
8. Covenants of the Holder. The Holder covenants that this Warrant has
-----------------------
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any other applicable securities law. This Warrant has
been purchased for investment only and not with a view to distribution or
resale, and may not be sold, pledged, hypothecated or otherwise transferred
unless this Warrant or the Shares represented hereby are registered under the
Securities Act, and any other applicable securities law, or the Company has
received an opinion of counsel satisfactory to it that registration is not
required. A legend in substantially the following form will be placed on any
certificates or other documents evidencing the Shares to be issued upon any
exercise of this Warrant:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE OR FOREIGN
JURISDICTION. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF
2
<PAGE>
ANY STATE OR FOREIGN JURISDICTION, OR ANY RULE OR REGULATION PROMULGATED
THEREUNDER.
Further, stop transfer instructions to the transfer agent of the Shares
have been or will be placed with respect to the Shares so as to restrict the
resale, pledge, hypothecation or other transfer thereof, subject to the further
items hereof, including the provisions of the legend set forth in this
paragraph.
9. Fractional Warrants. Upon the exercise of this Warrant, no fractions
-------------------
of Shares shall be issued; but fractional Warrants shall be delivered, entitling
the Holder, upon surrender with other fractional Warrants aggregating one or
more full Shares, to purchase such full Shares.
10. Registration Obligation. The Company has not agreed to file and the
-----------------------
Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of this Warrant or any Shares issued
upon the exercise of this Warrant.
11. Loss, Theft, Destruction of Warrant. Upon receipt of evidence
-----------------------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
receipt of indemnity reasonably satisfactory to the Company, or, in the case of
any such mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor.
12. Arbitration. All disputes arising or related to this Agreement must
-----------
exclusively be resolved by binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time the
arbitration proceeding commences; except that (a) Texas law and the Federal
Arbitration Act must govern construction and effect, (b) the locale of any
arbitration must be in San Antonio, Texas, and (c) the arbitrator must with the
award provide written findings of fact and conclusions of law. Any party may
seek from a court of competent jurisdiction any provisional remedy that may be
necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator's determination of the merits of the controversy.
The exercise of such arbitration rights by any party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights. An arbitration award
may be entered in any court having jurisdiction.
13. Benefit. All the terms and provisions of this Warrant shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
14. Notices. All notices, requests, demands, and other communications
-------
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, if
to the Company, addressed to the Company at 5617 Grissom Road, San Antonio,
Texas 78238; and if to the Holder, addressed to Travis Morgan Securities, Inc.,
18952 MacArthur Boulevard, Suite 360, Irvine, California 92612. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
15. Construction. Words of any gender used in this Warrant shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Warrant shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
16. Headings. The headings used in this Warrant are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Warrant, and in no way effect or constitute a part of this
Warrant.
3
<PAGE>
17. Law Governing. This Warrant shall be construed and governed by the
-------------
laws of the State of Texas, and all obligations hereunder shall be deemed
performable in Bexar County, Texas.
IN WITNESS WHEREOF, this Warrant has been issued on October 6th, 1999.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
------------------------------
John D. Walker II, President
4
<PAGE>
EXERCISE FORM
(To be Executed If The Owner Desires to Exercise the Warrant)
To: BioLynx.com, Inc.
5617 Grissom Road
San Antonio, Texas 78238
The undersigned hereby exercises, according to the terms and conditions
thereof ______ (number of Shares to be purchased) of the Warrant evidenced
hereby, and herewith makes payment of the purchase price at a price of $1.00 per
share in full in the amount of $_________________. Kindly issue all Shares to
the undersigned and deliver them to the undersigned at the address stated below.
If such number of shares shall not be all of the shares purchasable by this
Warrant, please issue a new Warrant of like tenor for the balance of the
remaining Shares purchasable hereunder to be delivered to the undersigned at the
address stated below.
________________________________________
(Printed Name)
________________________________________
Address
________________________________________
City State Zip Code
________________________________________
Signature
Dated:____________
5
<PAGE>
Exhibit 10.24
Stock Purchase Warrant Dated December 1, 1999 Between
BioLynx.Com, Inc. and Travis Morgan Securities, Inc.
<PAGE>
Exhibit 10.24
BIOLYNX.COM, INC.
STOCK PURCHASE WARRANT
Expiring January 31, 2000
7,500 Shares San Antonio, Texas
THIS IS TO CERTIFY that, for value received, TRAVIS MORGAN SECURITIES, INC.
(the "Holder") is entitled at any time from the date hereof, but prior to 2:00
p.m., San Antonio, Texas time on January 31, 2000, subject to and upon the terms
and conditions contained herein, to purchase up to 7,500 fully paid and non-
assessable shares of the common stock, par value $0.001 per share (the "Shares")
of BIOLYNX.COM, INC., a Texas corporation (the "Company"), at a purchase price
of $1.00 per Share (such number of the Shares and the purchase price being
subject to adjustment as provided herein). This Warrant shall be void and of no
effect and all rights hereunder shall cease at 2:00 p.m., San Antonio, Texas
time on January 31, 2000, except to the extent theretofore exercised; provided
that in the case of the earlier dissolution of the Company, this Warrant shall
become void on the date fixed for such dissolution.
1. Warrant. This Warrant has been issued by the Company to the Holder in
-------
connection with the offering of the Shares of the Company.
2. Covenants of the Company. The Company covenants that, while this
------------------------
Warrant is exercisable (a) it will reserve from its authorized and unissued
Shares a sufficient number of Shares to provide for the delivery of the Shares
pursuant to the exercise of this Warrant, and (b) that all Shares which may be
issued upon the exercise of this Warrant will upon issue be fully paid and non-
assessable.
3. Protection Against Dilution, Etc. In any of the following events,
--------------------------------
occurring after the date of the issuance of this Warrant, appropriate adjustment
shall be made in the number of Shares to be deliverable upon the exercise of
this Warrant and the purchase price per share to be paid, so as to maintain the
proportionate interest of the Holder as of the date hereof: (a) recapitalization
of the Company through a split-up or reverse split of the outstanding Shares
into a greater or lesser number, as the case may be, or (b) declaration of a
dividend on the Shares, payable in Shares or other securities of the Company
convertible into Shares, or (c) any of the events described in Paragraph 4
hereof.
4. Merger, Etc. In case the Company, or any successor, shall be
-----------
consolidated or merged with another company, or substantially all of its assets
shall be sold to another company in exchange for stock, cash or other property
with the view to distributing such stock, cash or other property to its
shareholders, each of the Shares purchasable by this Warrant shall be replaced
for the purposes hereof by the securities of the Company or cash or property
issuable or distributable in respect of one Share of the Company, or its
successors, upon such consolidation, merger, or sale, and adequate provision to
that effect shall be made at the time thereof. Provided, however,
notwithstanding anything herein contained to the contrary, in the event that the
terms of any such consolidation, merger or sale call for the distribution of any
cash or property to the shareholders of the Company, no such cash or property
shall be distributable to the Holder in connection with any unexercised portion
of this Warrant, unless the Holder shall have exercised this Warrant pursuant to
the terms of Paragraph 7 hereof and all other terms of this Warrant.
5. Notice of Certain Events. Upon the happening of any event requiring
------------------------
an adjustment of the Warrant purchase price hereunder, the Company shall
forthwith give written notice thereof to the Holder stating the adjusted Warrant
purchase price and the adjusted number of Shares purchasable upon the exercise
hereof resulting from such event and setting forth in reasonable detail the
method of calculation and the facts upon which such calculation is based. The
Board of Directors of the Company shall determine the computation made
hereunder. In the case of (a) any consolidation, merger, or sale affecting the
Company and calling for the payment of cash or the delivery of property to
shareholders of the Company, or (b) any voluntary or involuntary dissolution,
liquidation, or winding up of the Company shall at any time be proposed, the
Company shall give at least 20 days' prior written notice thereof to the Holder
stating the date on which such event is to take place and the date (which shall
be at least 20 days after the giving
1
<PAGE>
of such notice) as of which the holders of record of Shares shall be entitled to
participate in any such event. If the Holder does not elect to exercise any part
of this Warrant as a result of any such notice, the Holder shall have no right
with respect to any portion of this Warrant which shall remain unexercised to
participate in (i) any such cash or other property resulting from any such
consolidation, merger or sale, or (ii) any voluntary or involuntary dissolution,
liquidation, or winding up of the Company.
6. Shareholders' Rights. Until the valid exercise of this Warrant, the
--------------------
Holder shall not be entitled to any rights of a shareholder with respect to the
Shares covered by this Warrant; but immediately upon the exercise of this
Warrant and upon payment as provided herein, the Holder shall be deemed a record
holder of the Shares.
7. Manner of Exercise. In order to exercise this Warrant, the Holder
------------------
shall surrender this Warrant, duly endorsed or assigned to the Company or, in
blank, at the office of the Company, accompanied by (a) written notice to the
Company that the Holder elects to exercise this Warrant or, if less than the
entire amount thereof is to be exercised, the portion thereof to be exercised,
and (b) payment of the purchase price of the Shares to be purchased on such
exercise, in cash or by cashier's or certified check.
This Warrant shall be deemed to have been exercised immediately prior to
the close of business on the day of surrender of this Warrant for exercise in
accordance with the foregoing provisions, and at such time the person or persons
entitled to receive the Shares issuable upon exercise shall be treated for all
purposes as the record holder or holders of the Shares at such time. As
promptly as practicable on or after the exercise date, the Company shall issue
and shall deliver to the Holder a certificate or certificates for the number of
full Shares issuable upon exercise.
In case this Warrant is exercised in part only, upon such exercise the
Company shall execute and deliver to the Holder thereof, at the expense of the
Company, a new Warrant to purchase, in the aggregate, in the number of Shares
covered by the unexercised portion of this Warrant.
8. Covenants of the Holder. The Holder covenants that this Warrant has
-----------------------
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any other applicable securities law. This Warrant has
been purchased for investment only and not with a view to distribution or
resale, and may not be sold, pledged, hypothecated or otherwise transferred
unless this Warrant or the Shares represented hereby are registered under the
Securities Act, and any other applicable securities law, or the Company has
received an opinion of counsel satisfactory to it that registration is not
required. A legend in substantially the following form will be placed on any
certificates or other documents evidencing the Shares to be issued upon any
exercise of this Warrant:
THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAW OF ANY STATE OR FOREIGN
JURISDICTION. WITHOUT SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED EXCEPT UPON DELIVERY TO THE
COMPANY OF AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO THE
COMPANY OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO THE COMPANY TO THE
EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE SECURITIES
ACT OF 1933, AS AMENDED, THE SECURITIES LAW OF ANY STATE OR FOREIGN
JURISDICTION, OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.
Further, stop transfer instructions to the transfer agent of the Shares
have been or will be placed with respect to the Shares so as to restrict the
resale, pledge, hypothecation or other transfer thereof, subject to the further
items hereof, including the provisions of the legend set forth in this
paragraph.
2
<PAGE>
9. Fractional Warrants. Upon the exercise of this Warrant, no fractions
-------------------
of Shares shall be issued; but fractional Warrants shall be delivered, entitling
the Holder, upon surrender with other fractional Warrants aggregating one or
more full Shares, to purchase such full Shares.
10. Registration Obligation. The Company has not agreed to file and the
-----------------------
Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of this Warrant or any Shares issued
upon the exercise of this Warrant.
11. Loss, Theft, Destruction of Warrant. Upon receipt of evidence
-----------------------------------
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Warrant and, in the case of any such loss, theft, or destruction, upon
receipt of indemnity reasonably satisfactory to the Company, or, in the case of
any such mutilation, upon surrender and cancellation of this Warrant, the
Company will make and deliver, in lieu of such lost, stolen, destroyed or
mutilated Warrant, a new Warrant of like tenor.
12. Arbitration. All disputes arising or related to this Agreement must
-----------
exclusively be resolved by binding arbitration under the Commercial Arbitration
Rules of the American Arbitration Association in effect at the time the
arbitration proceeding commences; except that (a) Texas law and the Federal
Arbitration Act must govern construction and effect, (b) the locale of any
arbitration must be in San Antonio, Texas, and (c) the arbitrator must with the
award provide written findings of fact and conclusions of law. Any party may
seek from a court of competent jurisdiction any provisional remedy that may be
necessary to protect its rights or assets pending the selection of the
arbitrator or the arbitrator's determination of the merits of the controversy.
The exercise of such arbitration rights by any party will not preclude the
exercise of any self-help remedies (including without limitation, setoff rights)
or the exercise of any non-judicial foreclosure rights. An arbitration award
may be entered in any court having jurisdiction.
13. Benefit. All the terms and provisions of this Warrant shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns.
14. Notices. All notices, requests, demands, and other communications
-------
hereunder shall be in writing and delivered personally or sent by registered or
certified United States mail, return receipt requested with postage prepaid, if
to the Company, addressed to the Company at 5617 Grissom Road, San Antonio,
Texas 78238; and if to the Holder, addressed to Travis Morgan Securities, Inc.,
18952 MacArthur Boulevard, Suite 360, Irvine, California 92612. Any party
hereto may change its address upon 10 days' written notice to any other party
hereto.
15. Construction. Words of any gender used in this Warrant shall be held
------------
and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Warrant shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
16. Headings. The headings used in this Warrant are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Warrant, and in no way effect or constitute a part of this
Warrant.
17. Law Governing. This Warrant shall be construed and governed by the
-------------
laws of the State of Texas, and all obligations hereunder shall be deemed
performable in Bexar County, Texas.
3
<PAGE>
IN WITNESS WHEREOF, this Warrant has been issued on December 1, 1999.
BIOLYNX.COM, INC.
By /s/ John D. Walker II
------------------------------
John D. Walker II, President
4
<PAGE>
EXERCISE FORM
(To be Executed If The Owner Desires to Exercise the Warrant)
To: BioLynx.Com, Inc.
5617 Grissom Road
San Antonio, Texas 78238
The undersigned hereby exercises, according to the terms and conditions
thereof ______ (number of Shares to be purchased) of the Warrant evidenced
hereby, and herewith makes payment of the purchase price at a price of $1.00 per
share in full in the amount of $_________________. Kindly issue all Shares to
the undersigned and deliver them to the undersigned at the address stated below.
If such number of shares shall not be all of the shares purchasable by this
Warrant, please issue a new Warrant of like tenor for the balance of the
remaining Shares purchasable hereunder to be delivered to the undersigned at the
address stated below.
____________________________________
(Printed Name)
____________________________________
Address
____________________________________
City State Zip Code
____________________________________
Signature
Dated:__________
5
<PAGE>
Exhibit 10.25
Acknowledgment of Debt Dated December 1, 1999 Between
BioLynx.Com, Inc., John D. Walker, II, United Capital Investment
Group, Inc., and Alamo Commercial Group, Inc.
<PAGE>
Exhibit 10.25
ACKNOWLEDGMENT OF DEBT
THIS AGREEMENT is made this 1st day of December, 1999, by and between
BIOLYNX.COM, INC., a Texas corporation (the "the Company"), JOHN D. WALKER, II
("Walker"), UNITED CAPITAL INVESTMENT GROUP, INC., a Texas corporation
("United"), and ALAMO COMMERCIAL GROUP, INC., a Texas corporation ("Alamo").
WHEREAS, the Company is currently indebted to Walker, United and Alamo and
the parties desire to acknowledge the debt and the terms and conditions
surrounding the debt and the repayment thereof;
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
1. Debt. As of September 30, 1999, the Company was indebted to Walker,
----
United and Alamo, collectively, in the amount of $248,847. Since that date, the
Company has been advanced additional funds by Walker, United and Alamo which,
although not calculated at this time, constitute part of the total indebtedness
(the "Debt") owed to Walker, United and Alamo by the Company.
2. Repayment. Although the Company intends to repay the Debt, Walker,
---------
United and/or Alamo may convert the unpaid balance of the Debt attributable to
Walker, United and/or Alamo, individually, as provided in this Agreement.
3. Conversion. At any time Walker, United and/or Alamo may convert the
----------
unpaid balance of the Debt attributable to Walker, United and/or Alamo,
individually, into shares of preferred stock, par value $1.00 per share (the
"Preferred Stock") of the Company. Any portion of the Debt so converted into
shares of the Preferred Stock shall be converted at the rate of one share of the
Preferred Stock for every $1.00 of the principal amount of the Debt then
remaining unpaid. For convenience, the conversion of all or a portion, as the
case may be, of the unpaid balance of the Debt into the Preferred Stock is
hereinafter sometimes referred to as the conversion of the Debt. In the event
that the Debt is converted in part only, upon such conversion, the Company shall
execute and deliver to Walker, United and/or Alamo, as applicable, without
service charge, a new agreement acknowledging the remaining unpaid balance of
the Debt applicable to such party.
Further, at any time after a party converts the Debt into shares of the
Preferred Stock, such party may convert the shares of the Preferred Stock into
shares of the common stock of the Company, par value $0.001 per share (the
"Common Stock"). Any portion of the Preferred Stock so converted into shares of
the Common Stock shall be converted at the rate of one share of the Common Stock
for every 3.30 shares of Preferred Stock. For convenience, the conversion of all
or a portion, as the case may be, of the Preferred Stock into the Common Stock
is also hereinafter sometimes referred to as a conversion.
4. Delivery of Certificates. As promptly after a conversion as possible,
------------------------
the Company shall deliver a certificate or certificates representing the number
of fully paid and nonassessable shares of the Preferred Stock or Common Stock,
as applicable, into which the Debt or Preferred Stock, as applicable, (or
portion thereto) may be converted in accordance with the provisions of this
Agreement. Subject to the following provisions of this Agreement, such
conversion shall be deemed to have been made immediately prior to the close of
business on the conversion, accompanied by written notice, so that the rights of
Walker, United and/or Alamo, as applicable, shall cease with respect to the Debt
(or the portion thereof being converted) at such time, and the person or persons
entitled to receive the shares of the Preferred Stock or Common Stock, as
applicable, upon conversion shall be treated for all purposes as having become
the record holder or holders of such shares at such time. Provided, however,
that no such conversion on any date when the stock transfer books of the Company
shall be closed shall be effective to constitute the person or persons entitled
to receive the shares of the Preferred Stock or Common Stock, as applicable,
upon such conversion as the record holder or holders of such shares of the
Preferred Stock or Common Stock, as applicable, on such date, but such surrender
shall be effective to constitute the person or persons entitled to receive such
shares of the Preferred Stock or Common Stock, as applicable, as the record
holder or holders thereof for all purposes immediately prior to the close of the
business on the next succeeding day on which such stock transfer books are open.
1
<PAGE>
5. Interest. No payment or adjustment in respect of interest accrued on
--------
the Debt or in respect of dividends on the Preferred Stock or Common Stock, as
applicable, shall be made upon the conversion of the Debt.
6. Fractional Shares. No fractional shares or scrip representing
-----------------
fractional shares shall be issued upon the conversion of the Debt or Preferred
Stock. If the conversion of the Debt or Preferred Stock results in a fraction,
an amount equal to such fraction multiplied by the conversion price of the
Preferred Stock or Common Stock, as applicable, shall be paid to Walker, United
or Alamo, as applicable, in cash by the Company.
7. Adjustments. In case of any reclassification or change of outstanding
-----------
shares of the Preferred Stock or Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), or in case of any consolidation or
merger in which the Company is the continuing corporation and which does not
result in any reclassification or change of outstanding shares of the Preferred
Stock or Common Stock, or in case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety, Walker, United and/or Alamo, as applicable, shall have the right
thereafter to convert the Debt into the kind and amount of shares of stock of
the Company or of such successor or purchasing corporation and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale, or conveyance by a holder of the number of shares of Preferred
Stock or Common Stock of the Company into which the Debt might have been
converted immediately prior to such reclassification, change, consolidation,
merger, sale or conveyance. The provisions of this paragraph shall similarly
apply to successive reclassifications, changes, consolidations, mergers, sales,
or conveyances.
8. Reservation of Shares. The Company covenants that it will at times
---------------------
reserve and keep available out of its authorized Preferred Stock and Common
Stock, solely for the purpose of issuance upon conversion of the Debt or
Preferred Stock, as applicable, as herein provided, such number of shares of the
Preferred Stock and Common Stock as shall then be issuable upon such conversion.
The Company covenants that all shares of the Preferred Stock and Common Stock
which shall be so issuable shall, when issued, be duly and validly issued and
fully paid and nonassessable.
9. Registration Rights. The Company has not agreed to file and the
-------------------
Company does not anticipate the filing of a registration statement under the
Securities Act to allow a public resale of the Debt. However, pursuant to that
certain Registration Rights Agreement described in Exhibit A attached hereto and
---------
incorporated herein by this reference, the Company has agreed to registration
rights with respect to the resale of the shares of the Common Stock issuable
upon the conversion of any shares of the Preferred Stock received in connection
with the conversion of the Debt.
10. Conflict. Notwithstanding anything herein contained to the contrary,
--------
in the event of any conflict between the terms of the Acknowledgment or this
Agreement, the terms of this Agreement shall control.
11. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
12. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of the venue of any such mediation, arbitration, suit, action or proceeding
brought in any such county and any claim that any such mediation, arbitration,
suit, action or proceeding brought in such county has been brought in an
inconvenient forum.
13. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach, termination, or validity thereof, shall be
settled by final and binding arbitration in accordance with the Commercial
2
<PAGE>
Arbitration Rules of the American Arbitration Association ("AAA Rules") in
effect as of the effective date of this Agreement. The American Arbitration
Association shall be responsible for (a) appointing a sole arbitrator, and (b)
administering the case in accordance with the AAA Rules. The situs of the
arbitration shall be San Antonio, Texas. Upon the application of either party to
this Agreement, and whether or not an arbitration proceeding has yet been
initiated, all courts having jurisdiction hereby are authorized to: (x) issue
and enforce in any lawful manner, such temporary restraining orders, preliminary
injunctions and other interim measures of relief as may be necessary to prevent
harm to a party's interest or as otherwise may be appropriate pending the
conclusion of arbitration proceedings pursuant to this Agreement; and (y) enter
and enforce in any lawful manner such judgments for permanent equitable relief
as may be necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
14. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns. Notwithstanding anything
herein contained to the contrary, the Company shall have the right to assign
this Agreement to any party without the consent of the Holder.
15. Notices. All notices, requests and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, with postage prepaid and addressed to the
party to receive same, if to the Company, addressed to Mr. John D. Walker II at
5617 Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210)
256-1992, and e-mail [email protected]; and if to the Holder, addressed to Mr.
John D. Walker II at 5617 Grissom Road, San Antonio, Texas 78238, telephone
(210) 256-8300, fax (210) 256-1992, and e-mail [email protected]; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
16. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
17. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
18. Construction of Agreement. The parties hereto acknowledge and agree
-------------------------
that neither this Agreement nor any of the other documents executed in
connection herewith shall be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that each
of the parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the documents executed in connection herewith.
19. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
20. Incorporation by Reference. Any agreement referred to herein is
--------------------------
hereby incorporated into this Agreement by this reference.
21. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power
3
<PAGE>
or privilege shall not preclude any later exercise thereof or any exercise of
any other right, power or privilege hereunder or thereunder.
22. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
23. Invalidity. In the event any one or more of the provisions contained
----------
in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
24. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
25. Time of the Essence. Time is of the essence of this Agreement.
-------------------
26. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
27. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
28. Entire Agreement. This instrument, together with the Acknowledgment,
----------------
contains the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
SEE NEXT PAGE FOR SIGNATURES
4
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
BIOLYNX.COM, INC.,
By /s/ John D. Walker II
-----------------------------------
John D. Walker II, President
UNITED CAPITAL INVESTMENT GROUP, INC.
By /s/ John D. Walker II
-----------------------------------
John D. Walker II, President
ALAMO COMMERCIAL GROUP, INC.
By /s/ John D. Walker II
-----------------------------------
John D. Walker II, President
By /s/ John D. Walker II
-----------------------------------
John D. Walker II
Attachment
- ----------
Exhibit A - Registration Rights Agreement
5
<PAGE>
Exhibit A
Registration Right Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS AGREEMENT is entered into as of December 1, 1999, by and between
BIOLYNX.COM, INC., a Texas corporation (the "Company"), JOHN D. WALKER, II
("Walker"), UNITED CAPITAL INVESTMENT GROUP, INC., a Texas corporation
("United"), and ALAMO COMMERCIAL GROUP, INC., a Texas corporation ("Alamo").
Walker, United and Alamo are sometimes hereinafter collectively referred to as
the "Holders."
WHEREAS, on even date herewith the Company executed and delivered to the
Holders that certain Acknowledgment of Debt (the "Acknowledgment") whereby the
Company has agreed to issue to the Holders shares of the Company's common stock,
par value $0.001 per share (the "Common Stock"), upon the conversion of the Debt
(as defined in the Acknowledgment) as described in the Acknowledgment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Registration Rights Available. Pursuant to the terms and conditions
-----------------------------
contained herein, and in the Acknowledgment, the Company agrees to provide the
Holders or any permitted assignee of the Holders (collectively, the "Holder")
with the right to "piggyback" (the "Registration Rights") on a firm commitment
underwritten offering with respect to the Common Stock and any other securities
issued or issuable at any time or from time to time in respect of the Common
Stock as a result of a merger, consolidation, reorganization, stock split, stock
dividend, recapitalization or other similar event involving the Company
(collectively, the "Registrable Securities").
2. Registration Rights. With respect to the Registration Rights, the
-------------------
parties agree as follows:
(a) Subject to Paragraph 2(b), the Company will (i) promptly give to
the Holder written notice of any registration relating to an Underwritten Public
Offering, and (ii) include in such registration (and related qualification under
blue sky laws or other compliance) such of the Holder's Registrable Securities
as are specified in the Holder's written request or requests, mailed in
accordance with the terms of this Agreement within 30 days after the date of
such written notice from the Company.
(b) The right of the Holder to registration pursuant to the
Registration Rights shall be conditioned upon the Holder's participation in such
underwriting, and the inclusion of the Registrable Securities in the
underwriting shall be limited to the extent provided herein. The Holder shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for the Underwritten Public Offering
by the Company. Notwithstanding any other provision of this Agreement, if the
managing underwriter determines that marketing factors require a limitation of
the number of the Registrable Securities to be underwritten, the managing
underwriter may limit some or all of the Registrable Securities that may be
included in the registration and the Underwritten Public Offering as follows:
the number of the Registrable Securities that may be included in the
registration and the Underwritten Public Offering by the Holder shall be
determined by multiplying the number of the shares of the Registrable Securities
of all selling shareholders of the Company which the managing underwriter is
willing to include in such registration and the Underwritten Public Offering
times a fraction, the numerator of which is the number of the Registrable
Securities requested to be included in such registration and the Underwritten
Public Offering by the Holder, and the denominator of which is the total number
of the Registrable Securities which all selling shareholders of the Company have
requested to be included in such registration and the Underwritten Public
Offering. To facilitate the allocation of shares in accordance with the above
provisions, the Company may round the number of shares allocable to any such
person to the nearest 100 shares. If the Holder disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by written notice to the
Company and the managing underwriter, delivered not less than seven days before
the effective date of the Underwritten Public Offering. Any of the Registrable
Securities excluded or withdrawn from the Underwritten Public Offering shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 60 days after the effective date of the Registration
Statement relating thereto, or such other shorter period of time as the
underwriters may require.
1
<PAGE>
3. Registration Procedure. With respect to the Registration Rights, the
----------------------
following provisions shall apply:
(a) The Holder shall be obligated to furnish to the Company and the
underwriters such information regarding the Registrable Securities and the
proposed manner of distribution of the Registrable Securities as the Company and
the underwriters may request in writing and as shall be required in connection
with any registration, qualification or compliance referred to herein and shall
otherwise cooperate with the Company and the underwriters in connection with
such registration, qualification or compliance.
(b) With a view to making available the benefits of certain rules and
regulations of the Securities and Exchange Commission (the "SEC") which may at
any time permit the sale of any Restricted Securities as defined in Rule 144
("Rule 144") promulgated under the Securities Act of 1933, as amended (the
"Securities Act") to the public without registration, the Company agrees to use
its best lawful efforts to:
(i) Make and keep public information available, as those terms
are understood and defined in Rule 144 at all times during which the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act");
(ii) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
(at all times during which the Company is subject to such reporting
requirements); and
(iii) So long as the Holder owns any Restricted Securities, to
furnish to the Holder upon request a written statement from the Company as to
its compliance with the reporting requirements of Rule 144 and with regard to
the Securities Act and the Exchange Act (at all times during which the Company
is subject to such reporting requirements), a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents of the
Company and other information in the possession of or reasonably obtainable by
the Company as the Holder may reasonably request in availing itself of any rule
or regulation of the SEC allowing the Holder to sell any Restricted Securities
without registration.
(c) The Company agrees that it will furnish to the Holder such number
of prospectuses meeting the requirements of Section 10(a)(3) of the Securities
Act, offering circulars or other documents incident to any registration,
qualification or compliance referred to herein as provided or, if not otherwise
provided, as the Holder from time to time may reasonably request.
(d) All expenses (except for any underwriting and selling discounts
and commissions and legal fees for the Holder's attorneys) of any registrations
permitted pursuant to this Agreement and of all other offerings by the Company
(including, but not limited to, the expenses of any qualifications under the
blue sky or other state securities laws and compliance with governmental
requirements of preparing and filing any post-effective amendments required for
the lawful distribution of the Registrable Securities to the public in
connection with such registration, of supplying prospectuses, offering circulars
or other documents) will be paid by the Company.
(e) In connection with the preparation and filing of any Registration
Statement under the Securities Act pursuant to this Agreement, the Company will
give the Holder and the Holder's attorneys and accountants, the opportunity to
participate in the preparation of any Registration Statement, each prospectus
included therein or filed with the SEC, and each amendment thereof or supplement
thereto, and will give each of them such access to its books and records and
opportunities to discuss the business of the Company with its officers and the
independent public accountants who have certified its financial statements as
shall be necessary to conduct a reasonable investigation within the meaning of
the Securities Act.
(f) The Company shall notify each Holder of Registrable Securities
covered by a Registration Statement, during the time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an
2
<PAGE>
untrue statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
in the light of the circumstances then existing.
4. Blackout Period. At any time after the effective date of the
---------------
Registration Statement, if the Company gives to the Holder a notice pursuant to
Paragraph 3(f) hereof and stating that the Company requires the suspension by
the Holder of the distribution of any of the Registrable Securities, then the
Holder shall cease distributing the Registrable Securities for such period of
time (the "Blackout Period"), not to exceed 120 days from the time notice is
sent until the Company informs the Holder that the Blackout Period has been
terminated. Upon notice by the Company to the Holder of such determination, the
Holder will (a) keep the fact of any such notice strictly confidential, (b)
promptly halt any offer, sale, trading or transfer of any of the Registrable
Securities for the duration of the Blackout Period, and (c) promptly halt any
use, publication, dissemination or distribution of each prospectus included
within the Registration Statement, and any amendment or supplement thereto by it
and any of its affiliates for the duration of the Blackout Period.
5. Lock-Up. In connection with any Underwritten Public Offering, the
-------
Holder agrees, if requested, to execute a lock-up letter addressed to the
managing underwriter in customary form agreeing not to sell or otherwise dispose
of the Registrable Securities owned by the Holder (other than any that may be
included in the offering) for a period not exceeding 180 days.
6. Delay of Registration. No Holder shall have any right to obtain or
---------------------
seek an injunction restraining or otherwise delaying any registration of the
Registrable Securities as the result of any controversy that might arise with
respect to the interpretation or implementation of this Agreement.
7. Indemnification by the Company. In the event of any registration of
------------------------------
the Registrable Securities of the Company under the Securities Act, pursuant to
the terms of this Agreement, the Company agrees to indemnity and hold harmless
the Holder and each other person who participates as an underwriter in the
offering or sale of the Registrable Securities against any and all claims,
demands, losses, costs, expenses, obligations, liabilities, joint or several,
damages, recoveries and deficiencies, including interest, penalties and
attorneys' fees (collectively the "Claims"), to which the Holder or any such
underwriter may become subject under the Securities Act or otherwise, insofar as
the Claims or actions or proceedings, whether commenced or threatened, in
respect thereto arise out of or are based on any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement
under which the Holder's Registrable Securities were registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
the Company will reimburse the Holder and each such underwriter for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any Claim or action or proceeding in respect thereto; provided that
the Company shall not be liable in any such case to the extent that any Claim or
action or proceeding in respect thereof or expense arises out of or is based on
an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance on and in
conformity with written information furnished to the Company through an
instrument duly executed by the Holder specifically stating that it is for use
in the preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Holder or any
such underwriter and survive the transfer of the Registrable Securities by the
Holder.
8. Indemnification by the Holder. The Company may require, as a
-----------------------------
condition to including the Registrable Securities in any Registration Statement
filed pursuant to this Agreement, that the Company shall have received an
undertaking satisfactory to it from the Holder, to indemnify and hold harmless
(in the same manner and to the same extent as set forth in Paragraph 7 hereof)
the Company, each director and officer of the Company and each other person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement or alleged statement in or
omission or alleged omission from the Registration Statement, any preliminary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance on and in conformity with written information furnished to the Company
through an instrument duly executed by the Holder specifically stating that it
is for use in the preparation of
3
<PAGE>
the Registration Statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement. Notwithstanding the foregoing, the maximum
liability hereunder which the Holder shall be required to suffer shall be
limited to the net proceeds to the Holder from the Registrable Securities sold
by the Holder in any such offering. Such indemnity shall remain in full force
and effect, regardless of any investigation made by or on behalf of the Company
or any such director, officer or controlling person and shall survive the
transfer of the Registrable Securities by the Holder.
9. Notice of Claims. Promptly after receipt by an indemnified party of
----------------
notice of the commencement of any action or proceeding involving a Claim, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under this Agreement except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnifying party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist in respect of a Claim the indemnifying party
shall be entitled to participate in and to assume the defense thereof, jointly
with any other indemnifying party similarly notified to the extent that it may
wish, with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party for any legal or other expenses subsequently incurred by
the latter in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
that does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect of a Claim.
10. Indemnification Payments. The indemnification required by this
------------------------
Agreement shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
11. Assignment of Registration Rights. The rights to cause the Company to
---------------------------------
register Registrable Securities pursuant to this Agreement may be assigned by
the Holder to a transferee or assignee of such securities who shall, upon such
transfer or assignment, be deemed a Holder under this Agreement; provided that
the Company is furnished with written notice of the name and address of such
transferee or assignee and the Registrable Securities with respect to which the
Registration Rights are being assigned; provided, further, that such assignment
shall be effective only if immediately following such transfer the further
disposition of such securities by the transferee or assignee is restricted under
the Securities Act and that such transferee or assignee is either (a) a member
of the immediate family or a trust for the benefit of any Holder that is an
individual or (b) a transferee or assignee that after the transfer or assignment
holds all of the Registrable Securities.
12. Termination of this Agreement. This Agreement shall terminate with
-----------------------------
respect to the Holder when all of the Registrable Securities have been
registered as provided herein.
13. Conflict. Notwithstanding anything herein contained to the contrary,
--------
in the event of any conflict between the terms of the Acknowledgment or this
Agreement, the terms of this Agreement shall control.
14. Attorney's Fees. In the event that it should become necessary for any
---------------
party entitled hereunder to bring suit against any other party to this Agreement
for enforcement of the covenants herein contained, the parties hereby covenant
and agree that the party who is found to be in violation of said covenants shall
also be liable for all reasonable counsel's fees and costs of court incurred by
the other parties hereto.
15. Governing law; Jurisdiction. This Agreement shall be governed by and
---------------------------
construed in accordance with the laws of the State of Texas, without regard to
any conflicts of laws provisions thereof. Each party hereby irrevocably submits
to the personal jurisdiction of the United States District Court for Bexar
County, Texas, as well as of the District Courts of the State of Texas in Bexar
County, Texas over any suit, action or proceeding arising out of or relating to
this Agreement. Each party hereby irrevocably waives, to the fullest extent
permitted by law, any objection which it may
4
<PAGE>
now or hereafter have to the laying of the venue of any such mediation,
arbitration, suit, action or proceeding brought in any such county and any claim
that any such mediation, arbitration, suit, action or proceeding brought in such
county has been brought in an inconvenient forum.
16. Arbitration. Any controversy or claim arising out of or relating to
-----------
this Agreement, or the breach, termination, or validity thereof, shall be
settled by final and binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA Rules") in
effect as of the effective date of this Agreement. The American Arbitration
Association shall be responsible for (a) appointing a sole arbitrator, and (b)
administering the case in accordance with the AAA Rules. The situs of the
arbitration shall be San Antonio, Texas. Upon the application of either party to
this Agreement, and whether or not an arbitration proceeding has yet been
initiated, all courts having jurisdiction hereby are authorized to: (x) issue
and enforce in any lawful manner, such temporary restraining orders, preliminary
injunctions and other interim measures of relief as may be necessary to prevent
harm to a party's interest or as otherwise may be appropriate pending the
conclusion of arbitration proceedings pursuant to this Agreement; and (y) enter
and enforce in any lawful manner such judgments for permanent equitable relief
as may be necessary to prevent harm to a party's interest or as otherwise may be
appropriate following the issuance of arbitral awards pursuant to this
Agreement. Any order or judgment rendered by the arbitrator may be entered and
enforced by any court having competent jurisdiction.
17. Benefit. All the terms and provisions of this Agreement shall be
-------
binding upon and inure to the benefit of and be enforceable by the parties
hereto, and their respective heirs, executors, administrators, personal
representatives, successors and permitted assigns. Notwithstanding anything
herein contained to the contrary, the Company shall have the right to assign
this Agreement to any party without the consent of the Holder.
18. Notices. All notices, requests and other communications hereunder
-------
shall be in writing and shall be deemed to have been duly given at the time of
receipt if delivered by hand or communicated by electronic transmission, or, if
mailed, three days after deposit in the United States mail, registered or
certified, return receipt requested, with postage prepaid and addressed to the
party to receive same, if to the Company, addressed to Mr. John D. Walker II at
5617 Grissom Road, San Antonio, Texas 78238, telephone (210) 256-8300, fax (210)
256-1992, and e-mail [email protected]; and if to the Holder, addressed to Mr.
John D. Walker II at 5617 Grissom Road, San Antonio, Texas 78238, telephone
(210) 256-8300, fax (210) 256-1992, and e-mail [email protected]; provided,
however, that if either party shall have designated a different address by
notice to the other given as provided above, then any subsequent notice shall be
addressed to such party at the last address so designated.
19. Construction. Words of any gender used in this Agreement shall be
------------
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, and vice versa, unless the context requires
otherwise. In addition, the pronouns used in this Agreement shall be understood
and construed to apply whether the party referred to is an individual,
partnership, joint venture, corporation or an individual or individuals doing
business under a firm or trade name, and the masculine, feminine and neuter
pronouns shall each include the other and may be used interchangeably with the
same meaning.
20. General Assurances. The parties agree to execute, acknowledge, and
------------------
deliver all such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the intent and purposes of this
Agreement.
21. Construction of Agreement. The parties hereto acknowledge and agree
-------------------------
that neither this Agreement nor any of the other documents executed in
connection herewith shall be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that each
of the parties hereto contributed substantially to the negotiation and
preparation of this Agreement and the documents executed in connection herewith.
22. No Third Party Beneficiaries. Except as otherwise expressly forth in
----------------------------
this Agreement, no person or entity not a party to this Agreement shall have
rights under this Agreement as a third party beneficiary or otherwise.
5
<PAGE>
23. Incorporation by Reference. Any agreement referred to herein is
--------------------------
hereby incorporated into this Agreement by this reference.
24. Waiver. No course of dealing on the part of any party hereto or its
------
agents, or any failure or delay by any such party with respect to exercising any
right, power or privilege of such party under this Agreement or any instrument
referred to herein shall operate as a waiver thereof, and any single or partial
exercise of any such right, power or privilege shall not preclude any later
exercise thereof or any exercise of any other right, power or privilege
hereunder or thereunder.
25. Cumulative Rights. The rights and remedies of any party under this
-----------------
Agreement and the instruments executed or to be executed in connection herewith,
or any of them, shall be cumulative and the exercise or partial exercise of any
such right or remedy shall not preclude the exercise of any other right or
remedy.
26. Invalidity. In the event any one or more of the provisions contained
----------
in this Agreement or in any instrument referred to herein or executed in
connection herewith shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect the other provisions of this Agreement or any such other
instrument.
27. Excusable Delay. None of the parties hereto shall be obligated to
---------------
perform and none shall be deemed to be in default hereunder, if the performance
of a non-monetary obligation is prevented by the occurrence of any of the
following, other than as the result of the financial inability of the party
obligated to perform: acts of God, strikes, lock-outs, other industrial
disturbances, acts of a public enemy, wars or war-like action (whether actual,
impending or expected and whether de jure or de facto), arrest or other
restraint of governmental (civil or military) blockades, insurrections, riots,
epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms,
floods, washouts, sink holes, civil disturbances, explosions, breakage or
accident to equipment or machinery, confiscation or seizure by any government of
public authority, nuclear reaction or radiation, radioactive contamination or
other causes, whether of the kind herein enumerated, or otherwise, that are not
reasonably within the control of the party claiming the right to delay
performance on account of such occurrence.
28. Time of the Essence. Time is of the essence of this Agreement.
-------------------
29. Headings. The headings used in this Agreement are for convenience and
--------
reference only and in no way define, limit, simplify or describe the scope or
intent of this Agreement, and in no way effect or constitute a part of this
Agreement.
30. Multiple Counterparts. This Agreement may be executed in one or more
---------------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31. Entire Agreement. This instrument, together with the Acknowledgment,
----------------
contains the entire understanding of the parties and may not be changed orally,
but only by an instrument in writing signed by the party against whom
enforcement of any waiver, change, modification, extension, or discharge is
sought.
SEE NEXT PAGE FOR SIGNATURES
6
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
BIOLYNX.COM, INC.,
By /s/ John D. Walker II
-----------------------------------------------
John D. Walker II, President
UNITED CAPITAL INVESTMENT GROUP, INC.
By /s/ John D. Walker II
-----------------------------------------------
John D. Walker II, President
ALAMO COMMERCIAL GROUP, INC.
By /s/ John D. Walker II
-----------------------------------------------
John D. Walker II, President
/s/ John D. Walker II
-------------------------------------------------
JOHN D. WALKER II
7
<PAGE>
Exhibit 10.26
Escrow Agreement Dated December 1, 1999 Between
BioLynx.Com, Inc. and Sterling Bank
<PAGE>
Exhibit 10.26
ESCROW AGREEMENT
Account Name: BioLynx.Com, Inc. Escrow Account
Account Number:
Tax Identification No: 74-2916627
Date Opened:
THIS ESCROW AGREEMENT made and entered into as of the day of December 1,
1999, by and between BioLynx.Com, Inc. doing business as BioLynx a Texas
corporation ("Client"), and Sterling Bank, a Texas state banking association
("Escrow Agent").
WITNESSETH:
WHEREAS, Client pursuant to a Registration Statement having an Effective Date as
therein provided (the "Registration Statement") is making an offering of a
minimum of $250,000 and a maximum of $4,000,000 from the sale to investors (the
"Subscribers") of shares of the common stock of the Company, par value of $0.001
per share (the "Common Stock") at a price of $4.00 per share, pursuant to the
Securities Act of 1933, as amended, and
WHEREAS, Client wishes to retain the services of the Escrow Agent to escrow the
funds, and the Escrow Agent is willing to act as an escrowee, in accordance with
and subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the mutual promises and covenants
herein set forth, and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged and confessed, the parties agree as
follows:
1. Appointment of Escrow Agent. Client hereby appoints Sterling Bank as
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Escrow Agent for the purposes set forth herein and Sterling Bank accepts
such appointment upon the terms and provisions set forth in the Escrow
Agreement.
2. Deposits of Escrow Funds. Until the Initial Closing Date as hereinafter
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defined, all collected funds of the Subscribers received by the Company
shall be deposited directly into the Escrow Account. The Company shall
advise the Escrow Agent in writing at the time of each deposit into the
Escrow Account of the name and address of each Subscriber along with the
number of Shares of the Common Stock subscribed for by each Subscriber, and
the cash amount tendered by each Subscriber.
3. Duties and Responsibilities of Escrow Agent. The duties and
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responsibilities of the Escrow Agent shall be limited to the following:
(a) At the expiration of five days after the sale of 62,500 shares of
Common Stock totaling $250,000 by the Company and the deposit of the
proceeds from the sale thereof in the Escrow Account, together with
information as to the names and addresses of the Subscribers and the amount
subscribed for by each such Subscriber by 5:00 p.m., Houston, Texas time,
180 days from the effective date of the Prospectus (herein referred to as
the "Initial Closing Date"), the Company, in writing, shall direct the
Escrow Agent to pay all fees and commissions then due in connection with
the offering as specified in the Prospectus, and disburse the remainder of
such proceeds of such sales to the Company.
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<PAGE>
(b) In the event that the proceeds representing the sale of 62,500 shares
of Common Stock shall not have been deposited by the Company into the
Escrow Account by 5:00 p.m., Houston, Texas time, 180 days from the
effective date of the Prospectus or the Company terminates the Offering
before such date, then in such event, the Escrow Agent shall send within
five business days to the Subscribers, by checks, the cash theretofore
contributed by them to the Company and deposited in the Escrow Account,
with interest.
(c) Upon the happening of (i) the complete disbursement from the Escrow
Account by the Escrow Agent to the Company of the proceeds from the
Offering in accordance with the distribution terms hereinabove set forth,
or (ii) the repayment to the Subscribers of their subscriptions in the
event the Offering does not close as provided in the Registration
Statement, or (iii) the Offering is terminated before the Initial Closing
Date, and the repayment to the Subscribers of their subscriptions, the
Escrow Agent shall be relieved of all liabilities in connection with the
Escrow Account and this Agreement shall terminate.
4. Investment of Escrow Funds. Escrow Agent shall invest and reinvest the
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Escrow Funds only in such account or investments as the Company may specify
by written notice. The Company may only specify investments in (i) bank
accounts, (ii) bank money-market accounts, (iii) short-term certificates of
deposit issued by a bank, (iv) short-term securities issued or guaranteed
by the U.S. Government, or (v) money market mutual funds which hold United
States Treasury obligations and/or repurchase agreements covering United
States Treasury obligations. Escrow Agent shall not be liable or
responsible for any loss resulting from any investment of the Escrow Funds
in accordance with the terms of this Agreement. Client hereby agrees to
indemnify Escrow Agent from any losses incurred in making any of the
foregoing investments or following the investment instructions of Client.
The Escrow Agent shall not under any circumstances be required to advance
its own funds.
5. Liability of Escrow Agent. The duties of the Escrow Agent hereunder will
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be limited to observance of the express provisions of the Escrow Agreement.
Furthermore, the Escrow Agent is not expected or required to be familiar
with the provisions of any other writing, understanding or agreement, and
shall not be charged with any responsibility or liability in connection
with the observance or non-observance of the provisions of such other
writing, understanding or agreement, and no implied covenant of any type
whatsoever shall be read into the Escrow Agreement. The Escrow Agent may
rely and act upon any instrument received by it pursuant to this Escrow
Agreement which it reasonably believes to be in conformity with the
requirements of the Escrow Agreement and Escrow Agent shall not be
responsible for determining the genuineness, authenticity of authority from
any such instrument or the person signing same. Escrow Agent will not be
liable for any action taken or not taken by it under the terms of the
Escrow Agreement in the absence of fraud or gross negligence on its part.
In receiving the Escrow Funds, Escrow Agent acts only as a depository and
assumes no responsibility except pursuant to the terms of this Escrow
Agreement.
Escrow Agent may act or refrain from acting in respect of any matter
covered by this Escrow Agreement in full reliance upon and with the advice
of counsel which may be selected by it, and shall be fully protected in so
acting or in refraining from acting upon the advice of such counsel.
Furthermore, Escrow Agent may rely and shall be protected in acting upon
any writing that may be submitted to it in connection with its duties
hereunder without determining the genuineness, authenticity or due
authority from any such writing or the person signing same and shall have
no liability or responsibility with respect to the form, content or
validity thereof.
Escrow Agent shall have no responsibility or liability for any act or
omission on its part, notwithstanding any demand or notice to the contrary
by Client or any other person or entity, all subject to the sole limitation
that Escrow Agent exercises its best judgment. Except as herein expressly
provided, none of the provisions of the Escrow Agreement shall require
Escrow Agent to expend or risk its own funds or otherwise incur financial
liability or expense in the performance of any of its duties hereunder.
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<PAGE>
Escrow Agent is hereby authorized to comply with and obey all orders,
judgments, decrees or writs entered or issued by any court, and in the
event Escrow Agent obeys or complies with any such order, judgment, decree
or writ, in whole or in part, it shall not be liable to Client or any other
parties to this Escrow Agreement, or to any other person or entity, by
reason or such compliance, notwithstanding that it shall be determined that
any such order, judgment, decree or writ be entered without jurisdiction or
be invalid for any reason or be subsequently reversed, modified, annulled,
satisfied or vacated.
Escrow Agent shall not be required to institute or defend any action or
legal process involving any matter referred to herein which in any manner
affects his or its duties or liabilities hereunder to take any other action
with reference to the Escrow Funds not specifically agreed to herein, and
Escrow Agent shall not be responsible for any act or failure to act on its
part except in the case of its own fraud or gross negligence.
Should any controversy arise between Client and any other party to this
Escrow Agreement or between any other person or entity with respect to this
Escrow Agreement, or with respect to the ownership of or the right to
receive any sums from the Escrow Funds, Escrow Agent shall have the right
to institute a plea of interpleader in any court of competent jurisdiction
to determine the rights of the parties. Should a plea of interpleader be
instituted, or should Escrow Agent become involved in litigation in any
manner whatsoever, connected with or pertaining to this Escrow Agreement or
the Escrow Funds, Client hereby agrees to pay Escrow Agent, on demand, in
addition to any charge made hereunder for acting as escrow agent,
reasonable attorneys' fees incurred by Escrow Agent, and any other
disbursements, expenses, losses, costs, and damages in connection with or
resulting from such litigation.
6. Indemnification. Client hereby agrees to indemnify and hold Escrow Agent
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harmless from and against any and all claims, loses, liabilities, costs,
damages, fees charges and expenses (including attorneys' fees) which Escrow
Agent may incur or sustain by reason of its acting as Escrow Agent under
this Agreement, unless same shall result from the fraud or gross negligence
of Escrow Agreement.
7. Compensation of Escrow Agent. Escrow Agent shall be entitled to receive
----------------------------
compensation for its services hereunder in accordance with its schedule of
fees published from time to time and in effect at the time such
compensation is payable hereunder. A copy of the current fee schedule is
attached hereto as Exhibit A. Escrow Agent shall also be entitled to
reimbursement for any and all costs and expenses incurred in performing its
services hereunder, including without limitation, the reasonable fees and
expenses incurred in performing its services hereunder, including without
limitation, the reasonable fees and expenses of any counsel retained by it
in accordance with the terms of this Escrow Agreement. Without relieving
Client of any obligation to pay Escrow Agent the fees and expenses payable
to it hereunder, Escrow Agent is authorized to pay and deduct its fees and
expenses from the Escrow Funds and any interest or other income earned on
the Escrow Funds.
8. Resignation. Escrow Agent may resign as escrow agent at any time by giving
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Client at least ten (10) days' prior written notice of such resignation.
If on the effective date of such resignation Escrow Agent has not received
written instructions of appointment of a successor escrow agent, Escrow
Agent may thereupon deposit all Escrow Funds and documents into the
registry of a court of competent jurisdiction. The parties hereto intend
that a substitute escrow agent will be appointed to fulfill the duties of
Escrow Agent hereunder for the remaining term of the Agreement in the event
of Escrow Agent's resignation and Client will use its best efforts to
promptly appoint a substitute Escrow Agent who shall be bound by the terms
and provisions of the Escrow Agreement.
9. Termination and Amendment. The Escrow Agreement shall remain in effect
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until all Escrow Funds and any escrow documents are disbursed in accordance
herewith; provided that any Escrow Agent who resigns in accordance with the
terms hereof shall no longer be bound by this Escrow Agreement but the
Agreement shall remain in effect, notwithstanding such resignation, for
purposes of determining the rights and duties of Client and any such
successor Escrow Agent. No amendment or modification to this Escrow
Agreement shall be in force or effect unless signed by the parties hereto.
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<PAGE>
10. No Trusteeship. Client agrees that Escrow Agent is acting solely as an
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escrowee hereunder and not as a trustee and that Escrow Agent has no
fiduciary duties, obligations or liabilities under this Agreement.
11. Confidentiality. Except as required by applicable law, legal process or
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other legal compulsion, Escrow Agent shall hold all information relating to
the transactions contemplated by this Escrow Agent in strict confidence and
under no circumstance shall any of the terms and conditions or the
participants involved be disclosed, unless such disclosure is mandated by
applicable law.
12. Notices. All notices, requests, instructions and demands which may be
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given by any party hereto to any other party shall be given to such parties
in writing and shall be delivered either in hand with acknowledgment of
receipt or by depositing same in the United States mail, certified or
registered mail, return receipt requested, addressed to the respective
parties as follows.
(A) BioLynx.Com, Inc.
5617 Grissom Road
San Antonio, Texas 78238
Attn: John D Walker II
(B) Escrow Agent: Sterling Bank
P.O. Box 40333
Houston, Texas 77240-0333
Attention:
With a copy to: Michael Roy
General Counsel
Sterling Bancshares, Inc.
P.O. Box 40333
Houston, Texas 77240-0333
Or to such other address as may from time to time be specified by the
respective parties to the other party in writing. If any notice is
required by law, ten (10) days notice shall be deemed reasonable.
13. Binding Agreement. This Agreement shall be binding up upon and enforceable
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against and shall inure to the benefit of the respective successors, legal
representatives, heirs and assigns of the parties hereto.
14. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas.
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<PAGE>
"Client"
BioLynx.Com, Inc.
By: /s/ John D. Walker II
----------------------------------
Name: John D. Walker II
Title: President.
"Escrow Agent"
Sterling Bank
By: /s/ Samantha Gammage
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Name: Samantha Gammage
Title: Assistant Vice President
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<PAGE>
Exhibit 11
Computation of Per Share Earnings
<PAGE>
Exhibit 11
COMPUTATION OF PER SHARE EARNINGS
The table below presents information necessary for the computation of loss
per share of the Common Stock, on both a primary and fully diluted basis, for
the period from inception through December 31, 1998 and the nine-month period
ended September 30, 1999.
<TABLE>
<CAPTION>
Period From Inception Nine Months Ended
--------------------- -----------------
Through December 31, 1998 September 30, 1999
------------------------- ------------------
<S> <C> <C>
Net loss applicable to shares of
Common Stock and Common
Stock equivalents................. $ 799,998 $1,431,666
Average number of shares of
Common Stock outstanding.......... 2,249,000 3,081,580
Common Stock equivalents.......... 0 0
Total shares of Common ---------- ----------
Stock and Common Stock
equivalents....................... 2,249,000 3,081,580
Primary loss per share of
Common Stock...................... $ 0.36 $ 0.46
Fully diluted loss per share of
Common Stock...................... $ 0.36 $ 0.46
</TABLE>
Common Stock equivalents are considered anti-dilutive because of the net
losses incurred by the Company.
<PAGE>
Exhibit 23.2
Consent of John M. James, C.P.A.
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
I hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form SB-2 of my report dated November 19, 1999
relating to the financial statements of BioLynx.Com, Inc. which appear in such
Prospectus. I also consent to the reference to me under the headings "Experts"
in such Prospectus.
JOHN M. JAMES, C.P.A.
By /s/ John M. James
-----------------------------
John M. James
Houston, Texas
December 3, 1999
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> OTHER 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1999
<PERIOD-START> DEC-02-1998 JAN-01-1999
<PERIOD-END> DEC-31-1998 SEP-30-1999
<CASH> 0 78,462
<SECURITIES> 0 0
<RECEIVABLES> 0 14,249
<ALLOWANCES> 0 0
<INVENTORY> 0 19,393
<CURRENT-ASSETS> 0 116,104
<PP&E> 23,741 103,314
<DEPRECIATION> 1,387 24,077
<TOTAL-ASSETS> 22,354 226,117
<CURRENT-LIABILITIES> 0 248,847
<BONDS> 0 0
0 0
0 0
<COMMON> 2,249 4,267
<OTHER-SE> (801,247) (1,134,520)
<TOTAL-LIABILITY-AND-EQUITY> 22,354 226,117
<SALES> 0 10,410
<TOTAL-REVENUES> 0 10,410
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 799,998 1,390,884
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 40,782
<INCOME-PRETAX> (799,998) (1,431,666)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (799,998) (1,431,666)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (799,998) (1,431,666)
<EPS-BASIC> (0.36) (0.46)
<EPS-DILUTED> (0.36) (0.46)
</TABLE>
