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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS PURSUANT TO SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
HEALTHBRIDGE, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Texas 061538201
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization Identification No.)
1177 West Hastings Street, Suite 1818, Vancouver, BC Canada V6E2K3
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(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (604) 602-1717
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
TO BE SO REGISTERED EACH CLASS IS TO BE REGISTERED
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Common Stock, $0.0001 Par Value OTC Bulletin Board
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TABLE OF CONTENTS
PAGE
PART I
ITEM 1. Description of Business............................... 3
Our Corporate History......................................... 3
Our Business.................................................. 4
Reports to Securities Holders................................. 5
Risk Factors.................................................. 5
ITEM 2. Management's Discussion and Analysis or Plan of
Operations............................................... 12
ITEM 3. Description of Properties............................. 13
ITEM 4. Security Ownership of Certain Beneficial Owners
and Management........................................... 14
ITEM 5. Directors and Executive Officers, Promoters and
Control Persons.......................................... 15
ITEM 6. Executive Compensation................................ 16
ITEM 7. Certain Relationships and Related Transactions........ 18
ITEM 8. Description of Securities............................. 18
PART II
ITEM 1. Market Price Of And Dividends On The Registrant's
Common Equity And Related Stockholder Matters............ 19
ITEM 2. Legal Proceedings..................................... 20
ITEM 3. Changes And Disagreements With Accountants On
Accounting And Financial Disclosure...................... 20
ITEM 4. Recent Sales Of Unregistered Securities............... 20
ITEM 5. Indemnification Of Directors And Officers............. 20
PART III
ITEM 1 Index To Exhibits..................................... 21
Financial Statements And Exhibits............................. F-1
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
Information Regarding Forward Looking Statements: The statements contained in
this Form 10-SB that are not historical fact are "forward-looking statements".
These statements can often be identified by the use of forward-looking
terminology such as "estimates," "projects," "believes," "expects," "may,"
"will," "should," "intends," or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy that
involve risks and uncertainties. We wish to caution the reader that these
forward-looking statements, such as the timing, costs and scope of acquisition
of, or investments in, existing businesses, the revenue and profitability levels
of such businesses, and other matters contained above and herein in this Form
10-SB regarding matters that are not historical facts, are only predictions. No
assurance can be given that the future results indicated, whether expressed or
implied, will be achieved. While sometimes presented with numerical specificity,
these projections and other forward-looking statements are based upon a variety
of assumptions relating to our business which, although we consider reasonable,
may not be realized. Because of the number and range of the assumptions
underlying our projections and forward-looking statements, many of which are
subject to significant uncertainties and contingencies that are beyond our
reasonable control, some of the assumptions inevitably will not materialize and
unanticipated events and circumstances may occur subsequent to the date of this
Form 10-SB. These forward-looking statements are based on our current
expectations, and we assume no obligation to update this information. Therefore,
our actual experience and results achieved during the period covered by any
particular projections or forward-looking statements may differ substantially
from those projected. Consequently, the inclusion of projections and other
forward-looking statements should not be regarded as a representation by us or
any other person that these estimates and projections will be realized, and
actual results may vary materially. There can be no assurance that any of these
expectations will be realized or that any of the forward-looking statements
contained herein will prove to be accurate.
ITEM 1. DESCRIPTION OF BUSINESS
Our Corporate History
We were incorporated under the laws of the State of Texas on February
17, 1993 under the name of "GFB Alliance Services, Inc." On July 24, 1997, we
amended our Articles of Incorporation to, among other things, change our name to
"World Staffing II, Inc." On November 3, 1998, we further amended our Articles
of Incorporation to change our name to "WattMonitor, Inc." We amended our
Articles of Incorporation again on May 13, 1999 to, among other things, change
our name to Healthbridge, Inc. We are filing this Form 10-SB on a voluntary
basis under the Securities Exchange Act of 1934 (the "Exchange Act") in order to
remain eligible for quotation on the OTC Bulletin Board.
We were originally organized for the purpose of providing specialized
personnel placement and employee leasing services to businesses. However, we
abandoned that project and remained essentially dormant until December 29, 1998,
when we entered into a letter of intent to acquire all of the issued and
outstanding stock of Healthbridge, Inc., a Delaware corporation ("Healthbridge
Delaware"). Healthbridge Delaware was a newly formed entity that had acquired
the right to purchase the assets and certain liabilities of Roatan Medical
Technologies, Inc., Wintex Corporation, Roatan Medical Services, Inc. and United
Services, Inc. (collectively, the "Roatan Companies"). The Roatan Companies
developed and operated a proprietary medical waste treatment system called the
Redloc II Waste Disposal System, as more fully described below ("Redloc II").
The Roatan Companies also acquired the rights to the
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microwave waste sterilization patent on which the Redloc II system is based, as
more fully described elsewhere herein.
Healthbridge Delaware acquired the assets and certain liabilities of
the Roatan Companies on January 27, 1999. Shortly thereafter, we entered into a
merger agreement with Healthbridge Delaware whereby we merged with Healthbridge
Delaware and we were the surviving corporation. Under the merger agreement, each
of the issued and outstanding shares of Healthbridge Delaware common stock was
converted into the right to receive one share of our common stock. The merger
was completed May 13, 1999 after it was approved by the shareholders of both
companies.
Our Business
We develop, and intend to operate and sell the Redloc II Waste
Disposal System. The Redloc II Waste Disposal System collects regulated medical
waste at the point of generation in hospitals and other facilities and
maintains containment until after the point of sterilization and destruction of
the waste.
The technology is based upon a proprietary process that allows medical
waste, even large metal objects and hard-to-shred materials such as fabric,
mopheads and metals, to be rendered benign with virtually no dangerous exposure
to the waste handlers. The process produces no significant by-products that
require subsequent treatment prior to disposal.
The Redloc II system operates by closing a pressure chamber around
unopened waste receptacles and then uses microwaves and a small amount of water
to heat and pressurize the chamber. The automated system is controlled by a
computer which monitors the process to achieve complete sterilization. Through
the Redloc II system, contaminated waste receptacles are sterilized and reduced
to benign end-products that are ready for shredding, transport or other
disposal.
The Redloc II system produces no chemical by-products and does not
require employees to either handle contaminated waste or maintain contaminated
equipment. The problem of infection of hospital employees and even unrelated
persons from blood by-products with diseases such as HIV and Hepatitis, and the
inability to dispose of untreated waste, are changing the way in which this type
of waste will be handled in the future. Disposal sites are becoming more scarce
and expensive to operate, and the ability to get the local approvals necessary
to create new ones is being significantly curtailed. The most prevalent method
of sterilization, incineration, requires that the waste be handled in its
contaminated form. Furthermore, EPA regulations are expected to require
incinerators to be upgraded to burn waste without improperly discharging
contaminants into the air. These upgrades will require extensive on-site
facilities and may burn more fuel, thereby increasing operating expenses for
hospitals.
Business opportunities may be created for the Redloc II system by
changes in the way in which medical waste must be handled in the future due to
increasing scarcity and costs for disposal sites and changing federal and local
regulations. However, no assurance can be given that these opportunities will
develop, that the Redloc II system will be a viable solution should such
opportunities develop, or that the microwave waste sterilization patent and
related technology underlying the Redloc II system will have any value.
Our only operating Redloc II system is a beta-test system installed and
presently in use at the Presbyterian Hospital in Dallas, Texas. Pursuant to our
agreement with the Presbyterian Hospital, we are obligated to, among other
things, bear the cost of any shortfall in disposal capacity up to 1,470 pounds
at a cost of $0.23/per pound, per day, and to reimburse Presbyterian Hospital
for labor costs associated with such shortfall at $8.30/hour. Our beta-test
system has experienced problems with throughput (ie, the
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amount of medical waste that can be processed over a specified time period),
such that the beta-test system has produced a steady shortfall in disposal
capacity. In the past, we have paid Presbyterian Hospital up to $5,000 per month
due to such shortfall.
We believe it is in our best interest to maintain our contract with the
Presbyterian Hospital, despite the cost of any shortfall, because of the
product development assistance and the marketing opportunity such contract
affords the Redloc II system. Our development activities are directed at
increasing throughput and the overall efficiency of the Redloc II system. There
is, however, no assurance that we can modify the Redloc II system to increase
throughput.
We do not generate net income and we expend approximately
$25,000 per month on salaries and operations. At present, we do not have the
capital necessary to carry out business activities or exploit our technology. We
are in the process of attempting to raise up to $500,000 through a private
placement of up to 1,000,000 units (each consisting of one share of our common
stock and one common stock purchase warrant exercisable at $0.50 (the "2000
Offering"). We anticipate that, if successful, the funds generated by the 2000
Offering will permit us to continue our operations for a period of six months,
after which time we will need to raise additional capital.
At present, we have two full-time employees, one of which is our chief
engineer in charge of product development. Our other full-time employee
operates our Redloc II system beta-testing site at Presbyterian Hospital in
Dallas. We also have two part-time employees that assist with marketing,
development and bookkeeping.
We are a development stage company whose only business is the
development of the Redloc II system for future sale and operation. We will need
financing or future profitability to continue as a going concern. No assurance
can be given that we can achieve profitability or otherwise raise the capital
necessary to fund our future business and operating needs. No assurance can be
given that we can successfully develop or sell the Redloc II system.
Reports to Securities Holders
We do not currently file reports with the Securities and Exchange
Commission ("SEC"). We expect to prepare and provide annual reports to our
security holders after registration under the Exchange Act.
A copy of the materials we file with the SEC may be obtained and copied
at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Information on the Public Reference Room may be obtained by calling the
SEC at 1-800-SEC-0330. The SEC maintains an internet site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the SEC at the site http://www.sec.gov.
Risk Factors
LIMITED OPERATING HISTORY
Since our inception in 1993, we have engaged in limited business
activities and have generated no profits to date. Our primary activities to date
have been development of the Redloc II system and raising capital. Our success
is dependent upon the development and marketing of our Redloc II system. We do
not presently have sufficient capital to complete development of and market the
Redloc II system or exploit our technologies. Unanticipated problems, expenses,
and delays are frequently encountered in establishing a new business and
marketing and developing products. These could have a materially adverse effect
upon us and may force us to reduce or cease operations or change our business
entirely. We expect to continue to incur losses for the foreseeable future, and
no assurance can be given that we can or will ever operate profitably.
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FUTURE CAPITAL MAY NOT BE AVAILABLE TO CONTINUE BUSINESS OPERATIONS; FUTURE
CAPITAL NEEDS COULD RESULT IN DILUTION TO INVESTORS; ADDITIONAL FINANCING COULD
BE UNAVAILABLE OR HAVE UNFAVORABLE TERMS
Any funds raised in the 2000 Offering will be used for working capital
and general corporate purposes, including the payment of certain past due
obligations (including legal, accounting and consulting fees of approximately
$86,606.02), and to fund the registration of our securities under the Exchange
Act. At present, however, we have past due obligations of approximately $220,000
outstanding (including consulting fees of $55,000 owed to our director, Wilhelm
Liesner). If we are required to pay all of our outstanding obligations out of
the proceeds of the 2000 Offering, the remaining funds raised by the 2000
Offering, if any, may not be adequate to continue our operations beyond two
months.
We estimate that if we raise $300,000 in the 2000 Offering, the funds
received by us will not be adequate to finance our operations beyond six months.
If additional funds are not available, we may not be able to continue business
operations. Our ability to fund future capital requirements will depend on many
factors, including cash flow from operations, competing technological and market
developments, and our ability to complete development of and to market our
products and services successfully. We currently have no specific plans or
arrangements for financing other than the 2000 Offering and no commitments for
future financing. We may attempt to raise additional funds through equity or
debt financing. Any equity financings could result in dilution to our
then-existing stockholders. Debt financing will result in interest expense. Any
financing, if available, may be on terms unfavorable to us. If adequate funds
are not obtained, we may be required to reduce or cease operations.
UNPREDICTABLE PRODUCT ACCEPTANCE
There can be no assurance that we can develop the Redloc II system and
that medical facilities will buy our equipment to process medical waste and
associated services. Our failure to penetrate our markets would have a material
adverse effect upon our operations and prospects. Market acceptance of our
products will depend in part upon our ability to demonstrate the advantages of
our products over competing products. If our future marketing and/or sales
strategies are not effective, we may be required to reduce or cease operations.
TECHNOLOGICAL OBSOLESCENCE; FURTHER ENGINEERING AND DESIGN OF PRODUCTS; RELIANCE
ON THIRD PARTIES FOR RESEARCH AND DEVELOPMENT AND MANUFACTURING
The medical waste equipment and related services markets are
characterized by extensive, research and development and rapid technological
change resulting in very short product life cycles. Development of new or
improved products, processes or technologies may render our Redloc II system
obsolete or less competitive. Further, our Redloc II system requires further
engineering and design to meet user needs. We will be required to devote
substantial efforts and financial resources to complete development of and to
enhance our existing product and to develop new products. There can be no
assurance that we will succeed with these efforts and we may find it
inadvisable to continue with these efforts.
Our ability to complete development of the Redloc II system or to
develop new or improved products, and therefore our success, depends, to a
significant extent, upon past research and development activities of third
parties in the future. We have no internal research and development capability
and must rely on third parties to develop significant design changes to our
Redloc II system. Our inability to readily conduct research and development on
our products could have a significant adverse impact on our business, financial
condition, and results of operations. If we are unable to develop the Redloc II
system, we may be required to reduce or cease operations.
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Furthermore, we do not maintain our own production facilities to
manufacture the Redloc II system and do not intend to do so in the foreseeable
future. The Redloc II system will be produced, and components supplied by,
independent companies. Many of these independent companies may manufacture and
supply products for our existing and potential competitors. We do not have
licensing or other supply agreements with our suppliers. Any of our suppliers
could terminate its relationship with us at anytime. In the event that we
encounter difficulties with our suppliers, we could experience delays in
supplying products to our customers and potentially be forced to discontinue our
product line.
NO ASSURANCE OF A PUBLIC MARKET AND POSSIBILITY OF A VOLATILE MARKET
There is presently only a limited, sporadic and highly volatile public
market for shares of our common stock, and there is no assurance that any public
market will exist in the future, or, if one exists, that it will not be
volatile. There have been periods of extreme fluctuation in the stock markets
that, in many cases, were unrelated to the operating performance of, or
announcements concerning, the issuers of the affected securities. Securities of
issuers like us which have limited capitalization or securities are also
particularly susceptible to change based on short-term trading strategies of
certain investors. Accordingly, there can be no assurance that purchasers of our
common stock will be able to resell their shares at the purchase price or at any
price.
NO ASSURANCE OF CONTINUED LISTING ON THE OTC BULLETIN BOARD
In order to remain eligible for listing on the OTC Bulletin Board, we
must register our common stock with the SEC under the Exchange Act and clear all
comments raised by the SEC staff on or before May 17, 2000. If we fail to
register our stock and clear all comments by that date, our common stock will be
de-listed and removed from quotation on the OTC Bulletin Board. In the event
that our common stock is removed from quotation on the OTC Bulletin Board it
will begin trading on the "Pink Sheets" of the National Quotation Bureau, LLC.
Removal from quotation on the OTC Bulletin Board could increase the volatility
of any market for our common stock and significantly decrease its liquidity.
PENNY STOCK REGULATIONS
Our common stock has had a market price of less than $5.00 per share in
recent times. The SEC has adopted regulations which generally define "penny
stock" to be any equity security that has a market price (as defined) less than
$5.00 per share or an exercise price less than $5.00 per share, subject to
certain exceptions. During periods when our common stock does not qualify for
inclusion on the Nasdaq SmallCap Market or is removed therefrom, the common
stock may become subject to rules that impose additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers and accredited investors (generally those with assets in
excess of $1,000,000 or annual income exceeding $200,000, or $300,000 together
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of such
securities and have received the purchaser's written consent to the transaction
prior to the purchase. Additionally, for any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction,
of a disclosure schedule prepared by the SEC relating to the penny stock market.
The broker-dealer also must disclose the commissions payable to both the
broker-dealer and the registered representative, current quotations for the
securities and, if the broker-dealer is the sole market-maker, the broker-dealer
must disclose this fact and the broker-dealer's presumed control over the
market. Finally, monthly statements must be sent disclosing recent price
information for the penny stock held in the account and information on the
limited market in penny stocks. Consequently, the "penny stock" rules may
restrict the ability of broker-dealers to sell our common stock and may affect
the ability of investors to sell our common stock in the public market.
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WE WILL ALWAYS FACE THE RISK OF LIABILITY RESULTING FROM ENVIRONMENTAL AND OTHER
LIABILITIES, AND INSURANCE MAY NOT ALWAYS BE AVAILABLE OR SUFFICIENT
The medical waste technology industry presents risks of liability under
statutes and regulations, contracts, and tort law.
If we fail to comply with any duty imposed by laws or contracts,
liability for environmental contamination, personal injury, or property damage
might result. We do not maintain general liability insurance or pollution
liability insurance. If a claim is made against us for which we are uninsured,
it could have a material adverse effect on our business, financial condition and
results of operations.
The federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (CERCLA), and similar state laws, impose
strict liability on current and former owners and operators of facilities which
have released hazardous substances into the environment. Responsible parties may
be liable for substantial investigation and clean-up costs and damage to the
environment even if they operated their businesses properly and complied with
applicable laws and regulations. Liability under CERCLA may be joint and
several. Accordingly, if we were found to be a business with responsibility
related to a particular CERCLA site - even if it were not the party responsible
for the release of the hazardous substance - it could be required to pay the
entire cost of the investigation and clean-up, even though other parties might
also be liable. We might not be able to identify who the other responsible
parties might be, and we might not be able to compel them to contribute to these
expenses or they might be insolvent or unable to afford to contribute. If we
incur liability under CERCLA and if we cannot identify other parties responsible
under the law who we can compel to contribute to our expenses and who are
financially able to do so, it could have a material adverse effect on our
business, financial condition and results of operations.
We may also be susceptible to negative publicity if we are identified
as the source of potential environmental contamination. If an accident occurred
with one of our medical waste devices, with the potential risk of even minor
medical waste environmental contamination, the resulting media coverage could
have a material adverse effect on our business, financial condition and results
of operations.
WE COULD BE SUBJECT TO EXTENSIVE GOVERNMENTAL REGULATION WITH WHICH IT MIGHT BE
DIFFICULT, TIME-CONSUMING AND EXPENSIVE TO COMPLY
The medical waste industry is subject to extensive federal, state, local
and foreign laws and regulations. These regulations pertain to the collection,
documentation, transportation, reporting, packaging, treatment, labeling,
disposal, and handling of regulated medical waste.
Currently in the United States, while the Food and Drug Administration
("FDA") has already determined that sharp needle destructive devices require
premarket approval, the agency has not exercised its authority over medical
waste disposal systems such as the Redloc II system. This position could change
at any time. Moreover, areas in which we wish to expand may subject us to such
oversight and require premarket approval prior to the our being able to start
such activities. In addition to the FDA, the Environmental Protection Agency
regulates systems used to disinfect and sterilize medical waste and the
Occupational Safety and Health Administration regulates devices that may pose a
threat to hospital workers. The Redloc II system has not been submitted to such
agencies. There can be no assurance that we will ever obtain any required
approvals. If the we do not obtain such approvals, if required, we will not be
able to market or sell our equipment or processes in the United States.
Inability to sell our products in the United States will have a significant
adverse impact on our financial future. Moreover, future laws or regulations
introduced to govern or control the disposal of such products could have an
adverse effect on our business.
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Moreover, state and local regulations change often and new ones are
frequently enacted. This could require us to obtain new permits or to change the
way we operate. It is possible that we would not be able to obtain
newly-required permits. It is also possible that the cost of complying with new
or changed regulations could have a material adverse effect on our business,
financial condition and results of operations.
THE VIGOR OF GOVERNMENTAL ENFORCEMENT OF ENVIRONMENTAL REGULATIONS HAS AN
UNCERTAIN EFFECT ON OUR BUSINESS
We believe that the government's strict enforcement of laws and
regulations relating to medical waste collection and treatment will be good for
our business. These laws and regulations may increase the demand for our
services. We also believe that laws and regulations that make it more difficult
or expensive to use technologies that compete with our Redloc II system, such as
incineration, may give us a competitive advantage.
However, changes in governmental regulation of medical waste, such as:
encouraging the use of landfills; removing obstacles to the use of incineration
and autoclaving; reducing manpower and money used to enforce environmental
regulations favorable to our operations could have a material adverse effect on
our business, financial condition and results of operations.
We cannot predict the type or size of the effect that any government
action or inaction will have on our business.
WE MAY BE SUBJECT TO FINES AND PENALTIES FOR VIOLATIONS OF REGULATIONS RESULTING
FROM GOVERNMENTAL ENFORCEMENT PROCEEDINGS
From time to time we may be subject to governmental proceedings to
enforce regulations. We may be forced to pay fines and penalties and to
undertake remedial work at our facilities. Government enforcement actions also
may be initiated against us for the purpose of revoking or modifying any
permits. It is possible that these proceedings could have a material adverse
effect on our business, financial condition and results of operations.
OUR ABILITY TO GROW MAY BE LIMITED BY COMPETITION
The medical waste industry is very competitive. This may require us to
discount our prices in the future. Substantial price reductions could have a
material adverse effect on our business, financial condition and results of
operations.
We face important competition from a large number of small, local
competitors. Because companies can enter the collection and transport aspects of
the medical waste industry with very little money or technical know-how, there
are a large number of regional and local companies in the industry. We face
competition from these businesses and that competition may exist in each
location into which it tries to expand in the future. Our competitors could take
actions that would hurt our growth strategy, including the support of
regulations which could delay or prevent us from obtaining or keeping permits.
They might also give financial support to citizens' groups that oppose our plans
to locate a treatment or transfer facility at a particular location.
Our competitors and others are continuously trying to develop new and
better medical waste treatment and disposal technologies. These technologies may
operate more cheaply, handle more waste, produce fewer waste by-products or
pollutants, or have other advantages over our processes. If our
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competitors successfully introduce these technologies, we could be placed at a
competitive disadvantage. New treatment and disposal technologies could also
render our processes obsolete. It might not be possible to replace or improve
our equipment and processes to compete effectively with new technologies, and
even if it is possible it could be extremely expensive.
OUR REDLOC II SYSTEM AND OTHER ASPECTS OF OUR BUSINESS DEPEND ON PATENTED AND
PROPRIETARY INFORMATION
We own a patent relating to microwave waste sterilization and other
aspects of processing medical waste (the "Microwave Patent"). The Microwave
Patent may be essential to the current design of the Redloc II system.
We believe that the Microwave Patent is important to our prospects for
success. However, we cannot be sure that the Microwave Patent will give us a
competitive advantage. It is also possible that we could be successfully
challenged or circumvented by competitors or other parties. In addition, we
cannot be sure that our treatment processes do not infringe patents or other
proprietary rights of other parties.
In addition, we may need to sue any company that is infringing our
patents, and we may need to defend against claims of patent infringement brought
by other companies. Any litigation could be very costly and demand a great deal
of management's time and attention. There can be no assurance that we will have
sufficient funds to pursue, or defend against, any litigation or patent
infringement claim. We also could be required to participate in proceedings
before the United States Patent and Trademark Office to determine the priority
of inventions or the validity of patents, which also could involve a substantial
expense and significant management time and attention.
An unfavorable judgment or decision in any lawsuit or proceeding could
result in substantial monetary liability, or prevent us from continuing to use
our Redloc II system. If we are prevented from using our processes or equipment,
we could attempt to negotiate a license from the party owning the patent, or we
could attempt to redesign our processes to avoid infringement. If we suffered a
large monetary liability, or if we could not negotiate a license on reasonable
terms or redesign our processes to avoid infringement, it could have a material
adverse effect on our business, financial condition and results of operations or
force us to cease operations altogether.
WE MAY NOT BE ABLE TO KEEP UP WITH RAPID TECHNOLOGICAL AND OTHER CHANGES
The markets in which we compete are characterized by rapidly changing
technology, evolving industry standards, frequent new service and product
announcements, introductions and enhancements and changing consumer demands. We
may not be able to keep up with these rapid changes. In addition, these market
characteristics are heightened by the emerging nature of the Internet and the
apparent need for companies from many industries to offer Internet-based
products and services. In addition, the widespread adoption of new Internet,
networking or telecommunications technologies or other technological changes
could require us to incur substantial expenditures to modify or adapt its
services or infrastructure.
OUR SUCCESS DEPENDS ON KEY PERSONNEL
Our success has been, and will be, dependent to a large degree on our
ability to attract and retain qualified personnel. Competition for these
personnel is intense and we have not identified a number of the personnel who
will be required to make our business successful. The inability to identify,
hire, train and retain highly qualified technical and managerial personnel,
including qualified investor service representatives, in the future could have a
material adverse effect on our business, financial condition and
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operating results. We do not maintain "key person" life insurance policies on
any of our officers or employees.
LIMITED LIABILITY OF OFFICERS AND DIRECTORS
Our Articles of Incorporation and By-laws provide that a director's
liability to us for monetary damages will be limited. In addition, we are
obligated under our Articles of Incorporation and Bylaws to indemnify our
directors and officers against certain liabilities incurred with their service
in such capacities. We may execute indemnification agreements which will
indemnify each director and officer against certain liabilities which they may
incur. Each of these measures could reduce the legal remedies available to us
and the stockholders against such individuals.
EFFECTS OF CERTAIN CHARTER AND BYLAW PROVISIONS
Our Board of Directors has the authority to issue up to 25,000,000
shares of preferred stock and to determine the price, rights, preferences and
privileges of those shares without any further vote or action by our
stockholders. The rights of the holders of common stock will be subject to, and
may be adversely affected by, the rights of the holders of preferred stock.
While we have no present intention to issue shares of preferred stock, such
issuance, while providing desirable flexibility in connection with the possible
acquisitions and other corporate purposes, could have the effect of delaying,
deferring or preventing a change in our control and entrenching existing
management. In addition, such preferred stock may have other rights, including
economic rights, senior to the common stock, and, as a result, the issuance
thereof could have a material adverse effect on the market value of the common
stock. Certain other provisions of our Articles of Incorporation or Bylaws,
including a staggered Board of Directors and advance notice for stockholder
proposals and director nominations, may have the effect of delaying or
preventing changes of control or our management, which could adversely affect
the market price of our common stock.
EFFECT OF ISSUANCE OF WARRANTS
The existence of warrants could adversely affect our ability to obtain
future financing, and their exercise will dilute the interests of current
shareholders. The price which we may receive for the common stock issued upon
exercise of such warrants may be less than the market price of the common stock
at the time such warrants are exercised. Moreover, the holders of warrants might
be expected to exercise them at a time when we might be able to obtain needed
capital by a new offering of our securities on terms
11
<PAGE> 12
more favorable than those provided for by the warrants. As of April 12, 2000,
warrants to purchase 550,000 shares of our common stock at $0.50 per share were
outstanding. Additional warrants to purchase up to 1,000,000 shares of our
common stock at $0.50 per share may be issued in connection with the 2000
Offering. We may also issue additional shares, options and warrants in the
future, which issuances may have the same effect.
NO DIVIDENDS
We have not paid any dividends on our common stock and do not intend to
pay dividends in the foreseeable future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion should be read in conjunction with the
financial statements and notes thereto included in this Form 10-SB. Except for
the historical information contained herein, the discussion in this Annual
Report on Form 10-SB contains certain forward-looking statements that involve
risk and uncertainties, such as statements of the Company's plans, objectives,
expectations and intentions. The cautionary statements made in this document
should be read as being applicable to all related forward-looking statements
wherever they appear in this document. The Company's actual results could differ
materially from those discussed below in "Risk Factors", as well as discussed
elsewhere herein.
Overview
We are in the business of developing technologies and products for the
medical waste industry. We have acquired certain patents and other assets and
assumed certain limited liabilities with respect to the equipment used to
sterilize and process medical waste within hospital and other medical
facilities, namely the Redloc II system.
The Redloc II system processes regulated medical waste near the point
of generation and maintains containment throughout the process of sterilization.
The technology is based upon a proprietary process that allows medical waste,
including hard-to-shred materials such as fabric, mopheads and metals, to be
rendered benign with virtually no dangerous exposure to the waste handlers and
no significant by-products.
Our major asset is the patent relating to the Redloc II system. At
present we have no source of revenue and do not have the capital necessary to
carry out business activities or make use of our technology.
To date, we have not received any revenues and have incurred ongoing
operating losses due to costs related to business development, legal fees,
salaries, consulting fees, and other costs associated with establishing the
corporate infrastructure necessary to develop the Redloc II system.
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<PAGE> 13
During the next twelve months we intend to continue developing the
Redloc II system. Our development activities are directed at increasing
throughput and the overall efficiency of the Redloc II system. There is,
however, no assurance that we can modify the Redloc II system to increase
throughput. If we are unable to increase throughput we may be forced to abandon
the Redloc II system as a viable alternative to medical waste sterilization. In
addition, we intend to raise additional capital to fund our operations and the
development of our Redloc II system and to continue operating our beta-test
system at the Presbyterian Hospital.
At present, we do not have the capital necessary to carry out our plan
of operations. We do not generate net income and we have monthly costs
associated with operations of approximately $25,000. We are in the process of
attempting to raise up to $500,000 through our 2000 Offering, however, there can
be no assurance that we will be able to raise additional capital. We anticipate
that, if we successfully raise $500,000 in the 2000 Offering, after payment of
costs of the offering and certain past due obligations, the remaining funds
generated will permit us to continue our operations for a period of
approximately six months.
We do not expect any significant purchases or sales of plant and
significant equipment. We do not expect significant changes in the number of our
employees, provided, however, that if we are unable to raise additional capital
in the 2000 Offering we may be required to decrease the number of our employees
or cease operations altogether.
ITEM 3. DESCRIPTION OF PROPERTIES
Our headquarters is located at 870 Greenview Drive, Grand Prairie,
Texas 75050, where we lease approximately 4,201 square feet of warehouse and
office space. The property is rented on a month to
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<PAGE> 14
month basis and the lease is subject to cancellation upon one month's notice.
The current monthly rent is $2,725, including utilities.
We also lease approximately 500 square feet of office space at 1177
West Hastings Street, Vancouver, British Columbia, Canada V6E 2K3, on a
month-to-month basis at a monthly rental of $2,000, including utilities. The
lease of our Vancouver property is subject to cancellation upon one month's
notice.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
ownership of our common stock as of April 7, 2000, by each shareholder known by
us to be the beneficial owner of more than 5% of our common stock, each director
and all executive officers and directors as a group. Unless otherwise indicated
by footnote, each of the shareholders named in the table has sole voting and
investment power with respect to the shares of common stock beneficially owned.
There are no shares of our preferred stock issued and outstanding.
TITLE OF NAME AND ADDRESS NUMBER OF SHARES (1) % OF CLASS
CLASS OWNED
- ------------- -------------------------- -------------------- ------------
Common MFC Merchant Bank SA 3,861,000 32.79
6, Cours de Rive
P.O. Box Box 3540
1211 Geneva 3 Switzerland
Common Wilhelm Liesner 2,609,739 (2) 22.16
Prinzregentenstr. 124
D-81677 Munich
Germany
Common United Systems, Inc. 2,077,800 17.64
3627 Cole Ave.
Suite 330
Dallas, Texas 75204
Common Antonio Ponte 10,000 0.01
c/o RAIFINANZ AG
Bahnhofstrasse 106
Zurich, Switzerland CH 8001
Common Nora Coccaro (3) 20,000 0.17
Common All Executive officers and 2,639,739 22.42
directors as a group (4)
- ------------------------
(1) Represents the number of shares of common stock owned of record and
beneficially by each named person or group, expressed as a percentage of
11,774,283 shares of our common stock outstanding as of April 7, 2000.
(2) Includes shares held in the name of the companies listed below, each of
which is owned 100% by Mr. Liesner: United Systems, Inc. (2,077,800 shares),
Betamark (46,000 shares), LTEX Ltd. (98,000 shares), RIG Real Invest (34,886
shares), Roatan Medical Services (23,053 shares) and Roatan Medical Technologies
(330,000 shares).
(3) Ms. Coccaro became entitled to receive 20,000 shares of common stock
pursuant to her consulting agreement with us. Ms. Coccaro's 20,000 shares have
not yet been issued. Does not include an option to purchase 30,000 shares of
common stock vesting in equal amounts over 3 years that Ms. Coccaro is entitled
to receive under her consulting agreement, no portion of which is exerciseable
in the next six months.
(4) Includes: Nora Coccaro, President, Secretary, Treasurer and Director;
Wilhelm Liesner, Director; and Antonio Ponte, Director. Does not include an
option to purchase 30,000 shares of common stock vesting in equal amounts over
3 years that Ms. Coccaro is entitled to receive under her consulting agreement,
no portion of which is exerciseable in the next six months.
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<PAGE> 15
No arrangements presently exist which would result in a change in
control.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
(a) Our current officers and directors, who will serve until our next
annual meeting, or until their successors are elected or appointed and
qualified, are as follows:
NAME AGE YR. ELECTED OFFICE HELD
---- --- ----------- -----------
Nora Coccaro 43 1999 President, Secretary,
Treasurer and Director
Wilhelm Liesner 66 1999 Director
Antonio Ponte 45 1999 Director
Nora Coccaro. Ms. Coccaro grew up in Montevideo, Uruguay, where she attended
medical school at the University of Uruguay. Ms. Coccaro has been involved in
the North and South American financial communities for the past 15 years during
which time she has gained extensive experience in management of public companies
and particularly in Canadian and American mining activities in South America.
Ms. Coccaro has been President and Director of Net Master since January 25,
2000, and President and Director of Thor Ventures Corp. since February 1999. Ms.
Coccaro was Venezuelan Operations Manager of Ourominas Minerals Inc. from 1995
until 1997. In 1996 and 1997, Ms. Coccaro was retained by Homestake Mining
Company as consultant in Central America to review mineral title administration
procedures, land status and market research. In 1998, Ms. Coccaro was appointed
Director of Americana Gold & Diamond Holdings, Inc. an OTC Bulletin Board
company, and from 1998 until May 1999 she served as a Director and Executive
Vice-President of Black Swan Gold Mines. Since September 1998 Ms. Coccaro has
also served as the Consul of Uruguay to Western Canada. Ms. Coccaro has been an
executive officer of our company since November 1999 and is currently our
President, Treasurer, Secretary and Director. Her term as our Director expires
at our 2001 annual meeting.
Antonio Ponte. Mr. Antonio Ponte founded RAIFINANZ AG-ZURICH in 1987 and has
served as Chairman of the Board and Chief Executive Officer since that time. Mr.
Ponte has 25 years of investment and financial services experience in
Switzerland, Germany, Italy and the United States. His employment background
includes the Neue Aargauer Bank, the largest regional bank in Switzerland, and
UBS, Union Bank of Switzerland, where his fluency in five languages led to
positions in business development and international banking. Mr. Ponte remained
with Citibank Switzerland for almost eleven years as a manager in private
banking, marketing and the institutional banking division overseeing the credit
risks of financial institutions, and as relationship manager for many Swiss
banks. These positions provided significant banking contacts and relationships
for RAIFINANZ in eight countries. After two years at
15
<PAGE> 16
Zurich's Finter Bank, as portfolio manager of a large discretionary portfolio,
he founded RAIFINANZ. Mr. Ponte is currently our Director and his term expires
at our 2000 annual meeting.
Wilhelm H. Liesner. Mr. Wilhelm H. Liesner has been an investor, operator and
financier of real estate, manufacturing and trading ventures in Europe and the
United States for 25 years. Mr. Liesner made a significant personal investment
in the technology that served as the basis for the Redloc II System and helped
fund efforts to develop a commercially viable application of the technology. Mr.
Liesner is currently our Director and his term expires at our 2000 annual
meeting.
(b) We have no other employees required to be listed by Item 401(b) of
Regulation S-B.
(c) No family relationship exists among our directors and executive
officers.
(d) No legal proceedings have been instituted in the previous five
years against our directors and officers, Messrs. Coccaro, Liesner and Ponte.
ITEM 6. EXECUTIVE COMPENSATION
We maintain a 1999 Stock Incentive Plan (the "Incentive Plan") and a
1999 Outside Directors' Stock Option Plan (the "Director Plan"). The Incentive
Plan allows our Board of Directors to award a variety of equity-based
incentives, including stock awards, options, stock appreciation rights, phantom
shares, dividend equivalent rights and similar rights (together, "Stock
Incentives") to our employees. Our Board of Directors sets the exercise price
and other terms for Stock Incentives on the date of issuance. The maximum
number of shares of common stock available for issuance under the Incentive
Plan is 1,500,000. The Incentive Plan may be amended by our Board of Directors
without shareholder approval. The Incentive Plan is effective until May 3,
2009. To date, no options have been granted under the Incentive Plan. However,
pursuant to her consulting agreement, Ms. Coccaro is entitled to receive an
option to purchase 30,000 shares of our common stock on or before May 30, 2000.
Ms Coccaro's option will vest in equal amounts over a period of 3 years from
March 16, 2000.
The Director Plan provides each non-employee director with an annual
grant of 5,000 shares of our common stock beginning on the date of the first
meeting of the Board of Directors which follows our 2000 annual meeting of
shareholders. The maximum number of shares of common stock available for
issuance under the Director Plan is 120,000. The Director Plan is effective
until May 3, 2009. To date, no options have been granted under the Director
Plan.
No other regular salary, bonus, stock option plan, stock appreciation
rights, stock incentive plan, or other compensation or perquisites have been
implemented by us, except as indicated in subsection (b) below.
The following table sets forth certain summary information concerning
the compensation paid to our current and former executive officers since January
1, 1997.
16
<PAGE> 17
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
FISCAL
NAME AND PRINCIPAL POSITION YEAR PAID SALARY BONUS OTHER COMPENSATION
--------------------------- --------- ------ ----- ------------------
<S> <C> <C> <C> <C>
Nora Coccaro, President, Secretary, Treasurer and 1999 0 0 $ 5,000 (1)
Director
Wilhelm Liesner, Director 1999 0 0 $ 5,000 (2)
Luciano Nicasio, Director 1999 0 0 $21,500 (3)
Andrew Fisch, Treasurer and Director 1999 0 0 $21,500 (3)
Norman Wareham, Secretary, Treasurer and Director 1999 0 0 $13,659 (4)
Joel Dumareq, President and Director 1999 0 0 $ 0
Mark Hale, Sales and Marketing 1999 0 0 $72,000
Norman Wareham, Secretary, Treasurer and Director 1998 0 0 $ 0
Joel Dumareq, President and Director 1998 0 0 $ 0
Norman Wareham, Secretary, Treasurer and Director 1997 0 0 $ 0
Joel Dumareq, President and Director 1997 0 0 $ 0
John Spicer, President and Director 1997 0 0 $ 0
J. Dan Sifford, Secretary, Treasurer and Director 1997 0 0 $ 0
</TABLE>
(c) OPTION/SAR GRANTS. We did not grant any options or stock
appreciation rights during the last fiscal year. Pursuant to her consulting
agreement dated March 16, 2000, Ms. Coccaro is entitled to receive an option to
purchase 30,000 shares of our common stock at a purchase price of $1.06 per
share. Ms. Coccaro's option will vest in equal amounts over a period of 3 years
from March 16, 2000.
(d) AGGREGATE OPTION/SAR EXERCISES. No stock options or stock
appreciation rights were exercised during the last fiscal year.
- -------------------------
(1) Ms. Coccaro was entitled by unwritten agreement to receive $2500 per month
in consideration for services rendered by her as an executive officer from
November 16, 1999 to March 16, 2000. Ms. Coccaro became an executive officer in
November 1999 and received $2500 for each of November and December 1999. Ms.
Coccaro's unwritten agreement was superceded by her consulting agreement dated
March 16, 2000, which for a term of 1 year entitles her to receive $2500 per
month, options to purchase 30,000 shares of common stock vesting over 3 years,
and 2 months compensation if she is terminated for other than cause. Ms. Coccaro
also became entitled to receive 20,000 shares of common stock as a signing bonus
under her consulting agreement.
(2) Mr. Liesner received $5000 from us pursuant to a consulting agreement that
we assumed when we merged with Healthbridge Delaware. Mr. Liesner's consulting
agreement, which began on or around February 1, 1999, was for a term of one year
and provided that he would receive $5,000 per month in exchange for consulting
services. We are past due $55,000 in our payments to Mr. Liesner pursuant to the
consulting agreement. We intend to pay Mr. Liesner in part out of the proceeds
of the 2000 Offering.
(3) Messrs. Fisch and Nicasio received from us an aggregate of $21,500 pursuant
to a consulting agreement with Aurum Capital LLC of which Messrs. Fisch and
Nicasio are principals. The consulting agreement began June 1, 1999 and was
terminated by mutual agreement in November 1999. We owe Aurum Capital $5,499
under the consulting agreement.
(4) Mr. Wareham received from us $13,659 pursuant to a fee-for-time consulting
arrangement with Wareham Management Ltd. Mr. Wareham is the sole owner of
Wareham Management Ltd.
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<PAGE> 18
(e) LONG TERM INCENTIVE PLAN AWARDS. We did not award any long term
incentive plan awards during the last fiscal year.
(f) COMPENSATION OF DIRECTORS. All compensation paid to our directors
during the last fiscal year is detailed in subsection (b) above. Beginning on
the date of the first meeting of the Board of Directors which follows our 2000
annual meeting of shareholders, each of our non-employee directors will become
entitled to an annual grant of 5,000 shares of our common stock pursuant to our
Director Plan, as more thoroughly discussed elsewhere herein.
(g) EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT. We entered into
a consulting agreement with Ms. Coccaro dated March 16, 2000. Under her
consulting agreement, Ms. Coccaro is entitled to receive 20,000 shares of our
common stock and an option to purchase 30,000 shares of our common stock. Ms.
Coccaro's option must be granted on or before May 30, 2000 and will vest in
equal amounts over 3 years. Ms. Coccaro is also entitled to receive a salary of
$2,500 per month. In addition, Ms. Coccaro is eligible to be reimbursed for her
actual out of pocket expenses incurred in connection with her duties as our
President. Ms. Coccaro's consulting agreement can be terminated by us with or
without cause; provided, however, that if she is terminated without cause she
is entitled to receive two months salary ($5000).
No other compensation plans or arrangements exist that provide for
compensation in the event of the termination or resignation of one of our
executive officers.
(h) REPORT ON REPRICING OF OPTIONS/SARs. We have not granted any
options or stock appreciation rights. Ms. Coccaro will be granted an option to
purchase 30,000 shares of our common stock as detailed above.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As discussed above under "Item 1: Description of Business," we merged
with Healthbridge Delaware on May 13, 1999 and we were the surviving
corporation. Wilhelm Liesner, our director, was a beneficial owner of
Healthbridge Delaware and received directly or through entities controlled by
him approximately 2,609,739 shares of our common stock as a result of the
merger. Aurum Capital LLC (an entity whose members were our former directors
Andrew Fisch and Luciano Nicasio) was also a beneficial owner of Healthbridge
Delaware and received 400,000 shares of our common stock as a result of the
merger. Substantially all of our assets were assets of Healthbridge Delaware
prior to the merger.
There have been no other related party transactions, or any other
transactions or relationships required to be disclosed pursuant to Item
404 of Regulation S-B.
ITEM 8. DESCRIPTION OF SECURITIES
We are authorized by our Articles of Incorporation to issue 50,000,000
shares of common stock, par value $0.0001 per share, and 25,000,000 shares of
preferred stock, par value $0.0001 per share.
All shares of our common stock are entitled to one vote at any
shareholders meeting or other authorized vote of the shareholders. All shares of
our common stock are equal to one another with respect to dividends and
liquidation rights. Holders of our common stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds legally
available for dividends, and upon liquidation, are entitled to participate
pro-rata in a distribution of assets available for such distribution to
shareholders. There are no conversion, preemptive, option, or subscription
privileges with respect to any shares of our common stock. Our common stock does
not have cumulative voting rights which means that the holder of more than 50%
of the shares voting for the election of directors may elect all of the
directors if they choose to do so.
At present, there are no shares of our preferred stock issued and
outstanding. Shares of our preferred stock that are not issued and outstanding
may be issued from time to time, and will have such rights, preferences,
privileges and restrictions, including voting rights and dividend preferences,
as our
18
<PAGE> 19
Board of Directors may determine, without any vote or other approval by our
shareholders.
Our Articles of Incorporation contain certain provisions that could
delay, defer or prevent a change in our control. First, our Board of Directors
is authorized to issue preferred stock without further shareholder approval. The
issuance of preferred stock in response to a hostile bid could make it more
difficult for a third party to acquire a majority of our outstanding voting
stock, thereby delaying, deterring or preventing a change in our control.
Second, our Board of Directors is divided into three classes of directors, each
class as nearly equal in number of directors as possible. With a classified
Board of Directors, at least two annual meetings of stockholders, instead of
one, are generally required to effect a change in the majority of the Board of
Directors. As a result, our provisions for a classified Board of Directors may
discourage proxy contests for the election of directors and purchases of a large
block of our common stock because it is difficult to obtain control of the Board
of Directors in a short period of time. Finally, as stated above, our common
stock does not have cumulative voting rights which means that the holder of more
than 50% of the shares voting for the election of directors may elect all of the
directors if they choose to do so. The absence of cumulative voting may have the
effect of limiting the ability of minority stockholders to effect changes in our
Board of Directors and, as a result, may have the effect of delaying changes in
our control.
Reference is made to our Articles of Incorporation, as amended, and our
Bylaws as well as to the applicable statutes of the State of Texas for
additional details on the rights, privileges, and liabilities of holders of our
stock.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON OUR COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Our common stock began trading on the OTC Bulletin Board on September
8, 1998. From September 8, 1998 to November 6, 1998, it was traded under the
symbol "WSFF". On November 9, 1998, our symbol was changed to "WATZ". On May 25,
1999, our symbol was changed to "HLBR". As of April 7, 2000, we had
approximately 206 shareholders of record and 11,774,283 shares of common stock
outstanding.
The following table sets forth for the periods indicated the
approximate high and low bid prices for our common stock as reported each
quarterly period within the last two fiscal years on the OTC Bulletin Board. The
prices are inter-dealer prices, do not include retail mark up, mark down or
commission and may not necessarily represent actual transactions.
OTC BULLETIN BOARD
FISCAL QUARTER HIGH LOW
-------------- ---- ---
10/1/98-12/31/98.... 5 0.375
1/1/99-3/31/99...... 5.5 3
4/1/99-6/30/99...... 3.5 2.875
7/1/99-9/31/99...... 2 .5
10/1/99-12/31/99.... 1.75 .5
1/1/00-1/31/00...... .9375 .5625
During the last two years, we have not paid any dividends on our common
stock and we do not anticipate paying any cash dividends in the foreseeable
future. Although it is our intention to utilize all available funds for the
development of our business, no restrictions are in place which would limit or
19
<PAGE> 20
restrict our ability to pay dividends.
ITEM 2. LEGAL PROCEEDINGS
There are no pending legal proceedings to which we, our directors, or
our officers are a party. We have no knowledge of any pending legal proceedings
to which those parties owning 5% of our common stock are a party. No legal
proceedings are known to us to be contemplated against us by a governmental
authority.
On April 11, 2000 we received a letter, dated April 7, 2000, from an
attorney representing the co-inventors of the Microwave Patent. That letter
demands a payment of $162,600 on behalf of one of the co-inventors. The claim is
allegedly based upon an agreement between the co-inventors and United Systems,
Inc., one of the Roatan Companies and the company from which we acquired the
rights to the Microwave Patent. The letter threatens to initiate legal action to
terminate our rights to the Microwave Patent if payment is not made. It is our
position that any claim which the co-inventor may have to a payment in the
amount of $162,600, would be against United Systems, Inc., and that we did not
at any time assume an obligation to make that payment. We intend to contest any
claim for this payment which may be brought against us.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Since we are a development stage company, our principal accountants'
reports on our financial statements for the years ended December 31, 1998 and
1999 were qualified for the uncertainty that we may not be a going concern.
Other than as stated above, no principal accountant's report on our financial
statements for either of the past two years has contained an adverse opinion,
disclaimer of opinion or modification of opinion. There have been no
disagreements with accountants as to any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
We made the following sales of unregistered common stock during the
previous 3 years. All denominations are in U.S. Dollars unless otherwise noted.
<TABLE>
<CAPTION>
DATE
OF ISSUE TITLE PURCHASER SHARES SOLD CONSIDERATION EXEMPTION
-------- ----- --------- ----------- ------------- ---------
<S> <C> <C> <C> <C> <C>
2/22/99 Common Affaires Financieres S.A. 50,000 $100,000 Regulation D
2/22/99 Common Bank Julius Baer & Co., Ltd. 50,000 $100,000 Regulation D
2/22/99 Common Bank Leu AG 50,000 $100,000 Regulation D
2/22/99 Common Bank von Ernst & Cie AG 50,000 $100,000 Regulation D
2/22/99 Common Clariden Bank 50,000 $100,000 Regulation D
2/22/99 Common Rahn & Bodmer 100,000 $200,000 Regulation D
2/22/99 Common Triple Tree Ventures 100,000 $200,000 Regulation D
</TABLE>
We sold 450,000 shares of common stock with a total offering price of
$900,000 pursuant to our February 22, 1999 offering of common stock, placed
overseas. The principal underwriter for our February 22, 1999 offering was
ValorInvest Ltd. We paid a $90,000 in underwriting commissions in connection
with our February 22, 1999 offering.
We are about to initiate the 2000 Offering through which we anticipate
raising up to $500,000. The 2000 Offering is a private placement of up to
1,000,000 units (each consisting of one share of our common stock and one
common stock purchase warrant exercisable at $0.50) at a purchase price of
$0.50 per unit. Units sold in the 2000 Offering will be sold pursuant to
Regulation D.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article XIV of our Articles of Incorporation requires us to indemnify
and hold harmless our officers and directors to the fullest extent authorized by
the Texas Business Corporation Act against any and all liability, loss and
expense incurred in connection with a legal matter. This right to
indemnification is a contract right and includes the right to have us pay for
expenses incurred in defending any proceeding in advance of the proceeding's
final disposition. Our Articles of Incorporation also provide for the
elimination of personal monetary liability of directors and officers to the
fullest extent permissible under law.
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<PAGE> 21
In addition, our Articles of Incorporation permit us to indemnify any
of our employees or agents to the extent authorized from time to time by the
Board of Directors.
Futhermore, Ms. Coccaro's consulting agreement requires us to
indemnify her against all claims arising out of actions reasonably taken by
her in the performance of her duties.
At present, there is no pending litigation or proceeding involving our
officers and directors as to which indemnification is being sought.
PART FS
Our Financial Statements, required by Regulation SB, commence on page
F-1 hereof in response to Part FS of this Registration Statement on Form 10-SB
and are incorporated herein by this reference.
PART III
ITEM 1. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Item
Number Description
<S> <C>
1.1* Placement Agreement between WattMonitor, Inc. and ValorInvest Ltd., dated for reference January 28, 1999.
1.2* Placement Agreement between Healthbridge, Inc. and ValorInvest Ltd., dated as of April 5, 2000.
2.1* Asset Purchase Agreement, dated as of January 27, 1999, by and among Healthbridge, Inc., Roatan
Medical Technologies, Inc., Wintex Corporation, Roatan Medical Services, Inc. and United Services, Inc.
2.2* Agreement and Plan of Merger, dated as of February 28, 1999, by and among Healthbridge, Inc. and
WattMonitor, Inc.
3.1* Articles of Incorporation of GFB Alliance Services, Inc., filed February 17, 1993.
3.2* Articles of Amendment to the Articles of Incorporation of GFB Alliance Services, Inc., filed July 24, 1997.
3.3* Articles of Amendment to the Articles of Incorporation of World Staffing II, Inc., filed November 3, 1998.
3.4* Amended and Restated Articles of Incorporation of WattMonitor, Inc., filed May 13, 1999.
3.5* Bylaws of Healthbridge, Inc.
4.1* Article 4, Section 1 to Healthbridge's Articles of Incorporation (defining certain rights of preferred stock
holders).
4.2* Article 4, Section 2 to Healthbridge's Articles of Incorporation (defining certain rights of common stock holders).
10.1* Consulting Agreement between Healthbridge, Inc. and Wilhelm Liesner, dated on or around February 1, 1999.
10.2* Consulting Agreement between Healthbridge, Inc. and Nora Coccaro, dated as of March 16, 2000.
10.3* Letter Agreement between the Presbyterian Hospital of Dallas and Roatan Medical Services Corp., dated October 9,
1996.
10.4* 1999 Stock Incentive Plan.
10.5* 1999 Outside Directors' Stock Option Plan.
27.1* Financial Data Schedule.
- -------------------
*Filed herewith.
</TABLE>
<johnson>
21
<PAGE> 22
ITEM 2. DESCRIPTION OF EXHIBITS.
The documents required to be filed as Exhibit Number 2 in Part III of
Form 1-A filed as part of this Registration Statement on Form 10-SB are listed
in Item 1 of this Part III above. No documents are required to be filed as
Exhibit Numbers 5, 6 or 7 in Part III of Form 1-A, and the reference to such
Exhibit Numbers is therefore omitted. No additional exhibits are filed hereto.
22
<PAGE> 23
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
HEALTHBRIDGE, INC.
Date: April 13, 2000 By: /s/ Nora Coccaro
----------------
Nora Coccaro, President
23
<PAGE> 24
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
Index to Financial Statements
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report December 31, 1999 ..................................... F-2
Independent Auditors' Report December 31, 1998 ..................................... F-3
Balance Sheet at December 31, 1999 and 1998 ........................................ F-4
Statement of Operations For The Years Ended December 31, 1999 and 1998, and For the
Period From Inception (February 17, 1993) to December 31, 1999 ................ F-6
Statement of Stockholders' Equity For The Period From Inception (February 17, 1993)
to December 31, 1999 ......................................................... F-7
Statement of Cash Flows For The Years Ended December 31, 1999 and 1998, and For the
Period From Inception (February 17, 1993) to December 31, 1999 ................ F-9
Notes to the Financial Statements .................................................. F-11
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
</TABLE>
F-1
<PAGE> 25
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Healthbridge, Inc.
Vancouver, B.C. V6E 2K3
We have audited the accompanying balance sheet of Healthbridge, Inc. (formerly
Wattmonitor, Inc.) (A Development Stage Company) (the Company) as of December
31, 1999, and the related statement of operations, stockholders' equity and cash
flows for the year then ended, and for the period from inception (February 17
1993) to December 31, 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of the Company
for the year ended December 31, 1998, were audited by other auditors whose
report thereon, dated January 6, 2000, expressed an unqualified opinion.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of 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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Company at December 31,
1999, and the results of its operations and cash flows for the periods
indicated, in conformity with generally accepted accounting principles.
As discussed in Note 1, the Company has been in the development stage since its
inception on February 17, 1993. The Company is devoting substantially all of its
present efforts in establishing a new business and although planned principle
operations have commenced, there have been no significant revenues derived
therefrom. In addition, the Company does not presently have adequate financing
to carry out its business plan. These factors raise substantial doubt about its
ability to continue as a going concern. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/S/ Clancy and Co., P.L.L.C.
Clancy and Co., P.L.L.C.
Phoenix, Arizona
April 6, 2000
F-2
<PAGE> 26
To the Board of Directors and Stockholders of
WattMonitor, Inc. (formerly WorldStaffing II, Inc.)
We have audited the accompanying balance sheets of WattMonitor, Inc. (formerly
WorldStaffing II, Inc.) (a Development Stage Company) as of December 31, 1998
and 1997 and the related statements of operations, stockholders' equity and cash
flows for the years then ended and from inception on February 11, 1995 through
December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we 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.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of WattMonitor, Inc. (formerly
WorldStaffing II, Inc.) (a Development Stage Company) as of December 31, 1998
and 1997 and the results of its operations and cash flows for the years then
ended and from inception on February 11, 1995 through December 31, 1998 in
conformity with generally accepted accounting principles.
/s/ CROUCH, BIERWOLF & CHISHOLM
Salt Lake City, Utah
January 6, 2000
F-3
<PAGE> 27
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
ASSETS 1999 1998
---- ----
Current Assets
Cash $ 4,508 $3,061
Inventory (Note 3, 4) 40,395 0
---------- ------
Total Current Assets 44,903 3,061
Fixed Assets, Net (Note 3, 5) 5,782 0
Other Assets
Patents, Net (Note 3, 6) 1,976,477 0
---------- ------
Total Assets $2,027,162 $3,061
========== ======
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE> 28
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1999 1998
---- ----
<S> <C> <C>
Current Liabilities
Accounts Payable $ 317,530 $ 0
Notes Payable, Other (Note 8) 70,000 0
Accrued Interest (Note 3, 7, 8) 18,300 0
Notes Payable, Related Party (Note 3, 7) 96,159 0
----------- ---------
Total Current Liabilities 501,989 0
Commitments and Contingencies
Stockholders' Equity
Preferred Stock: $0.0001 Par Value, Authorized
25,000,000; Issued and Outstanding, None None None
Common Stock: $0.0001 Par Value, Authorized
50,000,000; Issued and Outstanding, 11,774,284 and
2,500,750, respectively 1,178 250
Additional Paid In Capital 2,836,854 120,392
Deficit Accumulated During the Development Stage (1,312,859) (117,581)
----------- ---------
Total Stockholders' Equity (A Deficit) 1,525,173 3,061
----------- ---------
Total Liabilities and Stockholders' Equity $ 2,027,162 $ 3,061
=========== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE> 29
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (FEBRUARY 17, 1993) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
From Inception
(February 17,
Year Ended Year Ended 1993) to
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Revenues $ 0 $ 0 $ 0
Expenses
General and Administrative 1,082,375 36,896 1,199,956
----------- ---------- -----------
Operating Loss (1,082,375) (36,896) (1,199,956)
Other Income (Expense)
Interest Income 7,897 0 7,897
Interest Expense (18,300) 0 (18,300)
----------- ---------- -----------
Total Other Income (Expense) (10,403) 0 (10,403)
------------ ---------- -----------
Net Loss Before Cumulative Effect of Accounting Change (1,092,778) (36,896) (1,210,359)
Cumulative Effect of Accounting Change (102,500) 0 (102,500)
----------- ---------- -----------
Net Loss Available to Common Stockholders $(1,195,278) $ (36,896) $(1,312,859)
=========== ========== ===========
Basic Loss Per Common Share $ (0.019)
==========
Loss Before Cumulative Effect of Accounting Change $ (0.10) $ (0.11)
Cumulative Effective of Accounting Change (0.01) (0.01)
----------- -----------
Net Loss $ (0.11) $ (0.12)
=========== ===========
Basic Weighted Average Number of
Common Shares Outstanding 11,261,277 1,956,773 11,261,277
=========== ========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE> 30
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (FEBRUARY 17, 1993) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Shares Issued For Organization Costs 1,200,000 $120 $ 1,080 $ 1,200
Loss, Year Ended December 31, 1993 (200) (200)
Loss, Year Ended December 31, 1994 (240) (240)
Loss, Year Ended December 31, 1995 (240) (240)
Loss, Year Ended December 31, 1996 (240) (240)
------- -------
Balance, December 31, 1996 0 0 1,200,000 120 1,080 (920) 280
Shares Issued for Cash 641,360 64 80,208 80,272
Loss, Year Ended December 31, 1997 (79,765) (79,765)
------- -------
Balance, December 31, 1997 0 0 1,841,360 184 81,288 (80,685) 787
Shares Issued for Services 130,000 13 12,987 13,000
Shares Issued for Cash 523,400 52 26,118 26,170
Roundup for Stock Split 5,990 1 (1) 0
Loss, Year Ended December 31, 1998 (36,896) (36,896)
------- -------
Balance, December 31, 1998 0 0 2,500,750 250 120,392 (117,581) 3,061
Rounding Adjustment to Prior Year Shares (750)
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-7
<PAGE> 31
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION (FEBRUARY 17, 1993) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Additional During the
Preferred Stock Common Stock Paid In Development
Shares Amount Shares Amount Capital Stage Total
------ ------ ------ ------ ------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Exchange of Assets For Common Stock Per Asset
Purchase Agreement Dated January 27, 1999 2,560,237 256 208,982 209,238
Release of Claims and Debt Capitalization Per
Asset Purchase Agreement Dated January 27, 1999 557,948 56 473,785 473,841
Conversion of Debt to Equity, February 1999 4,850,000 485 999,515 1,000,000
Conversion of Debt to Equity, February 1999 153,500 16 204,165 204,181
Services Rendered in Connection With the
Agreement and Plan of Merger Dated February 28,
1999 at $0.05 Per Share 702,600 70 35,060 35,130
Shares Issued For Cash in Completion of Private
Placement Memorandum, February 1999 450,000 45 899,955 900,000
Offering Costs (105,000) (105,000)
Rounding (1)
Loss, Year Ended December 31, 1999 (1,195,278) (1,195,278)
----------- -----------
Balance, December 31, 1999 0 $0 11,774,284 $1,178 $2,836,854 $(1,312,859) $ 1,525,173
==== ==== ========== ====== ========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-8
<PAGE> 32
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (FEBRUARY 17, 1993) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
From Inception
(February 17,
Year Ended Year Ended 1993) to
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net Loss $(1,195,278) $(36,896) $(1,312,859)
Adjustments to Reconcile Net Loss to Net Cash Used In
Operating Activities
Common Stock Issued For Services Rendered 35,130 13,000 48,130
Depreciation and Amortization 128,526 40 129,726
Write Off of Organizational Costs 102,500 0 102,500
Changes in Assets and Liabilities
Increase (Decrease) in Accounts Payable 47,269 0 47,269
Increase (Decrease) in Accrued Liabilities 18,300 0 18,300
----------- -------- -----------
Total Adjustments 331,725 13,040 345,925
----------- -------- -----------
Net Cash Used In Operating Activities (863,553) (23,856) (966,934)
Cash Flows From Investing Activities -- -- --
Cash Flows From Financing Activities
Borrowings Under Notes Payable 70,000 0 70,000
Proceeds From Sale of Common Stock 900,000 26,170 1,006,442
Offering Costs (105,000) 0 (105,000)
----------- -------- -----------
Net Cash Provided By Financing Activities 865,000 26,170 971,442
----------- -------- -----------
Increase in Cash and Cash Equivalents 1,447 2,314 4,508
Cash and Cash Equivalents, Beginning of Year 3,061 747 0
----------- -------- -----------
Cash and Cash Equivalents, End of Year $ 4,508 $ 3,061 $ 4,508
=========== ======== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE> 33
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998, AND FOR THE
PERIOD FROM INCEPTION (FEBRUARY 17, 1993) TO DECEMBER 31, 1999
<TABLE>
<CAPTION>
From Inception
(February 17,
Year Ended Year Ended 1993) to
December 31, December 31, December 31,
1999 1998 1999
---- ---- ----
<S> <C> <C> <C>
Supplemental Information:
Cash paid for:
Interest $ 0 $ 0 $ 0
========== ======= ==========
Income taxes $ 0 $ 0 $ 0
========== ======= ==========
Supplemental Noncash Investing and Financing Activities:
Common Stock Issued For Services Rendered $ 35,130 $13,000 $ 48,130
========== ======= ==========
Conversion of Debt to Equity $1,678,022 $ 0 $1,678,022
========== ======= ==========
Issuance of Common Stock in Completion of Asset
Purchase Agreement Dated January 27, 1999 $ 209,238 $ 0 $ 209,238
========== ======= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE> 34
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION
Healthbridge, Inc. (the Company) was incorporated under the laws of the
State of Texas on February 17, 1993, as GFB Alliance Services, Inc.,
with an authorized capital of 10,000 shares of $0.10 par value common
stock. On December 17, 1996, the Company changed the name of the
corporation to World Staffing II, Inc., and increased its authorized
capital to 50,000,000 shares of $0.0001 par value common stock. The
articles of amendment were filed on July 24, 1997, with the State of
Texas. On November 3, 1998, the Company amended its articles of
incorporation and changed its name to WattMonitor, Inc. On February 28,
1999, the Company completed an "Agreement and Plan of Merger," between
Healthbridge, Inc. (a Delaware corporation) (Healthbridge) and
WattMonitor, Inc., (a Texas Corporation) (the Company), with the
Company being the surviving corporation and continuing in existence
under the laws of the State of Texas under the name "Healthbridge,
Inc." Healthbridge has agreed to transfer 8,814,284 shares of
Healthbridge common stock in exchange for one share of the Company
common stock. The authorized capital of Healthbridge, Inc. (a Delaware
corporation) consists of 10,000,000 shares of $0.001 par value common
stock. As of the date of the merger, 8,814,284 shares of Healthbridge
common stock were outstanding, all of which are validly issued, fully
paid and nonassessable; and the outstanding common stock of
WattMonitor, Inc., was 2,950,000, all of which are validly issued,
fully paid and nonassessable. On May 13, 1999, the Company amended its
articles of incorporation and changed its name to Healthbridge, Inc.,
and increased its authorized capital to 75,000,000 million shares of
stock: 25,000,000 shares of $0.0001 par value preferred stock; and
50,000,000 shares of $0.0001 par value common stock. The Company has a
perpetual existence.
The Company is engaged in the business of developing and marketing
technologies and products for the medical waste industry. The Company
produces and markets the Redloc II Waste Disposal System, which is a
system that the Company represents can process regulated medical waste
near the point of generation and maintain containment throughout the
process of sterilization. The technology is based upon a proprietary
process that allows medical waste, including hard-to-shred materials
such as fabric, mopheads
F-11
<PAGE> 35
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION (CONTINUED)
and metals, to be rendered benign with virtually no dangerous exposure
to the waste handlers and no significant by-products.
On February 17, 1993, the Company issued 1,200,000 shares of common
stock for organization costs at $0.02 per share, or $1,200.
During February 1997, the Company issued 641,360 shares of common stock
for cash of $80,272.
On February 12, 1997, the Board of Directors approved a 200 for 1
forward split.
On September 9, 1998, the Company issued 130,000 shares of common stock
for services rendered at $1.00 per share, or $13,000.
On October 29, 1998, the Company issued 523,400 shares of common stock
for cash at $0.05 per share, or $26,170.
On October 29, 1998, the Board of Directors approved a 1 for 10 reverse
split.
During 1999, the Company adjusted its shares down by 749 shares of
common stock for rounding.
On February 28, 1999, the Company completed an "Agreement and Plan of
Merger," between Healthbridge, Inc. (a Delaware corporation)
(Healthbridge) and WattMonitor, Inc., (a Texas Corporation) (the
Company), with the Company being the surviving corporation and
continuing in existence under the laws of the State of Texas under the
name "Healthbridge, Inc." Healthbridge has agreed to transfer 8,814,284
shares of Healthbridge common stock in exchange for one share of the
Company common stock. The exchange was recorded as follows: (1) the
Company issued 2,560,237 shares of common stock to complete an Asset
Purchase Agreement dated January 27, 1999, or $209,238.
F-12
<PAGE> 36
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1 - ORGANIZATION (CONTINUED)
See Note 3; (2) the Company issued 557,948 shares of common stock to
convert debt to equity of $473,841; (3) the Company issued 4,850,000
shares of common stock to convert debt to equity of $1,000,000; (4) the
Company issued 153,500 shares of common stock to convert debt to equity
of $204,181; (5) the Company issued 702,600 shares of common stock for
services rendered at $0.05 per share, or $35,130.
During February 1999, the Company completed a Private Placement
Memorandum for 450,000 shares of common stock for cash at $2.00 per
share, or $900,000, less offering costs of $105,000.
The Company is a development stage company, as defined in Financial
Accounting Standards Board No. 7. The Company is devoting substantially
all of its present efforts in securing and establishing a new business,
and although its planned principal operations have commenced, there
have been no significant revenues derived therefrom. In addition, the
Company does not presently have adequate financing to carry out its
business plan. Management's plans include obtaining working capital
funds by seeking additional funding from private and public equity
investments to meet such needs. The accompanying financial statements
should not be regarded as typical for normal operating periods.
The financial statements have been prepared on the basis of accounting
principles applicable to a going concern. The financial statements do
no include any adjustments that might result from the outcome of this
uncertainty. The continuation of the Company as a going concern is
dependent upon the success of the Company in obtaining additional
funding. The Company's ability to achieve these objectives cannot be
determined at this time.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
A. Method of Accounting
F-13
<PAGE> 37
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
The Company's financial statements are prepared using the accrual
method of accounting.
B. Cash and Cash Equivalents
The Company considers all highly liquid debt instruments with a
maturity of three months or less when acquired to be cash and cash
equivalents.
C. Inventory
Inventory is stated at cost.
D. Property and Equipment
Property and equipment, stated at cost, is depreciated under the
straight-line method over their estimated useful lives ranging from
three to seven years.
E. Intangible Assets
Intangible assets represent patents and are recorded at cost in
accordance with Accounting Principles Board (APB) Opinion No. 17,
"Intangible Assets." The Company amortizes the intangible assets using
the straight-line method over the term of the specific agreements.
Continually, the Company evaluates whether the estimated useful life
used to amortize an intangible asset is appropriate due to changing
facts and circumstances resulting in increases or decreases in the
asset's estimated useful life, and records the change prospectively.
See Note 6.
F. Use of Estimates
Preparing financial statements requires management to make estimates
and assumptions that effect the reported amounts of assets,
liabilities, revenue and expenses. Actual results may differ from these
estimates.
F-14
<PAGE> 38
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
G. Income Taxes
The Company accounts for income taxes under the provisions of Statement
of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes." Under SFAS No. 109, deferred tax liabilities and assets
are determined based on the difference between the financial statement
and tax bases of assets and liabilities, using enacted tax rates in
effect for the year in which the differences are expected to reverse.
See Note 9.
H. Per Share of Common Stock
Basic earnings or loss per share has been computed based on the
weighted average number of common shares and common share equivalents
outstanding. All earnings or loss per share amounts in the financial
statements are basic earnings or loss per share, as defined by SFAS No.
128, "Earnings Per Share." Diluted earnings or loss per share does not
differ materially from basic earnings or loss per share for all periods
presented. All per share and per share information have been adjusted
retroactively to reflect stock splits and changes in par value.
I. Capital Structure
The Company has implemented SFAS No. 129, "Disclosure of Information
about Capital Structure," effective January 1, 1998, which established
standards for disclosing information about an entity's capital
structure. The implementation of SFAS No. 129 had no effect on the
Company's financial statements
J. Comprehensive Income
The Company has implemented SFAS No. 130, "Reporting Comprehensive
Income," effective January 1, 1998, which requires companies to
classify items of other
F-15
<PAGE> 39
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
comprehensive income by their nature in a financial statement and
display the accumulated balance of other comprehensive income
separately from retained earnings and additional paid in capital in the
equity section of a statement of financial position. The implementation
of SFAS No. 130 had no effect on the financial statements.
K. Start-Up Costs
Effective January 1, 1998, the Company also adopted the provisions of
the American Institute of Certified Public Accountants' Statement of
Position (SOP) 98-5, "Reporting on the Costs of Start-Up Activities."
SOP 98-5 provides guidance on the financial reporting of start-up and
organization costs and requires such costs to be expensed as incurred.
The total amount of deferred start-up costs reported as a cumulative
effect of a change in accounting principle is $102,500. See Note 3.
This new requirement did not have a significant effect on 1998 loss
before the cumulative effect of the accounting change.
L. Presentation
Certain accounts from prior years have been reclassified to conform
with the current year's presentation.
M. Pending Accounting Pronouncements
It is anticipated that current pending accounting pronouncements will
not have an adverse impact on the financial statements of the Company.
F-16
<PAGE> 40
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 - ASSET PURCHASE AGREEMENT
On January 27, 1999, Healthbridge Inc. (a Delaware Corporation)
(Healthbridge) completed an "Asset Purchase Agreement" (APA), with
Roatan Medical Technologies, Inc. (a Nevada Corporation), WinTex
Corporation (a Texas Corporation and wholly owned subsidiary of Roatan
Medical Technologies, Inc.), Roatan Medical Services Inc. (a Texas
Corporation), and United Services, Inc. (United), and Mr. Wilhelm
Liesner (an individual), the "Sellers." Healthbridge has agreed to
transfer 2,560,237 shares of Healthbridge common stock in exchange for
all of the assets of the sellers including all patents, inventories,
machinery, equipment, intangibles, and cash on hand and in banks as
described below. Certain assets, such as all tax loss carryforwards,
carrybacks, net operating losses, refunds, offsets, etc., are excluded
from the exchange. In accordance with the restructuring, Healthbridge
also agrees to assume certain of the payments and performance
obligations of the Sellers and its principal stockholder, according to
the APA. The following is a summary of the assets acquired and
liabilities assumed:
Assets Acquired:
- ----------------
Inventory (Note 4) $ 40,395
Fixed Assets, Net (Note 5) 10,778
Organization Costs (Note 2) 102,500
Patents, Net (Note 6) 2,100,007 2,253,680
----------
Liabilities Assumed:
- --------------------
FCIC Promissory Note (FCIC) 1,000,000
LTEX, L.L.C. Line of Credit (LTEX) 90,150
Betamark Note (Betamark) 81,567
Related Party Notes (Note 7) 96,159
Redloc Related Notes (See below) 473,841
Accrued Interest on Notes (Note 3, 7, 8) 12,464
Other:
Accounts Payable (Rig Real) 20,000
Accounts Payable (Other) 38,244
Accounts Payable per agreement
(includes FCIC "Expense Notes"
of $84,681) (See below) 232,017 (2,044,442)
---------- ----------
Additional Paid In Capital $ 209,238
==========
F-17
<PAGE> 41
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 3 - ASSET PURCHASE AGREEMENT (CONTINUED)
On February 24, 1999, an "Assumption and Release Agreement," was
executed by and among Healthbridge, Inc. (Healthbridge/the Assumptor),
Roatan Medical Technologies, Inc., Roatan Medical Services, Inc., and
United Services, Inc. (the Original Borrower Principals), Wilhelm
Liesner (Liesner) and First Capital Invest Corp., BVI (FCIC/
Noteholder). Healthbridge agreed to assume all of the payment and
performance obligations of the Original Borrower Principals and Liesner
as set forth in certain loan documents. Additionally, FCIC was given a
Conversion Right in connection with the transfer of the assets in the
APA which applies to the principal balance of the note only for the
conversion of 4,850,000 shares of common stock in cancellation of the
$1,000,000 principal amount of the note. Interest accrued under the
note is forgiven upon the exercise of the Conversion Right.
On or around February 26, 1999, FCIC converted the promissory note,
originally made by Roatan Medical Technologies, Inc. and later assumed
by Healthbridge, pursuant to the "Assumption and Release Agreement" per
above, into 4,850,000 shares of common stock.
Certain FCIC "Expense Notes" were assumed under the APA and are
included in accounts payable per above, and bear interest at 10% per
annum. Accrued interest at December 31, 1999 on the notes was $6,351.
During February 1999, the Redloc related notes were converted to
equity, and 557,948 shares of common stock were issued, canceling
$473,841 of assumed debt.
During February 1999, the LTEX note for $90,150, including accrued
interest of $4,357 (98,000 shares), the Betamark for $81,567, including
accrued interest of $8,107 (46,000 shares), and Accounts Payable (Rig
Real) for $20,000 (9,500 shares) were converted from debt to equity for
the issuance of a total 153,500 shares of common stock, or $204,181.
F-18
<PAGE> 42
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 4 - INVENTORY
Inventory consists of (6) sterilizers and various other supplies.
Inventory at December 31, 1999 was $40,395. See Note 3.
NOTE 5 - FIXED ASSETS
Property and equipment consists of office equipment and is as follows
at December 31, 1999:
Cost $24,786
Accumulated Depreciation 19,004
-------
Net Book Value $ 5,782
=======
Depreciation charged to operations during 1999 was $4,956. See Note 3.
NOTE 6 - PATENTS
Patents represent the rights to utilize a combination of microwave and
steam technology to sterilize infectious waste. The self-contained
modular system known as the "Redloc Waste Disposal System," processes
infectious waste in pressurized reusable containers until the waste is
sterilized. The waste is then processed through a granulator before
disposal in public waste facilities. Amortization expense included in
operations for 1999 is $123,530. See Note 3.
NOTE 7 - NOTES PAYABLE, RELATED PARTIES
Notes payable, related parties, of $96,159, at December 31, 1999,
represents two notes to Wilhelm Liesner as follows:
F-19
<PAGE> 43
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 7 - NOTES PAYABLE, RELATED PARTIES (CONTINUED)
(i) Dated May 1, 1996, for $75,000, due on demand or before December
31, 1998, with interest at 8% per annum through maturity. All past due
principal and interest due at maturity bears interest at 18% per annum.
The entire balance of $13,515 was assumed during 1999 as part of an
"Asset Purchase Agreement." See Note 3. Accrued interest at December
31, 1999, was $1,622.
(ii) Dated January 30, 1998, for $100,000, representing unpaid
consulting fees, due on demand or before December 31, 1998, with
interest at 8% per annum through maturity. All past due principal and
interest due at maturity bears interest at 18% per annum. The entire
balance of $82,644 was assumed during 1999 as part of an "Asset
Purchase Agreement." See Note 3. Accrued interest at December 31, 1999
was $9,917.
NOTE 8 - NOTES PAYABLE, OTHER
Notes Payable, other represents the following at December 31, 1999:
Valor Invest, Ltd. (1) $20,000
Valor Invest, Ltd. (2) 50,000
-------
Total $70,000
=======
(1) Valor Invest, Ltd. (an Irish Corporation) - dated December 16,
1999, in the original amount of $20,000, together with interest due at
the rate of 9% per annum, and due on demand. Accrued interest at
December 31, 1999, was $69.
(2) Valor Invest, Ltd. (an Irish Corporation) - dated November 9, 1999,
a line of credit up to $150,000, with interest at 8% per annum. The
term of the loan commences on the date of the first advance and is due
and payable upon the earlier of (i) November 15, 2000, or (ii) the
consummation of any equity or debt financings providing the Company
with at least $1,000,000 in gross proceeds. Individual promissory notes
are executed to receive funds. On November 16, 1999, $17,000 was
advanced and on December 7, 1999, $33,000 was advanced, for total
advances of $50,000 at December 31, 1999. Accrued interest at December
31, 1999, was $341. See Note 11.
F-20
<PAGE> 44
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 9 - INCOME TAXES
There is no current or deferred tax expense for the years ended
December 31, 1999 and 1998, due to the Company's loss position. The
benefits of timing differences have not been previously recorded. The
deferred tax consequences of temporary differences in reporting items
for financial statement and income tax purposes are recognized, as
appropriate. Realization of the future tax benefits related to the
deferred tax assets is dependent on many factors, including the
Company's ability to generate taxable income within the net operating
loss carryforward period. Management has considered these factors in
reaching its conclusion as to the valuation allowance for financial
reporting purposes. The income tax effect of temporary differences
comprising the deferred tax assets and deferred tax liabilities on the
accompanying balance sheet is a result of the following at December 31:
1999 1998
Deferred Taxes
NOL Carryforwards $ 459,500 29,107
Valuation Allowance (459,500) (29,107)
--------- --------
Net Deferred Tax Assets $ 0 $ 0
========= ========
The Company has available net operating loss carryforwards of
approximately $1,300,000 for tax purposes to offset future taxable
income, which expire principally in the year 2019.
10 - STOCK OPTION PLANS
On April 8, 1999, the Board of Directors approved the 1999 Stock
Incentive Plan and reserved 1,500,000 share of common stock exclusively
for issuance pursuant to Stock Incentives. The exercise price per share
will be identified in each Stock Incentive Agreement, but in no event
will be less than the fair market value on the date of grant. The
option expiration date is ten years after the date the option is
granted for a participant
F-21
<PAGE> 45
HEALTHBRIDGE, INC.
(FORMERLY WATTMONITOR, INC.)
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 10 - STOCK OPTION PLANS (CONTINUED)
who is not an over 10% owner, and five years for a participant who is
an over 10% owner.
On February 28, 1999, the Board of Directors approved the 1999 Outside
Directors' Stock Option Plan and reserved 120,000 shares of common
stock for issuance pursuant to an agreement stating the terms of the
plan. Each agreement shall provide the following terms: (1) the
exercise price per share will be the fair market value as of the date
of grant; (2) the option expiration date is ten years following the
date of grant, or one year after the date the Director ceases to serve
upon the Board of Directors; and (3) that the option is fully vested.
As of the date of these financial statements, no options have been
granted under either plan.
NOTE 11 - SUBSEQUENT EVENTS
As of the date of these financial statements, the Company has received
additional advances of $175,000 from Valor Invest Ltd., due on demand,
with interest at 9% per annum, for a total of $245,000 in outstanding
advances due this company.
F-22
<PAGE> 1
Exhibit 1.1
PLACEMENT AGREEMENT
THIS AGREEMENT dated for reference January 28, 1999, is made BETWEEN
WATTMONITOR, INC., a Texas corporation (the "Issuer"), and VALORINVEST LTD. (the
"Agent").
WHEREAS
A. The Issuer wishes to privately place with purchasers up to 450,000
Shares of its Common Stock at a price of U.S. $2.00 per share;
B. The Issuer wishes to appoint the Agent to distribute the Shares,
and the Agent is willing to accept such appointment on the terms
and conditions of this Agreement;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS
1.1 In this Agreement and the Recitals hereto:
(a) "Act" means the Securities Act of 1933 (United States), as
amended, the regulations and rules made thereunder and all
administrative policy statements, blanket orders, notices,
directions and rulings issued by the Commission;
(b) "Agent Fee" means the commission which is set out in this
Agreement and which is payable by the Issuer to the Agent
in consideration of the services performed by the Agent
under this Agreement;
(c) "Closing" means the day on which Shares are issued to the
Purchasers;
(d) "Commission" means the United States Securities and
Exchange Commission.
(e) "Offering Memorandum" means any offering memorandum, and
any amendments made to such offering memorandum, which is
required by the Act to be prepared, or is prepared, by the
Issuer in connection with the sale of any of the Shares;
(f) "Private Placement" means the offering of the Shares on the
terms and conditions set forth in this Agreement or the
Subscription Agreement;
<PAGE> 2
(g) "Purchasers" means the purchasers of Shares pursuant to the
Private Placement.
(h) "Shares" means the Shares of the Issuer to be offered by
the Issuer pursuant to this Agreement having the terms
provided in this Agreement;
(i) "Subscription Agreement" means the Subscription Agreement
attached hereto as Attachment I.
2. APPOINTMENT OF AGENT
2.1 The Issuer appoints the Agent as its exclusive agent and the Agent
accepts the appointment and agrees to act as the exclusive agent of the
Issuer to use its commercially reasonable efforts to find and introduce
to the Issuer potential purchasers to purchase up to 450,000 Shares, at a
price of $2.00 per Share, by way of private placement prior to February
15, 1999.
3. THE SHARES
3.1 The Shares will be Common Stock of the Issuer as described in the
Subscription Agreement issued and registered in the names of the
Purchasers or their nominees.
4. AGENTS' FEE
4.1 In consideration of the services performed by the Agents under
this Agreement, the Issuer agrees to pay to the Agent on the Closing an
Agent Fee equal to 10% of the gross proceeds received by the Issuer from
the sales of the Shares on such Closing.
4.2 The Agent Fee will be paid in lawful United States currency.
5. OFFERING RESTRICTIONS
5.1 The Agent will only sell the Shares to persons who represent
themselves as being:
(a) persons purchasing as principal who are accredited investors
residing outside the United States (all as defined in the
Subscription Agreement); and
(b) otherwise qualified to purchase the Shares as described in the
Subscription Agreement.
5.2 The Agent agrees that at the time any buy order for the Shares is
placed by clients of the Agent, the buyer will be outside the United
States, or the Agent and all persons acting on its behalf will reasonably
believe that the buyer is outside the United States, and neither the
Agent nor any person acting on its behalf will have knowledge that such
transaction has been pre-arranged with a buyer in the United States.
2
<PAGE> 3
5.3 Neither the Issuer, the Agent, nor any of their respective
affiliates, nor any person acting on behalf of any of the foregoing, will
offer or sell any of the Securities to U.S. Persons (as defined in the
Subscription Agreement) or in the United States, or undertake any
activity for the purpose of, or that could reasonably be expected to have
the effect of, conditioning the market for the Shares in the United
States.
6. OFFERING MEMORANDUM
6.1 The Agent will not sell Shares in such a way that an Offering
Memorandum is required, unless the Issuer consents in writing, or unless
the Issuer delivers an Offering Memorandum to the Agent or its solicitor.
6.2 The Issuer will ensure that any Offering Memorandum which is
prepared and delivered by the Issuer will conform with all the
requirements of the Act and will be reasonably satisfactory to the Agent.
6.3 The Issuer will deliver to the Agent as soon as possible after the
reference date of this Agreement sufficient commercial copies of any
Offering Memorandum which has been prepared.
6.4 If prior to the Closing, there is any material adverse change in
the Issuer's business, the Issuer will as soon as possible inform the
Agent of the change and prepare an appropriate amendment to the Offering
Memorandum.
6.5 Delivery by the Issuer of an Offering Memorandum will constitute
the Issuer's authorization to the Agent to utilize the Offering
Memorandum in connection with the Private Placement, and will constitute
a representation and warranty by the Issuer that the Offering Memorandum
does not contain a misrepresentation (as defined in the Act), other than
with respect to information supplied by and relating solely to the Agent.
6.6 If the Issuer has delivered an Offering Memorandum to the Agent
which has been prepared in accordance with this Agreement, then the Agent
will, on behalf of the Issuer, deliver a copy of such Offering Memorandum
to each potential purchaser introduced to the Issuer by the Agent.
7. SUBSCRIPTIONS
7.1 The Agent will use its best efforts to obtain from each Purchaser
introduced by the Agent, and deliver to the Issuer's escrow agent, Bank
Sarasin & Cie (the "Escrow Agent"), on or before each Closing duly
completed and signed subscriptions in the form of the Subscription
Agreement or in such other form consented to by the Issuer and the Agent
and executed by the Purchaser.
3
<PAGE> 4
8. TERMINATION
8.1 The Agent may terminate its obligations under this Agreement by
notice in writing to the Issuer at any time before the Closing if:
(a) a material adverse change in the business of the Issuer has
occurred;
(b) there is a material event, accident, governmental law or
regulation or other occurrence of any nature which, in the
opinion of the Agent, seriously affects or will seriously
affect the financial markets, or the business of the Issuer
or its subsidiaries, if any, or the ability of the Agent to
perform its obligations under this Agreement, or a
Purchaser's decision to purchase the Shares;
(c) an inquiry or investigation from or by a governmental
regulatory agency (whether formal or informal) in relation
to the Issuer, or the Issuer's directors, officers or
promoters, which may have a material adverse effect on the
proposed offering, is commenced or threatened in writing;
(d) any order to cease, halt or suspend trading (including an
order prohibiting communications with persons in order to
obtain expressions of interest) in the securities of the
Issuer prohibiting or restricting the Private Placement is
made by a competent regulatory authority and that order is
still in effect; or
(e) the Issuer breaches any material term of this Agreement and
fails to cure such breach within 5 business days after
written notice thereof from the Agent.
9. WARRANTIES, REPRESENTATIONS AND COVENANTS
9.1 The Issuer warrants and represents to and covenants with the Agent
that:
(a) the authorized and issued capital of the Issuer are as
disclosed in the Offering Memorandum and the outstanding
shares of the Issuer are fully paid and non-assessable;
(b) the Issuer will reserve or set aside sufficient shares in
its treasury to issue the Shares and all such shares will
be duly and validly issued as fully paid and
non-assessable;
(c) the Offering Memorandum, if any, subscription form and all
other written or oral representations made by the Issuer to
the Purchaser or potential Purchaser in connection with the
Private Placement will be accurate in all material respects
and will omit no fact, the omission of which will make such
representations misleading or incorrect;
4
<PAGE> 5
(d) the Issuer has complied in all material respects and will
so comply with the requirements of all applicable corporate
and securities laws and administrative policies and
directions, including, without limitation, the Act, in
relation to the issue and trading of its securities and in
all matters relating to the Private Placement;
(e) there is not presently, and will not be until the Closing
any material adverse change in the business of the Issuer
which has not been or will not be fully disclosed to the
Agent;
(f) the issue and sale of the Securities by the Issuer and the
Agent does not and will not conflict with, and does not and
will not result in a breach of, any of the terms of its
organizational documents or any material agreement or
instrument to which the Issuer is a party;
(g) neither the Issuer nor any of its subsidiaries is a party
to any actions, suits or proceedings which could materially
affect its business or financial condition, and to the best
of the Issuer's knowledge no such actions, suits or
proceedings are contemplated or have been threatened which
are not disclosed in the Offering Memorandum;
(h) there are no judgments against the Issuer or any of its
subsidiaries, if any, which are unsatisfied, nor are there
any consent decrees or injunctions to which the Issuer or
any of its subsidiaries, if any, is subject;
(i) this Agreement has been, or will be as of the Closing, duly
authorized by all necessary corporate action on the part of
the Issuer, and the Issuer has full corporate power and
authority to undertake the Private Placement;
(j) no order halting or suspending trading in securities of the
Issuer nor prohibiting the sale of such securities has been
issued to and is outstanding against the Issuer or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened;
(k) except as disclosed in the Offering Memorandum, no person
has any right, agreement or option, present or future,
contingent or absolute, or any right capable of becoming
such a right, agreement or option, for the issue or
allotment of any unissued shares in the capital of the
Issuer or its subsidiaries, if any, or any other security
convertible into or exchangeable for any such shares, or to
require the Issuer or its subsidiaries, if any, to
purchase, redeem or otherwise acquire any of the issued and
outstanding shares in its capital;
5
<PAGE> 6
(l) other than the Agent, no person, firm or corporation acting
or purporting to act at the request of the Issuer is
entitled to any brokerage, agency or finder's fee in
connection with the transactions described herein; and
(m) the warranties and representations in this Section are
materially true and correct and will remain so as of the
Closing.
9.2 The Agent warrants and represents to the Issuer that:
(a) it is a valid and subsisting corporation under the law of
the jurisdiction in which it was incorporated;
(b) it is not a "U.S. person" as defined under the Act;
(c) it is registered under applicable laws to the extent
required by such laws in connection with this Agreement;
and
(d) it will sell the Shares in compliance with the Act.
10. EXPENSES OF AGENT
10.1 The Issuer will pay all of the expenses of the Private Placement
and all the expenses reasonably incurred by the Agent in connection with
the Private Placement, up to a maximum of three thousand dollars
(U.S.$3,000.00).
10.2 The Issuer will pay the expenses referred to in the previous
Subsection even if the transactions contemplated by this Agreement are
not completed or this Agreement is terminated, unless the failure of
acceptance or completion or the termination is the result of a breach of
this Agreement by the Agent.
10.3 The Agent may, from time to time, render accounts for its expenses
in connection with the Private Placement to the Issuer for payment on or
before the dates set out in the accounts.
10.4 The issuer authorizes the Agent to deduct its reasonable expenses
in connection with Private Placement from the Proceeds of the Private
Placement and any advance payments made by the Issuer, including expenses
for which an account has not yet been rendered.
11. INDEMNITY
11.1 The Issuer will indemnify the Agent and each of the Agent's
agents, directors, officers and employees (collectively, the "Indemnified
Parties") and save them harmless against all losses, claims, damages or
liabilities:
6
<PAGE> 7
(a) existing by reason of a material misstatement contained in
the Offering Memorandum, Subscription Agreement or other
written or oral representation made by the Issuer to a
Purchaser or potential Purchaser in connection with the
Private Placement by reason of the omission to state a
material fact necessary to make such statements or
representations not misleading (except for information and
statements supplied by and relating solely to the Agent);
(b) arising directly or indirectly out of any order made by any
regulatory authority based upon an allegation that any such
material misstatement, misrepresentation or omission exists
(except information and statements supplied by and relating
solely to the agent), that trading in or distribution of
any of the Securities is to cease;
(c) resulting from the failure by the Issuer to obtain any
required regulatory approval to the Private Placement
unless the failure to obtain such approval is the result of
a breach of this Agreement by the Agent;
(d) resulting from a material breach by the Issuer of any of
the terms of this Agreement;
(e) if the Issuer fails to issue and deliver the certificates
representing the Shares with the result that any completion
of a sale of the Shares does not take place; or
(f) if, following the completion of a sale of any of the
Shares, a determination is made by any competent authority
setting aside the sale, unless that determination arises
out of an act or omission by the Agent.
11.2 If any action or claim is brought against an Indemnified Party in
respect of which indemnity may be sought from the Issuer pursuant to this
Agreement, the Indemnified Party will promptly notify the Issuer in
writing.
11.3 The Issuer will assume the defense of the action or claim,
including the employment of counsel and the payment of all expenses.
11.4 The Indemnified Party will have the right to employ one separate
counsel acceptable to Issuer, and the Issuer will pay the reasonable
documented fees and expenses of such counsel.
11.5 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified
Party from any other person in respect of any matters specified in this
Agreement and will continue in full force and effect until all possible
liability of the Indemnified Parties arising out of the transactions
contemplated by this Agreement has been extinguished by the operation of
law.
7
<PAGE> 8
11.6 If indemnification under this Agreement is found in a final
judgment (not subject to further appeal) by a court of competent
jurisdiction not to be available for reason of public policy, the Issuer
and the Indemnified Parties will contribute to the losses, claims,
damages, liabilities or expenses (or actions in respect thereof) for
which such indemnification is held unavailable in such proportion as is
appropriate to reflect the relative benefits to and fault of the Issuer,
on the one hand, and the Indemnified Parties on the other hand, in
connection with the mater giving rise to such losses, claims, damages,
liabilities or expenses (or actions in respect thereof). No person found
liable for a fraudulent misrepresentation (within the meaning of
applicable securities laws) will be entitled to contribution from any
person who is not found liable for such fraudulent misrepresentation.
11.7 To the extent that any Indemnified Party is not a party to this
Agreement, the Agent will obtain and hold the right and benefit of this
section in trust for and on be half of such Indemnified Party.
12. ASSIGNMENT AND SELLING GROUP PARTICIPATION
12.1 The Agent will not assign this Agreement or any of its rights
under this Agreement or, with respect to the Shares, enter into any
agreement in the nature of an option of a sub-option unless and until,
for each intended transaction, the Agent has obtained the consent of the
Issuer.
12.2 The Agent may offer selling group participation in compliance with
applicable laws and consistent with the normal course of the brokerage
business to selling groups of other licensed dealers, brokers and
investments dealers, who may or who may not be offered part of the
Agent's Fee.
13. NOTICE
13.1 Any notice under this Agreement will be given in writing and must
be delivered, sent by facsimile transmission or mailed by prepaid post
and addressed to the party to which notice is to be given at the address
next to their signatures below, or at another address designated by the
party in writing.
13.2 If notice is sent by facsimile transmission or is delivered, it
will be deemed to have been given at the time of transmission or
delivery.
13.3 If notice is mailed, it will be deemed to have been received 48
hours following the date of mailing of the notice.
13.4 If there is an interruption in normal mail service due to strike,
labor unrest or other cause at or prior to the time a notice is mailed,
the notice will be sent by facsimile transmission or will be delivered.
8
<PAGE> 9
14. TIME
14.1 Time is of the essence of this Agreement.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
15.1 The representations, warranties, covenants and indemnities of the
Issuer and the Agent contained in this Agreement will survive the Closing
for a period of three (3) years.
16. INUREMENT
16.1 This Agreement shall enure to the benefit of and is binding on the
parties to this Agreement and their successors and permitted assigns.
17. HEADINGS
17.1 The headings in this Agreement are for convenience of reference
only and do not affect the interpretation of this Agreement.
18. COUNTERPARTS
18.1 This Agreement may be executed in two or more counterparts and may
be delivered by facsimile, each of which will be deemed to be an original
and all of which will constitute one agreement, effective as of the
reference date given above.
19. LAW
19.1 This Agreement is governed by the law of the State of Texas.
This document was executed and delivered as of the date first given
above:
[SIGNATURES ON NEXT PAGE]
9
<PAGE> 10
Issuer:
WattMonitor, Inc.
By:/s/ Joel Dumaresq
-----------------
Joel Dumaresq
President
Agent:
ValorInvest Ltd.
By:/s/ Illegible Signature
-----------------------
Name:
Title:
10
<PAGE> 1
Exhibit 1.2
PLACEMENT AGREEMENT
THIS PLACEMENT AGREEMENT (this "Agreement") dated as of April 5, 2000, is
made by and between HEALTHBRIDGE, INC., a Texas corporation (the "Issuer"), and
VALORINVEST LTD. (the "Agent").
WHEREAS
A. The Issuer wishes to privately place with purchasers up to
1,000,000 units consisting of one share of common stock and one
common stock purchase warrant (each a "Unit") at a price of U.S.
$0.50 per Unit;
B. The Issuer wishes to appoint the Agent to distribute the Units,
and the Agent is willing to accept such appointment on the terms
and conditions of this Agreement;
THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS
1.1 In this Agreement and the Recitals hereto:
(a) "Act" means the Securities Act of 1933 (United States), as
amended, the regulations and rules made thereunder and all
administrative policy statements, blanket orders, notices,
directions and rulings issued by the Commission;
(b) "Agent Fee" means the commission which is set out in this
Agreement and which is payable by the Issuer to the Agent
in consideration of the services performed by the Agent
under this Agreement;
(c) "Closing" means the day on which the Issuer accepts
Subscription Agreements not previously accepted and
withdraws funds not previously withdrawn by Issuer;
(d) "Commission" means the United States Securities and
Exchange Commission.
(e) "Offering Memorandum" means any private placement
memorandum, and any amendments made to such offering
memorandum, which is required by the Act to be prepared, or
is prepared, by the Issuer in connection with the sale of
any of the Units;
<PAGE> 2
(f) "Private Placement" means the offering of the Units on the
terms and conditions set forth in this Agreement or the
Subscription Agreement;
(g) "Purchasers" means the purchasers of Units pursuant to the
Private Placement.
(h) "Subscription Agreement" means the Subscription Agreement
attached hereto as Exhibit A.
2. APPOINTMENT OF AGENT
2.1 The Issuer appoints the Agent as its exclusive agent and the Agent
accepts the appointment and agrees to act as the exclusive agent of the
Issuer to use its commercially reasonable efforts to find and introduce
to the Issuer potential Purchasers to purchase up to 1,000,000 Units, at
a price of $0.50 per Unit, by way of private placement.
3. THE UNITS
3.1 The Units will be one share of common stock and one common stock
purchase warrant of the Issuer as described in the Subscription Agreement
issued and registered in the names of the Purchasers or their nominees.
4. THE AGENT FEE
4.1 In consideration of the services performed by the Agent under this
Agreement, the Issuer agrees to pay to the Agent on each Closing an Agent
Fee equal to 8% of the gross proceeds received by the Issuer from the
sales of the Units on such Closing.
4.2 The Agent Fee will be paid in lawful United States currency.
5. OFFERING RESTRICTIONS
5.1 The Agent agrees that the Issuer will only sell the Units to
persons:
(a) who are not "U.S. persons" as that term is defined under
Regulation S of the Act;
(b) who are "accredited investors" as that term is defined under Rule
501(a) of the Act; and
(c) who are otherwise qualified to purchase the Units as described in
the Subscription Agreement.
5.2 The Agent agrees that at the time any buy order for the Units is
placed by persons introduced by the Agent, the buyer will be outside the
United States, or the Agent and all persons acting on its behalf will
reasonably believe that the buyer is outside the United
2
<PAGE> 3
States, and neither the Agent nor any person acting on its behalf will
have knowledge that such transaction has been pre-arranged with a buyer
in the United States.
5.3 Neither the Issuer, the Agent, nor any of their respective
affiliates, nor any person acting on behalf of any of the foregoing, will
offer or sell any of the Securities to U.S. Persons (as defined under
Regulation S of the Act) or in the United States, or undertake any
activity for the purpose of, or that could reasonably be expected to have
the effect of, conditioning the market for the Units in the United
States.
6. OFFERING MEMORANDUM
6.1 The Issuer will ensure that any Offering Memorandum which is
prepared and delivered by the Issuer will conform with all the
requirements of the Act and will be reasonably satisfactory to the Agent.
6.2 The Issuer will deliver to the Agent as soon as possible after the
reference date of this Agreement sufficient commercial copies of any
Offering Memorandum which has been prepared.
6.3 If prior to the Closing, there is any material adverse change in
the Issuer's business, the Issuer will as soon as possible inform the
Agent of the change and prepare an appropriate amendment to the Offering
Memorandum.
6.4 Delivery by the Issuer of an Offering Memorandum will constitute
the Issuer's authorization to the Agent to utilize the Offering
Memorandum in connection with the Private Placement, and will constitute
a representation and warranty by the Issuer that the Offering Memorandum
does not contain a misrepresentation (as defined in the Act), other than
with respect to information supplied by and relating solely to the Agent.
6.5 If the Issuer has delivered an Offering Memorandum to the Agent
which has been prepared in accordance with this Agreement, then the Agent
will, on behalf of the Issuer, deliver a copy of such Offering Memorandum
to each qualified potential purchaser introduced to the Issuer by the
Agent.
7. SUBSCRIPTIONS
7.1 The Agent will obtain from each Purchaser introduced by the Agent,
and deliver to the Issuer on or before each Closing, duly completed and
signed subscriptions in the form of the Subscription Agreement or in such
other form consented to by the Issuer and the Agent and executed by the
Purchaser.
8. TERMINATION
8.1 The Agent may terminate its obligations under this Agreement by
notice in writing to the Issuer at any time before the initial Closing
if:
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<PAGE> 4
(a) a material adverse change in the business of the Issuer has
occurred;
(b) there is a material event, accident, governmental law or
regulation or other occurrence of any nature which, in the
opinion of the Agent, seriously affects or will seriously
affect the financial markets, or the business of the Issuer
or its subsidiaries, if any, or the ability of the Agent to
perform its obligations under this Agreement, or a
Purchaser's decision to purchase the Units;
(c) an inquiry or investigation from or by a governmental
regulatory agency (whether formal or informal) in relation
to the Issuer, or the Issuer's directors, officers or
promoters, which may have a material adverse effect on the
proposed offering, is commenced or threatened in writing;
(d) any order to cease, halt or suspend trading (including an
order prohibiting communications with persons in order to
obtain expressions of interest) in the securities of the
Issuer prohibiting or restricting the Private Placement is
made by a competent regulatory authority and that order is
still in effect; or
(e) the Issuer breaches any material term of this Agreement and
fails to cure such breach within 5 business days after
written notice thereof from the Agent.
9. WARRANTIES, REPRESENTATIONS AND COVENANTS
9.1 The Issuer warrants and represents to and covenants with the Agent
that:
(a) to the Issuer's best knowledge, the authorized and issued
capital of the Issuer are as disclosed in the Offering
Memorandum and the outstanding shares of the Issuer are
fully paid and non-assessable;
(b) the Issuer will reserve or set aside sufficient shares in
its treasury to issue the Units and all such shares will be
duly and validly issued as fully paid and non-assessable;
(c) the Offering Memorandum, if any, subscription form and all
other written or oral representations made by the Issuer to
the Purchaser or potential Purchaser in connection with the
Private Placement will be accurate in all material respects
and will omit no fact, the omission of which will make such
representations misleading or incorrect;
(d) the Issuer has complied in all material respects and will
so comply with the requirements of all applicable corporate
and securities laws and administrative policies and
directions, including, without limitation, the
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<PAGE> 5
Act, in relation to the issue and trading of its securities
and in all matters relating to the Private Placement;
(e) there is not presently, and will not be upon each Closing
any material adverse change in the business of the Issuer
which has not been or will not be fully disclosed to the
Agent;
(f) the issue and sale of the Units by the Issuer and the Agent
does not and will not conflict with, and does not and will
not result in a breach of, any of the terms of its
organizational documents or any material agreement or
instrument to which the Issuer is a party;
(g) there are no judgments against the Issuer or any of its
subsidiaries, if any, which are unsatisfied, nor are there
any consent decrees or injunctions to which the Issuer or
any of its subsidiaries, if any, is subject;
(h) this Agreement has been duly authorized by all necessary
corporate action on the part of the Issuer, and the Issuer
has full corporate power and authority to undertake the
Private Placement;
(i) no order halting or suspending trading in securities of the
Issuer nor prohibiting the sale of such securities has been
issued to and is outstanding against the Issuer or its
directors, officers or promoters and no investigations or
proceedings for such purposes are pending or threatened;
(j) except as disclosed in the Offering Memorandum, no person
has any right, agreement or option, present or future,
contingent or absolute, or any right capable of becoming
such a right, agreement or option, for the issue or
allotment of any unissued shares in the capital of the
Issuer or its subsidiaries, if any, or any other security
convertible into or exchangeable for any such shares, or to
require the Issuer or its subsidiaries, if any, to
purchase, redeem or otherwise acquire any of the issued and
outstanding shares in its capital;
(k) other than the Agent, no person, firm or corporation acting
or purporting to act at the request of the Issuer is
entitled to any brokerage, agency or finder's fee in
connection with the transactions described herein; and
9.2 The Agent warrants and represents to the Issuer that:
(a) it is a valid and subsisting corporation under the law of
the jurisdiction in which it was incorporated;
(b) it is not a "U.S. person" as defined under the Act;
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<PAGE> 6
(c) it is registered under applicable laws to the extent
required by such laws in connection with this Agreement;
and
(d) it will act in compliance with the Act.
10. EXPENSES OF AGENT
10.1 The Issuer will pay all of the expenses of the Private Placement
and all the expenses reasonably incurred by the Agent in connection with
the Private Placement, up to a maximum of two thousand dollars
(U.S.$2,000.00).
10.2 The Issuer will pay the expenses referred to in the previous
Subsection even if the transactions contemplated by this Agreement are
not completed or this Agreement is terminated, unless the failure of
acceptance or completion or the termination is the result of a breach of
this Agreement by the Agent.
10.3 The Agent may, from time to time, render accounts for its expenses
in connection with the Private Placement to the Issuer for payment on or
before the dates set out in the accounts.
11. INDEMNITY
11.1 The Issuer will indemnify the Agent and each of the Agent's
agents, directors, officers and employees (collectively, the "Indemnified
Parties") and save them harmless against all losses, claims, damages or
liabilities:
(a) existing by reason of a material misstatement contained in
the Offering Memorandum, Subscription Agreement or other
written or oral representation made by the Issuer to a
Purchaser or potential Purchaser in connection with the
Private Placement by reason of the omission to state a
material fact necessary to make such statements or
representations not misleading (except for information and
statements supplied by and relating solely to the Agent);
(b) arising directly or indirectly out of any order made by any
regulatory authority based upon an allegation that any such
material misstatement, misrepresentation or omission exists
(except information and statements supplied by and relating
solely to the agent), that trading in or distribution of
any of the Securities is to cease;
(c) resulting from the failure by the Issuer to obtain any
required regulatory approval to the Private Placement
unless the failure to obtain such approval is the result of
a breach of this Agreement by the Agent;
(d) resulting from a material breach by the Issuer of any of
the terms of this Agreement;
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<PAGE> 7
(e) if the Issuer fails to issue and deliver the certificates
representing the Units with the result that any completion
of a sale of the Units does not take place; or
(f) if, following the completion of a sale of any of the
Shares, a determination is made by any competent authority
setting aside the sale, unless that determination arises
out of an act or omission by the Agent.
11.2 If any action or claim is brought against an Indemnified Party in
respect of which indemnity may be sought from the Issuer pursuant to this
Agreement, the Indemnified Party will promptly notify the Issuer in
writing.
11.3 The Issuer will assume the defense of the action or claim,
including the employment of counsel and the payment of all expenses.
11.4 The indemnity provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified
Party from any other person in respect of any matters specified in this
Agreement and will continue in full force and effect until all possible
liability of the Indemnified Parties arising out of the transactions
contemplated by this Agreement has been extinguished by the operation of
law.
11.5 If indemnification under this Agreement is found in a final
judgment (not subject to further appeal) by a court of competent
jurisdiction not to be available for reason of public policy, the Issuer
and the Indemnified Parties will contribute to the losses, claims,
damages, liabilities or expenses (or actions in respect thereof) for
which such indemnification is held unavailable in such proportion as is
appropriate to reflect the relative benefits to and fault of the Issuer,
on the one hand, and the Indemnified Parties on the other hand, in
connection with the matter giving rise to such losses, claims, damages,
liabilities or expenses (or actions in respect thereof). No person found
liable for a fraudulent misrepresentation (within the meaning of
applicable securities laws) will be entitled to contribution from any
person who is not found liable for such fraudulent misrepresentation.
11.6 To the extent that any Indemnified Party is not a party to this
Agreement, the Agent will obtain and hold the right and benefit of this
section in trust for and on be half of such Indemnified Party.
12. ASSIGNMENT AND SELLING GROUP PARTICIPATION
12.1 The Agent will not assign this Agreement or any of its rights
under this Agreement or, with respect to the Units, enter into any
agreement in the nature of an option of a sub-option unless and until,
for each intended transaction, the Agent has obtained the consent of the
Issuer.
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<PAGE> 8
12.2 The Agent may offer selling group participation in compliance with
applicable laws and consistent with the normal course of the brokerage
business to selling groups of other licensed dealers, brokers and
investments dealers, who may or who may not be offered part of the
Agent's Fee, provided that each such dealer or broker agrees to comply
with this Agreement.
13. NOTICE
13.1 Any notice under this Agreement will be given in writing and must
be delivered, sent by facsimile transmission or mailed by prepaid post
and addressed to the party to which notice is to be given at the address
next to their signatures below, or at another address designated by the
party in writing.
13.2 If notice is sent by facsimile transmission or is delivered, it
will be deemed to have been given at the time of transmission or
delivery.
13.3 If notice is mailed, it will be deemed to have been received 48
hours following the date of mailing of the notice.
13.4 If there is an interruption in normal mail service due to strike,
labor unrest or other cause at or prior to the time a notice is mailed,
the notice will be sent by facsimile transmission or will be delivered.
14. TIME
14.1 Time is of the essence of this Agreement.
15. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
15.1 The representations, warranties, covenants and indemnities of the
Issuer and the Agent contained in this Agreement will survive the final
Closing for a period of one (1) year.
16. INUREMENT
16.1 This Agreement shall enure to the benefit of and is binding on the
parties to this Agreement and their successors and permitted assigns.
17. HEADINGS
17.1 The headings in this Agreement are for convenience of reference
only and do not affect the interpretation of this Agreement.
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<PAGE> 9
18. COUNTERPARTS
18.1 This Agreement may be executed in two or more counterparts and may
be delivered by facsimile, each of which will be deemed to be an original
and all of which will constitute one agreement, effective as of the
reference date given above.
19. LAW
19.1 This Agreement is governed by the law of the State of Texas.
This document was executed and delivered as of the date first given
above:
[SIGNATURES ON NEXT PAGE]
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Issuer Address:
Healthbridge, Inc. 1177 West Hastings Street
Suite 1818
Vancouver, BC Canada V6E 2K3
Tel: (604) 602-1717
Fax: (604) 687-6755
By:/s/ Nora Coccaro
----------------
Nora Coccaro
President
Agent Address:
ValorInvest Ltd. 29 Quai des Bergues
1201 Geneva
Switzerland
Tel: (011) 41-22-732-5355
Fax: (011) 41-22-732-5695
By:/s/ Pierre Besuchet
-------------------
Pierre Besuchet
Director and Secretary
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<PAGE> 1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement dated as of the 27th day of January, 1999, by
and among Healthbridge, Inc., a Delaware corporation (the "Purchaser"); Roatan
Medical Technologies, Inc., a Utah corporation ("Roatan"); WinTex Corporation, a
Texas Corporation, a wholly-owned subsidiary of Roatan ("WinTex") Roatan Medical
Services, Inc., a Texas Corporation ("Services") and United Services, Inc.
("United") (Roatan, WinTex, Services and United are collectively referred to
herein as the "Sellers") and Mr. Wilhelm Liesner, an individual residing at 3611
Cole Avenue #330, Dallas, Texas 75204 (hereinafter referred to as the
"Stockholder").
W I T N E S S E T H:
WHEREAS, the Sellers are engaged in the business of developing and
marketing technologies and products for the medical waste industry and maintain
ownership of valuable intellectual property in connection therewith; and
WHEREAS, Stockholder, as majority shareholder of Roatan, Services and
United consents to the sale of the assets provided for in this Agreement; and
WHEREAS, the Sellers, Stockholder and certain affiliated companies have
executed a letter of intent (the "LOI") with First Capital Invest Corp. BVI
("FCIC") dated March 30, 1998 that contemplates a series of financings for the
benefit of Sellers and Stockholder; and
WHEREAS, pursuant to the LOI, FCIC has advanced certain funds for the
benefit of the Sellers and Stockholder and will arrange for future financings
for the Purchaser, subject to an agreed upon restructuring of the assets and
liabilities of the Sellers, Stockholder and their affiliated companies; and
WHEREAS, the Sellers have agreed upon a restructuring plan which
includes the sale of substantially all of the Sellers' assets to Purchaser,
pursuant to the terms and
<PAGE> 2
conditions of this Agreement, in exchange for voting stock of Purchaser and
other good and valuable consideration stated herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, the parties to this Agreement hereby agree as follows:
1. Acquisition of Assets in Exchange for Purchaser Voting Stock.
(a) Transfer of Assets. Sellers shall sell, transfer, assign
and convey to Purchaser, the assets described in Paragraph 1(b) of this
Agreement (the "Assets") in exchange for the shares of common stock, par value
$.01 per share ("Purchaser Stock"), of Purchaser, payable as provided in
Paragraph 1(c) of this Agreement.
(b) Acquisition of Sellers' Assets. Subject to the terms and
conditions of this Agreement and upon the representations, warranties, covenants
and agreements made in this Agreement by the parties, Sellers shall validly
transfer, assign, convey and deliver to Purchaser at the Closing, as hereinafter
defined, all of the property and assets of the Sellers of every kind and
wherever situated which are owned as of the Closing Date, as hereinafter
defined, by Sellers or in which they have any right or interest save and except
the Excluded Assets described in Paragraph 1(b)(iii) below. Except as excluded,
the Assets include all of the Sellers' goodwill, customer lists, franchises and
all rights, title and interest in and to the use of its their corporate names,
trade names, trademarks or any similar names and any other names under which the
Sellers conduct business; all patent rights, copyrights, licenses, marketing
rights, trade secrets, know-how, inventions and royalties; lands, leaseholds and
other interests in land; plants, buildings, machinery, equipment, tools, motor
vehicles, transportation and packing and delivery equipment and supplies; bonds,
stock, mortgages or other investments; notes, drafts and accounts receivable;
supplies on hand and in transit; inventories of finished goods, raw materials
and work in process; policies of insurance, fidelity and contract bonds; causes
of action, judgments, claims and demands of whatsoever nature; memberships,
agencies and permits; contract rights; rights under government licenses and
authorizations; software and other intangible intellectual property of all
kinds, deferred charges, advance payments, prepaid items, rights of offset and
credits of all kinds, contracts for supplies and for the sale
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<PAGE> 3
of goods, distribution and sales agreements and rights, and all other contracts,
books of account, files, papers and records relating to the aforesaid business
and assets, and all cash on hand and in banks) and except:
(i) the consideration to be received by the Sellers
pursuant to Paragraph 1(c) of this Agreement;
(ii) each of the Sellers' franchises to be a
corporation, its certificate of incorporation, corporate seal, minute books,
stock books and other corporate records having exclusively to do with the
corporate organization and capitalization of the Sellers;
(iii) certain other assets as listed on Schedule
1(a). All such excluded assets described in these sub-paragraphs (i), (ii),
(iii) are hereinafter referred to as the "Excluded Assets."
(c) Issuance of Shares of Purchaser Stock. The purchase price
for the assets to be purchased pursuant to this Agreement shall consist of the
following:
(i) to Roatan - three hundred thirty thousand
(330,000) shares of the common stock of Purchaser;
(ii) to United - two million seventy seven thousand
eight hundred (2,077,800) shares of the common stock of Purchaser;
(iii) to Services - twenty three thousand fifty three
(23,053) shares of the common stock of Purchaser;
(iv) to L.E. Creel (Trustee) - one hundred twenty
nine three hundred eighty four thousand (129,384) shares;
(v) Purchaser agrees to assist Sellers and
Stockholder to participate in, or otherwise sell, as a part of any future
offering or other transaction in which any majority stockholder of Purchaser
participates, in connection with the Closing of the transaction contemplated
herein.
(d) Specified Liabilities to be Assumed by Purchaser. In
addition to the consideration described in the foregoing paragraph 1(c), and
except to the extent expressly set forth in Paragraph 1(e) of this Agreement,
Purchaser shall assume no liabilities or
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<PAGE> 4
obligations of the Sellers or of the Stockholder whether actual or contingent,
and whether or not such liabilities are set forth on the Sellers' financial
statements or other books and records and regardless of whether such obligations
arise out of contracts or agreements or are statutory obligations of the
Sellers. In particular, and without limiting the generality of this Paragraph
1(d), Purchaser is not assuming any obligations to the Internal Revenue Service
("IRS") or to any other taxing agency or authority or with respect to any
employee benefit plan or relating to the preparation and consummation of the
transaction contemplated by this Agreement.
(e) Contracts and Obligations to be Assumed. Purchaser shall
assume no liabilities of any kind and description, other than the Sellers' and
Stockholder's liabilities specifically listed on a schedule of assumed
liabilities approved by Purchaser and attached hereto as Schedule 1(e).
(f) Purchase Price Allocation. The purchase price of the
assets acquired by Purchaser pursuant to this Agreement shall be determined by
Purchaser, subject to the approval of the Sellers, which approval shall not be
unreasonably withheld or delayed.
(g) Closing. The purchase and sale contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the office
of Esanu Katsky Korins & Siger, 605 Third Avenue, New York, New York on February
22, 1999 or upon such later date, or by such other method, as the parties may
mutually select (the "Closing" or "Closing Date").
2. Representations and Warranties of Sellers and Stockholder. Sellers
jointly and severally, hereby represent and warrant to Purchaser, as follows:
(a) Corporate.
(i) Roatan is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Utah and has full
power and authority to carry on its business and to own or lease all of its
properties and assets as and in the places such businesses are now conducted.
There is no jurisdiction in which Roatan owns or leases real property or where
its activities or the nature of its business or property would
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<PAGE> 5
require qualification or license as a foreign corporation where it is not so
qualified or licensed.
(ii) WinTex is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Texas and has full
power and authority to carry on its business and to own or lease all of its
properties and assets as and in the places such businesses are now conducted.
There is no jurisdiction in which WinTex owns or leases real property or where
its activities or the nature of its business or property would require
qualification or license as a foreign corporation where it is not so qualified
or licensed.
(iii) Services is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Texas and
has full power and authority to carry on its business and to own or lease all of
its properties and assets as and in the places such businesses are now
conducted. There is no jurisdiction in which Services owns or leases real
property or where its activities or the nature of its business or property would
require qualification or license as a foreign corporation where it is not so
qualified or licensed.
(iv) United is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Texas and has full
power and authority to carry on its business and to own or lease all of its
properties and assets as and in the places such businesses are now conducted.
There is no jurisdiction in which United owns or leases real property or where
its activities or the nature of its business or property would require
qualification or license as a foreign corporation where it is not so qualified
or licensed.
(v) Complete and correct copies of the certificates
of incorporation of each of the Sellers, certified by the appropriate
Secretaries of State and the by-laws of each of the Sellers, certified by the
secretary of each of the Sellers (the "Certificates of Incorporation" and
"By-Laws," respectively), and a list of the present officers and directors of
each of the Sellers, certified by their respective secretaries will be delivered
to Purchaser at or prior to Closing.
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<PAGE> 6
(vi) Sellers have full corporate power to carry out
the transactions provided for in this Agreement. All necessary corporate actions
required to be taken by the Sellers, including all necessary stockholder and
director approvals, relating to the execution and delivery of this Agreement and
the consummation of the transactions contemplated by this Agreement have been,
or shall, prior to Closing, be duly and validly taken. This Agreement and any
other agreements, instruments, releases or other obligations (collectively,
"Other Agreements") entered into in connection with this Agreement, when
executed and delivered by the Sellers, Stockholder or their respective agents,
will constitute the legal, valid and binding obligations of the Sellers
enforceable in accordance with their respective terms. No consent, approval or
agreement of any person, party, court, governmental authority, or entity is
required to be obtained by the Sellers in connection with the execution and
performance by the Sellers of this Agreement or such Other Agreements.
(vii) Except as set forth in Schedule 2(a)(ii),
Sellers do not have any equity investment or other interest, direct or indirect,
in, any domestic or foreign corporation, association, partnership, joint venture
or other entity.
(b) Property.
(i) Sellers do not own any real property. Schedule
2(b) identifies all real property or leasehold estates in real property of which
any of the Sellers is a lessor or lessee. Sellers are a party to legal, valid
and binding leases under which Sellers are a tenant or possessor in good
standing, free of any default or breach by Sellers or any affiliate of the
Sellers. Sellers have legal and valid occupancy permits, if required, and all
other required licenses or governmental approvals for the Scheduled leased
property. None of such real property leases shall be modified, terminated, or
affected in any way by the execution of this Agreement or the consummation of
the transactions contemplated by this Agreement nor shall such execution and
consummation grant any party any right of termination under any of such leases.
All rental and other payments due under such leases have been duly made, all
acts required to be performed by the Sellers and such affiliates have been duly
performed and Sellers enjoy the unrestricted quiet possession of
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<PAGE> 7
each of the premises purported to be leased by it. No improvement, fixture or
equipment in the premises or properties, leased, used or occupied by the Sellers
nor the leasehold or occupation with respect thereto, is in violation of any
zoning or building laws, and all such premises and properties are zoned for the
purposes for which such premises and properties are currently being used.
(ii) Except for (A) liens for taxes, assessments,
charges and other indebtedness, the validity of which the Sellers are contesting
in good faith by appropriate action diligently pursued, each of which is listed
in Schedule 2(b)(ii); (B) liens for taxes and assessments not yet payable; (C)
liens of employees and laborers for current wages not yet due; (D) liens arising
under the terms of a lease of real property as set forth in Schedule 2(b)(ii);
(E) as otherwise reflected in Schedule 2(b)(ii), Sellers own outright and has
good and marketable title to all its respective assets free and clear of all
Claims.
(iii) All leases entered into by the Sellers were
made at arms length with non-affiliated persons.
(iv) Except as set forth in Schedule 2(b)(v), all of
Sellers' rights under leases of all of its real and personal property may be
transferred to Purchaser without the consent of any third party. With respect to
those leases being assumed by Purchaser pursuant to Paragraph 1(e) of this
Agreement, Seller shall obtain any consent required to such assignment.
(c) Litigation. Except as set forth in Schedule 2(c),
there are no claims, actions, suits, proceedings, inquiries, labor disputes or
investigations (whether or not purportedly on behalf of the Sellers) pending or,
to the best of their knowledge, threatened against Sellers at law or in equity
or by or before any Federal, state, county, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, whether legal or administrative or in arbitration or mediation, nor is
there any basis for any such action or proceeding. Except as set forth in
Schedule 2(c), Sellers and their assets are not subject to, nor are the Sellers
in default with respect to, any order, writ, injunction, judgment, decree or
governmental restriction that could materially
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<PAGE> 8
and adversely affect its financial condition, business, assets or prospects or
that would interfere with the transactions contemplated by this Agreement.
(d) Compliance with Laws. To the best of Sellers' and
Stockholder's knowledge, Sellers are in compliance in all material respects with
all laws and the rules and regulations of all Federal, state and other
government agencies or authorities applicable to its business (including,
without limitation, with respect to wages, hours, hiring, firing, promotion,
equal opportunity, nondiscrimination, health, safety, environmental matters,
product labeling, warranties, packaging, advertising or sale of products, trade
regulations, anti-trust or control and foreign exchange), and Sellers possess
all required licenses and approvals for their services and facilities which are
required to be issued in connection with its business. To the best of Sellers'
and Stockholder's knowledge, Sellers have filed with the proper authorities all
statements, reports, information and forms required by all applicable laws,
rules and regulations, and has maintained in full force and effect all licenses
and permits necessary or proper in the conduct of its business. Sellers have
received no written notice or informal advice concerning any revocation or
limitation of any such license or permit and no such proceeding is pending, or,
to the best of Sellers' and Stockholder's knowledge, threatened.
(e) Contracts and Commitments.
(i) Sellers have no contracts or commitments with
respect to either purchases or sales by the Sellers involving a consideration in
excess of $5,000 individually or $10,000 in the aggregate which is not
cancelable by the Sellers without penalty upon 30 days notice other than
contracts made in the ordinary course of business. No purchase commitments by
the Sellers are in excess of the normal, ordinary and usual requirements of
their business or, to the best of their knowledge, at any price unreasonably
high or known to or believed to be excessive.
(ii) Schedule 2(e)(ii) identifies all employees,
consultants and others who have received remuneration from the Sellers in
connection with services rendered within the year prior to the execution of this
Agreement; including such individuals date of hire, rate of remuneration, title
and responsibility. Sellers have made no payments
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<PAGE> 9
or commissions or provided any benefits to others in connection with any sales
or proposed sales by the Sellers, except to employees of the Sellers or sales
representatives regularly engaged by the Sellers to promote the sale of their
products and services. To the best knowledge of the Sellers and Stockholder,
none of such employees or sales representatives are employed or engaged as a
consultant, advisor, purchasing representative, employee, officer, director or
otherwise, whether paid or unpaid, by any customer or proposed customer or by
any government or governmental agency or body of any kind and description or by
any other person, firm or corporation or hold political office or position
(whether or not paid) with any government or governmental agency or body or
receive remuneration for services rendered from any person, firm or corporation
other than Sellers.
(iii) Except as disclosed on Schedule 2(e)(ii), there
are no contracts, agreements or commitments or business arrangements with or to,
and there have not been any sales to, purchases from or other business
arrangements with, any current or former principal stockholders, directors or
officers of the Sellers (or any spouse or relative of any of the foregoing) and
neither Sellers nor Stockholder have any interest in any party with which the
Sellers do business.
(iv) Schedule 2(e)(iv) identifies all unexpired
material contracts to which Sellers are bound. Except as set forth in Schedule
2(e)(iv), Sellers are not a party to any agreement, contract or commitment (A)
granting any person any preferential rights to purchase any of its assets or
properties; (B) which continues over a period (including any periods covered by
an option to renew by any party) of more than one year from its date; (C) with
any distributor, dealer, sales agency or manufacturer's representative or with
any sales, advertising or public relations agency; (D) for capital improvements
or expenditures or the construction of fixed assets; (E) relating to the
borrowing of money or to a line of credit, including, without limitation, any
indenture, mortgage, note, loan or credit agreement, or any other contract or
obligation or to the direct or indirect guaranty or assumption by the Sellers of
obligations of others, including any arrangements which have the economic effect
although not the legal form of a guaranty; (F) with respect to security
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interests, liens, pledges, charges, encumbrances, options, rights of first
refusal, mortgages, indentures or security agreements; (G) not made in the
ordinary course of business; or (H) pursuant to which its right to compete with
any corporation, business trust, firm, individual, partnership, joint venture,
entity or organization, in the conduct of its business, is restrained or
restricted for any reason or in any way; except, with respect to clauses (B),
(D) and (G), agreements, contracts or commitments obligating Sellers to pay more
than $5,000 individually or $10,000 in the aggregate.
(f) No Defaults
(i) Except as described on Schedule 2(3)(iv), Sellers
and Stockholder have performed, in accordance with the terms thereof, all
material obligations required to be performed by them, and Sellers are not in
default, in any material respect, under any contract, lease, agreement or
instrument to which Sellers are a party; each such contract, lease, indenture,
agreement or instrument is a legal, valid and binding obligation of the Sellers
and, to the best of Sellers' and Stockholder's knowledge, the other parties
thereto, enforceable in accordance with its terms; there are no material
breaches or material defaults of or liabilities arising from any breach or
default of any provision thereof by any party thereto, which would, to the best
knowledge of Sellers or Stockholders materially and adversely affect Sellers'
business; and no event has occurred which, with or without the lapse of time or
giving of notice, or both, would constitute such a breach or default thereof by
any party thereto, would cause acceleration of any material obligation of any
party thereto or would materially and adversely affect the Sellers.
(ii) As of Closing. To the best of Sellers' and
Stockholder's knowledge, Sellers shall not be in violation of any term of their
Certificate of Incorporation or its By-Laws, and Sellers will not be in
violation of any judgment, decree or order, applicable to it. The execution and
delivery of this Agreement or any other related agreement by the Sellers and the
consummation of the transactions contemplated by this Agreement or any other
related agreement will not result in any such violation or a violation of the
Certificate of Incorporation or By-Laws of the Sellers or any applicable law or
to the best of Sellers' and Stockholder's knowledge be in conflict with,
constitute a default under
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or result in a violation of (or give rise to any right of termination,
cancellation or acceleration under) any contract, agreement, lease, indenture or
instrument to which the Sellers are a party, or any judgment, decree, order,
statute, rule or governmental regulation applicable to the Sellers or their
business or operations of the Sellers. Sellers are not a party to or bound by
any contract which would materially and adversely affect Sellers' business,
operations, financial condition or prospects.
(g) Patents, Trademarks and Copyrights.
(i) Schedule 2(h)(i) contains, and identifies the
Sellers' interest in: all patents (including all re-issues, divisions,
continuations and extensions thereof), patent applications, patent rights,
patent disclosures docketed, inventions, discoveries, confidential know-how,
copyrights, trademarks, trademark applications and trade names and similar
proprietary rights (collectively, "Proprietary Rights") owned by, or registered
in the name of, the Sellers or in which the Sellers have a right or option to
obtain or acquire an interest, or which are used in, or useful to, the business
of the Sellers. Confidential know-how includes, but is not limited to,
proprietary know-how, software, product formulae, manufacturing, engineering and
other drawings, process flow data, toxicological and ecological data, trade
secrets, technology, technical information, engineering data, design and
engineering specifications and similar materials recording or evidencing
Sellers' proprietary expertise relating to its business, whether or not
currently or heretofore used by Seller and used by or useful to the Sellers in
the conduct of its business. Sellers own outright all the Proprietary Rights
used in their businesses free and clear of all claims and pays no royalty to
anyone under any of them, except as referenced on Schedule 2(g)(ii). None of
Sellers' rights in and to any Proprietary Rights are or will be affected by the
consummation of the transaction contemplated by this Agreement.
(ii) Sellers have full right, title and interest in,
and no other person or entity owns any right, title or interest in, such
Proprietary Rights, except as specified in Schedule 2(g)(ii). Sellers have not
granted any license or made any assignment regarding any such Proprietary
Rights; there have been no asserted claim or litigation challenging or
threatening to challenge the right, title or interest of the Sellers with
respect to any such
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Proprietary Rights; the operations of the Sellers do not, to the best of
Sellers' and Stockholders' knowledge, infringe or violate any enforceable rights
of others in any patents, patent applications, patent rights, confidential
know-how, trademarks, trade names, copyrights, licenses or other proprietary
rights; Sellers as licensee of any Proprietary Right is not in default under any
license and all such licenses are in full force and effect. Seller is not aware
of any default by any other person or party with respect to any license to which
the Sellers are a party or of any infringement by anyone of Sellers' right,
title or interest with respect to the Proprietary Rights. To the best of
Sellers' and Stockholder's knowledge, there are no inventions, discoveries or
confidential know-how of a material nature developed by any employee, agent or
consultant of the Sellers which pertains to the business in which the Sellers
are engaged which has not been disclosed in Schedule 2(g)(i). All license
agreements and assignments set forth in Schedule 2(g)(i) granting Proprietary
Rights to the Sellers are, to the best of Sellers' knowledge, valid and
enforceable in accordance with their terms. Neither the execution of this
Agreement or the consummation of the transactions contemplated by this
Agreement, violates, conflicts with or results or will result in a breach of any
material license or other material agreements relating to Proprietary Rights.
(h) Investment Representation.
(i) Sellers and Stockholder are accredited investors,
within the meaning of Rule 501 of the Commission pursuant to the Securities Act.
Sellers and Stockholder are acquiring the Shares pursuant to this Agreement for
investment and not with a view to the sale or distribution thereof. Seller and
Stockholder understand that the Shares constitute restricted securities within
the meaning of Rule 144 of the Commission pursuant to the Securities Act and may
not be sold or otherwise transferred except pursuant to an effective
registration statement or an exemption from the registration requirements of the
Securities Act. Sellers further acknowledge that Seller and Stockholder have no
registration rights with respect to the Shares. Sellers and Stockholder have
been advised by counsel as to the meaning and implication of the acquisition of
restricted securities, the illiquid nature of the Shares.
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(ii) Sellers and Stockholder are aware that an
investment in Purchaser Stock involves a high degree of risk, that Purchaser has
incurred, and is continuing to incur, consolidated net losses, and no assurance
can be given as to the profitability of Purchaser's future operations, and that
Purchaser has significant funding requirements and the failure of Purchaser to
provide funding or the failure of its subsidiaries to obtain funding from other
sources could have a material adverse effect upon the subsidiaries and upon
Purchaser and could result in the curtailment of operations of Purchaser or one
or more subsidiaries and no assurance can be given as to the availability of
necessary funds to Purchaser or its subsidiaries.
(i) No Broker. Sellers nor any of their officers, directors or
employees have employed or engaged any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement. Sellers shall be solely
liable for the payment of any such brokerage fees, commissions or finders' fees.
(j) Reliance by Purchaser. No representation or warranty set
forth in this Paragraph 2 contains or shall contain any untrue statement of a
material fact or, when taken with all such representations, warranties, reports
and other materials, omitted, omits or will omit to state a material fact
necessary to make the statements contained herein and therein, when taken
together, not misleading and there is no fact which materially and adversely
affects the business, operations or financial condition of the Sellers, which
have not been set forth in this Agreement.
3. Representations and Warranties by Purchaser. Purchaser represents
and warrants to the Sellers that:
(a) Corporate.
(i) Purchaser is a corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to carry on its business and to own or lease
all of its properties and assets as and in the places such business is now
conducted. Purchaser has not engaged in any business and is not qualified to
conduct business as a foreign corporation in any jurisdiction.
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(ii) Purchaser has full corporate power to carry out
the transactions provided for in this Agreement. All necessary corporate action
required to be taken by Purchaser relating to the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement has been duly and validly taken, and this Agreement and any other
agreements entered into in connection with this Agreement, when executed and
delivered by Purchaser, will constitute the legal, valid and binding and
enforceable obligations of Purchaser. No consent, approval or agreement or any
person, party, court, governmental authority, or entity is required to be
obtained by Purchaser in connection with the execution and performance by
Purchaser of this Agreement or such other agreements.
(b) No Broker. Neither Purchaser nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
(c) Purchaser Capital Stock. The authorized capital of
Purchaser consists of, and shall not exceed prior to Closing without
Stockholder's prior written consent, ten million (10,000,000) shares of
Purchaser Stock, of which, 410,000 shares were issued and outstanding.
(d) Reliance by the Sellers. No representation or warranty set
forth in this Paragraph 3 contains or shall contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein not misleading.
4. Covenants of the Parties.
(a) Access to Records; Properties. During the period between
the date of this Agreement and the Closing Date, Sellers agree to give Purchaser
and their representatives full and prompt access to all of Sellers' premises and
all of Sellers' books and records, including tax returns filed and in
preparation and all filings with the IRS and Department of Labor and other
material relating to the transaction contemplated by this Agreement, and to
cause their respective officers and independent accountants to furnish
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<PAGE> 15
Purchaser with such financial and operating data and other information with
respect to Sellers' business and properties as Purchaser shall from time to time
request; provided, that such investigation shall not unreasonably interfere with
Sellers' business. Sellers, upon Purchaser's request, will deliver copies of any
tax returns which Sellers intend to file.
(b) Operation of Sellers' Business Prior to Closing. Sellers
agree that from the date of this Agreement to the Closing Date, without
Purchaser's prior written consent, Sellers will operate their businesses
substantially as they are presently operated and only in the ordinary course of
business. Sellers will duly comply with all applicable laws as may be required
on its part to effect the transactions contemplated by this Agreement and in the
conduct by Sellers of their businesses and the operation and use of their
properties and assets.
(c) Noncompetition. Provided that Purchaser is not in default
of any of its obligations under this Agreement, Sellers and Stockholder hereby
covenant and agree that, from the date of this Agreement until five (5) years
from the Closing Date, neither Sellers nor Stockholder will directly or
indirectly (i) engage in the medical waste treatment business or any directly
related business (whether for profit or not for profit), whether as an officer,
director, consultant, stockholder, guarantor, principal, agent, member,
operator, proprietor, employee, advisor or in any other manner in the United
States, or (ii) solicit any present or proposed client of Sellers, Purchaser or
any Affiliate of Purchaser or (iii) employ or engage any employee of Sellers or
Purchaser or (iv) aid or assist others with respect to any of the foregoing. The
parties hereto acknowledge and agree that Purchaser's business is national in
scope and that the foregoing non-competition covenant is an integral part of
this Agreement for which they are receiving adequate compensation, that
Purchaser would not enter in this Agreement without the inclusion of the
Covenants and that if any court of competent jurisdiction shall hold that the
scope or duration of the covenant not to compete set forth in this Paragraph
4(c) is not reasonable or otherwise enforceable, then the parties agree that
such court shall enforce the covenant to the greatest extent permitted under
applicable law.
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(d) Non-Disclosure and Non-Disturbance. Provided that
Purchaser is not in default of any of its obligations under this Agreement,
Sellers and Stockholder agree (i) solicit , initiate discussions with or engage
in negotiations with any Person, regardless of which party initiated any of the
foregoing, that they will not at any time use or disclose to any person any
Confidential Information relating to Sellers, Purchaser or any Affiliate of
Purchaser which provided Confidential Information to Seller or either
Stockholder; provided, however, that nothing in this Paragraph 4(d) shall be
construed to prohibit any Seller or either Stockholder from (i) using or
disclosing such information if it shall become public knowledge other than by or
as a result of disclosure by a person not having a right to make such disclosure
and (ii) complying with legal process, provided, that Purchaser shall be given
prompt notice in time to enable it to object to such disclosure. Sellers and
Stockholder further agree (ii) provide information or documentation relating to
Seller or its business, that they will take no action to induce or cause any of
Sellers' clients to cease engaging Purchaser for its personnel requirements or
to reduce the scope of services performed by Purchaser. For purposes hereof,
"Confidential Information" shall mean all information of a proprietary or
confidential nature relating to any Person, including, but not limited to, such
Person's trade secrets or proprietary information, technical know-how and
products, processes, inventions and discoveries, whether or not patentable, and
information concerning such Person's services, business, customer lists,
proposed services, marketing strategy, pricing policies and the requirements of
its clients.
(e) Negotiation with Others; Disposition of Securities.
Sellers and Stockholder shall deal exclusively with Purchaser regarding the sale
of the Assets contemplated herein or any acquisition of Sellers, whether by way
of merger, purchase of capital stock, purchase of assets or otherwise (a
"Potential Transaction") and, without the prior consent of Purchaser, neither
Sellers nor Stockholder shall, directly or indirectly, (i) solicit, initiate
discussions with or engage in negotiations with any Person, regardless of which
party initiated any of the foregoing, (ii) provide information or documentation
relating to Seller or its business, (iii) enter into any agreement with any
Person other than Purchaser which relates directly or indirectly to a Potential
Transaction. If Sellers or
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Stockholder shall receive any unsolicited inquiry relating to any of the
foregoing, Sellers or Stockholder shall immediately notify Purchaser.
(f) Injunctive Relief. Sellers and Stockholder agree that a
violation or threatened violation of any of the provisions of Paragraphs 4(c),
(d) and (e) of this Agreement shall cause immediate and irreparable harm to
Purchaser. In the event of any breach or threatened breach of said provisions,
Sellers and Stockholder consent to the entry of preliminary and permanent
injunctions by a court of competent jurisdiction prohibiting such party from any
violation or threatened violation of these provisions and compelling Seller to
comply with these provisions. This Paragraph 4(f) shall not affect or limit, and
the injunctive relief provided in this Paragraph 4(e) shall be in addition to,
any other remedies available to Purchaser at law or in equity. In the event an
injunction is issued against any such conduct by Sellers, the period referred to
in Paragraph 4(c) of this Agreement shall continue until the later of the
expiration of the period set forth therein or one (1) month from the date a
final judgment enforcing such provisions is entered and the time for appeal has
lapsed.
(g) Transfer Taxes. Each party to this Agreement shall pay all
respective sales, use and other transfer taxes, if any, imposed on such party
with respect to the transactions contemplated by this Agreement.
(h) Obtain Consents. Sellers and Stockholder shall obtain all
necessary consents to the assumption by Purchaser of all agreements and other
contracts being assumed by Purchaser and any other consent required to
consummate the transactions contemplated by this Agreement.
(i) Obligations Concerning Employees. Purchaser shall have no
obligation to hire any of Sellers' employees. Sellers and Stockholder shall be
responsible for any severance or other obligations to its employees.
(j) Compliance with Bulk Sales Law. Sellers shall take any and
all action to comply with applicable bulk sales law in connection with the sale
of the assets contemplated herein.
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(k) Change of Name. Sellers shall, prior to the Closing Date,
change their corporate name to a names reasonably acceptable to Purchaser which
name does not include any of the words "Roatan," "WinTex", "Redloc", "Services",
"United", or other words that are phonetically similar or have similar meaning
or names that are similar to that of Purchaser or any of Purchaser's affiliates.
(l) Compliance with Closing Conditions. Sellers and
Stockholder agree that the Sellers and Stockholder shall have complied with all
of the obligations, agreements and conditions set forth in Paragraph 5 herein
prior to the Closing Date.
5. Conditions to the Obligation of Purchaser to Close. The obligations
of Purchaser under this Agreement are subject to the satisfaction of the
following conditions unless waived by such parties:
(a) Representations and Warranties. On the Closing Date, the
representations and warranties of the Sellers and Stockholder shall be true and
correct as of the Closing Date with the same force and effect as if made on such
date, Sellers and Stockholder shall have performed all of their obligations
required to be performed by them under this Agreement at or prior to the Closing
Date, and Purchaser shall have received certificates of the chief executive of
the Sellers to such effect.
(b) Authorization of Sale. All action necessary to authorize
the execution, delivery and performance of this Agreement by the Seller shall
have been taken and the Sellers shall have delivered to Purchaser resolutions of
the boards of directors and stockholders of the Sellers, certified by the
secretary of the Sellers, relating to the execution, delivery and performance of
this Agreement.
(c) Transfer of Contracts and Consents. Sellers shall have
delivered to Purchaser instruments transferring all of the contracts to be
assigned to and assumed by Purchaser and such assignments shall have been
consented to by each of the other parties to such contracts whose consent is
required in order to effect the assignment of such contract.
(d) Instruments of Transfer. Sellers shall have delivered to
Purchaser:
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(i) Such instrument or instruments of transfer and
conveyance as shall, in the opinion of Purchaser's counsel, Esanu Katsky Korins
& Siger, be reasonably necessary to vest in Purchaser good and marketable title
to the business, property and assets to be transferred, assigned, conveyed and
delivered to Purchaser; and
(ii) All books, records and all other data (except
minute and stock books and other corporate records having exclusively to do with
the corporate organization and capitalization of the Sellers) relating to
Sellers' property and assets, business and operations; provided, however, that
after the Closing Date, Purchaser shall have reasonable rights to inspect and
make extracts from any books and records of Seller relating to matters prior to
the Closing Date.
(e) Release of Liens. All liens on the Sellers' property
(other than those permitted pursuant to the Schedules hereto) shall have been
released.
(f) Other Consents. Sellers shall have obtained any other
consents necessary for the Sellers to perform its obligations under this
Agreement. To the extent that any required consent is not obtained and Purchaser
nonetheless elects to close, the Sellers shall use their best efforts to obtain
such consents subsequent to the Closing.
(g) No Material Adverse Change. No material adverse change in
the business or financial condition of Sellers shall have occurred or be
threatened since the date of this Agreement, and no investigations, suits,
actions or other proceedings shall be threatened or pending before any court or
governmental agency or authority which, in the opinion of counsel for Purchaser,
are likely to result in a material adverse change in the business, financial
condition or prospects of the Sellers or are likely to result in the restraint,
prohibition or the obtaining of damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated by this
Agreement.
(h) No Litigation. There shall be no action or proceeding
pending or, to the knowledge of the Sellers threatened, before any court or
governmental agency or authority which, if adversely determined, would adversely
affect the ability of the parties to consummate the transactions contemplated by
this Agreement or the validity or
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enforceability of this Agreement, and Purchaser shall have received certificates
of the chief executive and financial officer of the Sellers to such effect.
(i) Updated Lien Searches. Sellers shall have provided
Purchaser with lien searches on the assets of the Sellers in the appropriate
jurisdictions no earlier than 15 days prior to the Closing Date, and such
searches shall reveal no material claims against the assets of the Sellers,
other than these claims identified in the Schedules hereto.
(j) Due Diligence Investigation. Purchaser shall not become
aware of any facts or information which shall have given Purchaser reason to
terminate this Agreement.
(k) Acceptance by Purchaser's Counsel. The form and substance
of all legal matters contemplated by this Agreement and of all papers delivered
pursuant to this Agreement shall be acceptable in form and substance to counsel
to Purchaser.
(l) Opinion of Counsel. Purchaser shall have received the
opinion of counsel to Seller, dated as of the Closing Date, addressed to
Purchaser and in form and substance satisfactory to Purchaser to the effect
that:
(i) Sellers are corporations duly organized, validly
existing and in good standing under the laws of the state of incorporation, and
each corporation is duly organized, validly existing and in good standing under
the laws of such state and each has the corporate power to own its property and
conduct their business as now being conducted;
(ii) Sellers are qualified to conduct business as
foreign corporations in each jurisdiction in which each may own or lease real
property and in each other jurisdiction in which the nature of the business
conducted by Sellers require qualification, except for such jurisdictions in
which the failure so to qualify will have a material adverse effect upon Sellers
and their businesses; and
(iii) Such counsel knows of no liens not set forth on
the lien search delivered at the Closing;
(iv) This Agreement and the Other Agreements have
been duly executed and delivered by Sellers and Stockholder, all corporate or
other action necessary
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for Sellers to approve this Agreement and the performance of the terms of this
Agreement have been taken, and this Agreement constitutes a legal, valid and
binding obligation of each of Sellers and Stockholder, enforceable in accordance
with its terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, or similar laws from time to time in effect
which affect creditors' rights generally, and by legal and equitable limitations
on the enforceability of specific remedies);
(v) Such counsel has no knowledge of any actions,
suits or proceedings pending or threatened against or affecting Sellers in any
court or before any arbitrator of any kind or before or by any governmental body
except as disclosed and provided for in the Schedules hereto. In rendering such
opinion, counsel may rely as to factual matters on certificates of officers,
directors or stockholders of Sellers and on certificates of governmental
officers.
(m) Releases. Purchaser shall have received copies of duly
authorized, executed releases from RIB Roatan Gmbh & Still, Redloc II, L.P.,
Redloc III, L.P. and Redloc IV, L.P. (collectively, the "Redloc Entities")
whereby Redloc Entities release any rights or claims any of the Redloc Entities
may have in connection with Sellers, Stockholder or their affiliates or the
technology or business of the Redloc Entities.
(n) Subordination to FCIC. Sellers shall have executed any and
all documents requested by FCIC in order to assure the seniority of the security
interests of FCIC and payment priority of FCIC to any other creditors of Sellers
and their affiliate companies.
(o) Stockholders Agreement. The Purchaser and Stockholder
shall have entered into a stockholders agreement (the "Shareholder's Agreement")
in form and substance satisfactory to FCIC. The Stockholders Agreement shall
include specific terms and conditions set forth in the LOI regarding, without
limitation, transferability of shares and Board of Directors membership and
appropriate non-competition and non-disclosure provisions.
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6. Conditions to Sellers' Obligations to Close. The obligations of the
Sellers under this Agreement are subject to the satisfaction of the following
conditions unless waived by the Sellers:
(a) Representations and Warranties. On the Closing Date the
representations and warranties of Purchaser shall be true and correct as of the
Closing Date with the same force and effect as if made on such date, Purchaser
shall have performed all of its obligations required to be performed by it under
this Agreement at or prior to the Closing Date, and the Sellers shall have
received certificates of the chief executive officer of Purchaser to such
effect.
(b) Authorization. All action necessary to authorize the
execution, delivery and performance of this Agreement, and the other agreements
by Purchaser shall have been taken and Purchaser shall have delivered to the
Sellers resolutions of the Board of Directors of each party certified by the
secretary of such parties.
(c) No Material Adverse Change. No material adverse change in
the business or financial condition of Purchaser shall have occurred or be
threatened since the date of this Agreement, and no investigations, suits,
actions or other proceedings shall be threatened or pending before any court or
governmental agency or authority which, in the opinion of counsel for the
Sellers, are likely to result in a material adverse change in the business,
financial condition or prospects of Purchaser or are likely to result in the
restraint, prohibition or the obtaining of damages or other relief in connection
with this Agreement or the consummation of the transactions contemplated by this
Agreement.
(d) No Litigation. There shall be no action or proceeding
pending or, to the knowledge of Purchaser, threatened, before any court or
governmental agency or authority which would adversely affect the ability of the
parties to consummate the transactions contemplated by this Agreement or the
Other Agreements or the validity or enforceability of this Agreement or the
other agreements, and Purchaser shall have received certificates of the chief
executive and financial officer of Purchaser to such effect.
(e) Payment of Purchase Price. Purchaser shall have delivered
or caused to be delivered a certificate for the Purchaser Stock to the Sellers.
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(f) Acceptance of Sellers' Counsel. The form and substance of
all legal matters contemplated by this Agreement and of all papers delivered
pursuant to this Agreement shall be acceptable in form and substance to counsel
to the Sellers.
7. Indemnification.
(a) Indemnification by the Sellers and Stockholder. Sellers
and Stockholder shall jointly and severally, indemnify and hold Purchaser
harmless from and against any and all actions, causes of action, liabilities,
claims, charges, losses, damages, expenses and costs, including attorneys' fees
(collectively "Damages"), that Purchaser may suffer, sustain, incur or become
subject to, arising out of, based upon, or by reason of any breach of the
warranties, representations, covenants and agreements of the Sellers and
Stockholder contained in this Agreement as well as any Damages which Purchaser
may sustain as a result of the failure of the Sellers and Stockholder to pay any
obligations not assumed by Purchaser or as a result of any transactions or
events arising out of or related directly or indirectly to this Agreement and
its operation either prior to, or after the Closing Date. Sellers shall defend
and pay all costs and expenses arising from all Damages resulting from causes of
action or claims of any kind asserted or threatened against Purchaser arising
from actions or omissions of the Sellers or transactions entered into by the
Sellers in connection with the conduct of Sellers' business prior to the Closing
Date or relate to obligations not assumed by Purchaser. The failure of the
Sellers and Stockholder to assume the defense of any action covered by the
indemnification provisions of this Paragraph 7(a) shall not affect in any manner
the Sellers' and Stockholder's liability or obligation with respect to such
obligation or liability.
(b) Indemnification by Purchaser. Purchaser agrees to
indemnify and hold the Sellers and Stockholder harmless from and against any and
all Damages that it may suffer, sustain, incur or become subject to, arising out
of, based upon or by reason of any breach of the representations, warranties,
covenants or agreements of Purchaser contained in this Agreement, as well as any
damages which Sellers and Stockholder, or any of them, may sustain as a result
of the failure of the Purchaser to pay any of the obligations assumed by the
Purchaser under this Agreement or as a result of any
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<PAGE> 24
transactions or events arising out of or related directly or indirectly to this
Agreement after the Closing date.
(c) Procedure. Claims for indemnity pursuant to this Paragraph
7 shall be submitted in writing in the method and manner of notices pursuant to
Paragraph 8(c) of this Agreement. Such notice shall specify in reasonable detail
the basis for such claim. The indemnifying party shall have the right to assume
the defense of any litigation or claim with respect to which indemnification is
sought; provided, however, that the failure to assume such defense shall not
affect the liability of the indemnifying party with respect to the underlying
obligation or legal fees.
(d) Survival. The indemnification provisions of this Paragraph
7 and the representations and warranties of the parties shall survive the
Closing and the consummation of the transactions contemplated by this Agreement;
provided, that the obligations of indemnification shall terminate three (3)
years after the Closing Date.
(e) Right of Offset. Purchaser shall have the right to offset
any obligations of Seller and Stockholder pursuant to this Agreement, including
this Paragraph 7, against any obligations due to the Sellers and Stockholder by
Purchaser or any affiliate of Purchaser, including any obligations arising under
any consulting or employment or other agreement between Purchaser or any
affiliate of Purchaser, on the one hand, and Sellers and Stockholder, on the
other hand.
-24-
<PAGE> 25
8. Miscellaneous.
(a) Entire Agreement. This Agreement, including the Schedules
hereto which constitute integral parts of this Agreement, constitutes the entire
agreement of the parties, superseding and terminating any and all prior or
contemporaneous oral and prior written agreements, understandings or letters of
intent between or among the parties with respect to the subject matter of this
Agreement. No part of this Agreement may be modified or amended, nor may any
right be waived, except by a written instrument which expressly refers to this
Agreement, states that it is a modification or amendment of this Agreement and
is signed by authorized officers of the parties to this Agreement, or, in the
case of waiver, by the party granting the waiver. No course of conduct or
dealing or trade usage or custom and no course of performance shall be relied on
or referred to by any party to contradict, explain or supplement any provision
of this Agreement, it being acknowledged by the parties to this Agreement that
this Agreement is intended to be, and is, the complete and exclusive statement
of the agreement with respect to its subject matter. Any waiver shall be limited
to the express terms thereof and shall not be construed as a waiver of any other
provisions or the same provisions at any other time or under any other
circumstances. This Agreement does not supersede or modify in any manner the LOI
or any other agreement entered into, either written or oral, between Sellers,
Stockholder and FCIC, provided, however, that terms expressly set forth herein
which specifically conflict with the LOI shall be governed exclusively by the
terms of this Agreement.
(b) Severability. If any section, term or provision of this
Agreement shall to any extent be heats or determined to be invalid or
unenforceable, the remaining sections, terms and provisions shall nevertheless
continue in full force and effect.
(c) Notices. All notices, demands, solicitation of consent or
approval, and other communications hereunder shall be in writing and shall be
deemed to have been given when given by hand or overnight courier service or
when deposited in the United States mail, postage prepaid, by registered or
certified mail, return receipt requested, or by telecopier or similar means of
communication (collectively, "telecopier") if receipt if
-25-
<PAGE> 26
acknowledged or if transmission is confirmed by mail as provided in this
Paragraph 8(b) addressed, as the case may be:
To Purchaser: Healthbridge, Inc.
c/o Esanu Katsky Korins & Siger LLP
605 Third Avenue
New York, New York 10158
telecopier: (212) 953-6899
Attention: Mr. Antonio Ponti
with a copy to Esanu Katsky Korins & Siger, LLP
605 Third Avenue
New York, New York 10158
telecopier: (212) 953-6899
Attention: Eric S. Kamisher, Esq.
To Sellers: Roatan Medical Technologies, Inc.
WinTex Corporation
Roatan Medical Services, Inc.
United Services, Inc.
Office Box 227377
Dallas, Texas 75222-7377
telecopier: (972) 647-4454
Attention: Mr. Wilhelm Liesner
with a copy to: Creel, Sussman and Moore LLP
5949 Sherry Lane
Suite 525
Dallas, Texas 75225
telecopier: (214) 378-8290
Attention: L.E. Creel, III, Esq.
To Stockholder: Mr. Wilhelm Liesner
3611 Cole Avenue #330
Dallas, Texas 75204
telecopier: (214) 528-4231
Any party may, by like notice, change the address, person or telecopier
number to whom notice shall be given.
(d) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements executed and to be performed wholly within such State, without giving
effect to the principles of conflicts
-26-
<PAGE> 27
of law. Each party hereby (i) irrevocably consents and agrees that any legal or
equitable action or proceeding arising under or in connection with this
Agreement or any document or instrument delivered with respect to this Agreement
shall be brought exclusively in any Federal or state court in the County of New
York, State of New York, and (ii) irrevocably submits to and accepts, with
respect to its properties and assets, generally and unconditionally, the
jurisdiction of the aforesaid courts.
(e) Further Assurances. At any time and from time to time,
each party agrees, without further consideration, to take such actions and to
execute and deliver such documents as may be reasonably necessary to effectuate
the purposes of this Agreement.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
(g) Headings. The headings in the Paragraphs of this Agreement
are inserted for convenience only and shall not constitute a part of this
Agreement.
Intentionally Left Blank
-27-
<PAGE> 28
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first written above.
HEALTHBRIDGE, INC.
By: /s/ Antonio Ponte
-------------------
Antonio Ponte
President
ROATAN MEDICAL TECHNOLOGIES, INC.
By: /s/ Wilhelm Liesner
-----------------------
Wilhelm Liesner
President
WINTEX CORPORATION, INC.
By: /s/ Wilhelm Liesner
-----------------------
Wilhelm Liesner
President
ROATAN MEDICAL SERVICES CORP.
By: /s/ Wilhelm Liesner
-----------------------
Wilhelm Liesner
President
UNITED SERVICES, INC.
By:/s/ Wilhelm Liesner
----------------------
Wilhelm Liesner
President
STOCKHOLDER:
/s/ Wilhelm Liesner
-------------------
Wilhelm Liesner
<PAGE> 29
Schedules to Asset Purchase Agreement
Schedule 1(a) Certain Other Assets
Schedule 1(e) Contracts and Obligations to be Assumed
Schedule 2(a)(ii) Investments in Third Parties
Schedule 2(b) Real Property
Schedule 2(b)(ii) Permitted Liens
Schedule 2(b)(v) Required Consents
Schedule 2(c) Litigation
Schedule 2(e)(ii) Employees
Schedule 2(e)(iv) Unexpired Material Contracts
Schedule 2(g)(i) Patents, Trademarks and Copyrights
Schedule 2(g)(ii) Proprietary Rights
<PAGE> 30
SCHEDULE 1 (a)
Certain Other Assets
1. All tax attributes and benefits of any types or nature whatsoever
belonging to, or assertable by, any of the Sellers and/or the
shareholder, including all tax loss carryforwards, carry-backs, net
operating losses, refunds, offsets, etc.
<PAGE> 31
SCHEDULE 1 (e)
Contracts and Obligations to be Assumed
<TABLE>
<CAPTION>
Loans / Notes Payable
- ---------------------
F. Sabournchi 1,198
---------
<S> <C>
$ 1,198
</TABLE>
Accounts Payable
RTAN Accounts Payable (over $1,000) per 7/31/98 (other than above)
<TABLE>
<CAPTION>
Inv. Date Amount
--------- ------
<S> <C> <C>
Ardt Financial (consultant) June - 97 $ 4,000
Blume & Associates (profess.) 1997 - May-98 2,327
BVS (profess.) Jan - 98 1,000
L.E Creel,III,Trustee 50,000
Hazel & Thomas (profess./patent) Feb-98-May-98 35,390
J. McCullough (consultant) Apr-98 5,346
Vann Phillips 8,000
Presbyterian Hospital *** Aug.-97-Apr-98 14,075
Raiffinanz 8,500
Richards & Medlok (profess./patent) 1996-1997 4,000
RIG Real (tvl.reimb) May-98 - June-98 4,397
Triple S (vendor / lease-purchase) Jul-98 1,501
W. Norris (consultant) Oct-97-Jan-98 8,800
First Capital Invest Corp., BVI
(Expense notes) $15,000
$20,000
$35,721
$13,960 84,681
------- ---------
$232,017
</TABLE>
* * * Due to agreement with Presbyterian Hospital to do maintenance and upgrades
as well as cover any shortfalls in sterilizer performance.
Royalties
Roatan Medical Technologies, Inc. is contractually obligated under certain
agreements to pay non-affiliated persons (Charles Ice and John McCullough)
royalty payments of $575 for the first 500 Redloc(R) II sterilizer units to be
sold.
<PAGE> 32
SCHEDULE 1 (e) CONTINUED
Other
For the benefit of the company, Mr. Bissell has been retained as a consultant;
this may cause a relatively small FICA problem at some point in the future.
Equipment Leases
See Schedule 2(b)(v) - each described equipment lease is to be assumed by
Purchaser.
<PAGE> 33
SCHEDULE 2 (a) (vii)
Investments in Third Parties
None, except those security interests detailed below:
Security interests, perfected by UCC-1 filings, are shown to be of record on
February 19, 1999 for the following entities, and Debtor:
Roatan Medical Services
Roatan Medical Services Corp.
Roatan Medical Technologies, Inc.
United Services Co.
United Services, Inc.
Other entities with similar names appear as Debtors but, according to the
Sellers, are unrelated.
The pertinent UCC-1's of records are as follows:
1. Debtor: ROATAN MEDICAL SERVICES, FINANCING STATEMENT,
05/22/1995, 9500101998, TXUCC
2. Debtor: ROATAN MEDICAL SERVICES CORP., FINANCING
STATEMENT, 12/11/1995, 9500237017, TXUCC
3. Debtor: ROATAN MEDICAL SERVICES CORP., FINANCING
STATEMENT, 02/15/1996, 9600031022,TXUCC
4. Debtor: ROATAN MEDICAL SERVICES CORP, A CORPORATION,
FEDERAL TAX LIEN, 07/01/1996, 9600129248, TXUCC
(terminated)
5. Debtor: ROATAN MEDICAL SERVICES CORP., FINANCING
STATEMENT, 06/15/1994, 9400118710, TXUCC
6. Debtor: ROATAN MEDICAL SERVICES CORP., FINANCING
STATEMENT, 06/15/1994, 9400118711,TXUCC
<PAGE> 34
SCHEDULE 2 (b)
Real Property
Roatan Medical Technologies, Inc. (RTAN) currently occupies premises at 870
Greenview, Grand Prairie, Texas on a "month-to-month" basis at a monthly expense
of $1,800 (triple net). This arrangements ends 12/31/98.
RTAN contributes $600 to the expense of an office/apartment for Mr. Liesner in
Dallas.
<PAGE> 35
SCHEDULE 2 (b) (ii)
Permitted Liens
See attached.
<PAGE> 36
8TH DOCUMENT of Focus printed in FULL format.
*** THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE
OBTAINED FROM THE OFFICE OF THE TEXAS SECRETARY OF STATE ***
TEXAS SECRETARY OF STATE, UCC RECORD
ACTIVE DEBTORS: ROATAN MEDICAL SERVICES CORP. (Business]
1136 107TH ST
ARLINGTON, TEXAS 76011
ACTIVE SECURED PARTY: SIEMENS CREDIT CORPORATION
5300 BROKEN SOUND BLVD., N. W.
BOCA RATON, FLORIDA 33487
TYPE: FINANCING STATEMENT
STATUS: ACTIVE AS OF: 06/15/1994
FILING-DATE: 06/15/1994
FILING-TIME: 8:00 AM Central Time
EXPIRATION: 06/15/1999
FILING-NUMBER: 9400118710
NUMBER OF PAGES ATTACHED TO FILING: 1
ENTER LEXDOC OR CALL 1-800-634-9738 TO ORDER COPIES OF THE ORIGINAL FILINGS
<PAGE> 37
9TH DOCUMENT of Focus printed in FULL format.
*** THIS DATA IS FOR INFORMATION PURPOSES ONLY. CERTIFICATION CAN ONLY BE
OBTAINED FROM THE OFFICE OF THE TEXAS SECRETARY OF STATE ***
TEXAS SECRETARY OF STATE, UCC RECORD
ACTIVE DEBTORS: ROATAN MEDICAL SERVICES CORP.[Business]
1950 STEMMONS FWY
DALLAS, TEXAS 75207
ACTIVE SECURED PARTY: SIEMENS CREDIT CORPORATION
5300 BROKEN SOUND BLVD., N.W.
BOCA RATON, FLORIDA 33487
TYPE: FINANCING STATEMENT
STATUS: ACTIVE AS OF: 06/15/1994
FILING-DATE: 06/15/1994
FILING-TIME: 8:00 AM Central Time
EXPIRATION: 06/15/1999
FILING-NUMBER: 9400118711
NUMBER OF PAGES ATTACHED TO FILING: 1
ENTER LEXDOC OR CALL 1-800-634-9738 TO ORDER COPIES OF THE ORIGINAL FILINGS
<PAGE> 38
SCHEDULE 2 (b) (iv)
Required Consents
The company currently holds leases for two computers (1 laptop, 1 desktop) and a
postage machine. These leases require the consent of the lessor to transfer to a
new lessee.
<PAGE> 39
SCHEDULE 2 (c)
Litigation
A shareholder of Roatan loaned $50,000 for the acquisition of a shell which then
became Roatan Medical Technologies, Inc. He is not satisfied with the payment
plan offered by Mr. Liesner and may subsequently commence legal proceedings.
<PAGE> 40
SCHEDULE 2 (e) (ii)
Insider Agreements
None
<PAGE> 41
SCHEDULE 2 (e) (iii)
Unexpired Material Contracts
See attached CONFIDENTIAL agreement with Presbyterian Hospital of Dallas.
<PAGE> 42
SCHEDULE 2 (f) (i)
Contract Performance
1. That certain contract between Roatan Medical Services, Inc. and Presbyterian
Hospital of Dallas, dated October 9, 1996.
<PAGE> 43
SCHEDULE 2 (g) (i)
Patents, Trademarks and Copyrights
CIP Patent Application Serial Number 08/651,920
Microwave Pressure Vessel and Method of Sterilization
Patent No. 5,495,941
Dual Compartment Sterilizable Waste Containment Unit
Trademark Reg. No. 2,075,948
Redloc
Trademark Reg. No. 5,728,310 (March 17, 1998)
Microwave waste sterilizer granted to Charles L. Ice and John V. McCullough,
pursuant to Application No. 510,287, assigned to United Systems, Inc., on or
about April 9, 1996, assigned to First Capital Investment Corp., BVI on March
30, 1998.
<PAGE> 44
SCHEDULE 2 (g) (ii)
Proprietary Rights
None
<PAGE> 1
Exhibit 2.2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of February 28, 1999 (the
"Merger Agreement") by and between WattMonitor, Inc., a Texas corporation
("WattMonitor"), and Healthbridge, Inc., a Delaware corporation
("Healthbridge"). WattMonitor and Healthbridge are hereinafter sometimes
collectively referred to as the "Constituent Corporations."
WHEREAS, the Board of Directors of each of WattMonitor and Healthbridge
approved the merger of Healthbridge with and into WattMonitor, with WattMonitor
being the surviving corporation (the "Merger") pursuant to the terms and subject
to the conditions of this Merger Agreement whereby (i) each of the issued and
outstanding shares of common stock, $.001 par value per share, of Healthbridge
will be converted into the right to receive the Merger Consideration set forth
in Section 5 hereof, and (ii) WattMonitor will be the Surviving Corporation; and
WHEREAS, for federal income tax purposes, it is intended that the
Merger shall qualify as a statutory merger under the provisions of Section
368(a)(1)(A) of the Internal Revenue Code, as amended (the "Code").
NOW THEREFORE, the parties agree as follows:
THE MERGER
Section 1. The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as hereinafter defined), HealthBridge shall be
merged with and into WattMonitor in accordance with Section 5.01 of the Texas
Business Corporation Act and the separate existence of Healthbridge shall
thereupon cease, and WattMonitor, as the surviving corporation in the Merger
(the "Surviving Corporation"), shall continue its existence under the laws of
the State of Texas under the name "Healthbridge, Inc."
Section 2. Articles of Incorporation. The Articles of Incorporation of
WattMonitor, a copy of which is attached hereto as Exhibit A, as amended in
connection with the Merger, shall be the Articles of Incorporation of the
Surviving Corporation, until such Articles of Incorporation are further changed
or amended as provided therein or by law.
Section 3. Bylaws. The Bylaws of WattMonitor as in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Corporation
until thereafter changed or amended as provided therein or as otherwise
permitted or required by law or by the Surviving Corporation's Articles of
Incorporation.
Section 4. Board of Director and Officers. The directors of the
Surviving Corporation shall be Joel Dumaresq, Andrew Fisch, Wilhelm Liesner,
Luciano Nicasio, Antonio Ponte, and an additional director nominated by Wilhelm
Liesner and mutually acceptable to the other directors. The foregoing directors
shall serve until their respective successors are duly
<PAGE> 2
elected or appointed and qualify in the manner provided in the Articles of
Incorporation and Bylaws of the Surviving Corporation or as otherwise provided
by law. The officers of the Surviving Corporation shall be Andrew Fisch as
President/CEO and Norman Wareham as Secretary/Treasurer. The foregoing officers
shall serve until their successors are duly elected or appointed and qualify in
the manner provided in the Articles of Incorporation and Bylaws of the Surviving
Corporation or as otherwise provided by law.
Section 5. Conversion of Shares. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder thereof each then
issued and outstanding share of HealthBridge common stock, par value $.001, (the
"Healthbridge Common Stock") shall be, by virtue of the Merger, and without any
action on the part of the holder thereof, cancelled and converted solely into
the right to receive, upon the surrender of the certificate formerly
representing such Healthbridge Common Stock, one (1) share of the Surviving
Corporation's common stock, par value $.0001 (the "Surviving Corporation Common
Stock").
The shares of Surviving Corporation Common Stock to be issued in the
Merger in exchange for certificates that immediately prior to the Effective Time
represented Healthbridge Common Stock are referred to herein as the "Merger
Consideration."
Section 6. Effective Time of Merger. Healthbridge will be merged with
and into WattMonitor, effective at the later of the date when a Certificate of
Merger is issued by the Secretary of State of the State of Texas or the date
when a Certificate of Merger is filed with the Secretary of State of the State
of Delaware (the "Effective Time").
Section 7. Certain Rights. Upon the Merger becoming effective, all the
property, rights, privileges, franchises, patents, trademarks, licenses,
registrations, and other assets of every kind and description of Healthbridge
shall be transferred to and vested in the Surviving Corporation without further
act or deed and all property, rights, and every other interest of Healthbridge
shall be as effectively the property rights and interests of the Surviving
Corporation as they were of Healthbridge. Healthbridge hereby agrees from time
to time, as and when requested by the Surviving Corporation or by its successors
or assigns, to execute and deliver or cause to be executed and delivered all
such deeds and instruments and to take or cause to be taken such further or
other action as the Surviving Corporation may deem necessary or desirable in
order to vest in and confirm to the Surviving Corporation title to and
possession of any property rights and interests of Healthbridge acquired or to
be acquired by reason of or as a result of the Merger herein provided for and
otherwise to carry out the intent and purposes hereof and the proper officers
and directors of the Surviving Corporation are fully authorized in the name of
Healthbridge or otherwise to take any and all such action.
Section 8. Representations and Warranties of WattMonitor. WattMonitor
represents and warrants to Healthbridge as follows:
a. Organization and Good Standing. WattMonitor is a duly incorporated
and validly existing corporation in good standing under the laws of
the state of Texas, with all requisite corporate power and authority
to own its properties and conduct its business, and is duly
qualified and in good
2
<PAGE> 3
standing as a foreign corporation authorized to do business in each
of the jurisdictions in which the character of the properties owned
or leased by it or the nature of the business transacted by it makes
such qualification necessary, except where the failure to be so
qualified would not in the aggregate have a material adverse effect
on the business, assets, properties, financial condition or results
of operation of WattMonitor and its subsidiaries taken as a whole
(in respect of WattMonitor and its subsidiaries taken as a whole, as
the case may be, a "Material Adverse Effect"). WattMonitor has
heretofore delivered to Healthbridge true and correct copies of its
Articles of Incorporation and Bylaws as currently in effect.
b. Authorization; Binding Agreement. WattMonitor has all requisite
corporate power and authority to execute and deliver this Merger
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by WattMonitor's Board of Directors, no other
corporate proceedings on the part of WattMonitor are necessary to
authorize this Merger Agreement and the transactions contemplated
hereby. This Merger Agreement has been duly and validly executed and
delivered by WattMonitor, and constitutes a legal, valid and binding
agreement of WattMonitor, enforceable against WattMonitor in
accordance with its terms (except as enforceability may be limited
by bankruptcy, insolvency, moratorium or other similar laws
affecting creditors' rights generally or by the principles governing
the availability of equitable remedies).
c. Capitalization. As of the date hereof, the authorized capital stock
of WattMonitor consists of 50,000,000 shares of common stock. As of
the date hereof, 3,050,000 shares of WattMonitor Common Stock are
issued and outstanding, all of which are validly issued, fully paid
and nonassessable. There is not now, and at the Effective Time there
will not be, any existing option, warrant, subscription or other
rights, agreement or commitment to which WattMonitor is a party
which either obligates WattMonitor or any of its subsidiaries to
issue, sell or transfer any shares of its capital stock or restricts
the transfer of or otherwise relates to the capital stock of
WattMonitor.
d. Litigation. As of the date hereof there are no claims, actions,
proceedings or investigations pending or, to the best knowledge of
WattMonitor, threatened, involving or affecting WattMonitor or any
of its properties or assets or, to the best of WattMonitor's
knowledge, any employee, consultant, director or officer in his or
her capacity as such, of WattMonitor or any of its subsidiaries
before any court or governmental or regulatory authority or body
which, if adversely decided, could have a Material Adverse Effect.
As of the date hereof, neither WattMonitor nor
3
<PAGE> 4
any of its property or assets is subject to any order, judgment,
injunction or decree that singly or in the aggregate has a Material
Adverse Effect.
e. Governmental Approvals and Compliance with Law. No consent, license,
approval, qualification or form of exemption from or authorization
of or declaration, registration or filing with any government entity
on the part of WattMonitor which has not been made is required in
connection with the execution or delivery by WattMonitor of this
Merger Agreement, the consummation by WattMonitor of the
transactions contemplated hereby or the performance by WattMonitor
of its obligations hereunder other than the filing of Articles of
Merger with the Secretary of State of Texas and the filing of a
Certificate of Merger with the Secretary of State of Delaware.
f. Absence of Breach. The execution and delivery by WattMonitor of this
Merger Agreement, the consummation of the transactions contemplated
hereby and the performance by WattMonitor of its obligations
hereunder, will not, subject to obtaining the required approval of
WattMonitor's shareholders, (a) conflict with or result in a breach
of any of the provisions of its Articles of Incorporation or Bylaws,
(b) contravene any law, rule or regulation of any state or of the
United States or any political subdivision thereof or therein, or
any order, writ, judgment, injunction, decree, determination or
award currently in effect, or (c) require any consent, approval or
notice under or result in a violation or breach of or constitute
(with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation, or
acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, agreement or other
instrument to which WattMonitor or any of its subsidiaries is a
party or by which any of their assets are bound, the failure of
which to obtain, in each such case, would have a Material Adverse
Effect.
Section 9. Representations and Warranties of Healthbridge. Healthbridge
represents and warrants to WattMonitor as follows:
a. Organization and Good Standing. Healthbridge is a duly incorporated
and validly existing corporation in good standing under the laws of
the state of Delaware, with all requisite corporate power and
authority to own its properties and conduct its business, and is
duly qualified and in good standing as a foreign corporation
authorized to do business in each of the jurisdictions in which the
character of the properties owned or leased by it or the nature of
the business transacted by it makes such qualification necessary,
except where the failure to be so qualified would not in the
aggregate have a material adverse effect on the business, assets,
properties, financial condition or results of operation of
Healthbridge and its subsidiaries taken as a whole (in respect of
Healthbridge and its
4
<PAGE> 5
subsidiaries taken as a whole, as the case may be, a "Material
Adverse Effect"). Healthbridge has heretofore delivered to
WattMonitor true and correct copies of its Certificate of
Incorporation and Bylaws as currently in effect.
b. Authorization; Binding Agreement. Healthbridge has all requisite
corporate power and authority to execute and deliver this Merger
Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated hereby have been duly
and validly authorized by Healthbridge's Board of Directors, no
other corporate proceedings on the part of Healthbridge are
necessary to authorize this Merger Agreement and the transactions
contemplated hereby. This Merger Agreement has been duly and validly
executed and delivered by Healthbridge, and constitutes a legal,
valid and binding agreement of Healthbridge, enforceable against
Healthbridge in accordance with its terms (except as enforceability
may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally or by the
principles governing the availability of equitable remedies).
c. Capitalization. As of the date hereof, the authorized capital stock
of Healthbridge consists of 10,000,000 shares of common stock. As of
the date hereof, 8,814,284 shares of Healthbridge Common Stock are
issued and outstanding, all of which are fully paid and
nonassessable. There is not now, and at the Effective Time there
will not be, any existing option, warrant, subscription or other
rights, agreement or commitment to which Healthbridge is a party
which either obligates Healthbridge or any of its subsidiaries to
issue, sell or transfer any shares of its capital stock or restricts
the transfer of or otherwise relates to the capital stock of
Healthbridge.
d. Litigation. As of the date hereof there are no claims, actions,
proceedings or investigations pending or, to the best knowledge of
Healthbridge, threatened, involving or affecting Healthbridge or any
of its properties or assets or, to the best of Healthbridge's
knowledge, any employee, consultant, director or officer in his or
her capacity as such, of Healthbridge or any of its subsidiaries
before any court or governmental or regulatory authority or body
which, if adversely decided, could have a Material Adverse Effect.
As of the date hereof, neither Healthbridge nor any of its property
or assets is subject to any order, judgment, injunction or decree
that singly or in the aggregate has a Material Adverse Effect.
e. Governmental Approvals and Compliance with Law. No consent, license,
approval, qualification or form of exemption from or authorization
of or declaration, registration or filing with any government entity
on the part of Healthbridge which has not been made is required in
connection with the
5
<PAGE> 6
execution or delivery by Healthbridge of this Merger Agreement, the
consummation by Healthbridge of the transactions contemplated hereby
or the performance by Healthbridge of its obligations hereunder
other than the filing of Articles of Merger with the Secretary of
State of Texas and the filing of a Certificate of Merger with the
Secretary of State of Delaware.
f. Absence of Breach. The execution and delivery by Healthbridge of
this Merger Agreement, the consummation of the transactions
contemplated hereby and the performance by Healthbridge of its
obligations hereunder, will not, subject to obtaining the required
approval of Healthbridge's shareholders, (a) conflict with or result
in a breach of any of the provisions of its Certificate of
Incorporation or Bylaws, (b) contravene any law, rule or regulation
of any state or of the United States or any political subdivision
thereof or therein, or any order, writ, judgment, injunction,
decree, determination or award currently in effect, or (c) require
any consent, approval or notice under or result in a violation or
breach of or constitute (with or without due notice or lapse of time
or both) a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
agreement or other instrument to which Healthbridge or any of its
subsidiaries is a party or by which any of their assets are bound,
the failure of which to obtain, in each such case, would have a
Material Adverse Effect.
Section 10. Termination. Anything herein or elsewhere to the contrary
notwithstanding, this Merger Agreement may be terminated and abandoned by the
Board of Directors of any Constituent Corporation at any time prior to the
Effective Time. This Merger Agreement may be amended by the Boards of Directors
of the Constituent Corporations at any time prior to the Effective Time,
provided that an amendment made subsequent to the adoption of this Merger
Agreement by the stockholders of any Constituent Corporation shall not without
approval of the affected stockholders: (i) alter or change the amount or kind of
shares, obligations, cash, property and/or rights to be received in exchange for
or on conversion of all or any of the shares of any class or series thereof of
such Constituent Corporation, (ii) alter or change any term of the Articles of
Incorporation of the Surviving Corporation to be effected by the Merger, or
(iii) alter or change any of the terms and conditions of this Merger Agreement
if such alteration or change would adversely affect the holders of any class or
series of shares of such Constituent Corporation.
Section 11. Miscellaneous.
a. Governing Law. This Merger Agreement shall be governed by
and construed in accordance with the laws of the State of Texas, regardless of
the laws that might otherwise govern under the applicable principles of
conflicts of law of the State of Texas.
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b. Headings. Headings included herein are for convenience only
and shall not be used to interpret or construe this Merger Agreement.
c. Copies of Plan of Merger. A copy of the executed Plan of
Merger is on file at the principal place of business of the Surviving
Corporation at: 1177 West Hastings Street, Suite 1818, Vancouver, British
Columbia, Canada V6E2K3; attention: Norman Wareham, Secretary. A copy of the
Plan of Merger will be furnished by the Surviving Corporation, on written
request and without cost, to any shareholder of the Constituent Corporations and
to any creditor of the Constituent Corporations.
d. Entire Agreement; Amendment. This Merger Agreement
constitutes the entire and exclusive agreement between the parties relating to
the subject matter hereof, and all other prior negotiations, representations,
understandings and agreements are expressly superseded hereby. No agreements
amending or supplementing the terms hereof shall be effective except by means of
a written document signed by the duly authorized representatives of both
parties.
e. Counterparts; Facsimile Signature. This Merger Agreement
may be executed by facsimile and in one or more counterparts, each of which
shall be deemed an original.
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
7
<PAGE> 8
IN WITNESS WHEREOF, the parties to this Merger Agreement, pursuant to
the approval and authority duly given by resolution adopted by their respective
Boards of Directors, have caused these presents to be executed by the duly
authorized officers of each party hereto as the respective act, deed and
agreement of each of said corporations, as of the date first referenced above.
WATTMONITOR, INC., a Texas corporation
By: /s/ Joel Dumaresq
-----------------
Joel Dumaresq
President
HEALTHBRIDGE, INC., a Delaware corporation
By: /s/ Antonio Ponte
-----------------
Antonio Ponte
President
8
<PAGE> 1
EXHIBIT 3.1
===============================
ARTICLES OF INCORPORATION
OF
GFB ALLIANCE SERVICES, INC.
===============================
ARTICLE ONE
The name of the corporation is GFB ALLIANCE SERVICES, 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 a corporation may be incorporated
under the Texas Business Corporation Act.
ARTICLE FOUR
The aggregate number of shares which the corporation shall have
authority to issue is Ten Thousand (10,000). The shares shall have a par value
of Ten Cents.
ARTICLE FIVE
The Corporation will not commence business until it has received for
the issuance of its shares consideration of the value of $1,000.00.
===============================
ARTICLES OF INCORPORATION
GFB ALLIANCE SERVICES, INC., PAGE 1
<PAGE> 2
ARTICLE SIX
The street address of its initial Registered Office, and the name of
its initial Registered Agent at this address is as follows:
Lawyer's Aid Service, Inc.
408 West 17th Street, Suite 101
Austin, Texas 78701
ARTICLE SEVEN
The number of initial Directors is one (1). The name and address of
the initial Director is:
George Boehme
4669 Southwest Freeway, Suite 814
Houston, Texas 77027
ARTICLE EIGHT
The name and address of the Incorporator is:
Marilyn S. Hershman
408 W. 17th Street, Suite 101
Austin, Texas 78701-1207
(512) 474-2002
===============================
IN WITNESS WHEREOF: I have hereunto set my hand this 17th day of
February, 1993.
/s/ MARILYN S. HERSHMAN
---------------------------------
Marilyn S. Hershman, Incorporator
===============================
ARTICLES OF INCORPORATION
GFB ALLIANCE SERVICES, INC., PAGE 2
<PAGE> 1
EXHIBIT 3.2
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Articles of Incorporation:
ARTICLE ONE
The name of the corporation is GFB ALLIANCE SERVICES, INC.
ARTICLE TWO
The following amendment to the Articles of Incorporation was adopted by
the shareholders of the corporation on December 11, 1996.
This amendment
i. deletes ARTICLE ONE of the original Articles of
Incorporation in its entirety and provides for a new ARTICLE
ONE as set forth below and
ii. deletes ARTICLE FOUR of the original Articles of
Incorporation in its entirety and provides for a new
ARTICLE FOUR as set forth below.
The amendment deletes the language in ARTICLE ONE of the original Articles
of Incorporation and the full text of ARTICLE ONE shall be as follows:
ARTICLE ONE
The name of the corporation is WORLD STAFFING II, INC.
The amendment deletes the language in ARTICLE FOUR of the original
Articles of Incorporation and the full text of ARTICLE FOUR shall be as follows:
ARTICLE FOUR
The aggregate number of shares in which the corporation
shall have authority to issue is 50,000,000 shares of the par value of
$0.0001 each Common Voting Equity Stock, such shares to carry the
short title "Common"; and NO other class of stock.
The Board of Directors may further create separate series
within any class of stock.
ARTICLE THREE
The number of shares of the corporation outstanding at the time of such
adoption was 60,000 common shares; and the number of shares entitled to vote
thereon was 60,000.
<PAGE> 2
ARTICLE FOUR
The number of shares voted for such amendment was 58,0110; and the
number of shares voted against such amendment was 0.
ARTICLE FIVE
The manner in which any exchange, reclassification or cancellation of
issued shares provided for in the amendment shall be effected, is as follows:
The Officers are empowered and directed to exchange the issued 60,000
common shares of par value $0.001 for 60,000 common shares of par value
$0.0001.
ARTICLE SIX
The manner in which such amendment effects a change in the amount of
stated capital, and the amount of stated capital as changed by such amendment,
are as follows:
This amendment empowers and directs the Officers to exchange the
issued 60,000 common shares of par value $0.001 for 60,000 common shares of
par value $0.0001.
This amendment will have the effect of reducing stated capital by
$54.00.
Dated the 22nd day of July, 1997.
GFB ALLIANCE SERVICES, INC.
/s/ J. DAN SIFFORD JR.
---------------------
J. DAN SIFFORD JR.
------------------
Printed Name
Secretary
<PAGE> 1
EXHIBIT 3.3
ARTICLES OF AMENDMENT
AFTER ISSUANCE OF STOCK
(pursuant to TEXAS BUSINESS CORPORATION ACT)
WORLD STAFFING II, INC.
(OF TEXAS)
(1) THE ORIGINAL ARTICLES of Incorporation originally filed on
February 17, 1993, and last amended July 24, 1997 shall be further changed and
amended as follows:
ARTICLE ONE is hereby superseded and amended to read as set forth
immediately following:
The name of the corporation is WATTMONITOR, INC.
(2) ADOPTION OF THE AMENDMENT occurred by unanimous consent of the
Board of Directors on October 29, 1998 immediately following a special
shareholder action: (a) The total shares issued and outstanding and entitled to
vote was 19,713,600; (2)The ownership of 11,720,000 (59.45%) shares was
represented at the Meeting; (3) All 11,720,000 (59.45%) shares voted in favor of
the Amendment.
/s/ JOHN SPICER /s/ J. DAN SIFFORD
--------------- ------------------
JOHN SPICER/Pres J. DAN SIFFORD
<PAGE> 1
Exhibit 3.4
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
WATTMONITOR, INC.
THE UNDERSIGNED, to amend and restate the Articles of Incorporation of
WattMonitor, Inc. in its entirety, under and pursuant to the provisions of the
Texas Business Corporation Act ("TBCA"), does hereby certify as follows:
The Instrument accurately copies the articles of incorporation and all
amendments thereto that are in effect to date and as further amended by the
restated articles of incorporation and that the instrument contains no other
change in any provisions.
Each amendment has been effected in conformity with provisions of the
Texas Business Corporation Act.
These amended and restated articles of incorporation were adopted by
the vote of at least two thirds of the holders of outstanding shares of company
stock entitled to vote at a special meeting of the shareholders held on May 3,
1999. The total number of common stock shares outstanding and entitled to vote
at such meeting was 2,950,000. The number of common stock shares voting for the
amended and restated articles of incorporation was 1,994,800. The number of
common stock shares voting against the amended and restated articles of
incorporation was zero.
ARTICLE ONE
The name of the corporation is Healthbridge, Inc.
ARTICLE TWO
The period of its duration is perpetual.
<PAGE> 2
ARTICLE THREE
The purpose for which the corporation is organized is the transaction
of any and all lawful business for which a corporation may be incorporated under
the TBCA.
ARTICLE FOUR
The total number of shares of stock which the corporation has authority
to issue is Seventy-Five Million (75,000,000) shares, of which Fifty Million
(50,000,000) shares shall be Common Stock, par value $0.0001 per share (the
"Common Stock) and Twenty-Five Million (25,000,000) shares shall be Preferred
Stock, par value $.0001 per share (the "Preferred Stock"). The corporation shall
be entitled to treat the person in whose name any share of its stock is
registered as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such share on the
part of any other person, whether or not the corporation shall have notice
thereof, except as expressly provided by applicable law. The shares of the
Preferred Stock and Common Stock, respectively, shall have the following express
terms:
SECTION 1. PREFFERED STOCK.
1.1 Series of Preferred Stock. With regard to any other shares of
Preferred Stock authorized herein, the Board of Directors of the corporation is
hereby expressly granted authority, to the full extent now or hereafter
permitted herein or by the TBCA, at any time or from time to time, by resolution
or resolutions, to create one or more series of Preferred Stock, to fix the
authorized number of shares of any such series (which number of shares may vary
as between series and be changed from time to time by like action), and to fix
the terms of such series, including but not limited to, the following:
(i) the designation of such series, which may be by
distinguishing number, letter or title;
(ii) the rate or rates at which shares of such series shall be
entitled to receive dividends; whether dividends are to be paid in the
form of common stock of the corporation; the periods in respect of
which dividends are payable; the conditions upon, and times of payment
of, such dividends; the relationship and preference, if any, of such
dividends to dividends payable on any other class or classes or any
other series of stock; whether such dividends shall be cumulative and,
if cumulative, the date or dates from which such dividends shall
accumulate; and the other terms and conditions applicable to dividends
upon shares of such series;
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<PAGE> 3
(iii) the rights of the holders of the shares of such series
in case the corporation be liquidated, dissolved or wound up (which may
vary depending upon the time, manner or voluntary or involuntary nature
or other circumstances of such liquidation, dissolution or winding up)
and the relationship and preference, if any, of such rights to rights
of holders of shares of stock of any other class or classes or any
other series of stock;
(iv) the right, if any, of the corporation to redeem shares of
such series at its option, including any limitation of such right, and
the amount or amounts to be payable in respect of the shares of such
series in case of such redemption (which may vary depending on the
time, manner or other circumstances of such redemption), and the
manner, effect and other terms and conditions of any such redemption;
(v) the obligation, if any, of the corporation to purchase,
redeem or retire shares of such series and/or amounts to be payable
from time to time for such purpose or into any fund created for such
purpose, or the number of shares to be purchased, redeemed or retired,
the per share purchase price or prices, and the other terms and
conditions of any such obligation or obligations;
(vi) the voting rights, if any, which, if granted, may be
full, special, or limited, to be given the shares of such series,
including, without limiting the generality of the foregoing, the right,
if any, as a series or in conjunction with other series or classes, to
elect one or more members of the Board of Directors either generally or
at certain times or under certain circumstances, and restrictions, if
any, on particular corporate acts without a specified vote or consent
of holders of such shares (such as, among others, restrictions on
modifying the terms of such series or of the Preferred Stock,
restricting the permissible terms of other series or the permissible
variations between series of the Preferred Stock, authorizing or
issuing additional shares of the Preferred Stock, creating debt, or
creating any class of stock ranking prior to or on a parity which the
Preferred Stock or any series thereof
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<PAGE> 4
as to dividends, or assets remaining for distribution to the
stockholders in the event of the liquidation, dissolution, or winding
up of the corporation);
(vii) the right, if any, to exchange or convert the shares
into shares of any other series of the Preferred Stock or into shares
of any other class of stock of the corporation or the securities of any
other corporation, and the rate or basis, time, manner, terms and
conditions of exchange or conversion or the method by which the same
shall be determined; and
(viii) the other special rights, if any, and the
qualifications, limitations or restrictions thereof, of the shares of
such series.
The Board of Directors shall fix the terms of each series of the
Preferred Stock by resolution or resolutions adopted at any time prior to the
issuance of the shares thereof, and the terms of each such series may, subject
only to restrictions, if any, imposed by these Articles of Incorporation or by
applicable law, vary from the terms of other series to the extent determined by
the Board of Directors from time to time and provided in the resolution or
resolutions fixing the terms of the respective series of the Preferred Stock.
1.2 Status of Certain Shares. Shares of any series of the Preferred
Stock, whether provided for herein or by resolution or resolutions of the Board
of Directors, which have been redeemed (whether through the operation of a
sinking fund or otherwise) or which, if convertible or exchangeable, have been
converted into or exchanged for shares of stock of any other class or classes,
or which have been purchased or otherwise acquired by the corporation, shall
have the status of authorized and unissued shares of the Preferred Stock of the
same series and may be reissued as a part of the series of which they were
originally a part or may be reclassified and reissued as part of a new series of
the Preferred Stock to be created by resolution or resolutions of the Board of
Directors or as part of any other series of the Preferred Stock, all subject to
the conditions or restrictions on issuance set forth herein or in the resolution
or resolutions adopted by the Board of Directors providing for the issue of any
series of the Preferred Stock.
SECTION 2. COMMON STOCK.
2.1 Issuance, Consideration and Terms. Any unissued or treasury shares
of the Common Stock may be issued from time to time for such consideration (not
less than the par value thereof) as may be fixed from time to time by the Board
of Directors. The
4
<PAGE> 5
Common Stock shall be subject to the express terms of the Preferred Stock and
any series thereof. Each share of Common Stock shall be of equal rank and shall
be identical to every other share of Common Stock. Holders of Common stock shall
have such rights as are provided herein and by law.
2.2 Voting Rights. Except as expressly required by law or as provided
in or fixed and determined pursuant to Section 1 of this Article Four, the
entire voting power and all voting rights shall be vested exclusively in the
Common Stock. Each holder of shares of Common Stock shall be entitled to one (1)
vote for each share standing in such holder's name on the books of the
corporation.
2.3 Dividends. Subject to Section 1 of this Article Four, the holders
of Common Stock shall be entitled to receive, and shall share equally share for
share, when and as declared by the Board of Directors, out of the assets of the
corporation which are by law available therefor, dividends or distributions
payable in cash, in property or in securities of the corporation.
ARTICLE FIVE
The corporation will not commence business until it has received for
the issuance of its shares consideration of the value of $1,000.
ARTICLE SIX
The shareholders of the corporation shall have no preemptive right to
acquire additional, unissued, treasury shares or other securities of the
corporation.
ARTICLE SEVEN
The street address of the corporation's registered office in the State
of Texas is: 408 West 17th Street, Suite 101, Austin, Texas 78701. The name of
its registered agent at that address is Lawyer's Aid Service, Inc.
5
<PAGE> 6
ARTICLE EIGHT
FOURTH: The name and mailing address of the incorporator is Marilyn S.
Hershman, 408 W. 17th Street, Suite 101, Austin, Texas 78701-1207.
ARTICLE NINE
Except as otherwise required by law, special meetings of stockholders
of the corporation for any purpose or purposes may be called by the Board of
Directors pursuant to a resolution stating the purpose or purposes thereof
approved by a majority of the total number of directors which the Board of
Directors of the corporation would have if there were no vacancies (the "Whole
Board") or by the Chairman of the Board of Directors of the corporation. Special
meetings of the stockholders may also be called by the holders of at least fifty
percent (50%) of all shares entitled to vote at the proposed special meeting. No
business other than that stated in the notice shall be transacted at any special
meeting. Notwithstanding anything contained in these Articles of Incorporation
to the contrary, the affirmative vote of the holders of at least 80% of the
voting power of all outstanding shares of the corporation entitled to vote
generally (the "Voting Stock"), voting together as a single class, shall be
required to alter, amend, or adopt any provision inconsistent with or repeal
this Article Nine.
ARTICLE TEN
The following provisions of this Article Ten shall apply with respect
to the Board of Directors of the corporation:
SECTION 1. NUMBER, ELECTION AND TERMS.
Except as otherwise fixed by or pursuant to the provisions of Article
Four hereof relating to the rights of the holders of any shares of the Preferred
Stock or any series thereof having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under specified
circumstances, the number of the directors of the corporation shall be fixed
from time to time exclusively pursuant to a resolution adopted by a majority of
the Whole Board (but shall not be less than two). So long as there shall be more
than two directors, the directors, other than those who may be elected by the
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<PAGE> 7
holders of any shares of Preferred Stock or series thereof having a preference
over the Common Stock as to dividends or upon liquidation, shall be classified,
with respect to the time for which they severally hold office, into, three
classes, as nearly equal in number as possible, one class to be originally
elected for a term expiring at the first annual meeting of stockholders, another
class to be originally elected for a term expiring at the second annual meeting
of stockholders, and another class to be originally elected for a term expiring
at the third annual meeting of stockholders, with each class to hold office
until its successor is duly elected and qualified. At each succeeding annual
meeting of stockholders, directors elected to succeed those directors whose
terms then expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until such person's successor shall have been duly
elected and qualified. Election of directors need not be by written ballot
unless and to the extent that the Bylaws of the corporation so provide.
Cumulative voting for directors shall not be permitted.
SECTION 2. STOCKHOLDER NOMINATIONS AND PROPOSALS.
Advance notice of stockholder nominations for the election of directors
and of the proposal of business by stockholders shall be given as provided in
the Bylaws of the corporation, as amended and in effect from time to time.
SECTION 3. NEWLY CREATED DIRECTORSHIPS AND VACANCIES.
Except as otherwise provided for or fixed by or pursuant to the
provisions of Article Four hereof relating to the rights of the holders of any
class or series of the Preferred Stock having a preference over the Common Stock
as to dividends or upon liquidation, to elect directors under specified
circumstances, 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, unless such Board of
Directors determines that such newly created directorships or vacancies shall be
filled by the stockholders at a special meeting of the stockholders called
pursuant to the terms of Article Nine hereof. 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
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<PAGE> 8
directorship was created or the vacancy occurred and until such director's
successor shall have been duly elected and qualified. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
SECTION 4. REMOVAL.
Any director may be removed from office only for cause by the
affirmative vote of the holders of at least a majority of the Voting Stock,
voting together as a single class.
SECTION 5. AMENDMENT, REPEAL, ETC.
Notwithstanding anything contained in these Articles of Incorporation
to the contrary, the affirmative vote of the holders of at least 80% of the
Voting Stock, voting together as a single class, shall be required to alter,
amend, adopt any provision inconsistent with or repeal this Article Ten.
ARTICLE ELEVEN
The Bylaws of the corporation may be altered or repealed and new Bylaws
may be adopted either: (i) at any annual or special meeting of stockholders, by
the affirmative vote of the holders of a majority of the Voting Stock, provided
that in the case of any such stockholder action at a special meeting of
stockholders, notice of the proposed alteration, repeal or adoption of the new
Bylaw or Bylaws must be contained in the notice of such special meeting; or (ii)
by the affirmative vote of a majority of the Whole Board.
Notwithstanding anything contained in these Articles of Incorporation
to the contrary, the affirmative vote of the holders of at least 80% of the
Voting Stock, voting together as a single class, shall be required to alter,
amend, adopt any provision inconsistent with, or repeal this Article Eleven.
ARTICLE TWELVE
The corporation reserves the right at any time and from time to time to
amend, alter, change or repeal any provision contained in these Articles of
Incorporation, and any 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, except as set forth in Article Fourteen, all
rights, preferences and privileges of whatsoever nature conferred upon
stockholders, directors or any other persons whomsoever by and pursuant
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<PAGE> 9
to these Articles of Incorporation in its present form or as hereafter amended
are granted subject to the right reserved in this Article Twelve.
Notwithstanding anything contained in these Articles of Incorporation to the
contrary, the affirmative vote of the holders of at least 80% of the Voting
Stock, voting together as a single class, shall be required to alter, amend,
adopt any provision inconsistent with or repeal Articles Nine, Ten, Eleven or
Twelve hereof.
ARTICLE THIRTEEN
A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for such liability as is expressly not subject to
limitation under the TBCA as the same exists or hereafter may be amended.
Neither the amendment nor repeal of this Article Thirteen shall eliminate or
reduce the effect of this Article Thirteen in respect of any matter occurring,
or any cause of action, suit or claim that, but for this Article Thirteen would
accrue or arise, prior to such amendment or repeal.
ARTICLE FOURTEEN
The corporation shall indemnify the persons described in the following
provisions of this Article Fourteen to the extent set forth herein:
SECTION 1. INDEMNIFICATION.
Each person who was or is made a party to, or is threatened to be made
a party to, or who was or is made a nonparty witness or otherwise involved as a
nonparty in, any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereafter a
"proceeding") by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was or has agreed to become a director or
officer of the corporation, or is or was serving or has agreed to serve at the
request of the corporation as a director, officer, trustee, employee, or agent
of another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such action, suit or proceeding is alleged in an official capacity as a
director, officer, employee, agent or trustee or in any other capacity while
serving as a director, officer, employee, agent or
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<PAGE> 10
trustee, shall be indemnified and held harmless by the corporation to the
fullest extent authorized by the TBCA (as the same now exists or hereafter may
be amended, but in the event of any such amendment only to the extent that such
amendment authorizes broader indemnification rights than the TBCA permitted
prior to such amendment) from and against any and all liability, loss and
expense (including attorneys' fees, judgments, fines, ERISA excise taxes and
penalties and amounts paid or to be paid in settlement) actually and reasonably
incurred or suffered by such person in connection with such proceeding and any
appeal therefrom and such indemnification shall continue as to a person who has
ceased to be a director, officer, employee or agent and administrator of such
person; provided that, except as provided in Section 2 of this Article Fourteen,
the corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation. The right to indemnification conferred in this Section 1 of
this Article Fourteen shall be a contract right and shall include the right to
have the corporation pay the expenses incurred in defending any such proceeding
in advance of its final disposition; any advance payments to be paid by the
corporation shall be paid within 30 calendar days after the receipt by the
corporation of a statement or statements from the claimant requesting such
advance or advances from time to time; provided, however, that, if and to the
extent the TBCA requires, the payment of such expenses incurred by a director or
officer in such person's capacity as a director or officer (and not in any other
capacity) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Article Fourteen or otherwise. The corporation may, to the extent
authorized from time to time by the Board of Directors, grant rights to
indemnification, and rights to have the corporation pay the expenses incurred in
defending any proceeding in advance of its final disposition, to any employee or
agent of the corporation to the fullest extent of the provisions of this Article
Fourteen with respect to the indemnification and advancement of expenses of
directors and officers of the corporation.
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SECTION 2. RIGHT OF CLAIMANT TO BRING SUIT.
If a claim under Section 1 of this Article Fourteen is not paid in full
by the corporation within 30 calendar days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation) that the
claimant has not met the standard of conduct which makes it permissible under
the TBCA for the corporation to indemnify the claimant for the amount claimed,
but the burden of providing such defense shall be on the corporation. Neither
the failure of the corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because the claimant has met the applicable standard of
conduct set forth in the TBCA, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
SECTION 3. NON-EXCLUSIVITY OF RIGHTS.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in this
Article Fourteen shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of these Articles of
Incorporation or any Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise. No repeal or modification of this Article Fourteen shall
in any way diminish or adversely affect the rights herein conferred on any
director or officer of the corporation, or any other person specified herein, in
respect of any occurrence or matter arising prior to any such repeal or
modification.
SECTION 4. INSURANCE.
The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership,
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joint venture, trust or other enterprise against any such expense, liability or
loss, whether or not the corporation would have the power to indemnify such
person against such expense, liability or loss under the TBCA.
SECTION 5. SEVERABILITY.
If any provision or provisions of this Article Fourteen shall be held
to be invalid, illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining provisions of this
Article Fourteen (including, without limitation, each portion of any paragraph
of this Article Fourteen containing any such provision held to be invalid,
illegal or unenforceable, that is not itself held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (ii) to
the fullest extent possible, the provisions of this Article Fourteen (including,
without limitation, each such portion of any paragraph of this Article Fourteen
containing any such provision held to be invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.
ARTICLE FIFTEEN
The number of initial directors is one (1). The name and address of the
initial director is:
George Boehme
4669 Southwest Freeway, Suite 814
Houston, Texas 77027
[Signature appears on the following page]
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IN WITNESS WHEREOF, the undersigned President of the corporation has
executed this Amended and Restated Articles of Incorporation as of May 10, 1999.
/s/ Joel Dumaresq
Joel Dumaresq
President
<PAGE> 1
EXHIBIT 3.5
HEALTHBRIDGE, INC.
A TEXAS CORPORATION
BYLAWS
---------------
ARTICLE I
STOCKHOLDERS
SECTION 1.1 ANNUAL MEETING. An annual meeting of stockholders for the
purpose of electing directors and of transacting such other business as may come
before it shall be held each year at such date, time, and place, either within
or without the State of Texas, as may be specified by the Board of Directors.
SECTION 1.2 SPECIAL MEETINGS. Special meetings of stockholders for any
purpose or purposes may be held at any time exclusively upon call of the
Chairman or a majority of the total number of directors which the Board of
Directors of the corporation would have if there were no vacancies (the "Whole
Board"), at such time and place either within or without the State of Texas as
may be stated in the notice.
SECTION 1.3 NOTICE OF MEETING. Written notice of stockholders'
meetings, stating the place, date, and hour thereof, and, in the case of a
special meeting, the purpose or purposes for which the meeting is called, shall
be given by the President or the Secretary to each stockholder entitled to vote
thereat at least ten days but not more than sixty days before the date of the
meeting, unless a different period is prescribed by law. Stockholders wishing to
submit a proposal or director nomination for consideration at a meeting of the
stockholders must provide advance written notice of such proposal to the
Secretary of the corporation of not less than 30 days nor more than 60 days
prior to the meeting.
<PAGE> 2
SECTION 1.4 QUORUM. Except as otherwise provided by law or in the
Certificate of Incorporation or these Bylaws, at any meeting of stockholders,
the holders of a majority of the outstanding shares of each class of stock
entitled to vote at the meeting shall be present or represented by proxy in
order to constitute a quorum for the transaction of any business. In the absence
of a quorum, a majority in interest of the stockholders present or the chairman
of the meeting may adjourn the meeting from time to time in the manner provided
in Section 1.5 of these Bylaws until a quorum shall attend.
SECTION 1.5 ADJOURNMENT. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty 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 stockholder of record entitled to vote at the meeting.
SECTION 1.6 ORGANIZATION. The Chairman shall call to order meetings of
stockholders and shall act as chairman of such meetings. The Board of Directors
or, if the Board fails to act, the stockholders may appoint any stockholder,
director, or officer of the corporation to act as chairman of any meeting in the
absence of the Chairman. The Secretary shall act as secretary of all meetings of
stockholders, but, in the absence of the Secretary, the chairman of the meeting
may appoint any other person to act as secretary of the meeting.
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SECTION 1.7 VOTING. Except as otherwise provided by law or in the
Certificate of Incorporation or these Bylaws and except for the election of
directors, at any meeting duly called and held at which a quorum is present, a
majority of the votes cast at such meeting upon a given question by the holders
of outstanding shares of stock of all classes of stock of the corporation
entitled to vote thereon who are present in person or by proxy shall decide such
question. At any meeting duly called and held for the election of directors at
which a quorum is present, directors shall be elected by a plurality of the
votes cast by the holders (acting as such) of shares of stock of the corporation
entitled to elect such directors.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.1 NUMBER AND TERM OF OFFICE. The business, property, and
affairs of the corporation shall be managed by a Board of Directors consisting
of no less than two directors. The number of directors may be fixed from time to
time exclusively pursuant to a resolution adopted by a majority of the Whole
Board (but may not be less than two). The Board of Directors shall be divided
into three classes, which are hereby designated Class A, Class B and Class C.
The term of office of the initial Class A directors shall expire at the next
annual meeting of stockholders, that of the initial Class B directors at the
second succeeding annual meeting of stockholders, and that of the initial Class
C directors at the third succeeding annual meeting of stockholders. At each
annual meeting after the initial classification of directors, directors to
replace those whose
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terms expire at such annual meeting shall be elected to hold office until the
third succeeding annual meeting. The directors shall be elected by the holders
of shares entitled to vote thereon at the annual meeting of stockholders, and
each shall serve until his respective successor has been elected and qualified.
Directors need not be stockholders.
SECTION 2.2 MEETINGS. Regular meetings of the Board of Directors may be
held without notice at such time and place as shall from time to time be
determined by the Board. Special meetings of the Board of Directors shall be
held at such time and place as shall be designated in the notice of the meeting
whenever called by the President or by one of the directors then in office.
SECTION 2.3 NOTICE OF SPECIAL MEETINGS. The Secretary, or in his
absence any other officer of the corporation, shall give each director notice of
the time and place of holding of special meetings of the Board of Directors at
least twenty-four hours before the meeting, whether by mail, telegram, cable,
radiogram, telecopier, electronic mail, courier, or personal service. No
business may be transacted at any meeting without specification of such business
in the notice.
SECTION 2.4 QUORUM AND ORGANIZATION OF MEETINGS. A majority of the
total number of members of the Board of Directors as constituted from time to
time shall constitute a quorum for the transaction of business, but, if at any
meeting of the Board of Directors (whether or not adjourned from a previous
meeting) there shall be less than a quorum present, a majority of those present
may adjourn the meeting to another time and place, and the meeting may be held
as adjourned without further notice or waiver. Except as otherwise provided by
law or in the Certificate of Incorporation or these
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Bylaws, a majority of the directors present at any meeting at which a quorum is
present may decide any question brought before such meeting. Meetings shall be
presided over by the Chairman, or in the absence of the Chairman, by such other
person as the directors may select. The Secretary of the corporation shall act
as secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
SECTION 2.5 EXECUTIVE COMMITTEE. The Board, by resolution adopted by a
majority of the Board, may designate an Executive Committee of one or more
directors, which committee shall have all the powers and authority of the Board
except as otherwise provided in such resolution, Texas Business Corporation Act,
or any other applicable law. The members of the Executive Committee shall serve
at the pleasure of the Board. All action of the Executive Committee shall be
reported to the Board at its next meeting.
SECTION 2.6 OTHER COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the Board, designate one or more other committees, each
committee to consist of one or more of the directors of the corporation. Such
committees shall have such powers as the Board of Directors shall assign from
time to time. The Board may designate one or more directors as alternate members
of any such committee, who may replace any absent or disqualified member at any
meeting of the committee. Each such committee which may be established by the
Board of Directors pursuant to these Bylaws may fix its own rules and
procedures. Notice of meetings of committees, other than of regular meetings
provided for by the rules, shall be given to committee members. All action taken
by committees shall be recorded in minutes of the meetings.
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SECTION 2.7 ACTION WITHOUT MEETING. Nothing contained in these Bylaws
shall be deemed to restrict the power of members of the Board of Directors or
any committee designated by the Board to take any action required or permitted
to be taken by them without a meeting.
SECTION 2.8 TELEPHONE MEETINGS. Nothing contained in these Bylaws shall
be deemed to restrict the power of members of the Board of Directors, or any
committee designated by the Board, to participate in a meeting of the Board, 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.
ARTICLE III
OFFICERS
SECTION 3.1 EXECUTIVE OFFICERS. The executive officers of the
corporation shall be a President, one or more Vice Presidents, a Treasurer, and
a Secretary, each of whom shall be elected by the Board of Directors. The Board
of Directors may elect or appoint such other officers (including a Controller
and one or more Assistant Treasurers and Assistant Secretaries) as it may deem
necessary or desirable. Each officer shall hold office for such term as may be
prescribed by the Board of Directors from time to time. Any person may hold at
one time two or more offices.
SECTION 3.2 POWERS AND DUTIES. The Chairman shall preside at all
meetings of the stockholders and of the Board of Directors. In the absence of
the Chairman, the President, or a Vice President appointed by the President or,
if the President fails to make such appointment, by the Board, shall perform all
the duties of the Chairman. The officers and agents of the corporation shall
each have such powers and authority and shall
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<PAGE> 7
perform such duties in the management of the business, property, and affairs of
the corporation as generally pertain to their respective offices, as well as
such powers and authorities and such duties as from time to time may be
prescribed by the Board of Directors.
ARTICLE IV
RESIGNATIONS, REMOVALS, AND VACANCIES
SECTION 4.1 RESIGNATIONS. Any director or officer of the corporation,
or any member of any committee, may resign at any time by giving written notice
to the Board of Directors, the President, or the Secretary of the corporation.
Any such resignation shall take effect at the time specified therein or, if the
time be not specified therein, then upon receipt thereof. The acceptance of such
resignation shall not be necessary to make it effective.
SECTION 4.2 REMOVALS. (a) The board of Directors, by majority vote, at
any meeting thereof, or by written consent, at any time, may, to the extent
permitted by law, remove with or without cause from office or terminate the
employment of any officer or member of any committee and may, with or without
cause, disband any committee.
(b) Any director or the entire Board of Directors may be
removed with cause by the holders of a majority of all outstanding shares of the
corporation entitled to vote generally, voting together as a single class.
SECTION 4.3 VACANCIES. Any vacancy in the office of any director or
officer through death, resignation, removal, disqualification, or other cause,
and any additional directorship resulting from increase in the number of
directors, may be filled at any time
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by a majority of the directors then in office (even though less than a quorum
remains); provided, however, that in the case of any newly created directorship
or vacancy in the office of any director, the Board of Directors may require
that such newly created directorship or vacancy be filled by the stockholders at
a special meeting of the stockholders. Subject to the provisions of this Article
IV, the person so chosen shall hold office until his successor shall have been
elected and qualified, or, if the person so chosen is a director elected to fill
a vacancy, he shall (subject to the provisions of this Article IV) hold office
for the unexpired term of his predecessor.
ARTICLE V
CAPITAL STOCK
SECTION 5.1 STOCK CERTIFICATES. The certificates for shares of the
capital stock of the corporation shall be in such form as shall be prescribed by
law and approved, from time to time, by the Board of Directors.
SECTION 5.2 TRANSFER OF SHARES. Shares shall be transferable only on
the corporation's books, upon surrender of the certificate for the shares,
properly endorsed. The Board may require satisfactory surety before issuing a
new certificate to replace a certificate claimed to have been lost or destroyed.
SECTION 5.3 FIXING RECORD DATE. In order that the corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion, or exchange of stock,
or for the purpose of any other lawful action, the Board of Directors may fix,
in advance, a record date, which, unless otherwise provided by law,
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shall not be more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action.
SECTION 5.4 LOST CERTIFICATES. The Board of Directors or any transfer
agent of the corporation authorized by the Board of Directors may direct a new
certificate or certificates representing stock of the corporation to be issued
in place of any certificate or certificates theretofore issued by the
corporation, alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen, or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors (or any transfer agent of the corporation
authorized to do so by a resolution of the Board of Directors) may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen, or destroyed certificate or certificates, or his
legal representative, to give the corporation a bond in such sum as the Board of
Directors (or any transfer agent so authorized) shall direct to indemnify the
corporation against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen, or destroyed or
the issuance of such new certificates, and such requirement may be general or
confined to specific instances.
SECTION 5.5 REGULATIONS. The Board of Directors shall have power and
authority to make all such rules and regulations as it may deem expedient
concerning the issue, transfer, registration, cancellation, and replacement of
certificates representing stock of the corporation.
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ARTICLE VI
MISCELLANEOUS
SECTION 6.1 CORPORATE SEAL. The corporate seal shall have inscribed
thereon the name of the corporation and shall be in such form as may be approved
from time to time by the Board of Directors.
SECTION 6.2 FISCAL YEAR. The fiscal year of the corporation shall begin
on the 1st day of January in each year and terminate on the 31st day of December
in each succeeding year.
SECTION 6.3 NOTICES AND WAIVERS THEREOF. (a) Whenever any notice
whatever is required by law, the Certificate of Incorporation, or these Bylaws
to be given to any stockholder, director, or officer, such notice, except as
otherwise provided by law, may be given personally, by mail, or by courier or,
in the case of directors or officers, by telecopier, electronic mail, telegram,
cable, courier, or radiogram, addressed to such address as appears on the books
of the corporation. Any notice given by telecopier, electronic mail, telegram,
cable, or radiogram shall be deemed to have been given when it shall have been
transmitted and any notice given by mail or courier shall be deemed to have been
given when it shall have been deposited in the United States mail with postage
thereon prepaid or delivered to such courier.
(b) Whenever any notice is required to be given by law, the Certificate
of Incorporation, or these Bylaws, a written waiver thereof, signed by the
person entitled to such notice, whether before or after the meeting or the time
stated therein, shall be deemed equivalent in all respects to such notice to the
full extent permitted by law.
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SECTION 6.4 STOCK OF OTHER CORPORATIONS OR OTHER INTERESTS. Unless
otherwise ordered by the Board of Directors, the President, the Secretary, or
such attorneys or agents of the corporation as may be from time to time
authorized by the Board of Directors or the President shall have full power and
authority on behalf of this corporation to attend and to act and vote in person
or by proxy at any meeting of the holders of securities of any corporation or
other entity in which this corporation may own or hold shares or other
securities, and at such meetings shall possess and may exercise all the rights
and powers incident to the ownership of such shares or other securities which
this corporation, as the owner or holder thereof, might have possessed and
exercised if present. The President, the Secretary, or such attorneys or agents,
may also execute and deliver on behalf of this corporation powers of attorney,
proxies, consents, waivers, and other instruments relating to the shares or
securities owned or held by this corporation.
ARTICLE VII
AMENDMENTS
Except as otherwise provided by law or in the Certificate of
Incorporation or these Bylaws, the Bylaws of the corporation may be altered or
repealed and new Bylaws may be adopted either: (a) at any annual or special
meeting of stockholders, by the affirmative vote of the holders of a majority of
the voting power of the stock issued and outstanding and entitled to vote
thereat, provided that in the case of any such stockholder action at a special
meeting of stockholders, notice of the proposed alteration, repeal or adoption
of the new Bylaw or Bylaws must be contained in the notice of such special
meeting; or (b) by the affirmative vote of a majority of the Whole Board.
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<PAGE> 1
Exhibit 4.1
ARTICLE FOUR
The total number of shares of stock which the corporation has authority
to issue is Seventy-Five Million (75,000,000) shares, of which Fifty Million
(50,000,000) shares shall be Common Stock, par value $0.0001 per share (the
"Common Stock) and Twenty-Five Million (25,000,000) shares shall be Preferred
Stock, par value $.0001 per share (the "Preferred Stock"). The corporation shall
be entitled to treat the person in whose name any share of its stock is
registered as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such share on the
part of any other person, whether or not the corporation shall have notice
thereof, except as expressly provided by applicable law. The shares of the
Preferred Stock and Common Stock, respectively, shall have the following express
terms:
SECTION 1. PREFFERED STOCK.
1.1 Series of Preferred Stock. With regard to any other shares of
Preferred Stock authorized herein, the Board of Directors of the corporation is
hereby expressly granted authority, to the full extent now or hereafter
permitted herein or by the TBCA, at any time or from time to time, by resolution
or resolutions, to create one or more series of Preferred Stock, to fix the
authorized number of shares of any such series (which number of shares may vary
as between series and be changed from time to time by like action), and to fix
the terms of such series, including but not limited to, the following:
(i) the designation of such series, which may be by
distinguishing number, letter or title;
(ii) the rate or rates at which shares of such series shall be
entitled to receive dividends; whether dividends are to be paid in the
form of common stock of the corporation; the periods in respect of
which dividends are payable; the conditions upon, and times of payment
of, such dividends; the relationship and preference, if any, of such
dividends to dividends payable on any other class or classes or any
other series of stock; whether such dividends shall be cumulative and,
if cumulative, the date or dates from which such dividends shall
accumulate; and the other terms and conditions applicable to dividends
upon shares of such series;
(iii) the rights of the holders of the shares of such series
in case the corporation be liquidated, dissolved or wound up (which may
vary depending upon the time, manner or voluntary or involuntary nature
or other circumstances of such liquidation, dissolution or winding up)
and the relationship and preference, if any, of such rights to rights
of holders of shares of stock of any other class or classes or any
other series of stock;
(iv) the right, if any, of the corporation to redeem shares of
such series at its option, including any limitation of such right, and
the amount or amounts to be payable in respect of the shares of such
series in case of such redemption (which may vary depending on the
time, manner or other circumstances of such redemption), and the
manner, effect and other terms and conditions of any such redemption;
<PAGE> 2
(v) the obligation, if any, of the corporation to purchase,
redeem or retire shares of such series and/or amounts to be payable
from time to time for such purpose or into any fund created for such
purpose, or the number of shares to be purchased, redeemed or retired,
the per share purchase price or prices, and the other terms and
conditions of any such obligation or obligations;
(vi) the voting rights, if any, which, if granted, may be
full, special, or limited, to be given the shares of such series,
including, without limiting the generality of the foregoing, the right,
if any, as a series or in conjunction with other series or classes, to
elect one or more members of the Board of Directors either generally or
at certain times or under certain circumstances, and restrictions, if
any, on particular corporate acts without a specified vote or consent
of holders of such shares (such as, among others, restrictions on
modifying the terms of such series or of the Preferred Stock,
restricting the permissible terms of other series or the permissible
variations between series of the Preferred Stock, authorizing or
issuing additional shares of the Preferred Stock, creating debt, or
creating any class of stock ranking prior to or on a parity which the
Preferred Stock or any series thereof as to dividends, or assets
remaining for distribution to the stockholders in the event of the
liquidation, dissolution, or winding up of the corporation);
(vii) the right, if any, to exchange or convert the shares
into shares of any other series of the Preferred Stock or into shares
of any other class of stock of the corporation or the securities of any
other corporation, and the rate or basis, time, manner, terms and
conditions of exchange or conversion or the method by which the same
shall be determined; and
(viii) the other special rights, if any, and the
qualifications, limitations or restrictions thereof, of the shares of
such series.
The Board of Directors shall fix the terms of each series of the
Preferred Stock by resolution or resolutions adopted at any time prior to the
issuance of the shares thereof, and the terms of each such series may, subject
only to restrictions, if any, imposed by these Articles of Incorporation or by
applicable law, vary from the terms of other series to the extent determined by
the Board of Directors from time to time and provided in the resolution or
resolutions fixing the terms of the respective series of the Preferred Stock.
1.2 Status of Certain Shares. Shares of any series of the Preferred
Stock, whether provided for herein or by resolution or resolutions of the Board
of Directors, which have been redeemed (whether through the operation of a
sinking fund or otherwise) or which, if convertible or exchangeable, have been
converted into or exchanged for shares of stock of any other class or classes,
or which have been purchased or otherwise acquired by the corporation, shall
have the status of authorized and unissued shares of the Preferred Stock of the
same series and may be reissued as a part of the series of which they were
originally a part or may be reclassified and reissued as part of a new series of
the Preferred Stock to be created by resolution or resolutions of the Board of
Directors or as part of any other series of the Preferred Stock, all subject to
the conditions or restrictions on issuance set forth herein or in the resolution
or resolutions adopted by the Board of Directors providing for the issue of any
series of the Preferred Stock.
<PAGE> 1
Exhibit 4.2
ARTICLE FOUR
The total number of shares of stock which the corporation has authority
to issue is Seventy-Five Million (75,000,000) shares, of which Fifty Million
(50,000,000) shares shall be Common Stock, par value $0.0001 per share (the
"Common Stock) and Twenty-Five Million (25,000,000) shares shall be Preferred
Stock, par value $.0001 per share (the "Preferred Stock"). The corporation shall
be entitled to treat the person in whose name any share of its stock is
registered as the owner thereof for all purposes and shall not be bound to
recognize any equitable or other claim to, or interest in, such share on the
part of any other person, whether or not the corporation shall have notice
thereof, except as expressly provided by applicable law. The shares of the
Preferred Stock and Common Stock, respectively, shall have the following express
terms:
SECTION 2. COMMON STOCK.
2.1 Issuance, Consideration and Terms. Any unissued or treasury shares
of the Common Stock may be issued from time to time for such consideration (not
less than the par value thereof) as may be fixed from time to time by the Board
of Directors. The Common Stock shall be subject to the express terms of the
Preferred Stock and any series thereof. Each share of Common Stock shall be of
equal rank and shall be identical to every other share of Common Stock. Holders
of Common stock shall have such rights as are provided herein and by law.
2.2 Voting Rights. Except as expressly required by law or as provided
in or fixed and determined pursuant to Section 1 of this Article Four, the
entire voting power and all voting rights shall be vested exclusively in the
Common Stock. Each holder of shares of Common Stock shall be entitled to one (1)
vote for each share standing in such holder's name on the books of the
corporation.
2.3 Dividends. Subject to Section 1 of this Article Four, the holders
of Common Stock shall be entitled to receive, and shall share equally share for
share, when and as declared by the Board of Directors, out of the assets of the
corporation which are by law available therefor, dividends or distributions
payable in cash, in property or in securities of the corporation.
<PAGE> 1
EXHIBIT 10.1
CONSULTING AGREEMENT
This consulting agreement (this "Agreement") is made in ______________
as of this____ day of _____________, 1999 by and between Healthbridge, Inc., a
Delaware corporation ("Company"), and Wilhelm H. Liesner ("Consultant"). Company
and Consultant are each sometimes hereinafter referred to as a "Party" and
collectively, the "Parties".
RECITALS
WHEREAS, Company desires to employ a Consultant to perform certain
services for the Company and the Consultant desires to perform such services on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and conditions herein contained, the parties, intending to be legally
bound, agree as follows:
SECTION 1. TERM AND DUTIES.
1.1 Retention of Consultant. Company hereby retains the Consultant to
perform the duties described herein in accordance with the terms and conditions
set forth in this Agreement. Consultant agrees to perform such duties faithfully
and to the best of his ability and to devote such time and attention to his
duties hereunder as is reasonably necessary to perform Consultant's duties
hereunder.
1.2 Term. The term of this Agreement shall begin on the date hereof
and end on the first anniversary thereof, unless earlier terminated as provided
herein
1.3 Duties. The Consultant shall perform all the reasonable duties
assigned to him by the Chief Executive Officer of the Company from time-to-time;
provided, however, that Consultant shall not be required to travel from his
residence in Germany to the United States on less than seven days advance
written notice and without reimbursement of reasonable travel expenses, nor
shall Consultant be required to provide services averaging more than 40 hours
per month on an annualized basis (excluding attendance at meetings of the
Company's Board of Directors, if required). Consultant shall use his best
efforts to fulfill his duties and shall cooperate fully with Company in the
advancement of Company's best interests.
SECTION 2. COMPENSATION, EXPENSES.
2.1 Base Fee. Company shall pay Consultant a base fee of $5,000 per
month (the "Consulting Fee") payable in advance, inclusive of all costs except
for expenses reimbursable, if any, as provided in Section 2.2 below. Payments
under this Section shall be made to Consultant
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on the first business day of each calendar month during the term of this
Agreement, prorated for any period of less than a month.
2.2 Expenses. All expenses incurred by Consultant in the performance
of his duties shall be borne by Consultant, except that the Company shall
reimburse the Consultant for reasonable expenses not exceeding $50 for any one
expenditure and other expenditures approved by Company (in its sole discretion)
in advance and in writing. All travel expenses must be approved by Company in
advance and in writing and shall be paid in advance at the request of
Consultant. If the services to be performed by Consultant require travel by the
Consultant and Company shall decline to reimburse such expenses, Consultant may
decline to perform such services. The Consultant shall submit to Company a
statement itemizing any such expenses and stating the amount due from Company;
such statement shall have attached any receipts and invoices evidencing such
expenses. Within thirty (30) days after the closing of the Company's fiscal
quarter, Company shall pay to the Consultant the full amount of reasonable and
all preapproved expenses submitted by Consultant, excepting only those expenses,
which are either insufficiently substantiated or unreasonable. Within thirty
(30) days of any travel or other expenses paid in advance by Company, Consultant
shall submit to the Company a statement itemizing the use of the advance payment
made by the Company together with reimbursement for any portion of such advance
not expended in such travel.
SECTION 3. FACILITIES. The Consultant shall provide all of his own office space,
equipment, supplies, and other facilities as the Consultant deems necessary or
appropriate for the performance of his duties under this Agreement. If
Consultant is required to perform services at an office of the Company, Company
shall at its expense provide office space, equipment, supplies, and other
facilities as is required to perform such services. Company may furnish the
Consultant (in its sole discretion) with other resources as Company deems
necessary or appropriate for the Consultant's performance of his duties under
this Agreement.
SECTION 4. TERMINATION.
4.1 Termination for cause. The Company may terminate the Consultant's
employment hereunder "for cause" but such termination will be limited to the
following events: (a) the Consultant's conviction of any crime involving theft
or willful destruction of property of the Company or his conviction of any
felony involving moral turpitude or fraud; (b) Consultant's continued and
repeated violations of specific reasonable written directions of the Chief
Executive Officer of the Company (other than Consultant's declination of
services for failure of the Company to pay in advance for any travel costs
required) and (c) the Consultant's breach of any material representation and
warranty or covenant made herein.
4.2 Termination other than for cause. The Company may terminate this
Agreement at any time by giving Consultant thirty (30) days advance notice.
4.3 Obligations of the Company Upon Termination. Upon termination of
this Agreement by the Company "for cause" the Company shall not be obligated to
pay Consultant
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the Consulting Fee for the remainder of the term of this Agreement. Upon
termination of this Agreement other than "for cause", the Company shall pay the
Consultant the Consulting Fee when due until the end of the term, as if this
Agreement had not been terminated
SECTION 5. OTHER ENGAGEMENTS. During the term of this Agreement, Consultant may
undertake to perform any service on behalf of any other entity. Upon request by
Company, Consultant shall promptly provide Company with a written notice,
updated from time to time, as requested by Company, containing: (i) the names of
any other entities for which Consultant is performing services, and (ii) the
type of services being performed for such other entities.
SECTION 6. NON-SOLICITATION; DISPARAGMENT.
6.1 Covenants. During the term of this Agreement and for six (6)
months thereafter, the Consultant shall not, directly or indirectly: (a) whether
for the Consultant's own account or the account of any other person, interfere
with Company's relationship with any person, including any person who at any
time during the term hereof was an employee, contractor, supplier, or customer
of Company; or (b) disparage Company or any of its shareholders, directors,
officers, employees, or agents.
6.2 Construction. If any covenant in Section 6.1 is held to be
unreasonable, arbitrary, or against public policy, such covenant shall be
considered to be divisible with respect to scope and time, and such lesser scope
or time, or both of them, as a court of competent jurisdiction may determine to
be reasonable, not arbitrary, and not against public policy, shall be effective,
binding, and enforceable against the Consultant.
6.3 Publicity and Announcements. No announcement shall be made by
Consultant in connection with the signing of this Agreement or the subject
matter hereof without the prior agreement of Company.
SECTION 7. CONFIDENTIALITY.
7.1 Confidentiality Provisions.
(a) From time to time Company and its affiliates may provide the
Consultant with Confidential Information (as defined below) in connection with
work to be performed by the Consultant pursuant to this Agreement. With regard
to this Confidential Information, the parties agree that throughout and
following the term of this Agreement for a period of 3 years, the Consultant
shall hold in confidence the Confidential Information and shall not disclose it
to any person except (1) with the specific prior written consent of Company, (2)
as otherwise expressly permitted by the terms of this Agreement, and (3) to
persons to whom the Consultant reasonably believes that disclosure must be made
to facilitate the Consultant's obligations under this Agreement so long as such
persons enter into an agreement with Company pursuant to which such persons
agree to hold all Confidential Information provided to them in strictest
confidence and to use it for no purpose other than the purpose for which it is
disclosed.
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(b) All trade secrets of Company shall be entitled to all of the
protections and benefits under all applicable state and federal laws. The
Consultant hereby waives any requirement that Company submit proof of the
economic value of any trade secret or post a bond or other security.
(c) None of the foregoing obligations and restrictions applies to any
part of the Confidential Information that the Consultant demonstrates was or
became generally available to the public other than as a result of a disclosure
by the Consultant after the date of this Agreement or by another party known by
Consultant to be bound by a duty of confidentiality to Company.
(d) Confidential Information means:
(1)' all information to which Company, and its representatives have
given Consultant access both prior to and during his performance of this
Agreement, including, without limitation, all product specifications, data,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing methods or distribution plans and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software, programs and
technologies (including object code and source code), programs and technologies,
databases and database technologies, systems, structures, and architectures (and
related formulae, compositions, processes, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information, and
any other information, however documented, that is a trade secret of the Company
within the meaning of any applicable state or Federal trade secret law; and
(2) information concerning the affairs of the Company (which
includes historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, personnel training and techniques and
materials, however documented) which has not been made public by the Company;
and
(3) notes, analysis, compilations, studies, summaries, and other
material prepared by or for Company containing or based, as a whole or in part,
on any information included in the foregoing.
7.2 Return of Confidential Information. Upon termination of this
Agreement, or upon the request of Company during the term of this Agreement, the
Consultant shall return to Company all of the Confidential Information in his
possession or subject to his control, and the Consultant shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of the
Confidential Information.
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SECTION 8. CONSULTANT REPRESENTATIONS, WARRANTIES AND COVENANTS.
8.1 Performance. Consultant represents and warrants that it will
perform all of his obligations under this Agreement in a good and workmanlike
manner, consistent with or exceeding generally accepted industry practices and
procedures. In addition, Consultant represents and warrants that: (a) services
performed under this Agreement shall meet any reasonable instructions and
specifications provided to Consultant; and (b) the work delivered resulting from
Consultant's obligations hereunder shall at all times during the term of this
Agreement be up-to-date and current.
SECTION 9 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PARTIES. Each Party
represents, warrants and covenants to the other Party as follows:
9.1 Corporate Organization and Good Standing. The Company is a company
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its principal place of business, with all requisite
corporate/company power and authority to own, operate and lease its properties
and to carry on its business as it is now being conducted. The Company is
qualified and in good standing to do business in all jurisdictions where its
business or ownership or leasing of property or assets requires such
qualification.
9.2 Authority. The Party has all requisite corporate/personal power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby. To
the extent required by law, the execution and delivery of this Agreement by the
Party and the consummation by the Party of the transactions contemplated hereby
have been duly authorized by its board of directors or similar governing body,
if applicable, and no other corporate, shareholder or member proceedings on the
part of the Party are necessary to authorize the Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Party and this Agreement is a valid and binding obligation of
the Party enforceable against such Party.
9.3 Actions and Proceedings. There is no claim, charge, arbitration,
grievance, action, suit, investigation, bankruptcy, insolvency, rearrangement or
similar actions or proceedings, whether voluntary or involuntary, by or before
any court, arbiter, administrative agency or other governmental authority now
pending or, to the best of the Party's knowledge, threatened against the Party
or any of its affiliates, or which involves any of the business, properties or
assets of the Party or its affiliates that, if adversely resolved or determined,
would have a material adverse effect on the Party or its affiliates. Neither the
Party nor any of its affiliates has any intention of filing or commencing any
such actions or proceedings.
9.4 Conflicts. Neither the execution and delivery by the Party nor the
performance by the Party of the terms hereof conflicts with, results in a breach
or violation of any of the terms or provisions of, or constitutes a default
under (a) the organizing documents of the Party, (b) any statute, law or
regulation applicable to the Party, or (c) any judgment, decree, order or ruling
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applicable to the Party of any court or regulatory, administrative or
governmental agency, body or authority, or arbitrator having or asserting
jurisdiction over the Party or its properties, except as to (b) and (c) above,
for possible breaches, violations or defaults which, individually or in the
aggregate, would not have a material adverse effect on the ability of the Party
to perform its obligations hereunder.
9.5 Third Party Consents. No consent, approval, authorization, order,
declaration, or filing with any government, governmental instrumentality,
regulatory authority, court, or other person is required for the execution and
delivery of this Agreement, except such as have been duly made and obtained or
such others as have not been made and obtained and which, individually and in
the aggregate, would not have a material adverse effect on the ability of the
Party to perform its obligations hereunder.
SECTION 10. INTENTIONALLY OMITTED.
SECTION 11. GENERAL PROVISIONS.
11.1 Commitment of Company. Unless specifically authorized in writing,
the Consultant is not authorized to bind or commit Company or its affiliates to
any third party by any representation, promise, contract, or agreement for any
purpose whatsoever.
11.2 Relationship, Reimbursement Obligation. The Consultant shall
operate as an independent contractor and not as an agent of Company or its
affiliates during the performance of this Agreement. No personnel of Consultant
shall be deemed under any circumstances to be an agent or employee of Company or
its affiliates. Nothing in this Agreement shall be construed as creating any
other relationship between Company or any of its affiliates and the Consultant.
It shall be the responsibility of the Consultant to pay any taxes or other
assessments incurred by it pursuant to this Agreement. Consultant agrees to
reimburse Company harmless for any tax liability that Company incurs as a result
of any payments made under the terms of this Agreement.
11.3 Offset. Company shall be entitled to offset against any and all
amounts owing to the Consultant under this Agreement against the amount of any
and all claims that Company may have against the Consultant hereunder.
11.4 Waiver. The rights and remedies of the Parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement shall
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege shall preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law:
(a) no claim or right arising out of this Agreement may be discharged by one
Party, as a whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other Party; (b) no waiver that may be given by
a Party shall be applicable except in the specific instance for which it is
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given; and (c) no notice to or demand on one Party shall be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement.
11.5 Binding Effect, Delegation of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall be binding upon, the Parties hereto and
their respective successors, assigns, heirs, and legal representatives,
including any entity with which Parties may merge or consolidate or to which all
or substantially all of its assets may be transferred. The duties and covenants
of the Consultant under this Agreement, being personal, may not be delegated,
except as permitted in writing by Parties prior to such delegation.
11.6 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and shall be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
Party may designate by notice to the other Party) with copies for information
only as follows:
If to Company:
Healthbridge, Inc.
c/o Aurum Investment Management LLC
1 Atlantic Street
Stamford, CT 06901
Fax: (203) 358-9025
Attention: Andrew Fisch
with a copy to: Powell, Goldstein, Frazer & Murphy LLP
1001 Pennsylvania Avenue, N.W.
Sixth Floor
Washington, D.C. 20004
Attention: Michael H. Chanin, Esq.
Fax: (202) 624-7222
If to the Consultant:
Wilhelm H. Liesner
c/o RIG Real Invest
Prinzregentenstr. 124
D-81677 Munich, Germany
Fax: 49-89-419-51720
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with a copy to:
Creel, Sussman and Moore
59401 Sherry Lane
Suite 525
Dallas, Texas 75225
Attention: L.E. Creel, III, Esq.
Fax: (214)378-8290
11.7 Entire Agreement. This Agreement contains the entire agreement
between the Parties with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral or written, between the Parties hereto
with respect to the subject matter hereof. This Agreement may not be amended
orally, but only by an agreement in writing signed by the Parties hereto.
11.8 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and shall not affect its
construction or interpretation. All references to "Section" or "Sections" refer
to the corresponding Section or Sections of this Agreement unless otherwise
specified. All words used in this Agreement shall be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
11.9 Severability. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement shall remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree shall remain in
full force and effect to the extent not held invalid or unenforceable. If any
provision of this Agreement, or portion thereof, is held invalid or
unenforceable, the Parties agree to negotiate in good faith to replace such
provision or portion thereof with a provision of similar economic impact.
11.10 Survival. Sections 2.2, 4.3, 6, 7, 8, 9 and 11.6 shall survive
the termination of this Agreement.
11.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original copy of this
Agreement and all of which, when taken together, shall be deemed to constitute
one and the same agreement.
11.12 Governing Law. This Agreement shall be governed by the laws of
the Texas without regard to conflicts of law principles.
11.13 Fax Execution. This Agreement may be executed by delivery of a
signed signature page by fax and such fax execution and delivery will be valid
in all respects.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.
HEALTHBRIDGE, INC. CONSULTANT
By: /s/ Antonio Ponte /s/ Wihelm H. Liesner
----------------- ---------------------
Name: Wihelm H. Liesner
Title:
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EXHIBIT 10.2
CONSULTING AGREEMENT
Consulting Agreement (this "Agreement"), dated as of March 16, 2000, by
and between Healthbridge, Inc., a Texas corporation (the "Company"), and Nora
Coccaro, an individual residing at 5775 Hampton Place, Suite 1002, Vancouver,
B.C. (the "Consultant").
RECITALS
WHEREAS, the Company desires to retain the Consultant to perform certain
services for and on behalf of the Company in connection with its business and
the Consultant desires to perform such services.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the sufficiency whereof is hereby acknowledged, the
parties agree as follows:
SECTION 1
TERMS AND DUTIES
1.1 Retention of Consultant.
The Company hereby retains the Consultant to perform the duties described
herein in accordance with the terms and conditions set forth in this Agreement.
Consultant agrees to perform such duties faithfully and to the best of her
ability and to devote such time and attention to its duties hereunder as is
necessary or is required by the Company.
1.2 Term.
Subject to the provisions of Section 3, the term of the Consultant's
retention under this Agreement will be one year, beginning on the date hereof,
which term shall automatically be extended for additional terms of one year each
unless (a) the Consultant notifies the Company of her intention not to renew the
terms of this Agreement not less than 30 days prior to the expiration of any
term, or (b) the Company notifies the Consultant of its intention not to renew
the terms of this Agreement not less than 30 days prior to the expiration of any
term.
1.3 Duties.
Consultant shall spend such amount of time as is reasonably required to
perform such duties and services as the Company may request and that are within
the scope of the Consultant's area of expertise.
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The Consultant shall use her best efforts to promote the business of the
Company and cooperate fully with the Company's Board of Directors in the
advancement of the Company's best interests.
SECTION 2
COMPENSATION; BENEFITS
2.1 Compensation.
2.1.1 Salary. The Consultant shall be paid a monthly salary of $2500.
2.1.2 Signing Bonus. At the time when the Company and the Consultant sign
the Agreement, the Consultant shall be granted a one-time distribution of 20,000
shares of the Company's common stock. In addition, the Company shall grant to
the Consultant on or before May 30, 2000 an option to acquire 30,000 shares of
the Company's common stock (the "Option") pursuant to the Company's 1999 Stock
Incentive Plan (the "Plan"). The Option shall have an exercise price determined
as of the date of grant, vest in equal amounts over a period of three years, and
carry such additional terms as the Company's Board of Directors shall determine
pursuant to the Plan.
2.2 Expenses.
The Company shall reimburse the Consultant for reasonable expenses that
the Consultant incurs at the request of, or on behalf of, the Company in the
performance of the Consultant's duties pursuant to this Agreement and in
accordance with the Company's employment policies. The Consultant shall file
expense reports with respect to such expenses in accordance with the Company's
policies.
SECTION 3
TERMINATION
3.3 Events of Termination.
The Consultant's services and any and all other rights of the Consultant
under this Agreement or otherwise as a consultant to the Company shall
terminate:
(a) upon the Consultant's death;
(b) immediately upon notice from the Company to the Consultant that
the Consultant is being terminated for Cause (as defined in Section 3.2);
or
(c) immediately upon notice from the Company to the Consultant that
the Consultant is being terminated without Cause.
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3.2 Cause.
"Cause" means: (a) the Consultant's material breach of any provision of
the Agreement, which breach is not cured within 15 days of Consultant's receipt
of written notice of such breach; (b) the Consultant's appropriation (or
attempted appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Company without the prior
written permission of the Company's Board of Directors; (c) the Consultant's
misappropriation (or attempted misappropriation) of any of the Company's funds
or property; or (e) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest with respect
to, a felony or the equivalent thereof.
3.3 Termination Pay.
3.3.1 Upon the termination of this Agreement, the Company shall be
obligated to pay the Consultant (or, in the event of her death, her designated
beneficiary as defined below) only such compensation as is provided in this
Section 3.3. Such payments shall be in lieu of all other amounts and in
settlement and complete release of all claims the Consultant may have against
the Company. For purposes of this Section 3.3, the Consultant's designated
beneficiary shall be such individual beneficiary or trust, located at such
address, as the Consultant may designate by notice to the Company from time to
time or, if the Consultant fails to give notice to the Company of such a
beneficiary, the Consultant's estate. Notwithstanding the preceding sentence,
the Company shall have no duty, in any circumstances, to (a) attempt to open an
estate on behalf of the Consultant; (b) determine whether any beneficiary
designated by the Consultant is alive; (c) ascertain the address of any such
beneficiary; (d) determine the existence of any trust; (e) determine whether any
person or entity purporting to act as the Consultant's personal representative
(or the trustee of a trust established by the Consultant) is duly authorized to
act in that capacity; or (f) locate or attempt to locate any beneficiary,
personal representative, or trustee.
3.3.2 Termination by the Company for Cause. If the Company terminates this
Agreement for Cause, the Company shall pay to the Consultant (a) her Salary
through the date of such termination and (b) such expenses as the Consultant
shall have incurred under Section 2.2 hereof to the date of termination.
3.3.3 Termination by the Company without Cause. If the Company terminates
this Agreement without Cause, the Company shall pay to the Consultant (a) her
Salary through the date of such termination; (b) an additional two months of her
Salary beyond the date of such termination; and (c) such expenses as the
Consultant shall have incurred under Section 2.2 hereof to the date of
termination.
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SECTION 4
INDEMNIFICATION
The Company shall indemnify the Consultant against and defend and hold the
Consultant harmless from, to the fullest extent permitted by the law of Texas on
the date of this Agreement, all claims, actions and liabilities arising out of
activities and actions reasonably taken by the Consultant in the performance of
her duties hereunder.
SECTION 5
GENERAL PROVISIONS
5.1 Representations And Warranties.
5.1.1 By Consultant. The Consultant represents and warrants to the Company
that, to the Consultant's best knowledge, the execution and delivery by the
Consultant of this Agreement do not, and the performance by the Consultant of
the Consultant's obligations hereunder shall not, with or without the giving of
notice or the passage of time, or both: (a) violate any judgment, writ,
injunction, or order of any court, arbitrator, or governmental agency applicable
to the Consultant or (b) conflict with or result in the breach of any provisions
of or the termination of, or constitute a default under, any agreement to which
the Consultant is a party or by which the Consultant is or may be bound.
5.1.2 By Company. The Company represents and warrants to the Consultant
that to the Company's best knowledge, the execution and delivery by the Company
of this Agreement do not, and the performance by the Company of the Company's
obligations hereunder will not (a) violate any judgment, writ, injunction, or
order of any court, arbitrator, or governmental agency binding upon the Company
or (b) conflict with, result in the breach or the termination of, or constitute
a default under, any agreement to which the Company is a party or by which the
Company is bound.
5.2 Waiver.
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by either party in
exercising any right, power, or privilege under this Agreement shall operate as
a waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege shall preclude any other or further
exercise of such right, power, or privilege or the exercise of any other right,
power, or privilege. To the maximum extent permitted by applicable law, (a) no
claim or right arising out of this Agreement may be discharged by one party, as
a whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; (b) no waiver that may be given by a party
shall be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one party shall be deemed to be a waiver
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of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.
5.3 Binding Effect; Delegation Of Duties Prohibited.
This Agreement shall inure to the benefit of, and shall be binding upon,
the parties hereto and their respective successors, assigns, heirs, and legal
representatives, including any entity with which the Company may merge or
consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Consultant under this Agreement,
being personal, may not be delegated.
5.4 Notices.
All notices, consents, waivers, and other communications under this
Agreement must be in writing and shall be deemed to have been duly given when
(a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested, or (c) received by the addressee,
if sent by a nationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as a party may
designate by notice to the other parties):
If to the Company:
Healthbridge, Inc.
1177 West Hastings Street If to the Consultant:
Suite 1818
Vancouver, BC V6E 2K3 Nora Coccaro
Canada 5775 Hampton Place, Suite 1002
Attention: Nora Coccaro Vancouver, B.C.
Telephone: (604) 602-1717 Telephone: (604) 221-7323
Telecopy: (604) 408-1739 Telecopy: (604) 687-6755
With a copy to:
Powell, Goldstein, Frazer & Murphy LLP
1001 Pennsylvania Avenue, N.W., Suite
600
Washington, D.C. 20004
Attention: John Bagwell, Esq.
Telephone: (202) 624-3973
Telecopy: (202) 624-7222
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5.5 Relationship; Reimbursement Obligation.
The services to be performed hereunder shall be performed by the
Consultant as an independent contractor. Nothing in this Agreement shall be
construed as creating any other relationship between the Company and the
Consultant. If however, the Internal Revenue Service asserts employment taxes
against the Company, the Consultant shall reimburse the Company for any
employment taxes that the Company is required to pay. The Consultant shall make
such reimbursement to the Company within 30 days of the Consultant's receipt of
a notice demanding that such reimbursement be made.
5.6 Entire Agreement; Amendments.
This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to the
subject matter hereof. This Agreement may be amended only by an agreement in
writing signed by both parties hereto.
5.7 Severability.
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement shall
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree shall remain in full force and effect to
the extent not held invalid or unenforceable.
5.8 Rules of Construction.
5.8.1 All references to days and months in this Agreement will be deemed
to refer to calendar days and calendar months unless otherwise specified.
5.8.2 Whenever a pronoun of a particular gender is used in this Agreement,
that pronoun will, if appropriate, also refer to the other gender and the
neuter. Whenever a neuter pronoun is used in this Agreement, that pronoun will,
if appropriate, also refer to the masculine and feminine gender. Whenever the
plural of a word is used in this Agreement, and that word will, if appropriate,
include the singular of that word. Whenever the singular of a word is used in
this Agreement that word will, if appropriate, include the plural of that word.
5.8.3 The language herein is the language chosen by both of the parties
hereto and will not be construed against the drafter.
5.8.4 Article and section headings are used in this Agreement only as a
matter of convenience, are not a part of this Agreement, and will not have any
effect upon the
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construction or interpretation of this Agreement. References to sections means
sections of this Agreement unless the context otherwise requires.
5.9 Counterparts.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original copy of this Agreement and all of which, when
taken together, shall be deemed to constitute one and the same agreement.
5.10 Governing Law.
This Agreement shall be governed by the laws of the State of Texas without
regard to conflicts of laws principles.
The parties have executed and delivered this Agreement as of the date
above first written above.
Healthbridge, Inc.
By: /s/ Nora Coccaro /s/ Nora Coccaro
-------------------- --------------------
Nora Coccaro Nora Coccaro
President
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EXHIBIT 10.3
ROATAN
- --------------------------------------------------------------------------------
MEDICAL SERVICES CORP
Mr. Jerald L. Husman
Director, Environmental Services
Presbyterian Hospital of Dallas
82000 Walnut Hill Lane
Dallas, Texas 75231
October 9, 1996
Re: Roatan Equipment
Dear Mr. Husman,
Following your discussion with Mark Hale and myself, we commit to the following:
o Effective October 15, 1996, Roatan will bear the cost of the box/bag disposal
shortfall daily, up to 1,470 lbs. at a cost of $.023/lb. This calculation
is based on Presbyterian Hospital of Dallas (PHD) running the machines
12 hours/day, 7 days/week. If PHD chooses not to run the machines on that
basis, the shortfall will be reduced accordingly. PHD will be reimbursed by
Roatan on a monthly basis until such time as the machines are operating
consistently to represented specifications or 48 months, whichever comes
first.
o Roatan will reimburse PHD for labor costs at a rate of $8.30/hour, up to
12 hours/day, up to 7 days/week for the time PHD chooses to operate the
equipment, for the dedicated operation of the equipment during the same
period of time described above. Roatan will train the operator to do
preventive, simple maintenance.
o Roatan will maintain 150 processing cans at PHD for 48 months. Defective
cans will be replaced at no charge by Roatan during this period.
o Roatan will maintain a stock of parts at PHD. These parts will include
windows, "o" rings, filters, gaskets, sealants, and other commonly needed
maintenance parts. PHD will provide secured storage for said materials at
no cost to Roatan.
o Roatan will provide a fourth sterilizer to PHD at no cost, at such time
sterilizer efficiency is restored, and PHD has definable space. PHD will
provide space and utility access; Roatan will install the machine and
complete final hookups.
o The terms and agreements between PHD and Roatan are not available as public
information.
Thank you for your continued support. May I assure you that we are committed -
as indicated in the past - to bring our joint effort to a successful conclusion.
Sincerely yours,
/s/ W. H. LIESNER
W. H. Liesner
President
WHL/twl
<PAGE> 1
EXHIBIT 10.4
WATTMONITOR, INC.
1999 STOCK INCENTIVE PLAN
SECTION I. DEFINITIONS
1.1 Definitions. Whenever used herein, the masculine
pronoun will be deemed to include the feminine, and the singular to include the
plural, unless the context clearly indicates otherwise, and the following
capitalized words and phrases are used herein with the meaning thereafter
ascribed:
(a) "Affiliate" means:
(1) an entity that directly or through
one or more intermediaries is
controlled by the Company, and
(2) any entity in which the Company has
a significant equity interest, as
determined by the Company.
(b) "Board of Directors" means the board of
directors of the Company.
(c) "Code" means the Internal Revenue Code of
1986, as amended.
(d) "Committee" means the committee appointed by
the Board of Directors to administer the Plan. The Board of Directors shall
consider the advisability of whether the members of the Committee shall consist
solely of at least two members of the Board of Directors who are both "outside
directors" as defined in Treas. Reg. Section 1.162-27(e) as promulgated by the
Internal Revenue Service and "non-employee directors" as defined in Rule
16b-3(b)(3) as promulgated under the Exchange Act.
(e) "Company" means WattMonitor, Inc., a Texas
corporation.
(f) "Disability" has the same meaning as provided
in the long-term disability plan or policy maintained or, if applicable, most
recently maintained, by the Company or, if applicable, any Affiliate of the
Company for the Participant. If no long-term disability plan or policy was
ever maintained on behalf of the Participant or, if the determination of
Disability relates to an Incentive Stock Option, Disability means that
condition described in Code Section 22(e)(3), as amended from time to time. In
the event of a dispute, the determination of Disability will be made by the
Committee and will be supported by advice of a physician competent in the area
to which such Disability relates.
(g) "Dividend Equivalent Rights" means certain
rights to receive cash payments as described in Section 3.5.
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(h) "Exchange Act" means the Securities Exchange
Act of 1934, as amended from time to time.
(i) "Fair Market Value" with regard to a date
means:
(1) the average of the high and low
prices at which Stock shall have
been sold on that date or the last
trading date prior to that date as
reported by the NASDAQ Stock Market
(or, if applicable, as reported by a
national securities exchange
selected by the Committee on which
the shares of Stock are then
actively traded) and published in
The Wall Street Journal,
(2) if Stock is not traded on a
securities exchange, but is reported
by the NASDAQ Stock Market and
market information is published on a
regular basis in The Wall Street
Journal, the average of the
published high and low sales prices
for that date or the last business
day prior to that date as published
in The Wall Street Journal,
(3) if such market information is not
published on a regular basis, the
average of the high bid and low
asked prices of Stock in the
over-the-counter market on that date
or the last business day prior to
that date, as reported by the NASDAQ
Stock Market, or, if not so
reported, by a generally accepted
reporting service, or
(4) if Stock is not publicly traded, as
determined in good faith by the
Committee with due consideration
being given to (i) the most recent
independent appraisal of the
Company, if such appraisal is not
more than twelve months old and (ii)
the valuation methodology used in
any such appraisal provided that,
for purposes of granting awards
other than Incentive Stock Options,
Fair Market Value of the shares of
Stock may be determined by the
Committee by reference to the
average market value determined over
a period certain or as of specified
dates, to a tender offer price for
the shares of Stock (if settlement
of an award is triggered by such an
event) or to any other reasonable
measure of fair market value.
(j) "Option" means a non-qualified stock option
or an incentive stock option.
(k) "Over 10% Owner" means an individual who at
the time an Incentive Stock Option is granted owns Stock possessing more than
10% of the total combined voting power of the Company or one of its
Subsidiaries, determined by applying the attribution rules of Code Section
424(d).
(l) "Participant" means an individual who
receives a Stock Incentive hereunder.
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(m) "Performance Unit Award" refers to a
performance unit award as described in Section 3.6.
(n) "Phantom Shares" refers to the rights
described in Section 3.7.
(o) "Plan" means the WattMonitor, Inc. 1999 Stock
Incentive Plan.
(p) "Stock" means the Company's common stock, par
value $.0001.
(q) "Stock Appreciation Right" means a stock
appreciation right described in Section 3.3.
(r) "Stock Award" means a stock award described
in Section 3.4.
(s) "Stock Incentive Agreement" means an
agreement between the Company and a Participant or other documentation
evidencing an award of a Stock Incentive.
(t) "Stock Incentive Program" means a written
program established by the Committee, pursuant to which Stock Incentives are
awarded under the Plan under uniform terms, conditions and restrictions set
forth in such written program.
(u) "Stock Incentives" means, collectively,
Dividend Equivalent Rights, Incentive Stock Options, Non-Qualified Stock
Options, Phantom Shares, Stock Appreciation Rights and Stock Awards.
(v) "Subsidiary" means any corporation (other
than the Company) in an unbroken chain of corporations beginning with the
Company if, with respect to Incentive Stock Options, at the time of the
granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain.
(w) "Termination of Employment" means the
termination of the employee-employer relationship between a Participant and the
Company and its Affiliates, regardless of whether severance or similar payments
are made to the Participant for any reason, including, but not by way of
limitation, a termination by resignation, discharge, death, Disability or
retirement. The Committee will, in its absolute discretion, determine the
effect of all matters and questions relating to a Termination of Employment,
including, but not by way of limitation, the question of whether a leave of
absence constitutes a Termination of Employment.
SECTION 2 THE STOCK INCENTIVE PLAN
2.1 Purpose of the Plan. The Plan is intended to (a)
provide incentive to officers and key employees of the Company and its
Affiliates to stimulate their efforts toward the continued success of the
Company and to operate and manage the business in a manner that will provide
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for the long-term growth and profitability of the Company; (b) encourage stock
ownership by officers and key employees by providing them with a means to
acquire a proprietary interest in the Company, acquire shares of Stock, or to
receive compensation which is based upon appreciation in the value of Stock;
and (c) provide a means of obtaining, rewarding and retaining key personnel and
consultants.
2.2 Stock Subject to the Plan. Subject to adjustment in
accordance with Section 5.2, 1,500,000 shares of Stock (the "Maximum Plan
Shares") are hereby reserved exclusively for issuance pursuant to Stock
Incentives. At such time as the Company become subject to Section 16 of the
Exchange Act, at no time may the Company have outstanding under the Plan, Stock
Incentives subject to Section 16 of the Exchange Act and shares of Stock issued
in respect of Stock Incentives under the Plan in excess of the Maximum Plan
Shares. The shares of Stock attributable to the nonvested, unpaid, unexercised,
unconverted or otherwise unsettled portion of any Stock Incentive that is
forfeited or cancelled or expires or terminates for any reason without becoming
vested, paid, exercised, converted or otherwise settled in full will again be
available for purposes of the Plan.
2.3 Administration of the Plan. The Plan is administered
by the Committee. The Committee has full authority in its discretion to
determine the officers and key employees of the Company or its Affiliates to
whom Stock Incentives will be granted and the terms and provisions of Stock
Incentives, subject to the Plan. Subject to the provisions of the Plan, the
Committee has full and conclusive authority to interpret the Plan; to prescribe,
and amend and rescind rules and regulations relating to the Plan; to determine
the terms and provisions of the respective Stock Incentive Agreements and to
make all other determinations necessary or advisable for the proper
administration of the Plan. The Committee's determinations under the Plan need
not be uniform and may be made by it selectively among persons who receive, or
are eligible to receive, awards under the Plan (whether or not such persons are
similarly situated). The Committee's decisions are final and binding on all
Participants.
2.4 Eligibility and Limits. Stock Incentives may be
granted only to officers, and key employees and consultants of the Company, or
any Affiliate of the Company; provided, however, that an incentive stock option
may only be granted to an employee of the Company or any Subsidiary. In the
case of incentive stock options, the aggregate Fair Market Value (determined as
at the date an incentive stock option is granted) of stock with respect to
which stock options intended to meet the requirements of Code Section 422
become exercisable for the first time by an individual during any calendar year
under all plans of the Company and its Subsidiaries may not exceed $100,000;
provided further, that if the limitation is exceeded, the incentive stock
option(s) which cause the limitation to be exceeded will be treated as
non-qualified stock option(s).
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SECTION 3 TERMS OF STOCK INCENTIVES
3.1 Terms and Conditions of All Stock Incentives.
(a) The number of shares of Stock as to which a
Stock Incentive may be granted will be determined by the Committee in its sole
discretion, subject to the provisions of Section 2.2 as to the total number of
shares available for grants under the Plan and subject to the limits on Options
and Stock Appreciation Rights in the following sentence. On such date as
required by Section 162(m) of the Code and the regulations thereunder for
compensation to be treated as qualified performance based compensation, the
maximum number of shares of Stock with respect to which Options or Stock
Appreciation Rights may be granted during any one year period to any employee
may not exceed 1,700,000.
(b) Each Stock Incentive will either be evidenced
by a Stock Incentive Agreement in such form and containing such terms,
conditions and restrictions as the Committee may determine to be appropriate,
or be made subject to the terms of a Stock Incentive Program, containing such
terms, conditions and restrictions as the Committee may determine to be
appropriate. Each Stock Incentive Agreement or Stock Incentive Program is
subject to the terms of the Plan and any provisions contained in the Stock
Incentive Agreement or Stock Incentive Program that are inconsistent with the
Plan are null and void.
(c) The date a Stock Incentive is granted will be
the date on which the Committee has approved the terms and conditions of the
Stock Incentive and has determined the recipient of the Stock Incentive and the
number of shares covered by the Stock Incentive, and has taken all such other
actions necessary to complete the grant of the Stock Incentive.
(d) Any Stock Incentive may be granted in
connection with all or any portion of a previously or contemporaneously granted
Stock Incentive. Exercise or vesting of a Stock Incentive granted in
connection with another Stock Incentive may result in a pro rata surrender or
cancellation of any related Stock Incentive, as specified in the applicable
Stock Incentive Agreement or Stock Incentive Program.
(e) Unless, except as to incentive stock options,
otherwise permitted by the Committee, Stock Incentives are not transferable or
assignable except by will or by the laws of descent and distribution and are
exercisable, during the Participant's lifetime, only by the Participant; or in
the event of the Disability of the Participant, by the legal representative of
the Participant; or in the event of death of the Participant, by the legal
representative of the Participant's estate or if no legal representative has
been appointed, by the successor in interest determined under the Participant's
will.
3.2 Terms and Conditions of Options. Each Option granted
under the Plan must be evidenced by a Stock Incentive Agreement. At the time
any Option is granted, the Committee will determine whether the Option is to be
an incentive stock option described in Code Section 422 or a non-qualified
stock option, and the Option must be clearly identified as to its status as an
incentive stock option or a non-qualified stock option. Incentive stock
options may only be granted to employees of the Company or any Subsidiary. At
the time any incentive stock option
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granted under the Plan is exercised, the Company will be entitled to legend the
certificates representing the shares of Stock purchased pursuant to the Option
to clearly identify them as representing the shares purchased upon the exercise
of an incentive stock option. An incentive stock option may only be granted
within ten (10) years from the earlier of the date the Plan is adopted or
approved by the Company's stockholders.
(a) Option Price. Subject to adjustment in
accordance with Section 5.2 and the other provisions of this Section 3.2, the
exercise price (the "Exercise Price") per share of Stock purchasable under any
Option must be as set forth in the applicable Stock Incentive Agreement, but in
no event may it be less than the Fair Market Value on the date the Option is
granted with respect to an incentive stock option. With respect to each grant
of an incentive stock option to a Participant who is an Over 10% Owner, the
Exercise Price may not be less than 110% of the Fair Market Value on the date
the Option is granted.
(b) Option Term. Any incentive stock option
granted to a Participant who is not an Over 10% Owner is not exercisable after
the expiration of ten (10) years after the date the Option is granted. Any
incentive stock option granted to an Over 10% Owner is not exercisable after
the expiration of five (5) years after the date the Option is granted. The
term of any Non-Qualified Stock Option must be as specified in the applicable
Stock Incentive Agreement.
(c) Payment. Payment for all shares of Stock
purchased pursuant to exercise of an Option will be made in any form or manner
authorized by the Committee in the Stock Incentive Agreement or by amendment
thereto, including, but not limited to, cash or, if the Stock Incentive
Agreement provides:
(i) by delivery to the Company of a
number of shares of Stock which have
been owned by the holder for at
least six (6) months prior to the
date of exercise having an aggregate
Fair Market Value of not less than
the product of the Exercise Price
multiplied by the number of shares
the Participant intends to purchase
upon exercise of the Option on the
date of delivery;
(ii) in a cashless exercise through a
broker; or
(iii) by having a number of shares of
Stock withheld, the Fair Market
Value of which as of the date of
exercise is sufficient to satisfy
the Exercise Price.
In its discretion, the Committee also may authorize (at the time an Option is
granted or thereafter) Company financing to assist the Participant as to
payment of the Exercise Price on such terms as may be offered by the Committee
in its discretion. Payment must be made at the time that the Option or any
part thereof is exercised, and no shares may be issued or delivered upon
exercise of an option until full payment has been made by the Participant. The
holder of an Option, as such, has none of the rights of a stockholder.
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(d) Conditions to the Exercise of an Option.
Each Option granted under the Plan is exercisable by whom, at such time or
times, or upon the occurrence of such event or events, and in such amounts, as
the Committee specifies in the Stock Incentive Agreement; provided, however,
that subsequent to the grant of an Option, the Committee, at any time before
complete termination of such Option, may accelerate the time or times at which
such Option may be exercised in whole or in part, including, without
limitation, upon a Change in Control and may permit the Participant or any
other designated person to exercise the Option, or any portion thereof, for all
or part of the remaining Option term, notwithstanding any provision of the
Stock Incentive Agreement to the contrary.
(e) Termination of Incentive Stock Option. With
respect to an incentive stock option, in the event of termination of employment
of a Participant, the Option or portion thereof held by the Participant which
is unexercised will expire, terminate, and become unexercisable no later than
the expiration of three (3) months after the date of termination of employment;
provided, however, that in the case of a holder whose termination of employment
is due to death or Disability, one (1) year will be substituted for such three
(3) month period; provided, further that such time limits may be exceeded by
the Committee under the terms of the grant, in which case, the incentive stock
option will be a nonqualified option if it is exercised after the time limits
that would otherwise apply. For purposes of this Subsection (e), termination
of employment of the Participant will not be deemed to have occurred if the
Participant is employed by another corporation (or a parent or subsidiary
corporation of such other corporation) which has assumed the incentive stock
option of the Participant in a transaction to which Code Section 424(a) is
applicable.
(f) Special Provisions for Certain Substitute
Options. Notwithstanding anything to the contrary in this Section 3.2, any
Option issued in substitution for an option previously issued by another
entity, which substitution occurs in connection with a transaction to which
Code Section 424(a) is applicable, may provide for an exercise price computed
in accordance with such Code Section and the regulations thereunder and may
contain such other terms and conditions as the Committee may prescribe to cause
such substitute Option to contain as nearly as possible the same terms and
conditions (including the applicable vesting and termination provisions) as
those contained in the previously issued option being replaced thereby.
3.3 Terms and Conditions of Stock Appreciation Rights.
Each Stock Appreciation Right granted under the Plan must be evidenced by a
Stock Incentive Agreement. A Stock Appreciation Right entitles the Participant
to receive the excess of (1) the Fair Market Value of a specified or
determinable number of shares of the Stock at the time of payment or exercise
over (2) a specified or determinable price which, in the case of a Stock
Appreciation Right granted in connection with an Option, may not be less than
the Exercise Price for that number of shares subject to that Option. A Stock
Appreciation Right granted in connection with a Stock Incentive may only be
exercised to the extent that the related Stock Incentive has not been
exercised, paid or otherwise settled.
(a) Settlement. Upon settlement of a Stock
Appreciation Right, the Company must pay to the Participant the appreciation in
cash or shares of Stock (valued at the aggregate
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Fair Market Value on the date of payment or exercise) as provided in the Stock
Incentive Agreement or, in the absence of such provision, as the Committee may
determine.
(b) Conditions to Exercise. Each Stock
Appreciation Right granted under the Plan is exercisable or payable at such
time or times, or upon the occurrence of such event or events, and in such
amounts, as the Committee specifies in the Stock Incentive Agreement; provided,
however, that subsequent to the grant of a Stock Appreciation Right, the
Committee, at any time before complete termination of such Stock Appreciation
Right, may accelerate the time or times at which such Stock Appreciation Right
may be exercised or paid in whole or in part.
3.4 Terms and Conditions of Stock Awards. The number of
shares of Stock subject to a Stock Award and restrictions or conditions on such
shares, if any, will be as the Committee determines, and the certificate for
such shares will bear evidence of any restrictions or conditions. Subsequent
to the date of the grant of the Stock Award, the Committee has the power to
permit, in its discretion, an acceleration of the expiration of an applicable
restriction period with respect to any part or all of the shares awarded to a
Participant. The Committee may require a cash payment from the Participant in
an amount no greater than the aggregate Fair Market Value of the shares of
Stock awarded determined at the date of grant in exchange for the grant of a
Stock Award or may grant a Stock Award without the requirement of a cash
payment.
3.5 Terms and Conditions of Dividend Equivalent Rights.
A Dividend Equivalent Right entitles the Participant to receive payments from
the Company in an amount determined by reference to any cash dividends paid on
a specified number of shares of Stock to Company stockholders of record during
the period such rights are effective. The Committee may impose such
restrictions and conditions on any Dividend Equivalent Right as the Committee
in its discretion shall determine, including the date any such right shall
terminate and may reserve the right to terminate, amend or suspend any such
right at any time.
(a) Payment. Payment in respect of a Dividend
Equivalent Right may be made by the Company in cash or shares of Stock (valued
at Fair Market Value on the date of payment) as provided in the Stock Incentive
Agreement or Stock Incentive Program, or, in the absence of such provision, as
the Committee may determine.
(b) Conditions to Payment. Each Dividend
Equivalent Right granted under the Plan is payable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the
Committee specifies in the applicable Stock Incentive Agreement or Stock
Incentive Program; provided, however, that subsequent to the grant of a
Dividend Equivalent Right, the Committee, at any time before complete
termination of such Dividend Equivalent Right, may accelerate the time or times
at which such Dividend Equivalent Right may be paid in whole or in part.
3.6 Terms and Conditions of Performance Unit Awards. A
Performance Unit Award shall entitle the Participant to receive, at a specified
future date, payment of an amount equal to all or a portion of the value of a
specified or determinable number of units (stated in terms of a designated or
determinable dollar amount per unit) granted by the Committee. At the time of
the grant, the Committee must determine the base value of each unit, the number
of units subject to a
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Performance Unit Award, the performance factors applicable to the determination
of the ultimate payment value of the Performance Unit Award and the period over
which Company performance shall be measured. The Committee may provide for an
alternate base value for each unit under certain specified conditions.
(a) Payment. Payment in respect of Performance
Unit Awards may be made by the Company in cash or shares of Stock (valued at
Fair Market Value on the date of payment) as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Performance Unit
Award granted under the Plan shall be payable at such time or times, or upon
the occurrence of such event or events, and in such amounts, as the Committee
shall specify in the applicable Stock Incentive Agreement or Stock Incentive
Program; provided, however, that subsequent to the grant of a Performance Unit
Award, the Committee, at any time before complete termination of such
Performance Unit Award, may accelerate the time or times at which such
Performance Unit Award may be paid in whole or in part.
3.7 Terms and Conditions of Phantom Shares. Phantom
Shares shall entitle the Participant to receive, at a specified future date,
payment of an amount equal to all or a portion of the Fair Market Value of a
specified number of shares of Stock at the end of a specified period. At the
time of the grant, the Committee will determine the factors which will govern
the portion of the rights so payable, including, at the discretion of the
Committee, any performance criteria that must be satisfied as a condition to
payment. Phantom Share awards containing performance criteria may be designated
as Performance Share Awards.
(a) Payment. Payment in respect of Phantom
Shares may be made by the Company in cash or shares of Stock (valued at Fair
Market Value on the date of payment) as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program, or, in the absence of such
provision, as the Committee may determine.
(b) Conditions to Payment. Each Phantom Share
granted under the Plan is payable at such time or times, or upon the occurrence
of such event or events, and in such amounts, as the Committee specify in the
applicable Stock Incentive Agreement or Stock Incentive Program; provided,
however, that subsequent to the grant of a Phantom Share, the Committee, at any
time before complete termination of such Phantom Share, may accelerate the time
or times at which such Phantom Share may be paid in whole or in part.
3.8 Treatment of Awards Upon Termination of Employment.
Except as otherwise provided by Plan Section 3.2(e), any award under this Plan
to a Participant who has experienced a Termination of Employment may be
cancelled, accelerated, paid or continued, as provided in the applicable Stock
Incentive Agreement or Stock Incentive Program, or, in the absence of such
provision, as the Committee may determine. The portion of any award
exercisable in the event of continuation or the amount of any payment due under
a continued award may be adjusted by the Committee to reflect the Participant's
period of service from the date of grant through the
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date of the Participant's Termination of Employment or such other factors as
the Committee determines are relevant to its decision to continue the award.
SECTION 4 RESTRICTIONS ON STOCK
4.1 Escrow of Shares. Any certificates representing the
shares of Stock issued under the Plan will be issued in the Participant's name,
but, if the applicable Stock Incentive Agreement or Stock Incentive Program so
provides, the shares of Stock will be held by a custodian designated by the
Committee (the "Custodian"). Each applicable Stock Incentive Agreement or
Stock Incentive Program providing for transfer of shares of Stock to the
Custodian must appoint the Custodian as the attorney-in-fact for the
Participant for the term specified in the applicable Stock Incentive Agreement
or Stock Incentive Program, with full power and authority in the Participant's
name, place and stead to transfer, assign and convey to the Company any shares
of Stock held by the Custodian for such Participant, if the Participant
forfeits the shares under the terms of the applicable Stock Incentive Agreement
or Stock Incentive Program. During the period that the Custodian holds the
shares subject to this Section, the Participant is entitled to all rights,
except as provided in the applicable Stock Incentive Agreement or Stock
Incentive Program, applicable to shares of Stock not so held. Any dividends
declared on shares of Stock held by the Custodian must provide in the
applicable Stock Incentive Agreement or Stock Incentive Program, be paid
directly to the Participant or, in the alternative, be retained by the
Custodian or by the Company until the expiration of the term specified in the
applicable Stock Incentive Agreement or Stock Incentive Program and shall then
be delivered, together with any proceeds, with the shares of Stock to the
Participant or to the Company, as applicable.
4.2 Restrictions on Transfer. The Participant does not
have the right to make or permit to exist any disposition of the shares of
Stock issued pursuant to the Plan except as provided in the Plan or the
applicable Stock Incentive Agreement or Stock Incentive Program. Any
disposition of the shares of Stock issued under the Plan by the Participant not
made in accordance with the Plan or the applicable Stock Incentive Agreement or
Stock Incentive Program will be void. The Company will not recognize, or have
the duty to recognize, any disposition not made in accordance with the Plan and
the applicable Stock Incentive Agreement or Stock Incentive Program, and the
shares so transferred will continue to be bound by the Plan and the applicable
Stock Incentive Agreement or Stock Incentive Program.
SECTION 5 GENERAL PROVISIONS
5.1 Withholding. The Company must deduct from all cash
distributions under the Plan any taxes required to be withheld by federal,
state or local government. Whenever the Company proposes or is required to
issue or transfer shares of Stock under the Plan or upon the vesting of any
Stock Award, the Company has the right to require the recipient to remit to the
Company an amount sufficient to satisfy any federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such shares or the vesting of such Stock Award. A Participant
may pay the withholding tax in cash, or, if the applicable Stock Incentive
Agreement or Stock Incentive Program provides, a Participant may elect to have
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the number of shares of Stock he is to receive reduced by, or with respect to a
Stock Award, tender back to the Company, the smallest number of whole shares of
Stock which, when multiplied by the Fair Market Value of the shares of Stock
determined as of the Tax Date (defined below), is sufficient to satisfy
federal, state and local, if any, withholding taxes arising from exercise or
payment of a Stock Incentive (a "Withholding Election"). A Participant may
make a Withholding Election only if both of the following conditions are met:
(a) The Withholding Election must be made on or
prior to the date on which the amount of tax required to be withheld is
determined (the "Tax Date") by executing and delivering to the Company a
properly completed notice of Withholding Election as prescribed by the
Committee; and
(b) Any Withholding Election made will be
irrevocable except on six months advance written notice delivered to the
Company; however, the Committee may in its sole discretion disapprove and give
no effect to the Withholding Election.
5.2 Changes in Capitalization; Merger; Liquidation.
(a) The number of shares of Stock reserved for
the grant of Options, Dividend Equivalent Rights, Performance Unit Awards,
Phantom Shares, Stock Appreciation Rights and Stock Awards; the number of
shares of Stock reserved for issuance upon the exercise or payment, as
applicable, of each outstanding Option, Dividend Equivalent Right, Phantom
Share and Stock Appreciation Right and upon vesting or grant, as applicable, of
each Stock Award; the Exercise Price of each outstanding Option and the
specified number of shares of Stock to which each outstanding Dividend
Equivalent Right, Phantom Share and Stock Appreciation Right pertains must be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock resulting from a subdivision or combination of shares or the
payment of a stock dividend in shares of Stock to holders of outstanding shares
of Stock or any other increase or decrease in the number of shares of Stock
outstanding effected without receipt of consideration by the Company.
(b) In the event of a merger, consolidation or
other reorganization of the Company or tender offer for shares of Stock, the
Committee may make such adjustments with respect to awards and take such other
action as it deems necessary or appropriate to reflect such merger,
consolidation, reorganization or tender offer, including, without limitation,
the substitution of new awards, or the adjustment of outstanding awards, the
acceleration of awards, the removal of restrictions on outstanding awards, or
the termination of outstanding awards in exchange for the cash value determined
in good faith by the Committee of the vested portion of the award. Any
adjustment pursuant to this Section 5.2 may provide, in the Committee's
discretion, for the elimination without payment therefor of any fractional
shares that might otherwise become subject to any Stock Incentive, but except
as set forth in this Section may not otherwise diminish the then value of the
Stock Incentive.
(c) The existence of the Plan and the Stock
Incentives granted pursuant to the Plan must not affect in any way the right or
power of the Company to make or authorize any adjustment, reclassification,
reorganization or other change in its capital or business structure,
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<PAGE> 12
any merger or consolidation of the Company, any issue of debt or equity
securities having preferences or priorities as to the Stock or the rights
thereof, the dissolution or liquidation of the Company, any sale or transfer of
all or any part of its business or assets, or any other corporate act or
proceeding.
5.3 Cash Awards. The Committee may, at any time and in
its discretion, grant to any holder of a Stock Incentive the right to receive,
at such times and in such amounts as determined by the Committee in its
discretion, a cash amount which is intended to reimburse such person for all or
a portion of the federal, state and local income taxes imposed upon such person
as a consequence of the receipt of the Stock Incentive or the exercise of
rights thereunder.
5.4 Compliance with Code. All incentive stock options to
be granted hereunder are intended to comply with Code Section 422, and all
provisions of the Plan and all incentive stock options granted hereunder must
be construed in such manner as to effectuate that intent.
5.5 Right to Terminate Employment. Nothing in the Plan
or in any Stock Incentive confers upon any Participant the right to continue as
an employee or officer of the Company or any of its Affiliates or affect the
right of the Company or any of its Affiliates to terminate the Participant's
employment at any time.
5.6 Non-Alienation of Benefits. Other than as
specifically provided with regard to the death of a Participant, no benefit
under the Plan may be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge; and any attempt to do so
shall be void. No such benefit may, prior to receipt by the Participant, be in
any manner liable for or subject to the debts, contracts, liabilities,
engagements or torts of the Participant.
5.7 Restrictions on Delivery and Sale of Shares; Legends.
Each Stock Incentive is subject to the condition that if at any time the
Committee, in its discretion, shall determine that the listing, registration or
qualification of the shares covered by such Stock Incentive upon any securities
exchange or under any state or federal law is necessary or desirable as a
condition of or in connection with the granting of such Stock Incentive or the
purchase or delivery of shares thereunder, the delivery of any or all shares
pursuant to such Stock Incentive may be withheld unless and until such listing,
registration or qualification shall have been effected. If a registration
statement is not in effect under the Securities Act of 1933 or any applicable
state securities laws with respect to the shares of Stock purchasable or
otherwise deliverable under Stock Incentives then outstanding, the Committee
may require, as a condition of exercise of any Option or as a condition to any
other delivery of Stock pursuant to a Stock Incentive, that the Participant or
other recipient of a Stock Incentive represent, in writing, that the shares
received pursuant to the Stock Incentive are being acquired for investment and
not with a view to distribution and agree that the shares will not be disposed
of except pursuant to an effective registration statement, unless the Company
shall have received an opinion of counsel that such disposition is exempt from
such requirement under the Securities Act of 1933 and any applicable state
securities laws. The Company may include on certificates representing shares
delivered pursuant to a Stock Incentive such legends referring to the foregoing
representations or
E-12
<PAGE> 13
restrictions or any other applicable restrictions on resale as the Company, in
its discretion, shall deem appropriate.
5.8 Listing and Legal Compliance. The Committee may
suspend the exercise or payment of any Stock Incentive so long as it determines
that securities exchange listing or registration or qualification under any
securities laws is required in connection therewith and has not been completed
on terms acceptable to the Committee.
5.9 Termination and Amendment of the Plan. The Board of
Directors at any time may amend or terminate the Plan without stockholder
approval; provided, however, that the Board of Directors may condition any
amendment on the approval of stockholders of the Company if such approval is
necessary or advisable with respect to tax, securities or other applicable
laws. No such termination or amendment without the consent of the holder of a
Stock Incentive may adversely affect the rights of the Participant under such
Stock Incentive.
5.10 Stockholder Approval. The Plan must be submitted to
the stockholders of the Company for their approval within twelve (12) months
before or after the adoption of the Plan by the Board of Directors of the
Company. If such approval is not obtained, any Stock Incentive granted
hereunder will be void.
5.11 Choice of Law. The laws of the State of Texas govern
the Plan, to the extent not preempted by federal law, without reference to the
principles of conflict of laws.
5.12 Effective Date of Plan. This Plan was approved by
the Board of Directors as of February 28, 1999, and shall become effective upon
its approval by the Company's shareholders.
WATTMONITOR, INC.
By:/s/ Joel Dumaresq
-----------------
President
E-13
<PAGE> 1
EXHIBIT 10.5
WATTMONITOR, INC.
1999 OUTSIDE DIRECTORS' STOCK OPTION PLAN
SECTION 1. INTRODUCTION
The WattMonitor, Inc. 1999 Outside Directors' Stock Option
Plan (the "Plan") provides the Company with the ability to grant each
non-employee director nonqualified stock options ("Options") to purchase shares
("Option Shares") of common stock of WattMonitor, Inc. (the "Company").
SECTION 2. DEFINITIONS
2.1 Definitions. The following words and phrases shall,
when used herein, have the meanings set forth below:
(a) "Act" means the Securities Exchange Act of
1934, as amended.
(b) "Affiliate" means (i) an entity that directly
or through one or more intermediaries is controlled by the Company, and (ii)
any entity in which the Company has a significant equity interest, as
determined by the Company.
(c) "Agreement" means a stock option agreement,
which is an agreement subject to the terms of the Plan.
(d) "Board of Directors" means the Board of
Directors of the Company.
(e) "Code" means the Internal Revenue Code of
1986, as amended.
(f) "Committee" means the committee appointed by
the Board of Directors to administer the Plan.
(g) "Common Stock" means the common stock, par
value $.0001 per share, of the Company.
(h) "Director" means a director of the Company.
(i) "Employee" means any person who is employed
by the Company or an Affiliate for purposes of the Federal Insurance
Contributions Act.
(j) "Fair Market Value" with regard to a date
means:
(1) the average of the high and low
prices at which a Share shall have
been sold on that date or the last
trading date prior to that date as
reported by the NASDAQ Stock Market
(or, if applicable, as reported by a
national securities exchange
selected by the Committee on which
the shares of Stock are then
actively traded) and published in
The Wall Street Journal,
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<PAGE> 2
(2) if Shares are not traded on a
securities exchange, but are
reported by the NASDAQ Stock Market
and market information is published
on a regular basis in The Wall
Street Journal, the average of the
published high and low sales prices
for that date or the last business
day prior to that date as published
in The Wall Street Journal,
(3) if such market information is not
published on a regular basis, the
average of the high bid and low
asked prices of a Share in the
over-the-counter market on that date
or the last business day prior to
that date, as reported by the NASDAQ
Stock Market, or, if not so
reported, by a generally accepted
reporting service, or
(4) if Shares are not publicly traded,
as determined in good faith by the
Committee with due consideration
being given to (i) the most recent
independent appraisal of the
Company, if such appraisal is not
more than twelve months old and (ii)
the valuation methodology used in
any such appraisal, provided that,
Fair Market Value of a Share may be
determined by the Committee by
reference to the average market
value determined over a period
certain or as of specified dates, to
a tender offer price for Shares (if
settlement of an award is triggered
by such an event) or to any other
reasonable measure of fair market
value.
(k) "Option" means an option to purchase Shares
of the Company granted pursuant to and in accordance with the provisions of the
Plan.
(l) "Optionee" means a Director who is granted an
Option pursuant to and in accordance with the provisions of the Plan.
(m) "Option Shares" means Shares subject to and
issued pursuant to an exercise of an Option granted under the Plan.
(n) "Share" means a share of Common Stock of the
Company.
SECTION 3. ADMINISTRATION
3.1 Delegation to Committee. The Plan shall be
administered by the Committee which shall consist of at least two Directors who
are not eligible to participate in the Plan. The members of the Committee
shall be appointed by the Board of Directors. The Board of Directors may from
time to time remove members from or add members to the Committee. Vacancies on
the Committee shall be filled by the Board of Directors.
3.2 Committee Actions. The Committee shall select one of
its members as chairman, and shall hold meetings at such times and places as it
may determine. Acts approved by the majority of the Committee in a meeting at
which a quorum is present or acts reduced to or approved in writing by a
majority of the members of the Committee shall be the valid acts of the
Committee. A quorum
F-2
<PAGE> 3
shall be present at any meeting of the Committee which a majority of the
Committee members attend.
3.3 Finality. The Committee shall have the authority in
its sole discretion to interpret the Plan, to grant Options under and in
accordance with the provisions of the Plan, and to make all other
determinations and to take all other actions it deems necessary or advisable
for the implementation and administration of the Plan or Agreements thereunder,
except to the extent such powers are herein reserved by the Board of Directors.
All actions of the Board of Directors and the Committee shall be final,
conclusive and binding upon the Optionees. No member of the Board of Directors
or the Committee shall be liable for any action taken or decision made in good
faith relating to the Plan or any grant of an Option thereunder. All Options
granted pursuant to this Plan shall be evidenced by an Agreement and shall be
subject to the terms of the Plan and such additional terms are as set forth in
the Agreement.
3.4 Eligibility. Directors who are not Employees of the
Company or an Affiliate shall be eligible to receive Options under the Plan on
the terms and subject to the restrictions hereinafter set forth.
3.5 Exercise and Payment of Option Awards. All Options
may be exercised to the extent vested. All Options may be exercised only by
written notice to the Company. Payment for all shares of Stock purchased
pursuant to exercise of an Option shall be made (a) in cash; (b) by delivery to
the Company of a number of shares of Stock which have been beneficially owned
by the Eligible Director for at least six (6) months prior to the date of
exercise having an aggregate Fair Market Value of not less than the product of
the exercise price multiplied by the number of shares the Eligible Director
intends to purchase upon exercise of the Option on the date of delivery; or (c)
to the extent available, in a cashless exercise through a broker. Payment
shall be made at the time that the Option or any part thereof is exercised, and
no shares shall be issued or delivered upon exercise of an Option until full
payment has been made. The holder of an Option, as such, shall have none of
the rights of a stockholder.
3.6 Non-Transferability. Unless otherwise permitted by
the Committee, an Option shall not be transferable or assignable except by will
or by the laws of descent and distribution and shall be exercisable, during the
Optionee's lifetime, only by the Optionee, or in the event of the Optionee's
Disability, by his or her legal representative.
SECTION 4. SHARES SUBJECT TO PLAN
The aggregate number of Option Shares which may be issued
under the Plan shall at no time exceed 120,000. The limitations established by
this Section shall be subject to adjustment in accordance with the provisions
of the Plan. In the event that an Option expires or is terminated for any
reason, the Option Shares allocable to the unexercised portion of such Option
may again be subject to an Option under the Plan. In the event that an Optionee
delivers Shares as payment of the exercise price for an Option, such Shares may
be subject to Options under this Plan.
F-3
<PAGE> 4
SECTION 5. OPTION AWARDS
Each Option contemplated by this Section 5 shall be evidenced
by an Agreement which shall incorporate the applicable terms of the Plan. The
terms of each Agreement shall provide: (a) that the per share purchase price
for each share of Stock subject to the Option shall be the Fair Market Value as
of the date of grant; (b) that the Option shall expire upon the earlier of the
tenth (10th) anniversary following the date of grant or, subject to the
condition that an Option may not be exercised past the expiration of its term,
within one year after the date the Director ceases to serve upon the Board of
Directors and the board of directors of any affiliate for any reason; and (c)
that the option is fully vested.
SECTION 6. FORMULA GRANTS
Beginning with the date of the annual meeting of shareholders
which occurs in 1999, and continuing each year thereafter until the expiration
of the Plan, on the date of the first meeting of the Board of Directors which
follows the annual meeting of shareholders, each eligible director as of such
date shall be granted an Option to purchase 5,000 shares of Stock.
SECTION 7. TERM OF PLAN
The Plan shall be effective on the date of its approval by the
shareholders of the Company and shall continue to be effective until ten (10)
years following the effective date of the Plan, unless sooner terminated by the
Board of Directors pursuant to Section 10 hereof. The Company shall submit the
Plan to its stockholders for approval within twelve (12) months of the approval
of the Plan by the Board of Directors.
SECTION 8. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification that the
members of the Committee may have, each member of the Committee shall be
indemnified by the Company against the reasonable expenses, including
attorneys' fees, actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which it may be a party by reason of any action taken or failure to
act under or in connection with the Plan or any Option granted thereunder, and
against all amounts paid by it in settlement thereof (provided the settlement
has received the prior approval of the Company) or paid by it in satisfaction
of a judgment in any such action, suit or proceeding, except in relation to
matters as to which it shall be adjudged in the action, suit or proceeding that
the Committee member is liable for negligence or misconduct in the performance
of its duties; provided that promptly after institution of the action, suit or
proceeding the Committee member shall in writing offer the Company the
opportunity, at its own expense, to handle and defend such matter. Upon the
delivery to the Committee member of written notice of assumption by the Company
of the defense of such matter, the Company will not be responsible to the
Committee member for any further fees and disbursements relating to the defense
of such matter, including fees and disbursements of counsel.
SECTION 9. AMENDMENT AND TERMINATION OF THE PLAN
The Board of Directors at any time may amend or terminate the
Plan without stockholder approval; provided, however, that the Board of
Directors may condition any amendment on the approval of the stockholders of
the Company if such approval is necessary or advisable with respect
F-4
<PAGE> 5
to tax, securities or other applicable laws to which the Company, this Plan,
optionees or eligible directors are subject. No amendment or termination of
the Plan shall adversely affect the rights of an Optionee with regard to his
Options without his consent.
SECTION 10. ADJUSTMENT IN OPTION SHARES AND EXERCISE PRICE
If (i) the number of Shares shall be increased or reduced by a
change in par value, split-up, stock split, reverse stock split,
reclassification, merger, consolidation, distribution of stock dividends or
similar capital adjustments, or (ii) the Company engages in a transaction for
which the Committee determines an adjustment is appropriate, then the Committee
may make an adjustment in the number and kind of Shares available for the
granting of Options under the Plan. In addition, the Committee may, in its
sole and absolute discretion, make an adjustment in the number, kind and price
of Shares as to which outstanding Options, or the portions thereof then
unexercised, shall be exercisable, to the end that the Optionee's proportionate
interest is maintained as before the occurrence of the event. The adjustment
in outstanding Options will be made without change in the total price
applicable to the unexercised portion of the Option and, if necessary, with a
corresponding adjustment in the exercise price per share. Any fractional
Shares resulting from such adjustments shall be eliminated. All adjustments
made by the Committee under this Section shall be conclusive.
In the event of a merger, consolidation or other
reorganization of the Company or tender offer for Shares, the Committee may
make such adjustments with respect to Options and take such other action as it
deems necessary or appropriate to reflect such merger, consolidation,
reorganization or tender offer, including, without limitation, the substitution
of new Options, or the adjustment of outstanding Options, the acceleration of
Options, the removal of restrictions on outstanding Options, or the termination
of outstanding Options in exchange for the cash value determined in good faith
by the Committee of the Options. Any adjustment pursuant to this Section may
provide, in the Committee's discretion, for the elimination without payment
therefor of any fractional Shares that might otherwise become subject to any
Options, but except as set forth in this Section may not otherwise diminish the
then value of the Options.
SECTION 11. WITHHOLDING TAXES
To the extent required by law, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient to
satisfy any federal, state and local withholding tax requirement, if any, prior
to the delivery of any certificate or certificates for such Shares. An
optionee must pay the withholding tax in cash or by certified check or by the
Company deducting a sufficient number of Shares from the Option Shares issued
to satisfy withholding taxes, in accordance with the Agreement.
SECTION 12. RIGHTS AS A STOCKHOLDER
An Optionee or a transferee of an Optionee shall have no
rights as a stockholder with respect to any Option or Option Shares until the
date of the issuance of a stock certificate to him for the Option Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date the stock certificate is issued, except as
otherwise provided in the Plan.
F-5
<PAGE> 6
SECTION 13. GOVERNING LAW
The laws of the State of Texas shall govern this Plan.
SECTION 14. EFFECTIVE DATE
This Plan was approved by the Board of Directors as of
February 28, 1999, and shall become effective upon its approval by the
Company's shareholders.
WATTMONITOR, INC.
By:/s/ Joel Dumaresq
-----------------
President
F-6
<PAGE> 7
FIRST AMENDMENT TO THE
HEALTHBRIDGE, INC.
1999 OUTSIDE DIRECTORS' STOCK OPTION PLAN
(FORMERLY THE WATTMONITOR, INC. 1999 OUTSIDE DIRECTORS' STOCK OPTION PLAN)
THIS AMENDMENT, made as of 12th day of April, 2000, by
HEALTHBRIDGE, INC., a corporation duly organized and existing under the laws of
the State of Texas (hereinafter called the "Primary Sponsor");
The Primary Sponsor adopted the WattMonitor, Inc. 1999 Outside
Directors' Stock Option Plan (the "Plan") by indenture dated April 8, 1999.
The Primary Sponsor changed its name from WattMonitor, Inc. to Healthbridge,
Inc. on May 13, 1999.
The Primary Sponsor wants to change the name of the Plan to
reflect the Primary Sponsor's new name and wants to clarify that because there
was no annual meeting of shareholders in 1999 that grants will not be made
under the Plan until after the first annual meeting of shareholders that occurs
in 2000.
AMENDMENT
NOW, THEREFORE, the Primary Sponsor does hereby amend the Plan
effective as of the date first written above, except where specifically noted:
1. By replacing WattMonitor, Inc. with Healthbridge,
Inc. every place that WattMonitor, Inc. appears in the Plan.
2. By deleting the text of Section 6 and replacing it
with the following:
"Beginning with the date of the annual meeting of shareholders
which occurs in 2000, and continuing each year thereafter until the expiration
of the Plan, on the date of the first meeting of the Board of Directors which
follows the annual meeting of shareholders, each eligible director as of such
date shall be granted an Option to purchase 5,000 shares of Stock."
Except as specifically amended hereby, the Plan shall remain
in full force and effect as prior to this First Amendment.
F-7
<PAGE> 8
IN WITNESS WHEREOF, the Company has caused this First
Amendment to be executed on the day and year first above written.
HEALTHBRIDGE, INC.
By:/s/ Nora Coccaro
----------------
Nora Coccaro
President
ATTEST:
By:
-------------------------------
Title:
----------------------------
[CORPORATE SEAL]
F-8
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