SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 3, 1998
Medical Monitors, Inc.
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(Exact name of Registrant as specified in its charter)
DELAWARE 95-2930683
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
1990 Westwood Blvd., Penthouse, Los Angeles, CA 90025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (310) 441-0090
N/A
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets.
On February 9, 1998, the Registrant executed a definitive Agreement for
Exchange of Stock (the "Acquisition Agreement") with CyberAir Communications,
Inc., a Delaware Corporation ("CyberAir"). On March 3, 1998, the Registrant and
CyberAir amended and modified said agreement.
CyberAir is an integrated telecommunications company offering a wide
variety of telecommunication services and products,
Pursuant to the Acquisition Agreement, as amended on March 3, 1998, the
Registrant will acquire all of the issued and outstanding stock of CyberAir and
CyberAir will become a wholly owned subsidiary of the Registrant. At the closing
of the acquisition, all of the outstanding shares of CyberAir will be delivered
to the Registrant and exchanged for 25,000,000 shares of the Registrant's common
stock..
The acquisition has been approved by the boards of directors of the Medical
Monitors and CyberAir but is still subject to certain conditions as described in
the Acquisition Agreement, as amended, including, but not limited to, the
restructuring of the common stock of Medical Monitors which will include a
potential 1 for 100 reverse stock split, the conversion of certain debt of
Medical Monitors to equity, and the approval of the transaction by the
shareholders of Medical Monitors.
Item 7. Financial Statements, Pro Forma Financial Statements And Exhibits
(b) Pro Forma Financial Information
The Registrant will provide Pro Forma Consolidated Financial Statements
within 60 days of the Closing.
(c) Exhibits.
1 Agreement Regarding the Exchange of Stock Between the Registrant and the
Shareholders of CyberAir Communications, Inc., dated February 9, 1998.
2. Amendment to Agreement dated March 3, 1998.
Page 2
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the Undersigned, thereunto duly authorized.
MEDICAL MONITORS, INC.
(Registrant)
Date: March 12, 1998 /S/ Harry Shuster
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By: Harry Shuster
Its: President,
Chief Financial Officer
and Secretary
Page 3
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EXHIBIT 1
Agreement Regarding the Exchange of Stock Between the Registrant and the
Shareholders of CyberAir Communications, Inc., dated February 9, 1998.
<PAGE>
Agreement
Concerning The Exchange Of Stock
Between
Medical Monitors, Inc.
and
The Shareholders Of
CyberAir Communications Inc.
Dated February 9, 1998
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1 EXCHANGE OF SECURITIES ............................................. 1
1.1 Exchange of Shares ............................................ 1
1.2 Exemption from Registration ................................... 1
1.3 Non-taxable Transaction ....................................... 1
2 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS.................. 2
2.1 Organization .................................................. 2
2.2 Capital Stock ................................................. 2
2.3 Subsidiaries .................................................. 2
2.4 Directors and Officers ........................................ 2
2.5 Financial Statements .......................................... 2
2.6 Absence of Changes ............................................ 2
2.7 Absence of Undisclosed Liabilities ............................ 2
2.8 Tax Returns ................................................... 2
2.9 Patents, Trade Names and Rights ............................... 3
2.10 Compliance with Laws .......................................... 3
2.11 Litigation .................................................... 3
2.12 Authority ..................................................... 3
2.13 Ability to Carry Out Obligations .............................. 3
2.14 Full Disclosure ............................................... 3
2.15 Assets ........................................................ 4
2.16 Material Contracts ............................................ 4
3 REPRESENTATIONS AND WARRANTIES OF MEDICAL .......................... 4
3.1 Organization .................................................. 4
3.2 Capital Stock ................................................. 4
3.3 Subsidiaries .................................................. 4
3.4 Directors and Officers ........................................ 4
3.5 Patents, Trade Names and Rights ............................... 4
3.6 Compliance with Laws .......................................... 4
3.7 Litigation .................................................... 5
3.8 Authority ..................................................... 5
3.9 Ability to Carry Out Obligations............................... 5
3.10 Full Disclosure ............................................... 5
3.11 Assets ........................................................ 5
3.12 Filings with the SEC .......................................... 5
4 COVENANTS .......................................................... 6
4.1 Investigative Rights .......................................... 6
4.2 Conduct of Business ........................................... 6
5 CLOSING ............................................................ 6
5.1 Closing ....................................................... 6
5.2 Deliveries at Closing ......................................... 6
5.2.1 Shareholders' Deliveries at Closing ........................ 6
5.2.2 Medical Deliveries at Closing .............................. 7
(i)
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6 CONDITIONS TO OBLIGATIONS TO CLOSE ................................. 7
6.1 Conditions to Obligations of Shareholders to Close ............ 7
6.2 Conditions to Obligations of Medical .......................... 7
7 INDEMNIFICATION .................................................... 7
7.1 Indemnification by Shareholders ............................... 7
7.2 Indemnification by Medical .................................... 7
7.3 Notice and Opportunity to Defend .............................. 8
8 MISCELLANEOUS ...................................................... 8
8.1 Costs ......................................................... 8
8.2 Additional Documentation ...................................... 8
8.3 Captions and Headings ......................................... 9
8.4 No Oral Change ................................................ 9
8.5 Non-Waiver .................................................... 9
8.6 Time of Essence ............................................... 9
8.7 Choice of Law ................................................. 9
8.8 Counterparts and/or Facsimile Signature ....................... 9
8.9 Notices ....................................................... 9
8.10 Binding Effect ................................................ 10
8.11 Mutual Cooperation ............................................ 10
8.12 Brokers ....................................................... 10
8.13 Survival of Representations and Warranties .................... 10
8.14 Facsimile Signatures .......................................... 10
SCHEDULE A LIST OF CYBERAIR SHAREHOLDERS
EXHIBIT 1.2 INVESTMENT LETTER
EXHIBIT 2.3 SUBSIDIARIES OF CYBERAIR
EXHIBIT 2.4 CYBERAIR OFFICERS AND DIRECTORS
EXHIBIT 2.5 CYBERAIR FINANCIAL STATEMENTS
EXHIBIT 2.7 LIABILITIES OF CYBERAIR
EXHIBIT 2.11 CYBERAIR LITIGATION AND LEGAL PROCEEDINGS
EXHIBIT 2.15 EXCEPTIONS TO GOOD TITLE TO ASSETS
EXHIBIT 2.16 MATERIAL CONTRACTS OF CYBERAIR
EXHIBIT 5.2.2.2 POST CLOSING OFFICERS AND DIRECTORS
EXHIBIT 8.12 BROKERS
(ii)
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AGREEMENT
This Stock Exchange Agreement (the "Agreement") made this 9th day of
February, 1998, is by and among Medical Monitors, Inc., a Delaware Corporation
("Medical") and the undersigned shareholders of (the "Shareholders") which are
the owners of 100% of the capital stock of CyberAir Communications Inc., a
Delaware Corporation ("CyberAir").
A. Whereas, Shareholders hold all of the issued and outstanding common
stock of CyberAir; and
B. Whereas, Medical, a public company, desires to exchange shares of its
common stock for all of the issued and outstanding common stock of CyberAir held
by the Shareholders, thereby making CyberAir a wholly owned subsidiary of
Medical; and
C. Whereas, Shareholders desire to exchange all of the issued and
outstanding common stock of CyberAir for 18,900,000 shares of the common stock
of Medical, all as more fully set forth herein below; and
D. Whereas, the Board of Directors of Medical has authorized its proper
corporate officers to effect the transactions contemplated herein.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree to the following terms
and conditions:
1 EXCHANGE OF SECURITIES.
1.1 Exchange of Shares. Subject to all the terms and conditions of this
Agreement, Medical will deliver to Shareholders of CyberAir 18,900,000 shares of
previously authorized but unissued unregistered shares of the Common Stock, $.01
Par Value of Medical (the "Medical Shares"), in exchange for all of the issued
and outstanding shares of CyberAir owned by the CyberAir Shareholders.
1.2 Exemption from Registration. The parties hereto intend that the Medical
Shares to be exchanged shall be exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Act"), pursuant to Section 4(2) of the
Act and the rules and regulations promulgated thereunder and exempt from the
registration requirements of the applicable states. In furtherance thereof,
Shareholders will execute and deliver to Medical on the closing date, investment
letters suitable to Medical counsel, in form substantially as per Exhibit 1.2
attached hereto.
1.3 Non-taxable Transaction. The parties intend to effect this transaction
as a non-taxable reorganization pursuant to Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
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2 REPRESENTATIONS AND WARRANTIES OF CERTAIN SHAREHOLDERS.
Certain Shareholders (the "Warranting Shareholders") hereby represent and
warrant to Medical that:
2.1 Organization. CyberAir is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware has all
necessary corporate powers to own its properties and to carry on its business as
now owned and operated by it, and is duly qualified to do business and is in
good standing in each of the states where its business requires qualification.
2.2 Capital Stock. The authorized capital stock of CyberAir consists solely
of 75,000,000 shares of Common Stock, no par value per share. Immediately prior
to closing there shall be 189,000 shares of Common Stock issued and outstanding
all of which are owned by the Shareholders. All of the issued and outstanding
shares of CyberAir are duly and validly issued, fully paid and nonassessable.
There are no outstanding subscriptions, options, rights, warrants, debentures,
instruments, convertible securities or other agreements or commitments
obligating CyberAir to issue or to transfer from treasury any additional shares
of its capital stock of any class.
2.3 Subsidiaries. CyberAir has no subsidiaries and owns no interest in
other enterprises except as set forth on Exhibit 2.3 attached hereto.
2.4 Directors and Officers. Exhibit 2.4 hereto contains the names and
titles of all present officers and directors CyberAir as of the date of this
Agreement.
2.5 Financial Statements. Exhibit 2.5 hereto consists of the audited
financial statements of CyberAir as of February 28, 1998. The financial
statements have been prepared in accordance with generally accepted accounting
principles on an accrual basis and practices consistently followed by CyberAir
throughout the periods indicated, and fairly present the financial position of
CyberAir as of the dates of the balance sheets included in the financial
statements and the results of operations for the periods indicated.
2.6 Absence of Changes. Since the date of CyberAir's financial statements
included in Exhibit 2.5, there has not been any change in the financial
condition or operations of CyberAir, except for changes in the ordinary course
of business, which changes have not, in the aggregate, been materially adverse.
2.7 Absence of Undisclosed Liabilities. Except as set forth on Exhibit 2.7
attached hereto, CyberAir does not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent or otherwise,
and whether due or to become due, that is not reflected in the balance sheet of
CyberAir included in Exhibit 2.5.
2.8 Tax Returns. Within the times and in the manner prescribed by law,
CyberAir has filed all federal, state and local tax returns required by law and
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has paid all taxes, assessments and penalties due and payable. The provisions
for taxes, if any reflected in the Exhibits are adequate for the periods
indicated. There are no present disputes as to taxes of any nature payable by
CyberAir.
2.9 Patents, Trade Names and Rights. To the best of its knowledge CyberAir
and its subsidiaries own and hold all necessary patents, franchise rights,
trademarks, service marks, trade names, inventions, processes, know-how, trade
secrets, copyrights, licenses and other rights necessary to its business, and
the business of its subsidiaries as now conducted or proposed to be conducted.
CyberAir and its subsidiaries are not infringing upon or otherwise acting
adversely to the right or claimed right of any person with respect to any of the
foregoing.
2.10 Compliance with Laws. CyberAir and each of its subsidiaries have
complied with, and is not in violation of, applicable federal, state or local
statutes, laws and regulations (including, without limitation, any applicable
building, zoning or other law, ordinance or regulation) affecting its properties
or the operation of its business.
2.11 Litigation. Except as set forth in Exhibit 2.11 attached hereto,
neither CyberAir or any of its subsidiaries is a defendant to any suit, action,
arbitration or legal, administrative or other proceeding, or governmental
investigation which is pending or, to the best knowledge of the Shareholders,
threatened against or affecting CyberAir or its subsidiaries or their business,
assets or financial condition. CyberAir and its subsidiaries are not in default
with respect to any order, writ, injunction or decree of any federal, state,
local or foreign court, department, agency or instrumentality applicable to it.
CyberAir and its subsidiaries are not engaged in any material lawsuits to
recover monies due it.
2.12 Authority. The Board of Directors of CyberAir has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and CyberAir has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is a legal, valid and
binding obligation of the Shareholders and is enforceable in accordance with its
terms and conditions.
2.13 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by the Shareholders and the performance by the Shareholders of their
obligations hereunder in the time and manner contemplated will not cause,
constitute or conflict with or result in (a) any breach or violation of any of
the provisions of or constitute a default under any license, indenture,
mortgage, instrument, article of incorporation, bylaw, or other agreement or
instrument to which CyberAir is a party, or by which it may be bound, nor will
any consents or authorizations of any party to the Shareholders' performance of
their obligations hereunder be required; (b) an event that would permit any
party to any agreement or instrument to terminate it or to accelerate the
maturity of any indebtedness or other obligation of CyberAir; or (c) an event
that would result in the creation or imposition of any lien, charge or
encumbrance on any asset of CyberAir.
2.14 Full Disclosure. None of the representations and warranties made by
CyberAir Shareholder herein or in any exhibit, certificate or memorandum
furnished or to be furnished by Shareholders, or on their behalf, contain or
will contain any untrue statement of material fact or omit any material fact the
omission of which would be misleading.
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2.15 Assets.
2.15.1 Except as otherwise indicated in Exhibit 2.15 attached hereto,
CyberAir and each of its subsidiaries has good and marketable title to all of
its property, free and clear of all liens, claims and encumbrances.
2.16 Material Contracts. Material contracts of CyberAir are set forth in
Exhibit 2.16.
3 REPRESENTATIONS AND WARRANTIES OF MEDICAL.
Medical represents and warrants to Shareholders that:
3.1 Organization. Medical is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, and is duly qualified to do business and is in good standing
in each of the states where its business requires qualification.
3.2 Capital Stock. As of the date of this Agreement the authorized capital
stock of Medical consists of 50,000,000 shares of common stock, $.01 par value
per share. Immediately prior to closing the authorized capital stock of Medical
shall consist of 250,000,000 shares of common stock, $.01 par value and there
shall be 1,100,000 shares of Common Stock issued and outstanding. All of the
issued and outstanding shares shall have been duly and validly issued, fully
paid and nonassessable. There are no outstanding subscriptions, options, rights,
debentures, instruments, convertible securities or other agreements or
commitments obligation Medical to issue or to transfer from treasury any
additional shares of its capital stock of any class, other than those listed in
Medical's 1934 Act filings with the Securities and Exchange Commission. The
Common Stock of Medical is currently listed on the OTC Bulletin Board under the
symbol "MDMN".
3.3 Subsidiaries. Medical does not have any subsidiaries or own any
interest in any enterprise.
3.4 Directors and Officers. The names and titles of all directors and
officers of Medical are as set forth on Exhibit 3.4 attached hereto.
3.5 Patents, Trade Names and Rights. To the best of its knowledge Medical
owns and holds all necessary patents, franchise rights, trademarks, service
marks, trade names, inventions, processes, know-how, trade secrets, copyrights,
licenses and other rights necessary to its business as now conducted or proposed
to be conducted. Medical is not infringing upon or otherwise acting adversely to
the right or claimed right of any person with respect to any of the foregoing.
Page 4 of 13
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3.6 Compliance with Laws. Medical has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
(including, without limitation, any applicable building, zoning or other law,
ordinance or regulation and all federal and state securities laws (including,
without limitation, the Securities Act of 1933 and the Securities Exchange Act
of 1934) and all material respects NASDAQ rules) affecting its properties or the
operation of its business. To the best of its knowledge all stock of Medical
issued to date has been issued in compliance with all Federal and State
securities laws.
3.7 Litigation. Medical is not a party to any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation which
is pending or, to the best knowledge of Medical threatened against or affecting
Medical or its business, assets or financial condition except for suits as
described in its 1934 Act filings. Medical is not in default with respect to any
order, writ, injunction or decree of any federal, state, local or foreign court,
department, agency or instrumentality applicable to it.
3.8 Authority. The Board of Directors of Medical has authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein, and Medical has full power and authority to execute,
deliver and perform this Agreement, and this Agreement is a legal, valid and
binding obligation of Medical enforceable in accordance with its terms.
3.9 Ability to Carry Out Obligations. The execution and delivery of this
Agreement by Medical and the performance by the Medical of the obligations
hereunder in the time and manner contemplated will not cause, constitute or
conflict with or result in (a) any breach or violation of any of the provisions
of or constitute a default under any license, indenture, mortgage, instrument,
article of incorporation, bylaw, or other agreement or instrument to which
Medical is a party, or by which it may be bound, nor will any consents or
authorizations of any party to Medical's performance of its obligation
hereunder; (b) an event that would permit any party to any agreement or
instrument to terminate it or to accelerate the maturity of any indebtedness or
other obligation of Medical; or (c) an event that would result in the creation
or imposition of any lien, charge or encumbrance on any asset of Medical.
3.10 Full Disclosure. None of the representations and warranties made by
Medical herein or in any exhibit, certificate or memorandum furnished or to be
furnished by Medical or on its behalf, contains or will contain any untrue
statement of material fact or omit any material fact the omission of which would
be misleading.
3.11 Assets. Medical has good and marketable title to all of its property,
free and clear of all liens, claims and encumbrances, except as otherwise
indicated in its 1934 Act filings.
3.12 Filings with the SEC. As of the date of this Agreement Medical is
delinquent in its filing requirements with the Securities and Exchange
Commissions as required under the Securities Act of 1933 and the Securities
Exchange Act of 1934 (the "Exchange Act"), collectively (the "Public Reports").
Page 5 of 13
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Prior to the Closing Medical shall have brought current and will have made all
filings with the SEC that it is required to make. Each of the Public Reports has
complied with the Securities Act and the Exchange Act in all material respects.
None of the Public Reports, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, false or misleading. Medical has delivered to Shareholders
a correct and complete copy of each Public Report (together with all claims and
schedules thereto and as amended to date).
4 COVENANTS RELATING TO THE PERIOD PRIOR TO CLOSING.
4.1 Investigative Rights. From the date of this Agreement until the Closing
Date, each party shall provide to the other party, and such other party's
counsel, accountants, auditors and other authorized representatives, full access
during normal business hours and upon reasonable advance written notice to all
of each party's properties, books, contracts, commitments and records for the
purpose of examining the same. Each party shall furnish the other party with all
information concerning each party's affairs as the other party may reasonably
request.
4.2 Conduct of Business. Prior to Closing, Shareholders represent that
CyberAir shall conduct its business in the normal course. CyberAir shall not
amend its Articles of Incorporation or Articles of Organization, as the case may
be, or Bylaws (except as may be described in this Agreement), declare dividends,
redeem securities, incur additional or newly-funded liabilities outside the
ordinary course of business, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract, guarantee
obligations of any third party, settle or discharge any balance sheet receivable
for less than its stated amount, pay more on any liability than its stated
amount, or enter into any other transaction without the prior approval of
Medical, not to be unreasonably withheld.
5 CLOSING.
5.1 Closing. The closing of this transaction shall be held at the offices
of Medical, or such other place as is mutually agreeable to the parties, or by
FAX and Federal Express, at such time as Medical has brought all Public Reports
current and obtained approval of the acquisition contemplated by this Agreement,
as required by its by-laws and requisite federal and state corporate and
securities regulations.
5.2 Deliveries at Closing.
5.2.1 Shareholders' Deliveries at Closing. At the Closing, the Shareholders
shall deliver the following items:
5.2.1.1 certificates representing all of the shares of CyberAir stock held
by the Shareholders, along with a stock power or stock powers duly executed by
the Shareholders in blank;
5.2.1.2 an investment letter in the form of Exhibit 1.2 hereof, duly
executed by the Shareholders.
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5.2.2. Medical Deliveries at Closing. At the Closing, Medical shall deliver
the following items:
5.2.2.1 either (A) certificates representing the Medical Shares, duly
issued to the Shareholders as listed on Schedule A attached hereto, or (B) a
copy of a letter from Medical to its transfer agent, instructing such transfer
agent to issue the certificates representing the Medical Shares to the
Shareholders as listed on Schedule A.
5.2.2.2 resignations of the Officers and Directors of Medical and a
resolution concurrently therewith appointing CyberAir's designated Officers and
Directors as set forth on Exhibit 5.2.2.2 attached hereto.
6 CONDITIONS TO OBLIGATIONS TO CLOSE.
6.1 Conditions to Obligations of Shareholders to Close.. The obligations of
the Shareholders to consummate the transactions contemplated by this Agreement
shall be subject to the satisfaction of the conditions that the representations
and warranties of Medical shall be true in all material respects on and as of
the Closing Date with the same force and effect as though made on and as of the
Closing date, that Medical shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date. . In addition,
prior to Closing, CyberAir shall have caused the shareholder loan payable to
Harry Shuster in the amount of $1,000,000 to be converted to 150,000 shares of
common stock of Medical which shall be part of the 18,900,000 shares referenced
in paragraph 1.1.
6.2 Conditions to Obligations of Medical. The obligations of Medical to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the conditions that the representations and warranties of
the Shareholders shall be true in all material respects on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date, that the Shareholders shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement and
between Medical, its shareholders and CyberAir and related parties, be performed
or complied with by it on or prior to the Closing Date
7 INDEMNIFICATION.
7.1 Indemnification by Shareholders. The Warranting Shareholders agree
to indemnify, defend and hold the Medical shareholders, Medical, its officers
and directors, harmless against and in respect of any and all claims, demands,
losses, costs, expenses, obligations, liabilities, damages, recoveries and
deficiencies, including interest, penalties and reasonable attorney fees that it
shall incur or suffer, which arise out of, result or relate to any breach of, or
failure by CyberAir perform any of its material representations, warranties,
covenants or agreements in this Agreement or in any schedule, certificate,
exhibit or other instrument furnished or to be furnished by Shareholders under
this Agreement; provided however, that notice of any such breach shall have been
communicated with specificity within 2 years of the date hereof.
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7.2 Indemnification by Medical. Medical agrees to indemnify, defend and
hold the Shareholders harmless against and in respect of any and all claims,
demands, losses, costs, expenses, obligations, liabilities, damages, recoveries
and deficiencies, including interest, penalties and reasonable attorney fees,
that it shall incur or suffer, which arise out of, result or relate to any
breach of, or failure by Medical to perform any of its material representations,
warranties, covenants or agreements in this Agreement or in any schedule,
certificate, exhibit or other instrument furnished or to be furnished by Medical
under this Agreement.
7.3 Notice and Opportunity to Defend. If there occurs an event which any
Party asserts is an indemnifiable event, the Party seeking indemnification shall
notify the Party obligated to provide indemnification (the "Indemnifying Party")
promptly. If such event involves (i) any claim or (ii) the commencement of any
action or proceeding by a third person, the Party seeking indemnification will
give such Indemnifying Party written notice of such claim or the commencement of
such action or proceeding. Such notice shall be a condition precedent to any
liability of the Indemnifying Party hereunder. Such Indemnifying Party shall
have a period of thirty (30) days within which to respond thereto. If such
Indemnifying Party does not respond within such thirty (30) days period, such
Indemnifying Party shall be obligated to compromise or defend, at its own
expense and by counsel chosen by the Indemnifying Party shall provide reasonably
satisfactory to the Party seeking indemnity, such matter and the Indemnifying
Party shall provide the Party seeking indemnification with such assurances as
may be reasonably required by the latter to assure that the Indemnifying Party
will assume, and be responsible for, the entire liability issue. If such
Indemnifying Party does not respond within such thirty (30) day period and
rejects responsibility for such matter in whole or in part, the Party seeking
indemnification shall be free to pursue, without prejudice to any of its rights
hereunder, such remedies as may be available to such Party under applicable law.
The Party seeking indemnification agrees to cooperate fully with the
Indemnifying Party and its counsel in the defense against any such asserted
liability. In any event, the Party seeking indemnification shall have the right
to participate at its own expense in the defense of such asserted liability. Any
compromise of such asserted liability by the Indemnifying Party shall require
the prior written consent of the Party seeking indemnification. If, however, the
Party seeking indemnification refuses its consent to a bona fide offer of
settlement which the Indemnifying Party wishes to accept, the Party seeking
indemnification may continue to pursue such matter, free of any participation by
the Indemnifying Party, at the sole expense of the Party seeking
indemnification. In such event, the obligation of the Indemnifying Party to the
Party seeking indemnification shall be equal to the lesser of (i) the amount of
the offer of settlement which the Party seeking indemnification refused to
accept plus the costs and expenses of such Party prior to the date the
Indemnifying Party notifies the Party seeking indemnification of the offer of
settlement and (ii) the actual out-of-pocket amount the Party seeking
indemnification is obligated to pay as a result of such Party's continuing to
pursue such an offer. An Indemnifying Party shall be entitled to recover from
the Party seeking indemnification any additional expenses incurred by such
Indemnifying Party as a result of the decision of the Party seeking
indemnification to pursue such matter.
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8 MISCELLANEOUS.
8.1 Costs. Each party shall bear its own costs associated with this
Agreement, the closing of this Agreement, and all ancillary or related measures,
including without limitation, costs of attorneys fees, accountants fees, filing
fees, or other costs or expenses, without right or recourse from the other.
8.2 Additional Documentation. The parties acknowledge that further
agreements and documents, in addition to the Exhibits appended hereto, may be
required in order to effect the transactions contemplated hereunder. Each party
agrees to provide and execute such other and further agreements or documentation
as, in the opinions of respective counsel, are reasonably necessary to effect
the transactions contemplated hereunder and to maintain regulatory and legal
compliance.
8.3 Captions and Headings. The article and paragraph headings throughout
this Agreement are for convenience and reference only and shall not define,
limit or add to the meaning of any provision of this Agreement.
8.4 No Oral Change. This Agreement and any provision hereof may not be
waived, changed, modified or discharged orally, but only by an agreement in
writing signed by the party against whom enforcement of any such waiver, change,
modification or discharge is sought.
8.5 Non-Waiver. The failure of any party to insist in any one or more cases
upon the performance of any of the provisions, covenants or conditions of this
Agreement or to exercise any option herein contained shall not be construed as a
waiver or relinquishment for the future of any such provisions, covenants or
conditions. No waiver by any party of one breach by another party shall be
construed as a waiver with respect to any subsequent breach.
8.6 Time of Essence. Time is of the essence of this Agreement and of each
and every provision.
8.7 Choice of Law. This Agreement and its application shall be governed by
the laws of the State of Delaware.
8.8 Counterparts and/or Facsimile Signature. This Agreement may be executed
in any number of counterparts, including counterparts transmitted by telecopier
or FAX, any one of which shall constitute an original of this Agreement. When
counterparts of facsimile copies have been executed by all parties, they shall
have the same effect as if the signatures to each counterpart or copy were upon
the same document and copies of such documents shall be deemed valid as
originals. The parties agree that all such signatures may be transferred to a
single document upon the request of any party.
8.9 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been duly given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
Page 9 of 13
<PAGE>
If to Medical, addressed to it at:
Mr. Harry Shuster, President
Medical Monitors, Inc.
1990 Westwood Blvd.
Penthouse
Los Angeles, California 90025
With a copy to:
George G. Chachas, Esq.
Wenthur & Chachas
4180 La Jolla Village Drive
Suite 500
La Jolla, California 92037
If to CyberAir and the Shareholders, to them at:
CyberAir Communications, Inc.
c/o Edwin H. Jones III
33161 Camino Capistrano
Suite A
San Juan Capistrano, CA 92675
8.10 Binding Effect. This Agreement shall inure to and be binding upon the
heirs, executors, personal representatives, successors and assigns of each of
the parties to this Agreement.
8.11 Mutual Cooperation. The parties hereto shall cooperate with each other
to achieve the purpose of this Agreement and shall execute such other and
further documents and take such other and further actions as may be necessary or
convenient to effect the transaction described herein.
8.12 Brokers. The parties hereto represent that no other broker has brought
about this Agreement, and no other finder's fee has been paid or is payable by
either party, except for the broker whose name is set forth on Exhibit 8.12, and
whose fee shall be paid by the Shareholders. Each party hereto shall indemnify
and hold the other harmless against any and all claims, losses, liabilities or
expenses which may be asserted against it as a result of its dealings,
arrangements or agreements with any other broker.
8.13 Survival of Representations and Warranties. The representations,
warranties, covenants and agreements of the parties set forth in this Agreement
or in any instrument, certificate, opinion or other writing provided for herein
shall survive the Closing.
8.14 Facsimile Signatures. It is expressly agreed that the parties may
execute this agreement via facsimile signatures and such facsimile signature
pages shall be treated as originals for all purposes.
Page 10 of 13
<PAGE>
AGREED AND ACCEPTED as of the date first above written.
MEDICAL MONITORS, INC.
A Delaware Corporation
Dated: February 9, 1998 /S/ Harry Shuster
-----------------------
By: Harry Shuster
Its: President and Secretary
CyberAir Communications, Inc.
A Delaware Corporation
Dated: February 4, 1998 /S/ Edwin H. Jones
------------------------
By: Edwin H. Jones III
Its: Chairman
Dated: February 4, 1998 /s/ Robert A. Dietrich
------------------------
By: Robert A. Dietrich
Its: Secretary
SHAREHOLDERS OF CYBERAIR COMMUNICATIONS INC. WHO WILL WARRANT THE
REPRESENTATIONS HEREIN:
- ----------------------------------- ---------------------------------------
- ----------------------------------- ---------------------------------------
- ----------------------------------- ---------------------------------------
- ----------------------------------- ---------------------------------------
- ----------------------------------- ---------------------------------------
Page 11 of 13
<PAGE>
NON-WARRANTING CYBERAIR SHAREHOLDER SIGNATURE PAGE for Agreement Concerning the
Exchange of Stock between Medical Monitors, Inc. and the Shareholders of
CyberAir Communications Inc.
The undersigned shareholders of CyberAir execute this Agreement solely for the
purpose of affirming the following and for no other purpose.
Delivery of CyberAir Stock.
Each CyberAir Shareholder signing hereto hereby agrees to sell, assign,
transfer and deliver and does hereby sell, assign, transfer and deliver to
Medical, and Medical agrees to acquire and accept from each CyberAir
Shareholder, upon the terms and conditions set forth in this Agreement,
complete, absolute and unencumbered right, title and interest in and to the
CyberAir Shares held by each CyberAir Shareholder.
Consideration.
The entire consideration to be paid to CyberAir Shareholders in exchange
for the transfer, assignment and deliver of the CyberAir Shares is common shares
of the authorized but unissued capital stock of Medical as allocated on Schedule
A to each shareholder.
Exchange of Shares.
At the Closing Date as defined in this Agreement, Medical shall deliver to
the CyberAir Shareholders, in accordance with Schedule A, 18,900,000 shares of
the authorized but unissued capital stock of Medical (the "Medical Shares"). The
exchange of shares contemplated by this Agreement is intended to result in a
tax-free reorganization within the meaning of Section 368(a)(1)(B) of the Code.
The CyberAir Shareholders agree to assist Medical in adopting and filing any
documentation necessary to comply with the Code in order to preserve the
tax-free treatment of the within exchange of shares.
Investment Representation.
The Shares being acquired by the CyberAir Shareholders hereunder are being
acquired for investment purposes only and not with a view towards resale or
redistribution and no person or entity has any beneficial interest in such
shares except the CyberAir Shareholders. The Shares being acquired have not been
registered under the Securities Act of 1933 as amended (the "Securities Act")
and CyberAir Shareholders acknowledge and agree that they may not sell, offer,
transfer, hypothecate or convey such shares except pursuant to a registration
statement pursuant to the Securities Act or an exemption therefrom. Such shares
shall be issued with the following legend and shall be subject to a stock
transfer order delivered by the Company to the transfer agent, such legend to be
as follows:
Page 12 of 13
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
FOR THESE SHARES UNDER SUCH ACT OR AN OPINION OF THE COMPANY'S COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
Dated: ------------------- ---------------------------------------
Signature of Non-Warranting
CyberAir Shareholder
Page 13 of 13
<PAGE>
SCHEDULE A
LIST OF CYBERAIR SHAREHOLDERS
Shareholder Number of Number of
Name and Address CyberAir Shares Medical Shares
- ------------------------------------------------------------------------------
** To be supplied prior to Closing.
<PAGE>
EXHIBIT 1.2
INVESTMENT LETTER
Mr. Harry Shuster, President
Medical Monitors, Inc.
1990 Westwood Blvd.
Penthouse
Los Angeles, California 90025
Re: INVESTMENT LETTER
Gentlemen:
The undersigned having acquired by a stock-for-stock exchange a certain
amount of the total 18,900,000 restricted shares of common stock of Medical
Monitors, Inc., a Delaware corporation (the "Company"), par value $.01 per share
(the "Securities"), hereby represents to the Company that:
1. The Securities which are being acquired by the undersigned are being
acquired for the undersigned's own account and for investment and not with a
view to the public resale or distribution thereof.
2. The undersigned will not sell, transfer or otherwise dispose of the
Securities unless, in the opinion of the Company's counsel, such disposition
conforms with applicable securities laws requirements.
3. The undersigned is aware that the Securities are "restricted securities"
as that term is defined in Rule 144 (the "Rule") promulgated under the
Securities Act of 1933, as amended (the "Act").
The undersigned acknowledges that the undersigned has had an opportunity to
ask questions of and receive answers from duly designated representatives of the
Company concerning the finances of the Company and the proposed business plan of
the Company.
The undersigned acknowledges and understands that the Securities are
unregistered and must be held indefinitely unless they are subsequently
registered under the Act or an exemption from such registration is available.
The undersigned further acknowledges that the undersigned is fully aware of
the applicable limitations on the resale of the Securities. These restrictions
for the most part are set forth in Rule 144 (the "Rule"). The Rule permits sales
of "restricted securities" upon compliance with the requirements of such Rule.
If and when the Rule is available to the undersigned, the undersigned may make
only sales of the Securities in accordance with the terms and conditions of the
rule (which may limit the amount of Securities that may be sold).
<PAGE>
MEDICAL MONITORS, INC. Page 2
Investment Letter
- -------------------------------------------------------------------------------
By reason of the undersigned's knowledge and experience in financial and
business matters in general, and investments in particular, the undersigned is
capable of evaluating the merits and risks of an investment by the undersigned
in the Securities.
The undersigned is capable of bearing the economic risks of an investment
in the Securities. The undersigned fully understands the speculative nature of
the Securities and the possibility of loss.
The undersigned's present financial condition is such that the undersigned
is under no present or contemplated future need to dispose of any portion of the
Securities to satisfy any existing or contemplated undertaking, need, or
indebtedness.
Any and all certificates representing the Securities, and any and all
securities issued in replacement thereof or in exchange therefor, shall bear a
restrictive legend.
The undersigned further agrees that the Company shall have the right to
issue stop-transfer instructions to its transfer agent until such time as sale
is permitted under Security Laws and acknowledges that the Company has informed
the undersigned of its intention to issue such instructions.
Very truly yours,
----------------------------------
Undersigned
Date: ---------------------------
----------------------------------
Address
----------------------------------
Social Security Number
<PAGE>
EXHIBIT 2.3
SUBSIDIARIES OF CYBERAIR
NONE
<PAGE>
EXHIBIT 2.4
CYBERAIR OFFICERS AND DIRECTORS
OFFICERS
CEO and President ............................. Edwin H. Jones III
Chief Financial Officer ........................ Robert A. Dietrich
Secretary ...................................... Robert A. Dietrich
DIRECTORS
Edwin H. Jones III - Chairman of the Board
Robert A. Dietrich
Carol S. Lewis
<PAGE>
EXHIBIT 2.5
CYBERAIR
AUDITED FINANCIAL STATEMENTS
AS OF FEBRUARY 28, 1998
** To be Supplied Prior to Closing
<PAGE>
EXHIBIT 2.7
MATERIAL LIABILITIES OF CYBERAIR
NONE
<PAGE>
EXHIBIT 2.11
MATERIAL LITIGATION AND LEGAL PROCEEDINGS OF CYBERAIR
NONE
<PAGE>
EXHIBIT 2.15
EXCEPTIONS TO GOOD TITLE TO ASSETS
NONE
<PAGE>
EXHIBIT 2.16
MATERIAL CONTRACTS OF CYBERAIR
** Previously supplied.
<PAGE>
EXHIBIT 5.2.2.2.
POST CLOSING OFFICERS AND DIRECTORS
OFFICERS
CEO-President .................................. G. Michael Twomey
Chief Financial Officer ........................ Robert A. Dietrich
Secretary ...................................... Robert A. Dietrich
DIRECTORS
Edwin H. Jones III - Chairman of the Board
G. Michael Twomey
Robert A. Dietrich
<PAGE>
EXHIBIT 8.12
BROKERS / FINDERS
WCM INVESTMENTS INC.
<PAGE>
EXHIBIT 2
Amendment to Agreement
Dated March 3, 1998
<PAGE>
AMENDMENT TO AGREEMENT
This Amendment to Agreement (the "Amendment") is effective as of March 3,
1998, and is by and among Medical Monitors, Inc., a Delaware Corporation
("MMI"), CyberAir Communications, Inc., a Delaware Corporation ("CyberAir"), and
the Shareholders of CyberAir (the "Shareholders'), and amends and modifies that
certain Agreement Concerning the Exchange of Stock (the "Acquisition Agreement")
between Medical Monitors, Inc. and the Shareholders of CyberAir Communications,
Inc. dated February 9, 1998, as follows:
1. That recital C of the Acquisition Agreement is hereby amended to read as
follows:
C. Whereas, Shareholders desire to exchange all of the issued and outstanding
common stock of CyberAir for 25,000,000 shares of the common stock of Medical,
all as more fully set forth herein below.
2. That paragraph 1.1 of the Acquisition Agreement is hereby amended to
read as follows:
1.1 Exchange of Shares. Subject to all the terms and conditions of this
Agreement, Medical will deliver to Shareholders of CyberAir 25,000,000 shares of
previously authorized but unissued unregistered shares of the Common Stock, $.01
Par Value of Medical (the "Medical Shares"), in exchange for all of the issued
and outstanding shares of CyberAir owned by the CyberAir Shareholders.
3. That paragraph 6.1 of the Acquisition Agreement is hereby amended and to
read as follows:
6.1 Conditions to Obligations of Shareholders to Close.. The obligations of the
Shareholders to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction of the conditions that the representations and
warranties of Medical shall be true in all material respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing date, that Medical shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with by it on or prior to the Closing Date. In addition,
prior to Closing, Medcial r shall have caused the shareholder loan payable to
Harry Shuster in the amount of $1,000,000 to be converted to 150,000
post-reverse split shares of common stock of Medical. Therefore, after
completion of the acquisition and exchange of stock contemplated herewith there
shall be issued and outstanding a total of 26,100,000 shares of Common Stock.
Page 1 of 2
<PAGE>
4. That the paragraph titled "Exchange of Shares" on page 12 is hereby
amended to read as follows:
Exchange of Shares.
At the Closing Date as defined in this Agreement, Medical shall deliver to the
CyberAir Shareholders, in accordance with Schedule A, 25,000,000 shares of the
authorized but unissued capital stock of Medical (the "Medical Shares"). The
exchange of shares contemplated by this Agreement is intended to result in a
tax-free reorganization within the meaning of Section 368(a)(1)(B) of the Code.
The CyberAir Shareholders agree to assist Medical in adopting and filing any
documentation necessary to comply with the Code in order to preserve the
tax-free treatment of the within exchange of shares.
5. That the first paragraph of Exhibit 1.2 is hereby amended to read as
follows:
The undersigned having acquired by a stock-for-stock exchange a certain amount
of the total 25,000,000 restricted shares of common stock of Medical Monitors,
Inc., a Delaware corporation (the "Company"), par value $.01 per share (the
"Securities"), hereby represents to the Company that:
6. All other terms and conditions not inconsistent with this amendment
shall remain the same. It is expressly agreed that the parties may execute this
agreement via facsimile signature and such facsimile signature pages shall be
treated as originals for all purposes.
ACKNOWLEDGED AND AGREED:
MEDICAL MONITORS, INC.
A Delware Corporation
Dated: March 4, 1998 /s/ Harry Shuster
---------------------------------
By: Harry Shuster
Its: President and Secretary
CYBERAIR COMMUNICATIONS INC.
A Delware Corporation
Dated: March 4, 1998 /s/ Edwin H. Jones
--------------------------------
By: Edwin H. Jones III
Its: President
Dated: March 4, 1998 /s/ Robert A. Dietrich
---------------------------------
By: Robert A. Dietrich
Its: Secretary
Page 2 of 2
