<PAGE>
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
OCTOBER 4, 1996
Date of Report (Date of Earliest Event Reported)
OXFORD CAPITAL CORP.
--------------------
(Exact name of Registrant as specified in its Charter)
NEVADA
------
State or other jurisdiction of Incorporation
2-98747-D 87-0421454
- ---------------------- ----------------------
Commission File Number (IRS Employer
Identification
Number)
4615 SOUTHWEST FREEWAY
SUITE 420
HOUSTON, TEXAS 77027 77027
- ------------------------------- ----------------
(Address of principal executive (Zip Code)
Offices)
Registrant's telephone number, including area code
(713) 622-2527
---------------------
----------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE>
ITEM 1 CHANGES IN CONTROL OF REGISTRANT
As a result of the execution and completion of the Share Exchange Agreement
(the "Agreement") attached hereto as an exhibit, a change of control of the
registrant, Oxford Capital Corp., (the "Company") has occurred. Prior to the
completion of the Agreement the Company had 5,155,392 shares of common stock,
par value $0.001, issued and outstanding. As per the terms of the Agreement, the
current shareholders of Rx Staffing, Inc., ("Rx") and Safety and Fatigue
Consultants International, Inc., ("SFCI") exchanged 100% of their shares of Rx
and SFCI common stock for a total of 27,401,606 shares of authorized but
previously unissued common stock, par value $0.001, of the Company. Thus the
prior shareholders of Rx and SFCI, Jerry Stovall and Rick Tarell, now own
23,293,005 shares and 4,108,601 shares, respectively, or approximately 71.5% and
12.6%, respectively (an aggregate of 84%), of the outstanding shares of the
Company.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
On June 21, 1996, the Company entered into a Share Exchange Agreement with
the shareholders of Rx and SFCI located in Dallas, Texas. This agreement was
modified on August 20, 1996, and was subsequently closed on October 4, 1996.
Under the terms of the Agreement(s) the Company acquired 100% of the issued and
outstanding shares of Rx for 4,108,601 shares of authorized but previously
unissued common stock, par value $0.001, of the Company and 232,930 warrants
with an exercise price of $2.00 and 232,930 warrants with an exercise price of
$3.00. The warrants are exercisable for a period of two years from the date of
the closing. The Company also acquired 100% of the issued and outstanding
shares of SFCI common stock in exchange for 23,293,005 shares of authorized but
previously unissued common stock, par value $0.001, of the Company, and 931,720
warrants with an exercise price of $2.00 and 931,720 warrants with an exercise
price of $3.00. The warrants are exercisable for a period of two years from the
date of the closing. These shareholders now represent a controlling interest in
the Company.
Rx Staffing, Inc. ("Rx") was chartered in December 1995 and acquired a
major portion of its business by contract with Creative Employment Concepts,
Inc. ("CECI"). The purchase was concluded by the issuance of a non-recourse note
from Rx to CECI for $1,068,000. Rx is a leading professional employer
organization ("PEO"), which provides small and medium-sized businesses with an
outsourcing solution to the complexities and costs related to employment and
human resources. The Company's continuum of integrated employment-related
services consists of human resource administration, employment regulatory
compliance management, workers' compensation coverage, health care and other
employee benefits. The Company establishes a co-employer relationship with its
clients and contractually assumes substantial employer responsibilities with
respect to workaday employees. The Company believes its services assist
business owners in: (i) managing escalating costs associated with workers'
compensation, health insurance coverage, workplace safety programs, and
employee-related litigation, (ii) providing employers, and (iii) reducing the
time and effort required by business owners and executives to deal with the
increasingly complex legal and regulatory environment affecting employment. As
of June 30, 1996, the Company provided professional employer services to
approximately 59 client organizations with nearly 1,300 employees, primarily in
Texas.
According to U.S. Small Business Administration, there were approximately
5.1 million businesses in the United States with fewer than 500 employees in
1992. Collectively, these businesses employed an estimated 49 million employees
and represented approximately $1.1 trillion in aggregate annual payroll,
implying a potential market size for PEO services of $1.3 trillion (assuming an
average mark-up of approximately 20%). The PEO industry began to evolve in the
early 1980's largely in response to the burdens placed on small to medium-sized
employers by an increasingly complex legal and regulatory environment. While
various service providers, such as payroll processing firms, benefits and safety
consultants, and temporary services firms are available to assist businesses
with specific tasks, these
2
<PAGE>
organizations do not typically provide a comprehensive range of services
relating to the employer/employee relationship. PEO'S address this market void.
The PEO industry has experienced significant growth in recent years.
Industry sources estimate that gross revenues in the PEO industry grew from $5.0
billion in 1991 to $13.8 billion in 1995, representing a compounded annual
growth rate of approximately 29%. The Company believes that the increasing
willingness of businesses to out source non-core activities and functions, the
low market penetration of the PEO industry , and the growth in the number of
small businesses in the United States has contributed to the growing demand for
PEO services. The PEO industry is highly fragmented, with approximately 1,100
PEO'S in operation in 1995. The Company believes that increasing industry
regulatory complexity and the increasing capital requirements associated with
developing larger service delivery infrastructures and management information
systems should lead to significant consolidation opportunities in the PEO
industry.
The Company intends to further strengthen its position as an industry
leader by: (i) providing employers with comprehensive outsourcing solutions to
their human resource needs, (ii) targeting medium-sized businesses with 20 to
500 employees, (iii) aggressively manage health care and workers' compensation
costs through the development of vertically integrated managed care systems,
(iv) developing proprietary information systems to provide a competitive
advantage in managing costs and delivering a full range of high quality
services, (v) increasing penetration of existing markets by hiring additional
sales personnel and increasing sales productivity, and (vi) acquiring
established, quality PEO'S in selected markets.
SFCI which is a development stage company that has developed a
comprehensive training and consulting program for the transportation industry
with current emphasis being placed in the areas of safety, operations and
fatigue training for both management and over the road staff within trucking
industry. SFCI emphasizes fatigue training and sleep disorder testing for
client companies and their staff and has the support of major associations and
insurance companies involved within the trucking industry. The staff of SFCI
includes Gary Thibodeux (recent recipient of the 1996 National Safety
Professional of the Year Award from the National Private Truck Council) and
Albert Wauquier, PhD., a prominent researcher and academia, a Diplomat of the
American Board of Sleep Medicine and author of 12 books and some 230 published
research articles in Sleep and Neurophysiological research.
The incorporation of SFCI was a result of extensive discussions related to
the comprehensive nature of Mr. Thibodeux's fatigue and safety training,
lifestyle awareness experience, sleep diagnostic techniques with implementation
of all of these factors in the transportation industry and more specifically for
the long haul carrier. Driven from a heightened sense of urgency from both
federal regulators at the US Department of Transportation and private industry
interests represented by entities like the National Private Truck council and
the Canadian Safety Council, fatigue training and sleep disorder were combined
into SFCI. Using he extensive academic and industry research on this issue and
the operational implementation experience of the SFCI development team, SFCI has
developed a pragmatic training and wellness program which the industry can use
to reduce the risk inherent in the trucking and transportation industry.
Response to the preliminary marketing and awareness program provided industry
leaders and regulators has been overwhelming and very supportive of our efforts.
Endorsements have come from every sen of market availability.
Currently there is virtually no competition when compared to what the
market has available to address these issues. No other entity has such a
comprehensive program available and it is not unreasonable to assume that there
will not be any product but SFCI's available for at least one year and probably
two years if a true apples to apples comparison is made. This is due in large
part to practical logistical issues surrounding the human resource and
operational necessities of potential transportation and industrial clients. The
SFCI program was designed with these concerns as paramount so the program can be
implemented without undue cost and disruption to ongoing operations. Another
major reason for the lack
3
<PAGE>
of competition stems from the industry's reluctance to spend R&D funds to find
the "critical path" technology which SFCI has already incurred, analyzed,
adjusted and enhanced. SFCI's development team experience in the complex
implementation of such a program has proven much more difficult and challenging
than he expense which goes with that development process.
SFCI has a four (4) tier marketing segmentation to take this product to the
industry. Utilizing existing training companies and organizations with extensive
driver training experience through consultation contracts already negotiated and
also the consultation and operational audit capabilities of our safety and
engineering staff at SFCI, cost effective risk reduction can be achieved. Tier
ONE is the base training program itself. It consists of instructor manuals and
guide; driver training workbooks, tests and polls; driver handbooks and guides,
a teaching video, certification documentation and sleep disorder analysis
reports for management. This is meant to be a shelf product for the widest
possible distribution and not restricted by the size of the potential client
company, thus allowing for maximum market and industry penetration. Tier ONE is,
by design, meant to satisfy the o have been clamoring for immediate solutions to
this very high profile problem. Tier One will go along way toward satisfaction
of the "good faith effort" requirement regulators have decided the
transportation industry is lacking. This is not because the entities have not
wanted to address the fatigue issue but nothing has been available to them,
until now. Not surprisingly interest in the Tier One product has been soaring
and verbal commitments from many major trucking companies and industrial
applications (particularly the energy and refining industry) has outsold the
first printing run before it has been produced. Tier TWO involves the training
by our staff or our contracted training associates of both instructors and
drivers of interested clients for a fee. Pre scheduled training classes will
allow companies, both large and small, to have their staffs trained to teach the
course or to send their drivers to one of the training sessions we conduct. Thus
we can maximize market penetration even if the company is to small to have human
resource or safety departments of their own. Additionally, many of the manuals,
workbooks and guides have been set up as exhaustible available for repurchase
giving SFCI sales longevity as these clients expand grow.
Tier THREE is full consultation analysis of a given client company where
SFCI goes into a client company (in most cases much larger size) for a daily fee
and do a complete audit of their operations and safety program in order to
recommend changes and adjustments which would be necessary to achieve risk
reduction by taking away many of the inherent and sometimes unknown
disincentives to safety that the client company may be unaware exists. Tier
FOUR is the level where sleep disorder testing, analysis and treatment is
implemented. This is done through mobile testing units which have been designed
to allow for a driver or worker to be identified as having a sleeping disorder,
test that person in a medically sanctioned setting; treat that pe them back to
work in most cases in as little as seventy-two hours. By far the most difficult
and challenging aspect of the SFCI program is this tier of service which excites
the industry. It is through this segment of the SFCI program that can make the
most significant contribution to risk reduction in the industry and also where
SFCI is alone relative to any competition which may exist.
Regulatory issues are currently in process driven by the DOT's need to
address the urgency of accidents caused by fatigue training or lack thereof.
Very soon such training will be mandatory, if one is to be in compliance with
the requirement for a Commercial Drivers License (CDL).The SFCI program will be
at the forefront of this new regulation expected to be enacted sometime in 1997.
SFCI is poised to take advantage of this urgent need and is ready to accept
the challenge of being the industry leader in safety and fatigue training.
ITEM 5 OTHER EVENTS
In connection with the Agreement discussed in the above paragraph, $757,751
of accounts payable at June 30, 1996, of which $685,630 is the amount due to a
company owned by the president of the Company, will be converted into 757,751
warrants with an exercise price of $.5312 at the date of closing.
4
<PAGE>
The warrants may be exercised at any time prior to the second anniversary of the
issuance. The shares to be issued under these warrants have registration rights
which shall be made available to the holders upon the next registration of the
Company's common stock.
In 1994, by means of a Private Placement, the Company sold 3 of its Units
for $50,000 per Unit, or an aggregate of $150,000. Each Unit consisted of a
$50,000 12% note, due April 1, 1995, 50,000 shares of the common stock, and
25,000 warrants to purchase a like number of shares of common stock at $2.00 per
share, exercisable at any time up to two years from the date of issue. The
repayment of the notes, including accrued interest, has been extended to
December 31, 1995. In consideration for the extension, the note holders received
36,000 shares of the Company's common stock and the warrants were extended to
December 31, 1996.
On August 14, 1996, the Company completed negotiations with the note
holders to convert their notes payable, including accrued interest, into 357,453
shares of the Company's common stock, with an effective date of June 30, 1996.
The conversion rate is one share of the Company's common stock for each $.5312
of debt ($.5312 is the closing price of the Company's common stock on June 21,
1996). Also, the existing warrants will be canceled and new warrants in the
same amount will be issued at a price of $.5312, which may then be exchanged for
new common stock shares until June 30, 1998.
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
Audited Financial Statements of Rx Staffing, Corp.
Audited Financial Statements of Safety and Fatigue Consultants
International, Inc.
(b) Pro forma financial information
(c) Exhibits
(1) Stock Exchange Agreement between Oxford Capital Corp., and
Rx Staffing Inc.
(2) Stock Exchange Agreement between Oxford Capital Corp., and
Safety and Fatigue Consultants International, Inc.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, herein onto duly authorize.
OXFORD CAPITAL CORP.
Date: October 4, 1996 By: /s/ Robert Cheney
------------------------------
President
5
<PAGE>
[Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
and Shareholders of Rx Staffing Corp.
We have audited the accompanying balance sheet of Rx Staffing Corp. as of June
30, 1996, and the related statements of operations, stockholders' equity and
cash flows for the six months ended June 30, 1996. 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.
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 aspects, the financial position of Rx Staffing Corp. as of June 30,
1996, and the results of its operations and its cash flows for the six months
ended June 30, 1996, in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 8 to the
financial statements, the Company has suffered recurring losses from operations
and has a net working capital deficiency which raise substantial doubt about its
ability to continue as a going concern. Management's plans regarding those
matters also are described in Note 8. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ CHESHIER & FULLER, L.L.P.
CHESHIER & FULLER, L.L.P.
Dallas, TX
September 6, 1996
<PAGE>
RX STAFFING CORP.
BALANCE SHEET
JUNE 30, 1996
ASSETS
CURRENT ASSETS
Cash $ 2,911
Accrued payroll receivable 348,128
Accounts receivable - clients 64,087
----------
Total current assets 415,126
FURNITURE AND EQUIPMENT, net of
accumulated depreciation of $2,100 18,900
OTHER ASSETS
Goodwill, net of accumulated
amortization of $17,088 495,562
Covenant Not to Compete, net of
accumulated amortization of $60,000 540,000
Accounts receivable - affiliates 27,000
----------
TOTAL ASSETS $1,496,588
----------
----------
The accompanying notes are an integral part of these financial statments.
Page 2
<PAGE>
RX STAFFING CORP.
BALANCE SHEET
JUNE 30, 1996
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft $ 383,598
Accrued payroll payable 237,375
Accounts payable and accrued expenses 39,913
Accounts payable - John Eckeberger 139,064
Payroll taxes payable 169,553
Current portion of obligation payable 18,175
----------
Total current liabilities 987,678
LONG TERM OBLIGATION PAYABLE 508,520
----------
TOTAL LIABILITIES 1,496,198
----------
Common stock, $1 par value, 100,000 shares
authorized, 1,000 shares issued and outstanding 1,000
Additional paid-in capital 99,000
Retained earnings (deficit) (99,610)
----------
TOTAL STOCKHOLDERS' EQUITY 390
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,496,588
----------
----------
The accompanying notes are an integral part of these financial statments.
Page 3
<PAGE>
RX STAFFING CORP.
INCOME STATEMENT
FOR THE SIX MONTHS ENDED JUNE 30,1996
Sales $10,214,400
Cost of Sales 9,657,884
-----------
Gross profit 556,516
Operating expenses
Sales and marketing expenses 99,679
General and administrative expenses 524,635
-----------
624,314
-----------
Income (loss) from operations (67,798)
Other income and expenses
Interest expense 31,812
-----------
Net income (loss) before income taxes (99,610)
Provision for income taxes (benefit) -0-
-----------
NET INCOME (LOSS) $ (99,610)
-----------
-----------
The accompanying notes are an integral part of these financial statments.
Page 4
<PAGE>
RX STAFFING CORP.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Additional Retained
Common Paid-In Earnings
Stock Capital (Deficit) Total
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Balance, January 1, 1996 $ -0- $ -0- $ -0- $ -0-
Issuance of common stock
(1,000 shares) 1,000 99,000 -0- 100,000
Net income (loss) -0- -0- (99,610) (99,610)
---------- ---------- ---------- ----------
Balance, June 30, 1996 $ 1,000 $ 99,000 $ (99,610) $ 390
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>
The accompanying notes are an integral part of these financial statments.
Page 5
<PAGE>
RX STAFFING CORP.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30,1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (99,610)
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 77,088
Depreciation 2,100
Changes in Operating assets and liabilities:
Increase in accounts receivable and accrued receivables (439,215)
Increase in cash overdraft 383,598
Increase in accounts payable and accrued expenses 485,218
----------
Net cash provided (used) by operating activities 409,179
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of covenant not to compete (499,313)
----------
Net cash provided (used)by investing activities (499,313)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock 100,000
Reduction of obligation payable (6,955)
----------
Net cash provided (used) by financing activities 93,045
----------
Net increase (decrease) in cash 2,911
Cash at beginning of period -0-
----------
Cash at end of period $ 2,911
----------
----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during year for interest $ 26,545
----------
----------
Cash paid during year for income taxes $ -0-
----------
----------
On January 1, 1996, the Company incurred long term debt of $533,650 in acquiring
goodwill of $512,650 and furniture and equipment of $21,000.
The accompanying notes are an integral part of these financial statments.
Page 6
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1 - SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Rx Staffing Corp. (the "Company") was organized during December, 1995,
under the laws of the state of Texas. The Company is engaged in
providing employee leasing services primarily in the state of Texas.
Effective January 1, 1996, the Company entered into an agreement with
Creative Employment Concepts, Inc. ("CECI") to acquire all the
employee leasing contracts and furniture and equipment in the
possession of CECI as of that date for payments of $6,700 per month
until $1,068,000 is paid (discounted to $533,650 as explained in Note
3). Effective January 1, 1996, the Company also entered into an
agreement with John T. Eckeberger, a stockholder of CECI, whereby, for
$600,000, Mr. Eckeberger agreed not to compete with the Company for a
period of five years. The final major costs of the January 1, 1996,
acquisition were as follows:
Furniture and Equipment $ 21,000
Goodwill 512,650
Covenant Not To Compete 600,000
------------
Total Cost $ 1,133,650
------------
------------
The above costs were financed as follows:
Paid to Mr. Eckeberger out of cash flow
through June 30, 1996. $ 499,313
Payable to Mr. Eckeberger out of cash flow
after June 30, 1996. 100,687
Assumption of long-term debt payable to CECI. 533,650
------------
Total Cost $ 1,133,650
------------
------------
Page 7
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1 - SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
FURNITURE AND EQUIPMENT
Furniture and equipment are recorded at cost. Maintenance and repairs
are charged to expense as incurred. When assets are sold or retired,
the related cost and any accumulated depreciation are removed from the
accounts and any gain or loss is included in income. Significant
additions and betterments are capitalized.
Depreciation is computed using the straight line method over the
estimated useful lives of the assets of five years.
GOODWILL
The cost of goodwill is being expensed using the straight-line method
over fifteen years.
COVENANT NOT TO COMPETE
The cost of the covenant not to compete is being expensed using the
straight-line method over five years.
REVENUE RECOGNITION
The company reflects revenue and the related payroll costs as the
payroll accrues. Management estimated the allowance for bad debts as
of June 30, 1996, to be negligible.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between accrued
liabilities for financial and income tax reporting. Deferred taxes
represent future tax return consequences of those differences, which
will either be taxable or deductible when the assets or liabilities
are recovered or settled.
Page 8
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1 - SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ
from those estimates.
Note 2 - CONCENTRATION OF CREDIT RISK
The Company maintains cash balances in excess of the $100,000 amount
guaranteed by the Federal Depository Insurance Corporation.
Note 3 - LONG TERM DEBT
Long term debt as of June 30, 1996, consist of a non-interest bearing
obligation payable to CECI as consideration for the acquisition
explained in Note 1. The note is payable $6,700 monthly until
$1,068,000 is paid. The non-interest obligation was discounted at 12%
per annum and reflected in the initial amount of $533,650.
The following are maturities of the note at June 30, 1996, using the
12% per annum discount.
Year Ending June 30,
--------------------
1997 $ 18,175
1998 20,480
1999 23,077
2000 26,004
2001 29,302
Thereafter 409,657
----------
$ 526,695
----------
----------
Page 9
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 4 - INCOME TAXES
During the six months ended June 30, 1996, the Company incurred a net
operating loss which can be carried forward to offset future taxable
income. This loss carry forward expires in fifteen years. The major
book and tax difference was as follows:
Net loss per financial statement $ (99,610)
Differences in amortization of
covenant not to compete 40,000
----------
Net taxable loss available to offset
future taxable income $ (59,610)
----------
----------
The deferred tax benefit associated with the $99,610 net operating
loss is comprised of the following:
Deferred tax asset $ 39,844
Deferred tax valuation allowance (39,844)
----------
Net deferred tax asset $ -0-
----------
----------
Income tax benefit computed on net loss
carryforward at estimated statutory rates $ 23,844
Income taxes computed on income tax deferral
of amortization of covenant not to compete at
estimated statutory rates 16,000
----------
Income tax benefit of net loss at estimated
statutory rates 39,844
Increase in tax valuation allowance (39,844)
----------
Provision for income taxes (benefit) $ -0-
----------
----------
Page 10
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 5 - CONTINGENCIES
CECI sold substantively all of its assets to the Company in the
transaction explained in Note 1. John T. Eckeberger also entered into
a covenant not to compete agreement with the Company as explained in
Note 1. At the time these agreements were executed, CECI and Mr.
Eckeberger had significant tax liabilities. There is a risk that
this transfer could be challenged by the Internal Revenue Service.
Management of the Company believes that the consideration given
represents fair value for the assets and other consideration received.
The Company's sole shareholder has agreed to escrow the shares of
Oxford stock received in the pending merger explained in Note 7 for a
period of three years from the closing of the merger. In the event
the transactions explained in Note 7 is voided then the shares shall
revert back to Oxford. No provision has been made in the financial
statements for this contingency.
Note 6 - THREATENED AND PENDING LITIGATION
In the normal course of business, there are various outstanding
contingent liabilities associated with employee claims. Management
has reviewed pending and threatened litigation with legal counsel and
believes that those actions are without merit or that the ultimate
liability, if any, resulting from them will not materially affect the
company's financial position.
Note 7 - PENDING MERGER
Effective June 21, 1996, and amended August 20, 1996, the Company
entered into an exchange agreement with Oxford Capital Corp.
("Oxford"). Under that agreement, Oxford is to issue 4,108,601 new
shares and 465,840 warrants of Oxford to the sole stockholder of the
Company in exchange for 100% of the issued and outstanding shares of
the Company.
Effective June 21, 1996, and amended August 20, 1996, Safety and
Fatigue Consultants International ("SFCI"), an affiliate, entered into
a parallel exchange agreement with Oxford. Under that agreement,
Oxford is to issue 23,293,005 new shares and 1,863,440 warrants of
Oxford to the sole stockholder of the Company in exchange for 100% of
the issued and outstanding shares of SFCI.
As of September 6, 1996, the merger transactions have been completed
subject to the release of the audited financial statements of the
Company and SFCI.
Page 11
<PAGE>
RX STAFFING CORP.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 7 - PENDING MERGER, CONTINUED
As of June 30, 1996, Oxford's audited financial statements reflected
that current liabilities exceeded current assets by approximately
$1,012,000. On August 29, 1996, the Board of Directors of Oxford
approved conversion of accounts payable in the amount of $757,751 into
warrants to purchase 1,426,490 shares of Oxford common stock and to
conversion of note payable debt of $189,779 into 357,286 shares of
newly issued common stock of Oxford.
Note 8 - GOING CONCERN
As of June 30, 1996, the Company's current liabilities exceeded its
current assets by approximately $573,000. This factor, as well as the
Company's lack of profitability, create an uncertainty about the
Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. Management is
in the process of reorganizing its management structure and
negotiating agreements with affiliates to reduce operating expenses.
The pending merger explained in Note 7 will allow the Company to
diligently seek new capital from a broader range of sources. The
Company's continued existence is dependent upon its ability to
generate sufficient cash flows and capital to meet its regulatory and
operating needs.
Page 12
<PAGE>
[Letterhead]
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
and Shareholders of Safety & Fatigue Consultants International, Inc.
We have audited the accompanying balance sheet of Safety & Fatigue Consultants
International, Inc. (a development stage company) as of June 30, 1996, and the
related statements of operations, stockholder's equity and cash flows for the
four months ended June 30, 1996. 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.
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 aspects, the financial position of Safety & Fatigue Consultants
International, Inc. (a development stage company) as of June 30, 1996, and the
results of its operations and its cash flows for the four months ended June 30,
1996, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 6 to the
financial statements, the Company has suffered a loss from operations and has a
net working capital deficiency which raise substantial doubt about its ability
to continue as a going concern. Management's plans regarding those matters also
are described in Note 6. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ CHESHIER & FULLER, L.L.P.
CHESHIER & FULLER, L.L.P.
Dallas, Texas
September 6, 1996
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF FINANCIAL POSITION
JUNE 30, 1996
CURRENT ASSETS
Cash $ 52
Accounts receivable 2,747
--------
Total current assets 2,799
FURNITURE AND EQUIPMENT, net of
accumulated depreciation of $ 146 2,118
--------
TOTAL ASSETS $ 4,917
--------
--------
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES
Accounts payable $ 10,030
Accounts payable - affiliates 45,422
--------
Total current liabilities 55,452
--------
Total liabilities 55,452
STOCKHOLDER'S EQUITY
Common Stock, par value $ 1.00 per share;
authorized 100,000 shares; issued and
outstanding 1,000 shares 1,000
Subscription receivable (1,000)
Deficit accumulated during
the development stage (50,535)
--------
Total stockholder's equity (50,535)
--------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 4,917
--------
--------
The accompanying notes are an integral part of these financial statements.
Page 2
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE FOUR MONTHS ENDED JUNE 30, 1996
REVENUES
Consulting revenue $ 2,747
--------
EXPENSES
Advertising 192
Automobile 1,517
Business promotion 3,485
Consulting fees 12,885
Dues and Subscriptions 440
Depreciation 146
Insurance 228
Legal and professional 414
Meals 433
Research and development 20,476
Supplies 488
Travel 12,254
Other 325
--------
53,283
--------
Net income (loss) before income taxes (50,536)
Provision for income taxes - 0 -
--------
NET INCOME (LOSS) $(50,536)
--------
--------
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
FOR THE FOUR MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
Deficit
accumulated
during the
Common Subscription development
Stock receivable stage Total
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Balance, March 1, 1996 $ -0- $ -0- $ -0- $ -0-
Issuance of common stock
(1,000 shares) 1,000 (1,000) -0- -0-
Net income (loss) -0- -0- (50,536) (50,536)
------------ ------------ ------------ ------------
Balance, June 30, 1996 $ 1,000 $ (1,000) $ (50,536) $ (50,536)
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE FOUR MONTHS ENDED JUNE 30, 1996
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (50,536)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 146
Changes in operating assets and liabilities:
Increase in accounts receivable (2,747)
Increase in accounts payable 10,030
Increase in accounts payable - affiliates 45,422
----------
Net cash provided (used) by operating activities 2,315
----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment (2,263)
----------
Net cash provided (used)by investing activities (2,263)
----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash provided (used) by financing activities - 0-
----------
Net increase (decrease) in cash 52
Cash at beginning of period -0-
----------
Cash at end of period $ 52
----------
----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during year for interest $ -0-
----------
----------
Cash paid during year for income taxes $ -0-
----------
----------
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1 - SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND OPERATIONS
Safety & Fatigue Consultants International, Inc. (the "Company") was
organized during March, 1996, under the laws of the state of Texas.
The Company is engaged in providing consultation services and training
materials on safety and fatigue of truck drivers.
The Company's organization costs and various expenses necessary to
initiate the operation were financed through GJT Investments and Rx
Staffing. These transactions are properly recorded as accounts
payable to affiliates.
ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could
differ from estimates.
FURNITURE AND EQUIPMENT
Furniture and equipment are recorded at cost. Maintenance and repairs
are charged to expense as incurred. When assets are sold or retired,
the related cost and any accumulated depreciation are removed from the
accounts and any gain or loss is included in income. Significant
additions and betterments are capitalized.
DEPRECIATION
Depreciation is computed using the straight line method over the
estimated useful lives of the assets.
Page 6
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 1 - SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes. Deferred taxes represent future tax return
consequences of those differences, which will either be taxable or
deductible when the assets or liabilities are recovered or settled.
SUBSCRIPTION RECEIVABLE
As of June 30, 1996, the legal minimum capital of $1,000 had not been
contributed. The offsetting receivable is on an open account which
has been reflected as a reduction of stockholder's equity.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The carrying values of financial instruments reported on the Company's
statement of financial position approximate fair value.
Note 2 - DEVELOPMENT STAGE OPERATION
Operations as of June 30, 1996 were devoted primarily to raising
capital, research and development. Through that date, the Company was
operating as a development stage company.
Note 3 - INCOME TAXES
During the four months ended June 30, 1996, the Company incurred a net
operating loss which can be carried forward to offset future taxable
income. This loss carry forward expires in fifteen years. The major
book and tax difference was as follows:
Net loss per financial statement $ (50,536)
Book and tax differences -0-
----------
Net taxable loss available to offset
future taxable income $ (50,536)
----------
----------
Page 7
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 3- INCOME TAXES, CONTINUED
The deferred tax benefit associated with the $50,536 net operating
loss is comprised of the following:
Deferred tax asset $ 20,214
Deferred tax valuation allowance (20,214)
----------
Net deferred tax asset $ -0-
----------
----------
Income tax benefit of net loss at estimated
statutory rates $ 20,214
Increase in tax valuation allowance (20,214)
----------
Provision for income taxes $ -0-
----------
----------
Note 5 - PENDING MERGER
Effective June 21, 1996, and amended August 20, 1996, the Company
entered into an exchange agreement with Oxford Capital Corp.
("Oxford"). Under that agreement, Oxford is to issue 23,293,005 new
shares and 1,863,440 warrants of Oxford to the sole stockholder of the
Company in exchange for 100% of the issued and outstanding shares of
the Company.
Effective June 21, 1996, and amended August 20, 1996, Rx Staffing
Corp. ("Rx"), an affiliate, entered into a parallel exchange agreement
with Oxford. Under that agreement, Oxford is to issue 4,108,601 new
shares and 465,840 warrants of Oxford to the sole stockholder of the
Company in exchange for 100% of the issued and outstanding shares of
Rx.
As of June 30, 1996, Oxford's audited financial statements reflected
that current liabilities exceeded current assets by approximately
$1,012,000. On August 29, 1996, the Board of Directors of Oxford
approved conversion of accounts payable in the amount of $757,751 into
warrants to purchase 1,426,490 shares of Oxford common stock and to
conversion of note payable debt of $189,779 into 357,286 shares of
newly issued common stock of Oxford.
Page 8
<PAGE>
SAFETY & FATIGUE CONSULTANTS INTERNATIONAL, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
Note 6 - GOING CONCERN
As of June 30, 1996, the Company's current liabilities exceeded its
current assets by approximately $52,653. This factor, as well as the
Company's lack of profitability, create an uncertainty about the
Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might be necessary if
the Company is unable to continue as a going concern. Management is
in the process of negotiating agreements with prospective customer,
which they anticipate will create substantial revenues. The pending
merger explained in Note 5 will allow the Company to diligently seek
new capital from a broader range of sources. The Company's continued
existence is dependent upon its ability to generate sufficient cash
flows and capital to meet its regulatory and operating needs.
Page 9
<PAGE>
OXFORD CAPITAL CORP.
PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information
reflects (i) the acquisition of Rx Staffing Corp. ("Rx Staffing") by Oxford
Capital Corp. ("Oxford") for 4,108,601 shares of common stock, 232,930 warrants
exercisable at $2.00 per share and 232,930 warrants exercisable at $3.00 per
share, (ii) the acquisition of Safety & Fatigue Consultants International, Inc.
("S&FCI") by Oxford for 23,293,005 shares of common stock, 931,720 warrants
exercisable at $2.00 per share and 931,720 warrants exercisable at $3.00 per
share, (iii) the conversion of $757,751 of accounts payable into warrants
exercisable at $.5312 per share, and (iv) the conversion of notes payable in the
amount of $150,000 plus accrued interest into 357,453 shares of common stock.
The historical information of Oxford, Rx Staffing and S&FCI as of June 30,
1996 have been derived from the respective companies financial statements
included elsewhere herein. The pro forma financial information should be read
in conjunction with the accompanying notes thereto and with the financial
statements of Oxford, Rx Staffing and S&FCI.
Pro forma statements of operations have been omitted as Oxford had no
operations during the period, other than its efforts to identify and acquire an
operating business, and pro forma operating results would have been
substantially identical to the combined operating results of Rx Staffing and
S&FCI.
The pro forma condensed combined financial information does not purport to
be indicative of the financial position which would have existed had the
acquisitions been consummated as of the date indicated and should not be
construed as representative of future financial position. In management's
opinion, all adjustments necessary to reflect the effects of the acquisition
have been made.
<PAGE>
OXFORD CAPITAL CORP.
PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Rx Staffing S&FCI Oxford Adjustments Pro Forma
----------- ----- ------ ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash $ 3 $ - $ 1 $ 4
Accounts receivable 64 3 - 67
Accrued payroll receivable 348 - - 348
------- ------- ------- ------- -------
Total current assets 415 3 1 419
Fixed assets, net 19 2 - 21
Other assets 1,063 - - 1,063
------- ------- ------- ------- -------
Total assets $ 1,497 $ 5 $ 1 $ $ 1,503
------- ------- ------- ------- -------
------- ------- ------- ------- -------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank overdraft $ 384 - - 384
Accounts payable and
accrued expenses 586 55 823 ( 758)(a) 706
Loans payable - - 190 ( 190)(b) -
Current portion of long
term debt 18 - - 18
------- ------- ------- ------- -------
Total current
liabilities 988 55 1,013 ( 948) 1,108
Long term debt 509 - - 509
Shareholders' Equity:
Common Stock 1 1 5 1 (b) 33
25 (c)
Additional paid in capital 99 - 350 758 (a) 4
189 (b)
( 1,392)(c)
Subscription receivable - ( 1) - ( 1)
Accumulated deficit (99) (51) ( 1,367) 1,367 (c) (150)
------- ------- ------- ------- -------
1 (51) ( 1,012) 948 (114)
------- ------- ------- ------- -------
Total shareholders'
equity and liabilities $ 1,497 $ 5 $ 1 $ $ 1,503
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
<PAGE>
OXFORD CAPITAL CORP.
NOTES TO PRO FORMA CONDENSED COMBINED BALANCE SHEET
JUNE 30, 1996
1. The pro forma condensed combined balance sheet of Oxford Capital Corp.
reflects the acquisition of Rx Staffing and S&FCI by Oxford as if said
acquisition had occurred as of June 30, 1996. Such acquisitions involved
the issuance of approximately 27.4 million shares of Oxford common stock,
representing approximately 84% of the post-acquisition outstanding shares
of Oxford, in exchange (the "Exchange") for 100% of the outstanding stock
of Rx Staffing and S&FCI. The Exchange will be accounted for as a purchase
with Oxford considered the acquired company.
2 The pro forma balance sheet information reflects the combination of the
assets, liabilities and shareholders equity of Oxford, Rx Staffing and
S&FCI and adjustments for the following items:
(a) Accounts payable and accrued expenses $ 758
Additional paid-in capital $ 758
Adjustment to reflect conversion of certain accounts payable and
accrued expenses of Oxford into warrants of Oxford
(b) Notes payable $ 190
Common stock $ 1
Additional paid in capital $ 189
Adjustment to reflect conversion of notes payable in the amount of
$150,000 plus accrued interest totaling $39,879 into 357,453 shares of
common stock of Oxford
(c) Additional paid in capital $ 1,392
Accumulated deficit $ 1,367
Common stock $ 25
Adjustment to record the issuance of 4,108,601 shares of Oxford common
stock to the stockholders of Rx Staffing and 23,293,005 shares of
Oxford common stock to the stockholders of S&FCI upon the Exchange and
the elimination of Oxford's accumulated deficit
<PAGE>
EXCHANGE AGREEMENT
Between
OXFORD CAPITAL CORP.
Rx STAFFING, INC.
And
THE SHAREHOLDER
Dated August 20, 1996
Rx August 20, 1996
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
ARTICLES PAGE
- -------- ----
ARTICLE 1 REPRESENTATIONS, COVENANTS, AND WARRANTIES OF Rx STAFFING ,INC.
Sections
--------
1.01 Organization 1
1.02 Capitalization 2
1.03 Subsidiaries and Predecessor Corporation 2
1.04 Financial Statements 2
1.05 Information 3
1.06 Options and Warrants 3
1.07 Absence of Certain Changes or Events 3
1.08 Title and Related Matters 5
1.09 Litigation and Proceeding 5
1.10 Contracts 5
1.11 Material Contracts Default 6
1.12 No Conflict With Other Instruments 6
1.13 Governmental Authorizations 6
1.14 Compliance With Laws and Regulations 7
1.15 Approval of Agreement 7
1.16 Material Transactions of Affiliations 7
1.17 Labor Relations 7
1.18 Safety and Fatigue Consultants International.,
Schedules 7
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE SHAREHOLDERS
2.01 Ownership of Rx Staffing, Inc., shares. 9
ARTICLE III REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OXFORD
Sections
--------
3.01 Organization 10
3.02 Capitalization 10
3.03 Subsidiaries 10
3.04 Financial Statements 10
3.05 Information 12
3.06 Options and Warrants 12
3.07 Absence of Certain Changes or Events 12
3.08 Title and Related Matters 13
3.09 Litigation and Proceedings 13
3.10 Contracts 14
3.11 No Conflict With Other Instruments 14
3.12 Governmental Authorities 14
<PAGE>
ARTICLES PAGE
- -------- ----
3.13 Compliance With Laws and Regulations 14
3.14 Insurance 14
3.15 Approval of Agreement 14
3.16 Continuity of Business Enterprises 14
3.17 Material Transactions or Affiliations 15
3.18 Employment Matters 15
3.19 Oxford Schedules 15
ARTICLE IV PLAN OF EXCHANGE
Sections
--------
4.01 The Exchange 16
4.02 Anti-Dilution 17
4.03 Appointment of New Directors 17
4.04 Closing 17
4.05 Closing Events 17
4.06 Termination 17
ARTICLE V SPECIAL COVENANTS
Sections
--------
5.01 Stockholder Meeting of Oxford 19
5.02 Access to Properties and Records 19
5.03 Delivery of Books and Records 19
5.04 Special Covenants and Representations
Regarding the Exchanged Oxford Stock 19
5.05 Third Party Consents and Certificates 20
5.06 Actions Prior to Closing 20
5.07 Sales Under Rules 144 or 145, If Applicable 21
5.08 Indemnification 22
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF OXFORD
Sections
--------
6.01 Accuracy of Representations 22
6.02 Officer's Certificates 22
6.03 No Material Adverse Change 23
6.04 Good Standing 23
6.05 Officer and Director Questionnaires 23
6.06 Other Items 23
<PAGE>
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF RX STAFFING, INC.
Sections
--------
7.01 Accuracy of Representation 24
7.02 Stockholder Approval 24
7.03 Officer's Certificate 24
7.04 No Material Adverse Change 24
7.05 Good Standing 24
7.06 No Action by SEC 24
7.07 Other Items 25
ARTICLE VIII MISCELLANEOUS
Sections
--------
8.01 Brokers 25
8.02 Governing Law 25
8.03 Notices 25
8.04 Attorney's Fees 27
8.05 Confidentiality 27
8.06 Schedules, Knowledge 27
8.07 Third Party Beneficiaries 27
8.08 Entire Agreement 27
8.09 Survival; Termination 27
8.10 Counterparts 28
8.11 Amendment or Waiver 28
EXHIBITS
Exhibit "A"
Letter of Representation
Oxford Schedules
Rx Staffing, Inc. Schedules
<PAGE>
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as the "Agreement"), is
entered into as of this 21 St. day of June, 1996, by and among Oxford Capital
Corp., a Nevada corporation (hereinafter referred to as "Oxford"); Rx Staffing,
Inc., a corporation organized under the laws of the State of Texas (hereinafter
referred to as the "Rx"), and RICK TARELL, (hereinafter referred to as
"Shareholder") upon the following premises:
PREMISES
This Agreement provides for the acquisition by Oxford of 100% of the issued
and outstanding shares of Rx solely in exchange for 4,108,601 shares of Oxford
common stock and 232,930 Warrants with an exercise price of $2.00 and 232,930
Warrants with an exercise price of $3.00 ("Warrants"), on the terms and
conditions hereinafter provided, all for the purpose of effecting a so-called
"tax-free" reorganization pursuant to Sections 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived hear from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF Rx
As an inducement to, and to obtain the reliance of Oxford, Rx represents
and warrants as follows:
Section 1.01 ORGANIZATION. Rx is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Texas and
has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it required qualification except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the Rx Schedules (as hereinafter defined) are
1
<PAGE>
complete and correct copies of the Articles of Incorporation, as amended, of Rx
as in effect on the date hereof. The execution and delivery of this Agreement
does not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Rx's articles of incorporation or bylaws. Rx has taken
all actions required by law, Articles of Incorporation and By-Laws or otherwise
to authorize the execution and delivery of this Agreement. Rx has full power,
authority, and legal right and has taken all action required by law, its
memorandum and articles of association, and otherwise to consummate the
transactions herein contemplated.
Section 1.02 CAPITALIZATION. The authorized and issued share
capital of Rx Staffing Corp., is $1,000 divided into 1,000 Ordinary Shares.
All issued and outstanding shares of Rx are legally issued, fully paid, and non-
assessable and not issued in violation of the pre-emptive or other rights of any
person.
Section 1.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Rx does not
have any subsidiaries and does not own, beneficially or of record, any shares of
any other corporation, except as disclosed in Schedule 1.03. For purposes
hereinafter, Rx also includes those subsidiaries set forth on Schedule 1.03.
Section 1.04 FINANCIAL STATEMENTS.
(a) Included in the Rx Schedules is the audited consolidated balance
sheet of Rx and its subsidiaries at June 30, 1996, and the related audited
consolidated statements of profit and loss account and consolidated
statement of cash flows since inception, together with notes to such
statements and the opinion of Cheshire and Fuller, L.L.P., with respect
thereto.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles generally accepted and
conforming to United States GAAP. The Rx balance sheet presents a true
and fair view as of its date of the financial condition of Rx. Rx did not
have, as of the date of such balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or
the notes thereto, prepared in accordance with accounting principles
generally accepted in the United States, and all assets reflected therein
are properly reported and present fairly the value of the assets of Rx in
accordance with accounting principles generally accepted in the United
States. The statements of consolidated profit and loss account and
consolidated statement of cash flow reflect fairly the information required
to be set forth therein to United States GAAP.
(c) Rx has filed all income and/or franchise tax returns required to
be filed by it from inception to the date hereof. Included in the Rx
Schedules are
2
<PAGE>
true and correct copies of the income tax returns of Rx filed for the prior
three years. None of such income tax returns have been examined by the
appropriate tax authorities. Each of such income tax returns reflects the
taxes due for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(d) Rx does not owe any unpaid taxes (including any deficiencies,
interest, or penalties) through July 31, 1996, for which Rx may be liable
in its own right or as a transferee of the assets of, or as a successor to,
any other corporation or entity. Furthermore, except as accruing in the
normal course of business, Rx does not owe any accrued and unpaid taxes to
the date of this Agreement.
(e) The books and records, financial and otherwise, of Rx are in all
material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) Rx has good and marketable title to its assets and, except as set
forth in the Rx Schedules or the financial statements of Rx or the notes
thereto, has no material contingent liabilities, direct or indirect,
matured or unmatured.
Section 1.05 INFORMATION. The information concerning Rx set forth in
this Agreement and in the Rx Schedules is complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 1.06 OPTIONS OR WARRANTS. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued Rx common stock, except options, warrants, calls or commitments, if
any, to which Rx is not a party and by which it is not bound.
Section 1.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement or the Rx Schedules, since July 31, 1996:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or financial condition of Rx; or
(ii) any damage, destruction, or loss to Rx (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or financial condition of Rx.
(b) Rx has not (i) amended its Memorandum or Articles of
3
<PAGE>
Association; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of Rx;
(iv) made any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or (viii) made any increase in
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or which its officers, directors, or employees;
(c) Rx has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course
of business; (ii) paid or agreed to pay any material obligations or
liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent Rx balance sheet, and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the preparation
of this agreement and the consummation of the transactions contemplated
hereby; (iii) sold or transferred, or agreed to sell or transfer, any of
its assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, is the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value of less than $1,000);
(iv) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business or Rx; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued
or held as treasury stock); and
(d) to the knowledge of Rx, Rx has not become subject to any law or
regulation which materially and adversely affects, or in the future may
adversely affect the business, operations, properties, assets, or financial
condition of Rx.
Section 1.08 TITLE AND RELATED MATTERS. Rx has good and marketable
title to all of its properties, inventory, interests in properties, and assets,
real and personal, which are reflected in the most recent Rx balance sheet or
acquired after
4
<PAGE>
that date (except properties, interests in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business) free
and clear of all liens, pledges, charges, or encumbrances except (a) retention
of title rights and statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and -C- as described in the Rx Schedules. Except
as set forth in the Rx Schedules, Rx owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products it is currently manufacturing, including
the underlying technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management, or other information utilized in
connection with Rx business. Except as set forth in the Rx Schedules, no third
party has any right to, and Rx has not received any notice of infringement of or
conflict with asserted rights of others with respect to any product, technology,
data, trade secrets, know-how, propriety techniques, trademarks, service marks,
trade names, or copyrights which, singly or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a materially adverse
affect on the business, operations, financial condition, income, or business
prospects or Rx or any material portion of its properties, assets, or rights.
Section 1.09 LITIGATION AND PROCEEDINGS. Except as set forth in the Rx
Schedules, there are no actions, suits, proceedings, or investigations pending
or, to the knowledge of Rx after reasonable investigation, threatened by or
against Rx or affecting Rx or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind. Rx does not have any knowledge of any
material default on its part with respect to any judgment, order, injunction,
decree, award, rule, or regulation or any court, arbitrator, or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
Section 1.10 CONTRACTS.
(a) Except as included or described in the Rx Schedules, there are no
material contracts, agreements, franchises, license agreements, or other
commitments to which Rx is a party or by which it or any of its assets,
products, technology, or properties are bound other than those incurred in
the ordinary course of business;
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which Rx is a party or by which its properties are
bound and which are material to the operations of Rx taken as a whole are
valid and enforceable by Rx in all respects, except as limited by
bankruptcy and
5
<PAGE>
insolvency laws and by other laws affecting the rights of creditors
generally;
(c) Rx is not a party to or bound by, and the properties of Rx are
not subject to any contract, agreement, other commitment or instrument; any
charter or other corporate restriction; or any judgment order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of Rx; and
(d) Except as included or described in the Rx Schedules or reflected
in the most recent Rx balance sheet, Rx is not a party to any oral or
written (i) contract for the employment of any officer or employee which is
not terminable on 30 days or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan, agreement, (iii) agreement, contract, or indenture
relating to the borrowing or money, (iv) guaranty of any obligation, other
than one on which Rx is a primary obliger, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties
of obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of $1,000 in the aggregate; (vi)
collective bargaining agreement; (vii) agreement with any present or former
officer or director of Rx; or (viii) contract, agreement, or other
commitment involving payments by it of more than $1,000 in the aggregate.
Section 1.11 MATERIAL CONTRACT DEFAULTS. Rx is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations properties,
assets or condition of Rx and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which Rx has not taken adequate steps to prevent such a default from
occurring.
Section 1.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of
this Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which Rx is a
party or to which any of its properties or operations are subject.
Section 1.13 GOVERNMENTAL AUTHORIZATIONS. Except as set forth in the Rx
Schedules, Rx has all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with securities and corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, declaration, or filing with, any court or other
governmental body
6
<PAGE>
is required in connection with the execution and delivery by Rx of this
Agreement and the consummation by the Shareholder of the transaction
contemplated hereby.
Section 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth
in the Rx Schedules, to the knowledge of Rx, Rx has complied with all applicable
statues and regulations of any federal, state, or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets, or condition of
Rx or except to the extent that noncompliance would not result in the occurrence
of any material liability for Rx.
Section 1.15 APPROVAL OF AGREEMENT. The board of directors of Rx has
authorized the execution and delivery of this Agreement by Rx and has approved
the agreement and the transactions contemplated hereby.
Section 1.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. Set forth in the Rx
Schedules is a description of every material contract, agreement, or arrangement
between Rx and any predecessor and any person who was at the time of such
contract, agreement, or arrangement an officer, director, or person owning of
record, or known by Rx to own beneficially, 10% or more of the issued and
outstanding common stock of Rx and which is to be performed in whole or in part
after the date hereof of which was entered into not more than three years prior
to the date hereof. Except as disclosed in the Rx Schedules or otherwise
disclosed herein, no officer, director, or 10% shareholder of Rx has, or has had
since inception of Rx, any known interest, direct or indirect, in any material
transaction with Rx which was material to the business of Rx. There are no
commitments by Rx, whether written or oral, to lend any funds, or to borrow any
money from, or enter into any other material transaction with, any such
affiliated person.
Section 1.17 LABOR RELATIONS. Rx has not had work stoppage resulting
from labor problems. To the knowledge of Rx, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
Rx.
Section 1.18 Rx SCHEDULES. Rx, prior to closing, will deliver to Oxford
the following schedules, which are collectively referred to as the "Rx
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement and instruments and dated as of such date, all
certified by the chief executive officer of Rx as complete, true, and correct as
of the date of this agreement in all material respects:
(a) a schedule containing complete and correct copies of Articles of
Incorporation and By-Laws , as amended, of Rx in effect as of the date of
this
7
<PAGE>
Agreement;
(b) a schedule containing the financial statements of Rx identified
in paragraph 1.04(a);
(c) a schedule containing a list indicating the name and address of
each shareholder of Rx together with the number of shares owned by him, her
or it;
(d) a schedule containing a description of all real property owned or
leased by Rx, together with a description of every mortgage, deed of trust,
pledge, lien agreement, encumbrance, claim, or equity interest of any
nature whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which Rx
carries on or proposes to carry on its business (except those which, in the
aggregate, are immaterial to the present or proposed business of Rx);
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of Rx as of July 31, 1996, or thereafter other than
in the ordinary course of business of Rx, indicating the debtor and amount,
and classifying the accounts to show in reasonable detail the length of
time, if any, overdue, and stating the nature and amount of any refunds,
set offs, reimbursements, discounts, or other judgments which are in the
aggregate material and due to or claimed by such creditor;
(g) a schedule listing the accounts payable and notes and other
obligations payable of Rx as of July 31, 1996, or that arose thereafter
other than in the ordinary course of the business of Rx, indicating the
creditor and amount, classifying the accounts to show in reasonable detail
the length of time, if any, overdue, and stating the nature and amount of
any refunds, set offs, reimbursements, discounts, or other adjustments,
which in the aggregate are material and due or payable to Rx respecting
such obligations;
(h) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
conditions of Rx since July 31, 1996, required to be provided pursuant to
section 1.07 hereof; and
(i) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the Rx Schedules
by sections 1.01 through 1.18.
8
<PAGE>
Rx shall cause the Rx Schedules and the instruments and data delivered to
Oxford hereunder to be updated after the date hereof up to and including the
Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Rx. Rx shall have a
period of twenty (20) days after the date hereof to provide such schedules. If
Rx cannot or fails to do so, or if Oxford reasonably finds the schedules
unacceptable, Oxford may terminate this agreement by giving written notice to Rx
within three (3) days after the schedules were due to be produced or were
provided.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDER
As an inducement to, and to obtain the reliance of Oxford, the Shareholder
represents and warrants as follows:
Section 2.01 OWNERSHIP OF RX SHARES. The Shareholder hereby represents
and warrants with respect to himself that he is the legal and beneficial owner
of the number of Rx shares set forth opposite his name at the foot of this
agreement, except that in respect of shares set forth opposite names of persons
other than the Shareholder such named persons are nominees for trusts of which
the Shareholder or his families are beneficiaries and all of such shares are
free and clear of any claims, charges, equities, liens, security interests, and
encumbrances whatsoever, and that it has full right, power, and authority to
transfer, assign, convey, and deliver its Rx shares subject to necessary waivers
or transfer pre-emptive rights; and delivery of such shares at the closing will
convey to Oxford good and marketable title to such shares and clear of any
claims, charges, equities, liens, security interests and incumbrance whatsoever.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OXFORD
As an inducement to, and to obtain the reliance of Rx and the Shareholder,
Oxford represents and warrants as follows:
Section 3.01 ORGANIZATION. Oxford is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Nevada and
has
9
<PAGE>
the corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets to carry on its business in
all material respects as it is now being conducted, and there is no jurisdiction
in which it is not qualified in which the character and location of the assets
owned by it or the nature of the business transacted by it requires
qualification. Included in the Oxford Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation and bylaws of
Oxford as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Oxford's articles of incorporation or bylaws.
Oxford has taken all action required by law its articles of incorporation, its
bylaws, or otherwise to authorize the execution and delivery of this Agreement,
and Oxford has full power, authority, and legal right and has taken all action
required by law, it articles of incorporation, bylaws, or otherwise to
consummate the transactions herein contemplated.
Section 3.02 CAPITALIZATION. Oxford's authorized capitalization
consists of 50,000,000 shares of common stock, par value $.001, and 1,000,000
shares of Preferred Stock ,of which 5,155,392 common shares are issued and
outstanding. All issued and outstanding shares are legally issued, fully paid,
and non-assessable and not issued in violation of the pre-emptive or other
rights of any person or any applicable securities or Stock Exchange laws or
regulations. Oxford is duly listed on the NASDAQ Bulletin Board and its shares
are so listed. Oxford is in compliance with all applicable laws and regulations
and has paid all Stock Exchange fees which are due.
Section 3.03 SUBSIDIARIES AND PREDECESSOR CORPORATION. Oxford does not
have any subsidiaries and does not own, beneficially or of record, any shares of
any other corporation.
Section 3.04 FINANCIAL STATEMENTS.
(a) Included in the Oxford Schedule are the audited balance sheets of
Oxford as of December 31, 1994 and 1995, and June 30, 1996, and the related
audited statements of operations, stockholders' equity and changes in
financial position for the two fiscal years ended December 31, 1994 and
1995, and June 30, 1996, together with the notes to such statements and the
opinion of Thomas Leger & Co. L.L.P., independent certified public
accountants, with respect thereto.
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved. The Oxford balance sheets present fairly as of their
10
<PAGE>
respective dates the financial condition of Oxford. Oxford did not have as
of the date of any such Oxford balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent)which should be reflected in a balance sheet or the
notes thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the value of the assets of Oxford, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders's equity and changes in financial position reflect fairly the
information required to be set forth therein by generally accepted
accounting principles.
(c) Oxford has no liabilities with respect to the payment of any federal,
state, county local or other taxes, all Stock Exchange fees (including any
deficiencies, interest or penalties), except for taxes accrued but not yet
due and payable.
(d) Oxford has filed all state, federal or local income and/or franchise
tax returns required to be filed by it from inception to the date hereof.
Included in the Oxford schedules are true and correct copies of the
federal, state and local income tax returns of Oxford filed since the date
of inception. None of such federal income tax returns have been examined by
the Internal Revenue Service. Each of such income tax return reflects the
taxes due for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(e) The books and records, financial and otherwise, of Oxford are in all
material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) Oxford has good and marketable title to its assets, free from any
encumbrances and , except as set forth in the Oxford Schedules or the
Financial Statements of Oxford or the notes thereto and , has no material
contingent liabilities direct or indirect, matured or unmatured.
Section 3.05 INFORMATION. The information concerning Oxford set for in
this Agreement and the Oxford Schedules is complete and accurate in all material
respects and does not contain any untrue statements of a material fact or omit
to state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
Section 3.06 OPINIONS OR WARRANTS. There are no existing options,
11
<PAGE>
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Oxford, except options, warrants, calls or commitments, if
say, to which Oxford is not a party and by which it is not bound.
Section 3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the Oxford Schedules, since the date of the most recent Oxford
balance sheet:
(a) there has not been (I) any material adverse change in the business,
operations, properties, assets or condition of Oxford or (ii) any damage,
destruction or loss to Oxford (whether or not covered by insurance)
materially and adversely affecting the business, operation, properties,
assets or condition of Oxford;
(b) Oxford has not (I) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of Oxford;
(iv) made any material change in its method of management, operation, or
accounting; (v) entered into any other material transactions; (vi) made any
accrual of arrangement for or payment of bonuses or special compensation of
any kind or any severance or termination pay to any present former officer
or employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceed $1,000; or (viii) made any such increase
in any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement, made
to, for or with its officers, directors, or employees;
(c) Oxford has not (I) granted or agreed to grant any options, warrants,
or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any
funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the
ordinary course of business; (iii) paid or agreed to pay any material
obligations or liabilities (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Oxford balance sheet
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with
the preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or
transfer, any of its assets, properties, or rights (except assets,
properties, or rights not used
12
<PAGE>
or useful in its business which, in the aggregate have a value of less than
$1000), or canceled, or agreed to cancel, any debts or claims (except debts
or claims which in the aggregate are of a value less than $1000); (v) made
or permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is
material, concerning the business of Oxford; or (vi) issued, delivered or
agreed to issue or deliver, any stock, bonds, or other corporate securities
including debentures (whether unauthorized and unissued or held as
treasury stock), except in connection with this Agreement.
(d) to the best knowledge of Oxford, it has not become subject to any law
or regulation which materially and adversely affects, or in the future, may
adversely affect, the business, operations, properties, assets or condition
of Oxford.
Section 3.08 TITLE AND RELATED MATTERS. Oxford has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent Oxford balance sheet
or acquired after that date (except properties, interest in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all liens, pledges, charges, or encumbrances except
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; and (c) as described in the Oxford Schedules.
Section 3.09 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of Oxford after
reasonable investigation, threatened by or against Oxford or affecting Oxford or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. Oxford does not have any knowledge of any default on its part with
respect to any judgement, order, writs, injunction, decree, award, rule or
regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance which after reasonable investigation would result in the
discovery of such default.
Section 3.10 CONTRACTS. Oxford is not a party to any material contract,
franchise license agreement, agreement, or other commitments whether such
agreement is in writing or oral except for this Agreement.
Section 3.11 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute a
13
<PAGE>
default under, any indenture, mortgage, deed of trust, or other material
agreement or instrument to which Oxford is a party or to which it or any of its
assets or operations are subject.
Section 3.12 GOVERNMENTAL AUTHORITIES. Oxford has all licenses,
franchises, permits, and other governmental and authorizations, that are
legally required to enable it to conduct its business operation in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, of registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Oxford of this Agreement and the consummation by
Oxford of the transactions contemplated hereby
Section 3.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of its
knowledge, Oxford has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or conditions of Oxford or
except to the extent that noncompliance would not result in the occurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities
Section 3.14 INSURANCE. Oxford owns no insurable properties and
carries no casualty or liability insurance.
Section 3.15 APPROVAL OF AGREEMENT. The board of directors of Oxford
has authorized the execution and delivery of this Agreement by Oxford and has
approved this Agreement and the transactions contemplated hereby and approved
the submission of the agreement and the transactions contemplated hereby to the
Shareholders of Oxford for their approval with the recommendation that it be
accepted.
Section 3.16 CONTINUITY OF BUSINESS ENTERPRISES. Oxford has no
commitment or present intention to liquidate Rx or sell or otherwise dispose of
a material portion of Rx's business or assets following the consummation of the
transactions contemplated hereby.
Section 3.17 MATERIAL TRANSACTIONS OF AFFILIATIONS. Except as disclosed
herein and in the Oxford Schedules, there exists no material contract, agreement
or arrangement between Oxford and any predecessor and any person who was at the
time of such contract. agreement or arrangement an officer, director, or person
owning of record or know by Oxford to own beneficially, 10% or more of the
issued
14
<PAGE>
and outstanding common stock of Oxford and which is to be performed in whole or
in part after the date hereof or was entered into not more than three years
prior to the date hereof. Neither any officer, director, nor 10% Shareholders
of Oxford has, or has had during the last preceding full fiscal year, any known
interest in any such material transaction with Oxford which was material to the
business of Oxford. Oxford has no commitment, whether written or oral, to lend
any funds to, borrow any money from, or enter into any material transaction with
any such affiliated person.
Section 3.18 EMPLOYMENT MATTERS. Oxford has no employees other than its
executive officers.
Section 3.19 OXFORD SCHEDULES. Prior to closing Oxford will deliver to
Rx the following schedules, which are collectively referred to as the "Oxford
Schedules" and which consist of separate schedules, which are dated the date of
this Agreement, all certified by the chief executive officer of Oxford to be
complete, true, and accurate:
(a) a schedule containing complete and accurate copies of the articles of
incorporation and bylaws of Oxford as in effect as of the date of this
Agreement;
(b) a schedule containing a copy of the Oxford quarterly report on Form
10-QSB for the three months ended June 30, 1996, including the unaudited
financial statements identified in paragraph 3.04(a);
(c) a schedule containing a copy of the Oxford annual report on Form
10-KSB for the year ended December 31, 1995, which complies in all
material respects with the applicable requirements of the Securities Act of
1934, as amended;
(d) a schedule containing a copy of all other reports, statements and
registration statements filed or required to be filed with the SEC;
(e) a schedule containing a copy of the federal income tax returns of
Oxford identified in paragraph 3.04(a);
(f) a schedule setting forth the description of any material adverse
change in the business, operations, property, assets, or condition of
Oxford since December 31, 1995, required to be provided pursuant to Section
3.07 hereof;
(g) a list of all Shareholders of Oxford setting forth the address and
number
15
<PAGE>
of shares held beneficially and of record; and
(h) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed to the Stock
Exchange in the Oxford Schedules by Sections 3.01 through 3.18.
Oxford shall cause the Oxford Schedules and the instruments and data
delivered to Shareholders hereunder to be updated after the date hereof up to
and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Oxford. Oxford shall
have a period of twenty (20) days after the date hereof to provide such
schedules. If Oxford cannot or fails to do so, or if Rx reasonably finds the
schedules unacceptable, Rx may terminate this agreement by giving written notice
to Oxford within three (3) days after the schedules were due to be produced or
were provided.
ARTICLE IV
PLAN OF EXCHANGE
Section 4.01 THE EXCHANGE. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 4.04),
the Shareholder hereby agrees to assign, transfer, and deliver to Oxford, free
and clear of all liens, pledges, encumbrances, charges, restrictions or known
claims of any kind, nature, or description, the number of shares of common stock
of Rx set after his signature at the foot of this Agreement, in the aggregate
constituting at least 100% of the issued and outstanding shares of common stock
of Rx and Oxford agrees to acquire such shares on such date by issuing and
delivering in exchange therefor solely shares of Oxford restricted common stock,
par value $0.001, in the amount in accordance with Exhibit A attached hereto and
made a part of this agreement 4,108,601 shares of Oxford common stock
("Exchanged Oxford Stock")and 232,930 Warrants with an exercise price of $2.00
and 232,930 Warrants with an exercise price of $3.00 ("Warrants"). At the
Closing, the Shareholder shall, upon the surrender of their certificate or
certificates, representing their Rx shares to the registrar and transfer agent,
be entitled to receive a certificate or certificates representing 4,108,601
shares of the Exchanged Oxford Stock as per Exhibit A attached hereto and made a
part of this agreement and Warrants, as described above, totaling 465,860 which
are exercisable for a period of Two (2) years from the Closing Date.
Section 4.02 ANTI-DILUTION. The number of shares of Exchanged Oxford
16
<PAGE>
Stock shall be appropriately adjusted to take into account for any stock split,
stock dividend, reverse stock split, recapitalization, or similar change in the
Oxford common stock which may occur between the date of the execution of this
Agreement and the delivery date of the shares.
Section 4.03 APPOINTMENT OF NEW DIRECTORS. At closing the directors
of Oxford will resign and Oxford will appoint new directors to fulfil the terms
of the resigning directors.
Section 4.04 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date"), within the ten-day period commencing with
the last to occur of the following: the Oxford Shareholders' meeting and such
date as may be prescribed by any federal or state regulatory agency or authority
prior to which the transactions contemplated hereby may not be effectuated and
the expiry of the 20 day periods in clause 1.18 and 3.19 to provide schedules.
Such Closing shall take place at a mutually agreeable time and place.
Section 4.05 CLOSING EVENTS. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, ruling or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
Section 4.06 TERMINATION.
(a) This Agreement may be terminated by the board of directors of either
Oxford or Rx at any time prior to the Closing Date if:
(I) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions contemplated by
their Agreement and which, in the judgement of such board of
directors, made in good faith and based upon the advice of its legal
counsel, makes it inadvisable to proceed with the exchange
contemplated by this Agreement;
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions or in the judgement of such board of directors, made in
good faith and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be
obtained
17
<PAGE>
only on a condition or conditions which would be unduly burdensome, making
it inadvisable to proceed with the exchange; or
(iii) there shall have been any change after the date of the
latest balance sheets of Oxford and Rx, respectively, in the assets,
properties, business, or financial condition of Oxford or Rx, which
could have a materially adverse affect on the value of the business of
Oxford or Rx, respectively, except any changes disclosed in the Oxford
or Rx Schedules, as the case may be, dated as of the date of the
execution of this Agreement.
(iv) the Board of Directors of Oxford or Rx or the Shareholder
determine in good faith that a condition to closing has not occurred.
In the event of termination pursuant to this paragraph (a) of Section 4.06, no
obligation, right or liability shall arise hereunder, and each party shall bear
all of the expenses incurred by it in connection with the negotiation, drafting,
and execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing by
action of the board of directors of Oxford, if Rx shall fail to comply in
any material respect with any of its covenants or agreements contained in
this Agreement or if any of the representations or warranties of Rx
contained herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this paragraph (b) of Section 4.06,
this Agreement shall be of no further force or effect, and no obligation,
right or liability shall arise hereunder, except that Rx shall bear its own
costs as well as the reasonable costs of Oxford in connection with the
negotiations, preparation, and execution of this Agreement and matters in
connection therewith.
(c) This Agreement may be terminated at any time prior to the Closing Date
by action of the board of directors of Rx or by the Shareholder if Oxford
shall fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations or
warranties of Oxford contained herein shall be inaccurate in any material
respect. If this Agreement is terminated pursuant to this paragraph -C- of
Section 4.06, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that Oxford
shall bear its own costs as well as the reasonable costs of Rx and the
Shareholder incurred in connection with the negotiation, preparation and
execution of this Agreement.
18
<PAGE>
ARTICLE V
SPECIAL COVENANTS
Section 5.01 STOCKHOLDER MEETINGS OF OXFORD. As soon as practicable
following the execution of this Agreement, and prior to the Closing, Oxford
shall call a special meeting of its Shareholders to approve the following
proposals:
(a) the authorization and approval of this Agreement and the transactions
contemplated thereby;
(b) to take such other actions as the directors may determine are
appropriate.
Section 5.02 ACCESS TO PROPERTIES AND RECORDS. Oxford and Rx will each
afford to the officers and authorized representatives of the other and the
Shareholder full access to the properties, books and records of Oxford or Rx as
the case may be, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other,
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of Oxford or Rx, as
the case may be, as the other shall from time to time reasonably request.
Section 5.03 DELIVERY OF BOOKS AND RECORDS. At the Closing, Rx shall
deliver to Oxford the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Oxford now in the
possession of Oxford or its representatives.
Section 5.04 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
EXCHANGED OXFORD STOCK. The consummation of this Agreement and the
transactions herein contemplated, including the issuance of the Exchanged Stock
to the Shareholder of Rx as contemplated hereby, constitutes the offer and sale
of securities under the Securities and Exchange Act and applicable state
statutes. Such transactions shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such statutes which
depend, INTER ALIA, upon the circumstances under which the Shareholder acquires
such securities. In connection with reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, at the
Closing, Rx shall cause to be delivered, and the Shareholder shall deliver to
Oxford, letters of representation in the form attached hereto as Exhibit "A".
Section 5.05 THIRD PARTY CONSENTS AND CERTIFICATES. Oxford and Rx agree
19
<PAGE>
to cooperate with each other in order to obtain any required third party
consents to their Agreement and the transactions herein and therein
contemplated.
Section 5.06 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Oxford or Rx Schedules or as permitted or
contemplated by this Agreement, Oxford and Rx respectively, will each:
(i) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting
its assets, properties, and business;
(v) use its best reasonable efforts to maintain and preserve its
business organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and customers;
and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of their Agreement until the Closing Date,
neither Oxford nor Rx will:
(i) make any changes in their articles of incorporation or bylaws.
(ii) take any action described in Section 1.07 in the case of Rx, or
in Section 3.07, in the case of Oxford (all except as permitted
therein or as disclosed in the applicable party's schedules); or
(iii) enter into or amend any contract, agreement, or other
instruments of any of the types described in such party's schedules,
except that a
20
<PAGE>
party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of
goods or services.
Section 5.07 SALES UNDER RULE 144 OR 145, IF APPLICABLE.
(a) Oxford will use its best reasonable efforts to at all times comply
with the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and NASD, including timely filing of all
periodic reports required under the provisions of the Exchange Act and the
rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding restricted
stock of Oxford as of the date of their Agreement that such person intends
to sell any shares under Rule 144 or Rule 145 promulgated under the
Securities Act (including any rule adopted in substitution or replacement
thereof), Oxford will certify in writing to such person that it has filed
all of the reports required to be filed by it under the Exchange Act to
enable such person to sell such person's restricted stock under Rule 144 or
145, as may be applicable in the circumstances, or will inform such person
in writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is presented
to Oxford's transfer agent for registration of transfer in connection with
any sale theretofore made under Rule 144 or 145, provide such certificate
is duly endorsed for transfer by the appropriate person(s) or accompanied
by a separate stock power duly executed by the appropriate person(s) in
each case with reasonable assurances that such endorsements are genuine and
effective, and is accompanied by an opinion of counsel satisfactory to
Oxford and its counsel that stock transfer has complied with the
requirements of Rule 144 or 145, as the case may be, Oxford will promptly
instruct its transfer agent to register such shares and to issue one or
more new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144 or 145, as the case may be,
free of any stop transfer order or restrictive legend. The provisions of
their Section 5.07 shall survive the Closing and the consummation of the
transactions contemplated by their Agreement.
Section 5.08 INDEMNIFICATION.
(a) Rx and the Shareholder hereby agree to indemnify Oxford and each of
the officers, agents and directors of Oxford as of the date of execution of
their Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in
21
<PAGE>
investigating, preparing, or defending against any litigation, commenced or
threatened, or any claim whatsoever), to which it or they may become
subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Articles I and II of their Agreement. The
indemnification provided for in their paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement.
(b) Oxford hereby agrees to indemnify Rx and the Shareholder and each of
the officers, agents, and directors of Rx as of the date of execution of
their Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article III of their Agreement. The
indemnification provided for in their paragraph shall survive the Closing
and consummation of the interactions contemplated hereby and termination of
this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF OXFORD
The obligations of Oxford under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Rx and the Shareholder in this Agreement were true when made
and shall be true at the Closing Date with the same force and effect as if such
representations and warranties were made at and as of the Closing Date (except
for changes therein permitted by this Agreement), Rx and the Shareholder shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by Rx and the Shareholder prior to or
at the Closing. Oxford shall be furnished with a certificate, signed by a duly
authorized executive officer of Rx and dated the Closing Date, to the foregoing
effect.
Section 6.02 OFFICER'S CERTIFICATE. Oxford shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of Rx to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the knowledge of Rx threatened, which might result in
an action to enjoin or prevent the consummation of the transactions contemplated
by their Agreement, or, to the extent not disclosed in the Rx Schedules, by or
against Rx, which might result in any material adverse change in any of the
assets, properties, business, or operations of Rx.
22
<PAGE>
SECTION 6.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business, or operations of Rx nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business or operations of
Rx.
Section 6.04 GOOD STANDING. Oxford shall have received a certificate of
good standing from the proper authority dated as of a date within ten days prior
to the Closing Date certifying that Rx is in good standing as a corporation in
Canada.
Section 6.05 OFFICER AND DIRECTOR QUESTIONNAIRES. Oxford shall have
received officer and director questionnaires completed and signed by each
executive officer and director of Rx in form and substance reasonably
satisfactory to Oxford and its counsel which shall contain information for use
by Oxford in reporting the transaction contemplated hereby on Form 8-K to be
filed with the Securities and Exchange Commission.
Section 6.06 OTHER ITEMS.
(a) Oxford shall have received a Shareholders list of Rx containing the
name, address, and number of shares held by each Rx Shareholder as of the
date of Closing certified by an executive officer of Rx as being true,
complete and accurate,
(b) Oxford shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as Oxford may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF RX
AND THE SHAREHOLDER
The obligations of Rx and the Shareholder under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the following conditions:
Section 7.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Oxford in this Agreement were true when made and shall be
true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and Oxford shall have
performed and complied with all
23
<PAGE>
covenants and conditions required by this Agreement to be performed or complied
with by Oxford prior to or at the Closing, Rx shall have been furnished with a
certificate, signed by a duly authorized executive officer of Oxford and dated
the Closing Date, to the foregoing effect.
Section 7.02 STOCKHOLDER APPROVAL. The stockholders of Oxford shall
have approved this Agreement, the transactions contemplated hereby, and the
other matters described in Section 4.01.
Section 7.03 OFFICER'S CERTIFICATE. Rx shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized executive
officer of Oxford, to the effect that no litigation, proceeding, investigation
or inquiry is pending, or to the best knowledge of Oxford threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
Section 7.04 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of Oxford nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business or operations of
Oxford.
Section 7.05 GOOD STANDING. Rx shall have received a certificate of good
standing from the Secretary of State of the state of Nevada or other appropriate
office, dated as of a date within twenty days prior to the Closing Date
certifying that Oxford is in good standing as a corporation in the state of
Nevada and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section 7.06 NO ACTION BY SEC Oxford shall not be subject to any stop
order, enforcement action or other proceeding or investigation initiated against
Oxford, its officers or directors by the SEC or NASD.
Section 7.07 OTHER ITEMS.
(a) Rx shall have received a Shareholders list of Oxford, current at least
twenty (20) days prior to Closing, containing the name, address and number
of shares held by each such Oxford Shareholders certified by an executive
officer of Oxford as being true, complete and accurate,
(b) Rx shall have received further documents, certificates, or instruments
relating to the transactions contemplated hereby as Rx may reasonably
24
<PAGE>
request.
(c) Rx shall have received uniform commercial code certificates from the
appropriate state of local authorities dated as of the Closing Date to the
effect that there were no liens on the properties of Oxford
ARTICLE VIII
MISCELLANEOUS
Section 8.01 BROKERS. Oxford and Rx agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of their Agreement. Oxford and Rx
each agree to indemnify the other against any claim by any third person other
than those described above for any commission, brokerage, or finder's fee
arising form the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 8.02 GOVERNING LAW. Their Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of Nevada.
Section 8.03 NOTICES. Any notice or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Oxford, to: Oxford Capital Corp.
4615 Southwest Freeway, Suite 420
Houston, Texas 77024
With copies to: Vanderkam & Sanders
1111 Caroline Street
Suite 2905
Houston, Texas 77010
25
<PAGE>
If to Rx. Rx Staffing, Inc.
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
With copies to: Cassell & Stone, L.L.P.
Mr. M. David Burton
5958 Sherry Lane
Suite 1400
Dallas, Texas 75225
If to Shareholder Mr. Rick Tarell
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 8.04 ATTORNEY'S FEES. In the event that any party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party or parties shall
reimburse the nonbreaching party or parties for all costs, including reasonable
attorney's fees, incurred in connection therewith and in enforcing or collecting
any judgement rendered therein.
Section 8.05 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its representatives will hold in strict confidence
all data and information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or employee, or
from any books or records or from personal inspection, as such other party, and
shall not use such disclosure data or information or disclose the same to
others, except (i) to the extent such data or information is published, is a
matter of public knowledge, or is required by law to be published; and (ii) to
the extent that such disclosure data or information must be used or disclosed in
order to consummate the transactions contemplated by this Agreement. In the
event of the termination of this agreement, each party shall return to the other
party all documents and other materials obtained by it or on its behalf and
shall destroy all copies, digests, work papers, abstracts or other materials
relating
26
<PAGE>
thereto, and each party will continue to comply with the confidentiality
provisions set forth herein.
Section 8.06 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 8.07 THIRD PARTY BENEFICIARIES. This Agreement is strictly
between Oxford and Rx, and the Shareholder and, except as specifically provided,
no director, officer, stockholder, employee, agent, independent contractor or
any other person or entity shall be deemed to be a third party beneficiary of
this Agreement.
Section 8.08 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof.
Section 8.09 SURVIVAL; TERMINATION. The representations, warranties,
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of three
months.
Section 8.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. Solely for the purpose of this
facsimile signatures shall be deemed original signatures.
Section 8.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same of any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by any writing signed by all parties hereto, with
respect to any of the terms contained herein, and say term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision in intended.
27
<PAGE>
IN WITNESS WHEREOF, the corporate parties and the Shareholder hereto have
caused this Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first-above written.
ATTEST: OXFORD CAPITAL CORP.
BY:
- ------------------------- -------------------------
Secretary or Assistant Secretary Robert E. Cheney, President
ATTEST: Rx STAFFING, INC.
BY:
- ------------------------- -------------------------
Secretary or Assistant Secretary Rick Tarell, President
ATTEST: THE SHAREHOLDER
BY:
- ------------------------- -------------------------
Rick Tarelll
28
<PAGE>
EXHIBIT A
NAME SHARES OF Rx SHARES OF OXFORD
- --------------------------------------------------------------------------------
Mr. Rick Tarell 1000 4,108,601
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
29
<PAGE>
EXCHANGE AGREEMENT
Between
OXFORD CAPITAL CORP.
SAFETY AND FATIGUE CONSULTANTS INTERNATIONAL, INC..
And
THE SHAREHOLDER
Dated August 20, 1996
Rx August 20, 1996
<PAGE>
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
ARTICLES PAGE
- -------- ----
ARTICLE 1 REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SAFETY AND FATIGUE
CONSULTANTS INTERNATIONAL, INC.
Sections
--------
1.01 Organization 1
1.02 Capitalization 2
1.03 Subsidiaries and Predecessor Corporation 2
1.04 Financial Statements 2
1.05 Information 3
1.06 Options and Warrants 3
1.07 Absence of Certain Changes or Events 3
1.08 Title and Related Matters 5
1.09 Litigation and Proceeding 5
1.10 Contracts 5
1.11 Material Contracts Default 6
1.12 No Conflict With Other Instruments 6
1.13 Governmental Authorizations 6
1.14 Compliance With Laws and Regulations 7
1.15 Approval of Agreement 7
1.16 Material Transactions of Affiliations 7
1.17 Labor Relations 7
1.18 Safety and Fatigue Consultants International.,
Schedules 7
ARTICLE II REPRESENTATIONS, COVENANTS, AND WARRANTIES OF THE SHAREHOLDERS
2.01 Ownership of Safety and Fatigue Consultants
International, Inc., shares. 9
ARTICLE III REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OXFORD
Sections
--------
3.01 Organization 10
3.02 Capitalization 10
3.03 Subsidiaries 10
3.04 Financial Statements 10
3.05 Information 12
3.06 Options and Warrants 12
3.07 Absence of Certain Changes or Events 12
3.08 Title and Related Matters 13
3.09 Litigation and Proceedings 13
3.10 Contracts 14
3.11 No Conflict With Other Instruments 14
3.12 Governmental Authorities 14
<PAGE>
ARTICLES PAGE
- -------- ----
3.13 Compliance With Laws and Regulations 14
3.14 Insurance 14
3.15 Approval of Agreement 14
3.16 Continuity of Business Enterprises 14
3.17 Material Transactions or Affiliations 15
3.18 Employment Matters 15
3.19 Oxford Schedules 15
ARTICLE IV PLAN OF EXCHANGE
Sections
--------
4.01 The Exchange 16
4.02 Anti-Dilution 17
4.03 Appointment of New Directors 17
4.04 Closing 17
4.05 Closing Events 17
4.06 Termination 17
ARTICLE V SPECIAL COVENANTS
Sections
--------
5.01 Stockholder Meeting of Oxford 19
5.02 Access to Properties and Records 19
5.03 Delivery of Books and Records 19
5.04 Special Covenants and Representations
Regarding the Exchanged Oxford Stock 19
5.05 Third Party Consents and Certificates 20
5.06 Actions Prior to Closing 20
5.07 Sales Under Rules 144 or 145, If Applicable 21
5.08 Indemnification 22
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF OXFORD
Sections
--------
6.01 Accuracy of Representations 22
6.02 Officer's Certificates 22
6.03 No Material Adverse Change 23
6.04 Good Standing 23
6.05 Officer and Director Questionnaires 23
6.06 Other Items 23
<PAGE>
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF SAFETY AND FATIGUE
CONSULTANTS INTERNATIONAL, INC.
Sections
--------
7.01 Accuracy of Representation 24
7.02 Stockholder Approval 24
7.03 Officer's Certificate 24
7.04 No Material Adverse Change 24
7.05 Good Standing 24
7.06 No Action by SEC 24
7.07 Other Items 25
ARTICLE VIII MISCELLANEOUS
Sections
--------
8.01 Brokers 25
8.02 Governing Law 25
8.03 Notices 25
8.04 Attorney's Fees 27
8.05 Confidentiality 27
8.06 Schedules, Knowledge 27
8.07 Third Party Beneficiaries 27
8.08 Entire Agreement 27
8.09 Survival; Termination 27
8.10 Counterparts 28
8.11 Amendment or Waiver 28
EXHIBITS
Exhibit "A"
Letter of Representation
Oxford Schedules
Safety and Fatigue Consultants International, Inc. Schedules
<PAGE>
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as the "Agreement"), is
entered into as of this 21 St. day of June, 1996, by and among Oxford Capital
Corp., a Nevada corporation (hereinafter referred to as "Oxford"); Safety and
Fatigue Consultants International, Inc., a corporation organized under the laws
of the State of Texas (collectively hereinafter referred to as the "SFCI"), and
JERRY STOVALL, (hereinafter referred to as "Shareholder") upon the following
premises:
PREMISES
This Agreement provides for the acquisition by Oxford of 100% of the issued
and outstanding shares of SFCI solely in exchange for 23,293,005 shares of
Oxford common stock and 931,720 Warrants with an exercise price of $2.00 and
931,720 Warrants with an exercise price of $3.00 ("Warrants"), on the terms and
conditions hereinafter provided, all for the purpose of effecting a so-called
"tax-free" reorganization pursuant to Sections 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended.
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived hear from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF SFCI
As an inducement to, and to obtain the reliance of Oxford, SFCI represents
and warrants as follows:
Section 1.01 ORGANIZATION. SFCI is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Texas and has the corporate power and is duly authorized, qualified, franchised,
and licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets to carry on its
business in all material respects as it is now being conducted, including
qualification to do business as a foreign corporation in the states or countries
in which the character and location of the assets owned by it or the nature of
the business transacted by it required qualification except where failure to be
so qualified would not have a material adverse effect on its business. Included
in the SFCI Schedules (as hereinafter defined) are
1
<PAGE>
complete and correct copies of the Articles of Incorporation, as amended, of
SFCI as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of SFCI's articles of incorporation or bylaws.
SFCI has taken all actions required by law, ,Articles of Incorporation and
By-Laws or otherwise to authorize the execution and delivery of this Agreement.
SFCI has full power, authority, and legal right and has taken all action
required by law, its memorandum and articles of association, and otherwise to
consummate the transactions herein contemplated.
Section 1.02 CAPITALIZATION. The authorized and issued share
capital of SFCI Staffing Corp., is $1,000 divided into 1,000 Ordinary Shares.
All issued and outstanding shares of SFCI are legally issued, fully paid, and
non-assessable and not issued in violation of the pre-emptive or other rights of
any person.
Section 1.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. SFCI does not
have any subsidiaries and does not own, beneficially or of record, any shares of
any other corporation, except as disclosed in Schedule 1.03. For purposes
hereinafter, SFCI also includes those subsidiaries set forth on Schedule 1.03.
Section 1.04 FINANCIAL STATEMENTS.
(a) Included in the SFCI Schedules is the audited consolidated
balance sheet of SFCI and its subsidiaries at June 30, 1996, and the
related audited consolidated statements of profit and loss account and
consolidated statement of cash flows since inception, together with notes
to such statements and the opinion of Cheshire and Fuller, L.L.P., with
respect thereto.
(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles generally accepted and
conforming to United States GAAP. The SFCI balance sheet presents a true
and fair view as of its date of the financial condition of SFCI. SFCI did
not have, as of the date of such balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or
the notes thereto, prepared in accordance with accounting principles
generally accepted in the United States, and all assets reflected therein
are properly reported and present fairly the value of the assets of SFCI in
accordance with accounting principles generally accepted in the United
States. The statements of consolidated profit and loss account and
consolidated statement of cash flow reflect fairly the information required
to be set forth therein to United States GAAP.
(c) SFCI has filed all income and/or franchise tax returns required
to
2
<PAGE>
be filed by it from inception to the date hereof. Included in the SFCI
Schedules are true and correct copies of the income tax returns of SFCI
filed for the prior three years. None of such income tax returns have been
examined by the appropriate tax authorities. Each of such income tax
returns reflects the taxes due for the period covered thereby, except for
amounts which, in the aggregate, are immaterial.
(d) SFCI does not owe any unpaid taxes (including any deficiencies,
interest, or penalties) through July 31, 1996, for which SFCI may be liable
in its own right or as a transferee of the assets of, or as a successor to,
any other corporation or entity. Furthermore, except as accruing in the
normal course of business, SFCI does not owe any accrued and unpaid taxes
to the date of this Agreement.
(e) The books and records, financial and otherwise, of SFCI are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) SFCI has good and marketable title to its assets and, except as
set forth in the SFCI Schedules or the financial statements of SFCI or the
notes thereto, has no material contingent liabilities, direct or indirect,
matured or unmatured.
Section 1.05 INFORMATION. The information concerning SFCI set forth in
this Agreement and in the SFCI Schedules is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 1.06 OPTIONS OR WARRANTS. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued SFCI common stock, except options, warrants, calls or commitments, if
any, to which SFCI is not a party and by which it is not bound.
Section 1.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement or the SFCI Schedules, since July 31, 1996:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or financial condition of SFCI;
or (ii) any damage, destruction, or loss to SFCI (whether or not covered by
insurance) materially and adversely affecting the business, operations,
properties, assets, or financial condition of SFCI.
3
<PAGE>
(b) SFCI has not (i) amended its Memorandum or Articles of
Association; (ii) declared or made, or agreed to declare or make, any
payment of dividends or distributions of any assets of any kind whatsoever
to stockholders or purchased or redeemed, or agreed to purchase or redeem,
any of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of SFCI;
(iv) made any material change in its method of management, operation or
accounting; (v) entered into any other material transaction other than
sales in the ordinary course of its business; (vi) made any accrual or
arrangement for payment of bonuses or special compensation of any kind or
any severance or termination pay to any present or former officer or
employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceeds $1,000; or (viii) made any increase in
any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made
to, for, or which its officers, directors, or employees;
(c) SFCI has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course
of business; (ii) paid or agreed to pay any material obligations or
liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent SFCI balance sheet, and current liabilities
incurred since that date in the ordinary course of business and
professional and other fees and expenses in connection with the preparation
of this agreement and the consummation of the transactions contemplated
hereby; (iii) sold or transferred, or agreed to sell or transfer, any of
its assets, properties, or rights (except assets, properties, or rights not
used or useful in its business which, is the aggregate have a value of less
than $1,000), or canceled, or agreed to cancel, any debts or claims (except
debts or claims which in the aggregate are of a value of less than $1,000);
(iv) made or permitted any amendment or termination of any contract,
agreement, or license to which it is a party if such amendment or
termination is material, considering the business or SFCI; or (v) issued,
delivered, or agreed to issue or deliver any stock, bonds or other
corporate securities including debentures (whether authorized and unissued
or held as treasury stock); and
(d) to the knowledge of SFCI, SFCI has not become subject to any
law or regulation which materially and adversely affects, or in the future
may adversely affect the business, operations, properties, assets, or
financial condition of SFCI.
Section 1.08 TITLE AND RELATED MATTERS. SFCI has good and
4
<PAGE>
marketable title to all of its properties, inventory, interests in properties,
and assets, real and personal, which are reflected in the most recent SFCI
balance sheet or acquired after that date (except properties, interests in
properties, and assets sold or otherwise disposed of since such date in the
ordinary course of business) free and clear of all liens, pledges, charges, or
encumbrances except (a) retention of title rights and statutory liens or claims
not yet delinquent; (b) such imperfections of title and easements as do not and
will not materially detract from or interfere with the present or proposed use
of the properties subject thereto or affected thereby or otherwise materially
impair present business operations on such properties; and -C- as described in
the SFCI Schedules. Except as set forth in the SFCI Schedules, SFCI owns, free
and clear of any liens, claims, encumbrances, royalty interests, or other
restrictions or limitations of any nature whatsoever, any and all products it is
currently manufacturing, including the underlying technology and data, and all
procedures, techniques, marketing plans, business plans, methods of management,
or other information utilized in connection with SFCI business. Except as set
forth in the SFCI Schedules, no third party has any right to, and SFCI has not
received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
propriety techniques, trademarks, service marks, trade names, or copyrights
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a materially adverse affect on the business,
operations, financial condition, income, or business prospects or SFCI or any
material portion of its properties, assets, or rights.
Section 1.09 LITIGATION AND PROCEEDINGS. Except as set forth in the
SFCI Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the knowledge of SFCI after reasonable investigation, threatened
by or against SFCI or affecting SFCI or its properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. SFCI does not have any knowledge
of any material default on its part with respect to any judgment, order,
injunction, decree, award, rule, or regulation or any court, arbitrator, or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
Section 1.10 CONTRACTS.
(a) Except as included or described in the SFCI Schedules, there are
no material contracts, agreements, franchises, license agreements, or other
commitments to which SFCI is a party or by which it or any of its assets,
products, technology, or properties are bound other than those incurred in
the ordinary course of business;
(b) All contracts, agreements, franchises, license agreements, and
5
<PAGE>
other commitments to which SFCI is a party or by which its properties are bound
and which are material to the operations of SFCI taken as a whole are valid and
enforceable by SFCI in all respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the rights of creditors generally;
(c) SFCI is not a party to or bound by, and the properties of SFCI
are not subject to any contract, agreement, other commitment or instrument;
any charter or other corporate restriction; or any judgment order, writ,
injunction, decree, or award which materially and adversely affects, the
business operations, properties, assets, or condition of SFCI; and
(d) Except as included or described in the SFCI Schedules or
reflected in the most recent SFCI balance sheet, SFCI is not a party to any
oral or written (i) contract for the employment of any officer or employee
which is not terminable on 30 days or less notice; (ii) profit sharing,
bonus, deferred compensation, stock option, severance pay, pension benefit
or retirement plan, agreement, (iii) agreement, contract, or indenture
relating to the borrowing or money, (iv) guaranty of any obligation, other
than one on which SFCI is a primary obliger, for the borrowing of money or
otherwise, excluding endorsements made for collection and other guaranties
of obligations which, in the aggregate do not exceed more than one year or
providing for payments in excess of $1,000 in the aggregate; (vi)
collective bargaining agreement; (vii) agreement with any present or former
officer or director of SFCI; or (viii) contract, agreement, or other
commitment involving payments by it of more than $1,000 in the aggregate.
Section 1.11 MATERIAL CONTRACT DEFAULTS. SFCI is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations properties,
assets or condition of SFCI and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which SFCI has not taken adequate steps to prevent such a default
from occurring.
Section 1.12 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of
this Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust, or other material contract, agreement, or instrument to which SFCI is a
party or to which any of its properties or operations are subject.
Section 1.13 GOVERNMENTAL AUTHORIZATIONS. Except as set forth in the
SFCI Schedules, SFCI has all licenses, franchises, permits, and other
governmental
6
<PAGE>
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with securities and corporation laws, as hereinafter provided, no authorization,
approval, consent, or order of, declaration, or filing with, any court or other
governmental body is required in connection with the execution and delivery by
SFCI of this Agreement and the consummation by the Shareholder of the
transaction contemplated hereby.
Section 1.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth
in the SFCI Schedules, to the knowledge of SFCI, SFCI has complied with all
applicable statues and regulations of any federal, state, or other governmental
entity or agency thereof, except to the extent that noncompliance would not
materially and adversely affect the business, operations, properties, assets, or
condition of SFCI or except to the extent that noncompliance would not result in
the occurrence of any material liability for SFCI.
Section 1.15 APPROVAL OF AGREEMENT. The board of directors of SFCI has
authorized the execution and delivery of this Agreement by SFCI and has approved
the agreement and the transactions contemplated hereby.
Section 1.16 MATERIAL TRANSACTIONS OR AFFILIATIONS. Set forth in the
SFCI Schedules is a description of every material contract, agreement, or
arrangement between SFCI and any predecessor and any person who was at the time
of such contract, agreement, or arrangement an officer, director, or person
owning of record, or known by SFCI to own beneficially, 10% or more of the
issued and outstanding common stock of SFCI and which is to be performed in
whole or in part after the date hereof of which was entered into not more than
three years prior to the date hereof. Except as disclosed in the SFCI Schedules
or otherwise disclosed herein, no officer, director, or 10% shareholder of SFCI
has, or has had since inception of SFCI, any known interest, direct or indirect,
in any material transaction with SFCI which was material to the business of
SFCI. There are no commitments by SFCI, whether written or oral, to lend any
funds, or to borrow any money from, or enter into any other material transaction
with, any such affiliated person.
Section 1.17 LABOR RELATIONS. SFCI has not had work stoppage resulting
from labor problems. To the knowledge of SFCI, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
SFCI.
Section 1.18 SFCI SCHEDULES. SFCI, prior to closing, will deliver to
Oxford the following schedules, which are collectively referred to as the "SFCI
Schedules" and which consist of separate schedules dated as of the date of
execution of this Agreement and instruments and dated as of such date, all
certified by the chief executive officer of SFCI as complete, true, and correct
as of the date of this
7
<PAGE>
agreement in all material respects:
(a) a schedule containing complete and correct copies of Articles of
Incorporation and By-Laws , as amended, of SFCI in effect as of the date
of this Agreement;
(b) a schedule containing the financial statements of SFCI identified
in paragraph 1.04(a);
(c) a schedule containing a list indicating the name and address of
each shareholder of SFCI together with the number of shares owned by him,
her or it;
(d) a schedule containing a description of all real property owned or
leased by SFCI, together with a description of every mortgage, deed of
trust, pledge, lien agreement, encumbrance, claim, or equity interest of
any nature whatsoever in such real property;
(e) copies of all licenses, permits, and other governmental
authorizations (or requests or applications therefor) pursuant to which
SFCI carries on or proposes to carry on its business (except those which,
in the aggregate, are immaterial to the present or proposed business of
SFCI);
(f) a schedule listing the accounts receivable and notes and other
obligations receivable of SFCI as of July 31, 1996, or thereafter other
than in the ordinary course of business of SFCI, indicating the debtor and
amount, and classifying the accounts to show in reasonable detail the
length of time, if any, overdue, and stating the nature and amount of any
refunds, set offs, reimbursements, discounts, or other judgments which are
in the aggregate material and due to or claimed by such creditor;
(g) a schedule listing the accounts payable and notes and other
obligations payable of SFCI as of July 31, 1996, or that arose thereafter
other than in the ordinary course of the business of SFCI, indicating the
creditor and amount, classifying the accounts to show in reasonable detail
the length of time, if any, overdue, and stating the nature and amount of
any refunds, set offs, reimbursements, discounts, or other adjustments,
which in the aggregate are material and due or payable to SFCI respecting
such obligations;
(h) a schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
conditions of SFCI since July 31, 1996, required to be provided pursuant to
section 1.07 hereof; and
8
<PAGE>
(i) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed in the SFCI
Schedules by sections 1.01 through 1.18.
SFCI shall cause the SFCI Schedules and the instruments and data delivered
to Oxford hereunder to be updated after the date hereof up to and including the
Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by SFCI. SFCI shall have a
period of twenty (20) days after the date hereof to provide such schedules. If
SFCI cannot or fails to do so, or if Oxford reasonably finds the schedules
unacceptable, Oxford may terminate this agreement by giving written notice to
SFCI within three (3) days after the schedules were due to be produced or were
provided.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE SHAREHOLDER
As an inducement to, and to obtain the reliance of Oxford, the Shareholder
represents and warrants as follows:
Section 2.01 OWNERSHIP OF SFCI SHARES. The Shareholder hereby
represents and warrants with respect to himself that he is the legal and
beneficial owner of the number of SFCI shares set forth opposite his name at the
foot of this agreement, except that in respect of shares set forth opposite
names of persons other than the Shareholder such named persons are nominees for
trusts of which the Shareholder or his families are beneficiaries and all of
such shares are free and clear of any claims, charges, equities, liens, security
interests, and encumbrances whatsoever, and that it has full right, power, and
authority to transfer, assign, convey, and deliver its SFCI shares subject to
necessary waivers or transfer pre-emptive rights; and delivery of such shares at
the closing will convey to Oxford good and marketable title to such shares and
clear of any claims, charges, equities, liens, security interests and
incumbrance whatsoever.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF OXFORD
As an inducement to, and to obtain the reliance of SFCI and the
Shareholder,
9
<PAGE>
Oxford represents and warrants as follows:
Section 3.01 ORGANIZATION. Oxford is a corporation duly organized,
validly existing, and in good standing under the laws of the state of Nevada and
has the corporate power and is duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets to carry on its
business in all material respects as it is now being conducted, and there is no
jurisdiction in which it is not qualified in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Oxford Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation and bylaws of
Oxford as in effect on the date hereof. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated hereby
will not, violate any provision of Oxford's articles of incorporation or bylaws.
Oxford has taken all action required by law its articles of incorporation, its
bylaws, or otherwise to authorize the execution and delivery of this Agreement,
and Oxford has full power, authority, and legal right and has taken all action
required by law, it articles of incorporation, bylaws, or otherwise to
consummate the transactions herein contemplated.
Section 3.02 CAPITALIZATION. Oxford's authorized capitalization
consists of 50,000,000 shares of common stock, par value $.001, and 1,000,000
shares of Preferred Stock ,of which 5,155,392 common shares are issued and
outstanding. All issued and outstanding shares are legally issued, fully paid,
and non-assessable and not issued in violation of the pre-emptive or other
rights of any person or any applicable securities or Stock Exchange laws or
regulations. Oxford is duly listed on the NASDAQ Bulletin Board and its shares
are so listed. Oxford is in compliance with all applicable laws and regulations
and has paid all Stock Exchange fees which are due.
Section 3.03 SUBSIDIARIES AND PREDECESSOR CORPORATION. Oxford does not
have any subsidiaries and does not own, beneficially or of record, any shares of
any other corporation.
Section 3.04 FINANCIAL STATEMENTS.
(a) Included in the Oxford Schedule are the audited balance sheets of
Oxford as of December 31, 1994 and 1995, and June 30, 1996, and the related
audited statements of operations, stockholders' equity and changes in
financial position for the two fiscal years ended December 31, 1994 and
1995, and June 30, 1996, together with the notes to such statements and the
opinion of Thomas Leger & Co. L.L.P., independent certified public
accountants, with respect thereto.
10
<PAGE>
(b) All such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved. The Oxford balance sheets present fairly as of their
respective dates the financial condition of Oxford. Oxford did not have as
of the date of any such Oxford balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or the
notes thereto prepared in accordance with generally accepted accounting
principles, and all assets reflected therein are properly reported and
present fairly the value of the assets of Oxford, in accordance with
generally accepted accounting principles. The statements of operations,
stockholders's equity and changes in financial position reflect fairly the
information required to be set forth therein by generally accepted
accounting principles.
(c) Oxford has no liabilities with respect to the payment of any federal,
state, county local or other taxes, all Stock Exchange fees (including any
deficiencies, interest or penalties), except for taxes accrued but not yet
due and payable.
(d) Oxford has filed all state, federal or local income and/or franchise
tax returns required to be filed by it from inception to the date hereof.
Included in the Oxford schedules are true and correct copies of the
federal, state and local income tax returns of Oxford filed since the date
of inception. None of such federal income tax returns have been examined by
the Internal Revenue Service. Each of such income tax return reflects the
taxes due for the period covered thereby, except for amounts which, in the
aggregate, are immaterial.
(e) The books and records, financial and otherwise, of Oxford are in all
material aspects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) Oxford has good and marketable title to its assets, free from any
encumbrances and , except as set forth in the Oxford Schedules or the
Financial Statements of Oxford or the notes thereto and , has no material
contingent liabilities direct or indirect, matured or unmatured.
Section 3.05 INFORMATION. The information concerning Oxford set for in
this Agreement and the Oxford Schedules is complete and accurate in all material
respects and does not contain any untrue statements of a material fact or omit
to state a material fact required to make the statements made, in light of the
11
<PAGE>
circumstances under which they were made, not misleading.
Section 3.06 OPINIONS OR WARRANTS. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued stock of Oxford, except options, warrants, calls or commitments, if
say, to which Oxford is not a party and by which it is not bound.
Section 3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the Oxford Schedules, since the date of the most recent Oxford
balance sheet:
(a) there has not been (i) any material adverse change in the business,
operations, properties, assets or condition of Oxford or (ii) any damage,
destruction or loss to Oxford (whether or not covered by insurance)
materially and adversely affecting the business, operation, properties,
assets or condition of Oxford;
(b) Oxford has not (i) amended its articles of incorporation or bylaws;
(ii) declared or made, or agreed to declare or make any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of Oxford;
(iv) made any material change in its method of management, operation, or
accounting; (v) entered into any other material transactions; (vi) made any
accrual of arrangement for or payment of bonuses or special compensation of
any kind or any severance or termination pay to any present former officer
or employee; (vii) increased the rate of compensation payable or to become
payable by it to any of its officers or directors or any of its employees
whose monthly compensation exceed $1,000; or (viii) made any such increase
in any profit sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement, made
to, for or with its officers, directors, or employees;
(c) Oxford has not (i) granted or agreed to grant any options, warrants,
or other rights for its stocks, bonds, or other corporate securities
calling for the issuance thereof; (ii) borrowed or agreed to borrow any
funds or incurred, or become subject to, any material obligation or
liability (absolute or contingent) except liabilities incurred in the
ordinary course of business; (iii) paid or agreed to pay any material
obligations or liabilities (absolute or contingent) other than current
liabilities reflected in or shown on the most recent Oxford balance sheet
and current liabilities incurred since that date in the ordinary course of
business and professional and other fees and expenses in connection with
the
12
<PAGE>
preparation of this Agreement and the consummation of the transaction
contemplated hereby; (iv) sold or transferred, or agreed to sell or
transfer, any of its assets, properties, or rights (except assets,
properties, or rights not used or useful in its business which, in the
aggregate have a value of less than $1000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims which in the aggregate
are of a value less than $1000); (v) made or permitted any amendment or
termination of any contract, agreement, or license to which it is a party
if such amendment or termination is material, concerning the business of
Oxford; or (vi) issued, delivered or agreed to issue or deliver, any stock,
bonds, or other corporate securities including debentures (whether
unauthorized and unissued or held as treasury stock), except in connection
with this Agreement.
(d) to the best knowledge of Oxford, it has not become subject to any law
or regulation which materially and adversely affects, or in the future, may
adversely affect, the business, operations, properties, assets or condition
of Oxford.
Section 3.08 TITLE AND RELATED MATTERS. Oxford has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent Oxford balance sheet
or acquired after that date (except properties, interest in properties, and
assets sold or otherwise disposed of since such date in the ordinary course of
business), free and clear of all liens, pledges, charges, or encumbrances except
(a) statutory liens or claims not yet delinquent; (b) such imperfections of
title and easements as do not and will not materially detract from or interfere
with the present or proposed use of the properties subject thereto or affected
thereby or otherwise materially impair present business operations on such
properties; and (c) as described in the Oxford Schedules.
Section 3.09 LITIGATION AND PROCEEDINGS. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of Oxford after
reasonable investigation, threatened by or against Oxford or affecting Oxford or
its properties, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign, or before any arbitrator of any
kind. Oxford does not have any knowledge of any default on its part with
respect to any judgement, order, writs, injunction, decree, award, rule or
regulation of any court, arbitrator, or governmental agency or instrumentality
or any circumstance which after reasonable investigation would result in the
discovery of such default.
Section 3.10 CONTRACTS. Oxford is not a party to any material contract,
franchise license agreement, agreement, or other commitments whether such
agreement is in writing or oral except for this Agreement.
13
<PAGE>
Section 3.11 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute a default under, any indenture, mortgage, deed of trust, or other
material agreement or instrument to which Oxford is a party or to which it or
any of its assets or operations are subject.
Section 3.12 GOVERNMENTAL AUTHORITIES. Oxford has all licenses,
franchises, permits, and other governmental and authorizations, that are
legally required to enable it to conduct its business operation in all material
respects as conducted on the date hereof. Except for compliance with federal
and state securities or corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, of registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Oxford of this Agreement and the consummation by
Oxford of the transactions contemplated hereby
Section 3.13 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of its
knowledge, Oxford has complied with all applicable statutes and regulations of
any federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or conditions of Oxford or
except to the extent that noncompliance would not result in the occurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities
Section 3.14 INSURANCE. Oxford owns no insurable properties and
carries no casualty or liability insurance.
Section 3.15 APPROVAL OF AGREEMENT. The board of directors of Oxford
has authorized the execution and delivery of this Agreement by Oxford and has
approved this Agreement and the transactions contemplated hereby and approved
the submission of the agreement and the transactions contemplated hereby to the
Shareholders of Oxford for their approval with the recommendation that it be
accepted.
Section 3.16 CONTINUITY OF BUSINESS ENTERPRISES. Oxford has no
commitment or present intention to liquidate SFCI or sell or otherwise dispose
of a material portion of SFCI's business or assets following the consummation of
the transactions contemplated hereby.
Section 3.17 MATERIAL TRANSACTIONS OF AFFILIATIONS. Except as disclosed
herein and in the Oxford Schedules, there exists no material contract, agreement
or
14
<PAGE>
arrangement between Oxford and any predecessor and any person who was at the
time of such contract. agreement or arrangement an officer, director, or person
owning of record or know by Oxford to own beneficially, 10% or more of the
issued and outstanding common stock of Oxford and which is to be performed in
whole or in part after the date hereof or was entered into not more than three
years prior to the date hereof. Neither any officer, director, nor 10%
Shareholders of Oxford has, or has had during the last preceding full fiscal
year, any known interest in any such material transaction with Oxford which was
material to the business of Oxford. Oxford has no commitment, whether written
or oral, to lend any funds to, borrow any money from, or enter into any material
transaction with any such affiliated person.
Section 3.18 EMPLOYMENT MATTERS. Oxford has no employees other than its
executive officers.
Section 3.19 OXFORD SCHEDULES. Prior to closing Oxford will deliver to
SFCI the following schedules, which are collectively referred to as the "Oxford
Schedules" and which consist of separate schedules, which are dated the date of
this Agreement, all certified by the chief executive officer of Oxford to be
complete, true, and accurate:
(a) a schedule containing complete and accurate copies of the articles of
incorporation and bylaws of Oxford as in effect as of the date of this
Agreement;
(b) a schedule containing a copy of the Oxford quarterly report on Form
10-QSB for the three months ended June 30, 1996, including the unaudited
financial statements identified in paragraph 3.04(a);
(c) a schedule containing a copy of the Oxford annual report on Form
10-KSB for the year ended December 31, 1995, which complies in all
material respects with the applicable requirements of the Securities Act of
1934, as amended;
(d) a schedule containing a copy of all other reports, statements and
registration statements filed or required to be filed with the SEC;
(e) a schedule containing a copy of the federal income tax returns of
Oxford identified in paragraph 3.04(a);
(f) a schedule setting forth the description of any material adverse
change in the business, operations, property, assets, or condition of
Oxford since December 31, 1995, required to be provided pursuant to Section
3.07 hereof;
15
<PAGE>
(g) a list of all Shareholders of Oxford setting forth the address and
number of shares held beneficially and of record; and
(h) a schedule setting forth any other information, together with any
required copies of documents, required to be disclosed to the Stock
Exchange in the Oxford Schedules by Sections 3.01 through 3.18.
Oxford shall cause the Oxford Schedules and the instruments and data
delivered to Shareholders hereunder to be updated after the date hereof up to
and including the Closing Date.
It is understood and agreed that not all of the schedules referred to above
have been completed or are available to be furnished by Oxford. Oxford shall
have a period of twenty (20) days after the date hereof to provide such
schedules. If Oxford cannot or fails to do so, or if SFCI reasonably finds the
schedules unacceptable, SFCI may terminate this agreement by giving written
notice to Oxford within three (3) days after the schedules were due to be
produced or were provided.
ARTICLE IV
PLAN OF EXCHANGE
Section 4.01 THE EXCHANGE. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 4.04),
the Shareholder hereby agrees to assign, transfer, and deliver to Oxford, free
and clear of all liens, pledges, encumbrances, charges, restrictions or known
claims of any kind, nature, or description, the number of shares of common stock
of SFCI set after his signature at the foot of this Agreement, in the aggregate
constituting at least 100% of the issued and outstanding shares of common stock
of SFCI and Oxford agrees to acquire such shares on such date by issuing and
delivering in exchange therefor solely shares of Oxford restricted common stock,
par value $0.001, in the amount in accordance with Exhibit A attached hereto and
made a part of this agreement 23,293,005 shares of Oxford common stock
("Exchanged Oxford Stock")and 931,720 Warrants with an exercise price of $2.00
and 931,720 Warrants with an exercise price of $3.00 ("Warrants"). At the
Closing, the Shareholder shall, upon the surrender of their certificate or
certificates, representing their SFCI shares to the registrar and transfer
agent, be entitled to receive a certificate or certificates representing
23,293,005 shares of the Exchanged Oxford Stock as per Exhibit A attached hereto
and made a part of this agreement and Warrants, as described above, totaling
1,863,440 which are exercisable for a period of Two (2) years from the Closing
Date.
16
<PAGE>
Section 4.02 ANTI-DILUTION. The number of shares of Exchanged Oxford
Stock shall be appropriately adjusted to take into account for any stock split,
stock dividend, reverse stock split, recapitalization, or similar change in the
Oxford common stock which may occur between the date of the execution of this
Agreement and the delivery date of the shares.
Section 4.03 APPOINTMENT OF NEW DIRECTORS. At closing the directors
of Oxford will resign and Oxford will appoint new directors to fulfil the terms
of the resigning directors.
Section 4.04 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date"), within the ten-day period commencing with
the last to occur of the following: the Oxford Shareholders' meeting and such
date as may be prescribed by any federal or state regulatory agency or authority
prior to which the transactions contemplated hereby may not be effectuated and
the expiry of the 20 day periods in clause 1.18 and 3.19 to provide schedules.
Such Closing shall take place at a mutually agreeable time and place.
Section 4.05 CLOSING EVENTS. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall ensure to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, ruling or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
Section 4.06 TERMINATION.
(a) This Agreement may be terminated by the board of directors of either
Oxford or SFCI at any time prior to the Closing Date if:
(I) there shall be any actual or threatened action or proceeding
before any court or any governmental body which shall seek to
restrain, prohibit, or invalidate the transactions contemplated by
their Agreement and which, in the judgement of such board of
directors, made in good faith and based upon the advice of its legal
counsel, makes it inadvisable to proceed with the exchange
contemplated by this Agreement;
(ii) any of the transactions contemplated hereby are disapproved by
any regulatory authority whose approval is required to consummate such
transactions or in the judgement of such board of directors, made in
17
<PAGE>
good faith and based on the advice of counsel, there is substantial
likelihood that any such approval will not be obtained or will be
obtained only on a condition or conditions which would be unduly
burdensome, making it inadvisable to proceed with the exchange; or
(iii) there shall have been any change after the date of the
latest balance sheets of Oxford and SFCI, respectively, in the assets,
properties, business, or financial condition of Oxford or SFCI, which
could have a materially adverse affect on the value of the business of
Oxford or SFCI, respectively, except any changes disclosed in the
Oxford or SFCI Schedules, as the case may be, dated as of the date of
the execution of this Agreement.
(iv) the Board of Directors of Oxford or SFCI or the Shareholder
determine in good faith that a condition to closing has not occurred.
In the event of termination pursuant to this paragraph (a) of Section 4.06, no
obligation, right or liability shall arise hereunder, and each party shall bear
all of the expenses incurred by it in connection with the negotiation, drafting,
and execution of this Agreement and the transactions herein contemplated.
(b) This Agreement may be terminated at any time prior to the Closing by
action of the board of directors of Oxford, if SFCI shall fail to comply in
any material respect with any of its covenants or agreements contained in
this Agreement or if any of the representations or warranties of SFCI
contained herein shall be inaccurate in any material respect. If this
Agreement is terminated pursuant to this paragraph (b) of Section 4.06,
this Agreement shall be of no further force or effect, and no obligation,
right or liability shall arise hereunder, except that SFCI shall bear its
own costs as well as the reasonable costs of Oxford in connection with the
negotiations, preparation, and execution of this Agreement and matters in
connection therewith.
(c) This Agreement may be terminated at any time prior to the Closing Date
by action of the board of directors of SFCI or by the Shareholder if Oxford
shall fail to comply in any material respect with any of its covenants or
agreements contained in this Agreement or if any of the representations or
warranties of Oxford contained herein shall be inaccurate in any material
respect. If this Agreement is terminated pursuant to this paragraph -C- of
Section 4.06, this Agreement shall be of no further force or effect, and no
obligation, right or liability shall arise hereunder, except that Oxford
shall bear its own costs as well as the reasonable costs of SFCI and the
Shareholder incurred in connection with the negotiation, preparation and
execution of this Agreement.
18
<PAGE>
ARTICLE V
SPECIAL COVENANTS
Section 5.01 STOCKHOLDER MEETINGS OF OXFORD. As soon as practicable
following the execution of this Agreement, and prior to the Closing, Oxford
shall call a special meeting of its Shareholders to approve the following
proposals:
(a) the authorization and approval of this Agreement and the transactions
contemplated thereby;
(b) to take such other actions as the directors may determine are
appropriate.
Section 5.02 ACCESS TO PROPERTIES AND RECORDS. Oxford and SFCI will
each afford to the officers and authorized representatives of the other and the
Shareholder full access to the properties, books and records of Oxford or SFCI
as the case may be, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other,
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of Oxford or SFCI,
as the case may be, as the other shall from time to time reasonably request.
Section 5.03 DELIVERY OF BOOKS AND RECORDS. At the Closing, SFCI shall
deliver to Oxford the originals of the corporate minute books, books of account,
contracts, records, and all other books or documents of Oxford now in the
possession of Oxford or its representatives.
Section 5.04 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE
EXCHANGED OXFORD STOCK. The consummation of this Agreement and the
transactions herein contemplated, including the issuance of the Exchanged Stock
to the Shareholder of SFCI as contemplated hereby, constitutes the offer and
sale of securities under the Securities and Exchange Act and applicable state
statutes. Such transactions shall be consummated in reliance on exemptions from
the registration and prospectus delivery requirements of such statutes which
depend, INTER ALIA, upon the circumstances under which the Shareholder acquires
such securities. In connection with reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, at the
Closing, SFCI shall cause to be delivered, and the Shareholder shall deliver to
Oxford, letters of representation in the form attached hereto as Exhibit "A".
19
<PAGE>
Section 5.05 THIRD PARTY CONSENTS AND CERTIFICATES. Oxford and SFCI
agree to cooperate with each other in order to obtain any required third party
consents to their Agreement and the transactions herein and therein
contemplated.
Section 5.06 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date and
except as set forth in the Oxford or SFCI Schedules or as permitted or
contemplated by this Agreement, Oxford and SFCI respectively, will each:
(I) carry on its business in substantially the same manner as it has
heretofore;
(ii) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear
and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligations under
material contracts, leases, and instruments relating to or affecting
its assets, properties, and business;
(v) use its best reasonable efforts to maintain and preserve its
business organization intact, to retain its key employees, and to
maintain its relationship with its material suppliers and customers;
and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of their Agreement until the Closing Date,
neither Oxford nor SFCI will:
(I) make any changes in their articles of incorporation or bylaws.
(ii) take any action described in Section 1.07 in the case of SFCI, or
in Section 3.07, in the case of Oxford (all except as permitted
therein or as disclosed in the applicable party's schedules); or
(iii) enter into or amend any contract, agreement, or other
instruments
20
<PAGE>
of any of the types described in such party's schedules, except that a
party may enter into or amend any contract, agreement, or other
instrument in the ordinary course of business involving the sale of
goods or services.
Section 5.07 SALES UNDER RULE 144 OR 145, IF APPLICABLE.
(a) Oxford will use its best reasonable efforts to at all times comply
with the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and NASD, including timely filing of all
periodic reports required under the provisions of the Exchange Act and the
rules and regulations promulgated thereunder.
(b) Upon being informed in writing by any such person holding restricted
stock of Oxford as of the date of their Agreement that such person intends
to sell any shares under Rule 144 or Rule 145 promulgated under the
Securities Act (including any rule adopted in substitution or replacement
thereof), Oxford will certify in writing to such person that it has filed
all of the reports required to be filed by it under the Exchange Act to
enable such person to sell such person's restricted stock under Rule 144 or
145, as may be applicable in the circumstances, or will inform such person
in writing that it has not filed any such report or reports.
(c) If any certificate representing any such restricted stock is presented
to Oxford's transfer agent for registration of transfer in connection with
any sale theretofore made under Rule 144 or 145, provide such certificate
is duly endorsed for transfer by the appropriate person(s) or accompanied
by a separate stock power duly executed by the appropriate person(s) in
each case with reasonable assurances that such endorsements are genuine and
effective, and is accompanied by an opinion of counsel satisfactory to
Oxford and its counsel that stock transfer has complied with the
requirements of Rule 144 or 145, as the case may be, Oxford will promptly
instruct its transfer agent to register such shares and to issue one or
more new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144 or 145, as the case may be,
free of any stop transfer order or restrictive legend. The provisions of
their Section 5.07 shall survive the Closing and the consummation of the
transactions contemplated by their Agreement.
Section 5.08 INDEMNIFICATION.
(a) SFCI and the Shareholder hereby agree to indemnify Oxford and each of
the officers, agents and directors of Oxford as of the date of execution of
their Agreement against any loss, liability, claim, damage, or expense
21
<PAGE>
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentations made under Articles I and II of their Agreement. The
indemnification provided for in their paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement.
(b) Oxford hereby agrees to indemnify SFCI and the Shareholder and each of
the officers, agents, and directors of SFCI as of the date of execution of
their Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article III of their Agreement. The
indemnification provided for in their paragraph shall survive the Closing
and consummation of the interactions contemplated hereby and termination of
this Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF OXFORD
The obligations of Oxford under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by SFCI and the Shareholder in this Agreement were true when
made and shall be true at the Closing Date with the same force and effect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), SFCI and the
Shareholder shall have performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by SFCI and the
Shareholder prior to or at the Closing. Oxford shall be furnished with a
certificate, signed by a duly authorized executive officer of SFCI and dated
the Closing Date, to the foregoing effect.
Section 6.02 OFFICER'S CERTIFICATE. Oxford shall have been furnished
with a certificate dated the Closing Date and signed by a duly authorized
officer of SFCI to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the knowledge of SFCI threatened, which might result
in an action to enjoin or prevent the consummation of the transactions
contemplated by their Agreement, or,
22
<PAGE>
to the extent not disclosed in the SFCI Schedules, by or against SFCI, which
might result in any material adverse change in any of the assets, properties,
business, or operations of SFCI.
Section 6.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business, or operations of SFCI nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business or operations of
SFCI.
Section 6.04 GOOD STANDING. Oxford shall have received a certificate of
good standing from the proper authority dated as of a date within ten days prior
to the Closing Date certifying that SFCI is in good standing as a corporation in
Canada.
Section 6.05 OFFICER AND DIRECTOR QUESTIONNAIRES. Oxford shall have
received officer and director questionnaires completed and signed by each
executive officer and director of SFCI in form and substance reasonably
satisfactory to Oxford and its counsel which shall contain information for use
by Oxford in reporting the transaction contemplated hereby on Form 8-K to be
filed with the Securities and Exchange Commission.
Section 6.06 OTHER ITEMS.
(a) Oxford shall have received a Shareholders list of SFCI containing the
name, address, and number of shares held by each SFCI Shareholder as of the
date of Closing certified by an executive officer of SFCI as being true,
complete and accurate,
(b) Oxford shall have received such further documents, certificates or
instruments relating to the transactions contemplated hereby as Oxford may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SFCI
AND THE SHAREHOLDER
The obligations of SFCI and the Shareholder under this Agreement are
subject to the satisfaction, at or before the Closing Date, of the following
conditions:
Section 7.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Oxford in this Agreement were true when made and shall be
true
23
<PAGE>
as of the Closing Date (except for changes therein permitted by this Agreement)
with the same force and effect as if such representations and warranties were
made at and as of the Closing Date, and Oxford shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by Oxford prior to or at the Closing, SFCI shall have been
furnished with a certificate, signed by a duly authorized executive officer of
Oxford and dated the Closing Date, to the foregoing effect.
Section 7.02 STOCKHOLDER APPROVAL. The stockholders of Oxford shall
have approved this Agreement, the transactions contemplated hereby, and the
other matters described in Section 4.01.
Section 7.03 OFFICER'S CERTIFICATE. SFCI shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized executive
officer of Oxford, to the effect that no litigation, proceeding, investigation
or inquiry is pending, or to the best knowledge of Oxford threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement.
Section 7.04 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of Oxford nor shall any event have occurred
which, with the lapse of time or the giving of notice, may cause or create any
material adverse change in the financial condition, business or operations of
Oxford.
Section 7.05 GOOD STANDING. SFCI shall have received a certificate of
good standing from the Secretary of State of the state of Nevada or other
appropriate office, dated as of a date within twenty days prior to the Closing
Date certifying that Oxford is in good standing as a corporation in the state of
Nevada and has filed all tax returns required to have been filed by it to date
and has paid all taxes reported as due thereon.
Section 7.06 NO ACTION BY SEC Oxford shall not be subject to any stop
order, enforcement action or other proceeding or investigation initiated against
Oxford, its officers or directors by the SEC or NASD.
Section 7.07 OTHER ITEMS.
(a) SFCI shall have received a Shareholders list of Oxford, current at
least twenty (20) days prior to Closing, containing the name, address and
number of shares held by each such Oxford Shareholders certified by an
executive officer of Oxford as being true, complete and accurate,
24
<PAGE>
(b) SFCI shall have received further documents, certificates, or
instruments relating to the transactions contemplated hereby as SFCI may
reasonably request.
(c) SFCI shall have received uniform commercial code certificates from the
appropriate state of local authorities dated as of the Closing Date to the
effect that there were no liens on the properties of Oxford
ARTICLE VIII
MISCELLANEOUS
Section 8.01 BROKERS. Oxford and SFCI agree that there were no finders
or brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution or consummation of their Agreement. Oxford and SFCI
each agree to indemnify the other against any claim by any third person other
than those described above for any commission, brokerage, or finder's fee
arising form the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
Section 8.02 GOVERNING LAW. Their Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of Nevada.
Section 8.03 NOTICES. Any notice or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to Oxford, to: Oxford Capital Corp.
4615 Southwest Freeway, Suite 420
Houston, Texas 77024
With copies to: Vanderkam & Sanders
1111 Caroline Street
Suite 2905
Houston, Texas 77010
25
<PAGE>
If to SFCI. Safety and Fatigue Consultants International, Inc.
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
With copies to: Cassell & Stone, L.L.P.
Mr. M. David Burton
5958 Sherry Lane
Suite 1400
Dallas, Texas 75225
If to Shareholder Mr. Jerry Stovall
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed or telegraphed.
Section 8.04 ATTORNEY'S FEES. In the event that any party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party or parties shall
reimburse the nonbreaching party or parties for all costs, including reasonable
attorney's fees, incurred in connection therewith and in enforcing or collecting
any judgement rendered therein.
Section 8.05 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its representatives will hold in strict confidence
all data and information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director or employee, or
from any books or records or from personal inspection, as such other party, and
shall not use such disclosure data or information or disclose the same to
others, except (I) to the extent such data or information is published, is a
matter of public knowledge, or is required by law to be published; and (ii) to
the extent that such disclosure data or information must be used or disclosed in
order to consummate the transactions contemplated by this Agreement. In the
event of the termination of this agreement, each party shall return
26
<PAGE>
to the other party all documents and other materials obtained by it or on its
behalf and shall destroy all copies, digests, work papers, abstracts or other
materials relating thereto, and each party will continue to comply with the
confidentiality provisions set forth herein.
Section 8.06 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 8.07 THIRD PARTY BENEFICIARIES. This Agreement is strictly
between Oxford and SFCI, and the Shareholder and, except as specifically
provided, no director, officer, stockholder, employee, agent, independent
contractor or any other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
Section 8.08 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof.
Section 8.09 SURVIVAL; TERMINATION. The representations, warranties,
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of three
months.
Section 8.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. Solely for the purpose of this
facsimile signatures shall be deemed original signatures.
Section 8.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same of any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by any writing signed by all parties hereto, with
respect to any of the terms contained herein, and say term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision in intended.
27
<PAGE>
IN WITNESS WHEREOF, the corporate parties and the Shareholder hereto have
caused this Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first-above written.
ATTEST: OXFORD CAPITAL CORP.
BY:
- ---------------------- --------------------
Secretary or Assistant Secretary Robert E. Cheney, President
ATTEST: SAFETY AND FATIGUE CONSULTANTS
INTERNATIONAL, INC.
BY:
- ---------------------- --------------------
Secretary or Assistant Secretary Jerry Stovall, President
ATTEST: THE SHAREHOLDER
BY:
- -------------------- --------------------
Jerry Stovalll
28
<PAGE>
EXHIBIT A
NAME SHARES OF SFCI SHARES OF OXFORD
- --------------------------------------------------------------------------------
Mr. Jerry Stovall 1000 23,293,005
5307 E. Mockingbird Lane
Suite 300
Dallas, Texas 75206
