SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT
JANUARY 2, 2001
CYBEROPTICLABS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(FORMERLY KNOWN AS VESTEX, INC.)
NEW YORK
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(STATE OR OTHER JURISDICTION OF INCORPORATION)
33-23473-NY 11-52917728
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(COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
7 OLD LANTERN ROAD, NORWALK, CONNECTICUT 06851
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE)
(203) 846-4981
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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
[ITEMS]2
ITEM 2. Acquisition or Disposition of Assets
On November 21, 2000, the Company entered into two separate
Contribution and Exchange Agreements (the "Acquisition Agreements") with
I.S.G. Group, Inc., a New York corporation ("ISG"), and U.S. Direct
Insurance Agency, Inc., a New York corporation ("US Direct"). ISG and US
Direct are collectively referred to herein as the Target Companies.
Pursuant to the terms of the Acquisition Agreements, the Company acquired
the Target Companies for an aggregate of 21,651,000 shares of the Company's
common stock with a total of 25,764,000 shares of common stock issued and
outstanding after the acquisitions (the "Acquisitions"). Current management
of the Company resigned at the closing of the transactions and the business
of the Target Companies is the ongoing business of the Company. The
shareholders of ISG received 10,540,000 shares of common stock and the
shareholders of US Direct has received 11,111,000 shares of common stock on
the closing of the Acquisitions.
The Acquisitions were approved at a meeting of the Company's
shareholders on December 14, 2000.
As a result of the Acquisitions, the Company has the following
shares of Common Stock outstanding:
Class of Shareholder Shares of Common Stock Percentage
-------------------- ---------------------- ----------
Current Shareholders of the
Company Prior to the Acquisitions 4,113,000 15.96%
ISG Shareholders 10,540,000 40.91%
US Direct Shareholders 11,111,000 43.13%
---------- -------
Total 25,764,000 100.00%
========== =======
Although current shareholders were diluted by the acquisitions,
management of the Company believes these transactions are in the Company's
and its shareholders' best interest. The Acquisitions are consistent with
the business plan of the Company. By acquiring the Target Companies, the
Company received operations and subsidiaries with dynamic business plans.
Both ISG and US Direct are in the insurance business and their operations
will be complimentary to each other. As the Company had no business
operations prior to the Acquisitions, management felt these acquisitions
were important to creating value in the Company for its shareholders. The
Acquisitions were designed to provide the Target Companies with a public
market for their stock for the future benefit of their current shareholders
and to enhance the Target Companies' abilities to seek future funding of
their operations.
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Pursuant to the terms of the Acquisition Agreements, the Target
Companies nominated new directors for the Company. The new directors are
John Scagnelli and Krisha Nyborg. Ivan Wong remained a director of the
Company. Set forth below are biographical information on the new directors.
John Scagnelli, age 47, has 22 years experience in the data processing
industry. Mr. Scagnelli is currently the sales director for Hyperion
Solutions Financial Tam where he is in charge of selling business analysis
applications to the financial industry. Prior to Hyperion, Mr. Scagnelli
held the position of regional vice president for sales at HIE an enterprise
application integration company located in Marietta, Georgia and district
manager of sales for New York, New Jersey and Pennsylvania for Sterling
Software.
Krisha Nyborg, age 28, currently holds the position of Assistant Vice
President of Judicial Title Insurance Agency of White Plains, New York. The
Judicial Title Insurance Agency, Inc. has been in existence since 1978 and
is currently one of the largest Title Insurance agencies in the Tri-State
area. Ms. Nyborg has served in various capacities within Judicial over the
past eight years. She plays a key role in the creation, modification and
implementation of company wide policies and procedures relating to the
closing, production and operation systems. Presently, she is over the
Production Division, Closing Division and the Quality Control Team. In
addition, she is liaison with OC Systems, an application software provider
to the title industry, to innovate, enhance and administer the company's
application software. Ms. Nyborg earned a Bachelors of Arts Degree from St.
John's University.
Ivan Wong will continue as a director of the newly rearranged
Company. Dr. Wong is currently a registered Pharmacist and Professional
Consultant to small and medium sized medical related companies. Dr. Wong
had worked for Walgreens, Inc. as a registered Pharmacist for the last 5
years. He is currently residing in the city and state of New York. Dr. Wong
is also a Director of Interactive Health Network, an online health and
awareness concern. Dr. Wong is also a Director of the WB GROWTH FUND, LLC.,
an investment fund that finances pharmaceutical, biotech, Internet and
telecommunication companies. Dr. Wong holds a Doctorate Degree in Pharmacy
from the University of Arizona.
Information on US Direct
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US Direct Insurance Agency, Inc.: - a New York Corporation and licensed
Insurance agency that has been focusing on the development of technological
systems, solutions and processes that will allow it to become a nationwide
distributor of insurance products through both the Internet and traditional
insurance agents. In addition to the creation and growth of its insurance
agency business, US Direct intends to provide hosted applications and
Internet-based solutions to the insurance industry. US Direct's management
team has primarily focused its resources to date on the development of front-
end insurance industry applications including; comparative rating, online
policy application and issuance solutions. US Direct is also developing
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hosted applications that will enable insurance carriers to manage their agent
distribution channels utilizing hosted applications that take advantage of
universal client technology. Universal client technology allows ubiquitous
access to applications with the use of industry standard Internet browsers.
US Direct also owns 1,860,500 shares (approximately 43%) of RiderPoint
Inc. RiderPoint, Inc. ("Riderpoint") is a Internet-based provider of
innovative insurance products to motorcycle, all-terrain vehicle,
snowmobile and personal watercraft enthusiasts. Through an integrated
marketing and sales distribution plan that leverages powersport dealers,
the Internet and proprietary information systems, Riderpoint intends to
exploit the fragmentation, inefficiencies and dated methodologies currently
existing in the insurance industry to grow its premium base.
As an integral part of its growth strategy, US Direct intends to
utilize its comparative insurance rating engine known as IQ. This engine
provides US Direct with the ability to provide real-time comparatively
rated insurance quotes online to all of its targeted distribution channels.
IQ will showcase its ability to allow users to buy coverage online, without
any live agent support. While some customers will always prefer to speak to
an agent and therefore require agent support, the company believes that the
utilization of virtual comparative insurance rating, online policy
application and online policy issuance solutions will continue to grow in
the future.
Information on ISG
- ------------------
Insurance Solutions Group, Inc: - ISG Group Inc., ("ISG"), doing
business as Insurance Solutions Group was incorporated under the laws of
New York on December 21, 1999 and commenced operations during January of
2000. ISG provides comprehensive insurance solutions on behalf of Insurance
Companies, State Insurance Departments and Self-Insured Entities through its
operating subsidiaries; Universal Recoveries Inc. d.b.a Subrogation Partners
and U.L.A.E. Inc. d.b.a Claim Partners. The current client list of ISG
include local and state governments, as well as a few fortune 1000 companies.
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Universal Recoveries Inc. d.b.a. Subrogation Partners ("Subrogation
Partners") was acquired by ISG as part of a consolidation from common
shareholders. Universal Recoveries Inc. was incorporated under the laws of
the State of New York on March 25, 1997 and commenced operation during May
of 1997. Subrogation Partners provides insurance recovery and collection
services, including subrogation, salvage, healthcare and deductible
collections.
U.L.A.E. Inc. d.b.a. Claim Partners, ("Claim Partners") was incorporated
under the laws of the State of New York on October 20, 1999 and commenced
operations on January of 2000. Claim Partners is a third-party claims
administrator that provides claim management solutions to insurance
companies.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS, AND EXHIBITS
(b)(1) Pro Forma Financial Statements.
To Be Filed
(c)(1) Exhibits. The following exhibits are included as part of this report:
SEC
Exhibit Reference
Number Number Title of Document Location
- ------- -------- ----------------- --------
2.01 2 Contribution and Exchange Agreement
with US Direct Insurance Agency, Inc. This Filing
2.02 2 Contribution and Exchange Agreement
with ISG Group, Inc. This Filing
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SIGNATURES
In accordance with Section 13 or 15(d) of the Securities Exchange Act,
the registrant has duly caused this report to be signed by the
undersigned, "hereunto duly authorized".
Vestex, Inc.
(Registrant)
/s/ C.T. YEH Date: January 2, 2001
--------------------
C.T. Yeh
President/Director
/s/ IVAN WONG Date: January 2, 2001
--------------------
Ivan Wong
Secretary/Director
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2.02 2 Contribution and Exchange Agreement
with ISG Group, Inc.
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (this "Agreement") is
made this 30th day of November 2000, by and among CyberOpticLabs, Inc.,
a Nevada corporation ("CyberOpticLabs"); ISG Group, Inc., d.b.a.
Insurance Solutions Group, a New York corporation ("ISG"); and the
persons listed in Exhibit A-1 hereof who are the owners of record
of all the issued and outstanding stock of ISG who execute and deliver
this Agreement ("ISG Stockholders"), based on the following:
Recitals
CyberOpticLabs wishes to acquire all the issued and outstanding
stock of ISG in exchange for stock of CyberOpticLabs in a transaction
intended to qualify as a tax-free exchange pursuant to Section 351 of
the Internal Revenue Code of 1986, as amended (the "Code"). The
parties intend for this Agreement to represent the terms and conditions
of such tax-free exchange, which Agreement the parties hereby adopt.
CyberOpticLabs is also in the process of acquiring US Direct
Insurance Agency, Inc., a New York corporation ("US Direct"). Both
acquisitions will be through a share exchange with a total of
21,651,000 shares of CyberOpticLabs issued for both insurance
companies. As a result thereof, the ISG Stockholders, together
with the stockholders of U.S. Direct, shall be in "control"
(within the meaning of Section 368(c) of the Code) of CyberOpticLabs.
Agreement
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and
agreements hereinafter set forth, the mutual benefits to the parties
to be derived herefrom, and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, it is
hereby agreed as follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the 1.02
conditions set forth in this Agreement, on the Closing Date (as defined in
Section 1.05 hereof), the ISG Stockholders shall assign, transfer,
contribute and deliver to CyberOpticLabs, free and clear of all liens,
pledges, encumbrances, charges, restrictions, or claims of any kind, nature,
or description, all issued and outstanding shares of common stock of ISG
(the "ISG Shares") held by ISG Stockholders, which shares shall represent
all issued and outstanding shares of ISG common stock, and CyberOpticLabs
agrees to acquire such shares on such date by issuing and delivering in
exchange therefor an aggregate of 10,540,000 restricted shares of
CyberOpticLabs common stock, par value $0.001 per share, (the
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"CyberOpticLabs Common Stock"). Such shares of CyberOpticLabs Common Stock
shall be issued pro rata based on the number of ISG Shares held and as set
forth opposite the ISG Stockholder's respective names in Exhibit A-1. All
10,540,000 shares of CyberOpticLabs Common Stock to be issued and delivered
pursuant to this Agreement shall be appropriately adjusted to take into
account any stock split, stock dividend, reverse stock split,
recapitalization, or similar change in the CyberOpticLabs Common Stock
which may occur between the date of the execution of this Agreement and
the Closing Date.
1.02 Delivery of Certificates by ISG Stockholders. The transfer of
ISG Shares by the ISG Stockholders shall be effected by the delivery to
CyberOpticLabs at the Closing (as set forth in Section 1.05 hereof) of
certificates representing the transferred shares endorsed in blank or
accompanied by stock powers executed in blank and with all necessary
transfer taxes and other revenue stamps affixed and acquired at the ISG
Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to
the transaction contemplated hereby, CyberOpticLabs will own all the issued
and outstanding shares of ISG and ISG will be a wholly-owned subsidiary of
CyberOpticLabs operating under the name Insurance Solutions Group, Inc.
1.04 Further Assurances. At the Closing and from time to time
thereafter, the ISG Stockholders shall execute such additional instruments
and take such other action as CyberOpticLabs may reasonably request, without
undue cost to the ISG Stockholders in order to more effectively sell,
transfer, and assign clear title and ownership in the ISG Shares to
CyberOpticLabs.
1.05 Closing and Parties. The Closing contemplated hereby shall be
held at a mutually agreed upon time and at ISG offices located at 55 John
Street, NY, NY 10038 on or before December 31st, 2000, or on another date
to be agreed to in writing by the parties (the "Closing Date"). The
Agreement may be closed at any time following approval by a majority of
the stockholders of CyberOpticLabs Common Stock as set forth in Section
4.02 hereof and the ISG Stockholders as set forth in Section 5.02. The
Closing may be accomplished by wire, express mail, overnight courier,
conference telephone call or as otherwise agreed to by the respective
parties or their duly authorized representatives.
1.06 Closing Events.
(a) CyberOpticLabs Deliveries. Subject to fulfillment or waiver
of the conditions set forth in Article IV, CyberOpticLabs shall deliver
to ISG at Closing all the following:
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(i) A certificate of good standing from the secretary of
State of Nevada, issued as of a date within five days prior to the
Closing Date, certifying that CyberOpticLabs is in good standing as a
corporation in the State of Nevada;
(ii) Incumbency and specimen signature certificates dated
the Closing Date with respect to the officers of CyberOpticLabs executing
this Agreement and any other document delivered pursuant hereto on behalf
of CyberOpticLabs;
(iii) Copies of the resolutions of CyberOpticLabs's board of
directors and shareholder minutes or consents authorizing the execution
and performance of this Agreement and the contemplated transactions,
certified by the secretary or an assistant secretary of CyberOpticLabs as
of the Closing Date;
(iv) The certificate contemplated by Section 4.02, duly executed
by the chief executive officer of CyberOpticLabs;
(v) The certificate contemplated by Section 4.03, dated the
Closing Date, signed by the chief executive officer of CyberOpticLabs;
(vi) Certificates for 10,540,000 shares of CyberOpticLabs Common
Stock in the names of the ISG Stockholders and in the amounts set forth in
Exhibit "A-1;" and
In addition to the above deliveries, CyberOpticLabs shall take all
steps and actions as ISG and ISG Stockholders may reasonably request or
as may otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
(b) ISG Deliveries. Subject to fulfillment or waiver of the
conditions set forth in Article V, ISG and/or ISG Stockholder's shall
deliver to CyberOpticLabs at Closing all the following:
(i) A certificate of good standing from the secretary of
state of New York, issued as of a date within five days prior to the
Closing Date certifying that ISG is in good standing as a corporation in
the State of New York;
(ii) Incumbency and specimen signature certificates dated the
Closing Date with respect to the officers of ISG executing this Agreement
and any other document delivered pursuant hereto on behalf of ISG;
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(iii) Copies of resolutions of the board of directors and of the
stockholders of ISG authorizing the execution and performance of this
Agreement and the contemplated transactions, certified by the secretary
or an assistant secretary of ISG as of the Closing Date;
(iv) The certificate contemplated by Section 5.03, executed by
the chief operating officer of ISG; and
(v) The certificate contemplated by Section 5.04, dated the
Closing Date, signed by the chief operating officer of ISG.
In addition to the above deliveries, ISG shall take all steps and
actions as CyberOpticLabs may reasonably request or as may otherwise be
reasonably necessary to consummate the transactions contemplated hereby.
1.07. Termination
(a) This Agreement may be terminated by the board of directors of
either CyberOpticLabs or ISG 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 this Agreement
and which, in the reasonable judgment 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 transactions 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 reasonable judgment 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
only on a condition or conditions which would be unduly burdensome, making
it inadvisable to proceed with the exchange;
In the event of termination pursuant to this paragraph (a) of Section
1.07, 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, preparation, and execution of this Agreement and the
transactions contemplated hereby.
(b) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of CyberOpticLabs if (i) ISG 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 ISG contained herein shall be inaccurate in any material
respect or (ii) CyberOpticLabs determines that there has been or is likely
to be any material adverse change in the financial or legal condition of ISG.
In the event of termination pursuant to this paragraph (b) of this Section
1.07, no obligation, right, remedy, or liability shall arise hereunder. All
parties shall bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
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(c) This Agreement may be terminated at any time prior to the Closing
Date by action of the board of directors of ISG if (i) CyberOpticLabs 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 CyberOpticLabs contained herein shall be inaccurate in any
material respect or (ii) ISG determines that there has been or is likely to
be any adverse change in the financial or legal condition of CyberOpticLabs.
In the event of termination pursuant to this paragraph (c) of this Section
1.07, no obligation, right, remedy, or liability shall arise hereunder. All
parties shall each bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CYBEROPTICLABS
As an inducement to, and to obtain the reliance of ISG, CyberOpticLabs
represents and warrants as follows:
2.01 Organization. CyberOpticLabs is, and will be on the Closing Date,
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 and will
be duly authorized, qualified, franchised, and licensed under all applicable
laws, regulations, ordinances, and orders of public authorities to own all
of its properties and assets and to carry on its business in all material
respects as it is now being conducted, and there are no other jurisdictions
in which it is not so qualified in which the character and location of the
assets owned by it or the nature of the material business transacted by it
requires qualification, except where failure to do so would not have a
material adverse effect on its business, operations, properties, assets or
condition. The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement in accordance
with the terms hereof will not, violate any provision of CyberOpticLabs's
articles of incorporation or bylaws, or other agreement to which it is a
party or by which it is bound.
2.02 Approval of Agreement. CyberOpticLabs has full power, authority,
and legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, and otherwise to execute and deliver this
Agreement and to consummate the transactions herein contemplated. The board
of directors of CyberOpticLabs has authorized and approved the execution,
delivery, and performance of this Agreement and the transactions contemplated
hereby; subject to the approval of the CyberOpticLabs stockholders and
compliance with state and federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of CyberOpticLabs
consists of 100,000,000 shares of common stock, $0.001 par value, of which
4,005,000 shares are issued and outstanding and 5,000,000 shares of
preferred stock, $0.001 par value, none of which are issued and outstanding.
All issued and outstanding shares of CyberOpticLabs are legally issued, fully
paid, and nonassessable and not issued in violation of the preemptive or
other right of any person. There are no dividends or other amounts due or
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payable with respect to any of the shares of capital stock of CyberOpticLabs.
Immediately following the exchange referred to in Section 1.01 and the
Recitals above, the ISG Stockholders and the Stockholders of US Direct shall,
together, own at least 80% of the total combined voting power of all classes
of stock of CyberOpticLabs entitled to vote and at least 80% of the total
number of shares of each other class of stock of CyberOpticLabs that is then
issued and outstanding, such that the ISG Stockholders and the Stockholders
of US Direct shall, together, be in "control" (within the meaning of Section
368(c) of the Code) of CyberOpticLabs.
2.04. Financial Statements.
(a) Included in Schedule 2.04 are the audited balance sheets of
CyberOpticLabs as of December 14, 1999, and 1998, and the related
statements of operations, stockholders' equity (deficit), and cash flows
for the fiscal year ended December 31, 1999, and 1998, and from inception
through December 31, 1999, including the notes thereto, and the accompanying
report of Dave Thompson, CPA, independent certified public accountants.
Prior to the Closing Date, CyberOpticLabs shall deliver the unaudited
balance sheet of CyberOpticLabs as of September 30, 2000, and the related
statements of operations, stockholders' equity (deficit), and cash flows
for the nine months ended September 30, 2000, together with the notes
thereto and representations by the principal accounting and financial
officer of CyberOpticLabs to the effect that such financial statements
contain all adjustments (all of which are normal recurring adjustments)
necessary to present fairly the results of operations and financial
position for the periods and as of the dates indicated and such financial
statements shall not reflect any material changes since the December 31,
1999 financial statements.
(b) The financial statements of CyberOpticLabs delivered pursuant
to Section 2.04(a) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved as explained in the notes to such financial statements. The
CyberOpticLabs financial statements present fairly, in all material respects,
as of their respective dates, the financial position of CyberOpticLabs.
CyberOpticLabs did not have, as of the date of any such financial statements,
except as and to the extent reflected or reserved against therein, any
liabilities or obligations (absolute or contingent) which should be
reflected therein in accordance with generally accepted accounting
principles, and all assets reflected therein presently fairly the assets
of CyberOpticLabs in accordance with generally accepted accounting
principles.
(c) CyberOpticLabs has filed or will file as the Closing Date all
tax returns required to be filed by it from inception to the Closing Date.
All such returns and reports are accurate and correct in all material
respects. CyberOpticLabs has no material liabilities with respect to
the payment of any federal, state, county, local, or other taxes
(including any deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the date of the most recent balance
sheet of CyberOpticLabs, except to the extent reflected on such balance
sheet and all such dates and years and periods prior thereto and for which
CyberOpticLabs may at said date have been liable in its own right or as
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transferee of the assets of, or as successor to, any other corporation
or entity, except for taxes accrued but not yet due and payable, and to
the best knowledge of CyberOpticLabs, no deficiency assessment or proposed
adjustment of any such tax return is pending, proposed or contemplated.
To the best knowledge of CyberOpticLabs, none of such income tax returns
has been examined or is currently being examined by the Internal Revenue
Service and no deficiency assessment or proposed adjustment of any such
return is pending, proposed or contemplated. CyberOpticLabs has not made
any election pursuant to the provisions of any applicable tax laws (other
than elections that relate solely to methods of accounting, depreciation,
or amortization) that would have a material adverse affect on
CyberOpticLabs, its financial condition, its business as presently
conducted or proposed to be conducted, or any of its respective properties
or material assets. There are no outstanding agreements or waivers
extending the statutory period of limitation applicable to any tax
return of CyberOpticLabs.
2.05 Outstanding Warrants and Options. Except as set forth on
Schedule 2.05, CyberOpticLabs has no existing warrants or options, calls,
or commitments of any nature relating to the authorized and unissued
CyberOpticLabs Common Stock.
2.06 Information. The information concerning CyberOpticLabs set
forth in this Agreement 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.
CyberOpticLabs shall cause the schedules delivered by it pursuant hereto
and the instruments delivered to ISG hereunder to be updated after the
date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the schedules hereto, since the date of the most
recent CyberOpticLabs balance sheet described in Section 2.04 and
included in the information referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or
condition of CyberOpticLabs or (ii) any damage, destruction, or loss
to CyberOpticLabs (whether or not covered by insurance) materially
and adversely affecting the business, operations, properties, assets,
or condition of CyberOpticLabs;
(b) CyberOpticLabs 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 CyberOpticLabs; (iv) made any material change in its
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method of management, operation, or accounting; (v) entered into any
other material transactions; (vi) made any accrual or arrangement for
or payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or
employee; (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 with its officers, directors, or employees;
(c) CyberOpticLabs 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 any material obligation or liability
(absolute or contingent) other than current liabilities reflected in or
shown on the most recent CyberOpticLabs balance sheet and current
liabilities incurred since that date in the ordinary course of business;
(iv) sold or transferred, or agreed to sell or transfer, any of its
material 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 $5,000 or canceled, or agreed to cancel, any debts
or claims (except debts and claims which in the aggregate are of a value
of less than $5,000); (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, considering the business of
CyberOpticLabs; or (vi) 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 best knowledge of CyberOpticLabs, it has not become
subject to any law or regulation which materially and adversely affects,
or in the future would be reasonably expected to adversely affect, the
business, operations, properties, assets, or condition of CyberOpticLabs.
2.08 Litigation and Proceedings. There are no actions, suits,
or administrative or other proceedings pending or, to the knowledge of
CyberOpticLabs, threatened by or against CyberOpticLabs or adversely
affecting CyberOpticLabs 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. CyberOpticLabs does not
have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality.
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2.09 Compliance With Laws and Regulations. CyberOpticLabs has
complied with all applicable statutes and regulations of any federal,
state, or other governmental entity or agency thereof, except to the
extent that noncompliance (i) could not materially and adversely affect
the business, operations, properties, assets, or condition of
CyberOpticLabs or (ii) could not result in the occurrence of any material
liability for CyberOpticLabs. To the best knowledge of CyberOpticLabs,
the consummation of this transaction will comply with all applicable
statutes and regulations, subject to the preparation and filing of any
forms required by state and federal securities laws.
2.10 Compliance with Security Laws. CyberOpticLabs has complied
with all applicable security statutes and regulation of any federal,
state or other governmental entity or agency thereof, including the
filing of any required documents in regards to all sales of CyberOpticLabs
Stock. CyberOpticLabs is not required to file reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 and
CyberOpticLabs's counsel will deliver an opinion to this effect.
Notwithstanding the immediately preceding sentence, CyberOpticLabs has
voluntarily filed reports under the Securities Exchange Act of 1934,
which reports are complete and accurate in all material respects.
2.11 Material Contract Defaults. CyberOpticLabs is not a party
to any contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of
CyberOpticLabs, and there is no event of default or other event which,
with notice or lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which CyberOpticLabs has not taken adequate
steps to prevent such a default from occurring.
2.12 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 CyberOpticLabs is a party or to which any of its properties
or operations are subject.
2.13 Subsidiary. CyberOpticLabs does not own, beneficially or of
record, any equity securities in any other entity.
2.14 CyberOpticLabs Schedules. CyberOpticLabs has delivered to
ISG the following schedules, which are collectively referred to as the
"CyberOpticLabs Schedules" and which consist of the following separate
schedules dated as of the date of execution of this Agreement, all
certified by a duly authorized officer of CyberOpticLabs as complete,
true, and accurate:
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(a) A schedule including copies of the articles of incorporation
and bylaws of CyberOpticLabs in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of CyberOpticLabs approving this Agreement and the
transactions herein contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of CyberOpticLabs since the most recent CyberOpticLabs balance
sheet, required to be provided pursuant to Section 2.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the
CyberOpticLabs Schedules by Sections 2.01 through 2.13.
CyberOpticLabs shall cause the CyberOpticLabs Schedules and the
instruments delivered to ISG hereunder to be updated after the date
hereof up to and including the Closing Date. Such updated CyberOpticLabs
Schedules, certified in the same manner as the original CyberOpticLabs
Schedules, shall be delivered prior to and as a condition precedent to
the obligation of ISG to close.
2.15 Immediately following the exchanges referred to in Section
1.01, CyberOpticLabs will not be an "investment company" for purposes
of Section 351(e) of the Code and the Treasury regulations promulgated
thereunder.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ISG
As an inducement to, and to obtain the reliance of, CyberOpticLabs,
ISG represents and warrants as follows:
3.01 Organization. ISG is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under
the laws of the State of New York and has the corporate power and is and
will be duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities
to own all of its properties and assets and to carry on its business in
all material respects as it is now being conducted, and there are no
Page 16
other jurisdictions in which it is not so qualified in which the character
and location of the assets owned by it or the nature of the material
business transacted by it requires qualification, except where failure
to do so would not have a material adverse effect on its business,
operations, properties, assets or condition of ISG. The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated by this Agreement in accordance with the terms
hereof will not, violate any provision of ISG's articles of incorporation
or bylaws, or other material agreement to which it is a party or by which
it is bound.
3.02 Approval of Agreement. ISG has full power, authority, and
legal right and has taken, or will take, all action required by law, its
articles of incorporation, bylaws, or otherwise to execute and deliver
this Agreement and to consummate the transactions herein contemplated.
The board of directors of ISG have authorized and approved the execution,
delivery, and performance of this Agreement and the transactions
contemplated hereby; subject to the approval of the ISG Stockholders and
compliance with state and federal corporate and securities laws.
3.03 Capitalization. The authorized capitalization of ISG
consists of 11,000,000 shares of common stock of which as of the date
hereof 10,540,000 shares are issued and outstanding. All issued and
outstanding shares of ISG are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other
right of any person. There are no dividends or other amounts due or
payable with respect to any of the shares of capital stock of ISG.
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the audited balance sheet of
ISG as of September 30, 2000, and the related statements of operations,
cash flows, and stockholders' equity for the period from inception, to
September 30, 2000, including the notes thereto, and the accompanying
report of Cipolla, Sziklay, Zak & Co., L.L.C. of 470 Prospect Ave.,
Suite 202-206, West Orange, NJ 07052, independent certified public
accountants.
(b) The audited financial statements delivered pursuant to
Section 3.04(a) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved. The financial statements of ISG present fairly, as
of their respective dates, the financial position of ISG. ISG did not
have, as of the date of any such balance sheets, except as and to the
extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in
any financial statements or the notes thereto prepared in accordance
with generally accepted accounting principles, and all assets reflected
therein present fairly the assets of ISG, in accordance with generally
accepted accounting principles. The statements of revenue and expenses
and cash flows present fairly the financial position and result of
operations of ISG as of their respective dates and for the respective
periods covered thereby.
Page 17
(c) ISG has filed or will have filed as of the Closing Date all
tax returns required to be filed by it from inception to the Closing
Date. All such returns and reports are accurate and correct in all
material respects. ISG has no material liabilities with respect to the
payment of any federal, state, county, local, or other taxes (including
any deficiencies, interest, or penalties) accrued for or applicable to
the period ended on the date of the most recent unaudited balance sheet
of ISG, except to the extent reflected on such balance sheet and
adequately provided for, and all such dates and years and periods
prior thereto and for which ISG may at said date have been liable in its
own right or as transferee of the assets of, or as successor to, any
other corporation or entity, except for taxes accrued but not yet due
and payable, and to ISG's knowledge no deficiency assessment or proposed
adjustment of any such tax return is pending, proposed or contemplated.
Proper and accurate amounts of taxes have been withheld by or on behalf
of ISG with respect to all material compensation paid to employees of ISG
for all periods ending on or before the date hereof, and all deposits
required with respect to compensation paid to such employees have been
made, in complete compliance with the provisions of all applicable federal,
state, and local tax and other laws. To ISG's knowledge, none of such
income tax returns has been examined or is currently being examined by the
Internal Revenue Service, and no deficiency assessment or proposed
adjustment of any such return is pending, proposed, or contemplated.
ISG has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of accounting,
depreciation, or amortization) that would have a material adverse affect
on ISG, its financial condition, its business as presently conducted or
proposed to be conducted, or any of its properties or material assets.
There are no tax liens upon any of the assets of ISG. There are no
outstanding agreements or waivers extending the statutory period of
limitation applicable to any tax return of ISG.
3.05 Outstanding Warrants and Options. ISG has no issued warrants
or options, calls, or commitments of any nature relating to the authorized
and unissued ISG Common Stock.
3.06 Information. The information concerning ISG set forth in this
Agreement and in the schedules delivered by ISG pursuant hereto 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. ISG shall cause the schedules delivered by ISG
pursuant hereto to CyberOpticLabs hereunder to be updated after the date
hereof up to and including the Closing Date.
Page 18
3.07 Absence of Certain Changes or Events. Except as set forth in
this Agreement since the date of the most recent ISG balance sheet
described in Section 3.04 and included in the information referred to
in Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or condition
of ISG or (ii) any damage, destruction, or loss to ISG materially and
adversely affecting the business, operations, properties, assets, or
conditions of ISG.
(b) ISG 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 and material considering the business of ISG;
(iv) made any material change in its method of accounting; (v) entered into
any other material transactions other than those contemplated by this
Agreement; (vi) made any material accrual or material arrangement for or
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; or (vii)
made any material increase in any profit-sharing, bonus, deferred
compensation, insurance, pension, retirement, or other employee benefit
plan, payment, or arrangement made to, for, or with their officers,
directors, or employees;
(c) ISG 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 any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent ISG balance sheet
and current liabilities incurred since that date in the ordinary course
of business; (iv) sold or transferred, or agreed to sell or transfer,
any of its material assets, properties, or rights, or agreed to cancel,
any material debts or claims; (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, considering the business of
ISG; or (vi) 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 best knowledge of ISG, it has not become subject to any
law or regulation which materially and adversely affects, or in the future
would be reasonably expected to adversely affect, the business, operations,
properties, assets, or condition of ISG.
Page 19
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent ISG balance sheet and the notes thereto,
ISG has good and marketable title to all of its properties, inventory,
interests in properties, technology, whether patented or un-patented,
and assets, which are reflected in the most recent ISG 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 mortgages, liens, pledges,
charges, or encumbrances, except (i) statutory liens or claims not yet
delinquent; and (ii) 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.
To the best knowledge of ISG, its technology does not infringe on the
copyright, patent, trade secret, know-how, or other proprietary right of
any other person or entity and comprises all such rights necessary to
permit the operation of the business of ISG as now being conducted or
as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed in
Schedule 3.09, there are no material actions, suits, or proceedings
pending or, to the knowledge of ISG, threatened by or against ISG or
adversely affecting ISG, at law or in equity, before any court or other
governmental agency or instrumentality, domestic or foreign, or before
any arbitrator of any kind. ISG does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule, or regulation of any court, arbitrator, or
governmental agency or instrumentality.
3.10 Material Contract Defaults. ISG 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 ISG, and there is no event of default
or other event which, with notice or lapse of time or both, would
constitute a default in any material respect under any such contract,
agreement, lease, or other commitment in respect of which ISG has not
taken adequate steps to prevent such a default from occurring.
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 an event of default under, any material indenture, mortgage,
deed of trust, or other material contract, agreement, or instrument to
which ISG is a party or to which any of its properties or operations
are subject.
Page 20
3.12 Governmental Authorizations. ISG 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 of this Agreement. Except
for compliance with federal and state securities and corporation laws,
as hereinafter provided, no authorization, approval, consent, or order
of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and
delivery by ISG of this Agreement and the consummation by ISG of the
transactions contemplated hereby.
3.13 Compliance With Laws and Regulations. ISG has complied with
all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that
noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of ISG or except to the
extent that noncompliance would not result in the occurrence of any
material liability for ISG. To the best knowledge of ISG, the consummation
of this transaction will comply with all applicable statutes and
regulations, subject to the preparation and filing of any forms required
by state and federal security laws.
3.14 Subsidiary. ISG owns 100% of the equity in its two operating
subsidiaries: Universal Recoveries, Inc., d.b.a. Subrogation Partners,
a New York corporation, and U.L.A.E., Inc., d.b.a. Claim Partners, also
a New York corporation.
3.15 ISG Schedules. ISG has delivered to CyberOpticLabs the
following schedules, which are collectively referred to as the "ISG
Schedules" and which consist of the following separate schedules dated
as of the date of execution of this Agreement, and instruments and
CyberOpticLabs as of such date, all certified by the chief executive
officer of ISG as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation
and bylaws of ISG and all amendments thereto in effect as of the date
of this Agreement;
Page 21
(b) A schedule containing copies of resolutions adopted by the
board of directors of ISG approving this Agreement and the transactions
herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of ISG since the most recent ISG balance sheet, required to be
provided pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the ISG
Schedules by Sections 3.01 through 3.14.
ISG shall cause the ISG Schedules and the instruments delivered to
CyberOpticLabs hereunder to be updated after the date hereof up to and
including the Closing Date. Such updated ISG Schedules, certified in the
same manner as the original ISG Schedules, shall be delivered prior to
and as a condition precedent to the obligation of CyberOpticLabs to close.
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF ISG
The obligations of ISG under this Agreement are subject to the
satisfaction of ISG, at or before the Closing Date, of the following
conditions:
4.01 Shareholder Approval. CyberOpticLabs shall call and hold a
meeting of its stockholders, or obtain the written consent of a majority
of its stockholders, to approve the transactions contemplated by this
Agreement including the acquisition of ISG through the issuance of
CyberOpticLabs Common Stock for all of the issued and outstanding ISG
Shares.
4.02 Accuracy of Representations. The representations and
warranties made by CyberOpticLabs in this Agreement were true when made
and shall be true at the Closing Date with the same force and affect as
if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement), and
CyberOpticLabs shall have performed or complied with all covenants and
conditions required by this Agreement to be performed or complied with by
CyberOpticLabs prior to or at the Closing. ISG shall be furnished with
certificates, signed by duly authorized officers of CyberOpticLabs and
dated the Closing Date, to the foregoing effect.
Page 22
4.03 Officer's Certificates. ISG shall have been furnished with
certificates dated the Closing Date and signed by the duly authorized
chief executive officer of CyberOpticLabs to the effect that to such
officers best knowledge no litigation, proceeding, investigation, or
inquiry is pending or, to the best knowledge of CyberOpticLabs threatened,
which might result in an action to enjoin or prevent the consummation of
the transactions contemplated by this Agreement. Furthermore, based on
certificates of good standing, representations of government agencies, and
CyberOpticLabs's own documents and information, the certificate shall
represent, to the best knowledge of the officer, that:
(a) This Agreement has been duly approved by CyberOpticLabs's
board of directors and stockholders and has been duly executed and
delivered in the name and on behalf of CyberOpticLabs by its duly
authorized officers pursuant to, and in compliance with, authority
granted by the board of directors of CyberOpticLabs pursuant to a
unanimous consent;
(b) There have been no material adverse changes in
CyberOpticLabs up to and including the date of the certificate;
(c) All conditions required by this Agreement have been met,
satisfied, or performed by CyberOpticLabs;
(d) All authorizations, consents, approvals, registrations,
and/or filings with any governmental body, agency, or court required
in connection with the execution and delivery of the documents by
CyberOpticLabs have been obtained and are in full force and effect or,
if not required to have been obtained, will be in full force and
effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending
or threatened against CyberOpticLabs, wherein an unfavorable decision,
ruling, or finding could have an adverse effect on the financial
condition of CyberOpticLabs, the operation of CyberOpticLabs, or the
acquisition and reorganization contemplated herein, or any agreement
or instrument by which CyberOpticLabs is bound or in any way contests
the existence of CyberOpticLabs.
4.04 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 CyberOpticLabs, 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 CyberOpticLabs.
Page 23
4.05 Good Standings. ISG shall have received a certificate of
good standing from the secretary of State of Nevada, dated as of the
date within five days prior to the Closing Date, certifying that
CyberOpticLabs is in good standing as a corporation in the State of Nevada.
4.06 Percentage Ownership of CyberOpticLabs Stock. Immediately
following the exchange referred to in Section 1.01 hereof, ISG, together
with the stockholders of U.S. Direct, shall have "control" (within the
meaning of Section 368(c) of the Code) of CyberOpticLabs.
4.07 Other Items. ISG shall have received such further documents,
certificates, or instruments relating to the transactions contemplated
hereby as ISG may reasonably request.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF CYBEROPTICLABS
The obligations of CyberOpticLabs under this Agreement are subject to
the satisfaction, at or before the Closing Date, of the following
conditions:
5.01. Shareholder Approval. CyberOpticLabs shall call and hold a
meeting of its stockholders, or obtain through a majority written consent
of its stockholders, whereby the stockholders of CyberOpticLabs authorize
and approve this Agreement and the transactions contemplated hereby.
5.02 ISG Stockholders. Holders of all of the issued and outstanding
ISG Shares shall have executed this Agreement and the exchange of shares
contemplated by this Agreement.
5.03 Acquisition of US Direct Insurance Agency, Inc. CyberOpticLabs
shall acquire US Direct Insurance Agency, Inc., a New York corporation, or
have entered into a definitive agreement to acquire it.
5.04 Accuracy of Representations. The representations and warranties
made by ISG and the ISG Stockholders in this Agreement were true when made
and shall be true at the Closing Date with the same force and affect as if
such representations and warranties were made at and as of the Closing Date
(except for changes therein permitted by this Agreement), and ISG shall
have performed or complied with all covenants and conditions required by
this Agreement to be performed or complied with by ISG prior to or at the
Closing. CyberOpticLabs shall be furnished with a certificate, signed by
a duly authorized officer of ISG and dated the Closing Date, to the
foregoing effect.
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5.05 Officer's Certificates. CyberOpticLabs shall have been furnished
with certificates dated the Closing Date and signed by the duly authorized
chief operating officer of ISG to the effect that no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of ISG,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Agreement.
Furthermore, based on certificates of good standing, representations of
government agencies, and ISG's own documents, the certificate shall
represent, to the best knowledge of the officer, that:
(a) This agreement has been duly approved by ISG's board of directors
and has been duly executed and delivered in the name and on behalf of ISG
by its duly authorized officers pursuant to, and in compliance with,
authority granted by the board of directors of ISG pursuant to a unanimous
consent of its board of directors and a majority vote of its stockholders;
(b) Except as provided or permitted herein, there have been no
material adverse changes in ISG up to and including the date of the
certificate;
(c) All authorizations, consents, approvals, registrations, and/or
filing with any governmental body, agency, or court required in connection
with the execution and delivery of the documents by ISG have been obtained
and are in full force and effect or, if not required to have been obtained
will be in full force and effect by such time as may be required; and
(d) Except as otherwise disclosed in Schedule 3.09, there is no
material action, suit, proceeding, inquiry, or investigation at law or
in equity by any public board or body pending or threatened against
ISG, wherein an unfavorable decision, ruling, or finding would have
an adverse affect on the financial condition of ISG, the operation of
ISG, or the acquisition and reorganization contemplated herein, or
any material agreement or instrument by which ISG is bound or would in
any way contest the existence of ISG.
5.06 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 ISG, nor shall any event have
occurred which, with the lapse of time or the giving of notice, may cause
of create any material adverse change in the financial condition, business,
or operations of ISG.
5.07 Good Standing. CyberOpticLabs shall have received a certificate
of good standing from the appropriate authority in the State of New York,
dated as of a date with five days prior to the Closing Date, certifying
that the ISG is in good standing as a corporation in the State of New
York.
Page 25
5.08 Other Items. CyberOpticLabs shall have received such further
documents certificates, or instruments relating to the transactions
contemplated hereby as CyberOpticLabs may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of CyberOpticLabs and ISG
(a) From and after the date of this Agreement until the Closing
Date and except as set forth in the respective schedules to be delivered
by CyberOpticLabs and ISG pursuant hereto or as permitted or contemplated
by this Agreement, CyberOpticLabs and ISG will each:
(i) Carry on its business in substantially the same manner as it
has heretofore;
(ii) Maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it business
organization intact, to retain its key employees, and to maintain its
relationships with its material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on or
prior to the Closing Date all federal, state, county, and local tax
returns required to be filed by or on behalf of such entity or for
which such entity may be held responsible and shall pay, or cause to
pay, all taxes required to be shown as due and payable on such returns,
as well as all installments of tax due and payable during the period
commencing on the date of this Agreement and ending on the Closing
Date.; and
(vi) Fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement and except as
provided herein until the Closing Date, CyberOpticLabs and ISG will not:
Page 26
(i) Make any change in its articles of incorporation or bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument 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; and
(iii) Enter into any agreement for the sale of ISG or
CyberOpticLabs securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date,
ISG and CyberOpticLabs will afford to the other party's officers and
authorized representatives full access to the properties, books, and
records of the other party in order that each party may have full
opportunity to make such reasonable investigation as it shall desire
to make of the affairs of ISG or CyberOpticLabs and will furnish the
other party with such additional financial and other information as to
the business and properties of ISG or CyberOpticLabs as each party shall
from time to time reasonably request.
6.03 Indemnification by ISG. ISG will indemnify and hold
harmless CyberOpticLabs and its directors and officers, and each
person, if any, who controls CyberOpticLabs within the meaning of
the Securities Act, from and against any and all losses, claims,
damages, expenses, liabilities, or actions to which any of them may
become subject under applicable law (including the Securities Act and
the Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not
resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities, or actions arise out of or are based upon any
untrue statement or alleged untrue statement of material fact contained
in any application or statement filed with a governmental body or arising
out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in
order to make the statements therein not misleading, but only insofar as
any such statement or omission was made in reliance upon and in conformity
with information furnished in writing by ISG expressly for use therein.
The indemnity agreement contained in this Section 6.03 shall remain
operative and in full force and effect, regardless of any investigation
made by or on behalf of CyberOpticLabs and shall survive the consummation
of the transactions contemplated by this Agreement for a period of one year.
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6.04. Indemnification by CyberOpticLabs. CyberOpticLabs will
indemnify and hold harmless ISG, the ISG Stockholders, ISG's directors
and officers, and each person, if any, who controls ISG within the meaning
of the Securities Act, from and against any and all losses, claims, damages,
expenses, liabilities, or actions to which any of them may become subject
under applicable law (including the Securities Act and the Securities
Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending
any claims or actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities, or actions arise out
of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in any application or statement filed with a
governmental body or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was made
in reliance upon and in conformity with information furnished in writing
by CyberOpticLabs expressly for use therein. The indemnity agreement
contained in this Section 6.04 shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of ISG
and shall survive the consummation of the transactions contemplated by
this Agreement for a period of one year.
6.05 The Acquisition of CyberOpticLabs Common Stock. CyberOpticLabs
and ISG understand and agree that the consummation of this Agreement
including the issuance of the CyberOpticLabs Common Stock to ISG in
exchange for the ISG Shares as contemplated hereby, constitutes the offer
and sale of securities under the Securities Act and applicable state
statutes. CyberOpticLabs and ISG agree that such transactions shall be
consummated in reliance on exemptions from the registration and prospectus
delivery requirements of such statutes which depend, among other items, on
the circumstances under which such securities are acquired.
(a) In order to provide documentation for reliance upon the
exemptions from the registration and prospectus delivery requirements
for such transactions, each shareholder of ISG shall execute and deliver
to CyberOpticLabs an investment representation letter in substantially
the same form as that attached hereto as Exhibit "A."
(b) In connection with the transaction contemplated by this Agreement,
ISG and CyberOpticLabs shall each file, with the assistance of the other
and their respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by them to be necessary or
appropriate in an effort to document reliance on such exemptions, and
the appropriate regulatory authority in the states where the ISG
Stockholders reside unless an exemption requiring no filing is available
in such jurisdictions, all to the extent and in the manner as may be
deemed by such parties to be appropriate.
Page 28
(c) In order to more fully document reliance on the exemptions as
provided herein, ISG, the ISG Stockholders, and CyberOpticLabs shall
execute and deliver to the other, at or prior to the Closing, such further
letters of representation, acknowledgment, suitability, or the like as
CyberOpticLabs or ISG and their respective counsel may reasonably request
in connection with reliance on exemptions from registration under such
securities laws.
6.06 CyberOpticLabs Liabilities. Immediately prior to the
Closing Date, CyberOpticLabs shall have $20,000 in cash or cash
equivalents and $10,000 in liabilities with all expenses related to
this Agreement or otherwise having been paid.
6.07 Securities Filings. CyberOpticLabs shall be responsible
for the preparation of a Form D and its filing with the Securities and
Exchange Commission and ISG will be responsible for any and all filings
in any jurisdiction where its stockholders reside which would require
a filing with a governmental agency as a result of the transactions
contemplated in this Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) CyberOpticLabs will use its best efforts to at all times
satisfy the current public information requirements of rule 144
promulgated under the Securities Act so that its stockholders can
sell restricted securities that have been held for one year or more
or such other restricted period as required by rule 144 as it is
from time to time amended.
(b) Upon being informed in writing by any person holding
restricted stock of CyberOpticLabs as of the date of this Agreement
that such person intends to sell any shares under rule 144 promulgated
under the Securities Act (including any rule adopted in substitution
or replacement thereof), CyberOpticLabs will certify in writing to
such person that it is compliance with rule 144 current public
information requirement to enable such person to sell such person's
restricted stock under rule 144, as may be applicable under the
circumstances.
(c) If any certificate representing any such restricted stock
is presented to CyberOpticLabs's transfer agent for registration or
transfer in connection with any sales theretofore made under rule 144,
provided 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 CyberOpticLabs and its counsel that such
transfer has complied with the requirements of rule 144, as the case may
be, CyberOpticLabs will promptly instruct its transfer agent to register
Page 29
such transfer and to issue one or more new certificates representing such
shares to the transferee and, if appropriate under the provisions of rule
144, as the case may be, free of any stop transfer order or restrictive
legend. The provisions of this Section 6.08 shall survive the Closing and
the consummation of the transactions contemplated by this Agreement for a
period of two years.
6.09 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement, the two of the current
directors and officers of CyberOpticLabs shall resign, seriatim, and each
of Krisha Nyborg and John Scagnelli designated by ISG shall be appointed
to fill the vacancies created thereby.
6.10 No Plan to Dispose of CyberOptic Labs Stock Received In the
Exchanges Referred to in Section 1.01. None of the ISG Stockholders has,
nor will have, as of immediately prior to the closing of the exchanges
referred to in Section 1.01, any plan, intention, commitment of obligation
to dispose of any of the CyberOptic Labs common shares that any of them
will receive pursuant to Section 1.01.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. CyberOpticLabs and ISG 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 this
Agreement. Further, CyberOpticLabs and ISG each agree to indemnify the
other against any claim by any third person for any commission, brokerage,
or finder's fee or other payment with respect to this Agreement or the
transactions contemplated hereby based on any alleged agreement or
understanding between such party and such third person, whether express or
implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing
Date and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation
or warranty is being made by any party to any other regarding the treatment
of this transaction for federal or state income taxation. Each party has
relied exclusively on its own legal, accounting, and other tax adviser
regarding the treatment of this transaction for federal and state income
taxes and on no representation, warranty, or assurance from any other
party or such other party's legal, accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by, enforced
and construed under and in accordance with the laws of the State of
Nevada.
7.04 Notices. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered,
if sent by facsimile or telecopy transmission or other electronic
communication confirmed by registered or certified mail, postage prepaid,
or if sent by prepaid overnight courier addressed as follows:
Page 30
7.05 Consistent Tax Treatment of Exchanges. Each of the parties
hereto intend for the exchange contemplated under Section 1.01 to be
treated for tax purposes as a contribution by the ISG Stockholders of
their ISG shares to qualify as a tax-free exchange under Section 351(a)
of the Code. Each of the parties hereto shall treat the exchanges
contemplated under Section 1.01 consistent with such intent for all
tax reporting and other purposes including, without limitation in the
presentation and filing of their respective tax returns.
If to CyberOpticLabs, to: If to ISG, to:
Ivan Wong Insurance Solutions Group
CyberOpticLabs, Inc. 476 Express Drive South
7 Old Lantern Road Medford, NY 11763
Norwalk, Connecticut 06851 Fax: (613) 447-1561
Fax: (___) ____-______
With Copies to: With copies to:
Victor D. Schwarz, Esq. Eric Hellige, Esq.
2681 Parleys Way, Suite 203 Pryor Cashman Sherman & Flynn LLP
Salt Lake City, Utah 84109 410 Park Ave, NY, NY 10022
Fax: (801) 463-6085 Fax: (212) 326-0806
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 or sent by facsimile or telecopy transmission or other electronic
communication, or one day after the date so sent by overnight courier.
7.05 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 attorneys' fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this Agreement
reference is made to information set forth in the schedules provided by
CyberOpticLabs or ISG such reference is to information specifically set
forth in such schedules and clearly marked to identify the section of this
Agreement to which the information relates. Whenever any representation
is made to the "knowledge" of any party, it shall be deemed to be a
representation that no officer or director of such party, after reasonable
investigation, has any knowledge of such matters.
Page 31
7.07 Entire Agreement. This Agreement represents the entire agreement
between the parties relating to the subject matter hereof. All previous
agreements between the parties, whether written or oral, have been merged
into this Agreement. This Agreement alone fully and completely expresses
the agreement of the parties relating to the subject matter hereof. There
are no other courses of dealing, understandings, agreements, representations,
or warranties, written or oral, except as set forth herein.
7.08 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 six
months from the Closing Date, unless otherwise provided herein.
7.09 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.
7.10 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 such remedies may be enforced
concurrently, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any
other default then, theretofore, or thereafter occurring or existing. At
any time prior to the Closing Date, this Agreement may be amended by a
writing signed by all parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
CYBEROPTICLABS, INC., ISG Group, Inc., (d.b.a. Insurance Solutions
a Nevada corporation Group), a New York corporation
By:________________________ By:________________________
STATE OF ________ )
ss.
COUNTY OF ___________ )
On this day of November, 2000, personally appeared before
me __________, whose identity is personally known to me and who by me
duly sworn, did say that he is the _____________ of CyberOpticLabs, Inc.
and that said document was signed by him of behalf of said corporation by
authority of its bylaws, and said _____________ acknowledged to me that
said corporation executed the same.
______________________________________________
NOTARY PUBLIC
Page 32
STATE OF NEW YORK )
ss.
COUNTY OF _________ )
On this day of November, 2000, personally appeared before
me __________, whose identity is personally known to me and who by me
duly sworn, did say that he is the president of ISG Group, Inc. and
that said document was signed by him of behalf of said corporation by
authority of its bylaws, and said ________________ acknowledged to me
that said corporation executed the same.
__________________________________________
NOTARY PUBLIC
Page 33
Exhibit A-1
Insurance Solutions Group, Inc.
List of Stockholders
Number of Shares Number of CyberOpticLabs Share
Name of Shareholder of ISG Owned Shares to be Received in Exchange
- ------------------- ---------------- ---------------------------------
Eel Point Partners 10,125,000 10,125,000
Scott Conant 150,000 150,000
Robert Giannelli 100,000 100,000
Robin Marshlow 50,000 50,000
Gary Molampy 50,000 50,000
Jennifer Peck 50,000 50,000
Sandra Pogue 15,000 15,000
---------- ----------
Total 10,540,000 10,540,000
Page 34
2.01 2 Contribution and Exchange Agreement
with US Direct Insurance Agency, Inc.
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (this "Agreement") is made
this 30th day of November 2000, by and among CyberOpticLabs, Inc., a
Nevada corporation ("CyberOpticLabs"); US Direct Insurance Agency, Inc.,
a New York corporation ("US Direct"); and the persons listed in Exhibit
A-1 hereof who are the owners of record of all the issued and outstanding
stock of US Direct who execute and deliver this Agreement ("US Direct
Stockholders"), based on the following:
Recitals
CyberOpticLabs wishes to acquire all the issued and outstanding
stock of US Direct in exchange for stock of CyberOpticLabs in a transaction
intended to qualify as a tax-free exchange pursuant to Section 351 of the
Internal Revenue Code of 1986, as amended (the "Code"). The parties intend
for this Agreement to represent the terms and conditions of such tax-free
exchange, which Agreement the parties hereby adopt.
CyberOpticLabs is also in the process of acquiring ISG, Inc., a New
York corporation ("ISG"). Both acquisitions will be through a share
exchange with a total of 21,651,000 shares of CyberOpticLabs issued for
both insurance companies. As a result thereof, the US Direct Stockholders,
together with the stockholders of ISG, shall be in "control" (within the
meaning of Section 368(c) of the Code) of CyberOpticLabs.
Agreement
Based on the stated premises, which are incorporated herein by
reference, and for and in consideration of the mutual covenants and
agreements hereinafter set forth, the mutual benefits to the parties to
be derived herefrom, and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, it is hereby agreed as
follows:
ARTICLE I
EXCHANGE OF STOCK
1.01 Exchange of Shares. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section
1.05 hereof), the US Direct Stockholders shall assign, transfer, contribute
and deliver to CyberOpticLabs, free and clear of all liens, pledges,
encumbrances, charges, restrictions, or claims of any kind, nature, or
description, all issued and outstanding shares of common stock of US
Direct (the "US Direct Shares") held by US Direct Stockholders, which
shares shall represent all issued and outstanding shares of US Direct
common stock, and CyberOpticLabs agrees to acquire such shares on such
date by issuing and delivering in exchange therefore an aggregate of
11,111,000 restricted shares of CyberOpticLabs common stock, par value
$0.001 per share, (the "CyberOpticLabs Common Stock"). Such shares of
Page 35
CyberOpticLabs Common Stock shall be issued pro rata based on the number
of US Direct Shares held and as set forth opposite the US Direct
Stockholder's respective names in Exhibit A-1. All 11,111,000 shares of
CyberOpticLabs Common Stock to be issued and delivered pursuant to this
Agreement shall be appropriately adjusted to take into account any stock
split, stock dividend, reverse stock split, recapitalization, or similar
change in the CyberOpticLabs Common Stock which may occur between the
date of the execution of this Agreement and the Closing Date.
1.02 Delivery of Certificates by US Direct Stockholders. The
transfer of US Direct Shares by the US Direct Stockholders shall be
effected by the delivery to CyberOpticLabs at the Closing (as set
forth in Section 1.05 hereof) of certificates representing the transferred
shares endorsed in blank or accompanied by stock powers executed in blank
and with all necessary transfer taxes and other revenue stamps affixed
and acquired at the US Direct Stockholders' expense.
1.03 Operation as Wholly-Owned Subsidiary. After giving effect to
the transaction contemplated hereby, CyberOpticLabs will own all the
issued and outstanding shares of US Direct and US Direct will be a
wholly-owned subsidiary of CyberOpticLabs operating under the name
Insurance Solutions Group, Inc.
1.04 Further Assurances. At the Closing and from time to time
thereafter, the US Direct Stockholders shall execute such additional
instruments and take such other action as CyberOpticLabs may reasonably
request, without undue cost to the US Direct Stockholders in order to
more effectively sell, transfer, and assign clear title and ownership
in the US Direct Shares to CyberOpticLabs.
1.05 Closing and Parties. The Closing contemplated hereby shall
be held at a mutually agreed upon time and at ISG offices located at
55 John Street, NY, NY 10038 on or before December 31st, 2000, or on
another date to be agreed to in writing by the parties (the "Closing
Date"). The Agreement may be closed at any time following approval by
a majority of the stockholders of CyberOpticLabs Common Stock as set
forth in Section 4.02 hereof and the US Direct Stockholders as set forth
in Section 5.02. The Closing may be accomplished by wire, express mail,
overnight courier, conference telephone call or as otherwise agreed to
by the respective parties or their duly authorized representatives.
1.06 Closing Events.
(a) CyberOpticLabs Deliveries. Subject to fulfillment or waiver
of the conditions set forth in Article IV, CyberOpticLabs shall deliver
to US Direct at Closing all the following:
Page 36
(i) A certificate of good standing from the secretary of State
of Nevada, issued as of a date within five days prior to the Closing
Date, certifying that CyberOpticLabs is in good standing as a corporation
in the State of Nevada;
(ii) Incumbency and specimen signature certificates dated the Closing
Date with respect to the officers of CyberOpticLabs executing this Agreement
and any other document delivered pursuant hereto on behalf of CyberOpticLabs;
(iii) Copies of the resolutions of CyberOpticLabs's board of directors
and shareholder minutes or consents authorizing the execution and
performance of this Agreement and the contemplated transactions, certified
by the secretary or an assistant secretary of CyberOpticLabs as of the
Closing Date;
(iv) The certificate contemplated by Section 4.02, duly executed by
the chief executive officer of CyberOpticLabs;
(v) The certificate contemplated by Section 4.03, dated the Closing
Date, signed by the chief executive officer of CyberOpticLabs;
(vi) Certificates for 11,111,000 shares of CyberOpticLabs Common
Stock in the names of the US Direct Stockholders and in the amounts set
forth in Exhibit "A-1;" and
In addition to the above deliveries, CyberOpticLabs shall take all
steps and actions as US Direct and US Direct Stockholders may reasonably
request or as may otherwise be reasonably necessary to consummate the
transactions contemplated hereby.
(b) US Direct Deliveries. Subject to fulfillment or waiver of
the conditions set forth in Article V, US Direct and/or US Direct
Stockholder's shall deliver to CyberOpticLabs at Closing all the
following:
(i) A certificate of good standing from the secretary of
state of New York, issued as of a date within five days prior to the
Closing Date certifying that US Direct is in good standing as a
corporation in the State of New York;
(ii) Incumbency and specimen signature certificates dated
the Closing Date with respect to the officers of US Direct executing
this Agreement and any other document delivered pursuant hereto on
behalf of US Direct;
(iii) Copies of resolutions of the board of directors and
of the stockholders of US Direct authorizing the execution and performance
of this Agreement and the contemplated transactions, certified by the
secretary or an assistant secretary of US Direct as of the Closing Date;
Page 37
(iv) The certificate contemplated by Section 5.03, executed by
the chief operating officer of US Direct; and
(v) The certificate contemplated by Section 5.04, dated the
Closing Date, signed by the chief operating officer of US Direct.
In addition to the above deliveries, US Direct shall take all steps
and actions as CyberOpticLabs may reasonably request or as may otherwise
be reasonably necessary to consummate the transactions contemplated hereby.
1.07. Termination
(a) This Agreement may be terminated by the board of directors of
either CyberOpticLabs or US Direct 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
this Agreement and which, in the reasonable judgment 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 transactions
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 reasonable judgment 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 only on a condition or conditions
which would be unduly burdensome, making it inadvisable to proceed with
the exchange;
In the event of termination pursuant to this paragraph (a) of
Section 1.07, 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, preparation, and execution of this
Agreement and the transactions contemplated hereby.
(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of CyberOpticLabs if
(i) US Direct 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 US Direct contained herein shall
be inaccurate in any material respect or (ii) CyberOpticLabs determines
Page 38
that there has been or is likely to be any material adverse change in
the financial or legal condition of US Direct. In the event of
termination pursuant to this paragraph (b) of this Section 1.07, no
obligation, right, remedy, or liability shall arise hereunder. All
parties shall bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of US Direct if (i)
CyberOpticLabs 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 CyberOpticLabs contained herein
shall be inaccurate in any material respect or (ii) US Direct determines
that there has been or is likely to be any adverse change in the
financial or legal condition of CyberOpticLabs. In the event of
termination pursuant to this paragraph (c) of this Section 1.07, no
obligation, right, remedy, or liability shall arise hereunder. All
parties shall each bear their own costs incurred in connection with the
negotiation, preparation, and execution of this Agreement and the
transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF CYBEROPTICLABS
As an inducement to, and to obtain the reliance of US Direct,
CyberOpticLabs represents and warrants as follows:
2.01 Organization. CyberOpticLabs is, and will be on the Closing
Date, 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
and will be duly authorized, qualified, franchised, and licensed under
all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, and there
are no other jurisdictions in which it is not so qualified in which the
character and location of the assets owned by it or the nature of the
material business transacted by it requires qualification, except where
failure to do so would not have a material adverse effect on its business,
operations, properties, assets or condition. The execution and delivery
of this Agreement does not, and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will
not, violate any provision of CyberOpticLabs's articles of incorporation
or bylaws, or other agreement to which it is a party or by which it is
bound.
Page 39
2.02 Approval of Agreement. CyberOpticLabs has full power,
authority, and legal right and has taken, or will take, all action
required by law, its articles of incorporation, bylaws, and otherwise
to execute and deliver this Agreement and to consummate the transactions
herein contemplated. The board of directors of CyberOpticLabs has
authorized and approved the execution, delivery, and performance of
this Agreement and the transactions contemplated hereby; subject to
the approval of the CyberOpticLabs stockholders and compliance with
state and federal corporate and securities laws.
2.03 Capitalization. The authorized capitalization of
CyberOpticLabs consists of 100,000,000 shares of common stock,
$0.001 par value, of which 4,005,000 shares are issued and outstanding
and 5,000,000 shares of preferred stock, $0.001 par value, none of which
are issued and outstanding. All issued and outstanding shares of
CyberOpticLabs are legally issued, fully paid, and nonassessable and
not issued in violation of the preemptive or other right of any person.
There are no dividends or other amounts due or payable with respect to
any of the shares of capital stock of CyberOpticLabs. Immediately
following the exchange referred to in Section 1.01 and the Recitals
above, the US Direct Stockholders and the Stockholders of ISG shall,
together, own at least 80% of the total combined voting power of all
classes of stock of CyberOptic Labs entitled to vote and at least 80%
of the total number of shares of each other class of stock of
CyberOpticLabs that is then issued and outstanding, such that the US
Direct Stockholders and the Stockholders of ISG shall, together, be
in "control" (within the meaning of Section 368(c) of the Code) of
CyberOpticLabs.
2.04. Financial Statements.
(a) Included in Schedule 2.04 are the audited balance sheets of
CyberOpticLabs as of December 31, 1999, and 1998, and the related
statements of operations, stockholders' equity (deficit), and cash
flows for the fiscal year ended December 31, 1999, and 1998, and from
inception through December 31, 1999, including the notes thereto, and
the accompanying report of Dave Thompson, CPA, independent certified
public accountants. Prior to the Closing Date, CyberOpticLabs shall
deliver the unaudited balance sheet of CyberOpticLabs as of September
30, 2000, and the related statements of operations, stockholders' equity
(deficit), and cash flows for the nine months ended September 30, 2000,
together with the notes thereto and representations by the principal
accounting and financial officer of CyberOpticLabs to the effect that
such financial statements contain all adjustments (all of which are
normal recurring adjustments) necessary to present fairly the results
of operations and financial position for the periods and as of the
dates indicated and such financial statements shall not reflect any
material changes since the December 31, 1999 financial statements.
Page 40
(b) The financial statements of CyberOpticLabs delivered pursuant
to Section 2.04(a) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the
periods involved as explained in the notes to such financial statements.
The CyberOpticLabs financial statements present fairly, in all material
respects, as of their respective dates, the financial position of
CyberOpticLabs. CyberOpticLabs did not have, as of the date of any
such financial statements, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute or
contingent) which should be reflected therein in accordance with
generally accepted accounting principles, and all assets reflected
therein presently fairly the assets of CyberOpticLabs in accordance
with generally accepted accounting principles.
(c) CyberOpticLabs has filed or will file as the Closing Date
all tax returns required to be filed by it from inception to the
Closing Date. All such returns and reports are accurate and correct
in all material respects. CyberOpticLabs has no material liabilities
with respect to the payment of any federal, state, county, local, or
other taxes (including any deficiencies, interest, or penalties)
accrued for or applicable to the period ended on the date of the
most recent balance sheet of CyberOpticLabs, except to the extent
reflected on such balance sheet and all such dates and years and
periods prior thereto and for which CyberOpticLabs may at said date
have been liable in its own right or as transferee of the assets of,
or as successor to, any other corporation or entity, except for taxes
accrued but not yet due and payable, and to the best knowledge of
CyberOpticLabs, no deficiency assessment or proposed adjustment of
any such tax return is pending, proposed or contemplated. To the
best knowledge of CyberOpticLabs, none of such income tax returns has
been examined or is currently being examined by the Internal Revenue
Service and no deficiency assessment or proposed adjustment of any
such return is pending, proposed or contemplated. CyberOpticLabs
has not made any election pursuant to the provisions of any applicable
tax laws (other than elections that relate solely to methods of
accounting, depreciation, or amortization) that would have a material
adverse affect on CyberOpticLabs, its financial condition, its
business as presently conducted or proposed to be conducted, or any
of its respective properties or material assets. There are no
outstanding agreements or waivers extending the statutory period
of limitation applicable to any tax return of CyberOpticLabs.
2.05 Outstanding Warrants and Options. Except as set forth
on Schedule 2.05, CyberOpticLabs has no existing warrants or options,
calls, or commitments of any nature relating to the authorized and
unissued CyberOpticLabs Common Stock.
Page 41
2.06 Information. The information concerning CyberOpticLabs
set forth in this Agreement 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. CyberOpticLabs shall cause the schedules delivered by it
pursuant hereto and the instruments delivered to US Direct hereunder
to be updated after the date hereof up to and including the Closing Date.
2.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the schedules hereto, since the date of the most
recent CyberOpticLabs balance sheet described in Section 2.04 and
included in the information referred to in Section 2.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or
condition of CyberOpticLabs or (ii) any damage, destruction, or loss
to CyberOpticLabs (whether or not covered by insurance) materially
and adversely affecting the business, operations, properties, assets,
or condition of CyberOpticLabs;
(b) CyberOpticLabs 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 CyberOpticLabs; (iv) made any material change in its
method of management, operation, or accounting; (v) entered into any
other material transactions; (vi) made any accrual or arrangement for
or payment of bonuses or special compensation of any kind or any
severance or termination pay to any present or former officer or employee;
(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 with its officers, directors, or employees;
(c) CyberOpticLabs 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
any material obligation or liability (absolute or contingent) other
than current liabilities reflected in or shown on the most recent
CyberOpticLabs balance sheet and current liabilities incurred since
that date in the ordinary course of business; (iv) sold or transferred,
or agreed to sell or transfer, any of its material assets, properties,
or rights (except assets, properties, or rights not used or useful in
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its business which, in the aggregate have a value of less than $5,000
or canceled, or agreed to cancel, any debts or claims (except debts
and claims which in the aggregate are of a value of less than $5,000);
(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, considering the business of CyberOpticLabs;
or (vi) 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 best knowledge of CyberOpticLabs, it has not become
subject to any law or regulation which materially and adversely affects,
or in the future would be reasonably expected to adversely affect, the
business, operations, properties, assets, or condition of CyberOpticLabs.
2.08 Litigation and Proceedings. There are no actions, suits, or
administrative or other proceedings pending or, to the knowledge of
CyberOpticLabs, threatened by or against CyberOpticLabs or adversely
affecting CyberOpticLabs 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. CyberOpticLabs does not
have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality.
2.09 Compliance With Laws and Regulations. CyberOpticLabs has
complied with all applicable statutes and regulations of any federal,
state, or other governmental entity or agency thereof, except to the
extent that noncompliance (i) could not materially and adversely affect
the business, operations, properties, assets, or condition of
CyberOpticLabs or (ii) could not result in the occurrence of any
material liability for CyberOpticLabs. To the best knowledge of
CyberOpticLabs, the consummation of this transaction will comply with
all applicable statutes and regulations, subject to the preparation
and filing of any forms required by state and federal securities laws.
2.10 Compliance with Security Laws. CyberOpticLabs has complied
with all applicable security statutes and regulation of any federal,
state or other governmental entity or agency thereof, including the
filing of any required documents in regards to all sales of CyberOpticLabs
Stock. CyberOpticLabs is not required to file reports with the Securities
and Exchange Commission under the Securities Exchange Act of 1934 and
CyberOpticLabs's counsel will deliver an opinion to this effect.
Notwithstanding the immediately preceding sentence, CyberOpticLabs has
voluntarily filed reports under the Securities Exchange Act of 1934,
which reports are complete and accurate in all material respects.
2.11 Material Contract Defaults. CyberOpticLabs is not a party
to any contract, agreement, lease, or other commitment which is material
to the business, operations, properties, assets, or condition of
CyberOpticLabs, and there is no event of default or other event which,
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with notice or lapse of time or both, would constitute a default in any
material respect under any such contract, agreement, lease, or other
commitment in respect of which CyberOpticLabs has not taken adequate
steps to prevent such a default from occurring.
2.12 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 CyberOpticLabs is a party or to which any of its properties or
operations are subject.
2.13 Subsidiary. CyberOpticLabs does not own, beneficially or
of record, any equity securities in any other entity.
2.14 CyberOpticLabs Schedules. CyberOpticLabs has delivered to
US Direct the following schedules, which are collectively referred to
as the "CyberOpticLabs Schedules" and which consist of the following
separate schedules dated as of the date of execution of this Agreement,
all certified by a duly authorized officer of CyberOpticLabs as complete,
true, and accurate:
(a) A schedule including copies of the articles of incorporation
and bylaws of CyberOpticLabs in effect as of the date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of CyberOpticLabs approving this Agreement and the
transactions herein contemplated;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of CyberOpticLabs since the most recent CyberOpticLabs balance
sheet, required to be provided pursuant to Section 2.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 2.04(a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the
CyberOpticLabs Schedules by Sections 2.01 through 2.13.
CyberOpticLabs shall cause the CyberOpticLabs Schedules and the
instruments delivered to US Direct hereunder to be updated after the
date hereof up to and including the Closing Date. Such updated
CyberOpticLabs Schedules, certified in the same manner as the original
CyberOpticLabs Schedules, shall be delivered prior to and as a
condition precedent to the obligation of US Direct to close.
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2.15 Immediately following the exchanges referred to in Section
1.01, CyberOpticLabs will not be an "investment company" for purposes
of Section 351(e) of the Code and the Treasury regulations promulgated
thereunder.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF US Direct
As an inducement to, and to obtain the reliance of, CyberOpticLabs,
US Direct represents and warrants as follows:
3.01 Organization. US Direct is, and will be on the Closing Date, a
corporation duly organized, validly existing, and in good standing under
the laws of the State of New York and has the corporate power and is and
will be duly authorized, qualified, franchised, and licensed under all
applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, and
there are no other jurisdictions in which it is not so qualified in
which the character and location of the assets owned by it or the nature
of the material business transacted by it requires qualification, except
where failure to do so would not have a material adverse effect on its
business, operations, properties, assets or condition of US Direct. The
execution and delivery of this Agreement does not, and the consummation
of the transactions contemplated by this Agreement in accordance with
the terms hereof will not, violate any provision of US Direct's articles
of incorporation or bylaws, or other material agreement to which it is
a party or by which it is bound.
3.02 Approval of Agreement. US Direct has full power, authority,
and legal right and has taken, or will take, all action required by law,
its articles of incorporation, bylaws, or otherwise to execute and
deliver this Agreement and to consummate the transactions herein
contemplated. The board of directors of US Direct have authorized
and approved the execution, delivery, and performance of this Agreement
and the transactions contemplated hereby; subject to the approval of
the US Direct Stockholders and compliance with state and federal
corporate and securities laws.
3.03 Capitalization. The authorized capitalization of US Direct
consists of 20,000 shares of common stock of which as of the date
hereof 11,111 shares are issued and outstanding. All issued and
outstanding shares of US Direct are legally issued, fully paid, and
nonassessable and not issued in violation of the preemptive or other
right of any person. There are no dividends or other amounts due or
payable with respect to any of the shares of capital stock of US Direct.
Page 45
3.04 Financial Statements.
(a) Included in Schedule 3.04 are the unaudited balance sheet
of US Direct as of September 30, 2000, and the related statements of
operations, cash flows, and stockholders' equity for the period from
inception, to September 30, 2000, including the notes thereto.
(b) US Direct will have prepared, within 60 days of the Closing
Date, audited financial statements prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods involved. The financial statements of US
Direct will fairly, as of their respective dates, the financial
position of US Direct. US Direct will not have had, as of the date
of any such balance sheets, except as and to the extent reflected or
reserved against therein, any liabilities or obligations (absolute
or contingent) which should be reflected in any financial statements
or the notes thereto prepared in accordance with generally accepted
accounting principles, and all assets reflected therein will fairly
present the assets of US Direct, in accordance with generally
accepted accounting principles. The statements of revenue and
expenses and cash flows will present fairly the financial position
and result of operations of US Direct as of their respective dates
and for the respective periods covered thereby.
(c) US Direct has filed or will have filed as of the Closing
Date all tax returns required to be filed by it from inception to the
Closing Date. All such returns and reports are accurate and correct
in all material respects. US Direct has no material liabilities with
respect to the payment of any federal, state, county, local, or other
taxes (including any deficiencies, interest, or penalties) accrued for
or applicable to the period ended on the date of the most recent
unaudited balance sheet of US Direct, except to the extent reflected
on such balance sheet and adequately provided for, and all such dates
and years and periods prior thereto and for which US Direct may at
said date have been liable in its own right or as transferee of the
assets of, or as successor to, any other corporation or entity, except
for taxes accrued but not yet due and payable, and to US Direct's
knowledge no deficiency assessment or proposed adjustment of any such
tax return is pending, proposed or contemplated. Proper and accurate
amounts of taxes have been withheld by or on behalf of US Direct with
respect to all material compensation paid to employees of US Direct
for all periods ending on or before the date hereof, and all deposits
required with respect to compensation paid to such employees have
been made, in complete compliance with the provisions of all applicable
federal, state, and local tax and other laws. To US Direct's knowledge,
none of such income tax returns has been examined or is currently being
examined by the Internal Revenue Service, and no deficiency assessment
or proposed adjustment of any such return is pending, proposed, or
Page 46
contemplated. US Direct has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that
relate solely to methods of accounting, depreciation, or amortization)
that would have a material adverse affect on US Direct, its financial
condition, its business as presently conducted or proposed to be
conducted, or any of its properties or material assets. There are
no tax liens upon any of the assets of US Direct. There are no
outstanding agreements or waivers extending the statutory period
of limitation applicable to any tax return of US Direct.
3.05 Outstanding Warrants and Options. US Direct has no issued
warrants or options, calls, or commitments of any nature relating to
the authorized and unissued US Direct Common Stock.
3.06 Information. The information concerning US Direct set forth
in this Agreement and in the schedules delivered by US Direct pursuant
hereto 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. US Direct
shall cause the schedules delivered by US Direct pursuant hereto to
CyberOpticLabs hereunder to be updated after the date hereof up to
and including the Closing Date.
3.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement since the date of the most recent US Direct balance
sheet described in Section 3.04 and included in the information referred
to in Section 3.06:
(a) There has not been (i) any material adverse change in the
business, operations, properties, level of inventory, assets, or
condition of US Direct or (ii) any damage, destruction, or loss to
US Direct materially and adversely affecting the business, operations,
properties, assets, or conditions of US Direct.
(b) US Direct 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 and material
considering the business of US Direct; (iv) made any material change
Page 47
in its method of accounting; (v) entered into any other material
transactions other than those contemplated by this Agreement; (vi)
made any material accrual or material arrangement for or payment
of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; or
(vii) made any material increase in any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, or other
employee benefit plan, payment, or arrangement made to, for, or
with their officers, directors, or employees;
(c) US Direct 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 any material
obligation or liability (absolute or contingent) other than current
liabilities reflected in or shown on the most recent US Direct
balance sheet and current liabilities incurred since that date in
the ordinary course of business; (iv) sold or transferred, or
agreed to sell or transfer, any of its material assets, properties,
or rights, or agreed to cancel, any material debts or claims;
(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, considering the business of US Direct; or
(vi) 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 best knowledge of US Direct, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future would be reasonably expected to adversely
affect, the business, operations, properties, assets, or condition of
US Direct.
3.08 Title and Related Matters. Except as provided herein or
disclosed in the most recent US Direct balance sheet and the notes
thereto, US Direct has good and marketable title to all of its properties,
inventory, interests in properties, technology, whether patented or
un-patented, and assets, which are reflected in the most recent US
Direct 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
mortgages, liens, pledges, charges, or encumbrances, except (i)
statutory liens or claims not yet delinquent; and (ii) such
Page 48
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. To
the best knowledge of US Direct, its technology does not infringe on
the copyright, patent, trade secret, know-how, or other proprietary
right of any other person or entity and comprises all such rights
necessary to permit the operation of the business of US Direct as
now being conducted or as contemplated.
3.09 Litigation and Proceedings. Except as otherwise disclosed
in Schedule 3.09, there are no material actions, suits, or proceedings
pending or, to the knowledge of US Direct, threatened by or against US
Direct or adversely affecting US Direct, at law or in equity, before
any court or other governmental agency or instrumentality, domestic
or foreign, or before any arbitrator of any kind. US Direct does
not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule, or regulation
of any court, arbitrator, or governmental agency or instrumentality.
3.10 Material Contract Defaults. US Direct 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 US Direct, and there
is no event of default or other event which, with notice or lapse of
time or both, would constitute a default in any material respect under
any such contract, agreement, lease, or other commitment in respect of
which US Direct has not taken adequate steps to prevent such a default
from occurring.
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 an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or
instrument to which US Direct is a party or to which any of its
properties or operations are subject.
3.12 Governmental Authorizations. US Direct 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 of this Agreement. Except for
compliance with federal and state securities and corporation laws,
as hereinafter provided, no authorization, approval, consent, or order
of, or registration, declaration, or filing with, any court or other
governmental body is required in connection with the execution and
delivery by US Direct of this Agreement and the consummation by US
Direct of the transactions contemplated hereby.
Page 49
3.13 Compliance With Laws and Regulations. US Direct has
complied with all applicable statutes and regulations of any federal,
state, or other governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely affect
the business, operations, properties, assets, or condition of US
Direct or except to the extent that noncompliance would not result
in the occurrence of any material liability for US Direct. To the
best knowledge of US Direct, the consummation of this transaction
will comply with all applicable statutes and regulations, subject
to the preparation and filing of any forms required by state and
federal security laws.
3.14 Affiliate. US Direct owns approximately 43% of the
equity in its Affiliate: RiderPoint, Inc., a Delaware corporation.
3.15 US Direct Schedules. US Direct has delivered to CyberOpticLabs
the following schedules, which are collectively referred to as the "US
Direct Schedules" and which consist of the following separate schedules
dated as of the date of execution of this Agreement, and instruments and
CyberOpticLabs as of such date, all certified by the chief executive
officer of US Direct as complete, true, and accurate:
(a) A schedule including copies of the articles of incorporation
and bylaws of US Direct and all amendments thereto in effect as of the
date of this Agreement;
(b) A schedule containing copies of resolutions adopted by the
board of directors of US Direct approving this Agreement and the
transactions herein contemplated as referred to in Section 3.02;
(c) A schedule setting forth a description of any material adverse
change in the business, operations, property, inventory, assets, or
condition of US Direct since the most recent US Direct balance sheet,
required to be provided pursuant to Section 3.04 hereof;
(d) A schedule setting forth the financial statements required
pursuant to Section 3.04 (a) hereof; and
(e) A schedule setting forth any other information, together with
any required copies of documents, required to be disclosed in the US
Direct Schedules by Sections 3.01 through 3.14.
US Direct shall cause the US Direct Schedules and the instruments
delivered to CyberOpticLabs hereunder to be updated after the date
hereof up to and including the Closing Date. Such updated US Direct
Schedules, certified in the same manner as the original US Direct
Schedules, shall be delivered prior to and as a condition precedent
to the obligation of CyberOpticLabs to close.
Page 50
ARTICLE IV
CONDITIONS PRECEDENT TO OBLIGATIONS OF US Direct
The obligations of US Direct under this Agreement are subject to
the satisfaction of US Direct, at or before the Closing Date, of the
following conditions:
4.01 Shareholder Approval. CyberOpticLabs shall call and hold a
meeting of its stockholders, or obtain the written consent of a majority
of its stockholders, to approve the transactions contemplated by this
Agreement including the acquisition of US Direct through the issuance
of CyberOpticLabs Common Stock for all of the issued and outstanding US
Direct Shares.
4.02 Accuracy of Representations. The representations and
warranties made by CyberOpticLabs in this Agreement were true when
made and shall be true at the Closing Date with the same force and
affect as if such representations and warranties were made at and as
of the Closing Date (except for changes therein permitted by this
Agreement), and CyberOpticLabs shall have performed or complied with
all covenants and conditions required by this Agreement to be performed
or complied with by CyberOpticLabs prior to or at the Closing. US Direct
shall be furnished with certificates, signed by duly authorized officers
of CyberOpticLabs and dated the Closing Date, to the foregoing effect.
4.03 Officer's Certificates. US Direct shall have been furnished
with certificates dated the Closing Date and signed by the duly
authorized chief executive officer of CyberOpticLabs to the effect
that to such officers best knowledge no litigation, proceeding,
investigation, or inquiry is pending or, to the best knowledge of
CyberOpticLabs threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on certificates of good standing,
representations of government agencies, and CyberOpticLabs's own
documents and information, the certificate shall represent, to the best
knowledge of the officer, that:
(a) This Agreement has been duly approved by CyberOpticLabs's
board of directors and stockholders and has been duly executed and
delivered in the name and on behalf of CyberOpticLabs by its duly
authorized officers pursuant to, and in compliance with, authority
granted by the board of directors of CyberOpticLabs pursuant to a
unanimous consent;
(b) There have been no material adverse changes in
CyberOpticLabs up to and including the date of the certificate;
Page 51
(c) All conditions required by this Agreement have been met,
satisfied, or performed by CyberOpticLabs;
(d) All authorizations, consents, approvals, registrations,
and/or filings with any governmental body, agency, or court required
in connection with the execution and delivery of the documents by
CyberOpticLabs have been obtained and are in full force and effect or,
if not required to have been obtained, will be in full force and
effect by such time as may be required; and
(e) There is no material action, suit, proceeding, inquiry, or
investigation at law or in equity by any public board or body pending
or threatened against CyberOpticLabs, wherein an unfavorable decision,
ruling, or finding could have an adverse effect on the financial
condition of CyberOpticLabs, the operation of CyberOpticLabs, or the
acquisition and reorganization contemplated herein, or any agreement
or instrument by which CyberOpticLabs is bound or in any way contests
the existence of CyberOpticLabs.
4.04 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 CyberOpticLabs, 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 CyberOpticLabs.
4.05 Good Standings. US Direct shall have received a certificate
of good standing from the secretary of State of Nevada, dated as of the
date within five days prior to the Closing Date, certifying that
CyberOpticLabs is in good standing as a corporation in the State of
Nevada.
4.06 Percentage Ownership of CyberOpticLabs Stock. Immediately
following the exchange referred to in Section 1.01 hereof, US Direct,
together with the stockholders of U.S. Direct, shall have "control"
(within the meaning of Section 368(c) of the Code) of CyberOpticLabs.
4.07 Other Items. US Direct shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as US Direct may reasonably request.
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ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF CYBEROPTICLABS
The obligations of CyberOpticLabs under this Agreement are subject
to the satisfaction, at or before the Closing Date, of the following
conditions:
5.01 Shareholder Approval. CyberOpticLabs shall call and hold a
meeting of its stockholders, or obtain through a majority written
consent of its stockholders, whereby the stockholders of CyberOpticLabs
authorize and approve this Agreement and the transactions contemplated
hereby.
5.02 US Direct Stockholders. Holders of all of the issued and
outstanding US Direct Shares shall have executed this Agreement and
the exchange of shares contemplated by this Agreement.
5.03 Acquisition of Insurance Solutions Group, Inc. CyberOpticLabs
shall acquire Insurance Solutions Group, Inc., a New York corporation, or
have entered into a definitive agreement to acquire it.
5.04 Accuracy of Representations. The representations and
warranties made by US Direct and the US Direct Stockholders in this
Agreement were true when made and shall be true at the Closing Date
with the same force and affect as if such representations and warranties
were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and US Direct shall have performed or
complied with all covenants and conditions required by this Agreement
to be performed or complied with by US Direct prior to or at the Closing.
CyberOpticLabs shall be furnished with a certificate, signed by a duly
authorized officer of US Direct and dated the Closing Date, to the
foregoing effect.
5.05 Officer's Certificates. CyberOpticLabs shall have been
furnished with certificates dated the Closing Date and signed by the
duly authorized chief operating officer of US Direct to the effect
that no litigation, proceeding, investigation, or inquiry is pending
or, to the best knowledge of US Direct, threatened, which might result
in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement. Furthermore, based on certificates of
good standing, representations of government agencies, and US Direct's
own documents, the certificate shall represent, to the best knowledge
of the officer, that:
(a) This agreement has been duly approved by US Direct's board
of directors and has been duly executed and delivered in the name and
on behalf of US Direct by its duly authorized officers pursuant to,
and in compliance with, authority granted by the board of directors
of US Direct pursuant to a unanimous consent of its board of directors
and a majority vote of its stockholders;
Page 53
(b) Except as provided or permitted herein, there have been no
material adverse changes in US Direct up to and including the date of
the certificate;
(c) All authorizations, consents, approvals, registrations,
and/or filing with any governmental body, agency, or court required
in connection with the execution and delivery of the documents by US
Direct have been obtained and are in full force and effect or, if not
required to have been obtained will be in full force and effect by
such time as may be required; and
(d) Except as otherwise disclosed in Schedule 3.09, there is no
material action, suit, proceeding, inquiry, or investigation at law or
in equity by any public board or body pending or threatened against
US Direct, wherein an unfavorable decision, ruling, or finding would
have an adverse affect on the financial condition of US Direct, the
operation of US Direct, or the acquisition and reorganization
contemplated herein, or any material agreement or instrument by
which US Direct is bound or would in any way contest the existence
of US Direct.
5.06 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 US Direct, nor shall
any event have occurred which, with the lapse of time or the giving
of notice, may cause of create any material adverse change in the
financial condition, business, or operations of US Direct.
5.07 Good Standing. CyberOpticLabs shall have received a
certificate of good standing from the appropriate authority in the
State of New York, dated as of a date with five days prior to the
Closing Date, certifying that the US Direct is in good standing as
a corporation in the State of New York.
5.08 Other Items. CyberOpticLabs shall have received such
further documents certificates, or instruments relating to the
transactions contemplated hereby as CyberOpticLabs may reasonably request.
ARTICLE VI
SPECIAL COVENANTS
6.01 Activities of CyberOpticLabs and US Direct
(a) From and after the date of this Agreement until the Closing
Date and except as set forth in the respective schedules to be delivered
by CyberOpticLabs and US Direct pursuant hereto or as permitted or
contemplated by this Agreement, CyberOpticLabs and US Direct will each:
(i) Carry on its business in substantially the same manner
as it has heretofore;
(ii) Maintain in full force and effect insurance comparable
in amount and in scope of coverage to that now maintained by it;
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(iii) Perform in all material respects all of its obligations
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(iv) Use its best efforts to maintain and preserve it
business organization intact, to retain its key employees, and to
maintain its relationships with its material suppliers and customers;
(v) Duly and timely file for all taxable periods ending on
or prior to the Closing Date all federal, state, county, and local tax
returns required to be filed by or on behalf of such entity or for
which such entity may be held responsible and shall pay, or cause to pay,
all taxes required to be shown as due and payable on such returns, as
well as all installments of tax due and payable during the period
commencing on the date of this Agreement and ending on the Closing
Date; and
(vi) Fully comply with and perform in all material respects
all obligations and duties imposed on it by all federal and state laws
and all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement and except as
provided herein until the Closing Date, CyberOpticLabs and US Direct
will not:
(i) Make any change in its articles of incorporation or
bylaws;
(ii) Enter into or amend any material contract, agreement, or
other instrument 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; and
(iii) Enter into any agreement for the sale of US Direct or
CyberOpticLabs securities without the prior approval of the other party.
6.02 Access to Properties and Records. Until the Closing Date,
US Direct and CyberOpticLabs will afford to the other party's officers
and authorized representatives full access to the properties, books,
and records of the other party in order that each party may have full
opportunity to make such reasonable investigation as it shall desire
to make of the affairs of US Direct or CyberOpticLabs and will furnish
the other party with such additional financial and other information
as to the business and properties of US Direct or CyberOpticLabs as
each party shall from time to time reasonably request.
6.03 Indemnification by US Direct. US Direct will indemnify and
hold harmless CyberOpticLabs and its directors and officers, and each
person, if any, who controls CyberOpticLabs within the meaning of the
Securities Act, from and against any and all losses, claims, damages,
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expenses, liabilities, or actions to which any of them may become
subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not
resulting in liability, insofar as such losses, claims, damages,
expenses, liabilities, or actions arise out of or are based upon
any untrue statement or alleged untrue statement of material fact
contained in any application or statement filed with a governmental
body or arising out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished
in writing by US Direct expressly for use therein. The indemnity
agreement contained in this Section 6.03 shall remain operative and
in full force and effect, regardless of any investigation made by or
on behalf of CyberOpticLabs and shall survive the consummation of
the transactions contemplated by this Agreement for a period of one
year.
6.04 Indemnification by CyberOpticLabs. CyberOpticLabs will
indemnify and hold harmless US Direct, the US Direct Stockholders,
US Direct's directors and officers, and each person, if any, who
controls US Direct within the meaning of the Securities Act, from
and against any and all losses, claims, damages, expenses, liabilities,
or actions to which any of them may become subject under applicable
law (including the Securities Act and the Securities Exchange Act) and
will reimburse them for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any claims or
actions, whether or not resulting in liability, insofar as such losses,
claims, damages, expenses, liabilities, or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in any application or statement filed with a
governmental body or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein, or necessary in order to make the statements therein not
misleading, but only insofar as any such statement or omission was
made in reliance upon and in conformity with information furnished in
writing by CyberOpticLabs expressly for use therein. The indemnity
agreement contained in this Section 6.04 shall remain operative and
in full force and effect, regardless of any investigation made by or
on behalf of US Direct and shall survive the consummation of the
transactions contemplated by this Agreement for a period of one year.
6.05 The Acquisition of CyberOpticLabs Common Stock. CyberOpticLabs
and US Direct understand and agree that the consummation of this Agreement
including the issuance of the CyberOpticLabs Common Stock to US Direct in
exchange for the US Direct Shares as contemplated hereby, constitutes the
Page 56
offer and sale of securities under the Securities Act and applicable state
statutes. CyberOpticLabs and US Direct agree that such transactions
shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend,
among other items, on the circumstances under which such securities
are acquired.
(a) In order to provide documentation for reliance upon the
exemptions from the registration and prospectus delivery requirements
for such transactions, each shareholder of US Direct shall execute
and deliver to CyberOpticLabs an investment representation letter
in substantially the same form as that attached hereto as Exhibit "A."
(b) In connection with the transaction contemplated by this
Agreement, US Direct and CyberOpticLabs shall each file, with the
assistance of the other and their respective legal counsel, such
notices, applications, reports, or other instruments as may be deemed
by them to be necessary or appropriate in an effort to document reliance
on such exemptions, and the appropriate regulatory authority in the
states where the US Direct Stockholders reside unless an exemption
requiring no filing is available in such jurisdictions, all to the
extent and in the manner as may be deemed by such parties to be
appropriate.
(c) In order to more fully document reliance on the exemptions
as provided herein, US Direct, the US Direct Stockholders, and
CyberOpticLabs shall execute and deliver to the other, at or prior
to the Closing, such further letters of representation, acknowledgment,
suitability, or the like as CyberOpticLabs or US Direct and their
respective counsel may reasonably request in connection with reliance
on exemptions from registration under such securities laws.
6.06 CyberOpticLabs Liabilities. Immediately prior to the
Closing Date, CyberOpticLabs shall have $20,000 in cash or cash
equivalents and $10,000 in liabilities with all expenses related
to this Agreement or otherwise having been paid.
6.07 Securities Filings. CyberOpticLabs shall be responsible
for the preparation of a Form D and its filing with the Securities
and Exchange Commission and US Direct will be responsible for any and
all filings in any jurisdiction where its stockholders reside which
would require a filing with a governmental agency as a result of the
transactions contemplated in this Agreement.
6.08 Sales of Securities Under Rule 144, If Applicable.
(a) CyberOpticLabs will use its best efforts to at all times
satisfy the current public information requirements of rule 144
promulgated under the Securities Act so that its stockholders can
sell restricted securities that have been held for one year or more
or such other restricted period as required by rule 144 as it is
from time to time amended.
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(b) Upon being informed in writing by any person holding
restricted stock of CyberOpticLabs as of the date of this Agreement
that such person intends to sell any shares under rule 144 promulgated
under the Securities Act (including any rule adopted in substitution
or replacement thereof), CyberOpticLabs will certify in writing to
such person that it is compliance with rule 144 current public
information requirement to enable such person to sell such person's
restricted stock under rule 144, as may be applicable under the
circumstances.
(c) If any certificate representing any such restricted stock
is presented to CyberOpticLabs's transfer agent for registration or
transfer in connection with any sales theretofore made under rule
144, provided 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 CyberOpticLabs
and its counsel that such transfer has complied with the requirements
of rule 144, as the case may be, CyberOpticLabs will promptly instruct
its transfer agent to register such transfer and to issue one or more
new certificates representing such shares to the transferee and, if
appropriate under the provisions of rule 144, as the case may be, free
of any stop transfer order or restrictive legend. The provisions of
this Section 6.08 shall survive the Closing and the consummation of
the transactions contemplated by this Agreement for a period of two
years.
6.09 New Board of Directors and Officers. Upon closing of the
transactions contemplated by this Agreement, the two of the current
directors and officers of CyberOpticLabs shall resign, seriatim,
and each of Krisha Nyborg and John Scagnelli designated by US Direct
shall be appointed to fill the vacancies created thereby.
6.10 No Plan to Dispose of CyberOpticLabs Stock Received In
the Exchanges Referred to in Section 1.01. None of the US Direct
Stockholders has, nor will have, as of immediately prior to the
closing of the exchanges referred to in Section 1.01, any plan,
intention, commitment of obligation to dispose of any of the
CyberOpticLabs common shares that any of them will receive pursuant
to Section 1.01.
ARTICLE VII
MISCELLANEOUS
7.01 Brokers. CyberOpticLabs and US Direct 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 this Agreement. Further, CyberOpticLabs and US Direct each agree to
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indemnify the other against any claim by any third person for any
commission, brokerage, or finder's fee or other payment with respect
to this Agreement or the transactions contemplated hereby based on any
alleged agreement or understanding between such party and such third
person, whether express or implied, from the actions of such party.
The covenants set forth in this section shall survive the Closing
Date and the consummation of the transactions herein contemplated.
7.02 No Representation Regarding Tax Treatment. No representation
or warranty is being made by any party to any other regarding the
treatment of this transaction for federal or state income taxation.
Each party has relied exclusively on its own legal, accounting, and
other tax adviser regarding the treatment of this transaction for
federal and state income taxes and on no representation, warranty,
or assurance from any other party or such other party's legal,
accounting, or other adviser.
7.03 Governing Law. This Agreement shall be governed by,
enforced and construed under and in accordance with the laws of
the State of Nevada.
7.04 Notices. Any notices or other communications required
or permitted hereunder shall be sufficiently given if personally
delivered, if sent by facsimile or telecopy transmission or other
electronic communication confirmed by registered or certified mail,
postage prepaid, or if sent by prepaid overnight courier addressed
as follows:
7.05 Consistent Tax Treatment of Exchanges. Each of the
parties hereto intend for the exchange contemplated under Section
1.01 to be treated for tax purposes as a contribution by the US Direct
Stockholders of their US Direct shares to qualify as a tax-free exchange
under Section 351(a) of the Code. Each of the parties hereto shall
treat the exchanges contemplated under Section 1.01 consistent with
such intent for all tax reporting and other purposes including, without
limitation in the presentation and filing of their respective tax returns.
If to CyberOpticLabs, to: If to US Direct, to:
Ivan Wong Insurance Solutions Group
CyberOpticLabs, Inc. 476 Express Drive South
7 Old Lantern Road Medford, NY 11763
Norwalk, Connecticut 06851 Fax: (613) 447-1561
Fax: (___) ____-______
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With Copies to: With copies to:
Victor D. Schwarz, Esq. Eric Hellige, Esq.
2681 Parleys Way, Suite 203 Pryor Cashman Sherman & Flynn LLP
Salt Lake City, Utah 84109 410 Park Ave, NY, NY 10022
Fax: (801) 463-6085 Fax: (212) 326-0806
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 or sent by facsimile or telecopy transmission or other
electronic communication, or one day after the date so sent by
overnight courier.
7.05 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 attorneys' fees, incurred in connection therewith and in
enforcing or collecting any judgment rendered therein.
7.06 Schedules; Knowledge. Whenever in any section of this
Agreement reference is made to information set forth in the schedules
provided by CyberOpticLabs or US Direct such reference is to information
specifically set forth in such schedules and clearly marked to identify
the section of this Agreement to which the information relates. Whenever
any representation is made to the "knowledge" of any party, it shall be
deemed to be a representation that no officer or director of such party,
after reasonable investigation, has any knowledge of such matters.
7.07 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof.
All previous agreements between the parties, whether written or oral,
have been merged into this Agreement. This Agreement alone fully and
completely expresses the agreement of the parties relating to the
subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written
or oral, except as set forth herein.
7.08 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 six months from the Closing Date, unless otherwise provided herein.
7.09 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.
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7.10 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 such remedies may be enforced
concurrently, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or
any other default then, theretofore, or thereafter occurring or existing.
At any time prior to the Closing Date, this Agreement may be amended by
a writing signed by all parties hereto, with respect to any of the terms
contained herein, and any term or condition of this Agreement may be
waived or the time for performance thereof may be extended by a writing
signed by the party or parties for whose benefit the provision is
intended.
IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly
authorized, as of the date first above written.
CYBEROPTICLABS, INC., US Direct Insurance Agency Inc.,
a Nevada corporation a New York corporation
By:_______________________ By:_______________________
STATE OF ________ )
ss.
COUNTY OF ___________ )
On this day of November, 2000, personally appeared before
me _______________, whose identity is personally known to me and who by
me duly sworn, did say that he is the _____________ of CyberOpticLabs,
Inc. and that said document was signed by him of behalf of said
corporation by authority of its bylaws, and said _____________
acknowledged to me that said corporation executed the same.
______________________________________________
NOTARY PUBLIC
STATE OF NEW YORK )
ss.
COUNTY OF _________ )
On this day of November, 2000, personally appeared before
me __________, whose identity is personally known to me and who by me
duly sworn, did say that he is the president of ISG Group, Inc. and
that said document was signed by him of behalf of said corporation by
authority of its bylaws, and said ________________ acknowledged to me
that said corporation executed the same.
__________________________________________
NOTARY PUBLIC
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Exhibit A-1
US Direct Insurance Agency, Inc.
List of Stockholders
Number of Shares Number of CyberOpticLabs Share
Name of Shareholder of ISG Owned Shares to be Received in Exchange
- ------------------- ---------------- ---------------------------------
Geils Ventures LLC 10,000 10,000,000
Craig Gironda 400 400,000
Pedro P. Mata 400 100,000
Carl Carman 100 100,000
Gabriel Wajner 60 60,000
Paul Riss c/f Jacob 45 45,000
Paul Riss c/f Rebecca 45 45,000
Tara Lee Rama 25 25,000
Pedro F. Mata 10 10,000
Anthony Scalice 10 10,000
John Moore 6 6,000
Rita Garber 5 5,000
Ardsley Methodist Church 5 5,000
------ ----------
Total 11,111 11,111,000