UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 26, 2005
WEBB MORTGAGE DEPOT, INC.
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(Exact Name of Registrant
Florida
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(State or Other Jurisdiction of Incorporation)
65-0902373
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(IRS Employer Identification No.)
333-72376
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(Commission File Number)
155 Wilson Lake Road, Mooresville, NC 28117
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(Address of Principal Executive Offices) (Zip Code)
(800)952-8706
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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TABLE OF CONTENTS
Item 1.01. Entry into a Material Definitive Agreement.
Item 9.01. Financial Statements and Exhibits.
SIGNATURES
Exhibit 10.1
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Item 1.01. Entry into a Material Definitive Agreement.
Effective as of January 26, 2005, Registrant entered into a Share for Share
Exchange Agreement (the "Agreement") with Medical Connections, Inc., a Florida
corporation relating to the acquisition by Registrant of all of the outstanding
capital stock of Medical Connections in exchange for shares of common stock of
Webb Mortgage that would aggregate approximately 95% of the issued and
outstanding common stock of Registrant immediately after the transaction. The
Agreement contemplates that prior to Closing, Webb Mortgage will undertake a
100:1 reverse stock split and that we will redeem the 1,831,000 shares of our
common stock currently owned by Byron Webb, our president, in exchange for the
payment of $200,000 by Medical Connections. Concurrently with the reverse stock
split and the redemption of the shares of common stock owned by Mr. Webb, we
will issue up to a maximum of 446,000 shares of our common stock to the Medical
Connections shareholders. Closing of the transaction will be subject to
obtaining the required consents of the Webb Mortgage and Medical Connections
shareholders.
The foregoing is a summary of the terms of the Agreement, which summary is
qualified in its entirety by the terms of the Agreement. A copy of the Agreement
is attached as Exhibit 10.1 to this Current Report.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1 Share for Share Exchange Agreement executed as of January 26, 2005
between Webb Mortgage Depot, Inc., Byron Webb and Medical Connections, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: January 28, 2005
Webb Mortgage Depot, Inc.
By: /s/ Byron Webb
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Byron Webb
President
Exhibit 10.1
SHARE-FOR-SHARE EXCHANGE AGREEMENT
SHARE-FOR-SHARE EXCHANGE AGREEMENT made as of this 26th day of January 2005
by and among WEBB MORTGAGE DEPOT, INC. a Florida corporation (the
"Corporation"), BYRON WEBB ("Webb"), and MEDICAL CONNECTIONS, INC., a Florida
Corporation ("Medical"), together with each of the Medical Shareholders (as
hereinafter defined).
Recitals:
A. The Corporation has offered to issue 444,600 shares of its common stock,
$.001 par value (the "Common Stock), to the holders of shares of the capital
stock of Medical (the "Medical Shareholders") in exchange for their contribution
to the Corporation of all of the issued and outstanding capital stock of Medical
(the "Medical Shares").
B. The respective Boards of Directors of the Corporation and Medical have
determined that, subject to the terms, conditions, agreements, representations
and warranties set forth herein, the exchange contemplated herein will serve the
general welfare and advantage of their respective businesses.
C. Subject to the terms and conditions set forth herein, the Medical
Shareholders desire to contribute all of the shares of Medical capital stock for
shares of Common Stock in the manner hereinafter set forth herein.
D. The exchange is intended to comply with the requirements of Section 368
of the Internal Revenue Code of 1986, as amended, the Treasury Regulations
promulgated thereunder and the interpretive rulings issued pursuant thereto.
NOW, THEREFORE, in consideration of the foregoing recitals, as well as the
mutual covenants hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
ARTICLE I
EXCHANGE PROVISIONS
1.1 Contribution.
Subject to the terms and conditions hereinafter set forth:
(a) Each Medical Shareholder agrees to contribute, transfer, assign and
convey at Closing all of their Medical Shares to the Corporation, together with
all other rights, claims and interests he or she may have with respect to
Medical or its respective assets, and all claims he may have against its
officers and directors, including, but not limited to, all rights to unpaid
dividends and all claims and causes of action arising from or in connection with
the ownership of Medical Shares or its issuance, excluding any right, claim or
interest of same arising under this Agreement or in connection with the
transaction contemplated by this Agreement. Each Medical Shareholder shall
deliver to Medical all of his stock certificates representing the Medical
Shares, together with a stock power therefore, duly executed in blank, to be
held by Medical for delivery at Closing; and
(b) The Corporation agrees to issue to each Medical Shareholder at Closing
0.06264 shares of newly-issued Common Stock for each share of Medical capital
stock transferred to the Corporation pursuant to Section 1.1(a) up to a maximum
of 446,600 shares.
Schedule 1.1 sets forth the name of each Medical Shareholder, the number of
shares each owns as of the date of this Agreement and the number of shares of
Common Stock each will receive at Closing.
1.2 Byron Webb.
(a) At Closing, Medical shall pay to Webb $200,000 and Webb shall surrender
to the Corporation for cancellation 1,831,000 shares of the Corporation's common
stock representing all of the capital stock he owns in the Corporation.
1.3 Spin-off.
Prior to the Closing, the Corporation shall form a wholly owned subsidiary
and then transfer all of its assets and liabilities to said subsidiary.
Contemporaneously therewith, the Corporation shall distribute to its
shareholders, pro rata, all of its shares of capital stock in said subsidiary.
1.4 No Registration.
(a) Each of the Medical Shareholders acknowledges and agrees that:
(i) The Common Stock to be issued to the Medical Shareholders (the
"Exchanged Corporation Stock") is being issued to Medical Shareholders without
registration under applicable federal and state securities laws in reliance upon
certain exemptions from registration under such securities laws;
(ii) He has had the opportunity to ask questions of and receive answers
from the Corporation, Medical and their respective executive officers concerning
their businesses and the Exchanged Corporation Stock and all such inquiries have
been completed to his satisfaction;
(iii) Each certificate representing shares of the Exchanged Corporation
Stock will bear a legend restricting its transfer, sale, conveyance or
hypothecation, unless such Exchanged Corporation Stock is either registered
under applicable securities laws or an exemption from such registration is
applicable, and provided that if an exemption from registration is claimed, the
Corporation may require an opinion of legal counsel that, as a result of such
exemption, registration under the securities laws is not required to transfer,
sell, convey or hypothecate such Exchanged Corporation Stock;
(iv) He shall not transfer any Exchanged Corporation Stock except in
compliance with all applicable securities laws;
(v) He has a pre-existing personal or business relationship with Medical or
its officers, directors, agents or controlling persons, and has relied, if at
all, on the advice of such persons in electing to participate in the transaction
herein contemplated and not on any representations of the Corporation other than
those expressly set forth herein, or by reason of his business or financial
experience could be reasonably assumed to have the capacity to protect his own
interest in connection with the transaction;
(vi) He is acquiring the Exchanged Corporation Stock for his own account,
for investment purposes only and not with a view to the sale or distribution
thereof;
(vii) He has not received any general solicitation or general advertising
regarding the acquisition of the Exchanged Corporation Stock; and
(viii) He is capable of evaluating the merits and risks of an investment in
the Common Stock because he is a sophisticated investor by virtue of his prior
investments and has experience in investments similar in nature to the Common
Stock, including investments in unlisted and unregistered securities, and has
knowledge and experience in financial and business matters in general.
(b) The Corporation acknowledges and agrees that:
(i) The Medical capital stock is being transferred to the Corporation
without registration under applicable securities laws in reliance upon certain
exemptions from registration from such securities laws;
(ii) All certificates representing the Medical capital stock bear legends
restricting its transfer, sale, conveyance or hypothecation, unless such Medical
capital stock is either registered under the applicable securities laws, or an
exemption from such registration is applicable;
(iii) The Corporation shall not transfer any Medical capital stock except
in compliance with all applicable securities laws; and
(iv) The Corporation is acquiring the Medical capital stock for its own
account for investment purposes only and not with a view to the sale or
distribution thereof.
1.5 Closing. Consummation of the contemplated transaction shall take place
on the date that all the conditions set forth herein are satisfied or waived by
the appropriate parties at the offices of Jeffrey G. Klein, P.A. located at 2600
North Military Trail, Suite 270 Boca Raton, Florida 33431 or at another time or
date that is mutually agreeable to the parties hereto, or on such other date at
such other time as may be mutually agreed upon in writing by the parties hereto
(the "Closing").
ARTICLE II
THE CORPORATION'S REPRESENTATIONS AND WARRANTIES
The Corporation hereby makes the following representations and warranties
to the Medical Shareholders and Medical, each of which the Corporation
represents to be true and correct on the date hereof and (except as the
Corporation may notify Medical in writing prior to the Closing) shall be deemed
made again as of the Closing and represented by the Corporation to be true and
correct at the time of the Closing.
2.1 Organization. The Corporation is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and is not
required to be qualified or licensed as a foreign corporation in any other
jurisdiction. The Corporation has the full power and authority to conduct the
business in which it will engage upon completion of the transaction contemplated
herein. The Corporation does not have any subsidiary or equity interest in any
entity. Accurate, current and complete copies of the Articles of Incorporation
and Bylaws of the Corporation are attached hereto as Schedule 2.1.
2.2 Stock Ownership. The authorized capital stock of the Corporation
consists of 25 million shares of Common Stock, of which 4,209,144 are issued and
outstanding (excluding the Exchanged Corporation Stock). Notwithstanding the
above, the Corporation shall adjust its capital structure by implementing a
100:1 reverse stock split such that, at closing, it shall have no more than
23,400 shares of common stock issued and outstanding, after giving affect to the
redemption of the shares owned by Byron Webb.
All the issued and outstanding shares of capital stock of the Corporation
are duly authorized, validly issued, fully paid and nonassessable. Upon the
issuance of the Exchanged Corporation Stock, the Common Stock included in the
Exchanged Corporation Stock shall, on a fully diluted basis, constitute
approximately ninety five percent (95%) of all the issued and outstanding Common
Stock. Upon tender of the Medical capital stock to the Corporation in the manner
contemplated in Section 1.1 hereof, legal and beneficial ownership of the
Exchanged Corporation Stock shall be transferred to and vested in the Medical
Shareholders free and clear of all encumbrances, and all the Exchanged
Corporation Stock shall be duly authorized, validly issued, fully paid and
nonassessable.
There are currently outstanding a total of 200,000 options which expire on
August 31, 2005 which entitles the holder thereof to purchase shares of our
common stock at an exercise price of $.55 per share.
Except as set forth herein, there are no other outstanding bonds,
debentures, notes or other indebtedness or other securities of the Corporation
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which shareholders of the
Corporation may vote. Except as set forth above, there are no outstanding
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Corporation is a party or
by which it is bound obligating the Corporation to issue, deliver or sell, or
cause to be issued, delivered or sold, additional shares of capital stock or
other equity or voting securities of the Corporation or obligating the
Corporation to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. There
are no outstanding contractual obligations, commitments, understandings or
arrangements of the Corporation to repurchase, redeem or otherwise acquire or
make any payment in respect of any shares of capital stock of the Corporation.
2.3 Authority and Approval of Agreement.
(a) The execution and delivery of this Agreement by the Corporation and the
performance of all the Corporation's obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of the
Corporation pursuant to applicable law. The Corporation has the power and
authority to execute and deliver this Agreement and to perform all its
obligations hereunder.
(b) This Agreement and any other documents, instruments and agreements
executed by the Corporation in connection herewith constitute the valid and
legally binding agreements of the Corporation, enforceable against the
Corporation in accordance with their terms, except that (i) enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws of general application affecting the enforcement of the rights and
remedies of creditors; and (ii) the availability of equitable remedies may be
limited by equitable principles.
2.4 No Violations. Neither the execution, delivery nor performance of this
Agreement or any other documents, instruments or agreements executed by the
Corporation in connection herewith, nor the consummation of the transactions
contemplated hereby: (i) constitutes a violation of or default under (either
immediately, upon notice or upon lapse of time) the Articles of Incorporation or
Bylaws of the Corporation, any provision of any contract to which the
Corporation may be bound, any judgment or any law; or (ii) will or could result
in the creation or imposition of any encumbrance upon, or give to any third
person any interest in or right to, the Exchanged Corporation Stock or any other
capital stock of the Corporation; or (iii) will or could result in the loss or
adverse modification of, or the imposition of any fine or penalty with respect
to, any license, permit or franchise granted or issued to, or otherwise held by
or for the use of, the Corporation.
2.5 Financial Statements. Attached hereto as Schedule 2.5 are audited
financial statements of the Corporation ("Financial Statements"), including
balance sheets, statements of operations, statements of changes in shareholders'
equity and statements of cash flows for the fiscal year ended December 31, 2003
and the quarter ended September 30, 2004, the balance sheet as of September 30,
2004 being hereinafter referred to as the "Balance Sheet". The Financial
Statements and Balance Sheet are true, correct and complete, were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, and accurately reflect the Corporation's
financial condition and the results of the Corporation's operations for the
periods and as of the dates which they purport to cover.
2.6 Conduct Since Date of Balance Sheet. Except as disclosed in Schedule
2.6 hereto or as otherwise set forth herein (including the spin-off described in
paragraph 1.3 above), none of the following has occurred since the date of the
Balance Sheet:
(a) Any material adverse change in the financial condition, obligations,
capitalization, business, prospects or operations of the Corporation, nor are
there any circumstances known to the Corporation which might result in such a
material adverse change or such an effect;
(b) Any increase of indebtedness of the Corporation other than in the
ordinary course of business;
(c) Any settlement or other resolution of any dispute or proceeding other
than in the ordinary course of business;
(d) Any cancellation by the Corporation, without payment in full, of any
obligation to the Corporation of any shareholder, director, officer or employee
of the Corporation (or any member of their respective families), or any entity
in which any shareholder, director or officer of the Corporation (or any member
of their respective families) has any direct or indirect interests;
(e) Any obligation incurred by the Corporation other than in the ordinary
course of business;
(f) Any payment, discharge or satisfaction of any obligation or judgment,
other than in the ordinary course of business; or
(g) Any agreement obligating the Corporation to do or take any of the
actions referred to in this Section 2.7 outside the ordinary course of business.
2.7 Intentionally Deleted.
2.8 Offers. There are no outstanding offers, bids, proposals or quotations
made by the Corporation which, if accepted, would create a Contract with the
Corporation.
2.9 Officers, Directors, Agents, etc. Set forth on Schedule 2.9 annexed
hereto is a complete list of all officers (with office held), directors,
contractors and agents of the Corporation, and the compensation and all vacation
and other benefits they are entitled to receive from the Corporation.
2.10 Labor Matters. The Corporation is not and has never been a party to:
(i) any profit sharing, pension, retirement, deferred compensation, bonus, stock
option, stock purchase, retainer, consulting, health, welfare or incentive plan
or agreement or other employee benefit plan, whether legally binding or not; or
(ii) any plan providing for "fringe benefits" to its employees, including, but
not limited to, vacation, disability, sick leave, medical, hospitalization and
life insurance and other insurance plans, or related benefits; or (iii) any
employment agreement. No former employee of the Corporation has any claim
against the Corporation (whether under federal or state law, any employment
agreement or otherwise) on account of or for: (i) overtime pay; (ii) wages or
salary for any period; (iii) vacation, time-off or pay in lieu of vacation or
time-off; or (iv) any violation of any statute, ordinance or regulation relating
to minimum wages or maximum hours of work. No person or party (including, but
not limited to, governmental agencies of any kind) has any claim or basis for
any action or proceeding against the Corporation arising out of any statute,
ordinance or regulation relating to discrimination in employment or to
employment practices or occupational safety and health standards.
2.11 Environmental Matters. Except as set forth on Schedule 2.11, the
Corporation has not generated any hazardous wastes or engaged in activities
which are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where the Corporation has stored,
disposed or arranged for the disposal of chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation, and no polychlorinated biphenyls are used or stored at any property
owned or leased by the Corporation.
2.12 Books and Records. The Corporation's books and records are and have
been properly prepared and maintained in form and substance adequate for
preparing audited financial statements in accordance with generally accepted
accounting principles, and fairly and accurately reflect all of the
Corporation's assets, obligations and accruals, and all transactions (normally
reflected in books and records in accordance with generally accepted accounting
principles) to which the Corporation is or was a party or by which the
Corporation or any of its assets are or were affected.
2.13 Taxes. Except as otherwise disclosed in this Agreement, all taxes due,
owing and payable by the Corporation have been fully paid. The amounts set up as
provision for taxes on the Balance Sheet are sufficient for the payment of all
accrued and unpaid taxes of the Corporation, whether or not disputed. The amount
set up as provision for taxes on the Corporation's books and records for the
current fiscal year through the Closing shall be sufficient for the payment of
all accrued and unpaid taxes of the Corporation, whether or not disputed, for
such period. No claim for any tax due from or assessed against the Corporation
is being contested by the Corporation. None of the Corporation's tax returns or
reports has been audited by the Internal Revenue Service or any state or local
tax authority, and the Corporation has not received any notice of deficiency or
other adjustment from the Internal Revenue Service or any state or local tax
authority. There are no agreements, waivers or other arrangements providing an
extension of time with respect to the assessment of any tax against the
Corporation, nor are there any tax proceedings now pending or threatened against
the Corporation. No state of facts exists or has existed, nor has any event
occurred, which would constitute grounds for the assessment of any further tax
against the Corporation.
2.14 Litigation. The Corporation is not a party to, the subject of, or
threatened with any litigation nor, to the best of the Corporation's knowledge,
is there any basis for any litigation. The Corporation is not contemplating the
institution of any litigation.
2.15 Other Liabilities. No claim of breach of contract, tort, product
liability or other claim, contingent or otherwise, has been asserted or
threatened against the Corporation nor, to the best of the Corporation's
knowledge, is capable of being asserted by any employee, creditor, claimant or
other person against the Corporation. No state of facts exists or has existed,
nor has any event occurred, which could give rise to the assertion of any such
claim by any person.
2.16 Consents. The execution, delivery and performance by the Corporation
of this Agreement and the consummation by the Corporation of the transactions
contemplated hereby do not require any consent that has not been received prior
to the date hereof.
2.17 Judgments. There is no outstanding judgment against the Corporation.
There is no health or safety problem involving or affecting the Corporation.
There are no open workers compensation claims against the Corporation, or any
other obligation, fact or circumstance which would give rise to any right of
indemnification on the part of any current or former shareholder, director,
officer, employee or agent of the Corporation, or any heir or personal
representative thereof, against the Corporation or any successor to the
businesses of the Corporation.
2.18 Improper Payments. Neither the Corporation, nor any of its current or
former shareholders, directors, officers or employees or agents, nor any person
acting on behalf of the Corporation, has, directly or indirectly, made any
bribe, kickback or other payment of a similar or comparable nature, whether
lawful or not, to any person, public or private, regardless of form, whether in
money, property or services, to obtain favorable treatment for business secured
or special concessions already obtained. No funds or assets of the Corporation
were donated, lent or made available directly or indirectly for the benefit of,
or for the purpose of supporting or opposing, any government or subdivision
thereof, political party, candidate or committee, either domestic or foreign.
The Corporation has not maintained and does not maintain a bank account, or any
other account of any kind, whether domestic or foreign, which account was not or
is not reflected in the Corporation's books and records, or which account was
not listed, titled or identified in the name of the Corporation.
2.19 Full Disclosure. All the representations and warranties made by the
Corporation herein or in any Schedule, and all of the statements, documents or
other information pertaining to the transaction contemplated herein made or
given by the Corporation, its agents or representatives, are complete and
accurate, and do not omit any information required to make the statements and
information provided, in light of the transaction contemplated herein,
non-misleading, accurate and meaningful.
ARTICLE III
MEDICAL'S REPRESENTATIONS AND WARRANTIES
Medical hereby makes the following representations and warranties to the
Corporation, each of which Medical represents to be true and correct on the date
hereof and (except as Medical may notify the Corporation in writing prior to the
Closing) shall be deemed made again as of the Closing and represented by Medical
to be true and correct at the time of the Closing.
3.1 Organization. Medical is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida and is not required
to be qualified or licensed as a foreign corporation in any other jurisdiction.
Medical has the full power and authority to own all its assets and to conduct
its business as and where its business is presently conducted. Accurate, current
and complete copies of the Articles of Incorporation and Bylaws of Medical are
attached hereto as Schedule 3.1. Medical has no subsidiaries or equity interest
in any entity.
3.2 Stock Ownership. The authorized capital stock of Medical consists of
twenty five million (25,000,000) shares of common stock, 7,096,916 of which will
be outstanding at Closing. and twenty five million shares of preferred stock
none of which are or will be issued or outstanding at Closing. All the issued
and outstanding capital stock of Medical is duly authorized, validly issued,
fully paid and nonassessable. There are no outstanding bonds, debentures, notes
or other indebtedness or other securities of Medical having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which shareholders of Medical may vote. Except as set forth
above, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Medical is a party or by which it is bound obligating Medical to issue, deliver
or sell, or cause to be issued, delivered or sold, additional shares of capital
stock or other equity or voting securities of Medical or obligating Medical to
issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Medical to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of Medical.
3.3 Authority and Approval of Agreement.
(a) The execution and delivery of this Agreement by Medical and the
performance of all Medical's obligations hereunder have been duly authorized and
approved by all requisite corporate action on the part of Medical pursuant to
applicable law. Medical has the power and authority to execute and deliver this
Agreement and to perform all its obligations hereunder.
(b) This Agreement and each of the other documents, instruments and
agreements executed by Medical in connection herewith constitute the valid and
legally binding agreements of Medical, enforceable against Medical in accordance
with their terms, except that: (i) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies of creditors;
and (ii) the availability of equitable remedies may be limited by equitable
principles.
3.4 No Violations. Neither the execution, delivery nor performance of this
Agreement or any other documents, instruments or agreements executed by Medical
in connection herewith, nor the consummation of the transactions contemplated
hereby: (i) constitutes a violation of or default under (either immediately,
upon notice or upon lapse of time) the Articles of Incorporation or Bylaws of
Medical, any provision of any Contract to which Medical or its assets may be
bound, any judgment to which Medical is bound or any law applicable to Medical;
or (ii) result in the creation or imposition of any encumbrance upon, or give to
any third person any interest in or right to, any other capital stock of Medical
or any of the assets of Medical; or (iii) result in the loss or adverse
modification of, or the imposition of any fine or penalty with respect to, any
license, permit or franchise granted or issued to, or otherwise held by or for
the use of, Medical.
3.5 Consents. The execution, delivery and performance by Medical of this
Agreement and the consummation by Medical of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
3.6 Medical Financial Statements. Attached hereto as Schedule 3.6 are the
financial statements of Medical ("Medical Financial Statements"), including
balance sheets, statements of operations, statements of changes in stockholders'
equity and statements of cash flows for the period ended December 31, 2003, and
the fiscal quarter ending September 30, 2004 (the balance sheet as of September
30, 2004 being hereinafter referred to as the "Medical Balance Sheet"). The
Medical Financial Statements are true, correct and complete, were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, and accurately reflect Medical's financial
condition and the results of Medical's operations for the periods and as the
dates which they purport to cover.
3.7 Conduct Since Date of Medical Balance Sheet. Except as disclosed in
Schedule 3.7 hereto or as otherwise set forth herein, none of the following have
occurred since the date of the Medical Balance Sheet:
(a) Any material adverse change in the financial condition, obligations,
capitalization, business, prospects or operations of Medical, nor are there any
circumstances known to Medical which might result in such a material adverse
change or such an effect;
(b) Any increase of indebtedness of Medical other than in the ordinary
course of business;
(c) Any settlement or other resolution of any dispute or proceeding
including Medical other than in the ordinary course of business;
(d) Any cancellation by Medical, without payment in full, of any obligation
to Medical of any shareholder, partner, director, officer or employee of Medical
(or any member of their respective families), or any person in which any
shareholder, partner, director or officer of Medical (or any member of their
respective families) has any direct or indirect interest;
(e) Any obligation incurred by Medical other than in the ordinary course of
business;
(f) Any payment, discharge or satisfaction of any obligation or judgment of
or against Medical, other than in the ordinary course of business; or
(g) Any Contract obligating Medical to do or take any of the actions
referred to in this Section 3.7 outside the ordinary course of business.
3.8 Contracts. Schedule 3.8 hereto is an accurate, current and complete
list and description of each material Contract (other than this Agreement) to
which Medical is a party or by which Medical or any of its assets are bound. An
accurate, current and complete copy of each material Contract described in
Schedule 3.8 hereto has been furnished to the Corporation.
3.9 Offers. There are no outstanding offers, bids, proposals or quotations
made by Medical which, if accepted, would create a Contract with Medical.
3.10 Officers, Directors, Agents, etc. Set forth on Schedule 3.10 annexed
hereto is a complete list of all officers (with office held), directors,
contractors and agents of Medical, and the compensation and all vacation and
other benefits they are entitled to receive from Medical.
3.11 Labor Matters. Medical is not and has never been a party to: (i) any
profit sharing, pension, retirement, deferred compensation, bonus, stock option,
stock purchase, retainer, consulting, health, welfare or incentive plan or
agreement or other employee benefit plan, whether legally binding or not; or
(ii) any plan providing for "fringe benefits" to its employees, including, but
not limited to, vacation, disability, sick leave, medical, hospitalization and
life insurance and other insurance plans, or related benefits; or (iii) any
employment agreement. No former employee of Medical has any claim against
Medical (whether under federal or state law, any employment agreement or
otherwise) on account of or for: (i) overtime pay; (ii) wages or salary for any
period; (iii) vacation, time-off or pay in lieu of vacation or time-off; or (iv)
any violation of any statute, ordinance or regulation relating to minimum wages
or maximum hours of work. No person or party (including, but not limited to,
governmental agencies of any kind) has any claim or basis for any action or
proceeding against Medical arising out of any statute, ordinance or regulation
relating to discrimination in employment or to employment practices or
occupational safety and health standards.
3.12 Environmental Matters. Except as set forth in Schedule 3.12 Medical
has not generated any hazardous wastes or engaged in activities which are or
could be interpreted to be potential violations of laws or judicial decrees in
any manner regulating the generation or disposal of hazardous waste. There are
no on-site or off-site locations where Medical has stored, disposed or arranged
for the disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no underground storage
tanks located on property owned or leased by Medical.
3.13 Books and Records. Medical's books and records are and have been
properly prepared and maintained in form and substance adequate for preparing
audited financial statements in accordance with generally accepted accounting
principles, and fairly and accurately reflect all of Medical's assets,
obligations and accruals, and all transactions (normally reflected in books and
records in accordance with generally accepted accounting principles) to which
Medical is or was a party or by which Medical or any of its assets are or were
affected.
3.14 Taxes. Except as otherwise disclosed in this Agreement, all taxes due,
owing and payable by Medical have been fully paid. The amounts set up as
provision for taxes on the Medical Balance Sheet are sufficient for the payment
of all accrued and unpaid taxes of Medical, whether or not disputed. The amount
set up as provision for taxes on Medical's books and records for the current
fiscal year through the Closing shall be sufficient for the payment of all
accrued and unpaid taxes of Medical, whether or not disputed, for such period.
No claim for any tax due from or assessed against Medical is being contested by
Medical. None of Medical's tax returns or reports has been audited by the
Internal Revenue Service or any state or local tax authority, and Medical has
not received any notice of deficiency or other adjustment from the Internal
Revenue Service or any state or local tax authority. There are no agreements,
waivers or other arrangements providing an extension of time with respect to the
assessment of any tax against Medical, nor are there any tax proceedings now
pending or threatened against Medical. No state of facts exists or has existed,
nor has any event occurred, which would constitute grounds for the assessment of
any further tax against Medical.
3.15 Litigation. Medical is not a party to, the subject of, or threatened
with any litigation nor, to the best of Medical's knowledge, is there any basis
for any litigation. Medical is not contemplating the institution of any
litigation.
3.16 Other Liabilities. No claim of breach of contract, tort, product
liability or other claim (whether arising from Medical's business operations or
otherwise), contingent or otherwise, has been asserted or threatened against
Medical nor, to the best of Medical's knowledge, is capable of being asserted by
any employee, creditor, claimant or other person against Medical. No state of
facts exists or has existed, nor has any event occurred, which could give rise
to the assertion of any such claim by any person.
3.17 Consents. The execution, delivery and performance by Medical of this
Agreement and the consummation by Medical of the transactions contemplated
hereby do not require any consent that has not been received prior to the date
hereof.
3.18 Judgments. There is no outstanding judgment against Medical. There is
no health or safety problem involving or affecting Medical. There are no open
workers compensation claims against Medical, or any other obligation, fact or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, partner, director, officer, employee or
agent of Medical, or any heir or personal representative thereof, against
Medical or any successor to the business of Medical.
3.19 Compliance with Laws. Medical and its business are in full compliance
with all laws.
3.20 Improper Payments. Neither Medical, nor any of its current or former
shareholders, partners, directors, officers or employees or agents, nor any
person acting on behalf of Medical, has, directly or indirectly, made any bribe,
kickback or other payment of a similar or comparable nature, whether lawful or
not, to any person, public or private, regardless of form, whether in money,
property or services, to obtain favorable treatment for business secured or
special concessions already obtained. No funds or assets of Medical were
donated, lent or made available directly or indirectly for the benefit of, or
for the purpose of supporting or opposing, any government or subdivision
thereof, political party, candidate or committee, either domestic or foreign.
Medical has not maintained and does not maintain a bank account, or any other
account of any kind, whether domestic or foreign, which account was not or is
not reflected in the Medical corporate books and records, or which account was
not listed, titled or identified in the name of Medical.
3.21 Full Disclosure. All the representations and warranties made by
Medical herein or in any Schedule hereto, and all of the statements, documents
or other information pertaining to the transaction contemplated herein made or
given by Medical, its agents or representatives are complete and accurate, and
do not omit any information required to make the statements and information
provided, in light of the transaction contemplated herein, non-misleading,
accurate and meaningful.
ARTICLE IV
MEDICAL SHAREHOLDERS' REPRESENTATIONS,
WARRANTIES AND AGREEMENTS
Each Medical Shareholder hereby makes the following representations and
warranties to the Corporation, each of which such Medical Shareholder represents
to be true and correct on the date hereof and (except as such Medical
Shareholder may notify the Corporation in writing prior to the Closing) shall be
deemed made again as of the Closing and represented by such Medical Shareholder
to be true and correct at the time of the Closing.
4.1 Title to Stock. He is the sole owner, legally and beneficially, of the
Medical capital stock set forth on Schedule 1.1 hereto opposite his name, the
consideration payable by him therefore has been paid and such stock is fully
paid and nonassessable and free and clear of all encumbrances of every kind. He
has full legal right, power and authority to enter into this Agreement and to
sell, assign and transfer such stock to the Corporation. The delivery to the
Corporation of such stock pursuant to the provisions of this Agreement will
transfer to the Corporation valid title thereto, free and clear of all
encumbrances of every kind except any created by the Corporation. The Medical
capital stock represents his entire interest in Medical. He has no other rights,
claims or interest to, against or in Medical, or its officers and directors.
4.2 Enforceability. This Agreement and each of the other documents,
instruments and agreements executed by him in connection herewith constitute the
valid and legally binding agreements of him, enforceable against him in
accordance with their terms, except that: (i) enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws of
general application affecting the enforcement of the rights and remedies of
creditors; and (ii) the availability of equitable remedies may be limited by
equitable principles.
4.3 Brokerage Fees. There is no person acting on behalf of him who is
entitled to or has any claim for any brokerage or finder's fee or commission in
connection with the execution of this Agreement or the consummation of the
transactions contemplated hereby.
ARTICLE V
INTERPRETATION AND SURVIVAL OF
REPRESENTATIONS AND WARRANTIES
5.1 Interpretation. Each warranty and representation made by a party in
this Agreement or pursuant hereto is independent of all other warranties and
representations made by the same party in this Agreement or pursuant hereto
(whether or not covering identical, related or similar matters) and must be
independently and separately satisfied. Exceptions or qualifications to any such
warranty or representation shall not be construed as exceptions or
qualifications to any other warranty or representation.
5.2 Survival. All representations and warranties made in this Agreement or
pursuant hereto shall survive the date hereof, the Closing, the consummation of
the transaction contemplated hereby and any investigation.
ARTICLE VI
OBLIGATIONS PRIOR TO CLOSING
6.1 Conduct of the Corporation and Medical Pending Closing. During the
period from the date hereof until the Closing Date, except with the express
prior written consent of the other party, the Corporation and Medical hereby
covenant and agree that:
(a) each shall maintain its existence in good standing in the state of its
incorporation and each other jurisdiction where it is required to be licensed or
qualified as a foreign corporation, and shall not alter or amend its Articles of
Incorporation or Bylaws;
(b) each shall duly and timely file all returns and reports required by any
law to be filed by it, shall promptly pay when due all taxes assessed against it
or any of its assets, and shall conform to and fully comply with all the laws
pertaining to its assets or the conduct of its business; and
(c) each shall not take any action, or enter into any agreement that would
cause a breach of any of the representations and warranties made herein by the
Corporation or Medical, as applicable.
ARTICLE VII
CONDITIONS PRECEDENT TO MEDICAL'S AND THE
MEDICAL SHAREHOLDERS' OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Medical's and each of the Medical Shareholders'
respective obligations to consummate the transaction contemplated by this
Agreement shall be subject to the satisfaction of each of the conditions set
forth in this Article VII, except to the extent that such satisfaction is waived
in writing by Medical and a majority in interest of the Medical Shareholders.
7.1 Representations and Warranties of the Corporation. All representations
and warranties made by the Corporation in this Agreement and the Schedules
hereto shall be true and correct in all respects on the date hereof, and shall
be true and correct in all respects at the time of the Closing as though such
representations were again made, without exception or deviation, at the time of
the Closing.
7.2 Performance of this Agreement. The Corporation shall have duly
performed or complied with all the obligations under this Agreement to be
performed or complied with by the Corporation on or prior to the Closing.
7.3 Absence of Litigation. No litigation shall have been instituted on or
before the time of the Closing by any person, the result of which did or could
prevent or make illegal the consummation of the transaction contemplated by this
Agreement, or which had or could have a material adverse effect on the business
of the Corporation.
7.4 Deliveries at Closing. At or prior to Closing, in addition to all other
deliveries to be made by the Corporation, the Corporation shall deliver or cause
to be delivered to Medical and the Medical Shareholders a certificate signed by
Byron Webb, President of the Corporation, dated the Closing, certifying that:
(a) all of the terms and conditions of this Agreement to be satisfied or
performed by the Corporation on or before the time of the Closing have been
satisfied or performed; (b) no litigation has been instituted or, to the best of
Mr. Webb's knowledge, threatened on or before the time of the Closing by any
person (other than Medical), the result of which did or could prevent or make
illegal the consummation of the transaction contemplated by this Agreement, or
which had or could have a material adverse effect on the business of the
Corporation; and (c) there has not been any material adverse change in or
affecting the Corporation between the date of this Agreement and the time of the
Closing.
7.5 Filing of a proxy Statement with the Securities and Exchange
Commission. This Agreement is specifically subject to and contingent upon the
Corporation filing a proxy statement with the Securities and Exchange Commission
and distributing the proxy, if approved, to its shareholders for ratification.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE
CORPORATION'S OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, the Corporation's obligations to consummate the
transaction contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VIII, except to the extent
that such satisfaction is waived by the Corporation in writing.
8.1 Representations and Warranties of Medical and the Medical Shareholders.
All representations and warranties made by Medical and the Medical Shareholders
contained in this Agreement and the Schedules hereto shall be true and correct
in all respects on the date hereof, and shall be true and correct in all
respects at the time of the Closing as though such representations were again
made, without exception or deviation, at the time of the Closing.
8.2 Performance of this Agreement. Medical and the Medical Shareholders
shall have duly performed or complied with all of the covenants and obligations
under this Agreement to be performed or complied with by them on or prior to the
Closing.
8.3 Absence of Litigation. No litigation shall have been instituted on or
before the time of the Closing by any person, the result of which did or could
prevent or make illegal the consummation of the transaction contemplated by this
Agreement.
8.4 Deliveries at Closing. At Closing, in addition to all other deliveries
to be made to the Corporation hereunder, the Corporation shall receive a
certificate signed by Joseph Azzata, the chief executive officer of Medical,
dated as of the Closing, certifying that: (a) all of the terms and conditions of
this Agreement to be satisfied or performed by Medical on or before the time of
the Closing have been satisfied or performed; (b) no litigation has been
instituted or, to the best of Mr. Azzata's knowledge, threatened on or before
the time of the Closing by any person (other than the Corporation), the result
of which did or could prevent or make illegal the consummation of the
transaction contemplated by this Agreement, or which had or could have a
material adverse effect on the business of Medical; and (c) there has not been
any material adverse change in or affecting Medical between the date of this
Agreement and the time of the Closing.
8.5 Delivery of a proxy Statement to the Medical Connections shareholders
This Agreement is specifically subject to and contingent upon Medical
Connections delivering a proxy statement to its shareholders and the approval of
the holders of all issued and outstanding shares of common stock.
ARTICLE IX
OBLIGATIONS AT CLOSING
9.1 Obligations of the Corporation and Webb to Medical and the Medical
Shareholders at Closing. The Corporation hereby covenants and agrees to deliver
or cause to be delivered to Medical and Medical Shareholders at the Closing the
following:
(a) Duly issued certificates (legended as provided in Section 1.5(a)(iii)
hereof) representing all the Exchanged Corporation Stock, together with any
documentary stamps required in connection with such transfer and such other
appropriate documents and instruments of transfer as Medical may reasonably
request.
(b) An Active Status Certificate for the Corporation, dated no earlier than
ten (10) days before the Closing, from the State of Colorado.
(c) A copy of the resolutions adopted by the Board of Directors of the
Corporation, certified by its corporate secretary, which resolutions authorize
it to execute, deliver and perform this Agreement and consummate the
transactions contemplated hereby.
(d) Such corporate resolutions, resignations and other documents as shall
be required to remove all officers and directors of the Corporation and to
replace them with the following officers and directors:
Joseph Azzata
Anthony J. Nicolosi
(e) Webb shall cancel all of his share ownership in the Corporation as set
forth in paragraph 1.2 above
9.2 Medical's Obligations to the Corporation and Webb at Closing. Medical
agrees to deliver or cause to be delivered to the Corporation (paragraph (a)-(c)
only) and Webb (paragraph (d) only) at the Closing the following:
(a) A Good Standing Certificate for Medical dated no earlier than ten (10)
days before the Closing, from the State of Ohio.
(b) A copy of the resolutions adopted by the Board of Directors of Medical,
certified by its corporate secretary, which resolutions authorize it to execute,
deliver and perform this Agreement and consummate the transactions contemplated
hereby.
(c) All outstanding Medical capital stock certificates to be exchanged for
shares of Exchanged Corporation Stock free and clear of all encumbrances,
together with all certificates evidencing the same and stock powers therefore,
in a form acceptable to the Corporation, duly executed in blank.
(d) $200,000 to Webb as set forth in paragraph 1.2 above
9.3 Medical Shareholders' Obligations to the Corporation at Closing. Each
Medical Shareholder hereby covenants and agrees to deliver to the Corporation at
the Closing the following:
(a) If not previously delivered to Medical for such purposes, all his
Medical capital stock certificates, free and clear of all encumbrances, together
with all certificates evidencing same and stock powers therefore, in a form
acceptable to the Corporation, duly executed in blank.
(b) Such other documents and instruments as counsel to the Corporation may
reasonably request.
ARTICLE X
TERMINATION
10.1 Termination on Default. If, prior to the Closing, a party hereto shall
materially breach or default in the full and timely performance and satisfaction
of any of its representations and warranties or obligations under this
Agreement, and such breach or default is not cured on or before the fifth (5th)
day after the date notice is given by the non-defaulting party to the defaulting
party specifying the nature of such breach or default (or at or before the time
of the Closing if sooner), then the non-defaulting party may terminate this
Agreement immediately upon notice to the defaulting party; provided, however,
that no Medical Shareholder may terminate this Agreement.
10.2 Termination at Closing. If any of the conditions set forth in Article
VII hereof are not satisfied at or before the time of the Closing, then Medical
may terminate this Agreement by notifying the Corporation at the Closing. If any
of the conditions set forth in Article VIII hereof are not satisfied at or
before the time of the Closing, then the Corporation may terminate this
Agreement by notifying Medical and all the Medical Shareholders at the Closing.
ARTICLE XI
OTHER AGREEMENTS
11.1 Name Change. Contemporaneously with the consummation of this
transaction, the Corporation shall change its name to Medical Connections, Inc.
11.2 Reverse Stock Split. Contemporaneously with the consummation of this
transaction, the Corporation shall reverse split its common stock on a 100:1
basis.
11.3 Reimbursement of Costs and Expenses. Medical Connections agrees to
reimburse or pay on behalf of the Corporation, any and all expenses associated
with the closing of this transaction including but not limited to legal and
accounting fees, filing fees, edgarization costs, printing and postage costs
incurred in connection with the proxy. Medical Connections shall not be required
to reimburse the Corporation for any costs incurred in connection with the
preparation of its annual report.
ARTICLE XII
MISCELLANEOUS
12.1 Notices. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered personally or sent by registered or certified
mail, postage prepaid, and addressed as set forth below:
If to Medical Connection or
Medical Connection
Shareholders : 2700 W. Atlantic Boulevard, Suite 213,
Attn: Joseph Azzata Pompano Beach, Florida 33069
If to Webb Mortgage: 155 Wilson Lake Road, Mooresville, NC
28117
Attn: Byron Webb
12.2 Entire Agreement. This Agreement, including the Schedules attached
hereto and the documents delivered pursuant hereto, sets forth all the promises,
covenants, agreements, conditions and understandings among the parties hereto
with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained. No changes of or
modifications or additions to this Agreement shall be valid unless same shall be
in writing and signed by the parties hereto.
12.3 Binding Effect; Assignment. This Agreement shall be binding upon the
parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties.
12.4 Amendment. The parties hereby irrevocably agree that no attempted
amendment, modification or change (collectively, "Amendment") of this Agreement
shall be valid and effective, unless the parties shall unanimously agree in
writing to such Amendment.
12.5 No Waiver. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
12.6 Gender and Use of Singular and Plural. All pronouns shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the party or parties or their personal representatives, successors and assigns
may require.
12.7 Counterparts. This Agreement and any Amendments may be executed in one
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
12.8 Headings. The article and section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of the Agreement.
12.9 Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Florida.
12.10 Further Assurances. The parties hereto shall execute and deliver such
further instruments and do such further acts and things as may be reasonably
required to carry out the intent and purposes of this Agreement.
12.11 Litigation. If any party hereto is required to engage in litigation
or arbitration against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party (the "Prevailing Party"), then the party or parties against whom said
final judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegals' fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in order to enforce
the Prevailing Party's rights hereunder.
12.12 Confidentiality. Except for discussions of the transactions
contemplated by this Agreement among the parties hereto and their respective
representatives and counsel participating in this transaction, and except as may
be required of the Corporation pursuant to federal securities laws, each party
hereto shall, unless all other parties hereto shall otherwise agree, keep
confidential and not, directly or indirectly, disclose to any person the
existence of this Agreement, the transaction contemplated by this Agreement or
any of the terms thereof, or the fact that the Corporation and Medical have
entered into discussions or negotiations for any purpose whatsoever, and each
party hereto shall use its good faith efforts to cause its employees, agents,
officers, directors and representatives to abide by the foregoing restrictions
on disclosure.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth above.
WEBB MORTGAGE DEPOT, INC.
BY: /s/Byron J. Webb
_________________________ Name: Byron J. Webb
Title: President
MEDICAL CONNECTIONS, INC.
_________________________ BY: /s/Joseph Azzata
Name: Joseph Azzata
Title: CEO
/S/Byron Webb
_________________________ ___________________________________
BYRON WEBB
MEDICAL CONNECTIONS, INC.
SHAREHOLDERS:
___________________________________
___________________________________