Exhibit 2.4
REORGANIZATION AND STOCK PURCHASE AGREEMENT
This REORGANIZATION stocktickerAND STOCK PURCHASE AGREEMENT dated as of May 5,
2008 (this "Agreement") is by and between NT Holding Corp., a Nevada corporation
("NTH"), and Health Source Technologies, Inc., a Nevada corporation ("HST", and
together with NTH, the "Parties").
WHEREAS, the Board of Directors of NTH deems it advisable and in the
Best interest of the corporation and its shareholders to acquire 100% of
the equity of HST in exchange for a majority interest in NTH;
WHEREAS, the shareholders of HST desire to acquire a majority interest
in NTH in exchange for 100% of the equity of HST;
AND WHEREAS, the parties hereto intend that the transaction
contemplated hereby shall be completed as a tax-free exchange of stock;
NOW, THEREFORE, in consideration for the mutual promises contained herein,
the Parties hereby agree to the following terms and conditions of this
Reorganization and Stock Purchase Agreement.
1. Pre-Closing Actions of NTH. Immediately upon execution of this
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Agreement and prior to any Closing as set forth herein, NTH shall undertake the
following actions:
(a) The Board of Directors of NTH shall unanimously approve and
deliver to Xxxxxx Law Group (the "Escrow Agent") in escrow (the "Escrow")
board and/or shareholder resolutions (as required) with respect to (a)
approving all of the transactions set forth herein; (b) completing a 1 for
25 reverse stock split of NTH common stock; (c) directing the size of the
Board of Directors to be 3 members; (d) electing Xxx Xxxxxx, Xx. Xxx
Xxxxxxxx & Xxxxx Xxxxx to the board of directors of NTH as designated by
HST, (and (e) approving a name change of the corporation to "HST Global,
Inc. (the "NTH Board Resolutions").
(b) NTH shall prepare and file a 14C Information Statement with the US
Securities and Exchange Commission to complete a 1 for 25 reverse stock
split and to change the name of the Company to HST Global, Inc.
(c) NTH shall deliver or cause to be delivered to Escrow a total of
(i) 66,000,000 shares of common stock of NTH (the "Common Shares") and (ii)
1,000,000 shares of preferred stock of NTH, each preferred share
convertible into 405 shares of NTH common stock (the "Preferred Shares"),
all for delivery to shareholders or other designees of HST as advised to
Escrow prior to closing (collectively the "Escrowed NTH Shares").
(d) NTH shall use its reasonable best efforts to prepare and complete
the documents necessary to be filed with local, state and federal
authorities to consummate the transactions contemplated hereby.
(e) Until April 25, 2008 (the "Due Diligence Period"), NTH shall make
available to HST and HST's employees, attorneys, accountants, financial
advisors,
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agents and representatives during normal business hours all information
concerning the operation, business and prospects of NTH as may be
reasonably requested by HST. NTH will cooperate with HST for the purpose of
permitting HST to discuss NTH's business and prospects with customers,
creditors, suppliers and other persons having business dealings with such
party, including without limitation providing access to all employees,
consultants, assets, properties, books, accounts, records, tax returns,
contracts and other documents of NTH, provided that such access will not
materially interfere with the normal business operations of NTH.
2. Pre-Closing Action ofHST. Immediately upon execution of this
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Agreement and prior to the Closing as set forth herein, HST shall undertake the
following actions:
(a) The Board of Directors of HST shall execute and deliver
resolutions unanimously approving all of the transactions set forth herein.
(b) The shareholders of HST shall deliver to Xxxxxx Law Group in
escrow certificates representing 1,500 shares of common stock of HST (the
"Escrowed HST Shares"), representing 100% of the issued and outstanding
equity of HST, for delivery to NTH at Closing.
(c) HST shall have delivered $25,000 to NTH as a non-refundable
deposit prior to the date of this Agreement (the "Deposit"). NTH represents
and acknowledges that HST has completed this obligation
(d) HST shall deliver to NTH (i) cash equal to Two Hundred Thousand
and (ii) a promissory note for Two Hundred Seventy-Five Thousand Dollars
($275,000) (the "Note"), a form of which is attached hereto. With the
original Deposit of $25,000 which NT acknowledges, total consideration is
$500,000.
(e) During the Due Diligence Period, HST shall make available to NTH
and NTH's employees, attorneys, accountants, financial advisors, agents and
representatives during normal business hours all information concerning the
operation, business and prospects of HST as may be reasonably requested by
NTH. HST will cooperate with NTH for the purpose of permitting NTH to
discuss HST's business and prospects with customers, creditors, suppliers
and other persons having business dealings with such party, including
without limitation providing access to all employees, consultants, assets,
properties, books, accounts, records, tax returns, contracts and other
documents of HST, provided that such access will not materially interfere
with the normal business operations of HST.
3. Conditions to Closing. The parties' obligation to close the proposed
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Acquisition will be subject to specified conditions precedent including, but not
limited to, the following:
(a) The representations and warranties of NTH as set forth in Section
6 herein shall remain true and correct as of the Closing Date and no
material adverse change to the financial condition of NTH shall have
occurred.
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(b) The representations and warranties of HST as set forth in Section
7 herein shall remain true and correct as of the Closing Date and no
material adverse change in the business or financial condition of HST shall
have occurred.
(c) All the documents necessary to be filed with local, state and
federal authorities (including the Securities and Exchange Commission) are
prepared, and to the extent applicable, filed.
(d) NTH shall have provided the NTH Board Resolutions and any other
documents or approval required to complete the transactions contemplated
hereby and in the NTH Board Resolutions.
(e) NTH shall retain its good standing as a publicly traded company
under the Securities Exchange Act of 1934, trading on the over-the-counter
bulletin board under the symbol "NTHH.OB".
(f) HST shall have prepared and delivered to NTH within 60 days of
Closing audited and unaudited financial statements which if filed at the
time received would be complete and compliant with Regulation S-X, Section
310, sufficient for the combined entities to file any and all filings
required by the US Securities and Exchange Commission (the "HST Financial
Statements").
(g) NTH shall have completed an Assignment and Assumption Agreement
with Rider Point International pursuant to which it shall have divested
itself of any and all assets and/or obligations, except for such assets
and/or obligations as are expressly provided for herein (the "Spin-off").
4. At the Closing.
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(a) At the Closing, Xxxxxx Law Group shall release from escrow the NTH
Board Resolutions effectuating the election of members designated by HST to
the NTH Board of Directors. The members of the Board of Directors of NTH
prior to Closing shall submit resignations at Closing.
(b) At the Closing, Xxxxxx Law Group shall release the Escrowed NTH
Shares to the shareholders or designees of HST.
(c) At the Closing, Xxxxxx Law Group shall release the Escrowed HST
Shares to NTH.
(d) At the Closing, the existing officers of NTH shall resign and be
replaced by those officers appointed by the new Board of Directors.
(e) At the Closing, Xxxxxx Law Group shall release the documents
completing the Debt Assumption to NTH.
5. Timing ofClosing. The closing of the transactions contemplated by
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this Agreement ((the "Closing") shall occur upon the satisfaction of the
conditions set forth in this Agreement and upon instructions from the parties
hereto to the Escrow Agent. The closing date shall occur on May 7, 2008 in the
event such conditions are met, unless the Escrow
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Agent receives instructions otherwise from the parties or notice from a party
that the conditions set forth herein have not occurred (the "Closing Date").
Unless otherwise advised in writing by the parties, in the event the Closing
does not occur on or before May 9th, 2008) the Escrow Agent shall return the
Escrowed NTH Shares and the NTH Board Resolutions to NTH; (ii) the Escrow Agent
shall return the Escrowed HST Shares to the shareholders of HST; and (iii) the
Escrow Agent shall return the documentation with respect to the Debt Assumption
to HST.
6. Representations of NTH. NTH represents and warrants as follows:
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(a) Ownership of Shares. As of the Closing Date, the shareholders of
HST will become the owners of the Escrowed NTH Shares. The Escrowed NTH
Shares will be free from claims, liens or other encumbrances, except as
provided under applicable federal and state securities laws;
(b) Fully paid and Nonassessable. The Escrowed NTH Shares constitute
duly and validly issued shares of NTH, and are fully paid and
nonassessable, and NTH further represents that it has the power and the
authority to execute this Agreement and to perform the obligations
contemplated hereby;
(c) Organization of NTH; Authorization. NTH is a corporation duly
organized, validly existing and in good standing under the laws of
StateplaceNevada with full corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The
execution, delivery and performance of this Agreement have been duly
authorized by all necessary corporate action of NTH and this Agreement
constitutes a valid and binding obligation of NTH; enforceable against it
in accordance with its terms. Subsequent to the Spin-off, NTH will have no
subsidiaries.
(d) Capitalization. The authorized capital stock of NTH consists of
100,000,000 shares of common stock, par value $0.001 per share, and
5,000,000 shares of preferred stock, par value $0.001 per share. As of the
Closing Date (not including the Escrowed NTH Shares), NTH will have a total
of no more than 30,039,203 shares of common stock issued and outstanding
and no shares of preferred stock issued and outstanding. As of the Closing
Date, all of the issued and outstanding shares of common stock of NTH are
validly issued, fully paid and non-assessable. There is not and as of the
Closing Date, there will not be outstanding any warrants, options or other
agreements on the part of NTH obligating NTH to issue any additional shares
of common or preferred stock or any of its securities of any kind. Except
for the Escrow NTH Shares, NTH will not issue any shares of capital stock
from the date of this Agreement through the Closing Date. The Common Stock
of NTH is presently trading on the over-the-counter bulletin board
maintained by Nasdaq under the symbol "NTHH.OB".
(e) Ownership of NTH Shares. The delivery of certificates provided
herein for the Escrowed NTH Shares will result in the shareholders of HST
immediate acquisition of record and beneficial ownership of the Escrowed
NTH Shares, free and clear of all encumbrances.
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(f) No Conflict as to NTH. Neither the execution and delivery of this
Agreement nor the consummation of the exchange of the NTH Shares will (a)
violate any provision of the certificate of incorporation or by-laws (or
other governing instrument) of NTH or (b) violate, or be in conflict with,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of,
or accelerate the performance required by, or excuse performance by any
Person of any of its obligations under, or cause the acceleration of the
maturity of any debt or obligation pursuant to, or result in the creation
or imposition of any encumbrance upon any property or assets of NTH under,
any material agreement or commitment to which NTH is a party or by which
its property or assets is bound, or to which any of the property or assets
of NTH is subject, or (c) violate any statute or law or any judgment,
decree, order, regulation or rule of Governmental Body applicable to NTH
except, in the case of violations, conflicts, defaults, terminations,
accelerations or encumbrances described in clause (b) of this Section for
such matters which are not likely to have a material adverse effect on the
business or financial condition of NTH. The term "Governmental Body" shall
mean any government, municipality or political subdivision thereof, whether
federal, state, local or foreign, or any governmental or quasi-governmental
agency, authority, board, bureau, commission, department, instrumentality
or public body, or any court, arbitrator, administrative tribunal or public
utility.
(g) Consents and Approvals of Governmental Authorities. Except for (i)
the filing of a Form 14C to complete Amendment to the Articles of
Incorporation of NTH to complete the reverse stock split and name change
and (ii) the filing of a Form 8-K with the Securities and Exchange
Commission and a Form 8-K/A (filed within 71 days which will include the
financials and pro-forma financials of each of NTH and HST), no consent,
approval or authorization of, or declaration, filing or registration with,
any Governmental Body is required to be made or obtained by NTH in
connection with the execution, delivery and performance of this Agreement
by NTH or the consummation of the sale of the Escrowed NTH Shares.
(h) Other Consents. No consent of any Person is required to be
obtained by NTH to the execution, delivery and performance of this
Agreement or the consummation of the sale of the NTH Shares, including, but
not limited to, consents from parties to leases or other agreements or
commitments, except for any consent which the failure to obtain would not
be likely to have a material adverse effect on the business and financial
condition of NTH.
(i) Litigation. There is no action, investigation, inquiry, proceeding
or suit by or before any Governmental body pending or threatened in writing
against or involving NTH, or which questions or challenges the validity of
this Agreement. NTH is not subject to any judgment, order or decree that is
likely to have a material adverse effect on the business or financial
condition of NTH.
(j) Absence of Certain Changes. From December 31, 2006, to the date
hereof, NTH has not:
1. suffered damage or destruction of any of its properties or
assets (whether or not covered by insurance) which is materially
adverse to the
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financial condition of NTH, or made any disposition of any of its
material properties or assets other than in the ordinary course of
business;
2. made any change or amendment in its certificate of
incorporation or by-laws, or other governing instruments, except as
contemplated hereby or required to effect the transactions set forth
herein;
3. other than the NTH Escrowed Shares or other than the total
issued and outstanding shares set forth in paragraph 6(d) hereto,
issued or sold any equity securities or other securities, acquired,
directly or indirectly, by redemption or otherwise, any such
securities, reclassified, split-up or otherwise changed any such
security, or granted or entered into any options, warrants, calls or
commitments of any kind with respect thereto;
4. organized any new subsidiary or acquired any securities of any
Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject
to, whether directly or by way of guarantee or otherwise, any
obligation or liability with respect to any such indebtedness for
borrowed money;
6. paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than
the Spin-off or otherwise in the ordinary course of business;
7. prepaid any material obligation having a maturity of more than
90 days from the date such obligation was issued or incurred;
8. cancelled any material debts or waived any material claims or
rights, except for the Spin-off or otherwise in the ordinary course of
business;
9. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other
intellectual property owned or used by it;
10. granted any general increase in the compensation of officers
or employees (including any such increase pursuant to any employee
benefit plan);
11. purchased or entered into any contract or commitment to
purchase any material quantity of raw materials or supplies, or sold
or entered into any contract or commitment to sell any material
quantity of property or assets;
12. made any capital expenditures or additions to property, plant
or equipment or acquired any other property or assets;
13. written off or been required to write off any notes or
accounts receivable;
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14. written down or been required to write down any inventory;
15. entered into any collective bargaining or union contract or
agreement; or
16. incurred any liability (in excess of $2,000.00) or other
obligation.
(k) Contracts and Commitments. NTH is not a party to any:
1. contract or agreement (except for this Agreement) involving
any liability, obligation or covenant on the part of NTH;
2. lease of personal property;
3. employee bonus, stock option or stock purchase, performance
unit, profit-sharing, pension, savings, retirement, health, deferred
or incentive compensation, insurance or other material employee
benefit plan (as defined in Section 2(3) of ERISA) or program for any
of the employees, former employees or retired employees of NTH;
4. commitment, contract or agreement that is currently expected
by the management of NTH to result in any material loss upon
completion or performance thereof;
5. contract, agreement or commitment with any officer, employee,
agent, consultant, advisor, salesman, sales representative, value
added reseller, distributor or dealer, except for a management
contract with NTH's president; or
6. employment agreement or other similar agreement.
(l) Compliance with Law. The operations of NTH have been conducted in
accordance with all applicable laws and regulations of all Governmental
Bodies having jurisdiction over them, except for violations thereof which
are not likely to have a material adverse effect on the business or
financial condition of NTH. NTH has not received any notification of any
asserted present or past failure by it to comply with any such applicable
laws or regulations. NTH has all material licenses, permits, orders or
approvals from the Governmental Bodies required for the conduct of its
business, and is not in material violation of any such licenses, permits,
orders and approvals. All such licenses, permits, orders and approvals are
in full force and effect, and no suspension or cancellation of any thereof
has been threatened.
(m) Tax Matters.
1. NTH (i)(A) has filed or shall file prior to Closing all
nonconsolidated and noncombined Tax Returns and all consolidated or
combined Tax Returns that include only NTH and not HST or its other
Affiliates (for the purposes of this Section, such tax Returns shall
be considered nonconsolidated and noncombined Tax Returns) required to
be
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filed through the date hereof and has paid any Tax due through the
date hereof with respect to the time periods covered by such
nonconsolidated and noncombined Tax Returns and shall timely pay any
such Taxes required to be paid by it after the date hereof with
respect to such Tax Returns and (B) shall prepare and timely file all
such nonconsolidated and noncombined Tax Returns required to be filed
after the date hereof and through the Closing Date and pay all Taxes
required to be paid by it with respect to the periods covered by such
Tax Returns; (ii) all such Tax Returns filed pursuant to clause (i)
after the date hereof shall, in each case, be prepared and filed in a
manner consistent in all material respects (including elections and
accounting methods and conventions) with such Tax Return most recently
filed in the relevant jurisdiction prior to the date hereof, except as
otherwise required by law or regulation. Any such Tax Return filed or
required to be filed after the date hereof shall not reflect any new
elections or the adoption of any new accounting methods or conventions
or other similar items, except to the extent such particular
reflection or adoption is required to comply with any law or
regulation. (iii) "Affiliate" of any person means any other person
directly or indirectly through one or more intermediary persons,
controlling, controlled by or under common control with such person.
(iv) "Tax" (including, with correlative meaning, the terms "Taxes" and
"Taxable") shall mean: (A) any net income, gross income, gross
receipts, sales, use, ad valorem, transfer, transfer gains, franchise,
profits, license, withholding, payroll, employment, excise, severance,
stamp, rent, recording, occupation, premium, real or personal
property, intangibles, environmental or windfall profits tax,
alternative or add-on minimum tax, customs duty or other tax, fee,
duty, levy, impost, assessment or charge of any kind whatsoever
(including but not limited to taxes assessed to real property and
water and sewer rents relating thereto), together with any interest
and any penalty, addition to tax or additional amount imposed by any
Governmental Body (domestic or foreign) (a "Tax Authority")
responsible for the imposition of any such tax and interest on such
penalties, additions to tax, fines or additional amounts, in each
case, with respect to any party hereto, its business or tassets (or
the transfer thereof); (B) any liability for the payment of any amount
of the type described in the immediately preceding clause (A) as a
result of a party hereto being a member of an affiliated or combined
group with any other person at any time on or prior to the date of
Closing; and (C) any liability of a party hereto for the payment of
any amounts of the type described in the immediately preceding clause
(A) as a result of a contractual obligation to indemnify any other
person. (v) "Tax Return" shall mean any return or report (including
elections, declarations, disclosures, schedules, estimates and
information returns) required to be supplied to any Tax Authority.
2. NTH represents that prior to Closing, all consolidated or
combined Tax Returns (except those described in subparagraph (1)
above) required to be filed by any person through the date hereof that
are required or permitted to include the income, or reflect the
activities, operations and transactions, of NTH for any taxable period
shall have been timely filed, and the income, activities, operations
and transactions of NTH shall have been properly included and
reflected thereon. NTH shall prepare and file, or cause to be prepared
and filed, all such consolidated or combined Tax Returns that
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are required or permitted to include the income, or reflect the
activities, operations and transactions, of NTH, with respect to any
taxable year or the portion thereof ending on or prior to the Closing
Date, including, without limitation, NTH's consolidated federal income
tax return for such taxable years. Prior to Closing, NTH will timely
file a consolidated federal income tax return for the taxable year
ended December 31, 2007 and such return shall include and reflect the
income, activities, operations and transactions of NTH for the taxable
period then ended, and hereby expressly covenants and agrees to file a
consolidated federal income tax return, and to include and reflect
thereon the income, activities, operations and transactions of NTH for
the taxable period through the Closing Date. All Tax Returns filed
pursuant to this subparagraph (2) after the date hereof shall, in each
case, to the extent that such Tax Returns specifically relate to NTH
and PersonNamedo not generally relate to matters affecting other
members of NTH's consolidated group, be prepared and filed in a manner
consistent in all material respects (including elections and
accounting methods and conventions) with the Tax Return most recently
filed in the relevant jurisdictions prior to the date hereof, except
as otherwise required by law or regulation. NTH has paid or will pay
all Taxes that may now or hereafter be due with respect to the taxable
periods covered by such consolidated or combined Tax Returns.
3. There is no (nor has there been any request for an) agreement,
waiver or consent providing for an extension of time with respect to
the assessment of any Taxes attributable to NTH, or its assets or
operations and no power of attorney granted by NTH with respect to any
Tax matter is currently in force.
4. There is no action, suit, proceeding, investigation, audit,
claim, demand, deficiency or additional assessment in progress,
pending or threatened against or with respect to any Tax attributable
to NTH or its assets or operations.
5. All amounts required to be withheld as of the Closing Date for
Taxes or otherwise have been withheld and paid when due to the
appropriate agency or authority.
(n) Borrowing and Guarantees. NTH (a) PersonNamedoes not have any
indebtedness for borrowed money, (b) is not lending or committed to lend
any money (except for advances to employees in the ordinary course of
business), and (c) are not guarantors or sureties with respect to the
obligations of any Person. Following the Spin Off and the conversion of the
Convertible Debt, at the Closing, NTH (a) will not have any indebtedness
for borrowed money, (b) are not lending or committed to lend any money
(except for advances to employees in the ordinary course of business), and
(c) are not guarantors or sureties with respect to the obligations of any
Person.
(o) Environmental Matters.
1. At all times prior to the date hereof, each of NTH and its
Subsidiary have complied in all material respects with applicable
environmental laws, orders, regulations, rules and ordinances, the
violation of
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which would have a material adverse effect on the business or
financial condition of NTH and its Subsidiary, taken as a whole, or
which would require a payment by NTH or its Subsidiary in excess of
$2,000 in the aggregate, and which have been duly adopted, imposed or
promulgated by any legislative, executive, administrative or judicial
body or officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that
are material to the operations of NTH and its Subsidiary, taken as a
whole, are in full force and effect.
(p) Securities Matters. As of the Closing Date, NTH has made in a
timely manner all filings (the "Filings") with the Securities and Exchange
Commission (the "Commission") which it is required to make under the
Securities Act of 1933, as amended, and/or under the Securities Xxxxxxxx
Xxx 0000, as amended (collectively, the "Acts"). At the time filed, each
Filing complied as to form in all material respects with the applicable
requirements of the Acts and the rules and regulations of the Commission
thereunder and, at the time made, no Filing contained any untrue statement
of a material fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
(q) Disclosure. Neither this Agreement, the Schedules hereto nor any
of the Transaction Documents contain any untrue statement of a material
fact with respect to NTH and its Subsidiary, or omit to state a material
fact necessary in order to make the statements contained herein or therein
with respect to NTH and its Subsidiary not misleading. Neither NTH nor its
Subsidiary has any knowledge of any events, transactions or other facts
which, either individually or in the aggregate, may give rise to
circumstances or conditions which would have a material adverse effect on
the general affairs or the condition of business of NTH. "Transaction
Documents" shall mean, collectively, this Agreement, and each of the other
agreements and instruments to be executed and delivered by all or some of
the parties hereto in connection with the consummation of the transactions
contemplated hereby.
7. Representations ofHST. HST for their respective rights and interests
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represent and warrant as follows:
(a) Organization; Authorization. HST is a corporation duly organized,
validly existing and in good standing under the laws of Nevada with full
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance
of this Agreement have been duly authorized by all necessary corporate
action of HST and this Agreement constitutes a valid and binding
obligation; enforceable against in accordance with its terms. HST has no
subsidiaries.
(b) Capitalization. As of the date of this Agreement, HST has 1,500
shares of common stock issued and outstanding and no shares of preferred
stock issued and outstanding. No shares have otherwise been registered
under state or U.S. federal securities laws. As of the Closing Date, all of
the issued and outstanding shares of common stock of HST are validly
issued, fully paid and non-assessable. As of the Closing Date, there will
not be outstanding any warrants, options or other
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agreements on the part of HST obligating any of HST to issue any additional
shares of common or preferred stock or any of its securities of any kind.
HST will not issue any shares of capital stock from the date of this
Agreement through the Closing Date. The Escrowed HST Shares will be free
from claims, liens or other encumbrances, except as provided under
applicable federal and state securities laws;
(c) No Conflict as to HST and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated herein will (a) violate any provision of the articles of
incorporation or organization of HST or any of its Subsidiaries or (b)
violate, or be in conflict with, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Encumbrance
upon any property or assets of any of HST or any of its Subsidiaries under,
any material agreement or commitment to which any of HST, any of its
Subsidiaries is a party or by which any of their respective property or
assets is bound, or to which any of the property or assets of any of HST or
any of its Subsidiaries is subject, or (c) violate any statute or law or
any judgment, decree, order, regulation or rule of any court or other
Governmental Body applicable to HST or any of its Subsidiaries except, in
the case of violations, conflicts, defaults, terminations, accelerations or
Encumbrances described in clause (b) of this Section for such matters which
are not likely to have a material adverse effect on the business or
financial condition of HST and its subsidiaries, taken as a whole.
(d) Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with,
any Governmental Body is required to be made or obtained by HST or any of
either of its Subsidiaries in connection with the execution, delivery and
performance of this Agreement by HST or the consummation of the
transactions contemplated herein.
(e) Other Consents. No consent of any Person is required to be
obtained by HST to the execution, delivery and performance of this
Agreement or the consummation of the transactions contemplated herein,
including, but not limited to, consents from parties to leases or other
agreements or commitments, except for any consent which the failure to
obtain would not be likely to have a material adverse effect on the
business and financial condition of HST.
(f) Buildings, Plants and Equipment. The buildings, plants, structures
and material items of equipment and other personal property owned or leased
by HST or its Subsidiaries are, in all respects material to the business or
financial condition of HST and its Subsidiaries, taken as a whole, in good
operating condition and repair (ordinary wear and tear excepted) and are
adequate in all such respects for the purposes for which they are being
used. HST has not received notification that it is in violation of any
applicable building, zoning, anti-pollution, health, safety or other law,
ordinance or regulation in respect of its buildings, plants or structures
or their operations, which violation is likely to have a material adverse
effect on the business or financial condition of HST and its Subsidiaries,
taken as a whole or which would require a payment by HST or any of its
subsidiaries in excess of $2,000 in the aggregate, and which has not been
cured.
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(g) No Condemnation or Expropriation. Neither the whole nor any
portion of the property or leaseholds owned or held by HST or any of its
Subsidiaries is subject to any governmental decree or order to be sold or
is being condemned, expropriated or otherwise taken by any Governmental
Body or other Person with or without payment of compensation therefore,
which action is likely to have a material adverse effect on the business or
financial condition of HST and its Subsidiaries, taken as a whole.
(h) Litigation. There is no action, investigation, inquiry, proceeding
or suit by or before any court or Governmental Body pending or threatened
in writing against or involving HST or any of its Subsidiaries which is
likely to have a material adverse effect on the business or financial
condition of HST and any of its Subsidiaries, taken as whole, or which
would require a payment by HST or its subsidiaries in excess of $2,000 in
the aggregate or which questions or challenges the validity of this
Agreement. Neither HST nor any or its Subsidiaries is subject to any
judgment, order or decree that is likely to have a material adverse effect
on the business or financial condition of HST or any of its Subsidiaries,
taken as a whole, or which would require a payment by HST or its
Subsidiaries in excess of $2,000 in the aggregate.
(i) Absence of Certain Changes. From December 31, 2006, to the date
hereof, neither HST nor any of its Subsidiaries has:
1. suffered the damage or destruction of any of its properties or
assets (whether or not covered by insurance) which is materially
adverse to the business or financial condition of HST and its
Subsidiaries, taken as a whole, or made any disposition of any of its
material properties or assets other than in the ordinary course of
business;
2. made any change or amendment in its articles of incorporation
or memorandum of understanding, or other governing instruments;
3. paid, discharged or satisfied any material claim, liability or
obligation (absolute, accrued, contingent or otherwise), other than in
the ordinary course of business;
4. prepaid any material obligation having a maturity of more than
90 days from the date such obligation was issued or incurred;
5. cancelled any material debts or waived any material claims or
rights, except in the ordinary course of business;
6. disposed of or permitted to lapse any rights to the use of any
material patent or registered trademark or copyright or other
intellectual property owned or used by it;
7. granted any general increase in the compensation of officers
or employees (including any such increase pursuant to any employee
benefit plan);
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8. purchased or entered into any contract or commitment to
purchase any material quantity of raw materials or supplies, or sold
or entered into any contract or commitment to sell any material
quantity of property or assets, except (i) normal contracts or
commitments for the purchase of, and normal purchases of, raw
materials or supplies, made in the ordinary course business, (ii)
normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other
contracts, commitments, purchases or sales in the ordinary course of
business;
9. made any capital expenditures or additions to property, plant
or equipment or acquired any other property or assets (other than raw
materials and supplies) at a cost in excess of $2,000 in the
aggregate;
10. written off or been required to write off any notes or
accounts receivable in an aggregate amount in excess of $2,000;
11. written down or been required to write down any inventory in
an aggregate amount in excess of $2,000;
12. entered into any collective bargaining or union contract or
agreement; or
13. other than the ordinary course of business, incurred any
liability required by generally accepted accounting principles to be
reflected on a balance sheet and material to the business or financial
condition of HST and their subsidiaries taken as a whole.
(j) Labor Relations. Neither HST nor any of its Subsidiaries is a
party to any collective bargaining agreement. Except for any matter which
is not likely to have a material adverse effect on the business or
financial condition of HST and its Subsidiaries, taken as a whole, (i) HST
and its Subsidiaries are in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice, (ii)
there is no labor strike, dispute, slowdown or stoppage actually pending or
threatened against HST or any of its Subsidiaries, (iii) no representation
question exists respecting the employees of HST or any of its Subsidiaries,
(iv) neither HST nor any of its Subsidiaries has experienced any strike,
work stoppage or other labor difficulty, and (v) no collective bargaining
agreement relating to employees of HST or any of its Subsidiaries is
currently being negotiated.
(k) Compliance with Law. The operations of HST and its Subsidiaries
have been conducted in accordance with all applicable laws and regulations
of all Governmental Bodies having jurisdiction over them, except for
violations thereof which are not likely to have a material adverse effect
on the business or financial condition of HST and its Subsidiaries, taken
as a whole, or which would not require a payment by HST or its Subsidiaries
in excess of $2,000 in the aggregate, or which have been cured. Neither HST
nor any of its Subsidiaries has received any notification of any asserted
present or past failure by it to comply with any such applicable laws or
regulations. HST and its Subsidiaries have all material licenses,
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permits, orders or approvals from the Governmental Bodies required for the
conduct of their businesses, and are not in material violation of any such
licenses, permits, orders and approvals. All such licenses, permits, orders
and approvals are in full force and effect, and no suspension or
cancellation of any thereof has been threatened.
(l) Tax Matters.
1. Each of HST and its Subsidiaries (i)(A) has filed or shall
file prior to Closing all nonconsolidated and noncombined Tax Returns
and all consolidated or combined Tax Returns that include only HST and
not NTH or its other Affiliates (for the purposes of this Section,
such tax Returns shall be considered nonconsolidated and noncombined
Tax Returns) required to be filed through the date hereof and will
have paid any Tax due through the date hereof with respect to the time
periods covered by such nonconsolidated and noncombined Tax Returns
and shall timely pay any such Taxes required to be paid by it after
the date hereof with respect to such Tax Returns and (B) shall prepare
and timely file all such nonconsolidated and noncombined Tax Returns
required to be filed after the date hereof and through the Closing
Date and pay all Taxes required to be paid by it with respect to the
periods covered by such Tax Returns; (ii) all such Tax Returns filed
pursuant to clause (i) after the date hereof shall, in each case, be
prepared and filed in a manner consistent in all material respects
(including elections and accounting methods and conventions) with such
Tax Return most recently filed in the relevant jurisdiction prior to
the date hereof, except as otherwise required by law or regulation.
Any such Tax Return filed or required to be filed after the date
hereof shall not reflect any new elections or the adoption of any new
accounting methods or conventions or other similar items, except to
the extent such particular reflection or adoption is required to
comply with any law or regulation.
2. Each of HST and its Subsidiaries represents that prior to
Closing, all consolidated or combined Tax Returns (except those
described in subparagraph (1) above) required to be filed by any
person through the date hereof that are required or permitted to
include the income, or reflect the activities, operations and
transactions, of HST and its Subsidiaries for any taxable period shall
have been timely filed, and the income, activities, operations and
transactions of HST and its Subsidiaries shall have been properly
included and reflected thereon. HST and its Subsidiaries shall prepare
and file, or cause to be prepared and filed, all such consolidated or
combined Tax Returns that are required or permitted to include the
income, or reflect the activities, operations and transactions, of HST
and its Subsidiaries, with respect to any taxable year or the portion
thereof ending on or prior to the Closing Date, including, without
limitation, HST' and Subsidiaries' consolidated federal income tax
return for such taxable years. Prior to Closing, HST and its
Subsidiaries will timely file a consolidated federal income tax return
for the taxable year ended December 31, 2007 and such return shall
include and reflect the income, activities, operations and
transactions of HST and its Subsidiaries for the taxable period then
ended, and hereby expressly covenants and agrees to file a
consolidated federal income tax return, and to
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include and reflect thereon the income, activities, operations and
transactions of HST and its Subsidiaries for the taxable period
through the Closing Date. All Tax Returns filed pursuant to this
subparagraph (2) after the date hereof shall, in each case, to the
extent that such Tax Returns specifically relate to HST and its
Subsidiaries, be prepared and filed in a manner consistent in all
material respects (including elections and accounting methods and
conventions) with the Tax Return most recently filed in the relevant
jurisdictions prior to the date hereof, except as otherwise required
by law or regulation. Each of HST and its Subsidiaries has paid or
will pay all Taxes that may now or hereafter be due with respect to
the taxable periods covered by such consolidated or combined Tax
Returns.
3. All amounts required to be withheld as of the Closing Date for
Taxes or otherwise have been withheld and paid when due to the
appropriate agency or authority.
4. There shall be delivered or made available to NTH at or prior
to Closing true and complete copies of all income Tax Returns (or with
respect to consolidated or combined returns, the portion thereof) and
any other Tax Returns requested by NTH as may be relevant to HST, its
Subsidiaries, or their assets or operations for any and all periods
ending after December 31, 2000, or for any Tax years which are subject
to audit or investigation by any taxing authority or entity.
(m) Environmental Matters.
1. At all times prior to the date hereof, HST and its
Subsidiaries have complied in all material respects with applicable
environmental laws, orders, regulations, rules and ordinances, the
violation of which would have a material adverse effect on the
business or financial condition of HST and its Subsidiaries, taken as
a whole, or which would require a payment by HST or its Subsidiaries
in excess of $2,000 in the aggregate, and which have been duly
adopted, imposed or promulgated by any legislative, executive,
administrative or judicial body or officer of any Governmental Body.
2. The environmental licenses, permits and authorizations that
are material to the operations of HST and its Subsidiaries, taken as a
whole, are in full force and effect.
(n) Disclosure. Neither this Agreement, the Schedules hereto nor
any of the Transaction Documents contain any untrue statement of a
material fact with respect to HST and its Subsidiaries, or omit to
state a material fact necessary in order to make the statements
contained herein or therein with respect to HST and its Subsidiaries
not misleading. Neither HST nor its Subsidiaries has any knowledge of
any events, transactions or other facts which, either individually or
in the aggregate, may give rise to circumstances or conditions which
would have a material adverse effect on the general affairs or the
condition of business of HST.
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8. Antidilution. Subsequent to Closing, HST agrees not to issue any new
------------
shares of common stock via a Registration Statement on Form S-8 (other than for
an Employee Stock Option Plan) for a period of 24 months.
9. Indemnification.
---------------
(a) Survival of Representations, Warranties and Covenants.
Notwithstan-ding any right of HST fully to investigate the affairs of NTH
and its Subsidiary and the rights of NTH to fully investigate the affairs
of HST, and notwithstanding any knowledge of facts determined or
determinable by HST or NTH, pursuant to such investigation or right of
investigation, HST and NTH, have the right to rely fully upon the
representations, warranties, covenants and agreements of NTH, and HST
respectively, contained in this Agreement, or listed or disclosed on any
Schedule hereto or in any instrument delivered in connection with or
pursuant to any of the foregoing. All such representations, warranties,
covenants and agreements shall survive the execution and delivery of this
Agreement and the Closing hereunder. Notwithstanding the foregoing, all
representations and warranties of NTH and HST respectively, contained in
this Agreement, on any Schedule hereto or in any instrument delivered in
connection with or pursuant to this Agreement shall terminate and expire
twenty four (24) months after the date of Closing; provided, however, that
the liability of a party shall not terminate as to any specific claim or
claims of the type which arise or result from or are related to a claim for
fraud.
(b) Obligation of NTH and its Subsidiary to Indemnify. Each of NTH and
its Subsidiary agrees to indemnify, defend and hold harmless HST (and their
respective directors, officers, employees, Affiliates, successors and
assigns) from and against all claims, losses, liabilities, regulatory
actions, damages, deficiencies, judgments, settlements, costs of
investigation or other expenses (including Taxes, interest, penalties and
reasonable attorneys' fees and fees of other experts and disbursements and
expenses incurred in enforcing this indemnification) (collectively, the
"Losses") suffered or incurred by HST, or any of the foregoing persons
arising out of any breach of the representations and warranties, covenants
and agreements of NTH contained in this Agreement or in the Schedules or
any other Transaction Document.
(c) Obligation of HST to Indemnify. HST agrees to indemnify, defend
and hold harmless NTH (and any heirs, successor or assignee thereof) from
and against any Losses suffered or incurred by NTH arising out of any
breach of the representations and warranties, covenants and agreements of
HST contained in this Agreement or in the Schedules or any other
Transaction Document.
(d) Notice and Opportunity to Defend Third Party Claims.
(i) Within ten (10) days following receipt by any party hereto
(the "Indemnitee") of notice of any demand, claim, circumstance or Tax
Audit which would or might give rise to a claim, or the commencement
(or threatened commencement) of any action, proceeding or
investigation that may result in Losses (an "Asserted Liability"), the
Indemnitee shall give notice thereof (the "Claims Notice") to the
party or parties obligated to provide indemnification pursuant to
Sections 9(b), or 9(c) (collectively, the
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"Indemnifying Party"). The Claims Notice shall describe the Asserted
Liability in reasonable detail and shall indicate the amount
(estimated, if necessary, and to the extent feasible) of the Losses
that has been or may be suffered by the Indemnitee.
(ii) The Indemnifying Party may elect to defend, at its own
expense and with its own counsel, any Asserted Liability unless: (A)
the Asserted Liability includes a claim seeking an order for
injunction or other equitable or declaratory relief against the
Indemnitee, in which case the Indemnitee may at its own cost and
expense and at its option defend the portion of the Asserted Liability
seeking equitable or declaratory relief against the Indemnitee, or (B)
the Indemnitee shall have reasonably, and in good faith, after
consultation with the Indemnifying Party, concluded that: (x) there is
a conflict of interest between the Indemnitee and the Indemnifying
Party which could prevent or negatively influence the Indemnifying
Party from impartially or adequately conducting such defense; or (y)
the Indemnitee shall have one or more defenses not available to the
Indemnifying Party but only to the extent such defense cannot legally
be asserted by the Indemnifying Party on behalf of the Indemnitee. If
the Indemnifying Party elects to defend such Asserted Liability, it
shall within ten (10) days (or sooner, if the nature of the Asserted
Liability so requires) notify the Indemnitee of its intent to do so,
and the Indemnitee shall cooperate, at the expense of the Indemnifying
Party, in the defense of such Asserted Liability. If the Indemnifying
Party elects not to defend the Asserted Liability, is not permitted to
defend the Asserted Liability by reason of the first sentence of this
Section 9(d)(ii), fails to notify the Indemnitee of its election as
herein provided or contests its obligation to indemnify under this
Agreement with respect to such Asserted Liability, the Indemnitee may
pay, compromise or defend such Asserted Liability at the sole cost and
expense of the Indemnifying Party. Notwithstanding the foregoing,
neither the Indemnifying Party nor the Indemnitee may settle or
compromise any claim over the reasonable written objection of the
other, provided that the Indemnitee may settle or compromise any claim
as to which the Indemnifying Party has failed to notify the Indemnitee
of its election under this Section 9(d) or as to which the
Indemnifying Party is contesting its indemnification obligations
hereunder. If the Indemnifying Party desires to accept a reasonable,
final and complete settlement of an Asserted Liability so that such
Indemnitee's Loss is paid in full and the Indemnitee refuses to
consent to such settlement, then the Indemnifying Party's liability to
the Indemnitee shall be limited to the amount offered in the
settlement. The Indemnifying Party will exercise good faith in
accepting any reasonable, final and complete settlement of an Asserted
Liability. In the event the Indemnifying Party elects to defend any
Asserted Liability, the Indemnitee may participate, at its own
expense, in the defense of such Asserted Liability. In the event the
Indemnifying Party is not permitted by the Indemnitee to defend the
Asserted Liability, it may nevertheless participate at its own expense
in the defense of such Asserted Liability. If the Indemnifying Party
chooses to defend any Asserted Liability, the Indemnitee shall make
available to the Indemnifying Party any books, records or other
documents within its control that are necessary or appropriate for
such defense. Any Losses of any Indemnitee for which an Indemnifying
Party is liable for indemnification hereunder shall be paid upon
written demand therefor.
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(e) Exclusive Remedy. The parties agree that the indemnification
provisions of this Section shall constitute the sole or exclusive remedy of
any party in seeking damages or other monetary relief with respect to this
Agreement and the Contemplated transactions, provided that, nothing herein
shall be construed to limit the right of any party to seek: (i) injunctive
relief for a breach of this Agreement; or (ii) legal or equitable relief
for a claim for fraud.
10. Notices. Any notice which any of the parties hereto may desire to
-------
serve upon any of the other parties hereto shall be in writing and shall be
conclusively deemed to have been received by the party at its address, if
mailed, postage prepaid, United States mail, registered, return receipt
requested, to the following addresses:
If to NTH NT Holding Corp.
0000 Xxxxxxxxx #000
Xxxx, XX 00000
Attention: Xxxx Xxx, President
If to HST: Health Source Technologies, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, President
Copy to: Xxxxxx Law Group
0000 Xxxx Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: M. Xxxxxxx Xxxxxx
11. Successors. This Agreement shall be binding upon and inure to the
----------
benefit of the heirs, personal representatives and successors and assigns of the
parties.
12. Choice of Law. This Agreement shall be construed and enforced in
---------------
accordance with the laws of the State of Nevada, and the parties submit to the
exclusive jurisdiction of the courts of Nevada in respect of all disputes
arising hereunder.
13. Counterparts. This Agreement may be signed in one or more
------------
counterparts, all of which taken together shall constitute an entire agreement.
14. Confidential Information. Each of NTH and HST hereby acknowledges
-------------------------
and agrees that all information disclosed to each other whether written or oral,
relating to the other's business activities, its customer names, addresses, all
operating plans, information relating to its existing services, new or
envisioned products or services and the development thereof, scientific,
engineering, or technical information relating to the others business, marketing
or product promotional material, including brochures, product literature, plan
sheets, and any and all reports generated to customers, with regard to
customers, unpublished list of names, and all information relating to order
processing, pricing, cost and quotations,
18
and any and all information relating to relationships with customers, is
considered confidential information, and is proprietary to, and is considered
the invaluable trade secret of such party (collectively "Confidential
Information"). Any disclosure of any Confidential Information by any party
hereto, its employees, or representatives shall cause immediate, substantial,
and irreparable harm and loss to the other. Each party understands that the
other desires to keep such Confidential Information in the strictest confidence,
and that such party's agreement to do so is a continuing condition of the
receipt and possession of Confidential Information, and a material provision of
this agreement, and a condition that shall survive the termination of this
Agreement. Consequently, each party shall use Confidential Information for the
sole purpose of performing its obligations as provided herein.
15. Public Announcement. The parties shall make no public announcement
-------------------
concerning this agreement, their discussions or any other letters, memos or
agreements between the parties relating to this agreement until such time as
they agree to the contents of a mutually satisfactory press release which they
intend to release on the date of execution of this Agreement. Either of the
parties, but only after reasonable consultation with the other, may make
disclosure if required under applicable law.
16. Entire Agreement. This Agreement sets forth the entire agreement
-----------------
and understanding of the Parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any Party hereto which is not embodied in this Agreement or the
written statements, certificates, or other documents delivered pursuant hereto
or in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not so set forth.
17. Costs and Expenses. Except as otherwise specifically set forth
--------------------
herein, each party will bear its own attorneys, brokers, investment bankers,
agents, and finders employed by, such party. The parties will indemnify each
other against any claims, costs, losses, expenses or liabilities arising from
any claim for commissions, finder's fees or other compensation in connection
with the transactions contemplated herein which may be asserted by any person
based on any agreement or arrangement for payment by the other party.
18. Attorney's Fees. Should any action be commenced between the
-----------------
parties to this Agreement concerning the matters set forth in this Agreement or
the right and duties of either in relation thereto, the prevailing party in such
Action shall be entitled, in addition to such other relief as may be granted, to
a reasonable sum as and for its Attorney's Fees and Costs.
19. Finders. NTH represents and warrants that there are no finders or
--------
other parties which have represented NTH in connection with this transaction
which have not been previously provided with appropriate compensation. In the
event any such finders make a claim for any fee, share issuance of other
compensation in connection with the transactions contemplated hereby, they shall
be the sole responsibility of NTH. HST represents and warrants that there are no
finders or other parties which have represented HST in connection with this
transaction. In the event any such finders make a claim for any fee, share
issuance of other compensation in connection with the transactions contemplated
hereby, they shall be the sole responsibility of HST.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
For and on behalf of: NT Holding, Inc.
a Nevada corporation
By: \s\ Xxxx Xxx
----------------
Xxxx Xxx
President
For and on behalf of: Health Source Technologies, Inc.
a Nevada corporation
By: Xxxxxx X. Xxxxxx
----------------
Xxxxxx X. Xxxxxx
President
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