EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT is made this 26 Th. day of December,
1997, by and between: GREGORIAN SURGICAL INSTRUMENTS, INC., a
company formed under the laws of British Columbia, Canada,
(hereafter "GSI"), its assignee, designee, or nominee and the
shareholders of the said GREGORIAN SURGICAL INSTRUMENTS, INC.
("GSI SHAREHOLDERS").
WHEREAS, GSI desires to exchange (the "EXCHANGE") the shares
GSI owns in its wholly owned subsidiary XXXXXXXX GRENACHE, INC.,
("MGI") a Nevada corporation, with the shares currently held by
GSI SHAREHOLDERS in GSI, on a share for share basis in accordance
with the terms and conditions of this Agreement: and
WHEREAS, the GSI SHAREHOLDERS desire the said EXCHANGE in
accordance with the terms and conditions of this Agreement: and
WHEREAS, GSI and the GSI SHAREHOLDERS desire to facilitate
the EXCHANGE provided for herein.
NOW THEREFORE, in consideration of the mutual promises,
covenants and agreements of the parties contained herein, the
parties, intending to be legally bound hereby, agree as follows:
1. EXCHANGE OF SHARES. GSI shall deliver to the GSI
SHAREHOLDERS, FOUR MILLION NINE HUNDRED AND FORTY TWO THOUSAND
(4,942,000) SHARES of MGI, in EXCHANGE for FOUR MILLION NINE
HUNDRED AND FORTY TWO THOUSAND (4,942,000) GSI SHARES, for the
cancellation and the winding-up of GSI.
2. CLOSING DATE. This transaction shall be closed pursuant
to the terms and conditions herein on the date of execution of
this Agreement at midnight on December 26, 1997, at Vancouver,
British Columbia. The Date of Execution of this transaction is
herein called the "Closing Date". The actions outlined in
Section 3, which are to take place within seven (7) days of the
closing date are as follows.
3. CLOSING. At Closing, the parties shall take the
following actions:
3.1 Transfer of Shares. GSI shall deliver to the GSI
SHAREHOLDERS the MGI SHARES, upon the terms and subject to the
conditions set forth in this Agreement. GSI shall deliver to the
GSI SHAREHOLDERS the MGI SHARES free and clear of all claims and
encumbrances, and any restrictive legends. The MGI SHARES will
be registered in the name of each individual GSI SHAREHOLDER.
3.2 Transfer Agent Instructions. MGI will instruct its
Transfer Agent to issue the said MGI share certificates in
exchange for the GSI SHARES without restrictive legend in the
name of each individual GSI SHAREHOLDERS pursuant to this
Agreement.
4. SECURITIES ACT OF 1933 AND RESTRICTIONS.
GSI covenants and agrees with the GSI SHAREHOLDERS as follows:
a) GSI understands that the SHARES acquired pursuant
to this Agreement do not require to be restricted under the 1933
Act with the Securities and Exchange Commission in reliance upon
the exemption from such restriction requirements afforded by the
reorganization provisions of the 1933 Act, governing the
replacement of shares of an original offering.
b) GSI hereby represents and warrants that it is a
company duly formed under the laws of the British Columbia with
principal executive and administrative offices located outside
the US
c) GSI represents and warrants that MGI, is a
corporation duly formed under the laws of the State of Nevada,
USA on December 22, 1997 and that it is a wholly owned subsidiary
of GSI.
5. CONDITIONS OF BOTH PARTIES OBLIGATIONS TO CLOSE.
For the purposes of paragraph 5 through 15 only of this
Agreement:
(i) "GSI" SHALL INCLUDE BOTH GSI AND IT'S WHOLLY
OWNED SUBSIDIARY MGI, and
(ii) The following shall be the conditions of GSI
and GSI SHAREHOLDERS ("BOTH PARTIES") obligations to close
hereunder:
5.1 Representations and Warranties of Both Parties
Representations and Warranties made by BOTH PARTIES to this
Agreement shall be true and correct as of the Closing Date.
5.2 No Default - Covenants and Agreement.
BOTH PARTIES shall not be in material default with respect
to any obligation under this Agreement and both shall have
performed or complied with all covenants, agreements, and
conditions to be performed or complied with prior to, or at, the
Closing.
6. REPRESENTATIONS AND WARRANTIES OF BOTH PARTIES.
BOTH PARTIES represent and warrant to the other that the
statements contained in Sections 6.1 through 6.9 are true and
correct on the date hereof.
6.1 Corporate Standing. GSI is a corporation duly
organized, validly existing, and in good standing under the laws
of British Columbia, and it has full power and authority to enter
into this Agreement and to carry out the transactions
contemplated hereby. The execution and delivery of this
Agreement by GSI does not, and the consummation of the
transactions contemplated hereby will not, violate or result in a
breach of any provisions of GSI's Charter or Bylaws.
6.2 Capital Stock. The authorized capital stock of GSI
consists of Twenty Five Million (25,000,000) shares of Common
Stock without par value of which amount FOUR MILLION NINE HUNDRED
AND FORTY TWO THOUSAND (4,942,000) SHARES of Common Stock have
been validly issued and are outstanding, fully paid and non
assessable as of December 29, 1997.
6.3 Authority. GSI has full power and authority to enter
into this Agreement and has taken all action or will use its best
efforts to take all action, corporate and otherwise, necessary to
authorize the execution, delivery and performance of this
Agreement, the completion of the transactions contemplated hereby
and the execution and delivery on behalf of GSI of any and all
instruments necessary or appropriate in order to effectuate fully
the terms and conditions of this Agreement. Upon delivery of the
shares and payment of the purchase price, good title to the MGI
SHARES will pass, free and clear of all restrictions on transfer,
liens, encumbrances, security interest and claims whatsoever, to
the GSI SHAREHOLDERS. Other than as may be required under the
laws of any country other than the United States of America, or
Canada, no consent or approval of any court, governmental agency
or other public authority, or of any other person, corporation or
entity with any actual or alleged interest in GSI is required as
a condition to (a) the validity or enforceability of this
Agreement or any other instruments to be executed by GSI to
effectuate this Agreement, or (b) the completion or validity of
any of the transactions contemplated by this Agreement. This
Agreement has been properly executed and delivered by the duly
authorized officer of GSI, and constitutes the valid and legally
binding agreement of GSI and is enforceable against GSI in
accordance with its terms.
6.4 Financial Condition. GSI furnished, or made available
to the GSI SHAREHOLDERS, the financial statements (the "Financial
Statements") contained in GSI's records and all 15C2-11 reports
filed to date (collectively, hereafter, the "Reports").
There has been no material adverse change in, material loss or
destruction of, or material amount of damage to, the financial
condition or business of GSI since the filing of the most recent
Report arising from transactions whether or not in the ordinary
course of business. The regular books of account of GSI fairly
and accurately reflect all transactions since the filing of the
most recent Report are true, correct and complete, and are
maintained and kept in accordance with generally accepted
accounting principles consistently applied. GSI has no
liabilities or obligations, whether accrued, absolute, contingent
or otherwise, which would materially and adversely affect the
condition (financial and otherwise) of GSI, except and to the
extent reflected or reserved against in the balance sheets
included in the Financial Statements or otherwise disclosed in
the Reports. No dividends are due or unpaid by GSI.
6.5 Lawsuits and Proceedings. Except as disclosed in the
Financial Statements and Reports, there are no material actions
at law or in equity, governmental proceedings or investigations
pending or to the knowledge of GSI threatened against GSI or
against or with respect to the business or assets of GSI, and GSI
is not in material default with respect to any decree, injunction
or the order of any court or government authority. Except as
disclosed in the Financial Statements or Reports, GSI is in
substantial compliance with and has not received any notice of
any claimed violation of, any material federal, state, county or
municipal laws, ordinances, and regulation, and there is no
action at law or in equity, arbitration proceeding, governmental
proceeding or investigation, or motion or request to any court,
pending or to the knowledge of GSI threatened, against or with
respect to GSI with respect to this Agreement or any of the
transactions contemplated hereby.
6.6 Taxes. GSI knows of no outstanding claims against GSI
for taxes which constitute a lien on the shares being sold
hereunder.
6.7 Extraordinary Transactions. Since the filing of the
GSI's most recent Report, GSI has not:
(i) mortgaged, pledged or subjected to lien, charge or
any other encumbrance any of its assets;
(ii) except in the ordinary course of business, sold or
transferred any of its assets;
(iii) made any management decisions involving any
material change in its policies with regard to the provision of
services, sales, purchasing or the business, financial,
accounting (including reserves and the amounts thereof) or tax
policies or practices; or
(iv) declared or paid any dividends on, or made any
distributions in respect of any outstanding shares of capital
stock of GSI.
6.8 Adverse Circumstances. Except as disclosed in the
Reports or described herein, to the best knowledge of GSI, there
are no facts, developments or circumstances, existing or
threatened, of a special or unusual nature that may be materially
adverse to the assets, business, financial condition or future
prospects of GSI.
7. COVENANTS AND AGREEMENTS OF GSI SHAREHOLDERS.
The GSI SHAREHOLDERS hereby Covenant and agree as follows:
7.1 Action. As of the execution of this Agreement by the
GSI SHAREHOLDERS the GSI SHAREHOLDERS shall take all action
necessary or appropriate to authorize the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby.
7.2 Impairment - Representations and Warranties.
GSI SHAREHOLDERS shall not take any action or fail to take any
action without prior written approval of GSI which might cause
any representation or warranty of GSI SHAREHOLDERS made herein
not to be true on the Closing Date, or impair GSI SHAREHOLDER'S
ability to carry out its obligations under this Agreement.
7.3 Due Diligence. GSI SHAREHOLDERS or their agents have
had a full opportunity to conduct their due diligence of GSI in
connection with this Agreement to their complete satisfaction.
The GSI SHAREHOLDERS are familiar with GSI in connection with
this Agreement to its complete satisfaction. The GSI SHAREHOLDERS
are familiar with GSI, its financial condition, business and
prospects, has been provided with the Reports and with such other
information concerning GSI's financial and other affairs as GSI
SHAREHOLDERS deem necessary to enter into and perform this
Agreement, has had sufficient opportunity to review such material
and to ask questions and receive answers to verify the accuracy
of such information, and is not in any way relying upon any
information, representation or warranty (without implying that
the supplying of any such information or the making of any such
representation or warranty has occurred) that GSI or its
officers, directors, employees, agents and attorneys have
provided, or have failed to provide, to the GSI SHAREHOLDERS in
entering into or performing this Agreement.
8. DELIVERY OF DOCUMENTS BY GSI. At the Closing, and in
addition to all other documents and instruments which GSI is
required to deliver pursuant to this Agreement, GSI shall deliver
to the GSI SHAREHOLDERS the following documents duly executed by
GSI or the directors, officers, or employees of, or counsel to
GSI or appropriate governmental officials, in form and substance
satisfactory to the GSI SHAREHOLDERS and their counsel.
8.1 Good Standing. A Certificate of good standing from the
Secretary of State, of the State of Nevada, for MGI.
8.2 Other Documents. Such other documents, certificates
and instruments relating to the transactions contemplated by this
Agreement as the GSI SHAREHOLDERS or its counsel may reasonable
request or deem necessary.
9. INDEMNIFICATION. GSI and the GSI SHAREHOLDERS mutually
agree to indemnify and to hold the other harmless from and
against all material damages, losses, costs, liabilities,
expenses and deficiencies, including, without limitation,
additional taxes, and reasonable interest, attorney, accountant
and expert witness fees and expenses (collectively "Material
Damages") that result from or arise out of any misrepresentation,
breach of warranty, or non-fulfillment of any agreement, covenant
or obligation of the other under this Agreement. Each party
agrees to give the other prompt written notice of any event or
assertion of which it has knowledge concerning any Material
Damages to which it may request indemnification hereunder. Each
party will cooperate with the other in determining the validity
of any such claim or assertion. The indemnifying party hereunder
shall have the right to defend with counsel reasonably
satisfactory to the indemnified party any claims for Material
Damages for which the indemnified party has requested
indemnification hereunder, and after notice from the indemnifying
party regarding its assumption of the defense thereof, the
indemnifying party regarding its assumption of the defense
thereof, the indemnifying party shall not be liable to he
indemnified party for any legal or other expenses subsequently
incurred by the reasonable costs of investigation. Each party
agrees not to settle or compromise any claims for Material
damages without the prior written consent of the other. The
obligation of each party to indemnify the other under this
Section, shall terminate on the anniversary of the Closing Date,
except as to matters to which such party had made a claim for
indemnification or given written notice of a possible claim for
indemnification on or prior to such date.
10. BROKERAGE FEES. No broker, finder or intermediary is
entitled to receive any brokerage or similar type of commission,
fee, or payment arising out of this transaction, and GSI
SHAREHOLDERS will hold GSI harmless against any claim for such
commission fee or similar type of payment.
11. TERMINATION OF AGREEMENT. This Agreement and the
transactions contemplated hereby may be terminated by the GSI
SHAREHOLDERS without liability of any kind to GSI by written
instrument, signed by the GSI SHAREHOLDERS and delivered at any
time on or prior to the Closing Date, giving notice of
termination, if;
(a) There has been a material misrepresentation or material
breach of warranty on the part of GSI in the representations and
warranties set forth herein or in any Exhibit hereto or in any
share certificate delivered pursuant hereto, or GSI shall have
failed to perform or comply with, in any material respect, any
covenant, agreement or condition to be performed or complied with
prior to, or at the Closing.
(b) In the reasonable judgment of the GSI SHAREHOLDERS the
transactions contemplated by this Agreement have become
inadvisable or impracticable by reasons of:
(i) the announcement or the institution by federal, state
or local authorities of an investigation of or litigation or
proceedings against GSI which may have a material and adverse
effect on GSI, or the transactions contemplated hereby; or
(ii) the commencement since the date of this Agreement by
any other person, corporation or entity of litigation or
proceedings against or in regard to GSI, which may have a
material and adverse effect upon the authority or ability of GSI
to consummate the transactions contemplated hereby; or,
(c) the business, assets, results of operations, financial
condition or future prospects of GSI have been significantly and
adversely affected by reason of changes or developments in
operations, other than in the ordinary course of business, since
the filing of GSI's most recent Report as provided to GSI
SHAREHOLDERS.
12. AFFECT AFTER TERMINATION. In the event that this
Agreement shall be terminated in accordance with the provisions
of this Agreement, then all further obligations of each party to
the other under this Agreement shall terminate without further
liability.
13. EXPENSES. All legal, accounting and other costs and
fees incurred by BOTH PARTIES, in connection with the
transactions contemplated by this Agreement shall be borne and
paid for by the party incurring the same.
14. MISCELLANEOUS PROVISIONS.
14.1 Survival of Representations, Warranties and Covenants.
The respective representations, warranties, covenants and
agreements made in this Agreement by BOTH PARTIES shall survive
Closing for a period of one (1) year.
14.2 Assignment. This Agreement and all rights and
obligations hereunder may be assigned by BOTH PARTIES, in whole
or in part, without prior knowledge and /or written consent of
the other party.
14.3 Notices. Any notice, request, instruction or other
document or communication required or permitted to be delivered
in person or by deposit in the mail, postage prepaid, for mailing
by certified or registered mail, will be made as follows:
If to GSI delivered and mailed to:
Xxxxx Xxxxxx, Esq.
Barrister and Solicitor
00000 Xxxxxx Xxxxxxx
Xxxxxxx, XX, Xxxxxx, X0X 0X0
If to the GSI SHAREHOLDERS, delivered and mailed to:
Xxxxx & Co.
Barristers and Solicitors
0000 Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX, Xxxxxx, X0X 0X0
14.4 Section Headings. Section headings are for the
convenience only and shall not limit or otherwise affect any
provisions of this Agreement.
14.5 Entire Agreement. This Agreement and any Exhibits
hereto; constitute the entire agreement and understanding of the
parties hereto with respect to the matters herein set forth, and
all prior negotiations, writings and understandings relating to
the subject matter of this Agreement are merged herein and are
superseded and canceled by this Agreement.
14.6 Waivers - Amendments. Any of the terms or conditions
of this Agreement may be waived, but only in writing by the party
which is entitled to the benefit thereof, and this Agreement may
be amended or modified, in whole or in part, only by Agreement in
writing, executed by all parties to this Agreement.
14.7 Governing Law. This Agreement shall be construed and
enforced in accordance with the laws of British Columbia, Canada,
without regard to conflict of law.
15.9 Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed original as
well as by facsimile, but all of which together shall constitute
one and the same instrument.
THIS AGREEMENT IS HEREBY EXECUTED at the date first mentioned
above in Vancouver, British Columbia.
GREGORIAN SURGICAL INSTRUMENTS, INC.
/s/ XXXX XXXXXXX December 26, 1997
By: Xxxx Xxxxxxx, President
XXXXXXXX GRENACHE, INC.
/s/ XXXX XXXXXXXX December 26, 1997
By: Xxxx XxXxxxxx, President
SHAREHOLDERS OF
GREGORIAN SURGICAL INSTRUMENTS, INC.
/s/ XXXXX XXXXXXXXX December 26, 1997
By: Xxxxx Xxxxxxxxx, Spokesperson
SHAREHOLDERS OF GREGORIAN SURGICAL INSTRUMENTS, INC.
