AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is
made this 5th day of September, 2003, among Piezo Instruments, Inc., a Utah
corporation ("Piezo"); Omni Medical of Nevada, Inc., a Nevada corporation
("Omni"); and the stockholders of Omni (the "Omni Stockholders"), all of whom
are listed on Exhibit A hereto and who execute and deliver a copy of this
Agreement.
WITNESSETH:
RECITALS
WHEREAS, the respective Boards of Directors of Piezo and Omni have
adopted resolutions pursuant to which Piezo shall acquire and the Omni
Stockholders shall exchange 100% of the outstanding common stock of Omni; and
WHEREAS, the sole consideration for 100% of the outstanding common
stock of Omni shall be the exchange of shares of $0.001 par value common stock
of Piezo (which shares shall all be "restricted securities" as defined in Rule
144 of the Securities and Exchange Commission) as outlined in Exhibit A; and
WHEREAS, it is intended that the Omni Stockholders shall acquire
in exchange such "restricted securities" of Piezo in a reorganization within
the meaning of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended, as applicable;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, it is agreed:
Section 1
Exchange of Stock
1.1 Transfer and Number of Shares. The Omni Stockholders agree
to transfer to Piezo at the closing (the "Closing") 100% of the outstanding
common stock of Omni, all as listed in Exhibit A, which is attached hereto and
incorporated herein by reference (the "Omni Shares"), in exchange for
16,000,000 post-split shares of common stock of Piezo, pro rata, also as
outlined in Exhibit A, amounting to approximately 88.8% of the post-Agreement
outstanding common stock of Piezo. At the Closing, and excluding the
securities to be exchanged for the Omni Shares, the outstanding common stock
of Piezo will amount to 2,000,000 shares or approximately 11.1% of the post-
Agreement outstanding common stock of Piezo, after taking into account (i) a
reverse split on the basis of one for 14.5 shares owned of the outstanding
common stock of Piezo as outlined in Section 1.4 that was effective on the
opening of business on August 25, 2003; (ii) the issuance of an option to
acquire 225,000 post-split shares of "restricted securities" (common stock) of
Piezo; (iii) the cancellation of 1,466,379 post-split shares of common stock
of Piezo that are held by certain principal stockholders of Piezo as reference
in Schedule 1.5.1 hereof, that will include the 225,000 post-split shares of
common stock underlying the option in the preceding subparagraph; (iv) the
issuance of an aggregate of 500,000 post-split newly issued shares of
"restricted securities" (common stock) of Piezo in consideration of the
cancellation of such shares and the option referenced in the two preceding
subparagraphs and the waiver by the canceling stockholders of any registration
rights that had been granted to them or were applicable to any of the
cancelled shares or the option as outlined in Section 1.5.2 hereof; (v) and
the issuance of (or the agreement to issue) an aggregate of 293,104 shares of
common stock of Piezo for and in consideration of non-capital raising services
to be rendered pursuant to a written Consulting Agreement during the period
that will commence on the Closing and shall be effective for a period of six
months thereafter, and which shares shall be registered on Form S-8 of the
Securities and Exchange Commission on Closing, as outlined in Schedule 1.7.
Accordingly, and assuming all of the Omni Stockholders become party to the
Agreement, there will be 18,000,000 post-Agreement outstanding shares of
common stock of the reorganized Piezo.
1.2 Exchange of Certificates. The transfer of the Omni Shares
shall be effected by the delivery to Piezo at the Closing of stock
certificates representing the transferred shares duly endorsed in blank or
accompanied by stock powers executed in blank with all signatures witnessed or
guaranteed to the satisfaction of Piezo and with all necessary transfer taxes
and other revenue stamps affixed and acquired at the Omni Stockholders'
expense.
1.3 Further Assurances. At the Closing and from time to time
thereafter, the Omni Stockholders shall execute such additional instruments
and take such other action as Piezo may request in order to exchange and
transfer clear title and ownership of the Omni Shares to Piezo.
1.4 Reverse Split of Piezo Common Stock and Filing of DBA.
Prior to the Closing, (i) Piezo shall have effected a reverse split of its
outstanding common stock on the basis of one share for 14.5 shares owned,
which was effective on the opening of business on August 25, 2003; and (ii)
Piezo shall have filed a "Doing Business As" Certificate with the State of
Utah under the name Omni Medical Holdings, Inc." or such other similar name as
may be available in the State of Utah.
1.5 Share Cancellation by Piezo Stockholders. In consideration
of the Closing of the Agreement, the canceling principal stockholders that are
named in Schedule 1.5.1 hereof shall: (i) deliver at the Closing an aggregate
of 1,466,379 post-split shares of common stock of Piezo, that will include the
225,000 post-split shares of common stock underlying the option referenced in
subparagraph (ii) of Section 1.1 hereof, for cancellation to its treasury and
for return to the authorized but unissued capital stock of Piezo, and shall
waive any registration rights that had been granted to them or were applicable
to any of the cancelled shares, as outlined in Schedule 1.5.1 hereof; and (ii)
Piezo shall issue an aggregate of 500,000 post-split newly issued shares of
"restricted securities" (common stock) of Piezo in consideration of the
cancellation of such shares (including the 225,000 post-split shares of common
stock underlying the option referenced in subparagraph (ii) of Section 1.1
hereof) and the waiver by the canceling stockholders of any registration
rights that had been granted to them or were applicable to any of the
cancelled shares (as outlined in Section 1.5.2 hereof.
1.6 Execution and Delivery of Lock-Up/Leak-Out Agreement by Certain
Principal Stockholders of Piezo. As a condition of the Closing, the principal
stockholders that are named in Schedule 1.6.1 hereof shall execute and deliver
to Piezo the Lock-Up/Leak-Out Agreement attached hereto as Schedule 1.6.2
covering the shares of common stock of Piezo that are owned by them or
acquired hereafter by them.
1.7 Adoption of Consulting Agreement, Filing of S-8 Registration
Statement Covering Common Stock of Piezo to be Issued Thereunder and Issuance
of Common Stock. The reorganized Piezo shall adopt and ratify the Consulting
Agreement attached hereto as Schedule 1.7.1 and the issuance of an aggregate
of 293,104 shares of common stock of Piezo in consideration of non-capital
raising services to be rendered pursuant to the Consulting Agreement, and
which shares shall be registered on Form S-8 of the Securities and Exchange
Commission promptly after the Closing when the reorganized Piezo is deemed to
be "current" in the filing of all reports that were required to be filed by it
with the Securities and Exchange Commission for the preceding 12 month period.
1.8 Resignations of Present Directors and Executive Officers of
Piezo and Designation of New Directors and Executive Officers. On the
Closing, the present directors and executive officers of Piezo shall designate
the directors and executive officers nominated by Omni to serve in their place
and stead, until the next respective annual meetings of the stockholders and
the Board of Directors of the reorganized Piezo, and until their respective
successors shall be elected and qualified or until their respective prior
resignations or terminations, and with the current directors and executive
officers of Piezo resigning, in seriatim.
1.9 Limitations of Registration Statements on Forms S-8 of the
Securities and Exchange Commission. Except as provided in Section 1.6 hereof,
no shares of common stock or other securities of the reorganized Piezo shall
be registered on any registration statements on Forms S-8 of the Securities
and Exchange Commission for a minimum of 12 months following the Closing
without the prior written consent of the present directors of Piezo.
1.10 Outstanding Securities of Piezo and Acceptance of Opinions of
Counsel. Neither Omni nor the reorganized Piezo shall contest the validity of
any of the pre-Agreement outstanding Piezo common stock or any shares of
common stock of Piezo issued or issuable pursuant to Sections 1.5 and 1.7
hereof; and the reorganized Piezo and Omni, subject to concurrence by legal
counsel for the reorganized Piezo with any legal opinion rendered regarding
the resale of any of these securities, agrees to accept legal opinions
covering the resale of any of these securities in accordance with Rule 144 of
the Securities and Exchange Commission, if and when available for the resale
of outstanding securities of the reorganized Piezo, from Xxxxxxx X.
Xxxxxxxxxx, Esq. or Xxxxxxx X. Xxxxxxxxxx, Esq.
1.11 Closing. This Agreement will be deemed to be completed on the
execution and delivery of the Agreement by the Omni Stockholders collectively
owning not less than 50.1% of the outstanding Omni Shares; and the remainder
of the Omni Shares shall be acquired under and pursuant to the terms and
provisions of this Agreement as soon as practicable following the initial
Closing; provided, however, Omni and the Omni Stockholders understand that the
acquisition of less than 80% of the outstanding Omni Shares may have an
adverse effect on the tax free nature of the exchange of securities
contemplated hereunder.
Section 2
Closing
The Closing contemplated by Section 1 shall be held at the offices
of Xxxxxxx X. Xxxxxxxxxx, Esq., Suite 205, Hermes Building, 000 Xxxx 000
Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000, on or before ten days following the
execution and delivery of this Agreement, unless another place or time is
agreed upon in writing by the parties. The Closing may also be accomplished by
wire, express mail or other courier service, conference telephone
communications or as otherwise agreed by the respective parties or their duly
authorized representatives.
Section 3
Representations and Warranties of Piezo
Piezo represents and warrants to, and covenants with, the Omni
Stockholders and Omni as follows:
3.1 Corporate Status; Compliance with Securities Laws. Piezo is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Utah and is licensed or qualified as a foreign
corporation in all states in which the nature of its business or the character
or ownership of its properties makes such licensing or qualification necessary
(Utah only). Piezo is a publicly-held company, having previously and lawfully
offered and sold a portion of its securities in accordance with applicable
federal and state securities laws, rules and regulations. Its common stock
is quoted on the OTC Bulletin Board of the National Association of Securities
Dealers, Inc. (the "NASD") under the symbol "PEZO," though there is no
"established trading market" or these securities. Piezo is a "reporting
issuer" under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), has presently filed all reports that have been required to be filed by
it during the past 12 months and is not in violation of any applicable federal
or state securities laws, rules or regulations. All reports and registration
statements that have been filed by Piezo with the Securities and Exchange
Commission do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.
3.2 Capitalization. The current pre-Agreement authorized capital
stock of Piezo consists of 50,000,000 shares of $0.001 par value common voting
stock, of which 2,673,275 post-split shares are or will be issued and
outstanding immediately prior to the Closing (which includes the 225,000
shares of common stock underlying the option referenced in subparagraph (ii)
of Section 1.1 hereof), all fully paid and non-assessable. Except as provided
herein in Sections 1.1, 1.7 and this Section, there are no outstanding
options, warrants or calls pursuant to which any person has the right to
purchase any authorized and unissued common stock or other securities of
Piezo.
3.3 Financial Statements. The financial statements of Piezo
furnished to the Omni Stockholders and Omni, consisting of audited financial
statements for the years ended December 31, 2002 and 2001, and unaudited
financial statements for the period ended June 30, 2003, attached hereto as
Exhibits B and B-1, respectively, and incorporated herein by reference, are
correct and fairly present the financial condition of Piezo at such dates and
for the periods involved; such statements were prepared in accordance with
generally accepted accounting principles consistently applied, and no material
change has occurred in the matters disclosed therein, except as indicated in
Exhibit C, which is attached hereto and incorporated herein by reference.
Such financial statements do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
3.4 Undisclosed Liabilities. Piezo has no liabilities of any
nature except to the extent reflected or reserved against in its balance
sheets, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit C.
3.5 Interim Changes. Since the dates of its balance sheets,
except as set forth in Exhibit C, there have been no (i) changes in financial
condition, assets, liabilities or business of Piezo which, in the aggregate,
have been materially adverse; (ii) damages, destruction or losses of or to
property of Piezo, payments of any dividend or other distribution in respect
of any class of stock of Piezo or any direct or indirect redemption, purchase
or other acquisition of any class of any such stock; or (iii) increases paid
or agreed to in the compensation, retirement benefits or other commitments to
its employees.
3.6 Title to Property. Piezo has good and marketable title to all
properties and assets, real and personal, reflected in its balance sheets, and
the properties and assets of Piezo are subject to no mortgage, pledge, lien or
encumbrance, except for liens shown therein or in Exhibit C, with respect to
which no default exists.
3.7 Litigation. There is no litigation or proceeding pending, or
to the knowledge of Piezo, threatened, against or relating to Piezo, its
properties or business, except as set forth in Exhibit C. Further, no
officer, director or person who may be deemed to be an "affiliate" of Piezo is
party to any material legal proceeding which could have an adverse effect on
Piezo (financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Piezo.
3.8 Books and Records. From the date of this Agreement to the
Closing, Piezo will (i) give to the Omni Stockholders and Omni or their
respective representatives full access during normal business hours to all of
Piezo' offices, books, records, contracts and other corporate documents and
properties so that they or their respective representatives may inspect and
audit them; and (ii) furnish such information concerning the properties and
affairs of Piezo as they or their respective representatives may reasonably
request.
3.9 Tax Returns. Piezo has filed all federal and state income or
franchise tax returns that have been required to be filed by it or has
received currently effective extensions of the required filing dates.
3.10 Confidentiality. Until the Closing (and thereafter if there
is no Closing), Piezo and its representatives will keep confidential any
information which they obtain from the Omni Stockholders or from Omni
concerning the properties, assets and business of Omni. If the transactions
contemplated by this Agreement are not consummated by September 8, 2003, Piezo
will return to Omni all written matter with respect to Omni obtained by Piezo
in connection with the negotiation or consummation of this Agreement.
3.11 Corporate Authority. Piezo has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to the Omni Stockholders and Omni or their
respective representatives at the Closing a signed copy of resolutions of its
Board of Directors authorizing execution of this Agreement by Piezo' officers
and performance thereunder, and that the directors adopting and delivering
such resolutions are the duly elected and incumbent directors of Piezo.
3.12 Due Authorization. Execution of this Agreement and
performance by Piezo hereunder have been duly authorized by all requisite
corporate action on the part of Piezo, and this Agreement constitutes a valid
and binding obligation of Piezo and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Piezo, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application now or hereafter in effect relating to or affecting the
enforcement of creditors' right generally and the application of general
equitable principles in any action, legal or equitable.
3.13 Environmental Matters. Piezo has no knowledge of any
assertion by any governmental agency or other regulatory authority of any
environmental lien, action or proceeding, or of any cause for any such lien,
action or proceeding related to the business operations of Piezo. In
addition, to the best knowledge of Piezo, there are no substances or
conditions which may support a claim or cause of action against Piezo or any
of Piezo's current or former officers, directors, agents or employees, whether
by a governmental agency or body, private party or individual, under any
Hazardous Materials Regulations. "Hazardous Materials" means any oil or
petrochemical products, PCB's, asbestos, urea formaldehyde, flammable
explosives, radioactive materials, solid or hazardous wastes, chemicals, toxic
substances or related materials, including, without limitation, any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials" or "toxic substances" under any applicable
federal or state laws or regulations. "Hazardous Materials Regulations" means
any regulations governing the use, generation, handling, storage, treatment,
disposal or release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
3.14 Access to Information Regarding Omni. Piezo acknowledges
that Omni has delivered it copies of what has been represented to be
documentation containing all material information respecting Omni and Omni's
present and contemplated business operations, potential acquisitions,
management and other factors; that it has had a reasonable opportunity to
review such documentation and discuss it, to the extent desired, with its
legal counsel, directors and executive officers; that it has had, to the
extent desired, the opportunity to ask questions of and receive responses from
the directors and executive officers of Omni, and with the legal and
accounting firms of Omni, with respect to such documentation; and that to the
extent requested, all questions raised have been answered to Piezo's complete
satisfaction.
Section 4
Representations, Warranties and Covenants of Omni and
the Omni Stockholders
Omni and the Omni Stockholders represent and warrant to, and
covenant with, Piezo as follows (provided, however, that the Omni Stockholders
whose beneficial stock ownership interest in Omni is less than 5% as set forth
in Exhibit A shall make only those representations and warranties contained in
Sections 4.1, 4.11, 4.12 and 4.16):
4.1 Ownership. The Omni Stockholders respectively own the Omni
Shares free and clear of any liens or encumbrances of any type or nature
whatsoever, and each has full right, power and authority to exchange the Omni
Shares that are owned by each hereunder without qualification.
4.2 Corporate Status. Omni is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada
and is licensed or qualified as a foreign corporation in all states in which
the nature of Omni business or the character or ownership of Omni properties
makes such licensing or qualification necessary. It has no subsidiaries.
4.3 Capitalization. The authorized capital stock of Omni consists
of 21,000,000 shares, 20,000,000 of which are common stock, $0.001 par value
per share, of which 8,373,817 shares are issued and outstanding, all fully
paid and non-assessable; and 1,000,000 of which are preferred stock, $0.001
par value per share, of which no shares are issued and outstanding. There are
no outstanding options, warrants or calls pursuant to which any person has the
right to purchase any authorized and unissued common stock or other securities
of Omni.
4.4 Financial Statements. The financial statements of Omni
furnished to Piezo, consisting of audited financial statements for the years
ended March 31, 2002 and 2001 and for the period ended December 31, 2002,
attached hereto as Exhibit D and incorporated herein by reference, are correct
and fairly present the financial condition of Omni as of such dates and for
the periods involved; such statements were prepared in accordance with
generally accepted accounting principles consistently applied, and no material
change has occurred in the matters disclosed therein, except as indicated in
Exhibit E, which is attached hereto and incorporated herein by reference.
These financial statements do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading.
4.5 Undisclosed Liabilities. Omni has no material liabilities of
any nature except to the extent reflected or reserved against in its balance
sheets, whether accrued, absolute, contingent or otherwise, including, without
limitation, tax liabilities and interest due or to become due, except as set
forth in Exhibit E.
4.6 Interim Changes. Since the date of its balance sheets,
except as set forth in Exhibit E, there have been no (i) changes in the
financial condition, assets, liabilities or business of Omni, which in the
aggregate, have been materially adverse; (ii) damages, destruction or loss of
or to the property of Omni, payment of any dividend or other distribution in
respect of the capital stock of Omni or any direct or indirect redemption,
purchase or other acquisition of any such stock; or (iii) increases paid or
agreed to in the compensation, retirement benefits or other commitments to
their employees.
4.7 Title to Property. Omni has good and marketable title to all
properties and assets, real and personal, proprietary or otherwise, reflected
in its balance sheet, and the properties and assets of Omni are subject to no
mortgage, pledge, lien or encumbrance, except as reflected in its balance
sheets or in Exhibit E, with respect to which no default exists.
4.8 Litigation. There is no litigation or proceeding pending, or
to the knowledge of Omni, threatened, against or relating to Omni or its
properties or business, except as set forth in Exhibit E. Further, no
officer, director or person who may be deemed to be an affiliate of Omni is
party to any material legal proceeding which could have an adverse effect on
Omni (financial or otherwise), and none is party to any action or proceeding
wherein any has an interest adverse to Omni.
4.9 Books and Records. From the date of this Agreement to the
Closing, the Omni Stockholders will cause Omni to (i) give to Piezo and its
representatives full access during normal business hours to all of Omni
offices, books, records, contracts and other corporate documents and
properties so that Piezo may inspect and audit them; and (ii) furnish such
information concerning the properties and affairs of Omni as Piezo may
reasonably request.
4.10 Tax Returns. Omni has filed all federal and state income or
franchise tax returns that have been required to be filed by it or has
received currently effective extensions of the required filing dates.
4.11 Confidentiality. Until the Closing (and continuously if
there is no Closing), Omni and the Omni Stockholders and their representatives
will keep confidential any information which they obtain from Piezo concerning
its properties, assets and business. If the transactions contemplated by this
Agreement are not consummated by September 8, 2003, Omni and the Omni
Stockholders will return to Piezo all written matter with respect to Piezo
obtained by them in connection with the negotiation or consummation of this
Agreement.
4.12 Investment Intent. The Omni Stockholders are acquiring the
Piezo common stock to be exchanged and delivered to them under this Agreement
for "investment purposes and not with a view to the sale or distribution
thereof," and they have no commitment or present intention to sell or
distribute the Piezo common stock to be received hereunder. The Omni
Stockholders shall execute and deliver to Piezo on the Closing an Investment
Letter attached hereto as Exhibit F and incorporated herein by reference.
4.13 Corporate Authority. Omni has full corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder and will deliver to Piezo or its representative at the Closing a
signed copy of resolutions of its Board of Directors authorizing execution of
this Agreement by its officers and performance thereunder, and that the
directors adopting and delivering such resolutions are the duly elected and
incumbent directors of Omni.
4.14 Due Authorization. Execution of this Agreement and
performance by Omni hereunder have been duly authorized by all requisite
corporate action on the part of Omni, and this Agreement constitutes a valid
and binding obligation of Omni and performance hereunder will not violate any
provision of the Articles of Incorporation, Bylaws, agreements, mortgages or
other commitments of Omni, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application now or hereafter in effect relating to or affecting the
enforcement of creditors' right generally and the application of general
equitable principles in any action, legal or equitable.
4.15 Environmental Matters. Omni and the Omni Stockholders have no
knowledge of any assertion by any governmental agency or other regulatory
authority of any environmental lien, action or proceeding, or of any cause for
any such lien, action or proceeding related to the business operations of Omni
or its predecessors. In addition, to the best knowledge of Omni and the Omni
Stockholders, there are no substances or conditions which may support a claim
or cause of action against Omni or any of its current or former officers,
directors, agents, employees or predecessors, whether by a governmental agency
or body, private party or individual, under any Hazardous Materials
Regulations. "Hazardous Materials" means any oil or petrochemical products,
PCB's, asbestos, urea formaldehyde, flammable explosives, radioactive
materials, solid or hazardous wastes, chemicals, toxic substances or related
materials, including, without limitation, any substances defined as or
included in the definition of "hazardous substances," "hazardous wastes," "
hazardous materials" or "toxic substances" under any applicable federal or
state laws or regulations. "Hazardous Materials Regulations" means any
regulations governing the use, generation, handling, storage, treatment,
disposal or release of hazardous materials, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act and the Federal Water Pollution Control
Act.
4.16 Access to Information Regarding Piezo. Omni and the Omni
Stockholders acknowledge that Piezo has provided them with access to what has
been represented to be documentation containing all material information
respecting Piezo and its present and contemplated business operations,
potential acquisitions, management and other factors, by personal delivery to
them and/or by notification of access to the reports and registration
statements of Piezo that contain such information in the XXXXX Archives of the
Securities and Exchange Commission at xxx.xxx.xxx; that they have had a
reasonable opportunity to review such documentation and to discuss it, to the
extent desired, with their legal counsel, directors and executive officers;
that they have had, to the extent desired, the opportunity to ask questions of
and receive responses from the directors and executive officers of Piezo, and
with the legal and accounting firms of Piezo, with respect to such
documentation; and that to the extent requested, all questions raised have
been answered to their complete satisfaction.
Section 5
Conditions Precedent to Obligations of Omni
and the Omni Stockholders
All obligations of Omni and the Omni Stockholders under this Agreement are
subject, at their option, to the fulfillment, before or at the Closing, of
each of the following conditions:
5.1 Representations and Warranties True at Closing. The
representations and warranties of Piezo contained in this Agreement shall be
deemed to have been made again at and as of the Closing and shall then be true
in all material respects and shall survive the Closing.
5.2 Due Performance. Piezo shall have performed and complied
with all of the terms and conditions required by this Agreement to be
performed or complied with by it before the Closing.
5.3 Officers' Certificate. Omni shall have been furnished with a
certificate signed by the President of Piezo, in such capacity, attached
hereto as Exhibit G and incorporated herein by reference, dated as of the
Closing, certifying (i) that all representations and warranties of Piezo
contained herein are true and correct; and (ii) that since the date of the
financial statements (Exhibits B and B-1 hereto), there has been no material
adverse change in the financial condition, business or properties of Piezo,
taken as a whole.
5.4 Assets and Liabilities of Piezo. Unless otherwise agreed,
Piezo shall have no assets and no liabilities at Closing, and all costs,
expenses and fees incident to the Agreement shall have been paid, or adequate
provision for the payment of the foregoing shall have been made.
5.5 Resignations of Present Directors and Executive Officers and
Designation of New Directors and Executive Officers. At or simultaneous with
the Closing, corporate resolutions of Piezo shall have adopted all action
necessary to accomplish the resignation of Piezo's directors and executive
officers, in seriatim, while designating the nominees of Omni to the Board of
Directors.
5.6 DBA of Name. At or simultaneous to the Closing of this
Agreement, the Board of Directors of Piezo shall have adopted the resolutions
necessary to file a "DBA" under the name "Omni Medical Holdings, Inc." or such
other similar name as may be available in the State of Utah.
5.7 Reverse Split. Prior to the Closing of this Agreement, the
Board of Directors of Piezo shall have effected a reverse split of its
outstanding common stock on the basis of one for 14.5 shares owned of Piezo.
5.8 Share Cancellation, Share Issuance and Lock-Up/Leak-Out
Agreement. (i) 1,466,379 post-split shares of common stock of Piezo shall have
been delivered to Piezo for cancellation to its treasury (that will include
the 225,000 post-split shares of common stock underlying the option referenced
in subparagraph (ii) of Section 1.1 hereof) and for return to the authorized
but unissued capital stock of Piezo by certain principal stockholders as
outlined in Schedule 1.5.1 hereof; (ii) an aggregate of 500,000 post-split
newly issued shares of "restricted securities" (common stock) of Piezo shall
have been issued in consideration of the cancellation of such shares and the
waiver by the canceling stockholders of any registration rights that had been
granted to them or were applicable to any of the cancelled shares as outlined
in Section 1.5.2 hereof; (iii) Piezo shall adopt and ratify the Consulting
Agreement attached hereto as Schedule 1.7.1 and the issuance of an aggregate
of 293,104 shares of common stock of Piezo for and in consideration of
non-capital raising services to be rendered pursuant to the Consulting
Agreement, and which shares shall be registered on Form S-8 of the Securities
and Exchange Commission as provided in Section 1.7 hereof; and (iv) the
principal stockholders that are named in Schedule 1.6.1 hereof shall execute
and deliver to Piezo the Lock-Up/Leak-Out Agreement attached hereto as
Schedule 1.6.2 covering the shares of common stock of Piezo that are currently
owned by them or acquired hereafter by them.
5.9 Stockholders' Consent. Persons owing not less than 50.1 of
the outstanding Omni Shares shall have executed and delivered the Agreement.
Section 6
Conditions Precedent to Obligations of Piezo
All obligations of Piezo under this Agreement are subject, at
Piezo's option, to the fulfillment, before or at the Closing, of each of the
following conditions:
6.1 Representations and Warranties True at Closing. The
representations and warranties of Omni and the Omni Stockholders contained in
this Agreement shall be deemed to have been made again at and as of the
Closing and shall then be true in all material respects and shall survive the
Closing.
6.2 Due Performance. Omni, the Omni Stockholders shall have
performed and complied with all of the terms and conditions required by this
Agreement to be performed or complied with by them before the Closing.
6.3 Officers' Certificate. Piezo shall have been furnished with a
certificate signed by the President of Omni, in such capacity, attached hereto
as Exhibit H and incorporated herein by reference, dated as of the Closing,
certifying (i) that all representations and warranties of Omni and the Omni
Stockholders contained herein are true and correct; and (ii) that since the
date of the financial statements (Exhibit D), there has been no material
adverse change in the financial condition, business or properties of Omni,
taken as a whole.
6.4 Books and Records. The Omni Stockholders or the Board of
Directors of Omni shall have caused Omni to make available all books and
records of Omni, including minute books and stock transfer records; provided,
however, only to the extent requested in writing by Piezo at Closing.
6.5 Compliance With Specific Conditions of Section 1. The final
satisfaction and compliance with all of the requirements of Section 1 hereof
are conditions precedent to the obligations of Piezo hereunder as they were
all part of the negotiations that culminated in the execution and delivery of
this Agreement and must be fully satisfied at or within a reasonable time of
the Closing; and Sections 1.9 and 1.10 hereof are conditions that the current
members of the Board of Directors of Piezo may obtain specific performance of
in the event of default in any of the matters covered thereby.
6.6 Stockholders' Consent. Persons owing not less than 50.1 of
the outstanding Omni Shares shall have executed and delivered the Agreement.
Section 7
Termination
Prior to the Closing, this Agreement may be terminated (i) by mutual
consent in writing; (ii) by either the directors of Piezo or Omni, if there
has been a material misrepresentation or material breach of any warranty or
covenant by the other party; or (iii) by either the directors of Piezo or Omni
and the Omni Stockholders, if the Closing shall not have taken place, unless
adjourned to a later date by mutual consent in writing, by the date fixed in
Section 2.
Section 8
General Provisions
8.1 Further Assurances. At any time, and from time to time, after
the Closing, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the
intent and purposes of this Agreement.
8.2 Waiver. Any failure on the part of any party hereto to
comply with any its or their obligations, agreements or conditions hereunder
may be waived in writing by the party to whom such compliance is owed.
8.3 Brokers. Each party represents to the other parties that no
broker or finder has acted for each or any of them in connection with this
Agreement, and agrees to indemnify and hold harmless the other parties against
any fee, loss or expense arising out of claims by brokers or finders employed
or alleged to have been employed by each or any of them.
8.4 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given if delivered in person or
sent by prepaid first-class registered or certified mail, return receipt
requested, as follows:
If to Piezo: 0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
With a copy to: Xxxxxxx X. Xxxxxxxxxx, Esq.
455 East 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
If to Omni: 0000 Xx. Xxxxxxxx Xxxx, Xxxxx 0
Xxxxx Xxxx, Xxxxx Xxxxxx 00000
If to the Omni To the addresses listed in
Exhibit A.
Stockholders:
8.5 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes and cancels any other agreement,
representation or communication, whether oral or written, between the parties
hereto relating to the transactions contemplated herein or the subject matter
hereof.
8.6 Headings. The section and subsection headings in this
Agreement are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement.
8.7 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Utah,
except to the extent pre-empted by federal law, in which event (and to that
extent only), federal law shall govern. Any actions permitted hereunder shall
be brought in the State of Utah in the county in which the principal executive
offices of Piezo are situated only.
8.8 Assignment. This Agreement shall inure to the benefit of, and
be binding upon, the parties hereto and their successors and assigns.
8.9 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
8.10 Default. In the event of any default hereunder, the
prevailing party in any action to enforce the terms and provisions hereof
shall be entitled to recover reasonable attorney's fees and related costs.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization effective the latest date hereof.
PIEZO INSTRUMENTS, INC.
Date: September 4, 2003. By/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
OMNI MEDICAL OF NEVADA, INC.
Date: September 5, 2003. By /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
AGREEMENT AND PLAN OF REORGANIZATION
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Agreement and Plan
of Reorganization (the "Agreement") dated as of the 13 day of August, 2003,
among Piezo Instruments, Inc., a Utah corporation ("Piezo"); Omni Medical of
Nevada, Inc., a Nevada corporation ("Omni"); and the Omni stockholders (the
"Omni Stockholders"), by which the undersigned, through execution and delivery
of this Counterpart Signature page, intends to be legally bound by the terms
of the Agreement.
Dated: 8/13/03 /s/Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Dated: 8/14/03 /s/Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
Dated: 8/14/03 /s/Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Dated: 8/15/03 /s/Xx Xxxxxx and XxxXxx Xxxxxx
Xx Xxxxxx and XxxXxx Xxxxxx
Dated: 8/13/03 /s/
LHM Trading
EXHIBIT A
Number of Shares of
Number of Shares Piezo
Owned of to be
Name Omni Received in Exchange
See Exhibit A-1 See Exhibit A-1 1.903896765 Piezo
Shares for each Omni
Share Owned*
* Rounded up or down to the nearest whole Omni share
EXHIBIT B*
PIEZO INSTRUMENTS, INC.
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 2002 and 2001
* Incorporated by reference from the 10-KSB Annual Report of
Piezo for the year ended December 31, 2002, that was filed with the Securities
and Exchange Commission on March 26, 2003.
EXHIBIT B-1
PIEZO INSTRUMENTS, INC.
UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
JUNE 30, 2003
* Incorporated by reference from the 10-QSB Quarterly Report of
Piezo for the quarter ended June 30, 2003, that was filed with the Securities
and Exchange Commission on July 16, 2003.
EXHIBIT C
None.
EXHIBIT D
OMNI MEDICAL HOLDINGS, INC.
AUDITED FINANCIAL STATEMENTS FOR THE
YEARS ENDED MARCH 31, 2002 AND 2002
AND THE PERIOD ENDED
DECEMBER 31, 2002
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors
Xxxxxx Precision, Inc.
We have audited the accompanying consolidated balance sheet of Xxxxxx
Precision, Inc. and subsidiaries (the "Company") as of March 31, 2002, and the
related consolidated statements of operations, shareholders' (deficit) equity
and cash flows for the years ended March 31, 2002 and 2001. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Xxxxxx
Precision, Inc. and subsidiaries as of March 31, 2002, and the results of
their operations and their cash flows for the years ended March 31, 2002 and
2001 in conformity with accounting principles generally accepted in the United
States of America.
We have compiled the accompanying consolidated balance sheet of Xxxxxx
Precision, Inc. and subsidiaries as of December 31, 2002, the related
consolidated statements of operations and cash flows for the nine months ended
December 31, 2002 and 2001 and the consolidated statement of shareholders'
equity for the nine months ended December 31, 2002, in accordance with
Statements on Standards for Accounting and Review Services issued by the
American Institute of Certified Public Accountants. A compilation is limited
to presenting in the form of financial statements information that is the
representation of management. We have not audited or reviewed the
accompanying December 31, 2002 and 2001 consolidated financial statements and,
accordingly, do not express an opinion or any other form of assurance on them.
February 21, 2003
XXXXXX PRECISION, INC. AND SUBSIDIARIES
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
CONTENTS
Independent accountants' report 1
Financial statements:
Consolidated balance sheets 2
Consolidated statements of operations 3
Consolidated statements of shareholders' (deficit) equity 4
Consolidated statements of cash flows 5
Notes to consolidated financial statements 6 - 14
XXXXXX PRECISION, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 (AUDITED) AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
XXXXXX PRECISION, INC. AND SUBSIDIARIES
BALANCE SHEETS
MARCH 31, 2002 AND DECEMBER 31, 2002 (UNAUDITED)
ASSETS
MARCH 31, DECEMBER 31,
2002 2002
Current Assets:
Cash $ 9,344 $ 339,840
Accounts receivable, net of allowance for doubtful
accounts of $32,500 at March 31, 2002 and December
31, 2002 (unaudited) (notes 3 and 5) 81,193 96,697
Inventory (Note 5) 547,695 493,171
---------- -----------
Total current assets 638,232 929,708
Property and equipment, net (Notes 4 and 5) 31,843 208,308
Intangible asset (Note 3) 29,594
---------- -----------
Total assets $ 670,075 $ 1,167,610
========== ===========
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY
Current liabilities:
Accounts payable $ 269,265 $ 212,510
Accrued expenses 41,393 25,215
Notes payable, current portion (Note 5) 108,642 312,521
---------- -----------
Total current liabilities 419,300 550,246
Notes payable, net of current portion (Note 5) 263,131 191,605
---------- -----------
Total liabilities 682,431 741,851
---------- -----------
Commitments (Notes 5, 6 and 7)
Shareholders' (deficit) equity (Notes 6 and 9):
Common stock, $.001 par value, 20,000,000 shares
authorized; 12,305,536 and 13,396,667 (unaudited)
shares issued and outstanding at March 31, 2002
and December 31, 2002, respectively 12,306 13,397
Additional paid-in capital 885,300 1,556,709
Deferred compensation expense (67,778) (47,778)
Accumulated deficit (817,476) (1,071,861)
Advance receivable, shareholder (Note 6) (24,708) (24,708)
---------- -----------
Total shareholders' (deficit) equity (12,356) 425,759
---------- -----------
Total liabilities and shareholders' (deficit)
equity $ 670,075 $ 1,167,610
========== ===========
See notes to consolidated financial statements and independent accountants'
report.
XXXXXX PRECISION, INC. AND SUBSIDIAIRIES
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
YEARS ENDED NINE MONTHS ENDED DECEMBER 31,
2002 2001 2002 2001
(UNAUDITED) (UNAUDITED)
Sales $ 836,466 $1,617,472 $ 872,148 $ 673,549
Cost of sales 241,776 694,063 317,187 175,564
--------- ---------- --------- ----------
Gross profit 594,690 923,409 509,961 497,985
General and administrative
expenses 716,380 1,317,141 757,947 597,300
--------- ---------- --------- ----------
Loss from operations (122,690) (393,732) (247,986) (99,315)
Other income (expense):
Interest income 18 11,667 29,933
Interest expense (65,048) (79,992) (36,332) (44,579)
--------- ---------- --------- ----------
Net loss $(186,720) $ (462,047) $(254,385) $ (143,894)
See notes to consolidated financial statements and independent accountants'
report.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 (UNAUDITED)
Additional Deferred
Common Paid-in Compensation
Shares Stock Capital Expense
Balances, April 2, 2000 9,851,097 $ 9,851 $ 387,755 $ -
Sale of common stock pursuant to
private placement 1,095,732 1,096 398,904 -
Advance receivable, shareholder
Net loss
--------- ------- ---------- ---------
Balance, March 31, 2001 10,946,829 10,947 786,659
Issuance of common stock in
exchange for note payable 43,829 44 19,956
Issuance of common stock to
employees 1,314,878 1,315 78,685 (80,000)
Earned compensation expense 12,222
Advance receivable, shareholder
Net loss
---------- ------- ---------- ---------
Balances, March 31, 2002 12,305,536 12,306 885,300 (67,778)
Issuance of common stock in
exchange for note payable
(unaudited) 197,232 197 44,803
Sale of common stock pursuant
to private placements (unaudited) 197,232 197 44,803
Stock transferred to employees by
majority shareholder (unaudited) 52,500
Sale of common stock pursuant to
private placements (unaudited) 666,667 667 499,333
Issuance of common stock in
business acquisition (unaudited) 30,000 30 29,970
Earned compensation expense
(unaudited) 20,000
Net loss (unaudited)
---------- ------- ---------- ---------
Balances, December 31, 2002
(unaudited) 13,396,667 $13,397 $1,556,709 $ (47,778)
========== ======= ========== =========
[CONTINUED]
XXXXXX PRECISION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' (DEFICIT) EQUITY
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 (UNAUDITED)
Advance
Accumulated receivable,
Deficit shareholder Total
Balances, April 2, 2000 $ (168,699) $ 228,907
Sale of common stock pursuant to
private placement 400,000
Advance receivable, shareholder $(20,470) (20,470)
Net loss (462,057) (462,057)
----------- -------- ---------
Balance, March 31, 2001 (630,756) (20,470) 146,380
Issuance of common stock in
exchange for note payable 20,000
Issuance of common stock to
employees 0
Earned compensation expense 12,222
Advance receivable, shareholder (4,238) (4,238)
Net loss (186,720) (187,720)
---------- -------- ---------
Balances, March 31, 2002 (817,476) (24,708) (12,356)
Issuance of common stock in
exchange for note payable
(unaudited) 45,000
Sale of common stock pursuant
to private placements (unaudited) 45,000
Stock transferred to employees by
majority shareholder (unaudited) 52,500
Sale of common stock pursuant to
private placements (unaudited) 500,000
Issuance of common stock in
business acquisition (unaudited) 30,000
Earned compensation expense
(unaudited) 20,000
Net loss (unaudited) (254,385) (254,385)
----------- -------- ---------
Balances, December 31, 2002
(unaudited) $(1,071,861) $(24,708) $ 425,759
=========== ======== =========
See notes to consolidated financial statements and independent accountants'
report.
XXXXXX PRECISION, INC. AND SUBSIDIAIRIES
STATEMENTS OF CASH FLOWS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
YEARS ENDED NINE MONTHS ENDED DECEMBER 31,
2002 2001 2002 2001
(UNAUDITED) (UNAUDITED)
Net loss $(186,720) $(462,057) $(254,385) $ (143,894)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Depreciation and
amortization 11,806 53,617 19,642 9,768
Stock-based compensation
expense 12,222 72,500 5,556
Changes in operating
assets and liabilities net
of effects of business
acquisition:
Accounts receivable 201,417 (85,644) (8,027) 196,489
Inventory 98,633 3,781 54,524 88,917
Accounts payable (100,669) 122,968 (75,703) (79,885)
Accrued expenses 23,248 4,743 (16,178) (393)
--------- ---------- -------- ----------
Net cash provided by
(used in) operating
activities 59,937 (362,592) (207,627) 76,558
--------- ---------- -------- ----------
Cash flows from investing
activities:
Purchase of property and
equipment (926) (6,100) (48,417)
Payment for purchase of
business, net of cash
acquired (65,000)
--------- ---------- -------- ----------
Net cash used in investing
activities (926) (6,100) (113,417)
--------- ---------- -------- ----------
Cash flows from financing
activities:
Notes payable 125,000
Payments on notes payable (49,667) (41,775) (18,460) (44,940)
Proceeds from issuance of
common stock 400,000 545,000
--------- ---------- -------- ----------
Net cash (used in)
provided by financing
activities (49,667) 358,225 651,540 (44,940)
--------- ---------- -------- ----------
Net (decrease) increase
in cash 9,344 (10,467) 330,496 31,618
Cash, beginning 10,467 9,344
--------- ---------- -------- ----------
Cash, ending $ 9,344 $ $339,840 $ 31,618
========= ========== ======== ==========
Supplement disclosure of cash flow information:
Cash paid for interest $ 65,048 $ 79,992 $ 36,332 $ 44,579
========= ========== ======== ==========
Supplement disclosure of non-cash investing and financing activities:
Inventory transferred to
shareholder (Note 6) $ 4,238 $ 20,470 $ 0 $ 4,238
========= ========== ======== ==========
Conversion of debt to
equity (Note 5) $ 20,000 $ $ 45,000 $ 0
========= ========== ======== ==========
Business acquisition (Note 2):
Fair value of assets acquired $184,761
Liabilities assumed (89,761)
Common stock issued at acquisition (30,000)
--------
Cash paid at acquisition $ 65,000
========
See notes to consolidated financial statements and independent accountants'
report.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
1. Organization, interim financial statements and management's plans:
Organization:
Xxxxxx Precision, Inc. ("MPI" or the "Company"), a Nevada Corporation,
produces handheld surgical instruments used by ophthalmic surgeons in
refractive, corneal and LASIK surgeries. The Company is also a developer of
technology to ophthalmic surgeons, specifically within the domain of anterior
segment cataract extraction, and foldable intraocular lens placement as well
as keratorefractive procedures such as LASIK. The Company operates out of its
facility in Rapid City, South Dakota.
Interim financial statements:
The consolidated balance sheet as of December 31, 2002, the related
consolidated statements of operations and cash flows for the nine months ended
December 31, 2002 and 2001 and the consolidated statement of shareholders'
equity for the nine months ended December 31, 2002 have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
included normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows for all such periods
have been made. The results of operations for the nine months ended December
31, 2002, are not necessarily indicative of the operating results for the full
year.
Liquidity and management's plans:
The Company has incurred losses during each of the years ended March 31, 2002
and 2001 and during each of the nine-month periods ended December 31, 2002 and
2001 (unaudited). Management's plans to address concerns raised by this
issue includes:
a. The Company is implementing certain cost saving and operational plans
designed to improve future operating results. The plans include
reduction of both direct and indirect costs. In addition, management
expects that revenues will increase as a result of the Company's
acquisition of a transcription business (Note 2) and the development
of new sales/distributor relationships.
b. The Company has been successful in raising limited amounts of capital
through the sale of stock. Management believes that additional equity
financing will be available from the Company's private placements.
Management believes that these measures will enable the Company to have
adequate funds to support operations for the next twelve months.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
1. Business combinations (unaudited):
On April 15, 2002, Xxxxxx Precision Surgical Instruments, Inc. ("MPSI")
entered into an Agreement for the Exchange of Common Stock ("the Agreement")
with Daycor Corporation ("Daycor"), a Nevada Corporation. Pursuant to the
Agreement, the shareholders of MPSI sold to Daycor 100% of the issued and
outstanding shares of MPSI in exchange for 11,000,000, $.001 par value, newly
issued shares of voting common stock of Daycor.
The transaction was accounted for as a reverse acquisition of Daycor by MPSI,
since the shareholders of MPSI own approximately 86% of the post acquisition
common stock of the consolidated entity immediately after the completion of
the transaction. For accounting purposes, the acquisition has been treated as
an acquisition of Daycor by MPSI and as a recapitalization of MPSI. Shares of
common stock authorized and issued have been retroactively restated to present
the capital structure of Daycor. Concurrent with the merger, Daycor changed
its name to Xxxxxx Precision, Inc.
Effective July 10, 2002 the Company entered into an asset purchase agreement
with A&V Transcription Services ("A&V"), a general partnership based in the
state of Alabama. The results of operations of A&V have been included in the
consolidated financial statements since date of acquisition. A&V is a
provider of medical transcription services based in Alabama. As a result of
the acquisition, the Company has diversified its product base by entering into
the medical transcription market. On September 4, 2002 the Company formed
Xxxxxx Precision Health Information Services, Inc. ("MPHIS") (a wholly owned
subsidiary of MPI) to operate the transcription services business acquired
from A&V.
The aggregate purchase price was $95,000, including $65,000 in cash,
assumption of liabilities of $89,761 and common stock valued at $30,000.
The value of the common stock issued was determined by management based on
recent stock transactions.
The following table summarizes the estimated fair values of the assets
acquired and the liabilities assumed at July 10, 2002, the date of acquisition
(unaudited).
Current assets $ 7,477
Property, plant and equipment 145,000
Intangible asset customer list 32,284
----------
Total assets acquired 184,761
----------
Current liabilities (18,948)
Long-term debt (70,813)
----------
Total liabilities assumed (89,761)
----------
Net assets acquired $ 95,000
==========
The accompanying unaudited financial statements for the nine months ended
December 31, 2002 include the accounts of MPI, MPSI, A&V and MPHIS.
Intercompany balances and transactions have been eliminated on consolidation.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
2. Significant accounting policies:
Cash and cash equivalents:
Cash and cash equivalents include cash on hand, money market accounts and
short-term investments purchased with an original maturity of three months or
less.
Accounts receivable and concentration of credit risk:
The Company grants credit to its customers, generally without collateral. At
March 31, 2002 approximately 16% of trade receivables were due from one
customer. At December 31, 2002 (unaudited), no one customer accounted for 10%
or more of accounts receivable. During the years ended March 31, 2002 and
2001 and the nine months ended December 31, 2002 and 2001 (unaudited), no one
customer accounted for 10% or more of sales.
Inventories:
Inventories consist of surgical instruments and related components and are
valued by using the average cost method at the lower of cost or market.
Property, equipment and depreciation:
Property and equipment are recorded at cost. Depreciation is provided by use
of straight-line and accelerated methods over the estimated useful lives of
the assets ranging from 5 to 10 years.
Intangible asset:
The intangible asset consists of a customer list arising from the acquisition
of A&V, and is being amortized on a straight-line basis over 5 years
(approximately $6,500 per year). Amortization expense for the nine months
ended December 31, 2002 (unaudited) was $2,690.
Revenue recognition:
Revenue is recognized at the time goods are shipped and services are
performed.
Advertising:
Costs related to advertising and promotion of products are charged to sales
and marketing expense as incurred. Advertising and promotion costs were
approximately $171,700, $99,800, $62,500 and $90,800 for the years ended March
31, 2002 and 2001, and for the nine months ended December 31, 2002 and 2001
(unaudited), respectively.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
3. Significant accounting policies (continued):
Research and development:
Research and development costs are expensed as incurred.
Fair value of financial instruments:
The carrying amounts of the Company's cash and cash equivalents, receivables,
trade liabilities, accrued expenses and other current liabilities approximate
fair values due to the short maturities of these instruments. The carrying
value of the Company's short-term borrowings approximates fair value based on
the Company's current incremental borrowing rate for similar types of
borrowing arrangements. The fair values of the Company's receivables and
payables to related parties are not practicable to estimate due to the related
party nature of the underlying transactions and indefinite payment terms.
Stock-based compensation:
Statement of Financial Accounting Standards ("SFAS") No. 123 "Accounting for
Stock-Based Compensation" allows companies to choose whether to account for
employee stock-based compensation on a fair-value method, or to account for
such compensation under the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees"
("APB 25"). The Company has chosen to account for employee stock-based
compensation using APB 25.
Income taxes:
The Company recognizes deferred tax assets and liabilities for the expected
future tax consequences of events that have been recognized in the financial
statements or tax returns. Under this method, deferred tax liabilities and
assets are determined based upon the differences between the financial
statement carrying amounts and tax bases of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected
to reverse.
Comprehensive income:
SFAS No. 130, Reporting Comprehensive Income, establishes requirements for
disclosure of comprehensive income. During the years ended March 31, 2002 and
2001 (and the nine months ended December 31, 2002 and 2001 (unaudited), the
Company did not have any components of comprehensive income to report.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
3. Significant accounting policies (continued):
Recently issued accounting pronouncements:
In January 2003, the Financial Accounting Standards Board ("FASB") issued SFAS
Interpretation No. 46, Consolidation of Variable Interest Entities ("FIN 46"),
which changes the criteria by which one company includes another entity in its
consolidated financial statements. FIN 46 requires a variable interest entity
("VIE") to be consolidated by a company if that company is subject to a
majority of the risk of loss from the variable interest entity's activities or
entitled to receive a majority of the entity's residual returns or both. The
consolidation requirements of FIN 46 apply immediately to VIE's created after
January 31, 2003, and apply in the first fiscal period beginning after June
15, 2003, for VIE's created prior to February 1, 2003. As the Company does not
currently have an interest in a VIE, management does not expect that the
adoption of FIN 46 will have a significant immediate impact on the financial
condition or results of operations of the Company.
In November 2002, the FASB issued SFAS Interpretation No. 45 ("FIN 45"),
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees and Indebtedness of Others. FIN 45 elaborates on the
disclosures to be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it has issued.
It also requires that a guarantor recognize, at the inception of a guarantee,
a liability for the fair value of the obligation undertaken in issuing the
guarantee. The initial recognition and measurement provisions of this
interpretation are applicable on a prospective basis to guarantees issued or
modified after December 31, 2002, while the provisions of the disclosure
requirements are effective for financial statements of interim or annual
reports ending after December 15, 2002. The Company is currently evaluating
the recognition provisions of FIN 45, but does not expect that the adoption of
FIN 45 will have a significant immediate impact on the financial condition or
results of operations of the Company, as the Company has made no guarantees.
In July 2001, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 141, Business Combinations, and SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 141 requires that the purchase method of
accounting be used for all business combinations initiated after June 30,
2001. Use of the pooling-of-interests method is prohibited after that date.
SFAS No. 142 addresses the accounting and reporting for acquired goodwill and
other intangible assets. It changes the accounting for goodwill and other
intangible assets with indefinite lives from an amortization method to an
impairment-only approach and requires intangible assets with finite lives to
be amortized over their useful lives. This statement was effective for the
Company on April 1, 2002. The adoption of SFAS No. 142 did not have an impact
on the Company's financial position or results of operations.
In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, which addresses accounting and financial
reporting for the impairment or disposal of long-lived assets. This statement
was effective for the Company on January 1, 2002. The adoption of SFAS No.
144 did not have an impact on the financial condition or results of operations
of the company.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
3. Significant accounting policies (continued):
Recently issued accounting pronouncements (continued):
In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-Based
Compensation Transition and Disclosure. This statement amends SFAS No. 123,
Accounting for Stock-Based Compensation and establishes two alternative
methods of transition from the intrinsic value method to the fair value method
of accounting for stock-based employee compensation. In addition, SFAS No.
148 requires prominent disclosure about the effects on reported net income and
requires disclosure for these effects in interim financial information. The
provisions for the alternative transition methods are effective for fiscal
years ending after December 15, 2002 and the amended disclosure requirements
are effective for interim periods beginning after December 15, 2002. The
Company plans to continue accounting for stock-based compensation under APB
25. Therefore, this pronouncement is not expected to impact the Company's
financial position or results of operations.
Use of estimates:
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the balance sheet and the reported amounts of revenues and
expenses during the reporting periods. Actual results could differ from those
estimates.
3. Property and equipment:
At March 31, 2002 and December 31, 2002 (unaudited), property and equipment
consist of the following:
March 31, December 31,
2002 2002
(unaudited)
Office furniture and equipment $ 65,442 $ 66,458
Equipment 74,354 189,404
Leasehold improvements 11,689 14,039
Land and building 75,000
-------- --------
151,485 344,901
Less accumulated depreciation and amortization 119,641 136,593
-------- --------
$ 31,844 $ 208,308
======== ========
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
4. Notes payable:
At March 31, 2002 and December 31, 2002 (unaudited), notes payable consists of
the following:
March 31, December 31,
2002 2002
(unaudited)
Note payable, interest at 9.5%, payable in monthly
installments of $2,000, due July 15, 2003,
collateralized by inventory and accounts receivable $ 93,972 $ 97,718
Note payable, interest at 10.5%, payable in monthly
installments of $5,635, due April 1, 2003,
collateralized by inventory, accounts receivable,
equipment and real-estate owned by the Company's
majority shareholder 232,801 210,603
Note payable, related party, interest at 8%, converted
to equity April 2002 45,000
Note payable, interest at 8%, payable in monthly
installments of $1,956, due July 2009, collateralized
by all of the assets of MPHIS 119,004
Note payable, interest at 7.9%, payable in monthly
installments of $590, due July 2016, collateralized
by land and building 59,377
Note payable, interest at 24%, payable in monthly
installments of $905, due May 2004 16,550
Note payable, related party, interest at 5%, payable in
monthly installments of $375, due September 2004 10,874
-------- -------
371,773 504,126
Less current portion 108,642 312,521
-------- -------
$263,131 $191,605
======== ========
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
5. Notes payable (continued):
Future minimum note payments as of December 31, 2002, (unaudited) are
approximately as follows:
Years ending March 31,
2003 $ 26,700
2004 313,000
2005 26,300
2006 17,700
2007 17,700
Thereafter 102,726
---------
$ 504,126
=========
5. Related party transactions:
During the year ended March 31, 2002 the Company transferred inventory with a
carrying value of approximately $25,000 ($20,000 during the nine months ended
December 31, 2002 (unaudited)) to an officer and shareholder of the Company in
exchange for a receivable. The shareholder used the inventory for promotional
and other sales purposes on behalf of the Company. Subsequent to December
31, 2002, the Company entered into an agreement with the officer and
shareholder whereby the receivable is to be settled in exchange for 32,944
shares of treasury stock, which management believes is the fair value of the
stock. Accordingly, the amounts receivable from the shareholder have been
shown as a reduction of stockholders equity at March 31, 2002 and December 31,
2002 (unaudited).
At March 31, 2002, the Company owed $41,129 to one of its shareholders and
officers. Interest on the advance was at 8% and the advance was due to be
repaid in May 2005. In April 2002, the advance, together with accrued
interest of $3,871 was converted to 197,232 shares of common stock. Included
in interest expense for the year ended March 31, 2002 is $3,871 relating to
the advance.
XXXXXX PRECISION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 2002 AND 2001 AND
NINE MONTHS ENDED DECEMBER 31, 2002 AND 2001 (UNAUDITED)
(See independent accountants' report)
6. Commitments:
Operating lease:
The Company leases its operating facility on a month-to-month basis. The
lease may be canceled upon 30 days notice by the Company. The Company also
leases office equipment under operating leases with various terms through
February 2004. Total leases expense for the years ended March 31, 2002 and
2001 and the nine months ended December 31, 2002 and 2001 (unaudited) was
approximately $36,000, $22,200, $23,600, and $27,000, respectively. Future
minimum lease payments as of December 31, 2002, (unaudited) are as follows:
Years ending March 31,
2003 $ 7,400
2004 25,600
---------
$ 33,000
=========
8. Income taxes:
At March 31, 2002 and December 31, 2002 (unaudited) the Company has a net
operating loss of approximately $1,170,000 and $1,440,000, expiring on various
dates through 2022 if not utilized. Deferred tax assets arising from net
operating loss and temporary differences have been fully reserved by a
valuation allowance because the future utilization cannot be assured at this
time.
9. Shareholders' equity:
During the year ended March 31, 2002, 43,829 shares of common stock were
issued in exchange for a note payable in the amount of $20,000. Also during
the year ended March 31, 2002, 1,314,878 shares of common stock were issued
pursuant to employment agreements to two of the Company's directors. Theses
shares were valued at $80,000 at the date of issuance. Compensation expense
of $67,778 and $47,778 has been deferred at March 31, 2002 and December 31,
2002 (unaudited), respectively, in accordance with the terms of the employment
agreements.
During the nine months ended December 31, 2002 (unaudited), 863,889 shares of
common stock were issued in private placements at prices ranging from $0.22 to
$0.75 per share; 197,232 shares of common stock were issued in exchange for a
note payable to an officer of the Company in the amount of $45,000 and 30,000
shares of common stock valued at $30,000 were issued in connection with the
Company's acquisition of the assets of A&V. Also during the nine months ended
December 31, 2002, the Company's founding shareholder, awarded 230,100 of his
shares of the Company's common stock to Company employees. The Company has
accounted for this award as a capital contribution by the founding shareholder
resulting in compensation expense and an increase in additional-paid-in-
capital of $52,500 (unaudited).
EXHIBIT E
None.
EXHIBIT F
American Registrar & Transfer Co.
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Piezo Instruments, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Re: Exchange of shares of Omni Medical Holdings, Inc., a
Nevada corporation ("Omni"), for shares of Piezo
Instruments, Inc., a Utah corporation ("Piezo" or the
"Company")
Dear Ladies and Gentlemen:
Pursuant to that certain Agreement and Plan of Reorganization (the
"Agreement") between the undersigned, Omni, the other stockholders of Omni and
Piezo, I acknowledge that I have approved this exchange; that I am aware of
all of the terms and conditions of the Agreement. I represent and warrant
that (i) I am an "accredited investor" or, either alone or with the aid of a
"purchaser representative" am a "sophisticated investor"; (ii) I understand
the "unregistered" and "restricted" nature of the shares of Piezo being
received under the Agreement in exchange for the Omni Shares; (iii) I have
received and reviewed a copy of any and all material documents regarding the
Company, including, but not limited to all reports filed with the Securities
and Exchange Commission for the past twelve months; (iv) I hereby waive and
compromise any pre-emptive rights or shareholder agreements relating to the
prior issuance of shares of any of the Omni Shares; and (v) I hereby
compromise and/or waive any claims I have or may have against Omni by reason
of the purchase of any securities of Omni prior to the Closing of the
Agreement.
I understand that you have and will make books and records of your
Company available to me for my inspection in connection with the contemplated
exchange of my shares, and that I have been encouraged to review the
information and ask any questions I may have concerning the information of any
director or officer of the Company or of the legal and accounting firms for
the Company. I understand that the accounting firm for Piezo is Xxxxxxx,
McRenolds & Associates, Certified Public Accountants, 0000 Xxxxx 000 Xxxx,
#000, Xxxx Xxxx Xxxx, Xxxx 00000; Telephone #000-000-0000; and that legal
counsel for Piezo is Xxxxxxx X. Xxxxxxxxxx, Esq., 000 Xxxx 0xx Xxxxx, Xxxxx
000, Xxxx Xxxx Xxxx, Xxxx 00000, Telephone #000-000-0000.
I also understand that I must bear the economic risk of ownership
of any of the Piezo shares for a long period of time, the minimum of which
will be one (1) year, as these shares are "unregistered" shares and may not be
sold unless any subsequent offer or sale is registered with the United States
Securities and Exchange Commission or otherwise exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), or other
applicable laws, rules and regulations.
I intend that you rely on all of my representations made herein
and those in the personal questionnaire (if applicable) I provided to Omni for
use by Piezo as they are made to induce you to issue me the shares of Piezo
under the Plan, and I further represent (of my personal knowledge or by virtue
of my reliance on one or more personal representatives), and agree as follows,
to-wit:
1. That the shares being acquired are being received for
investment purposes and not with a view toward further distribution;
2. That I have a full and complete understanding of the phrase
"for investment purposes and not with a view toward further distribution";
3. That I understand the meaning of "unregistered shares" and
know that they are not freely tradeable;
4. That any stock certificate issued by you to me in connection
with the shares being acquired shall be imprinted with a legend restricting
the sale, assignment, hypothecation or other disposition unless it can be made
in accordance with applicable laws, rules and regulations;
5. I agree that the stock transfer records of your Company
shall reflect that I have requested the Company not to effect any transfer of
any stock certificate representing any of the shares being acquired unless I
shall first have obtained an opinion of legal counsel to the effect that the
shares may be sold in accordance with applicable laws, rules and regulations,
and I understand that any opinion must be from legal counsel satisfactory to
the Company and, regardless of any opinion, I understand that the exemption
covered by any opinion must in fact be applicable to the shares;
6. That I shall not sell, offer to sell, transfer, assign,
hypothecate or make any other disposition of any interest in the shares being
acquired except as may be pursuant to any applicable laws, rules and
regulations;
7. I fully understand that my shares which are being exchanged
for shares of the Company are "risk capital," and I am fully capable of
bearing the economic risks attendant to this investment, without
qualification; and
8. I also understand that without approval of counsel for
Piezo, all shares of Piezo to be issued and delivered to me in exchange for my
shares of Omni shall be represented by one stock certificate only and which
such stock certificate shall be imprinted with the following legend or a
reasonable facsimile thereof on the front and reverse sides thereof:
The shares of stock represented by this certificate
have not been registered under the Securities Act of
1933, as amended, and may not be sold or otherwise
transferred unless compliance with the registration
provisions of such Act has been made or unless
availability of an exemption from such registration
provisions has been established, or unless sold
pursuant to Rule 144 under the Act.
Any request for more than one stock certificate must be
accompanied by a letter signed by the requesting stockholder setting forth all
relevant facts relating to the request. Piezo will attempt to accommodate any
stockholders' request where Piezo views the request is made for valid business
or personal reasons so long as in the sole discretion of Piezo, the granting
of the request will not facilitate a "public" distribution of unregistered
shares of common voting stock of Piezo.
You are requested and instructed to issue a stock certificate as
follows, to-wit:
________________________________________________________
(Name(s) and Number of Shares)
________________________________________________________
(Address)
________________________________________________________
(City, State and Zip Code)
If joint tenancy with full rights of survivorship is
desired, put the initials JTRS after your names.
Dated this ________ day of _______________________, 2003.
Very truly yours,
______________________________________
(Signature)
______________________________________
Please Print Name
EXHIBIT G
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Piezo Instruments, Inc., a Utah
corporation ("Piezo"), represents and warrants the following as required by
the Agreement and Plan of Reorganization (the "Plan") between Piezo and Omni
Medical Holdings, Inc., a Nevada corporation ("Omni"), and the stockholders of
Omni (the "Omni Stockholders"):
1. That he is the President of Piezo and has been authorized
and empowered by its Board of Directors to execute and deliver this
Certificate to Omni and the Omni Stockholders.
2. Based on his personal knowledge, information, belief and
opinions of counsel for Piezo regarding the Plan:
(i) All representations and warranties of Piezo contained
within the Plan are true and correct;
(ii) Piezo has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Piezo as set forth in its
financial statements for the periods ended December
31, 2002 and 2001, and June 30, 2003, except as set
forth in Exhibit C to the Plan.
PIEZO INSTRUMENTS, INC.
By/S/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
EXHIBIT H
CERTIFICATE OF OFFICER PURSUANT TO
AGREEMENT AND PLAN OF REORGANIZATION
The undersigned, the President of Omni Medical Holdings, Inc., a
Nevada corporation ("Omni"), represents and warrants the following as required
by the Agreement and Plan of Reorganization (the "Plan") between Omni, its
stockholders (the "Omni Stockholders") and Piezo Instruments, Inc., a Utah
corporation ("Piezo"):
1. That he is the President of Omni and has been authorized and
empowered by its Board of Directors to execute and deliver this Certificate to
Piezo.
2. Based on his personal knowledge, information, belief:
(i) All representations and warranties of Omni contained
within the Plan are true and correct;
(ii) Omni has complied with all terms and provisions
required of it pursuant to the Plan; and
(iii) There have been no material adverse changes in the
financial position of Omni as set forth in its audited
financial statements for the years ended March 31,
2002 and 2001, and for the period ended December 31,
2002, except as set forth in Exhibit E to the Plan.
OMNI MEDICAL HOLDINGS, INC.
By/S/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President
Schedule 1.5.1
Canceling Principal Stockholders and Shareholdings
Post-Split Registration
Shares Rights
Xxxxxx Services, Inc. 1,241,379 Yes
Xxxxxxx Dynasty, LC 225,000* Yes
1,466,379
* Option granted in consideration of the sum of
$2,000 that could not be exercised unless and
until Piezo completed an Agreement and Plan of
Reorganization with an operating entity.
Schedule 1.5.2
Shares Issued in Consideration of Cancellation and Waiver of Registration
Rights
Xxxxxx Services, Inc.
Xxxxx X. Xxxxxx 31,250
Xxxxxxx X. Xxxxxx 31,250
Xxxxxx X. Xxxxxx 31,250
Xxxxxx X. Xxxxxxx 31,250
Xxxxxxx X. Xxxxxxxxxx, Esq. 25,000
Xxxxx X. Xxxxxxxxx 125,000
Xxxxxxx Dynasty LC 225,000
Schedule 1.6.1
Piezo Instruments, Inc. Stockholders
Subject to the Lock-Up/Leak-Out Agreement
Xxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
W-Group
Eadac Investments Ltd.
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxxx, Esq.
Xxxxxx Services, Inc.
Schedule 1.6.2
LOCK-UP/LEAK-OUT AGREEMENT
THIS LOCK-UP/LEAK-OUT AGREEMENT (the "Agreement") is made and
entered into as of the 5th day of September, 2003, between Piezo Instruments,
Inc., a Utah corporation ("Piezo"), and the individuals and entities that
execute and deliver a Counterpart Signature Page hereof, each a shareholder of
Piezo, and sometimes collectively referred to herein as the "Shareholders" and
each, a "Shareholder."
WHEREAS, Piezo intends to enter into an Agreement and Plan of
Reorganization between Piezo, Omni Medical Holdings, Inc., a Nevada
corporation ("Omni"), and the Omni Stockholders (the "Reorganization
Agreement") pursuant to which the execution and delivery of this Agreement is
a condition precedent to the closing of the Reorganization Agreement; and
WHEREAS, in order to facilitate the consummation of the
transactions contemplated by the Reorganization Agreement and to provide for
an orderly market for the Common Stock of Piezo subsequent to the closing of
the Reorganization Agreement, the Shareholders have agreed to enter into this
Agreement and to restrict the sale, assignment, transfer, conveyance,
hypothecation or alienation of the Common Stock, all on the terms set forth
below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants contained herein, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Notwithstanding anything contained in this Agreement, a
Shareholder may transfer his/her/its shares of Common Stock to his/her/its
affiliates, partners in a partnership, subsidiaries and trusts, or spouses and
lineal descendants for estate planning purposes provided that the transferee
(or the legal representative of the transferee) executes an agreement to be
bound by all of the terms and conditions of this Agreement.
2. Except as otherwise expressly provided herein, and except as
each Shareholder may be otherwise restricted from selling shares of Common
Stock, each Shareholder may only sell Common Stock subject to the following
conditions for the twelve (12) month period from the closing of the
Reorganization Agreement (the "Lock-Up/Leak-Out Period"):
2.1 The Shareholders shall collectively be allowed to sell 1% of
the outstanding securities of Piezo in any three month
period for a period of 12 months from the closing of the
Reorganization Agreement (the "Lock-Up/Leak/Out Period").
2.2 Except as otherwise provided herein, all Common Stock shall
be sold in "broker's transactions" as that term is defined
in Rule 144 of the Securities and Exchange Commission during
the Lock-Up/Leak-Out Period.
2.3 The Shareholders agree that they will not engage in any
short selling of the Common Stock during the Lock-Up/Leak-
Out Period.
2.4 During the Lock-Up/Leak/Out Period, Piezo shall maintain its
"reporting" status with the Securities and Exchange
Commission; file all reports that are required to be filed
by it during such period; and use its "best efforts" to
ensure that the Common Stock is continually quoted for
public trading on a nationally recognized medium of no less
significance than the OTC Electronic Bulletin Board of the
National Association of Securities Dealers, Inc. (the
"NASD"), the NASDAQ Small Cap or a recognized national stock
exchange.
3. By executing this Agreement, each Shareholder represents
that the Common Stock set forth in his/her/its Counterpart Signature Page is
all of the shares of Piezo Common Stock that such Shareholder beneficially
owns as of the date hereof. In addition to the Common Stock set forth in the
Counterpart Signature Page, this Agreement shall apply to all Piezo Common
Stock of which each Shareholder become the beneficial owner of during the
Lock-Up/Leak-Out Period.
4. Notwithstanding anything to the contrary set forth herein,
Piezo may, in its sole discretion, at any time and from time to time, waive
any of the conditions or restrictions contained herein to increase the
liquidity of the Common Stock or if such waiver would otherwise be in the best
interests of the development of the trading market for the Common Stock.
5. In the event of a tender offer to purchase all or
substantially all of Piezo's issued and outstanding securities, or a merger,
consolidation or other reorganization with or into an unaffiliated entity, and
if the requisite number of the record and beneficial owners of Piezo
securities then outstanding are voted in favor of such tender offer, merger,
consolidation or reorganization, and such tender offer, merger, consolidation
or reorganization is completed, this Agreement shall terminate as of the
closing of such event and the Common Stock restricted pursuant hereto shall be
released from such restrictions.
6. Except as otherwise provided in this Agreement or any other
agreements between the parties, the Shareholders shall be entitled to their
respective beneficial rights of ownership of the Common Stock, including the
right to vote the Common Stock for any and all purposes.
7. The Common Stock and per share price restrictions covered by
this Agreement shall be appropriately adjusted should Piezo make a dividend or
distribution, undergo a forward split or a reverse split or otherwise
reclassify its shares of Common Stock.
8. No transfer of any of the shares of Common Stock that are
subject to this Agreement shall be made in any transaction other than a
"broker's transaction" unless the transferee executes and delivers a copy of
this Agreement prior to the transfer of any stock certificate representing any
of the Common Stock so transferred.
9. This Agreement may be executed in any number of counterparts
with the same force and effect as if all parties had executed the same
document.
10. All notices, instructions or other communications required
or permitted to be given pursuant to this Agreement shall be given in writing
and delivered by certified mail, return receipt requested, overnight delivery
or hand-delivered to all parties to this Agreement, to Piezo, at 0000 Xxxxx
Xxxxxxxx Xxxxx, #000, Xxxx Xxxx xxxx, Xxxx 00000, and to the Shareholders, at
the addresses in their Counterpart Signature Pages. All notices shall be
deemed to be given on the same day if delivered by hand or on the following
business day if sent by overnight delivery or the second business day
following the date of mailing.
11. The resale restrictions on the Common Stock set forth in
this Agreement shall be in addition to all other restrictions on transfer
imposed by applicable United States and state securities laws, rules and
regulations.
12. Piezo or each Shareholder who fails to fully adhere to the
terms and conditions of this Agreement shall be liable to every other party
for any damages suffered by any party by reason of any such breach of the
terms and conditions hereof. Each Shareholder agrees that in the event of a
breach of any of the terms and conditions of this Agreement by any such
Shareholder, that in addition to all other remedies that may be available in
law or in equity to the non-defaulting parties, a preliminary and permanent
injunction, without bond or surety, and an order of a court requiring such
defaulting Shareholder to cease and desist from violating the terms and
conditions of this Agreement and specifically requiring such Shareholder to
perform his/her/its obligations hereunder is fair and reasonable by reason of
the inability of the parties to this Agreement to presently determine the
type, extent or amount of damages that Piezo or the non-defaulting
Shareholders may suffer as a result of any breach or continuation thereof.
13. This Agreement sets forth the entire understanding of the
parties hereto with respect to the subject matter hereof, and may not be
amended except by a written instrument executed by the parties hereto.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah applicable to contracts entered
into and to be performed wholly within said State; and Piezo and the
Shareholders agree that any action based upon this Agreement may be brought in
the United States and state courts of Utah only, and each submits
himself/herself/itself to the jurisdiction of such courts for all purposes
hereunder.
15. In the event of default hereunder, the non-defaulting
parties shall be entitled to recover reasonable attorney's fees incurred in
the enforcement of this Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Agreement as of the day and year first above written.
PIEZO INSTRUMENTS, INC.
Date: September 4. By/s/Xxxxxx Xxxxxxx
Its President
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxx Services, Inc.
(Printed Name)
/s/Xxxx X. Xxxxxx
(Signature)
0000 Xxxxx Xxxxxxxx Xxxxx, #000
(Street Address)
Xxxx Xxxx Xxxx, Xxxx 00000
(City and State)
-0-
(Number of Shares Owned or
Underlying Other Securities)
9/4/03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxxx X. Xxxxxx
(Printed Name)
/s/Xxxxxxx X. Xxxxxx
(Signature)
0000 Xxxxx Xxxxxxxx Xxxxx, #000
(Street Address)
Xxxx Xxxx Xxxx, Xxxx 00000
(City and State)
219,649
(Number of Shares Owned or
Underlying Other Securities)
9-4-03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxx X. Xxxxxx
(Printed Name)
/s/ Xxxxxx X. Xxxxxx
(Signature)
0000 Xxxxxxxxx Xx.
(Xxxxxx Xxxxxxx)
Xxxx Xxxx, Xxxx 00000
(City and State)
60,750
(Number of Shares Owned or
Underlying Other Securities)
9-4-03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxx X. Xxxxxx
(Printed Name)
/s/Xxxxx X. Xxxxxx
(Signature)
0000 Xxxxxxxxx Xx.
(Xxxxxx Xxxxxxx)
Xxxx Xxxx, Xxxx 00000
(City and State)
56,230
(Number of Shares Owned or
Underlying Other Securities)
9/4/03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxxxx X. Xxxxxxxx
(Printed Name)
/s/Xxxxxxxx X. Xxxxxxxx
(Signature)
00000 Xxxxxxxxx Xxxx Xx.
(Xxxxxx Xxxxxxx)
Xxxxxx, Xxxx 00000
(City and State)
5,000
(Number of Shares Owned or
Underlying Other Securities)
9-4-03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxx X. Xxxxxxx
(Printed Name)
/s/ Xxxxxx X. Xxxxxxx
(Signature)
0000 Xxxxxxx Xxxxx
(Xxxxxx Xxxxxxx)
Xxxxx, Xxxx 00000
(City and State)
60,750
(Number of Shares Owned or
Underlying Other Securities)
4 September 2003
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxx X. Xxxxxxxxx
(Printed Name)
/s/ Xxxxx X. Xxxxxxxxx
(Signature)
00 Xxxx Xxxxx
(Xxxxxx Address)
Cody, Wyoming 82414
(City and State)
351,343
(Number of Shares Owned or
Underlying Other Securities)
9-4-03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxxx X. Xxxxxxxxx
(Printed Name)
/s/Xxxxxxx X. Xxxxxxxxx
(Signature)
00 Xxxx Xxxxx
(Xxxxxx Address)
Cody, Wyoming 82414
(City and State)
7,723
(Number of Shares Owned or
Underlying Other Securities)
9-4-03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
W-Group
(Printed Name)
/s/Xxxxx X. Xxxxxxxxx, Attorney in fact
(Signature)
00 Xxxx Xxxxx
(Xxxxxx Address)
Cody, Wyoming 82414
(City and State)
34,620
(Number of Shares Owned or
Underlying Other Securities)
9/4/03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
EADAC Investments
(Printed Name)
/s/ Xxxxx X. Xxxxxxxxx, Beneficial Owner
(Signature)
00 Xxxx Xxxxx
(Xxxxxx Address)
Cody, Wyoming 82414
(City and State)
20,689
(Number of Shares Owned or
Underlying Other Securities)
9/4/03
(Date)
LOCK-UP/LEAK-OUT AGREEMENT
COUNTERPART SIGNATURE PAGE
This Counterpart Signature Page for that certain Lock-Up/Leak-Out
Agreement (the "Agreement") dated as of the 4th day of September, 2003, among
Piezo Instruments, Inc., a Utah corporation ("Piezo"); and certain persons who
are "Shareholders" of Piezo, by which the undersigned, through execution and
delivery of this Counterpart Signature Page, intends to be legally bound by
the terms of the Agreement, as a Shareholder, of the number of shares of Piezo
set forth below or hereafter acquired during the Lock-Up/Leak-Out Period as
defined in the Agreement.
Xxxxxxx X. Xxxxxxxxxx, Esq.
(Printed Name)
/s/ Xxxxxxx X. Xxxxxxxxxx
(Signature)
000 Xxxx 000 Xxxxx, #000
(Xxxxxx Address)
Xxxx Xxxx Xxxx, Xxxx 00000
(City and State)
55,586
(Number of Shares Owned or
Underlying Other Securities)
9/5/03
(Date)
Schedule 1.7.1
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (the "Agreement") is made as of the 4th day of
September, 2003, by and between Piezo Instruments, Inc., a Utah corporation
("Piezo"); Xxxxxx Services, Inc., a Utah corporation ("Xxxxxx Services"); and
Xxxxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx
and Xxxxx X. Xxxxxx, Xxxxxx Services' principals and/or employees or
consultants, and Xxxxxxx X. Xxxxxxxxxx, Esq., its legal counsel, who have and
will be rendering the services covered by this Agreement (collectively, the
"Consultants").
RECITALS
WHEREAS, Xxxxxx Services is a financial consulting firm that has
substantial expertise in advising private and public companies respecting
business plans, corporate structure, reorganization, acquisitions and mergers;
and
WHEREAS, Xxxxxx Services, by and through its Consultants, desires to
render services for and on behalf of Piezo; and
WHEREAS, Piezo desires to engage the services of Xxxxxx Services, by and
through its Consultants, and
WHEREAS, Piezo has provided Xxxxxx Services and the Consultants with
access to all material information concerning its organization, financial
condition, management, present and intended business operations or other
available information and has made its directors and executive officers
available to answer questions posed by Xxxxxx Services and the Consultants
regarding such information; and
WHEREAS, Xxxxxx Services and the Consultants are "accredited investors"
as that term in defined under Regulation D of the Securities and Exchange
Commission and have had access to all material information concerning Piezo,
its organization, financial condition, management, present and intended
business operations and other available information, and have had the
opportunity to ask questions of Piezo's directors and executive officers with
respect to such information and that all questions posed have been answered to
their complete satisfaction; and
WHEREAS, the parties desire to execute this Agreement to cover
compensation for these services that have and will be rendered by the
Consultants, and which Agreement shall have no affect on any other written
arrangements, written agreements or other written understandings between
Xxxxxx Services, the Consultants and Piezo whatsoever;
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants hereinafter set forth and the benefits to the parties to be derived
there from, it is hereby agreed as follows:
1. Services and Costs. The Consultants are hereby retained by Piezo
to serve as independent Consultants to provide advice and services
to Piezo in connection with the foregoing recitation of services
and related non-capital raising services, to the maximum of an
aggregate of 30 hours during the term hereof, and shall be
designated by Xxxxx X. Xxxxxx of Xxxxxx Services. All direct out
of pocket costs incurred by the Consultants during the terms
hereof shall be paid by Piezo; provided, however, any individual
costs in excess of $100 shall be first approved by the Chief
Executive Officer of Piezo. The Consultants agree to provide such
services to Piezo as Piezo may from time to time reasonably
request, including, without limitation, advice and services with
respect to those matters as to which they have special competence
by reason of their business experience, knowledge, and abilities.
Xxxxxx Services shall make the Consultants available during
reasonable business hours to perform all services reasonably
requested by Piezo under this Agreement, with the exception of
Xxxxxx Services's counsel, Xxxxxxx X. Xxxxxxxxxx, Esq., whose
services shall only relate to advice to or for the benefit of
Xxxxxx Services in providing the services covered hereby, and the
preparation and filing of the S-8 Registration Statement refered
to in Section 3 hereof.
2. Term. This Agreement shall remain in full force and effect for a
period of six months from the Closing of the Agreement and Plan of
Reorganization between Piezo and Omni Medical Holdings, Inc.
3. Compensation. Piezo shall pay, and Consultants shall accept, a
fee of 293,104 shares of Piezo common stock, all to be issued
pursuant to a Registration Statement on Form S-8 to be filed as
soon as practicable following the confirmation that the
reorganized Piezo is current in its filings with the Securities
and Exchange Commission. These shares shall be issued as follows:
Xxxxxxxx X. Xxxxxxxx 5,000
00000 Xxxxxxxxx Xxxx Xxxx
Xxxxxx, Xxxx 00000
Xxxxxx X. Xxxxxxx 29,500
0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxx X. Xxxxxx 29,500
0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxx X. Xxxxxx 31,250
0000 Xxxxx Xxxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxx X. Xxxxxx 188,399
0000 Xxxxx X xxxxxxx Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Xxxxxxx X. Xxxxxxxxxx, Esq. 25,000
000 Xxxx 000 Xxxxx, #000
Xxxx Xxxx Xxxx, Xxxx 00000
Total: 293,104
4. Independent Contractors. Xxxxxx Services and the Consultants are
retained under the terms of this Agreement as independent
contractors and nothing herein shall be construed as creating an
employer/employee relationship between the parties or their
principals or employees. Xxxxxx Services and the Consultants
shall be solely liable for the payment of any taxes imposed or
arising out of the payment of the compensation to it by Piezo as
set forth in this Agreement.
5. Termination for Cause. Piezo may not terminate this Agreement
during its term without cause which shall be established by
showing one or more of the following:
x. Xxxxxx Services or the Consultants have materially breached
the terms of this Agreement and, as a result, Piezo has
suffered damages;
x. Xxxxxx Services or the Consultants, in the determination of
the Board of Directors of Piezo, have been grossly negligent
in the performance of their duties hereunder;
x. Xxxxxx Services or the Consultants have substantially failed
to perform the duties requested in writing by Piezo, on
action by the Board of Directors, under the terms of this
Agreement after 10 days written notice setting forth the
details of such alleged substantial failure; or
x. Xxxxxx Services or the Consultants have engaged in material,
willful, or gross misconduct in the performance of its
duties hereunder.
No termination under this Section shall have any affect on the
fees that are payable to the Consultants hereunder, and all shares
allocated to each of the Consultants hereunder shall vest and be
payable to the Consultants under this Agreement, without
qualification.
6. Lock-Up/Leak-Out Agreement. Piezo is contemplating a
reorganization with Omni Medical Holdings, Inc., a publicly-held
Nevada corporation ("Omni"), and the Shareholders have each agreed
to execute and deliver the Lock-Up/Leak-Out Agreement that is
attached hereto as Exhibit A and incorporated herein by reference
as a condition subsequent to the issuance of the securities of
Piezo hereunder, in the event of the closing of this
reorganization.
7. Nondisclosure of Information. Xxxxxx Services and the Consultants
agree that during the term of this Agreement, none will, directly
or indirectly, disclose to any person not authorized by Piezo to
receive or use such information, any of Piezo's confidential or
proprietary data, information, or techniques, or give to any
person not authorized by Piezo to receive it any information that
is not generally known to anyone other than Piezo or that is
designated by Piezo as "limited," "private," "confidential," or
otherwise marked to indicate its confidential nature.
8. Assignment. This Agreement may not be assigned by either party
without the prior written consent of the other party.
9. Entire Agreement. Except as indicated in the recitation at the
forefront of this Agreement, this Agreement supersedes any and all
other agreements, oral or written, between the parties with
respect to the subject matter hereof, and no other agreement,
statement or promise relating to the subject matter of this
Agreement which is not contained or referred to herein shall be
valid or binding.
10. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Utah, and
any action brought by any party to this Agreement shall only be
maintained in the federal and state court situated in Salt Lake
County, Utah.
11. Severability. If, and to the extent that, any court of competent
jurisdiction holds any provision of this Agreement to be invalid
or unenforceable, such holding shall in no way affect the validity
of the remainder of this Agreement.
12. Waiver. No failure by any party to insist on the strict
performance of any covenant, duty, agreement, or condition of this
Agreement, or to exercise any right or remedy consequent on a
breach thereof, shall constitute a waiver of any such breach or
any other covenant, agreement, term, or condition.
13. Default. In the event of any default hereunder, the non-
defaulting party shall be entitled to recover reasonable
attorney's fees and related costs in the enforcement of this
Agreement.
14. Current Status of Reports of Piezo. Following the closing of the
Agreement and Plan of Reorganization between Piezo and Omni
Medical Holdings, Inc., Piezo shall do everything in its power and
use its best efforts to immediately file all information with the
Securities and Exchange Commission that would assist the Company
in being deemed to be "current" in the filing of its reports that
are required to have been filed by it during the previous twelve
months, without qualification.
PIEZO INSTRUMENTS, INC.
Dated: September 8, 2003 By/s/Xxxxxx X. Xxxxx
Its President
XXXXXX SERVICES, INC.
Dated: September 4, 2003 By/s/ Xxxxx X. Xxxxxx
Its Chief Executive Officer
CONSULTANTS
Dated: September 4, 2003 /s/Xxxxxxxx X. Xxxxxxxxx
Xxxxxxxx X. Xxxxxxxx
Dated: September 4, 2003 /s/Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Dated: September 4, 2003 /s/Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Dated: September 4, 2003 /s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Dated: September 4, 2003 /s/Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Dated: September 5, 2003 /s/Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxx, Esq.
