REORGANIZATION AND STOCK PURCHASE AGREEMENTE
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This REORGANIZATION AND STOCK PURCHASE AGREEMENT (the "Agreement") is
effective as of the 1st day of February, 2004, by and between Single Source
Financial Services Corporation, a New York corporation ("Issuer"), certain
shareholders of the Issuer listed on Exhibit K attached hereto (the "Control
Shareholders"), Bio-Solutions Manufacturing, Inc., a Nevada corporation ("BSM"),
and the shareholders of BSM listed in Exhibit A attached hereto (the "BSM
Shareholders"). The Issuer, Control Shareholders, BSM, and the BSM Shareholders
shall each sometimes be referred to as a "Party" and collectively as the
"Parties."
In consideration of the mutual promises, covenants, and representations
contained herein, and other good and valuable consideration,
THE PARTIES HERETO AGREE AS FOLLOWS:
1. EXCHANGE OF SECURITIES. Subject to the terms and conditions of this
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agreement, the Issuer agrees to issue to the BSM Shareholders an aggregate of
Twelve Million Six Hundred Forty-Five Thousand (12,645,000) shares of the common
stock of the Issuer, par value $0.001 per share (the "Issuer Shares"), in
exchange for 100% of the issued and outstanding shares of BSM, which is Twelve
Million Six Hundred Forty-Five Thousand (12,645,000) shares of common stock (the
"BSM Shares"), such that BSM shall become a wholly-owned subsidiary of the
Issuer. In the stock exchange, each of the BSM Shares will be exchanged for one
(1) of the Issuer Shares. In addition, the Issuer agrees to replace those BSM
warrants listed on Exhibit A with warrants to purchase the same number of shares
of Issuer's common stock on substantially similar terms or such other terms as
Issuer and such warrant holders shall agree (the "Issuer Warrants"). The Issuer
Shares and Issuer Warrants will be placed in escrow and be subject to an escrow
agreement attached as referenced in Section 4.
2. REPRESENTATIONS AND WARRANTIES OF ISSUER AND THE CONTROL SHAREHOLDERS.
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Issuer and the Control Shareholders represent and warrant, to the best of their
knowledge, to BSM and the BSM Shareholders the following:
i. Organization. Issuer is a corporation duly organized, validly
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existing, and in good standing under the laws of the State of New
York, and has all necessary corporate powers to own properties and
carry on its business, and is duly qualified to do business and is in
good standing in the State of New York and the State of California.
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ii Capital. The authorized capital stock of Issuer consists of One
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Hundred Million (100,000,000) shares of common stock, par value $0.001
per share, of which One Million One Hundred Fifty-Five (1,000,155)
shares are issued and outstanding, and Ten Million (10,000,000) shares
of preferred stock, par value $0.001 per share, none of which are
issued or outstanding. All outstanding shares are fully paid and
non-assessable, and are free of liens, encumbrances, options,
restrictions and legal or equitable rights of others not a party to
this Agreement. Except for the Issuer Warrants or as listed on Exhibit
B attached hereto, (i) at Closing (as defined in Section 9 below)
there will be no outstanding subscriptions, options, rights, warrants,
convertible securities, or other agreements or commitments obligating
Issuer to issue or to transfer from treasury any additional shares of
its capital stock, except as required under the terms of the Debt
Conversion Agreement referred to in Exhibit D and (ii) immediately
following the Closing there will be Thirteen Million Six Hundred
Forty-Five Thousand One Hundred and Fifty-Five (13,645,155) shares of
common stock of the Issuer issued and outstanding, of which Twelve
Million Six Hundred Forty-Five Thousand (12,645,000) will be newly
issued shares issued as a part of the Closing. None of the outstanding
shares of Issuer, prior to Closing, are subject to any stock
restriction agreements.
iii Financial Statements. Exhibit C to this Agreement includes the
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current balance sheet of Issuer, and the related statements of
income and retained earnings as of and for the fiscal year ended
October 31, 2003 (the "Financial Statements"). The Financial
Statements have been prepared in accordance with generally
accepted accounting principles consistently followed by Issuer
throughout the periods indicated, and fairly present the
financial position of Issuer as of the date of the balance sheet
and the Financial Statements, and the results of its operations
for the periods indicated.
iv Absence of Changes. Since the date of the Financial Statements,
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there has not been any change in the financial condition or
operations of Issuer, except changes in the ordinary course of
business, which changes have not in the aggregate been materially
adverse.
v. Liabilities. Except as listed on Exhibit D attached hereto,
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Issuer does not have any debt, liability, or obligation of any
nature, whether accrued, absolute, contingent, or otherwise, and
whether due or to become due. Any current or long-term
liabilities that the Issuer has as of the Closing Date (as
defined in Section 9 below) and that are not listed on Exhibit
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D attached hereto will be transferred to Single Source Electronic
Transactions, Inc. ("SSET") at the Closing. Except as listed on
Exhibit D, Issuer is not aware of any pending, threatened or
asserted claims, lawsuits or contingencies involving Issuer or
its common stock. Except as listed on Exhibit D, there is no
known dispute of any kind between the Issuer and any third party,
and no such known dispute will exist at the Closing. At Closing,
Issuer will be free from any and all liabilities, liens, claims
and/or commitments ("Liabilities"), except those set forth in
Exhibit D, or in the ordinary course of its business, provided
however, any such Liabilities will be paid by the Controlling
Shareholders at or prior to Closing. All expenses related to
performance of the obligations in the Spin-Off Agreement
described in Section 6 below will be the responsibility of, and
paid for by, the Control Shareholders.
vi. Ability to Carry Out Obligations. Issuer and each Control
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Shareholder has the right, power, and authority to enter into and
perform his or its obligations under this Agreement. The
execution and delivery of this Agreement by Issuer and the
performance by Issuer of its obligations hereunder will not
cause, constitute, or conflict with or result in (a) any breach
or violation or any of the provisions of or constitute a default
under any license, indenture, mortgage, charter, instrument,
articles of incorporation, bylaw, or other agreement or
instrument to which Issuer or its shareholders are a party, or by
which they may be bound, nor will any consents or authorizations
of any party other than those hereto be required, (b) an event
that would cause Issuer to be liable to any party, or (c) an
event that would result in the creation or imposition or any
lien, charge or encumbrance on any asset of Issuer or upon the
securities of Issuer to be acquired by the BSM Shareholders.
vii Compliance with Laws. Issuer has complied with and is not in
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violation of any federal, state, or local statute, law, and/or
regulation pertaining to Issuer. Issuer has complied with all
federal and state securities laws in connection with the
issuance, sale and distribution of its securities.
viii Litigation. Except as listed in Exhibit D, Issuer is not a party
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to any suit, action, arbitration, or legal, administrative or
other proceeding, or pending governmental investigation. There is
no basis for any such action or proceeding and no such action or
proceeding is threatened against Issuer and Issuer is not subject
to or in default with respect to any order, writ, injunction, or
decree of any federal, state, local, or foreign court,
department, agency, or instrumentality. Except as
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provided in Section 8 below, the payment of the settlement amount
and all expenses related to any litigation listed on Exhibit D
will be the responsibility of, and paid for by, the Control
Shareholders.
ix. Absence of Certain Changes. Except as set forth in Exhibit E
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attached hereto, or as specifically contemplated in this
Agreement, since October 31, 2003, the Issuer and its
subsidiaries have not:
(1) suffered any material adverse change in its working capital,
financial condition, assets, liabilities, business, or prospects,
or suffered any material casualty loss (whether or not insured);
(2) made any change in business operations or in the manner of
conducting business inconsistent with past practice;
(3) except as listed on Exhibit H attached hereto, paid, discharged
or satisfied any claim, lien, encumbrance or liability other than
in the ordinary course of business and consistent with past
practice;
(4) other than in the ordinary course of its business, paid, made, or
set aside for payment any distribution in respect of its
shareholders or directly or indirectly redeemed, purchased or
otherwise acquired any shares of its capital stock;
(5) made any change in any method of accounting or accounting
practice;
(6) granted any increase in compensation of any officer, employee, or
agent of the Issuer or any of its subsidiaries; or
(7) except as listed on Exhibit H, entered into, amended or
terminated any material contract, agreement or license to which
the Issuer or any of its subsidiaries is a party.
x. Corporate Documents. If not previously provided, copies of all
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corporate documents in the possession of Issuer shall be
delivered to BSM simultaneously with the execution of this
Agreement.
xi. Material Contracts. All material contracts, agreements,
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commitments, and instruments to which the Issuer and/or any of
its subsidiaries are subject and by which they are bound are
listed in Exhibit H and true and correct copies thereof have been
provided to BSM and the BSM Shareholders. All such contracts are
in full force and effect, there have been no
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cancellations thereof, there are no outstanding disputes
thereunder, and there does not exist any default in any material
respect, or event which is a breach in any material respect, of
the terms of such contract.
xii. Tax Returns. Issuer and all of its subsidiaries have filed, with
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appropriate governmental authorities, all tax and related returns
required to be filed, and such returns adequately reflect all
taxes payable, copies of which shall be provided upon the signing
of this Agreement. However, one of Issuer's subsidiaries, SSFS
Merchant Services, Inc. ("SSFSM"), has never obtained a Federal
Employer Identification Number, has never had any revenues and
has never filed tax returns, while another one of Issuer's
subsidiaries, CardReady of New York, Inc. ("CRNY"), has never had
any revenues and has never filed tax returns. All federal, state,
local, county, franchise, sales, use, excise, property, and other
taxes payable have been paid, and no reserves for unpaid taxes
have been set up or are required.
xiii. Title. The Issuer Shares will be, at Closing, free and clear of
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all liens, security interests, pledges, charges, claims,
encumbrances and restrictions of any kind except as imposed under
the terms of this Agreement and under federal and applicable
state securities laws, and all such shares shall bear the
restrictive legend in Section 3.B.i.(2) below. None of the Issuer
Shares are or will be subject to any voting trust or agreement.
No person holds or has the right to receive any proxy or similar
instrument with respect to such shares, and, except as provided
in this Agreement, the Issuer is not a party to any agreement
which offers or grants to any person the right to purchase or
acquire any of the Issuer Shares. There is no applicable local,
state or federal law, rule, regulation, or decree, that Issuer is
currently aware of, which would, as a result of the issuance of
the Issuer Shares to the BSM Shareholders, impair, restrict or
delay the BSM Shareholders' voting rights with respect to the
Issuer Shares (provided that the BSM Shareholders file the
required statement under Rule 13d-1 of the regulations under the
Securities Exchange Act of 1934). At Closing, the Issuer Shares
will be placed in escrow in accordance with Section 4 below.
xiv Insurance. Neither the Issuer nor any of its subsidiaries are
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insureds under any insurance policies.
xv. Brokers, Finders. No agent, broker, investment banker, person, or
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firm acting on behalf of the Issuer or any of its subsidiaries is
or will be entitled to any broker's or finder's fee or any
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other commission or similar fee directly or indirectly in
connection with the transactions contemplated hereby.
xvi Disclosure. Neither this Agreement nor any schedule, exhibit,
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list, certificate or other instrument or document delivered to
BSM pursuant to this Agreement by or on behalf of the Issuer or
any of its subsidiaries, contains any untrue statement of a
material fact or omits to state any material fact required to be
stated herein or therein to make the statements, representations
or warranties and information contained herein or therein not
misleading. The Issuer acknowledges that it is a reporting
company under the Securities Exchange Act of 1934.
3. REPRESENTATIONS AND WARRANTIES OF BSM AND THE BSM SHAREHOLDERS.
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A. BSM represents and warrants, to the best of its knowledge, to the Issuer
and the Control Shareholders the following:
i. Organization. BSM is a corporation duly organized, validly
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existing, and in good standing under the laws of Nevada, has all
necessary corporate powers to own properties and carry on a
business, and is duly qualified to do business and is in good
standing in Nevada.
ii. Shareholders. Exhibit A attached hereto correctly sets forth the
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names and holdings of the BSM Shareholders. Except as listed on
Exhibit A, (i) there are no shares of capital stock of BSM issued
and outstanding and (ii) there are no warrants, options or other
rights of any kind in existence with respect to the future
issuance of any capital stock of BSM. All warrants to purchase
shares of BSM that are listed on Exhibit A will be canceled at
the Closing and replaced with the Issuer Warrants.
iii. Litigation. BSM is not a party to any suit, action, arbitration,
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or legal, administrative, or other proceeding or pending
governmental investigation. To the best knowledge of BSM, there
is no basis for any such action or proceeding and no such action
or proceeding is threatened against BSM and BSM is not subject to
or in default with respect to any order, writ, injunction, or
decree of any federal, state, local, or foreign court,
department, agency, or instrumentality.
iv Tax Returns. BSM and all of its subsidiaries have filed, with
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appropriate governmental authorities, all tax and related returns
required to be filed, and such returns adequately
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reflect all taxes payable. All federal, state, local, county,
franchise, sales, use, excise, property, and other taxes
payable have been paid, and no reserves for unpaid taxes have
been set up or are required.
v Ability to Carry Out Obligations. BSM has the right, power, and
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authority to enter into and perform its obligations under this
Agreement. The execution and delivery of this Agreement by BSM
and the performance by BSM of its obligations hereunder will not
cause, constitute, or conflict with or result in (a) any breach
or violation of any of the provisions of or constitute a default
under any license, indenture, mortgage, charter, instrument,
articles of incorporation, bylaw, or other agreement or
instrument to which BSM or its shareholders are a party, or by
which they may be bound, nor will any consents or authorizations
of any party other than those hereto be required, (b) an event
that would cause BSM to be liable to any party, or (c) an event
that would result in the creation or imposition or any lien,
charge or encumbrance on any asset of BSM or upon the BSM Shares.
vi Material Contracts. All material contracts, agreements,
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commitments, and instruments to which BSM is subject and by which
it is bound are in full force and effect, there have been no
cancellations thereof, there are no outstanding disputes
thereunder, and there does not exist any default in any material
respect or event, which is a breach in any material respect of
the terms of such contract, commitments and instruments.
vii Brokers, Finders. No agent, broker, investment banker, person, or
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firm acting on behalf BSM is or will be entitled to any broker's
or finder's fee or any other commission or similar fee directly
or indirectly in connection with the transactions contemplated
hereby.
B. The BSM Shareholders represent and warrant, to the best of their
knowledge, to the Issuer and the Control Shareholders the following:
i. Securities Law Matters.
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(1) The BSM Shareholders are acquiring the Issuer Shares and Issuer
Warrants for their own account for investment only and not with a view
towards, or in connection with, the public sale or distribution
thereof, except pursuant to sales registered, or exempt from
registration, under the Securities Act of 1933 (the "1933 Act") and
applicable state securities laws. The BSM Shareholders shall offer,
sell, pledge,
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hypothecate or otherwise transfer the Issuer Shares and Issuer
Warrants only pursuant to registration under the 1933 Act and
applicable state securities laws or an exemption from registration
under the 1933 Act and any applicable state securities laws. The BSM
Shareholders (i) have such knowledge and experience in financial and
business matters that they are capable of evaluating the merits and
risks of an investment in the Issuer and (ii) are aware that an
investment in the Issuer Shares and Issuer Warrants involves a high
degree of risk and that they may be required to bear such risk for an
indefinite period of time, and that they are able to bear such risk.
The BSM Shareholders understand that the Issuer Shares and Issuer
Warrants are being offered and exchanged in reliance on specific
exemptions from the registration requirements of federal and
applicable state securities laws, and that the Issuer is relying upon
the truth and accuracy of, and the BSM Shareholders' compliance with,
their representations, warranties and agreements herein in order to
determine the availability of such exemptions and the eligibility of
the BSM Shareholders to acquire the Issuer Shares and Issuer Warrants.
The BSM Shareholders and their advisors, if any, have been (i)
furnished with all materials relating to the business, finances and
operations of the Issuer and the offer and exchange of the Issuer
Shares and Issuer Warrants that they have requested and (ii) afforded
the opportunity to ask all questions of the Issuer as they have in
their discretion deemed advisable. The BSM Shareholders have sought
such accounting, legal and tax advice as they have considered
necessary to make an informed investment decision with respect to
their acquisition of the Issuer Shares and Issuer Warrants.
(2) The BSM Shareholders understand that the stock certificates and
documents representing the Issuer Shares and Issuer Warrants will bear
a restrictive legend in substantially the following form:
THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE "LAWS").
THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF EITHER (I) AN EFFECTIVE
REGISTRATION
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STATEMENT FOR THE SECURITIES UNDER THE LAWS OR (II) AN
OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE
AND SCOPE REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT
THAT REGISTRATION IS NOT REQUIRED UNDER THE LAWS DUE TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE LAWS.
ii Title. The BSM Shares will be, at Closing, free and clear of all
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liens, security interests, pledges, charges, claims, encumbrances and
restrictions of any kind except as imposed under federal and
applicable state securities laws, and all such shares shall bear an
appropriate restrictive legend. None of the BSM Shares are or will be
subject to any voting trust or agreement. No person holds or has the
right to receive any proxy or similar instrument with respect to such
shares and the BSM Shareholders are not a party to any agreement which
offers or grants to any person the right to purchase or acquire any of
the BSM Shares. There is no applicable local, state or federal law,
rule, regulation, or decree which would, as a result of the delivery
of the BSM Shares to the Issuer, impair, restrict or delay Issuer's
voting rights with respect to the BSM Shares.
iii Brokers, Finders. No agent, broker, investment banker, person, or firm
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acting on behalf of the BSM Shareholders is or will be entitled to any
broker's or finder's fee or any other commission or similar fee
directly or indirectly in connection with the transactions
contemplated hereby.
4. ESCROW AGREEMENT. At Closing, the Issuer Shares and Issuer Warrants will
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be placed in escrow under the terms of an escrow agreement attached hereto as
Exhibit G (the "Escrow Agreement"). The Issuer Shares and Issuer Warrants are
being placed in escrow to ensure compliance with certain obligations under
Sections 6 and 7 below (all of the foregoing being collectively referred to as
the "Obligations"). The Issuer Shares and Issuer Warrants will only be released
from escrow and delivered to the BSM Shareholders as provided in the Escrow
Agreement. While the Issuer Shares are in escrow, the BSM Shareholders will have
the right to vote the Issuer Shares as provided in the Escrow Agreement, if
necessary, but will not have the right to sell, assign, pledge, hypothecate or
otherwise transfer the Issuer Shares. If the Obligations are not complied with
as set forth in the Escrow Agreement,
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then the Issuer Shares will be transferred to the Control Shareholders (in
accordance with a validly executed stock power, with an appropriate Medallion
guarantee, that will be held in escrow with the Issuer Shares) and the Issuer
Warrants will be canceled. In the event that the Obligations are not complied
with as set forth in the Escrow Agreement and the Issuer Shares are transferred
to the Control Shareholders, then the BSM Shares transferred to the Issuer under
the terms of this Agreement will be returned to the BSM Shareholders.
5. CONTROL OF ISSUER. After the Closing, BSM and the BSM Shareholders, as
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the holders of a majority of the Issuer's common stock, agree that while the
Issuer Shares are subject to the Escrow Agreement, they will not allow or cause
any shares of Issuer to be issued that will result in the Issuer Shares
representing less than fifty-one percent (51%) of the outstanding voting
securities of the Issuer (with all persons and entities being issued shares of
Issuer after Closing to be made aware of the requirement to transfer any
distribution of SSET shares as provided in Section 6 below).
6. SPIN-OFF AGREEMENT.
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i BSM Undertakings. BSM has been fully informed by the Issuer that The
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Issuer and SSET have entered into a Spin-Off Agreement in the form
attached as Exhibit F (the "Spin-Off Agreement"). BSM agrees to
fulfill the obligations of the Issuer and SSET (while it is a
subsidiary of the Issuer) under the Spin-Off Agreement, and
acknowledge that, under the terms of the Spin-Off Agreement, (i) the
Issuer will be distributing all of its shares in SSET on a pro rata
basis to those shareholders of the Issuer determined as of the record
date set for such distribution (the "SSET Spin-Off"), with SSET having
previously become a publicly traded company, and (ii) the Issuer
and/or SSET must take certain actions in order to complete such
distribution. The BSM Shareholders acknowledge that they have read and
understand the obligations of the Issuer and SSET under the Spin-Off
Agreement. BSM acknowledges and agrees that if, after Closing, they
take any action, or fail to take any action reasonably requested in
writing by the Control Shareholders, where such act or omission
prevents or otherwise interferes with Issuer's and/or SSET's ability
to comply with the terms of this Agreement and/or the Spin-Off
Agreement, then, provided that such action or inaction is not caused
by the Control Shareholders failure to pay for the action or inaction,
such failure may trigger the rescission provisions of the Escrow
Agreement. If the SSET Spin-Off does not occur within six (6) months
after the Closing Date, upon request of the Control Shareholders, BSM
shall, at the cost and expense
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of the Control Shareholders, then promptly do everything required in
order for the Issuer to sell all of its shares in SSET, CRNY and SSFSM
to the Control Shareholders for all such shares, the sum of One
($1.00) Dollar.
ii Payment of Expenses. The parties agree that all fees and expenses
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incurred by the Issuer and SSET in order to fulfill their obligations
under the Spin-Off Agreement will be paid by the Control Shareholders.
The Control Shareholders shall select, at their cost and expense such
counsel, accountants and other service providers as they shall deem
necessary to effect the Spin-Off and shall be available for review of
the work performed to complete the Spin-Off, with the intent of
delivering final documents to the officers and directors of the Issuer
for review. All fees and expenses of SSET and the Issuer, including
but not limited to legal (including review by Issuer's counsel) and
accounting (including review by Issuer's accountants), printing,
delivery expense, stock certificate/transfer services and filing fees,
as well as incremental costs of the Issuer, including but not limited
to legal and accounting costs related to the period of time that the
subsidiaries are under the control of the Issuer. The payment of the
fees and expenses shall be personally guaranteed by the Control
Shareholders and shall be paid within the time period stated by the
service providers. The Spin-Off shares shall not be released from
escrow to the Control Shareholders or their designees until all fees
and expenses known or existing as of the date the Spin-Off shares are
received into escrow have been paid. Ten (10) days after receipt of
the Spin-Off shares into escrow, provided all known or existing
expenses as described in this paragraph are fully paid or provided for
by payment to BSM by the Controlling Shareholders of the amount due,
the Spin-Off Shares will be distributed to the Control Shareholders or
their designees.
iii a. Distribution of Dividend Shares. Following completion of the SSET
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Spin-Off and after payment of the amount of any tax liability as
determined in sub-paragraph b, below, in consideration of the payment
of a total of One ($1.00) Dollar, each BSM Shareholder agrees to
transfer all of the shares of SSET that such BSM Shareholder received
in the SSET Spin-Off to such persons and in such amounts as are
designated by the Control Shareholders (with the Control Shareholders
to reimburse the BSM Shareholders for any "Adverse Tax Consequences",
as provided in sub-paragraph b, below, relating to and resulting from
such transfer). At the time of such transfer, such SSET shares shall
be free and clear of any liens, encumbrances or restrictions created
by the
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BSM Shareholders. In addition, immediately after completion of the
SSET Spin-Off, the Issuer and BSM agree to cause all other persons and
entities who were issued shares of the Issuer between the Closing Date
and the record date for the SSET Spin-Off to transfer all SSET shares
distributed to such persons and entities to such persons and in such
amounts as are designated by the Control Shareholders in consideration
of the payment of a total of One ($1.00) Dollar for all such persons
or entities (with the Control Shareholders to reimburse such persons
and entities for any adverse tax consequences relating to or resulting
from such transfer).
b. Adverse Tax Consequences. For purposes of this Agreement, the term
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"Adverse Tax Consequences" shall be any actual tax liability incurred,
or that would be incurred even if no tax recognition event has
occurred as of the date of distribution of the Spin-Off Shares to the
Control Shareholders or their designees ("Liability"), to (1) the BSM
Shareholders, (2) the purchasers of the Control Shares and (3) those
shareholders issued shares, other than as the result of a purchase in
the public market, subsequent to the date of this Agreement
(collectively referred to in this paragraph as the "Shareholders") as
a result of the Spin-Off only as described in this Section. If the
distribution of the Spin-Off shares causes a reduction in the cost
basis of the SSFS shares, then that reduction in cost basis shall be
deemed an Adverse Tax Consequence and the Shareholders shall be paid
the Liability in an amount equal to the then prevailing capital gains
tax rate, which is currently Fifteen (15%) Percent, of the reduction
in such basis. If the distribution is determined to be taxable as a
dividend, that treatment of the dividend shall be deemed an Adverse
Tax Consequence, and the Shareholders shall be paid the Liability at
the then prevailing tax rate , which is presently Fifteen (15%)
Percent. If the distribution is determined to be taxable as ordinary
income or any other classification of income, that treatment as
ordinary income or any other classification of income, shall be deemed
an Adverse Tax Consequence, and the Shareholders shall be paid the
Liability at the tax rate applicable to such ordinary income or other
classification equal to the Shareholder's combined federal, state and
local tax rate for the previous year; provided the information needed
to calculate the amount due is provided to the Issuer within ten (10)
days from the date on which notice of the amount and nature of the
taxable event is sent to the Shareholder. The Issuer must send such
notice within three (3) days of such "ordinary income/other income
classification" determination by the Issuer's auditor. If the
Shareholder, for any reason, does not provide the information needed
to determine the amount of the Liability within ten (10) days, the
Shareholder will be paid the Liability at the rate of Thirty Percent
(30%). Prior to the delivery of the Spin-Off shares to the Control
Shareholders or their designees, the amount of the Liability for all
the Shareholders ("Total Liability") determined under this Section
shall be paid to the Escrow Agent for distribution to the
Shareholders. The determination of the Total Liability shall be
determined by the Issuer's auditor, at the sole expense of the Control
Shareholders. The Issuer's auditor shall be required by the Issuer to
make written determination of the Total Liability no later than thirty
(30) days prior to the planned distribution date of the Spin-Off
shares. If the Issuer's auditor determines the Total Liability is
Sixty Thousand ($60,000) or less, then the Control Shareholders shall
not have
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objection rights. In the event the Total Liability exceeds Sixty
Thousand ($60,000) dollars, the Control Shareholders shall have the
right to object to the valuation by written notice to the Issuer's
auditor within five (5) days of receipt of written notice from the
Issuer or the Issuer's auditor of the amount of the Total Liability.
In the event of an objection, the Control Shareholders' certified
public accountant, within thirty (30) days of receipt by the Control
Shareholders of the notice of the amount of the Total Liability from
the Issuer or the Issuer's auditor, at the Control Shareholders sole
expense, shall make its determination of the valuation of the Total
Liability and notify the Issuer and the Issuer's auditor, in writing,
of the amount of its determination. The respective Total Liability
valuations of the Issuer's auditor and of the Control Shareholders'
certified public accountant shall then be added and divided by two (2)
and the resulting average shall be the determination of the valuation
of the Total Liability for the purposes of this Section. Within seven
(7) days of receipt of the determination of the Total Liability, the
Control Shareholders shall then pay to the Escrow Agent the Total
Liability so determined, based on the above. If the actual tax
liability finally determined by the Internal Revenue Service for any
Shareholder exceeds that Shareholder's share of the Total Liability
payment received from the Escrow Agent ("Excess"), then any such
Shareholder shall, upon notice and proof to the Control Shareholders,
receive from the Control Shareholders payment for the amount of the
Excess. The Control Shareholders personally guarantee payment of the
amount of the Excess to all Shareholders who provide notice and proof
to the Control Shareholders of an Excess.
iv Officers and Directors of Subsidiaries. BSM agrees that it shall not
--------------------------------------
take any action (and shall not cause the Issuer, SSET, CRNY or SSFSM
to take any action) that would cause any change in the officers and
directors of SSET, CRNY and SSFSM prior to the SSET Spin-Off without
the prior written consent of the Control Shareholders, which consent
shall not be unreasonably withheld. Prior to the SSET Spin-Off, BSM
shall take all legally permissible actions requested by the Control
Shareholders, at the sole cost and expense of the Control
Shareholders, in order to maintain the boards of directors and
officers of SSET, CRNY and SSFSM as designated by the Control
Shareholders.
v Action by the Control Shareholders. The Control Shareholders in their
----------------------------------
individual capacity shall not cause or permit the directors and
officers of SSET, CRNY and SSFSM to take any action that may in any
manner be detrimental to the Issuer, BSM and/or the BSM Shareholders.
In the event SSET, CRNY and SSFSM takes any such detrimental action,
the Control Shareholders shall indemnify and hold harmless the Issuer,
BSM and the BSM Shareholders for any damages, costs or expenses they
may incur as a result of such detrimental action.
Page 17 of 59
7. TRANSFER OF CARDREADY OPTION. BSM has been fully informed by the Issuer
----------------------------
that the Issuer and SSET have entered into an Option Assignment Agreement with
CardReady International, Inc. ("CardReady") and MBBRAMAR, Inc. ("MBB") in the
form of the attached Exhibit I (the "Assignment Agreement"). The BSM
Shareholders and BSM acknowledge that, under the terms of the Assignment
Agreement, (i) the Issuer has canceled its previous exercise of its option to
purchase shares of CardReady from MBB (the "Option"), (ii) the Issuer has
assigned all of its rights and obligations under the Option to SSET and (iii) in
the future, SSET, CardReady and MBB will renegotiate the terms of the Option in
such manner as they may agree, in their sole discretion. The BSM Shareholders
and BSM acknowledge and agree (i) that they have read and understand the
Assignment Agreement and (ii) that they shall at no time take any action, or
fail to take any action reasonably requested in writing by MBB, where such act
or omission would prevent or otherwise interfere with (A) SSET's and MBB's
renegotiation of the Option on terms acceptable to MBB or (B) SSET's future
exercise of the renegotiated Option, if any. The BSM Shareholders and BSM
acknowledge that if they fail to comply with the agreement in clause (ii) above
at any time while SSET is still a subsidiary of the Issuer, then such failure
may trigger the rescission provisions of Escrow Agreement. The Parties agree
that all fees and expenses incurred by SSET in connection with the renegotiation
of the Option or the exercise of the renegotiated Option will be paid by the
Control Shareholders.
8. ▇▇▇▇▇ CASE SETTLEMENT. BSM and the BSM Shareholders acknowledge that the
---------------------
Issuer entered into a settlement agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇ and ▇▇▇▇▇") in order to settle that certain case entitled ▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ et al, Los Angeles Superior Court Case No. SC067244. Pursuant to
the terms of the settlement agreement, Issuer agreed to issue ▇▇▇▇▇ and ▇▇▇▇▇,
and their attorneys, a total of 14,000 shares (after giving effect to a
1-for-100 reverse stock split) of the Issuer's common stock and ▇▇▇▇▇▇ ▇▇▇▇▇▇
and ▇▇▇▇▇▇ Sock guaranteed that those shares of common stock would be worth at
least $100,000 within three (3) years. If ▇▇▇▇▇ and ▇▇▇▇▇ are not able to sell
the shares of common stock for $100,000 within three (3) years, then ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇ Sock would owe ▇▇▇▇▇ and ▇▇▇▇▇ the difference between what
▇▇▇▇▇ and ▇▇▇▇▇ could have sold the common stock for during those three (3)
years and $100,000. Under this Agreement, provided the transaction has not been
rescinded as set forth in Section 4, and in the Escrow Agreement attached hereto
as Exhibit G, BSM agrees that if ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Sock are required to
pay ▇▇▇▇▇ and ▇▇▇▇▇ due to the fact the common stock could not be sold for at
least $100,000 in the three (3) year period of time, then BSM will cause the
Issuer to indemnify and pay ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ Sock for any amounts they
are required to pay under the settlement agreement.
Page 18 of 59
9. DATE AND TIME OF CLOSING. The closing of the transactions described
------------------------
herein (the "Closing"), shall take place at the offices of the Issuer on January
30, 2004, or at such other place, date and time as the Parties may agree in
writing (the "Closing Date").
10. DOCUMENTS TO BE DELIVERED AT CLOSING. i. By the Issuer.
-------------------------------------------------------
(1) Board of Directors Minutes authorizing the issuance of the Issuer
Shares and the Issuer Warrants in the names of the BSM Shareholders
based upon their holdings in BSM as listed on Exhibit A.
(2) Certificates for the Issuer Shares and Issuer Warrants will be placed
in escrow pursuant to the Escrow Agreement.
(3) The resignation of all officers of Issuer.
(4) A Board of Directors resolution replacing the existing members of the
Issuer's Board of Directors with such person(s) as the BSM
Shareholders designate as a director(s) of Issuer.
(5) A copy of this Agreement, the Escrow Agreement and the Share Lock-Up
Agreement referred to in Section 12 below (the "Lock-Up Agreement")
signed by the Issuer.
(6) All of the business and corporate records of Issuer, including but not
limited to correspondence files, bank statements, checkbooks, savings
account books, minutes of shareholder and directors meetings,
financial statements, tax returns, shareholder listings, stock
transfer records, agreements and contracts.
(7) Confirmation that Issuer's annual report on Form 10-KSB for the fiscal
year ended October 31, 2003 has been filed with the Securities and
Exchange Commission.
ii. By the BSM Shareholders and BSM.
--------------------------------
(1) Delivery to the Issuer of certificates representing the BSM
Shares, together with validly executed stock powers containing
applicable Medallion signature guarantees, and the original
warrants listed on Exhibit A marked "canceled."
(2) A copy of this Agreement and the Escrow Agreement signed by BSM
and the BSM Shareholders, as well as a copy of the
Page 19 of 59
Lock-Up Agreement signed by the persons who are parties thereto.
(3) The "Original Stock Powers" and "Dividend Stock Powers" referred
to in the Escrow Agreement, all validly executed and containing
applicable Medallion signature guarantees.
iii. By the Control Shareholders.
---------------------------
(1) A copy of this Agreement and the Escrow Agreement signed by the
Control Shareholders.
(2) Personal guarantees from ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. Sock, ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (collectively, the "Guarantors") to
BSM in such form as are agreed upon by BSM and the Guarantors.
11. REMEDIES. Any controversy or claim arising out of, or relating to, this
--------
Agreement, or the making, performance, or interpretation thereof, shall be
settled by binding arbitration in Los Angeles County, California in accordance
with the Rules of the American Arbitration Association then existing, and
judgment on the arbitration award may be entered in any court having
jurisdiction over the subject matter of the controversy. The rules of discovery
for the arbitration shall be determined by the Parties or by the arbitrator if
the Parties cannot agree.
12. LOCK-UP AGREEMENT. Certain BSM Shareholders will enter into a Share
-----------------
Lock-Up Agreement for a period of two (2) years from the date of Closing in the
form attached hereto as Exhibit J.
13. INDEMNIFICATION.
----------------
i. Indemnification by the Issuer. The Issuer and the Control
-----------------------------
Shareholders shall indemnify, hold harmless, and reimburse BSM
and its shareholders, officers and directors from and against any
and all claims, losses, damages, liabilities, diminution of value
and costs and related expenses (including without limitation,
settlement costs and any legal or other fees or expenses for
investigating or defending any actions or threatened actions),
whether or not involving a third party claim, reasonably incurred
by BSM in connection with any of the following:
(1) any misrepresentation or breach of any warranty made by the
Issuer or any of its subsidiaries under this Agreement as to
which a notice is given under paragraph iii. below within the
time period specified in Section 14.x. below;
(2) the non-fulfillment or breach of any covenant, agreement, or
obligation of the Issuer or any of its subsidiaries contained in
or contemplated by this Agreement that occurs prior to the
Closing; and
Page 20 of 59
(3) any obligation related to or arising from the business of the
Issuer or any of its subsidiaries prior to the Closing that is
not disclosed herein as an obligation that will remain in
existence after the Closing.
ii Indemnification by BSM. BSM shall indemnify, hold harmless, and
----------------------
reimburse the Issuer and the Control Shareholders from and
against any and all claims, losses, damages, liabilities,
diminution of value and costs and related expenses (including
without limitation, settlement costs and any legal or other fees
or expenses for investigating or defending any actions or
threatened actions), whether or not involving a third party
claim, reasonably incurred by the Issuer and the Control
Shareholders in connection with any of the following:
(1) any misrepresentation or breach of any warranty made by BSM or
the BSM Shareholders under this Agreement as to which a notice is
given under paragraph iii. below within the time period specified
in Section 14.x. below;
(2) the non-fulfillment or breach of any covenant, agreement, or
obligation of BSM or the BSM Shareholders contained in or
contemplated by this Agreement; and
(3) any obligation related to or arising from the business of BSM
either before or after the Closing.
iii. Procedure for Indemnity. The indemnified parties shall promptly
-----------------------
notify the indemnifying party of any claim, demand, action or
proceeding (collectively, a "Claim") for which indemnification
will be sought under this Section 13, and if such Claim is a
third party Claim, the indemnifying party will have the right, at
its expense, to assume the defense thereof using counsel
reasonably acceptable to the indemnified party. The indemnified
party shall have the right to participate, at its own expense,
with respect to any such third party Claim. In connection with
any such third party Claim, the parties hereto shall cooperate
with each other and provide each other with access to relevant
books and records in their possession. No such third party Claim
shall be settled without the prior written consent of the
indemnified party, which consent shall not be unreasonably
withheld. If a firm written offer is made to settle any such
third party Claim and the indemnifying party proposes to accept
such settlement and the indemnified party refuses to consent to
such settlement, then: (i) the indemnifying party shall be solely
responsible for, all further defense of such third party Claim;
and (ii) the maximum liability of the indemnifying party relating
to such third party Claim shall be the amount of the
Page 21 of 59
proposed settlement if the amount thereafter recovered from the
indemnified party on such third party Claim is greater than the
amount of the proposed settlement.
14. MISCELLANEOUS.
-------------
i. Captions and Headings. The Article and Section headings
throughout this Agreement are for convenience and reference only,
and shall in no way be deemed to define, limit, or add to the
meaning of any provision of this Agreement.
ii No Oral Changes. This Agreement and any provision hereof may not
be changed, modified, or discharged orally, but only by an
agreement in writing signed by the Party against whom enforcement
of any change, modification, or discharge is sought.
iii Non-Waiver. No waiver of any covenant, condition, or provision of
this Agreement shall be deemed to have been made unless expressly
in writing and signed by the Party against whom such waiver is
charged; and (i) the failure of any Party to insist in any one or
more cases upon the performance of any of the provisions,
covenants, or conditions of this Agreement or to exercise any
option herein contained shall not be construed as a waiver or
relinquishment for the future of any such provisions, covenants,
or conditions, (ii) the acceptance of performance of anything
required by this Agreement to be performed with knowledge of the
breach or failure of a covenant, condition, or provision hereof
shall not be deemed a waiver of such breach or failure, and (iii)
no waiver by any Party of one breach by another Party shall be
construed as a waiver with respect to any other or subsequent
breach.
iv. Time of Essence. Time is of the essence for this Agreement and of
each and every provision hereof.
v. Entire Agreement. This Agreement, with exhibits, contains the
entire Agreement and understanding between the Parties hereto,
and supersedes all prior agreements and understandings whether
oral or in writing; provided, however, that if this Agreement is
signed by the Parties prior to the Closing Date, the terms of the
Letter of Understanding between the Issuer and BSM dated November
12, 2003 (other that paragraphs 1 and 2 thereof) shall be
incorporated by reference into this Agreement as if set forth in
full herein.
vi Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed
Page 22 of 59
an original, but all of which together shall constitute one and
the same instrument.
vii Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given on the date of service if served personally
on the Party to whom notice is to be given, or on the third day
after mailing if mailed to the Party to whom notice is to be
given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
Issuer: c/o Bio-Solutions Manufacturing, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
BSM: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Control ▇▇▇▇▇▇. F. Sock, Esq.
Shareholders: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
BSM Shareholders: To each respective BSM Shareholder
at the address set forth on Exhibit A.
viii Attorney's Fees. Except as otherwise provided herein, if a
dispute should arise between the Parties including, but not
limited to, arbitration, the prevailing Party shall be reimbursed
by the non-prevailing Party for all reasonable expenses incurred
in resolving such dispute, including reasonable attorneys' fees,
exclusive of such amount of attorneys' fees as shall be a premium
for result or for risk of loss under a contingency fee
arrangement.
ix Cooperation. The Parties will each cooperate in good faith and
use their best efforts to cause the Closing to occur on or before
January 30, 2004.
x Survival of Representations. The representations and warranties
given hereunder shall survive for a period of one (1) year
following the Closing Date.
xi. Governing Law. It is the intention of the Parties that the law of
the State of California should govern the validity of this
Agreement, the construction of its terms and the
Page 23 of 59
interpretation of the rights and duties of the Parties, without
regard to the conflict of laws rules thereof.
xii. Successors and Assigns. This Agreement shall be binding upon the
Parties, and their heirs, legal representatives, successors and
assigns.
xiii. Authority of Corporate Signatories. Each individual signing on
behalf of a Party, not a natural person, that is an entity has
the authority to execute this Agreement on behalf of such person.
xiv. No Interpretation Against Drafter. This Agreement has been
negotiated at arms'- length between persons sophisticated and
knowledgeable in these types of matters. Accordingly, any normal
rules of construction that would require a court to resolve
matters of ambiguities against the drafting party is hereby
waived and shall not apply in interpreting this Agreement.
xv Costs and Expenses. Except as provided in Sections 2.v., 2.viii.,
6 and 7 above, or in the Spin-Off Agreement, all expenses
(including attorney's and accountant's fees) incurred by any
Party in connection with (i) the preparation and negotiation of
this Agreement and the other agreements and documents referred to
herein and (ii) the consummation of the transactions referred to
herein or therein (whether occurring prior to or after the
Closing), shall be borne by the Party who incurred them. The
foregoing notwithstanding, it is specifically acknowledged and
agreed by BSM and the BSM Shareholders that the Issuer and SSET
shall be allowed and entitled to pay, either before or after the
Closing, any expenses covered by the preceding sentence that the
Control Shareholders shall be responsible for and pay all
expenses (including attorneys' fees) incurred by the Issuer, SSET
and the Controlling Shareholders prior to Closing in connection
with the preparation of this Agreement and the agreements
referred to herein.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement on
the date first written above.
SINGLE SOURCE FINANCIAL SERVICES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. Sock
------------------------------
▇▇▇▇▇▇ ▇. Sock, President
BIO-SOLUTIONS MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Page 24 of 59
Control Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. Sock /s/ ▇▇▇▇▇▇ ▇. Sock
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
Balance of This Page Intentionally Left Blank
Page 25 of 59
BSM Shareholders
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
Environmental Services of By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Mississippi, LLC -----------------
(President)
▇▇▇▇▇ ▇. ▇▇▇▇
-----------------
(Print Name)
--------------------------------------------------------------------------------
Sterling Sound, LLC /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------
Member
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------
(Print Name)
--------------------------------------------------------------------------------
Bio-Solutions International, Inc. By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
--------------------------------- ------------------------
President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
------------------------
(Print Name)
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Page 26 of 59
--------------------------------------------------------------------------------
Rising Star, LLC By:/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
(Print Name)
--------------------------------------------------------------------------------
Page 27 of 59
EXHIBIT A
---------
List of BSM Shareholders
--------------------------------------------------------------------------------
Name Number of BSM Warrants to
Address Shares Owned Purchase BSM
Shares*
--------------------------------------------------------------------------------
Environmental
Services of 5,120,000 - 0-
Mississippi, LLC
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Sterling Sound,
LLC 2,500,000 - 0 -
c/o ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Bio-Solutions
International, Inc. 2,000,000 - 0 -
▇▇▇▇ ▇▇▇▇▇ ▇▇.,
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. 1,000,000 - 0 -
#1807
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. 500,000 - 0 -
#909
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇.
Kunkala 500,000 - 0 -
▇▇▇▇ ▇. ▇▇▇ ▇▇.
#▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
11 Holder St. 25,000 - 0 -
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 100,000 100,000
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ 100,000 100,000
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 50,000 50,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
Page 28 of 59
--------------------------------------------------------------------------------
93003
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000 50,000
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 30,000 30,000
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,000 30,000
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. 40,000 40,000
▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ 50,000 50,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. 50,000 -0-
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Rising Star, LLC 500,000 -0-
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Total: 12,645,000 450,000
--------------------------------------------------------------------------------
*The warrants are dated February 1, 2004 and are to purchase common stock of BSM
with an expiration date of three years and an exercise price of $1.50 per share.
Page 29 of 59
EXHIBIT B
---------
Outstanding Commitments Obligating Issuer to Issue
Additional Shares of Capital Stock
1. 1,950,400 shares of Common Stock, as provided in the Debt Conversion
Agreement described in Exhibit D.
Page 30 of 59
EXHIBIT C
---------
Issuer's Financial Statements as of October 31, 2003
Page 31 of 59
EXHIBIT D
Issuer's Threatened/Pending Litigation and Outstanding
Liabilities
The Issuer is aware of the following litigation matter:
Pacific ▇▇▇▇ Directory v. Single Source Financial Services Corporation, et
al, Los Angeles County Superior Court Case No. 02T01372. The case alleges that
$23,029 is owing for yellow page advertising. The Issuer contends that it did
not contract with Pacific ▇▇▇▇ Directory, but instead that an unrelated business
entity, Tax Debt Negotiators, Inc., may have contracted with Pacific ▇▇▇▇
Directory. On October 15, 2002, the parties entered into a Notice of Conditional
Settlement, which was filed with the Court. Under the terms of the Notice of
Conditional Settlement, after the Issuer has made certain payments to the
plaintiffs, the parties stipulated that a dismissal will be filed with the Court
dismissing the plaintiff's case against the Issuer without prejudice. At this
point, the Issuer has satisfied its obligations under the Notice of Conditional
Settlement and is in the process of obtaining a dismissal of the case.
The Issuer has the following outstanding liabilities:
Veena Kaila a total of $424,000 principal plus interest at the rate of
seven and 5/10 (7.5%) per cent per year until conversion, which is in the
process of being converted into Issuer's common stock pursuant to Debt
Conversion Agreement. BSM and the BSM Shareholders are aware that any shares
issuable under such agreement have not been included as outstanding shares in
the Agreement to which this Exhibit is attached.
A total of $187,000 owed to the Control Shareholders and/or entities of
which they are the sole owners, which will be paid at closing by a loan to the
Issuer.
Loan Payable to Veena Kaila totaling $94,000 as of December 31, 2003, which
is intended to be converted into the Issuer's common stock at Twenty-five
($0.25) cents per share.
Page 32 of 59
EXHIBIT E
---------
Changes Since October 31, 2003
None
Page 33 of 59
EXHIBIT F
---------
Spin-Off Agreement
Page 34 of 59
EXHIBIT G
---------
Escrow Agreement
Page 35 of 59
ESCROW AGREEMENT
This ESCROW AGREEMENT (the "Agreement") by and between Single Source
Financial Services Corporation, a New York corporation (the "Issuer"), certain
shareholders of Issuer listed on Exhibit A attached hereto (the "Control
Shareholders"), Bio-Solutions Manufacturing, Inc., a Nevada corporation ("BSM"),
the individuals listed on Exhibit B attached hereto (the "BSM Shareholders"),
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., (the "Agent") is entered into and effective on
. Each of the Issuer, the Control
-----------------------------------
Shareholders, BSM, the BSM Shareholders and the Agent shall sometimes be
referred to as a "Party" and collectively as the "Parties."
I. Escrow
1.01 Appointment and Acknowledgment of Escrow Agent. The Parties hereby
appoint the Agent, and the Agent hereby agrees to serve, as Escrow Agent
pursuant to the terms of this Agreement. The Agent will receive the following
(and acknowledges receipt thereof from the Parties):
(2) from Issuer, Twelve Million Six Hundred Forty Five Thousand
(12,645,000) shares of Issuer's common stock issued in the name of the
BSM Shareholders (the "Issuer Shares"), together with the Issuer
Warrants (as defined in the Reorganization and Stock Purchase
Agreement attached hereto as Exhibit D);
(3) from the BSM Shareholders, validly executed and Medallion guaranteed
stock powers authorizing the transfer of the Shares to the Control
Shareholders in the amounts as designated in writing by the control
shareholders (the "Original Stock Powers");
(4) from the BSM Shareholders, validly executed and Medallion guaranteed
stock powers authorizing the transfer of any dividends distributed on
the Shares to the Control Shareholders in the amounts set forth on
Exhibit A (the "Dividend Stock Powers"); and
(5) from BSM, Twelve Million Six Hundred Forty Five Thousand (12,645,000)
shares of BSM's common stock issued in the name of the Issuer (the
"BSM Shares"). (The Issuer Shares and the BSM Shares collectively
referred to as the "Shares".)
Page 36 of 59
(6) from SSFS, a validly executed and Medallion guaranteed stock power
authorizing the transfer of the BSM shares to the BSM shareholders in
the amount set forth on Exhibit B (the "BSM Stock Power").
The items described in Sections 1.01(a), (b), (c), (d) and (e) collectively
are referred to as the "Escrowed Property." If there are any accretions to, or
conversions of, the Escrowed Property, then the Escrowed Property shall include
such accretions or conversions. While the Shares are a part of the Escrowed
Property, the BSM Shareholders and the Issuer shall exercise all rights and
privileges of a stockholder with respect to the Issuer Shares and the BSM Shares
issued to each of them, except the right to sell, assign, pledge, hypothecate or
otherwise transfer the Shares or vote the Shares in such a manner as to place
the Issuer in breach of the (i) Reorganization and Stock Purchase Agreement
between Issuer, the Control Shareholders, the BSM Shareholders and BSM, to which
this Agreement is attached as Exhibit G (the "Reorganization and Stock Purchase
Agreement") or (ii) Spin-Off Agreement between Issuer and Single Source
Electronic Transactions, Inc. ("SSET"), which is attached to the Reorganization
and Stock Purchase Agreement as Exhibit F (the "Spin-Off Agreement").
1.02 Operation of Escrow. The Parties agree that the escrow created by this
Agreement (the "Escrow") shall operate as follows:
(a) Under the terms of the Reorganization and Stock Purchase Agreement, the
Shares and the Issuer Warrants will be issued in the names of the BSM
Shareholders in the amounts shown on the attached Exhibit B and then placed in
Escrow under the terms of this Agreement until one of the following events
occurs:
(i) six (6) months pass after the Closing Date of the Reorganization and
Stock Purchase Agreement (the "Deadline") and no event described in clause (ii)
or (iii) below has previously occurred;
(ii) prior to the Deadline, BSM and/or the BSM Shareholders take any
action, or fail to take any action reasonably requested in writing by the
Control Shareholders, where such act or omission (A) prevents or otherwise
interferes with Issuer's and/or SSET's ability to comply with the terms of the
Reorganization and Stock Purchase Agreement and/or the Spin-Off Agreement or (B)
otherwise constitutes a breach by BSM and/or the BSM Shareholders of any of
their obligations under and the Reorganization and Stock Purchase Agreement;
Page 37 of 59
(iii) prior to the Deadline, BSM and/or the BSM Shareholders take any
action, or fail to take any action reasonably requested in writing by MBBRAMAR,
Inc. ("MBB"), where such act or omission prevents or otherwise interferes with
(A) SSET's and MBB's renegotiation of the Option (as defined in the
Reorganization and Stock Purchase Agreement, attached hereto as Exhibit D) on
terms acceptable to MBB or (B) any exercise by SSET of the renegotiated Option.
If the terms of clause (i) above are satisfied, the BSM Shareholders shall
thereafter be entitled to the Issuer Shares and the Issuer Warrants and the
Issuer shall be entitled to the BSM Shares. If the terms of clause (ii) or (iii)
above are satisfied, the Control Shareholders shall thereafter be entitled to
the Issuer Shares and the BSM Shares shall be returned to the BSM Shareholders
(with the Issuer Warrants then being canceled). While the Issuer Shares are in
Escrow, Issuer's stock transfer agent shall be instructed to show the address of
the BSM Shareholders with respect to the Shares in care of the Agent.
(b) At such time as the BSM Shareholders, or the Control Shareholders
believe they are entitled to their respective Escrowed Property under this
Agreement, then that Party shall submit a request for dispersal of the Escrowed
Property (a "Request for Dispersal") in the form attached hereto as Exhibit C to
both the Agent and the other Parties. The Party issuing the Request for
Dispersal must deliver it in the manner, and to the addresses, listed in Section
2.04 below.
(c) Upon the receipt of a validly delivered Request for Dispersal, the
Party that received it shall have fifteen (15) days after receipt to deliver a
written statement objecting to the Request for Dispersal (an "Objection"). An
Objection must be delivered to the Agent and the other Parties in the manner,
and to the addresses, listed in Section 2.04 below, and must be received by the
Agent and the other Parties on or before the fifteenth day after the sending
Party's receipt of the Request for Dispersal.
(d) If the Agent does not receive a timely Objection, the Agent shall
deliver the Escrowed Property to the Parties in the manner provided in this
Escrow Agreement.
(e) If the Agent does receive a timely Objection from another Party, then
the Parties will attempt in good faith for a period of thirty (30) days
thereafter ("Negotiation Period") to agree upon a resolution for the
distribution of the Escrowed Property. If the Parties reach such an agreement, a
memorandum setting forth such agreement shall be prepared and signed by each of
the Parties and furnished to the Agent. The Agent shall then be entitled to rely
on
Page 38 of 59
any such memorandum and release the Escrowed Property in accordance with the
terms thereof.
(f) In the event the Parties are unable to reach an agreement regarding the
release of the Escrowed Property by the end of the Negotiation Period, then any
Party may institute such actions or proceedings as they deem appropriate in any
of the courts provided in Section 2.08 of this Agreement to resolve the dispute.
In that case, the Agent shall hold the Escrowed Property until such time as it
receives (i) a judgment from such court or (ii) written instructions signed by
the Parties involved in the dispute. The Agent shall be entitled to act in
accordance with any such judgment or instruction.
1.03 Further Provisions Relating to the Escrow.
(a) In the event the Agent receives shares of SSET as a dividend on the
Issuer Shares, the Agent shall use the Dividend Stock Powers to promptly, after
receiving payment from the Control Shareholders for the amount of the Total
Liability as determined under the Adverse Tax Consequences section of the
Reorganization and Stock Purchase Agreement, transfer the shares of SSET as
directed by written instructions from the Control Shareholders. After such
transfer, the shares of SSET shall not be a part of the Escrowed Property.
(b) The release of the Escrowed Property by the Agent in accordance with
the terms of this Agreement shall operate to divest all right, title, interest,
claim, and demand, either at law or in equity, of any Party (other than the
distributee) in and to the Escrowed Property so released and shall be a
perpetual bar both at law and in equity with respect to such released Escrowed
Property against the Parties and against any person claiming or attempting to
claim such released Escrowed Property from, through or under such Party.
(c) BSM (as to half) and the Control Shareholders (as to half) agree to
reimburse the Agent for the Agent's reasonable fees and other expenses
(including legal fees and expenses) incurred by the Agent in connection with his
duties hereunder.
(d) BSM and the Control Shareholders, and each of them, agrees to indemnify
and hold harmless the Agent against any and all claims, suits, actions,
proceedings (formal or informal), investigations, judgments, deficiencies,
damages, settlements, liabilities, and legal and other expenses (including legal
counsel fees and expenses of attorneys chosen by the Agent) as and when incurred
and whether or not involving a third party arising out of or based upon any act,
omissions, alleged act, or alleged omission by the Agent or any other cause, in
any case in connection with the acceptance of, or the performance or
nonperformance by the Agent
Page 39 of 59
of, any of the Agent's duties under this Agreement, except as a result of the
Agent's bad faith or gross negligence. The Agent shall be fully protected by (i)
acting in reliance upon any notice, instructions, direction, other document, or
signature believed by the Agent to be genuine, (ii) assuming that any person
purporting to give the Agent any notice, instructions, direction, or other
document in accordance with the provisions hereof, in connection with this
Agreement, or in connection with the Agent's duties under this Agreement, has
been duly authorized so to do, or (iii) acting or failing to act in good faith
on the advice of any counsel retained by the Agent. The Agent shall not be
liable for any mistake of fact or of law or any error of judgment, or for any
act or any omission, except as a result of the Agent's bad faith or gross
negligence. To the extent that the Escrowed Property is represented by stock
certificates, the Agent shall not be liable if the Agent submits all or a
portion of the Escrowed Property to be broken into smaller denominations to the
appropriate transfer agent, and such transfer agent fails to return properly
that portion of the Escrowed Property to the Agent which such transfer agent was
instructed to return.
(e) The Agent makes no representation as to the validity, value,
genuineness, or the collectibility of the Shares or any other security or other
document or instrument held by or delivered to the Agent.
(f) The Agent shall have no duties or responsibilities except those
expressly set forth herein. The Parties agree that the Agent will not be called
upon to construe any contract or instrument. The Agent shall not be bound by any
waiver, modification, amendment, termination, cancellation, or revision of this
Agreement, unless in writing and signed by the other Parties and received by the
Agent and, if the Agent's duties as Escrow Agent hereunder are affected, unless
the Agent shall have given his prior written consent thereto. The Agent shall
not be bound by any assignment by Issuer, BSM, the BSM Shareholders, or the
Control Shareholders of their rights hereunder unless the Agent shall have
received written notice thereof from the assignor. The Agent is authorized to
comply with and obey all laws, rules, regulations, orders, judgments, and
decrees of any governmental authority, court, or other tribunal. If the Agent
complies with any such law, rule, regulation, order, judgment, or decree, the
Agent shall not be liable to any of the Parties or to any other person even if
such law, rule, order, regulation, judgment, or decree is subsequently reversed,
modified, annulled, set aside, vacated, found to have been entered without
jurisdiction, or found to be in violation of or beyond the scope of a
constitution or a law.
Page 40 of 59
(g) If the Agent (i) shall be uncertain as to the Agent's duties or rights
hereunder, (ii) shall receive any notice, instructions, direction, or other
document from any other Party with respect to the Escrowed Property which, in
the Agent's opinion, is in conflict with any of the provisions of this
Agreement, or (iii) should be advised that a dispute has arisen with respect to
the payment, ownership, or right of possession of the Escrowed Property or any
part thereof, or the property to be exchanged for the Escrowed Property (or as
to the delivery, non-delivery, or content of any notice, instructions,
direction, or other document), the Agent shall be entitled, without liability to
anyone, to refrain from taking any action other than to use the Agent's
reasonable efforts to keep safely the Escrowed Property until the Agent shall be
directed otherwise in writing by the other Parties or by an order, decree, or
judgment of a court of competent jurisdiction which has been finally affirmed on
appeal or which by lapse of time or otherwise is no longer subject to appeal (a
"Final Judgment"), but the Agent shall be under no duty to institute or to
defend any proceeding, although the Agent may, in the Agent's discretion and at
the expense of BSM and the Control Shareholders as provided in Section 1.03(c),
institute or defend such proceedings.
(h) The Agent (and any successor Escrow Agent or Agents) reserves the right
to resign as the Escrow Agent at any time, provided fifteen (15) days prior
written notice is given to the other Parties, and provided further that a
mutually acceptable successor escrow agent(s) is named within such fifteen (15)
day period. The Agent may, but is not obligated to, petition any court in the
State of Florida having jurisdiction to designate a successor Agent. The
resignation of the Agent (and any successor Escrow Agent or Agents) shall be
effective only upon delivery of the Escrowed Property to the successor Escrow
Agent(s). The Parties reserve the right to jointly remove the Escrow Agent at
any time, provided fifteen (15) days prior written notice is given to the Escrow
Agent. If no successor Escrow Agent has been appointed and has accepted the
Escrowed Property within fifteen (15) days after any notice provided above is
sent, all responsibilities of the Agent hereunder shall, nevertheless, cease.
The Agent's sole responsibility thereafter shall be to use the Agent's
reasonable efforts to keep safely the Escrowed Property and to deliver the
Escrowed Property as directed in writing by the other Parties or by a Final
Judgment. Except as set forth in this Section 1.03(h), this Agreement shall not
otherwise be assignable by the Agent without the prior written consent of the
other Parties.
(i) The BSM Shareholders and the Control Shareholders authorize the Agent,
if the Agent is threatened with litigation or is sued, to interplead all
interested parties in any court of competent
Page 41 of 59
jurisdiction and to deposit the Escrowed Property with the clerk of that court.
(j) The Agent's responsibilities and liabilities hereunder, except as a
result of the Agent's own bad faith or gross negligence, will terminate upon the
delivery by the Agent of all the Escrowed Property under any provision of this
Agreement.
II. Miscellaneous
2.01 Further Action. At any time and from time to time, the BSM
Shareholders, at the expense of BSM, and the Control Shareholders, at their own
expense, each agree, to take such actions and to execute and deliver such
documents as may be reasonably necessary to effectuate the purposes of this
Agreement. BSM and the Control Shareholders shall each pay one-half of any
transfer tax arising out of (i) the placing of the Escrowed Property into the
Escrow, (ii) the delivery of the Escrowed Property out of the Escrow or (iii)
the transfer of the Escrowed Property into the name of any person or entity
pursuant to the terms of this Agreement. The Agent shall have no liability
regarding transfer taxes even if the other Parties fail to comply with the
obligations set forth in the prior sentence.
2.02 Survival. Subject to Section 1.03(j), the covenants, agreements,
representations, and warranties contained in or made pursuant to this Agreement
shall survive the delivery by the Agent of the Escrowed Property, irrespective
of any investigation made by or on behalf of any Party.
2.03 Modification. This Agreement sets forth the entire understanding of
the Parties with respect to the subject matter hereof, supersedes all existing
agreements among them concerning such subject matter, and (subject to Section
1.03(f)) may be modified only by a written instrument duly executed by each
Party.
2.04 Notices. Any notice, instructions, direction, or other document or
communication required or permitted to be given hereunder shall be in writing
and shall be sent by Federal Express, Express Mail, or similar overnight
delivery or courier service or delivered (in person or by facsimile) against
receipt to the Party to whom it is to be given at the address of such Party set
forth below (or to such other address as the Party shall have furnished in
writing in accordance with the provisions of this Section 2.04), with a copy to
each of the other Parties:
If to Issuer: c/o Bio-Solutions Manufacturing, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Page 42 of 59
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Control ▇▇▇▇▇▇ ▇. Sock, Esq.
Shareholders: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to BSM ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to BSM
Shareholders: To each respective BSM Shareholder at the
address and facsimile number set forth on Exhibit
B.
If to the Agent: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice, instructions, direction, or other document or communication
(including a Request for Dispersal or an Objection) shall be deemed given at the
time of receipt thereof as evidenced by proof of delivery issued by the delivery
or courier service, facsimile confirmation or signed receipt of the party to
whom sent .
2.05 Waiver. Any waiver by any Party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of this
Agreement. The failure of a Party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that Party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
2.06 Binding Effect. Subject to Section 1.03(h), the provisions of this
Agreement shall be binding upon and inure to the benefit of Issuer, the Control
Shareholders, BSM and the BSM Shareholders and their respective assigns, heirs,
and personal representatives, and shall be binding upon and inure to the benefit
of the Agent and the Agent's successors and assigns.
2.07 No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights
Page 43 of 59
enforceable by any person who is not a Party (except as provided in Section
2.06).
2.08 Jurisdiction. The Parties hereby irrevocably consent to the
jurisdiction of the courts of the State of Florida, and of any federal court
located in such state in connection with any action, suit, or proceeding arising
out of, based on, or in connection with this Agreement, any document or
instrument delivered pursuant to, in connection with, or simultaneously with
this Agreement, any breach of this Agreement or any such document or instrument,
or any transaction contemplated hereby or thereby, and each Party covenants and
agrees not to assert, by way of motion, as a defense, or otherwise, in any such
action, suit, or proceeding, any claim that such Party is not subject personally
to the jurisdiction of such court, that such Party's property is exempt or
immune from attachment or execution, that the action, suit, or proceeding is
brought in an inconvenient forum, that the venue of the action, suit, or
proceeding is improper, or that this Agreement or the subject matter hereof may
not be enforced in or by such court.
2.09 Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
2.10 Counterparts; Governing Law. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. It shall be
governed by and construed in accordance with the laws of the State of Florida
without giving effect to conflict of laws.
IN WITNESS WHEREOF, the Parties have duly executed this Agreement on the
date first written above.
"Issuer"
Single Source Financial Services Corporation "Agent"
By: /s/ ▇▇▇▇▇▇ ▇. Sock /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------- --------------------------------
Title: President ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
-----------------------------------
"BSM"
Bio-Solutions Manufacturing, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: President
-----------------------------------
Page 44 of 59
Control Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. Sock /s/ ▇▇▇▇▇▇ ▇. Sock
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
Page 45 of 59
BSM Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
Environmental Services of Mississippi, By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
LLC --------------------
(President)
▇▇▇▇▇ ▇. ▇▇▇▇
--------------------
(Print Name)
--------------------------------------------------------------------------------
Sterling Sound, LLC /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
Member
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
(Print Name)
--------------------------------------------------------------------------------
Bio-Solutions International, By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Inc. ---------------------------
President
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
---------------------------
(Print Name)
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Page 46 of 59
--------------------------------------------------------------------------------
Rising Star, LLC By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
(Print Name)
--------------------------------------------------------------------------------
Page 47 of 59
Exhibit A
Control Shareholders
Single Source Financial Services Corporation
Name
Address
▇▇▇▇▇▇ ▇. Sock
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Page 48 of 59
Exhibit B
BSM Shareholders
--------------------------------------------------------------------------------
Name Number of BSM Warrants to
Address Shares Owned Purchase BSM
Shares*
--------------------------------------------------------------------------------
Environmental
Services of 5,120,000 - 0-
Mississippi, LLC
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Sterling Sound,
LLC 2,500,000 - 0 -
C/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
#▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Bio-Solutions
International, Inc. 2,000,000 - 0 -
▇▇▇▇ ▇▇▇▇▇ ▇▇.,
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
-------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. 1,000,000 - 0 -
#1807
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. 500,000 - 0 -
#909
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇.
Kunkala 500,000 - 0 -
▇▇▇▇ ▇. ▇▇▇ ▇▇.
#▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Page 49 of 59
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
11 Holder St. 25,000 - 0 -
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 100,000 100,000
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Facsimile 516-488-
4625
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ 100,000 100,000
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Facsimile: 973-
926-1735
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 50,000 50,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: 805-
654-0990
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000 50,000
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Facsimile: 718-
885-2882
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 30,000 30,000
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Facsimile: 501-
225-6025
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,000 30,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Facsimile: 501-
225-6025
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. 40,000 40,000
▇▇▇▇▇▇
12085 Valley Heart
--------------------------------------------------------------------------------
Page 50 of ▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ 50,000 50,000
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. 50,000 -0-
▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇
--------------------------------------------------------------------------------
Rising Star, LLC 500,000 -0-
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Total: 12,645,000 450,000
--------------------------------------------------------------------------------
*The warrants are dated February 1, 2004 and are to purchase common stock of BSM
with an expiration date of three years and an exercise price of $1.50 per share.
Page 51 of 59
Exhibit C
Request for Dispersal
Pursuant to the terms of the Escrow Agreement (the "Agreement") by and
between Single Source Financial Services Corporation (the "Issuer"), those
certain shareholders of Issuer listed on Exhibit A attached thereto (the
"Control Shareholders"), Bio-Solutions Manufacturing, Inc., a Nevada corporation
("BSM"), those individuals listed on Exhibit B attached thereto (the "BSM
Shareholders"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (the "Agent"), the undersigned hereby
certify to the Agent that the event checked below has occurred (with all
capitalized terms having the meanings set forth in the Agreement):
1. [_] Six (6) months have passed after the Closing Date of the
Reorganization and Stock Purchase Agreement (the "Deadline") and no event
described in paragraph 2, or 3 below has previously occurred.
2. [_] Prior to the Deadline, BSM and/or the BSM Shareholders have taken an
action, or failed to take an action reasonably requested in writing by the
Control Shareholders, where such act or omission (A) prevents or otherwise
interferes with Issuer's and/or SSET's ability to comply with the terms of the
Reorganization and Stock Purchase Agreement and/or the Spin-Off Agreement or (B)
otherwise constitutes a breach by BSM and/or the BSM Shareholders of any of
their obligations under the Reorganization and Stock Purchase Agreement.
3. [_] Prior to the Deadline, BSM and/or the BSM Shareholders have taken an
action, or failed to take an action reasonably requested in writing by MBBRAMAR,
Inc. ("MBB"), where such action or omission has prevented or otherwise
interfered with (A) SSET's and MBB's renegotiation of the Option (as defined in
the Reorganization and Stock Purchase Agreement) on terms acceptable to MBB of
(B) any exercise by SSET of the renegotiated Option.
Based on the foregoing, the undersigned demand that the Escrowed Property
be released pursuant to the terms of the Escrow Agreement.
Dated:
------------------------------- ------------------------------------
------------------- -------------------------
-------------------------- --------------------
------------------------------- --------------
--------------------------------------- ----------
Page 52 of 59
EXHIBIT D
REORGANIZATION AND STOCK PURCHASE AGREEMENT
Page 53 of 59
EXHIBIT H
---------
Material Contracts
1. See Exhibit D hereto
2. See Exhibit F hereto.
3. See Exhibit I hereto.
Page 54 of 59
EXHIBIT I
---------
Option Assignment Agreement
Page 55 of 59
EXHIBIT J
---------
Share Lock-Up Agreement
Page 56 of 59
SHARE LOCK-UP AGREEMENT
THIS AGREEMENT is made this day of , 2004, by and
------------ -----------
between SINGLE SOURCE FINANCIAL SERVICES CORPORATION, a New York corporation
(the "Corporation") and ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇. KUNKALA,
(collectively referred to as "Shareholders").
WHEREAS, Shareholders are officers and directors of the Corporation; and
WHEREAS, pursuant to that certain Reorganization and Stock Purchase
Agreement, effective as of February 1, 2004 (the "Reorganization and Stock
Purchase Agreement") the Corporation acquired all of the issued and outstanding
shares and warrants of Bio-Solutions Manufacturing Inc., a Nevada corporation
("BSM"), in exchange for 12,645,000 shares of its common stock and 450,000
Warrants to purchase shares of the Corporations common stock; and
WHEREAS, The Shareholders are the owners of 2,000,000 shares of the common
stock of the Corporation (the "Shares"); and
WHEREAS, under the terms of the Stock Purchase Agreement, the Shares are
held in escrow until the earlier of the happening of certain events enumerated
therein or six (6) months from the date of closing; and
WHEREAS, as a condition of the Reorganization and Stock Purchase Agreement,
the Shareholders agreed to restrict the sale of their shares in the Corporation
for a period of two (2) years from the date of closing.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
conditions contained herein, the parties hereto agree as follows:
Lock-Up of Shares. For a period of two (2) years from the date hereof, the
-----------------
Shareholders agree that following the release of their shares from escrow to
deposit the following shares with ▇. ▇▇▇▇▇▇▇ Press, Esq., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. Such shares constitute all of the shares owned by the
Shareholders in the Corporation:
Name of Shareholder Shares
------------------- ------
▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,000,000
▇▇▇ ▇. ▇▇▇▇▇▇ 500,000
▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala 500,000
The Shareholders acknowledge that their Shares are held by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., under the terms of an Escrow Agreement, dated , and
------------
that upon the
Page 57 of 59
release of the Shares from Escrow, they will direct the Escrow Agent to deliver
the Shares to ▇. ▇▇▇▇▇▇▇ Press, Esq., to be held for the balance of the two (2)
year term. At the end of the two (2) year period and after receiving the consent
of the authorized officer of the Corporation, the certificates representing the
Shares shall be returned to each Shareholder at the address on the signature
page hereto.
This Agreement may be signed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
SINGLE SOURCE FINANCIAL
SERVICES CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. Sock
----------------------------------
Its President
-------------------------
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------- -----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇. KUNKALA
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, # ▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, # ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------------- -----------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, # ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The undersigned agrees to hold the Shares under the terms of this
Agreement.
/s/ ▇. ▇▇▇▇▇▇▇ Press
----------------------
▇. ▇▇▇▇▇▇▇ Press, Esq.
Page 58 of 59
EXHIBIT K
---------
Control Shareholders
Single Source Financial Services Corporation
Name
Address
▇▇▇▇▇▇ ▇. Sock
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Page 59 of 59