REORGANIZATION AND STOCK PURCHASE AGREEMENT
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
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.
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
existing, and in good standing under the laws of the State of
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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.
ii Capital. The authorized capital stock of Issuer consists of One
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
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,
there has not been any change in the financial condition or
operations of Issuer, except changes in the ordinary course of
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business, which changes have not in the aggregate been materially
adverse.
v. Liabilities. Except as listed on Exhibit D attached hereto, 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 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
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.
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vii Compliance with Laws. Issuer has complied with and is not in
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 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 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
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;
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(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
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, 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 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
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 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
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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
insureds under any insurance policies.
xv. Brokers, Finders. No agent, broker, investment banker, person, or
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 other
commission or similar fee directly or indirectly in connection with
the transactions contemplated hereby.
xvi Disclosure. Neither this Agreement nor any schedule, exhibit, 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.
A. BSM represents and warrants, to the best of its knowledge, to the
Issuer and the Control Shareholders the following:
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i. Organization. BSM is a corporation duly organized, validly 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
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, 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
appropriate governmental authorities, all tax and related returns
required to be filed, and such returns adequately 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
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
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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, 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
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.
(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, 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
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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
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
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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
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 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 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, then the Issuer Shares will be transferred
to the Control Shareholders (in
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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
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.
i BSM Undertakings. BSM has been fully informed by the Issuer that The
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,
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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 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
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
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,
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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 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 "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
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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 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
14
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.
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.
15
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.
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.
16
(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 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
17
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
(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
18
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 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
19
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 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,
20
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 interpretation of
the rights and duties of the Parties, without regard to the conflict
of laws rules thereof.
21
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
22
BIO-SOLUTIONS MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Control Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. Sock /s/ ▇▇▇▇▇▇ ▇. Sock
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
Balance of This Page Intentionally Left Blank
23
BSM Shareholders
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
Environmental Services of By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Mississippi, LLC -------------------------------
(President)
▇▇▇▇▇ ▇. ▇▇▇▇
(Print Name)
--------------------------------------------------------------------------------
Sterling Sound, LLC /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(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/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
24
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
Rising Star, LLC By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
(Print Name)
--------------------------------------------------------------------------------
25
EXHIBIT A
List of BSM Shareholders
--------------------------------------------------------------------------------
Name Number of BSM Warrants to Purchase
Address Shares Owned BSM Shares*
--------------------------------------------------------------------------------
Environmental Services of
Mississippi, LLC 5,120,000 -0-
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Sterling Sound, LLC
C/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500,000 -0-
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Bio-Solutions
International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇., 2,000,000 -0-
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇▇ 1,000,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇ 500,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇▇ 500,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
11 Holder St 25,000 -0-
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 100,000 100,000
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ 100,000 100,000
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
26
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 50,000 50,000
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 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.
27
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.
28
EXHIBIT C
Issuer's Financial Statements as of October 31, 2003
29
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.
30
EXHIBIT E
Changes Since October 31, 2003
None
31
EXHIBIT F
Spin-Off Agreement
32
EXHIBIT G
Escrow Agreement
33
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
34
(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".)
(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;
35
(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;
(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
36
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 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
37
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 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.
38
(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.
(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.
39
(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 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
40
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.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Control ▇▇▇▇▇▇ ▇. Sock, Esq.
Shareholders: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to BSM ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
41
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 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
42
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
Control Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇. Sock /s/ ▇▇▇▇▇▇ ▇. Sock
--------------------------------------------------------------------------------
43
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------------------------------------
44
BSM Shareholders:
--------------------------------------------------------------------------------
NAME SIGNATURE
--------------------------------------------------------------------------------
Environmental Services of By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Mississippi, LLC -------------------------------
(President)
▇▇▇▇▇ ▇. ▇▇▇▇
(Print Name)
--------------------------------------------------------------------------------
Sterling Sound, LLC /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(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/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------------------------------------
45
--------------------------------------------------------------------------------
Rising Star, LLC By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
(Print Name)
--------------------------------------------------------------------------------
46
Exhibit A
Control Shareholders
Single Source Financial Services Corporation
Name
Address
▇▇▇▇▇▇ ▇. Sock
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
47
Exhibit B
BSM Shareholders
--------------------------------------------------------------------------------
Name Number of BSM Warrants to Purchase
Address Shares Owned BSM Shares*
--------------------------------------------------------------------------------
Environmental Services
of Mississippi, LLC 5,120,000 -0-
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Sterling Sound, LLC
C/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,500,000 -0-
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ #▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Bio-Solutions
International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇., 2,000,000 -0-
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇▇ 1,000,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇ 500,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
48
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇ ▇. Kunkala
▇▇▇▇ ▇. ▇▇▇ ▇▇. #▇▇▇▇ 500,000 -0-
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
11 Holder St 25,000 -0-
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ 100,000 100,000
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇ 100,000 100,000
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 50,000 50,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 50,000 50,000
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇ 30,000 30,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
49
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 30,000 30,000
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 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.
50
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: _____________________ _______________________________
____________________________ _______________________________
____________________________ _______________________________
51
EXHIBIT D
REORGANIZATION AND STOCK PURCHASE AGREEMENT
52
EXHIBIT H
Material Contracts
1. See Exhibit D hereto
2. See Exhibit F hereto.
3. See Exhibit I hereto.
53
EXHIBIT I
Option Assignment Agreement
54
EXHIBIT J
Share Lock-Up Agreement
55
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
56
The Shareholders acknowledge that their Shares are held by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Esq., under the terms of an Escrow Agreement, dated ________________,
and that upon the 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.
57
EXHIBIT K
Control Shareholders
Single Source Financial Services Corporation
Name
Address
▇▇▇▇▇▇ ▇. Sock
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
58