Acquisition Agreement - eHealth.com Inc. and Online Films LLC
ACQUISITION AGREEMENT
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Re: Online Films LLC
THIS AGREEMENT dated for reference September 17, 1999, is among Ehealth.com,
Inc., a Nevada company of 1100 Melville Street, 6th Floor, Vancouver, B.C.,
V6E 4A6, and fax (604) 682-6509 (the "Company"); and Mark Rutledge and Rob
Maclean, both of 1040 Hamilton Street, Suite 207, Vancouver, B.C. V6B 2R9, and
fax (604) 689-8163 (together the "Principals"); and Online Films LLC, a Delaware
limited liability company of 1040 Hamilton Street, Suite 207, Vancouver, B.C.
V6B 2R9, and fax (604) 689-8163 ("Online").
WHEREAS the Company has agreed to raise $8 million to finance the development of
Online's business and the Principals have agreed to transfer all of their
interest in Online to the Company and become directors and officers of the
Company, FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are
acknowledged, the parties agree that:
INTERPRETATION
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1. The definitions in the recitals are part of this agreement.
2. In this agreement:
a. "Beneficiaries" means the persons with a beneficial interest in the
Principals' Interest.
b. "Business Plan" means Online's business plan dated September, 1999.
c. "Closing" means September 30, 1999.
d. "Consolidation" means the Company's proposed 3:1 consolidation of its
issued and outstanding common stock.
e. "Financing" means $8 million for the development of Online.
f. "Principals' Interest" means the Principals' interest in Online.
g. "$" means United States dollars.
TERMS AND CONDITIONS OF THE ACQUISITION
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The Financing
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3. The Company will raise the Financing by offering 1 million of its shares at
$8.00 per share under Regulation S of the United States Securities Act of
1933 and will advance the proceeds to Online. Online will use the proceeds
to develop its business as described in the Business Plan.
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The Share Transfer
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4. The Principals will transfer the Principals' Interest to the Company
immediately after the Closing so that Online becomes a wholly owned
subsidiary of the Company as of the Closing date.
5. As consideration for the Transfer, the Company will issue 6,132,800 post-
Consolidation shares in the Company's common stock to the Principals and
the Beneficiaries as soon as practicable after the Closing. The Principals
will advise the Company in writing of the names and addresses of the
Beneficiaries and the number of shares to which each is entitled under this
agreement. These shares will be subject to Rule 144 of the United States
Securities Act of 1933.
6. Online consents to the Principals' transferring the Principals'
Interest to the Company.
REPRESENTATIONS AND WARRANTIES
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The Principals
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7. The Principals represent and warrant that:
a. They own the Principals' Interest free of any claim or potential claim
by any person except the Beneficiaries and have Beneficiaries'
authority to transfer the Principals' Interest as described in this
agreement.
b. Neither they nor the Beneficiaries have any right to acquire
additional interests in Online.
c. Nothing in the Business Plan is proprietary to their employers or
former employers or any other person, and their providing their
expertise and services to Online is not an infringement of
intellectual property rights owned by any person or company.
d. The Business Plan truly and accurately reflects the business of Online
and the intentions of the Principals.
Online
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8. Online represents and warrants that:
a. It is a limited liability company formed and in good standing under
the laws of Delaware.
b. The Principals' Interest are fully paid and non-assessable and
represent all of their interest in Online.
c. It has granted no person a right to acquire any additional shares of
Online.
d. It has the legal capacity and authority to make and perform this
agreement.
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<PAGE>
e. It has incurred no liabilities and entered into no contracts that are
not disclosed in writing to the Company.
f. It has conducted no business except the business that is described in
the Business Plan.
g. No claims against it or any of its principals are before any court or
regulatory authority or are pending or threatened, and it is not aware
of any ground for any claim that might succeed.
OTHER PROVISIONS
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9. The Principals and Online acknowledge that this agreement was prepared for
the Company by Jeffs & Company Law Corporation and that it may contain
terms and conditions onerous to them. They expressly acknowledge that the
Company has given them adequate time to review this agreement and to seek
and obtain independent legal advice, and they represent to the Company that
they have in fact sought and obtained independent legal advice and are
satisfied with all the terms and conditions of this agreement.
10. Time is of the essence of this agreement.
11. This agreement is governed by the laws of British Columbia and must be
litigated in the courts of British Columbia.
12. Any notice that must be given or delivered under this agreement must be in
writing and delivered by hand or transmitted by fax to the address or fax
number given for the party on page 1 and is deemed to have been received
when it is delivered by hand or transmitted by fax unless the delivery or
transmission is made after 4:00 p.m. or on a non-business day where it is
received, in which case it is deemed to have been delivered or transmitted
on the next business day. Any payments of money must be delivered by hand
or wired as instructed in writing by the receiving party. Any delivery of a
thing other than a written notice or money must be delivered by hand to the
receiving party's address.
13. Neither the Principals nor Online may assign this agreement or any
part of it to another party.
14. Any amendment of this agreement must be in writing and signed by the
parties.
15. This agreement enures to the benefit of and binds the parties and
their respective successors, heirs and permitted assignees.
16. No failure or delay of the Company in exercising any right under this
agreement operates as a waiver of the right. The Company's rights under
this agreement are cumulative and do not preclude the Company from relying
on or enforcing any legal or equitable right or remedy.
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<PAGE>
17. If any provision of this agreement is illegal or unenforceable under any
law, then it is severed and the remaining provisions remain legal and
enforceable.
18. This agreement may be signed in counterparts and delivered to the parties
by fax, and the counterparts together are deemed to be one original
document.
Ehealth.com, Inc. The Principals:
/s/ Allen Wilson /s/ Mark Rutledge
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Authorized signatory Mark Rutledge
September 19, 1999 September 23, 1999
Online Films LLC
/s/ Mark Rutledge /s/ Rob Maclean
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Mark Rutledge Rob Maclean
September 23, 1999 September 23, 1999
/s/ Rob Maclean
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Rob Maclean
September 23, 1999
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