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SHARE PURCHASE AND MERGER AGREEMENT

Agreement and Plan of Merger

SHARE PURCHASE AND MERGER AGREEMENT | Document Parties: ADVANCE TECHNOLOGIES INC | American SXAN Biotech, Inc | Infrared Systems International, Inc | SXAN Acquisition Corp You are currently viewing:
This Agreement and Plan of Merger involves

ADVANCE TECHNOLOGIES INC | American SXAN Biotech, Inc | Infrared Systems International, Inc | SXAN Acquisition Corp

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Title: SHARE PURCHASE AND MERGER AGREEMENT
Governing Law: Nevada     Date: 5/31/2007

SHARE PURCHASE AND MERGER AGREEMENT, Parties: advance technologies inc , american sxan biotech  inc , infrared systems international  inc , sxan acquisition corp
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EXHIBIT 10.1

 

 

 

 

SHARE PURCHASE AND MERGER AGREEMENT

 

BY AND AMONG

ADVANCE TECHNOLOGIES INC.

SXAN ACQUISITION CORP.

AND

 

AMERICAN SXAN BIOTECH, INC.

 

 

 

DATED AS OF MAY 24, 2007

 

<PAGE>

 

 

SHARE PURCHASE AND MERGER AGREEMENT

 

SHARE PURCHASE AND MERGER AGREEMENT (the "AGREEMENT") dated as of May

24, 2007 by and among Advance Technologies Inc., a corporation formed under the

laws of the State of Nevada ("AVTX"), SXAN Acquisition Corp., a corporation

newly formed under the laws of the State of Delaware and a wholly owned

subsidiary of AVTX (the "MERGER SUB"), American SXAN Biotech, Inc., a

corporation formed under the laws of the State of Delaware ("SXAN"), the

individual who is identified on the signature pages of this Agreement as the

Investor ("INVESTOR"), and Gary Ball and Wendy Ball (the "PRINCIPAL

SHAREHOLDERS"). Each of AVTX, the Merger Sub, SXAN and each of the Investors or

the Principal Shareholders is referred to herein individually as a "PARTY" and

all are referred to collectively as the "PARTIES."

PREAMBLE

WHEREAS, SXAN owns 100% of the registered capital of Tieli

XiaoXingAnling Forest Frog Breeding Co., Ltd. ("TXFF"), a corporation organized

under the laws of The People's Republic of China;

WHEREAS, AVTX and SXAN have determined that a business combination

between them is advisable and in the best interests of their respective

companies and stockholders and presents an opportunity for their respective

companies to achieve long-term strategic and financial benefits;

WHEREAS, the Investor is affiliated with SXAN, and wishes to purchase

certain common shares of AVTX (the "PURCHASED SHARES," as further defined

herein) for cash (the "SHARE PURCHASE");

WHEREAS, AVTX has proposed to acquire SXAN pursuant to a merger

transaction whereby, pursuant to the terms and subject to the conditions of this

Agreement, SXAN shall become a wholly owned subsidiary of AVTX through the

merger of SXAN with and into the Merger Sub (the "MERGER"); and

WHEREAS, in the Merger, all issued and outstanding shares of capital

stock of SXAN shall be cancelled and converted into the right to receive 100,000

Series B Convertible Shares of AVTX (the "MERGER SHARES") which Shares, together

with the Purchased Shares, shall represent 93.5 % of the voting power of AVTX

after the Merger;

NOW, THEREFORE, in consideration of the premises and the mutual

covenants, representations and warranties contained herein, the Parties,

intending to be legally bound, hereby agree as follows:

CERTAIN DEFINITIONS

As used in this Agreement, the following terms shall have the meanings

set forth below:

"APPLICABLE LAW" means any domestic or foreign law, statute, regulation, rule,

policy, guideline or ordinance applicable to the businesses of the Parties, the

Merger and/or the Parties.

"DGCL" means Delaware General Corporation Law.

"KNOWLEDGE" means, in the case of AVTX or SXAN, a particular fact or other

matter of which its Chief Executive Officer or the Chief Financial Officer is

actually aware or which a prudent individual serving in such capacity could be

 

<PAGE>

 

expected to discover or otherwise become aware of in the course of conducting a

reasonable review or investigation of the corporation and its business and

affairs.

"LIEN" means, with respect to any property or asset, any mortgage, lien, pledge,

charge, security interest, claim, encumbrance, royalty interest, any other

adverse claim of any kind in respect of such property or asset, or any other

restrictions or limitations of any nature whatsoever.

"MATERIAL ADVERSE EFFECT" with respect to any entity or group of entities means

any event, change or effect that has or would have a materially adverse effect

on the financial condition, business or results of operations of such entity or

group of entities, taken as a whole.

"PERSON" means any individual, corporation, partnership, trust or unincorporated

organization or a government or any agency or political subdivision thereof.

"SURVIVING ENTITY" shall mean SXAN as the surviving entity in the Merger as

provided in Section 1.04.

"TAX" (and, with correlative meaning, "TAXES" and "TAXABLE") means:

(i) any income, alternative or add-on minimum tax, gross receipts tax,

sales tax, use tax, ad valorem tax, transfer tax, franchise tax, profits tax,

license tax, withholding tax, payroll tax, employment tax, excise tax, severance

tax, stamp tax, occupation tax, property tax, environmental or windfall profit

tax, custom, duty or other tax, impost, levy, governmental fee or other like

assessment or charge of any kind whatsoever together with any interest or any

penalty, addition to tax or additional amount imposed with respect thereto by

any governmental or Tax authority responsible for the imposition of any such tax

(domestic or foreign), and

(ii) any liability for the payment of any amounts of the type described

in clause (i) above as a result of being a member of an affiliated,

consolidated, combined or unitary group for any Taxable period, and

(iii) any liability for the payment of any amounts of the type

described in clauses (i) or (ii) above as a result of any express or implied

obligation to indemnify any other person.

"TAX RETURN" means any return, declaration, form, claim for refund or

information return or statement relating to Taxes, including any schedule or

attachment thereto, and including any amendment thereof.

ARTICLE I

THE TRANSACTIONS

SECTION 1.01 THE SHARE PURCHASE

(a) On the Closing Date (defined herein), the Share Purchase shall be

consummated, in which the Investor shall purchase from AVTX an aggregate of

fifty seven million, one hundred forty three thousand, three hundred and two

(57,143,302) shares of the Common Stock of AVTX ("PURCHASED SHARES") for cash

consideration of Three Hundred Twenty Five Thousand and 00/100 Dollars

($325,000.00).

(b) The Parties intend that the issuance of the Purchased Shares to the

Investors pursuant to the Share Purchase shall be exempt from the registration

requirements of the Securities Act of 1933 (the "SECURITIES ACT") pursuant to

Section 4(2) of the Securities Act and the rules and regulations promulgated

thereunder.

 

<PAGE>

 

SECTION 1.02 THE MERGER

Upon the terms and subject to the conditions set forth in this

Agreement and in accordance with the DGCL, at the Effective Time (as hereinafter

defined), all SXAN Shares (as hereinafter defined) shall be cancelled and

converted into the right to receive the Merger Shares. In connection therewith,

the following terms shall apply:

(a) CERTIFICATE OF DESIGNATION. Prior to the Closing, AVTX shall file

with the Secretary of State of the State of Nevada a Certificate of Designation

of the Series B Convertible Preferred Shares ("Series B Preferred Shares") in

the form of SCHEDULE 1.02 hereto.

(b) EXCHANGE AGENT. Robert Brantl, Esq., counsel for SXAN, shall act as

the exchange agent (the "EXCHANGE AGENT") for the purpose of exchanging SXAN

Shares for the Merger Shares. At or prior to the Closing, AVTX shall deliver to

the Exchange Agent the Merger Shares.

(c) CONVERSION OF SECURITIES.

(i) CONVERSION OF SXAN SECURITIES. At the Effective Time, by

virtue of the Merger and without any action on the part of AVTX, SXAN or the

Merger Sub, or the holders of any of their respective securities:

(A) Each of the issued and outstanding shares of

common stock of SXAN (the "SXAN SHARES") immediately prior to the Effective Time

shall be converted into and represent the right to receive, and shall be

exchangeable for, that number of Series B Preferred Shares of AVTX as shall be

determined by dividing 100,000 by the number of then issued and outstanding SXAN

Shares.

(B) All SXAN Shares shall no longer be outstanding

and shall automatically be canceled and retired and shall cease to exist, and

each holder of a certificate representing any such shares shall cease to have

any rights with respect thereto, except the right to receive the Merger Shares

to be issued pursuant to this Section 1.02(c)(i) upon the surrender of such

certificate in accordance with Section 1.08, without interest. No fractional

shares may be issued; but each fractional share that would result from the

Merger will be rounded to the nearest number of whole shares.

(C) The Merger Shares (I) together with the Purchased

Shares acquired in the Share Purchase, shall represent 93.5%, on a fully diluted

basis, of the voting power of all classes of issued and outstanding stock of

AVTX at the Effective Time, after giving effect to the Merger, and (II) shall be

convertible into 900,000,000 shares of the Common Stock of AVTX on a fully

diluted basis at any time after the consummation of the spin-off transaction

described in the Operating Subsidiary Agreement (as defined in Section 5.01 (d)

hereof).

(ii) CONVERSION OF MERGER SUB STOCK. At the Effective Time, by

virtue of the Merger and without any action on the part of SXAN, AVTX, the

Merger Sub, or the holders of any of their respective securities, each share of

capital stock of Merger Sub outstanding immediately prior to the Effective Time

shall be converted into one share of the common stock of the Surviving Entity

and the shares of common stock of the Surviving Entity so issued in such

conversion shall constitute the only outstanding shares of capital stock of the

Surviving Entity and the Surviving Entity shall be a wholly owned subsidiary of

AVTX.

(d) EXEMPTION FROM REGISTRATION. The Parties intend that the issuance

of the Merger Shares to the Investors shall be exempt from the registration

requirements of the Securities Act pursuant to Section 4(2) of the Securities

Act and the rules and regulations promulgated thereunder.

 

<PAGE>

 

(e) AGREEMENT RE CONVERSION INTO AVTX COMMON STOCK. Each recipient of

Series B Preferred Shares of AVTX pursuant to the Merger hereby agrees not to

convert such shares into Common Stock of AVTX until the authorized number of

shares of AVTX Common Stock is increased.

SECTION 1.03 CLOSING

The closing of the Share Purchase and the Merger (the "CLOSING") will

take place at the offices of Robert Brantl, Esq. within one (1) business day

following the satisfaction or waiver of the conditions precedent set forth in

Article V or at such other date as AVTX and SXAN shall agree (the "CLOSING

DATE"), but in any event no later than June 30, 2007 unless extended by a

written agreement of AVTX and SXAN.

SECTION 1.04 MERGER; EFFECTIVE TIME

At the Effective Time and subject to and upon the terms and conditions

of this Agreement, Merger Sub shall, and AVTX shall cause Merger Sub to, merge

with and into SXAN in accordance with the provisions of the DGCL, the separate

corporate existence of Merger Sub shall cease and SXAN shall continue as the

Surviving Entity. The Effective Time shall occur upon the filing with the

Secretary of State of the State of Delaware of a Certificate of Merger, executed

in accordance with the applicable provisions of the DGCL (the "EFFECTIVE TIME").

The date on which the Effective Time occurs is referred to as the "EFFECTIVE

DATE." Provided that this Agreement has not been terminated pursuant to Article

VI, the Parties will cause the Certificate of Merger to be filed as soon as

practicable after the Closing.

SECTION 1.05 EFFECT OF THE MERGER

The Merger shall have the effect set forth in Title 8, Section 259 of

the DGCL. Without limiting the generality of the foregoing, and subject thereto,

at the Effective Time, all the properties, rights, privileges, powers and

franchises of SXAN and Merger Sub shall vest in the Surviving Entity, and all

debts, liabilities and duties of SXAN and Merger Sub shall become the debts,

liabilities and duties of the Surviving Entity.

SECTION 1.06 CERTIFICATE OF INCORPORATION AND BYLAWS; DIRECTORS AND

OFFICERS

Pursuant to the Merger:

(a) The Certificate of Incorporation and Bylaws of SXAN as in effect

immediately prior to the Effective Time shall be the Certificate of

Incorporation and Bylaws of the Surviving Entity immediately following the

Merger.

(b) The directors and officers of the SXAN immediately prior to the

Merger shall be the directors and officers of the Surviving Entity subsequent to

the Merger.

SECTION 1.07 RESTRICTIONS ON RESALE

(a) Neither the Purchased Shares issued pursuant to the Share Purchase

nor the Series B Preferred Shares issued pursuant to the Merger will be

registered under the Securities Act, or the securities laws of any state, and

cannot be transferred, hypothecated, sold or otherwise disposed of until: (i) a

registration statement with respect to such securities is declared effective

under the Securities Act, or (ii) AVTX receives an opinion of counsel for the

holders of the shares proposed to be transferred, reasonably satisfactory to

 

<PAGE>

 

counsel for AVTX, that an exemption from the registration requirements of the

Securities Act is available.

The certificates representing the Purchased Shares and the Merger

Shares which are being issued hereunder shall contain a legend substantially as

follows:

"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE

SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A

REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER

SUCH ACT, OR ADVANCE TECHNOLOGIES INC. RECEIVES AN OPINION OF COUNSEL

FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR ADVANCE

TECHNOLOGIES, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS

OF SUCH ACT IS AVAILABLE."

SECTION 1.08 EXCHANGE OF CERTIFICATES

(a) EXCHANGE OF CERTIFICATES. After the Effective Time, the holders of

the SXAN Shares shall be required to surrender all their SXAN Shares to the

Exchange Agent, and the holders shall be entitled upon such surrender to receive

in exchange therefor certificates representing the proportionate number of

Merger Shares into which the SXAN Shares theretofore represented by the stock

certificates so surrendered shall have been exchanged pursuant to this

Agreement. Until so surrendered, each outstanding certificate which, prior to

the Effective Time, represented SXAN Shares shall be deemed for all corporate

purposes, subject to the further provisions of this Article I, to evidence the

ownership of the number of whole Merger Shares for which such SXAN Shares have

been so exchanged. No dividend payable to holders of Merger Shares of record as

of any date subsequent to the Effective Time shall be paid to the owner of any

certificate which, prior to the Effective Time, represented SXAN Shares, until

such certificate or certificates representing all the relevant SXAN Shares,

together with a stock transfer form, are surrendered as provided in this Article

I or pursuant to letters of transmittal or other instructions with respect to

lost certificates provided by the Exchange Agent.

(b) FULL SATISFACTION OF RIGHTS. All Merger Shares for which the SXAN

Shares shall have been exchanged pursuant to this Article I shall be deemed to

have been issued in full satisfaction of all rights pertaining to the SXAN

Shares.

(c) EXCHANGE OF CERTIFICATES. All certificates representing SXAN Shares

converted into the right to receive Merger Shares pursuant to this Article I

shall be furnished to AVTX subsequent to delivery thereof to the Exchange Agent

pursuant to this Agreement.

(d) CLOSING OF TRANSFER BOOKS. On the Effective Date, the stock

transfer book of SXAN shall be deemed to be closed and no transfer of SXAN

Shares shall thereafter be recorded thereon.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF AVTX

AVTX, the Principal Shareholders and, where applicable, the Merger Sub

hereby jointly and severally represent and warrant to SXAN and to the Investors,

as of the date of this Agreement, as of the Closing Date and as of the Effective

Time, as follows:

 

<PAGE>

 

SECTION 2.01 ORGANIZATION, STANDING AND POWER

AVTX is a corporation duly incorporated, validly existing and in good

standing under the laws of the State of Nevada, and has corporate power and

authority to conduct its business as presently conducted by it and to enter into

and perform this Agreement and to carry out the transactions contemplated by

this Agreement. Merger Sub is a corporation duly incorporated, validly existing

and in good standing under the laws of the State of Delaware, and has corporate

power and authority to enter into and perform this Agreement and to carry out

the transactions contemplated by this Agreement.

SECTION 2.02 SUBSIDIARIES

AVTX owns all of the outstanding capital stock of the Merger Sub and of

Infrared Systems International, a Nevada corporation ("OPERATING SUB"). Other

than its ownership of the Merger Sub and the Operating Sub, AVTX does not have

an ownership interest in any Person. Merger Sub is a recently formed corporation

and prior to the date hereof and through the Effective Date Merger Sub shall not

conduct any operating business, become a party to any agreements, or incur any

liabilities or obligations. Operating Sub holds the license to certain

technology licensed to it by AVTX as its only asset.

SECTION 2.03 CAPITALIZATION

(a) There are 200,000,000 shares of capital stock of AVTX authorized,

consisting of 100,000,000 shares of common stock, $0.001 par value per share

(the "AVTX COMMON SHARES"), and 100,000,000 shares of preferred stock, $0.001

par value per share ("AVTX PREFERRED SHARES"). . As of the date of this

Agreement, there are 39,527,897 AVTX Common Shares issued and outstanding. In

addition, AVTX has issued and outstanding and 27,011,477 rights to acquire AVTX

Common Shares which have been designated Series A Non-Voting Convertible

Preferred Stock, $0.001 par value per share ("SERIES A PREFERRED SHARES").

(b) No AVTX Common Shares or AVTX Preferred Shares have been reserved

for issuance to any Person, and there are no other outstanding rights, warrants,

options or agreements for the purchase of AVTX Common or Preferred Shares except

as provided in this Agreement.

(c) All outstanding AVTX Common Shares are validly issued, fully paid,

non-assessable, not subject to pre-emptive rights and have been issued in

compliance with all state and federal securities laws or other Applicable Law.

The Series A Preferred Shares are not validly issued, due to the failure to file

a certificate of designations with respect to that class of shares, but

represent a contractual right to acquire AVTX Common Shares, and when that right

is exercised, the AVTX Common Shares so issued will be validly issued, fully

paid, non-assessable, not subject to pre-emptive rights. The Common Shares to be

purchased by the Investors and the Series B Preferred Shares issuable to the

SXAN shareholders pursuant to the Merger will, when issued pursuant to this

Agreement, be duly and validly authorized and issued, fully paid and

non-assessable.

SECTION 2.04 AUTHORITY FOR AGREEMENT

The execution, delivery, and performance of this Agreement by each of

AVTX and Merger Sub has been duly authorized by all necessary corporate and

shareholder action, and this Agreement, upon its execution by the Parties, will

constitute the valid and binding obligation of each of AVTX and the Merger Sub,

enforceable against each of them in accordance with and subject to its terms,

except as enforceability may be affected by bankruptcy, insolvency or other laws

of general application affecting the enforcement of creditors' rights. The

execution and consummation of the transactions contemplated by this Agreement

and compliance with its provisions by AVTX and Merger Sub will not violate any

 

<PAGE>

 

provision of Applicable Law and will not conflict with or result in any breach

of any of the terms, conditions, or provisions of, or constitute a default

under, AVTX's Articles of Incorporation, Merger Sub's Certificate of

Incorporation, or either of their Bylaws, in each case as amended, or, in any

material respect, any indenture, lease, loan agreement or other agreement or

instrument to which AVTX is a party or by which it or any of its properties is

bound, or any decree, judgment, order, statute, rule or regulation applicable to

AVTX or Merger Sub.

SECTION 2.05 FINANCIAL CONDITION

Except as set forth on Schedule 2.05 hereto, the Annual Report on Form

10-KSB filed by AVTX for the year ended September 30, 2006 and the Quarterly

Report on Form 10-QSB filed by AVTX for the period ended March 31, 2007 (the

"SEC Filings") are true, correct and complete in all material respects, are not

misleading and do not omit to state any material fact which is necessary to make

the statements contained in such public filings not misleading in any material

respect. The financial statements included in the SEC Filings (the "Financial

Statements") were prepared in accordance with generally accepted accounting

principles and fairly reflect the financial condition of AVTX as of the dates

stated and the results of its operations for the periods presented.

SECTION 2.06 ABSENCE OF CERTAIN CHANGES OR EVENTS

Since March 31, 2007, except as reported in the Quarterly Report filed

by AVTX with the Securities and Exchange Commission ("SEC") on Form 10-QSB for

the period ending on that date, and except as contemplated by this Agreement:

(a) there has not been any Material Adverse Change in the business,

operations, properties, assets, or condition of AVTX;

(b) AVTX has not (i) amended its Articles of Incorporation; (ii)

declared or made, or agreed to declare or make, any payment of dividends or

distributions of any assets of any kind whatsoever to stockholders or purchased

or redeemed, or agreed to purchase or redeem, any outstanding capital stock;

(iii) made any material change in its method of management, operation, or

accounting; (iv) entered into any material transaction; or (v) made any accrual

or arrangement for payment of bonuses or special compensation of any kind or any

severance or termination pay to any present or former officer or employee;

(c) AVTX has not (i) borrowed or agreed to borrow any funds or

incurred, or become subject to, any material obligation or liability (absolute

or contingent) except liabilities incurred in the ordinary course of business;

(ii) paid any material obligation or liability (absolute or contingent) other

than current liabilities reflected in or shown on the most recent AVTX balance

sheet, and current liabilities incurred since that date in the ordinary course

of business; (iii) sold or transferred, or agreed to sell or transfer, any

material assets, properties, or rights, or canceled, or agreed to cancel, any

material debts or claims; or (iv) made or permitted any material amendment or

termination of any contract, agreement, or license to which it is a party.

SECTION 2.07 GOVERNMENTAL AND THIRD PARTY CONSENTS

No consent, waiver, approval, order or authorization of, or

registration, declaration or filing with, any court, administrative agency or

commission or other federal, state, county, local or other foreign governmental

authority, instrumentality, agency or commission or any third party, including a

party to any agreement with AVTX, the Operating Sub or Merger Sub, is required

by or with respect to AVTX, the Operating Sub or Merger Sub in connection with

the execution and delivery of this Agreement or the consummation of the

 

<PAGE>

 

transactions contemplated hereby, except for such consents, waivers, approvals,

orders, authorizations, registrations, declarations and filings as may be

required under (i) applicable securities laws, or (ii) the Nevada Revised

Statues or the DGCL.

SECTION 2.08 LITIGATION

There is no action, suit, investigation, audit or proceeding pending

against, or to the Knowledge of AVTX, threatened against or affecting, AVTX or

the Merger Sub or the Operating Sub or any of their respective assets or

properties before any court or arbitrator or any governmental body, agency or

official.

SECTION 2.09 INTERESTED PARTY TRANSACTIONS

Except as disclosed in the SEC Filings, AVTX is not indebted to any

officer or director of AVTX, and no such person is indebted to AVTX.

SECTION 2.10 COMPLIANCE WITH APPLICABLE LAWS

To the Knowledge of AVTX, the business of each of AVTX, the Operating

Sub and the Merger Sub has not been, and is not being, conducted in violation of

any Applicable Law.

SECTION 2.11 TAX RETURNS AND PAYMENT

AVTX has duly and timely filed all material Tax Returns required to be

filed by it and has duly and timely paid all Taxes shown thereon to be due.

Except as disclosed in Financial Statements filed by AVTX with the SEC, there is

no material claim for Taxes that is a Lien against the property of AVTX other

than Liens for Taxes not yet due and payable, none of which is material. AVTX

has not received written notification of any audit of any Tax Return of AVTX

being conducted or pending by a Tax authority where an adverse determination

could have a Material Adverse Effect on AVTX, no extension or waiver of the

statute of limitations on the assessment of any Taxes has been granted by AVTX

which is currently in effect, and AVTX is not a party to any agreement, contract

or arrangement with any Tax authority or otherwise, which may result in the

payment of any material amount in excess of the amount reflected on the above

referenced AVTX Financial Statements.

SECTION 2.12 SECURITY LISTING

AVTX is a fully compliant reporting company under the Securities

Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and all AVTX public

filings required under the Exchange Act have been made. The common stock of AVTX

is listed for quotation on the OTC Bulletin Board. To the Knowledge of AVTX,

AVTX has not been threatened or is not subject to removal of its common stock

from the OTC Bulletin Board.

SECTION 2.13 FINDERS' FEES

AVTX has not incurred, nor will it incur, directly or indirectly, any

liability for brokers' or finders' fees or agents' commissions or investment

bankers' fees or any similar charges in connection with this Agreement or any

transaction contemplated hereby, except that AVTX will owe $25,000 to Jeffrey

Hausig for services rendered in connection with the transactions contemplated by

this Agreement.

 

<PAGE>

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SXAN

SXAN hereby represents and warrants to AVTX and to Merger Sub, as of

the date of this Agreement and as of the Effective Time (except as otherwise

indicated), as follows:

SECTION 3.01 ORGANIZATION, STANDING AND POWER

SXAN is a privately held corporation duly incorporated, validly

existing and in good standing under the laws of the State of Delaware, and has

full corporate power and authority to conduct its business as pre


 
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