FORMATION AGREEMENT BFI-VPI

FORMATION AGREEMENT



This Formation Agreement (this "Agreement") is made as of the 15th day of October, 1996, by and between BIOFACTORS, INC., a Delaware corporation ("BFI"), and VOICE PLUS, INC., a California corporation ("VPI").





WITNESSETH:



WHEREAS, BFI is the developer and marketer of a system to assess performance readiness called the FACTOR 1000(R) system;



WHEREAS, VPI is a systems integrator and national distributor of voice processing equipment;



WHEREAS, BFI and VPI have determined that it would be desirable to combine the marketing, distribution and service capabilities of VPI with the experienced product and business development skills of BFI management and BFI's proprietary FACTOR 1000 technology;



WHEREAS, to effect such combination, BFI and VPI have determined that BFI and VPI should become wholly-owned subsidiaries of a newly formed Delaware corporation ("Parent");



WHEREAS, BFI and VPI have also determined that, as part of such combination, Parent should undertake an underwritten initial public offering of its common stock ("Parent Common Stock") pursuant to a registration statement filed under the Securities Act of 1933, as amended (the "IPO"); and



WHEREAS, BFI and VPI intend that the foregoing steps be accomplished pursuant to an integrated transaction which constitutes a Section 351 transaction for federal income tax purposes.



THEREFORE, in consideration of the foregoing and of the mutual promises and agreements herein contained, and intending to be legally bound, the parties hereby agree as follows:



1. Formation of Parent. BFI and VPI shall cause the formation of Parent as a corporation under the laws of the State of Delaware pursuant to a Certificate of Incorporation substantially in the form attached hereto as EXHIBIT A. Initially, for purposes of e ...