Registration Statement for Securities Offered Pursuant to a Transaction — Form S-3
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-3 Registration Statement for Securities Offered 41 157K
Pursuant to a Transaction
2: EX-3.3 Articles of Incorporation/Organization or By-Laws 2 9K
3: EX-5.1 Opinion re: Legality 2 8K
4: EX-10.24 Material Contract 30 110K
5: EX-10.25 Material Contract 46 170K
6: EX-23.3 Consent of Experts or Counsel 1 6K
EXHIBIT 10.25
AGREEMENT AND PLAN OF MERGER
by and among
MEDICAL INDUSTRIES OF AMERICA, INC.,
a Florida corporation,
MIOA ACQUISITION COMPANY IV, INC.,
a Florida corporation
YOUR GOOD HEALTH NETWORK, INC.
a Florida corporation,
and
DR. DAVID VASTOLA
DANA PUSATERI
DR. MARTIN SANTIAGO
JUAN COCUY
IRMA ESPINOZA
RANDY DAVIS
ELAINE CALLENDRILLO
LYDIA TORREGROSA-GREBER
RICHARD HOFFMAN
ERIC CONN
EXHIBIT INDEX
EXHIBIT A Company Offices and Clinics
EXHIBIT B Articles of Merger
EXHIBIT C Articles of Incorporation
EXHIBIT D Bylaws
EXHIBIT E General Release
EXHIBIT F Employment Agreements and Addendum
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SCHEDULE INDEX
SCHEDULE 2.1 Designation of Shareholders
SCHEDULE 2.1(e)(ii) Pre-Existing Rights
SCHEDULE 3.1 Existing Options, Warrants, Calls & Rights
SCHEDULE 3.2 Articles and Bylaws
SCHEDULE 3.3 List of Security Holders of the Company
SCHEDULE 3.6 Financial Statements of the Company
SCHEDULE 3.7 Conduct Since Recent Balance Sheet
SCHEDULE 3.9 Liabilities
SCHEDULE 3.10(a) Liens
SCHEDULE 3.10(c) Leasehold Interests
SCHEDULE 3.11 Accounts Receivable
SCHEDULE 3.12(b) Personal Property Leases
SCHEDULE 3.12(c) Purchase Commitments
SCHEDULE 3.12(g) Loan Agreements
SCHEDULE 3.12(h) Guarantees
SCHEDULE 3.12(k) Other Material Contracts
SCHEDULE 3.13 Officers and Directors
SCHEDULE 3.14 Labor Matters
SCHEDULE 3.15(a) Compliance
SCHEDULE 3.15(b) Licenses and Permits
SCHEDULE 3.15(c) Environmental Matters
SCHEDULE 3.17(b) Tax Returns
SCHEDULE 3.17(d) Agreements under Section 341(f), etc.
SCHEDULE 3.18 Insurance
SCHEDULE 3.19 Personnel
SCHEDULE 3.20 Litigation
SCHEDULE 3.24 Trade Rights
SCHEDULE 3.25 Bank Accounts
SCHEDULE 3.26 Other Material Matters
SCHEDULE 3.30 Warranties in Respect to Affiliated Companies
SCHEDULE 4.11(a) Compliance With Laws
SCHEDULE 4.11(b) Licenses and Permits
SCHEDULE 4.11(c) Environmental Matters
SCHEDULE 4.12 Litigation
SCHEDULE 11.1 Notices to Shareholders
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is effective as of the
15th day of October, 1998 by and among MEDICAL INDUSTRIES OF AMERICA, INC., a
Florida corporation or its assigns ("MIOA"), MIOA ACQUISITION COMPANY IV, INC.,
a Florida corporation (the "ACQUISITION CORP"), YOUR GOOD HEALTH NETWORK, INC.
and its subsidiaries, Florida corporations (collectively hereinafter called the
"COMPANY") and DR. DAVID VASTOLA, DANA PUSATERI, DR. MARTIN SANTIAGO, JUAN
COCUY, IRMA ESPINOZA, RANDY DAVIS, ELAINE CALLENDRILLO, LYDIA TORREGROSA-GREBER,
RICHARD HOFFMAN AND ERIC CONN (hereinafter individually referred to as
"SHAREHOLDER" and collectively referred to as the "SHAREHOLDERS").
RECITALS:
A. The Company provides pain therapy, physical therapy, occupational therapy,
speech therapy and primary care physician practice services (the
"Business").
B. The principal business location of the Company is 525 S.E. 6th Avenue,
Suite B, Delray Beach, Florida 33483 (the "Principal Business Location").
C. The Company also has offices and clinics at the following addresses shown
in EXHIBIT A annexed hereto.
D. The Shareholders own Eight Hundred Twenty-Nine Thousand Six Hundred
Sixty-eight (829,668) common shares, $.001 par value per share, of the
Company capital stock (the "SHAREHOLDERS' SHARES") which constitutes one
hundred percent (100%) of the total issued and outstanding common stock of
the Company (the "Company Shares").
E. MIOA presently owns and upon consummation of the Merger will own 100% of
all authorized, issued and outstanding stock of Acquisition Corp. The
Shareholders shall receive (subject to dissenters' rights as described in
Section 2.2) in consideration for the merger of the Company into
Acquisition Corp shares of MIOA restricted voting common stock, $.0025 par
value per share (hereinafter referred to as the "MIOA STOCK" or the "MIOA
SHARES") in accordance with the terms and conditions hereof.
F. The Company will, as soon as practicable after the execution of this
Agreement and subject to the satisfaction or waiver of the conditions
precedent set forth in Articles VII and VIII of this Agreement, file
Articles of Merger with the Florida Secretary of State Division of
Corporations thereby statutorily merging the Company into Acquisition
Corp, (such merger being referred to herein as the "Merger"). The Merger
shall be in accordance with this Agreement, the Articles of Merger, the
Florida Business Corporation Act (the "FLORIDA STATUTE").
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ARTICLE I.
THE MERGER
1.1. THE MERGER. As of the Effective Date (as hereinafter defined)
and in accordance with the applicable provisions of the Florida Statute, the
Company shall be merged with and into Acquisition Corp, in accordance with the
terms and conditions of this Agreement and the articles of merger in
substantially the form of EXHIBIT B annexed hereto (hereinafter referred to as
the "ARTICLES OF MERGER"), subject to such changes as to form (but not
substance) as may be required by the Florida Statute. The Acquisition Corp shall
be the surviving corporation of the Merger (the Acquisition Corp, in such
capacity, being hereinafter sometimes referred to as the "SURVIVING CORPORATION"
or "SURVIVING COMPANY"). Thereupon, the separate existence of the Company shall
cease, and the Acquisition Corp, as the Surviving Corporation, shall continue
its corporate existence under the Florida Statute.
1.2. FILING ARTICLES OF MERGER. As soon as practicable after the
execution of this Agreement and subject to the satisfaction or waiver of the
conditions precedent set forth in Articles VII and VIII of this Agreement, the
Acquisition Corp and the Company will execute the Articles of Merger, and shall
file or cause to be filed such Articles of Merger with the Secretary of State of
Florida. Upon the filing of the Articles of Merger, MIOA will irrevocable
instruct its transfer agent to issue and deliver in the manner provided herein
certificates evidencing the MIOA Shares to be issued in the Merger.
1.3. EFFECT OF THE MERGER. Upon the effectiveness of the Merger, (a)
the Surviving Corporation shall own and possess all assets and property of every
kind and description, and every interest therein, wherever located, and all
rights, privileges, immunities, powers, franchises and authority of a public as
well as of a private nature, of the Acquisition Corp and the Company (the
"CONSTITUENT CORPORATIONS"), and all obligations owed to, belonging to or due to
each of the Constituent Corporations, all of which shall be vested in the
Surviving Corporation pursuant to Florida Statute without further act or deed,
and (b) the Surviving Corporation shall be liable for all claims, liabilities
and obligations of the Constituent Corporations, all of which shall become and
remain the obligations of the Surviving Corporation pursuant to Florida Statute
without further act or deed.
1.4. SURVIVING CORPORATION. Upon the effectiveness of the Merger,
the Articles of Incorporation and Bylaws of the Surviving Corporation shall be
identical to those attached hereto as EXHIBITS C AND D, respectively. The
directors of the Surviving Corporation initially shall be Dana Pusateri, Paul C.
Pershes, and Arthur Kobrin each of who shall continue to be the directors of the
Surviving Corporation, subject to the Articles of Incorporation and the Bylaws.
1.5. SUBSEQUENT ACTIONS. If at any time after the Effective Date,
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurance or any other actions or things are necessary or
desirable to (i) vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights,
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properties or assets of either Acquisition Corp or the Company acquired or to be
acquired by the Surviving Corporation as a result of, or in connection with, the
Merger or (ii) otherwise to carry out this Agreement, then the officers and
directors of the Surviving Corporation shall be authorized to (x) execute and
deliver, in the name and on behalf of either the Acquisition Corp or the
Company, as the case may be, all such deeds, bills of sale, assignments and
assurances and (y) to take and do, in the name of and on behalf of each
corporation or otherwise, all such actions and things as may be necessary or
desirable, to vest, perfect or confirm any and all right, title and interest in,
to and under such rights, properties or assets in the Surviving Corporation or
otherwise to carry out this Agreement.
1.6. STATUS AND CONVERSION OF SHARES. Upon the Effective Date of the
Merger:
(a) Each share certificate representing each outstanding share
of Acquisition Corp shall continue to be a share of issued and outstanding
Common Stock of the Surviving Corporation and shall be retained by MIOA (the
"ACQUISITION CORP STOCK").
(b) The share certificates representing all the Shareholders
Shares shall, by virtue of the Merger and without any action on the part of the
holder thereof, be deemed canceled and extinguished. In exchange for the merger
of the Company into the Acquisition Corp, the Shareholders shall (subject to
Section 2.2 Dissenters' Rights) receive the Merger Consideration set forth and
defined in Section 2.1 below (the "MERGER CONSIDERATION").
1.7. BOOKS AND RECORDS. On the Closing Date (as hereinafter
defined), the Company shall deliver to MIOA all of the stock books, records and
minute books of the Company, all financial and accounting books and records of
the Company, all tax returns and records of the Company, and all supplier,
client, customer, patient (to the extent allowed by law) sales and other
business records of the Company.
1.8 BOARD AND STOCKHOLDER APPROVAL. This Agreement is subject to,
and it is a condition to the consummation of the Merger, that MIOA Board
approval, Acquisition Corp Board approval, Acquisition Corp stockholder
approval, Company Board approval and Company stockholder approval be obtained.
1.9. TAX CONSEQUENCES. It is intended that the Merger shall
constitute a reorganization within the meaning of Section 368 of the Code, and
that this Agreement shall constitute a "plan of reorganization" for purposes of
Section 368 of the Code.
ARTICLE II.
MERGER CONSIDERATION, REGISTRATION RIGHTS, CLOSING
2.1. SHAREHOLDERS' MERGER CONSIDERATION. In exchange for merging the
Company into the Acquisition Corp and canceling and extinguishing the Company
Shares in accordance with this Merger Agreement, the Shareholders, as designated
and in the amounts set forth on SCHEDULE 2.1, shall receive the following Merger
Consideration:
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(a) PURCHASE PRICE. MIOA agrees, subject to the provisions of
this Agreement, to pay to the Shareholders Two Million Five Hundred Thousand
Dollars ($2,500,000.00) (hereinafter the "Purchase Price") as set forth below.
(b) METHOD OF PAYING PURCHASE PRICE. Except as provided in
Section 2.2 below, the Purchase Price shall be paid in MIOA Shares. For purposes
of determining the number of MIOA Shares that a Shareholder will receive, the
portion of the Purchase Price allocated to the Shareholder as set forth in
SCHEDULE 2.1 shall be divided by $0.75; the resulting quotient is the number of
MIOA Shares that shall be delivered to the Shareholders at the Closing. Cash
shall be paid in lieu of fractional shares and any additional MIOA Shares issued
hereunder shall be deemed to have been paid as of the Closing Date for purposes
of Rule 144 of the Securities Act of 1933.
(c) PRICE ADJUSTMENT.
(i) PRICE ADJUSTMENT. Notwithstanding the foregoing, if
during any 20 day trading period beginning on the first anniversary date of the
Effective Date and ending on the last day of the 18th month following the
Effective Date (hereinafter called the "LOOKBACK PERIOD"), the Fair Market Value
of a MIOA Share (defined below) is less than $0.75, then in such event, MIOA
will issue, upon receipt of a "PRICE ADJUSTMENT REQUEST" (as defined below),
"ADDITIONAL CONSIDERATION" to the Shareholders, in proportion to their ownership
interests as designated in SCHEDULE 2.1 [Dissenting Shareholders (as defined
below) and any Company Shareholder who has exercised any buyback rights he may
have shall not be entitled to any Additional Consideration]. Such Additional
Consideration shall mean additional MIOA Shares determined as follows: The
portion of the Purchase Price allocated to a Company Shareholder as set forth in
SCHEDULE 2.1 (excluding Dissenting Shareholders and any Company Shareholder who
has exercised his buyback) shall be divided by the Fair Market Value of an MIOA
Share as established by the parties for the period set forth in the Price
Adjustment Request; from the resulting quotient subtract the number of MIOA
Shares delivered to the Shareholder at Closing; the resulting remainder is the
number of additional MIOA Shares that shall be delivered to the Shareholder.
Cash shall be paid in lieu of fractional shares and such additional MIOA Shares
shall be deemed to have been paid as of the Closing Date for purposes of Rule
144 of the Securities Act of 1933.
ii. PRICE ADJUSTMENT REQUEST. The term "PRICE ADJUSTMENT
REQUEST" shall mean a written notice from Mr. Pusateri or his assigns delivered
to MIOA no later than nineteen (19) months following the Effective Date
designating the Shareholders who are entitled to Additional Consideration and
setting forth with specificity the calculations made in determining such
entitlement. Unless contested, MIOA shall deliver to such Shareholders the
Additional Consideration within thirty (30) days of the receipt of the Price
Adjustment Request. If contested, the parties shall in good faith work toward
resolving their differences. If such differences have not been resolved within
thirty (30) days from the delivery of the Price Adjustment Request, such matters
shall be submitted to binding arbitration with the American
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Arbitration Association serving Palm Beach County, Florida. The non-prevailing
party shall pay all reasonable costs and expenses incurred by the prevailing
party in such arbitration.
(d) FAIR MARKET VALUE OF MIOA SHARES. The term "FAIR MARKET
VALUE" of an MIOA Share shall be calculated as follows: (1) if the principal
market for such stock is a national securities exchange, the 20 day trailing
average of the closing prices per share of such stock as reported by such
exchange or on a composite tape reflecting transactions on such exchange, (2) if
the principal market for such stock is not a national securities exchange and
such stock is quoted on The Nasdaq Stock Market ("NASDAQ"), and (i) if actual
closing price information is available with respect to such stock, the 20 day
trailing average of the closing prices per share of such stock on Nasdaq, or
(ii) if such information is not available, the 20 day trailing average of the
bid prices per share of such stock on Nasdaq, or (3) if the principal market for
such stock is not a national securities exchange and such stock is not quoted on
Nasdaq, the 20 day trailing average of the bid prices per share of such stock as
reported on the OTC Bulletin Board Service or by National Quotation Bureau,
Incorporated or a comparable service; PROVIDED, HOWEVER, that if clauses (1),
(2) and (3) of this Section are all inapplicable, or if no trades have been made
or no quotes are available for such day, the fair market value of such stock
shall be determined as follows: The Shareholders and MIOA shall each appoint an
appraiser and the two appraisers appointed shall have fifteen (15) days to
appoint a third appraiser. Each of such appraisers shall be engaged in the
business of providing appraisals of stock similar to the MIOA stock. The
Shareholders and MIOA shall pay the fee of the appraisers it appoints plus
one-half of the third appraiser's fee. Within thirty (30) days following the
appointment of the third appraiser, the two originally selected appraisers shall
each submit a sealed appraisal to the Shareholders and MIOA. If after the
appraisals have been submitted and the Shareholders and MIOA are unable to agree
upon an acceptable fair market value within fifteen (15) days, the third
appraiser shall select one of the two previously submitted appraisals as the
Fair Market Value of an MIOA Share. The selection by the third appraiser shall
be final and binding upon the parties. Any delay caused by the appraisal
procedures shall cause the closings otherwise contemplated herein to accommodate
such delay.
(e) PUT OPTION.
i. PUT OPTION. If at any time within one (1) year of the
Closing Date, MIOA experiences a "Funding Event" (as defined below), the
Shareholders (excluding the Dissenting Shareholders), in proportion to their
ownership percentage as set forth in SCHEDULE 2.1, shall each have the right by
delivering to MIOA a "PUT REQUEST" (as defined below) to require MIOA to
purchase (the "PUT OPTION" or the "PUT") their proportionate share of an amount
equal to, but not exceeding in the aggregate, Five Hundred Thousand Dollars
($500,000.00) worth of the MIOA Shares delivered to the Shareholders at Closing.
For these purposes, the Put price of an MIOA Share shall be equal to $0.75 (the
"PUT PRICE PER SHARE").
ii. FUNDING EVENT. The term "FUNDING EVENT" shall mean
the sale by MIOA of its assets and/or a debt or equity raise by MIOA whereby the
"NET AVAILABLE PROCEEDS" (as defined below) equal or exceed Three Million
Dollars ($3,000,000.00). The term "NET AVAILABLE PROCEEDS" shall mean the net
proceeds received by MIOA after the payment of
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costs and expenses incurred in connection with such Funding Event and after the
satisfaction of all preexisting rights as set forth in SCHEDULE 2.1(E)II. In
addition, a Funding Event shall be deemed to have occurred in the case of any
consolidation or merger of MIOA with or into another corporation or the
conveyance of all or substantially all of the assets of MIOA to another
corporation. MIOA shall notify the Shareholders in writing within 30 days of the
completion of a Funding Event.
iii. PUT REQUEST. The term "PUT REQUEST" shall mean a
written notice from a Company Shareholder delivered to MIOA together with the
requisite number of MIOA shares free of all encumbrances, claims or liens except
for encumbrances under state or federal securities laws. Such request shall be
submitted within thirty (30) days after receiving notice from MIOA of a Funding
Event and shall state that MIOA has experienced a Funding Event and shall
further state the Put Price that the Company Shareholder is entitled to receive
as a result of this provision. Unless contested, MIOA shall pay the Put Price to
the Shareholder(s) within thirty (30) days of the receipt of the Put Request. If
contested, the parties shall in good faith to resolve their differences. If such
differences have not been resolved within thirty (30) days, such matters shall
be submitted to binding arbitration with the American Arbitration Association
serving Palm Beach County, Florida. The non-prevailing party shall pay all
reasonable costs and expenses incurred by the prevailing party in such
arbitration. Cash shall be paid in lieu of fractional shares and such additional
MIOA Shares shall be deemed to have been paid as of the Closing Date for
purposes of Rule 144 of the Securities Act of 1933. If MIOA shall fail to pay
the Company Shareholder(s) their Put Price within the time periods set forth
herein interest shall accrue on the unpaid amount at the maximum rate allowed by
law. This covenant shall survive the Closing of this transaction.
(f) CAPITAL ADJUSTMENTS AFFECTING MIOA SHARES.
i. The existence of the MIOA Shares or any rights the
Shareholders may otherwise have shall not affect in any way the price
adjustments set forth herein, the right or power of the Surviving Company or
MIOA to make or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Surviving Company's or MIOA's capital
structure or their business, or to undertake any merger or consolidation of the
Surviving Company or MIOA or to pay dividends, or to subdivided its outstanding
shares into a greater number of shares, combine its outstanding shares into a
smaller number of shares, issue any securities, bonds, debentures, or preferred
or prior preference stock ahead of or affecting the common stock of the
Surviving Company or MIOA, the rights thereof or to effect the dissolution or
liquidation of the Surviving Company or MIOA, or any sale or transfer of all or
part of their assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
ii. In the event of a stock dividend, recapitalization,
or merger in which MIOA is the surviving corporation, split-up, combination or
exchange of shares or the like which results in a change in the number or kind
of shares of common stock which is outstanding immediately prior to such event,
the aggregate number and kind of MIOA Shares owned by the Shareholders and the
rights of the Shareholders to receive additional MIOA Shares
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in respect to the Purchase Price shall be appropriately adjusted in the same
manner as the number and kind of shares of a shareholder of MIOA who owned the
same number and kind of shares immediately prior to such event. Such adjustments
shall be made by the Board of Directors of MIOA, whose determination shall be
conclusive and binding on all parties.
iii. Except as otherwise expressly provided herein, the
issuance of shares of MIOA's capital stock of any class, or securities
convertible into shares of capital stock of any class, either in connection with
direct sale or upon the exercise of rights or warrants to subscribe therefor, or
upon conversion of shares or obligations of MIOA convertible into such shares or
other securities, shall not affect, and no adjustment by reason thereof shall be
made with respect to the number of or price to the MIOA Shares the Shareholders
then owns or his rights in respect to additional MIOA Shares.
iv. In case of any consolidation or merger of MIOA with
or into another corporation or the conveyance of all or substantially all of the
assets of MIOA to another corporation or a share exchange transaction, the MIOA
Shares shall thereafter be convertible into the number of shares of stock,
options or other securities or property to which a holder of the number of
shares of common stock deliverable upon entitlement to the MIOA Shares would
have been entitled upon such consolidation, merger, conveyance or exchange; and,
in any such case, appropriate adjustment shall be made in the application of the
provisions herein set forth with respect to the rights and interest thereafter
of the holders of rights to receive additional MIOA Shares, to the end that the
provisions set forth herein shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares of stock, options or other property
thereafter deliverable upon entitlement to the MIOA Shares.
2.2 DISSENTING SHARES. (a) Notwithstanding the provisions of this Article
2 or any other provision of this Agreement, all outstanding Company Shares held
by the Company Shareholders who have not voted in favor of the Merger as
evidenced by their failure to execute this Agreement and all other required
Transaction Documents and with respect to which dissenter's rights have been
properly exercised and notice given to the Company in accordance with the
Florida Dissenter's Statutes and which dissenter's rights have not been
withdrawn or lost (hereinafter sometimes "DISSENTING SHAREHOLDER(S)" and
sometimes "COMPANY DISSENTING SHARES") shall no longer be entitled to vote or to
exercise any other rights as a Company Shareholder and shall only be entitled to
payment for their Company Dissenting Shares in accordance with the Florida
Dissenter's Statutes (i.e., Sections 607.1301 ET. seq.) (unless such Shareholder
timely withdraws its notice of election to dissent or fails to perfect its right
to dissent in accordance with the Florida Dissenter's Statutes).
2.3. NO REGISTRATION. By executing this Agreement and thereby voting in
favor of this Merger, the Shareholders acknowledge and agree that:
(a) Except as otherwise provided herein, the MIOA Shares are
being granted and issued without registration under applicable federal and state
securities laws in reliance upon certain exemptions from registration under such
securities laws;
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(b) Each certificate representing the MIOA Shares will bear a
legend restricting its transfer, sale, conveyance or hypothecation, unless such
MIOA Shares are either registered under applicable securities laws or an
exemption from such registration is applicable;
(c) The Shareholders shall not transfer all or any of the MIOA
Shares except in compliance with all applicable securities laws including Rule
144 of the Securities Act of 1933. Rule 144 presently allows a sale, within
certain limitations, of the MIOA Shares after one (1) year from the date the
MIOA Shares are unconditionally earned pursuant to this agreement;
(d) The Shareholders are acquiring the MIOA Shares for their
own account, for investment purposes only and not with a view to the sale or
distribution thereof.
2.4. INCIDENTAL REGISTRATION. MIOA agrees that if at any time it shall
propose to file a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") on a form suitable for sales by its shareholders,
it will give written notice to such effect to the Shareholders, at least thirty
(30) days prior to such filing, and, at the written request of the Shareholders,
made within ten (10) days after the receipt of such notice, will include therein
at MIOA's cost and expense (except for the fees and expenses of counsel to the
Shareholders and underwriting discounts, commissions and filing fees
attributable to the MIOA Shares included therein) such of the MIOA Shares held
by a Company Shareholder as he shall request; provided, however, that if the
offering being registered by MIOA is underwritten and if no other outstanding
shares of MIOA's common stock are included therein and if the representative of
the underwriters certifies that the inclusion therein of the MIOA Shares would
materially and adversely effect the sale of the securities to be sold by MIOA
thereunder, the public offering of the MIOA Shares included in such registration
statement either shall be delayed for a period of ninety (90) days after the
commencement of the underwritten public offering, provided that the
representative of the underwriters certifies in writing that such delay would
not materially and adversely effect the sale of the securities to be sold by
MIOA or, if the representative of the underwriters will not so certify, the
Shareholders shall not be permitted to participate in such registration except
to the extent, and then only in proportion thereto, that the other MIOA
officers/directors and other shareholders of MIOA possessing similar
registration rights are entitled to participate.
2.5. CLOSING. Consummation of the contemplated transaction (the "CLOSING")
shall take place on November 13, 1998 or on such other date or at such other
time or place as may be mutually agreed upon in writing by the parties hereto
(the "CLOSING DATE"). Notwithstanding the foregoing Closing Date, the subject
Merger shall become effective as of October 15, 1998 (the "EFFECTIVE DATE").
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHAREHOLDERS
The Company and the Shareholders, jointly and severally, make the
following representations and warranties to MIOA, each of which is true and
correct on the date hereof, shall remain true and correct in all material
respects to and including the Closing Date, shall be unaffected by any
investigation heretofore or hereafter made by MIOA, or any knowledge of MIOA
other than as specifically disclosed herein or in the disclosure schedules
delivered to MIOA, and shall survive the Closing of the transactions provided
for herein for the period ending on the second anniversary date of the Effective
Date. Notwithstanding anything herein to the contrary, if MIOA, by written
notice prior to the expiration of the survival period, advises of its question,
dispute, debate, variance or contention relative to any specific representation
or warranty of Shareholders such survival period shall be extended until such
time as the matter in question is resolved. For purposes of this section the
term "SHAREHOLDERS' KNOWLEDGE" shall mean "ACTUAL" or "CONSTRUCTIVE" knowledge
of the Shareholders. For these purposes "CONSTRUCTIVE KNOWLEDGE" shall mean that
knowledge or information that a prudent individual could be reasonably expected
to discover or otherwise become aware of in the course of the Company's
Business.
3.1 COMPANY SHARES. The Shareholders are the owners of the Company Shares
free and clear of any direct or indirect claims, liens, security interests,
charges, pledges or encumbrances of any nature whatsoever and will be free of
such claims, liens, security interests, charges, pledges or encumbrances as of
the Closing Date. All of the Company Shares are validly issued to the
Shareholders, fully paid and nonassessable. Except as set forth in SCHEDULE 3.1,
there are no existing options, warrants, calls, rights or commitments of any
character relating to the Company Shares or any Company securities of any kind.
3.2 ORGANIZATION. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida and is
validly qualified or licensed in each jurisdiction wherein the character of the
property owned or leased by it, or the nature of its business, makes such
licensing or qualification necessary. Accurate, current and complete copies of
the Articles of Incorporation and Bylaws of the Company are attached hereto as
SCHEDULE 3.2.
3.3 CAPITALIZATION. Except as set forth in SCHEDULE 3.3, the authorized
capital stock of the Company consists of One Million (1,000,000) shares of
common stock, $.001 par value per share (the "Company Stock"), Eight Hundred
Twenty-Nine Thousand Six Hundred Sixty-eight (829,668) common shares of which
are issued and outstanding. No shares of capital stock or other equity
securities of the Company are issued, reserved for issuance or outstanding. All
outstanding shares of capital stock of the Company are duly authorized, validly
issued, fully paid and nonassessable and, not subject to preemptive rights.
There are no outstanding bonds, debentures, notes or other indebtedness or other
securities of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters
9
on which shareholders of the Company may vote. Except as set forth above, there
are no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which the Company is a
party or by which it is bound obligating the Company to issue, deliver or sell,
or cause to be issued, delivered or sold, additional shares of capital stock or
other equity securities of the Company or obligating the Company to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. There are no outstanding
contractual obligations, commitments, understandings or arrangements of the
Company to repurchase, redeem or otherwise acquire or make any payment in
respect of any shares of capital stock of the Company. A complete list of
security holders of the Company and their addresses is attached hereto as
SCHEDULE 3.3.
3.4 AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by the Company and
the Shareholders and the performance of all the Company's and the Shareholders'
obligations hereunder have been duly authorized and approved by all requisite
corporate action on the part of the Company and the Shareholders pursuant to
applicable law. The Company and the Shareholders have the power and authority to
execute and deliver this Agreement and to perform all their obligations
hereunder.
(b) This Agreement, the Employment Agreements (hereinafter defined)
and any other documents, instruments and agreements executed by the Company and
the Shareholders in connection herewith (the "TRANSACTION DOCUMENTS") constitute
the valid and legally binding agreements of the Company and the Shareholders,
enforceable against the Company and the Shareholders in accordance with their
terms, except that (i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the enforcement of the rights and remedies of creditors; and (ii) the
availability of equitable remedies may be limited by equitable principles.
3.5 NO VIOLATIONS. Neither the execution, delivery nor performance of this
Agreement or any other Transaction Document executed by the Shareholders and the
Company in connection herewith, nor the consummation of the transactions
contemplated hereby: (a) will violate any statute, law, ordinance, rule or
regulation (collectively, "Laws") or any order, writ, injunction, judgment, plan
or decree (collectively, "Orders") of any court, arbitrator, authority,
instrumentality or other governmental body, whether federal, state, municipal,
foreign or other (collectively, "Government Entities"), (b) will require any
authorization, consent, approval, exemption or other action by or notice to any
Government Entity; (c) subject to obtaining the consents referred to in this
Agreement, will violate or conflict with, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default) under,
or will result in the termination of, or accelerate the performance required by,
or result in the creation of any Lien (as hereinafter defined) upon any of the
assets of the Company (or the Company Shares) under any term or provision of the
Articles of Incorporation or By-Laws of the Company or of any contract,
commitment, understanding, arrangement, agreement or restriction of any kind or
character to which the Company or the Shareholders is a party or by which the
Company or the Shareholders or any of its or his assets or properties may be
bound or affected; or (d) will or
10
could result in the loss or adverse modification of, or the imposition of any
fine or penalty with respect to, any license, permit or franchise granted or
issued to, or otherwise held by or for the use of, the Company, which in respect
to any one or more of the above would if deemed to be untrue have a material
adverse effect upon the Business, the Company or its assets.
3.6 FINANCIAL STATEMENTS. Included as SCHEDULE 3.6 are true and complete
copies of the financial statements of the Company and its wholly owned
subsidiaries consisting of (i) an audited consolidated balance sheet of the
Company as of December 31, 1997 and unaudited consolidated balance sheets of the
Company as of December 31, 1996, and 1995 and the related audited and unaudited
consolidated statements of operations and cash flows for the years then ended
(including the notes contained therein or annexed thereto), and (ii) an
unaudited consolidated balance sheets of the Company as of September 30, 1998
(the "Recent Balance Sheet"), and the related unaudited consolidated statements
of operations and cash flows for the nine (9) months then ended (the "Recent
Statement of Operations") and for the corresponding period of the prior year
(including the notes and schedules contained therein or annexed thereto). All of
such financial statements (including all notes and schedules contained therein
or annexed thereto) are true, complete and accurate in all material respects,
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis, have been prepared in accordance with the books
and records of the Company, and fairly present, in accordance with generally
accepted accounting principles, the assets, liabilities and financial position,
the results of operations and cash flows of the Company as of the dates and for
the years and periods indicated.
3.7 CONDUCT SINCE DATE OF RECENT BALANCE SHEET. Except for this Agreement
and as disclosed in SCHEDULE 3.7 hereto, none of the following has occurred
since the date of the Recent Balance Sheet:
(a) NO ADVERSE CHANGE. Any material adverse change in the financial
condition, assets, liabilities, business or operations of the Company;
(b) NO DAMAGE. Any material loss, damage or destruction, whether
covered by insurance or not, affecting the Company's business or properties;
(c) NO INCREASE IN COMPENSATION. Any increase in the compensation,
salaries or wages payable or to become payable to any employee or agent of the
Company (including, without limitation, any increase or change pursuant to any
bonus, pension, profit sharing, retirement or other plan or commitment), or any
bonus or other employee benefit granted, made or accrued;
(d) NO LABOR DISPUTES. Any labor dispute or disturbance, other than
routine individual grievances which are not material to the business, financial
condition or results of operations of the Company.
11
(e) NO COMMITMENTS. Any commitment or transaction by the Company
(including, without limitation, any borrowing or capital expenditure) other than
in the ordinary course of business consistent with past practice;
(f) NO DIVIDENDS. Any declaration, setting aside, or payment of any
dividend or any other distribution in respect of the Company's capital stock;
any redemption, purchase or other acquisition by the Company of any capital
stock of the Company, or any security relating thereto; or any other payment to
any Shareholder of the Company;
(g) NO DISPOSITION OF PROPERTY. Any sale, lease or other transfer or
disposition of any properties or assets of the Company, except in the ordinary
course of business;
(h) NO INDEBTEDNESS. Any indebtedness for borrowed money incurred,
assumed or guaranteed by the Company;
(i) NO LIENS. Any mortgage, pledge, lien or encumbrance made on any
of the properties or assets of the Company;
(j) NO AMENDMENT OF CONTRACTS. Any entering into, amendment or
termination by the Company of any contract, or any waiver of material rights
thereunder, other than in the ordinary course of business;
(k) LOANS AND ADVANCES. Any loan or advance (other than advances to
employees in the ordinary course of business for travel and entertainment in
accordance with past practice) to any person including, but not limited to, any
Affiliate (for purposes of this Agreement, the term "Affiliate" shall mean and
include all shareholders, directors and officers of the Company; the spouse of
any such person; any person who would be the heir or descendant of any such
person if he or she were not living; and any entity in which any of the
foregoing has a direct or indirect interest); or
(l) CREDIT. Any grant of credit to any customer or distributor on
terms or in amounts more favorable than those which have been extended to such
customer or distributor in the past, any other change in the terms of any credit
heretofore extended, or any other change of the Company's policies or practices
with respect to the granting of credit.
3.8 SUBSIDIARIES. Other than Professional Healthcare Services, Inc.
Physical Therapy and Rehabilitation, Inc., Preferred Medical Management
Solutions, Inc. and Professional Rehab Group, Inc. (collectively the "AFFILIATED
COMPANIES"), the Company has no subsidiaries or interests in any other entity
nor does the Company own or control, directly or indirectly, any capital stock
of any corporation or interest in any partnership, trust or unincorporated
association, or any interest or investment in any other corporation, association
or other business entity. The Shareholders hereby warrant and represent that:
(a) GOOD STANDING. The Affiliated Companies are duly organized,
validly existing and in good standing under the laws of the State of Florida.
The Affiliated Companies
12
have all necessary power to own their properties and assets and to carry on
their business as presently conducted.
(b) OWNERSHIP INTEREST. The Company owns, beneficially and of
record, all of the issued and outstanding shares of capital stock of the
Affiliated Companies. All of the shares of The Affiliated Companies are validly
issued to the Company, fully paid and nonassessable.
3.9 LIABILITIES. Except as and to the extent specifically disclosed in the
Recent Balance Sheet, or in SCHEDULE 3.9, the Company does not have any
liabilities, commitments or obligations (secured or unsecured, and whether
accrued, absolute, contingent, direct or indirect), other than commercial
liabilities and obligations incurred since the date of the Recent Balance Sheet
in the ordinary course of business and consistent with past practice and none of
which has or will have a material adverse effect on the business, financial
condition or results of operations of the Company. Except as and to the extent
described in the Recent Balance Sheet or in SCHEDULE 3.9, neither the Company
nor the Shareholders has knowledge of any basis for the assertion against the
Company of any liability and neither has knowledge of any circumstances,
conditions, happenings, events or arrangements, contractual or otherwise, which
may give rise to liabilities, except commercial liabilities and obligations
incurred in the ordinary course of the Company's business and consistent with
past practice.
3.10 TITLE TO AND CONDITION OF PROPERTIES.
(a) MARKETABLE TITLE. The Company has good and marketable title to
all of the Company's assets and properties which are integral to the operation
of its Business, including, without limitation, all such properties (tangible
and intangible) reflected in the Recent Balance Sheet, except for items disposed
of in the ordinary course of business since the date of such Recent Balance
Sheet, free and clear of all mortgages, liens, (statutory or otherwise) security
interests, claims, pledges, licenses, equities, options, covenants,
reservations, restrictions, exceptions, limitations, charges or encumbrances of
any nature whatsoever (collectively, "Liens") except those described in SCHEDULE
3.10(A). Except for Permitted Encumbrances and those described in SCHEDULE 3.10,
none of the Company's assets, business or properties are subject to any
restrictions with respect to the transferability thereof; and the Company's
title thereto will not be affected in any way by the transactions contemplated
hereby. "PERMITTED ENCUMBRANCES" means and includes: (i) customary landlord
liens; (ii) unfiled liens and charges incident to construction or maintenance;
(iii) the lien of taxes and assessments which are not delinquent; (iv) minor
defects and irregularities in title, which do not materially impair the values
or use of property; (v) other like purposes which do not materially impair the
value of property or use of property for the purposes for which property is or
may be reasonably expected to be held; (vi) rights reserved to or vested in any
municipality or governmental or other public authority to control, regulate or
use in any manner any portion of a property which, do not materially impair the
value of the property for the purposes for which it is or may reasonably be
expected to be held; (vii) any obligations or duties affecting any portion of
any property to any municipality or governmental or other public authority with
respect to any right, power, franchise, grant, license or permit which do not,
materially impair the value of a property or use of a property for the purpose
for which it is or may reasonably be expected to be held; (viii) present or
future valid
13
zoning laws and ordinances consistent with the intended use of a property; (ix)
liens, pledges and encumbrances securing liabilities set forth in the financial
statements furnished to MIOA or set forth in the Schedules or Exhibits; and (z)
liens specifically set forth in the Schedules hereto.
(b) CONDITION. All property and assets owned, leased or otherwise
utilized by the Company are in good operating condition and repair, free from
any defects (except such minor defects as do not interfere with the use thereof
in the conduct of the normal operations of the Company) sufficient to carry on
the Business of the Company as it is presently being conducted.
(c) REAL ESTATE. The Company owns no real estate and has not
committed to purchase any real estate. Except as stated on SCHEDULE 3.10(C), no
officer, director, shareholder or employee of the Company, or any spouse, child
or other relative thereof, owns directly or indirectly, in whole or in part, any
of the leaseholds of the Company. Each of the leases described on SCHEDULE
3.10(C) is a valid and binding obligation of the Company and enforceable in
accordance with its terms and conditions, and to the best knowledge and belief
of the Company and the Shareholders, each of the leases described on SCHEDULE
3.10(C) is a valid and binding obligation of each of the other parties thereto.
Neither the Company nor, to the best knowledge of the Shareholders, any other
party to any such lease is in default with respect to any material term or
condition thereof, nor to the best knowledge of the Company and the
Shareholders, has any event occurred which through the passage of time or the
giving of notice, or both, would constitute a default thereunder, or would cause
the acceleration of any obligation of any party thereto or the creation of a
lien or encumbrance upon any of the assets of the Company. So far as the Company
and Shareholders are aware, the use and operation of the buildings, fixtures and
other improvements described in SCHEDULE 3.10(C) as presently conducted is not
in violation of any applicable building code, zoning ordinance or other law or
regulation.
3.11 ACCOUNTS RECEIVABLE. All accounts receivable of the Company reflected
on the Recent Balance Sheet, and as incurred in the normal course of business
since the date thereof, represent arm's length sales actually made in the
ordinary course of business. The collection of the accounts receivable will not
deviate materially from historical collection percentages without the necessity
of commencing legal proceedings; are to Shareholders' knowledge subject to no
counterclaim or setoff; and are not in dispute. SCHEDULE 3.11 contains an aged
schedule of accounts receivable included in the Recent Balance Sheet.
3.12 CONTRACTS AND COMMITMENTS.
(a) REAL PROPERTY LEASES. Except as set forth in SCHEDULE 3.10(C),
the Company has no leases of real property.
(b) PERSONAL PROPERTY LEASES. Except as set forth in SCHEDULE
3.12(B), the Company has no leases of personal property involving consideration
or other expenditure in excess of $10,000.00 or involving performance over a
period of more than six (6) months.
14
(c) PURCHASE COMMITMENTS. Except as set forth in SCHEDULE 3.12(C),
the Company has no purchase commitments for inventory items or supplies in
excess of Fifteen Thousand Dollars ($15,000,00).
(d) SALES COMMITMENTS. The Company has no sales contracts or
commitments to customers which aggregate in excess of $10,000.00 to any one
customer (or group of affiliated customers). The Company has no sales contracts
or commitments except those made in the ordinary course of business, at arm's
length, and no such contracts or commitments are for a sales price which would
result in a loss to the Company.
(e) CONTRACTS WITH AFFILIATES AND CERTAIN OTHERS. The Company has no
agreement, understanding, contract or commitment (written or oral) with any
Affiliate or any employee, agent, consultant, distributor or dealer that is not
cancelable by the Company on notice of not longer than 30 days without
liability, penalty or premium of any nature or kind whatsoever.
(f) POWERS OF ATTORNEY. The Company has not given a power of
attorney, which is currently in effect, to any person, firm or corporation for
any purpose whatsoever.
(g) LOAN AGREEMENTS. Except as set forth in SCHEDULE 3.12 (G), the
Company is not obligated under any loan agreement, promissory note, letter of
credit, or other evidence of indebtedness as a signatory, guarantor or
otherwise.
(h) GUARANTEES. Except as disclosed on SCHEDULE 3.12 (H), the
Company has not guaranteed the payment or performance of any person, firm or
corporation, agreed to indemnify any person or act as a surety, or otherwise
agreed to be contingently or secondarily liable for the obligations of any
person.
(i) GOVERNMENT CONTRACTS. The Company is not a party to any contract
with any governmental body.
(j) BURDENSOME OR RESTRICTIVE AGREEMENTS. To the best of the
Shareholders' knowledge, the Company is not a party to nor is it bound by any
agreement, deed, lease or other instrument which is so burdensome as to
materially affect or impair the operation of the Company. Without limiting the
generality of the foregoing, the Company is not a party to nor is it bound by
any agreement requiring the Company to assign any interest in any trade secret
or proprietary information, or prohibiting or restricting the Company from
competing in any business or geographical area or soliciting customers or
otherwise restricting it from carrying on its business anywhere in the world.
(k) OTHER MATERIAL CONTRACTS. The Company has no lease, contract or
commitment of any nature involving consideration or other expenditure in excess
of $10,000.00, or involving performance over a period of more than six (6)
months, or which is otherwise individually material to the operations of the
Company, except as explicitly described in SCHEDULE 3.12(K) or in any other
Schedule.
15
(l) NO DEFAULT. The Company is not in default under any lease,
contract or commitment, nor has any event or omission occurred which through the
passage of time or the giving of notice, or both, would constitute a material
default thereunder or cause the acceleration of any of the Company's obligations
or result in the creation of any Lien on any of the assets owned, used or
occupied by the Company except where such default or lien would not have a
material adverse effect on the Company. To the best of the Company's and the
Shareholders' knowledge, no third party is in default under any material lease,
contract or material commitment to which the Company is a party, nor has any
event or omission occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder or give rise to an
automatic termination, or the right of discretionary termination, thereof.
3.13 OFFICERS, DIRECTORS, AGENTS, ETC. Set forth on SCHEDULE 3.13 attached
hereto is a complete list of all officers (with office held), directors,
contractors and agents of the Company and the Affiliated Companies, and the
compensation and all vacation and other benefits they are entitled to receive
from the Company.
3.14 LABOR MATTERS. Except as set forth on SCHEDULE 3.14, the Company is
not a party to: (a) any profit sharing, pension, retirement, deferred
compensation, bonus, stock option, stock purchase, retainer, consulting, health,
welfare or incentive plan or agreement or other employee benefit plan, whether
legally binding or not; or other employee benefit plan, whether legally binding
or not; or (b) any plan providing for "fringe benefits" to its employees,
including, but not limited to, vacation, disability, sick leave, medical,
hospitalization and life insurance and other insurance plans, or related
benefits; or (c) any employment agreement. To the best of the Company's and the
Shareholders' knowledge, no former employee of the Company has any claim against
the Company (whether under federal or state law, any employment agreement or
otherwise) on account of or for: (a) overtime pay; (b) wages or salary for any
period; (c) vacation, time-off or pay in lieu of vacation or time-off; or (d)
discrimination, sexual harassment, employment practices or any violation of any
statue, ordinance or regulation relating to minimum wages or maximum hours of
work.
3.15 COMPLIANCE WITH LAWS AND ORDERS.
(a) COMPLIANCE. Except as set forth in SCHEDULE 3.15(A), the Company
(including each and all of its operations, practices, properties, contracts,
agreements and assets) is in compliance with all applicable laws and orders
applicable to discrimination in employment, Medicare, insurance, patient
brokering and referral, advertising, occupational safety and health, trade
practices, competition, pricing and billing, employment, retirement and labor
relations, and product advertising (hereinafter "Laws" and Orders"). Except as
set forth in SCHEDULE 3.15 (A), the Shareholders have not received notice of any
violation or alleged violation of, and to the best of the Company's and the
Shareholders' knowledge, is subject to any Liability for past or continuing
violation of, any Laws or Orders. To the best of Company's and Shareholders'
knowledge, all reports and returns required to be filed by the Company with any
Government Entity have been filed, and to the best of Company's and
Shareholders' knowledge were accurate
16
and complete in all material respects when filed. Without limiting the
generality of the foregoing:
i. The Company has made all required payments to its
unemployment compensation reserve accounts with the appropriate governmental
departments of the states where it is required to maintain such accounts, and
each of such accounts has a positive balance.
ii. The Company has timely filed (except where the failure to
file would have no material adverse effect on the Company, its Business or its
assets), in a complete and materially correct manner, all requisite claims and
other reports required to be filed in connection with all state and federal
Medicare and Medicaid programs due on or before the date hereof. There are no
claims, actions, payment reviews, or appeals pending or to the best of the
Company's and the Shareholders' knowledge, threatened before any commission,
board or agency, including, without limitation, any intermediary or carrier, the
Administrator of the Health Care Financing Administration, the Florida
Department of Health and Rehabilitative Services, the Florida Board of Pharmacy
or any other state or federal agency with respect to any Medicare or Medicaid
claims filed by the Company on or before the Closing Date or program compliance
matters, which would materially adversely affect the Business, the Company or
the consummation of the transactions contemplated hereby. No validation review
or program integrity review related to the Company (other than normal, routine
reviews) has been conducted by any commission, board or agency in connection
with the Medicare or Medicaid program, and no such reviews are scheduled,
pending or, to the best of the Company's and the Shareholders' knowledge,
threatened against or affecting the Company or the consummation of the
transactions contemplated hereby.
iii. Neither the Company nor any person or entity
providing services for the Company have engaged in any activities which are
prohibited under 42 U.S.C. (delta)1320a-7a or (delta)1320a-7b, or the
regulations promulgated thereunder, pursuant to such statutes or any other
related state or local statutes and regulations, including but not limited to
the following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its, his or her own behalf or on behalf of another,
with intent to fraudulently secure such benefit or payment; and (d) knowingly
and willfully soliciting or receiving any remuneration, kickback, bribe or
rebate, directly or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration in return for (x) referring an
individual to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare or
Medicaid, or (y) purchasing, leasing or ordering, or arranging for or
recommending purchasing, leasing or ordering, any medication, goods, facility,
service or item for which payment may be made in whole or in part by Medicare or
Medicaid. No physician (or his or her immediate family members) having a
"financial relationship" with Company, as that term is defined in 42 U.S.C.
Section 1395nn, is in a position, directly or indirectly, to refer
17
patients or services to the Company, or any such referral complies with the
requirements of 42 U.S.C. Section 1395 and the regulations promulgated pursuant
thereto.
iv. The Company has filed when due any and all material
cost reports and other documentation and reports, if any, required to be filed
by third-party payors and governmental agencies in compliance with applicable
contractual provisions and/or laws, regulations and rules.
(b) LICENSES AND PERMITS. Except for those which would have no
material adverse effect on the Company, its Business or its assets, the Company
has all licenses, permits, approvals, authorizations and consents of all
Government Entities and all certification organizations required for the conduct
of the Business and operation of its facilities. All such licenses, permits,
approvals, authorizations and consents are described in SCHEDULE 3.15 (B), are
in full force and effect and will not be affected or made subject to loss,
limitation or any obligation to reapply as a result of the transactions
contemplated hereby. Except as set forth in SCHEDULE 3.15 (B), the Company
(including its Business, operations, properties and assets) is and has been in
compliance with all such permits and licenses, approvals, authorizations and
consents.
(c) ENVIRONMENTAL MATTERS. The applicable Laws relating to pollution
or protection of the environment, including Laws relating to emissions,
discharges, generation, storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("Waste") into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"), as
amended, and their state and local counterparts are herein collectively referred
to as the "Environmental Laws". Without limiting the generality of the foregoing
provisions of this Section 3.15, the Company is, to the best of the
Shareholders' knowledge, in material compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or contained in any
regulations, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder. Except as set forth
in SCHEDULE 3.15(C), there is no Litigation nor, to the best of the Company's
and the Shareholders' knowledge, any demand, claim, hearing or notice of
violation pending or threatened against the Company relating in any way to the
Environmental Laws or any Order issued, entered, promulgated or approved
thereunder.
3.16 BOOKS AND RECORDS. With respect to all material matters occurring
since the inception of the Company, the minute books and other records of the
Company contain complete and accurate records of all such material matters,
meetings and other corporate actions of its shareholders and board of directors.
18
3.17 TAX MATTERS.
(a) PROVISION FOR TAXES. The provision made for taxes on the Recent
Balance Sheet is and will be sufficient for the payment of all federal, state,
foreign, county, local and other income, ad valorem, excise, profits, franchise,
occupation, property, payroll, sales, use, gross receipts and other taxes (and
any interest and penalties) and assessments, whether or not disputed, at the
date of the Recent Balance Sheet and for all years and periods prior thereto.
Since the date of the Recent Balance Sheet, the Company has not incurred any
taxes other than taxes incurred in the ordinary course of business consistent in
type and amount with past practices of the Company.
(b) TAX RETURNS FILED. Except as set forth on SCHEDULE 3.17(B), all
federal, state, foreign, county, local and other tax returns required to be
filed by or on behalf of the Company have been timely filed and when filed were
true and correct in all material respects, and the taxes shown as due thereon
were paid or adequately accrued. True and complete copies of all tax returns or
reports filed by the Company for each of its three (3) most recent fiscal years
have been delivered to MIOA. The Company has duly withheld and paid all taxes
which it is required to withhold and pay relating to salaries and other
compensation heretofore paid to the employees of the Company.
(c) TAX AUDITS. The Company has not received from the Internal
Revenue Service or from the tax authorities of any state, county, local or other
jurisdiction any notice of underpayment of taxes or other deficiency which has
not been paid nor any objection to any return or report filed by the Company.
There are outstanding no agreements or waivers extending the statutory period of
limitations applicable to any tax return or report.
(d) OTHER. Except as set forth in SCHEDULE 3.17 (D), the Company has
not (i) filed any consent or agreement under Section 341(f) of the Internal
Revenue Code of 1986, as amended (the "Code"), (ii) applied for any tax ruling,
(iii) entered into a closing agreement with any taxing authority, (iv) filed an
election under Section 338(g) or Section 338(h)(10) of the Code (nor has a
deemed election under Section 338(e) of the Code occurred), (v) made any
payments, or been a party to an agreement (including this Agreement) that under
any circumstances could obligate it to make payments that will not be deductible
because of Section 280G of the Code, or (vi) been a party to any tax allocation
or tax sharing agreement. The Company is not a "United States real property
holding company" within the meaning of Section 897 of the Code.
3.18 INSURANCE. Set forth in SCHEDULE 3.18 is a complete and accurate list
and description of all policies of fire, liability, product liability, workers
compensation, health and other forms of insurance presently in effect with
respect to the Business and properties of the Company, true and correct copies
of which have heretofore been delivered to MIOA. All such policies are valid and
outstanding and provide insurance coverage for the properties, assets and
operations of the Company. No policy (nor any previous policy) provides for or
is subject to any currently enforceable retroactive rate or premium adjustment,
loss sharing arrangement or other actual or contingent liability arising wholly
or partially out of events arising prior to the date
19
hereof. Except as set forth in SCHEDULE 3.18, there have been no claims filed
against such policies. No notice of cancellation or termination has been
received by any of the Shareholders with respect to any such policy, and neither
the Company nor the Shareholders has knowledge of any act or omission of the
Company which could result in cancellation of any such policy prior to its
scheduled expiration date. The Company has not been refused any insurance with
respect to any aspect of the operations of the Business nor has its coverage
been limited by any insurance carrier to which it has applied for insurance or
with which it has carried insurance during the last three years. There is no
claim by the Company pending under any such policies as to which coverage has
been questioned, denied or disputed by the underwriters of such policies, and
neither the Company nor the Shareholders knows of any basis for denial of any
claim under any such policy. To the best knowledge of the Shareholders, the
Company has not received any written notice from or on behalf of any insurance
carrier issuing any such policy that insurance rates therefor will hereafter be
substantially increased (except to the extent that insurance rates may be
increased for all similarly situated risks) or that there will hereafter be a
cancellation or an increase in a deductible (or an increase in premiums in order
to maintain an existing deductible) or nonrenewal of any such policy.
3.19 PERSONNEL. SCHEDULE 3.19 attached hereto contains accurate and
complete information as to names and rates of compensation (whether in the form
of salaries, bonuses, commissions or other supplemental compensation now or
hereafter payable) of all personnel of the Company, together with information as
to any contracts with any such personnel. The Company has no pension,
profit-sharing, bonus, incentive, insurance or other employee benefit plans
(including, without limitation, any such plans within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended) in
which any employees of the Company participate, except as set forth in SCHEDULE
3.19.
3.20 LITIGATION. Other than as set forth in SCHEDULE 3.20, the Company is
not a party to, the subject of, or threatened with any litigation nor to the
best knowledge of the Company and the Shareholders, is there any basis for any
litigation which would have a material adverse effect on the Company, its
Business or its assets. The Company is not contemplating the institution of any
litigation.
3.21 OTHER LIABILITIES. To the best of the Company's and the Shareholders'
knowledge no claim of breach of contract, tort, product liability or other
claim, contingent or otherwise, has been asserted or threatened against the
Company nor is capable of being asserted by any employee, creditor, claimant or
other person against the Company. To the best of the Company's and the
Shareholders' knowledge, no state of facts exists or has existed, nor has any
event occurred, which could reasonably be expected to give rise to the assertion
of any such claim by any person.
3.22 JUDGMENTS. There are no outstanding judgments against the Company.
There are no open workers compensation claims against the Company, or to the
best of the Company's and the Shareholders' knowledge, any other obligation,
fact or circumstance which would give rise to any right of indemnification on
the part of any current or former shareholder, director, officer,
20
employee or agent of the Company, or any heir or personal representative
thereof, against the Company, or any successor to the businesses of the Company.
3.23 BROKERS. Neither the Shareholders nor the Company have any liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which MIOA
could become liable or obligated.
3.24 TRADE RIGHTS. SCHEDULE 3.24 lists all Trade Rights (as defined below)
in which the Company now has any interest, specifying whether such Trade Rights
are owned, controlled, used or held (under license or otherwise) by the Company,
and also indicating which of such Trade Rights are registered. All Trade Rights
shown as registered in SCHEDULE 3.24 have been properly registered, all pending
registrations and applications have been properly made and filed and all
annuity, maintenance, renewal and other fees relating to registrations or
applications are current. In order to conduct the business of the Company, as
such is currently being conducted or proposed to be conducted, the Company does
not require any Trade Rights that it does not already have. To the best of the
Company's and the Shareholders' knowledge, the Company is not infringing and has
not infringed any Trade Rights of another in the operation of the business of
Company, nor is any other person infringing the Trade Rights of the Company. The
Company has not granted any license or made any assignment of any Trade Right
listed in SCHEDULE 3.24, nor does the Company pay any royalties or other
consideration for the right to use any Trade Rights of others. There is no
Litigation pending or to the best of the Company's and the Shareholders'
knowledge, threatened to challenge the Company's right, title and interest with
respect to its continued use and right to preclude others from using any Trade
Rights of the Company. All Trade Rights of the Company are valid, enforceable
and in good standing, and there are no equitable defenses to enforcement based
on any act or omission of the Company. The consummation of the transactions
contemplated hereby will not alter or impair any Trade Rights owned or used by
the Company. As used herein, the term "Trade Rights" shall mean and include: (i)
all trademark rights, business identifiers, trade dress, service marks, trade
names and brand names, all registrations thereof and applications therefor and
all goodwill associated with the foregoing; (ii) all copyrights, copyright
registrations and copyright applications, and all other rights associated with
the foregoing and the underlying works of authorship; (iii) all patents and
patent applications, and all international proprietary rights associated
therewith; (iv) all contracts or agreements granting any right, title, license
or privilege under the intellectual property rights of any third party; (v) all
inventions, mask works and mask work registrations, know-how, discoveries,
improvements, designs, trade secrets, shop and royalty rights, employee
covenants and agreements respecting intellectual property and non-competition
and all other types of intellectual property; and (vi) all claims for
infringement or breach of any of the foregoing.
3.25 BANK ACCOUNTS. SCHEDULE 3.25 sets forth the names and locations of
all banks, trust companies, savings and loan associations and other financial
institutions at which the Company maintains a safe deposit box, lock box or
checking, savings, custodial or other account of any nature, the type and number
of each such account and the signatories therefor, a description of any
compensating balance arrangements, and the names of all persons authorized to
draw thereon, make withdrawals therefrom or have access thereto.
21
3.26 OTHER MATERIAL MATTERS. Except as set forth in SCHEDULE 3.26, to the
best of the Company's and Shareholders' knowledge, there are no rulings,
legislative enactments, laws, regulations, orders or directives pending,
threatened or enacted or any other changes in the industry that would have a
material adverse impact on the Company's Business as it is now being conducted
or is anticipated to be conducted in the future or which would have, or likely
have, a material adverse effect on the financial condition, assets, business,
prospects, clients or operations of the Company.
3.27 DISCLOSURE. No representation or warranty by the Company and/or the
Shareholders in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of the
Company or Shareholders pursuant to this Agreement or in connection with
transactions contemplated hereby, knowingly contains or shall contain any untrue
statement of material fact or omits or shall knowingly omit a material fact
necessary to make the statements contained therein not misleading. All
statements and information contained in any schedule, exhibit or other
Transaction Document delivered by or on behalf of the Company and/or the
Shareholders shall deemed to be representations and warranties by the Company
and the Shareholders.
3.28 WARRANTIES APPLICABLE TO AFFILIATED COMPANIES. Except as set forth in
SCHEDULE 3.30 hereto, the representations and warranties set forth in Sections
3.4 through 3.29 inclusive, of this Article III relative to the Company shall
also be true relative to the Affiliated Companies, their properties, assets,
liabilities and business.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF MIOA
MIOA hereby makes the following representations and warranties to the
Shareholders, each of which MIOA represents to be true and correct on the date
hereof, shall remain true and correct in all material respects to and including
the Closing Date, shall be unaffected by any investigation heretofore or
hereafter made by the Shareholders, or any knowledge of the Shareholders other
than as specifically disclosed in the disclosure schedules delivered to the
Shareholders, and shall survive the Closing of the transactions provided for
herein for the period ending on the second anniversary date of the Effective
Date. Notwithstanding anything herein to the contrary, if the Shareholders, by
written notice prior to the expiration of said survival period, advises MIOA of
his/her question, dispute, debate, variance or contention relative to any
specific representation or warranty of MIOA such survival period shall be
extended until such time as the matter in question is resolved. For purposes of
this section the term "KNOWLEDGE OF THE MIOA OR ACQUISITION CORP" shall mean
"ACTUAL" or "CONSTRUCTIVE" knowledge of the present officers of MIOA. For these
purposes "CONSTRUCTIVE KNOWLEDGE" shall mean that knowledge or information that
a prudent individual could be reasonably expected to discover or otherwise
become aware of in the course of the Company's Business.
4.1. MIOA SHARES. All of the MIOA Shares shall be validly issued to the
Shareholders, fully paid and non-assessable. MIOA shall deliver, good and
marketable title to the MIOA Shares, which shares shall be fully paid and
non-assessable and except as otherwise
22
provided in this Agreement shall be free and clear of all Liens (as defined in
Section 3.10(a) above).
4.2. ORGANIZATION. MIOA and the Acquisition Corp are corporations duly
organized, validly existing and in good standing under the laws of the State of
Florida and are not required to be qualified or licensed as a foreign
corporation in any other jurisdiction. MIOA and the Acquisition Corp have the
full power and authority to own all their assets and to conduct their business
as and where its business is presently conducted.
4.3. AUTHORITY AND APPROVAL OF AGREEMENT.
(a) The execution and delivery of this Agreement by MIOA and the
Acquisition Corp and the performance of their obligations hereunder have been
duly authorized and approved by all requisite corporate action on the part of
MIOA and the Acquisition Corp pursuant to applicable law. MIOA and the
Acquisition Corp have the power and authority to execute and deliver this
Agreement and to perform all their obligations hereunder.
(b) This Agreement and each of the other documents, instruments and
agreements executed by MIOA and the Acquisition Corp in connection herewith
constitute the valid and legally binding agreements of MIOA and the Acquisition
Corp, enforceable against MIOA and the Acquisition Corp in accordance with their
terms, except that: (i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the enforcement of the rights and remedies of creditors; and (ii) the
availability of equitable remedies as may be limited by equitable principles.
4.4. NO VIOLATIONS. Neither the execution, delivery nor performance of
this Agreement or any other documents, instruments or agreements executed by
MIOA and the Acquisition Corp in connection herewith, nor the consummation of
the transactions contemplated hereby: (a) constitutes a violation of or default
under (either immediately, upon notice or upon lapse of time) the Articles of
Incorporation or Bylaws of MIOA or the Acquisition Corp, any provision of any
contract to which MIOA, the Acquisition Corp., or their assets may be bound, any
judgment to which MIOA or the Acquisition Corp is bound or any law applicable to
MIOA or the Acquisition Corp; or (b) result in the creation or imposition of any
encumbrance upon, or give any third person any interest in or right to, any or
all of the MIOA Shares or any other capital stock of MIOA or the Acquisition
Corp or any of the assets of MIOA or the Acquisition Corp; or (c) result in the
loss or adverse modification of, or the imposition of any fine or penalty with
respect to, any license, permit or franchise granted or issued to, or otherwise
held by or for the use of, MIOA or the Acquisition Corp.
4.5. CONSENTS. The execution, delivery and performance by MIOA and the
Acquisition Corp of this Agreement and the consummation by MIOA and Acquisition
Corp. of the transactions contemplated hereby do not require any consent that
has not been received prior to the date hereof.
23
4.6. S.E.C. DOCUMENTS. MIOA has delivered or made available to the
Shareholders all required reports, schedules, forms, statements and other
documents filed or to be filed with the Securities and Exchange Commission (the
"SEC") since January 1, 1997 (collectively, the "SEC DOCUMENTS"). To the best of
MIOA's knowledge, MIOA has filed with the SEC all documents required to be filed
under the Securities Act and Exchange Act since January 1, 1997. As of their
respective dates and to the best of MIOA's knowledge, the MIOA SEC documents
complied in all material respects with the requirements of the Securities Act
and Exchange Act and to the best of MIOA's knowledge, none of such documents
contained an untrue statement of a material fact or knowingly omitted to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading. To the best of MIOA's knowledge, the financial
statements included in the SEC Documents comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with generally accepted accounting principles (except, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated therein
or in the notes thereto).
4.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the SEC
Documents and to the best of MIOA's knowledge, since the date of the most recent
financial statements included in the SEC Documents, MIOA has conducted its
business only in the ordinary course consistent with past practice in light of
its current business circumstances, and there is not and has not been: (a) any
material adverse change with respect to MIOA or its capital stock; (b) any
condition, event or occurrence which, individually or in the aggregate, could
reasonably be expected to have a material adverse effect or give rise to a
material adverse change with respect to MIOA or its capital stock; or (c) any
condition, event or occurrence which could reasonably be expected to prevent,
hinder or materially delay the ability of MIOA to consummate the transactions
contemplated by this Agreement.
4.8. BROKERS. Neither MIOA nor the Acquisition Corp has any liability
or obligation to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement for which the
Shareholders or the Company could become liable or obligated.
4.9. FULL DISCLOSURE. To the best knowledge of MIOA and the Acquisition
Corp, no representation or warranty by MIOA or Acquisition Corp in this
Agreement, nor any statement, certificate, schedule, document or exhibit hereto
furnished or to be furnished by or on behalf of MIOA or the Acquisition Corp
pursuant to this Agreement or in connection with transactions contemplated
hereby, contains or shall contain any untrue statement of material fact or
knowingly omits a material fact necessary to make the statements contained
therein not materially misleading.
4.10. NO ENCUMBRANCES ON MIOA SHARES. Except as set forth in this
Agreement, the MIOA Shares being issued by MIOA to the Shareholders are validly
issued, fully paid and/or nonassessable and are free and clear of any liens,
claims, encumbrances or restrictions of any kind other than those restrictions
imposed by the various securities laws, and none of those
24
securities are subject to options, rights, warrants, or other agreements or
commitments other than as set forth in this Agreement.
4.11 COMPLIANCE WITH LAWS AND ORDERS.
(a) COMPLIANCE. Except as disclosed in the SEC Documents or as set
forth in SCHEDULE 4.11(A), MIOA (including each and all of its operations,
practices, properties, contracts, agreements and assets) is in compliance with
all applicable laws and orders, those applicable to Laws and Orders (as defined
in 3.15(a)). Except as disclosed in the SEC Documents or as set forth in
SCHEDULE 4.11(A), the present officers of MIOA have not received notice of any
violation or alleged violation of, and to the best of the MIOA's knowledge, is
subject to any Liability for past or continuing violation of, any Laws or
Orders. To the best of MIOA's knowledge, all reports and returns required to be
filed by MIOA with any Government Entity have been filed, and were, to the best
of MIOA's knowledge, accurate and complete in all material respects when filed.
Without limiting the generality of the foregoing:
i. MIOA has made all required payments to its
unemployment compensation reserve accounts with the appropriate governmental
departments of the states where it is required to maintain such accounts, and
each of such accounts has a positive balance.
ii. MIOA has timely filed (except where the failure to
file would have no material adverse effect on MIOA), in a complete and
materially correct manner, all requisite claims and other reports required to be
filed in connection with all state and federal Medicare and Medicaid programs
due on or before the date hereof. There are no claims, actions, payment reviews,
or appeals pending or to the best of MIOA's knowledge, threatened before any
commission, board or agency, including, without limitation, any intermediary or
carrier, the Administrator of the Health Care Financing Administration, the
Florida Department of Health and Rehabilitative Services, the Florida Board of
Pharmacy or any other state or federal agency with respect to any Medicare or
Medicaid claims filed by MIOA on or before the Closing Date or program
compliance matters, which would materially adversely affect MIOA or the
consummation of the transactions contemplated hereby. No validation review or
program integrity review related to MIOA (other than normal, routine reviews)
has been conducted by any commission, board or agency in connection with the
Medicare or Medicaid program, and no such reviews are scheduled, pending or, to
the best of MIOA's knowledge, threatened against or affecting the MIOA or the
consummation of the transactions contemplated hereby.
iii. Neither MIOA nor any person or entity providing
services for MIOA has engaged in any activities which are prohibited under 42
U.S.C. (delta)1320a-7a or (delta)1320a-7b, or the regulations promulgated
thereunder, pursuant to such statutes or any other related state or local
statutes and regulations, including but not limited to the following: (a)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any application for any benefit or payment;
(b) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any benefit
or payment; (c) failing to disclose knowledge by a claimant of the occurrence of
any event affecting the initial or continued right to any benefit or payment on
its, his or her own
25
behalf or on behalf of another, with intent to fraudulently secure such benefit
or payment; and (d) knowingly and willfully soliciting or receiving any
remuneration, kickback, bribe or rebate, directly or indirectly, overtly or
covertly, in cash or in kind, or offering to pay or receive such remuneration in
return for (x) referring an individual to a person for the furnishing or
arranging for the furnishing of any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (y) purchasing, leasing or
ordering, or arranging for or recommending purchasing, leasing or ordering, any
medication, goods, facility, service or item for which payment may be made in
whole or in part by Medicare or Medicaid. No physician (or his or her immediate
family members) having a "financial relationship" with Company, as that term is
defined in 42 U.S.C. Section 1395nn, is in a position, directly or indirectly,
to refer patients or services to the Company, or any such referral complies with
the requirements of 42 U.S.C. Section 1395 and the regulations promulgated
pursuant thereto.
iv. MIOA has filed when due any and all material cost
reports and other documentation and reports, if any, required to be filed by
third-party payors and governmental agencies in compliance with applicable
contractual provisions and/or laws, regulations and rules.
(b) LICENSES AND PERMITS. Except for those which would have no
material adverse effect on MIOA, MIOA has all licenses, permits, approvals,
authorizations and consents of all Government Entities and all certification
organizations required for the conduct of its Business and operation of its
facilities. All such licenses, permits, approvals, authorizations and consents
are in full force and effect and will not be affected or made subject to loss,
limitation or any obligation to reapply as a result of the transactions
contemplated hereby. Except as disclosed in the SEC Documents or as set forth in
SCHEDULE 4.11(B), MIOA is and has been in compliance with all such permits and
licenses, approvals, authorizations and consents.
(c) ENVIRONMENTAL MATTERS. The applicable Laws relating to pollution
or protection of the environment, including Laws relating to emissions,
discharges, generation, storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("Waste") into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"), as
amended, and their state and local counterparts are herein collectively referred
to as the "Environmental Laws". Without limiting the generality of the foregoing
provisions of this Section 4.11, MIOA is in material compliance with all
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in the Environmental Laws or
contained in any regulations, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder.
Except as disclosed in the SEC Documents or as set forth in SCHEDULE 4.11(C),
there is no Litigation nor, to the best of MIOA's knowledge, any demand, claim,
hearing
26
or notice of violation pending or threatened against MIOA relating in any way to
the Environmental Laws or any Order issued, entered, promulgated or approved
thereunder.
4.12 LITIGATION. Other than as set forth in SCHEDULE 4.12, MIOA is not a
party to, the subject of, or to the best of its knowledge, threatened with any
litigation nor to the best knowledge of MIOA is there any basis for any
litigation which would have a material adverse effect on MIOA. At the present
time, MIOA is not contemplating the institution of any litigation.
ARTICLE V.
INTERPRETATION; SURVIVAL OF
REPRESENTATIONS AND WARRANTIES; AND INDEMNIFICATION
5.1. INTERPRETATION. Except where indicated otherwise, each warranty and
representation made by a party in this Agreement or pursuant hereto is
independent of all other warranties and representations made by the same party
in this Agreement or pursuant hereto (whether or not covering identical, related
or similar matters) and must be independently and separately satisfied. Except
where indicated otherwise, exceptions or qualifications to any such warranty or
representation shall not be construed as exceptions or qualification to any
other warranty or representation.
5.2. SURVIVAL. All representations and warranties made in this Agreement
or pursuant hereto shall survive the date hereof and the Closing Date through
the second anniversary date of the Effective Date. Notwithstanding anything
herein to the contrary, if an indemnitee under this agreement, by written notice
prior to the expiration of the survival period, advises an indemnitor of its
question, dispute, debate, variance or contention relative to any specific
representation warranty or other matter which is subject to the indemnity
provisions of this Section, such survival period shall be extended only in
respect to such matter until such time as the matter in question is resolved.
5.3. INDEMNIFICATION.
(a) BY SHAREHOLDERS. The Shareholders hereby agree to indemnify,
defend and hold harmless MIOA, its subsidiaries and their directors, officers,
employees and controlled and controlling persons (hereinafter "MIOA'S
AFFILIATES"), from and against all Claims (as hereinafter defined) asserted
against, resulting to, imposed upon, or incurred by MIOA, MIOA's affiliates, the
Company, their businesses or their assets, directly or indirectly, by reason of,
arising out of or resulting from (x) the breach of any representation or
warranty of the Company or such Shareholders contained in or made pursuant to
Article III of this Agreement; (y) the breach of any covenant of the Company or
such Shareholders contained in this Agreement, and (z) any Claim against the
Company, its business or its assets not otherwise disclosed in this Agreement or
the disclosure schedules relating to or arising from matters related to or
arising from the Company, or its businesses prior to the Closing Date. As used
in this section, the term "CLAIM" shall include (i) all liabilities; (ii) all
losses, damages, judgments, awards, settlements, costs and expenses (including,
without limitation, interest including prejudgment interest in any litigated
matter),
27
penalties, court costs and reasonable attorneys fees and expenses); and (iii)
all demands, claims, actions, costs of investigation, causes of action,
proceedings and assessments ultimately determined to be valid.
(b) BY MIOA. MIOA hereby agrees to indemnify, defend and hold
harmless the Shareholders from and against all Claims asserted against,
resulting to, imposed upon or incurred by any such person, directly or
indirectly, by reason of or resulting from (x) the inaccuracy or breach of any
representation or warranty of MIOA contained in or made pursuant to this
Agreement; (y) the breach of any covenant of MIOA contained in this Agreement;
or (z) all Claims of or against the Shareholders specifically assumed by MIOA
pursuant hereto.
(c) MATERIALITY. The parties recognize that many of the
representations, warranties and covenants set forth in this Agreement are
qualified by the term "MATERIAL". For purposes of this Agreement, the parties
hereby agree that a "MATERIAL" event(s) has occurred if the impact of such
event(s) has resulted or is reasonably likely to result in costs, expenses
and/or damages for any event(s) singularly or in the aggregate in excess of
Fifty Thousand Dollars ($50,000.00).
(d) PROCEDURE FOR INDEMNITY. The party indemnified hereunder (the
"Indemnified Party") shall notify in writing the indemnifying party (the
"Indemnifying Party") within thirty (30) days after a Claim is presented to the
Indemnified Party, and the Indemnifying Party shall defend such claim at its
expense. If the Indemnifying Party does not defend or settle such claim, the
Indemnified Party may do so without the Indemnifying Party's participation, in
which case the Indemnifying Party shall pay the reasonable expenses of such
defense, and the Indemnified Party may settle or compromise such claim without
the Indemnifying Party's consent. If the Indemnified Party fails to notify the
Indemnifying Party, and if the Indemnifying Party is thereby materially
prejudiced by such failure of notice in its defense of the claim, the
Indemnifying Party's obligation of indemnity hereunder shall be extinguished
with respect to such claim to the extent that the Indemnifying Party has been
prejudiced by the failure to give such notice. The remedies provided in this
Article V will be the exclusive remedy for Claims for indemnification that are
available to MIOA and the Shareholders.
5.4. LIMITATION.
(a) In respect to all Claims other than Claims related to Medicare
issues, the parties agree that the indemnification provisions set forth in this
Article shall be limited, individually or in the aggregate, to such Claims in
excess of Fifty Thousand Dollars ($50,000.00) (the "Threshold"). Once a Claim or
Claims exceeds the Threshold, if a party is entitled to indemnification under
Section 5.3, such party shall recover all appropriate funds above the Threshold,
as provided in Section 5.3
(b) In respect to all Medicare related Claims for which a party is
entitled to indemnification hereunder (hereinafter "MEDICARE CLAIMS"), the
parties hereby agree that MIOA and the Shareholders will share equally in
respect to the first Two Hundred Thousand Dollars ($200,000.00) of all Medicare
Claims without regard to the Threshold limitations for which a
28
party is entitled to indemnification hereunder (the "SHARING AMOUNT"). Once any
one or more Medicare Claim(s) individually, or in the aggregate, exceeds the
Sharing Amount then, in such event, if a party is entitled to indemnification
under Section 5.3, such party shall recover all appropriate funds for all
amounts above the Sharing Amount as provided in Section 5.3.
(c) Notwithstanding the foregoing, the indemnitors shall not be
liable for any liabilities resulting from Claims, including Medicare Claims,
that are covered by any insurance policy or other indemnity or contribution
agreement unless, and only to the extent that, the full limit of such insurance
policy, indemnity or contribution agreement has been exceeded. Further, the
indemnitors shall not be liable for any liabilities resulting from Claims in
excess of $2,500,000.00.
ARTICLE VI.
OTHER COVENANTS
6.1. GENERAL RELEASES. At the Closing, the Shareholders shall deliver
general releases to MIOA, substantially in the form attached hereto as EXHIBIT
E, releasing MIOA, the Company, the Surviving Company and their directors,
officers, agents and employees from all claims through the Closing Date, except
(i) for matters arising out of or from this Agreement or the Transaction
Documents, (ii) as may be described in written contracts disclosed in the
disclosure schedules and expressly described and excepted from such releases,
and (iii) indemnification rights and compensation for current periods expressly
described and excepted from such releases. Such releases shall also contain
waivers of any right of contribution or other recourse against the Surviving
Company with respect to representations, warranties or covenants made herein by
the Company.
6.2. ACCESS TO INFORMATION AND RECORDS. During the period prior to the
Closing Date, the Shareholders shall cause the Company to give MIOA, its
counsel, accountants and other representatives (i) access during normal business
hours to all of the properties, books, records, contracts and documents of the
Company and for the purpose of such inspection, investigation and testing as
MIOA deems appropriate (and the Company shall furnish or cause to be furnished
to MIOA and its representatives all information with respect to the business and
affairs of the Company as MIOA may request); (ii) access to employees, agents
and representatives for the purposes of such meetings and communications as MIOA
reasonably desires; and (iii) with the prior consent of the Company in each
instance (which consent shall not be unreasonably withheld), access to vendors,
customers, manufacturers of its machinery and equipment, and others having
business dealings with the Company.
6.3. CONSENTS. MIOA, the Company and the Shareholders will use their
reasonable best efforts prior to the Closing Date to obtain all consents
necessary for the consummation of the transactions contemplated hereby.
29
6.4. OTHER ACTION. MIOA, the Company and the Shareholders shall use their
reasonable best efforts to cause the fulfillment at the earliest practicable
date of all of the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
6.5. DISCLOSURE SCHEDULE. MIOA, the Shareholders and the Company shall
have a continuing obligation to promptly notify each other in writing with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the disclosure schedules, but no such disclosure shall cure any
breach of any representation or warranty which is inaccurate.
6.6 RULE 144 REQUIREMENTS. With a view to making available to the
Shareholders the benefits of Rule 144 promulgated under the Securities Act and
any other rule or regulation of the SEC that may at any time permit such persons
to sell securities of MIOA to the public without registration, MIOA agrees that,
at all times during which it is subject to the reporting requirements of the
Exchange Act, it will use its commercially reasonable best efforts to file with
the SEC in a timely manner all reports and other documents required of MIOA
under the Securities Act and the Exchange Act.
ARTICLE VII.
CONDITIONS PRECEDENT TO THE SHAREHOLDERS' OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, the Shareholders' obligation to consummate the
transaction contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Article VII, except to the extent
that such satisfaction is waived in writing by the Shareholders.
7.1. REPRESENTATIONS AND WARRANTIES OF MIOA AND ACQUISITION CORP. All
representations and warranties made by MIOA and the Acquisition Corp in this
Agreement and the Schedules hereto shall be true and correct in all material
respects on the date hereof, and shall be true and correct in all material
respects at the time of the Closing Date as though such representations were
again made, without exception or deviation, at the time of the Closing Date.
7.2. PERFORMANCE OF THIS AGREEMENT. MIOA and the Acquisition Corp shall
have duly performed or complied with all the obligations under this Agreement to
be performed or complied with by MIOA and the Acquisition Corp on or prior to
the Closing Date.
7.3. ABSENCE OF LITIGATION. No litigation shall have been instituted on or
before the time of the Closing Date by any person, the result of which did or
could prevent or make illegal the consummation of the transaction contemplated
by this Agreement, or which had or could have a material adverse effect on MIOA
or the Acquisition Corp.
7.4. SHAREHOLDERS' GUARANTEES. MIOA shall use all reasonable efforts to
have the Shareholders removed from any and all guarantees, agreements,
obligations or debts, as identified in SCHEDULE 7.4, that were entered into by
the Shareholders to facilitate or induce
30
another party to engage in any business activity with the Company. If MIOA is
unable to remove the Shareholders from such guarantees, agreements, obligations
or debts then, in such event, MIOA will indemnify the Shareholders for any
damages the Shareholders incur relative to such guarantees, agreements,
obligations or debts.
7.5. EMPLOYMENT AGREEMENTS ADDENDUM AND OPTION PLAN. The Company and
certain principal Shareholders shall have executed the employment agreements and
the addendum to the employment agreement in substantially the same forms as
attached hereto as composite Exhibit F (the "EMPLOYMENT AGREEMENTS AND
ADDENDUM"). It is hereby agreed that MIOA and the Company will enter into a
non-qualified stock option plan whereby MIOA will grant periodically to the
Company options for the purpose of providing additional compensation to the
Company's managers and key employees. The Company and MIOA will mutually agree
as to the number of such options and their exercise prices.
7.6. DELIVERIES AT CLOSING. On or prior to the Closing Date, in addition
to all other deliveries to be made by MIOA, MIOA shall deliver or cause to be
delivered to the Shareholders a certificate signed by an officer of MIOA, dated
the Closing Date, certifying that: (a) all of the terms and conditions of this
Agreement to be satisfied or performed by MIOA and Acquisition Corp. on or
before the time of the Closing Date have been satisfied or performed; and (b) no
litigation has been instituted or, to best of said officer's knowledge
threatened on or before the time of the Closing Date by any person, the result
of which did or could prevent or make illegal the consummation of the
transaction contemplated by this Agreement.
ARTICLE VIII.
CONDITIONS PRECEDENT TO MIOA OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, MIOA's obligations to consummate the transaction
contemplated by this Agreement shall be subject to the satisfaction of each of
the conditions set forth in this Article VIII, except to the extent that such
satisfaction is waived by MIOA in writing.
8.1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. All
representations and warranties made by the Company and the Shareholders
contained in this Agreement and the disclosure schedules hereto shall be true
and correct in all material respects on the date hereof, and shall be true and
correct in all material respects at the time of the Closing Date as though such
representations were again made, without exception or deviation, at the time of
the Closing Date.
8.2. PERFORMANCE OF THIS AGREEMENT. The Company and the Shareholders shall
have duly performed or complied with all of the covenants and obligations under
this Agreement to be performed or complied with by them on or prior to the
Closing Date.
8.3. ABSENCE OF LITIGATION. No litigation shall have been instituted on or
before the time of the Closing Date by any person, the result of which did or
could prevent or make illegal
31
the consummation of the transaction contemplated by the Agreement, or which had
or could have a material adverse effect on the Company or its Business.
8.4 EXECUTION OF EMPLOYMENT AGREEMENTS. The Company and certain principal
Shareholders shall have executed the Employment Agreements in substantially the
same form as attached hereto as composite Exhibit F.
8.5. DELIVERIES AT CLOSING. On or prior to the Closing Date, in addition
to all other deliveries to be made by the Shareholders hereunder, the
Shareholders shall deliver or cause to be delivered a certificate signed by the
Shareholders, dated as of the Closing Date, certifying that: (a) all of the
terms and conditions of this Agreement to be satisfied or performed by the
Company and the Shareholders on or before the time of the Closing Date have been
satisfied or performed; (b) no litigation has been instituted or, to the best of
their knowledge, threatened on or before the time of the Closing Date by any
person, the result of which did or could prevent or make illegal the
consummation of the transaction contemplated by this Agreement; or which had or
could have a material adverse effect on the Company or its Business; and (c)
there has not been any material adverse change in or affecting the Company or
its Business between the date of this Agreement and the Closing Date.
ARTICLE IX.
OBLIGATIONS ON OR BEFORE THE CLOSING DATE
9.1. OBLIGATIONS OF MIOA TO THE SHAREHOLDERS ON OR BEFORE THE CLOSING
DATE. MIOA hereby covenants and agrees to deliver or cause to be delivered to
the Shareholders on or before the Closing Date or, if agreed, as soon thereafter
as is reasonably possible the following:
(a) The duly issued certificates (legend as provided herein)
representing the Purchase Price, together with any documentary stamps required
in connection with such transfer and such other appropriate documents and
instruments of transfer as the Shareholders may reasonably request;
(b) A certification by an officer of MIOA and the Acquisition Corp
that MIOA and the Acquisition Corp are authorized to execute, deliver and
perform this Agreement and is authorized to consummate the transactions
contemplated hereby; and
(c) All Schedules, Exhibits, leases and employment agreements and
other ancillary documents contemplated by this Agreement and such other
documents and instruments as the Shareholders may reasonably request in order to
effectuate the terms of this Agreement.
9.2. OBLIGATIONS OF THE COMPANY AND THE SHAREHOLDERS TO MIOA ON OR BEFORE
THE CLOSING DATE. The Company and the Shareholders hereby covenant and agree to
deliver or cause to be delivered to MIOA on or before the Closing Date or, if
agreed, as soon thereafter as is reasonably possible the following:
32
(a) Duly executed stock certificates representing the Company
Shares, free and clear of all encumbrances together with any documentary stamps
required in connection with such transfer and such other appropriate documents
and instruments of transfer as MIOA may reasonably request;
(b) A certification by the Company's president that the Company was
authorized to execute, deliver and perform this Agreement and is authorized to
consummate the transactions contemplated hereby;
(c) A Good Standing Certificate for the Company and the Affiliated
Companies from the State of Florida dated no later than ten (10) days prior to
the Closing Date.
(d) Incumbency certificates relating to each person executing (as a
corporate officer or otherwise on behalf of another person) any document
executed and delivered to MIOA pursuant to the terms hereof.
(e) The General Releases referred to in Section 6.1, duly executed
by the persons referred to in such Section.
(f) All Schedules, Exhibits, leases and employment agreements and
other ancillary documents contemplated by this Agreement and such other
documents and instruments as MIOA may reasonably request in order to effectuate
the terms of this Agreement.
(g) An estoppel certificate or status letter from each of the
landlords in respect to the real estate leases of the Company and the Affiliated
Companies which shall certify that (i) the lease is valid and in full force and
effect; (ii) the amounts payable by the Company or the Affiliated Companies
under the lease and the date to which the same have been paid; (iii) whether
there are, to the knowledge of said landlord, any defaults thereunder, and, if
so, specifying the nature thereof; and (iv) that the transactions contemplated
by this Agreement will not constitute default under the lease.
ARTICLE X.
TERMINATION AND RECISSION
10.1. RECISSION POST CLOSING DATE. It is hereby acknowledged that as of
the Closing Date of this Agreement, the parties to this Agreement have not
completed their respective due diligence on MIOA and the Company nor have all
the Schedules and Exhibits to this Agreement been completed and provided as
required herein. Further, it is hereby acknowledged that this transaction is
conditioned upon the approval of MIOA's board of directors and Copelco Financial
Corporation which has not been obtained as of the Closing Date. Accordingly, the
parties obligation to consummate the transactions contemplated by this Agreement
shall be subject to (a) the completion of their due diligence and the completion
and the delivery of the Schedules and Exhibits, all to their reasonable
satisfaction, (b) the unconditional approval of this transaction by Copelco
Financial Corporation and (c) the approval of MIOA's board of directors. If any
one or more of these conditions have not been satisfied by November 20, 1998,
then, in such event,
33
MIOA or the Company shall have the right to rescind this transaction by
providing written notice to the parties to this transaction. Such notice must be
given no later than November 23, 1998, unless otherwise agreed. If the
transaction is rescinded in accordance with this provision, MIOA shall return
the stock of the Company Shares to the proper Shareholders in exchange for the
MIOA Shares. Thereafter, all rights, duties and obligations of the parties shall
terminate and this Agreement shall be null and void with no further force or
effect.
ARTICLE XI.
MISCELLANEOUS
11.1. NOTICES. All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given if the same shall be in
writing and shall be delivered personally or sent by registered or certified
mail, postage prepaid, and addressed as set forth below:
If to the Shareholders: See Schedule 11.1
With a copy to: Joel Mayersohn
Atlas, Pearlman, Trop & Borkson
200 East Las Olas Blvd.
Suite 1900
Fort Lauderdale, Florida 33301
To Company: Your Good Health, Inc.
1903 S. Congress Ave., #400
Boynton Beach, FL 33463
Attn: Paul C. Pershes
If to MIOA: Medical Industries of America, Inc.
1903 S. Congress Ave., #400
Boynton Beach, FL 33463
Attn: Paul C. Pershes, President
Any such notices shall be deemed received upon actual receipt if
personally delivered or the third business day after the post-marked date of
mailing.
11.2. ENTIRE AGREEMENT. This Agreement, including the disclosure schedules
attached hereto and the documents delivered pursuant hereto, sets forth all the
promises, covenants, agreements, conditions and understandings among the parties
hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements or conditions, expressed
or implied, oral or written, except as herein contained. No changes of or
modifications or additions to this Agreement shall be valid unless same shall be
in writing and signed by the parties hereto.
34
11.3. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon the
parties hereto, their beneficiaries, heirs and administrators. No party may
assign or transfer its interests herein, or delegate its duties hereunder,
without the written consent of the other parties.
11.4. AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification or change (collectively, "AMENDMENT") of this Agreement
shall be valid and effective, unless the parties shall unanimously agree in
writing to such Amendment.
11.5. NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
11.6. GENDER AND USE OF SINGULAR AND PLURAL. All pronouns shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the party or parties or their personal representatives, successors and
assigns may require.
11.7. COUNTERPARTS. This Agreement and any amendments may be executed in
one or more counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
11.8. HEADINGS. The article and section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of the Agreement.
11.9. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Florida, and any litigation pertaining or related to
this Agreement shall, to the extent permitted by law, be held in the courts of
Palm Beach County, Florida.
11.10. FURTHER ASSURANCES. The parties hereto shall execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
11.11. LITIGATION. If any party hereto is required to engage in litigation
or arbitration against any other party hereto, either as plaintiff or as
defendant, in order to enforce or defend any of its or his rights under this
Agreement, and such litigation results in a final judgment in favor of such
party (the "PREVAILING PARTY"), then the party or parties against whom said
final judgment is obtained shall reimburse the Prevailing Party for all direct,
indirect or incidental expenses incurred by the Prevailing Party in so enforcing
or defending its or his rights hereunder, including, but not limited to, all
attorneys' fees, paralegal' fees, court costs and other expenses incurred
throughout all negotiations, trials or appeals undertaken in order to enforce
the Prevailing Party's rights hereunder.
11.12. CONFIDENTIALITY. Except for discussions of the transactions
contemplated by this Agreement among the parties hereto and their
representatives and counsel participating in this
35
transaction, and except as may be required of the Corporation pursuant to
federal securities laws, each party hereto shall, unless all other parties
hereto shall otherwise agree, keep confidential and not, directly or indirectly,
disclose to any person the existence of this Agreement, the transaction
contemplated by this Agreement or any of the terms thereof, and each party
hereto shall use its good faith efforts to cause its employees, agents,
officers, directors and representatives to abide by the foregoing restrictions
on disclosure.
11.13. COSTS AND EXPENSES. The parties hereby agree that they each will be
responsible for the payment of their respective costs and expenses including
professional fees incurred in connection with this transaction with the further
understanding that fifty percent (50%) of the costs and expenses incurred by
the Shareholders and the Company shall be the responsibility of the
Shareholders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year set forth above.
WITNESSES: MEDICAL INDUSTRIES OF AMERICA, INC.
______________________________ By: /s/ PAUL C. PERSHES
Print name:___________________ Paul C. Pershes, President
MIOA ACQUISTION COMPANY IV, INC.
______________________________ By: /s/ PAUL C. PERSHES
Print name:___________________ Paul C. Pershes, President
SHAREHOLDERS:
______________________________ /s/ DAVID VASTOLA
Print name:___________________ David Vastola
______________________________ /s/ DANA PUSATERI
Print name:___________________ Dana Pusateri
______________________________ /s/ MARTIN SANTIAGO
Print name:___________________ Martin Santiago
36
______________________________ /s/ JUAN COCUY
Print name:___________________ Juan Cocuy
______________________________ /s/ IRMA ESPINOZA
Print name:___________________ Irma Espinoza
______________________________ /s/ RANDY DAVIS
Print name:___________________ Randy Davis
______________________________ /s/ ELAINE CALLENDRILLO
Print name:___________________ Elaine Callendrillo
______________________________ /s/ LYDIA TORREGROSA-GREBER
Print name:___________________ Lydia Torregrosa-Greber
______________________________ /s/ RICHARD HOFFMAN
Print name:___________________ Richard Hoffman
______________________________ /s/ ERIC CONN
Print name:___________________ Eric Conn
YOUR GOOD HEALTH NETWORK, INC.
_______________________________ By: /s/ DANA PUSATERI
Print name:___________________ Dana Pusateri, Chief Executive
Officer
37
EXHIBIT A
COMPANY OFFICES AND CLINICS
38
EXHIBIT B
ARTICLES OF MERGER
39
EXHIBIT C
ARTICLES OF INCORPORATION
40
EXHIBIT D
BYLAWS
41
EXHIBIT E
GENERAL RELEASE
42
EXHIBIT F
EMPLOYMENT AGREEMENTS AND ADDENDUM
43
Dates Referenced Herein and Documents Incorporated by Reference
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