FINAL
EXECUTION COPY
EXHIBIT 9.4
TAX-FREE REORGANIZATION AGREEMENT
UNDER I.R.C. SS.368(A)(1)(C)
REORGANIZATION AGREEMENT entered into as of this 8th day of December, 2000
by and between North Vermont 12 LLC, a Vermont Limited Liability Corporation
having its principal offices at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
(hereinafter referred to as "NV12") and Sickbay Health Media, Inc., a Delaware
Corporation, having its principal offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Sickbay").
WHEREAS, Sickbay is an integrated on-line and off-line health media
company; and
WHEREAS, NV12 is a recently formed specialized web and multi-media
engineering firm; and
WHEREAS, it is the desire of NV12 to transfer, and of Sickbay to acquire,
all the assets, business and properties of NV12, including, without limitation
hereby, trademarks, trade names, franchises, licenses, leases, contracts,
goodwill, and name of NV12, subject to NV12's stated liabilities, and solely in
exchange for shares of Sickbay's Common Stock; and
WHEREAS, this Agreement and the performance by NV12 hereunder have been
authorized, approved, and found advisable by all of the members of NV12 (the
"Members"); and
WHEREAS, this Agreement and the performance by Sickbay
hereunder have been authorized and approved by the Board of Directors of
Sickbay; and
WHEREAS, the Members of NV12, as part of their approval of this
agreement, have further approved a Plan of Liquidation and Dissolution of NV12,
pursuant to which the shares of Sickbay's Common Stock to be received by NV12
will be distributed by NV12 ratably to its Members in exchange for, and in
complete cancellation and retirement of all their membership interests, followed
by the dissolution of NV12 promptly thereafter, which Plan of Complete
Liquidation and Dissolution, will also be submitted to the members of NV12 for
their approval.
NOW, THEREFORE, on the terms, and subject to the conditions hereof, it is
agreed as follows:
1. TRANSFER AND ACQUISITION OF ASSETS.
1.1 On the terms of this Agreement, subject to the conditions set
forth herein at the time and place of Closing, as hereinafter defined, NV12
shall convey, assign, transfer, and deliver to Sickbay, by appropriate
warranty deeds, bills of sale, assignments, or other instruments, free and
clear of all liens, encumbrances, mortgages, chattel mortgages, all of
NV12's business, properties, and assets of every kind and description, real
or personal, including, but not being limited to, NV12's goodwill and all
of its right, title, or interest in and to the name, ▇▇▇▇.▇▇▇. Inc.,
(collectively the "Assets") subject to certain specified unpaid and
unsatisfied liabilities and obligations of NV12 in existence at the time of
closing.
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1.2 On the terms of this Agreement, and subject to the conditions set
forth herein, Sickbay shall purchase and acquire the Assets of NV12, and
thereby become the sole owner and operator of all of the assets, businesses
and properties of NV12.
2. TRANSFER AND DELIVERY OF STOCK.
2.1 On the terms of this Agreement, and subject to the conditions set
forth herein, in exchange for the Assets of NV12, Sickbay shall transfer
and deliver to NV12 (or, on irrevocable instructions of NV12, the Members
thereof), at the time and place of closing, certificates representing an
aggregate of Five Hundred Thousand (500,000) Shares of Common Stock of
Sickbay (the "Purchase Price Shares").
2.2 If distributed to the Members thereof, as contemplated hereunder,
the Purchase Price Shares shall be distributed pro rata to such Members
proportionate to their membership interests.
2.3 The Purchase Price Shares shall bear a legend restricting further
transfer or resale (except for the redistribution to the Members of NV12,
as expressly permitted by Section 2.2 hereof so long as the NV12 Members
take the Purchase Price Shares, subject to the foregoing restriction). NV12
and its Members understand and agree that currently applicable regulations
relating to restricted securities will not permit the sale, transfer or
re-offer of the Purchase Price Shares prior to the first annual anniversary
of the Closing Date, except upon a duly filed and effective registration
statement with the Securities and
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Exchange Commission, or as to any specific transaction, not involving an
affiliate of the issuer, any applicable exemption from registration,
provided that such exemption is based upon the opinion of counsel to the
issuer, reasonably acceptable to counsel to Sickbay herein; and that no
assurance has been or can be given that the regulations in effect at any
future date under the circumstances in effect at such future date will
necessarily permit sale, transfer or other disposition of such securities
after such one (1) year period. Sickbay shall enter into the Piggyback
Registration Rights Agreement with each member of NV12 in the form annexed
as Exhibit "A" hereto.
2.4 Promptly following the exchange of Shares of Common Stock of
Sickbay for all of the assets of NV12, the NV12 shall be promptly
liquidated and dissolved.
3. TIME AND PLACE OF CLOSING.
3.1 The transactions contemplated hereunder shall be consummated on
Friday, December 8, 2000, at 1:00 p.m., or such other date and time as may
be agreed upon in writing by the parties, (the "Closing Date") at the
offices of D. ▇▇▇▇▇ ▇▇▇▇▇, Esq., ▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, or at such other time and place as may be agreed upon in writing by
the parties.
3.2 At the closing ("Closing"), the parties shall complete the
exchanges required by Sections 1 and 2 of this Reorganization Agreement,
and exchange such other documents as may be specified hereinafter or
otherwise be necessary or appropriate
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for the completion of the transactions agreed upon.
3.3 At or prior to the time of Closing, the stock books and records of
Sickbay may be reviewed or inspected by representatives of NV12 at any time
or from time to time during regular business hours, and Sickbay will make
the same reasonably available for such purpose.
3.4 At or prior to the time of Closing, the books and records of NV12
may be reviewed or inspected by representatives of Sickbay at any time or
from time to time during regular business hours, and NV12 will make the
same reasonably available for such purpose.
4. REPRESENTATIONS OF WARRANTIES OF NV12
NV12 represents and warrants to, and agrees with, Sickbay as follows:
(a) It is a start-up Vermont Limited Liability Corporation, duly
organized, and validly existing and qualified to undertake and operate its
businesses in the form the same are being conducted, where they are
presently conducted;
(b) It is a newly established specialized web and multi-media
engineering firm, engaged in developing multi-media content for itself and
its clients, and also engineering and programming back-end technology
designed as custom based applications;
(c) It has limited assets and has realized insignificant revenues, to
date, and the future prospects of such business may be entirely dependent
upon future events including the ability to integrate its proposed
activities with those of existing health-
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related magazines and website, such as those of Sickbay, as to which there
can be no assurance, and as to which no promises of any kind have been made
to Sickbay;
(d) Annexed hereto as Schedule 4(d) is: [i] the most current unaudited
balance sheet of NV12; [ii] including a list of substantially all of its
business assets; and [iii] a list of its customers and identified
prospective customers relating to the operation of the NV12 Web Site;
(e) Except for the obligations to Sickbay hereunder, NV12 has no debts
or liabilities, other than those arising in the ordinary course of the
business activities of NV12, and such debts or liabilities, in the
aggregate, do not exceed the cash on hand to meet such obligations, except
for those obligations listed on Schedule 4(e) hereto, as the "Schedule of
Liabilities to be Assumed";
(f) It has no debts or liabilities to Members of NV12;
(g) This Agreement has been duly authorized and approved by the
Members of NV12; and
(h) There is no suit, action or threatened proceeding outstanding
against NV12 seeking to enjoin the transactions contemplated hereunder, or
seeking any other relief which, if determined against NV12, would have a
material adverse effect on the business or assets of NV12.
5. REPRESENTATIONS OF WARRANTIES OF SICKBAY
Sickbay represents and warrants to, and agree with, NV12 as follows:
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(a) It is a Utah corporation, duly organized and validly existing and
duly qualified to undertake the transactions required of it hereunder,
without any further license, permit, consent or exemption whatsoever from
any applicable governmental law, rule or regulation;
(b) This Agreement has been authorized and approved by the Board of
Directors of Sickbay;
(c) American Stock Transfer & Trust Company is the duly authorized
transfer agent for the Common Stock of Sickbay;
(d) The Common Stock of Sickbay is listed on the NASD Electronic
Bulletin Board and trades thereon under the symbol SKBY;
(e) Sickbay is current in its filings under the Securities Exchange
Act of 1934 (the "Exchange Act"), having most recently filed its 10-Q for
the period ended September 30, 2000 ("Exchange Act Filings");
(f) The Company's Exchange Act Filings are true and correct and do not
omit to state any material fact necessary in order to render the statements
made therein not misleading;
(g) There is no suit, action or threatened proceeding outstanding
against Sickbay seeking to enjoin the transactions contemplated hereunder,
or seeking any other relief which, if determined adversely to Sickbay,
would have a material adverse effect on the business and affairs of
Sickbay;
(h) The Purchase Price Shares will be, when issued, duly authorized,
validly issued and non-assessable Shares of Sickbay; and
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(i) No representation has been made as to the future value of the
Purchase Price Shares or any other securities of Sickbay.
6. CONSENTS TO ASSIGNMENT AND TRANSFER.
6.1 NV12 shall obtain, prior to the time of Closing, any consents,
agreements, and other actions (collectively "Consents") required for the
transfer of the Assets to Sickbay, including the intangible assets included
in such Assets, such as web pages and web sites, and franchises to which
NV12 is a party or which it owns of holds or uses at the time of Closing.
In the event any such Consents are known to be required, they shall be
itemized on Schedule 6.1 hereof.
6.2 Sickbay shall obtain, prior to the time of Closing, all Consents
required by it for its acquisition of the Assets and the payment of any
Purchase price. In the event any such Consents are known to be requited,
they shall be itemized on Schedule 6.1 hereof.
7. CONDITIONS TO NV12'S OBLIGATIONS TO CLOSE
The obligations of NV12 to consummate the transaction to be performed
by it in connection with the closing are subject to the satisfaction of the
following conditions:
(a) The representations and warranties of Sickbay contained in Section
5 hereof shall be true and correct in all material respects as though such
representations and warranties had been made on and as of the time of such
Closing;
(b) Sickbay shall have performed and complied with all
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agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing;
(c) The President of Sickbay shall deliver NV12, at the Closing, a
certificate stating that the conditions specified in sub-sections (a) and
(b) of this Section 7 have been fulfilled;
(d) The Assistant Secretary of Sickbay shall have delivered to NV12 at
closing, a certificate certifying as to the incumbency of the President of
Sickbay, and attaching the certificate required by sub-section (c) of this
Section 7;
(e) The persons identified in Exhibit 7(e) hereof shall have entered
into consulting or employment contracts with Sickbay in the form of Exhibit
"7" hereto; and
(f) Sickbay shall have executed and delivered the Piggyback
Registration Rights Agreements
8. CONDITIONS TO SICKBAY'S OBLIGATIONS TO CLOSE
The obligations of Sickbay to consummate the transaction to be
performed by it in connection with the closing are subject to the
satisfaction of the following conditions:
(a) The representations and warranties of NV12 contained in Section 4
hereof shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and
as of the time of such Closing;
(b) NV12 shall have performed and complied with all agreements,
obligations and conditions contained in this Agreement that are required to
be performed or complied with by it on or
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before the Closing;
(c) The President of NV12 shall deliver to each Purchaser, at the
closing, a certificate stating that the conditions specified in
sub-sections (a) and (b) of this Section 7 have been fulfilled.
(d) The Secretary of NV12 shall have delivered to Sickbay at Closing,
a certificate certifying as to the incumbency of the President of NV12, and
attaching the certificate required by sub-section (c) of this Section 8;
and
(e) The persons identified in Exhibit 7(e) hereof shall have entered
into consulting or employment contracts with Sickbay.
9. OPINION OF SICKBAY'S COUNSEL
Sickbay shall furnish NV12 at the time and place of Closing the
opinion of Sickbay's counsel, to the following effect:
(a) Sickbay is duly organized, existing, and in good standing under
the laws of Utah, and is duly authorized in Utah and the other
jurisdictions in which it has qualified to do business, to conduct the
business it is then engaged in therein;
(b) The Purchase Price Shares of Sickbay's Common Stock which are to
be transferred and delivered by Sickbay to NV12 in exchange for the assets
of NV12 constitute duly authorized, issued, fully paid and non-assessable
shares of Common Stock of Sickbay, and that the Shareholders of NV12 will
acquire good title to such Shares in exchange for, and upon, the receipt by
Sickbay of the Assets of NV12;
(c) This Agreement has been properly authorized,
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executed, and delivered by Sickbay, and the performance by Sickbay has been
properly authorized and approved; and
(d) This Agreement constitutes the legally valid and enforceable
obligation and undertaking of Sickbay in accordance with its terms and
provisions, subject to the conditions herein; and
(e) Neither this Agreement for the transfer and delivery, nor the
transfer and delivery as herein agreed, of Shares of Sickbays Common Stock
to NV12 requires any qualification or authorization under the United States
Securities Laws or the laws of Utah applicable to the issuance or sale of
stock or other securities in Utah.
10. OPINION OF NV12'S COUNSEL
NV12 shall furnish Sickbay at the time and place of closing the
opinion of NV12's counsel in form and substance reasonably acceptable to
Sickbay's counsel as follows:
(a) This Agreement has been properly authorized, executed, and
delivered by NV12, and the performance by NV12 of its obligations hereunder
has been properly authorized and approved; and
(b) This Agreement constitutes the legally valid and enforceable
obligation and undertaking of NV12 in accordance with its terms and
provisions, subject to the conditions herein; and
(c) Upon execution and delivery of a ▇▇▇▇ of sale and other conveyance
documents, all the assets, leases, contracts (other than this contract),
franchises, permits, options, names,
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trademarks, trade names, copyrights, formulas, trade secrets, and all other
property to be transferred by NV12 to Sickbay as hereinabove provided,
shall have been validly and effectively transferred to Sickbay.
11. POST CLOSING UNDERTAKINGS OF THE PARTIES.
Each of the parties undertakes to the other to execute and deliver
such further documents and additional instruments as may be required to
complete the transactions.
12. SUCCESSORS
This Agreement shall be binding upon and inure to the benefit of the
respective parties hereto, their heirs, representatives, successors, and
assigns; provided, however, that neither this Agreement nor the rights of
either party hereunder may be assigned by Sickbay, Inc. or by NV12 prior to
Closing.
13. COUNTERPARTS
This Agreement may be executed in several counterparts, which, taken
together, shall constitute one document, which shall become binding when
duly executed and delivered to each of the parties hereto.
14. COSTS AND EXPENSES
14.1 Each party shall be responsible for, and shall pay, the
professionals retained by it, and neither party shall have any liability
(except as otherwise set forth herein) to the other for payment of the
other party's retained professionals.
14.2 Notwithstanding the provisions of Section 14.1 hereof, Sickbay
agrees to pay, at Closing, upon billing thereof,
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the specified liabilities of NV 12 to be assumed by it hereunder. [THE REST
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IN WITNESS WHEREOF, the parties hereto have hereunto set their respective
hands and seals or have caused these presents to be executed in their respective
names and their respective corporate seals to be hereunto affixed and attested
by their respective officers hereunto duly authorized, the day and year first
hereinabove written.
NORTH VERMONT 12, LLC
By:
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Member
By:
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Member
By:
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Member
By:
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Member
SICKBAY HEALTH MEDIA, INC.
By:
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Chairman
By:
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Chairman
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