EXHIBIT 10.1
MEMBER INTEREST PURCHASE AGREEMENT
THIS MEMBER INTEREST PURCHASE AGREEMENT is made and entered into
as of the 12th day of September, 2000, but effective as of June 30, 2000
(the "Effective Date") by and between ADVANCED MEDICAL MANAGEMENT, INC., a
Maryland corporation (hereinafter "Seller") and TESSA COMPLETE HEALTH CARE,
INC., a Georgia corporation (the "Buyer").
EXPLANATORY STATEMENT
Seller is the owner of the sole member interest (the "Interest")
in Advanced Medical Management of Nevada, LLC, a Nevada limited liability
company (the "Company").
Pursuant to the terms and conditions of this Agreement, Seller
will sell and assign all of its right, title and interest in and to the
Interest to Buyer.
NOW, THEREFORE, the parties hereto agree as follows:
1. Agreement to Sell. At the Closing hereunder, but effective
as of the Effective Date, Seller shall sell and assign and Buyer shall
purchase and accept, at the price, and upon the terms and conditions
hereinafter set forth, all of Seller's right, title and interest in and to
the Interest.
2. Price.
2.1 The purchase price for the purchase of the Interest
shall be nine hundred forty thousand seven hundred twenty (940,787) shares
of the common stock of Buyer, which shall be evidenced by a duly issued
Stock Certificate of Buyer and delivered by Buyer to Seller at Closing. The
Buyer and Seller agree that the allocation of the purchase price is as set
forth on Exhibit A.
2.2 The Buyer and Seller agree that the Buyer shall not
assume, directly or indirectly, any debts, obligations or liabilities of the
Company which accrued prior to the Effective Date. The Seller shall
indemnify the Buyer and the Company for such obligations pursuant to Section
8.1 hereof. Notwithstanding the foregoing, however, the Company shall
remain obligated for its existing employment agreements and for the lease of
its office space ("Lease").
3. Closing. Closing shall take place simultaneously with the
execution hereof, but shall be effective as of the Effective Date. At the
Closing, Seller hereby agrees to deliver to Buyer an absolute assignment to
Buyer of the Interest by the execution and delivery by Seller of an
Assignment of Member Interest in the form set forth in Exhibit B hereto.
4. Seller's Representations and Warranties. Seller represents
and warrants as follows:
4.1 On this date Seller is the sole owner of the Interest.
4.2 On this date the Interest is free and clear of any liens
whatsoever and Seller has full power and authority to convey it to Buyer in
accordance with the terms and provisions of this Agreement.
4.3 The Company is the sole owner of the furniture,
fixtures, supplies and accounts receivable listed and described on Exhibit C
hereof.
4.4 A copy of the Company's existing business license from
Xxxxx County is attached hereto as Exhibit D. The business license is
currently in effect as of the Effective Date and all fees have been paid
through July 31, 2000.
4.5 The Company owns its accounts receivable free and clear
of any interest or participation by any employee of the Company or any other
person, and the Seller agrees to promptly reimburse or return to Buyer any
misdirected payment of an accounts receivable that the Seller receives.
4.6 Seller agrees to use its commercially reasonable
efforts, without incurring any out-of-pocket costs, to transfer the
Company's existing computer software programs to Buyer or to otherwise allow
Buyer and/or Company to continue to utilize such computer software programs,
to the extent such transfer or use is permitted by the licensor of such
programs.
4.7 Seller makes the investment representations and
warranties set forth in that certain Subscription Agreement attached hereto
as Exhibit F and by this reference incorporated herein.
4.8 Seller represents and warrants that it has the full
power and authority to enter into this Agreement and to complete the
transactions contemplated hereby.
4.9 Seller represents and warrants that all of the Seller's
representations and warranties are as true and accurate at the time of the
execution of this Agreement as they were on the effective date.
5. Buyer's Representations and Warranties. Buyer represents and
warrants that it has the full power and authority to enter into this
Agreement and to complete the transactions contemplated hereby.
6. Lease. The Company shall continue to occupy space under the
Lease pursuant to the terms of the Sublease attached hereto as Exhibit E,
which the parties shall execute upon the Closing hereunder. However,
notwithstanding anything to the contrary contained in the Sublease, the
Seller shall continue to be responsible, at Seller's sole cost and expense,
for the installation of the tenant improvements required by Section 7.5 of
the Lease.
7. Use of Name. The Buyer shall be entitled to keep the name of
the Company through December 31, 2000. As of January 1, 2001, the Buyer
shall cause the name of the Company to be changed so that it does not
include the name "Advanced Medical Management" or "Multi-Specialty Health
Care" in any part of its name or tradename. Seller expressly acknowledges
and agrees that Buyer may use the name "Multi-Care Health and Rehabilitation
Center".
8. Indemnification.
8.1 Seller undertakes to indemnify and hold Buyer harmless
from and against any and all costs, claims, and liabilities of any nature
whatsoever (including reasonable attorneys' fees) arising out of or in any
manner due to (i) liabilities or undertakings with respect to the Interest
which arise out of events occurring prior to the Closing (ii) any breach of
any warranty or representation made by Seller herein, and (iii) any debts,
obligations and liabilities of the Company which accrued before the
Effective Date. Seller shall assume and promptly pay for any existing
debts, obligations and liabilities of the Company as of the Effective Date.
8.2 Buyer undertakes to indemnify and hold Seller harmless
from and against any and all costs, claims, and liabilities of any nature
whatsoever affecting or pertaining to the Company and the Interest
(including reasonable attorneys' fees) arising out of or pertaining to
events occurring on or after the Effective Date.
9. Survival of Covenants. Each and every representation,
warranty, undertaking and indemnification on the part of Seller and the
Buyer shall survive Closing hereunder.
10. Agreement Binding. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
heirs, personal representatives, successors and assigns.
11. Governing Law; Attorney Fees. This Agreement shall be
construed in accordance with the laws of the State of Nevada. If suit is
brought to enforce any of the terms or provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorney fees and costs.
12. Confidentiality. The Buyer and Seller agree that this
Agreement and the transactions contemplated hereby may not be disclosed or
otherwise divulged to anyone other than their representatives for the
purposes of effectuating the transactions contemplated by this Agreement and
only after the representatives are informed of the confidential nature of
such information. After the Closing, all aspects of this Agreement shall be
kept confidential except as may be necessary in a proceeding to enforce the
rights of any party under this Agreement or except as required by applicable
federal and state securities laws.
13. Counterparts. This Agreement may be signed in various
counterparts which together shall constitute one and the same instrument.
14. Registration Rights.
14.1. Right to Piggyback.
14.1.1. If Buyer proposes to register any securities of
Buyer under the Securities Act on any registration form before July 1, 2001
(otherwise than for the registration of securities to be offered and sold by
Buyer pursuant to (i) an employee benefit plan, (ii) a dividend or interest
reinvestment plan, (iii) other similar plans or (iv) reclassification of
securities, mergers, consolidations and acquisitions of assets) permitting a
secondary offering or distribution, not less than 90 days prior to each such
registration Buyer shall give to Seller written notice of such proposal
which shall describe in detail the proposed registration and distribution
(including those jurisdictions where registration or qualification under the
securities or blue sky laws is intended) and, upon the written request of
Seller furnished within 30 days after the date of any such notice, proceed
to include in such registration such shares of the common stock of Buyer
that Seller has received pursuant to Section 2.1 of this Agreement
("Piggy-Back Shares") as have been requested by the Seller to be included in
such registration. Seller shall in its request describe briefly the
proposed disposition of such shares of Common Stock. Buyer will in each
instance use its best efforts to cause all such Piggy-Back Shares to be
registered under the Securities Act and qualified under the securities or
blue sky laws of any jurisdiction requested by the Seller , all to the
extent necessary to permit the sale or other disposition thereof (in the
manner stated in such request) by the Seller.
14.1.2. If the managing underwriter, who shall be
selected by Buyer advises Buyer in writing that, in its opinion, the
inclusion of the Piggy-Back Shares with the securities being registered by
Buyer would materially adversely affect the distribution of all such
securities, then Buyer will include in such registration the securities
Buyer proposes to sell and the Piggy-Back Shares requested to be included in
such registration on a pro rata basis.
14.2. Selection of Underwriter; Participation in
Underwritten Registrations. Seller agrees to the selection by Buyer of the
underwriter to manage such registration and to execute an underwriting
agreement with such underwriter that is in customary form. The Seller shall
not participate in any registration hereunder which is underwritten unless
the Seller (i) agrees to sell its Piggy-Back Shares on the basis provided in
any underwriting arrangements approved by Buyer, and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements; provided that no holder of Piggy-Back Shares included in any
underwritten registration shall be required to make any representations or
warranties to Buyer or the underwriters other than representations and
warranties regarding the Seller and the Seller's intended method of
distribution.
14.3. Withdrawal of Registration. Nothing in this
Section shall be deemed to require Buyer to proceed with any registration of
its securities after giving the notice as provided herein; provided,
however, that Buyer shall pay all expenses incurred pursuant to such notice
(in accordance with Section 14.6.
14.4. Registration and Qualification Procedures. Buyer
is not granting Seller "demand" registration rights. However, whenever
Buyer is required by the provisions of this Section to use its best efforts
to effect the registration of any of its securities under the Securities
Act, Buyer will, as expeditiously as is possible:
(i) prepare and file with the SEC a registration
statement with respect to such securities in connection with which Buyer
will give the Seller, its counsel and accountants the opportunity to
participate in the preparation of such registration statement, each
prospectus included therein or filed with the SEC, and each amendment
thereof or supplement thereto, and will give each of them such access to its
books and records and such opportunities to discuss the business of Buyer
with its officers and the independent public accountants who have certified
its financial statements as shall be necessary, in the opinion of the
Seller's counsel, to conduct a reasonable investigation within the meaning
of the Securities Act;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and the prospectus current and to comply with the provisions of
the Securities Act with respect to the sale of all securities covered by
such registration statement whenever the Seller shall desire to sell the
same; provided, however, Buyer shall have no obligation to file any
amendment or supplement at its own expense more than nine months after the
effective date of such registration statement;
(iii) furnish to the Seller such number of copies of
preliminary prospectuses and prospectuses and each supplement or amendment
thereto and such other documents as it may reasonably request in order to
facilitate the sale or other disposition of the securities owned by it in
conformity with (i) the requirements of the Securities Act and (ii) the
proposed method of distribution;
(iv) use its reasonable best efforts to register or
qualify the securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions within the United States
as the Seller shall reasonably request, and do such other reasonable acts
and things as may be required of it to enable the Seller to conclude the
sale or other disposition in such jurisdictions of the securities owned by
them; provided, however, that Buyer shall not be required to (a) qualify as
a foreign corporation or consent to a general and unlimited service of
process in any such jurisdiction, (b) subject itself to any material
taxation in any such jurisdiction, or (iii) qualify as a dealer in
securities;
(v) furnish, at the request of the Seller, on the date
such securities are delivered to the underwriters for sale pursuant to such
registration or, if such securities are not being sold through underwriters,
on the date the registration statement with respect to such securities
become effective, (a) an opinion, dated such date, of counsel representing
Buyer for the purposes of such registration, addressed to the underwriters,
if any, and to the Seller, covering such legal matters with respect to the
registration in respect of which such opinion is being given as the Seller
may reasonably request and are customarily included in such opinions, and
(b) letters, dated respectively, (1) the effective date of the registration
statement and (2) the date such securities are delivered to the
underwriters, if any, for sale pursuant to such registration, from a firm of
independent certified public accountants of recognized national standing
selected by Buyer, addressed to the underwriters, if any, and to the Seller,
covering such financial, statistical and accounting matters with respect to
the registration in respect of which such letters are being given as the
Seller may reasonably request and are customarily included in such letters;
(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders as soon as reasonably practicable, but not later than 16
months after the effective date of the registration statement, an earnings
statement covering a period of at least 12 months beginning after the
effective date of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
(vii) cause all such Piggy-Back Shares to be listed
on each securities exchange on which similar securities issued by Buyer are
then listed and to be qualified for trading on each system on which similar
securities issued by Buyer are from time to time qualified;
(viii) provide a transfer agent and registrar for all
such Piggy-Back Shares not later than the effective date of such
registration statement and thereafter maintain such a transfer agent and
registrar; and otherwise cooperate with the Seller and the managing
underwriter to facilitate the timely preparation and delivery of
certificates representing Piggy-Back Shares to be sold and not bearing any
restrictive legends, and enable such Piggy-Back Shares to be in such
denominations and registered in such names as the managing underwriter may
reasonably request at least two business days prior to any sale of Piggy-
Back Shares to the underwriters;
(ix) enter into and perform an underwriting agreement
with the managing underwriter, if any, containing customary (i) terms of
offer and sale of the securities, payment provisions, underwriting discounts
and commissions, and (ii) representations, warranties, covenants,
indemnities, terms and conditions;
(x) notify the Seller during any time when a prospectus
relating to the registration is required to be delivered under the
Securities Act, upon discovery that, or upon the happening of any event as a
result of which, the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made, and at the request of the Seller promptly
prepare and furnish to the Seller a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they are made;
(xi) keep the Seller advised in writing as to the
initiation and progress of any registration under this Section.
14.5. Holdback Agreements.
14.5.1. If any registration pursuant to this Section is
in connection with an underwritten public offering, the Seller agrees, if so
required by the managing underwriter, not to effect any public sale or
distribution of Piggy-Back Shares (other than as part of such underwritten
public offering) during the period beginning 15 days prior to the effective
date of such registration statement and ending on the 90th day (or such
longer period of time as may be requested by the managing underwriter (which
period shall in no event exceed 180 days)) after the effective date of such
registration statement; provided, however, that each person that is an
officer, director, or beneficial owner of five percent or more of the
outstanding shares of Buyer Common Shares enters into such an agreement on
similar terms.
14.5.2. Buyer agrees not to effect any public sale or
distribution of its equity securities or securities convertible into or
exchangeable or exercisable for any of such securities during the 15 days
prior to or 90 days (or such longer period of time as may be requested by
the managing underwriter (which period shall in no event exceed 180 days))
after any underwritten registration pursuant this Section has become
effective, except as part of such underwritten registration and except
pursuant to registrations on Form S-8 or S-4 or any successor or similar
forms thereto.
14.6. Registration Expenses. If Buyer is required by the
provisions of this Section to use its best efforts to effect the
registration or qualification under the Securities Act or any state
securities or blue sky laws of any of the Piggy-Back Shares, Buyer shall pay
all expenses in connection therewith, including (i) all expenses incident to
filing with the National Association of Securities Dealers, Inc., (ii)
registration fees, (iii) printing expenses, (iv) accounting and legal fees
and expenses, (v) expenses of any special audits incident to or required by
any such registration or qualification, and (vi) expenses of complying with
the securities or blue sky laws of any jurisdictions in connection with such
registration or qualification; provided, however, Buyer shall not be liable
for (1) any discounts or commissions to any underwriter attributable to
Piggy-Back Shares being sold; (2) any stock transfer taxes incurred in
respect of the Piggy-Back Shares being sold; or (3) the legal fees of the
Seller.
14.7. Indemnification.
14.7.1. In connection with any registration or
qualification of securities under this Section, Buyer agrees to indemnify
the Seller against all losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) caused by any untrue, or
alleged untrue, statement of a material fact contained in any registration
statement, preliminary prospectus, prospectus or notification or offering
circular (as amended or supplemented if Buyer shall have furnished any
amendments or supplements thereto) or caused by any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses are caused by any
untrue statement or alleged untrue statement or omission or alleged omission
based upon information furnished in writing to Buyer by Seller or any
underwriter expressly for use therein.
14.7.2. In connection with any registration or
qualification of securities under this Section, the Seller, agrees to
indemnify Buyer and each officer, director and controlling person of Buyer
against all losses, claims, damages, liabilities and expenses (including the
costs of reasonable investigation) caused by any untrue, or alleged untrue,
statement of a material fact contained in any registration statement,
preliminary prospectus, prospectus or notification or offering circular (as
amended or supplemented if the Seller shall have furnished information for
any amendments or supplements thereto) or caused by any omission, or alleged
omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the
extent such losses, claims, damages, liabilities or expenses are caused by
any untrue statement or alleged untrue statement or omission or alleged
omission based upon information furnished in writing to Buyer by the Seller
expressly for use therein.
14.7.3. Any person entitled to indemnification
hereunder will (i) give reasonably prompt written notice to the indemnifying
party of any claim with respect to which it seeks indemnification and
(ii) unless in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party.
If such defense is assumed, the indemnifying party will not be subject to
any liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the
defense of a claim will not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim.
14.7.4. The indemnification provided for under this
Section will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling person of such indemnified party and will survive the transfer
of Piggy-Back Shares.
14.7.5. The parties agree to make such provisions, as
are reasonably requested by any indemnified party, for contribution to such
party in the event indemnification is unavailable for any reason. Such
right to contribution shall be in such proportion as is appropriate to
reflect the relative fault of and benefits to Buyer on the one hand and the
Seller on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits to
the indemnifying party and indemnified parties shall be determined by
reference to, among other things, the total proceeds received by the
indemnifying party and indemnified parties in connection with the offering
to which such losses, claims, damages, liabilities or expenses relate. The
relative fault of the indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether the action in
question, including any untrue or alleged untrue statement of a material
fact or omission or alleged omission or state a material fact, has been made
by, or relates to information supplied by, such indemnifying party or the
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The parties
hereto agree that it would not be just or equitable if contribution pursuant
hereto were determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable considerations
referred to in this Section. No person found guilty of any fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not found
guilty of such fraudulent misrepresentation.
15. Notice. All notices required or permitted under this Agreement
shall be in writing and shall be either (i) personally delivered with signed
receipt, (ii) sent by first class certified mail, return receipt requested,
postage prepaid, or (iii) sent by a nationally-recognized overnight courier
and addressed:
if to Landlord: Advanced Medical Management, Inc
0000 Xxxxxxxxx Xxxxx
Xxxxx X
Xxxxxxxxx, Xxxxxxxx 00000
ATTN: Xxxxxxxx X. Xxxx
with a copy to: Xxxxxx X. Xxxxxx, Esquire
c/o Neuberger, Quinn, Gielen, Rubin & Gibber, P.A.
Xxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
if to Tenant: Tessa Complete Health Care, Inc.
Attn: Xxxxxx X. Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxxxxx Xxxxxx, Esquire
Tessa Complete Health Care, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxxxxx 00000
IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed under seal on the day and year first above written.
WITNESS: SELLER:
ADVANCED MEDICAL MANAGEMENT, INC.
_____________________________________
By:__/s/________________________(SEAL)
BUYER:
TESSA COMPLETE HEALTH CARE, INC.
_____________________________________
By:__/s/Xxxxxx Flippin_____________(SEAL)
EXHIBIT A
TO
MEMBER INTEREST PURCHASE AGREEMENT
Allocation of Purchase Price
----------------------------
1. Furniture and Fixtures $114,141
2. Supplies 1,400
3. Accounts Receivables 212,539
4. Reimbursement for Three Months Rent 24,715
-------
Total $352,795
=======
Purchase Price: 940,787 Tessa shares x $.375 (closing price on Effective
Date) = $352,795.12
EXHIBIT B
TO
MEMBER INTEREST PURCHASE AGREEMENT
Assignment of Member Interest
EXHIBIT C
TO
MEMBER INTEREST PURCHASE AGREEMENT
List of Assets of Company
EXHIBIT D
TO
MEMBER INTEREST PURCHASE AGREEMENT
Business License
EXHIBIT E
TO
MEMBER INTEREST PURCHASE AGREEMENT
Sublease
