Exhibit 10.30
================================================================================
AGREEMENT AND PLAN OF REORGANIZATION
by and among
CRDENTIA CORP.,
CRDE CORP.,
TRAVMED ACQUISITION CORPORATION
and
TRAVMED USA, INC.,
and the Shareholders of TRAVMED USA, Inc.
dated March 28, 2005
================================================================================
Exhibit 10.30
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
1.1. Defined Terms........................................................1
1.2. Construction of Certain Terms and Phrases............................9
ARTICLE II THE MERGER........................................................9
2.1. The Merger...........................................................9
2.2. Effective Time.......................................................9
2.3. Effect of the Merger................................................10
2.4. Articles of Incorporation; Bylaws...................................10
2.5. Directors and Officers..............................................10
2.6. Effect on Capital Stock/Merger Consideration........................10
2.7. Exchange Procedure..................................................14
2.8. Closing.............................................................15
2.9. Exemption from Registration.........................................17
2.10. Authorization of the Shareholder Representative.....................17
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................18
3.1. Organization of the Company.........................................18
3.2. Capital Stock of the Company........................................19
3.3. Ownership of Shares.................................................19
3.4. Authority of the Company............................................19
3.5. No Affiliates.......................................................20
3.6. No Conflicts........................................................20
3.7. Consents and Governmental Approvals and Filings.....................20
3.8. Books and Records...................................................20
3.9. Company Financial Statements........................................21
3.10. Absence of Changes..................................................21
3.11. No Undisclosed Liabilities..........................................21
3.12. Tangible Personal Property..........................................21
3.13. Benefit Plans; ERISA................................................22
3.14. Real Property.......................................................23
3.15. Proprietary Information of Third Parties............................23
3.16. Compliance with Legal Requirements; Governmental Authorizations.....23
3.17. Legal Proceedings; Orders...........................................25
3.18. Contracts...........................................................26
3.19. Accounts Receivable.................................................28
3.20. Accounts Payable....................................................28
3.21. Equipment...........................................................28
3.22. Insurance...........................................................28
3.23. Tax Matters.........................................................29
3.24. Labor and Employment Relations......................................30
3.25. Certain Employees...................................................31
3.26. Absence of Certain Developments.....................................32
3.27. Customers...........................................................33
3.28. Bank Accounts.......................................................33
-i-
Exhibit 10.30
3.29. Permits.............................................................33
3.30. Regulatory Compliance...............................................34
3.31. Third Party Consents................................................34
3.32. Relationships with Related Persons..................................34
3.33. Certain Payments....................................................34
3.34. Brokers.............................................................35
3.35. Verification of Credentials.........................................35
3.36. Existing Indebtedness...............................................35
3.37. Material Misstatements and Omissions................................35
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT, CRDE AND
ACQUISITION CO. ............................................................36
4.1. Organization........................................................36
4.2. Authority...........................................................36
4.3. Litigation..........................................................36
4.4. Reports and Financial Statements....................................36
4.5. No Conflicts........................................................37
4.6. Consents and Governmental Approvals and Filings.....................37
4.7. Absence of Certain Changes or Events................................37
4.8. Brokers.............................................................38
4.9. Parent Common Stock.................................................38
4.10. Operation of Acquisition Co.........................................38
4.11. Absence of Undisclosed Liabilities..................................38
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS................38
5.1. Requisite Power and Authority.......................................38
5.2. Investment Representations..........................................38
5.3. Transfer Restrictions...............................................39
5.4. Market Standoff.....................................................40
5.5. Filings.............................................................40
ARTICLE VI ADDITIONAL AGREEMENTS............................................41
6.1. Access to Information...............................................41
6.2. Public Announcements; Company Literature............................41
6.3. Fees and Expenses...................................................41
6.4. Confidentiality.....................................................41
6.5. Parent Common Stock Legend..........................................42
6.6. Collection of Accounts Receivable...................................42
6.7. Future Liabilities; Indemnification.................................42
6.8. Non-Competition Agreement...........................................42
6.9. Conduct of Business of Company Post-Closing.........................43
6.10. Notification of Audits..............................................43
ARTICLE VII CONDITIONS TO CONSUMMATION OF THE MERGER........................44
7.1. Conditions to Each Party's Obligations to Effect the Merger.........44
7.2. Conditions to the Obligations of the Company........................44
7.3. Conditions to the Obligations of Parent and Acquisition Co..........45
ARTICLE VIII TERMINATION; AMENDMENT; WAIVER.................................46
8.1. Termination.........................................................46
8.2. Effect of Termination...............................................46
-ii-
Exhibit 10.30
8.3. Amendment...........................................................47
8.4. Extension; Waiver...................................................47
ARTICLE IX ACTIONS BY THE PARTIES AFTER THE CLOSING.........................47
9.1. Survival of Representations, Warranties, Etc........................47
9.2. Indemnification.....................................................47
9.3. Offset Rights; Notice of Claim......................................49
9.4. Non-Exclusivity.....................................................49
ARTICLE X ARBITRATION.......................................................50
10.1. Arbitration.........................................................50
ARTICLE XI MISCELLANEOUS....................................................50
11.1. Further Assurances..................................................50
11.2. Notices.............................................................50
11.3. Entire Agreement....................................................51
11.4. Waiver..............................................................51
11.5. Amendment...........................................................51
11.6. No Third Party Beneficiary..........................................52
11.7. No Assignment; Binding Effect.......................................52
11.8. Headings............................................................52
11.9. Severability........................................................52
11.10 Governing Law.......................................................52
11.11 Consent to Jurisdiction and Forum Selection.........................52
11.12 Construction........................................................52
11.13 Counterparts........................................................52
11.14 Attorney's Fees.....................................................53
SCHEDULES AND EXHIBITS
Schedule
Company Disclosure Schedule
Exhibits
Exhibit A - Articles of Merger
Exhibit B - Forms of Convertible Subordinated Promissory Note
Exhibit C - Non-Competition and Non-Solicitation Agreement - Xxxxxx Xxxxxx
Exhibit D - Company Secretary Certificate
Exhibit E - Release
Exhibit F - Opinion of Company Counsel to Company
Exhibit G - Subordination Agreement
Exhibit H - Parent Secretary Certificate
Exhibit I - Acquisition Co. Secretary Certificate
Exhibit J - Information Certificate
-iii-
Exhibit 10.30
Exhibit K - Registration Rights Agreement
Exhibit L - Employment Agreement - Xxxxxx Xxxxxx
Exhibit M - Non-Competition and Non-Solicitation Agreement - Xxxxx Xxxxxxxx
Exhibit N - Assignment Agreement
Exhibit O - First Amendment to the Lease Agreement
Exhibit P - Administrative Sharing Agreement
-iv-
Exhibit 10.30
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (this "Agreement") is made and
entered into as of March 28, 2005, by and among Crdentia Corp., a Delaware
corporation ("Parent"), CRDE Corp., a Delaware corporation and wholly-owned
subsidiary of Parent ("CRDE"), TRAVMED Acquisition Corporation, a North Carolina
corporation and a wholly-owned subsidiary of CRDE ("Acquisition Co."), TRAVMED
USA, Inc., a North Carolina corporation (the "Company"), Xxxxx Xxxxxxxx and
Xxxxxx Xxxxxx who currently constitute all of the Shareholders of the Company
(individually a "Shareholder" and collectively, the "Shareholders").
RECITALS:
A. Upon the terms and subject to the conditions of this Agreement and in
accordance with the North Carolina Business Corporation Act (the "Controlling
Act"), CRDE, Acquisition Co. and the Company will enter into a business
combination transaction pursuant to which Acquisition Co. will merge with and
into the Company (the "Merger").
B. The Board of Directors of Parent and CRDE each has (i) determined that
the Merger is consistent with and in furtherance of the long-term business
strategy of Parent and CRDE and fair to, and in the best interests of, Xxxxxx,
XXXX and their respective shareholders, and (ii) approved this Agreement, the
Merger and the other transactions contemplated by this Agreement.
C. The Board of Directors of the Company (i) has determined that the Merger
is consistent with and in furtherance of the long-term business strategy of the
Company and fair to, and in the best interests of, the Company and its
Shareholders, and (ii) has approved this Agreement, the Merger and the other
transactions contemplated by this Agreement.
D. The Shareholders of the Company have unanimously approved this
Agreement, the Merger and the other transactions contemplated by this Agreement.
E. CRDE, the sole Shareholder of Acquisition Co., has approved this
Agreement, the Merger and other transactions contemplated by this Agreement.
F. Parent, CRDE, Acquisition Co., the Company and the Shareholders desire
to make certain representations and warranties and other agreements in
connection with the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and promises contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
-1-
Exhibit 10.30
ARTICLE I
DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the following defined terms
have the meanings indicated below:
"AAA" has the meaning set forth in Section 10.1.
"ACCOUNTS PAYABLE" has the meaning set forth in Section 3.20.
"ACCOUNTS RECEIVABLE" means all accounts receivable of the Company that are
reflected on the Interim Financial Statements and all unbilled accounts
receivable relating to the Company's operations prior to the Cut-Off.
"ACQUISITION CO." has the meaning set forth in the first paragraph of this
Agreement.
"ACQUISITION CO. COMMON STOCK" has the meaning set forth in Section
2.6(c)(iii).
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding, arbitration,
Order, inquiry, hearing, assessment with respect to fines or penalties or
litigation (whether civil, criminal, administrative, investigative or informal)
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental or Regulatory Authority.
"AFFILIATE" means, with respect to any Person, a Family Member or another
Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by or is under common control with such Person.
"AGREEMENT" has the meanings set forth in the first paragraph of this
Agreement and in Section 2.2.
"ARTICLE" has the meaning set forth in Section 1.2.
"ARTICLES OF MERGER" has the meaning set forth in Section 2.2.
"ASSETS AND PROPERTIES" and "Assets or Properties" of any Person each means
all assets and properties of every kind, nature, character and description
(whether real, personal or mixed, whether tangible or intangible, whether
absolute, accrued, contingent, fixed or otherwise and wherever situated),
including the goodwill related thereto, operated, owned or leased by such
Person, including, without limitation, cash, cash equivalents, accounts and
notes receivable, chattel paper, documents, instruments, general intangibles,
real estate, equipment, inventory, goods and Intellectual Property.
"BENEFIT PLAN" means any Plan established, arranged or maintained by the
Company or any corporate group of which the Company is or was a member, existing
at the Closing Date or prior thereto, to which the Company contributes or has
contributed, or under which any employee, officer, director or former employee,
officer or director of the Company or any beneficiary thereof is covered, is
eligible for coverage or has benefit rights.
"BOOKS AND RECORDS" of any Person means all files, documents, instruments,
papers, books, computer files (including but not limited to files stored on a
computer's hard drive or on floppy disks), electronic files and records in any
other medium relating to the business, operations, accounting practices or
condition of such Person.
"BUSINESS DAY" means a day other than Saturday, Sunday or any day on which
banks located in the State of Texas are authorized or obligated to close.
-2-
Exhibit 10.30
"CAR" has the meaning set forth in Section 10.1.
"CASH CONSIDERATION" has the meaning set forth in Section 2.6(b)(i).
"CLOSING" has the meaning set forth in Section 2.8(a).
"CLOSING DATE" has the meaning set forth in Section 2.8(a).
"CODE" means the Internal Revenue Code of 1986, as amended and any
Treasury Regulations promulgated thereunder.
"COMPANY" has the meaning set forth in the first paragraph of this
Agreement.
"COMPANY COMMON STOCK" has the meaning set forth in Section 3.2(a) of this
Agreement.
"COMPANY DISCLOSURE SCHEDULE" means the disclosure schedule attached
hereto which sets forth the exceptions to the representations and warranties
contained in Article III hereof and certain other information called for by this
Agreement.
"COMPANY FINANCIAL STATEMENTS" means (i) the audited balance sheets of the
Company and the related audited statements of income and retained earnings for
the fiscal periods ended December 31, 2003 and December 31, 2002, (ii) the
unaudited balance sheet of the Company and the related unaudited statements of
income and retained earnings for the fiscal period ended December 31, 2004 and
(iii) the Interim Financial Statements.
"CONSENT" means any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"CONFIDENTIALITY AGREEMENT" means the certain confidentiality agreement
between RBC Centura Investment Banking Group ("RBC") and Parent dated December
9, 2004.
"CONTEMPLATED TRANSACTIONS" means all of the transactions contemplated by
this Agreement, including: (a) the Merger; (b) the execution, delivery, and
performance of the Non-Competition Agreements, the Subordination Agreements,
Registration Rights Agreement, Employment Agreement, and the Releases; (c) the
performance by Xxxxxx, XXXX and the Company of their respective covenants and
obligations under this Agreement; and (d) CRDE's acquisition and ownership of
the Company Common Stock and exercise of control over the Company.
"CONTRACT" means any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"CONVERSION SHARES" has the meaning set forth in Section 2.9.
"COPYRIGHTS" has the meaning set forth in the definition of "Intellectual
Property."
"CRDE" has the meaning set forth in the first paragraph of this Agreement.
-3-
Exhibit 10.30
"CUT-OFF" means 12 midnight of March 27, 2005.
"DAMAGES" has the meaning set forth in Section 9.2(a).
"DEFINED BENEFIT PLAN" means each Benefit Plan which is subject to Part 3
of Title I of ERISA, Section 412 of the Code or Title IV of ERISA.
"EFFECTIVE TIME" has the meaning set forth in Section 2.2.
"ENCUMBRANCES" means any mortgage, pledge, assessment, security interest,
deed of trust, lease, lien, adverse claim, equitable interest, levy, charge,
community property interest, right of first refusal or other encumbrance of any
kind, or any conditional sale or title retention agreement or other agreement to
give any of the foregoing in the future.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder.
"ERISA AFFILIATE" means any entity which is a member of a "controlled
group of corporations" or which is or was under "common control" with the
Company as defined in Section 414 of the Code.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING INDEBTEDNESS" has the meaning set forth in Section 3.36.
"FAMILY MEMBER" of an individual Person means (i) the individual's spouse
and former spouses, (ii) any other natural person who is related to the
individual or the individual's spouse within the second degree, and (iii) any
other natural person who resides with such individual.
"FINAL DATE" has the meaning set forth in Section 8.1(b).
"FIRST INCREASE" has the meaning set forth in Section 2.6(e)(i).
"FIRST MEASUREMENT PERIOD" has the meaning set forth in Section 2.6(e)(i).
"GAAP" means United States generally accepted accounting principles, as
currently in effect, applied on a basis consistent with the basis on which
Parent's audited financial statements are prepared.
"GOVERNMENTAL AUTHORIZATION" means any approval, consent, license, permit,
waiver, or other authorization issued, granted, given or otherwise made
available by or under the authority of any Governmental or Regulatory Authority
or pursuant to any Legal Requirement.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
the United States or other country, any state, county, city or other political
subdivision.
"INDUSTRY ACQUISITIONS" means acquisitions by Parent or any Affiliate
thereof of temporary health staffing companies or travel nurse companies.
-4-
Exhibit 10.30
"INTELLECTUAL PROPERTY" means (i) trademarks, service marks, trade dress,
logos, trade names and corporate names, together with all translations,
adaptations, derivations and combinations thereof and including all goodwill
associated therewith, and all applications, registrations and renewals in
connection therewith (collectively, "Trademarks"), (ii) trade secrets and
confidential business information (including without limitation, know-how,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans), however documented; (iii) proprietary computer
software and programs (including object code and source code) and other
proprietary rights and copies and tangible embodiments thereof (in whatever form
or medium); (iv) database technologies, systems, structures and architectures
(and related processes, formulae, compositions, improvements, devices, know-how,
inventions, discoveries, concepts, ideas, designs, methods and information) and
any other related information, however, documented; (v) any and all information
concerning the business and affairs of a Person (which includes historical
financial statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, the names and backgrounds
of key personnel and personnel training and techniques and materials), however
documented; (vi) any and all notes, analysis, compilations, studies, summaries,
and other material prepared by or for a Person containing or based, in whole or
in part, on any information included in the foregoing, however documented; and
(vii) any similar or equivalent rights to any of the foregoing.
"INTERIM FINANCIAL STATEMENTS" means the management prepared balance sheet
and the related statement of income and retained earnings for the Company, in
each case, for the period beginning January 1, 2005 and ending on the Cut-Off.
"KEY EMPLOYEES" means those employees of the Company that Parent in its
sole discretion has designated as "key employees" prior to the Closing and set
forth on Schedule 1.1(c) attached hereto.
"KNOWLEDGE OF THE COMPANY" or "Known to the Company" means the knowledge
of any officer or director of the Company or any of the Shareholders. An
officer, director or Shareholder of the Company will be deemed to have Knowledge
of the existence or absence of a particular fact or other matter if: (i) such
individual is actually aware of the existence or absence of such fact or other
matter; or (ii) a prudent individual could be expected to discover or otherwise
become aware of the existence or absence of such fact or other matter in the
course of conducting a reasonably comprehensive investigation concerning the
existence or absence of such fact or other matter.
"KNOWLEDGE OF THE PARENT" or "Known to the Parent" means the knowledge of
any officer or director of the Parent. An officer or director of Parent will be
deemed to have Knowledge of a particular fact or other matter if: (i) such
individual is actually aware of such fact or other matter; or (ii) a prudent
individual could be expected to discover or otherwise become aware of such fact
or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
"LANDLORD" means L&W Holding Company, LLC, a North Carolina limited
liability company.
-5-
Exhibit 10.30
"LEGAL REQUIREMENT" means any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute or treaty.
"LIABILITIES" has the meaning set forth in Section 3.11.
"LOAN AND SECURITY AGREEMENT" means that certain Loan and Security
Agreement by and between the Shareholders and the Company, dated November 3,
2004 which will be automatically released (without any further action on the
part of any Person) upon the satisfaction of the amounts owed to Shareholders'
Lender at Closing.
"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means, for any
Person, a material adverse effect whether individually or in the aggregate (a)
on the business, operations, financial condition, Assets and Properties,
liabilities or commercial prospects of such Person, or (b) on the ability of
such Person to consummate the transactions contemplated hereby.
"MERGER" has the meaning set forth in the first recital of this Agreement.
"NON-COMPETITION AGREEMENT" means the Non-Competition and Non-Solicitation
Agreements by and between the Parent and each of the Shareholders.
"NOTE" has the meaning set forth in Section 2.6(b)(ii).
"NOTE CONSIDERATION" has the meaning set forth in Section 2.6(b)(ii).
"ORDER" means any award, decision, writ, judgment, decree, ruling,
subpoena, verdict, injunction or similar order of any Governmental or Regulatory
Authority (in each such case whether preliminary or final).
"ORDINARY COURSE OF BUSINESS" means the action of a Person that is (i)
consistent with the past practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such Person; (ii) not required to
be authorized by the board of directors of the Company; and (iii) similar in
nature and magnitude to actions customarily taken, without the action of the
board of directors or similar body, in the ordinary course of the normal
day-to-day operations of other Persons that are in the same line of business as
the Company.
"OTCBB" shall mean the regulated quotation service known as the OTC
Bulletin Board.
"OUTSTANDING COMPANY COMMON STOCK" has the meaning set forth in Section
2.6(a).
"PARENT" has the meaning set forth in the first paragraph of this
Agreement.
"PARENT GROUP" has the meaning set forth in Section 9.2(a).
"PARENT'S LENDER" means, collectively, Bridge Healthcare Finance, LLC and
Bridge Opportunity Finance, LLC its Affiliates and any successor or assigns of
any of such entities, and any future secured lender of Parent or an Affiliate of
Parent as long as such successor, assign or future lender becomes a party to the
Subordination Agreement to the same extent as the aforementioned Bridge
entities.
"PARENT SEC DOCUMENTS" means each form, report, schedule, statement and
other document filed by the Parent beginning in August 2003 through the date
immediately prior to the date of this Agreement under the Exchange Act or the
Securities Act, including any amendment to such document.
-6-
Exhibit 10.30
"PERMITS" means all licenses, permits, certificates of authority,
authorizations, approvals, registrations and similar consents granted or issued
by any Governmental or Regulatory Authority.
"PERMITTED ENCUMBRANCE" means (a) any Encumbrance for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP and (b) any
minor imperfection of title or similar Encumbrance which individually or in the
aggregate with other such Encumbrances does not impair the value of the property
subject to such Encumbrance or the use of such property in the conduct of the
business of the Company.
"PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union, association or Governmental or Regulatory Authority.
"PLAN" means any bonus, incentive compensation, deferred compensation,
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workers' compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"PROCEEDING" means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental or Regulatory Authority.
"QUALIFIED PLAN" means each Benefit Plan which is intended to qualify
under Section 401 of the Code.
"REAL PROPERTY" has the meaning set forth in Section 3.14.
"REGISTRATION RIGHTS AGREEMENT" has the meaning set forth in Section
2.6(e)(iv).
"RELATED PARTY LOANS" mean the outstanding loans due and payable as of the
Cut-Off to the Company by (a) the Shareholders as the same are offset against an
amount payable by the Company to the Shareholders in the amount of $194,000 as
of December 31, 2004 plus any accrued and unpaid interest since that date, (b)
Team Staffing International, LLC, and (c) Trans Continental Consulting, LLC.
-7-
Exhibit 10.30
"RELEASE" has the meaning set forth in Section 2.8(b)(iv).
"SEC" means the Securities & Exchange Commission of the United States.
"SECOND INCREASE" has the meaning set forth in Section 2.6(e)(ii).
"SECTION" has the meaning set forth in Section 1.2.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SHAREHOLDER REPRESENTATIVE" has the meaning set forth in Section 2.10(a).
"SHAREHOLDERS" has the meaning set forth in the first paragraph of this
Agreement.
"SHAREHOLDERS' LENDER" means Capital Tempfunds, Inc.
"XXXXX I" has the meaning set forth in Section 3.30.
"XXXXX II" has the meaning set forth in Section 3.30.
"STOCK CERTIFICATES" has the meaning set forth in Section 2.7(a).
"SUBORDINATION AGREEMENT" has the meaning set forth in Section
2.8(b)(viii).
"SURVIVING CORPORATION" has the meaning set forth in Section 2.1.
"TAX" (and, with correlative meaning, "Taxes," "Taxable" and "Taxing")
means (i) any federal, state, local or foreign income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental or windfall
profit tax, custom, duty or other tax, governmental fee or other like assessment
or charge of any kind whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any Governmental or Regulatory
Authority responsible for the imposition of any such tax (domestic or foreign),
(ii) any liability for payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, consolidated, combined, unitary or
other group for any Taxable period and (iii) any liability for the payment of
any amounts of the type described in (i) or (ii) as a result of any express or
implied obligation to indemnify any other Person.
"TAX RETURN" means any return, report, information return, schedule or
other document (including any related or supporting information) filed or
required to be filed with respect to any taxing authority with respect to Taxes.
"THIRD PARTY EXPENSES" has the meaning set forth in Section 6.3.
-8-
Exhibit 10.30
"THREATENED" means a claim, Proceeding, dispute, action or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other circumstances exist that would
lead a prudent Person to reasonably conclude that such a claim, Proceeding,
dispute, action, or other matter has a reasonable probability of being asserted,
commenced, taken, or otherwise pursued in the foreseeable future.
"TRADEMARKS" has the meaning set forth in the definition of "Intellectual
Property."
"TRAVELING NURSE BUSINESS" means the business of providing "traveling"
temporary health staffing, including nurses, operating room technicians,
licensed practical nurses, certified nurse assistants, physical therapists,
occupational therapists, speech therapists and radiology technologists;
excluding, specifically from such definition any of the aforementioned personnel
provided on a "per-diem" basis other than to the extent such personnel are
provided pursuant to contracts or agreements relating thereto to which the
Company is a party as of the Cut-Off (as such contracts may be renewed in the
future in the name of the Surviving Corporation).which business shall not be
excluded. As used herein: (i) the terms "traveling" and "per-diem" shall have
the meaning ascribed to such terms by the temporary healthcare staffing industry
in the United States of America.
"UNITED STATES PERSON" has the meaning set forth in Section 3.23(h).
1.2. CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context of this
Agreement otherwise requires, (a) words of any gender include each other gender;
(b) words using the singular or plural number also include the plural or
singular number, respectively; (c) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (d) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; (e) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or;" and (f) "including" means
"including without limitation." Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified. All accounting terms used in this Agreement which are not otherwise
defined shall have the meanings given to them under GAAP.
ARTICLE II
THE MERGER
2.1. THE MERGER. At the Effective Time and subject to and upon the terms
and conditions of this Agreement and the applicable provisions of the
Controlling Act, Acquisition Co. shall be merged with and into the Company, the
separate corporate existence of Acquisition Co. shall cease and the Company
shall continue as the surviving corporation. The Company as the surviving
corporation after the Merger is hereinafter sometimes referred to as the
"Surviving Corporation."
2.2. EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties hereto shall cause the Merger to be consummated by the filing of the
articles and plan of merger substantially in the form attached hereto as Exhibit
A (the "Articles of Merger") with the Secretary of State of the State of North
Carolina in accordance with the relevant provisions of the Controlling Act (the
time of acceptance by the Secretary of State of the State of North Carolina of
such filing, or such later time as may be agreed in writing by the parties and
specified in the Articles of Merger, being the "Effective Time") as soon as
practicable on the Closing Date. Unless the context otherwise requires, the term
"Agreement" as used herein refers collectively to this Agreement and the
Articles of Merger.
-9-
Exhibit 10.30
2.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the Merger
shall be as provided in this Agreement and the applicable provisions of the
Controlling Act. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of the Company and Acquisition Co. shall vest in the Surviving
Corporation, and all debts, liabilities and duties of the Company and
Acquisition Co. shall become the debts, liabilities and duties of the Surviving
Corporation.
2.4. ARTICLES OF INCORPORATION; BYLAWS.
(a) At the Effective Time, the Articles of Incorporation of
Acquisition Co. shall be the Articles of Incorporation of the Surviving
Corporation, except that Article I thereof shall be amended to read in its
entirety as follows: "The name of the Corporation is TRAVMED USA, Inc."
(b) At the Effective Time, the Bylaws of Acquisition Co. shall be
the Bylaws of the Surviving Corporation, except that the Bylaws shall be amended
to reflect that the name of the Surviving Corporation shall be "TRAVMED USA,
Inc."
2.5. DIRECTORS AND OFFICERS. The directors of Acquisition Co. immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, until their respective
successors are duly elected or appointed and qualified. The officers of
Acquisition Co. immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, each to hold office in accordance with
the Articles or Incorporation and Bylaws of the Surviving Corporation, until
their successors are duly elected or appointed or qualified.
2.6. EFFECT ON CAPITAL STOCK/MERGER CONSIDERATION.
(a) Conversion of Company Common Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of any Person, each
share of the Company Common Stock issued and outstanding immediately prior to
the Effective Time (the "OUTSTANDING COMPANY COMMON STOCK") shall be canceled
and automatically converted into the right to receive, upon surrender of the
certificates representing such shares, a ratable portion of the Cash
Consideration and Note Consideration as determined in Section 2.6(b) below. At
the Effective Time, all rights in respect of such Outstanding Company Common
Stock shall cease to exist, other than the right to receive the Cash
Consideration and Note Consideration, and any other additional merger
consideration as determined in Section 2.6(d) below and all such shares shall be
cancelled and retired. Each share of capital stock of Acquisition Co. issued and
outstanding immediately prior to the Effective Time shall be converted into the
right to receive one share of the Surviving Corporation.
(b) Merger Consideration. Subject to Section 2.6 (d) and (e), the
merger consideration consists of and is valued at $6,430,980.00 (the "MERGER
CONSIDERATION") and will be paid on the Closing Date as follows:
-10-
Exhibit 10.30
(i) Cash Consideration. Fifty percent (50%) of the Merger
Consideration shall be paid in cash (the "CASH CONSIDERATION") to the
Shareholders based on their pro rata share of the Merger Consideration by wire
transfer to the Shareholders or by cashier's checks drawn upon a federally
insured lending institution on the Closing Date; and
(ii) Note Consideration. The remaining fifty percent (50%) of
the Merger Consideration (the "NOTE CONSIDERATION") shall be paid in the form of
a three-year convertible subordinated promissory note (the "NOTE") in the form
attached hereto as Exhibit B issued by the Parent to the Shareholders in the
aggregate original principal amount of the Note Consideration. The Parent shall
issue a Note to each Shareholder in accordance with their pro rata share of the
Merger Consideration.
(c) Actions at the Effective Time. At the Effective Time:
(i) Except for the securities referred to in Section
2.6(c)(ii) below, each share of Outstanding Company Common Stock will
automatically, by virtue of the Merger and without any action on the part of the
holder thereof, be canceled and converted into a right to receive from Parent
the Cash Consideration and the Note Consideration in the amount as determined
pursuant to this Section 2.6.
(ii) Each share of Company Common Stock held in the treasury
of the Company shall be canceled and retired without payment of any
consideration therefor.
(iii) Each share of common stock of Acquisition Co.
("ACQUISITION CO. COMMON STOCK") issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one validly issued,
fully paid and non-assessable share of common stock of the Surviving Corporation
and shall constitute the only shares of capital stock of the Surviving
Corporation outstanding immediately after the Effective Time.
(d) Related Party Loans; Accounts Receivable/Payable; Additional
Merger Consideration. The Parent recognizes and agrees that, immediately prior
to Closing, the Company will (at the option of the Company), either forgive all
or part of the Related Party Loans or distribute all or part of same to the
Shareholders or all or part of the Related Party Loans will otherwise be
satisfied and simultaneously therewith the Shareholders shall release and do
hereby agree to release the Loan and Security Agreement which will be deemed
released upon the payment by Parent of the amounts owed to the Shareholders'
Lender at Closing without any further action being required on part of any
Person; provided, at the request of Parent, the Shareholders shall execute and
deliver to Parent any releases (including any UCC releases) or instruments
necessary to fully release the Loan and Security Agreement. At Closing, Parent
shall payoff the balance of the loan owed and payable to Shareholders' Lender
using the proceeds of the Accounts Receivable. The foregoing provisions of this
Section 2.6(d) have been approved by Parent based on the understanding and
agreement of the Company and the Shareholders that: (A) as of the Cut-Off the
Company will not have any indebtedness, liabilities or obligations of any nature
whatsoever that relate to the Company's operations prior to the Cut-Off, whether
secured or unsecured, other than the trade payables, whether or not invoices
therefor have been received by the Company prior to the Closing for which the
Company shall have sufficient cash (or Accounts Receivable which are collectible
in due course and as to which Parent shall not
-11-
Exhibit 10.30
assume any collection risk such risk being specifically retained by the
Shareholders) to meet its payment obligations, and to satisfy all Accounts
Payable as of the Cut-Off as such Accounts Payable may become due; (B) the
Shareholders shall be responsible for all wages, obligations and liabilities
arising out of the operations of the Company through the Cut-Off and the Parent
shall be responsible for all wages, obligations and liabilities of the Company
arising after the Cut-Off; (C) all the Accounts Receivable of the Company as of
the Closing Date shall be available to the Parent to satisfy the amounts owed to
the Shareholder's Lenders, to satisfy Accounts Payable, and to satisfy any and
all other liabilities of the Company incurred prior to the Cut-Off that relate
to the Company's operations prior to the Cut-Off; (D) within ninety (90) days of
the Closing Date, Parent shall provide the Shareholders an accounting of all
Accounts Receivable collected, all amounts paid to the Shareholders' Lender, all
amounts paid to settle the Accounts Payable as of the Cut-Off, and all other
amounts paid to settle any and all other liabilities incurred by the Company
prior to the Cut-Off that relate to the Company's operations prior to the
Cut-Off; and (E) to the extent there shall be an excess of Accounts Receivable,
plus the following, all of which shall be determined as of the Cut-Off: (a)
deposits (as reflected on the Interim Financial Statements) and (b) prepaid
expenses and cash and cash equivalents (as reflected on the Interim Financial
Statements) and rent expense, group insurance expense, other expenses paid in
advance (and reflected on the Interim Financial Statements) other expenses paid
in advance (and reflected on the Interim Financial Statements), as such expenses
relate to the Company's operations after the Cut-Off over all payments made to
settle all of the aforementioned liabilities, the Parent shall, along with such
accounting, tender any such excess to the Shareholders or if there is a
shortfall, Parent shall be entitled to receive a prompt payment of the full
amount of any such shortfall from the Shareholders; provided, to the extent
Shareholders shall fail to pay any such shortfall, Parent may, at its option,
offset any such shortfall against any amounts next due and payable under the
Notes. For purposes of collection risk associated with Accounts Receivable, any
amounts comprising the Accounts Receivable that are not collected within ninety
(90) days of Closing shall be deemed uncollectible.
(e) Future Contingent Payments.
(i) To the extent the revenue generated from the Company's
operations during the first twelve (12) months ended March 31, 2006 ("FIRST
MEASUREMENT PERIOD") shall be higher than the revenue generated (x) by the
Company during the twelve (12) months ended March 31, 2005 plus (y) from the
Existing Business during the period January 1, 2005 through March 31, 2005
annualized ("BASE PERIOD") (such positive difference herein referred to as the
"FIRST INCREASE") but not otherwise, Shareholders shall be entitled (on a
pro-rata basis in accordance with each Shareholder's share of the Merger
Consideration) to receive from the Parent one-half (1/2) of the First Increase
in the form of validly issued, fully paid and non-assessable shares of Parent
Common Stock to be delivered to the Shareholders at such time as the Parent
shall have finalized its determination of the First Increase as provided in
Section 2.6(e)(iii). For purposes of this Section 2.6(e)(i), the number of
Parent Common Stock required to be issued shall be determined by taking the
average of the closing prices of the Parent Common Stock as reported on the
OTCBB or other stock exchange or quotation system for the last fifteen (15)
trading days ending two (2) days prior to the date of issuance of Parent Common
Stock pursuant to this Section 2.6(e)(i).
-12-
Exhibit 10.30
(ii) To the extent the revenue generated from the Company's
operations during the twelve (12) months ending March 31, 2007 ("SECOND
MEASUREMENT Period") shall be higher than the revenue generated during the FIRST
Measurement Period (such positive difference herein referred to as the "Second
INCREASE") but not otherwise, Shareholders shall be entitled (on a pro-rata
basis in accordance with each Shareholder's share of the Merger Consideration)
to receive from the Parent one-half (1/2) of the Second Increase in the form of
validly issued, fully paid and non-assessable shares of Parent Common Stock to
be delivered to the Shareholders at such time as the Parent shall have finalized
its determination of the Second Increase as provided in Section 2.6(e)(iii). For
purposes of this Section 2.6(e)(ii), the number of Parent Common Stock required
to be issued shall be determined by taking the average of the closing prices of
the Parent Common Stock as reported on the OTCBB or other stock exchange or
quotation system for the last fifteen (15) trading days ending two (2) days
prior to the date of issuance of Parent Common Stock pursuant to this Section
2.6(e)(ii). Notwithstanding the provisions of this Section 2.6(e)(ii), in the
event there shall have been a decline in revenue during the First Measurement
Period as compared to the Base Period, then for purposes of calculating the
Second Increase, if any, under this Section 2.6(e)(ii), the First Measurement
Period will be replaced by the Base Period for purposes of said calculation.
(iii) The amounts of the First Increase and the Second
Increase shall be determined by the Parent acting in good faith. Unless the
Shareholders notify the Parent, within fifteen (15) days after receipt of the
statement or reports used by the Parent to determine the amounts of the First
Increase or the Second Increase, that Shareholders disagree with Parent's
computation, the determinations of the Parent shall be binding and conclusive
for purposes of this Agreement. The Parent shall provide the Shareholders with
reasonable access to the Books and Records of the Parent to verify the Parent's
determinations with respect to the First Increase, the Second Increase and
number of Parent Common Stock payable to the Shareholder pursuant to Section
2.6(e)(i) and (ii).
(iv) If the Shareholders object to the Parent's computation of
the First Increase or the Second Increase by providing notice in accordance with
Section 2.6(e)(iii), the amount of the First Increase or the Second Increase
shall be determined by negotiation between the Parent and Shareholders. If the
Parent and Shareholders are unable to reach agreement within fifteen (15)
business days after such notification, the determination of the amount of the
First Increase or the Second Increase for the period in question shall be
determined using the binding arbitration procedure prescribed in Article X.
(v) The parties acknowledge and agree that for the sole
purpose of determining the amounts under Section 6.2(e)(i) and (ii), immediately
after Closing, Parent will combine its existing Traveling Nurse Business
("EXISTING BUSINESS") with that of the Company under the supervision of Xxxxxx
Xxxxxx (one of the Shareholders). To minimize the possibility of any future
disputes as to the amount of the First Increase or the Second Increase, the
parties hereby agree that all of the revenue to be generated by the combined
operations shall be attributed to the operations of the Company.
-13-
Exhibit 10.30
(vi) The Shareholders and Parent shall enter into a
"REGISTRATION RIGHTS AGREEMENT" (herein so called) substantially in the form of
Exhibit K providing that Parent shall (at the sole expense of the Shareholders
which shall include any filing fees) prepare and file with the SEC a
registration statement for an offering to be made on a continuous basis pursuant
to Rule 415 (or any appropriate similar rule that may be adopted by the SEC)
under the Securities Act covering the Parent Common Stock issued to the
Shareholders pursuant to Section 2.6(e).
(vii) Notwithstanding anything to the contrary written herein,
in the event: (A) Xxxxxx Xxxxxx'x employment with the Company is terminated
before the expiration of the Second Measurement Period via (x) voluntary
termination of such employment by Xxxxxx Xxxxxx, or (y) termination "for cause"
as such term is defined in the Employment Agreement; and (B) the Parent (acting
in its sole discretion) does not promptly following such termination hire Xxxxx
Xxxxxxxx in replacement of Xxxxxx Xxxxxx; then the Parent's obligation to make
any payments under Section 2.6(e) shall immediately terminate; provided any
earned but unpaid amounts prior to any such termination of employment will be
paid in accordance with the provisions of Section 2.6(e).
2.7. EXCHANGE PROCEDURE.
(a) At the Effective Time, holders of Company Common Stock shall be
entitled to receive in exchange therefor the Cash Consideration and Note
Consideration to which such holder of Company Common Stock is entitled pursuant
to Section 2.6 above. It is specifically agreed and understood by the parties
that Stock Certificates are being held by the Shareholders' Lender but will be
delivered by the Shareholders by no later than ten (10) days of the Closing Date
and the provisions of Section 2.7(a) are subject to this qualification. The
Stock Certificates so surrendered shall forthwith be canceled. No interest will
accrue or be paid to the holder of any Company Common Stock. From and after the
Effective Date, until surrendered as contemplated by this Section 2.7, each
Stock Certificate shall be deemed for all corporate purposes to evidence the
amount of the Cash Consideration and Note Consideration into which the Company
Common Stock represented by such Stock Certificate have been converted.
(b) Except for any payments required pursuant to Sections 2.6(d) or
(e), the Cash Consideration and Note Consideration delivered upon the surrender
for exchange of Company Common Stock in accordance with the terms hereof shall
be deemed to have been delivered in full satisfaction of all rights pertaining
to such Company Common Stock. There shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of Company
Common Stock which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Stock Certificates are presented to the Surviving
Corporation for any reason, they shall be canceled and exchanged as provided in
this Section 2.7, provided that the presenting holder is listed on the Company's
Shareholder list as a holder of Company Common Stock.
(c) In the event that any Stock Certificates evidencing Company
Common Stock shall have been lost, stolen or destroyed, the Parent shall pay in
exchange for such lost, stolen or destroyed Stock Certificates, upon the making
of an affidavit of that fact by the holder thereof, such Merger Consideration as
may be required pursuant to Section 2.6 above; provided, however, that Parent
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Stock Certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent or the Exchange Agent with respect to the
Stock Certificates alleged to have been lost, stolen or destroyed.
-14-
Exhibit 10.30
(d) Notwithstanding anything to the contrary in this Section 2.7,
none of the Surviving Corporation or any party hereto shall be liable to a
holder of Company Common Stock for any amount properly paid to a public official
pursuant to any applicable abandoned property, escheat or similar law.
(e) Each of the Parent, Acquisition Co. and the Company will take
all such reasonable and lawful acts as may be necessary or desirable in order to
effectuate the Merger in accordance with this Agreement as promptly as possible.
If, at any time after the Effective Time, any further action is necessary or
desirable to carry out the purposes of this Agreement and to vest the Surviving
Corporation with full right, title and possession to all assets, property,
rights, privileges, powers and franchises of the Company, the officers and
directors of the Company and Acquisition Co. are fully authorized in the name of
the respective corporations or otherwise to take, and will take, all such lawful
and necessary action so long as such action is not inconsistent with this
Agreement.
2.8. CLOSING.
(a) Time and Place. The closing of the Merger under this Agreement
(the "CLOSING") shall take place at the offices of Kane, Russell, Xxxxxxx &
Xxxxx, P.C., 0000 Xxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, at 10:00 a.m. on
March 28, 2005, or at such time and in such manner as the parties mutually agree
(the "CLOSING DATE"). Except as otherwise provided in this Agreement, the
failure to consummate the merger provided for in this Agreement on the date and
time specified herein will not relieve any party to this Agreement of any
obligation under this Agreement.
(b) Closing Deliveries by the Company and the Shareholders. At the
Closing, the Company and the Shareholders, as the case may be, shall have
delivered or caused to be delivered to Parent, CRDE and/or Acquisition Co., as
the case may be:
(i) the Articles of Merger, duly executed by the Company;
(ii) the Non-Competition Agreement by and between Parent and
Xxxxxx Xxxxxx, substantially in the form of Exhibit C, duly executed by such
parties;
(iii) a certificate of the Secretary of the Company
substantially in the form of Exhibit D attached hereto, certifying as of the
Closing Date (A) a true and complete copy of the organizational documents of the
Company certified as of a recent date by the Secretary of State of North
Carolina, (B) a certificate of each appropriate Secretary of State certifying
the good standing of the Company in its state of incorporation and all states in
which it is qualified to do business1, (C) a true and complete copy of the
resolutions of the board of directors of the Company and the resolutions of the
Shareholders of the Company, each authorizing the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby and (D) incumbency matters;
--------
1 It is specifically agreed that the certificates required under Section
2.8(b)(iii)(B) shall be ordered by the Shareholders (at their sole cost)
prior to Closing but must be received by the Parent by no later than
thirty (30) days of the Closing Date.
-15-
Exhibit 10.30
(iv) a Release by each of the Shareholders, substantially in
the form of Exhibit E attached hereto (the "RELEASE"), duly executed by each
Shareholder;
(v) resignation letter of each of the officers and directors
of the Company, dated effective as of the Closing;
(vi) an opinion of Xxxxxxxxxx Xxxxxxxx LLP, counsel to the
Company and the Shareholders, substantially in the form attached hereto as
Exhibit F with respect to matters contained in Article III and other relevant
matters;
(vii) a listing of the amount of Note Consideration and Cash
Consideration to be paid at the Closing to each Person entitled to receive a
portion thereof pursuant to the terms hereof to be attached as Schedule 2.8
hereto;
(viii) a Subordination Agreement by each Shareholder
substantially in the form of Exhibit G (each, a "SUBORDINATION AGREEMENT");
(ix) an Information Certificate in the form of Exhibit J;
(x) the Registration Rights Agreement in the form of Exhibit
K;
(xi) the Employment Agreement (between the Company and Xxxxxx
Xxxxxx) in the form of Exhibit L;
(xii) the Non-Competition Agreement by and between Parent and
Xxxxx Xxxxxxxx in the form of Exhibit M, duly executed by such parties;
(xiii) the Assignment Agreement covering 21 nurses (between
Team Staffing International, LLC and the Company) in the form of Exhibit N;
(xiv) the First Amendment to the Lease Agreement (between
Landlord and the Company) in the form of Exhibit O, provided in the event the
same has not been finalized by the parties by the Closing Date it shall be
mutually negotiated in good-faith and finalized by the parties after Closing and
will not constitute an item to be delivered at Closing; provided, further, the
first year (beginning with April 1, 2005) rent to be charged by Landlord under
said Lease Agreement shall not exceed $120,000 on an annual basis;
(xv) the Administrative Sharing Agreement (between Team
Staffing International, LLC and the Company) in the form of Exhibit P, provided
in the event the same has not been finalized by the parties by the Closing Date
it shall be mutually finalized (acting in good-faith) by the parties after
Closing and will not constitute an item to be delivered at Closing;
(xvi) a consent of Landlord in form and substance satisfactory
to Parent's Lender; and
-16-
Exhibit 10.30
(xvii) such other documents as Parent or Parent's Lender may
reasonably request for the purpose of facilitating the consummation of the
Contemplated Transactions.
(c) Closing Deliveries By Parent. At the Closing, Parent, CRDE
and/or Acquisition Co., as the case may be, shall have delivered or caused to be
delivered to the Company and/or the Shareholders, as the case may be:
(i) the Non-Competition Agreement, duly executed by Parent and
each Shareholder in the forms of Exhibit C and Exhibit M;
(ii) the Note Consideration and Cash Consideration for each
Shareholder as set forth on Section 2.8 of the Company Disclosure Schedule;
(iii) a certificate of the Secretary of CRDE substantially in
the form of Exhibit H attached hereto, certifying as of the Closing Date (A) a
true and complete copy of the organizational documents of CRDE certified as of a
recent date by the Secretary of State of Delaware, (B) a true and complete copy
of the resolutions of the board of directors of CRDE authorizing the execution,
delivery and performance of this Agreement by CRDE and the consummation of the
transactions contemplated hereby and (C) incumbency matters; and
(iv) a certificate of the Secretary of Acquisition Co.
substantially in the form of Exhibit I attached hereto, certifying as of the
Closing Date (A) a true and complete copy of the organizational documents of
Acquisition Co., (B) a true and complete copy of the resolutions of the board of
directors and shareholder of Acquisition Co. authorizing the execution, delivery
and performance of this Agreement by Acquisition Co. and the consummation of the
transactions contemplated hereby and (C) incumbency matters;
(v) the Registration Rights Agreement in the form of Exhibit
K; and
(vi) the Employment Agreement (between the Company and Xxxxxx
Xxxxxx) in the form of Exhibit L.
2.9. EXEMPTION FROM REGISTRATION. Based on the representations of the
Shareholders to the Parent regarding their respective investor status, the
parties acknowledge that the issuance of the Parent Common Stock issuable upon
conversion of the Notes (the "Conversion Shares") will be exempt from
registration requirements of the Securities Act pursuant to the private
placement exemption provided by Rule 505 and/or 506 of Regulation D promulgated
under the Securities Act and/or Section 4(2) of the Securities Act, and
applicable state securities laws.
2.10. AUTHORIZATION OF THE SHAREHOLDER REPRESENTATIVE.
(a) Xxxxxx Xxxxxx (one of the Shareholders) (and each successor
appointed in accordance with this Section 2.10) is hereby appointed, authorized
and empowered to act as the stockholder representative (when acting in such
capacity, the "SHAREHOLDER REPRESENTATIVE") on behalf of the Shareholders, in
connection with and to facilitate the consummation of the transactions
contemplated by this Agreement, which powers shall include, without limitation:
(i) to deliver all certificates representing the Company Common Stock tendered
therewith to Parent; (ii) to prosecute, negotiate, defend, agree to, enter into
settlements and comprises of, and comply with orders of courts and awards of
arbitrators with respect to indemnification claims or other disputes arising
under this Agreement; (iii) to resolve any indemnification claims under this
Agreement; and (iv) to make, execute, acknowledge and deliver all such other
agreements, guarantees, orders, receipts, endorsements, notices, requests,
instructions, certificates, stock powers, letters and other writings, and, in
general, to do any and all things and to take any and all actions that the
Shareholder Representative in his sole and absolute discretion, may consider
necessary or proper or convenient in connection with the consummation of the
transactions contemplated by this Agreement.
-17-
Exhibit 10.30
Accordingly, the Shareholder Representative shall have unlimited authority
and power to act on behalf of the Shareholders with respect to this Agreement
and the disposition, settlement or other handling of all disputes and
indemnification claims, and other rights or obligations arising from or taken
pursuant to this Agreement. Each Shareholder will be bound by all actions taken
by the Shareholder Representative in connection with this Agreement. The
Shareholder Representative shall not be liable to any Shareholder for any costs,
damages or expenses incurred in connection with the performance of his
responsibilities hereunder, except to the extent such costs, damages or expenses
arise from the Shareholder Representative's intentional misconduct, gross
negligence or fraudulent acts.
The grant of authority provided for in this Section 2.10 is coupled with
an interest and is being granted, in part, as an inducement to Parent, CRDE and
Acquisition Co. to enter into this Agreement, and shall be irrevocable and
survive the death, incompetency, bankruptcy or liquidation of any Shareholder
and shall be binding upon any successor thereto.
Parent, CRDE, Acquisition Co. and Surviving Corporation shall have the
right to rely upon all actions taken or omitted to be taken by the Shareholder
Representative pursuant to this Agreement or any applicable ancillary document,
and notwithstanding anything herein to the contrary, Parent, CRDE, Acquisition
Co. and Surviving Corporation shall not have any responsibility or obligation
whatsoever to any Shareholder or to any other party with respect to or arising
out of the actions taken or any inaction by the Shareholder Representative.
(b) If the Shareholder Representative is unable or unavailable to
perform his duties hereunder, a successor Shareholder Representative shall be
selected by a majority (based on percentage of stock ownership) of the
Shareholders of the Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company and each of the Shareholders, jointly and severally, represent
and warrant to Parent, CRDE and Acquisition Co. as of the date hereof and as of
the Closing Date as follows:
-18-
Exhibit 10.30
3.1. ORGANIZATION OF THE COMPANY. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
North Carolina. The Company is duly authorized to conduct business and is in
good standing in the State of North Carolina and each jurisdiction where such
qualification is required except for any jurisdiction where failure so to
qualify would not have a Material Adverse Effect upon the Company. The Company
has full power and authority, and holds all Permits and authorizations necessary
to carry on its business and to own and use the Assets and Properties owned and
used by the Company except where the failure to have such power and authority or
to hold such Permit or authorization would not have a Material Adverse Effect on
the Company's business. The Company has delivered to Parent correct and complete
copies of its charter documents and organizational documents, each as amended to
date.
3.2. CAPITAL STOCK OF THE COMPANY.
(a) The authorized capital stock of the Company consists of (i)
100,000 shares of common stock, no par value ("COMPANY COMMON STOCK"), of which
2,000 shares are issued and outstanding as of the date hereof; (ii) no shares of
capital stock of the Company in treasury; and (iii) no shares of preferred
stock. Each share of the issued and outstanding capital stock of the Company is
duly authorized, validly issued, fully paid and nonassessable. Section 3.2(a) of
the Company Disclosure Schedule sets forth a complete and accurate list
specifying the number of shares of Company Common Stock held by each
Shareholder.
(b) There are no subscriptions, options, warrants, calls,
commitments and other rights of any kind for the purchase or acquisition of, and
any securities convertible or exchangeable for, any capital stock of the
Company, including the holder thereof, the number of shares of Company Common
Stock subject thereto, the exercise price, date of grant, vesting schedule and
expiration thereof and any terms regarding the acceleration of vesting thereof.
(c) Except as provided in Section 3.2(c) of the Company Disclosure
Schedule, there are no agreements to which the Company is a party or by which it
is bound with respect to the voting (including voting trusts or proxies),
registration under the Securities Act, or sale or transfer (including agreements
relating to pre-emptive rights, rights of first refusal, co-sale rights or
"drag-along" rights) of any securities of the Company. To the Knowledge of the
Company, there are no agreements among other parties, to which the Company is
not a party and by which it is not bound, with respect to the voting (including
voting trusts or proxies) or sale or transfer (including agreements relating to
rights of first refusal, co-sale rights or "drag-along" rights) of any
securities of the Company.
3.3. OWNERSHIP OF SHARES. Except as set forth in Section 3.3 of the
Company Disclosure Schedule, each of the Shareholders owns beneficially and of
record that number of shares of Company Common Stock listed opposite such
Shareholder's name in Section 3.2(a) of the Company Disclosure Schedule, free
and clear of all Encumbrances, and has good and valid title to such shares. The
delivery of the stock certificate(s) representing the Outstanding Common Stock
in the manner provided in Section 2.7 will transfer to the Parent good and valid
title thereto free and clear of all Encumbrances.
3.4. AUTHORITY OF THE COMPANY. The Company has all necessary power and
authority and has taken all action necessary to enter into this Agreement, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder and no other proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions contemplated hereby.
This Agreement has been duly and validly executed and delivered by the Company
and constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally and
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies.
-19-
Exhibit 10.30
3.5. NO AFFILIATES. Except as listed in Section 3.5 of the Company
Disclosure Schedule, the Company does not have any Affiliates or subsidiaries
and is not a partner in any partnership or a party to a joint venture.
3.6. NO CONFLICTS. The execution and delivery by the Company of this
Agreement does not, and the performance by the Company of its obligations under
this Agreement and the consummation of the transactions contemplated hereby will
not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the charter documents, bylaws or other
organizational documents of the Company;
(b) conflict with or result in a violation or breach of, or give any
Governmental or Regulatory Authority the right to revoke, withdraw, suspend,
cancel, termination or modify any term or provision of any law, Order, Permit,
statute, rule or regulation applicable to the Company, the business or Assets or
Properties of the Company or the capital stock of the Company Common Stock;
(c) result in a breach of, or default under (or give rise to right
of termination, modification, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
agreement, lease or other similar instrument or obligation to which the Company,
any of its Assets and Properties or the Company Common Stock may be bound,
except for such breaches or defaults as set forth in Section 3.6(c) of the
Company Disclosure Schedule as to which requisite waivers or consents will have
been obtained by the Closing Date;
(d) cause any of the Assets or Properties of the Company to be
reassessed or revalued by any taxing authority or any Governmental or Regulatory
Authority;
(e) result in an imposition or creation of any Encumbrance or Tax on
the business or Assets or Properties of the Company or the Company Common Stock.
3.7. CONSENTS AND GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Company is required in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
3.8. BOOKS AND RECORDS. The minute books and other corporate records of
the Company as made available to Parent contain a true and complete record of
all actions taken at all meetings and by all written consents in lieu of
meetings of the Shareholders, the boards of directors and committees of the
boards of directors of the Company. The Company has delivered or made available
true and complete copies of each document which has been requested by Parent or
its counsel in connection with their legal and accounting review of the Company.
To the Knowledge of the Company, the stock transfer ledgers and other similar
records of the Company accurately reflect all issuances and record transfers in
the capital stock of the Company. The Books and Records of the Company are true,
correct and complete, represent bonafide business transactions and have been
maintained in accordance with sound business practices, including to the
Knowledge of the Company the maintenance of an adequate system of internal
controls.
-20-
Exhibit 10.30
3.9. COMPANY FINANCIAL STATEMENTS. The Company has previously delivered to
Parent the Company Financial Statements and the pro-forma income statement for
twelve (12) months ended December 31, 2004 a copy of which is attached as part
of Section 3.9 of the Company Disclosure Schedule. The Company Financial
Statements (i) are materially true, correct and complete, (ii) other than
Interim Financial Statements, have been prepared in accordance and in conformity
with GAAP, and (iii) fairly present the financial condition and results of
operations of the Company as of the respective dates thereof and for the periods
covered thereby (except Interim Financial Statements are subject to normal
period-end adjustments, accruals, and lack footnotes and certain other
presentation items); provided, however, the parties hereto specifically
acknowledge that the Interim Financial Statements are unaudited and prepared by
the management of the Company and that immediately prior to the Effective Time
the Related Party Loans will be satisfied, forgiven or distributed as dividends
in accordance with Section 2.6(d).
3.10. ABSENCE OF CHANGES. Except for the execution and delivery of this
Agreement and the transactions to take place pursuant hereto on or prior to the
Closing Date, since December 31, 2004, there has not been any Material Adverse
Change, or any event or development which, individually or together with other
such events, could reasonably be expected to result in a Material Adverse Effect
on the Company.
3.11. NO UNDISCLOSED LIABILITIES. Except as disclosed in Section 3.11 of
the Company Disclosure Schedule or in the Company Financial Statements, there
are no liabilities, whether known or unknown, whether asserted or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due, whether or not of a kind
required by GAAP to be set forth on a financial statement or on the notes
thereto, including but not limited to any liability for Taxes (the
"Liabilities"), nor any basis for any claim against the Company for any such
liabilities, relating to or affecting the Company or any of its Assets and
Properties, other than such liabilities incurred after December 31, 2004 in the
Ordinary Course of Business which have not had, and could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect on the Company. To the Knowledge of the Company there is no circumstance,
condition, event or arrangement that may hereafter give rise to any liabilities
of the Company or any successor to its business except in the Ordinary Course of
Business or is otherwise set forth on in Section 3.11 of the Company Disclosure
Schedule.
3.12. TANGIBLE PERSONAL PROPERTY. The Company is in possession of and has
good and marketable title to, or has valid leasehold interests in or valid
rights under written agreements to use, all tangible personal property,
equipment, plants, buildings, structures, facilities and all other Assets and
Properties used in or reasonably necessary for the conduct of the Company's
business, including all tangible personal property reflected on the Company
Financial Statements and any tangible personal property acquired since that date
other than property disposed of since such date in the Ordinary Course of
Business. All such tangible personal property, equipment, plants, buildings,
structures, facilities and all other assets and properties are listed in Section
3.12 of the Company Disclosure Schedule and are free and clear of all
Encumbrances, other than Permitted Encumbrances which have not had a Material
Adverse Effect on the Company.
-21-
Exhibit 10.30
3.13. BENEFIT PLANS; ERISA.
(a) Section 3.13(a) of the Company Disclosure Schedule lists each
Benefit Plan together with a brief description of the type of plan and benefit
provided thereunder. The Company has no commitment, proposal, or communication
to employees regarding the creation of an additional Plan or any increase in
benefits under any Benefit Plan. The Company has provided to Parent (i) a copy
of each Benefit Plan (including amendments) and a list of persons participating
in such arrangement, (ii) the three most recent annual reports on the Form 5500
series for each Benefit Plan required to file such report and (iii) the most
recent trustee's report for each Benefit Plan funded through a trust.
(b) Neither the Company, an ERISA Affiliate or predecessor thereof
has ever maintained, contributed to or been obligated to contribute to any
Defined Benefit Plan or multiemployer plan (as defined in Section (3)(37) or
4001(a)(3) of ERISA) and no condition exists that presents a material risk to
the Company or an ERISA Affiliate of incurring a liability under Title IV of
ERISA.
(c) Each Benefit Plan has been operated and administered in all
material respects in accordance with its terms and, as of the Closing Date, will
be in full compliance, in form and operation, with all applicable laws
(including but not limited to ERISA and the Code). The reserves reflected in the
Company Financial Statements for the obligations of the Company under all
Benefit Plans are adequate and were determined in accordance with GAAP.
(d) Each Qualified Plan has received a determination letter from the
Internal Revenue Service confirming that it qualifies under Section 401(a) of
the Code and nothing has occurred since the issuance of that letter which would
adversely affect such qualified status or the plan sponsor's ability to rely on
such determination letter.
(e) No Benefit Plan provides benefits, including without limitation
death or medical benefits (whether or not insured), with respect to current or
former employees of the Company or any ERISA Affiliate beyond their termination
of service (other than (i) coverage mandated by applicable law, (ii) benefits
under a Qualified Plan, (iii) deferred compensation benefits accrued as
liabilities on the books of the Company or any ERISA Affiliate or (iv) benefits
the full cost of which is borne by any current or former employee (or his or her
beneficiary)).
(f) The consummation of the transactions contemplated by this
Agreement will not, either immediately or upon the occurrence of any event
thereafter, (i) entitle any current or former employee or officer or director of
the Company or any ERISA Affiliate to severance pay, unemployment compensation
or any other payment, or (ii) accelerate the time of payment or vesting, or
increase the amount of compensation otherwise due any such individual.
-22-
Exhibit 10.30
(g) There are no pending or, to the Knowledge of the Company,
anticipated or threatened claims by or on behalf of any Benefit Plan, by any
employee or beneficiary covered under any such Benefit Plan, or otherwise
involving any such Benefit Plan (other than routine claims for benefits).
3.14. REAL PROPERTY. The Company does not own any real property. Section
3.14 of the Company Disclosure Schedule contains a complete and accurate legal
description of each parcel of real property leased by the Company (as lessee or
lessor) (the "Real Property") and all Encumbrances (other than Permitted
Encumbrances) relating to or affecting the Real Property. The Company has a
valid leasehold interest in all real property used in or relating to the conduct
of the Company's business, free and clear of all Encumbrances other than
Permitted Encumbrances. The Company has rights of ingress and egress with
respect to the Real Property, and all buildings, structures, facilities,
fixtures and other improvements thereon material for the operation of the
Company's business. Each lease with respect to the Real Property is a legal,
valid and binding agreement of the Company subsisting in full force and effect
enforceable in accordance with its terms, and except as set forth in Section
3.14 of the Company Disclosure Schedule, there is no, and the Company has not
received notice of any, default (or any condition or event which, after notice
or lapse of time or both, would constitute a default) thereunder.
3.15. PROPRIETARY INFORMATION OF THIRD PARTIES. No third party has claimed
that any Person employed by or affiliated with the Company in connection with
and during the Company's operation of its business has (i) violated or may be
violating any of the terms or conditions of such Person's employment,
non-competition or non-disclosure agreement with such third party, (ii)
disclosed or may be disclosing or utilized or may be utilizing any proprietary
information or documentation of such third party, or (iii) interfered or may be
interfering in the employment relationship between such third party and any of
its present or former employees. No third party has requested information from
the Company which relates to such a claim. Except as set forth in Section 3.15
of the Company Disclosure Schedule, to the Knowledge of the Company, no Person
employed by or affiliated with the Company in connection with and during the
Company's ownership and operation of its business has employed any trade secret
or any information or documentation proprietary to any former employer and no
Person employed by or affiliated with the Company in connection with and during
the Company's ownership and operation of its business has violated any
confidential relationship which such Person may have had with any third party,
in connection with the sale of any service or proposed service of the Company,
and to the Knowledge of the Company, there is no reason to believe there will be
any such employment or violation.
3.16. COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) Except as set forth in Section 3.16(a) of the Company Disclosure
Schedule:
-23-
Exhibit 10.30
(i) the Company is, and at all times since its incorporation
has been, in full compliance with each Legal Requirement that is or was
applicable to it or to the conduct or operation of its business or the ownership
or use of any of its Assets and Properties except where failure to so comply,
individually and in the aggregate, would not reasonably be expected to have a
Material Adverse Effect with respect to the Company;
(ii) no event has occurred or circumstance exists that (with
or without notice or lapse of time) (A) may constitute or result in a violation
by the Company of, or failure on the part of the Company to comply with, any
Legal Requirement, or (B) may give rise to any obligation on the part of the
Company to undertake, or to bear all or any portion of the cost of, any remedial
action of any nature; and
(iii) the Company has not received any notice or other
communication (whether oral or written) from any Governmental or Regulatory
Authority or any other Person regarding (A) any actual, alleged, possible, or
potential violation of, or failure to comply with, any Legal Requirement, or (B)
any actual, alleged, possible, or potential obligation on the part of the
Company to undertake, or to bear all or any portion of the cost of, any remedial
action of any nature.
(b) Section 3.16(b) of the Company Disclosure Schedule contains a
complete and accurate list of each Governmental Authorization that is held by
the Company or that otherwise relates to the business of, or to any of the
Assets and Properties owned or used by, the Company. Each Governmental
Authorization listed or required to be listed in Section 3.16(b) of the Company
Disclosure Schedule is valid and is in full force and effect. Except as set
forth on Section 3.16(b) of the Company Disclosure Schedule:
(i) the Company is, and at all times has been, in full
compliance with all of the terms and requirements of each Governmental
Authorization identified or required to be identified in Section 3.16(b) of the
Company Disclosure Schedule except where failure to so comply, individually and
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect with respect to the Company;
(ii) no event has occurred or circumstance exists that may
(with or without notice or lapse of time) (A) constitute or result directly or
indirectly in a violation of or a failure to comply with any term or requirement
of any Governmental Authorization listed or required to be listed in Section
3.16(b) of the Company Disclosure Schedule, or (B) result directly or indirectly
in the revocation, withdrawal, suspension, cancellation, or termination of, or
any modification to, any Governmental Authorization listed or required to be
listed in Section 3.16(b) of the Company Disclosure Schedule;
(iii) the Company has not received any notice or other
communication (whether oral or written) from any Governmental or Regulatory
Authority or any other Person regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (B) any actual, proposed, possible, or potential
revocation, withdrawal, suspension, cancellation, termination of, or
modification to any Governmental Authorization; and
-24-
Exhibit 10.30
(iv) all applications required to have been filed for the
renewal of the Governmental Authorizations listed or required to be listed in
Section 3.16(b) of the Company Disclosure Schedule have been duly filed on a
timely basis with the appropriate Governmental or Regulatory Authority, and all
other filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental or Regulatory Authority other than those the failure of which to
obtain, possess or make would not have a Material Adverse Effect with respect to
the Company.
The Governmental Authorizations listed in Section 3.16(b) of the Company
Disclosure Schedule collectively constitute all of the Governmental
Authorizations necessary to permit the company to lawfully conduct and operate
its business in the manner it currently conducts and operates such business and
to permit the Company to own and use its assets in the manner in which it
currently owns and uses such assets other than those the failure of which to
obtain, possess or make would not have a Material Adverse Effect with respect to
the Company.
3.17. LEGAL PROCEEDINGS; ORDERS.
(a) Except as set forth in Section 3.17(a) of the Company Disclosure
Schedule, there is no pending Proceeding:
(i) that has been commenced by or against the Company or that
otherwise relates to or may affect the business of, or any of the Assets or
Properties owned or used by the Company; or
(ii) that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
To the Knowledge of the Company, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such Proceeding. The
Company has delivered to Parent copies of all pleadings, correspondence, and
other documents relating to each Proceeding listed in Section 3.17(a) of the
Company Disclosure Schedule. The Proceedings listed in Section 3.17(a) of the
Company Disclosure Schedule will not have a Material Adverse Effect on the
business, operations, assets, condition, or prospects of the Company.
(b) Except as set forth in Section 3.17(b) of the Company Disclosure
Schedule:
(i) the Company is not subject to any Order that relates to
the business of, or any of the assets owned or used by, the Company other than
any such order which, individually, or in the aggregate, would not have a
Material Adverse Effect with respect to the Company; and
(ii) no officer, director, agent, or employee of the Company
is subject to any Order that prohibits such officer, director, agent, or
employee from engaging in or continuing any conduct, activity, or practice
relating to the business of the Company.
(c) Except as set forth in Section 3.17(c) of the Company Disclosure
Schedule:
-25-
Exhibit 10.30
(i) the Company is, and at all times has been, in full
compliance with all of the terms and requirements of each Order to which it, or
any of the Assets or Properties owned or used by it, is or has been subject,
except where failure to so comply, individually and in the aggregate, would not
reasonably be expected to have a Material Adverse Effect with respect to the
Company;
(ii) no event has occurred or circumstance exists that may
constitute or result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any Order to which the
Company, or any of the Assets or Properties owned or used by the Company, is
subject; and
(iii) the Company has not received any notice or other
communication (whether oral or written) from any Governmental or Regulatory
Authority or any other Person regarding any actual, alleged, possible, or
potential violation of, or failure to comply with, any term or requirement of
any Order to which the Company, or any of the Assets or Properties owned or used
by the Company, is or has been subject.
3.18. CONTRACTS.
(a) Section 3.18 of the Company Disclosure Schedule contains a true
and complete list of each of the following contracts, agreements or other
arrangements to which the Company is a party or by which any of its Assets and
Properties is bound (and, to the extent oral, accurately describes the terms of
such contracts, agreements and arrangements):
(i) all collective bargaining or similar labor agreements;
(ii) all contracts for the employment of any officer, employee
or other Person or entity on a full time, part time, consulting or other basis
and all independent contractor agreements;
(iii) all loan agreements, indentures, debentures, notes or
letters of credit relating to the borrowing of money or to mortgaging, pledging
or otherwise placing a lien on any material asset or material group of assets of
the Company;
(iv) each written warranty, guaranty, or other similar
undertaking with respect to contractual performance extended by the Company;
(v) all leases or agreements under which the Company is lessee
or lessor of, or holds, or operates, any property, real or personal, owned by
any other party;
(vi) all commitments, contracts, sales contracts, purchase
orders, mortgage agreements or groups of related agreements with the same party
or any group or affiliated parties which require or may in the future require
payment of any consideration by the Company;
(vii) all license agreements, distribution agreements or any
other agreements involving any of the Company's Intellectual Property, including
agreements with current and former employees, consultants or contractors
regarding the appropriation or the non-disclosure of any Intellectual Property;
-26-
Exhibit 10.30
(viii) each joint venture partnership and other Contract
(however named) involving a sharing of profits, losses, costs or liabilities by
the Company with any other Person;
(ix) any Contract for payments to or by any Person by the
Company based on sales, purchases or profits, other than direct payments for
goods;
(x) each power of attorney that is currently effective and
outstanding;
(xi) each Contract entered into other than in the Ordinary
Course of Business that contains or provides for an express undertaking by the
Company to be responsible for consequential damages;
(xii) each Contract for capital expenditures in excess of
$10,000;
(xiii) all subscription or other agreements related to the
equity ownership of the Company;
(xiv) all contracts or commitments that in any way restrict
the Company from carrying on its business anywhere in the world;
(xv) all other contracts and agreements that (A) involve the
payment or potential payment in excess of $10,000, pursuant to the terms of any
such contract or agreement, by the Company and (B) cannot be terminated within
30 days after giving notice of termination without resulting in any cost or
penalty to the Company;
(xvi) all contracts or commitments that in any way grants a
third party a right of first refusal for the purchase of the Company or any of
its Assets or Properties; and
(xvii) each amendment, supplement, and modification (whether
oral or written) in respect to any of the foregoing.
(b) A correct and complete copy of each Contract disclosed in the
Company Disclosure Schedule has been previously provided to Parent and CRDE.
Each contract, agreement or other arrangement disclosed in the Company
Disclosure Schedule is in full force and effect and constitutes a legal, valid
and binding agreement, enforceable in accordance with its terms, of the Company,
and to the Knowledge of the Company, the other parties thereto; and the Company
has performed all of its required obligations under, and is not in violation or
breach of or default under, any such contract, agreement or arrangement. To the
Knowledge of the Company, the other parties to any such contract, agreement or
arrangement are not in violation or breach of or default under any such
contract, agreement or arrangement. To the Knowledge of the Company, none of the
present or former employees, officers, directors or Shareholders of the Company
is a party to any oral or written contract or agreement prohibiting any of them
from freely competing with other parties or engaging in the Company's business
as now operated. No event has occurred or circumstance exists that (with or
without notice or the lapse of time) may contravene, conflict with, or result in
a violation or breach of, or give the Company or any other
-27-
Exhibit 10.30
Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, termination, or modify,
any Contract to which the Company is a party. The Company has not given to or
received from any other Person any notice or other communication (whether oral
or written) regarding any actual, alleged, possible, or potential violation or
breach of, or default under any Contract. There are no renegotiations of,
attempts to renegotiate or outstanding rights to renegotiate any material
amounts paid or payable to the Company under current or complete Contract with
any Person and, to the Knowledge of the Company, no such Person has made written
demand for such renegotiation. The Contracts relating to the sale of services of
the Company have been entered into in the Ordinary Course of Business and have
been entered into without the commission of any act alone or in concert with any
other Person, or any consideration having been paid or promised, that would be
in violation of any Legal Requirement.
3.19. ACCOUNTS RECEIVABLE. All Accounts Receivable of the Company
represent valid obligations arising from sales actually made or services
actually performed in the Ordinary Course of Business. There is no contest,
claim, or right of set-off, other than returns in the Ordinary Course of
Business under any contract with any obligor of Accounts Receivable relating to
the amount or validity of such Accounts Receivable. Section 3.19 of the Company
Disclosure Schedule contains a complete and accurate list of all Accounts
Receivable as of the Closing Date, which lists sets forth the aging of such
Accounts Receivable.
3.20. ACCOUNTS PAYABLE. Set forth in Section 3.20 of the Company
Disclosure Schedule is a complete and accurate list of all accounts payable of
the Company as of the Cut-Off (collectively, the "Accounts Payable") which
represent or will represent obligations of the Company arising from purchases
actually made, services actually received or obligations otherwise incurred by
the Company.
3.21. EQUIPMENT. All tangible personal property and equipment used by the
Company in the conduct of its business are in good operating condition and
repair (subject to normal wear and tear) with no known material defects so as to
permit the operation of its business as presently conducted, no such equipment
or tangible personal property is in need of maintenance or repairs except for
ordinary, routine maintenance and repairs which are not material in nature or
cost, and with respect to each item of equipment and tangible personal property,
the Company has not received notification that it is in violation, in any
material respect, of any applicable building, zoning, subdivision, fire
protection, health or other law, Order, ordinance or regulation and no such
violation exists.
3.22. INSURANCE. Set forth in Section 3.22 of the Company Disclosure
Schedule is a complete and accurate list of all primary, excess and umbrella
policies, bonds and other forms of insurance currently owned or held by or on
behalf of and/or providing insurance coverage to the Company or the Assets and
Properties of the Company (or any of the Company's directors, officers,
salespersons, agents or employees), including the following information for each
such policy: type(s) of insurance coverage provided; name of insurer; effective
dates; policy number; per occurrence and annual aggregate deductibles or
self-insured retentions; per occurrence and annual aggregate limits of liability
and the extent, if any, to which the limits of liability have been exhausted.
All policies set forth on the Company Disclosure Schedule are in full force and
effect, and with respect to such policies, all premiums currently payable or
previously due have
-28-
Exhibit 10.30
been paid, and no notice of cancellation or termination has been received with
respect to any such policy. All such policies are sufficient for compliance with
all requirements of law and all agreements to which the Company is a party or
otherwise bound, and are valid, outstanding, collectible and enforceable
policies and, to the Knowledge of the Company, provide adequate insurance
coverage for the Company and the business and Assets and Properties of the
Company and will remain in full force and effect through the respective dates
set forth in Section 3.22 of the Company Disclosure Schedule. None of such
policies contains a provision that would permit the termination, limitation,
lapse, exclusion or change in the terms of coverage of such policy (including,
without limitation, a change in the limits of liability) by reason of the
consummation of the Contemplated Transactions. Complete and accurate copies of
all such policies and related documentation have previously been provided to the
Parent.
3.23. TAX MATTERS.
(a) Except as set forth in Section 3.23 of the Company Disclosure
Schedule, all Tax Returns required to be filed by or on behalf of the Company
have been duly filed on a timely basis and to the Knowledge of the Company such
Tax Returns are true, complete and correct. Except as set forth in Section 3.23
of the Company Disclosure Schedule, all Taxes shown to be payable on the Tax
Returns or on subsequent assessments with respect thereto have been paid in full
on a timely basis, and no other Taxes are payable by the Company with respect to
items or periods covered by such Tax Returns (whether or not shown on or
reportable on such Tax Returns) or with respect to any period prior to Closing.
The Company has withheld and paid over all Taxes required to have been withheld
and paid over, and complied with all information reporting and backup
withholding requirements, including maintenance of required records with respect
thereto, in connection with amounts paid or owing to any employee, creditor,
independent contractor, or other third party. There are no liens on any of the
assets of the Company with respect to Taxes, other than liens for Taxes not yet
due and payable. Except as set forth in Section 3.23 of the Company Disclosure
Schedule, the Company is not currently the beneficiary of any extension of time
within which to file any Tax Return.
(b) Except as set forth in Section 3.23 of the Company Disclosure
Schedule, the amount of the Company's liability for unpaid Taxes for all periods
ending on or before March 27, 2005 does not, in the aggregate, exceed the amount
of the current liability accruals for Taxes (excluding reserves for deferred
Taxes), reflected on the Company Financial Statements, and except as provided in
Section 3.23 of the Company Disclosure Schedule, the amount of the Company's
liability for unpaid Taxes for all periods ending on or before the Closing Date
shall not, in the aggregate, exceed the amount of the current liability accruals
for Taxes (excluding reserves for deferred Taxes), as such accruals are
reflected on the Company Financial Statements, as adjusted for operations and
transactions in the Ordinary Course of Business since March 27, 2005 in
accordance with past custom and practice. There are no contracts, agreements,
arrangements, commitments or undertakings relating to any prior audit of the
Company, and there are no contracts, agreements, arrangements, commitments or
undertakings with the Internal Revenue Service or any other Governmental or
Regulatory Authority that have or are reasonably likely to have a material and
adverse impact on the Company's Taxes that are not reflected in the Company
Financial Statements.
-29-
Exhibit 10.30
(c) To the extent such documents exist, Parent has been
furnished by the Company true and complete copies of (i) relevant portions of
income tax audit reports, statements of deficiencies, closing or other
agreements received by the Company or on behalf of the Company relating to
Taxes, and (ii) except as set forth in Section 3.23 of the Company Disclosure
Schedule, all federal and state income or franchise tax returns for the Company
for all periods ending on and after December 31, 2001.
(d) The Tax Returns of the Company have never been audited by a
Governmental or Regulatory Authority, nor is any such audit in process, pending
or threatened (either in writing or verbally, formally or informally). To the
Knowledge of the Company, and except as set forth in Section 3.23 of the Company
Disclosure Schedule, no deficiencies exist or have been asserted (either in
writing or verbally, formally or informally) or are expected to be asserted with
respect to Taxes of the Company, and the Company has not received notice (either
in writing or verbally, formally or informally) or expects to receive notice
that it has not filed a Tax Return or paid Taxes required to be filed or paid by
it. The Company is neither a party to any action or proceeding for assessment or
collection of Taxes, nor has such event been asserted or threatened (either in
writing or verbally, formally or informally) against the Company or any of its
assets. No waiver or extension of any statute of limitations is in effect with
respect to Taxes or Tax Returns of the Company. The Company has disclosed on its
federal income tax returns all positions taken therein that could give rise to a
substantial understatement penalty within the meaning of Section 6662 of the
Code.
(e) The Company is not (nor has it ever been) a party to any Tax
sharing agreement or Tax indemnity agreement and has not assumed the Tax
liability of any other Person under contract. The Company is not or has ever
been a member of an affiliated group filing a consolidated federal income Tax
Return and, except as set forth in Section 3.23 of the Company Disclosure
Schedule, the Company has no liability for the Taxes of any individual or entity
under Section 1.1502-6 of the Treasury Regulations (or any similar provision of
state, local or foreign law) as a transferee or successor, by contract or
otherwise.
(f) The Company does not have any deferred income or gains
reportable for Tax purposes which is not reflected in the Tax Returns of the
Company for any period ending after the Closing Date that is attributable to a
transaction occurring in, or resulting from a change in accounting method for a
period prior to the Closing Date (see explanation set forth in Section 3.23 of
the Company Disclosure Schedule).
(g) The Company's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is accurately reflected on the Tax Returns and the Books and Records
provided to Parent (see explanation set forth in Section 3.23 of the Company
Disclosure Schedule).
(h) All of the Shareholders are "UNITED STATES PERSONS," within the
meaning of Section 7701(a)(30) of the Code.
-30-
Exhibit 10.30
3.24. LABOR AND EMPLOYMENT RELATIONS. To the Knowledge of the Company, no
officer, executive or group of five (5) or more employees of the Company has or
have any plans to terminate his, her or their employment with the Company.
Parent acknowledges that twenty four (24) of the Company's employees are not
citizens of the United States and that while these employees are employed by the
Company in compliance with all United States immigration and labor laws, the
immigration status of such employees is subject to the rules and regulations
(and interpretation thereof) of the United States Federal Government. The
Company is not a party to or bound by any collective bargaining agreement with
any labor organization, group or association covering any of its employees, and
to the Knowledge of the Company, there are no attempts to organize any of the
Company's employees by any Person, unit or group seeking to act as their
bargaining agent. The Company has complied with all applicable laws relating to
the employment of labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining, discrimination against race, color,
national origin, religious creed, physical or mental disability, sex, age,
ancestry, medical condition, marital status or sexual orientation, occupational
health and safety and the withholding and payment of social security and other
Taxes. The Company is not liable for the payment of any compensation, damages,
taxes, fines, penalties or other amounts, however designated, for the failure to
comply with any of the foregoing Legal Requirements. To the knowledge of the
Company, no employees of the Company are in violation of any term of any
employment contract, patent disclosure agreement, non-competition agreement, or
any restrictive covenant to a former employer relating to any such employee to
be employed by the Company because of the nature of the business conducted or
presently proposed to be conducted by the Company or the use of trade secrets or
proprietary information of others. There are no pending or, to the Knowledge of
the Company, threatened charges (by employees, independent contractors, their
representatives or governmental authorities) of unfair labor practices or of
employment discrimination or of any other wrongful action with respect to any
aspect of employment of any Person employed or formerly employed by the Company.
No union representation elections relating to the Company's employees have been
scheduled by any Governmental or Regulatory Authority, no organizational effort
is being made with respect to any of such employees, and no investigation of the
Company's employment policies or practices by any Governmental or Regulatory
Authority is pending or threatened. The Company is not currently, and in the
past has not been, involved in labor negotiations with any unit or group seeking
to become the bargaining unit for any employees of the Company. The Company has
never experienced any work stoppages and to the Knowledge of the Company, no
work stoppage has been threatened or is planned.
3.25. CERTAIN EMPLOYEES. Set forth in Section 3.25 of the Company
Disclosure Schedule is (i) the name, title and total compensation of each
officer and director of the Company; (ii) the name, title and total compensation
for each other employee, consultant, agent or other representative of the
Company for 2003 and 2004; (iii) all wage and salary increase, bonuses and
increases and any other direct or indirect compensation received by any such
Person since December 31, 2004; (iv) any payments or commitments to pay any
severance or termination pay to any current or former officer, director,
employee, consultant, contractor or agent of the Company; and (v) any accrual
for, or commitment or agreement by the Company to pay, such increases, bonus or
pay. Except as set forth on Schedule 3.25, the Company has not received any
notice from any such Person whether orally or in writing that he or she will
cancel or otherwise terminate such Person's relationship with the Company. None
of such Persons has an employment agreement or understanding, whether oral or
written, with the Company which is not terminable on notice by the Company
without cost or other liability to the Company.
-31-
Exhibit 10.30
3.26. ABSENCE OF CERTAIN DEVELOPMENTS. Except for expenses incurred in
connection with this Agreement, for events, conditions, actions or transaction
in the ordinary course of business (all of which shall be accounted and paid for
in accordance with any applicable provisions of this Agreement), and except as
set forth on Section 3.26 of the Company Disclosure Schedule, since December 31,
2004, the Company has not:
(a) issued any stock, bonds or other corporate securities or any
right, options or warrants with respect thereto;
(b) borrowed any amount, obtained any letters of credit or incurred
or become subject to any liabilities in excess of $10,000 in the aggregate;
(c) discharged or satisfied any lien or Encumbrance or paid any
obligation or liability, other than current liabilities paid in the Ordinary
Course of Business and other than current federal income Tax liabilities;
(d) declared or made any payment or distribution of cash or other
property to Shareholders with respect to its stock, or purchased or redeemed any
shares of its capital stock;
(e) mortgaged or pledged any of its Assets or Properties, or
subjected them to any lien, charge or any other Encumbrance, except liens for
current property Taxes not yet due and payable;
(f) sold, leased, subleased, assigned or transferred any of its
Assets or Properties, except in the Ordinary Course of Business, or cancelled
any debts or claims;
(g) made any changes in any employee, consultant or contractor
compensation, severance or termination agreement, commitment or transaction
other than routine salary increases consistent with past practice or offer
employment to any individuals;
(h) entered into any material transaction or modified any existing
transaction (the aggregate consideration for which is in excess of $10,000);
(i) suffered any damage, destruction or casualty loss, whether or
not covered by insurance;
(j) made any capital expenditures, additions or improvements or
commitments for the same, except those made in the Ordinary Course of Business
which in the aggregate do not exceed $10,000;
(k) entered into any transaction or operated the Company's business
not in the Ordinary Course of Business;
(l) made any change in its accounting methods or practices or ceased
making accruals for taxes, obsolete inventory, vacation and other customary
accruals;
(m) ceased from reserving cash to pay taxes, principal and interest
on borrowed funds, and other customary expenses and payments;
-32-
Exhibit 10.30
(n) caused to be made any reevaluation of any of its Assets or
Properties;
(o) caused to be entered into any amendment or termination of any
lease, customer or supplier contract or other material contract or agreement to
which it is a party, other than in the Ordinary Course of Business;
(p) made any material change in any of its business policies,
including, without limitation, advertising, distributing, marketing, pricing,
purchasing, personnel, sales, returns, budget or product acquisition or sale
policies;
(q) terminated or failed to renew, or received any written threat
(that was not subsequently withdrawn) to terminate or fail to renew, any
contract or other agreement that is or was material to the Company's business or
its financial condition;
(r) permitted to occur or be made any other event or condition of
any character which has had a Material Adverse Effect on it;
(s) waived any rights material to its financial or business
condition;
(t) made any illegal payment or rebates; or
(u) entered into any agreement to do any of the foregoing.
3.27. CUSTOMERS. The Company has previously provided to Parent a true and
correct list of the Company's current customers and the Company's customers
during the 2003 and 2004 fiscal years related to the Company business. Since
January 1, 2003 no single customer or group of affiliated customers contributing
more than $10,000 per annum to the gross revenues of the Company's business has
terminated any of their agreements with the Company, and no such customer has
given notice to the Company of an intention to discontinue doing business or
reduce the level of gross revenues from that in fiscal year 2005 with the
Company (see comment set forth on Section 3.27 of the Company Disclosure
Schedule).
3.28. BANK ACCOUNTS. Section 3.28 of the Company Disclosure Schedule
contains a complete and accurate list of each deposit account or asset
maintained by or on behalf of the Company with any bank, brokerage house or
other financial institution, specifying with respect to each the name and
address of the institution, the name under which the account is maintained, the
account number, and the name and title or capacity of each Person authorized to
have access thereto.
3.29. PERMITS. Section 3.29 of the Company Disclosure Schedule contains a
true and complete list of all Permits used in and material, individually or in
the aggregate, to the Company's business. All such Permits are currently
effective and valid and have been validly issued, except for those the failure
of which to obtain, possess or make would not have a Material Adverse Effect
with respect to the Company. No additional Permits are necessary to enable the
Company to conduct its business in material compliance with all applicable
federal, state and local laws. Neither the execution, delivery or performance of
this Agreement nor the mere passage of time will have any effect on the
continued validity or sufficiency of the Permits, nor will any additional
Permits be required by virtue of the execution, delivery or performance of this
Agreement to enable the Company to conduct its business as now operated. To the
Knowledge of the Company, there is no pending Action or Proceeding by any
Governmental or Regulatory Authority which could affect the Permits or their
sufficiency for the current conduct of the Company's business or of the conduct
of the Company's business after the Closing. The Company has provided Parent
with true and complete copies of all Permits listed in the Company Disclosure
Schedule.
-33-
Exhibit 10.30
3.30. REGULATORY COMPLIANCE. Except as provided in Section 3.30 of the
Company Disclosure Schedule, to the Knowledge of the Company, neither the
Company nor any of its operations are regulated by any Governmental or
Regulatory Authority and the Company has complied with all applicable
requirements of any Governmental or Regulatory Authority with respect to any
services provided by it (including but not limited to the Medicare Anti-Kickback
Statute, the Health Insurance Portability and Accountability Act of 1996, the
Federal False Claims Act, the Federal laws concerning physician self-referral
known as "Xxxxx I" and "Xxxxx II", and the rules and regulations of the Joint
Commission on Accreditation of Healthcare Organizations).
Neither the Company, nor any officer, employee or agent of the Company has
made an untrue statement of a material fact or fraudulent statement to any
Governmental or Regulatory Authority, failed to disclose a material fact
required to be disclosed to any Governmental or Regulatory Authority, or
committed an act, made a statement, or failed to make a statement that, at the
time such disclosure was made, could reasonably be expected to provide a basis
for any Governmental or Regulatory Authority to invoke its policies respecting
fraud, untrue statements of material facts, bribery or illegal gratuities or any
similar policies.
3.31. THIRD PARTY CONSENTS. No consent, approval or authorization of any
third party on the part of the Company is required in connection with the
consummation of the transactions contemplated hereunder except as otherwise
provided in Section 3.31 of the Company Disclosure Schedule.
3.32. RELATIONSHIPS WITH RELATED PERSONS. Except as set forth on Schedule
3.32, no Shareholder or any Affiliate of the Company has, or since January 1,
2002 has had, any interest in the property, whether real, personal or mixed, or
whether tangible or intangible, used in or pertaining to the Company's
businesses. No Shareholder or any Affiliate of the Company owns, or since
January 1, 2002 has owned (of record or as beneficial owner) an equity interest
or any other financial or profit interest in a Person that has (i) had business
dealings or a material financial interest in any transaction with the Company or
(ii) engaged in competition with the Company with respect to any line of the
products or services of the Company. Except as set forth in Section 3.32 of the
Company Disclosure Schedule, no Shareholder nor any Affiliate of the Company is
a party to any Contract with or has any right or claim against the Company.
3.33. CERTAIN PAYMENTS. Neither the Company nor any director, officer,
agent or employee of the Company, or to the Knowledge of the Company, any other
Person associated with or acting for or on behalf of the Company, has directly
or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence
payment, kick-back or other payment to any Person, private or public, regardless
of any form, whether in money, property or services (A) to obtain favorable
treatment in securing business, (B) to pay for favorable treatment for business
secured, (C) to obtain special concessions or for special concessions already
obtained for or in respect of the Company or any Affiliate thereof, or (D) in
violation of any Legal Requirement, or (ii) established or maintained any fund
or asset that has not been recorded in the Books and Records of the Company.
-34-
Exhibit 10.30
3.34. BROKERS. Except as set forth in Section 3.34 of the Company
Disclosure Schedule, neither the Shareholders nor the Company have retained any
broker in connection with the transactions contemplated hereunder. Neither
Parent, CRDE nor Acquisition Co. has, or will have, any obligation to pay any
broker's, finder's, investment banker's, financial advisor's or similar fee in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of the Shareholders or the Company.
3.35. VERIFICATION OF CREDENTIALS. Except as set forth in Section 3.35 of
the Company Disclosure Schedule, the Company has implemented policies and
procedures to verify the credentials (including, but not limited to, with
respect to education and licensure) of personnel that the Company places with
its clients and to collect, maintain and update such credentialing information.
To the Knowledge of the Company, employees, contractors and consultants each
consistently follow and have followed such policies and procedures.
3.36. EXISTING INDEBTEDNESS. As of the date of this Agreement and as of
the close of business on the day prior to the Closing Date, (i) all indebtedness
of or any obligation of the Company (whether as obligor or as guarantor) for
borrowed money, whether current, short-term, or long-term, secured or unsecured,
(ii) all indebtedness of the Company (whether as obligor or as guarantor) for
the deferred purchase price for purchases of property outside the ordinary
course which is not evidenced by trade payables, (iii) all lease obligations of
the Company (whether as obligor or as guarantor) under leases which are capital
leases in accordance with GAAP, (iv) all off-balance sheet financings of the
Company (whether as obligor or as guarantor), (v) any payment obligations of the
Company (whether as obligor or as guarantor) in respect of banker's acceptances
or letters of credit (other than stand-by letters of credit in support of
ordinary course trade payables), (vi) any liability of the Company (whether as
obligor or as guarantor) with respect to interest rate swaps, collars, caps and
similar hedging obligations, (vii) any present, future or contingent obligations
of the Company under (A) any phantom stock or equity appreciation rights, plan
or agreement, (B) any consulting, deferred pay-out or earn-out arrangements in
connection with the purchase of any business or entity, (C) any non-competition
agreement, (viii) any accrued bonuses, (ix) any accrued Taxes other than payroll
Taxes accrued in the Ordinary Course of Business, (x) any accrued and unpaid
interest or any contractual prepayment premiums, penalties or similar
contractual charges resulting from the Contemplated Transactions or the
discharge of such obligations with respect to any of the foregoing, (xi) all
indebtedness of or any obligation of the Company owed to the Shareholders or to
any Affiliate of the Shareholders and (xii) all indebtedness of or any
obligation of the Company incurred for the personal benefit of the Shareholders
or any Affiliate of the Shareholders, including without limitation, any Family
Members of the Shareholders, is listed on Section 3.36 of the Company Disclosure
Schedule hereto (collectively, but without duplication, the "Existing
Indebtedness").
-35-
Exhibit 10.30
3.37. MATERIAL MISSTATEMENTS AND OMISSIONS. The statements,
representations and warranties of the Company contained in this Agreement
(including the exhibits and schedules hereto) and in each document, statement,
certificate or exhibit furnished or to be furnished by or on behalf of the
Company pursuant hereto, or in connection with the transactions contemplated
hereby, taken together, do not contain and will not contain any untrue statement
of a material fact and do not or will not omit to state a material fact
necessary to make the statements or facts contained herein or therein, in light
of the circumstances made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT, CRDE AND ACQUISITION CO.
Parent, CRDE and Acquisition Co., jointly and severally, represent and
warrant to the Company as of the date hereof and as of the Closing Date, as
follows:
4.1. ORGANIZATION. Parent is a corporation duly organized, validly
existing and in good standing under the laws of the State of the Delaware. CRDE
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Acquisition Co. is a corporation duly organized,
validly existing, and in good standing under the laws of the State of North
Carolina. Each of Parent, CRDE and Acquisition Co. is duly authorized to conduct
business and is in good standing under the laws of each jurisdiction where such
qualification is required except for any jurisdiction where failure so to
qualify would not have a Material Adverse Effect upon Parent, CRDE or
Acquisition Co., as the case may be.
4.2. AUTHORITY. Each of Parent, CRDE and Acquisition Co. has all necessary
corporate power and corporate authority and has taken all corporate actions
necessary to enter into this Agreement, to consummate the transactions
contemplated hereby and to perform its respective obligations hereunder and no
other proceedings on the part of Xxxxxx, XXXX or Acquisition Co. are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by each
of Parent, CRDE and Acquisition Co. and constitutes a legal, valid and binding
obligation of Parent, CRDE and Acquisition Co., respectively, enforceable
against each of Parent, CRDE and Acquisition Co. in accordance with its terms
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
4.3. LITIGATION. There are no Actions or Proceedings pending or, to the
Knowledge of Parent, threatened or anticipated against, relating to or affecting
the transactions contemplated by this Agreement, and, to the Knowledge of
Parent, there is no basis for any such Action or Proceeding.
4.4. REPORTS AND FINANCIAL STATEMENTS. As of the date hereof, the Parent
has furnished or made available to the Company and the Shareholders true and
complete copies of all Parent SEC Documents. As of their respective filing
dates, all such Parent SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and none
of such Parent SEC Documents contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances in which they
were made, not misleading, except to the extent corrected by a document
subsequently filed with the SEC. The
-36-
Exhibit 10.30
Parent Financial Statements comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, have been prepared in accordance with GAAP
consistently applied (except as may be indicated in the notes thereto or, in the
case of unaudited statements, as permitted by Form 10-QSB of the SEC) and
present fairly the consolidated financial position of the Parent at the dates
thereof and the consolidated results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
audit adjustments).
4.5. NO CONFLICTS. The execution and delivery by the Parent, CRDE and
Acquisition Co. of this Agreement does not, and the performance by the Parent,
CRDE and Acquisition Co. of their respective obligations under this Agreement
and the consummation of the transactions contemplated hereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the charter documents, bylaws or other
organizational documents of the Parent, CRDE or Acquisition Co., as applicable;
(b) conflict with or result in a violation or breach of, or give any
Governmental or Regulatory Authority the right to revoke, withdraw, suspend,
cancel, termination or modify any term or provision of any law, Order, Permit,
statute, rule or regulation applicable to the Parent, CRDE or Acquisition Co. or
the business or Assets or Properties of the Parent, CRDE or Acquisition Co.;
(c) result in a breach of, or default under (or give rise to right
of termination, modification, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, license,
agreement, lease or other similar instrument or obligation to which the Parent,
CRDE or Acquisition Co. or any of their respective Assets and Properties may be
bound;
(d) cause any of the Assets or Properties of the Parent or CRDE to
be reassessed or revalued by any taxing authority or any Governmental or
Regulatory Authority;
(e) result in an imposition or creation of any Encumbrance or Tax on
the business or Assets or Properties of the Parent or CRDE.
4.6. CONSENTS AND GOVERNMENTAL APPROVALS AND FILINGS. No consent, approval
or action of, filing with or notice to any Governmental or Regulatory Authority
on the part of the Parent or CRDE is required in connection with the execution,
delivery and performance of this Agreement or the consummation of the
transactions contemplated hereby.
4.7. ABSENCE OF CERTAIN CHANGES OR EVENTS. Parent and its subsidiaries
have conducted their respective businesses only in the Ordinary Course of
Business in all material respects and, since December 31, 2004, except as
contemplated by or disclosed in this Agreement, or as disclosed in the Parent's
SEC Documents, there has not been any material event, occurrence, change or
effect that, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect upon Parent.
-37-
Exhibit 10.30
4.8. BROKERS. Neither Parent, CRDE nor Acquisition Co. has retained any
broker in connection with the transactions contemplated hereunder. Neither the
Company nor the Shareholders has, and will have, any obligation to pay any
broker's, finder's investment banker's, financial advisor's or similar fee in
connection with this Agreement or the transactions contemplated hereby by reason
of any action taken by or on behalf of Xxxxxx, XXXX or Acquisition Co.
4.9. PARENT COMMON STOCK. The Parent acknowledge and agree that when
issued as required by this Agreement and except where otherwise required by
specific terms of this Agreement, the shares of Parent Common Stock to be issued
pursuant to this Agreement will be duly authorized, validly issued, fully paid
and nonassessable and free and clear of all Encumbrances and preemptive rights.
The certificates representing such shares will be in due and proper form.
4.10. OPERATION OF ACQUISITION CO. Acquisition Co. is a direct, wholly
owned subsidiary of CRDE, is being formed solely for the purpose of engaging in
the transactions contemplated by this Agreement, has engaged in no other
business activities and has conducted its operations only as contemplated by
this Agreement.
4.11. ABSENCE OF UNDISCLOSED LIABILITIES. The Parent has no liabilities of
any material nature, whether accrued, absolute, contingent or otherwise, other
than material liabilities: (i) adequately reflected or reserved against on the
balance sheet included in Parent's SEC Documents filed prior to the date hereof;
(ii) incurred since December 31, 2004 in the ordinary course of business
consistent with past practice; none of which, in the aggregate, would reasonably
be expected to have a Material Adverse Effect on the Parent.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF THE SHAREHOLDERS
Each Shareholder hereby represents and warrants to Parent, CRDE and
Acquisition Co. as follows (such representations and warranties do not lessen or
obviate the representations and warranties of the Company and the Shareholders
set forth in Article III above):
5.1. REQUISITE POWER AND AUTHORITY. Such Shareholder has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry out its provisions. All action on such
Shareholder's part required for the lawful execution and delivery of this
Agreement has been or will be effectively taken prior to the Closing. Upon
execution and delivery, this Agreement will be the valid and binding obligation
of such Shareholder, enforceable in accordance with its terms.
5.2. INVESTMENT REPRESENTATIONS. Such Shareholder understands that the
Conversion Shares which may be issued upon conversion of the Notes have not been
registered under the Securities Act. Such Shareholder also understands that the
Conversion Shares will be offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon such
Shareholder's representations and warranties contained in this Agreement. Such
Shareholder hereby represents and warrants as follows:
-38-
Exhibit 10.30
(a) Such Shareholder is an "accredited investor" as defined in Rule
501(a) of the Securities Act.
(b) Such Shareholder has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to Parent so that he, she or it is capable of evaluating the merits and risks of
his, her or its investment in the Conversion Shares and has the capacity to
protect his, her or its own interests. Such Shareholder must bear the economic
risk of this investment indefinitely unless the Conversion Shares are registered
pursuant to the Securities Act or an exemption from registration is available.
Such Shareholder also understands that there is no assurance that any exemption
from registration under the Securities Act will be available and that, even if
available, such exemption may not allow such Shareholder to transfer all or any
portion of the Conversion Shares under the circumstances, in the amounts or at
the times such Shareholder might propose.
(c) Such Shareholder will be acquiring the Conversion Shares for
such Shareholder's own account for investment only, and not with a view towards
their distribution.
(d) Such Shareholder represents that by reason of his, her or its
business or financial experience, such Shareholder has the capacity to protect
his, her or its own interests in connection with the transactions contemplated
in this Agreement. Further, such Shareholder is aware of no publication of any
advertisement in connection with the transactions contemplated in the Agreement.
(e) Such Shareholder has received and read the Parent SEC Filings
and has had an opportunity to discuss Parent's business, management and
financial affairs with directors, officers and management of Parent and has had
the opportunity to review Parent's operations and facilities. Such Shareholder
has also had the opportunity to ask questions of and receive answers from Parent
and its management regarding the terms and conditions of this investment.
Additionally, such Shareholder will go through the process described in this
subsection (e) immediately prior to acquiring any Conversion Shares.
(f) Such Shareholder acknowledges and agrees that the Conversion
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available. Such
Shareholder has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act as in effect from time to time and the
Shareholders hereby specifically agree to abide by Rule 144 with respect to any
shares of Parent Common Stock.
(g) Such Shareholder resides in the state or province identified in
the address of such Shareholder set forth on the signature page to this
Agreement.
-39-
Exhibit 10.30
5.3. TRANSFER RESTRICTIONS. Such Shareholder acknowledges and agrees that
the Conversion Shares are subject to restrictions on transfer set forth in this
Section 5.3. Such Shareholder agrees not to make any disposition of all or any
portion of the Conversion Shares unless and until: (i) there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement; or (ii) the transferee (except for transfers in compliance with Rule
144 to which this resale restriction shall not apply) has agreed in writing to
be bound by the terms of Article 5 of this Agreement, such Shareholder shall
have notified Parent of the proposed disposition and shall have furnished Parent
with a detailed statement of the circumstances surrounding the proposed
disposition and if reasonably requested by Parent, such Shareholder shall have
furnished Parent with an opinion of counsel, reasonably satisfactory to Parent,
that such disposition will not require registration of such shares under the
Securities Act. Notwithstanding the provisions of clauses (i) and (ii) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer by such Shareholder to a family member of such Shareholder or trust for
the benefit of such Shareholder or family member; provided, however, that in
each case the transferee will be subject to the terms of Article 5 of this
Agreement to the same extent as if he, she or it were an original Shareholder
hereunder. Parent shall be entitled to impose stop transfer instructions with
respect to the Conversion Shares in order to enforce the foregoing restrictions.
The certificates representing the Conversion Shares (when issued pursuant
to a conversion of a Note) shall bear the following legend restricting transfer,
and such other legends as may be required by any applicable state securities
law:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR
UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
5.4. MARKET STANDOFF. Such Shareholder agrees that, only to the extent
other officers of Parent or an Affiliate holding positions similar to such
Shareholder may be required to agree to market standoff described in this
Section 5.4, such Shareholder will not, without the prior written consent of
Parent, during the period commencing on the date of filing of a registration
statement by Parent pursuant to an underwritten public offering by Parent of its
capital stock or securities convertible into its capital stock and ending on the
date specified by Parent (such period not to exceed 180 days following the
filing of the final prospectus relating to such offering), transfer or dispose
of any Conversion Shares owned by such Shareholder. In order to enforce the
foregoing covenant, Parent may impose stop-transfer instructions with respect to
such securities of the Shareholder (and the shares or securities of every other
Person subject to the foregoing restriction) until the end of such period.
5.5. FILINGS. The Parent agrees to continue to file all reports and
filings under the Securities Exchange Act of 1934, as amended, during the time
Rule 144 shall be available to the Shareholders until such time as the
Shareholders may sell under the provisions of Rule 144k.
-40-
Exhibit 10.30
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1. ACCESS TO INFORMATION. The Company has given Parent and its
authorized representatives (including, without limitation, its attorneys and
accountants), reasonable access to all employees, customers, offices, warehouses
and other facilities, to (and where necessary, provide copies of) all books and
records, contracts and all personnel files of current employees of the Company
and its subsidiaries and the Company has caused its officers and those of its
subsidiaries to furnish Parent with such financial and operating data and other
information with respect to the business and properties of the Company and its
subsidiaries as Parent has requested.
6.2. PUBLIC ANNOUNCEMENTS; COMPANY LITERATURE. None of Parent, CRDE,
Acquisition Co. or the Company shall issue any press release or otherwise make
any public statements with respect to the transactions contemplated by this
Agreement, including the Merger, without the prior consent of Parent and
Acquisition Co. (in the case of the Company) or the Company (in the case of
Parent, CRDE or Acquisition Co.), except as may be required by applicable law
(in which case the disclosing party will provide the other party to review in
advance of the disclosure), including any determination by Parent that a press
release or other public statement is required under applicable securities or
regulatory rules. The parties agree there shall be no public announcement of
this Agreement or the consummation of the Merger except as may be required by
applicable law. The parties agree to announce this Agreement or the consummation
of the Merger to the Company's employees, customers, vendors and strategic
partners at such time and in such form as is mutually agreed upon by all parties
to this Agreement.
6.3. FEES AND EXPENSES. Whether or not the Merger is consummated, all
fees, costs and expenses incurred in connection with the Merger, this Agreement
and the other agreements and transactions contemplated hereby and thereby,
including all legal, accounting, financial advisory, broker's consulting and
other fees and expenses of third parties incurred by a party in connection with
the negotiation, documentation and effectuation of the terms and conditions of
the Merger, this Agreement and the other agreements and Contemplated
Transactions hereby and thereby ("THIRD PARTY EXPENSES"), shall be the
obligation of the respective party incurring such Third Party Expenses.
Notwithstanding the foregoing, the Shareholders shall be responsible for any
fees payable to RBC or any other broker or advisors retained by the Shareholders
or the Company with respect to the transactions contemplated herein. The
Shareholders shall personally and severally bear the costs of up to $21,000
associated with bringing the Company's accounting Books and Records to a state
which is in accordance with sound business practices and in accordance with GAAP
in preparation for Parent's audit of such accounting Books and Records.
6.4. CONFIDENTIALITY. The parties agree that the Confidentiality Agreement
remains in full force and effect and the parties thereto remain bound by the
terms thereto. The parties hereto will maintain in confidence, and will direct
its directors, officers, employees, agents, Affiliates and advisors to maintain
in confidence any written, oral or other information furnished by another party
to this Agreement in connection with the Contemplated Transactions, unless (a)
such information is already known to such party or to others not bound by a duty
of confidentiality or such information becomes publicly available through no
fault of such party, (b) the use of such information is necessary or appropriate
in making any filing or obtaining any consent or approval required for the
consummation of the transactions contemplated by this Agreement, or (c) the
furnishing or use of such information is required by law. If the Merger is not
consummated, each party will return or, at the request of the party supplying
the information, destroy as much of such written information as the other party
may reasonably request.
-41-
Exhibit 10.30
6.5. PARENT COMMON STOCK LEGEND. In the event that the Conversion Shares
or the Parent Common Stock issued to the Shareholders pursuant to Section 2.6(e)
may be sold under Rule 144(k) of the Securities Act of 1933, as amended, as
determined by an opinion of counsel to the holder reasonably acceptable to
Parent (if reasonably required by Parent), Parent shall, as soon as reasonably
practicable upon the written request of the holder thereof, issue to (and/or
cause its transfer agent to issue to) such holder a new certificate evidencing
such Conversion Shares without the legend required by Section 5.3 endorsed
thereon.
6.6. COLLECTION OF ACCOUNTS RECEIVABLE. After Closing, Parent agrees to
pursue collection of unpaid Accounts Receivable as of the Effective Time in a
manner consistent with past practices except where such past practices requires
modification to comply with applicable law. Pursuant to and as provided in
Section 2.6(d) of this Agreement, Parent shall provide Shareholders an
accounting of the Accounts Receivable and tender any amounts due and owing the
Shareholders promptly along with any back-up documentation with respect thereof.
6.7. FUTURE LIABILITIES; INDEMNIFICATION. Notwithstanding Section 9.2(b),
Parent, CRDE and the Company shall indemnify the Shareholders and hold the
Shareholders harmless from all losses, claims, damages and liabilities arising
from any operational matters of the Company beginning after the Cut-Off (except
where any such loss, claim, damage or liability arises from the gross negligence
or intentional misconduct of the Shareholder seeking indemnity under this
Section 6.7), to which the Shareholders may become subject as a result of such
Shareholder's employment, ownership or affiliation with the Company prior to the
Cut-Off, to the maximum extent permitted by law. The Shareholders shall notify
Parent, CRDE and the Company promptly in writing describing such loss, claim,
damage and liability, the amount or a reasonable estimate thereof, and the
method of computation of such amount, all with reasonable particularity and
containing a reference to the provisions of this Agreement or other agreement,
instrument or certificate delivered pursuant hereto in respect of which such
loss, claim, damage and liability shall have occurred. Xxxxxx, XXXX and the
Company's obligation shall survive for a period of six (6) months from the
Effective Time. To the extent required to indemnify hereunder, Parent shall have
the absolute right to control the defense and disposition of any proceeding
brought with respect to any matter for which the Parent may be required to
indemnify a Shareholder hereunder.
6.8. NON-COMPETITION AGREEMENT. Upon the occurrence of a "Subordination
Event of Default" (as such term is defined in the Subordination Agreement),
Sections 2.2, 2.3, and 2.4 of each of the Non-Competition Agreements shall
become void and have no effect without liability on the part of any party
thereto or its Affiliates. In the event of the termination of the
Non-Competition Agreements as a result of a Subordination Event of Default,
Parent and its Affiliates shall not (except where an action against (x) a
Shareholder is otherwise authorized under this Agreement or any of the
Contemplated Transactions or (y) any of the personnel referred to herein by
Parent or an Affiliate thereof is based upon unrelated grounds) take any legal
action or commence any legal proceedings against the Shareholders or any nurse,
operating room technician, licensed practical nurse, certified nurse assistant,
physical therapist, occupational therapist, speech therapist or radiology
technologist who terminates his or her employment with the Surviving Corporation
or its Affiliates and obtains employment with the Shareholders or their
Affiliates including the Surviving Corporation.
-42-
Exhibit 10.30
6.9. CONDUCT OF BUSINESS OF COMPANY POST-CLOSING. Following the Closing,
Parent agrees to conduct the business of the Surviving Corporation in the manner
consistent with past practices (except where such past practices required to be
modified due to application of securities laws or other compulsory process).
Following the Closing and until the Notes are satisfied, Parent further agrees
on its behalf and on behalf of its subsidiaries (i) to operate and cause its
subsidiaries to operate and book all revenue derived from new customers for the
Traveling Nurse Business obtained after the Effective Date in and through the
Surviving Corporation; (ii) to renew all contracts, agreements relating to
Traveling Nurse Business through the same entity (or in the Parent's or Parent's
Affiliates case, another entity of Parent's choosing to the extent such contract
was originally entered into by Parent or the Affiliate prior to Cut-Off) in
which such contract or agreement exists as of the Effective Date; (iii) that the
only indebtedness of the Surviving Corporation, other than inter-company
advances which shall be forgiven or eliminated upon the occurrence of a
Subordination Event of Default under the Subordination Agreement, shall be the
Surviving Corporation acting as a co-borrower with Parent's Lender which are
secured by accounts payable for purchases of goods or services provided or to be
provided to the Surviving Corporation; (iv) that Parent shall immediately
provide written notice to the Shareholders of any default under any of the loan
documentation between Parent and Parent's Lender; (v) that no security interest
in the Assets or Properties of the Surviving Corporation, or pledge of the
equity of the Surviving Corporation will be granted to any party other than
Parent's Lender; (vi) to not issue any interests in (or grant any rights or
options related to) the equity of the Surviving Corporation; and (vii) that the
Parent will provide the Shareholders (at the sole expense of the Shareholders)
and their authorized representatives (including, without limitation, its
attorneys and accountants), reasonable access to all employees, customers,
offices, warehouses and other facilities, to provide copies (where necessary, at
the expense of Shareholders) of all Books and Records, contracts and all
personnel files of current employees of the Surviving Corporation and will cause
its officers to furnish the Shareholders with such reasonable financial and
operating data and other information with respect to the business and properties
of the Surviving Corporation (at the expense of the Shareholders) as the
Shareholders may reasonably request from time to time. After Closing, the
Company's business shall be conducted in the name of "TravMed USA, a Crdentia
Company" until the Notes are satisfied.
6.10. NOTIFICATION OF AUDITS. In the event of a federal or state tax audit
of the Company related to any period prior to Closing, Parent shall provide
written notice thereof to the Shareholders as promptly as practicable. After
such notice, the Shareholders shall be entitled to (at their expense)
participate and negotiate a final resolution (subject to a final approval of
Parent of any such final resolution negotiated by the Shareholders) of any such
audit; provided to the extent the Shareholders shall have assumed the
responsibility to fully satisfy any amounts sought (or negotiated as due) as
part of any such tax audit and Parent shall withhold its consent to any such
final resolution, Parent will be required to indemnify and hold harmless the
Shareholders from any additional amounts (in excess of the amount the
Shareholders shall have negotiated to settle any such audit) which may arise due
to Parent's failure to provide its consent to any such final resolution
negotiated by the Shareholders.
-43-
Exhibit 10.30
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1. CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER. The
respective obligations of each party hereto to effect the Merger are subject to
the satisfaction at or prior to the Effective Time of the following conditions:
(a) no statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or enforced by any
United States federal or state court or United States federal or state
Governmental or Regulatory Authority that prohibits, restrains, enjoins or
restricts the consummation of the Merger; and
(b) any governmental or regulatory notices, approvals or other
requirements necessary to consummate the transactions contemplated hereby shall
have been given, obtained or complied with, as applicable.
7.2. CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligation of the
Company to effect the Merger is subject to the satisfaction at or prior to the
Effective Time of the following conditions:
(a) the representations and warranties of Parent, CRDE and
Acquisition Co. contained in this Agreement shall be true and correct in all
material respects at and as of the Effective Time with the same effect as if
made at and as of the Effective Time (except to the extent such representations
specifically relate to an earlier date, in which case such representations shall
be true and correct in all material respects as of such earlier date, and in any
event, subject to the foregoing materiality qualification) and, at the Closing,
Xxxxxx, XXXX and Acquisition Co. shall have delivered to the Company a
certificate to that effect, executed by an officer of Parent, CRDE and
Acquisition;
(b) each of the covenants and obligations of Parent, CRDE and
Acquisition Co. to be performed at or before the Effective Time pursuant to the
terms of this Agreement shall have been duly performed in all material respects
at or before the Effective Time and, at the Closing, Parent, CRDE and
Acquisition Co. shall have delivered to the Company a certificate to that
effect, executed by an officer of Parent, CRDE and Acquisition Co.;
(c) Parent shall have delivered all of Closing deliveries set forth
in Section 2.8(c) above;
(d) the Related Party Loans shall have been satisfied, distributed
or forgiven in accordance with Section 2.6(d); and
(e) all proceedings taken by the Parent, CRDE and Acquisition Co.
and all instruments executed and delivered by Xxxxxx, XXXX and Acquisition Co.
on or prior to the Closing in connection with the Contemplated Transactions
shall be reasonably satisfactory in form and substance to counsel for the
Company.
-44-
Exhibit 10.30
7.3. CONDITIONS TO THE OBLIGATIONS OF PARENT AND ACQUISITION CO. The
respective obligations of Parent, CRDE and Acquisition Co. to effect the Merger
are subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects at and as of
the Effective Time with the same effect as if made at and as of the Effective
Time (except to the extent such representations specifically relate to an
earlier date, in which case such representations shall be true and correct in
all material respects as of such earlier date) and, at the Closing, the Company
shall have delivered to Parent, CRDE and Acquisition Co. a certificate to that
effect, executed by an executive officer of the Company;
(b) each of the covenants and obligations of the Company to be
performed at or before the Effective Time pursuant to the terms of this
Agreement shall have been duly performed in all material respects at or before
the Effective Time and, at the Closing, the Company shall have delivered to
Parent, CRDE and Acquisition Co. a certificate to that effect, executed by an
executive officer of the Company;
(c) the consents specified on Section 3.6(c) of the Company
Disclosure Schedule and any other material third party consents necessary to
consummate the transactions contemplated hereby shall have been given, obtained
or complied with as applicable;
(d) there shall have been no events, changes or effects,
individually or in the aggregate, with respect to the Company or its
subsidiaries having, or that would reasonably be expected to have, a Material
Adverse Effect on the Company;
(e) all consents, conditions, and requirements imposed by Parent's
Lender for a successful closing of the transactions contemplated by this
Agreement shall have been met to the satisfaction of the counsel of Parent's
Lender;
(f) the results of Parent's due diligence investigations of the
Company shall be satisfactory to Parent, as determined in a sole amount and
absolute discretion;
(g) the Company and the Shareholders, as the case may be, shall have
delivered all of the Closing deliveries set forth in Section 2.8(b) above;
(h) the Shareholders shall have fully and finally released the Loan
and Security Agreement;
(i) all proceedings taken by the Company and the Shareholders and
all instruments executed and delivered by the Company and the Shareholders on or
prior to the Closing in connection with the Contemplated Transactions shall be
reasonably satisfactory in form and substance to counsel for the Parent, CRDE
and Acquisition Co.
-45-
Exhibit 10.30
ARTICLE VIII
TERMINATION; AMENDMENT; WAIVER
8.1. TERMINATION. This Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time whether before or after
approval and adoption of this Agreement:
(a) by written consent of Parent, CRDE, Acquisition Co. and the
Company;
(b) by Parent, CRDE and Acquisition Co. or the Company if (i) any
court of competent jurisdiction in the United States or other United States
federal or state governmental entity shall have issued a final order, decree or
ruling, or taken any other final action, restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling or other action is or
shall have become non-appealable, or (ii) the Merger has not been made effective
by [March 31, 2005] (the "FINAL DATE"); provided that no party may terminate
this Agreement pursuant to this clause (ii) if such party's failure to fulfill
any of its obligations under this Agreement shall have been a principal reason
that the Effective Time shall not have occurred on or before said date.
(c) by the Company if (i) there shall have been a material breach of
any representations or warranties on the part of Xxxxxx, XXXX or Acquisition Co.
set forth in this Agreement or if any representations or warranties of Parent,
CRDE or Acquisition Co. shall have become untrue in any material respect,
provided that the Company has not breached any of its obligations hereunder in
any material respect; or (ii) there shall have been a breach by Parent, CRDE or
Acquisition Co. of any of their respective covenants or agreements hereunder in
any material respect or materially adversely affecting (or materially delaying)
the ability of Parent, CRDE, Acquisition Co. or the Company to consummate the
Merger, and Parent, CRDE or Acquisition Co., as the case may be, has not cured
such breach within ten (10) Business Days after notice by the Company thereof,
provided that the Company has not breached any of its obligations hereunder in
any material respect; or
(d) by Xxxxxx, XXXX and Acquisition Co. if (i) there shall have been
a breach of any representations or warranties on the part of the Company set
forth in this Agreement or if any representations or warranties of the Company
shall have become untrue in any material respect, provided that neither Parent,
CRDE nor Acquisition Co. has breached any of their respective obligations
hereunder in any material respect; or (ii) there shall have been a breach by the
Company of one or more of its covenants or agreements hereunder in any material
respect or materially adversely affecting (or materially delaying) the ability
of Parent, CRDE, Acquisition Co. or the Company to consummate the Merger, and
the Company has not cured such breach within ten (10) Business Days after notice
by Parent, CRDE or Acquisition Co. thereof, provided that neither Parent, CRDE
nor Acquisition has breached any of their respective obligations hereunder in
any material respect.
8.2. EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 8.1 above, this Agreement
shall forthwith become void and have no effect without liability on the part of
any party hereto or its Affiliates, directors, officers or Shareholders other
than the provisions of this Section 8.2 and Sections 6.2, 6.3 and 6.4.
-46-
Exhibit 10.30
8.3. AMENDMENT. This Agreement may be amended by action taken by the
Company, Xxxxxx, XXXX and Acquisition Co. at any time before or after approval
of the Merger by the Shareholders of the Company but after any such approval no
amendment shall be made that requires the approval of such Shareholders under
applicable law without such approval. This Agreement (including the Company
Disclosure Schedule) may be amended only by an instrument in writing signed on
behalf of all the parties hereto.
8.4. EXTENSION; WAIVER. At any time prior to the Effective Time, each
party hereto may, only by action taken in writing, (i) extend the time for the
performance of any of the obligations or other acts of the other party, (ii)
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document certificate or writing delivered pursuant
hereto or (iii) waive compliance by the other party with any of the agreements
or conditions contained herein. Any agreement on the part of any party hereto to
any such extension or waiver shall be valid only if set forth in an instrument,
in writing, signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
ARTICLE IX
ACTIONS BY THE PARTIES AFTER THE CLOSING
9.1. SURVIVAL OF REPRESENTATIONS, WARRANTIES, ETC. The representations,
warranties and covenants contained in or made pursuant to this Agreement or any
certificate, document or instrument delivered pursuant to or in connection with
this Agreement in the transactions contemplated hereby shall survive the
execution and delivery of this Agreement and the Closing hereunder
(notwithstanding any investigation, analysis or evaluation by any party hereto
or their designees of the Assets and Properties, business, operations or
condition (financial or otherwise) of the other party) until the third
anniversary of the Effective Time; provided, however, that the representations
and warranties of the parties contained in Sections 3.2, 3.3, 3.4, 3.23, 3.34
and 5.2 shall continue to survive indefinitely in full force and effect
following the Effective Time.
9.2. INDEMNIFICATION.
(a) By the Company and the Shareholders. The Company and the
Shareholders shall severally indemnify, defend and hold harmless Parent, CRDE,
Acquisition Co. and the Surviving Corporation and their respective officers,
directors, employees, Affiliates, agents, successors, subsidiaries and assigns
(collectively the "PARENT GROUP") from and against any and all costs, losses
(including, without limitation, diminution in value), liabilities, damages,
lawsuits, deficiencies, claims and expenses, including without limitation,
interest, penalties, costs of mitigation, lost profits and other losses
resulting from any shutdown or curtailment of operations, attorneys' fees and
all amounts paid in investigation, defense or settlement of any of the foregoing
(collectively, the "DAMAGES"), incurred in connection with, arising out of,
resulting from or incident to (i) any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by the
Company or the Shareholders in or pursuant to this Agreement, or in the other
documents delivered in connection with the Contemplated Transactions, (ii)
Actions or Proceedings set forth in the Company Disclosure Schedule or in the
other documents delivered in connection with the Contemplated Transactions and
(iii) Actions or Proceedings involving the Company whether disclosed in the
Company Disclosure Schedule or not; provided, however, the Shareholders shall
not be required to pay damages unless (A) the aggregate amount of such damages
exceeds $50,000 (in which case only the amount of such Damages in excess of
$50,000) shall become payable, it being understood that said $50,000 floor shall
not apply to Damages incurred under Sections 9.2(a)(ii) and (iii).
Notwithstanding the foregoing provisions hereof, it is understood and agreed
that the amount of Damages payable by the Shareholders to the Parent Group shall
in no event exceed the Merger Consideration.
-47-
Exhibit 10.30
(b) By Parent. Xxxxxx, XXXX and Acquisition Co. shall, jointly and
severally, indemnify, defend and hold harmless the Company and the Shareholders
and their respective officers, employees, agents, successors and assigns from
and against any and all Damages incurred in connection with, arising out of,
resulting from or incident to any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by Parent,
CRDE or Acquisition Co. in or pursuant to this Agreement, or in any other
documents delivered in connection with the Contemplated Transactions.
(c) Third Party Claims; Defense of Claims. If any Action or
Proceeding is filed or initiated against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to the indemnifying
party as promptly as practicable (and in any event within ten days after the
service of the citation or summons); provided, however, that the failure of any
indemnified party to give timely notice shall not affect rights to
indemnification hereunder except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such Action or Proceeding, then the indemnifying
party shall be entitled, if it so elects, to take control of the defense and
investigation of such Action or Proceeding and to employ and engage attorneys of
its own choice to handle and defend the same, such attorneys to be reasonably
satisfactory to the indemnified party, at the indemnifying party's cost, risk
and expense (unless (i) the indemnifying party has failed to assume the defense
of such Action or Proceeding or (ii) the named parties to such Action or
Proceeding include both of the indemnifying party and the indemnified party, and
the indemnified party and its counsel determine in good faith that there may be
one or more legal defenses available to such indemnified party that are
different from or additional to those available to the indemnifying party and
that joint representation would be inappropriate), and to compromise or settle
such Action or Proceeding, which compromise or settlement shall be made only
with the written consent of the indemnified party, such consent not to be
unreasonably withheld. The indemnified party may withhold such consent if such
compromise or settlement would adversely affect the conduct of business or
requires less than an unconditional release to be obtained. If (i) the
indemnifying party fails to assume the defense of such Action or Proceeding
within fifteen (15) days after receipt of notice thereof pursuant to this
Section 9.2, or (ii) the named parties to such Action or Proceeding include both
the indemnifying party and the indemnified party and the indemnified party and
its counsel determine in good faith that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to the indemnifying party and that joint representation would be
inappropriate, the indemnified party against which such Action or Proceeding has
been filed or initiated will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such Action or
Proceeding on behalf of and for the account and risk of the indemnifying party.
In the event the indemnified party assumes defense of the Action or Proceeding,
the indemnified party will keep the indemnifying party reasonably informed of
the progress of any such defense, compromise or settlement and will consult
with, when appropriate, and consider any reasonable advice from, the
indemnifying party of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 9.2 and for any final judgment
(subject to any right of appeal), and the indemnifying party agrees to indemnify
and hold harmless the indemnified party from and against any Damages by reason
of such settlement or judgment.
-48-
Exhibit 10.30
Regardless of whether the indemnifying party or the indemnified party
takes up the defense, the indemnifying party will pay reasonable costs and
expenses in connection with the defense, compromise or settlement for any Action
or Proceeding under this Section 9.2.
The indemnified party shall cooperate in all reasonable respects with the
indemnifying party and such attorneys in the investigation, trial and defense of
such Action or Proceeding and any appeal arising therefrom; provided, however,
that the indemnified party may, at its own cost, participate in the
investigation, trial and defense of such Action or Proceeding and any appeal
arising therefrom. The indemnifying party shall pay all expenses due under this
Section 9.2 as such expenses become due.
(d) Indemnity Claims. A claim for indemnification for any matter not
involving a third-party claim may be asserted by notice to the party from whom
indemnification is sought.
9.3. OFFSET RIGHTS; NOTICE OF CLAIM.
(a) Right of Offset. Subject to the limitations set forth in this
Article IX, in the event that Parent, CRDE or Acquisition Co. suffers Damages
pursuant to this Article 9 or as a result of any breach of the Non-Competition
Agreement, each shall have the right to offset (in accordance with each
Shareholder's pro-rata share of any such Damages) such Damages against the
principal amount of the Notes (in the reverse order of maturity) in the event
any Notes are outstanding as of the date thereof.
(b) Notice. If a party hereto believes it has suffered or incurred
any Damages, such party shall so notify the other promptly in writing describing
such Damage, the amount thereof, if known, and the method of computation of such
Damage, all with reasonable particularity and containing a reference to the
provisions of this Agreement or other agreement, instrument or certificate
delivered pursuant hereto in respect of which such Damage shall have occurred.
9.4. NON-EXCLUSIVITY. The parties hereto acknowledge and agree that the
indemnity obligations set forth above shall not be the exclusive remedy of the
indemnified parties with respect to the Contemplated Transactions.
-49-
Exhibit 10.30
ARTICLE X
ARBITRATION
10.1. ARBITRATION. In the event of any dispute among the parties hereto as
to the interpretation of any provision of this Agreement or the rights and
obligations of any party hereunder, such dispute shall be resolved through
binding arbitration as hereinafter provided. If arbitration is required to
resolve a dispute hereunder, any party may notify the American Arbitration
Association in Dallas, Texas ("AAA") and request AAA to select one person to act
as the arbitrator for resolution of the dispute. The arbitrator so selected
shall conduct any such proceedings using the Commercial Arbitration Rules (the
"CAR") of the AAA and such rules will be binding upon all parties to the
arbitration proceeding. The arbitrator is encouraged to modify the application
of the CAR as the arbitrator deems appropriate to accomplish the arbitration in
the quickest and least expensive manner possible. Accordingly, the arbitrator
may (i) dispense with any formal rules of evidence and allow hearsay testimony
so as to limit the number of witnesses required, (ii) accept evidence of
property values without formal appraisals and upon such information provided by
the parties or other persons and otherwise minimize discovery procedures as the
arbitrator deems appropriate, (iii) act upon his understanding or interpretation
of the law on any issue without the obligation to research such issue or accept
or act upon briefs of the issue prepared by any party, (iv) limit the time for
presentation of any party's case as well as the amount of information or number
of witnesses to be presented in connection with any hearing, and (v) impose any
other rules which the arbitrator believes appropriate to effect a resolution of
the dispute as quickly and inexpensively as possible. The arbitrator will have
the exclusive authority to determine and award costs of arbitration and the
costs incurred by any party for their attorneys, advisors and consultants.
ARTICLE XI
MISCELLANEOUS
11.1. FURTHER ASSURANCES. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party reasonably may request, all the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
Article IX).
11.2. NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission with answer back
confirmation or mailed (postage prepaid by certified or registered mail, return
receipt requested) or by overnight courier to the parties at the following
addresses or facsimile numbers:
If to Parent, CRDE or Surviving Corporation:
Crdentia Corp.
00000 Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Chief Executive Officer
-50-
Exhibit 10.30
with copies to:
Kane, Russell, Xxxxxxx & Xxxxx, P.C.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to Shareholders' Representative:
0000 Xxxxxxxxx Xx.
Xxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxx
with copies to:
Xxxxx Xxxxxxxx
00000 Xxxxx Xxxx Xxx
Xxxxxxxx, XX 00000
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 11.2, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 11.2, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 11.2, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section 11.2). Any party from time to time may change
its address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
11.3. ENTIRE AGREEMENT. This Agreement (and all exhibits and schedules
attached hereto, all other documents delivered in connection herewith) supersede
all prior discussions and agreements among the parties with respect to the
subject matter hereof and contains the sole and entire agreement among the
parties hereto with respect thereto, including, without limitation, the binding
provision of the letter of intent dated March 2, 2005.
11.4. WAIVER. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party
hereto of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by law or otherwise afforded, will be cumulative and not
alternative.
11.5. AMENDMENT. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
-51-
Exhibit 10.30
11.6. NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article IX.
11.7. NO ASSIGNMENT; Binding Effect. Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto without the
prior written consent of the other parties hereto and any attempt to do so will
be void. This Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
11.8. HEADINGS. The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
11.9. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and mutually
acceptable to the parties herein.
11.10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts executed
and performed in such State, without giving effect to conflicts of laws
principles.
11.11. CONSENT TO JURISDICTION AND FORUM SELECTION. Each of the Parent,
CRDE, Acquisition Co., the Company and the Shareholders irrevocably agrees that
any legal action or proceeding with respect to this Agreement (including any
legal action or proceeding to enforce the arbitration provisions of this
Agreement) or for the recognition and enforcement of any judgment obtained
through the arbitration provisions of this Agreement will be brought and
determined in the federal or state courts or other courts located in Dallas
County, Texas, and each of the Parent, CRDE, Acquisition Co., the Company and
the Shareholders hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the exclusive jurisdiction of the aforesaid courts.
11.12. CONSTRUCTION. No provision of this Agreement shall be construed in
favor of or against any party on the ground that such party or its counsel
drafted the provision. Any remedies provided for herein are not exclusive of any
other lawful remedies which may be available to either party. This Agreement
shall at all times be construed so as to carry out the purposes stated herein.
-52-
Exhibit 10.30
11.13. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument. The parties
specifically acknowledge and agree that any variation of "version numbers" or
other similar references contained on any of the signature pages shall be
inconsequential, shall not have any contractual significance, and shall not
affect the validity of such signature pages in any way whatsoever.
11.14. ATTORNEY'S FEES. In the event any action is brought for enforcement
or interpretation of this Agreement, the prevailing party shall be entitled to
recover reasonable attorney's fees and costs incurred in said action.
[Remainder of page intentionally left blank]
-53-
SIGNATURE PAGE TO AGREEMENT AND PLAN OF REORGANIZATION
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto, or their duly authorized officer, as of the date first above
written.
CRDENTIA CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
CRDE CORP.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
TRAVMED ACQUISITION CORPORATION,
a North Carolina corporation
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------
Name: Xxxxxx X. Xxxxxxxx
Title: President
TRAVMED USA, INC.,
a North Carolina corporation
By: /s/ Xxxxx Xxxxxxxx
------------------
Name: Xxxxx Xxxxxxxx
Title: President
Address: /s/ Xxxxx Xxxxxxxx
18300 River Ford Run -------------------
Xxxxxxxx, XX 00000 Xxxxx Xxxxxxxx
Address: /s/ Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xx. -----------------
Xxxxxxxx, XX 00000 Xxxxxx Xxxxxx
COMPANY DISCLOSURE SCHEDULE
(See Attachments)
S-1
EXHIBIT A
ARTICLES OF MERGER
(See Attachment)
A-1
EXHIBIT B
FORMS OF
CONVERTIBLE SUBORDINATED PROMISSORY NOTE
(SEE ATTACHMENTS)
B-1
EXHIBIT C
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
(Xxxxxx Xxxxxx)
(See Attachment)
C-1
EXHIBIT D
COMPANY SECRETARY CERTIFICATE
(See Attachment)
D-1
EXHIBIT E
RELEASES
(See Attachments)
E-1
EXHIBIT F
OPINION OF COMPANY COUNSEL TO COMPANY
(See Attachment)
F-1
EXHIBIT G
SUBORDINATION AGREEMENT
(See Attachment)
G-1
EXHIBIT H
CRDE SECRETARY CERTIFICATE
(See Attachment)
H-1
EXHIBIT I
ACQUISITION CO. SECRETARY CERTIFICATE
(See Attachment)
I-1
EXHIBIT J
INFORMATION CERTIFICATE
(See Attachment)
J-1
EXHIBIT K
REGISTRATION RIGHTS AGREEMENT
(See Attachment)
K-1
EXHIBIT L
EMPLOYMENT AGREEMENT - XXXXXX XXXXXX
(See Attachment)
L-1
EXHIBIT M
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
(Xxxxx Xxxxxxxx)
(See Attachment)
M-1
EXHIBIT N
ASSIGNMENT AGREEMENT
(See Attachment)
N-1
EXHIBIT O
FIRST AMENDMENT TO THE LEASE AGREEMENT
To be handled post Closing.
O-1
EXHIBIT P
ADMINISTRATIVE SHARING AGREEMENT
To be handled post Closing.
P-1
