DATED THE August 22, 2011
Agreement between
Trident Laboratories, Inc
And its Shareholders
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
-AND-
Medytox Institute of Laboratory Medicine, Corp.
0000 X. Xxxxxxxxxx Xxxx
Xxxxxxx
Xxxxxxx 00000
===============================
Agreement for the purchase
Of
Trident Laboratories, Inc.
By
Medytox Institute of Laboratory Medicine, Corp.
===============================
Agreement:
This Agreement dated 22nd August 2011, describes a transaction as has been
discussed between the parties hereto. The agreement does not purport to deal
with all the issues required in a transaction of this nature but the parts as
agreed herein are binding upon the parties to complete the transaction
described. Each party will be responsible to seek their own legal
representation and neither party will have any responsibility for any costs
that the other party may incur as part of this process.
The parties agree and confirm that all communication and discussions regarding
this transaction will remain confidential and that under no circumstance will
any information be released publicly unless as may be required by law and
certain SEC rules to disclose certain information. Even then any information
to be released will be agreed by all parties before being made publicly
available.
BETWEEN:
1. Medytox Institute of Laboratory Medicine, Corp 0000 X. Xxxxxxxxxx Xxxx,
Xxxxxxx, Xxxxxxx 00000
And
2. Trident Laboratories, Inc And its Shareholders, 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxxxx 00000
/s/ DH /s/ CH /s/ MS /s/ SL
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WHEREAS:
A. Medytox Institute of Laboratory Medicine, Corporation (hereinafter
referred to as MILM) is a newly formed Florida Corporation that will acquire
and operate one or more Clinical Laboratories as subsidiaries for the purpose
of carrying out Laboratory tests that may be required by the Medytox business
in the Urine Toxicology and with the intention of building diversified
Laboratory testing in sectors other than that of the "Medytox" business.
B. Trident Laboratories, Inc and its Shareholders, (hereinafter referred to
as TL) operate a certified Clinical Laboratory in Hollywood, Florida where
they provide services for a number of customers in the Florida area.
The parties' agree as follows:
1. MILM agrees to purchase 81% ownership in TL upon the signing of this
agreement as described in 3 below. Current ownership in TL is disclosed in
attachment A hereto.
2. Shareholders of TL will retain 19% ownership of TL for a period of 24 or
36 months after which time they may or may not agree to sell their
shareholding as described in 4 below.
3. MILM will acquire 81% ownership in TL for the sum of $500,000 (five
hundred thousand US dollars) paid as described below
MILM will pay to the shareholders of TL on a pro-rata basis as per attachment
A the following
i. 15% of the revenue generated and collected by TL from Medytox business
on a monthly basis until the $500,000 is paid in full
ii. The profits from existing and future business other than Medytox
business will be owned 100% by the selling shareholders until such time that
MILM has paid the $500,000 in full.
iii. The parties agree to contribute on a pro-rata basis from business
generated towards the costs and overheads of TL. That means that if business
from Medytox accounts for 30% of the total revenue MILM agrees to cover 30% of
the costs and overheads less executive salaries or if TL generated business
exclusive of Medytox business accounts for 30% of the total revenue then TL
agrees to cover 30% of the costs and overheads less executive salaries. A
schedule of fixed costs and overheads and variable costs and overheads is
attached in Schedule B hereto.
iv. In the event that the $500,000 is not paid in full 12 months after this
agreement is signed any unpaid balance will become due and payable
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v. Upon signing of this agreement TL will issue new shares or shareholders
will assign 49% of their current shareholdings to reflect that MILM owns 49%
of TL. TL or the selling shareholders will retain these shares in their
possession or place the shares in an escrow agreement with their lawyer until
the $500,000 as described above is paid in full. Upon payment of the $500,000
as described herein TL will issue new shares or shareholders will assign a
further 32% of their current shareholdings to reflect that MILM owns a total
of 81% of TL. The parties will complete whatever amendments or applications as
may be necessary to comply with all Medicare and licensing regulations to
effect this agreement without violation of any regulations that apply to such
a transaction.
vi. No further shares of any classification can be validly issued by TL for
any reason for a period of 12 months from the date of this agreement or until
TL shareholders have been paid in full for their shares without all parties
signing an agreement of approval in the event that an issuance of shares for
any reason is desired.
vii. In addition there shall not be (i) any incurrence of debt except in the
ordinary course of business, (ii) any material change in the business or (iii)
any failure to comply with federal (Medicare) or State license laws or
regulations for a period of 12 months from the date of this agreement or until
TL shareholders have been paid in full for their shares
viii. In the event that MILM fails to pay the $500,000 as described above
within 30 days of the date on which payment is due then TL will or the selling
shareholders will have the right to rescind this transaction.
4. MILM agrees to purchase the additional 19% of TL by paying the
shareholders of TL an amount equal to three times annual profits generated by
the business carried out by TL, excluding profits generated by Medytox
business, at 24 months (SD1) from the accounting year end following the date
this agreement is signed or at 36 months (SD2) from the accounting year end
following the date this agreement is signed if desired by all or one of the
shareholders owning the 19% of TL at that time. Profits are defined as sales
from business other than "Medytox business" less the relevant proportion
towards fixed overheads and costs and variable costs that TL incurs.
i. In the event that one or all of the owners of the 19% decide to sell
their shareholding to MILM accountants will provide within 90 days of the year
end, audited figures for the profits of the TL business excluding profits
generated by Medytox business and MILM will pay to the shareholder a pro-rata
amount equal to three times those profits for their pro-rata ownership of the
19%. To confirm; 100% of the three times profits of the TL business minus
profits generated by Medytox business will be paid to the 19% shareholders on
a pro-rata basis.
ii. TL will retain ownership and full rights to 19% of the net profits
generated by TL for as long as they own their shareholding.
/s/ DH /s/ CH /s/ MS /s/ SL
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iii. In the event that one or all of the shareholders owning the 19% holding
in TL decide to retain ownership of their shareholding after SD2 then MILM
will no longer agree to purchase their shareholding under this agreement. That
shareholder will not have the right to sell their shares to any other party
and in the event the shareholder offers their shares for sale to a third party
MILM will have the right to purchase that shareholder's shares for $1 (one
dollar). All other benefits and rights will be retained by the shareholder.
iv. In the event that one or all of the shareholders owning the 19%
shareholding in TL decide to retain ownership of their shareholding after SD2
then a dividend policy will be agreed to whereby that shareholder receives a
dividend on an annual basis on a pro-rata basis out of the dividend paid by
the Company.
v. In the event that one or all of the owners of the 19% decides to avail
of this agreement to sell their shares to MILM at SD1 or SD2 and MILM does not
purchase the shares as described above, MILM will pay to the shareholders 10%
of gross revenue of TL monthly on a pro-rata basis as a default payment until
it makes the payment for 19% ownership as described above. This 10% default
payment will not reduce the amount owed to the 19% shareholders using the
formula of three times profits as described above.
vi. The formula of three times earnings is valid only in the event that MILM
generated business accounts for in excess of 80% of the sales revenue at the
TL Laboratory at the time that TL agrees to sell their remaining 19%
ownership. In the event that MILM generated revenues are not in excess of 80%
of the total revenue generated by the business then TL have the right to
receive four times earnings for the sale of their 19% as described herein.
/s/ DH /s/ CH /s/ MS /s/ SL
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5. TL will provide a copy of a recent Balance sheet and P&L statement as an
attachment (C) to this agreement to confirm that there are no debts currently
owed by TL other than in the ordinary course of business
6. Executive salary levels and employment agreements for management will be
disclosed in attachment D
7. TL will provide a complete list of equipment owned, the value of that
equipment and details of any financing agreement or lien associated with that
equipment
8. TL agrees to use the Billing Company, as provided by MILM, for the
billing of all Medytox business generated by TL from this date forward.
9. MILM will immediately secure a quantity of "Medytox" tests to be
completed and billed by TL along with a complete breakdown of any liabilities
against the revenue generated for TL by the completion and billing for these
tests.
10. The parties will work to acquire whatever equipment is required to carry
out all the tests as may be required by Medytox and the parties recognise that
in the meantime it will be necessary to send some of the tests required by
"Medytox" to other laboratories.
11. TL will provide whatever information is required by MILM/Medytox
regarding their testing and reporting process, including whatever details may
be required about other laboratories that may be used to provide a complete
service to "Medytox"
12. The parties will work together to install and or refine any reporting
documentation that may be required for certain tests in the future
13. Legal and accounting advice will be sought by the parties as to the most
efficient means to complete this transaction and both parties agree and accept
that nothing will be done that violates any Medicare law or licensure
compliance. If changes are suggested to the agreement herein by professional
advisors to comply with these laws and license requirements and that do not
materially change the end result for both parties then there will be no
objection by either party to such changes.
14. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser makes the following warranties and representations to the
Seller:
The Purchaser is a Florida corporation
All actions necessary or appropriate for the Purchaser to consummate this
transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Purchaser shall be true as of the
date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially
complied with.
/s/ DH /s/ CH /s/ MS /s/ SL
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15. REPRESENTATIONS AND WARRANTIES OF SELLER(S)
The Seller(s) makes the following warranties and representations to the
Seller:
The Seller(s) have the full right and authority to sell the shares as referred
to in this agreement and confirm that the shares being sold will be fully paid
and without lien or encumbrance of any kind .
All actions necessary or appropriate for the Seller(s) to consummate this
transaction shall have taken place on or before the Closing Date.
The representations and warranties of the Seller(s) shall be true as of the
date of this Agreement and shall continue to be true through the Closing Date.
All the terms and conditions of this Agreement shall have been materially
complied with.
16. Both parties will accept a faxed or scanned copy of this signed
agreement as binding
17. Upon the signing of this document, both parties agree that they have
entered into a mutually exclusive agreement and hereby confirm that each party
has the right and ability to deliver any parts as may be required to complete
this agreement.
18. The parties agree that formal contracts will be governed by the Laws of
Florida.
/s/ DH /s/ CH /s/ MS /s/ SL
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Signed by /s/ Xxxxxx Xxxxx Date 8/22/11
For and on behalf of Medytox Institute of Laboratory Medicine
Signed by;
/s/ Xxxxxxxx Xxxxxx 8/22/11
Date
For and on behalf of Trident Laboratories, Inc
/s/Xxxxxxxxxxx Xxxxxx 8/22/11
Date
Shareholder of Trident Laboratories, Inc
/s/ Xxxxxxx Steegsera 8/22/11
Date
Shareholder of Trident Laboratories, Inc
Date
Shareholder of Trident Laboratories, Inc
Date
Shareholder of Trident Laboratories, Inc
/s/ DH /s/ CH /s/ MS /s/ SL
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Schedule A
Shareholder details including ownership of Trident Laboratories, Inc
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Schedule B
Costs:
Fixed monthly costs;
Executive Salaries;
Wages;
Variable costs;
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Schedule C
Balance sheet and P&L statement
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Schedule D
Executives, their role and their salary
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