EXHIBIT 2.1
STOCK EXCHANGE AGREEMENT
AND
PLAN OF MERGER
THIS STOCK EXCHANGE AGREEMENT AND PLAN OF MERGER ("Agreement") is entered
into this 30th day of September 1999 by and among Nugget Exploration, Inc., a
Nevada corporation ("Nugget"), Nugget Holding Company, a Delaware corporation
("Newco"), and GoHealth.md Inc., a Delaware corporation ("GoHealth.md") (Nugget,
Newco and GoHealth.md may be collectively referred to as the "Constituent
Parties").
Recitals
A. Nugget, Newco and GoHealth.md desire to effect the merger of GoHealth.md
with and into Newco, pursuant to the terms of this Agreement, so that
GoHealth.md will be a wholly owned subsidiary of Nugget.
B. The Boards of Directors of Nugget, Newco and GoHealth.md, deeming it
advisable and in their respective best interests, have approved the merger of
GoHealth.md with and into Newco, upon and subject to the terms, conditions and
provisions set forth in this Agreement.
C. For corporate law purposes, the transaction contemplated by this
Agreement constitutes a merger in accordance with the Delaware General
Corporation Law and Nevada Revised Statutes.
D. For federal income tax purposes, Nugget, Newco, GoHealth.md, and
GoHealth.md Stockholders intend that the transaction contemplated by this
Agreement shall qualify as a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code of 1986, as amended (the "Code").
Agreement
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by reference, and for and in consideration of the mutual covenants and
agreements contained herein, and in reliance on the representations and
warranties set forth in this Agreement, the benefits to be derived herein and
for other valuable consideration, the sufficiency of which is hereby expressly
acknowledged, the Constituent Parties agree as follows:
1.1 Merger. At the Effective Time (as defined in Section 1.3 hereof),
Newco shall be merged with and into GoHealth.md (the "Merger")
pursuant to the General Corporation Law of the State of Delaware and
the Nevada Revised Statutes, (collectively, the "Corporation Law") in
accordance with this Agreement and the Merger Documents defined in
Section 1.2 hereof. Thereupon, the corporate identity and existence of
GoHealth.md, with all its rights, privileges, immunities, powers and
purposes, shall continue unaffected and unimpaired by the Merger, and
the corporate identity and existence, with all the rights, privileges,
immunities, powers and purposes, of Newco shall be merged into
GoHealth.md as the corporation surviving the Merger, and GoHealth.md
shall be fully vested therewith. The separate identity, existence and
corporate organization of GoHealth.md shall continue after the Merger
becomes effective, and thereupon GoHealth.md shall continue as the
surviving corporation (herein sometimes called the "Surviving
Corporation").
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1.2 Filing of Merger Documents. At or before the Closing (as defined in
Section 1.3 hereof), GoHealth.md and Newco shall cause articles of
merger and such other documents as are necessary under the Corporation
Law (the "Merger Documents"), to be executed to effectuate the merger
under applicable state laws. The Constituent Parties shall file the
Merger Documents with respective Secretary of State of Delaware as
provided in the Corporation Law upon the Closing.
1.3 Closing and Effective Time of the Merger. The Merger shall be
effective as provided in the Merger Documents and upon the filing
thereof with the respective Secretary of State of Delaware, which time
may herein be referred to as the "Effective Time." The Closing of the
transactions contemplated by this Agreement ("Closing") shall take
place simultaneous with the Effective Time, hence the filing of the
Merger Documents shall occur only upon the presentation of all
required schedules and documents, after the conclusion of all required
due diligence, and upon satisfaction of the conditions precedent to
Closing, as described in Section 13.1 herein. Closing shall take place
at such place as the Constituent Parties hereto shall agree upon or by
facsimile transmission and overnight delivery service.
1.4 Further Assurances. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further
deeds, assignments or assurances in law or that any other things are
necessary, desirable or proper to complete the merger in accordance
with the terms of this agreement or to vest, perfect or confirm, of
record or otherwise, in the Surviving Corporation, the title to any
property or rights of Newco acquired or to be acquired by GoHealth.md
by reason of, or as a result of the Merger, the Constituent Parties
agree that Nugget, GoHealth.md, and their proper officers and
directors shall execute and deliver all such proper deeds, assignments
and assurances in law and do all things necessary, desirable or proper
to vest, perfect or confirm title to such property or rights in the
Surviving Corporation and otherwise to carry out the purpose of this
Agreement, and that the proper officers and directors of GoHealth.md,
Newco and Nugget are fully authorized in the name and on behalf of
GoHealth.md, Nugget and Newco, respectively, to take any and all such
action.
1.5 Conversion. At the Effective Time, all of the issued and outstanding
shares of capital stock of GoHealth.md shall, by virtue of the Merger
and without any action on the part of any shareholder of GoHealth.md,
become or be converted or canceled as follows:
a. Each issued common share, $0.001 par value, of GoHealth.md as of
the Closing (the "GoHealth.md Stock") shall be converted into and
exchanged for one share of fully paid and non-assessable Nugget
Common Stock, $0.01 par value ("Nugget Stock").
b. No fractional shares of Nugget Stock shall be issued in the
Merger. In lieu of the issuance or recognition of fractional
Nugget Stock, cash equal to the value of such fractional share on
the Closing Date shall be paid to each holder of GoHealth.md
Stock converting a fractional share as provided in this Section
1.5.
c. Each share of Newco Stock issued and outstanding immediately
prior to the Effective Time of the Merger shall by virtue of the
Merger, and without any action on the part of the holder thereof,
automatically become one fully paid and nonassessable share of
stock of GoHealth.md.
d. Any securities held in GoHealth.md's treasury shall be cancelled
and retired.
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e. Upon completion of the conversion and cancellation described in
this Section 1.5, Nugget will own all of the issued and
outstanding capital stock of the Surviving Corporation, and which
stock shall have been duly authorized and validly issued, and be
fully paid and nonassessable, with no pre- emptive or other
rights in the Surviving Corporation held by any person or entity.
1.6. Exchange of Certificates. At or after the Effective Time each of
GoHealth.md Stockholders shall, upon surrender of certificates
representing such GoHealth.md Stock, receive the number of Nugget
Stock determined as set forth in Section 1.5. At the Closing,
GoHealth.md shall deliver to Nugget and Newco a list of the
GoHealth.md shareholders, by name,address, tax identification number
and number of shares of GoHealth.md stock they own at the closing.
Schedule 1.6 attached hereto and incorporated herein sets forth a list
of all GoHealth.md Stockholders and the number of shares of
GoHealth.mdstock owned as of the date of this agreement.
a. Until the certificates representing GoHealth.md Stock have been
surrendered by GoHealth.md Stockholders and replaced by shares of
Nugget Stock in accordance with this Agreement, the certificates
for GoHealth.md Stock shall, for all corporate purposes, be
deemed to be evidence of the right to receive the Nugget Stock as
set forth in this Agreement. Whether or not a certificate is
surrendered, from and after the Effective Time, such certificates
shall under no circumstances evidence, represent or otherwise
constitute any stock or other interest whatsoever in Newco, the
Surviving Corporation or any other person, firm or corporation
other than Nugget or its successors. By virtue of the Merger and
without any action of GoHealth.md Stockholders, GoHealth.md Stock
shall otherwise be deemed canceled as of the Effective Time.
1.7 Deliveries. GoHealth.md Stockholders shall deliver at Closing the
certificates representing GoHealth.md Stock, together with any
necessary endorsements and with all necessary transfer tax and other
revenue stamps, acquired at the expense of GoHealth.md Stockholders,
affixed and canceled. GoHealth.md Stockholders agree to cure any
deficiencies with respect to the endorsement of the certificates or
other documents of conveyance with respect to such GoHealth.md Stock
or with respect to the stock powers accompanying any GoHealth.md
Stock. Subject to Nugget's prior receipt of the certificates
representing GoHealth.md Stock in accordance with this Section, Nugget
shall deliver at the Closing certificates representing the Nugget
Stock in exchange for the GoHealth.md stock. In the event any
certificate representing GoHealth.md stock shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by a
GoHealth.md Stockholder claiming such certificate to be lost, stolen
or destroyed and subject to such other conditions as the Board of
Directors of Nugget may impose, Nugget shall issue in exchange for
such lost, stolen or destroyed certificate the Nugget Stock
certificate otherwise due such GoHealth.md Stockholder under this
Agreement. When authorizing the issuance of a certificate of the
Nugget Stock in exchange therefor, the Board of Directors of Nugget
may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed
certificate to provide Nugget and its transfer agent a bond or other
surety in such sum as Nugget may reasonably direct as indemnity
against any claim that may be made with respect to the certificate
alleged to have been lost, stolen or destroyed.
1.8 Tax-Free Reorganization. It is the intention of the Constituent
Parties hereto that the Merger constitute a "reorganization" within
the meaning of Section 368(a)(1)(A) of the Code, by reason of the
application of Section 368(a)(2)(E) of the Code, and that this
Agreement and exhibits and Schedules hereto constitute a plan of
reorganization. All Constituent Parties shall cooperate with one
another after the closing in order to achieve a tax free
reorganization.
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1.9 Tax Status. GoHealth.md, GoHealth.md Stockholders, and Nugget intend
the Merger to constitute a plan of reorganization pursuant to Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended,
provided, however, that notwithstanding this statement of intent and
the similar statement in the Recital D of this Agreement,at the
effective date GoHealth.md and GoHealth.md stockholders shall have
deemed to have concluded that the Merger, and the transactions
contemplated hereby, as currently structured and under existing tax
law, will provide the tax treatment to GoHealth.md and GoHealth.md
Stockholders desired by them, and that regardless of the actual tax
outcome of the transactions, no Constituent Party shall raise such tax
treatment as an impediment to the Merger.
1.10 Exercise of Options and Warrants Relating to GoHealth.md Stock. Prior
to the Closing, the holders of options or warrants granted by
GoHealth.md shall not exercise any such securities or acquire any
underlying securities of GoHealth.md.
1.11 GoHealth.md Options and Warrants. At the Effective Time, Nugget shall
assume GoHealth.md's rights and obligations under each of the
outstanding options and warrants previously granted by GoHealth.md, a
complete list (including grantee names, vesting schedule, number of
shares, and grant date) of which appears on the attached Schedule 1.11
(each such option and warrant existing immediately prior to the
Effective Time being called an "Existing Option", and each such option
and warrant so assumed by Nugget being called an "Assumed Option"), by
which assumption the optionee shall have the right to purchase that
number of shares of Nugget Stock (rounded down to the nearest whole)
into which the number of shares of GoHealth.md Stock the optionee was
entitled to purchase under the Existing Option would have been
converted pursuant to the terms of the Merger as described in Section
1.5 hereof. Each Assumed Option shall constitute a continuation of the
Existing Option, with the same rights, terms, and obligations as the
Existing Option substituting Nugget for the Surviving Company as
issuer. The aggregate price for the total number of shares of Nugget
Stock at which the Assumed Option may be exercised shall be the
aggregate price at which the Existing Option was exercisable for the
total number of shares of GoHealth.md Stock, reduced (as necessary for
purposes of rounding down) to the price that will buy the number of
whole shares for which the Assumed Option will be exercisable in
accordance with this Section 1.11, and the purchase price per share of
Nugget Stock thereunder shall be such aggregate price divided by the
total number of whole shares of Nugget Stock covered thereby. The
assumption of the Assumed Options by Nugget as provided in this
Section 1.11 shall not, except as provided herein, provide the holders
thereof additional benefits which they did not have immediately prior
to the Effective Time or relieve the holders thereof of any
obligations or restrictions applicable to the Assumed Options or the
shares of Nugget Stock obtainable upon exercise of the Assumed
Options. Except as set forth in the option or warrant agreement, there
shall be no acceleration of the vesting schedule for any Existing
Option as a result of the consummation of the Merger. From and after
the date of this Agreement, no additional options or warrants shall be
granted by GoHealth.md. However, options and warrants of Nugget may be
granted or issued after Closing.
1.12 Restricted Stock. GoHealth.md and GoHealth.md Stockholders acknowledge
and agree that all Nugget Stock issued to GoHealth.md Stockholders
hereunder shall bear a prominent legend restricting the sale or other
transfer thereof unless such shares are registered with the Securities
and Exchange Commission under the Securities Act of 1933, and with any
applicable state in compliance with the securities laws of such state
(collectively, "Securities Laws") or unless GoHealth.md Stockholder
delivers a legal opinion acceptable to Nugget's General Counsel that
such sale or other transfer is exempt from registration in compliance
with Securities Laws.
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2.1 Post-Merger Affairs.
a. The current officers and directors of GoHealth.md shall remain
the officers and directors of GoHealth.md after the Merger. At
the Closing, GoHealth.md shall inform the directors of Nugget in
writing of their designees and Nugget and its directors shall
take all coporate action needed to appoint such designess as
directors of Nugget and the then existing Nugget directors
(except such existing directors that are designees) shall resign
as directors of Nugget.
b. The Articles of Incorporation and Bylaws of Nugget in effect
immediately prior to the Merger will remain as such after the
Merger, without any modification or amendment as a result of the
Merger.
3.1 Warranties and Representations of GoHealth.md In order to induce
Nugget to enter into this Agreement and to complete the transaction
contemplated hereby, GoHealth.md warrants and represents to Nugget
that:
a. Organization and Standing. GoHealth.md is a corporation duly
organized, validly existing and in good standing under the laws
of the state of Delaware. It is also qualified to do business and
in good standing in every other state or jurisdiction in which it
operates, except where the failure to be so duly qualified or
licensed and in good standing would not individually or in the
aggregate have a material adverse effect on GoHealth.md, and has
all requisite corporate power and authority to own, operate and
lease its assets, properties and business in such states or
jurisdictions. Copies of the articles of incorporation and Bylaws
of GoHealth.md hereto delivered to Nugget and Newco are accurate
and complete as of the date hereof and shall be complete and
accurate as of the Closing.
b. Capitalization. As of Closing, 10,000,000 shares of GoHealth.md
Stock, par value $0.001, are authorized for issuance by
GoHealth.md, of which 3,102,000 shares of Common Stock are issued
and outstanding. Additionally, GoHealth.md has outstanding
options which are exercisable into a total of 465,000 shares of
its GoHealth.md Stock at prices ranging from $0.50 to $1.50 per
share. GoHealth.md also has 102,000 warrants outstanding, each of
which is convertible into one (1) share of GoHealth.md Stock at
$2.50 per share. No other voting or equity securities are
authorized or issued and no other securities convertible into
voting stock are authorized or issued. GoHealth.md does not have
any outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which GoHealth.md is bound, calling
for the issuance of any additional shares of Common Stock or any
other voting or equity security which conversion, exercisable or
derivative rights are not transferable into a parent
corporation's securities. The GoHealth.md Stock constitutes 100%
of the outstanding equity capital of GoHealth.md and such stock
constitutes 100% of GoHealth.md's voting power, representing the
exclusive right to receive dividends, when, and if, declared and
paid, and the exclusive right to receive the proceeds of
liquidation attributable to GoHealth.md Stock, if any. From the
date hereof, and until the Closing Date, no dividends or
distributions of capital, surplus, or profits shall be paid or
declared by GoHealth.md in redemption of their outstanding shares
or otherwise. Except as expressly described herein, no additional
shares shall be issued in connection with this Merger by
GoHealth.md.
c. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of GoHealth.md, enforceable against
GoHealth.md in accordance with its terms. GoHealth.md has the
absolute and unrestricted right, power, authority, and capacity
to execute and deliver this Agreement and to perform its
obligations under this Agreement. Neither the execution nor
delivery
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of this Agreement nor the consummation or performance of the
Merger will contravene, conflict with, constitute default or
result in a violation of (i) any provisions of the articles of
incorporation or Bylaws of GoHealth.md, or (ii) any external
restraint, ruling, agreement, law, judgment, contract, agreement,
plan or order relating to GoHealth.md, which contravention,
conflict, violation or default would result in a material adverse
effect on GoHealth.md's business. The execution and delivery of
this Agreement and the consummation of the transactions on the
part of GoHealth.md contemplated hereunder have been duly and
validly authorized by the board of directors of GoHealth.md and
at or prior to the Closing shall have obtained shareholder
approval for the Merger, or shall have provided the other
Constituent Parties such assurances, including opinions of
counsel, that the other Constituent Parties reasonably require
that no such shareholder approval is required.
d. Taxes. Within the times and in the manner prescribed by law,
GoHealth.md and its subsidiaries have filed all federal, state
and local income or other tax returns and reports required to be
filed with all governmental agencies and have paid or accrued for
payment all taxes as shown on such returns, such that a failure
to file, pay or accrue will not have a material adverse effect on
GoHealth.md or its subsidiaries.
e. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending against GoHealth.md or to the best of GoHealth.md's
knowledge, after diligent inquiry, threatened against or
affecting GoHealth.md or its subsidiaries, or against any of the
officers or directors therewith that arise out of their operation
of GoHealth.md and its subsidiaries, nor, to the best of
GoHealth.md's knowledge, is GoHealth.md or its subsidiaries in
material violation of any federal or state law, ordinance or
regulation of any kind whatever, including, but not limited to
laws, rules and regulations governing the sale of its products,
services or securities. GoHealth.md is not an investment company
as defined in or otherwise subject to regulation under, the
Investment Company Act of 1940.
f. Assets & Liabilities. GoHealth.md represents that neither it nor
its subsidiaries own or have rights or obligations to any assets
and liabilities not disclosed and accounted for in its audited
financial statements, which shall have been provided to Nugget
and Newco prior to Closing.
g. No Interest in Suppliers, Customers, Landlords or Competitors. To
the best of GoHealth.md's knowledge after due inquiry, except as
set forth in its audited financial statements or in this
Agreement none of the following persons possess an ownership
interest of any nature whatsoever in any supplier, customer,
landlord or competitor of GoHealth.md or its subsidiaries:
GoHealth.md Shareholder, family member of any GoHealth.md
Shareholder; or employee of GoHealth.md or its subsidiaries.
h. Insider Debt. Except as specifically set forth herein or in its
audited financial statements, neither GoHealth.md nor its
subsidiaries owe any money, securities, or property to any of the
following persons: GoHealth.md Shareholders, family members of
GoHealth.md Shareholders, or employees of GoHealth.md or its
subsidiaries either directly or indirectly. GoHealth.md and its
subsidiaries do not have any material debt, liability or
obligation of any nature, whether accrued, absolute, contingent
or otherwise, and whether due or to become due, that is not
reflected in its audited financial statements. GoHealth.md and
its subsidiaries do not currently have, nor will they have on
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the Closing Date any pension plan, profit-sharing plan, or stock
purchase plan for any of its employees or certain options to
proposed executive officers.
i. Conduct of Business. GoHealth.md represents that it shall not
materially change the normal course of its business operations
prior to Closing. GoHealth.md shall not amend its Articles of
Incorporation or Bylaws (except as may be described in this
Agreement), declare dividends, redeem securities, incur
additional or newly-funded liabilities outside the ordinary
course of business, acquire or dispose of fixed assets, change
employment terms, enter into any material or long-term contract,
guarantee obligations of any third party, settle or discharge any
balance sheet receivable for less than its stated amount, pay
more on any liability than its stated amount, or enter into any
other transaction without the prior approval of Nugget, not to be
unreasonably withheld.
j. Filings with the Securities and Exchange Commission ("SEC").
GoHealth.md represents that it is aware that Nugget is subject to
SEC reporting requirements.
k. Effect of Merger Transactions. On the Effective Date, as
described herein:
i. Nugget will own all of the issued and outstanding capital
stock of GoHealth.md; and
ii. No other person or entity will have any pre-emptive or other
rights to acquire any of the capital stock of GoHealth.md.
l. Lack of Subsidiaries. GoHealth.md has no subsidiaries.
m. Absence of Certain Changes. Except as otherwise set forth in this
Agreement, there have not been since the date of the latest
audited balance sheet delivered by GoHealth.md any changes of the
following nature:
i. Business, properties, and financial condition. Any
significant labor disputes or any material adverse change in
GoHealth.md's properties, business supply of raw materials,
or markets for its products, including, but not limited to,
damage or destruction of property by fire or other casual,
whether or not covered by insurance, or any material adverse
change in the financial condition or results of operations
of GoHealth.md taken as a whole.
ii. Capital stock; options, dividends, and so forth. Any change
in the authorized, issued, or outstanding capital stock of
GoHealth.md; any granting of any stock option or right to
purchase shares of capitalstock or any issuance of any
security convertible into shares of capital stock of
GoHealth.md; any purchase, redemption, retirement, or other
acquisition of any shares of capital stock by GoHealth.md;
or any agreement to do any of the foregoing; or any
declaration, setting aside; or payment of any dividend or
other distribution in respect of the capital stock of
GoHealth.md.
iii. Sales, leases, borrowings, and so forth. Any sale of lease
of GoHealth.md's property or assets, other than inventory
sold in the ordinary course of busienss, any mortgage or
pledge of any properties or assets of GoHealth.md, any
borrowing incurred, assumed or guaranteed by GoHealth.md
other than in the ordinary course of business.
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iv. Employee benefit plans and certain salaries. Any employment
contract, bonus, stock option, profit-sharing, pension,
retirement, incentive or similar arrangement or plan
instituted, agreed to, or amended.
n. No Violation. GoHealth.md has received no notice of violation of
any applicable zoning regulation, ordinance, or other law, order,
regulation, or requirement relating to its operations, business,
or its properties and, so far as is known to GoHealth.md, (i)
thereis no such violation of a material nature and (ii) all
buildings and structures used by GoHealth.md substantially
conform with all applicable ordinances, codes and regulations.
4.1 Warranties and Representations of Nugget. In order to induce
GoHealth.md to enter into this Agreement and to complete the
transaction contemplated herein, Nugget warrants and represents to
GoHealth.md that:
a. Organization and Standing. Nugget is a corporation duly
organized, validly existing and in good standing under the laws
of Nevada. It is also qualified to do business and in good
standing in every other state or jurisdiction in which it
operates, except where the failure to be so duly qualified or
licensed and in good standing would not individually or in the
aggregate have a material adverse effect on Nugget, and has all
requisite corporate power and authority to own, operate and lease
its assets, properties and business in such states or
jurisdictions. Copies of the articles of incorporation and Bylaws
of Nugget hereto delivered to GoHealth.md are accurate and
complete as of the date hereof and shall be complete and accurate
as of the Closing.
b. Capitalization. As of Closing, Nugget shall have authorized for
issuance 25,000,000 shares of voting Common Stock, $0.01 par
value, of which a total of 697,117 shares will be issued and
outstanding, which shares are validly issued, fully paid and
non-assessable. To the best of Nugget's knowledge, all such
issued and outstanding shares were issued pursuant to a valid
registration statement under the Act or pursuant to valid
exemptions therefrom. No other voting or equity securities are
authorized or issued and no other securities convertible into
voting or equity stock are authorized or issued. Nugget does not
have any outstanding subscriptions, warrants, calls, options,
rights, commitments or agreements by which Nugget is bound,
calling for the issuance of any additional shares of Common Stock
or any other voting or equity security which conversion,
exercisable or derivative rights are transferable into its or
another entities' securities. Nugget has no outstanding debt
securities except as set forth in its audited financial
statements.
c. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of Nugget, enforceable against
Nugget in accordance with its terms. Nugget has the absolute and
unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and to perform its obligations under this
Agreement. Neither the execution nor delivery of this Agreement
nor the consummation or performance of the Merger will
contravene, conflict with, constitute default or result in a
violation of (i) any provisions of the articles of incorporation
or Bylaws of Nugget, or (ii) any external restraint, ruling,
agreement, law, judgment, contract, agreement, plan or order
relating to Nugget, which contravention, conflict, violation or
default would result in a material adverse effect on Nugget's
business. The execution and delivery of this Agreement and the
consummation of the transactions on the part of Nugget
contemplated hereunder have been duly and validly authorized by
the board of directors of Nugget and at or prior to the Closing
shall have obtained shareholder approval for the Merger, or shall
have provided the other Constituent Parties
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such assurances, including opinions of counsel, that the other
Constituent Parties reasonably require that no such shareholder
approval is required.
d. Taxes. Within the times and in the manner prescribed by law,
Nugget and its subsidiaries have filed all federal, state and
local income or other tax returns and reports required to be
filed with all governmental agencies and have paid or accrued for
payment all taxes as shown on such returns, such that a failure
to file, pay or accrue will not have a material adverse effect on
Nugget or its subsidiaries. Nugget has not been advised, nor is
it aware, that any taxing authorityis auditing or is considering
an audit of its operations or tax returns.
e. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending against Nugget or to the best of Nugget's knowledge,
after diligent inquiry, threatened against or affecting Nugget or
its subsidiaries, or against any of the officers or directors
therewith that arise out of their operation of Nugget and its
subsidiaries, nor, to the best of Nugget's knowledge, is Nugget
or its subsidiaries in material violation of any federal or state
law, ordinance or regulation of any kind whatever, including, but
not limited to laws, rules and regulations governing the sale of
its products, services or securities. Nugget is not an investment
company as defined in or otherwise subject to regulation under,
the Investment Company Act of 1940.
f. Assets & Liabilities. Nugget represents that it owns no assets
and has incurred no liabilities except as disclosed in its
audited financial statements and in this Agreement.
g. Filings with the Securities and Exchange Commission ("SEC"). To
the best of Nugget's knowledge, it has complied with all
reporting requirements of the Securities Exchange Act of 1934
(the "Exchange Act") and that all such filings do not contain and
have not contained any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under
which they were made, false or misleading. Additionally, to the
best of Nugget's knowledge, it has never been subject to any SEC
administrative proceedings, enforcement actions or sanctions and
there is not such proceeding or enforcement investigation pending
or threatened.
h. Insider Debt. Except as specifically set forth in its audited
financial statements, Nugget does not owe any money, securities,
or property to any of the following persons: Nugget Shareholders,
family members of Nugget Shareholders, or employees of Nugget
either directly or indirectly. Nugget does not have any material
debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become
due, that is not reflected in its audited financial statements.
Nugget does not currently have, nor will it have on the Closing
Date any pension plan, profit-sharing plan, or stock purchase
plan for any of its employees or certain options to proposed
executive officers.
i. Ownership of Shares. Upon the transfer of the Nugget Common Stock
to the GoHealth.md Shareholders pursuant to this Agreement, the
GoHealth.md Shareholders will thereby acquire fully paid and
nonassessable shares of Nugget Stock with good and absolute
marketable title thereto. Such securities shall be subject to
restrictions imposed by the Act, and applicable state Blue Sky
laws due to lack of registration with any federal or state
securities commissions or authorities. Nugget shall be
responsible for obtaining any and all exemptions from
registration under Federal
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or applicable state securities laws in connection with the
issuance of Nugget Stock to the GoHealth.md shareholders under
the terms of this Agreement and pursuant to the Merger.
j. Effect of Merger Transactions. On the Effective Date, as
described herein:
i. Nugget will own all of the issued and outstanding capital
stock of GoHealth.md; and
ii. No other person or entity will have any pre-emptive or other
rights to acquire any of the capital stock of GoHealth.md.
k. Lack of Subsidiaries. As of Closing, Nugget shall have only one
subsidiary, Newco.
l. Absence of Certain Changes. Except as otherwise set forth in this
Agreement, there have not been since the date of the latest
audited balance sheet delivered by Nugget any changes of the
following nature:
i. Business, properties, and financial condition. Any
significant labor disputes or any material adverse change in
Nugget's properties, business supply of raw materials, or
markets for its products, including, but not limited to,
damage or destruction of property by fire or other casual,
whether or not covered by insurance, or any material adverse
change in the financial condition or results of operations
of Nugget taken as a whole.
ii. Capital stock; options, dividends, and so forth. Any change
in the authorized, issued, or outstanding capital stock of
Nugget; any granting of any stock option or right to
purchase shares of capital stock or any issuance of any
security convertible into shares of capital stock of Nugget;
any purchase, redemption, retirement, or other acquisition
of any shares of capital stock by Nugget; or any agreement
to do any of the foregoing; or any declaration, setting
aside; or payment of any dividend or other distribution in
respect of the capital stock of Nugget.
iii. Sales, leases, borrowings, and so forth. Any sale of lease
of Nugget's property or assets, other than inventory sold in
the ordinary course of busienss, any mortgage or pledge of
any properties or assets of Nugget, any borrowing incurred,
assumed or guaranteed by Nugget other than in the ordinary
course of business.
iv. Employee benefit plans and certain salaries. Any employment
contract, bonus, stock option, profit-sharing, pension,
retirement, incentive or similar arrangement or plan
instituted, agreed to, or amended.
m. No Violation. Nugget has received no notice of violation of any
applicable zoning regulation, ordinance, or other law, order,
regulation, or requirement relating to its operations, business,
or its properties and, so far as is known to Nugget, (i) thereis
no such violation of a material nature and (ii) all buildings and
structures used by Nugget substantially conform with all
applicable ordinances, codes and regulations.
5.1 Warranties and Representations of Newco. In order to induce
GoHealth.md to enter into this Agreement and to complete the
transaction contemplated herein, Newco warrants and represents to
GoHealth.md that:
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a. Organization and Standing. Newco is a corporation duly organized,
validly existing and in good standing under the laws of Delaware.
It is also qualified to do business and in good standing in every
other state or jurisdiction in which it operates, except where
the failure to be so duly qualified or licensed and in good
standing would not individually or in the aggregate have a
material adverse effect on Newco, and has all requisite corporate
power and authority to own, operate and lease its assets,
properties and business in such states or jurisdictions. Copies
of the articles of incorporation and Bylaws of Newco hereto
delivered to GoHealth.md are accurate and complete as of the date
hereof and shall be complete and accurate as of the Closing.
b. Capitalization. As of Closing, Newco shall have authorized for
issuance 25,000,000 shares of voting Common Stock, $0.001 par
value, of which 1,000 shares will be issued and outstanding and
validly issued, fully paid and non-assessable, all of which are
owned by Nugget. To the best of Newco's knowledge, all such
issued and outstanding shares were issued pursuant to a valid
registration statement under the Act or pursuant to valid
exemptions therefrom. No other voting or equity securities are
authorized or issued and no other securities convertible into
voting stock are authorized or issued. Newco does not have any
outstanding subscriptions, warrants, calls, options, rights,
commitments or agreements by which Newco is bound, calling for
the issuance of any additional shares of Common Stock or any
other voting or equity security which conversion, exercisable or
derivative rights are not transferable into a parent
corporation's securities. Newco has no outstanding debt
securities except as set forth in its audited financial
statements.
c. Authority, No Conflict. This Agreement constitutes the legal,
valid, and binding obligation of Newco, enforceable against Newco
in accordance with its terms. Newco has the absolute and
unrestricted right, power, authority, and capacity to execute and
deliver this Agreement and to perform its obligations under this
Agreement. Neither the execution nor delivery of this Agreement
nor the consummation or performance of the Merger will
contravene, conflict with, constitute default or result in a
violation of (i) any provisions of the articles of incorporation
or Bylaws of Newco, or (ii) any external restraint, ruling,
agreement, law, judgment, contract, agreement, plan or order
relating to Newco, which contravention, conflict, violation or
default would result in a material adverse effect on Newco's
business. The execution and delivery of this Agreement and the
consummation of the transactions on the part of Newco
contemplated hereunder have been duly and validly authorized by
the board of directors of Newco and at or prior to the Closing
shall have obtained shareholder approval for the Merger, or shall
have provided the other Constituent Parties such assurances,
including opinions of counsel, that the other Constituent Parties
reasonably require that no such shareholder approval is required.
d. Taxes. Within the times and in the manner prescribed by law,
Newco and its subsidiaries have filed all federal, state and
local income or other tax returns and reports required to be
filed with all governmental agencies and have paid or accrued for
payment all taxes as shown on such returns, such that a failure
to file, pay or accrue will not have a material adverse effect on
Newco or its subsidiaries.
e. No Pending Actions. There are no legal actions, lawsuits,
proceedings or investigations, either administrative or judicial,
pending against Newco or to the best of Newco's knowledge, after
diligent inquiry, threatened against or affecting Newco or its
subsidiaries, or against any of the officers or directors
therewith that arise out of their operation of Newco and its
subsidiaries, nor is Newco or its subsidiaries in material
violation of any federal or state law, ordinance or regulation
68
w. of any kind whatever, including, but not limited to laws, rules
and regulations governing the sale of its products, services or
securities. Newco is not an investment company as defined in or
otherwise subject to regulation under, the Investment Company Act
of 1940.
f. Assets & Liabilities. Newco represents that it owns no assets and
that it has not incurred any liabilities since inception except
as disclosed to GoHealth.md.
g. Insider Debt. Except as specifically set forth in its audited
financial statements, Newco does not owe any money, securities,
or property to any of the following persons: Newco Shareholders,
family members of Newco Shareholders, or employees of Newco
either directly or indirectly. Newco does not have any material
debt, liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become
due, that is not reflected in its audited financial statements.
Newco does not currently have, nor will it have on the Closing
Date any pension plan, profit-sharing plan, or stock purchase
plan for any of its employees or certain options to proposed
executive officers.
h. Effect of Merger Transactions. On the Effective Date, as
described herein:
i. Nugget will own all of the issued and outstanding capital
stock of GoHealth.md; and
ii. No other person or entity will have any pre-emptive or other
rights to acquire any of the capital stock of GoHealth.md.
i. Lack of Subsidiaries. Newco has no subsidiaries.
j. Absence of Certain Changes. Except as otherwise set forth in this
Agreement, there have not been since the date of the latest
audited balance sheet delivered by Newco any changes of the
following nature:
i. Business, properties, and financial condition. Any
significant labor disputes or any material adverse change in
Newco's properties, business supply of raw materials, or
markets for its products, including, but not limited to,
damage or destruction of property by fire or other casual,
whether or not covered by insurance, or any material adverse
change in the financial condition or results of operations
of Newco taken as a whole.
ii. Capital stock; options, dividends, and so forth. Any change
in the authorized, issued, or outstanding capital stock of
Newco; any granting of any stock option or right to purchase
shares of capitalstock or any issuance of any security
convertible into shares of capital stock of Newco; any
purchase, redemption, retirement, or other acquisition of
any shares of capital stock by Newco; or any agreement to do
any of the foregoing; or any declaration, setting aside; or
payment of any dividend or other distribution in respect of
the capital stock of Newco.
iii. Sales, leases, borrowings, and so forth. Any sale of lease
of Newco's property or assets, other than inventory sold in
the ordinary course of busienss, any mortgage or pledge of
any properties or assets of Newco, any borrowing incurred,
assumed or guaranteed by Newco other than in the ordinary
course of business.
69
iv. Employee benefit plans and certain salaries. Any employment
contract, bonus, stock option, profit-sharing, pension,
retirement, incentive or similar arrangement or plan
instituted, agreed to, or amended.
k. No Violation. Newco has received no notice of violation of any
applicable zoning regulation, ordinance, or other law, order,
regulation, or requirement relating to its operations, business,
or its properties and, so far as is known to Newco, (i) thereis
no such violation of a material nature and (ii) all buildings and
structures used by Newco substantially conform with all
applicable ordinances, codes and regulations.
6.1 No Misleading Statements or Omissions. Neither this Agreement nor any
schedule or document attached hereto or presented to Nugget or Newco
by GoHealth.md or to GoHealth.md by Nugget or Newco in connection with
this Agreement or the Merger, contain or contained any materially
misleading statement, or omits any material fact of statement
necessary to make the other statements or facts therein set forth not
materially misleading.
7.1 Validity of this Agreement. By Closing, all corporate and other
proceedings required to be taken by Nugget, Newco and GoHealth.md in
order to enter into and to carry out this Agreement shall have been
duly and properly taken. Upon execution, this Agreement shall
constitute the valid, binding and enforceable obligations of the
Constituent Parties and shall inure to the benefit of the heirs,
executors, administrators, successors and assigns of the GoHealth.md
Shareholders and upon the successors and assigns of Nugget, except to
the extent limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws relating to or effecting
generally the enforcement of creditors rights. The execution and
delivery of this Agreement and these stated terms shall not result in
the breach of any of the terms or conditions of, or constitute a
default under or violate the Constituent Parties' Articles of
Incorporation and Bylaws thereto or any similar document of
undertaking, oral or written, to which the Constituent Parties are a
party to or is bound or may be affected by, nor will such execution,
delivery and carrying out violate any order, writ, injunction, decree,
law, rule or regulation of any court, regulatory agency or other
governmental body; and the business now conducted by the Constituent
Parties can continue to be so conducted after completion of the
transaction contemplated hereby, with GoHealth.md as a wholly-owned
subsidiary of Nugget.
8.1 Access to Books and Records. During the course of the Merger through
Closing, Nugget, Newco and GoHealth.md agree to make available for
inspection all corporate books, records and assets, and otherwise
afford to each other and their respective representatives, reasonable
access to all documentation and other information concerning the
business, financial and legal conditions of each other for the purpose
of conducting a due diligence investigation thereof. Such due
diligence investigation shall be for the purpose of satisfying each
party as to the business, financial and legal condition of each other
for the purpose of determining the desirability of consummating the
proposed Merger. The Constituent Parties further agree to keep
confidential and not use for their own benefit, except in accordance
with this Agreement and the Merger, any information or documentation
obtained in connection with any such investigation.
9.1 Restricted Shares; Legend. All shares of Nugget Common Stock to be
issued to the GoHealth.md Shareholders will be issued pursuant to
exemptions from registration and therefore shall be "restricted
securities" as defined in the Act; and each stock certificate issued
to such recipients hereunder will bear a restrictive legend
substantially as follows:
70
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under the
securities laws of any state and may not be sold or otherwise
transferred unless in compliance with the registration provisions of
such Act and state laws or unless availability of an exemption from
such registration provisions has been established.
Appropriate stop transfer instructions regarding such shares shall be
given to Nugget's stock transfer agent, American Securities Transfer.
10.1 Expenses. Each of the Constituent Parties shall bear and pay the costs
and expenses they have allocated prior to the execution of the
Agreement and that they shall bear and pay the costs incurred by them
or on their behalf in connection with the consummation of this
Agreement, including, without limiting the generality of the
foregoing, fees and expenses of financial consultants, accountants and
counsel and the cost of any documentary stamps, sales and excise taxes
which may be imposed upon or be payable in respect to the transaction.
11.1 Deliveries. At or after Closing, each GoHealth.md Shareholder may
deliver or surrender a certificate or certificates representing all of
such shareholder's GoHealth.md Stock. Upon delivery of such shares,
Nugget will deliver or irrevocably instruct its transfer agent to
deliver the number of shares of Nugget Stock equal to the number of
GoHealth.md shares so surrendered in the certificate format specified
by each GoHealth.md Shareholder.
12.1 No Reverse Split. A material term hereto and a condition to Nugget
entering into this Agreement is that GoHealth.md agree that for a
period of twelve (12) months from the date of Closing, no
recapitalization or reverse stock splits will be effected without the
prior written consent of all of the directors of Nugget as of the date
immediately prior to Closing of this Agreement, which consent shall
not be unreasonably withheld.
13.1 Conditions Precedent to Closing. The obligations of the Constituent
Parties under this Agreement shall be and are subject to fulfillment,
prior to or at the Closing, of each of the following conditions:
a. That each of the representations and warranties of the
Constituent Parties contained herein shall be true and correct at
the time of the Closing date as if such representations and
warranties were made at such time;
b. That the Constituent Parties shall have performed or complied
with all agreements, terms and conditions required by this
Agreement to be performed or complied with by them prior to or at
the time of the Closing;
c. GoHealth.md shall provide Nugget with complete audited financial
statements for the period ending May 31, 1999, on or before the
Closing Date.
d. That the Constituent Parties shall be satisfied with the results
of their due diligence and review of the other Constituent
Parties' books and records as set forth in Section 8.1 herein.
e. GoHealth.md shall provide Nugget with the express consent, in a
format satisfactory to Nugget, of all holders of GoHealth.md's
convertible securities, as described in Section 3.1(b), to
convert such GoHealth.md securities into shares of Nugget's
common stock.
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14.1 Termination. This Agreement may be terminated at any time before or, at
Closing, by:
a. The mutual agreement of the Constituent Parties;
b. Any party if:
i. Any provision of this Agreement applicable to a party shall
be materially untrue or fail to be accomplished;
ii. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of this Agreement; or
iii. The conditions precedent to Closing are not satisfied.
c. Upon termination of this Agreement for any reason, in accordance
with the terms and conditions set forth in this paragraph, each
said party shall bear all costs and expenses as each party has
incurred and no party shall be liable to the other.
15.1 Miscellaneous Provisions. This Agreement is the entire agreement
between the Constituent Parties in respect of the subject matter
hereof, and no other agreements exist, written or oral, nor may this
Agreement be modified except in writing and executed by all of the
Constituent Parties hereto. The failure to insist upon strict
compliance with any of the terms, covenants or conditions of this
Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
18.1 Controlling Law. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the state of Delaware,
without regard to its law on the conflict of laws. Any dispute arising
out of this Agreement shall be brought in a court of competent
jurisdiction in Delaware. The Constituent Parties exclude any and all
statutes, laws and treaties which would allow or require any dispute
to be decided in another forum or by other rules of decision than
provided in this Agreement.
19.1 Notices. All notices, requests, instructions, or other documents to be
given hereunder shall be in writing and sent by registered mail to the
Constituent Parties at the following addresses:
a. If to Nugget:
Nugget Exploration, Inc.
Attn.: Xxxxx Xxxxxx, President
0000 Xxxx 0000 Xxxxx, Xxxxx 000
Xxxxx, XX 00000
b. If to GoHealth.md:
GoHealth.md, Inc.
Attn.: Xx. Xxxxxxx Xxxxxx, President
0000 Xxxxxxxxxx Xxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
20.1 Finders and Brokers. The Constituent Parties agree that neither has
utilized any finder or broker in bringing the Constituent Parties
together or who were instrumental in the negotiation, execution, or
consummation of this Agreement. Further, the Constituent Parties each
agree to indemnify the other against any claim by any third person for
any commission, brokerage or finder's fee or other payment with
respect to this
72
Agreement or the transaction contemplated hereby based on any alleged
agreement or understanding between such party and such third person,
whether express or implied, from the actions of such party. The
covenants set forth in this section shall survive Closing and the
consummation of the transaction herein contemplated.
21.1 Counterparts. This Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together
shall constitute one and the same binding Agreement, with one
counterpart being delivered to each party hereto.
IN WITNESS WHEREOF, the foregoing Agreement, having been duly approved and
adopted by the Board of Directors, of the Constituent Parties, as required, in
the manner provided by the laws of the state of Nevada and state of Delaware,
the presidents of the Constituent Parties do now execute this Agreement under
the authority of the directors of each.
Nugget Exploration, Inc.
By: /s/ Xxxxx Xxxxxx
-------------------------
Xxxxx Xxxxxx, President
GoHealth.md, Inc.
By: /s/ Xxxxxxx Xxxxxx
-------------------------
Xx. Xxxxxxx Xxxxxx, President
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Schedule 1.6
HOLDERS OF COMMON STOCK IN GOHEALTH.MD, INC.
as of October 1, 1999
NAME #of Shares
Xxxxxx Xxxxxx, Sr. 2,667
Xxxxxx Xxxxxx, Jr. 2,667
Xxxxx Xxxxx 4,000
Xxxxxx XxXxxxxxxx, M.D. 2,000
Xxxxxx Xxxxx, III, Esq. 4,000
Xxxxx Xxxxxxxxx, M.D. 4,000
Xxxx Xxxx, M.D. 4,000
Xxxxxxx Xxxxx, Esq. 4,000
Xxxxxx XxXxxxx, Jr., Esq. 2,000
Mullica Hill-Family Practice (Xx. Xxxxxx & Xx. Xxxxxx) 4,000
Xxxxxxx Xxxxxxxxxx 2,666
Xxxxxx Xxxxxx 2,000,000
Xxxxxxx Xxxxx 500,000
Xxxxx X'Xxxxxxx 500,000
Xxxx Xxxxxx 2,000
Market Management Professionals, Inc. 2,000
Xxxxxxxxx Xxxxxxx, MD 4,000
J. Xxxx Xxxxxxxxx, Esq. 12,000
Xxxxxx Xxxxx 2,000
Xxxxxx Xxxx, D.O. 10,000
Xxxxx X. Gettson, D.C. 10,000
Xxxxxx Xxxxx 2,000
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NAME #of Shares
Xxxxxx Xxxxxxxx 2,000
Xxxxxx Xxxxxx 2,000
Xxxxxx XxXxxxxxx 2,000
Xxxx Keminosh, D.C. 4,000
Xxxxxxx Xxxxxxx, D.C. 2,000
Xxxxxxx Xxxxxxx 2,000
Xxxx Xxxxxxx 4,000
Xxxxxx Xxxxx, M.D. 4,000
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Schedule 1.11
HOLDERS OF OPTIONS TO ACQUIRE COMMON STOCK IN
GOHEALTH.MD, INC.
as of October 1, 1999
DATE # OF SHARES EXERCISE
GRANTED NAME ISSUABLE PRICE
2/23/99 Xxxxxxx Xxxxx 115,000 $.50
2/23/99 Xxxxx X'Xxxxxxx 115,000 $.50
5/7/99 Millennium Consulting 30,000 $.50
5/26/99 Xxxx Xxxxxx 2,500 $.50
5/26/99 Xxxx Xxxxxx 2,500 $1.00
5/26/99 Xxxx Xxxxxx 2,500 $.50
5/26/99 Xxxx Xxxxxx 2,500 $1.00
6/12/99 J. Xxxx Xxxxxxxxx 10,000 $1.00
6/12/99 J. Xxxx Xxxxxxxxx 10,000 $1.50
8/27/99 Xxxxxx Xxxx, D.O. 150,000 $1.00
8/27/99 Xxxxx X. Gettson, D.C. 25,000 $1.00
HOLDERS OF WARRANTS ISSUED BY GOHEALTH.MD, INC.
as of October 1, 1999
NAME # of Warrants
Xxxxxx Xxxxxx, Sr. 2667
Xxxxxx Xxxxxx, Jr. 2,667
Xxxxx Xxxxx 4,000
Xxxxxx XxXxxxxxxx, M.D. 2,000
Xxxxxx Xxxxx, III, Esq. 4,000
Xxxxx Xxxxxxxxx, M.D. 4,000
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NAME # of Warrants
Xxxx Xxxx, M.D. 4,000
Xxxxxxx Xxxxx, Esq. 4,000
Xxxxxx XxXxxxx, Jr., Esq. 2,000
Mullica Hill-Family Practice (Xx. Xxxxxx & Xx. Xxxxxx) 4,000
Xxxxxxx Xxxxxxxxxx 2,666
Xxxx Xxxxxx 2,000
Market Management Professionals, Inc. 2,000
Xxxxxxxxx Xxxxxxx, MD 4,000
J. Xxxx Xxxxxxxxx, Esq. 12,000
Xxxxxx Xxxxx 2,000
Xxxxxx Xxxx, D.O. 10,000
Xxxxx X. Gettson, D.C. 10,000
Xxxxxx Xxxxx 2,000
Xxxxxx Xxxxxxxx 2,000
Xxxxxx Xxxxxx 2,000
Xxxxxx XxXxxxxxx 2,000
Xxxx Keminosh, D.C. 4,000
Xxxxxxx Xxxxxxx, D.C. 2,000
Xxxxxxx Xxxxxxx 2,000
Xxxx Xxxxxxx 4,000
Xxxxxx Xxxxx, M.D. 4,000
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