EXHIBIT 2.3
Reorganization Agreement
This Reorganization Agreement (the "Agreement") is made and entered into by
and among National Business Holdings, Inc., a publicly held Florida corporation
with a class of securities registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended ("Issuer" and the "Exchange Act,"
respectively); Union Dental Corp., a Florida corporation ("Union Dental");
Direct Dental Services, Inc., a Florida corporation ("DDS") and the individuals
listed in Exhibit A annexed hereto and made a part hereof as Exhibit 0.1
("Stockholders"); Issuer, Union Dental, DDS and the Stockholders being sometimes
hereinafter collectively referred to as the "Parties" or generically as a
"Party").
Preamble:
WHEREAS, the respective boards of directors of Issuer, DDS and Union Dental
believe it is in the best interests of each corporation and their respective
stockholders that Union Dental and DDS become a wholly owned subsidiary of
Issuer and, in furtherance thereof, have approved the Reorganization; and
WHEREAS, the Issuer currently has 32,284,831 shares of common stock issued
and outstanding and zero shares of preferred stock issued and outstanding.
WHEREAS, pursuant to the terms of the Reorganization, as hereinafter set
forth, among other things, all of the outstanding and reserved securities of DDS
(the "DDS's Securities") will be exchanged for 12,500,0000 shares of Issuer's
common stock, $0.001 par value ("Issuer's common stock") and 1,000,000 shares of
Issuer's preferred stock, $0.0001 par value with each share of preferred stock
provides voting rights equal to 15 shares of Issuer's common stock (Issuer's
preferred stock), representing approximately 46% and 100% of the issued and
outstanding Issuer common stock and Issuer preferred stock at the time of
Closing; and
WHEREAS, pursuant to the terms of the Reorganization, as hereinafter set
forth, among other things, all of the outstanding and reserved securities of
Union Dental (the "Union Dental's Securities") will be exchanged for 5,000,000
shares of Issuer's common stock, $0.001 par value ("Issuer's common stock") and
zero shares of Issuer's preferred stock, no par value, representing
approximately 18% of the issued and outstanding Issuer common stock on the
Closing Date; and
WHEREAS, on or about December 20, 2004, Union Dental acquired substantially
all of the assets (except the Patient List) of Xxxxxx X. Xxxxx D.D.S., P.A.
(hereinafter referred to as "PA") pursuant to an Asset Purchase Agreement; and
WHEREAS, the Parties have mutually agreed to make certain representations
and warranties and other agreements in connection with the Reorganization and
their subsequent operating and business relationships; and
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WHEREAS, the Parties intend, by executing this Agreement, to adopt a plan
of reorganization within the meaning of Section 368(a)(1)(B) of the Internal
Revenue Code of 1986, as amended (the "Code"):
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration
the sufficiency of which is acknowledged, the Parties, intending to be legally
bound, hereby agree as follows:
Article I
Plan of Reorganization
1.1 Definitions
The following terms, whether or not initially capitalized, will have the
meanings set forth below:
Accredited Investor: A person or entity that meets the asset or income
requirements for treatment as an accredited investor specified in Rule 501 of
Commission Regulation D promulgated under the Securities Act
Affiliate: An entity or person that controls, is controlled by or is under
common control with another person.
Issuer Financial Statements: Financial statements, including all related
schedules and the notes thereto, of Issuer included in the report on Commission
Form 10-KSB for the period ended May 31, 2003, as amended; the reports on
Commission Form 10-QSB filed subsequent to May 31, 2003 and any financial
statements included in current reports on Commission Form 8-K filed since the
dates of the Subsequent Quarterly Reports; all such financial statements being
hereinafter collectively and generically referred to as the "Issuer Financial
Statements,"
Issuer Schedules: The schedules referenced by the Section designations of
this Agreement as to which they apply, annexed at the direction of Issuer to
this Agreement and constituting a material component of this Agreement.
Capital Stock: The generic term used for equity securities, whether common,
preferred or otherwise.
Closing: The event at which the exchange of all of the Union Dental and DDS
securities will be exchanged for approximately 64% of the outstanding shares of
Issuer's common stock.
Closing Date: The date on which the Closing takes place.
Commission: The United States Securities and Exchange Commission.
Code: The Internal Revenue Code of 1986, as amended.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Act Reports: All reports filed by Issuer with the Commission
pursuant to the Exchange Act, including all exhibits filed therewith.
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Exchange Agent: The person or entity responsible following the Closing, for
issuing and delivering the shares of Issuer's common stock and preferred stock
to the Union Dental and DDS Stockholders.
GAAP: Generally accepted accounting principles, consistently applied.
IRS: The United States Internal Revenue Service.
Knowledge: When used to qualify a representation or warranty, the word
"knowledge" or any derivations or variations thereof, whether in the form of a
word or phrase, will mean knowledge after reasonable inquiry by a senior
executive officer of the legal entity on whose behalf the assertion is made and
will include information that such legal entity should have had in the exercise
of reasonable diligence.
Target's Financial Statements: DDS and PA's financial statements (balance
sheets, income statements and related schedules and footnotes) as of and for the
fiscal years ending December 31, 2002 and 2003 (audited), any calendar quarter
ended between December 31, 2003 and the Closing Date and Union Dental's
financial statements (unaudited),, all prepared in conformity with GAAP and
applicable Commission auditing rules and regulations.
Target Schedules: The schedules referenced by the Section designations of
this Agreement as to which they apply, annexed at the direction of Union Dental
and DDS to this Agreement and constituting a material component of this
Agreement.
Material: When used to qualify a representation or warranty, the word
"material" or any derivations or variations thereof, whether in the form of a
word or phrase, will mean a variance that could have negatively affected a
decision by a reasonably prudent person to engage in the transactions
contemplated by this Agreement, and will be measured both on the occasion in
which such term is referenced as well as on an aggregate basis with other
similar matters.
NASD: The National Association of Securities Dealers, Inc., a Delaware
corporation and self regulatory organization registered with the Commission.
OTC Bulletin Board: The over the counter electronic securities market
operated by the NASD.
Securities Act: The Securities Act of 1933, as amended.
Substantial Compliance: Compliance which the Party for whose benefit or at
whose request an act is performed, or for whose benefit or at whose request an
act is refrained from could under the circumstances be reasonably expected to
accept as full compliance.
Tax: For the purposes of this Agreement, a "Tax" or, collectively, "Taxes,"
means any and all federal, state, local and foreign taxes, assessments and other
governmental charges, duties, impositions and liabilities, including taxes based
upon or measured by gross receipts, income, profits, sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes, together with all interest,
penalties and additions imposed with respect to such amounts and any obligations
under any agreements or arrangements with any other person with respect to such
amounts.
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Additional defined terms are specified in certain sections and subsections
below and are characterized by the use of initial letter capitalization.
1.2 Reorganization
(A) The Reorganization.
(1) At the Closing on this Agreement all of the Union Dental's
Stockholders will exchange all of their Union Dental securities, being
an aggregate of 500 shares of common stock, $0.001 par value, for
5,000,000 shares of Issuer common stock, $0.001 par value, which
represents approximately 18% of the outstanding shares of Issuer's
common stock.
(2) At the Closing of this Agreement, all of the issued and outstanding
options to purchase 3,452,250 Union Dental common stock (the "Union
Dental Options") shall be exchanged for an aggregate of 3,452,250
options to purchase Issuer common stock (the "Issuer Options") upon
the same terms and conditions;
(3) The shares of Issuer's common stock and preferred stock will be issued
by the Exchange Agent following the Closing and will be transferred to
the Stockholders in proportion to their holdings of Union Dental
common stock at the time of Closing.
(4) At the Closing on this Agreement all of the DDS's Stockholders will
exchange all of their DDS securities, being an aggregate of 500 shares
of common stock, $0.001 par value, for 12,500,000 shares of Issuer
common stock, $0.001 par value, which represents approximately 46% of
the outstanding shares of Issuer's common stock and 1,000,000 shares
of the Issuer preferred stock, no par value, which represents 100% of
the outstanding shares of Issuer's preferred stock, as called for by
this Agreement.
(5) The shares of Issuer's common stock and preferred stock will be issued
by the Exchange Agent following the Closing and will be transferred to
the Stockholders in proportion to their holdings of DDS common stock
at the time of Closing.
(B) As promptly as practicable after the satisfaction or waiver of the
conditions set forth in Article VI, the Parties will cause the
Reorganization to be consummated by effecting the exchange all of Union
Dental's and DDS's common stock for the shares of Issuer's common stock and
preferred stock, as described above.
(C) The Closing Date and time of the Reorganization will be the date and time
on which the Closing of this Reorganization Agreement is consummated, which
shall, in any event, take place on or before December 31, 2004, unless the
Parties agree in writing to further extend the Closing Date.
(1) At the Closing the Parties will exchange all closing documentation,
certificates, resolutions, exhibits, schedules and opinions called for
by this Agreement, and
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(2) All of Union Dental and DDS's outstanding securities will be exchanged
with Issuer for approximately 64% of Issuer's common stock and 100% of
Issuer's preferred stock, as specified above; provided that delivery
of the certificates for the shares of Issuer's common stock and
preferred stock will be made directly to Stockholders by Issuer's
stock transfer agent as soon as practicable after the Closing.
1.3 Effect of the Reorganization.
At the Closing, the effect of the Reorganization will be that Union Dental
and DDS will each become a wholly owned subsidiary of Issuer and that the
Stockholders immediately prior to the Closing will become stockholders of Issuer
at the Closing, with no further rights, title or interest in Union Dental or
DDS, other than indirectly as stockholders of Issuer.
1.4 Fractional Shares.
No fraction of a share of Issuer's common stock will be issued, but in lieu
thereof each holder of shares of Union Dental or DDS's common stock who will
otherwise be entitled to a fraction of a share of Issuer's common stock (after
aggregating all fractional shares of Issuer's common stock to be received by
such holder) will be entitled to receive from Issuer a whole share of Issuer's
common stock. 1.5 Exchange of Certificates.
(A) Exchange Agent. Unless modified by Issuer prior to the Closing Date,
Issuer's current transfer agent, will serve as the Exchange Agent.
(B) Issuer to Provide Common Stock. Issuer will promptly make available to the
Exchange Agent for exchange in accordance with this Article I the shares of
Issuer's common stock and preferred stock in exchange for all of the
outstanding shares of Union Dental and DDS's common stock.
(C) Exchange Procedures. All certificates for shares of Union Dental and DDS's
outstanding common stock will be tendered to Issuer at the Closing, with
medallion signature guarantees or otherwise in proper form for immediate
transfer to the order of Issuer, whereupon Issuer will issue instructions
to the Exchange Agent to issue shares of Issuer's common stock, in the
quantities and names set forth in Schedule 1.5(C).
(D) Transfers of Ownership. If any certificate for shares of Issuer's common
stock and preferred stock is to be issued in a name other than that in
which the certificate surrendered in exchange therefor is registered, it
will be a condition of the issuance thereof that the certificate so
surrendered will be properly endorsed and otherwise in proper form for
transfer and that the person requesting such exchange will have paid to
Issuer or any agent designated by it any transfer or other Taxes required
by reason of the issuance of a certificate for shares of Issuer's common
stock and preferred stock in any name other than that of the registered
holder of the certificate surrendered, or established to the satisfaction
of Issuer, or any agent designated by it, that such Tax has been paid or is
not payable.
(E) No Liability. Notwithstanding anything to the contrary in this Section 17,
neither the Exchange Agent, Issuer, Union Dental, DDS or any other person
will be liable to a holder of shares of Issuer's common stock or Union
Dental or DDS's Capital Stock for any amount properly paid to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
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1.6 No Further Ownership Rights in Union Dental or DDS's Securities.
(A) All shares of Issuer's common stock and preferred stock issued upon the
surrender for exchange of shares of Union Dental and DDS's Capital Stock in
accordance with the terms hereof will be deemed to have been issued in full
satisfaction of all rights pertaining to such shares of Union Dental and
DDS's Capital Stock, and there will be no further registration of transfers
on the records of Union Dental or DDS, of shares of Union Dental or DDS's
Capital Stock which were outstanding immediately prior to the Closing.
(B) If, after the Closing, Certificates are presented to Union Dental or DDS,
for any reason, they will be canceled and exchanged as provided in this
Article I.
1.7 Lost, Stolen or Destroyed Certificates.
In the event any certificates evidencing shares of Union Dental or DDS's
Capital Stock will have been lost, stolen or destroyed, Union Dental or DDS's
transfer agent or share registrar will, prior to the Closing, have issued in
exchange for such lost, stolen or destroyed certificates, upon the making of an
affidavit of that fact by the holder thereof, such shares of its stock;
provided, however, that Issuer may, in its discretion and as a condition
precedent to the issuance of the shares of Issuer's common stock and preferred
stock to be exchanged therefor, require the owner of such lost, stolen or
destroyed certificates to deliver a bond in such sum as it may reasonably direct
as indemnity against any claim that may be made against Issuer or the Exchange
Agent with respect to the certificates alleged to have been lost, stolen or
destroyed.
1.8 Tax Consequences and Accounting Treatment.
It is intended by the Parties that the Reorganization will constitute a
reorganization within the meaning of Section 368(a)(1)(B) of the Code, and the
Parties agree that if modification of the non-material terms of this Agreement
to attain such qualification is necessary, they will negotiate in good faith to
make such required modification.
1.9 Taking of Necessary Action: Further Action.
If, at any time after the Closing, any further action is necessary or
desirable to carry out the purposes of this Agreement including the vesting in
Issuer of full right, title and possession to all of Union Dental and DDS's
Capital Stock or compliance with the requirements of Code Section 368(a)(1)(B),
the officers and directors of Issuer, Union Dental and DDS are fully authorized
and empowered in the name of their respective corporations or otherwise to take,
and will take, all lawful and necessary action.
Article II
Representations and Warranties of Union Dental and DDS
Union Dental, DDS and the Stockholders hereby represent and warrant to
Issuer, as a material inducement to its entry into this Agreement, subject only
to the exceptions specifically disclosed in Schedule 2, as follows:
2.1 Organization of Union Dental and DDS.
(A) Union Dental and DDS are each a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida.
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(B) Union Dental and DDS each have the corporate power to own its property and
to carry on its business as now being conducted and as proposed to be
conducted by Union Dental and DDS.
(C) Union Dental and DDS are each duly qualified to do business and in good
standing as a foreign corporation in each jurisdiction in which the failure
to be so qualified would have a material adverse effect on the business,
assets (including intangible assets), financial condition, or results of
operations of Union Dental and DDS.
(D) Union Dental and DDS each has delivered a true and correct copy of its
articles of incorporation and bylaws (or similar governing instruments),
each as amended to date, to counsel for Issuer.
2.2 Union Dental and DDS's Capital Structure.
(A) The authorized Capital Stock of Union Dental consists of 10,000,000 shares
of common stock, $0.001 par value, and zero shares of preferred stock;
(B) The authorized Capital Stock of DDS consists of 7,500 shares of common
stock, $1.00 par value, and zero shares of preferred stock;
(C) There are 500 shares of Union Dental common stock and zero shares of Union
Dental preferred stock issued and outstanding, held by the persons, and in
the amounts, set forth on Schedule 1.5(C).
(D) There are 500 shares of DDS common stock and zero shares of DDS preferred
stock issued and outstanding, held by the persons, and in the amounts, set
forth on Schedule 1.5(C).
(E) All outstanding shares of Union Dental and DDS common or preferred stock
are duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, the articles of
incorporation or bylaws of Union Dental, DDS or any agreement to which
Union Dental or DDS are a party or is bound.
(F) Except as set forth on Schedule 2.2(F), Union Dental and DDS each has no
other outstanding securities or securities reserved for issuance for any
purpose, there being no other obligations directly or indirectly obligating
Union Dental or DDS to issue any of its securities to any person for any
purpose; and there are no other options, warrants, calls, rights,
commitments or agreements of any character to which Union Dental or DDS is
a party or by which it is bound obligating Union Dental or DDS to issue,
deliver, sell, repurchase or redeem, or cause to be issued, delivered,
sold, repurchased or redeemed, any shares of the Union Dental or DDS
Capital Stock or obligating Union Dental or DDS to grant, extend or enter
into any such option, warrant, call, right, commitment or agreement.
2.3 Subsidiaries.
Union Dental and DDS do not have any subsidiaries, and does not otherwise
own any shares of stock or any interest in, or control, directly or indirectly,
any other corporation, partnership, association, joint venture or business
entity.
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2.4 Authority.
(A) Union Dental and DDS each has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions
contemplated hereby.
(B) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Union Dental and DDS.
(C) This Agreement has been duly executed and delivered by Union Dental and DDS
and, subject to the proper authorization of this Agreement by Issuer's
board of directors and its due execution and delivery by Issuer to Union
Dental and DDS, constitutes the valid and binding obligation of Union
Dental and DDS.
(D) The execution and delivery of this Agreement by Union Dental and DDS does
not, and the consummation of the transactions contemplated hereby will not,
conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a
material benefit under (i) any provision of the articles of incorporation
or bylaws of Union Dental or DDS or (ii) any material mortgage, indenture,
lease, contract or other agreement or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Union Dental or DDS or its properties or
assets.
(E) No consent, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or other governmental authority or instrumentality ("Governmental Entity"),
is required by or with respect to Union Dental or DDS in connection with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under applicable state and federal securities laws (e.g.,
notification on Form D) and the laws of any foreign country.
2.5 DDS and PA Financial Statements.
(A) Schedule 2.5(A) includes Union Dental's DDS and PA's Financial Statements.
(B) Union Dental, DDS and PA's Financial Statements are complete and correct in
all material respects and have been prepared in accordance GAAP throughout
the periods indicated.
(C) Union Dental, DDS and PA's Financial Statements present fairly the
financial condition and operating results of DDS and PA as of the dates and
during the periods indicated therein, subject to normal year-end audit
adjustments, which will not be material in the aggregate.
(D) Union Dental, DDS and PA's financial statements comply with the
requirements for material acquisitions under Commission Regulation S-B and
in a manner permitting Issuer to comply with its obligation under the
Securities Act and the Exchange Act in conjunction therewith
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2.6 No Undisclosed Liabilities.
Union Dental or DDS each separately represent and warrant that it does not
have any material liabilities or obligations, either accrued or contingent
(whether or not required to be reflected in financial statements in accordance
with generally accepted accounting principles), and whether due or to become
due, which individually or in the aggregate (i) have not been reflected in the
DDS or PA Balance Sheet (including the notes thereto) or (ii) have not been
specifically described in this Agreement or in the Union Dental or DDS
Schedules.
2.7 Title of Properties, Absence of Liens and Encumbrances & Condition of
Equipment.
(A) Schedule 2.7(A) sets forth a true and complete list of all real property
owned and leased by Union Dental and DDS and the aggregate annual mortgage,
rental or other fee payable therefor or under any such lease.
(B) All deeds, titles, leases and mortgages are in good standing, valid and
effective in accordance with their respective terms, and there is not with
respect to Union Dental or DDS under any of such deeds, titles, leases or
mortgages, any existing default or event of default (or event which with
notice or lapse of time, or both, would constitute a default and with
respect to which Union Dental or DDS has not taken adequate steps to
prevent such default from occurring), except where the lack of such good
standing, validity and effectiveness or the existence of such default or
event of default would not have a material adverse effect on Union Dental
or DDS.
(C) Union Dental and DDS each holds good and valid title to, or, in the case of
leased properties and assets, valid leasehold interests in, all of its
tangible properties and assets, real, personal and mixed, used in its
business, free and clear of any liens, charges, pledges, security interests
or other encumbrances, except as reflected in Union Dental and DDS's
Financial Statements and except for such imperfections of title and
encumbrances, if any, which are not substantial in character, amount or
extent, and which do not materially detract from the value, or interfere
with the present use, of the property subject thereto or affected thereby
(D) The equipment owned or leased by Union Dental and DDS are listed in
Schedule 2.7(D) (the "Equipment"), except individual pieces of equipment
owned by Union Dental or DDS with an individual value of less than $500.
The Equipment is, taken as a whole, in good operating condition and
regularly and properly maintained, reasonable wear and tear excepted.
2.8 Litigation.
Schedule 2.8 annexed hereto accurately lists all suits, actions and legal,
administrative, arbitration or other proceedings and governmental investigations
and all other claims, pending or, to Union Dental and DDS's Knowledge,
threatened or which Union Dental and DDS each expects will ultimately be
threatened or commenced. None of any such suits, actions, proceedings,
investigations or claims seeks to prevent the consummation of the
Reorganization.
2.9 Minute Books.
The minute books of Union Dental and DDS made available to counsel for
Issuer each contain a complete and accurate summary of all meetings of directors
and stockholders since the time of incorporation of Union Dental and DDS, and
reflect all transactions referred to in such minutes accurately in all material
respects.
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2.10 Brokers' and Finders' Fees.
Union Dental and DDS each has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement or any transaction
contemplated hereby.
2.11 Regulation SB Disclosure Document
The information supplied by Union Dental and DDS responding to each Item in
Commission Regulation S-B (other than Items 201, 501, 502, 506, 512 and, to the
extent of audit requirements, Item 310) annexed hereto as Exhibit 2.11 (the
"Regulation S-B Disclosure Documents"), part of which must be included in a
current report on Commission Form 8-K to be filed by Issuer within four (4) days
after the Closing Date, as well as in all other reports which Issuer files
thereafter pursuant to the Exchange Act, will not contain any statement which,
at such time and in light of the circumstances under which it is made, is false
or misleading with respect to any Material fact, or will omit to state any
Material fact necessary in order to make the statements made therein not false
or misleading or omit to state any Material fact necessary to correct any
statement which has become false or misleading.
2.12 Disclosure to Union Dental and DDS's Stockholders
Each of Union Dental and DDS's Stockholders hereby represents and warrants
that he, she or it:
(A) Has had access through the Commission's Internet web site at xxx.xxx.xxx,
in the XXXXX Archives sub-cite, to all of Issuer's reports filed with the
Commission during the past two fiscal years, has reviewed all such reports
and has, either directly or through a representative, been granted access
to all of Issuer's officers and directors, and to all officers and
directors of Issuer's operating subsidiaries, for purposes of providing all
disclosure required under applicable federal and state securities laws in
conjunction with the exchange contemplated by this Agreement;
(B) Has been advised that:
(1) The securities to be issued to them by Issuer in exchange for their
shares of Union Dental and DDS's common stock have not been registered
under the Securities Act, the Exchange Act or any comparable state
securities laws, but rather are being issued in reliance on the
exemption from registration under the Securities Act provided by
Section 4(2) thereof;
(2) All certificates for their shares of Issuer's common stock and
preferred stock will bear legends restricting any transactions
therein, directly or indirectly, unless the Issuer's shares are first
registered under applicable federal and state securities laws or the
proposed transaction is exempt from such registration requirements,
and such facts are demonstrated to the satisfaction of Issuer and its
legal counsel, based on such third party legal opinions, affidavits
and transfer agency procedures as Issuer will reasonably require;
(3) Issuer's transfer agent has been instructed to decline transfers of
certificates for their shares of Issuer's common stock, unless the
foregoing requirements have been met and have been confirmed as having
been met by a duly authorized officer of Issuer.
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(C) Has independently determined through his, her or its own legal counsel,
that all requirements of their states of domicile for the issuance of the
shares of Issuer's common stock and preferred stock called for by this
Agreement have been met, or will have been met, prior to Closing, by such
legal counsel acting on behalf of the Parties to this Agreement.
2.13 Representations Complete.
None of the representations or warranties made by Union Dental, DDS or
their stockholders, nor any statement made in any Schedule, Exhibit or
certificate furnished by Union Dental or DDS pursuant to this Agreement, when
read in its entirety, contains or will contain any untrue statement of a
Material fact at the time the Closing takes place, or omits or will omit to
state any Material fact necessary in order to make the statements contained
herein or therein, in the light of the circumstances under which made, not
misleading.
Article III
Representations and Warranties of Issuer
Issuer represents and warrants to Union Dental and DDS as a Material
inducement to its entry into this Agreement, subject to the exceptions
specifically disclosed in the Issuer Schedules or in Issuer's Exchange Act
Reports, as follows:
3.1 Organization, Standing and Power.
(A) Issuer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida.
(B) Issuer has the corporate power to own its properties and to carry on its
business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so
qualified would have a Material adverse effect on Issuer taken as a whole.
(C) A true and correct copy of its articles of incorporation and bylaws, as
amended to date, are available at the Commission's web site in the XXXXX
archives, filed as exhibits to the report on Form 10-KSB for the year ended
May 31, 2003, and any future modifications thereof will be filed with the
Commission and will also be available at such site.
3.2 Capital Structure.
(A) The authorized stock of Issuer consists of 300,000,000 shares of common
stock, par value $0.0001 per share, and 25,000,000 shares of Preferred
Stock, $0.0001 par value per share, the attributes of which are to be
determined on a case by case basis by Issuer's board of directors.
(B) Issuer will have 32,284,831 shares of common stock issued and outstanding
as of Closing. There are no shares of preferred stock issued and
outstanding as of Closing. Immediately following the Closing there will be
27,500,000 shares of common stock issued and outstanding. Existing
shareholders of Issuer, by agreement, will surrender a sufficient number of
issued and outstanding shares to treasury if necessary to reach this
result.
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(C) There are no other options, warrants, calls, rights, commitments,
retirement plans or deferred compensation plans of any nature or agreements
of any character to which Issuer is a party or by which it is bound
obligating Issuer to issue, deliver, sell, repurchase or redeem, or cause
to be issued, delivered, sold, repurchased or redeemed, any shares of the
Capital Stock of Issuer or obligating Issuer to grant, extend or enter into
any such option, warrant, call, right, commitment or agreement.
(D) All of Issuer's shares of common and preferred stock have been duly
authorized, and all of its issued and outstanding shares of Issuer common
stock have been validly issued, are fully paid and non-assessable and are
free of any liens or encumbrances other than any liens or encumbrances
created by or imposed upon the holders thereof.
(E) Subject to the Union Dental, DDS and the Stockholders' compliance with
their obligations under this Agreement, the shares of Issuer's common stock
and preferred stock to be issued pursuant to the Reorganization will be
duly authorized, validly issued, fully paid, and non-assessable.
3.3 Authority.
(A) Issuer has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
(B) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Issuer
(C) This Agreement has been duly executed and delivered by Issuer and, subject
to having also been approved by Union Dental and DDS's board of directors
and properly executed and delivered by Union Dental and DDS, constitutes a
valid and binding obligation of Issuer.
(D) The execution and delivery of this Agreement do not, and the consummation
of the transactions contemplated hereby will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time,
or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to loss of a material benefit under:
(1) Any provision of the articles of incorporation or bylaws of Issuer; or
(2) Any mortgage, indenture, lease, contract or other agreement or
instrument, permit, concession, franchise, license, judgment, order,
decree, statute, law, ordinance, rule or regulation applicable to
Issuer or its properties or assets, other than any such conflicts,
violations, defaults, terminations, cancellations or accelerations
which individually or in the aggregate would not have a material
adverse effect on the ability of Issuer to consummate the transactions
contemplated hereby.
(E) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Governmental Entity, is required by or with
respect to Issuer in connection with the execution and delivery of this
Agreement by Issuer or the consummation by Issuer of the transactions
contemplated hereby, except for:
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(1) Such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state and
federal securities laws (e.g, a Form D Notification Statement) and the
laws of any foreign country; and
(2) Such other consents, authorizations, filings, approvals and
registrations which if not obtained or made would not have a Material
adverse effect on the ability of Issuer to consummate the transactions
contemplated hereby.
3.4 Exchange Act Reports; Issuer Financial Statements.
(A) All materials required to be filed by Issuer with the Commission pursuant
to Sections 13 or 15(d) of the Exchange Act have been filed and are
available on the Commission's Internet web site at xxx.xxx.xxx in its XXXXX
Archives sub-site.
(B) To the best of Issuer's Knowledge, the Exchange Act Reports comply in all
Material respects with the requirements of the Exchange Act and do not
contain any untrue statement of a Material fact or omit 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 subsequently filed document
with the Commission or by information provided by Issuer to Union Dental.
(C) The Issuer Financial Statements comply as to form in all Material respects
with applicable accounting requirements and with the published rules and
regulations of the Commission with respect thereto, have been prepared in
accordance with GAAP and fairly present the consolidated financial position
of Issuer at the date thereof and of its operations and cash flows for the
period then ended, subject to normal year end audit adjustments.
(D) There has been no change in Issuer's accounting policies or estimates
except as described in the notes to Issuer's Financial Statements. Since
the date of the financial statements, there has not been any change in the
financial condition or operations of Issuer, except changes in the ordinary
course of business, which changes have not in the aggregate been materially
adverse.
(E) Issuer has no material obligations, other than those set forth in Issuer's
Financial Statements.
(F) The information provided by Issuer in the Current Report on Form 8-K
pertaining to this Reorganization (excluding information provided by or on
behalf of Union Dental or DDS, as to which Issuer makes no representation)
will not contain any statement which, at such time and in light of the
circumstances under which it will be made, is false or misleading with
respect to any Material fact, or will omit to state any Material fact
necessary in order to make the statements therein not false or misleading.
(G) If at any time prior to the Closing Date any event relating to Issuer or
any of its affiliates, officers or directors should be discovered by Issuer
which should be set forth in a current report on Form 8-K, Issuer will
promptly inform Union Dental and DDS.
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3.5 Brokers' and Finders' Fees.
Except as disclosed in the Exchange Act Reports, Issuer has not incurred,
and will not incur, directly or indirectly, any liability for brokerage or
finders' fees or agents' commissions or any similar charges in connection with
this Agreement, the Reorganization or any transaction contemplated hereby.
3.6 Ownership of Union Dental and DDS's Capital Stock.
As of the date of execution of this Agreement, Issuer does not own any
shares of Union Dental or DDS's Capital Stock.
3.7 Litigation.
There are no suits, actions or legal, administrative, arbitration or other
proceedings or governmental investigations against Issuer pending or, to
Issuer's Knowledge, threatened, which (i) if determined adversely to Issuer,
could be expected to result in a Material adverse effect on the financial
condition or results of operations of Issuer, or (ii) seek to prevent the
consummation of the Reorganization, except as may be disclosed in the Exchange
Act Reports.
3.8 Limited Activities.
(A) Issuer has no material day-to-day operations or assets other than
acquisition-related activities and compliance with applicable laws,
including federal securities and internal revenue laws.
(B) Issuer currently has no operating subsidiaries.
3.9 No Undisclosed Liabilities.
Issuer does not have any Material liabilities or obligations, either
accrued or contingent (whether or not required to be reflected in financial
statements in accordance with GAAP), and whether due or to become due, which
individually or in the aggregate, (i) have not been reflected in the Issuer
Financial Statements (including the notes thereto) or (ii) have not been
specifically described in this Agreement or in the Exchange Act Reports.
3.10 No Changes.
Since the date of its latest Exchange Act Report there has not been,
occurred or arisen any:
(A) Destruction, damage to, or loss of any assets (including without limitation
intangible assets) of Issuer or its subsidiaries (whether or not covered by
insurance), either individually or in the aggregate, exceeding $500.
(B) Labor trouble or claim of wrongful discharge, sexual harassment or other
unlawful labor practice or action;
(C) Change in accounting methods or practices (including any change in
depreciation or amortization policies or rates, any change in policies in
making or reversing accruals, or any change in capitalization of software
development costs) by Issuer or its subsidiaries;
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(D) Declaration, setting aside, or payment of a dividend or other distribution
in respect to the shares of Issuer, or any direct or indirect redemption,
purchase or other acquisition by Issuer of any of its shares;
(E) Other event or condition of any character that has or would, in Issuer's
reasonable judgment, be expected to have a Material adverse effect on
Issuer;
(F) Negotiation or agreement by Issuer to do any of the things described in the
preceding clauses (A) through (E) other than negotiations regarding the
transactions contemplated by this Agreement.
3.11 Tax and Other Returns and Reports.
(A) Tax Returns and Audits.
(1) Issuer has accurately prepared and filed all required federal, state,
local and foreign returns, estimates, information statements and
reports ("Returns") relating to any and all Taxes relating or
attributable to Issuer or its operations and such Returns are true and
correct in all Material respects and have been completed in accordance
with applicable law in all material respects.
(2) Issuer has timely paid all Taxes required to be paid with respect to
such Returns and have withheld with respect to its employees all
federal and state income taxes, FICA, FUTA and other Taxes they are
required to withhold.
(3) The accruals for Taxes on the books and records of Issuer are
sufficient to discharge the Taxes for all periods (or the portion of
any period) ending on or prior to the Closing Date.
(4) Issuer has not been delinquent in the payment of any Tax nor is there
any Tax deficiency outstanding, proposed or assessed against Issuer,
nor has Issuer executed any waiver of any statute of limitations on or
extending the period for the assessment or collection of any Tax.
(5) No audit or other examination of any Return of Issuer is presently in
progress. Issuer does not have any liabilities for unpaid federal,
state, local and foreign Taxes, whether asserted or unasserted, known
or unknown, contingent or otherwise and Issuer has no Knowledge of any
basis for the assertion of any such liability attributable to Issuer
or its assets or operations.
(6) Issuer is not a party to or bound by any tax indemnity, tax sharing or
tax allocation agreement.
(7) Issuer has provided, or made available to Union Dental, DDS or their
legal counsel copies of all federal, provincial and state income and
all sales and use Tax Returns of Issuer for all periods since 2000.
(8) There are (and as of immediately following the Closing Date there will
be) no liens on the assets of Issuer relating to or attributable to
Taxes.
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(9) Issuer has no Knowledge of any basis for the assertion of any Tax
claim which, if adversely determined, would result in liens on the
assets of Issuer.
(10) There is no contract, agreement, plan or arrangement, including but
not limited to the provisions of this Agreement, covering any employee
or former employee of Issuer that, individually or collectively, could
give rise to the payment of any amount that would not be deductible
pursuant to Sections 280G, 162 or 404 of the Code.
(B) No Penalty.
Issuer is not subject to any penalty by reason of a violation of any order,
rule or regulation of, or a default with respect to any return, report or
declaration required to be filed with, any Governmental Entity to which it is
subject, which violations or defaults, individually or in the aggregate, would
have a material adverse effect on Issuer.
3.12 Environmental and OSHA.
(A) Hazardous Material.
(1) As of the Closing Date, no Material amount of any substance that is
regulated by any Governmental Entity or that has been designated by
any Governmental Entity to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without
limitation, PCBs, asbestos, urea-formaldehyde and all substances
listed pursuant to CERCLA or RCRA, and the regulations and
publications promulgated pursuant to said laws (a "Hazardous
Material"), is present, as a result of the actions of Issuer in
violation of any law in effect on or before the Closing Date, in, on
or under any property, including the land and the improvements, ground
water and surface water thereof, that Issuer owns, operates, occupies
or leases.
(2) In any event, Issuer does not know of the presence of any Hazardous
Material in, on or under any of their property.
(B) Hazardous Materials Activities.
At no time prior to the Closing Date has Issuer transported, stored, used,
manufactured, released or exposed its employees or others to Hazardous Materials
in violation of any law in effect on or before the Closing Date, nor has Issuer
disposed of, transferred, sold, or manufactured any product containing a
Hazardous Material (collectively "Hazardous Materials Activities") in violation
of CERCLA, RCRA, TSCA or any other applicable state or federal acts (including
the rules and regulations thereunder) as in effect on or before the Closing
Date.
(C) Permits.
Issuer currently holds no environmental approvals, permits, licenses,
clearances and consents and none are necessary for the conduct of Issuer's
Hazardous Material Activities and other businesses of Issuer as such activities
and businesses are currently being conducted.
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3.13 No Reverse Merger.
Issuer's existing or successor board of directors shall not recommend or
pass a corporate resolution that it reverse split its common stock for a period
of twelve (12) months from the Effective Date except if the reverse split is
necessary for Issuer to become qualified and accepted for listing on the NASDAQ
Small Cap Exchange, the American Stock Exchange or any other major exchange.
3.14 Representations Complete.
None of the representations or warranties made by Issuer, nor any statement
made in any Schedule, Exhibit or certificate furnished by Issuer pursuant to
this Agreement, when read in its entirety, contains or will contain any untrue
statement of a Material fact at the Closing Date, or omits or will omit to state
any Material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
Article IV
Conduct Prior to the Closing
4.1 Conduct of Business of Union Dental and DDS
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Closing, as the case may be,
Union Dental and DDS agree (except to the extent that Issuer will otherwise
consent in writing), that they will promptly notify Issuer of any event or
occurrence or emergency which is not in the ordinary course of business and
which is Material and adverse to the business of Union Dental or DDS.
4.2 Conduct of Business of Issuer.
During the period from the date of this Agreement and continuing until the
earlier of the termination of this Agreement or the Closing, as the case may be,
Issuer agrees (except to the extent that Union Dental and DDS will otherwise
consent in writing), that Issuer will promptly notify Union Dental and DDS of
any event or occurrence or emergency which is not in the ordinary course of
business and which is Material and adverse to the business of Issuer.
Article V
Additional Agreements
5.1 Report on Form 8-K.
(A) Within four (4) days following the Closing Date, Issuer, with the
assistance and cooperation of Union Dental's current officers, auditors,
employees and legal counsel, will prepare and file with the Commission a
current report on Commission Form 8-K (the "8-K Report") disclosing the
Reorganization and containing information concerning Union Dental required
by Commission Regulation S-B.
(B) The Parties will use their best efforts to secure the Commission's
acceptance of Union Dental and DDS's audited financial statements, as
complying with the requirements of Regulation S-B, and Union Dental and DDS
will make any modifications to its financial statements suggested by the
Commission; and, if required, will use best efforts to secure from the
Commission required extensions of time in which to provide materials
complying with Commission Regulation S-B, if necessary.
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5.2 Consent of Union Dental's Stockholders.
Because each Union Dental and DDS Stockholder has independently made the
decision to exchange all of his, her or its Union Dental and DDS Securities for
shares of Issuer's common stock, no formal stockholder action by Union Dental or
DDS will be required in conjunction with authorization of this Agreement or the
Closing; however, each Union Dental and DDS Stockholder must have become a party
to this Agreement.
5.3 Access to Information.
(A) Union Dental and DDS will afford Issuer and its accountants, counsel and
other representatives, reasonable access during normal business hours
during the period prior to the Closing to all of its properties, books,
contracts, commitments and records; and other information concerning the
business, properties and personnel of Union Dental and DDS as Issuer may
reasonably request.
(1) Union Dental and DDS agree to provide to Issuer and its accountants,
counsel and other representatives copies of internal financial
statements promptly upon request.
(B) Issuer will afford Union Dental, DDS and their accountants, counsel and
other representatives, reasonable access during normal business hours
during the period prior to the Closing to all of its properties, books,
contracts, commitments and records; and other information concerning the
business, properties and personnel of Issuer as Union Dental and DDS may
reasonably request.
(1) Issuer agrees to provide to Union Dental, DDS and their accountants,
counsel and other representatives copies of internal financial
statements promptly upon request.
(C) No information or Knowledge obtained in any investigation pursuant to this
Section 5.3 will affect or be deemed to modify any representation or
warranty contained herein or the conditions to the obligations of the
Parties to consummate the Reorganization.
5.4 Confidentiality.
(A) From the date hereof to and including the Closing Date, the Parties will
maintain, and cause their directors, employees, agents and advisors to
maintain, in confidence and not disclose or use for any purpose, except the
evaluation of the transactions contemplated hereby and the accuracy of the
respective representations and warranties of the Parties contained herein,
information concerning the other Parties and obtained directly or
indirectly from such Parties, or their directors, employees, agents or
advisors, or as was in the possession of such Party prior to obtaining such
information from such other Party as to which the fact of prior possession
such possessing Party will have the burden of proof and such information as
is or becomes:
(1) Available to the non-disclosing Party from third parties not subject
to an undertaking of confidentiality or secrecy;
(2) Generally available to the public other than as a result of a breach
by the non-disclosing party hereunder; or
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(3) Required to be disclosed under applicable law.
(B) In the event that the transactions contemplated hereby will not be
consummated, all such information which will be in writing will be returned
to the Party furnishing the same, including to the extent reasonably
practicable, copies or reproductions thereof which may have been prepared.
5.5 Expenses.
Whether or not the Reorganization is consummated, all expenses incurred in
connection with the Reorganization and this Agreement will be the sole
obligation of the Party incurring such expenses.
5.6 Public Disclosure.
Unless otherwise required by law, prior to the Closing Date no disclosure
(whether or not in response to an inquiry) of the subject matter of this
Agreement will be made by any Party unless approved by all Parties prior to
release, provided that such approval will not be unnecessarily withheld,
subject, in the case of Issuer, to Issuer's obligation to comply with applicable
securities laws.
5.7 Consents.
The Parties will promptly apply for or otherwise seek, and use their best
efforts to obtain, all consents and approvals required to be obtained by them
for the consummation of the Reorganization; all of such consents and approvals
being set forth in Schedule 5.7.
5.8 Legal Requirements.
The Parties will take all reasonable actions necessary to comply promptly
with all legal requirements which may be imposed on them with respect to the
consummation of the transactions contemplated by this Agreement and will
promptly cooperate with and furnish information to any Party in connection with
any such requirements imposed upon such other Party in connection with the
consummation of the transactions contemplated by this Agreement and will take
all reasonable actions necessary to obtain (and will cooperate with the other
Parties in obtaining) any consent, approval, order or authorization of, or any
registration, declaration or filing with, any Governmental Entity or other
person, required to be obtained or made in connection with the taking of any
action contemplated by this Agreement.
5.9 Best Efforts: Additional Documents and Further Assurances.
(A) Each of the Parties to this Agreement will use its best efforts to
effectuate the transactions contemplated hereby and to fulfill and cause to
be fulfilled the conditions to the Reorganization and the condition
subsequent under this Agreement.
(B) Each Party, at the request of another Party, will execute and deliver such
other instruments and do and perform such other acts and things as may be
reasonably necessary or desirable for effecting completely the consummation
of this Agreement and the transactions contemplated hereby.
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5.10 Board of Directors.
Immediately following Closing, Xx. Xxxxxx X. Xxxxx will be elected to
Issuer's board of directors and thereafter, Issuer will call its annual meeting
of stockholders, nominating as director candidates such persons as the
Stockholders shall deem appropriate.
Article VI
Conditions to the Reorganization
6.1 Conditions to Obligations of Each Party to Effect the Reorganization.
The respective obligations of each party to this Agreement to effect the
Reorganization will be subject to the satisfaction at or prior to the Closing
Date of the following conditions:
(A) No Injunctions or Restraints: Illegality.
No temporary restraining order, preliminary or permanent injunction or
other order issued by any court of competent jurisdiction or other legal
restraint or prohibition preventing the consummation of the Reorganization will
be in effect, nor will any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending; nor will there be any action
taken, or any statute, rule, regulation or order enacted, entered, enforced or
deemed applicable to the Reorganization, which makes the consummation of the
Reorganization illegal.
6.2 Additional Conditions to Obligations of Union Dental and DDS.
The obligations of Union Dental and DDS to consummate and effect this
Agreement and the transactions contemplated hereby will be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Union Dental
and DDS:
(A) Representations, Warranties and Covenants.
The representations and warranties of Issuer in this Agreement will be true
and correct in all material respects on and as of the Closing Date as though
such representations and warranties were made on and as of such time and Issuer
will have performed and complied in all Material respects with all covenants,
obligations and conditions of this Agreement required to be performed and
complied with by it as of the Closing Date.
(B) Certificate of Issuer.
Union Dental and DDS will have been provided with a certificate executed on
behalf of Issuer by its President and its Chief Financial Officer, Treasurer or
officer exercising such functions to the effect that, as of the Closing Date:
(1) All representations and warranties made by Issuer under this Agreement
are true and complete in all material respects; and
(2) All covenants, obligations and conditions of this Agreement to be
performed by Issuer on or before such date have been so performed in
all Material respects.
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(C) Satisfactory Form of Legal Matters.
The form, scope and substance of all legal and accounting matters
contemplated hereby and all documents and other papers delivered hereunder prior
to and on the Closing Date will be reasonably acceptable to counsel to Union
Dental and DDS.
(D) Legal Opinion.
Union Dental and DDS will have received a legal opinion from legal counsel
to Issuer, substantially in the form of Exhibit 6.2(D) hereto.
(E) No Material Adverse Changes.
There will not have occurred any event, fact or condition that has had or
reasonably would be expected to have a Material adverse effect on Issuer.
(F) Tax Opinion.
(1) Union Dental will have received a written opinion from its tax
advisors to the effect that the Reorganization will constitute a
reorganization within the meaning of Section 368(a)(1)(B) of the Code.
In rendering such opinion such tax advisor may rely on (and to the
extent reasonably required, the Parties will make) reasonable
representations related thereto.
6.3 Additional Conditions to the Obligations of Issuer.
The obligations of Issuer to consummate and effect this Agreement and the
transactions contemplated hereby will be subject to the satisfaction at or prior
to the Closing Date of each of the following conditions, any of which may be
waived, in writing, exclusively by Issuer:
(A) Representations, Warranties and Covenants.
The representations and warranties of Union Dental and DDS in this
Agreement will be true and correct in all Material respects on and as of the
Closing Date as though such representations and warranties were made on and as
of such time and Union Dental and DDS will have performed and complied in all
Material respects with all covenants, obligations and conditions of this
Agreement required to be performed and complied with by it as of the Closing
Date.
(B) Certificate of Union Dental and DDS.
Issuer will have been provided with a certificate executed on behalf of
Union Dental and DDS respectively by its President and Chief Financial Officer
to the effect that, as of the Closing Date, all:
(1) Representations and warranties made by Union Dental and DDS
respectively under this Agreement are true and complete in all
Material respects; and
(2) Covenants, obligations and conditions of this Agreement to be
performed by Union Dental and DDS respectively on or before such date
have been so performed in all Material respects.
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(C) Third Party Consents.
Any and all consents, waivers and approvals required from third parties
relating to the contracts and agreements of Union Dental and DDS so that the
Reorganization and other transactions contemplated hereby do not adversely
affect the rights of, and benefits to, Union Dental and DDS thereunder will have
been obtained.
(D) Satisfactory Form of Legal and Accounting Matters.
The form, scope and substance of all legal and accounting matters
contemplated hereby and all documents and other papers delivered hereunder prior
to and on the Closing Date will be reasonably acceptable to Issuer's counsel
(provided that the condition subsequent concerning the compliance of information
provided by Union Dental with the requirements of Commission Regulation S-B, on
a timely basis, will survive the Closing).
(E) Legal Opinion.
Issuer will have received a legal opinion from legal counsel to Union
Dental and DDS, in substantially the form of Exhibit 6.3(E) hereto.
(F) No Material Adverse Changes.
There will not have occurred any event, fact or condition that has had or
reasonably would be expected to have a Material adverse effect on Union Dental
or DDS.
(G) Non-accredited Investors.
There will be no stockholders of Union Dental or DDS who are not Accredited
Investors.
6.4 Documents to be Delivered at Closing.
(A) By the Issuer
(1) Board of Directors Minutes authorizing the issuance of a certificate
or certificates for 15,000,000 Shares, registered in the names of the
Stockholders based upon their holdings in Union Dental and DDS as
agreed to on Exhibit A.
(2) The resignation of all officers of Issuer.
(3) A Board of Directors resolution appointing such person as
Stockholder's designate as a director(s) of Issuer.
(4) The resignation of all the directors of Issuer, except that of
Stockholder's designee, dated subsequent to the resolution described
in 6.4(A)(3), above.
(5) Audited financial statements of the Issuer filed with the SEC, which
shall include a current balance sheet and statements of operations,
stockholders equity and cash flows for the twelve month period then
ended.
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(6) All of the business and corporate records of Issuer, including but not
limited to correspondence files, bank statements, checkbooks, savings
account books, minutes of shareholder and directors meetings,
financial statements, shareholder listings, stock transfer records,
agreements and contracts.
(7) Such other minutes of Issuer's shareholders or directors as may
reasonably be required by Stockholders.
(B) By Union Dental, DDS and the Stockholders
(1) Delivery to the Issuer, or to its Transfer Agent, the certificates
representing 100% of the issued and outstanding stock of Union Dental
and DDS.
(2) Consents signed by all the Stockholders of Union Dental and DDS
consenting to the terms of this Agreement.
(3) Audited financial statements in form and substance, and prepared in
accordance with, rules and regulations of the Commission and meeting
the filing requirements for a transaction of this type.
Article VII
Survival of Condition Subsequent, Representations and Warranties & Covenants
7.1 Survival of Condition Subsequent, Representations and Warranties &
Covenant.
All conditions subsequent to the Reorganization and covenants to be
performed after the Closing, and all representations and warranties in this
Agreement or in any instrument delivered pursuant to this Agreement will survive
the Closing and continue until the date the audit of Issuer's financial
statements for the year ending May 31, 2004 has been completed and Issuer has
received a signed opinion from its independent auditors certifying such
financial statements (the "2004 Audit Date").
Article VIII
Termination, Amendment and Waiver
8.1 Termination.
This Agreement may be terminated and the Reorganization abandoned at any
time prior to the Closing Date, as follows:
(A) By mutual consent of the Parties.
(B) By Issuer if it is not in Material breach of its obligations under this
Agreement and there has been a Material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Union Dental or DDS and such breach has not been cured within 15 days after
notice to Union Dental or DDS.
(C) By Union Dental or DDS if it is not in Material breach of its respective
obligations under this Agreement and there has been a Material breach of
any representation, warranty, covenant or agreement contained in this
Agreement on the part of Issuer and such breach has not been cured within
15 days after notice to Issuer;
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(D) By any Party if:
(1) The Reorganization has not occurred by December 31, 2004;
(2) There is a order of a federal or state court in effect preventing
consummation of the Reorganization; or
(3) There will be any action taken, or any statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the
Reorganization by any Governmental Entity which would make
consummation of the Reorganization illegal.
(E) Where action is taken to terminate this Agreement pursuant to this Section
8.1, it will be sufficient for such action to be authorized by the board of
directors (as applicable) of the Party taking such action.
8.2 Effect of Termination.
In the event of termination of this Agreement as provided in Section 8.1,
this Agreement will immediately become null and void and there will be no
liability or obligation on the part of any Party or their respective officers,
directors or stockholders, except if such termination results from the breach by
a Party of any of its representations, warranties, covenants or agreements set
forth in this Agreement (it being understood that termination of this Agreement
because of failure of Union Dental or DDS to satisfy the condition set forth in
Section 6.3(A) as a result of the occurrence of a Post-Execution Event will not
be deemed to be a termination resulting from such a breach of representation or
warranty.)
8.3 Amendment.
(A) This Agreement may be amended by the Parties at any time before or after
approval of matters presented in connection with the Closing by the
stockholders of those Parties required by applicable law to so approve but,
after any such stockholder approval, no amendment will be made which by law
requires the further approval of stockholders of a party without obtaining
such further approval.
(B) This Agreement may not be amended except by an instrument in writing signed
on behalf of each of the Parties.
8.4 Extension & Waiver.
(A) At any time prior to the Closing any Party may, to the extent legally
allowed:
(1) Extend the time for the performance of any of the obligations or other
acts of the other Parties;
(2) Waive any inaccuracies in the representations and warranties made to
such party contained herein or in any document delivered pursuant
hereto; or
(3) Waive compliance with any of the agreements or conditions for the
benefit of such Party contained herein.
(B) Any agreement on the part of a Party to any such extension or waiver will
be valid only if set forth in an instrument in writing signed on behalf of
such Party.
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Article IX
General Provisions
9.1 Interpretation.
(A) When a reference is made in this Agreement to Schedules or Exhibits, such
reference will be to a Schedule or Exhibit to this Agreement unless
otherwise indicated.
(B) The words "include," "includes" and "including" when used herein will be
deemed in each case to be followed by the words "without limitation."
(C) The headings contained in this Agreement are for reference purposes only
and will not affect in any way the meaning or interpretation of this
Agreement.
(D) The captions in this Agreement are for convenience and reference only and
in no way define, describe, extend or limit the scope of this Agreement or
the intent of any provisions hereof.
(E) All pronouns and any variations thereof will be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the
Party or Parties, or their personal representatives, successors and assigns
may require.
(F) The Parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement (or waive its right to such
representation) and, therefore, waive the application of any law,
regulation, holding or rule of construction providing that ambiguities
in an agreement or other document will be construed against the party
drafting such agreement or document.
9.2 Notice.
(A) All notices, demands or other communications given hereunder will be in
writing and will be deemed to have been duly given on the third business
day after mailing by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
(1) To Issuer:
National Business Holdings, Inc.
0000 Xxxxxx Xx., Xxx Xxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, CEO
Telephone (000) 000-0000, Fax (000) 000-0000.
(2) To Union Dental:
Union Dental Corp.
0000 Xxxxxxxxxx Xxxxx Xxxxx 000, Xxxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx, President
Telephone (000) 000-0000; Fax (000) 000-0000;
e-mail xxxxxxxx@xxxxxxxxxxx.xxx;
with a copy to
Xxxxxxx X. Xxxxxxx, Esquire
Xxxxxx, Xxxxxxx & Xxxxx, LLP
0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000
Telephone (000) 000-0000; Fax (000) 000-0000;
e-mail xxxxxxxx@xxx-xxx.xxx.
25
(3) To DDS:
Direct Dental Services, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx, President
Telephone (000) 000-0000; Fax (000) 000-0000;
e-mail xxxxxxxx@xxxxxxxxxxx.xxx.
with a copy to
Xxxxxxx X. Xxxxxxx, Esquire
Xxxxxx, Xxxxxxx & Xxxxx, LLP
0000 X. Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx Xxxxx, XX 00000
Telephone (000) 000-0000; Fax (000) 000-0000;
e-mail xxxxxxxx@xxx-xxx.xxx.
or to the Stockholders at their respective addresses set forth herein or
such other address or to such other person as any Party will designate to
the other for such purpose in the manner hereinafter set forth.
(B) At the request of any Party, notice will also be provided by overnight
delivery, facsimile transmission or e-mail, provided that a transmission
receipt is retained.
9.3 Merger of All Prior Agreements Herein.
(A) This instrument, together with the instruments referred to herein, contains
all of the understandings and agreements of the Parties with respect to the
subject matter discussed herein.
(B) All prior agreements whether written or oral are merged herein and will be
of no force or effect.
9.4 Survival.
The several representations, warranties and covenants of the Parties
contained herein will survive the execution hereof and the Closing and will be
effective regardless of any investigation that may have been made or may be made
by or on behalf of any Party.
9.5 Severability.
If any provision or any portion of any provision of this Agreement, other
than one of the conditions precedent or subsequent, or the application of such
provision or any portion thereof to any person or circumstance will be held
invalid or unenforceable, the remaining portions of such provision and the
remaining provisions of this Agreement or the application of such provision or
portion of such provision as is held invalid or unenforceable to persons or
circumstances other than those to which it is held invalid or unenforceable,
will not be affected thereby.
9.6 Governing Law.
This Agreement will be construed in accordance with the substantive and
procedural laws of the State of Florida (other than those regulating Taxation
and choice of law). 9.7 Indemnification.
(A) Each Party hereby irrevocably agrees to indemnify and hold the other
Parties harmless from any and all liabilities and damages (including legal
26
or other expenses incidental thereto), contingent, current, or inchoate to
which they or any one of them may become subject as a direct, indirect or
incidental consequence of any action by the indemnifying Party or as a
consequence of the failure of the indemnifying Party to act, whether
pursuant to requirements of this Agreement or otherwise.
(B) In the event it becomes necessary to enforce this indemnity through an
attorney, with or without litigation, the successful Party will be entitled
to recover from the indemnifying Party, all costs incurred including
reasonable attorneys' fees throughout any negotiations, trials or appeals,
whether or not any suit is instituted.
9.8 Dispute Resolution.
(A) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement any proceedings
pertaining directly or indirectly to the rights or obligations of the
Parties hereunder will, to the extent legally permitted, be held in Broward
County, Florida, and the prevailing Party will be entitled to recover its
costs and expenses, including reasonable attorneys' fees up to and
including all negotiations, alternative dispute resolution proceedings,
trials and appeals, whether or not any formal proceedings are initiated.
(B) In the event of any dispute arising under this Agreement, or the
negotiation thereof or inducements to enter into the Agreement, the dispute
will, at the request of any Party, be exclusively resolved through the
following procedures:
(1) First, the issue will be submitted to mediation before a mediation
service in Broward County, Florida to be selected by lot from four
alternatives to be provided, two by Issuer and two by Union Dental.
The mediation efforts will be concluded within ten business days after
their initiation unless the Parties unanimously agree to an extended
mediation period;
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties will submit the
dispute to binding arbitration before an arbitration service located
in Broward County, Florida to be selected by lot, from four
alternatives to be provided, two by Issuer and two by Union Dental.
(3) Expenses of mediation will be borne equally by the Parties, if
successful. Expenses, including reasonable attorneys' fees, of
mediation, if unsuccessful, and of arbitration, will be borne by the
Party or Parties against whom the arbitration decision is rendered. If
the terms of the arbitral award do not establish a prevailing Party,
then the expenses of unsuccessful mediation and arbitration will be
borne equally by the Parties involved.
9.9 Benefit of Agreement.
The terms and provisions of this Agreement will be binding upon and inure
to the benefit of the Parties, their successors, assigns, personal
representatives, estate, heirs and legatees but are not intended to confer upon
any other person any rights or remedies hereunder.
9.10 Further Assurances.
The Parties agree to do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, stock certificates and other documents, as may, from time to time,
be required herein to effect the intent and purpose of this Agreement.
27
9.11 Counterparts.
(A) This Agreement may be executed in any number of counterparts.
(B) All executed counterparts will constitute one Agreement notwithstanding
that all signatories are not signatories to the original or the same
counterpart.
(C) Execution by exchange of facsimile transmission will be deemed legally
sufficient to bind the signatory; however, the Parties will, for aesthetic
purposes, prepare a fully executed original version of this Agreement which
will be the document filed with the Commission.
9.12 Time of Essence.
Time is of the essence of this Agreement and of each and every provision
hereof.
In Witness Whereof, Issuer, Union Dental, DDS and the Stockholders have
caused this Agreement to be executed by themselves or their duly authorized
respective officers, all as of the last date set forth below:
National Business Holdings, Inc.
(a Florida corporation)
By: /s/ Xxxxx X. Xxxxxx
------------------------
Xxxxx X. Xxxxxx, President
Dated: December 28, 2004
State of }
County of ___________ } ss.:
On this 28th day of December, 2004, before me, a notary public in and for
the county and state aforesaid, personally appeared ___________________, to me
known, and known to me to be the President of National Business Holdings, Inc.,
the above-described corporation, and to me known to be the person who executed
the foregoing instrument, and acknowledged the execution thereof to be his free
act and deed, and the free act and deed of National Business Holdings, Inc., for
the uses and purposes therein mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of ______________, ____.
{seal}
--------------------------------
Notary Public - State of Florida
28
Union Dental Corporation
(a Florida corporation)
By: /s/Xx. Xxxxxx X. Xxxxx
---------------------------------
Xx. Xxxxxx X. Xxxxx, President
Dated: December 28, 2004
State of Florida }
County of Broward } ss.:
On this 28th day of December, 2004, before me, a notary public in and for
the county and state aforesaid, personally appeared Xx. Xxxxxx X. Xxxxx, to me
known, and known to me to be the President of Union Dental Corp., the
above-described corporation, and to me known to be the person who executed the
foregoing instrument, and acknowledged the execution thereof to be his free act
and deed, and the free act and deed of Union Dental Corp., for the uses and
purposes therein mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____
(Seal)
--------------------------------
Notary Public
Direct Dental Services, Inc.
(a Florida corporation)
By: /s/Xx. Xxxxxx X. Xxxxx
---------------------------------
Xx. Xxxxxx X. Xxxxx, President
Dated: December 28, 2004
State of Florida }
County of Broward } ss.:
On this 28th day of December, 2004, before me, a notary public in and for
the county and state aforesaid, personally appeared Xx. Xxxxxx X. Xxxxx, to me
known, and known to me to be the President of Direct Dental Services, Inc. , the
above-described corporation, and to me known to be the person who executed the
foregoing instrument, and acknowledged the execution thereof to be his free act
and deed, and the free act and deed of Direct Dental Services, Inc., for the
uses and purposes therein mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____
(Seal)
--------------------------------
Notary Public
Stockholders
/s/ Xx. Xxxxxx X. Xxxxx
---------------------------------
Xx. Xxxxxx X. Xxxxx,
owner of 1,000 shares of common stock of Union Dental Corp.
And 7,500 shares of common stock of DDS.
Dated: December 27, 2004
29
State of Florida }
County of Broward } ss.:
On this 27th day of December, 2004, before me, a notary public in and for
the county and state aforesaid, personally appeared Xx. Xxxxxx X. Xxxxx, to me
known, and known to me to be a stockholder of Union Dental Corp. and Direct
Dental Services, Inc., the above-described corporations, and to me known to be
the person who executed the foregoing instrument, and acknowledged the execution
thereof to be his free act and deed, for the uses and purposes therein
mentioned.
In witness whereof, I have hereunto set my hand and affixed my notarial
seal the day and year in this certificate first above written. My commission
expires the ___day of _______________, ____.
{seal}
--------------------------------
Notary Public - State of Florida
30
