MedLink International. Inc.
&
CNI Medical Coding & Recovery, Inc.
DEFINITIVE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered into as of
this 30th day of January 2006, by and among MedLink International, Inc., a
Delaware corporation, (the "Acquiror"), CNI Medical Coding & Recovery, Inc., a
Delaware corporation (the "Acquiree") and the shareholders of the Acquiree more
particularly described herein (the "Shareholders").
RECITALS
A. The Shareholder owns, in the aggregate, 100% of the outstanding capital
stock of the Acquiree.
B. The Acquiror is a reporting company for the purposes of the Securities
Exchange Act of 1934 (the "Exchange Act"), the common stock of which is
quoted on the over-the-counter bulletin board of the National
Association of Securities Dealers, Inc.
C. The Acquiror desires to acquire 100% of the issued and outstanding
capital stock of the Acquiree as of the Closing Date, making the
Acquiree a wholly-owned subsidiary of the Acquiree, and the
Shareholders desire to exchange all of their shares of the Acquiree's
capital stock for one hundred thousand shares of the Acquiror's class A
common stock.
D. It is the intention of the parties hereto that: (i) the Acquiror shall
acquire 100% of the issued and outstanding capital stock of the
Acquiree in exchange for solely one hundred thousand (100,000) shares
of the Acquiror's Class A common stock. (the "Exchange"); (ii) the
Exchange shall qualify as a tax-free reorganization under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended, and
related sections thereunder; and (iii) the Exchange shall qualify as a
transaction in securities exempt from registration or qualification
under the Securities Act of 1933, as amended (the "Act"), and under the
applicable securities laws of the states or jurisdictions where the
Shareholders reside.
NOW, THEREFORE, in consideration for the mutual premises set forth herein and
for such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties, intending to be legally bound, agree
as follows:
1. Recitals and Definitions.
(a) The foregoing recitals are true and correct and are incorporated
herein and made a part hereof.
(b) For purposes of this Agreement, the terms set forth below shall
have the following meanings:
Acquiree - CNI Medical Coding & Recovery, Inc., a Delaware
corporation
Acquiror MedLink International, Inc., a Delaware corporation
Act - the Securities Act of 1933, as amended
Acquiree Statements - unaudited financial statements of the Acquiree for the
fiscal year ended December 31,2005.
Closing- the consummation of the Exchange contemplated hereby
Closing Date - the date on which all of the actions necessary to effect
the consummation of the Exchange have taken place
Common Stock - Class A common stock, $.001 par value per share, of
Acquiror
Common Shares - the shares of Common Stock to be issued to the
Shareholders pursuant to this Agreement
Exchange - the acquisition by Acquiror of all of the outstanding
shares of the issued and outstanding capital stock of
the Acquiree in exchange for an aggregate of 100,000
Common Shares
Exchange Act - the Securities Exchange Act of 1934
Shareholders - all of holders of capital stock of the Acquiree as of
the date of this agreement
Acquiror Statements - Acquiror's financial statements, whether audited or
unaudited, as filed with the Securities and Exchange
Commission as of the date of this agreement and as of
the Closing Date, as applicable
2. Exchange of Shares.
(a) General. The Acquiror, the Acquiree and the Shareholders agree that,
subject to the terms and conditions set forth elsewhere herein, and on the terms
and conditions set forth herein, the Shareholders will exchange all of the
issued and outstanding shares of the capital stock of the Acquiree owned by them
for a total of 100,000 Common Shares, making the Acquiree a wholly-owned
subsidiary of the Acquiror. The foregoing, along with the exchange and delivery
2
of documents described elsewhere herein will constitute the "Closing," and the
date on which such events occur will constitute the "Closing Date."
Other than for the exchange of Common Shares contemplated hereby, the
parties hereto do not contemplate the exchange or payment of any other
consideration, regardless of form, nor do they contemplate any arrangement by
which the Acquiror would dispose of its controlling interest in the Acquiree.
The Common Shares to be issued to the Shareholders in connection with
the consummation of the Exchange will not be registered pursuant to the Act,
and will bear a restrictive legend indicating the restrictions on their
transferability.
Simultaneously with the Closing of this Exchange, the Shareholders will
deliver to Acquiror the certificates representing all of the outstanding shares
of Acquiree's capital stock owned by them, duly endorsed (or with duly
executed stock powers) so as to make Acquiror the sole owner thereof, free and
clear of all liens, claims and encumbrances, except as may be otherwise
disclosed herein.
3. Closing and Post-Closing. Closing of the Exchange will take place at the
offices of the Acquiree, on such date and time as the parties shall mutually
agree, it being their intention to consummate the Exchange within 30 days from
the date of this Agreement.
(a) Conditions of Closing. The parties' respective obligations to
consummate the Exchange are as set forth below.
(i) The Acquiror's obligation to consummate the Exchange is
conditioned on the occurrence of, or waiver of, the following:
(A) due diligence satisfactory to the Acquiror;
(B) approval of the respective Boards of Directors of the Acquiree
and the corporate Shareholders;
(C) Acquiree shall have no more than 100 shares of common stock
outstanding;
(D) Acquiree shall have retained a firm of independent auditors to
conduct an audit of Acquiree's financial statements for the
Acquiree's two most recent financial statements and other
periods for which audited financial statements are required
under the Exchange Act;
(E) the representations and warranties of the Acquiree set forth
in this Agreement shall be true and correct in all material
respects on the date hereof and on the Closing Date;
(F) all third-party consents reasonably deemed necessary by the
Acquiror shall have been received; and
3
(G) all documents, exhibits and schedules required to be delivered
by the Acquiree or the Shareholders hereunder shall have been
delivered, or waived by the Acquiror.
(ii) The Acquiree's and Shareholders' obligation to consummate the
Exchange is conditioned on the occurrence of, or waiver of, the following:
(A) due diligence satisfactory to the Acquiree and the
Shareholders;
(B) approval of the Board of Directors of the Acquiree and each of
the corporate Shareholders;
(C) Acquiror shall have no more than 10,000,000 shares of Class A
Common Stock outstanding;
(D) the representations and warranties of the Acquiror set forth
in this Agreement shall be true and correct in all material
respects on the date hereof and on the Closing Date;
(E) all third-party consents reasonably deemed necessary by the
Acquiree and the Shareholders shall have been received; and
(F) all documents, exhibits and schedules required to be delivered
by the Acquiror hereunder shall have been delivered or waived
by the Acquiree and the Shareholders.
(b) Closing Deliveries by the Acquiror. At the Closing, the ACQUIREE (as
the case may be) will deliver to the Acquiree and the Shareholders (as the case
may be) the following:
(i) certified copies of all corporate actions necessary to authorize the
execution, delivery and performance of this Agreement the Acquiror,
and the consummation of the transactions contemplated hereby;
(ii) certificates of good standing from the State of Delaware for the
Acquiror, current within five (5) calendar days of the Closing Date;
(iii) incumbency certificates for each the Acquiror;
(iv) certificates representing the Common Shares issued in the names of
the Shareholders and in such appropriate denominations as are
consistent with the Shareholders' respective interests in the
Acquiree;
4
(v) all of the books and records of the Acquiror, including updated
minute books;
(v) all other documents reasonably requested by the Acquiree or its
legal counsel and a majority of the Shareholders.
(c) Closing Deliveries by the Acquiree and the Shareholders. At the
Closing, the Acquiree and the Shareholders (as the case may be) will deliver to
the Acquiror the following:
(i) certified copies of all corporate actions necessary to authorize the
execution, delivery and performance of this Agreement by each of the
Acquiree and each of the corporate Shareholders, and the
consummation of the transactions contemplated hereby;
(ii) Certificates of good standing from the State of Delaware for the
Acquiree, current within five (5) calendar days of the Closing Date;
(iii) certificates representing 100% of the outstanding capital stock of
the Acquiree;
(iv) investment letters signed by each of the Shareholders; and (v) all
other documents reasonably requested by the Acquiror.
(d) the Closing: Actions at Closing. The following actions shall take
place at, and constitute
(i) exchange of documents set forth under subsection (c), above;
(ii) appointment to the following persons to the offices of the Acquiror
indicated below:
President: Xxxxx Xxxx
Executive Vice President: Xxxxxxxxx Xxxxxxxxx
Secretary: Xxxxx Xxxx
4. Representations and Warranties of the Acquiree. The Acquiree, as a material
inducement to the Acquiror to enter into this Agreement and consummate the
transactions contemplated hereby, makes the following representations and
warranties to the Acquiror. The representations and warranties are true and
correct in all material respects, to the best knowledge of the Acquiree.
(a) Securities Holders. The Shareholders are the owners of record of all
of the issued and outstanding shares of the Acquiree's capital stock, and are
identified, along with their respective ownership, in Exhibit 4 (a) attached
hereto.
5
(b) Financial Statements. Exhibit 4(b) consists of the Acquiree
Statements. The Acquiree Statements and financial information contained therein
present fairly the financial condition of the Acquiree and the results of its
operations for the periods covered. The Acquiree Statements are subject to
further revision prior to audit, which are not anticipated to have a materially
adverse impact on such Acquiree Statements.
(c) Undisclosed Liabilities. The Acquiree does not have any liabilities
or obligations of any nature, fixed or contingent, matured or unmatured, that
are not shown or otherwise provided for in the Acquiree Statements, except for
liabilities and obligations arising subsequent to the date of the Acquiree
Statements in the ordinary course of business, none of which individually or in
the aggregate is materially adverse to the business or financial condition of
the Acquiree, other than those liabilities and obligations set forth in Exhibit
4(c).
(d) Materiallv Adverse Change. Since the date of the Acquiree
Statements, the business of the Acquiree has been operated in the ordinary
course of business and, except as set forth in Exhibit 4(d), there has not
been:
(i) any materially adverse change in the business, condition
(financial or otherwise), results of operations, prospects,
properties, assets, liabilities, earnings, net worth, business
or prospects of Acquiree for such period or at any time during
such period;
(ii) any material damage, destruction or loss (whether or not
covered by insurance) affecting the Acquiree or its assets,
properties, or business;
(iii) any declaration, setting aside, or payment of any dividend or
other distribution in respect of any shares of capital stock
of Acquiree, or any direct or indirect redemption, purchase or
other acquisition of any such stock or any agreement to do so;
(iv) any issuance or sale by the Acquiree or agreement by the
Acquiree to sell or pledge any of the Acquiree's securities,
nor have any irrevocable proxies been given with respect to
the Acquiree's securities;
(v) any statute, rule, regulation or order adopted (including
orders of regulatory authorities with jurisdiction over the
Acquiree or its business) that materially and adversely
affects the Acquiree or its business or financial condition;
(v) any material increase in the rate of compensation or in bonus
or commission payments payable or to become payable to any of
the salaried employees of the Acquiree; provided, however,
that this paragraph shall not restrict or limit the Acquiree
in any way from hiring additional personnel who are needed for
its operation; or
(vii) any other events or conditions of any character that may
reasonably be expected to have a materially adverse effect on
the Acquiree or its business or financial condition.
6
(e) Litigation. Except as set forth in the Acquiree Statements or notes
thereto, or as set forth in Schedule 4(e) hereto, there are no actions, suits,
claims, investigations or legal, administrative or arbitration proceedings
pending or threatened against the Acquiree or its assets or its business,
whether at law or in equity or before or by any federal, state, municipal,
local, foreign or other governmental department, commission, board, bureau,
agency or instrumentality, nor does the Acquiree know of any basis for any such
action, suit, claim, investigation or proceeding. Expressly excluded from this
representation are all pending and threatened actions that may arise in the
ordinary course of Acquiree's business.
(f) Compliance: Governmental Authorizations. The Acquiree has complied
in all material respects with all federal, state, local or foreign laws,
ordinances, regulations and orders applicable to its business, including
without limitation, federal and state securities laws that, if not complied
with, would materially and adversely affect such business. The Acquiree has all
federal, state, local and foreign governmental licenses and permits necessary
for the conduct of its business. Such licenses and permits are in full force
and effect. The Acquiree is unaware of any violations of any such licenses or
permits or of any proceedings that are pending or threatened to revoke or limit
the use of such licenses or permits.
(g) Due Organization. The Acquiree is a corporation duly organized and
validly existing under the laws of Delaware; its status is active; it is
qualified to do business and is in good standing in the State of New York. The
Acquiree has the power to own its properties and assets and to carry on its
business as now presently conducted. The Certificate of Incorporation and
Bylaws of the Acquiree are attached hereto as composite Exhibit 4(f) and are
made a part hereof.
(h) Tax Matters. The Acquiree has filed all federal, state and local
tax or related returns and reports due or required to be filed, which reports
accurately reflect in all material respects the amount of taxes due. Except as
disclosed on the Acquiree Statements, the Acquiree has paid all amounts of
taxes or assessments that would be delinquent if not paid as of the date of
this Agreement, other than taxes or charges being contested in good faith or
not yet finally determined. The Acquiree is not aware of any tax liens with
respect to any properties owned by the Acquiree.
(i) Agreements. Schedule 4(g) contains a true and complete list and
brief description of all material written or oral contracts, agreements,
mortgages, obligations, understandings, arrangements, restrictions, and other
instruments to which the Acquiree is a party or by which the Acquiree is a
party or by which or its assets may be bound. True and correct copies of all
items set forth on Schedule 4(g) have been made available to the Acquiror. No
event has occurred that (whether with or without notice, lapse of time or the
happening or occurrence of any other event) would constitute a material default
by the Acquiree under any of the contracts or agreements as set forth in
Schedule 4(g). The Acquiree is not aware of any material default by the other
parties to such agreements.
(j) Title to Property and Related Matters. The Acquiree has good and
marketable title to all of its properties and assets, real, personal and mixed,
owned by it at the date of this Agreement of any kind or character, free and
clear of any liens or encumbrances, except as indicated in the Acquiree
Statements of on Exhibit 4(h) attached hereto. Except for matters that may
arise in the ordinary course of business, the Acquiree's assets are in good
operating
7
condition and repair, reasonable wear and tear excepted. There does not exist
any condition that materially interferes with the use thereof in the ordinary
course of the Acquiree's business.
(k) Licenses: Trademarks: Trade Names. A list of licenses, trademarks,
trade names, service marks, copyrights, patents or any applications for any of
the foregoing that relate to the Acquiree's business are set forth in Schedule
4(i).
(1) Due Authorization. This Agreement has been duly authorized,
executed and delivered by the Acquiree and constitutes a valid and binding
agreement of the Acquiree, enforceable in accordance with its terms except as
such enforcement may be limited in applicable bankruptcy, insolvency,
moratorium, and other similar laws relating to, limiting or affecting the
enforcement of creditors rights generally or by the application of equitable
principles. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby, nor compliance with any
of the provisions hereof, will violate in any material respect any order, writ,
injunction or decree of any court or governmental authority, or violate or
conflict with in any material respect or constitute a default under (or give
rise to any right of termination, cancellation or acceleration under) any
provisions of the Acquiree's Certificate of Incorporation or By-laws, the terms
or conditions or provisions of any note, bond, lease, mortgage, obligations,
agreement, understanding, arrangement or restriction of any kind to which the
Acquiree is a party or by which the Acquiree or its properties may be bound, or
violate in any material respect any statute, law, rule or regulation applicable
to the Acquiree. No consent or approval by any governmental authority is
required in connection with the execution and delivery by the Acquiree of this
Agreement or by the consummation of the transactions contemplated hereby.
(m) Capitalization. The authorized capitalization of the Acquiree is as
set forth on Schedule 4(j). All outstanding securities have been duly
authorized, validly issued, and are fully paid and non-assessable, and all such
securities were issued in compliance with applicable federal and state
securities law. There are no outstanding or presently authorized securities,
warrants, preemptive rights, subscription rights, options or related
commitments or agreements of any nature to issue any of the Acquiree's
securities.
(n) Full Disclosure. The Acquiree has disclosed to the Acquiror all
events, conditions and facts materially affecting the properties, business and
prospects of the Acquiree that are known to the Acquiree. The Acquiree has not
withheld disclosure of any events, conditions, and facts of which it may have
knowledge and that may materially and adversely affect the properties, business
or prospects of the Acquiree.
(o) Brokerage Fees. The Acquiree has not incurred, and will not incur,
any liability for brokerage or finder's fees or similar charges in connection
with this Agreement or the transactions contemplated hereby.
(p) Share Ownership. The shares of the Acquiree's capital stock to be
exchanged for shares of the Acquiror's Common Shares in the Exchange are owned,
of record and beneficially, by the Shareholder, free and clear of all liens and
encumbrances of any kind and nature, and have not been sold, pledged, assigned
or otherwise transferred. There are no agreements to sell, pledge, assign or
otherwise transfer such securities.
8
(q) Approvals Required. No approval, authorization, consent, order or
other action of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in connection
with the execution and delivery by the Shareholder of this Agreement or the
consummation of the transactions described herein, except to the extent that the
Shareholder may be required to file reports in accordance with relevant
regulations under federal and state securities laws.
(r) Subsidiaries. The Acquiree's subsidiaries are set forth in Schedule
4(r).
(s) Emplovee Benefit Plans. Neither the Acquiree nor any of its
subsidiaries has any employee benefit plans.
5. Representations and Warranties of the Acquiror. The Acquiror, as a material
inducement to the Acquiree and the Shareholders to enter into this Agreement and
consummate the transactions contemplated hereby, jointly and severally make the
following representations and warranties to the Acquiree and to the
Shareholders, which representations and warranties are true and correct in all
material respects at this date, to the best knowledge of the Acquiror after due
inquiry.
(a) Shares of Common Stock. The Shares to be delivered to the Shareholders
at the Closing will be validly and legally issued, free and clear of all liens,
encumbrances, transfer fees and preemptive rights, and will be fully paid and
non-assessable.
(b) Due Organization. The Acquiror is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
and is qualified to do business in each state where it is required to be
qualified and where such qualification is material to its business, and has the
corporate power to own its property and to carryon its business as now presently
conducted.
(c) Due Authorization. This Agreement has been duly authorized, executed,
and delivered by the Acquiror and constitutes a legal, valid and binding
obligation of the Acquiror, enforceable in accordance with its terms except as
such enforcement may be limited by applicable bankruptcy, insolvency,
moratorium, and other similar laws relating to, limiting or affecting the
enforcement of creditors rights generally or by the application of equitable
principles. The execution, delivery and performance of this Agreement by the
Acquiror will not violate or conflict with in any material respect or constitute
a default under any provisions of applicable law, the Acquiror's Articles of
Incorporation or bylaws, or any agreement or instrument to which the Acquiror is
a party or by which it or its assets are bound. No consent of any federal,
state, municipal or other governmental authority is required by Acquiror for the
execution, delivery or performance of this Agreement by the Acquiror. No consent
of any party to any contract or agreement to which the Acquiror is a party or by
which any of its property or assets are subject is required for the execution,
delivery or performance of this Agreement by the Acquiror that has not been
obtained at the date of this Agreement.
(d) Acquiror's Statements. The Acquiror Statements and financial
information contained therein were prepared in accordance with generally
accepted accounting principles and present fairly the financial condition of the
Acquiree and the results of its operations for the periods covered.
9
(e) Undisclosed Liabilities. There are no liabilities, whether
contingent or otherwise, of the Acquiror or its subsidiary that have not been
disclosed on the Acquiror Statements or in notes thereto, nor is the Acquiror
aware of the basis for any such liability.
(f) Materially Adverse Change. Since the date of the audited statements
included in the Acquiror Statements, there has been no materially adverse
change to the financial condition or operations of the Acquiror or its
subsidiary, nor does the Acquiror anticipate any such materially adverse
change.
(g) Litigation. There are no actions, suits, claims, investigations or
legal, administrative or arbitration proceedings pending against the Acquiror
or its subsidiary, their respective assets or business, whether at law or in
equity, or before or by any federal, state, municipal, local, foreign or other
governmental department, commission, board, bureau, agency or instrumentality;
nor does the Acquiror know of a threat of, or any basis for, any such action,
suit, claim, investigation or proceeding
(h) Compliance; Governmental Authorizations. The Acquiror and its
subsidiary have has complied in all material respects with all federal, state,
local or foreign laws, ordinances, regulations and orders applicable to its
business, including without limitation, federal and state securities laws that,
if not complied with, would materially and adversely affect such business. The
Acquiror and its subsidiary have all federal, state, local and foreign
governmental licenses and permits necessary for the conduct of their respective
business. Such licenses and permits are in full force and effect. The Acquiror
does not know of any violations of any such licenses or permits. No proceedings
are pending or, to the knowledge of the Acquiror, threatened, to revoke or
limit the use of such licenses or permits.
(i) Tax Matters. The Acquiror and its subsidiary have filed all
federal, state and local tax or related returns and reports due or required to
be filed, which reports accordingly reflect in all material respects the amount
of taxes due. The Acquiror has paid all amounts of taxes on assessments that
would be delinquent if not paid as of the date of this Agreement, other than
taxes or charges being contested in good faith (which are identified on
Schedule 5(i) or not yet finally determined. The Acquiror is not aware of any
tax liens with respect to any properties owned by the Acquiree or its
subsidiary.
(j) Agreements. Schedule 5(g) contains a true and complete list and
brief description of all material written or oral contracts, agreements,
mortgages, obligations, understandings, arrangements, restrictions, and other
instruments to which the Acquiror or its subsidiary is a party or by which the
Acquiror or its subsidiary, or their respective assets, may be bound. True and
correct copies of all items set forth on Schedule 5(g) will be made available
to the Acquiree before the Closing Date. No event has occurred that (whether
with or without notice, lapse of time or the happening or occurrence of any
other event) would constitute a material default by the Acquiror or its
subsidiary (as the case may be) under any of the contracts of agreements set
forth in Schedule 5(g). The Acquiror is not aware of any material default by
the other parties to such agreements. In addition, no material violations have
occurred pursuant to any loan agreements to which the Acquiror is a party.
(k) Full Disclosure. The Acquiror has disclosed to the Acquiree all
events, conditions and facts materially affecting the business and prospects of
the Acquiror. The Acquiror has not withheld disclosure of any events,
conditions, and facts of which it may have
10
knowledge and that may materially and adversely affect the business or prospects
of the Acquiror.
(I) Brokerage Fees. The Acquiror has not incurred, and will not incur,
any liability for brokerage or finder's fees or similar charges in connection
with this Agreement.
(m) No Approvals Required. No approval, authorization, consent, order
or other action of, or filing with, any person, firm or corporation or any
court, administrative agency or other governmental authority is required in
connection with the execution and delivery by the Acquiror of this Agreement or
the consummation of the transactions described herein, except to the extent
that the parties may be required to file reports in accordance with relevant
regulations under federal and state securities laws.
(n) Further Disclosure. The Acquiree and the Shareholders are entitled
to rely on the accuracy and completeness of the Acquiree's filings made
pursuant to the Securities Exchange Act of 1934, and represent that such
filings are true and complete in all material respects, and do not omit any
information necessary to make the information contained therein not misleading.
(o) Securities Laws. The Acquiror, and all holders of five percent (5%)
or more of the Acquiror's outstanding capital stock have complied in all
material respects with applicable federal and state securities laws, rules and
regulations. All shares of capital stock of the Acquiror have been issued in
accordance with applicable federal and state securities laws, rules and
regulations. There are no stop orders in effect with respect to any of the
Acquiror's securities. All outstanding securities are fully-paid and are
non-assessable.
(p) Tradabilitv. Bid and asked quotations for the Common Stock are
posted on the over-the-counter bulletin board of the National Association of
Securities Dealers, Inc. ("OTCBB"). A complete list of the market makers for
the Common Stock, and contact information where available, is attached as
Exhibit 5(k). Neither the Acquiror nor any of its officers or directors, is
aware of or has any reason to be aware of any claim, inquiry or investigation
by a state or federal regulatory authority, or the OTCBB, regarding trading in
the Common Stock or any related claim, inquiry or investigation.
(q) Standstill. Since the date of the letter of intent between the
Acquiror and the Acquiree dated December 6, 2006, through the date of this
Agreement, neither the Acquiree, or any of their respective officers,
directors, employees, agents or consultants has, and none of them will, through
the Closing Date:
(i) engage (nor permit others to engage on their behalf) in
discussions with any party other than the Acquiree or the
Shareholders pertaining to a possible business merger,
combination, acquisition, reverse acquisition, or similar
transaction;
(ii) increase or otherwise alter the compensation structure for
either the Acquiror's or its subsidiary's agents, consultants,
or affiliates;
11
(iii) enter into any contracts, commitments, or obligations other
than in the ordinary course of the business of the Acquiror
and of its subsidiary, consistent with their respective
business practices;
(iv) dispose of the assets of the Acquiror or its subsidiary, other
than in the ordinary course of its business consistent with
previous activities; or
(v) otherwise take any actions that might reasonably be perceived
to be out of the ordinary course of business.
6. Indemnification.
(a) Acquiree Indemnification. Acquiree hereby indemnifies and holds
harmless Acquiror and Acquiror's present and future officers, directors,
employees and agents with respect to any and all adverse consequences incurred
by any of them in connection with each and all of the following:
(i) Any misrepresentation or breach of any warranty made by
Acquiree in this Agreement or in any Schedule, Exhibit, or
other document attached hereto or delivered to the Acquiror by
the Acquiree or any officer of the Acquiree in connection with
the transactions contemplated hereby.
(ii) The breach of any covenant, agreement, or obligation of
Acquiree contained in this Agreement or any Schedule or
Exhibit hereto or any other instrument specifically
contemplated by this Agreement.
(iii) Any misrepresentation contained in any statement in writing or
certificate furnished by an officer of Acquiree pursuant to
this Agreement or in connection with the transactions
contemplated by this Agreement.
(iv) Any liability or obligation of any kind or nature that arises
out of, or relates to, any pension, retirement, profit
sharing, deferred compensation, bonus or other incentive plan,
or any collective bargaining agreement or other labor
agreement, including single or multi-employer plans or
agreements, to which Acquiree or any of its affiliates is a
party or by which any of them is bound, other than assumed
liabilities.
(v) Any liability, obligation or claim for taxes owed by Acquiree
with respect to any period ending on or before the Closing
Date, except as such may be shown on the Financial Statements.
(v) Any misrepresentation in or omission from any list, Schedule,
Exhibit, certificate or other instrument required to be
furnished or specifically contemplated to have been furnished
pursuant to this Agreement to Acquiror or its authorized
representatives.
12
(vii) The Acquiree hereby and herewith acknowledges the effect and
operation of all laws concerning the environmental condition
of the Acquiree's assets existing and applicable as of the
Closing Date.
(b) Acquiror Indemnification. The Acquiror hereby jointly and severally
indemnify and hold harmless the Acquiree and the Acquiree's officers, directors
and employees in respect of any and all adverse consequence incurred by any of
them in connection with each and all of the following:
(i) Any misrepresentation or breach of any warranty made by
Acquiror in this Agreement or in any Schedule, Exhibit, or
other document attached hereto or delivered to Acquiree by
Acquiror or any officer of Acquiror in connection with the
transactions contemplated hereby;
(ii) The breach of any covenant, agreement, or obligation of
Acquiror contained in this Agreement or any Schedule or
Exhibit hereto or any other instrument specifically
contemplated by this Agreement;
(iii) Any misrepresentation contained in any statement in writing or
certificate furnished by an officer of the Acquiror or an
officer pursuant to this Agreement or in connection with the
transactions contemplated by this Agreement, or any material
omission by the Acquiror, or any officer or representative of
either of them;
(iv) Any claim or assertion made against the Acquiror arising in
connection with any event, transaction or circumstance that
occurred or is claimed to have occurred prior to the Closing
Date; and
(v) Any claim or assertion made in connection with purchasing,
selling, or trading in the Acquiror's securities, or in
connection the federal or state securities laws, rules and
regulations.
(c) Claim for Indemnification. Whenever any claims shall arise for
indemnification hereunder, the party seeking indemnification (the "Indemnitee")
shall promptly notify the other party (the "Indemnitor") of the claim and, when
known, the facts constituting the basis for such claim. If any claim for
indemnification hereunder results from or is in connection with any claim or
adverse consequence by a person who is not a party to this Agreement ("Third
Party Claim"), such notice shall also specify, if known, the amount or an
estimate of the amount of the liability arising there from. The Indemnitee shall
give the other party prompt notice of any such claim and the Indemnitor shall
undertake the defense thereof by representatives of its own choosing, reasonably
satisfactory to the Indemnitee, at the expense of the Indemnitor. The Indemnitee
shall have the right to participate in any such defense of a Third Party Claim
with advisory counsel of its own choosing, at its own expense. If the
Indemnitor, within a reasonable time after notice of any such Third Party Claim,
fails to defend, the Indemnitee or any subsidiary or affiliate of the Indemnitee
shall have the right to undertake the defense, compromise or settlement of such
Third Party Claim on behalf of, and for the account of, Indemnitor, at the
expense and risk of Indemnitor. Indemnitor shall not, without the Indemnitee's
written consent, settle or compromise any such Third Party Claim or
unconditional term thereof, the giving by the claimant or the plaintiff to
Indemnitee and/or Indemnitee's subsidiary or subsidiaries, or affiliate or
affiliates, as
the case may be, an unconditional release from all liability in respect of such
Third Party Claim. Notwithstanding any provision herein to the contrary, failure
of Indemnitee to give any notice required by this Section shall not constitute a
waiver of Indemnitee's right to indemnification or a defense to any claim by
Indemnitee hereunder.
(d) Payment of Indemnification. All indemnification hereunder shall be
effected upon demand by payment of cash or delivery of a certified or cashier's
check in the amount of the indemnification liability after determination in
accordance with the foregoing.
(e) Survival of Indemnification. The indemnities contained herein shall
survive the Closing.
(f) Minimum Claim. Neither the Acquiree nor the Acquiror shall have any
obligation to indemnify the other for any single claim or related series of
claims involving, in the aggregate, less than $5,000.
7. Miscellaneous.
(a) Survival. All of the representations, warranties, and covenants of the
parties contained in this Agreement shall survive the Closing through all
applicable statutes of limitation.
(b) Press Releases and Announcements. No party shall issue any press
release or announcement relating to the subject matter of this Agreement without
the prior written approval of the other party; provided, however, that any party
may make any public disclosure it believes in good faith is required by law or
regulation (in which case the disclosing party will advise the other party prior
to making the disclosure).
(c) No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the parties and their respective
successors and permitted assIgns.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefits of the parties named herein and their respective
successors and permitted assigns. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other party.
(e) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. Any and all notices or other communications or deliveries
required or permitted to be given or made pursuant to any of the provisions of
this Agreement shall be deemed to have been duly given or made for all purposes
if sent by certified or registered mail,
14
return receipt requested and postage prepaid, overnight courier, express mail,
hand delivered or sent by facsimile with receipt confirmed as follows:
If to Acquiror, at:
MedLink International, Inc.
00 Xxxx Xxxxx
Xxxxx 000X
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Acquiree and the Shareholders (collectively, at:
0 Xxxxxx Xx
Xxxxxx, XX 00000
Attn: Xxxxxxxxx Xxxxxxxxx
Telephone: (000) 000-00000
(h) Governing Law. This Agreement shall be governed by and constructed III
accordance with the internal laws (and not the law of conflicts) of the State of
New York.
(i) Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by all
of the parties. No waiver by any party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach or warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction declares that any term or provision
hereof is invalid or unenforceable, the parties agree that the court making the
determination of invalidity or unenforceability shall have the power to reduce
the scope duration, or area of the term or provision, to delete specific words
or phases, or to replace any invalid or unenforceable term or provision with a
term or provision, and this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment may be appealed.
(k) Expenses. Acquiror will be responsible for their respective costs,
fees and expenses in connection with the Exchange. Acquiree will be responsible
for the costs, fees and expenses of its Shareholders in connection with the
Exchange, and for one-half of its costs, fees and expenses. Acquiror will be
responsible for one half of Acquiror' s costs, fees and expenses in connection
with the Exchange.
(1) Construction. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent, and no rule
of strict construction shall be applied against any party. Any reference to any
federal, state, local, or
15
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.
(m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) Specific Performance. Each of the parties acknowledges and agrees that
the other party would be damaged irreparably if any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached. Accordingly, each of the parties agrees that the other party shall
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the parties and the matter
(subject to the provisions below, in addition to any other remedy to which it
may be entitled, at law or in equity.)
(o) Submission to Jurisdiction. Each of the parties submits to the
jurisdiction of any state or federal court sitting in Suffolk County, New York,
in any action or proceeding arising out of or relating to this Agreement, agrees
that all claims in respect of the action or proceeding may be heard and
determined in any such court, and agrees not to bring action or proceeding
arising out of or relating to this Agreement in any other court. Each of the
parties waives any defense of inconvenient forum or lis pendens alibi to the
maintenance of any action or proceeding so brought and waives any bond, surety,
or other security that might be required of any other party with respect
thereto.
(p) Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the parties and supersedes any
prior understandings, agreements, or representations by or between the parties,
written or oral, that may have related in any way to the subject matter hereof.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on as of the
date first above written.
MEDLINK INTERNATIONAL, INC. CNI MEDICAL CODING & RECOVERY, INC.
By: /s/ Xxxxx Xxxx By: /s/ Xxxxxxxxx Xxxxxxxxx
------------------------------------ -------------------------------
Xxxxx Xxxx, Executive Vice-President Xxxxxxxxx Xxxxxxxxx, President
SHAREHOLDER:
By: /s/ Xxxxxxxxx Xxxxxxxxx
--------------------------------------
Xxxxxxxxx Xxxxxxxxx, 100% shareholder
17
Exhibit A
CNI Medical Coding & Recoverv. Inc. Shareholder List
----------------------------------------------------
Xxxxxxxxx Xxxxxxxxx 100 shares
100 total issues and outstanding
18
Exhibit B
CNI Financial Statements:
-------------------------
Waived by MedLink International
By: /s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx, Chief Financial Officer
Exhibit C
Liabilities
-----------
CNI Medical Coding and Recovery, Inc. has zero liabilities or obligations
Exhibit D
---------
No Material adverse changes
EXHIBIT E
---------
NO LITIGATION
Exhibit F
Certificate of Incorporation
& By-Laws of
CNI Medical Coding & Recovery, Inc.
Exhibits G, H, I, J have been waived by MedLink International, Inc.
By: /s/ Xxxxx Xxxx
-----------------------------------
Xxxxx Xxxx, Chief Financial Officer
Exhibit K
Market Makers:
Knight Equity Markets, L.P.
WM. X. Xxxxxxx & Co., Incorporated.
The Vertical Group, Inc.
TD Waterhouse Capital Markets, Inc.
Hill Xxxxxxxx Xxxxx and Co., Inc.
Bear, Xxxxxxx & Co. Inc.
Stem Xxxx Capital Markets, Inc.
Domestic Securities, Inc.
Xxxxxx Securities, Inc.
Pershing ILC.
First American Capital & Trading Corporation
UBS Securities ILC
Citigroup Global Markets, Inc.