EXHIBIT 10.01
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
HELPMATE ROBOTICS, INC.,
HELPMATE ROBOTICS SUBSIDIARY, INC.
AND
PAINCARE, INC.
TABLE OF CONTENTS
1. Plan of Reorganization.............................. 1
2. Terms of Merger..................................... 2
3. Delivery of Shares.................................. 9
4. Representations of PainCare......................... 9
5. Representations of HELP............................. 12
6. Closing............................................. 17
7. Conditions Precedent to the Obligations
of PainCare......................................... 17
8. Conditions Precedent to the Obligation of
HELP and HELP Sub................................... 19
9. Indemnification..................................... 20
10. Nature and Survival of Representations.............. 22
11. Documents at Closing................................ 22
12. Finder's Fees....................................... 23
13. Miscellaneous....................................... 24
Signature Page................................................... 26
Exhibit A - Plan and Articles of Merger
Exhibit B - PainCare Shareholder Schedule
(i)
AGREEMENT AND PLAN OF REORGANIZATION
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This Agreement and Plan of Reorganization (hereinafter the "Agreement") is
entered into effective as of this 20th day of December, 2001, by and among
Helpmate Robotics, Inc., a Connecticut corporation (hereinafter "HELP");
Helpmate Robotics Subsidiary, Inc., a newly-formed Connecticut corporation
(hereinafter "HELP Sub"); and PainCare, Inc., a Nevada corporation (hereinafter
"PainCare").
RECITALS:
WHEREAS, HELP desires to acquire PainCare as a wholly-owned subsidiary and
to issue shares of HELP common stock to the shareholders of PainCare upon the
terms and conditions set forth herein.
WHEREAS, HELP Sub is a wholly-owned subsidiary corporation of HELP which
shall be merged into PainCare, whereupon PainCare shall be the surviving
corporation of said merger and shall become a wholly-owned subsidiary of HELP
(HELP Sub and PainCare are sometimes collectively hereinafter referred to as the
"Constituent Corporations").
WHEREAS, the boards of directors of HELP and PainCare, respectively, deem
it advisable and in the best interests of such corporations and their respective
shareholders that HELP Sub merge with and into PainCare pursuant to this
Agreement and the Plan and Articles of Merger in the forms attached hereto as
Exhibit "A" and pursuant to applicable provisions of law (such transaction
hereafter referred to as the "Merger").
WHEREAS, HELP Sub has an authorized capitalization consisting of 20,000
shares of no par value common stock, of which 1,000 shares shall be issued and
outstanding and owned by HELP as of the closing of the Merger. PainCare has an
authorized capitalization consisting of 100,000,000 shares of common stock,
$.001 par value ("PainCare Common Stock"), of which 7,555,357 shares are issued
and outstanding, or reserved for issuance, as of the date hereof; and 10,000,000
authorized shares of "blank check" preferred stock, $.001 par value, of which
none have been issued or are outstanding ("Preferred Stock"). All of said
outstanding shares of PainCare Common Stock are owned by the shareholders of
PainCare as set forth on the attached Exhibit "B" (hereafter "PainCare
Shareholders").
NOW THEREFORE, for the mutual consideration set out herein, and other good
and valuable consideration, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
AGREEMENT
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1. Plan of Reorganization. The parties hereto do hereby agree that HELP
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Sub shall be merged with and into PainCare upon the terms and conditions set
forth herein. It is the intention of the parties hereto that this transaction
qualify as a tax-free reorganization under Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended, and related
sections thereunder.
2. Terms of Merger. In accordance with the provisions of this
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Agreement and the requirements of applicable law, HELP Sub shall be merged with
and into PainCare as of the Effective Date (the terms "Closing" and "Effective
Date" are defined in Section 6 hereof). PainCare shall be the surviving
corporation (hereinafter sometimes the "Surviving Corporation") and the separate
existence of HELP Sub shall cease when the Merger shall become effective.
Consummation of the Merger shall be upon the following terms and subject to the
following conditions:
(a) Corporate Existence.
(1) At the Effective Date, the Surviving Corporation shall
continue its corporate existence as a Nevada corporation and (i) it shall
thereupon and thereafter possess all rights, privileges, powers, franchises
and property (real, personal and mixed) of each of the Constituent
Corporations; (ii) all debts due to either of the Constituent Corporations,
on whatever account, all causes in action and all other things belonging to
either of the Constituent Corporations shall be taken and deemed to be
transferred to and shall be vested in the Surviving Corporation by virtue
of the Merger without further act or deed; and (iii) all rights of
creditors and all liens upon any property of any of the Constituent
Corporations shall be preserved unimpaired, limited in lien to the property
affected by such liens immediately prior to the Effective Date, and all
debts, liabilities and duties of the Constituent Corporations shall
thenceforth attach to the Surviving Corporation.
(2) At the Effective Date, (i) the Articles of Incorporation and
the By-laws of PainCare, as existing immediately prior to the Effective
Date, shall be and remain the Articles of Incorporation and By-Laws of the
Surviving Corporation; (ii) the members of the Board of Directors of
PainCare holding office immediately prior to the Effective Date shall
remain as the members of the Board of Directors of the Surviving
Corporation (if on or after the Effective Date a vacancy exists on the
Board of Directors of the Surviving Corporation, such vacancy may
thereafter be filled in a manner provided by applicable law and the By-laws
of the Surviving Corporation); and (iii) until the Board of Directors of
the Surviving Corporation shall otherwise determine, all persons who hold
offices of the Surviving Corporation at the Effective Date shall continue
to hold the same offices of the Surviving Corporation.
(b) Events Occurring at or Prior to Closing.
(1) HELP shall have authorized 40,000,000 shares of common stock
without par value.
(2) HELP shall have 900,000 shares of its common stock issued and
outstanding (taking into effect the reverse stock split described in this
Agreement) and no other shares of capital stock issued or outstanding not
taking into effect the shares to be issued under this Agreement.
(3) HELP shall have and will demonstrate to the reasonable
satisfaction of PainCare that it has no debts, taxes, liabilities, liens
and/or judgments, contingent or fixed, in excess of amounts reserved to
satisfy such items, and no material assets other than a minimum of $315,000
in cash in its bank accounts (net of amounts reserved as described above)
(the "Help Cash"), subject to the provisions of the following sentence and
Section 2(e)(8), which shall be available to and used as deemed appropriate
by the new management of HELP. Notwithstanding the foregoing sentence if
the contemplated transactions are not closed by December 31, 2001, the
minimum amount of Help Cash shall be reduced to $300,000 and if the
transactions are not closed by February 28, 2002, and the parties have
agreed to extend such date pursuant to Section 13(c) below, the minimum
amount of Help Cash will be reduced to $275,000 with reductions of $25,000
for equal calendar quarter thereafter that the transactions do not close.
If the Help Cash at Closing is less than $315,000 (or such lesser amount as
provided in the foregoing sentence), then the difference (the "Help Cash
Shortfall") shall be retained by HELP (to be available to and used as
deemed appropriate by the new management of HELP) from the Holdback Amount
(as defined below) prior to any distribution of the Holdback Amount to Help
Shareholders of record as of a record date prior to the Closing Date.
Notwithstanding anything herein to the contrary, the provisions of
this Section 2(b)(3) shall survive the Closing without limitation.
(4) HELP shall effect a 22.19 to 1 reverse stock split, reducing
its outstanding shares of common stock to 900,000 shares from 19,971,313
shares. All references herein to shares of common stock of HELP to be
issued or as outstanding give effect to the 22.19 to 1 reverse split unless
otherwise stated.
(5) The resignation of the existing HELP officers and directors
and the appointment of new officers and directors as directed by PainCare.
(6) HELP will not have any options, warrants or other derivative
instruments which may be converted to HELP capital stock.
(c) Conversion of Securities.
As of the Effective Date and without any action on the part of HELP,
HELP Sub, PainCare or the holders of any of the securities of any of these
corporations each of the following shall occur:
(1) Each share of PainCare Common Stock issued and outstanding
immediately prior to the Effective Date shall be converted into one share
of HELP Common Stock up to a maximum aggregate amount of 7,600,000 shares
of HELP Common Stock (the "Help Conversion Shares"). All such shares of
PainCare Common Stock shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each certificate
previously evidencing any such shares shall thereafter represent the right
to receive, upon the surrender of such certificate in accordance with the
provisions of Section 3 hereof, certificates evidencing such number of
shares of HELP Common Stock, respectively, into
which such shares of PainCare Common Stock were converted. The holders of
such certificates previously evidencing shares of PainCare Common
outstanding immediately prior to the Effective Date shall cease to have any
rights with respect to such shares of PainCare Common except as otherwise
provided herein or by law;
(2) Any shares of PainCare capital stock held in the treasury of
PainCare immediately prior to the Effective Date shall automatically be
canceled and extinguished without any conversion thereof and no payment
shall be made with respect thereto;
(4) Each share of capital stock of HELP Sub issued and outstanding
immediately prior to the Effective Date shall remain in existence as one
share of common stock of the Surviving Corporation, all of which shall be
owned by HELP;
(5) The shares of HELP Common Stock previously issued and outstanding
immediately prior to the Merger will remain outstanding, subject to the
provisions of Section 2(b)(4) hereof, so that after conversion of the
PainCare Common, HELP shall have no more than 8,500,000 shares of HELP
Common Stock outstanding;
(6) As of the Effective Date, HELP shall assume and then discharge,
as required, the responsibilities of PainCare with respect to the
following:
(i) Section 2.2.1 (with respect to the payment of and the
issue of common stock upon the conversion of that certain $510,000
Debenture), Section 2.2.2 (with respect to the issuance, delivery,
payment and the issue of common stock regarding the Installment
Payments), Section 2.3 (with respect to capital adjustments affecting
such Debenture, the underlying capital stock and the Installment
Payments), and Section 2.5 (with respect to certain Registration
Rights the underlying capital stock of the Debenture and the
Installment Payments) with respect to that certain Share Purchase
Agreement by and among PAINCARE, INC. a Nevada corporation (the
"Buyer"), ▇▇▇▇ ▇▇▇▇▇▇, in trust for and on behalf of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (each of ▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are hereinafter referred to as a
"Shareholder" and collectively, the "Shareholders"), ▇▇▇▇▇▇▇▇ PAIN
MANAGEMENT CLINIC, INC., a corporation incorporated under the laws of
the Province of Ontario (the "Company") and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated
December 1, 2000;
(ii) Sections 2.4.1 and 2.5 (with respect to the payment of
and the issue of common stock upon the conversion of that certain
$1,200,000 Debenture), Sections 2.4.2 and 2.5 (with respect to the
issuance, delivery, payment and the issue of common stock upon the
conversion of those certain Debentures regarding the Installment
Payments), Section 2.5.1 (with respect to capital adjustments
affecting such Debentures and the underlying capital stock), Section
2.8 (with respect to certain Registration Rights the underlying
capital stock), and Section 6.14 (with respect to the Conduct of
Business Post-Closing) with respect to that certain Agreement and Plan
of Merger by and among PAINCARE, INC., a
Nevada corporation (the "Buyer"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D. (the
"Stockholder")and ADVANCED ORTHOPAEDICS OF SOUTH FLORIDA, INC., a
Florida corporation (the "Company") Dated January 1, 2002;
(iii) Section 2.2.1 (with respect to the payment of and the
issue of common stock upon the conversion of that certain $490,000
Debenture), Section 2.2.2 (with respect to the issuance, delivery,
payment and the issue of common stock regarding the Installment
Payments), Section 2.3 (with respect to capital adjustments affecting
such Debenture, the underlying capital stock and the Installment
Payments), and Section 2.5 (with respect to certain Registration
Rights the underlying capital stock of the Debenture and the
Installment Payments) with respect to that certain Agreement of
Assignment of Beneficial and Proprietary Interest dated March 1, 2001,
by and among PAINCARE, INC., a Nevada corporation (the "Buyer"),
INTERFIDUCIA TRUST REG. in its capacity as trustee for and on behalf
of LEXUS TRUST (the "Beneficial Owner"), ▇▇▇▇▇▇▇▇ PAIN MANAGEMENT
CLINIC INC., a corporation incorporated under the laws of the Province
of Ontario (the "Company"), ▇▇▇▇▇ INVESTMENTS LIMITED, a corporation
incorporated under the laws of Malta ("Holdco"), ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AND ▇▇▇▇ ▇▇▇▇▇▇;
(iv) With respect to all duties, obligation and other matters
required of PainCare including, without limitation, the obligation to
issue, deliver, pay and issue common stock regarding conversions,
issue warrants, and provide registration rights associated with or
arising from that certain Series of 8% Convertible Notes which may be
issued by PainCare in the aggregate amount of $500,000 issued pursuant
to a series of Subscription Agreements beginning in September 2001;
(v) With respect to all duties, obligation and other matters
required of PainCare including, without limitation, the obligation to
pay compensation, fees and expenses, issue warrants, issue common
stock upon the conversion of such warrants, and provide
indemnification regarding that certain Placement Agent Letter
Agreement by and between Sterling Financial Investment Group, Inc.
(together with its affiliates, "Sterling")and PainCare dated July 25,
2001;
(vi) With respect to all duties, obligation and other matters
required of PainCare including, without limitation, the obligation to
pay compensation, fees and expenses, issue warrants, issue common
stock upon the conversion of such warrants, and provide
indemnification regarding that certain Capital Services Agreement
dated August 21, 2001 by and between ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
("▇▇▇▇▇▇▇▇▇▇") and PainCare;
(vii) With respect to all duties, obligation and other matters
required of PainCare including, without limitation, the obligation to
pay compensation, fees and expenses, issue stock, warrants and other
securities, issue common stock upon
the conversion of any derivative instruments, and provide
indemnification regarding that certain Financial Advisory Service
Agreement by and between Private Financing Group and PainCare dated
June 11, 2001; and
(viii) With respect to all duties, obligation and other matters
required of PainCare including, without limitation, the obligation to
payments, issue common stock upon conversion and provide
indemnification regarding that certain Future Advance 10% Convertible
Debenture payable to ▇▇▇ ▇▇▇▇▇▇▇ in the amount of $144,459 dated April
1, 2001.
(7) As of the Effective Date, HELP shall assume and then discharge
the responsibilities of PainCare with respect to all options to purchase
PainCare Common Stock pursuant to PainCare's 2000 Stock Option Plan and
PainCare's 2001 Stock Option Plan (the "Option Plans") or otherwise (the
"Options") aggregating 5,000,000 option shares, whether granted, vested or
unvested. The Option Plans shall be assumed by HELP. As of the Effective
Date, each Option outstanding immediately prior to the Effective Date (an
"Outstanding Option") shall be deemed to constitute an option to acquire,
on the same terms and conditions as were applicable under such Option
immediately prior to the Effective Date, such number of shares of HELP
Common Stock as is equal to the number of shares of PainCare Common Stock
subject to the unexercised portion of such Option. The exercise price per
share of each assumed Option shall be equal to the exercise price of such
Option immediately prior to the Effective Date. The term, exercisability,
vesting schedule, status, character and other terms and conditions of the
Options shall remain unchanged.
(8) As of the Effective Date, HELP shall assume and then discharge
the responsibilities of PainCare with respect to all warrants to purchase
PainCare Common Stock pursuant to any warrant issued or other agreement
entered into by PainCare (the "Warrants"), whether vested or unvested. The
Warrants shall be assumed by HELP. As of the Effective Date, each Warrant
outstanding immediately prior to the Effective Date (an "Outstanding
Warrant") shall be deemed to constitute an option to acquire, on the same
terms and conditions as were applicable under such Warrant immediately
prior to the Effective Date, such number of shares of HELP Common Stock as
is equal to the number of shares of PainCare Common Stock subject to the
unexercised portion of such Warrant. The exercise price per share of each
assumed Warrant shall be equal to the exercise price of such Warrant
immediately prior to the Effective Date. The term, exercisability, vesting
schedule, status, character and other terms and conditions of the Warrants
shall remain unchanged.
Notwithstanding anything herein to the contrary, the provisions of
this Section 2(c)(6)(7)(8) shall survive the Closing without limitation.
(d) Other Matters.
(1) Except as set forth in Section 2(e) of this Agreement, there
shall be no stock dividend, stock split, recapitalization, or exchange of
shares with respect to or rights issued in respect of HELP's Common Stock
after the date hereof and there shall be no dividends paid on HELP's Common
Stock after the date hereof, in each case through and including the
Effective Date.
(2) PainCare and HELP shall have received all requisite director and
shareholder approval of all matters set forth herein and no shareholder of
PainCare or HELP shall have exercised any dissenters rights under
applicable corporate law.
(3) HELP shall and will demonstrate to the satisfaction of PainCare
that it has filed with the Securities and Exchange Commission ("SEC") a
Joint Proxy and Registration Statement, on Form S-4 (the "Registration
Statement") as required with respect to this transaction, and that the
Closing of this transaction shall not occur until such time as such
Registration Statement has been declared "effective" by the SEC.
(4) HELP shall and will demonstrate to the satisfaction of PainCare
that it has satisfied all requirements as may be required by the laws,
rules and regulations of the State of Connecticut, the National Association
of Securities Dealers ("NASD") and the SEC with respect to the transactions
contemplated by the Definitive Agreements.
(e) Holdback Distribution
(1) On December 30, 1999, HELP completed the sale of substantially all of
HELP's assets, subject to specified liabilities, to Pyxis Corporation
("Pyxis"). In consideration thereof, HELP received certain cash less
the sum of $1,250,000.00 (such amount, together with any interest or
other earnings thereon, and less distributions made to satisfy certain
payment obligations of HELP being called the "Holdback Amount"), which
is to be held in escrow for a period of two years following December
30, 1999, in order to settle potential indemnification claims by Pyxis
and satisfy specified payment obligations of HELP to Pyxis.
(2) The net cash heretofore received by HELP from Pyxis has been
distributed to HELP's stockholders of record who were such on January
29, 2000. PainCare acknowledges that the (other than claims under
Section 2(b)(3) above for the Help Cash Shortfall) neither the HELP
Conversion Shares, nor shares issued pursuant to the Option Plan, nor
any securities issued by HELP after the Effective Date, shall be
entitled to any distributions to be made out of the Holdback Amount
when, as and if the Holdback Amount, or any portion thereof, is
released from escrow. Accordingly, the parties confirm this Agreement
and agree to deal with the Hold back Amount as follows:
(a) As a result of the Merger, the PainCare Shareholders and each
subsequent holder of any of the HELP Conversion Shares, for
themselves, and for the heirs, personal representatives,
administrators, successors and assigns (each of the foregoing
being referred to as a "Holder"), relinquish any and all rights
to receive or participate in any dividend or distribution of any
of the Holdback Amount (other than
claims under Section 2(b)(3) above for the Help Cash Shortfall),
when, if and in whatever manner such Holdback Amount is ever
distributed upon the Common Stock of HELP (or any securities into
which the Common Stock of HELP may be converted) whether by
dividend, distribution in partial or complete liquidation of
HELP, or otherwise (all of the foregoing being referred to as the
"Holdback Distribution").
(b) If any Holder receives any Holdback Distribution with respect to
the Shares in violation of the provisions of this Agreement, the
Holder shall hold such Holdback Distribution in trust for the
benefit of HELP and such Holdback Distribution shall not be
commingled with other funds or property of such Holder.
(3) The provisions set forth in this Section 2(e) shall be binding upon
and inure to the benefit of the PainCare Shareholders, HELP and their
respective transferees, heirs, legal representatives, personal
representatives, successors and assigns. The restrictions set forth in
this Section 2(e)shall be applicable to all HELP Conversion Shares,
including any securities into which the HELP Conversion Shares may be
converted.
(4) It is the intention of the parties hereto that (i) the restrictions
upon the HELP Conversion Shares set forth in this Section 2(e) shall
have the same force and effect as would similar restrictions set forth
in the Bylaws and Certificate of Incorporation of HELP, and (ii) the
HELP Conversion Shares shall not be deemed issued and outstanding in
determining the number of shares of HELP's common stock issued and
outstanding for purposes of calculating the pro rata distribution of
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the Holdback Distribution to HELP's stockholders.
(5) The provisions of this Section 2(e) may only be amended, modified or
waived by (a) either (1) the affirmative vote of the holders of a
majority of the issued and outstanding shares of HELP's common stock
(other than the HELP Conversion Shares) at a duly constituted meeting
of such stockholders or (2) a written consent of the holders of a
majority of the issued and outstanding shares of HELP's common stock
(other than the HELP Conversion Shares) in lieu of such a vote, and
(b) the approval of the Board of Directors of HELP as it may exist
from time to time subsequent to the Closing.
(6) The provisions of this Section 2(e) shall survive the Closing without
limitation.
(7) Notwithstanding any provision to the contrary set forth above, HELP
shall retain from the Holdback Amount, and shall make available to the
new management of HELP, an amount equal to the Help Cash Shortfall, if
any.
3. Delivery of Shares. On or as soon as practicable after the Effective
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Date, PainCare will use its best efforts to cause the PainCare Shareholders to
surrender for cancellation certificates representing their shares of PainCare
Common Stock, against delivery of certificates representing the shares of HELP
Common Stock for which the PainCare shares are to be converted in the Merger.
Until surrendered and exchanged as herein provided, each outstanding certificate
which, prior to the Effective Date, represented an PainCare stock certificate
shall be deemed for all corporate purposes to evidence ownership of the same
number of shares of HELP Common Stock into which the PainCare certificate shall
have been so converted.
4. Representations of PainCare. PainCare hereby represents and warrants
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as follows, which warranties and representations shall also be true as of the
Effective Date, all of which representations and warranties are qualified in
their entirety by the information set forth in a certain PainCare Disclosure
Schedule delivered by PainCare to HELP simultaneously with the delivery of this
Agreement and which will be updated, if necessary, as of the Closing Date (the
"PainCare Disclosure Schedule") and which shall be inclusive of the PainCare
Subs (as hereafter defined) where reference is made to PainCare unless otherwise
stated herein or in the PainCare Disclosure Schedules:
(a) The PainCare Shareholders listed on the attached Exhibit "B"
are the sole owners of record and beneficially of the issued and outstanding
capital stock of PainCare. Exhibit B identifies the number of shares of PainCare
Common and Preferred Stock owned of record and beneficially by each of the
PainCare Shareholders as of the date of this Agreement. All options, warrants,
or other rights to receive PainCare securities are described at Section 2(c)(6)
of this Agreement. To the extent that the instruments and agreements described
at Section 2(c)(6) do not currently contemplate the transactions provided in
this Agreement, then prior to the Closing, PainCare shall enter into agreements
with the securities holders described in Section 2(c)(6) providing that such
securities holders will receive shares of Help common stock in place of the
shares of PainCare common stock to which they are otherwise entitled.
(b) The PainCare Common Stock and Preferred Stock constitutes duly
authorized, validly issued shares of capital stock of PainCare, fully paid and
nonassessable and are the only capital shares of PainCare outstanding.
(c) The PainCare audited financial statements as of December 31,
2000 (the PainCare Audited Statements"), and the PainCare unaudited financial
statements for the nine (9) month period ending September 30, 2001 (the
"PainCare Unaudited Statements") (hereinafter collectively referred to as the
"PainCare Financial Statements") which have been delivered to HELP are
materially complete, accurate and fairly present the financial condition of the
named entity as of the date thereof and the results of its operations for the
periods covered. Other than as set forth in any schedule attached hereto, there
are no material liabilities or obligations, either fixed or contingent, not
disclosed in the PainCare Financial Statements or in any exhibit thereto or
notes thereto other than contracts or obligations in the ordinary course of
business; and no such contracts or obligations in the ordinary course of
business constitute liens or other liabilities which materially alter the
financial condition of PainCare as reflected in the PainCare Financial
Statements. PainCare has or will have at Closing, good title to all assets shown
on the PainCare Financial Statements subject only to dispositions and other
transactions in the ordinary course of business, the
disclosures set forth therein and liens and encumbrances of record. The PainCare
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied (except as may be indicated therein
or in the notes thereto), saving certain footnotes and adjustments which have
not been included and/or made with respect to the PainCare Unaudited Statements.
(d) Since December 31, 2000, there have not been any material
adverse changes in the financial position of PainCare except changes arising in
the ordinary course of business, which changes will in no event materially and
adversely affect the financial position of PainCare.
(e) PainCare is not a party to any material pending litigation or,
to its best knowledge, any governmental investigation or proceeding, not
reflected in the PainCare Financial Statements, and to its best knowledge, no
material litigation, claims, assessments or any governmental proceedings are
threatened against PainCare.
(f) PainCare is in good standing in its state of incorporation, and
is in good standing and duly qualified to do business in each state where
required to be so qualified except where the failure to so qualify would have no
material negative impact on PainCare.
(g) PainCare has, or by the Effective Date will have, filed all
material tax, governmental and/or related forms and reports (or extensions
thereof) due or required to be filed and has (or will have) paid or made
adequate provisions for all taxes or assessments which have become due as of the
Effective Date.
(h) PainCare has not materially breached any material agreement to
which it is a party. PainCare has previously given HELP copies or access
thereto of all material contracts, commitments and/or agreements to which
PainCare is a party including all relationships or dealings with related parties
or affiliates.
(i) PainCare has no subsidiary corporations except for Advanced
Ortheopedic of South Florida, Inc., PainCare Management Services, Inc. and
PainCare Surgery Centers, Inc. (hereinafter the "PainCare Subs").
(j) PainCare has made its corporate financial records, minute
books, and other corporate documents and records available for review to present
management of HELP prior to the Effective Date, during reasonable business hours
and on reasonable notice.
(k) The execution of this Agreement does not materially violate or
breach any material agreement or contract to which PainCare is a party and this
Agreement has been duly authorized by all appropriate and necessary corporate
action and PainCare, to the extent required, has obtained all necessary
approvals or consents required by any agreement to which PainCare is a party.
(l) Information provided by PainCare regarding PainCare and the
PainCare Shareholders which is to be included in the Registration Statement will
not at the time the Registration Statement becomes effective and as of the date
of the PainCare shareholder meeting,
and as of the date of any HELP shareholder meeting contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not misleading.
(m) PainCare is in compliance with, and PainCare has operated any
businesses previously owned or operated by it in compliance with, all applicable
laws, orders, rules and regulations of all governmental bodies and agencies,
including applicable securities laws and regulations and environmental laws and
regulations, except where such noncompliance has and will have, in the
aggregate, no material adverse effect. PainCare has not received notice of any
noncompliance with respect to the foregoing.
(n) Without limiting the foregoing, PainCare and any other person
or entity for whose conduct PainCare is legally held responsible are in material
compliance with all applicable federal, state, regional, local or provincial
laws, statutes, ordinances, judgments, rulings and regulations relating to any
matters of pollution, protection of the environment, health or safety, or
environmental regulation or control (collectively, "Environmental Laws").
Neither PainCare nor any other person or entity for whose conduct PainCare is
legally responsible, has (i) received any notice, demand, request for
information, or administrative inquiry relating to any violation of an
Environmental Law or the institution of any suit, action, claim or proceeding
alleging such violation or investigation by any governmental authority or any
third party of any such violation, (ii) manufactured, generated, treated,
stored, handled, processed, released, transported or disposed of any hazardous
substance on, under, from or at any of PainCare's properties or any other
properties, (iii) become aware or received notice of the release or disposal of
any hazardous substances in violation of any applicable Environmental Law, on,
under or at any of PainCare's properties or any other properties, (iv) become
aware or received notice of any actual or potential material liability on the
part of PainCare for the response to or remediation of any hazardous substance
at or arising from any of PainCare's properties or any other properties owned or
operated by PainCare or any other person for whose conduct PainCare is legally
responsible, or (v) become aware of or received notice of any actual or
potential liability on the part of PainCare for the costs of response to or
remediation of hazardous substances at or arising from any properties owned or
operated by PainCare or any other person for whose conduct PainCare is or may be
held responsible. For purposes of this Agreement, the term "hazardous substance"
shall mean any toxic or hazardous materials or substances, including asbestos,
buried contaminants, chemicals, flammable explosives, radioactive materials or
petroleum and petroleum products and any substances defined as, or included in
the definition of, "hazardous substances," "hazardous wastes," "hazardous
materials" or "toxic substances" under any Environmental Law. No Environmental
Law imposes any obligation upon PainCare arising out of or as a condition to any
transaction contemplated hereby, including, without limitation, any requirement
to modify or to transfer any permit or license, any requirement to file any
notice or other submission with any governmental authority, the placement of any
notice, acknowledgment, or covenant in any land records, or the modification of
or provision of notice under any agreement, consent order, or consent decree.
(o) Except as and to the extent specifically disclosed in this
Agreement and those that are specifically reflected or reserved against as to
amount in the latest balance sheet contained in the PainCare Financial
Statements, there is no basis for the assertion against PainCare of any material
liabilities or obligations of any nature, whether absolute, accrued, contingent
or otherwise
and whether due or to become due, including, without limitation, any liability
for taxes and interest, penalties and other charges payable with respect
thereto. Except as set forth in this Agreement, neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
hereby will (a) result in any payment (whether severance pay, unemployment
compensation or otherwise) becoming due from PainCare to any employee, director
or officer or former employee, director or officer of PainCare, (b) increase any
benefits otherwise payable to any employee, director or officer or former
employee, director or officer of PainCare, or (c) result in the acceleration of
the time of payment or vesting of any such benefits.
(p) No patent, formula, process, trade secret, trademark, trade
name, assumed name or copyright currently used by PainCare, including all
intellectual property used in the operation of the business of PainCare
(collectively, the "PainCare Intellectual Property"), infringes on any patent,
copyright, trademark or other intellectual property right of any person, or
violates the terms of any agreements related thereto, nor have there been any
claims of infringement or to PainCare's knowledge, threatened against PainCare.
(q) The representations and warranties by PainCare contained in
this Agreement (as qualified by the PainCare Disclosure Statement) when taken as
a whole do not contain any untrue statement of a material fact or omits to state
a material fact necessary in order to make the statements therein not
misleading. Except as specifically indicated elsewhere in this Agreement, all
material documents about PainCare delivered by PainCare in connection herewith
have been and will be complete originals, or exact copies thereof.
(r) Assuming all consents and approvals described in this Agreement
or in the PainCare Disclosure Statement have been obtained and assuming the
appropriate filings and mailings described in this Agreement and the PainCare
Disclosure Statement are made by PainCare under the Securities Act and with the
Secretary of State of Nevada and Connecticut, the execution and delivery by
PainCare of this Agreement and the closing documents and the consummation by
PainCare of the transactions contemplated hereby do not and will not require the
consent, approval or action of, or any filing or notice to, any corporation,
firm, person or other entity or any public, governmental or judicial authority
(except for such consents, approvals, actions, filing or notices the failure of
which to make or obtain will not in the aggregate have a material adverse
effect). PainCare is not subject to, or a party to, any mortgage, lien, lease,
agreement, contract, instrument, order, judgment or decree or any other material
restriction of any kind or character which would prevent or hinder the continued
operation of the business of HELP and PainCare after the closing.
5. Representations of HELP and HELP Sub. HELP and the HELP Sub hereby
-------------------------------------
jointly and severally represent and warrant as follows, each of which
representations and warranties shall continue to be true as of the Effective
Date and all of which representations and warranties are qualified in their
entirety by the information set forth in a certain HELP Disclosure Schedule
delivered by HELP to PainCare simultaneously with the delivery of this Agreement
and which will be updated, if necessary, as of the Closing Date (the "HELP
Disclosure Schedule")
(a) As of the Effective Date, the shares of HELP Common Stock to be
issued and delivered to the PainCare Shareholders hereunder will, when so issued
and delivered, constitute duly authorized, validly and legally issued shares of
HELP capital stock, fully-paid and
nonassessable and free of all liens and encumbrances.
(b) HELP has the corporate power to enter into this Agreement and
to perform its obligations hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by the respective Boards of Directors of HELP and HELP Sub and
by HELP as the sole shareholder of HELP Sub. The execution and performance of
this Agreement will not constitute a material breach of any agreement,
indenture, mortgage, license or other instrument or document to which HELP or
HELP Sub is a party and will not violate any judgment, decree, order, writ,
rule, statute, or regulation applicable to HELP, HELP Sub or their properties.
The execution and performance of this Agreement will not violate or conflict
with any provision of the respective Certificate of Incorporation or by-laws of
HELP or HELP Sub.
(c) HELP has delivered to PainCare a true and complete copy of its
(i) audited financial statements for the fiscal years ended December 31, 2000,
1999 and 1998, and unaudited interim financial statements for the period ended
September 30, 2001, (the "HELP Financial Statements"). The HELP Financial
Statements are complete, accurate and fairly present the financial condition of
HELP as of the dates thereof and the results of its operations for the periods
then ended. There are no material liabilities or obligations either fixed or
contingent not reflected therein. The HELP audited financial statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly present the financial position of HELP as of the dates
thereof and the results of its operations and changes in financial position for
the periods then ended. HELP Sub has no financial statements because it is
currently being formed for the purpose of effectuating the Merger and it has no
assets, liabilities, contracts or obligations of any kind other than as received
or incurred in connection with its incorporation in Connecticut. HELP has no
subsidiaries except for HELP Sub, and HELP Sub has no subsidiaries.
(d) Since December 31, 2000, there have not been any material
adverse changes in the financial condition of HELP. At Closing, HELP will have
no material assets and no liabilities of any kind other than the Cash and its
rights to the Holdback Amount.
(e) Neither HELP nor HELP Sub is a party to or the subject of any
pending litigation, claims, or governmental investigation or proceeding not
reflected in the HELP Financial Statements or otherwise disclosed herein, and
there are no lawsuits, claims, assessments, investigations, or similar matters,
to the best knowledge of HELP and HELP Sub, threatened or contemplated against
or affecting HELP Sub, HELP, its management or its properties.
(f) HELP and HELP Sub are each duly organized, validly existing and
in good standing under the laws of the jurisdiction of their incorporation; each
has the corporate power to own its property and to carry on its business as now
being conducted and is duly qualified to do business in any jurisdiction where
so required except where the failure to so qualify would have no material
negative impact.
(g) HELP and HELP Sub have filed all federal, state, county and
local income, excise, property and other Tax (as defined below), governmental
and/or related returns, forms, or reports, which are due or required to be filed
by it prior to the date hereof and have paid or made adequate provision in the
HELP Financial Statements for the payment of all Taxes, fees, or assessments
which have or may become due pursuant to such returns or pursuant to any
assessments received. Neither HELP nor HELP Sub is delinquent or obligated for
any Tax, penalty, interest, delinquency or charge. All Taxes which HELP nor HELP
Sub is obligated to withhold from amounts owing to any employee, creditor or
third party have been fully paid or properly accrued and will be satisfied from
the cash assets including the Holdback Amount of HELP and the HELP Sub as they
exist immediately prior to the Closing. The parties shall cooperate fully, as
and to the extent reasonably requested by the other party, in connection with
the filing of Tax Returns and any audit, litigation or other proceeding with
respect to Taxes. For purposes of this Agreement, the term "Tax" or "Taxes"
means any federal, state, local or foreign income, gross receipts, license,
capital stock, franchise, profits, payroll, employment, withholding, social
security, unemployment, disability, real property, ad valorem/personal property,
stamp, excise, occupation, sales, use, transfer, environmental, customs duties,
value added, alternative or add-on minimum, estimated or other tax, including
any interest, penalty or addition thereto, whether disputed or not.
(h) HELP's authorized capital stock presently consists of: (i)
40,000,000 shares of Common Stock, without par value, of which 19,971,313 shares
are presently issued and outstanding, not giving effect to the reverse split.
HELP Sub's capitalization consists of 1,000,00020,000 shares of no par value
common stock ("HELP Sub's Common Stock"), of which 1,000 shares outstanding, all
of which owned by HELP, free and clear of all liens, claims and encumbrances.
All outstanding shares of capital stock of HELP and HELP Sub are, or shall be at
Closing, validly issued, fully paid and nonassessable. There are no existing
options, calls, warrants, preemptive rights, registration rights or commitments
of any character relating to the issued or unissued capital stock or other
securities of either HELP or HELP Sub.
(i) HELP and HELP Sub have (and at the Closing they will have)
disclosed in writing all events, conditions and facts materially affecting the
business, financial conditions or results of operations of either HELP or HELP
Sub.
(j) The corporate financial records, minute books, and other
documents and records of HELP and HELP Sub have been made available to PainCare
prior to the Closing.
(k) HELP has not breached, nor is there any pending, or to the
knowledge of management, any threatened claim that HELP has breached in any
material respect, any of the terms or conditions of any agreements, contracts or
commitments to which it is a party or by which it or its properties is bound and
the breach of which would have a material adverse effect upon HELP or its
business or assets. HELP hereby represents that it is not a party to any
material contract or commitment other than appointment documents with its
transfer agent, and that it has disclosed to PainCare all relationships or
dealings with related parties or affiliates.
(l) HELP has complied with the provisions for registration under
the Securities Act of 1933 and all applicable blue sky laws in connection with
all of its public stock offering. There
are no outstanding, pending or threatened stop orders or other actions or
investigations relating thereto.
(m) Intentionally omitted.
(n) HELP is in compliance with, and HELP has operated any businesses
previously owned or operated by it in compliance with, all applicable laws,
orders, rules and regulations of all governmental bodies and agencies, including
applicable securities laws and regulations and environmental laws and
regulations, except where such noncompliance has and will have, in the
aggregate, no material adverse effect. HELP has not received notice of any
noncompliance with respect to the foregoing.
(o) Without limiting the foregoing, HELP and any other person or
entity for whose conduct HELP is legally held responsible are in material
compliance with all applicable federal, state, regional, local or provincial
laws, statutes, ordinances, judgments, rulings and regulations relating to any
matters of pollution, protection of the environment, health or safety, or
environmental regulation or control (collectively, "Environmental Laws").
Neither HELP nor any other person or entity for whose conduct HELP is legally
responsible, has (i) received any notice, demand, request for information, or
administrative inquiry relating to any violation of an Environmental Law or the
institution of any suit, action, claim or proceeding alleging such violation or
investigation by any governmental authority or any third party of any such
violation, (ii) manufactured, generated, treated, stored, handled, processed,
released, transported or disposed of any hazardous substance on, under, from or
at any of HELP's properties or any other properties, (iii) become aware or
received notice of the release or disposal of any hazardous substances in
violation of any applicable Environmental Law, on, under or at any of HELP's
properties or any other properties, (iv) become aware or received notice of any
actual or potential material liability on the part of HELP for the response to
or remediation of any hazardous substance at or arising from any of HELP's
properties or any other properties owned or operated by HELP or any other person
for whose conduct HELP is legally responsible, or (v) become aware of or
received notice of any actual or potential liability on the part of HELP for the
costs of response to or remediation of hazardous substances at or arising from
any properties owned or operated by HELP or any other person for whose conduct
HELP is or may be held responsible. For purposes of this Agreement, the term
"hazardous substance" shall mean any toxic or hazardous materials or substances,
including asbestos, buried contaminants, chemicals, flammable explosives,
radioactive materials or petroleum and petroleum products and any substances
defined as, or included in the definition of, "hazardous substances," "hazardous
wastes," "hazardous materials" or "toxic substances" under any Environmental
Law. No Environmental Law imposes any obligation upon HELP arising out of or as
a condition to any transaction contemplated hereby, including, without
limitation, any requirement to modify or to transfer any permit or license, any
requirement to file any notice or other submission with any governmental
authority, the placement of any notice, acknowledgment, or covenant in any land
records, or the modification of or provision of notice under any agreement,
consent order, or consent decree.
(p) HELP has filed all required documents, reports and schedules with
the SEC since it become subject to the reporting requirements of the Securities
and Exchange Act of 1934 (collectively, the "HELP SEC Documents"). As of their
------------------
respective dates, the HELP SEC
Documents complied in all material respects with the requirements of the
Securities Act, and, at the respective times they were filed, none of the HELP
SEC Documents contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements (including, in each case, any notes
thereto) of HELP included in the HELP SEC Documents complied as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles (except as may be
indicated therein or in the notes thereto) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the consolidated
financial position of HELP as of the respective dates thereof and the results of
its operations and its cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal year-end audit adjustments and to any
other adjustments described therein). HELP has not, since December 31, 2000,
made any change in the accounting practices or policies applied in the
preparation of financial statements.
(q) Except as and to the extent specifically disclosed in this
Agreement and those that are specifically reflected or reserved against as to
amount in the latest balance sheet contained in the HELP Financials, there is no
basis for the assertion against HELP of any material liabilities or obligations
of any nature, whether absolute, accrued, contingent or otherwise and whether
due or to become due, including, without limitation, any liability for taxes and
interest, penalties and other charges payable with respect thereto. Except as
set forth in this Agreement, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will (a)
result in any payment (whether severance pay, unemployment compensation or
otherwise) becoming due from HELP to any employee, director or officer or former
employee, director or officer of HELP, (b) increase any benefits otherwise
payable to any employee, director or officer or former employee, director or
officer of HELP, or (c) result in the acceleration of the time of payment or
vesting of any such benefits.
(r) No patent, formula, process, trade secret, trademark, trade name,
assumed name or copyright currently used by HELP, including all intellectual
property used in the operation of the business of HELP (collectively, the "HELP
Intellectual Property"), infringes on any patent, copyright, trademark or other
intellectual property right of any person, or violates the terms of any
agreements related thereto, nor have there been any claims of infringement or to
HELP's knowledge, threatened against HELP.
(s) HELP has no consultants or independent contractors to whom it is
paying compensation for services. HELP has no material contracts, commitments,
arrangements, or understandings relating to its business, operations, financial
condition, or prospects. For purposes of this Section, "material" means payment
or performance of a contract, commitment, arrangement or understanding entered
into in the ordinary course of business which is expected to (i) involve
payments in excess of $3,000 per year, (ii) have a duration exceeding one (1)
year, or (iii) any contract, commitment, arrangement or understanding entered
into not in the ordinary course of business. Other than this Agreement and the
transactions contemplated hereby, there are no outstanding contracts,
commitments or bids, or services, development or sales proposals. There are no
outstanding lease or purchase commitments of HELP.
(t) The representations and warranties by HELP contained in this
Agreement (as qualified by the HELP Disclosure Statement) when taken as a whole
do not contain any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein not misleading.
Except as specifically indicated elsewhere in this Agreement, all material
documents about HELP or the HELP Subsidiary delivered by HELP in connection
herewith have been and will be complete originals, or exact copies thereof.
(u) Assuming all consents and approvals described in this Agreement
or in the HELP Disclosure Statement have been obtained and assuming the
appropriate filings and mailings described in this Agreement and the HELP
Disclosure Statement are made by HELP under the Securities Act and with the
Secretary of State of Nevada and Connecticut, the execution and delivery by HELP
of this Agreement and the closing documents and the consummation by HELP of the
transactions contemplated hereby do not and will not require the consent,
approval or action of, or any filing or notice to, any corporation, firm, person
or other entity or any public, governmental or judicial authority (except for
such consents, approvals, actions, filing or notices the failure of which to
make or obtain will not in the aggregate have a material adverse effect). HELP
is not subject to, or a party to, any mortgage, lien, lease, agreement,
contract, instrument, order, judgment or decree or any other material
restriction of any kind or character which would prevent or hinder the continued
operation of the business of HELP and PainCare after the closing.
(v) Information provided by HELP regarding HELP, the HELP Sub and its
officers, directors and shareholders which is to be included in the Registration
Statement will not at the time the Registration Statement becomes effective and
as of the date of the PainCare shareholder meeting, and as of the date of any
HELP shareholder meeting contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
6. Closing. The Closing of the transactions contemplated herein shall
-------
take place on such date (the "Closing") upon the effectiveness of the
Registration Statement and as mutually determined by the parties hereto when all
conditions precedent have been met and all required documents have been
delivered, which Closing is expected to be on or about February 28, 2002, or
such later date as mutually agreed to by all parties hereto. The "Effective
Date" of the Merger shall be that date on which executed copies of the attached
Plan and Articles of Merger is filed with the Secretary of States of Nevada and
Connecticut.
7. Conditions Precedent to the Obligations of PainCare. All obligations
---------------------------------------------------
of PainCare under this Agreement are subject to the fulfillment, prior to or as
of the Closing and/or the Effective Date, as indicated below, of each of the
following conditions:
(a) The representations and warranties by or on behalf of HELP and
HELP Sub contained in this Agreement or in any certificate or document delivered
pursuant to the provisions hereof shall be true in all material respects at and
as of the Closing and Effective Date as though such representations and
warranties were made at and as of such time.
(b) HELP and HELP Sub shall have performed and complied with all
covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by them prior to or at the Closing.
(c) On or before the Closing, the shareholders of HELP, if required
by law, the directors of HELP and HELP Sub, and HELP as sole shareholder of HELP
Sub shall have approved in accordance with applicable state corporation law the
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein.
(d) On or before the Closing Date, HELP and HELP Sub shall have
delivered certified copies of resolutions of the sole shareholder and director
of HELP Sub and of the directors and shareholders, if required, of HELP
approving and authorizing the execution, delivery and performance of this
Agreement and authorizing all of the necessary and proper action to enable HELP
and HELP Sub to comply with the terms of this Agreement including the election
of pincer's PainCare's nominees to the Board of Directors of HELP, the adoption
of an Employee Stock Option Plan in the form provided by PainCare and all
matters outlined herein.
(e) The Merger shall be permitted by applicable state law and HELP
shall have sufficient shares of its capital stock authorized to complete the
Merger.
(f) At Closing, all officers and directors of HELP shall have
resigned in writing from their positions as officers and directors and the
following PainCare nominees shall been elected and shall serve as the officers
and directors of HELP until their resignation, retirement or dismissal:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - Chairman of the Board and CEO
▇▇▇ ▇▇▇▇▇, M.D - Board Member and President
▇▇▇▇ ▇▇▇▇▇▇▇ - Board Member and Secretary, Treasurer and CFO
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D. - Board Member only
----
(g) At the Closing, all instruments and documents delivered to
PainCare Shareholders pursuant to the provisions hereof shall be reasonably
satisfactory to legal counsel for PainCare.
(h) At the Closing, upon consummation of the Merger, HELP shall have
the same authorized and issued capital as set forth in Section 2(c)(5) hereof.
(i) The shares of restricted HELP capital stock to be issued to
PainCare Shareholders at Closing will be validly issued, nonassessable and
fully-paid under Connecticut corporation law and will be issued in a nonpublic
offering in compliance with all federal, state and applicable securities laws.
(j) Intentionally omitted.
(k) PainCare shall have received all necessary and required approvals
and consents from required parties and its shareholders.
(l) HELP shall have demonstrated to the satisfaction of PainCare that
it has satisfied all requirements of the SEC with respect to the transactions
contemplated by this Agreement and that the Registration Statement is effective.
(m) At the Closing, HELP and HELP Sub shall have delivered to
PainCare an opinion of its counsel dated as of the Closing to the effect that:
(n) HELP and HELP Sub, each is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by HELP and HELP Sub and is a valid and binding obligation of
HELP and HELP Sub enforceable in accordance with its terms;
(iii) HELP and HELP Sub each through its Board of Directors and
stockholders have taken all corporate action necessary for performance
under this Agreement;
(iv) The documents executed and delivered to PainCare and
PainCare Shareholders hereunder are valid and binding in accordance with
their terms and vest in PainCare Shareholders, as the case may be, all
right, title and interest in and to the shares of HELP's Common Stock to be
issued pursuant to Section 2 hereof, and the shares of HELP capital stock
when issued will be duly and validly issued, fully-paid and nonassessable;
and
(v) HELP and HELP Sub each has the corporate power to execute,
deliver and perform under this Agreement.
(vi) Legal counsel for HELP and HELP Sub is not aware of any
liabilities, claims or lawsuits involving HELP or HELP Sub.
8. Conditions Precedent to the Obligations of HELP and HELP Sub. All
------------------------------------------------------------
obligations of HELP and HELP Sub under this Agreement are subject to the
fulfillment, prior to or at the Closing, of each of the following conditions:
(a) The representations and warranties by PainCare contained in this
Agreement or in any certificate or document delivered pursuant to the provisions
hereof shall be true in all material respects at and as of the Closing as though
such representations and warranties were made at and as of such time.
(b) PainCare shall have performed and complied with all covenants,
agreements, and conditions set forth in, and shall have executed and delivered
all documents required by this Agreement to be performed or complied with or
executed and delivered by them prior to or at the Closing.
(c) On or before the Closing, the shareholders of PainCare and the
directors of
PainCare shall have approved in accordance with applicable state corporation law
the execution and delivery of this Agreement and the consummation of the
transactions contemplated herein.
(d) On or before the Closing Date, PainCare shall have delivered
certified copies of resolutions of its shareholders and directors approving and
authorizing the execution, delivery and performance of this Agreement and
authorizing all of the necessary and proper action to enable PainCare to comply
with the terms of this Agreement.
(e) The Merger shall be permitted by applicable state law.
(f) At the Closing, all instruments and documents delivered to HELP
pursuant to the provisions hereof shall be reasonably satisfactory to legal
counsel for HELP.
(g) PainCare shall deliver an opinion of its legal counsel to the
effect that:
(i) PainCare and its subsidiaries are, each a corporation
duly organized, validly Existing and in good standing under the laws of the
jurisdiction of incorporation;
(ii) This Agreement has been duly authorized, executed and
delivered by PainCare and is a valid and binding obligation of PainCare
enforceable in accordance with its terms;
(iii) PainCare through its Board of Directors and stockholders
have taken all corporate action necessary for performance under this
Agreement;
(iv) The documents executed and delivered to HELP hereunder
are valid and binding in accordance with their terms; and
(v) PainCare has the corporate power to execute, deliver and
perform under this Agreement.
(vi) Legal counsel for PainCare is not aware of any
liabilities, claims or lawsuits involving PainCare.
9. Indemnification.
---------------
(a) General Indemnification. For a period of one year from the
Closing, HELP and HELP Sub agree to jointly and severally indemnify and hold
harmless PainCare, its officers, directors and employees, and PainCare agrees to
indemnify and hold harmless HELP and HELP Sub, against and in respect of any
liability, damage or deficiency, all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses including attorney's fees incident to
any of the foregoing, resulting from any material misrepresentations made by an
indemnifying party to an indemnified party, an indemnifying party's breach of
covenant or warranty or an indemnifying party's nonfulfillment of any agreement
hereunder, from any material misrepresentation in or omission from any
certificate or document furnished or to be furnished hereunder or with respect
to matters arising from or out of events or occurrences prior to the Closing.
(b) PainCare Indemnification. Notwithstanding anything herein to the
contrary, for a period of three years from the Closing, PainCare agrees to
indemnify and hold harmless HELP, the HELP Subsidiary, and each person, if any,
who controls HELP or the HELP Subsidiary within the meaning of Section 15 of
the Act against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934 or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) with
respect to PainCare only which arise out of or are based upon any untrue
----
statement of a material fact contained in the S-4 Registration Statement
described herein or in any amendment thereof, or in the Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by it or any of them in connection with investigating or defending any
such loss, claim, damage, liability or action, to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or omission made in reliance upon and in conformity with written
information furnished to HELP by or on behalf of PainCare or any of the PainCare
Shareholders for use in connection with the preparation thereof.
(c) HELP Indemnification. Notwithstanding anything herein to the
contrary, for a period of three years from the Closing, HELP agrees to indemnify
and hold harmless PainCare, the PainCare subsidiaries, and each person, if any,
who controls PainCare or the PainCare subsidiaries within the meaning of Section
15 of the Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act of 1933, as amended, the Securities Exchange Act of 1934 or other federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) with
respect to HELP only which arise out of or are based upon any untrue statement
----
of a material fact contained in the S-4 Registration Statement described herein
or in any amendment thereof, or in the Prospectus, or in any amendment thereof
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
any of them in connection with investigating or defending any such loss, claim,
damage, liability or action, to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or omission
made in reliance upon and in conformity with written information furnished to
PainCare by or on behalf of HELP or any of the HELP shareholders for use in
connection with the preparation thereof.
(d) The parties agree the aggregate of all Claims for which indemnity
would accrue to any one party pursuant to this Section shall be limited to
$1,000,000 with the requirement that no such indemnity will accrue until and
unless such Claim(s) for indemnity, individually or in the aggregate, is equal
to or greater than $50,000. Further, the party entitled to indemnification shall
have a duty to mitigate its damages. Indemnitors shall not be liable for any
liabilities resulting from Claims that are covered by any insurance policy or
other indemnity or contribution agreement unless, and only to the extent that,
the full limit of such insurance policy, indemnity or contribution agreement has
been exceeded.
(e) Indemnification pursuant to this Section will be the exclusive
remedy of the parties with respect to any other party's alleged violation or
breach of, or default under, this Agreement (notwithstanding whether a claim or
third party claim with respect thereto is based on or could be asserted under
another theory of liability, including, without limitation, contract, tort,
strict liability, statutory liability or any other theory of liability), except
on account of the fraud (whether as defined by applicable statute or the common
law) of any other party to this Agreement. For these purposes, if any party
seeks to establish the fraud of any other party to this Agreement, all of such
other party's representations and warranties contained in this Agreement will be
deemed to have been made to the knowledge of such other party.
10. Nature and Survival of Representations. All representations,
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warranties and covenants made by any party in this Agreement shall survive the
Closing and the consummation of the transactions contemplated hereby for one
year (saving those representations, warranties and covenants made by any party
in this Agreement for which indemnity shall be available pursuant to Sections
9(b) or 9(c) which shall survive three (3) years) from the Closing. All of the
parties hereto are executing and carrying out the provisions of this Agreement
in reliance solely on the representations, warranties and covenants and
agreements contained in this Agreement and not upon any investigation upon which
it might have made or any representation, warranty, agreement, promise or
information, written or oral, made by the other party or any other person other
than as specifically set forth herein.
11. Documents at Closing. At the Closing, the following documents shall
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be delivered:
(a) PainCare will deliver, or will cause to be delivered, to HELP the
following:
(i) a certificate executed by the CEO and Secretary of
PainCare to the effect that all representations and warranties made by PainCare
under this Agreement are true and correct as of the Closing, the same as though
originally given to HELP or HELP Sub on said date;
(ii) a certificate from the state of PainCare's incorporation
dated not more than 10 days prior to the Closing to the effect that PainCare is
in good standing under the laws of said state;
(iii) such other instruments, documents and certificates, if
any, as are required to be delivered pursuant to the provisions of this
Agreement;
(v) executed copies of the Plan and Articles of Merger for
filing; and certified copies of resolutions adopted by the shareholders and
directors of PainCare authorizing the Merger; and
(vi) all other items, the delivery of which is a condition
precedent to the
obligations of HELP and HELP Sub, as set forth herein.
(b) HELP and HELP Sub will deliver or cause to be delivered to
PainCare:
(i) stock certificates representing those securities of
HELP to be issued as a part of the Merger as described in Section 2 hereof;
(ii) a certificate of the President and Secretary of HELP
and HELP Sub, respectively, to the effect that all representations and
warranties of HELP and HELP Sub made under this Agreement are true and correct
as of the Closing, the same as though originally given to PainCare on said date;
(iii) certified copies of resolutions adopted by HELP's and
HELP Sub's Board of Directors and HELP's shareholders, if required, and HELP
Sub's sole stockholder authorizing the Merger and all related matters;
(iv) certificates from the jurisdiction of incorporation of
HELP and HELP Sub dated not more than 10 days prior to the Closing Date that
each of said corporations is in good standing under the laws of said state;
(v) opinion of HELP's counsel as described in Section 7(n)
above;
(vi) the HELP Cash;
(vii) such other instruments and documents as are required
to be delivered pursuant to the provisions of this Agreement;
(viii) resignations of the officers and directors of HELP and
HELP Sub; and
(ix) all other items, the delivery of which is a condition
precedent to the obligations of PainCare, as set forth in Section 7 hereof,
including the net proceeds of the HELP Financing.
12. Finder's Fees. HELP and HELP Sub, jointly and severally, represent
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and warrant to PainCare, and PainCare represents and warrants to each of HELP
and HELP Sub, that none of them, or any party acting on their behalf, has
incurred any liabilities, either express or implied, to any "broker" of "finder"
or similar person in connection with this Agreement or any of the transactions
contemplated hereby which would require the other party to incur and pay any
commissions or finders' fees. In this regard, HELP shall be responsible for the
payment of all commissions or finders' fees due and owing to parties for which
it is has contacted for or is otherwise responsible and PainCare shall be
responsible for the payment of all commissions or finders' fees due and owing to
parties for which it has contracted for or is otherwise responsible. HELP and
HELP Sub, jointly and severally, on the one hand, and PainCare on the other
hand, will indemnify and hold the other harmless from any claim, loss, cost or
expense whatsoever (including reasonable fees and disbursements of counsel) from
or relating to any such express or implied liability.
13. Miscellaneous.
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(a) Further Assurances. At any time, and from time to time, after
------------------
the Effective Date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of this Agreement.
(b) Waiver. Any failure on the part of any party hereto to comply
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with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(c) Termination. All obligations hereunder may be terminated at the
-----------
discretion of either party's Board of Directors if (i) the closing conditions
specified in Sections 7 and 8 are not met by February 28, 2002, unless
unanimously extended, or (ii) any of the representations and warranties made
herein have been materially breached.
(d) Amendment. This Agreement may be amended only in writing as
---------
agreed to by all parties hereto.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the last known address of the noticed party.
(f) Headings. The section and subsection headings in this Agreement
--------
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) Binding Effect. This Agreement shall be binding upon the parties
--------------
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
(i) Entire Agreement. This Agreement and the attached Exhibits
----------------
including the Plan and Articles of Merger attached hereto as Exhibit "A" is the
entire agreement of the parties covering everything agreed upon or understood in
the transaction. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution hereof.
(j) Time. Time is of the essence.
----
(k) Severability. If any part of this Agreement is deemed to be
------------
unenforceable the balance of the Agreement shall remain in full force and
effect.
(l) Responsibility and Costs. Whether the Merger is consummated or
------------------------
not, all fees, expenses and out-of-pocket costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred by the parties hereto shall be borne solely and entirely
by the party that has incurred such costs and expenses, unless the failure to
consummate the Merger constitutes a breach of the terms hereof, in which event
the breaching party shall be responsible for all reasonable costs of all parties
hereto. The parties have agreed to an allocation of responsibility by their
respective counsel with respect to certain legal matters to be completed prior
to the Effective Date, which allocation is set forth in the HELP Disclosure
Schedule. HELP's obligation to deliver the HELP Cash at the Closing is subject
to HELP incurring legal costs and expenses with respect to the transaction
described in this Agreement in accordance with that allocation. If HELP or its
legal counsel determines at anytime during the process of completing the
transactions contemplated by this Agreement that HELP'S legal counsel is having
to bear more than its allotted duties it shall immediately advise PainCare and
its counsel specifying in writing the tasks and the extent of the duties it is
being required to undertake for which it was not otherwise responsible. Upon
such determination and notice all such work with respect to the subject
transactions will be stopped until such time as the parties can resolve the
issues. If such issues can not be resolved to the satisfaction of both parties,
either party may terminate this Agreement and the parties' duties and
responsibilities as provided herein shall notwithstanding anything herein to the
contrary immediately terminate. Failure of HELP or its counsel to immediately
provide such notice to PainCare will result in a waiver of any rights HELP may
otherwise have with respect to the delivery of the HELP Cash and the indemnity
provisions of this Agreement but only to the extent that such failure to give
notice results in a shortfall of such HELP Cash of more than $5,000.00.
(m) Applicable Law. This Agreement shall be construed and governed
--------------
by the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first above written.
HELPMATE ROBOTICS SUBSIDIARY, INC. HELPMATE ROBOTICS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, President By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, CEO
------------------------------------- -------------------------------
PAINCARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO
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EXHIBIT "A"
To Agreement and Plan of Reorganization
Plan and Articles of Merger
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EXHIBIT "B"
To Agreement and Plan of Reorganization
List of PainCare Common Stockholders
------------------------------------