MEMBERSHIP INTEREST EXCHANGE AGREEMENT
Exhibit
10.2
This
Membership Interest Exchange Agreement made this as of the 20th
day of
December 2007 by and among between SFH I Acquisition Corp., a Delaware
corporation, with a principal place of business located at ▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, (the “Company” or “the Corporation”),
Pharmco, LLC, a Florida limited liability company with a principal place of
business located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇(“Pharmco"), together with each of the members of Pharmco (as hereinafter
defined).
Recitals:
A. The
Corporation has offered to issue ten million shares of its common stock, $.0001
par value (the "Common Stock), to the holders of Membership Interests of Pharmco
(the "Pharmco Membership Holders") in exchange for their contribution to the
Corporation of all of the issued and outstanding membership interests of Pharmco
(the “Pharmco Membership Interests”).
B. The
respective Boards of Directors of the Corporation and Pharmco have determined
that, subject to the terms, conditions, agreements, representations and
warranties set forth herein, the exchange contemplated herein will serve the
general welfare and advantage of their respective businesses.
C. Subject
to the terms and conditions set forth herein, the Pharmco Members desire to
contribute and exchange all of the Pharmco Membership Interests for shares
of
Common Stock of the Corporation in the manner hereinafter set forth
herein.
D. The
exchange is intended to comply with the requirements of Section 368 of the
Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder and the interpretive rulings issued pursuant thereto.
NOW,
THEREFORE, in consideration of the foregoing recitals, as well as the mutual
covenants hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE
I
EXCHANGE
PROVISIONS
1.1 Contribution.
Subject
to the terms and conditions hereinafter set forth:
(a) Each
Pharmco Member agrees to contribute, transfer, assign and convey at Closing
all
of their Pharmco Membership Interests to the Corporation, together with all
other rights, claims and interests he or she may have with respect to Pharmco
or
its respective assets, and all claims he may have against its officers and
directors, including, but not limited to, all rights to unpaid dividends and
all
claims and causes of action arising from or in connection with the ownership
of
Pharmco Membership Interests or its issuance, excluding any right, claim or
interest of same arising under this Agreement or in connection with the
transaction contemplated by this Agreement. Each Pharmco Member shall deliver
to
the Company at Closing all of his membership certificates representing the
Pharmco Membership Interests.
(b) The
Corporation agrees to issue to each Pharmco Member the Member’s pro rata portion
of the total number of Membership Interests to be issued to the Pharmco Members.
(c)
Attached hereto and marked Schedule 1.1 is a list of the Pharmco Members, the
number of Membership Interests and/or their pro rata share in the outstanding
Membership Interests each owns as of the date of this Agreement and the number
of shares of Common Stock each will receive at Closing.
1.2
No
Registration.
(a) Each
of
the Pharmco Members acknowledges and agrees that:
(i) The
Common Stock to be issued to the Pharmco Members (the "Exchanged Corporation
Stock") is being issued to Pharmco Members without registration under applicable
federal and state securities laws in reliance upon certain exemptions from
registration under such securities laws;
(ii) Each
member has had the opportunity to ask questions of and receive answers from
the
Corporation, Pharmco and their respective executive officers concerning their
businesses and the Exchanged Corporation Stock and all such inquiries have
been
completed to his satisfaction;
(iii) Each
certificate representing shares of the Exchanged Corporation Stock will bear
a
legend restricting its transfer, sale, conveyance or hypothecation, unless
such
Exchanged Corporation Stock is either registered under applicable securities
laws or an exemption from such registration is applicable, and provided that
if
an exemption from registration is claimed, the Corporation may require an
opinion of legal counsel that, as a result of such exemption, registration
under
the securities laws is not required to transfer, sell, convey or hypothecate
such Exchanged Corporation Stock;
(iv) Each
member shall not transfer any Exchanged Corporation Stock except in compliance
with all applicable securities laws;
(v) Each
member has a pre-existing personal or business relationship with the Company
or
its officers, directors, agents or controlling persons, and has relied, if
at
all, on the advice of such persons in electing to participate in the transaction
herein contemplated and not on any representations of the Corporation other
than
those expressly set forth herein, or by reason of his business or financial
experience could be reasonably assumed to have the capacity to protect his
own
interest in connection with the transaction;
(vi) Each
member is acquiring the Exchanged Corporation Stock for his own account, for
investment purposes only and not with a view to the sale or distribution
thereof;
(vii) He
has
not received any general solicitation or general advertising regarding the
acquisition of the Exchanged Corporation Stock;
(viii) He
is
capable of evaluating the merits and risks of an investment in the Common Stock
because he is a sophisticated investor by virtue of his prior investments and
has experience in investments similar in nature to the Common Stock, including
investments in unlisted and unregistered securities, and has knowledge and
experience in financial and business matters in general; and
(ix.) Each
member agrees and understands that the terms and conditions of this Agreement
were not negotiated in an arm’s length transaction as the manager of Pharmco is
also the president of the Company.
1.6 Closing.
Consummation of the contemplated transaction shall take place on the date that
all the conditions set forth herein are satisfied or waived by the appropriate
parties at the offices of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, P.A., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at another time or place that is mutually
agreeable to the parties hereto, or on such other date at such other time as
may
be mutually agreed upon in writing by the parties hereto (the
"Closing").
ARTICLE
II
THE
CORPORATION'S REPRESENTATIONS AND WARRANTIES
The
Corporation hereby makes the following representations and warranties to the
Pharmco Members and Pharmco, each of which the Corporation represents to be
true
and correct on the date hereof and (except as the Corporation may notify Pharmco
in writing prior to the Closing) shall be deemed made again as of the Closing
and represented by the Corporation to be true and correct at the time of the
Closing.
2.1 Organization.
The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Corporation has the full
power and authority to conduct the business in which it will engage upon
completion of the transaction contemplated herein. Except as set forth in the
Corporation’s filings with the Securities and Exchange Commission, the
Corporation does not have any subsidiary or equity interest in any entity.
Accurate,
current and complete copies of the Articles of Incorporation and Bylaws of
the
Corporation have been filed with the Securities and Exchange Commission and
are
available at ▇▇▇.▇▇▇.▇▇▇.
2.2 Stock
Ownership.
The
authorized capital stock of the Corporation consists of one hundred twenty
million shares of
Common
Stock, consisting of one hundred million shares of Common Stock and twenty
million shares of Preferred Stock. There are currently ten million shares of
common stock issued and outstanding. There are no preferred shares outstanding.
The Company is currently in negotiation for the possible issuance of an
additional 45 million shares of common stock in connection with a potential
acquisition.
All
the
issued and outstanding shares of capital stock of the Corporation are duly
authorized, validly issued, fully paid and nonassessable. Upon tender of the
Pharmco membership interests in the manner contemplated in Section 1.1 hereof,
legal and beneficial ownership of the Exchanged Corporation Stock shall be
transferred to and vested in the Pharmco Members free and clear of all
encumbrances,except those required by Rule 144 of the Securities Act,and all
the
Exchanged Corporation Stock shall be duly authorized, validly issued, fully
paid
and nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Corporation having the right to vote
(or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which shareholders of the Corporation may vote. Except as set
forth above, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Corporation is a party or by which it is bound obligating the
Corporation to issue, deliver or sell, or cause to be issued, delivered or
sold,
additional shares of capital stock or other equity or voting securities of
the
Corporation or obligating the Corporation to issue, grant, extend or enter
into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual obligations,
commitments, understandings or arrangements of the Corporation to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares of
capital stock of the Corporation.
2.3 Authority
and Approval of Agreement.
(a) The
execution and delivery of this Agreement by the Corporation and the performance
of all the Corporation's obligations hereunder have been duly authorized and
approved by all requisite corporate action on the part of the Corporation
pursuant to applicable law. The Corporation has the power and authority to
execute and deliver this Agreement and to perform all its obligations
hereunder.
(b) This
Agreement and any other documents, instruments and agreements executed by the
Corporation in connection herewith constitute the valid and legally binding
agreements of the Corporation, enforceable against the Corporation in accordance
with their terms, except that (i) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies of creditors;
and (ii) the availability of equitable remedies may be limited by equitable
principles.
2.4
No
Violations.
Neither
the execution, delivery nor performance of this Agreement or any other
documents, instruments or agreements executed by the Corporation in connection
herewith, nor the consummation of the transactions contemplated hereby: (i)
constitutes a violation of or default under (either immediately, upon notice
or
upon lapse of time) the Articles of Incorporation or Bylaws of the Corporation,
any provision of any contract to which the Corporation may be bound, any
judgment or any law; or (ii) will or could result in the creation or imposition
of any encumbrance upon, or give to any third person any interest in or right
to, the Exchanged Corporation Stock or any other capital stock of the
Corporation; or (iii) will or could result in the loss or adverse modification
of, or the imposition of any fine or penalty with respect to, any license,
permit or franchise granted or issued to, or otherwise held by or for the use
of, the Corporation.
2.5 Financial
Statements.
The
financial statements as filed by the Corporation with the Securities and
Exchange Commission set forth the financial condition of the Company. The
Financial Statements are true, correct and complete, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods indicated, and accurately reflect the Corporation's financial
condition and the results of the Corporation's operations for the periods and
as
of the dates which they purport to cover.
2.6 Conduct
Since Date of Balance Sheet.
Except
as disclosed in Schedule
2.6
hereto
or as otherwise set forth herein none of the following has occurred since the
date of the Balance Sheet:
(a) Any
material adverse change in the financial condition, obligations, capitalization,
business, prospects or operations of the Corporation, nor are there any
circumstances known to the Corporation which might result in such a material
adverse change or such an effect;
(b) Any
settlement or other resolution of any dispute or proceeding other than in the
ordinary course of business;
(c) Any
cancellation by the Corporation, without payment in full, of any obligation
to
the Corporation of any shareholder, director, officer or employee of the
Corporation (or any member of their respective families), or any entity in
which
any shareholder, director or officer of the Corporation (or any member of their
respective families) has any direct or indirect interests;
(d) Any
payment, discharge or satisfaction of any obligation or judgment, other than
in
the ordinary course of business; or
(e) Any
agreement obligating the Corporation to do or take any of the actions referred
to in this Section 2.7 outside the ordinary course of business.
2.7 Labor
Matters.
The
Corporation is not and has never been a party to: (i) any profit sharing,
pension, retirement, deferred compensation, bonus, stock option, stock purchase,
retainer, consulting, health, welfare or incentive plan or agreement or other
employee benefit plan, whether legally binding or not; or (ii) any plan
providing for "fringe benefits" to its employees, including, but not limited
to,
vacation, disability, sick leave, Pharmco, hospitalization and life insurance
and other insurance plans, or related benefits; or (iii) any employment
agreement other than with ▇▇▇▇▇ ▇▇▇▇. No former employee of the Corporation
has
any claim against the Corporation (whether under federal or state law, any
employment agreement or otherwise) on account of or for: (i) overtime pay;
(ii)
wages or salary for any period; (iii) vacation, time-off or pay in lieu of
vacation or time-off; or (iv) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work. No person or
party (including, but not limited to, governmental agencies of any kind) has
any
claim or basis for any action or proceeding against the Corporation arising
out
of any statute, ordinance or regulation relating to discrimination in employment
or to employment practices or occupational safety and health
standards.
2.8 Environmental
Matters.
The
Corporation has not generated any hazardous wastes or engaged in activities
which are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where the Corporation has stored,
disposed or arranged for the disposal of chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation, and no polychlorinated biphenyls are used or stored at any property
owned or leased by the Corporation.
2.9 Books
and Records.
The
Corporation's books and records are and have been properly prepared and
maintained in form and substance adequate for preparing audited financial
statements in accordance with generally accepted accounting principles, and
fairly and accurately reflect all of the Corporation's assets, obligations
and
accruals, and all transactions (normally reflected in books and records in
accordance with generally accepted accounting principles) to which the
Corporation is or was a party or by which the Corporation or any of its assets
are or were affected.
2.10 Taxes.
Except
as otherwise disclosed in this Agreement, or any applicable SEC filings, all
taxes due, owing and payable by the Corporation have been fully paid. The
amounts set up as provision for taxes on the Balance Sheet are sufficient for
the payment of all accrued and unpaid taxes of the Corporation, whether or
not
disputed. The amount set up as provision for taxes on the Corporation's books
and records for the current fiscal year through the Closing shall be sufficient
for the payment of all accrued and unpaid taxes of the Corporation, whether
or
not disputed, for such period. No claim for any tax due from or assessed against
the Corporation is being contested by the Corporation. None of the Corporation's
tax returns or reports has been audited by the Internal Revenue Service or
any
state or local tax authority, and the Corporation has not received any notice
of
deficiency or other adjustment from the Internal Revenue Service or any state
or
local tax authority. There are no agreements, waivers or other arrangements
providing an extension of time with respect to the assessment of any tax against
the Corporation, nor are there any tax proceedings now pending or threatened
against the Corporation. No state of facts exists or has existed, nor has any
event occurred, which would constitute grounds for the assessment of any further
tax against the Corporation.
2.11 Litigation.
The
Corporation is not a party to, the subject of, or threatened with any litigation
nor, to the best of the Corporation's knowledge, is there any basis for any
litigation. The Corporation is not contemplating the institution of any
litigation.
2.12 Other
Liabilities.
No
claim of breach of contract, tort, product liability or other claim, contingent
or otherwise, has been asserted or threatened against the Corporation nor,
to
the best of the Corporation's knowledge, is capable of being asserted by any
employee, creditor, claimant or other person against the Corporation. No state
of facts exists or has existed, nor has any event occurred, which could give
rise to the assertion of any such claim by any person.
2.13 Judgments.
There
is no outstanding judgment against the Corporation. There is no health or safety
problem involving or affecting the Corporation. There are no open workers
compensation claims against the Corporation, or any other obligation, fact
or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, director, officer, employee or agent
of
the Corporation, or any heir or personal representative thereof, against the
Corporation or any successor to the businesses of the Corporation.
2.14 Improper
Payments.
Neither
the Corporation, nor any of its current or former shareholders, directors,
officers or employees or agents, nor any person acting on behalf of the
Corporation, has, directly or indirectly, made any bribe, kickback or other
payment of a similar or comparable nature, whether lawful or not, to any person,
public or private, regardless of form, whether in money, property or services,
to obtain favorable treatment for business secured or special concessions
already obtained. No funds or assets of the Corporation were donated, lent
or
made available directly or indirectly for the benefit of, or for the purpose
of
supporting or opposing, any government or subdivision thereof, political party,
candidate or committee, either domestic or foreign. The Corporation has not
maintained and does not maintain a bank account, or any other account of any
kind, whether domestic or foreign, which account was not or is not reflected
in
the Corporation's books and records, or which account was not listed, titled
or
identified in the name of the Corporation.
2.15 Full
Disclosure.
All the
representations and warranties made by the Corporation herein or in any
Schedule, and all of the statements, documents or other information pertaining
to the transaction contemplated herein made or given by the Corporation, its
agents or representatives, are complete and accurate, and do not omit any
information required to make the statements and information provided, in light
of the transaction contemplated herein, non-misleading, accurate and
meaningful.
ARTICLE III
PHARMCO'S
REPRESENTATIONS AND WARRANTIES
Pharmco
hereby makes the following representations and warranties to the Corporation,
each of which Pharmco represents to be true and correct on the date hereof
and
(except as Pharmco may notify the Corporation in writing prior to the Closing)
shall be deemed made again as of the Closing and represented by Pharmco to
be
true and correct at the time of the Closing.
3.1 Organization.
Pharmco
is a limited liability corporation duly organized, validly existing and in
good
standing under the laws of the State of Florida and is not required to be
qualified or licensed as a foreign corporation in any other jurisdiction.
Pharmco has the full power and authority to own all its assets and to conduct
its business as and where its business is presently conducted. Accurate, current
and complete copies of the Articles of Incorporation and Bylaws of Pharmco
are
to be attached hereto as Schedule
3.1.
Pharmco
has no subsidiaries or equity interest in any entity.
3.2 Membership
Ownership.
Schedule 1.1 sets forth the owners of all of the issued and outstanding
Membership Interests of Pharmco as of the date hereof. All the issued and
outstanding membership interests are duly authorized, validly issued, fully
paid
and nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Pharmco having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which members of Pharmco may vote. Except as set forth above,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Pharmco is a party or by which it is bound obligating Pharmco to issue, deliver
or sell, or cause to be issued, delivered or sold, additional membership
interests or other equity or voting securities of Pharmco or obligating Pharmco
to issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Pharmco to repurchase, redeem or otherwise acquire or make any payment in
respect of any membership interests. Notwithstanding the foregoing, if prior
to
closing, Pharmco shall issue additional membership interests, Pharmco shall
so
advise the Corporation. However, the total number of shares of the Exchanged
Corporation Stock to be delivered to the Pharmco Members shall not be adjusted
as a result of any increase or decrease in the number of membership interests.
No
additional Membership Interests will be issued following execution of this
Agreement unless terminated as provided for herein.
3.3 Authority
and Approval of Agreement.
(a) The
execution and delivery of this Agreement by Pharmco and the performance of
all
Pharmco's obligations hereunder have been duly authorized and approved by all
requisite corporate action on the part of Pharmco pursuant to applicable law.
Pharmco has the power and authority to execute and deliver this Agreement and
to
perform all its obligations hereunder.
(b) This
Agreement and each of the other documents, instruments and agreements executed
by Pharmco in connection herewith constitute the valid and legally binding
agreements of Pharmco, enforceable against Pharmco in accordance with their
terms, except that: (i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the enforcement of the rights and remedies of creditors; and (ii)
the
availability of equitable remedies may be limited by equitable
principles.
3.4 No
Violations.
Neither
the execution, delivery nor performance of this Agreement or any other
documents, instruments or agreements executed by Pharmco in connection herewith,
nor the consummation of the transactions contemplated hereby: (i) constitutes
a
violation of or default under (either immediately, upon notice or upon lapse
of
time) the Articles of Organization or Bylaws of Pharmco, any provision of any
Contract to which Pharmco or its assets may be bound, any judgment to which
Pharmco is bound or any law applicable to Pharmco; or (ii) result in the
creation or imposition of any encumbrance upon, or give to any third person
any
interest in or right to, any other capital stock of Pharmco or any of the assets
of Pharmco; or (iii) result in the loss or adverse modification of, or the
imposition of any fine or penalty with respect to, any license, permit or
franchise granted or issued to, or otherwise held by or for the use of,
Pharmco.
3.5 Consents.
Subject
only to the consents of the Pharmco members, the execution, delivery and
performance by Pharmco of this Agreement and the consummation by Pharmco of
the
transactions contemplated hereby do not require any consent that has not been
received prior to the date hereof.
3.6 Pharmco
Financial Statements.
Pharmco
shall provide the Company with audited financial statements as required by
the
Securities and Exchange Commission as a condition precedent to closing.
3.7 Contracts.
Schedule
3.8
will set
forth an accurate, current and complete list and description of each material
Contract (other than this Agreement) to which Pharmco is a party or by which
Pharmco or any of its assets are bound. An accurate, current and complete copy
of each material Contract described in Schedule
3.8
hereto
shall be furnished to the Corporation prior to Closing.
3.8 Labor
Matters.
Pharmco
is not and has never been a party to: (i) any profit sharing, pension,
retirement, deferred compensation, bonus, stock option, stock purchase,
retainer, consulting, health, welfare or incentive plan or agreement or other
employee benefit plan, whether legally binding or not; or (ii) any plan
providing for "fringe benefits" to its employees, including, but not limited
to,
vacation, disability, sick leave, Pharmco, hospitalization and life insurance
and other insurance plans, or related benefits; or (iii) any employment
agreement. No former employee of Pharmco has any claim against Pharmco (whether
under federal or state law, any employment agreement or otherwise) on account
of
or for: (i) overtime pay; (ii) wages or salary for any period; (iii) vacation,
time-off or pay in lieu of vacation or time-off; or (iv) any violation of any
statute, ordinance or regulation relating to minimum wages or maximum hours
of
work. No person or party (including, but not limited to, governmental agencies
of any kind) has any claim or basis for any action or proceeding against Pharmco
arising out of any statute, ordinance or regulation relating to discrimination
in employment or to employment practices or occupational safety and health
standards.
3.9 Environmental
Matters.
Except
as set forth in Schedule
3.12
Pharmco
has not generated any hazardous wastes or engaged in activities which are or
could be interpreted to be potential violations of laws or judicial decrees
in
any manner regulating the generation or disposal of hazardous waste. There
are
no on-site or off-site locations where Pharmco has stored, disposed or arranged
for the disposal of chemicals, pollutants, contaminants, wastes, toxic
substances, petroleum or petroleum products; there are no underground storage
tanks located on property owned or leased by Pharmco.
3.10 Books
and Records.
Pharmco's books and records are and have been properly prepared and maintained
in form and substance adequate for preparing audited financial statements in
accordance with generally accepted accounting principles, and fairly and
accurately reflect all of Pharmco's assets, obligations and accruals, and all
transactions (normally reflected in books and records in accordance with
generally accepted accounting principles) to which Pharmco is or was a party
or
by which Pharmco or any of its assets are or were affected.
3.11 Taxes.
Except
as otherwise disclosed in this Agreement, all taxes due, owing and payable
by
Pharmco have been fully paid. The amounts set up as provision for taxes on
the
Pharmco Balance Sheet are sufficient for the payment of all accrued and unpaid
taxes of Pharmco, whether or not disputed. The amount set up as provision for
taxes on Pharmco's books and records for the current fiscal year through the
Closing shall be sufficient for the payment of all accrued and unpaid taxes
of
Pharmco, whether or not disputed, for such period. No claim for any tax due
from
or assessed against Pharmco is being contested by Pharmco. None of Pharmco's
tax
returns or reports has been audited by the Internal Revenue Service or any
state
or local tax authority, and Pharmco has not received any notice of deficiency
or
other adjustment from the Internal Revenue Service or any state or local tax
authority. There are no agreements, waivers or other arrangements providing
an
extension of time with respect to the assessment of any tax against Pharmco,
nor
are there any tax proceedings now pending or threatened against Pharmco. No
state of facts exists or has existed, nor has any event occurred, which would
constitute grounds for the assessment of any further tax against Pharmco.
3.12 Litigation.
Except
as set forth in Schedule 3.12, Pharmco is not a party to, the subject of, or
threatened with any litigation nor, to the best of Pharmco's knowledge, is
there
any basis for any litigation. Pharmco is not contemplating the institution
of
any litigation.
3.13 Other
Liabilities.
No
claim of breach of contract, tort, product liability or other claim (whether
arising from Pharmco's business operations or otherwise), contingent or
otherwise, has been asserted or threatened against Pharmco nor, to the best
of
Pharmco's knowledge, is capable of being asserted by any employee, creditor,
claimant or other person against Pharmco. No state of facts exists or has
existed, nor has any event occurred, which could give rise to the assertion
of
any such claim by any person.
3.14 Consents.
The
execution, delivery and performance by Pharmco of this Agreement and the
consummation by Pharmco of the transactions contemplated hereby do not require
any consent that has not been received prior to the date hereof.
3.15 Judgments.
There
is no outstanding judgment against Pharmco. There is no health or safety problem
involving or affecting Pharmco. There are no open workers compensation claims
against Pharmco, or any other obligation, fact or circumstance which would
give
rise to any right of indemnification on the part of any current or former
shareholder, partner, director, officer, employee or agent of Pharmco, or any
heir or personal representative thereof, against Pharmco or any successor to
the
business of Pharmco.
3.16 Compliance
with Laws.
Pharmco
and its business are in full compliance with all laws.
3.17 Improper
Payments.
Neither
Pharmco, nor any of its current or former shareholders, partners, directors,
officers or employees or agents, nor any person acting on behalf of Pharmco,
has, directly or indirectly, made any bribe, kickback or other payment of a
similar or comparable nature, whether lawful or not, to any person, public
or
private, regardless of form, whether in money, property or services, to obtain
favorable treatment for business secured or special concessions already
obtained. No funds or assets of Pharmco were donated, lent or made available
directly or indirectly for the benefit of, or for the purpose of supporting
or
opposing, any government or subdivision thereof, political party, candidate
or
committee, either domestic or foreign. Pharmco has not maintained and does
not
maintain a bank account, or any other account of any kind, whether domestic
or
foreign, which account was not or is not reflected in the Pharmco corporate
books and records, or which account was not listed, titled or identified in
the
name of Pharmco.
3.18 Full
Disclosure.
All the
representations and warranties made by Pharmco herein or in any Schedule hereto,
and all of the statements, documents or other information pertaining to the
transaction contemplated herein made or given by Pharmco, its agents or
representatives are complete and accurate, and do not omit any information
required to make the statements and information provided, in light of the
transaction contemplated herein, non-misleading, accurate and
meaningful.
ARTICLE
IV
PHARMCO
MEMBERSHIP INTERESTS' REPRESENTATIONS,
WARRANTIES
AND AGREEMENTS
Each
Pharmco Member hereby makes the following representations and warranties to
the
Corporation, each of which such Pharmco Member represents to be true and correct
on the date hereof and (except as such Pharmco Member may notify the Corporation
in writing prior to the Closing) shall be deemed made again as of the Closing
and represented by such Pharmco Member to be true and correct at the time of
the
Closing.
4.1 Title
to Membership Interest.
He is
the sole owner, legally and beneficially, of the Pharmco Membership Interest
stock set forth on Exhibit Schedule
1.1
hereto
opposite his name, the consideration payable by him therefore has been paid
and
such membership interest is fully paid and nonassessable and free and clear
of
all encumbrances of every kind. He has full legal right, power and authority
to
enter into this Agreement and to sell, assign and transfer such membership
interest to the Corporation. The delivery to the Corporation of such membership
interest pursuant to the provisions of this Agreement will transfer to the
Corporation valid title thereto, free and clear of all encumbrances of every
kind except any created by the Corporation. The Pharmco membership interest
represents his entire interest in Pharmco. He has no other rights, claims or
interest to, against or in Pharmco, or its officers and directors.
4.2 Enforceability.
This
Agreement and each of the other documents, instruments and agreements executed
by him in connection herewith constitute the valid and legally binding
agreements of him, enforceable against him in accordance with their terms,
except that: (i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general application
affecting the enforcement of the rights and remedies of creditors; and (ii)
the
availability of equitable remedies may be limited by equitable
principles.
4.3 Brokerage
Fees.
There
is no person acting on behalf of him who is entitled to or has any claim for
any
brokerage or finder's fee or commission in connection with the execution of
this
Agreement or the consummation of the transactions contemplated
hereby.
ARTICLE
V
INTERPRETATION
AND SURVIVAL OF
REPRESENTATIONS
AND WARRANTIES
5.1 Interpretation.
Each
warranty and representation made by a party in this Agreement or pursuant hereto
is independent of all other warranties and representations made by the same
party in this Agreement or pursuant hereto (whether or not covering identical,
related or similar matters) and must be independently and separately satisfied.
Exceptions or qualifications to any such warranty or representation shall not
be
construed as exceptions or qualifications to any other warranty or
representation.
5.2 Survival.
All
representations and warranties made in this Agreement or pursuant hereto shall
survive the date hereof, the Closing, the consummation of the transaction
contemplated hereby and any investigation.
ARTICLE
VI
OBLIGATIONS
PRIOR TO CLOSING
6.1 Conduct
of the Corporation and Pharmco Pending Closing.
During
the period from the date hereof until the Closing Date, except with the express
prior written consent of the other party, the Corporation and Pharmco hereby
covenant and agree that:
(a) each
shall maintain its existence in good standing in the state of its incorporation
and each other jurisdiction where it is required to be licensed or qualified
as
a foreign corporation, and shall not alter or amend its Articles of
Incorporation or Bylaws;
(b) each
shall duly and timely file all returns and reports required by any law to be
filed by it, shall promptly pay when due all taxes assessed against it or any
of
its assets, and shall conform to and fully comply with all the laws pertaining
to its assets or the conduct of its business; and
(c) each
shall not take any action, or enter into any agreement that would cause a breach
of any of the representations and warranties made herein by the Corporation
or
Pharmco, as applicable.
ARTICLE
VII
CONDITIONS
PRECEDENT TO PHARMCO'S AND THE
PHARMCO
MEMBERSHIP INTERESTS' OBLIGATIONS
Notwithstanding
the execution and delivery of this Agreement or the performance of any part
hereof, Pharmco's and each of the Pharmco Membership Interests' respective
obligations to consummate the transaction contemplated by this Agreement shall
be subject to the satisfaction of each of the conditions set forth in this
Article VII, except to the extent that such satisfaction is waived in writing
by
Pharmco and a majority in interest of the Pharmco Membership
Interests.
7.1 Representations
and Warranties of the Corporation.
All
representations and warranties made by the Corporation in this Agreement and
the
Schedules hereto shall be true and correct in all respects on the date hereof,
and shall be true and correct in all respects at the time of the Closing as
though such representations were again made, without exception or deviation,
at
the time of the Closing.
7.2 Performance
of this Agreement.
The
Corporation shall have duly performed or complied with all the obligations
under
this Agreement to be performed or complied with by the Corporation on or prior
to the Closing.
7.3 Absence
of Litigation.
No
litigation shall have been instituted on or before the time of the Closing
by
any person, the result of which did or could prevent or make illegal the
consummation of the transaction contemplated by this Agreement, or which had
or
could have a material adverse effect on the business of the
Corporation.
ARTICLE
VIII
CONDITIONS
PRECEDENT TO THE
CORPORATION'S
OBLIGATIONS
Notwithstanding
the execution and delivery of this Agreement or the performance of any part
hereof, the Corporation's obligations to consummate the transaction contemplated
by this Agreement shall be subject to the satisfaction of each of the conditions
set forth in this Article VIII, except to the extent that such satisfaction
is
waived by the Corporation in writing.
8.1 Representations
and Warranties of Pharmco and the Pharmco Members.
All
representations and warranties made by Pharmco and the Pharmco Members contained
in this Agreement and the Schedules hereto shall be true and correct in all
respects on the date hereof, and shall be true and correct in all respects
at
the time of the Closing as though such representations were again made, without
exception or deviation, at the time of the Closing.
8.2 Performance
of this Agreement.
The
owners of 100% of the issued and outstanding membership interests of Pharmco
shall have executed this Agreement. Pharmco and the Pharmco Members shall have
duly performed or complied with all of the covenants and obligations under
this
Agreement to be performed or complied with by them on or prior to the
Closing.
8.3 Absence
of Litigation.
Except
as otherwise disclosed in this agreement, no litigation has been instituted
on
or before the time of the Closing by any person, the result of which did or
could prevent or make illegal the consummation of the transaction contemplated
by this Agreement.
8.4 Deliveries
of Audited Financial Statements.
Closing
shall be contingent upon delivery of the Pharmco audited financial statements
in
accordance with applicable rules and regulations. If said statements have not
been delivered on or before March 31, 2008, the Company, in its sole and
absolute discretion may terminate this Agreement.
8.5 Schedules.
Pharmco
shall have provided to the Corporation all referenced schedules.
ARTICLE
IX
OBLIGATIONS
AT CLOSING
9.1 Obligations
of the Corporation to Pharmco and the Pharmco Members at Closing.
The
Corporation hereby covenants and agrees to deliver or cause to be delivered
to
Pharmco and Pharmco Members at the Closing the following:
(a) Duly
issued certificates (legended as provided in Section 1.5(a)(iii) hereof)
representing all the Exchanged Corporation Stock, together with any documentary
stamps required in connection with such transfer and such other appropriate
documents and instruments of transfer as Pharmco may reasonably
request.
(b) An
Active
Status Certificate for the Corporation, dated no earlier than ten (10) days
before the Closing, from the State of Delaware.
(c) A
copy of
the resolutions adopted by the Board of Directors of the Corporation, certified
by its corporate secretary, which resolutions authorize it to execute, deliver
and perform this Agreement and consummate the transactions contemplated
hereby.
9.2 Pharmco's
Obligations to the Corporation.
Pharmco
agrees to deliver or cause to be delivered to the Corporation at the Closing
the
following:
(a) A
Good
Standing Certificate for Pharmco dated no earlier than ten (10) days before
the
Closing, from the State of Florida.
(b) A
copy of
the resolutions adopted by the Board of Directors of Pharmco, certified by
its
corporate secretary, which resolutions authorize it to execute, deliver and
perform this Agreement and consummate the transactions contemplated
hereby.
(c) All
outstanding Pharmco Membership Interests to be exchanged for the Exchanged
Corporation Stock free and clear of all encumbrances.
9.3 Pharmco
Members’ Obligations to the Corporation at Closing.
Each
Pharmco Member hereby covenants and agrees to deliver to the Corporation at
the
Closing the following:
(a) If
not
previously delivered to the Corporation, all his Pharmco Membership Interests,
free and clear of all encumbrances, together with all certificates evidencing
same and stock powers therefore, in a form acceptable to the Corporation, duly
executed in blank.
(b) Such
other documents and instruments as counsel to the Corporation may reasonably
request.
ARTICLE
X
TERMINATION
10.1 Termination
on Default.
If,
prior to the Closing, a party hereto shall materially breach or default in
the
full and timely performance and satisfaction of any of its representations
and
warranties or obligations under this Agreement, and such breach or default
is
not cured on or before the fifth (5th) day after the date notice is given by
the
non-defaulting party to the defaulting party specifying the nature of such
breach or default (or at or before the time of the Closing if sooner), then
the
non-defaulting party may terminate this Agreement immediately upon notice to
the
defaulting party; provided, however, that no Pharmco Membership may terminate
this Agreement.
10.2 Termination
at Closing.
If any
of the conditions set forth in this Agreement are not satisfied at or before
the
time of the Closing, then either party may terminate this Agreement upon notice
to the other.
ARTICLE XII
MISCELLANEOUS
11.1 Notices.
All
notices, requests, demands and other communications hereunder shall be deemed
to
have been duly given if the same shall be in writing and shall be delivered
personally or sent by registered or certified mail, postage prepaid.
11.2 Entire
Agreement.
This
Agreement, including the Schedules attached hereto and the documents delivered
pursuant hereto, sets forth all the promises, covenants, agreements, conditions
and understandings among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements or conditions, expressed or implied, oral or written, except as
herein contained. No changes of or modifications or additions to this Agreement
shall be valid unless same shall be in writing and signed by the parties
hereto.
11.3 Binding
Effect; Assignment.
This
Agreement shall be binding upon the parties hereto, their beneficiaries, heirs
and administrators. No party may assign or transfer its interests herein, or
delegate its duties hereunder, without the written consent of the other
parties.
11.4 Amendment.
The
parties hereby irrevocably agree that no attempted amendment, modification
or
change (collectively, "Amendment") of this Agreement shall be valid and
effective, unless the parties shall unanimously agree in writing to such
Amendment.
11.5 No
Waiver.
No
waiver of any provision of this Agreement shall be effective unless it is in
writing and signed by the party against whom it is asserted, and any such
written waiver shall only be applicable to the specific instance to which it
relates and shall not be deemed to be a continuing or future
waiver.
11.6 Gender
and Use of Singular and Plural.
All
pronouns shall be deemed to refer to the masculine, feminine, neuter, singular
or plural, as the identity of the party or parties or their personal
representatives, successors and assigns may require.
11.7 Counterparts.
This
Agreement and any Amendments may be executed in one or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
11.8 Headings.
The
article and section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of the Agreement.
11.9 Governing
Law.
This
Agreement shall be construed in accordance with the laws of the State of
Florida.
11.10
Further
Assurances.
The
parties hereto shall execute and deliver such further instruments and do such
further acts and things as may be reasonably required to carry out the intent
and purposes of this Agreement.
11.11
Litigation.
If any
party hereto is required to engage in litigation or arbitration against any
other party hereto, either as plaintiff or as defendant, in order to enforce
or
defend any of its or his rights under this Agreement, and such litigation
results in a final judgment in favor of such party (the "Prevailing Party"),
then the party or parties against whom said final judgment is obtained shall
reimburse the Prevailing Party for all direct, indirect or incidental expenses
incurred by the Prevailing Party in so enforcing or defending its or his rights
hereunder, including, but not limited to, all attorneys' fees, paralegals'
fees,
court costs and other expenses incurred throughout all negotiations, trials
or
appeals undertaken in order to enforce the Prevailing Party's rights
hereunder.
11.12
Confidentiality.
Except
for discussions of the transactions contemplated by this Agreement among the
parties hereto and their respective representatives and counsel participating
in
this transaction, and except as may be required of the Corporation pursuant
to
federal securities laws, each party hereto shall, unless all other parties
hereto shall otherwise agree, keep confidential and not, directly or indirectly,
disclose to any person the existence of this Agreement, the transaction
contemplated by this Agreement or any of the terms thereof, or the fact that
the
Corporation and Pharmco have entered into discussions or negotiations for any
purpose whatsoever, and each party hereto shall use its good faith efforts
to
cause its employees, agents, officers, directors and representatives to abide
by
the foregoing restrictions on disclosure.
WAIVER
OF CONFLICT: YOU WIL BE EXECUTING A LEGALLY BINDING AGREEMENT. THIS AGREEMENT
HAS BEEN PREPARED BY ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ATTORNEY, AS COUNSEL FOR SFH I
ACQUISITION CORP. EACH SIGNATORY TO THIS AGREEMENT HAS BEEN URGED TO SEEK
INDEPENDENT COUNSEL WITH RESPECT TO THE EXECUTION OF THIS AGREEMENT AND THE
CONSEQUENCES TO EACH INDIVIDUAL OR MEMBER AS A RESULT OF EXECUTING THIS
AGREEMENT. PRIOR TO EXECUTION OF THIS AGREEMENT, EACH PARTY HAS HAD THE
OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH INDEPENDENT COUNSEL. BY EXECUTION
OF
THIS AGREEMENT, EACH SIGNATORY HERETO WAIVES ANY POTENTIAL CONFLICT OF
INTEREST.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the date and year set forth above.
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