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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 14, 2000
SICKBAY HEALTH MEDIA, INC. ("SKBY")
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(Exact name as specified in Charter)
UTAH 33-20525 22-2223126
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification Number)
510 BROADHOLLOW ROAD, MELVILLE, NEW YORK 11747
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(Address of principal executive offices)
Registrant's telephone number, including area code: 631-694-0400
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SICKBAY.COM, INC.
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(Former name of former address, if changed since last report)
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Item 1. Change in Control of Registrant - Not Applicable
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Item 2. Acquisition of Disposition of Assets - Not Applicable
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Item 3. Bankruptcy or Receivership - Not Applicable
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Item 4. Changes in Registrant's Certifying Accountant -
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Effective July 10, 2000, the Company engaged Lazar Levine & Felix, LLP,
located at 350 Fifth Avenue, Suite 6820, New York, NY 10118-0170, to serve as
its independent public accountants for the fiscal year ending December 31, 2000.
The change of auditors was recommended by the full Board of Directors of the
Company. The Company previously did not have an Audit Committee, but has now
formed such a Committee consisting entirely of non-management directors.
The change of auditors was not occasioned by any disagreement with the
prior accountants, Linder & Linder, 8 Chatham Place, Dix Hills, NY 11746. The
Company merely decided, as part of its growth plan, to transfer audit
responsibilities to a larger full-service firm and intends to retain a
professional relationship with the former accountants. The Company has
authorized Linder & Linder to respond fully to the inquiries of the current
accountants.
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Item 5. Other Events.
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On July 14, 2000, the Company finalized certain financing agreements with
First Frontier Holdings, Inc. ("FFH"). The financing agreements provide for the
purchase of equity securities of the Company by FFH ("Stock Purchase
Agreement"), negotiated arrangements for the management and operation of the
Company ("Stockholders' Agreement") and obligations for the registration of the
Common Stock of the Company purchased and to-be-purchased by FFH (the
"Registration Rights Agreement"). The method of codification of the foregoing
agreements and arrangements was the execution of an Amending Agreement, annexed
hereto as Exhibit "A", dated July 14, 2000 and signed by both parties on or
shortly after the date thereof.
The Stock Purchase Agreement
(a) FFH has paid to the Company Four Million Three Hundred and Fourty-Five
Thousand Dollars ($4,345,000) in cash and provided substantial services relating
to the Company's Net Sweat, Health Publishing, Inc. and Healthline Publishing,
Inc. acquisitions.
(b) The Company has issued or authorized for issuance to FFH an aggregate
of Four Million Three Hundred Forty-Five Thousand Shares (4,345,000) pursuant to
the Agreements.
(c) FFH remains obligated to invest an additional Six Hundred and
Sixty-Five Thousand ($665,000) Dollars in cash for additional Shares of the
Company's Common Stock. Upon such additional investment, the Company shall
immediately authorize and issue Six Hundred and Sixty-Five Thousand (665,000)
additional Shares or any such pro rata Shares to FFH.
(d) FFH remains obligated to provide additional services to the Company.
The services for a five year period ending March 2, 2005 include:
(i) strategic planning for all phases of corporate growth;
(ii) legal consultation for corporate positioning and Securities and
Exchange Commission compliance;
(iii) strategic financial planning for all phases of corporate growth;
(iv) technical support relative to future acquisitions;
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(v) due diligence assistance for Company acquisitions;
(vi) merger and acquisition consultation for short term acquisitions
and long term exit strategies;
(vii) consultation for retaining sureties and bonding services;
(viii) strategic planning for selection and approval of public
exchange venues;
(ix) structure future financial instruments for capital expansion;
(x) introduction and negotiations to key institutional clients for
market support, analysis and rating; and
(xi) introduction to international institutional clients, exchanges
and foreign markets.
(e) The parties have stipulated that the fair value of the services to be
provided by FFH is Ten Million ($10,000,000) Dollars. However, in the event of
termination of the services of FFH for cause, the maximum number of Shares which
FFH may lose is One Million (1,000,000) (based upon market value or $10.00 per
Share, whichever is higher). The Company has a right to renew FFH's services for
one (1) additional year from March 2, 2005 to March 2, 2006, for the issuance of
an additional One Million (1,000,000) Shares.
(f) FFH has the further right and option to purchase up to an additional
Four Million (4,000,000) Shares on or before September 15, 2000 at an additional
purchase price of $4.00 per share.
The Stockholders' Agreement
(a) The Board of Directors shall initially consist of five (5) Directors,
one of whom shall be appointed by FFH. Two (2) additional Directors, Dr. Eric
Donnenfeld and Mr. Glen Bilbo, have been recently added to the Board of
Directors. Mr. Bilbo is the appointee of FFH, and Dr. Donnenfeld is unaffiliated
with management.
(b) FFH has the right of first refusal on all subsequent financings by the
Company for any placements of existing Stock or Warrants by the Company through
March 2, 2005.
(c) The principal shareholders of the Company have agreed not to transfer
any Shares until after the consummation of a Qualified Secondary Offering.
"Qualified Secondary Offering" has been defined as
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an offering with gross proceeds to the Company of at least Ten Million
($10,000,000) Dollars reflecting a market value of the Company of at least Fifty
Million ($50,000,000) Dollars prior thereto.
(d) FFH has the right to participate in any transfer of Shares by a
founder, with certain exceptions, and each founder shall have the right to
participate in the transfer of any Shares by FFH.
(e) All Shares issued to FFH bear a legend restricting re-transfer and have
been issued subject to the requirements of registration under the Securities Act
of 1933, as amended.
The Registration Rights Agreement
FFH has the right to demand a registration with respect to the securities
held by it at any time not later than six (6) months following a Qualified
Secondary Offering. In addition, if the Company proposes to register any of its
Shares under the Securities Act for sale to the public, whether for its own
account or the account of other security holders, it will be, under most
circumstances, obligated to offer to FFH the right to include its Shares, or a
portion thereof, in such registration. The usual conditions for registration,
including cross-indemnification, have been included in the Agreement.
The foregoing is a summary of the referenced Agreements and is not intended to
be a complete re-statement thereto. This summary shall not in any way modify the
Agreements.
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Item 6. Resignations of Registrant's Directors - None.
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Item 7. Financial Statements and Exhibits -
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Exhibit A. Amending Agreement dated July 14, 2000 relating to the FFH
Agreements with the Company.
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Item 8. Change in Fiscal Year - Not Applicable
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Item 9. Sales of Equity Securities Pursuant to Regulations--
Not Applicable
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
SICKBAY HEALTH MEDIA, INC.
(formerly known as Sickbay.com, Inc.)
/s/ MARK BASILE
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Mark Basile
Chairman and Secretary
/s/ ALLEN MOTOLA
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Dr. Allen Motola
President and Treasurer
Dated: July 25, 2000
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SICKBAY HEALTH MEDIA, INC.
EXHIBIT A TO 8-K FILED
SICKBAY.COM, INC.
510 BROADHOLLOW ROAD
SUITE 300
MELVILLE, NY 11747
July 14, 2000
First Frontier Holdings, Inc.
111 Great Neck Road
Great Neck, New York
Att: Glen B. Bilbo
President
Dear Mr. Bilbo:
Reference is made to certain agreements identified herein by and between
Sickbay.com, Inc., a Utah corporation (the "Company") and First Frontier
Holdings, Inc., a New York corporation ("FFH").
The parties have signed and delivered each of the following agreements:
Stock Purchase Agreement dated as of March 6, 2000; Stockholders Agreement dated
March 6, 2000; and Registration Rights Agreement dated as of March 6, 2000
(collectively the "Agreements"). Notwithstanding the "as of" dates of such
Agreements, the parties stipulate and agree all of such Agreements were first
signed and delivered in June 2000.
WHEREAS, pursuant to the Stock Purchase Agreement, the Company has agreed
to sell to FFH, and FFH has agreed to purchase from the Company, for the
consideration specified in subparagraphs (b) and (c) of Section 3 of the Stock
Purchase Agreement a total of up to Six Million Four Hundred Thousand
(6,400,000) shares of the Company's Common Stock par value $.001 (the "Shares");
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Mr. Glen Bilbo
July 14, 2000
Page 2
WHEREAS, pursuant to the Stock Purchase Agreement and in exchange of the
Shares permitted and required to be issued by the Company, FFH has agreed to pay
to the Company an aggregate of Five Million ($5,000,000) Dollars plus certain
additional consideration. Of the $5,000,000 amount, Two Million ($2,000,000)
Dollars is allocated to initiate and close certain acquisition transactions for
Two Million (2,000,000) of the Shares (the "Acquisition Shares") are included in
the 6,400,000 Shares specified above;
WHEREAS, the Company has heretofore completed the NetSweat Health
Publishing Inc. acquisition, and the asset purchase of Healthline Publishing,
Inc. with the consent and assistance of FFH in contemplation of that purchase;
WHEREAS, pursuant to the provisions of paragraph 3(b), the Company agrees
that FFH has heretofore paid to the Company: (i) Five Hundred Thousand
($500,000) Dollars prior to March 6, 2000; (ii) One Million Two Hundred Fifty
Thousand ($1,250,000) Dollars which was due on March 15, 2000; (iii) One Hundred
Fifty Thousand ($150,000) Dollars of the $1,250,000 due on May 1, 2000; and (iv)
One Million One Hundred Thousand Dollars ($1,100,000) immediately prior hereto;
WHEREAS, in addition to the foregoing, FFH has advanced to the Company One
Million Three Hundred Forty Five Thousand Dollars ($1,345,000) of the Two
Million ($2,000,000) Dollars due pursuant to paragraph (iv) of subparagraph (b)
of Section 3 of the Stock Purchase Agreement; and
WHEREAS, Six Hundred Fifty Five Thousand Dollars ($655,000) remains due and
owing to the Company for Shares to be delivered, and Company acknowledges that
FFH has paid One Million Three Hundred Forty Five Thousand Dollars ($1,345,000)
of the Two Million Dollar ($2,000,000) acquisition allocation representing the
balance of funds allocated for Company acquisition; and
WHEREAS, Four Million Three Hundred Forty Five Thousand (4,345,000) Shares
have been authorized for issuance to FFH, as set forth herein.
NOW, THEREFORE, the parties hereby have agreed to implement the Agreements,
as modified hereby, as follows:
I. The Stockholders Agreement shall be and hereby is deemed to be in full
force and effect without further action required by any party with respect
thereto. The date of such Agreement shall
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Mr. Glen Bilbo
July 14, 2000
Page 3
be changed for all purposes to July 14, 2000.
II. The Registration Rights Agreement shall be deemed to be in full force
and effect without further action required by any party with respect thereto.
The date of such Agreement shall be changed for all purposes to July 14, 2000.
III. The Stock Purchase Agreement shall be deemed to be in full force and
effect, except as hereinafter otherwise required, without further action by
either party, as follows:
A. The Company has previously authorized the issuance to FFH of Three
Million (3,000,000) Shares, based upon the original funding agreement.
B. The Company has further authorized and issued to FFH an additional
One Million Three Hundred Forty Five Thousand (1,345,000) Shares in
compliance with the acquisition portion of the Funding Agreement, and
notification to the Company's transfer agent, to that effect, has been
sent.
C. There remains due to the Company, the sum of Six Hundred Fifty Five
Thousand Dollars ($655,000) that represents the balance of the portion of
said funding representing the balance of the acquisition portion of FFH and
Company agrees that the balance of the acquisition funding shall be made
adjustable pending the Company's need for such funds.
D. Upon receipt of the Six Hundred Fifty Five Thousand Dollars
($655,000) referred to in III (C) above, or any portion thereof the Company
shall immediately authorize and issue Six Hundred Fifty Five Thousand
(655,000) additional Shares or any such pro rata additional Shares to FFH.
IV. Miscellaneous.
A. Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested, with a copy sent by ordinary
mail on the same day), telex, telecopier with confirmation and followed promptly
by hard copy in accordance with this provision, or courier guaranteeing
overnight delivery and recognized for high quality service:
(i) if to FFH, at
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Mr. Glen Bilbo
July 14, 2000
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c/o First Frontier Holdings, Inc.
Beckman, Millman & Sanders, LLP
General Counsel
First Frontier Holdings, Inc.
116 John Street - Suite 1313
New York, NY 10038
Tel: 212/406-4700
Fax: 212/406-3750
Attn: Steven A. Sanders, Esq.
(ii) if to the Company at
Sickbay.Com, Inc.
510 Broadhollow Road
Melville, NY 11747
Attention: Mr. Mark R. Basile, CEO.
Tel: 516/694-0040
Fax: 516/694-2234
with a copy to:
D. David Cohen, Esq.
The Jericho Atrium
500 No. Broadway - Suite 133
Jericho, New York 11753
Tel: 516/933-1700
Fax: 516/933-8454
or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company or to FFH (in the case of the Company).
All such notices and communications shall be deemed to have been duly
given: at the time delivered, if delivered by hand or telex; one (1) business
day if sent by overnight courier; five (5) business days after being deposited
in the mail, if mailed; and when receipt acknowledged, if telecopied.
B. Parties. This Agreement shall inure to the benefit of and be binding
upon FFH and the Company and their respective successors and assigns provided,
however, that FFH may not assign, subcontract or otherwise subdivide its
responsibilities under subparagraphs (c) and (e) of Section 3 of the Stock
Purchase Agreement.
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Mr. Glen Bilbo
July 14, 2000
Page 5
C. Submission to Jurisdiction. Each of the parties hereto hereby
irrevocably and unconditionally consent to submit to the exclusive jurisdiction
of the courts of the State of New York and of the United States of America, in
each case located in the County of New York, for any action, proceeding or
investigation in any court or before any governmental authority ("Litigation")
arising out of or relating to this Agreement and the transactions contemplated
hereby (and agrees not to commence any Litigation relating thereto except in
such courts). Each of the parties hereto hereby irrevocably and unconditionally
waives any objection to the laying of venue of any Litigation arising out of
this Agreement or the transactions contemplated hereby in the courts of the
State of New York or the United States of America, in each case located in the
County of New York, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such Litigation
brought in any such court has been brought in an inconvenient forum.
D. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to the
conflict of law rules thereof, applicable to contracts made and to be performed
within that State.
E. Remedies/Prior Defaults. Each of the parties hereby waives any and all
defaults, if any, arising prior to the day hereof. The sole and exclusive remedy
for the Company, by reason of the nonperformance by FFH of its obligations with
respect to the payment of the sums due, shall be as follows:
(i) Upon any uncured failure to pay the Six Hundred Fifty Five
Thousand ($655,000) Dollars due to the Company, the Company shall be
relieved of its responsibility to issue the additional Shares, prorata,
required by paragraph III (D) of this Agreement.
(ii) In the event of payment by FFH and failure to deliver the Shares
by the Company, FFH shall be entitled to a declaratory judgment requiring
the issuance of the Shares together with such rights and remedies,
including claims for damages, if any, resulting from the failure to deliver
such Shares as may arise therefrom.
F. Further Warranties by the Company. The Company stipulates and agrees
that to the extent that FFH failed to comply with the terms of the Stock
Purchase Agreement, Stockholders' Agreement and/or Registration Rights Agreement
prior to the date
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Mr. Glen Bilbo
July 14, 2000
Page 6
hereof, the Company was not adversely affected in any material fashion and that
any implication to the contrary in any communications from the Company to FFH or
its counsel are hereby withdrawn upon the due execution of this Agreement.
G. Effect of Headings. The Article and Section headings herein and in the
Agreements are for convenience only and shall not affect the construction
hereof.
H. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. In proving this Agreement
it shall not be necessary to produce or account for more than one such
counterpart executed by the party against whom enforcement is sought.
I. Severability. If any provision of this Agreement shall be held to be
illegal, invalid or unenforceable such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement unless the effect thereof would be to alter materially the effect of
this Agreement, and this Agreement (if not so altered) shall be carried out as
if any such illegal, invalid or unenforceable provision were not contained
herein.
J. Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy on the part of any party upon any breach or default
of any party to this Agreement shall impair any such right, power or remedy, nor
shall it be construed to be a waiver of any such breach or default, or any
acquiescence therein, or of any similar breach or default thereafter occurring;
nor shall any waiver of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring. It is further
agreed that any waiver, permit, consent or approval of any kind or character on
any party of any breach or default under this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such writing and
that all remedies either under this Agreement, or by law otherwise afforded to
any party, shall be cumulative and not alternative.
K. Entire Agreement. This letter agreement, together with the Agreements
annexed hereto, is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the
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Mr. Glen Bilbo
July 14, 2000
Page 7
parties hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or in the Agreements. The company shall first clear with
FFH's counsel any SEC filings relating to this letter agreement and the
Agreements. The Company shall first clear with FFH's counsel any SEC filings
relating to this letter agreement and the Stock Purchase Agreement, Stockholders
Agreement and Registration Rights Agreement.
Very truly yours,
SICKBAY.COM, INC.
By: /s/ MARK BASILE, CEO
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/s/ MARK BASILE
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MARK BASILE, ESQ.
Individually with Respect to
the Stockholders Agreement
/s/ ALLEN MOTOLA
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DR. ALLEN MOTOLA
Individually with Respect to
the Stockholders Agreement
ACCEPTED AND AGREED:
FIRST FRONTIER HOLDINGS, INC.
By: /s/ GLEN B. BILBO, PRES.
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Glen B. Bilbo, President
