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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM 8-K
-------------------
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 30, 1999 000-05667
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Date of Report (Date of earliest event reported) Commission File Number
SEAL HOLDINGS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 64-0769296
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
5601 N. Dixie Highway, Suite 411
Fort Lauderdale, Florida 33334
----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(954) 771-5402
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(Registrant's telephone number, including area code)
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Item 2. Acquisition or Disposition of Assets.
Summary of Disposition of Assets
On September 30, 1999, Seal Holdings Corporation, a Delaware corporation ("Seal"
or "the Company") completed a transaction pursuant to which its wholly-owned
subsidiary, OH, Inc. (a Florida corporation which, through its subsidiaries,
owns, operates and manages a comprehensive outpatient medical, diagnostic and
surgical facility and physician practice business located in Fort Lauderdale,
Florida ("OHI")), became a wholly-owned subsidiary of Oakridge Outpatient
Center, Inc., a corporation beneficially owned by an investor group comprised of
certain members of the Company's subsidiaries' management. OHI's business
constituted the only active business operations of the Company. The Company has
no ownership interest in Oakridge Outpatient Center, Inc.
OHI was merged into the surviving company for a nominal payment and assumption
by the surviving company of all liabilities of OHI and its subsidiaries, after
presentation to the Company of an offer whereby the investor group would invest
working capital in the surviving company in addition to receiving limited
supplemental loans directly from an affiliate of the Company's principal
shareholder, M. Lee Pearce, M.D. ("Dr. Pearce"). In connection with the
transaction (and as more fully described below), the Company will receive 79% of
certain adjusted litigation proceeds, if any, that may arise in respect of
certain claims which may be initiated by or on behalf of OHI or any of its
subsidiaries after September 30, 1999.
The Company continues to focus its resources on acquisitions of companies which
provide services in health care and life sciences (with particular interest
in information technology companies with Internet applications) and is currently
pursuing several potential investments. In support of its acquisition program,
Dr. Pearce, the Company's principal shareholder, has agreed to provide Seal with
funding of up to $10 million for future acquisitions and operations as approved
by the Board of Directors. Dr. Pearce owns approximately 93% of the outstanding
Class A common shares of Seal and 100% of the outstanding Class B common shares
of Seal, which elects a majority of the Board of Directors. The Company
previously announced that it has retained Benedetto Gartland & Company, an
investment banking firm based in New York, to assist in the identification,
evaluation and financing of any potential transactions. The Company has not
consummated any such acquisition to date. There can be no assurance that the
Company will be able to identify, attract, finance, or consummate any such
transactions. Any financing activities by the Company could result in
substantial dilution of existing equity positions and increased interest
expense. Transaction costs to the Company in connection with any such activities
may also be significant.
Details of Disposition of Assets
Pursuant to an Agreement and Plan of Merger, dated as of September 30, 1999 (the
"Merger Agreement"), among Seal, OHI, Oakridge Outpatient Center, Inc., a
Florida corporation ("Parent"), and OH Acquisition Corp., a Florida corporation
and a wholly-owned subsidiary of Parent (the "Disappearing Corporation"), the
Disappearing Corporation was merged with and into OHI (the "Merger").
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Pursuant to the Merger (and as more fully described in the Merger Agreement),
all of the outstanding capital stock of OHI held by the Company was converted
into One Dollar and 79% of the "Adjusted Proceeds" (as defined in the Merger
Agreement) if and when actually received by Parent or OHI (or any of their
respective subsidiaries) after September 30, 1999 in settlement of or awarded as
damages of any nature arising from any claim asserted by or on behalf of OHI (or
any of its subsidiaries) after September 30, 1999 relating to unfair competition
or trade practices, anti-competitive conduct, interference or other tortious
conduct which OHI or any of its subsidiaries may have suffered or experienced
prior to September 30, 1999. As more fully described in the Merger Agreement,
the term "Adjusted Proceeds" takes into account the payment of certain amounts
required to be paid by OHI to parties other than Seal, including, without
limitation, certain litigation expenses associated with any such claim, certain
damages or awards which OHI or any of its subsidiaries may have to pay in
connection with any such claim, certain loans, capital contributions and other
funds advanced to OHI or its subsidiaries, certain indebtedness attributable to
accrued rent, and 5% of the first Twenty Million Dollars of litigation proceeds
which are in excess of certain litigation expenses.
The Company has no right to initiate, prosecute or pursue any such claim, to
make any effort to maximize or collect the proceeds, if any, therefrom, or to
cause any person to take any such action. No other person is obligated to take
any such action. If any such claim is brought, there can be no assurance that
any proceeds will result therefrom. In addition, if proceeds from any such claim
are received by Parent or OHI (or any of their respective subsidiaries), there
can be no assurance that such proceeds will be in an amount large enough to
require any payment to the Company under the Merger Agreement.
All of the outstanding capital stock of Parent is held by Gary Matzner, Rudy
Noriega and Doyle Campbell, M.D. Immediately prior to the Merger, Mr. Matzner
was OHI's general counsel, Mr. Noriega was OHI's president and Dr. Campbell was
a physician employee of a subsidiary of OHI.
Dr. Pearce is the majority stockholder and Chairman of the Board of Directors of
the Company. Dr. Pearce also owns, directly or indirectly, a number of entities
from which OHI or its subsidiaries have leased and continue to lease office
space.
The terms of the Merger were the result of arms-length negotiations between the
parties. The foregoing description of the Merger is qualified in its entirety by
reference to the Merger Agreement filed as an exhibit to this 8-K.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(b) The following unaudited pro forma condensed consolidated financial
statements are filed with this report:
Pro Forma Condensed Consolidated Balance Sheet - As of June 30, 1999
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Pro Forma Condensed Consolidated Statements of Operations - Year ended
December 31, 1998 and six months ended June 30, 1999
The Pro Forma Condensed Consolidated Balance Sheet of Seal as of June
30,1999 reflects the financial position of the Company after giving
effect to the disposition of assets described in Item 2. It assumes
that the transaction took place as of January 1, 1998. The Pro Forma
Condensed Consolidated Statements of Operations for the year ended
December 31, 1998 and the six months ended June 30, 1999 assume that
the transaction occurred on January 1, 1998. The unaudited pro forma
condensed consolidated financial statements have been prepared by the
Company based upon assumptions deemed proper by it. The unaudited pro
forma condensed consolidated financial statements presented herein are
shown for illustrative purposes only and are not necessarily indicative
of the financial position or results of operations of the Company that
would have actually occurred had the transaction been in effect as of
the date or for the periods presented. In addition, it should be noted
that the Company's historical financial statements will reflect the
disposition only from September 30, 1999, the effective date of the
Merger.
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SEAL HOLDINGS CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments (1) Pro Forma
---------- --------------- ---------
ASSETS
<S> <C> <C> <C>
Current assets
Cash and cash equivalents $ 547,653 $ 545,075 $ 2,578
Accounts receivable, net 1,385,551 1,385,551 --
Inventory 182,618 182,618 --
Prepaid expenses and other current assets 396,210 349,960 46,250
Due from affiliates 20,930 20,930 --
----------- ----------- -----------
Total current assets 2,532,962 2,484,134 48,828
Deposits 144,785 144,785 --
Notes receivable from employees 123,689 123,689 --
Property and equipment, net 12,260,330 12,094,660 165,670
Investment in Camber 1,845,245 -- 1,845,245
Other assets 210,692 210,692 --
----------- ----------- -----------
Total assets $17,117,703 $15,057,960 $ 2,059,743
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Accounts payable $ 819,200 $ 717,326 $ 101,874
Accrued professional fees 617,904 418,623 199,281
Accrued compensation and related liabilities 732,183 732,183 --
Due to affiliates 940,323 940,323 --
Notes payable to affiliates 4,478,000 4,478,000 --
Short-term note payable 306,972 306,972 --
Current portion of capital lease obligations and loans 965,748 965,748 --
Other liabilities 260,435 260,435 --
----------- ----------- -----------
Total current liabilities 9,120,765 8,819,610 301,155
Obligations under capital leases and loans, less
current portion 4,196,202 4,196,202 --
----------- ----------- -----------
Total liabilities 13,316,967 13,015,812 301,155
Shareholder's equity:
Total shareholder's equity 3,800,736 2,042,148 1,758,588
----------- ----------- -----------
Total liabilities and shareholders' equity $17,117,703 $15,057,960 $ 2,059,743
=========== =========== ===========
</TABLE>
(1) Consists of adjustments necessary to reflect the disposition of OHI as
if the transaction had occurred on January 1, 1998.
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Seal Holdings Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments (2) Pro Forma
---------- --------------- ---------
(Unaudited) (Unaudited)
<S> <C> <C> <C>
Revenues:
Net patient service revenue $ 2,144,013 $ 2,144,013 $ --
Premium revenue 950,620 950,620 --
Interest income 57,127 31,861 25,266
------------ ------------ ------------
Total revenues 3,151,760 3,126,494 25,266
------------ ------------ ------------
Expenses:
Salaries and benefits 6,517,982 5,867,356 650,626
Professional fees 2,102,762 1,705,682 397,080
Supplies 322,026 296,649 25,377
Rent 434,235 368,162 66,073
Other operating expenses 578,198 578,198 --
Depreciation 131,318 117,588 13,730
Selling, general and administrative 1,499,256 1,271,334 227,922
Provision for bad debts 324,655 324,655 --
Interest 21,444 21,444 --
------------ ------------ ------------
Total expenses 11,931,876 10,551,068 1,380,808
------------ ------------ ------------
Net loss $ (8,780,116) $ (7,424,574) $ (1,355,542)
============ ============ ============
Loss per common share:
Basic and diluted $ (0.28) $ (0.23) $ (0.04)
============ ============ ============
Pro forma weighted average shares outstanding 31,726,744 31,726,744 31,726,744
============ ============ ============
</TABLE>
(2) Consists of adjustments necessary to reflect the disposition of OHI as
if the transaction had occurred on January 1, 1998.
On December 21, 1998, Seal (which for periods prior to April 2, 1999 is
referred to herein as the "Acquiree") and OHI, entered into an
Agreement and Plan of Exchange which became effective on April 2, 1999,
whereby 100% of the outstanding common stock of OHI was exchanged for
91% of the outstanding common stock of the Acquiree. Accordingly, the
acquisition was treated for financial reporting purposes as a reverse
acquisition in the financial statements which were filed in the
Company's June 30, 1999 report on Form 10-Q, with OHI (the "Acquirer")
as the accounting acquirer.
As a result of the aforementioned transaction, the historical December
31, 1998 Statement of Operations contained herein is that of OHI, the
accounting acquirer, even though the Company elected to use the name
Seal Holdings Corporation for periods subsequent to the effective date
of the reverse acquisition. Earnings per share for the periods
presented have been restated to reflect the number of shares
outstanding at June 30, 1999.
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Seal Holdings Corporation and Subsidiaries
Pro Forma Condensed Consolidated Statements of Operations
For the Six Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments (3) Pro Forma
---------- --------------- ---------
<S> <C> <C> <C>
Revenues:
Net patient service revenue $ 3,861,690 $ 3,861,690 $ --
Premium revenue 560,530 560,530 --
Interest income 17,262 17,262 --
------------ ------------ ------------
Total revenues 4,439,482 4,439,482 --
------------ ------------ ------------
Expenses:
Salaries and benefits 7,130,082 6,824,510 305,572
Professional fees 1,589,429 1,173,208 416,221
Supplies 828,134 825,227 2,907
Rent 998,933 973,915 25,018
Other operating expenses 835,249 835,249 --
Depreciation 638,195 630,963 7,232
Selling, general and administrative 1,315,515 1,122,519 192,996
Provision for bad debts 646,248 646,248 --
Interest 274,484 274,484 --
------------ ------------ ------------
Total expenses 14,256,269 13,306,323 949,946
------------ ------------ ------------
Net loss $ (9,816,787) $ (8,866,841) $ (949,946)
============ ============ ============
Loss per common share:
Basic and diluted $ (0.31) $ (0.28) $ (0.03)
============ ============ ============
Pro forma weighted average shares outstanding 31,726,744 31,726,744 31,726,744
============ ============ ============
</TABLE>
(3) Consists of adjustments necessary to reflect the disposition of OHI as
if the transaction had occurred on January 1, 1998. Earnings per share
for the periods presented have been restated to reflect the number of
shares outstanding at June 30, 1999.
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(c) Exhibits
2.1 Agreement and Plan of Merger, dated as of September 30, 1999, by and
among OH, Inc., Seal Holdings Corporation, Oakridge Outpatient Center,
Inc., and OH Acquisition Corp.
2.2 Articles of Merger of OH Acquisition Corp. into OH, Inc., filed on
September 30, 1999.
99.2 Funding Commitment by Dr. Pearce
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SEAL HOLDINGS CORPORATION
By: /s/ Cecilio M. Rodriguez
--------------------------
Cecilio M. Rodriguez
Treasurer
Dated: October 15, 1999
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of September 30, 1999 (this
"Agreement"), by and among Oakridge Outpatient Center, Inc., a Florida
corporation ("Parent"), OH Acquisition Corp., a Florida corporation (the
"Disappearing Corporation"), OH, Inc., a Florida corporation ("OHI"), and Seal
Holdings Corporation, a Delaware corporation and the sole shareholder of OHI
("Seal").
W I T N E S S E T H:
WHEREAS, the Board of Directors of Parent, Seal and OHI have determined
that the merger of the Disappearing Corporation with and into OHI (the "Merger")
is consistent with and in furtherance of the long-term business strategy of each
of Parent, Seal, and OHI and is fair to, and in the best interests of Parent,
Seal, OHI and their respective stockholders.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
THE MERGER
SECTION I.1 The Merger. Upon the terms and subject to the
conditions of this Agreement, at the Effective Time (as defined in Section 1.2)
and in accordance with the Florida Business Corporation Act, as amended (the
"FBCA"), the Disappearing Corporation shall be merged with and into OHI and the
separate existence of the Disappearing Corporation shall thereupon cease. OHI
shall be the surviving company in the Merger and is hereinafter sometimes
referred to as the "Surviving Company."
SECTION I.2 Effective Time of the Merger. The Merger shall
become effective at such time (the "Effective Time") as shall be stated in (i)
the Articles of Merger, in the form attached as Exhibit 1.2, to be filed with
the Secretary of State of the State of Florida in accordance with Section
607.224 of the FBCA (the "Merger Filing"). The Merger Filing shall be made
simultaneously with or as soon as practicable after the Closing (as defined in
Section 3.3).
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ARTICLE II
THE SURVIVING COMPANY
SECTION II.1 Articles of Incorporation. The Articles of
Incorporation of OHI in effect immediately prior to the Effective Time shall be
the Articles of Incorporation of the Surviving Company.
SECTION II.2 Bylaws. The Bylaws of OHI in effect immediately
prior to the Effective Time shall be the Bylaws of the Surviving Company.
SECTION II.3 Directors. The directors of the Disappearing
Corporation immediately prior to the Effective Time shall be the directors of
the Surviving Company, and such directors shall serve in accordance with the
Bylaws of the Surviving Company until their successors are duly elected or
appointed and qualified.
SECTION II.4 Officers. The officers of the Surviving Company
shall be as designated in Schedule 2.4 hereto, and such officers shall serve in
accordance with the Bylaws of the Surviving Company until their respective
successors are duly elected or appointed and qualified.
ARTICLE III
CONVERSION OF SHARES
SECTION III.1 Conversion of OHI Common Stock and the
Disappearing Corporation Common Stock in the Merger.
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(a) At the Effective Time, by virtue of the Merger and without any action
on the part of the sole holder of shares of common stock, par value $.001 per
share, of OHI ("OHI Common Stock"), the shares of OHI Common Stock issued and
outstanding immediately prior to the Effective Time shall be canceled and shall
thereafter represent, in the aggregate, Seal's right to receive, as the sole
holder of OHI Common Stock, (i) One Dollar and No Cents ($1.00) and (ii)
seventy-nine percent (79%) of the "Adjusted Proceeds" (as hereinafter defined)
as and when actually received by the Parent, the Surviving Company or any of
their respective subsidiaries after the Effective Time in settlement of, or
awarded as damages (including, without limitation, any compensatory,
consequential, incidental or punitive damages) arising from or relating to, any
claim, proceeding, action or litigation hereafter asserted by or on behalf of
the Surviving Company or any of its subsidiaries against any person or entity
relating in whole or in part to any claims of unfair competition or trade
practices, anti-competitive conduct, interference or other tortious conduct
(together with any claims incidental thereto) which OHI or any of its
subsidiaries may have suffered or experienced prior to the Effective Time (a
"Claim" and together with the One Dollar, the "Merger Consideration"). The
parties acknowledge and agree that (i) the Merger Consideration constitutes
adequate, fair and valuable consideration and (ii) Seal has obtained an opinion
of an investment banker to the effect that the transactions contemplated by this
Agreement are fair to the stockholders of Seal from a financial point of view.
Seal acknowledges that on or about the Effective Time the Surviving Company
intends to enter into a Loan Agreement ("Loan Agreement") with Broward Holdings
Corp., a Delaware corporation ("BHC"), whereby in exchange for certain
consideration from BHC to the Surviving Company, BHC will have the right to
control and direct all aspects of any Claim and to receive certain of any
proceeds from such a Claim. The term "Adjusted Proceeds" shall mean the gross
amounts received by the Surviving Company, its subsidiaries, or any of their
respective successors or assigns in settlement and/or awarded and received as
damages less (A) all costs and expenses (including attorneys fees and
disbursements) incurred directly or indirectly by, or on behalf of, BHC, the
Surviving Company (or any of their respective Affiliates) in connection with any
such Claim (the "Litigation Expenses"), (B) the amount of any damage or award
required to be paid by, or on behalf of, BHC, the Surviving Company, or any of
their respective Affiliates, to any third person or entity named as a defendant
(or who is an Affiliate of such defendant) in any Claim arising out of matters
reasonably related to such Claim, (C) the aggregate amount of all loans, capital
contributions or other funds advanced, loaned or similarly expended by any
Affiliate of Seal or BHC from April 2, 1999 through the Effective Time to OHI or
its subsidiaries, and/or, after the Effective Time, to the Surviving Company,
Parent or any of their respective subsidiaries (including without limitation
amounts funded by BHC pursuant to the Loan Agreement and all amounts paid on
account of any letter of credit or similar credit support outstanding on the
Effective Time relating to the obligations of OHI, the Surviving Company, Parent
or any of their respective subsidiaries, (D) the aggregate amount of accrued
rent payable by OHI or any of its subsidiaries for the period from March 1998
through the Effective Time to any Affiliates of OHI or such subsidiaries, and
(E) five (5) percent of the first Twenty Million ($20,000,000) Dollars of
litigation and/or Settlement Proceeds in excess of the Litigation Expenses. For
purposes of this Section 3.1, "Affiliate" shall mean a person or entity,
directly or indirectly, controlling, controlled by, or under common control
with, another person or entity. Nothing in this Section 3.1 shall (i) obligate
BHC, the Surviving Company or any successor or assign to assert any Claim, bring
any proceeding, action or litigation with respect to a Claim, or obtain or
maximize any recovery on a Claim, nor (ii) grant any rights to Seal with regard
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to the terms of settlement or litigation strategy with respect to any Claim
which may be asserted, all of which shall be in the sole and absolute discretion
of BHC, the Surviving Company or any of their respective successors or assigns.
(b) At the Effective Time, by virtue of the Merger and without any action
on the part of Parent or the Disappearing Corporation, each issued and
outstanding share of common stock, $.01 par value, of the Disappearing
Corporation ("Disappearing Corporation Common Stock") shall thereafter represent
one share of Common Stock of the Surviving Company.
SECTION III.2 Certificates.
(a) From and after the Effective Time, all OHI Common Stock outstanding
immediately prior to the Effective Time shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and the holder
of a certificate representing shares of OHI Common Stock shall cease to have any
rights with respect thereto, except the right to receive upon surrender thereof
to Parent, the Merger Consideration.
(b) From and after the Effective Time, all Disappearing Corporation Common
Stock outstanding immediately prior to the Effective Time shall be automatically
converted on a share-for-share basis into newly issued shares of the Common
Stock of the Surviving Company. The holder of a certificate representing shares
of Disappearing Corporation Common Stock shall have the right to surrender any
stock certificate issued by the Disappearing Corporation for a new stock
certificate to be issued by the Surviving Company.
(c) At the Closing (as hereinafter defined), Seal shall deliver to Parent
all certificates of OHI Common Stock, duly endorsed in blank, held by Seal that
immediately prior to the Effective Time represented all of the issued and
outstanding shares of OHI Common Stock, and Parent shall deliver to Seal the
Merger Consideration. The Parties acknowledge and agree that the Parent's and
Surviving Company's obligations regarding payment of 79% of any Adjusted
Proceeds from any Claim in accordance with Section 3.1(a) hereof shall survive
the Merger.
SECTION III.3 Closing. The closing (the "Closing") of the
transactions contemplated by this Agreement shall take place at the offices of
Proskauer Rose LLP, One Boca Place, 2255 Glades Road, Suite 340 West, Boca
Raton, Florida 33431, or at such other place as Parent, OHI and Seal shall
mutually agree, at 10:00 a.m., on September 30, 1999 (the "Closing Date"), or
such other date as Parent, OHI and Seal may mutually agree. Promptly following
the Closing, Seal shall turn over control of the books and records of OHI;
provided, however, that Seal shall have the right to make copies after Closing
of such books and records upon reasonable notice.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND THE
DISAPPEARING CORPORATION
Each of Parent and the Disappearing Corporation, jointly and severally,
represent and warrant to OHI and Seal as of the date hereof as follows:
SECTION IV.1 Corporate Organization, Etc. Each of Parent and
the Disappearing Corporation are corporations duly organized, validly existing
and in good standing under the laws of the state of their respective
incorporation and have the requisite power and authority to carry on their
respective business as it is now being conducted and to own, operate and lease
their respective properties and assets. Each of Parent and the Disappearing
Corporation are duly qualified and licensed to do business and are in good
standing in every jurisdiction in which the conduct of their respective
business, the ownership or lease of their respective properties require them to
be so qualified or licensed, except where the failure to be so qualified or
licensed would not have a material adverse effect on their respective business,
operations, properties, assets, condition (financial or otherwise) or results of
operations. True, accurate and complete copies of each of Parent's and the
Disappearing Corporation's respective Articles of Incorporation and Bylaws, in
each case as in effect on the date hereof, including all amendments thereto,
have been delivered to Seal and OHI.
SECTION IV.2 Authorization, Etc. Each of Parent and the
Disappearing Corporation have full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement have been duly authorized by the
Board of Directors of each of Parent and the Disappearing Corporation and no
other proceedings on the part of Parent or the Disappearing Corporation are
necessary to authorize this Agreement. This Agreement constitutes a legal, valid
and binding obligation of each of Parent and the Disappearing Corporation,
enforceable against Parent and the Disappearing Corporation in accordance with
its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF OHI AND SEAL
Each of OHI and Seal, jointly and severally, represent and warrant to
Parent and the Disappearing Corporation as of the date hereof as follows:
SECTION V.1 Authorization, Etc. Seal and OHI each have full
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement have been duly authorized by the Board of Directors of each of
Seal and OHI and no other proceedings on the part of Seal or OHI are necessary
to authorize this Agreement. This Agreement constitutes a legal, valid and
binding obligation of Seal and OHI, enforceable against Seal and OHI in
accordance with its terms, except that such enforcement may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
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SECTION V.2 Corporate Organization, Etc.
(a) OHI is a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation and has the requisite
power and authority to carry on its business as it is now being conducted and to
own, operate and lease its properties and assets. OHI is duly qualified and
licensed to do business and is in good standing in every jurisdiction in which
the conduct of its business, the ownership or lease of its properties require it
to be so qualified or licensed, except where the failure to be so qualified or
licensed would not have a material adverse effect on its business, operations,
properties, assets, condition (financial or otherwise) or results of operations.
True, accurate and complete copies of Articles of Incorporation and Bylaws, in
each case as in effect on the date hereof, including all amendments thereto,
have been delivered to Parent and the Disappearing Corporation.
(b) Each direct and indirect subsidiary of OHI is duly incorporated or
organized, validly existing and in good standing under the laws of the state of
its organization and has the requisite power and authority to carry on its
business as it is now being conducted and to own, operate and lease its
properties and assets. Each subsidiary is duly qualified and licensed to do
business and is in good standing in every jurisdiction in which the conduct of
its business, the ownership or lease of its properties require it to be so
qualified or licensed, except where the failure to be so qualified or licensed
would not have a material adverse effect on its business, operations,
properties, assets, condition (financial or otherwise) or results of operations.
All of the outstanding shares of capital stock of each subsidiary, or membership
interests, in the case of subsidiary limited liability companies, of OHI are
duly authorized and validly issued, fully paid, non-assessable and are owned,
directly or indirectly, by OHI free and clear of any liens, claims or
encumbrances.
SECTION V.3 Capitalization. The authorized capital stock of
OHI consists of 50,000,000 shares of OHI Common Stock, of which 1,000 shares are
issued and outstanding as of the date hereof and 10,000,000 shares of preferred
stock, no shares of which are issued and outstanding as of the date hereof. All
of the issued and outstanding shares of OHI Common Stock are duly authorized and
validly issued and are fully paid, non-assessable and are owned of record and
beneficially by Seal.
SECTION V.4 Title to Shares. Seal has good and marketable
title to and is the lawful owner, of record and beneficially, of all of the
issued and outstanding capital stock of OHI. The OHI Common Stock is not subject
to any lien, claim, encumbrance or restriction of any type, kind or nature in
favor of any third party.
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ARTICLE VI
AGREEMENTS OF THE PARTIES
SECTION VI.1 Consultants. For a period of six (6) months from
the Effective Time, Seal agrees to make available to the Surviving Company, at
Seal's expense, the services of Cecilio Rodriguez and Jonathon Klein (or such
other persons who may then provide similar functions to Seal) for consultation
from time to time upon reasonable notice. Such consultation may be either in
person, via telephone or other means. Unless otherwise agreed by Seal, such
consultation shall be limited to matters involving the historical operations and
books and records of OHI and its subsidiaries.
SECTION 6.2 Other Agreements with BHC. The parties acknowledge
that Parent and the Surviving Company are entering into a Loan Agreement with
BHC and certain other agreements with BHC and its Affiliates (collectively, the
"Other Agreements"). Parent and the Surviving Company acknowledge that Seal is
not a party to such Other Agreements and that Seal shall have no liability for
any breach of any of such Other Agreements.
ARTICLE VII
GENERAL PROVISIONS
SECTION VII.1 Interpretation. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. In this Agreement, unless a
contrary intention appears, (i) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision, and (ii) reference to any
Article or Section means such Article or Section hereof. No provision of this
Agreement shall be interpreted or construed against any party hereto solely
because such party or its legal representative drafted such provision.
SECTION VII.2 Governing Law. This agreement shall be governed
in all respects, including validity, interpretation and effect, by the internal
laws of the state of Florida.
SECTION VII.3 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement. Each of the parties
agrees to accept and be bound by facsimile signatures hereto.
SECTION VII.4 Parties In Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to confer upon any other
person any rights or remedies of any nature whatsoever under or by reason of
this Agreement.
SECTION VII.5 Schedules and Exhibits. All Schedules and
Exhibits referred to in this Agreement shall be attached hereto and are
incorporated herein by reference.
SECTION VII.6 Amendment of Agreement. No amendments or
variations of the terms or conditions of this Agreement shall be valid unless
made in writing signed by all parties hereto.
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SECTION VII.7 Severability. If any term, provision, condition
or covenant of this Agreement or the application thereof to any party or
circumstances shall be held to be invalid or unenforceable to any extent in any
jurisdiction, then the remainder of this Agreement and the application of such
term, provision, condition or covenant in any other jurisdiction or to persons
or circumstances other than those as to whom or which it is held to be invalid
or unenforceable, shall not be affected thereby, and each term, provision,
condition and covenant of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
SECTION VII.8 Entire Agreement. This Agreement and any other
agreements between the parties dated the date hereof supersede any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter and contain all the covenants and agreements between the
parties with respect to the subject matter of this Agreement in any manner
whatsoever. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by any
party, or anyone acting on behalf of any party, which are not included herein,
and that no other agreement, statement or promise not contained in this
Agreement or referred to herein shall be valid or binding. This Agreement
constitutes the entire Agreement between the parties with respect to the subject
matter hereof and shall bind and inure to the benefit of the parties and their
respective successors, assigns, heirs and personal representatives, subject to
the restriction on assignment contained herein.
SECTION VII.9 Assignment. The parties hereto may not assign
any of their rights or obligations hereunder without obtaining the prior written
consent of the other parties hereto, which consent shall not be unreasonably
withheld.
SECTION VII.10 Notices. All notices, requests, demands and
other communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered by hand or mailed, first
class certified mail with postage paid or by overnight receipted courier
service:
If to Parent or the Disappearing Corporation, to:
1000 NE 56th Street
Ft. Lauderdale, FL 33334
or to such other person or address as Parent or the Disappearing Corporation
shall furnish by notice to Seal or OHI in writing.
If to Seal or OHI, to:
5601 North Dixie Highway
Suite 420
Ft. Lauderdale, FL 33334
or to such other person or address as Seal or OHI shall furnish by notice to
Parent and the Disappearing Corporation in writing.
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SECTION VII.11 Expenses. Each party hereto shall bear its own
expenses, including, without limitation, legal fees and expenses, with respect
to this Agreement.
SECTION VII.12 Further Assurances. The parties hereby agree
from time to time to execute and deliver such further and other transfers,
assignments and documents and do all matters and things which may be convenient
or necessary to more effectively and completely carry out the intentions of this
Agreement.
* * * * *
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IN WITNESS WHEREOF, Parent, the Disappearing Corporation, OHI and Seal
have caused this Agreement to be signed on their behalf as of the date first
written above.
OAKRIDGE OUTPATIENT CENTER, INC.
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriego
-----------------------------
Title: CEO
-----------------------------
OH ACQUISITION CORP.
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: CEO
-----------------------------
SEAL HOLDINGS CORPORATION
By: /s/ Cecilio M. Rodriguez
-----------------------------
Name: Cecilio M. Rodriguez
-----------------------------
Title: Vice President
-----------------------------
OH, INC.
By: /s/ Cecilio M. Rodriguez
-----------------------------
Name: Cecilio M. Rodriguez
-----------------------------
Title: Vice President
-----------------------------
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The undersigned hereby join in this Agreement for the purpose of
acknowledging and agreeing to the terms of Sections 3.1(a), 3.2(a), 3.2(c) and
7.12 with regard to any Claims which may relate in whole or in part to the
undersigned subsidiaries of OHI and/or the Surviving Company.
OAKRIDGE AMBULATORY SURGERY, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
OAKRIDGE CARDIAC CATHETERIZATION, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
OAKRIDGE MEDICAL GROUP, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
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OAKRIDGE REHABILITATION, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
OAKRIDGE CLINICAL LABORATORY, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
OAKRIDGE IMAGING, LLC
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
COMPREHENSIVE OUTPATIENT CENTERS OF
FLORIDA, INC.
By: /s/ Rudy Noriega
-----------------------------
Name: Rudy Noriega
-----------------------------
Title: Manager
-----------------------------
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Exhibit 2.2
STATE OF FLORIDA
ARTICLES OF MERGER
OF
OH ACQUISITION CORP.,
A FLORIDA CORPORATION
INTO
OH, INC.,
A FLORIDA CORPORATION
Pursuant to Sections 607.1108 and 607.1109 of the Florida Business
Corporation Act, the undersigned entities adopt the following articles of
merger:
FIRST: OH Acquisition Corp., a Florida corporation ("OH Acquisition"),
shall be merged, in accordance with Section 607.1108 of the Florida Business
Corporation Act (the " FBCA") with and into OH, Inc., a Florida corporation (the
"Surviving Company"), which shall be the surviving company (the "Merger").
SECOND: The Plan of Merger is set forth in the Agreement and Plan of
Merger, dated as of September 30, 1999, a copy of which is attached hereto (the
"Merger Agreement");
THIRD: The Articles of Incorporation of OH, Inc. as in effect
immediately prior to the Effective Date of the Merger shall be the Articles of
Incorporation of the Surviving Company until the same shall be amended in
accordance with the FBCA and such Articles of Incorporation.
FOURTH: The Merger Agreement was approved and adopted by the Board of
Directors and the sole shareholder of the Surviving Company as of the 30th day
of September, 1999, in accordance with Section 607.1103 of the FBCA, and by the
Board of Directors and the sole shareholder of OH Acquisition as of the 30th day
of September, 1999, in accordance with Section 607.1103 of the FBCA.
FIFTH: The Effective Date of the Merger is the date on which these
Articles of Merger are filed with the Department of State of the State of
Florida.
Signed this 30th day of September, 1999
OH ACQUISITION CORP., a Florida corporation
By: /s/ Rudy Noriega
--------------------------------------
Name: Rudy Noriega
--------------------------------------
Title: CEO
--------------------------------------
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OH, INC., a Florida corporation
By: /s/ Cecilio M. Rodriguez
--------------------------------------
Name: Cecilio M. Rodriguez
--------------------------------------
Title: Vice President
--------------------------------------
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Exhibit 99.2
M. Lee Pearce, M.D.
September 30, 1999
Seal Holdings Corporation
5601 N. Dixie Highway, Suite 411
Fort Lauderdale, Florida 33334
Gentlemen:
This letter will confirm my agreement, in connection with
consummation of that certain Agreement and Plan of Merger by and among Seal
Holdings Corporation, OH, Inc. and OH Acquisition Corp., to make funding
available to Seal Holdings Corporation for working capital purposes and to
enable Seal to enter into acquisitions and other transactions, all as approved
from time to time by the Board of Directors of Seal.
The foregoing commitment to provide funding shall be subject
to the following terms and conditions:
Such funding shall be in the form of either direct equity investment or
lending arrangements in an aggregate amount not to exceed $10,000,000.
The form of investment will be as agreed by the Board of Directors of
Seal and the undersigned consistent with the best interests of the
Corporation and all of its shareholders. In connection therewith, the
undersigned acknowledges that the investment shall be structured taking
into account all of the relevant factors, including, among other
things, dilution to the existing shareholders of Seal.
This commitment is intended to be a binding obligation on the undersigned;
provided, however, that the undersigned shall have the right to delegate his
obligations hereunder to entities under the control of the undersigned.
Very truly yours,
/s/ M. Lee Pearce, M.D.
-----------------------
M. Lee Pearce, M.D.
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