UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 1999.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to
__________
Commission File Number: 2-89616
Consolidated Medical Management, Inc.
(Exact name of Registrant as specified in charter)
Montana 82-0369233
State or other jurisdiction of IRS Employer I.D. No.
incorporation or organization
11829 Florida Blvd., Baton Rouge, LA 70815
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (504) 292-3100
Check whether the Issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such fling requirements for the past 90 days. (1) Yes
[X] No [ ] (2) Yes [X] No [ ]
State the number of shares outstanding of each of the Issuer's classes of
common equity as of the latest practicable date: At August 11, 1999, there
were 8,182,587 common shares of the Registrant outstanding.
Consolidated Medical Management, Inc.
Baton Rouge, Louisiana
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements 1
Consolidated Balance 2
Consolidated Statements of Operations 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Report of Independent Accountants 16
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 17
Part II - Other Information
Item 2. Change in Securities 19
Item 5. Other Information 21
Item 6. Exhibits and Reports on Form 8-K 22
Signature 22
Part I
Financial Information
Item 1. Financial Information
The consolidated financial statements for Consolidated Medical Management
Company, Inc. (the Company) included herein are unaudited but reflect, in
management's opinion, all adjustments, consisting only of normal recurring
adjustments, that are necessary for a fair presentation of the Company's
financial position and the results of its operations for the interim periods
presented. Because of the nature of the Company's business, the results of
operations for the six months ended June 30, 1999 are not necessarily
indicative of the results that may be expected for the full fiscal year. The
financial statements included herein should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-KSB for the year ended December 31, 1998 (1998 Form 10-KSB).
The consolidated financial statements included herein have been subjected to a
limited review by Roberts, Cherry and Company, independent accountants for the
Company, whose report is included herein.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Consolidated Balance Sheets
(Unaudited)
June 30, 1999 December 31, 1998
Assets
Current Assets
Cash $ 73,437 $ 25,540
Receivables , net 284,336 166,869
Inventory 7,667
Prepaid Expenses 16,811 4,315
Notes Receivable 116,000 140,673
Total Current Assets 498,251 337,397
Property and Equipment, net 352,122 336,298
Other Assets 879,379 139,743
Total Assets $1,729,752 $ 813,438
Liabilities and Stockholders' Equity
(Deficit)
Current Liabilities
Notes Payable - Current Portion $ 526,759 $ 88,532
Capital Lease Obligation Payable
- Current Portion 87,860 83,406
Convertible Debentures and Notes
Payable - Current Portion 465,000 415,000
Accounts Payable 331,178 140,456
Accrued Expenses 93,693 138,101
Total Current Liabilities 1,504,490 865,495
Long Term Liabilities
Notes Payable - Long Term Portion 674 2,613
Capital Lease Obligation Payable
- Long-Term Portion 175,891 221,156
Total Long Term Liabilities 176,565 223,769
Total Liabilities 1,681,055 1,089,264
Stockholders' Equity
(Deficit)
Common Stock
$.001 par value, 50,000,000 shares
authorized, 7,932,587 shares
issued and outstanding as of
June 30, 1999 and 5,496,057 shares
issued and outstanding
as of December 31, 1998 7,933 5,496
Additional Paid-in-Capital 2,581,126 1,854,173
Retained Earnings (Deficit) (2,540,362) (2,135,495)
Total Stockholders' Equity
(Deficit) 48,697 (275,826)
Total Liabilities and
Stockholders' Equity (Deficit) $1,729,752 $ 813,438
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Consolidated Statements of Operations
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Revenues $338,467 $178,107 $646,843 $346,705
Operating
Expenses
Personnel Costs 269,787 102,614 323,032 173,272
Bad Debt Expense - 15,158 - 18,072
Consulting 90,983 - 203,318 -
Commissions - 5,352 - 7,464
Depreciation and
Amortization 60,386 2,817 64,350 3,299
Educational - 10,092 - 12,311
Legal and Professional 167,646 5,640 55,280 66,540
Office Expense 41,782 32,528 89,745 38,920
Occupancy 12,327 5,198 21,079 13,692
Transportation 33,132 - 33,132
Total Operating Expenses 676,043 179,399 989,936 333,570
Income (Loss) from
Operations (337,576) (1,292) (343,093) 13,135
Other Income
(Expenses)
Other - (28,251) 200 (33,759)
Interest Expense (47,862) - (47,862) -
Interest Income - - 3,476 -
(47,862) (28,251) (44,186) (33,759)
Income (Loss) before
Income Taxes (385,438) (29,543) (387,279) (20,624)
Income Tax Expense - (3,792) - (3,792)
Net Income (Loss) $(385,438) $(25,751) $(387,279) $(16,832)
Net Income (Loss) per
Share $(0.0687) $(0.005) $(0.0691) $(0.003)
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
Baton Rouge, Louisiana
Consolidated Statements of Cash Flows
(Unaudited)
Six Months Ended June 30,
June 30, 1999 June 30, 1998
Cash Flows from Operating Activities:
Net Income (Loss) ($ 387,279) ($ 16,832)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Provided by
Operating Activities:
Depreciation and Amortization 75,191 7,464
Non Cash Consulting and
Services Paid by Stock Issue 364,507 -
(Increase) Decrease in Receivables (117,467) (143,465)
(Increase) Decrease in Prepaid Expenses (12,496) -
(Increase) Decrease in Other Assets - (31,168)
Increase (Decrease) in Accounts Payable 190,723 101,048
Increase (Decrease) in Accrued Expenses (44,408) 9,561
Increase (Decrease) in Income Taxes Payable - -
Increase (Decrease) in Deferred Income Taxes - 2,005
Net Cash Provided (Used) by Operating
Activities 68,771 (71,387)
Cash Flows from Investing Activities:
Issuance of Notes Receivable - (147,000)
Payment on Notes Receivable (24,673)
Purchases of Property, Plant and Equipment (3,678) (29,174)
Net Cash Provided (Used) by Investing
Activities (28,351) (176,174)
Cash Flows from Financing Activities:
Proceeds from Issuance of Debentures
and Convertible Notes 100,000 180,000
Repayment of Debentures (50,000) -
Proceeds from Stock Issuance - 40,000
Proceeds from Issuance of Debt - 23,008
Payments on Long-Term Debt (42,523) (3,993)
Net Cash Provided (Used) by Financing
Activities 7,477 239,015
Net Increase (Decrease) in Cash 47,897 ( 8,546)
Cash, Beginning of period 25,540 34,415
Cash, end of period $73,437 $25,869
Supplemental Disclosure of Cash Flow
Information
Cash Paid During the Year for:
Interest $47,862 $9,398
Income Taxes $ - $ -
Supplemental Disclosure of Non-Cash Financing
Information
In the six months ended June 30, 1999, the Company issued
common stock for consulting services rendered totaling $233,087.
The accompanying notes and are an integral part of the consolidated financial
statements.
<PAGE>
Consolidated Medical Management, Inc.
(A Montana Corporation)
Notes to Consolidated Financial Statements
(UNAUDITED)
Note 1 Organization and Summary of Significant Policies
The Company (formerly Golden Maple Mining and Leaching Co., Inc.) was
incorporated under the laws of the State of Montana on August 13, 1981. The
Company ceased its mining operations in 1985, and discontinued all business
operations in 1990. On May 23, 1998, the Company acquired all the common
stock of Consolidated Medical Management, Inc. (a private Louisiana
corporation, hereafter sometimes referred to as "CMMI-LA" or "subsidiary") in
a stock for stock exchange transaction, whereupon, CMMI-LA became a wholly
owned subsidiary of the Company
The CMMI-LA subsidiary provided management services for home healthcare
providers predominately in southern Louisiana. The Company's subsidiary,
Independent Diagnostic Services, Inc., provides diagnostic ultrasound imaging
services to physician offices, clinics, hospital, and skilled nursing
facilities, and also provides mobile laboratories that will enable services to
be provided for communities with limited access to technologists, hospitals
and diagnostic laboratories. The Company's subsidiary, Psychiatric Medical
Services, Inc. ("PMSI") operates a partial-unit mental services hospital in an
existing hospital environment. In June 1999, the Company acquired Nevada
Resort Medical Services, Ltd. and Practice Management Group Nevada, both based
in Las Vegas, Nevada, to expand its medical services delivery abilities.
Principles of Consolidation - The consolidated financial statements include
the accounts of Consolidated Medical Management, Inc. (a Montana Corporation),
and its subsidiaries, Independent Diagnostic Services, Inc. and Psychiatric
Management Services, Inc. The Company and its subsidiaries provide health
care services specializing in mobile diagnostic imaging and the operation of a
part-hospital psychiatric unit and therefore extends credit to the health care
providers involved with the patients served. All significant intercompany
transactions and balances have been eliminated.
Accounting policies of the Company conform with generally accepted accounting
principles and reflect practices appropriate to the industry in which it
operates. The significant policies are summarized below:
Property, Plant, Equipment and Depreciation - Expenditures for property,
plant and equipment are recorded at cost. Renewals and improvements which
extend the economic life of such assets are capitalized. Expenditures for
maintenance, repairs and other renewals are charged to expense. For major
dispositions, the cost and accumulated depreciation are removed from the
accounts and any gain or loss is included in the results of operations.
Depreciation is provided over the estimated useful lives of assets using
accelerated methods.
Receivables - The Company, through it's Louisiana subsidiary, grants credit
through trade receivables to its customers, all of whom are home health care
providers in the state of Louisiana. The Company performs ongoing credit
evaluations of its customers' financial condition and, generally, requires no
collateral from its customers. As of year-end, the company reviewed its
receivables. Those receivables where collection was deemed questionable were
charged off. A further review of receivables indicated no additional
allowance was necessary for the remaining accounts.
Inventories - Inventories consist of supplies, and are valued at the lower of
cost or market, using the specific identification method.
Cash Flows and Concentration of Credit Risk - - For purposes of the
statement of cash flows, the Company considers all highly liquid investments
that are readily convertible to known amounts of cash and that have an
original maturity of three months or less to be cash equivalents. Cash
consists principally of demand deposits at commercial banks. These balances,
as reflected in the bank's records, are insured by the Federal Deposit
Insurance Corporation up to $100,000. At June 30, 1999 and December 31, 1998,
the Company's deposits did not exceed the insured limits.
Risks and Uncertainties - The preparation of financial statements in
conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported period. Actual results could differ from those
estimates.
Note 2 Receivables
Receivables consist of the following:
1999 1998
Management Fees, Service billings $ 294,416 $ 188,484
Advances to Trinity Billing 13,564 13,564
Interest 6,900 3,478
Other 9,560 1,447
324,440 206,973
Less: Allowance for Uncollectible Accounts (40,104) (40,104)
$ 284,336 $ 166,869
Note 3 Notes Receivable
1999 1998
Note Receivable from Spectrum Financial,
Inc., a related party, in the
original amount of $15,000, with
interest at 6%, principal and interest
due June 30, 1999, unsecured. $ 15,000 $ 15,000
Note Receivable from Jaguar
International, Inc., a related party,
in the original amount of $100,000,
with interest at 6%, principal and
interest due June 30, 1999,
unsecured. 100,000 100,000
Note Receivable from Louisiana
Mobile Imaging, Inc. in the original
amount of $75,000, with interest at
0%, principal due December 1, 1998,
secured by a pledge of receivables. - 24,673
Note Receivable from an individual
in the original amount of $1,000, with
interest at 6%, principal and interest
due November 13, 1999, unsecured. 1,000 1,000
Total Notes Receivable 116,000 140,673
Less Current Portion (116,000) (140,673)
Long Term Portion of Notes Receivable $ - $ -
Note 4 Property, Plant and Equipment
1999 1998
Furniture $ 6,721 $ 6,721
Equipment 103,758 30,297
Automotive 14,640 3,600
Assets under Capital Lease 399,175 399,175
524,294 439,793
Less Accumulated Depreciation
(including $150,044 of accumulated
amortization of capital lease assets) (172,172) (103,495)
Property, Plant and Equipment - Net $ 352,122 $ 336,298
Note 5 Other Assets
1999 1998
Prepaid Consulting Agreement (net of
accumulated amortization of $22,000 and
10,000, respectively) $ 98,000 $ 110,000
Goodwill 775,005 -
Deposits 4,297 2,684
Other 2,077 27,059
$ 879,379 $ 139,743
The Company recognized Goodwill in the acquisition of Nevada Resort Medical
Services, Ltd. Goodwill will be amortized over the expected life of the
assets acquired, ten years on a straight-line basis.
Note 6 Lease Commitments
During the period ended June 30, 1999, the Company leased its main
administration office facilities under operating leases, which expired June
1998 and August 1998. Thereafter the office space has been rented on a
month-to-month basis. Monthly rent for the office space totals $600. Lease
expense for the six-month periods ended June 30, 1999 and 1998 totaled $1,006
and $-0-, respectively.
The Company also is leasing remote office space for its subsidiary, IDSI, from
a related party, Jaguar International, Inc. under a monthly operating lease of
$1,700 monthly. Total rent expense for the six-month period ended June 30,
1999 was $5,100. The Company also leases office space in Baton Rouge for its
subsidiary, PMSI. The lease is for one year beginning May 1, 1999 with
monthly installments of $1,318.
The Company is also leasing equipment used by it's subsidiary, IDSI, under
operating leases with total monthly lease expense payments of $842. The
leases are for thirty-six (36) months, and expire in September and October
2001. Total lease expense for the six-month period ended June 30, 1999 was
$2,526.
The Company also leases office space for the use of one of its officers in San
Antonio, Texas under an operating lease. The lease is on a month-to-month
basis with monthly rental of $400. Total rent paid in the second quarter of
1999 was $1,200.
The Company also leases other office assets, notably a copier, and phone
system, under non-cancelable operating leases expiring through September
2000. Lease expense for the six-month period ended June 30, 1999 was $3,394.
At June 30, 1999, future minimum lease payments under long-term non-cancelable
leases for succeeding fiscal periods is as follows:
1999, through December 31, $ 8,282
2000 18,114
2001 7,926
Thereafter -
Total $ 34,322
Note 7 Notes Payable
1999 1998
Note payable to GE Capital financing the phone
system, in the original amount of $10,222,
dated September 16, 1997, payable in
thirty-nine installments of $341 with interest
at 12.5%, secured by a pledge of the
phone system. $ 4,433 $ 6,145
Six (6) notes payable to Spectrum Financial,
Inc., a related party of the Company, dated
September 29, 1998, due July 29, 1999,
interest at 10%, payable on maturity,
unsecured 85,000 85,000
Note payable to individuals from the
acquisition of Nevada Resort Medical
Services and Practice Management Group,
dated June 4, 1999, payable on or
before August 4, 1999 with interest at
10.0%, secured by a pledge of the
Company's stock interest in the
acquired companies. 438,000
Total Notes Payable 527,433 91,145
Less: Current Portion (526,759) (88,532)
Long-Term Portion $ 674 $ 2,613
Maturities of Notes Payable over the next
five years are:
1999 $ 526,759
2000 674
After -
$ 527,433
Note 8 Capital Leases
1999 1998
Equipment Capital Leases Payable to
leasing companies in original amounts
totaling approximately $399,176,
payable in monthly installments
ranging from twenty-four to sixty
months, totaling $10,133 ($9,572
beginning February 1, 1999), with
implicit interest rate of twelve (12%)
percent, through March 2003. These leases
are secured by pledges of imaging equipment
and related transportation vehicles with
original cost totaling approximately $400,000 as
of December 31, 1998. These vehicles are
included in company owned assets
described as Capital Lease Assets. $ 263,750 $ 304,562
Less: Current Portion (87,860) (83,406)
Long-Term Portion $ 175,890 $ 221,156
Following is a schedule of minimum lease
payments under Capital Leases:
1999 $ 57,712
2000 114,863
2001 84,588
2002 46,431
2003 11,608
After -
Total Payments 315,202
Less: Interest included therein (51,452)
Net Payments $ 263,750
Maturities of Capital Lease Obligations payable
in subsequent periods ending March 31, are as
follows:
2000 87,860
2001 94,578
2002 48,040
2003 33,272
After -
$ 263,750
Note 9 Convertible Debentures and Notes Payable
The Company issued convertible debentures in 1998 that are subordinated to
bank debt and secured leases. The debentures are otherwise unsecured but are
given a preference over unsecured debt. The debentures include interest at
fifteen (15%) percent, interest is payable in monthly installments. Each
debenture has a conversion right for each holder to convert the debenture
principal to shares of the Company's common stock at $2.50 per share or sixty
(60%) percent of the bid price, whichever is greater on the date of
conversion. Accrued interest and any principal amount not converted to shares
of stock will be paid in cash at conversion. As of June 30, 1999, the company
had issued and outstanding $140,000 in debentures. The debentures are due one
year from date of issue. All debentures issued are due in 1999.
The Company issued convertible promissory notes payable in 1998. The notes
are unsecured and include interest at ten (10%) percent, interest is payable
in monthly installments. Each note has a conversion right for each holder to
convert the note's unpaid principal to shares of the Company's common stock
based on $2.50 per share, or a total of 90,000 at the note holder's
discretion. Accrued interest and any principal amount not converted to shares
of stock will be paid in cash at conversion. As of June 30, 1999, the company
had issued and outstanding $325,000 in debentures. The notes are due July 31,
1999.
The Company has entered into an agreement with Spectrum Financial, Inc.
("Spectrum") whereby Spectrum will exchange shares it owns with the debenture
holder upon exercise of the debenture's conversion option, in satisfaction of
the Company's obligations under the conversion provisions. In exchange,
Spectrum will then receive an unsecured note payable from the Company (see
Note 7) for the face amount of the debenture surrendered. During the year
ended December 31, 1998, Spectrum exchanged a total of 14,000 of its shares in
connection with this agreement and received five notes payable from the
Company totaling $35,000.
1999
Total Convertible Debentures and Notes Payable $ 465,000
Less: Current Portion (465,000)
Long-Term Portion $ -
Note 10 Income Taxes
The provision for income taxes for six months ended June 30, 1999 and 1998
consists of the following:
1999 1998
Current Provision
Federal $ - $ -
State - -
Deferred Provision (Benefit) - -
Total Income Tax Expense (Benefit) $ - $ -
The effective tax rate of the Company for 1999 and 1998 differs from the
federal statutory rate primarily due to state income taxes, if any.
Deferred income taxes arise from temporary differences resulting from the
Company's subsidiary utilizing the cash basis of accounting for tax purposes
and the accrual basis for financial reporting purposes. Deferred taxes are
classified as current or noncurrent, depending on the classification of the
assets and liabilities to which they relate. Deferred taxes arising from
timing differences that are not related to an asset or liability are
classified as current or noncurrent, depending on the periods in which the
timing differences are expected to reverse. The Company's previous principal
temporary differences relate to revenue and expenses accrued for financial
purposes, which are not taxable for financial reporting purposes. The
Company's temporary differences consist of bad debt expense recorded in the
financial statements that is not deductible for tax purposes and differences
in the depreciation expense calculated for financial statement purposes and
tax purposes.
The net deferred tax asset or liability is composed of the following:
1999 1998
Total Deferred Tax Assets $ - $ -
Less: Valuation Allowance - -
Net Deferred Tax Asset - -
Total Deferred Tax Liabilities - -
Net Deferred Tax Liability - -
Less Current Portion - -
Long - Term Portion $ - $ -
The Company has net operating loss carryforwards totaling $869,697, which
expire through 2014.
Note 11 Common and Preferred Stock
Common Stock
The Company's common stock is $0.001 par value, 50,000,000 shares are
authorized as of June 30, 1999 and December 31, 1998. As of June 30, 1999
and December 31, 1998, the Company had 7,932,587 and 5,496,057 shares issued
and outstanding, respectively.
Preferred Stock
In 1998, the Company amended its articles to authorize Preferred Stock. There
are 20,000,000 shares authorized with a par value of $0.001. The shares are
non-voting and non-redeemable by the Company. The Company further designated
two series of its Preferred Stock: "Series 'A' $12.50 Preferred Stock" with
2,159,193 shares of the total shares authorized and "Series 'A' $8.00
Preferred Stock," with the number of authorized shares set at 1,079,957
shares. As of June 30, 1999 and December 31, 1998 there are no shares issued
and outstanding.
Dividends - Dividends are non-cumulative, however, the holders of such series,
in preference to the holders of any common stock, shall be entitled to
receive, as and when declared payable by the Board of Directors from funds
legally available for the payment thereof, dividends in lawful money of the
United States of America at the rate per annum fixed and determined as herein
authorized for the shares of such series, but no more, payable quarterly on
the last days of March, June, September, and December in each year with
respect to the quarterly period ending on the day prior to each such
respective dividend payment date. In no event shall the holders of either
series receive dividends of more than one percent (1%) in any fiscal year.
Each share of both series shall rank on a parity with each other share of
preferred stock, irrespective of series, with respect to dividends at the
respective fixed or maximum rates for such series.
Conversion provisions - Any holder of either series may convert any or all of
such shares into shares of common stock of the Company at any time. Said
shares shall be convertible at a rate equal to three (3) shares of common
stock of the Company for each one (1) share of Series "A" $12.50 Preferred
Stock. The Series "A" $12.50 Preferred Stock shall be convertible, in whole
or in part, at any time after the common stock of the Company shall maintain
an average bid price per share of at least $12.50 for ten (10) consecutive
trading days.
Series "A" $8.00 Preferred Stock shall be convertible at a rate equal to three
(3) shares of common stock of the Company for each one (1) share of Series "A"
$8.00 Preferred Stock. The Series "A" $8.00 Preferred Stock shall be
convertible, in whole or in part, at any time after the common stock of the
Company shall maintain an average bid price per share of at least $8.00 for
ten (10) consecutive trading days.
The preferential amount payable with respect to shares of either Series of
Preferred Stock in the event of voluntary or involuntary liquidation,
dissolution, or winding-up, shall be an amount equal to $5.00 per share, plus
the amount of any dividends declared and unpaid thereon.
Note 12 Earnings per Share
Earnings per share for the six month period ended June 30, 1999 is computed as
follows:
Income Shares Per-Share
(Numerator) (Denominator) Amount
Net Income (Loss) ($ 387,279)
Basic EPS
Income (Loss) available to
common stockholders ( 387,279) 5,606,406 ($ 0.0691)
Effect of Dilutive Securities
Convertible Debt - -
Diluted EPS
Income (Loss) available to
common stockholders ($ 387,279) 5,606,406 ($ 0.0691)
Earnings per share for the six months period ended June 30, 1998 is computed
as follows:
Income Shares Per-Share
(Numinator) (Denominator) Amount
Net Income (Loss) ($ 16,832)
Basic EPS
Income (Loss) available to
common stockholders (16,832) 5,116,057 ($ 0.0033)
Effect of Dilutive Securities
None - -
Diluted EPS
Income (Loss) available to
common stockholders ($ 16,832) 5,116,057 ($ 0.0033)
The Company has issued convertible debt that, if fully converted, would have a
dilutive effect of 180,000 shares. The Company has entered into an agreement
with a related party, Spectrum Financial, Inc. whereby Spectrum will exchange
shares it controls for the debt issued to convertible debt holders upon the
debt holders' exercise of their options. Due to the effect of this agreement,
these shares are not considered dilutive for these calculations.
Note 13 Commitments and Contingencies
In the opinion of management, there are no contingent claims or litigation
against the Company, which would materially affect its financial position at
June 30, 1999.
The Management service contracts that the Company has with the home health
care agencies it served include a provision that allows the Company's client
to recover the amount paid by the client from the management fees paid to the
Company if the client is required to repay any fees it receives, due to
actions or services provided by the Company.
Note 14 Economic Dependence
During the six months period ended June 30, 1999, approximately sixty-four
(64%) percent of the Company's total operating income was earned under
management contracts with one major customer. The contracts have a term of one
year, ending December 31, 1999, renewable annually
Note 15 Related Party Transactions
During the three months and six months periods ended June 30, 1999, the
Company paid fees totaling $85,922 and $35,799, respectively, in the form of
cash and stock, to related companies and individuals that own stock in the
Company and provided services to the Company. Included in this total of fees
are amounts paid as follows:
Paid to Description of Fees Amount
GCSW Funding, Inc. Consulting services provided $ 25,122
Spectrum Financial, Inc. Consulting services provided 36,800
Southern Property
Management, Inc Consulting services provided 24,000
$ 85,922
The Company has informal agreements with three related companies, GCSW
Funding, Inc., Jaguar International, Inc. (a shareholder of the Company) and
Southern Properties, Inc. to provide various consulting services to the
Company as required.
The Company engaged Spectrum Financial, Inc., which is owned by two of the
Company's shareholders who collectively own approximately fifteen percent of
the Company's outstanding common stock as of June 30, 1999, to provide
consulting services. Such consulting services have included identifying
potential targeted companies for acquisition, and negotiating such
transactions. Spectrum is then paid fees, either in cash or by the issuance
of the Company's stock. In 1999, the Company paid Spectrum fees totaling
$36,800 for such services.
The Company has also agreed to pay Spectrum commissions in connection with its
services rendered in identification of specific targets for acquisition,
whether the targeted company is acquired or not.
The Company also has notes payable totaling $85,000 payable to Spectrum
Financial, Inc. as of June 30, 1999. The notes are unsecured. See Note 7.
As of June 30, 1999, the Company has accrued $5,410 in interest payable on
these notes and has recorded $4,215 in interest expense.
The Company holds a note receivable from Jaguar International, Inc., which
owns approximately forty-four (44%) percent of the outstanding stock as of
December 31, 1998, in the amount of $100,000. See Note 3, as of December 31,
1998. The Company also holds a note receivable from Spectrum Financial, Inc.
in the amount of $15,000 as of December 31, 1998.
The Company also has included in accounts payable, $5,410 payable to Spectrum
Financial, Inc. for cost reimbursements due. Accounts Payable also includes
$63,223 due to companies controlled by the Company's major stockholder, for
consulting services rendered and fees incurred by these companies on behalf of
the Company.
Note 16 Non Cash Financing Transactions
During the second quarter of 1999, the Company issued stock in exchange for
services of $233,087 (1,184,749 common shares issued).
Note 17 Stock Options
The Company has two stock option plans. The first plan was adopted in April
1998. Under this plan, the Company granted options to three entities for a
total of 550,000 shares of the Company's common stock. The original exercise
price of the options granted under the plan was $0.10 per share, and was for a
five-year period. All shares granted under this plan were issued.
In October 1998, the Company adopted "1998 Non-Qualified Stock Option Plan
No.2". Under this plan, a total of 1,500,000 shares are available. The
qualified recipients of the plan's options are all employees of the Company
and any other individuals who perform bona fide services to the Company. The
Options granted under this plan have a term of five years, and a maximum
exercise price of $4.125 per share. Subsequent to year-end, the Company
granted four options under this plan for a total of 522,986 shares at an
option price of $0.10 per share. All of the shares optioned to date have been
exercised.
No compensation costs were charged to income in 1999 under these plans.
Note 18 Fair Values
The Company has a number of financial instruments, none of which are held for
trading purposes. The Company estimates that the fair value of all financial
instruments at June 30, 1999 does not differ materially from the aggregate
carrying values of its financial instruments recorded in the accompanying
balance sheet.
Note 19 Acquisitions
On June 4, 1999, the Company acquired all of the outstanding ownership
interests of Nevada Resort Medical Services, LTD, LLC, in exchange for the
issuance of 200,000 shares of the Company's common stock and payment of
$238,000 in cash or notes. Pursuant to the purchase, the Company issued notes
payable totaling $238,000, dated June 4, 1999, due in full on August 4, 1999,
bearing 10% interest and secured by a pledge of the interest acquired in this
purchase. See Note 7
On June 4, 1999, the Company also acquired all of the outstanding ownership
interests of Practice Management Group in exchange for the issuance of 190,000
shares of the Company's common stock and payment of $200,000 in cash or
notes. Pursuant to the purchase, the Company issued notes payable totaling
$200,000, dated June 4, 1999, due in full on August 4, 1999, bearing 10%
interest and secured by a pledge of the interest acquired in this purchase.
See Note 7.
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Directors
Consolidated Medical Management, Inc.
(A Montana Corporation)
Baton Rouge, Louisiana
We have made a review of the consolidated balance sheet of Consolidated
Medical Management, Inc. as of June 30, 1999, and the related consolidated
statements of operations and cash flows for the six-month periods ended June
30, 1999 and 1998, in accordance with standards established by the American
Institute of Certified Public Accountants. These financial statements are the
responsibility of the Company's management.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit in accordance with generally
accepted auditing standards, the objective of which is the expression of an
opinion regarding the financial statements taken as a whole. Accordingly, we
do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of December 31, 1998, and the
related consolidated statements of income, cash flows and changes in common
shareholders' equity (deficit) for the year then ended (not presented herein);
and in our report dated February 5, 1999, we expressed a qualified opinion on
those financial statements. In our opinion, the information set forth in the
accompanying balance sheet as of December 31, 1998, is fairly stated in all
material respects in relation to the balance sheet from which it has been
derived.
ROBERTS, CHERRY and COMPANY
A Corporation of
Certified Public Accountants
Shreveport, Louisiana
August 12, 1999
Consolidated Medical Management, Inc.
(A Montana Corporation)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion and analysis should be read in combination with
Management's Discussion and Analysis of Financial Condition and Results of
Operations in Item 6 of the 1998 Form 10-KSB, the financial statements and
notes contained in Item 7 of the 1998 Form 10-KSB and the interim financial
statements and notes thereto contained elsewhere in this Report.
RESULTS OF OPERATIONS
For the Six Month Period Ended June 30, 1999
For the six months ended June 30, 1999, the Company recognized net loss of
($387,279), (with loss per share of ($0.0681) per common share). During this
period, the Company, since the acquisition of Consolidated Medical Management,
Inc. (the private Louisiana company) by the public Company (formerly Golden
Maple Mining and Leaching, Inc.), has aggressively pursued acquisitions of
related medical service providers and other entities that, once acquired, it
is believed, will add to its ability to provide medical services. The
following principal factors contribute to these results. For the period ended
June 30, 1999, the Company recognized the operations of its wholly-owned
subsidiaries, Independent Diagnostic Services, Inc. and Psychiatric Management
Services, Inc. (PMSI) with consolidated operating revenue of $646,843 for the
six months compared to $338,467 for the three-month period ended June 30,
1999.
Operating revenues are composed of management fees associated with providing
services, under contract, to various home-health providers and PHP (Partial
Hospital Programs), primarily located in southern Louisiana and the fee income
from delivery of diagnostic and transportation services associated with the
health care industry. Changes in the home health care industry caused the
Company to shift its emphasis away from home health care and toward the PHP
program, and to other medical management programs, which the Company expects
will be more profitable.
For the six-month period ended June 30, 1999, the Company incurred operating
costs associated with the production of revenue totaling $989,936 composed of
$676,043 in the three months ended June 30, 1999 versus $313,893 incurred in
the first quarter of 1999. The most significant elements of operating
expenses are personnel costs totaling $269,787 for the three months ended June
30, 1999, $53,245 for the first quarter. Personnel costs include the
professional wages of the personnel who deliver the health-care services
required by the contracts and related administrative salaries and benefits.
Another significant operating cost is consulting fees paid in connection with
the medical management performed by the Company. These costs totaled $203,318
for the six-month period ending June 30, 1999. In the quarter ended June 30,
1999, the Company incurred legal and professional fees totaling $167,646
primarily associated with filings and legal matters on stock related issues.
The Company incurred office expense totaling $41,782 for the six-month period
For the six-month ended June 30, 1998, the net loss applicable to common stock
totaled ($16,832) or ($0.003) per share. In this 1998 period, the Company had
no operations and recognized nominal expenses associated with the maintenance
of the Company's filings.
The Company is actively pursuing several medical services related acquisitions
that will allow the Company to significantly expand its delivery of medical
management and consulting services. The Company has targeted several medical
management companies that are actively negotiating with to acquire and enable
the Company to enter more profitable service delivery areas.
FINANCIAL CONDITION
Liquidity and Capital Resources
As of June 1999, the Company sold a total of $550,000 in convertible and
subordinated debentures ($465,000 remains as of June 30, 1999). The debentures
are subordinated to bank debt and secured leases and are due within one year
of issue. The debentures are otherwise unsecured but are given a preference
over unsecured debt. The debentures include interest at fifteen (15%)
percent, payable in monthly installments. Each debenture has a conversion
right for each holder to convert the debenture principal to shares of the
Company's common stock at the greater of $2.50 per share or ninety (90%)
percent of the bid price, whichever is greater on the date of conversion.
Accrued interest and any principal amount not converted to shares of stock
will be paid in cash. A consultant to the Company, and a stockholder,
Spectrum Financial, Inc. entered into an agreement with the Company whereby it
assumed the Company's obligation to exchange shares it owned upon request of
conversion by a debenture holder.
The Company had cash of $73,437 as of June 30, 1999 and receivables totaling
$284,336 from customers, of which $160,276 (56% of total receivables) was
current, Management has reviewed the collectibility of these accounts, and
determined that the collection is probable.
The Company has advanced funds to Jaguar, Inc. (a shareholder), Spectrum
Financial, Inc. (a shareholder) and Southern Properties Management, Inc. in
the form of notes receivable totaling $116,000 as of June 30, 1999. The terms
of the notes call for the Company to be paid interest of 6%, are due June 30,
1999 and are unsecured. Management believes these amounts to be collectable.
The Company's accounts payable and accrued expenses total $424,871 as of June
30, 1999. This compares to $278,557 as of December 31, 1998. The Company's
obligations under these accounts have aged since December 31, 1998, with
$302,338 of these amounts owed for more than ninety days.
The Company is considering various means to obtain long-term financing to
support its acquisition plans and current operation requirements. However,
the Company's ability to fund its obligations under its remaining debentures
and notes payable, with over $465,000 due in the next one hundred twenty days,
is not certain without additional long-term financing or capital injection.
The Company's total obligations due within the next one hundred twenty days is
$1,401,450, exclusive of obligations under capital leases and other operating
lease obligations.
PART II
OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Since the end of the fiscal year ended December 31, 1998, and through the end
of the quarter ended June 30, 1999, the Company has sold the following shares
of common stock of the Company without registration under the Securities Act
of 1933:
a. On January 14, 1999 the Company issued 159,995 shares of common stock
to Underwriters Trust, controlled by Charles Coburn, Trustee, a consultant of
the Company. The shares were issued for consulting services under the
Company's Non-Qualified Stock Option Plan dated October 7, 1998.
b. On January 14, 1999 the Company issued 117,999 shares of common stock
to Spectrum Financial, Inc., controlled by C. J. Douglas and Virgil Robbins,
consultants to the Company. The shares were issued for consulting services
under the Company's Non-Qualified Stock Option Plan dated October 7, 1998.
c. On January 14, 1999 the Company issued 239,992 shares of common stock
to GCSW Funding Group, controlled by Garvis Wooley, a stockholder of the
Company. The shares were issued for consulting services under the Company's
Non-Qualified Stock Option Plan dated October 7, 1998.
d. On January 19, 1999 the Company issued 306,295 shares of common stock
to Rapid Release Research, L. L. C., a contract promotional company engaged by
the Company. The shares were issued for promotional marketing consulting
services.
e. On January 21, 1999 the Company issued 15,000 shares of common stock to
Dr. Joe S. Wakil, M. D. a consultant and director of the Company. The shares
were issued for consulting services.
f. On January 21, 1999 the Company issued 7,500 shares of common stock to
Ms. Jean Brandau, a consultant to the Company. The shares were issued for
consulting services.
g. On January 21, 1999 the Company issued 5,000 shares of common stock to
Ms. Antoinette Dipuma, an employee of the Company. The shares were issued for
consulting services.
h. On April 29, 1999 the Company issued 50,000 shares of common stock to
Mr. Dale Bachman, an consultant to the Company. The shares were issued for
consulting services in identifying targets for acquisition and are valued at
$25,000 based on 50% current market price.
i. On April 29, 1999 the Company issued 5,000 shares of common stock to
Mr. Curtis W. Poindexter, a consultant to the Company. The shares were issued
for consulting services in identifying targets for acquisition and are valued
at $2,500 based on 50% current market price.
j. On April 29, 1999 the Company issued 2,000 shares of common stock to Mr.
Tim Von Scheele, a consultant to the Company. The shares were issued for
consulting services in identifying targets for acquisition and are valued at
$1,000 based on 50% current market price.
k. On May 14, 1999 the Company issued 230,030 shares of common stock to
Mr. David LeClere, an attorney of the Company. The shares were issued for
legal representation services rendered to the Company.
l. On May 14, 1999 the Company issued 19,970 shares of common stock to Mr.
David LeClere, an attorney of the Company. The shares were issued for legal
representation services rendered to the Company.
m. On May 14, 1999 the Company issued 250,000 shares of common stock to
Spectrum Financial, Inc., a related party to the Company whose principals are
Virgil Robbins and C. J. Douglas, consultants to the Company. The shares were
issued for general consulting services and consultations related to new
acquisitions of the Company.
n. On May 14, 1999 the Company issued 250,000 shares of common stock to
Southern Property Management, Inc., a related party to the Company whose
principal is Garvis Wooley, consultant to the Company. The shares were issued
for general consulting services and consultations related to new acquisitions
of the Company.
o. On May 14, 1999 the Company issued 5,100 shares of common stock to
Sunni M. Wooley, The Company's President. The shares were issued for general
consulting services and consultations related to new acquisitions of the
Company.
p. On May 14, 1999 the Company issued a total of 26,900 shares of common
stock to various employees of the Company. The shares were issued for
services to the Company.
q. On May 14, 1999 the Company issued 128,249 shares of common stock to
Trace Resources, Inc., an independent consultant used in the promotion of the
IDSI subsidiary.
r. On June 4, 1999 the Company issued 197,530 shares of common stock to
Rapid Release Research, L. L. C., a contract promotional company engaged by
the Company. The shares were issued for promotional marketing consulting
services.
s. On June 4, 1999 the Company issued 250,000 shares of common stock to
David LeClere, an attorney of the Company. The shares were issued for legal
representation services rendered to the Company.
t. On June 30, 1999 the Company issued 400,000 shares of common stock to
Jack London in exchange for his ownership interest in Nevada Resort Medical
Services, Ltd. and Practice Management Group Nevada, which were purchased by
the Company.
All of the aforesaid securities set forth immediately above were issued
without registration under the Act by reason of the exemption from
registration afforded by the provisions of Section 4(2) thereof, as
transactions by an issuer not involving any public offering, each recipient of
securities having delivered appropriate investment representations to
Registrant with respect thereto and having consented to the imposition of
restrictive legends upon the certificates evidencing such securities. No
underwriting discounts or commissions were paid in connection with such
issuances.
Item 5. Other Information
Changes in Management
The following table sets forth the current executive officers and directors of
the Company:
Director
Name Age Position(s) Since
Jack London __ Chairman, President and CEO 1999
Dale L. Bachman 51 Director 1998
Sunni M. Wooley 23 Director 1998
Peggy D. Behrens 43 Director and Secretary 1998
Lynn Simon, M.D. 48 Director 1998
Jack London - Mr. London has over seventeen years of experience in healthcare
marketing, hospital administration and public relations. He was the co-owner
of Nevada Resort Medical Services which provides urgent care facilities at the
Imperial Palace Hotel & Casino with a planned location opening soon at Caesars
Palace, which was acquired by the Company in the second quarter of 1999. Mr.
London is the founder of Physician Alliance, the co-founder of Practice
Management Group of Nevada, Inc., which was also acquired by the Company in
the second quarter of 1999. He has served as the Director of the Benefits
Implementation Team and Account Supervisor at the opening of the MGM Grand,
and has served as Director of Marketing for Desert Springs Hospital. Mr.
London serves as a board member of the American Cancer Society, the Arthritis
Foundation of Southern Nevada, and the Nevada School of the Arts.
All of the other officers have previously reported their biographical
information.
The Company presently has no employment contracts with any of its executive
officers. The Company anticipates negotiating and entering into employment
contracts with such persons during the first quarter of 1999.
Mr. Lamar Laster, who was the Chairman and COO of the Company, resigned
effective April 20, 1999.
There are no family relationships among directors or executive officers of the
Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. The following exhibits are included as part of this report:
Exhibit No Description of Exhibit
2.1 Agreement to purchase Nevada Resort Medical Services, LTD, LLC
2.1.1 Note Payable form to Jack London
2.1.2 Note Payable form to Nawaz Qureshi MD
2.1.3 Note Payable form to Rudy R. Manthei DO
2.2 Agreement to purchase Practice Management Group, A Nevada
Corporation
2.2.1 Note Payable form to Don Boyd
2.3 Purchase of interest in American Family Health Care of Nevada, Inc.
10 Employment Agreement of Jack London
(b) No reports on Form 8-K were filed during the quarter covered by this
report.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Consolidated Medical Management, Inc.
___________________________________________
By - Jack London, President, Chairman and CEO
Date: August 13, 1999
Exhibit 2.1 Agreement to purchase Nevada Resort Medical Services, LTD, LLC
AGREEMENT
This Agreement (the "Agreement"), entered into this 4 day of June, 1999, is
by, between, and among Consolidated Medical Management, Inc., a publicly held
Montana corporation (hereinafter the "Purchaser"), Nevada Resort Medical
Services, LTD, LLC, is a privately?held Nevada corporation (hereinafter the
"Private Company"), and the Membership Interest of the Private Company
(hereinafter the "Shareholder").
RECITALS:
WHEREAS, the Purchaser wishes to acquire, and the Shareholder is willing to
sell, all of their shares and options right of the outstanding stock of the
Private Company in exchange for Two Hundred Thousand (200,000) shares of the
voting Rule 144 Common stock of the Purchaser, and Two Hundred Thousand
Dollars ($238,000.00) in cash.
NOW, THEREFORE, based upon the stated premises, which are incorporated herein
by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Purchaser, the Private Company, and the
Shareholder approve and adopt this Agreement and mutually covenant and agree
with each other as follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the Closing Date the Shareholder shall transfer to the Purchaser
certificates for the number of shares of the common stock of the Private Company
described in Schedule "A," attached hereto and incorporated herein, which in
the aggregate shall represent all of the issued and outstanding shares of the
common stock of the Private Company.
1.2 In exchange for the transfer of the common stock of the Private Company
pursuant to subsection 1.1. hereof, the Purchaser shall on the Closing Date
and contemporaneously with such transfer of the common stock of the Private
Company to it by the Shareholder issue and deliver to the Shareholder the
number of shares of common stock of the Purchaser specified on Schedule "A"
hereof.
2. Representations and Warranties of the Shareholder. The Shareholder,
represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
2.1 Ownership of Stock.
a. The Shareholder is the record and beneficial owner and holder of the
number of fully paid and nonassessable shares of the common stock of the
Private Company listed in Schedule "A" hereto as of the date hereof and will
continue to own such shares of the common stock of the Private Company until
the delivery thereof to the Purchaser on the Closing Date and all such shares
of common stock are or will be on the Closing Date owned free and clear of all
liens, encumbrances, charges and assessments of every nature and subject to no
restrictions with respect to transferability. The Shareholder currently has,
and will have at Closing, full power and authority to dispose, assign, and
transfer his shares of the Private Company in accordance with the terms
hereof. The Shareholder currently has, and will have at Closing, full power
and authority to vote his shares of the Private Company, without restriction
of any kind.
b. Except for this Agreement, there are no outstanding options, contracts,
calls, commitments, agreements or demands of any character relating to the
common stock of the Private Company listed in Schedule "A" and owned by the
Shareholders.
2.2 Accuracy of All Statements Made by the Shareholder. No representation
or warranty by the Shareholder in this Agreement, nor any statement,
certificate, schedule, or exhibit hereto furnished or to be furnished by or on
behalf of the Shareholder pursuant to this Agreement, nor any document or
certificate delivered to the Purchaser by the Shareholder pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading.
3. Representations and Warranties of the Private Company. The Private
Company represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
3.1 Organization and Authority. The Private Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
3.2 Capitalization. As of the date of the Closing, the Private Company will
the following members/shareholders which represents all the
members/shareholders that have been duly authorized and validly issued and is
fully paid and nonassessable. There are no memberships, options, warrants,
conversion privileges, or other rights presently outstanding for the purchase
of any authorized but unissued memberships of the Private Company.
3.3 Performance of This Agreement. The execution and performance of this
Agreement and the transfer of stock contemplated hereby have been authorized
by the board of directors of the Private Company.
3.4 Financials. True copies of the financial statements of the Private
Company for March 31, 1999, has been furnished to the Purchaser. Said
financial statements are true and correct in all material respects and present
an accurate and complete disclosure of the financial condition of the Private
Company as of March 31, 1999, and the earnings for the periods covered, in
accordance with generally accepted accounting principles applied on a
consistent basis. Such financial statements meet the requirements of
Regulation S?X and Item 7 of Form 8?K promulgated by the Securities and
Exchange Commission.
3.5 Liabilities. There are no material liabilities of the Private Company,
whether accrued, absolute, contingent or otherwise, which arose or relate to
any transaction of the Private Company, its agents or servants occurring prior
to March 31, 1999, which are not disclosed by or reflected in said financial
statements. As of the date hereof, there are no known circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may hereafter give rise to liabilities, except in the normal course of
business of the Purchaser.
3.6 Absence of Certain Changes or Events. Except as set forth in this
Agreement, since March 31 1999, there has not been (i) any material adverse
change in the business, operations, properties, level of inventory, assets, or
condition of the Private Company, or (ii) any damage, destruction, or loss to
the Private Company (whether or not covered by insurance) materially and
adversely effecting the business, operations, properties, assets, or
conditions of the private Company.
3.7 Litigation. There are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending, or outstanding
against or involving the Private Company or its subsidiaries, if any, or their
assets, properties, or business, nor does the Private Company or its
subsidiaries know, or have reasonable grounds to know, of any basis for any
such proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions. In addition, there are no
material proceedings existing, pending or reasonably contemplated to which any
officer, director, or affiliate of the Private Company or as to which the
Shareholder is a party adverse to the Private Company or any of its
subsidiaries or has a material interest adverse to the Private Company or any
of its subsidiaries.
3.8 Taxes. All federal, state, foreign, county and local income, profits,
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating thereto) and assessments which
are due and payable have been duly reported, fully paid and discharged as
reported by the Private Company, and there are no unpaid taxes which are, or
could become a lien on the properties and assets of the Private Company,
except as provided for in the financial statements of the Private Company, or
have been incurred in the normal course of business of the Private Company
since that date. All tax returns of any kind required to be filed have been
filed and the taxes paid or accrued.
3.9 Hazardous Materials. No hazardous material has been released, placed,
stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently
or previously owned or leased by the Private Company or any of its
subsidiaries.
3.10 Business Plan. All of the information contained in the business plan of
the Private Company, a copy of which has been furnished to the Purchaser, is
true and correct in all material respects and does not contain any untrue
statement of material fact or omit a material fact necessary to make the
statement contained therein not misleading.
3.11 Accuracy of All Statements Made by the Private Company. No
representation or warranty by the Private Company in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be
furnished by or on behalf of the Private Company pursuant to this Agreement,
nor any document or certificate delivered to the Purchaser by the Private
Company pursuant to this Agreement or in connection with actions contemplated
hereby, contains or shall contain any untrue statement of material fact or
omits or shall omit a material fact necessary to make the statements contained
therein not misleading.
4. Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Private Company and to the Shareholder as set forth below.
These representations and warranties are made as an inducement for the Private
Company and the Shareholder to enter into this Agreement and, but for the
making of such representations and warranties and their accuracy, the Private
Company and the Shareholder would not be parties hereto.
4.1 Organization and Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Montana with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
4.2 Capitalization. As of the date of the Closing, the Purchaser will
have a total of no more than 7,303,057 shares of common stock issued and
outstanding, including the shares to be issued to the Shareholder. All of the
shares will have been duly authorized and validly issued and will be fully
paid and nonassessable. Except for the Purchaser's obligations hereunder with
respect to the shares to be issued pursuant to subsection 1.2 hereof, there
are no options, warrants, conversion privileges, or other rights presently
outstanding for the purchase of any authorized but unissued stock of the
Purchaser. As of the Closing, the Articles of Incorporation, as amended, of
the Purchaser (the "Purchaser Articles") and as currently in effect shall be
in the form previously furnished to the Private Company. The rights,
preferences, and privileges of the common stock shall be as set forth in the
Purchaser Articles.
4.3 Performance of This Agreement. The execution and performance of this
Agreement and the issuance of stock contemplated hereby have been authorized
by the board of directors of the Purchaser.
4.4 Financials. True copies of the financial statements of the Purchaser for
the fiscal year ended December 31, 1998, and the period ended March 31, 1999,
have been delivered by the Purchaser to the Private Company. These statements
have been examined and certified by Roberts, Cherry & Company, Certified
Public Accountants. Said financial statements are true and correct in all
material respects and present an accurate and complete disclosure of the
financial condition of the Purchaser as of March 31, 1999, and the earnings
for the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Purchaser, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Purchaser, its agents or servants which are not disclosed
by or reflected in said financial statements. As of the date hereof, there are
no known circumstances, conditions, happenings, events or arrangements,
contractual or otherwise, which may hereafter give rise to liabilities, except
in the normal course of business of the Purchaser.
4.6 Litigation. There are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending, or outstanding
against or involving the Purchaser or its subsidiaries, if any, or their
assets, properties, or business, nor does the Purchaser or its subsidiaries
know, or have reasonable grounds to know, of any basis for any such
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions. In addition, there are no material
proceedings existing, pending or reasonably contemplated to which any officer,
director, or affiliate of the Purchaser is a party adverse to the Purchaser or
any of its subsidiaries or has a material interest adverse to the Purchaser or
any of its subsidiaries.
4.7 Taxes. All federal, state, foreign, county and local income, profits,
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating thereto) and assessments which
are due and payable have been duly reported, fully paid and discharged as
reported by the Purchaser, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Purchaser, except as
provided for in the financial statements of the Purchaser, or have been
incurred in the normal course of business of the Purchaser since that date.
All tax returns of any kind required to be filed have been filed and the taxes
paid or accrued.
4.8 Hazardous Materials. No hazardous material has been released, placed,
stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently
or previously owned or leased by the Purchaser or any of its subsidiaries,
except as set forth in the financial statements of the Purchaser.
4.9 Legality of Shares to be Issued. The shares of common stock of the
Purchaser to be issued by the Purchaser pursuant to this Agreement, when so
issued and delivered, will have been duly and validly authorized and issued by
the Purchaser and will be fully paid and nonassessable.
4.10 Accuracy of All Statements Made by the Purchaser. No representation or
warranty by the Purchaser in this Agreement, nor any statement, certificate,
schedule, or exhibit hereto furnished or to be furnished by the Purchaser
pursuant to this Agreement, nor any document or certificate delivered to the
Private Company or the Shareholder pursuant to this Agreement or in connection
with actions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits to state or shall omit to state a material
fact necessary to make the statements contained therein not misleading.
5. Covenants of the Parties.
5.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by the Private Company,
if not previously furnished, such entity shall deliver to the Purchaser copies
of the Articles of Incorporation, as amended, and the current bylaws of the
Private Company, and copies of the resolutions duly adopted by the board of
directors of the Private Company approving this Agreement and the transactions
herein contemplated.
b. Simultaneous with the execution of this Agreement by the Purchaser, if not
previously furnished, such entity shall deliver to the Private Company copies
of the Purchaser Articles, and the current bylaws of the Purchaser, and copies
of the resolutions duly adopted by the board of directors of the Purchaser
approving this Agreement and the transactions herein contemplated.
5.2 Access to Information.
a. The Purchaser and its authorized representatives shall have full access
during normal business hours to all properties, books, records, contracts, and
documents of the Private Company, and the Private Company shall furnish or
cause to be furnished to the Purchaser and its authorized representatives all
information with respect to its affairs and business as the Purchaser may
reasonably request. The Purchaser shall hold, and shall cause its
representatives to hold confidential, all such information and documents,
other than information that (i) is in the public domain at the time of its
disclosure to the Purchaser; (ii) becomes part of the public domain after
disclosure through no fault of the Purchaser; (iii) is known to the Purchaser
or any of its officers or directors prior to disclosure; or (iv) is disclosed
in accordance with the written consent of the Private Company. In the event
this Agreement is terminated prior to Closing, the Purchaser shall, upon the
written request of the Private Company, promptly return all copies of all
documentation and information provided by the Private Company hereunder.
b. The Private Company and its authorized representatives shall have full
access during normal business hours to all properties, books, records,
contracts, and documents of the Purchaser, and the Purchaser shall furnish or
cause to be furnished to the Private Company and its authorized
representatives all information with respect to its affairs and business the
Private Company may reasonably request. The Private Company shall hold, and
shall cause its representatives to hold confidential, all such information and
documents, other than information that (i) is in the public domain at the time
of its disclosure to the Private Company; (ii) becomes part of the public
domain after disclosure through no fault of the Private Company; (iii) is
known to the Private Company or any of its officers or directors prior to
disclosure; or (iv) is disclosed in accordance with the written consent of the
Purchaser. In the event this Agreement is terminated prior to Closing, the
Private Company shall, upon the written request of the Purchaser, promptly
return all copies of all documentation and information provided by the
Purchaser hereunder.
5.3 Actions Prior to Closing. From and after the date of this Agreement
and until the Closing Date:
a. The Purchaser and the Private Company shall each carry on its business
diligently and substantially in the same manner as heretofore, and neither
party shall make or institute any unusual or novel methods of purchase, sale,
management, accounting or operation.
b. Neither the Purchaser nor the Private Company shall enter into any contract
or commitment, or engage in any transaction not in the usual and ordinary
course of business and consistent with its business practices.
c. Neither the Purchaser nor the Private Company shall amend its Articles of
Incorporation or bylaws or make any changes in authorized or issued capital
stock, except as provided in this Agreement.
d. The Purchaser and the Private Company shall each use its best efforts
(without making any commitments on behalf of the company) to preserve its
business organization intact.
e. Neither the Purchaser nor the Private Company shall do any act or omit to
do any act, or permit any act or omission to act, which will cause a material
breach of any material contract, commitment, or obligation of such party.
f. The Purchaser and the Private Company shall each duly comply with all
applicable laws as may be required for the valid and effective issuance or
transfer of stock contemplated by this Agreement.
g. Neither the Purchaser nor the Private Company shall of any property or
assets, except products sold in the ordinary course of business.
h. The Purchaser and the Private Company shall each promptly notify the other
of any lawsuits, claims, proceedings, or investigations that may be
threatened, brought, asserted, or commenced against it, its officers or
directors involving in any way the business, properties, or assets of such
party.
5.4 Shareholders' Meeting or Consent. The Purchaser shall promptly submit
this Agreement and the transactions contemplated hereby for the approval of
its stockholders and, subject to the fiduciary duties of the Board of
directors of the Purchaser under applicable law, shall use its best efforts to
obtain stockholder approval and adoption of this Agreement and the
transactions contemplated hereby. In connection with such meeting of
stockholders, the Purchaser shall prepare a proxy or information statement to
be furnished to the shareholders of the Purchaser setting forth information
about this Agreement and the transactions contemplated hereby. The Private
Party shall promptly furnish to the Purchaser all information, and take such
other actions, as may reasonably be requested in connection with any action to
be taken by the Purchaser in connection with the immediately preceding
sentence. The Private Company shall have the right to review and provide
comments to the proxy or information statement prior to mailing to the
shareholders of the Purchaser.
5.5 No Covenant as to Tax or Accounting Consequences. It is expressly
understood and agreed that neither the Purchaser nor its officers or agents
has made any warranty or agreement, expressed or implied, as to the tax or
accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
5.6 Indemnification. The Private Company and the Shareholder, severally and
not jointly, shall indemnify Purchaser for any loss, cost, expense, or other
damage (including, without limitation, attorneys' fees and expenses) suffered
by Purchaser resulting from, arising out of, or incurred with respect to the
falsity or the breach of any representation, warranty, or covenant made by the
Private Company or the Shareholder herein, and any claims arising from the
operations of the Private Company prior to the Closing Date. Purchaser shall
indemnify and hold the Private Company and the Shareholder harmless from and
against any loss, cost, expense, or other damage (including, without
limitation, attorneys' fees and expenses) resulting from, arising out of, or
incurred with respect to, or alleged to result from, arise out of or have been
incurred with respect to, the falsity or the breach of any representation,
covenant, warranty, or agreement made by Purchaser herein, and any claims
arising from the operations of Purchaser prior to the Closing Date. The
indemnity agreement contained herein shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any party
and shall survive the consummation of the transactions contemplated by this
Agreement.
5.7 Publicity. The parties agree that no publicity, release, or other public
announcement concerning this Agreement or the transactions contemplated by
this Agreement shall be issued by any party hereto without the advance
approval of both the form and substance of the same by the other parties and
their counsel, which approval, in the case of any publicity, release, or other
public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
5.8 Expenses. Except as otherwise expressly provided herein, each party to
this Agreement shall bear its own respective expenses incurred in connection
with the negotiation and preparation of this Agreement, in the consummation of
the transactions contemplated hereby, and in connection with all duties and
obligations required to be performed by each of them under this Agreement.
5.9 Further Actions. Each of the parties hereto shall take all such
further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the Closing Date shall be
subject to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Private Company and the Shareholder in this Agreement
or given on their behalf hereunder shall be substantially accurate in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as of the
Closing Date.
6.2 Performance of Obligations and Covenants. The Private Company and the
Shareholder shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by them
prior to or at the Closing.
6.3 Officer's Certificate. The Purchaser shall have been furnished with a
certificate (dated as of the Closing Date and in form and substance reasonably
satisfactory to the Purchaser), executed by an executive officer of the
Private Company, certifying to the fulfillment of the conditions specified in
subsections 6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or any
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated
by this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall not have
occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Private Company to conduct its business
or the earning power thereof on the same basis as in the past.
6.6 Shareholders' Approval. The holders of not less than a majority of the
outstanding common stock of the Purchaser shall have voted for authorization
and approval of this Agreement and the transactions contemplated hereby.
6.7 Shareholders' Execution of Agreement. This Agreement shall have been
duly executed and delivered by each of the parties owning in the aggregate all
of the outstanding stock of the Private Company as of the Closing Date.
7. Conditions Precedent to Obligations of the Private Company and the
Shareholder. Each and every obligation of the Private Company and the
Shareholder to be performed on the Closing Date shall be subject to the
satisfaction prior thereto of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties made by the Purchaser in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date.
7.2 Performance of Obligations and Covenants. The Purchaser shall have
performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
7.3 Officer's Certificate. The Private Company shall have been furnished with
a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to the Private Company), executed by an executive
officer of the Purchaser, certifying to the fulfillment of the conditions
specified in subsections 7.1 and 7.2 hereof.
7.4 No Litigation or Proceedings. There shall be no litigation or any
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated
by this Agreement or which seeks substantial damages in respect thereof.
7.5 No Material Adverse Change. As of the Closing Date there shall not have
occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Purchaser to conduct its business.
7.6 No Material Liabilities of Purchaser. As of the Closing Date the
Purchaser shall have no liabilities which in the aggregate exceed $50,000.00,
that are not disclosed and the corporation balance sheet.
8. Securities Law Provisions.
8.1 Restricted Securities. Each of the parties hereto, severally and not
jointly, represents that he, she, or it is aware that the shares issued or
transferred to him, her, or it will not have been registered pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), or any state securities
act, and thus will be restricted securities as defined in Rule 144 promulgated
by the Securities and Exchange Commission (the "SEC"). Therefore, under current
interpretations and applicable rules, he, she, or it will probably have to
retain such shares for a period of at least one year and at the expiration of
such one year period his, her, or its sales may be confined to brokerage
transactions of limited amounts requiring certain notification filings with
the SEC and such disposition may be available only if the issuer is current
in its filings with the SEC under the Securities Exchange Act of 1934, as
amended, or other public disclosure requirements.
8.2 Non-distributive Intent. Each of the parties hereto, severally and not
jointly, covenants and warrants that the shares received are acquired for his,
her, or its own account and not with the present view towards the distribution
thereof and he, she, or it will not dispose of such shares except (i) pursuant
to an effective registration statement under the 1933 Act, or (ii) in any
other transaction which, in the opinion of counsel acceptable to the issuer,
is exempt from registration under the 1933 Act, or the rules and regulations
of the SEC thereunder. In order to effectuate the covenants of this
subsection, an appropriate legend will be placed upon each of the certificates
of common stock issued or transferred pursuant to this Agreement, and stop
transfer instructions shall be placed with the transfer agent for the
securities.
8.3 Evidence of Compliance with Private Offering Exemption. Each of the
parties hereto, severally and not jointly, hereby represents and warrants that
he, she, or it, either individually or together with his, her, or its
representative, has such knowledge and experience in business and financial
matters that he, she, or it is capable of evaluating the risks of this
Agreement and the transactions contemplated hereby, and that the financial
capacity of such party is of such proportion that the total cost of such
person's commitment in the shares would not be material when compared with
his, her, or its total financial capacity. Upon the written request of the
issuer of the securities issued or transferred pursuant to this Agreement, any
party hereto shall provide such issuer with evidence of compliance with the
requirements of any federal or state exemption from registration. The
Purchaser and the Private Company shall each file, with the assistance of the
other and its respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by each of them to be necessary or
appropriate in an effort to document reliance on such exemptions, unless an
exemption requiring no filing is available in the particular jurisdiction, all
to the extent and in the manner as may be deemed by such parties to be
appropriate.
9. Closing.
9.1 Time and Place. The Closing of this transaction ("Closing") shall take
place at 11829 Fla. Blvd. Baton Rouge, La. 70816, at 4:00 PM on June 4, 1999,
or at such other time and place as the parties hereto shall agree upon. Such
date is referred to in this Agreement as the "Closing Date. "
9.2 Documents To Be Delivered by the Private Company and the Shareholder. At
the Closing the Private Company and the Shareholder shall deliver to the
Purchaser the following documents:
a. Certificates for the number of shares of common Company in the manner
and form required by subsection 1.1 hereof.
b. The certificate required pursuant to subsection 6.3 hereof.
c. Such other documents of transfer, certificates c documents as the
Purchaser may reasonably request.
9.3 Documents To Be Delivered by the Purchaser. At the Closing shall deliver
to the Private Company and the Shareholder the following documents:
a. Certificates for the number of shares of common as determined in
sub?section 1.2 hereof.
b. The certificate required pursuant to subsection 7.3 hereof.
c. Such other documents of transfer, certificates of and documents as the
Private Company and the Shareholder may reasonably request.
10. Termination. This Agreement may be terminated by the Purchaser or the
Private Company by notice to the other if, (i) at any time prior to the
Closing Date any event shall have occurred or any state of facts shall exist
that renders any of the conditions to its or their obligations to consummate
the transactions contemplated by this Agreement incapable of fulfillment, or
(ii) on July 31, 1999, if the Closing shall not have occurred. Following
termination of this Agreement no party shall have liability to another party
relating to such termination, other than any liability resulting from the
breach of this Agreement by a party prior to the date of termination.
11. Miscellaneous.
1 1.1 Notices. All communications provided for herein shall be in writing and
shall be deemed to be given or made when served personally or when deposited
in the United States mail, certified return receipt requested, addressed as
follows, or at such other address as shall be designated by any party hereto
in written notice to the other party hereto delivered pursuant to this
subsection:
Purchaser: Consolidated Medical Management, Inc.
11829 Fla. Blvd.
Baton Rouge, Louisiana 70816
Attention: Sunni M. Wooley
Private Company: Jack London
3075 E. Flamingo Rd. Suite 112
Las Vegas, Nevada 89121
11.2 Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder.
11.3 Assignment. This Agreement may not be assigned in whole or in part by the
parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
11.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
11.5 Partial Invalidity. If any term, covenant, condition, or provision of
this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition, or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
11.6 Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, prior discussions, letters of
intent, and preliminary agreements between the parties hereto relating to the
subject matter of this Agreement.
11.7 Interpretation of Agreement. This Agreement shall be interpreted and
construed as if equally drafted by all parties hereto.
11.8 Survival of Covenants. Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall
remain in full force and effect until the obligations of such party hereunder
have been fully satisfied.
11.9 Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
11.10 Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated, or discharged except by means of a written supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
11.11 Full Knowledge. By their signatures, the parties acknowledge that they
have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
terms and conditions of this Agreement.
11.12 Headings. The descriptive headings of the various sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
11.13 Counterparts. This Agreement may be executed in two or more partially or
fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory, but all of which together shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement as of
the day and year first above written.
PURCHASER: CONSOLIDATED MEDICAL MANAGEMENT, INC.
By: ______________________________________________
Sunni M. Wooley President
PRIVATE COMPANY: NEVADA RESORT MEDICAL SERVICES, LTD, LLC
MEMBERSHIP: 21.37 % INTEREST
By: ___________________________________________
Jack London Owner
MEMBERSHIP: 11.55 % INTEREST
___________________________________________
Nawaz Qureshi, MD
MEMBERSHIP: 67.08 % INTEREST
___________________________________________
Rudy R. Manthei, DO
SCHEDULE "A"
TO THE AGREEMENT
NAME OF NO. OF SHARES OF NO. OF SHARES OF
SHAREHOLDER THE PRIVATE COMPANY THE PURCHASER TO
TO BE TRANSFERRED BE ISSUED OR CASH
Jack G. London,. 21.37 % Membership Interest 200,000 shares &
$ 50,861.00 (Note)
Nawaz Qureshi MD 11.55 % Membership Interest $ 27,489.00 (Note)
Rudy R. Manthel DO 67.08 % Membership Interest $ 159,650.00 (Note)
Exhibit 2.1.1 Note Payable form to Jack London
PROMISSORY NOTE
DATE: June 4, 1999
MAKER: Consolidated Medical Management, Inc.
PAYEE: Jack G. London
PLACE FOR PAYMENT: 3075 E Flamingo Rd. Suite 112, Las Vegas, Nv. 89121
PRINCIPAL AMOUNT: Fifty Thousand Eight Hundred Sixty One Dollars ($50,861.00)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM THE DUE DATE:
10%
TERMS OF PAYMENT (principal and interest):
Principal is due on or before August 4, 1999.
Maker promises to pay to the Order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above.
If this Note is given to an attorney for collection, or if suit is
brought for collection, or if it is collected through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee reasonable attorney's
fees in addition to other amount due. Reasonable attorney's fees shall be ten
percent (10%) of all amounts due unless either party pleads otherwise.
Nothing in this Note shall authorize the collection of interest in excess
of the highest rate allowed by law.
This note is secured by a 21.37% membership/shareholder interest in
Nevada Resort Medical Services, LTD, LLC, organized in the State of Nevada,
Limited-Liability Company Charter.
This Note shall be construed in accordance with and governed by the laws
of Louisiana, without regard to conflict of law principles.
Consolidated Medical Management, Inc.
By: ___________________________
Sunni M. Wooley President
Exhibit 2.1.2 Note Payable form to Nawaz Qureshi MD
PROMISSORY NOTE
DATE: June 4, 1999
MAKER: Consolidated Medical Management, Inc.
PAYEE: Nawaz Qureshi MD
PLACE FOR PAYMENT: 3075 E Flamingo Rd. Suite 112, Las Vegas, Nv. 89121
PRINCIPAL AMOUNT: Twenty Seven Thousand Four Hundred Eighty Nine Dollars
($27,489.00)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM THE DUE DATE:
10%
TERMS OF PAYMENT (principal and interest):
Principal is due on or before August 4, 1999.
Maker promises to pay to the Order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above.
If this Note is given to an attorney for collection, or if suit is
brought for collection, or if it is collected through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee reasonable attorney's
fees in addition to other amount due. Reasonable attorney's fees shall be ten
percent (10%) of all amounts due unless either party pleads otherwise.
Nothing in this Note shall authorize the collection of interest in excess
of the highest rate allowed by law.
This note is secured by a 11.55% membership/shareholder interest in
Nevada Resort Medical Services, LTD, LLC, organized in the State of Nevada,
Limited-Liability Company Charter.
This Note shall be construed in accordance with and governed by the laws
of Louisiana, without regard to conflict of law principles.
Consolidated Medical Management, Inc.
By: ___________________________
Sunni M. Wooley President
Exhibit 2.1.3 Note Payable form to Rudy R. Manthei DO
PROMISSORY NOTE
DATE: June 4, 1999
MAKER: Consolidated Medical Management, Inc.
PAYEE: Rudy R. Manthei DO
PLACE FOR PAYMENT: 3075 E Flamingo Rd. Suite 112, Las Vegas, Nv. 89121
PRINCIPAL AMOUNT: One Hundred Fifty Nine Thousand Six Hundred Fifty Dollars
($159,650.00)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM THE DUE DATE:
10%
TERMS OF PAYMENT (principal and interest):
Principal is due on or before August 4, 1999.
Maker promises to pay to the Order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above.
If this Note is given to an attorney for collection, or if suit is
brought for collection, or if it is collected through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee reasonable attorney's
fees in addition to other amount due. Reasonable attorney's fees shall be ten
percent (10%) of all amounts due unless either party pleads otherwise.
Nothing in this Note shall authorize the collection of interest in excess
of the highest rate allowed by law.
This note is secured by a 67.08% membership/shareholder interest in
Nevada Resort Medical Services, LTD, LLC, organized in the State of Nevada,
Limited-Liability Company Charter.
This Note shall be construed in accordance with and governed by the laws
of Louisiana, without regard to conflict of law principles.
Consolidated Medical Management, Inc.
By: ___________________________
Sunni M. Wooley President
Exhibit 2.2 Agreement to purchase Practice Management Group, A Nevada
Corporation
AGREEMENT
This Agreement (the "Agreement"), entered into this 4 day of June, 1999, is
by, between, and among Consolidated Medical Management, Inc., a publicly held
Montana corporation (hereinafter the "Purchaser"), and Practice Management
Group, A Nevada Corporation., is a privately?held Nevada corporation
(hereinafter the "Private Company"), and the Shareholders of the Private
Company (hereinafter the "Shareholder").
RECITALS:
WHEREAS, the Purchaser wishes to acquire, and the Shareholder is willing to
sell, all of their shares and options right of the outstanding stock of the
Private Company in exchange for One Hundred Ninety Thousand shares (190,000)
of the voting Rule 144 Common stock of the Purchaser, and Two Hundred
Thousand Dollars ($200,000.00)in cash.
NOW, THEREFORE, based upon the stated premises, which are incorporated herein
by reference, and for and in consideration of the mutual covenants and
agreements set forth herein, the mutual benefits to the parties to be derived
herefrom, and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Purchaser, the Private Company, and the
Shareholder approve and adopt this Agreement and mutually covenant and agree
with each other as follows:
1. Shares to be Transferred and Shares to be Issued.
1.1 On the Closing Date the Shareholder shall transfer to the Purchaser
certificates for the number of shares of the common stock of the Private
Company described in Schedule "A," attached hereto and incorporated herein,
which in the aggregate shall represent all of the issued and outstanding
shares of the common stock of the Private Company.
1.2 In exchange for the transfer of the common stock of the Private Company
pursuant to subsection 1.1. hereof, the Purchaser shall on the Closing Date
and contemporaneously with such transfer of the common stock of the Private
Company to it by the Shareholder issue and deliver to the Shareholder the
number of shares of common stock of the Purchaser specified on Schedule "A"
hereof.
2. Representations and Warranties of the Shareholder. The Shareholder,
represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
2.1 Ownership of Stock.
a. The Shareholder is the record and beneficial owner and holder of the
number of fully paid and nonassessable shares of the common stock of the
Private Company listed in Schedule "A" hereto as of the date hereof and will
continue to own such shares of the common stock of the Private Company until
the delivery thereof to the Purchaser on the Closing Date and all such shares
of common stock are or will be on the Closing Date owned free and clear of all
liens, encumbrances, charges and assessments of every nature and subject to no
restrictions with respect to transferability. The Shareholder currently has,
and will have at Closing, full power and authority to dispose, assign, and
transfer his shares of the Private Company in accordance with the terms
hereof. The Shareholder currently has, and will have at Closing, full power
and authority to vote his shares of the Private Company, without restriction
of any kind.
b. Except for this Agreement, there are no outstanding options, contracts,
calls, commitments, agreements or demands of any character relating to the
common stock of the Private Company listed in Schedule "A" and owned by the
Shareholders.
2.2 Accuracy of All Statements Made by the Shareholder. No representation
or warranty by the Shareholder in this Agreement, nor any statement,
certificate, schedule, or exhibit hereto furnished or to be furnished by or on
behalf of the Shareholder pursuant to this Agreement, nor any document or
certificate delivered to the Purchaser by the Shareholder pursuant to this
Agreement or in connection with actions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading.
3. Representations and Warranties of the Private Company. The Private
Company represents and warrants to the Purchaser as set forth below. These
representations and warranties are made as an inducement for the Purchaser to
enter into this Agreement and, but for the making of such representations and
warranties and their accuracy, the Purchaser would not be a party hereto.
3.1 Organization and Authority. The Private Company is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Nevada with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
3.2 Capitalization. As of the date of the Closing, the Private Company will
have a total of no more than 2,500 shares of common stock issued and
outstanding. All of the shares will have been duly authorized and validly
issued and will be fully paid and nonassessable. There are no options,
warrants, conversion privileges, or other rights presently outstanding for the
purchase of any authorized but unissued stock of the Private Company.
3.3 Performance of This Agreement. The execution and performance of this
Agreement and the transfer of stock contemplated hereby have been authorized
by the board of directors of the Private Company.
3.4 Financials. True copies of the financial statements of the Private
Company for March 31, 1999, has been furnished to the Purchaser. Said
financial statements are true and correct in all material respects and present
an accurate and complete disclosure of the financial condition of the Private
Company as of March 31, 1999, and the earnings for the periods covered, in
accordance with generally accepted accounting principles applied on a
consistent basis. Such financial statements meet the requirements of
Regulation S?X and Item 7 of Form 8?K promulgated by the Securities and
Exchange Commission.
3.5 Liabilities. There are no material liabilities of the Private Company,
whether accrued, absolute, contingent or otherwise, which arose or relate to
any transaction of the Private Company, its agents or servants occurring prior
to March 31, 1999, which are not disclosed by or reflected in said financial
statements. As of the date hereof, there are no known circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may hereafter give rise to liabilities, except in the normal course of
business of the Purchaser.
3.6 Absence of Certain Changes or Events. Except as set forth in this
Agreement, since March 31 1999, there has not been (i) any material adverse
change in the business, operations, properties, level of inventory, assets, or
condition of the Private Company, or (ii) any damage, destruction, or loss to
the Private Company (whether or not covered by insurance) materially and
adversely effecting the business, operations, properties, assets, or
conditions of the private Company.
3.7 Litigation. There are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending, or outstanding
against or involving the Private Company or its subsidiaries, if any, or their
assets, properties, or business, nor does the Private Company or its
subsidiaries know, or have reasonable grounds to know, of any basis for any
such proceedings, investigations or inquiries, product liability or other
claims, judgments, injunctions or restrictions. In addition, there are no
material proceedings existing, pending or reasonably contemplated to which any
officer, director, or affiliate of the Private Company or as to which the
Shareholder is a party adverse to the Private Company or any of its
subsidiaries or has a material interest adverse to the Private Company or any
of its subsidiaries.
3.8 Taxes. All federal, state, foreign, county and local income, profits,
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating thereto) and assessments which
are due and payable have been duly reported, fully paid and discharged as
reported by the Private Company, and there are no unpaid taxes which are, or
could become a lien on the properties and assets of the Private Company,
except as provided for in the financial statements of the Private Company, or
have been incurred in the normal course of business of the Private Company
since that date. All tax returns of any kind required to be filed have been
filed and the taxes paid or accrued.
3.9 Hazardous Materials. No hazardous material has been released, placed,
stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently
or previously owned or leased by the Private Company or any of its
subsidiaries.
3.10 Business Plan. All of the information contained in the business plan of
the Private Company, a copy of which has been furnished to the Purchaser, is
true and correct in all material respects and does not contain any untrue
statement of material fact or omit a material fact necessary to make the
statement contained therein not misleading.
3.11 Accuracy of All Statements Made by the Private Company. No
representation or warranty by the Private Company in this Agreement, nor any
statement, certificate, schedule, or exhibit hereto furnished or to be
furnished by or on behalf of the Private Company pursuant to this Agreement,
nor any document or certificate delivered to the Purchaser by the Private
Company pursuant to this Agreement or in connection with actions contemplated
hereby, contains or shall contain any untrue statement of material fact or
omits or shall omit a material fact necessary to make the statements contained
therein not misleading.
4. Representations and Warranties of the Purchaser. The Purchaser represents
and warrants to the Private Company and to the Shareholder as set forth below.
These representations and warranties are made as an inducement for the Private
Company and the Shareholder to enter into this Agreement and, but for the
making of such representations and warranties and their accuracy, the Private
Company and the Shareholder would not be parties hereto.
4.1 Organization and Good Standing. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Montana with full power and authority to enter into and perform the
transactions contemplated by this Agreement.
4.2 Capitalization. As of the date of the Closing, the Purchaser will
have a total of no more than 7,303,057 shares of common stock issued and
outstanding, including the shares to be issued to the Shareholder. All of the
shares will have been duly authorized and validly issued and will be fully
paid and nonassessable. Except for the Purchaser's obligations hereunder with
respect to the shares to be issued pursuant to subsection 1.2 hereof, there
are no options, warrants, conversion privileges, or other rights presently
outstanding for the purchase of any authorized but unissued stock of the
Purchaser. As of the Closing, the Articles of Incorporation, as amended, of
the Purchaser (the "Purchaser Articles") and as currently in effect shall be
in the form previously furnished to the Private Company. The rights,
preferences, and privileges of the common stock shall be as set forth in the
Purchaser Articles.
4.3 Performance of This Agreement. The execution and performance of this
Agreement and the issuance of stock contemplated hereby have been authorized
by the board of directors of the Purchaser.
4.4 Financials. True copies of the financial statements of the Purchaser for
the fiscal year ended December 31, 1998, and the period ended March 31, 1999,
have been delivered by the Purchaser to the Private Company. These statements
have been examined and certified by Roberts, Cherry & Company, Certified
Public Accountants. Said financial statements are true and correct in all
material respects and present an accurate and complete disclosure of the
financial condition of the Purchaser as of March 31, 1999, and the earnings
for the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis.
4.5 Liabilities. There are no material liabilities of the Purchaser, whether
accrued, absolute, contingent or otherwise, which arose or relate to any
transaction of the Purchaser, its agents or servants which are not disclosed
by or reflected in said financial statements. As of the date hereof, there are
no known circumstances, conditions, happenings, events or arrangements,
contractual or otherwise, which may hereafter give rise to liabilities, except
in the normal course of business of the Purchaser.
4.6 Litigation. There are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending, or outstanding
against or involving the Purchaser or its subsidiaries, if any, or their
assets, properties, or business, nor does the Purchaser or its subsidiaries
know, or have reasonable grounds to know, of any basis for any such
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions. In addition, there are no material
proceedings existing, pending or reasonably contemplated to which any officer,
director, or affiliate of the Purchaser is a party adverse to the Purchaser or
any of its subsidiaries or has a material interest adverse to the Purchaser or
any of its subsidiaries.
4.7 Taxes. All federal, state, foreign, county and local income, profits,
franchise, occupation, property, sales, use, gross receipts and other taxes
(including any interest or penalties relating thereto) and assessments which
are due and payable have been duly reported, fully paid and discharged as
reported by the Purchaser, and there are no unpaid taxes which are, or could
become a lien on the properties and assets of the Purchaser, except as
provided for in the financial statements of the Purchaser, or have been
incurred in the normal course of business of the Purchaser since that date.
All tax returns of any kind required to be filed have been filed and the taxes
paid or accrued.
4.8 Hazardous Materials. No hazardous material has been released, placed,
stored, generated, used, manufactured, treated, deposited, spilled,
discharged, released, or disposed of on or under any real property currently
or previously owned or leased by the Purchaser or any of its subsidiaries,
except as set forth in the financial statements of the Purchaser.
4.9 Legality of Shares to be Issued. The shares of common stock of the
Purchaser to be issued by the Purchaser pursuant to this Agreement, when so
issued and delivered, will have been duly and validly authorized and issued by
the Purchaser and will be fully paid and nonassessable.
4.10 Accuracy of All Statements Made by the Purchaser. No representation or
warranty by the Purchaser in this Agreement, nor any statement, certificate,
schedule, or exhibit hereto furnished or to be furnished by the Purchaser
pursuant to this Agreement, nor any document or certificate delivered to the
Private Company or the Shareholder pursuant to this Agreement or in connection
with actions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits to state or shall omit to state a material
fact necessary to make the statements contained therein not misleading.
5. Covenants of the Parties.
5.1 Corporate Records.
a. Simultaneous with the execution of this Agreement by the Private Company,
if not previously furnished, such entity shall deliver to the Purchaser copies
of the Articles of Incorporation, as amended, and the current bylaws of the
Private Company, and copies of the resolutions duly adopted by the board of
directors of the Private Company approving this Agreement and the transactions
herein contemplated.
b. Simultaneous with the execution of this Agreement by the Purchaser, if not
previously furnished, such entity shall deliver to the Private Company copies
of the Purchaser Articles, and the current bylaws of the Purchaser, and copies
of the resolutions duly adopted by the board of directors of the Purchaser
approving this Agreement and the transactions herein contemplated.
5.2 Access to Information.
a. The Purchaser and its authorized representatives shall have full access
during normal business hours to all properties, books, records, contracts, and
documents of the Private Company, and the Private Company shall furnish or
cause to be furnished to the Purchaser and its authorized representatives all
information with respect to its affairs and business as the Purchaser may
reasonably request. The Purchaser shall hold, and shall cause its
representatives to hold confidential, all such information and documents,
other than information that (i) is in the public domain at the time of its
disclosure to the Purchaser; (ii) becomes part of the public domain after
disclosure through no fault of the Purchaser; (iii) is known to the Purchaser
or any of its officers or directors prior to disclosure; or (iv) is disclosed
in accordance with the written consent of the Private Company. In the event
this Agreement is terminated prior to Closing, the Purchaser shall, upon the
written request of the Private Company, promptly return all copies of all
documentation and information provided by the Private Company hereunder.
b. The Private Company and its authorized representatives shall have full
access during normal business hours to all properties, books, records,
contracts, and documents of the Purchaser, and the Purchaser shall furnish or
cause to be furnished to the Private Company and its authorized
representatives all information with respect to its affairs and business the
Private Company may reasonably request. The Private Company shall hold, and
shall cause its representatives to hold confidential, all such information and
documents, other than information that (i) is in the public domain at the time
of its disclosure to the Private Company; (ii) becomes part of the public
domain after disclosure through no fault of the Private Company; (iii) is
known to the Private Company or any of its officers or directors prior to
disclosure; or (iv) is disclosed in accordance with the written consent of the
Purchaser. In the event this Agreement is terminated prior to Closing, the
Private Company shall, upon the written request of the Purchaser, promptly
return all copies of all documentation and information provided by the
Purchaser hereunder.
5.3 Actions Prior to Closing. From and after the date of this Agreement
and until the Closing Date:
a. The Purchaser and the Private Company shall each carry on its business
diligently and substantially in the same manner as heretofore, and neither
party shall make or institute any unusual or novel methods of purchase, sale,
management, accounting or operation.
b. Neither the Purchaser nor the Private Company shall enter into any contract
or commitment, or engage in any transaction not in the usual and ordinary
course of business and consistent with its business practices.
c. Neither the Purchaser nor the Private Company shall amend its Articles of
Incorporation or bylaws or make any changes in authorized or issued capital
stock, except as provided in this Agreement.
d. The Purchaser and the Private Company shall each use its best efforts
(without making any commitments on behalf of the company) to preserve its
business organization intact.
e. Neither the Purchaser nor the Private Company shall do any act or omit to
do any act, or permit any act or omission to act, which will cause a material
breach of any material contract, commitment, or obligation of such party.
f. The Purchaser and the Private Company shall each duly comply with all
applicable laws as may be required for the valid and effective issuance or
transfer of stock contemplated by this Agreement.
g. Neither the Purchaser nor the Private Company shall of any property or
assets, except products sold in the ordinary course of business.
h. The Purchaser and the Private Company shall each promptly notify the other
of any lawsuits, claims, proceedings, or investigations that may be
threatened, brought, asserted, or commenced against it, its officers or
directors involving in any way the business, properties, or assets of such
party.
5.4 Shareholders' Meeting or Consent. The Purchaser shall promptly submit
this Agreement and the transactions contemplated hereby for the approval of
its stockholders and, subject to the fiduciary duties of the Board of
directors of the Purchaser under applicable law, shall use its best efforts to
obtain stockholder approval and adoption of this Agreement and the
transactions contemplated hereby. In connection with such meeting of
stockholders, the Purchaser shall prepare a proxy or information statement to
be furnished to the shareholders of the Purchaser setting forth information
about this Agreement and the transactions contemplated hereby. The Private
Party shall promptly furnish to the Purchaser all information, and take such
other actions, as may reasonably be requested in connection with any action to
be taken by the Purchaser in connection with the immediately preceding
sentence. The Private Company shall have the right to review and provide
comments to the proxy or information statement prior to mailing to the
shareholders of the Purchaser.
5.5 No Covenant as to Tax or Accounting Consequences. It is expressly
understood and agreed that neither the Purchaser nor its officers or agents
has made any warranty or agreement, expressed or implied, as to the tax or
accounting consequences of the transactions contemplated by this Agreement or
the tax or accounting consequences of any action pursuant to or growing out of
this Agreement.
5.6 Indemnification. The Private Company and the Shareholder, severally and
not jointly, shall indemnify Purchaser for any loss, cost, expense, or other
damage (including, without limitation, attorneys' fees and expenses) suffered
by Purchaser resulting from, arising out of, or incurred with respect to the
falsity or the breach of any representation, warranty, or covenant made by the
Private Company or the Shareholder herein, and any claims arising from the
operations of the Private Company prior to the Closing Date. Purchaser shall
indemnify and hold the Private Company and the Shareholder harmless from and
against any loss, cost, expense, or other damage (including, without
limitation, attorneys' fees and expenses) resulting from, arising out of, or
incurred with respect to, or alleged to result from, arise out of or have been
incurred with respect to, the falsity or the breach of any representation,
covenant, warranty, or agreement made by Purchaser herein, and any claims
arising from the operations of Purchaser prior to the Closing Date. The
indemnity agreement contained herein shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any party
and shall survive the consummation of the transactions contemplated by this
Agreement.
5.7 Publicity. The parties agree that no publicity, release, or other public
announcement concerning this Agreement or the transactions contemplated by
this Agreement shall be issued by any party hereto without the advance
approval of both the form and substance of the same by the other parties and
their counsel, which approval, in the case of any publicity, release, or other
public announcement required by applicable law, shall not be unreasonably
withheld or delayed.
5.8 Expenses. Except as otherwise expressly provided herein, each party to
this Agreement shall bear its own respective expenses incurred in connection
with the negotiation and preparation of this Agreement, in the consummation of
the transactions contemplated hereby, and in connection with all duties and
obligations required to be performed by each of them under this Agreement.
5.9 Further Actions. Each of the parties hereto shall take all such
further action, and execute and deliver such further documents, as may be
necessary to carry out the transactions contemplated by this Agreement.
6. Conditions Precedent to the Purchaser's Obligations. Each and every
obligation of the Purchaser to be performed on the Closing Date shall be
subject to the satisfaction prior thereto of the following conditions:
6.1 Truth of Representations and Warranties. The representations and
warranties made by the Private Company and the Shareholder in this Agreement
or given on their behalf hereunder shall be substantially accurate in all
material respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as of the
Closing Date.
6.2 Performance of Obligations and Covenants. The Private Company and the
Shareholder shall have performed and complied with all obligations and
covenants required by this Agreement to be performed or complied with by them
prior to or at the Closing.
6.3 Officer's Certificate. The Purchaser shall have been furnished with a
certificate (dated as of the Closing Date and in form and substance reasonably
satisfactory to the Purchaser), executed by an executive officer of the
Private Company, certifying to the fulfillment of the conditions specified in
subsections 6.1 and 6.2 hereof.
6.4 No Litigation or Proceedings. There shall be no litigation or any
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated
by this Agreement or which seeks substantial damages in respect thereof.
6.5 No Material Adverse Change. As of the Closing Date there shall not have
occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Private Company to conduct its business
or the earning power thereof on the same basis as in the past.
6.6 Shareholders' Approval. The holders of not less than a majority of the
outstanding common stock of the Purchaser shall have voted for authorization
and approval of this Agreement and the transactions contemplated hereby.
6.7 Shareholders' Execution of Agreement. This Agreement shall have been
duly executed and delivered by each of the parties owning in the aggregate all
of the outstanding stock of the Private Company as of the Closing Date.
7. Conditions Precedent to Obligations of the Private Company and the
Shareholder. Each and every obligation of the Private Company and the
Shareholder to be performed on the Closing Date shall be subject to the
satisfaction prior thereto of the following conditions:
7.1 Truth of Representations and Warranties. The representations and
warranties made by the Purchaser in this Agreement or given on its behalf
hereunder shall be substantially accurate in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date.
7.2 Performance of Obligations and Covenants. The Purchaser shall have
performed and complied with all obligations and covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing.
7.3 Officer's Certificate. The Private Company shall have been furnished with
a certificate (dated as of the Closing Date and in form and substance
reasonably satisfactory to the Private Company), executed by an executive
officer of the Purchaser, certifying to the fulfillment of the conditions
specified in subsections 7.1 and 7.2 hereof.
7.4 No Litigation or Proceedings. There shall be no litigation or any
proceeding by or before any governmental agency or instrumentality pending or
threatened against any party hereto that seeks to restrain or enjoin or
otherwise questions the legality or validity of the transactions contemplated
by this Agreement or which seeks substantial damages in respect thereof.
7.5 No Material Adverse Change. As of the Closing Date there shall not have
occurred any material adverse change, financially or otherwise, which
materially impairs the ability of the Purchaser to conduct its business.
7.6 No Material Liabilities of Purchaser. As of the Closing Date the
Purchaser shall have no liabilities which in the aggregate exceed $50,000.00,
that are not disclosed and the corporation balance sheet.
8. Securities Law Provisions.
8.1 Restricted Securities. Each of the parties hereto, severally and not
jointly, represents that he, she, or it is aware that the shares issued or
transferred to him, her, or it will not have been registered pursuant to the
Securities Act of 1933, as amended (the "1933 Act"), or any state securities
act, and thus will be restricted securities as defined in Rule 144
promulgated by the Securities and Exchange Commission (the "SEC"). Therefore,
under current interpretations and applicable rules, he, she, or it will
probably have to retain such shares for a period of at least one year and at
the expiration of such one year period his, her, or its sales may be confined
to brokerage transactions of limited amounts requiring certain notification
filings with the SEC and such disposition may be available only if the issuer
is current in its filings with the SEC under the Securities Exchange Act of
1934, as amended, or other public disclosure requirements.
8.2 Non-distributive Intent. Each of the parties hereto, severally and not
jointly, covenants and warrants that the shares received are acquired for his,
her, or its own account and not with the present view towards the distribution
thereof and he, she, or it will not dispose of such shares except (i) pursuant
to an effective registration statement under the 1933 Act, or (ii) in any
other transaction which, in the opinion of counsel acceptable to the issuer,
is exempt from registration under the 1933 Act, or the rules and regulations
of the SEC thereunder. In order to effectuate the covenants of this
subsection, an appropriate legend will be placed upon each of the certificates
of common stock issued or transferred pursuant to this Agreement, and stop
transfer instructions shall be placed with the transfer agent for the
securities.
8.3 Evidence of Compliance with Private Offering Exemption. Each of the
parties hereto, severally and not jointly, hereby represents and warrants that
he, she, or it, either individually or together with his, her, or its
representative, has such knowledge and experience in business and financial
matters that he, she, or it is capable of evaluating the risks of this
Agreement and the transactions contemplated hereby, and that the financial
capacity of such party is of such proportion that the total cost of such
person's commitment in the shares would not be material when compared with
his, her, or its total financial capacity. Upon the written request of the
issuer of the securities issued or transferred pursuant to this Agreement, any
party hereto shall provide such issuer with evidence of compliance with the
requirements of any federal or state exemption from registration. The
Purchaser and the Private Company shall each file, with the assistance of the
other and its respective legal counsel, such notices, applications, reports,
or other instruments as may be deemed by each of them to be necessary or
appropriate in an effort to document reliance on such exemptions, unless an
exemption requiring no filing is available in the particular jurisdiction, all
to the extent and in the manner as may be deemed by such parties to be
appropriate.
9. Closing.
9.1 Time and Place. The Closing of this transaction ("Closing") shall take
place at 11829 Fla. Blvd., Baton Rouge, La. 70816, at 4:00 PM on June 4, 1999,
or at such other time and place as the parties hereto shall agree upon. Such
date is referred to in this Agreement as the "Closing Date. "
9.2 Documents To Be Delivered by the Private Company and the Shareholder. At
the Closing the Private Company and the Shareholder shall deliver to the
Purchaser the following documents:
a. Certificates for the number of shares of common Company in the manner
and form required by subsection 1.1 hereof.
b. The certificate required pursuant to subsection 6.3 hereof.
c. Such other documents of transfer, certificates c documents as the
Purchaser may reasonably request.
9.3 Documents To Be Delivered by the Purchaser. At the Closing shall deliver
to the Private Company and the Shareholder the following documents:
a. Certificates for the number of shares of common as determined in
sub-section 1.2 hereof.
b. The certificate required pursuant to subsection 7.3 hereof.
c. Such other documents of transfer, certificates of and documents as the
Private Company and the Shareholder may reasonably request.
10. Termination. This Agreement may be terminated by the Purchaser or the
Private Company by notice to the other if, (i) at any time prior to the
Closing Date any event shall have occurred or any state of facts shall exist
that renders any of the conditions to its or their obligations to consummate
the transactions contemplated by this Agreement incapable of fulfillment, or
(ii) on July 31, 1999, if the Closing shall not have occurred. Following
termination of this Agreement no party shall have liability to another party
relating to such termination, other than any liability resulting from the
breach of this Agreement by a party prior to the date of termination.
11. Miscellaneous.
1 1.1 Notices. All communications provided for herein shall be in writing and
shall be deemed to be given or made when served personally or when deposited
in the United States mail, certified return receipt requested, addressed as
follows, or at such other address as shall be designated by any party hereto
in written notice to the other party hereto delivered pursuant to this
subsection:
Purchaser: Consolidated Medical Management, Inc.
11829 Fla. Blvd.
Baton Rouge, Louisiana 70816
Attention: Sunni M. Wooley
Private Company: Jack London
3075 E. Flamingo Rd. Suite 112
Las Vegas, Nevada 89121
11.2 Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder.
11.3 Assignment. This Agreement may not be assigned in whole or in part by the
parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
11.4 Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
11.5 Partial Invalidity. If any term, covenant, condition, or provision of
this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition, or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
11.6 Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, prior discussions, letters of
intent, and preliminary agreements between the parties hereto relating to the
subject matter of this Agreement.
11.7 Interpretation of Agreement. This Agreement shall be interpreted and
construed as if equally drafted by all parties hereto.
11.8 Survival of Covenants. Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall
remain in full force and effect until the obligations of such party hereunder
have been fully satisfied.
11.9 Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
11.10 Amendment. This Agreement or any provision hereof may not be changed,
waived, terminated, or discharged except by means of a written supplemental
instrument signed by the party or parties against whom enforcement of the
change, waiver, termination, or discharge is sought.
11.11 Full Knowledge. By their signatures, the parties acknowledge that they
have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
terms and conditions of this Agreement.
11.12 Headings. The descriptive headings of the various sections or parts of
this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
11.13 Counterparts. This Agreement may be executed in two or more partially or
fully executed counterparts, each of which shall be deemed an original and
shall bind the signatory, but all of which together shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties hereto executed the foregoing Agreement as of
the day and year first above written.
PURCHASER: CONSOLIDATED MEDICAL MANAGEMENT, INC.
By: ______________________________________________
Sunni M. Wooley President
PRIVATE COMPANY: PRACTICE MANGEMENT GROUP OF NEVADA, INC.
By: ______________________________________________
Jack London President
By: ______________________________________________
Don Boyd Secretary
SCHEDULE "A"
TO THE
AGREEMENT
NAME OF NO. OF SHARES OF NO. OF SHARES OF
SHAREHOLDER THE PRIVATE COMPANY THE PURCHASER
TO BE TRANSFERRED TO BE ISSUED
Jack G. London 1,250 shares 190,000 shares
Don Boyd 1,250 shares $200,000.00 (Note)
Exhibit 2.2.1 Note Payable form to Don Boyd
PROMISSORY NOTE
DATE: June 4, 1999
MAKER: Consolidated Medical Management, Inc.
PAYEE: Don Boyd
PLACE FOR PAYMENT: 3075 E Flamingo Rd. Suite 112, Las Vegas, Nv. 89121
PRINCIPAL AMOUNT: Two Hundred Thousand Dollars. ($200,000.00)
ANNUAL INTEREST RATE ON UNPAID PRINCIPAL FROM THE DUE DATE:
10%
TERMS OF PAYMENT (principal and interest):
Principal is due on or before August 4, 1999.
Maker promises to pay to the Order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above.
If this Note is given to an attorney for collection, or if suit is
brought for collection, or if it is collected through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee reasonable attorney's
fees in addition to other amount due. Reasonable attorney's fees shall be ten
percent (10%) of all amounts due unless either party pleads otherwise.
Nothing in this Note shall authorize the collection of interest in excess
of the highest rate allowed by law.
This note is secured by 1,250 share of Practice Management Group, Inc., a
Nevada Corporation, Common Stock.
This Note shall be construed in accordance with and governed by the laws
of Louisiana, without regard to conflict of law principles.
Consolidated Medical Management, Inc.
By: ___________________________
Sunni M. Wooley President
Exhibit 2.3 Purchase of interest in American Family Health Care of Nevada,
Inc.
STOCK SALE AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that Jack G. London, ("Seller"), in
consideration of Ten Thousand shares (10,000) of Rule 144 Common Stock of
Consolidated Medical Management, Inc. and other valuable goods received from
Consolidated Medical Management, Inc.("Buyer"), the receipt and sufficiency of
which are hereby acknowledged, has granted, bargained, sold, conveyed,
transferred, and delivered and by these presents does bargain, sell, grant,
convey, transfer, and deliver unto Buyer the following :
1. Twenty percent (20%) of American Family Health Care of Nevada, Inc. a
Nevada Corporation, DBA ___________________represented by certificate#________
in the amount of _________ shares, endorsed, receipt acknowledged
2 Assignment by Seller of an Option Agreement to purchase the remaining
Eighty percent (80%) of American Family Health Care of Nevada, Inc a Nevada
Corporation to the Buyer.
To have and to hold the same unto Buyer, his executors, administrators, and
assigns forever.
Sellers warrants and represents to Buyer that the title conveyed is good, its
transfer is rightful, and the Property is delivered free from any security
interest or other lien or encumbrance.
Seller, for Seller and for Seller's executors, administrators and assigns,
covenants and agrees with Buyer to warrant and defend title to the Property
hereby sold unto the Buyer, his executors, administrators, and assigns against
all and every person and persons whomsoever.
IN WITNESS WHEREOF, Seller has hereunto executed and delivered this Bill of
Sale this 4 day of June, 1999..
___________________________________________
Jack G. London Owner
Exhibit 10 Employment Agreement of Jack London
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, date this 12th day of May, 1999, is by and
between Jack London (hereinafter referred to as "Executive") and Consolidated
Medical Management, Inc., A Montana corporation (hereinafter referred to as
the "Company").
RECITALS
WHEREAS, the Company desires to employ Executive as President and Chief
Executive Officer and Chairman and Executive desires to accept the position of
President and Chief Executive Officer, and
WHEREAS, in order to retain the services of the Executive in the position
of President and Chief Executive Officer the Company desires to enter into
this employment agreement (the "Agreement") with Executive on such terms and
conditions as are more fully set forth herein.
NOW, THEREFORE, for good and valuable consideration and in consideration
of the promises and mutual covenants contained herein, the parties hereto
agree as follows:
AGREEMENT
1. Employment. The Company hereby agrees to, and does hereby, employ the
Executive and Executive hereby accepts employment with the Company on the
terms and conditions set forth in the Agreement.
2. Term. The term of this Agreement shall be effective as of May 12, 1999
and shall continue for a period of three (3) years thereafter (the "Term").
After the original Term, this Agreement shall continue in effect and shall be
deemed automatically renewed for period of twelve (12) months ("Renewal Term")
unless either party hereto shall notify the other party in writing at least
sixty (60) days prior to the end of the Term or any Renewal Term of their
intention of not renewing this Agreement. Any termination notice given by the
Company must be authorized by the Company's Board of Directors (the "Board of
Directors"). Executive may terminate this Agreement at any time during the
Term or any Renewal Term upon thirty (30) days written notice to the Company.
During the Term or any Renewal Term, the Company agrees not to terminate the
Executive except as set forth in Section 6 of this Agreement.
3. Duties. During the Term or any Renewal Term of this Agreement,
Executive agrees to serve the Company as President and Chief Executive Officer
and in such other offices and directorships of the Company and of its
subsidiaries and related companies (collectively, "Affiliates") to which he
may be elected or appointed, and to perform such other reasonable and
appropriate duties as may be requested of him by the Board of Directors
consistent with serving the position of President and Chief Executive
Officer. In performance of his duties, Executive shall be subject to the
direction of the Board of Directors. The Executive agrees to devote the time
as is necessary to carry out his duties under this Agreement. The principal
place of performance by Executive of his duties hereunder shall be in Las
Vegas, Nevada.
4. Definitions.
(b) Change of Control. A Change of Control shall be deemed to occur at
such times as:
(i) any person or group of affiliated or related person ("Person") is or
becomes the beneficial owner, directly or indirectly, through a purchase,
merger or other acquisition or transaction or series of transactions, of
shares of capital stock, whether presently issued or issued in the future, of
the Company entitling such Person to exercise twenty percent (20%) or more of
the total voting power of all shares of capital stock of the Company entitled
to vote generally in the election of directors; or
(ii) any consolidation of the Company with, or merger of the Company into,
any other Person, any merger of another Person into the Company (other than a
merger (1) which does not result in any reclassification, conversion, exchange
or cancellation of outstanding shares of the Company's capital stock or (2)
which is effected solely to change the jurisdiction of the Company and results
in a reclassification, conversion or exchange of outstanding shares of capital
stock into solely shares of capital stock); or
(iii) a change of the Board of Directors of the Company in which
individuals who constituted the Board of Directors of the Company as of the
date this Agreement is executed cease for any reason to constitute a majority
of directors then in office unless the majority of the Board of Directors has
been recommended to serve on the Board of Directors by Executive.
(b) For Cause. For cause shall be deemed to exist only upon (I) the
Executive being convicted of a felony, (ii) the Executive being convicted for
having embezzled or misappropriated funds of the Company or any of its
Affiliates; or (iii) receipt by Executive of written notification by the Board
of Directors that Executive has willfully failed and continues to willfully
fail to substantially perform his duties and has failed to cure such
deficiencies within a thirty (30) day period after written notification of
such willful failure (other than failure resulting from a Disability, as
defined herein).
5. Compensation.
(a) Salary and Bonuses. As salary during the Term and any Renewal Term,
the Company shall pay the Executive, in accordance with its normal payroll, a
minimum annual salary of Two Hundred Thousand Dollars ($200,000) during the
first year of the Agreement, Two Hundred Twenty Five Thousand Dollars
($225,000) commencing on the first yearly anniversary of this Agreement, Two
Hundred Fifty Thousand Dollars ($250,000) commencing on the second yearly
anniversary of this Agreement, with yearly minimum increases thereafter of
eleven percent (11%) per annum ("Base Salary") such salary to be paid no less
then biweekly. The exact increase shall be set by the Board of Directors but
shall be no less than as set forth above. Executive shall also be entitled to
participate in the Company's bonus plan. Executive shall be entitled to such
bonuses as the compensation committee of the Company (the "Compensation
Committee") or the Board of Directors may periodically award in its
discretion; however, Executive's bonus shall be no less then the largest bonus
awarded to any other employee or executive of the Company.
(b) Fringe Benefits. The Company shall provide Executive with an
automobile allowance of Five Hundred Fifty Dollars ($550.00) per month during
the Term and any Renewal Term. Further, during the Term and any Renewal Term
Executive shall receive all rights and benefits for which he is then eligible
under any pension plan, profit-sharing plan, savings plan, deferred
compensation plan, stock option plan, health and accident plan or arrangement
or any other benefit plan, which the Company provides for any of its employees
or executives which rights and benefits shall be no less then the maximum
rights and benefits any employee or executive of the Company receives.
(c) Medical and Disability Insurance. During the Term and any Renewal
Term, Executive shall receive coverage under the Company's health, dental, eye
and disability insurance programs on terms and benefits no less favorable than
are in existence on the date this Agreement is executed and in no event shall
such insurance programs be less than that of any other employee or executive
of the Company. The disability policy shall provide for Executive to receive
at least sixty percent (60%) of his then Base Salary. Notwithstanding any
provision of this Agreement to the contrary, in the event that Executive's
employment is terminated for any reason other than For Cause, the Company
shall continue to be obligated pursuant to this Section 5© to maintain
such health, dental, eye and disability insurance policy for the benefit of
the Executive as if he were still employed by the Company for the Term or any
Renewal Term of this Agreement plus an additional one (1) year after the
expiration of the Term or any Renewal Term, as applicable, provided such
policy can be procured to cover Executive after termination of employment, and
thereafter Executive shall be entitled to COBRA benefits at the same cost as
other participants of the Company.
(d) Life Insurance. The Company shall obtain and shall pay all premiums
payable with respect to a $1,000,000 term life insurance policy and $1,000,000
of key man life insurance payable to Executive's designated beneficiary.
Notwithstanding any provision of this Agreement to the contrary, in the event
that Executive's employment is terminated for any reason other than For Cause,
the Company shall continue to be obligated pursuant to this Section 5 (d) to
maintain such policies for the benefit of the Executive as if he were still
employed by the Company for one (1) year after the termination of this
Agreement.
(e) On the date this Agreement is executed the Company shall cause to be
issued to Executive One Million (1,000,000) options, which options shall be
immediately vested, to purchase shares of the Company's common stock which
option price shall be equal to the Closing bid price on the date this
Agreement is executed. Such options shall be issued pursuant to a registered
stock option plan and Executive shall be immediately vested.
(f) Expenses. All travel, entertainment and other expenses incident to
the rendering of services by Executive hereunder shall be paid by the
Company. If any such expenses are paid in the first instance by Executive,
the Company shall reimburse him therefor on presentation of the appropriate
documentation required by the Internal Revenue Code and Regulations.
(g) Vacation. Executive shall be entitled to paid vacation of not less
than three (3) weeks per year.
(h) Termination Payments other than For Cause. If there is a Change of
Control and Executive elects to terminate this Agreement or Executive's
employment is terminated by Executive or by the Company other than For Cause,
Executive shall receive from the Company all remaining Base Salary for the
Term and any Renewal Term of this Agreement plus six (6) month's Base Salary,
all other amounts due and payable on the termination date, including but not
limited to accrued or partially earned bonuses, unused, accrued or partially
earned vacation time and all other amounts due to Executive pursuant to this
Agreement. Further, the Company shall be obligated to maintain Executive's
health, dental, eye and disability insurance as set forth in Section 5(a) and
maintain the life insurance as set forth in Section 5(d). Further, if not
otherwise vested, all stock options which have been granted to the Executive
by the Company (either previously or in the future) will immediately vest in
the event this Agreement is not renewed there is a Change of Control and
Executive elects to terminate this Agreement or by the Company other than For
Cause and such options shall be exercisable for a period of one (1) year after
such termination date. All amounts due to Executive pursuant to this Section
5 shall be collectively referred to in this Agreement as compensation.
6. Termination. During the Term or any Renewal Term, Executive may be
discharged by the Company For Cause in which event Executive's employment with
the Company shall cease and the Company shall have no further obligation or
duties under this Agreement, except for compensation accrued under Section
5(a) and 5(b) at the date of termination. In addition, Executive's employment
shall terminate upon the earliest to occur: (i) the death of Executive or (ii)
at the election of the Board of Directors (subject to the Americans with
Disabilities Act), the inability of Executive by reason of physical or mental
disability ("Disability") to continue the proper performance of his duties for
a period of ninety (90) consecutive days in any twelve (12) month period.
Notwithstanding the foregoing, if Executive has received medical advice that
he can return to work within one hundred eighty (180) days then Executive's
employment shall not be terminated. Upon termination of Executive's
employment due to death or Disability the Company shall continue to pay to
Executive or his estate, as the case may be, the compensation otherwise
payable to him under Section 5 for one (1) year.
7. Indemnification. Indemnification of Executive. Company agrees to
defend, hold harmless and indemnify Executive against any and all claims,
actions, causes of action, suits, expenses (including attorney's fees), costs
or any of the liabilities which are in any way related to the Executive's
employment with the Company, to the fullest extent permitted by Chapter 78 of
the Nevada Revised Statutes. Company, for purposes of this Section 7(a),
includes any subsidiary, affiliate, division or any of the predessors or
successors, and its Board of Directors, directors, officers, or shareholders.
8. Office. The Company hereby agrees to assume that certain lease for the
premises commonly known as 3075 E. Flamingo Road, Suite 112, Las Vegas, Nevada
(the "Office"). The primary suites of Executive's employment shall be the
Office. Upon termination of the Lease, or at the discretion of Executive,
before the termination of the Lease, the Company shall provide Executive with
other suitable office space in Las Vegas, Nevada to carry out his duties.
Further, during the Term and any Renewal Term the Company shall provide
Executive with all staffing necessary, including secretarial and reception
services, in order to allow Executive to efficiently carry out his duties
prescribed in this Agreement.
9. Miscellaneous
(a) Notices. Any notice or other communication required or permitted to
be given hereunder shall be made in writing and shall be delivered in person
or mailed by prepaid registered or certified mail, return receipt requested,
addressed to the parties as follows:
If to the Company:
Consolidated Medical Management, Inc.
11829 Florida Blvd
Baton Rouge, LA 70815
If to Executive:
Mr. Jack London
3075 E. Flamingo Rd., Suite 112
Las Vegas, NV 89121
With a copy to:
Ira S. Levine, Esq.
Berkley, Gordon, Levine, Goldstein & Garfinkel, LLP
2700 W. Sahara Avenue, Fifth Floor
Las Vegas, NV 89102
Or to such other address as the party shall have furnished in writing in
accordance with this Section. Such notices or communications shall be
effective upon delivery if delivered in person and either upon actual receipt
or three (3) days after mailing, whichever is earlier, if delivered by mail.
(b) Parties in Interest. This Agreement shall be binding upon and inure
to the benefit of Executive, and it shall be binding upon and inure to the
benefit of the company and any corporation succeeding to all or substantially
all of the business and assets of the Company by merger, consolidation,
purchase of assets or otherwise.
(c) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the employment of Executive by the Company and contains all of the
covenants and agreements between the parties with respect to such employment
in any manner whatsoever. Any modification of this Agreement will be
effective only if it is in writing signed by the party to be charged.
(d) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada without giving effect to the
choice of law or conflicts of laws and rules of such jurisdiction.
(e) Severability. In the event that any term or condition contained in
this Agreement shall for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
condition of this Agreement, but this Agreement shall be construed as if such
invalid or illegal or unenforceable term or condition had never been contained
herein.
(f) Any and all claims, disputes, or controversies arising between the
parties hereto regarding any of the terms of this Agreement or the breach
thereof, on the Written demand of any of the parties hereto, shall be
submitted first to mediation and if the parties cannot resolve their dispute
in mediation, such claim, dispute or contingency shall be submitted to and be
determined by final and binding arbitration held in Las Vegas, Nevada in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association. This agreement to arbitrate shall be specifically enforceable in
any state or federal court of competent jurisdiction in the state of Nevada.
(h) Executive agrees that his salary act forth in Section 5(a) of this
Agreement shall be offset to the extent Executive receives any salary for his
role as serving as an officer of Physician Alliance. However, Executive shall
have no obligation to remain in the employ of Physician Alliance, and if no
longer employed by Physician Alliance for any reason, then Executive shall be
entitled to his full salary as set forth in Section 5(a) of this Agreement.
Notwithstanding anything to the contrary contained in this agreement, CMMI
shall only be responsible for the differential between Executives salary from
Physician Alliance and the amount in Section 5(a) herein, until CMMI receives
sufficient funding from an anticipated Private Placement, at which time CMMI
shall compensate Executive as set forth in Section 5(a) through (h).
IN WITNESS WHEROF, the parties hereto have executed this Agreement on the
dates across from their respective signatures, effective as of the date first
written above.
Date: ________________ CONSOLIDATED MEDICAL MANAGEMENT, INC.
By: _____________________________________
Sunni M. Wooley
Date: ___________________ By: _____________________________________
Jack G. London
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