As filed with the Securities and Exchange Commission on March 16, 1998
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OAK TREE MEDICAL SYSTEMS, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 02-0401674
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
163-03 Horace Harding Expressway, Flushing, New York 11365
(Address of Registrant's principal executive offices and zip code)
Registrant's telephone number, including area code: (718) 961-5224
Settlement Agreement between Oak Tree Medical Systems, Inc.
and William Kedersha
and
Consulting Agreement between Oak Tree Medical Systems, Inc.
and Progressive Planning Associates, Inc.
(Full title of the plan)
Richard P. Greene, P.A.
2455 E Sunrise Blvd. Suite 905, Ft Lauderdale, Florida 33304 (954) 564-6616
(Address, including zip code, and telephone number, including area code, of
agent for service)
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT
OF SECURITIES AMOUNT OFFERING AGGREGATE OF
TO BE TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED SHARE/OPTION PRICE FEE
- -------------------------------------------------------------------------------
KEDERSHA:
Common Stock(1) 22,500 $1.87(2) $42,075 $12.41
DUBBIN:
Common Stock(1) 125,000 $1.87(2) $233,750 $68.96
TOTAL $81.37(3)
- ------------------------------------------------------------------------------
(1) Represents shares issuable under certain conditions to William Kedersha
and Progressive Planning Associates, Inc.
(2) The prices hereof may change prior to the effective date of the
Registration Statement; therefore, such prices are estimated solely for
the purposes of computing the registration fee pursuant to Rule 457(a).
(3) Reflects the required filing fee.
<PAGE>
PART I
Item 1. Plan Information.
Not applicable.
Item 2. Registrant Information and Employee Plan Annual Information.
Not applicable.
PART II
Item 3. Incorporation of Documents by Reference.
The Registrant incorporates the following documents by reference in this
Registration Statement:
(a) The Registrant's Annual Report on Form 10-KSB for the fiscal year
ended May 31, 1997;
(b) The Registrant's Quarterly Report on Form 10-QSB for the quarter
ended November 30, 1997;
(c) The Registrant's Articles of Incorporation and Amendments thereto,
and the Registrant's Bylaws;
(d) All other documents filed by Registrant after the date of this
Registration Statement under Section 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, prior to the filing of a post-effective
amendment to this Registration Statement that registers securities covered
hereunder that remain unsold.
Item 4. Description of Securities.
The class of securities to be offered hereby is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended. The Company's
authorized capitalization is 25,000,000 shares of common stock, $.01 par value,
of which 4,592,025 shares of common stock are issued and outstanding.
Holders of the Company's Common Stock are entitled to one vote per share
on each matter submitted to vote at any meeting of shareholders. Shares of
Common Stock do not carry cumulative voting rights and therefore, holders of a
majority of the outstanding shares of Common Stock will be able to elect the
entire board of directors and, if they do so, minority shareholders would not be
able to elect any members to the board of directors. The Company's board of
directors has authority, without action by the Company's shareholders, to issue
all or any portion of the authorized but unissued shares of Common Stock, which
would reduce the percentage ownership of the Company of its shareholders and
which would dilute the book value of the Common Stock.
Shareholders of the Company have no preemptive rights to acquire
additional shares of Common Stock. The Common Stock is not subject to redemption
and carries no subscription or conversion rights. In the event of liquidation of
the Company, the shares of Common Stock are entitled to share equally in
corporate assets after the satisfaction of all liabilities. Holders of Common
Stock are entitled to receive such dividends as the board of directors may from
time to time declare out of funds legally available for the payment of
dividends. During the last two fiscal years the Company has not paid cash
dividends on its Common
<PAGE>
Stock and does not anticipate that it will pay cash dividends in the foreseeable
future.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Officers and Directors.
The Registrant is a Delaware corporation. The General Corporation Law of
Delaware provides authority for broad indemnification of directors, officers,
employees and agents. The Registrant's Articles of Incorporation, as Amended,
incorporate the indemnification provisions of the General Corporation Law of
Delaware to the fullest extent provided.
The Registrant has entered into indemnification agreements with its
Directors indemnifying them against liability and reasonable costs and expenses
incurred in litigation arising by reason of the fact that he or she is or was a
director, officer, stockholder, employee, or agent of the Registrant, provided
that the director acted in good faith and in a manner reasonably intended to be
in or not opposed to the best interests of the Registrant, and with respect to
any criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits
EXHIBIT DESCRIPTION
- ------- -----------
5.1 Opinion of Richard P. Greene, P.A.
10.1 Settlement Agreement between the Registrant and William Kedersha,
dated September 3, 1997
10.2 Agreement between the Registrant and Progressive Planning
Associates, Inc., dated August 1997
23.1 Consent of Richard P. Greene, P.A.
23.2 Consent of Most Horowitz & Company, LLP, CPA
Item 9. Undertakings.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities offered at that time shall be deemed to be the
initial bona fide offering thereof.
<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing the Registration Statement on Form S-8 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Ft. Lauderdale, State of
Florida, on this 11th day of March, 1998.
OAK TREE MEDICAL SYSTEMS, INC.
By: /s/ HENRY DUBBIN
--------------------------
Henry Dubbin, President
<PAGE>
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
- ------- ----------- ----
5.1 Opinion of Richard P. Greene, P.A.
10.1 Settlement Agreement between the Registrant and
William Kedersha, dated September 3, 1997
10.2 Agreement between the Registrant and Progressive Planning
Associates, Inc., dated August 1997
23.1 Consent of Richard P. Greene, P.A.
23.2 Consent of Most Horowitz & Company, LLP, CPA
Exhibit 5.1
LAW OFFICES
RICHARD P. GREENE, P.A.
INTERNATIONAL BUILDING
2455 EAST SUNRISE BOULEVARD
SUITE 905
FORT LAUDERDALE, FLORIDA 33304
------
TELEPHONE: (954) 564-6616
Fax: (954) 561-0997
March 10, 1998
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oak Tree Medical Systems, Inc.
Gentlemen:
This opinion is given in connection with the registration with the
Securities and Exchange Commission of an aggregate of 147,500 shares of Common
Stock granted by Oak Tree Medical Systems, Inc. (the "Company"). The Shares are
being registered pursuant to a requirement of Section 5 of the Securities Act of
1933, as amended (the "Act") pursuant to a Registration Statement filed with the
Washington, D.C. Office of the United States Securities and Exchange Commission
(the "Registration Statement").
We have acted as counsel to the Company only in connection with the
preparation of the Form S-8 Registration Statement pursuant to which the Shares
were registered, in so acting, have examined the originals and copies of
corporate instruments, certificates and other documents of the Company and
interviewed representatives of the Company to the extent we deemed it necessary,
in order to form the basis for the opinion hereinafter set forth.
In such examination we have assumed the genuineness of all signatures and
authenticity of all documents submitted to me as certified or photostatic
copies. As to all questions of fact material to this opinion which have not been
independently established, we have relied upon statements or certificates of
officers or representatives of the Company.
The 147,500 shares of Common Stock are being registered and distributed
pursuant to the Company's Registration Statement. The shares of Common Stock are
now authorized but unissued.
Based upon the foregoing, we are of the opinion that:
1. The Shares of the Company registered with the Securities and
Exchange Commission, having been issued and sold pursuant to the Registration
Statement, are fully paid and non-assessable and there will be no personal
liability to the owners thereof.
<PAGE>
U.S. Securities and Exchange Commission
March 10, 1998
Page Two
This law firm hereby consents to the use of this opinion in connection
with the Company's Registration Statement and the inclusion of this opinion as
an Exhibit thereto.
Very truly yours,
/s/ RICHARD P. GREENE, P.A.
---------------------------
Richard P. Greene
For the Firm
RPG\evb
Exhibit 10.1
OAK TREE
MEDICAL SYSTEMS, INC.
163-03 HORACE HARDING EXPRESSWAY, FLUSHING, NY 11365
TEL: (718) 460-8400
TEL: (718) 961-6352
FAX: (718) 961-8905
SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is made this 3rd day of September, 1997,
by and between
Oak Tree Medical Systems, Inc. and its various subsidiaries, directors and
officers (hereafter collectively referred to as "Oak Tree") and William Kedersha
("Kedersha"), all such parties collectively referred to as the "Parties".
WITNESSETH
WHEREAS, Kedersha served as Chief Executive Officer of Oak Tree for the period
of time from October, 1996 through April 30, 1997; and
WHERE AS, Kedersha entered into an Employment Agreement with Oak Tree dated
December, 1996 ("Employment Agreement"). Such Employment Agreement finalized the
terms of the employment relationship between Kedersha as Oak Tree's Chief
Executive Officer and Oak Tree as employer; and
WHEREAS, Kedersha claims that monies and other property are due him from Oak
Tree, under the terms of the Employment Agreement; and
WHEREAS, Oak Tree denies that it is in any way indebted to Kedersha; and
WHEREAS, Oak Tree and Kedersha desire to resolve certain of their differences
without resort to litigation;
NOW THEREFORE, in consideration of the mutual covenants, agreements and promises
contained herein and for other consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows, upon the advice and
assistance of their respective counsel:
1. Oak Tree and their respective directors, officers, heirs, successors and
assigns hereby release, remit and forever discharge William Kedersha from
and against any claims, demands, causes of action, suits and liabilities
whatever, whether claimed or known, that any of them has or might
hereafter assert for or on account of any act, event, matter, debt or
obligation arising or occurring prior to the date of this Agreement and
relating in any way to William Kedersha personally, as a shareholder, as
an officer, Chief Executive Officer or director of Oak Tree.
<PAGE>
2. Oak Tree and their respective directors, heirs, successors and assigns
hereby indemnify Kedersha and hold Kedersha harmless from and against any
losses, judgments, or expenses and costs, including those of legal counsel
incurred for Kedersha's defense or other representation, that might
hereafter be incurred, entered against or sustained by Kedersha as a
result of any legal matters or action being filed or a finding by a Court
of competent jurisdiction or any voluntary stipulation by Oak Tree or
Kedersha that Kedersha is indebted to Oak Tree or is or may be liable to
Oak Tree or any others for any acts or omissions occurring while Kedersha
had any relationship with Oak Tree, its officers, directors, employees,
shareholders or others whatsoever. This provision shall not apply to
criminal acts committed by Kedersha.
3. Kedersha and his respective heirs, successors and assigns hereby release,
remit and forever discharge Oak Tree, its directors and officers from and
against any claims, demands, causes of action, suits and liabilities
whatever, whether claimed or known, that any of them has or might
hereafter assert for or on account of any act, event, matter, debt or
obligation arising or occurring prior to the date of this Agreement and
relating in any way to Oak Tree and its obligations to him as a result of
his relationship with Oak Tree while acting as an officer, Chief Executive
Officer or director of Oak Tree.
4. a) Kedersha hereby covenants, warrants and represents that he will not,
within a twenty (20) mile radius of any existing or previously owned Oak
Tree facility and for a period of one (1) year from the date of this
Agreement, directly or indirectly own, manage, operate, finance or
participate in the ownership, management, operation or financing of any
physical therapy facility. Such radial measurement shall also include
such sites as are presently being researched or considered for acquisition
or management by Oak Tree. Oak Tree will provide Kedersha, at the time of
execution of this Agreement, a list of the sites referred to herein.
b) For the term of this provision, Kedersha will not disclose or refer to
any third parties, act as agent or broker, or personally develop or
utilize any business opportunity or confidential information which he
learned of or which came to him while acting as or in relation to his
position as Chief Executive Officer or director of Oak Tree, including
those business acquisition opportunities which Oak Tree may or may not
have finalized, considered or is presently considering. If however, Oak
Tree has terminated negotiations with potential future or previous targets
of acquisition or management, Kedersha may freely approach such parties
after six (6) months has lapsed from Oak Tree's termination of
negotiations.
c) The provisions of this fourth paragraph, except as stated herein, shall
not apply to any relationship Kedersha may have had or has with either
Steve Gelles, Michael Cantor, or Dr. Jose Colon. Kedersha may not,
however, compete in any way with Oak Tree within a twenty (20) mile radius
for one (1) year, as stated previously in paragraph 4. a).
<PAGE>
d) All the provisions of this fourth paragraph shall be immediately null
and void if Oak Tree fails to satisfy all the terms of this Agreement. In
the event that Oak Tree fails to adhere to all the terms of this
Agreement, it is understood that this Agreement will not prevent Kedersha
from seeking any legal remedy that he may have had under his employment
contract prior to the signing of this Agreement
5. The Employment Agreement shall henceforth be considered to be null and
void, except as noted otherwise in this agreement and in the event, Oak
Tree defaults in any of the provisions of this Agreement.
6. All unpaid past due Oak Tree related business expenses placed on the
Kedersha Oak Tree Corporate American Express account shall be paid by
Kedersha. If the unpaid balance of this American Express exceeds $10,000,
Oak Tree will immediately reimburse Kedersha in the amount that exceeds
$10,000. Kedersha will also accept full financial responsibility for the
corporate vehicle (1997 Range Rover) presently being leased through BMW.
7. Kedersha will return any Oak Tree business records (if any) in his
possession at the time of the signing of this Agreement. In the event
Kedersha has knowledge that any such assets are actually in the possession
or control of Oak Tree or others, Kedersha shall cooperate with Oak Tree
in identifying and locating such assets. This provision shall survive the
execution and Release provisions of this Agreement. After Kedersha has
received his stock and after the balance of the shares are delivered to
Frederick C. Veit, Esq., Kedersha shall return the corporate lap top
computer and any related software.
8. Kedersha shall be issued 22,500, unrestricted shares, of Oak Tree Medical
Systems, Inc. common stock within a 14 day period from the signing of this
agreement. Kedersha will be given 7,500 shares within 14 days of the
signing of this document. Kedersha agrees not to sell more than 5,000
shares during the month September and no more than 2.500 shares during the
month of October. The balance of the shares will be delivered Frederick
Veit, Esq. within 14 days following the signing of this agreement. He
will release a minimum of 1,500 shares per month thereafter on the 15th of
each month, beginning October 15st, 1997. Kedersha may sell all, part or
none of the shares immediately upon receipt or thereafter. Kedersha may
sell, in any subsequent month after October 15th, 1997, any or all shares
he has previously received.
9. The Parties hereto warrant and represent that they are duly authorized to
execute this Agreement. The Parties further warrant and represent that
each person signing the Agreement in a representative capacity is also
duly authorized to execute the Agreement on behalf of their respective
principals.
10. This Agreement sets forth in its entirety the understanding of the Parties
as it relates to the subject matter hereof, and there exists among the
Parties no agreements, understandings, representations, warranties,
inducements or consideration except as recited herein. The Agreement may
not be amended or modified in whole or in part except in a writing duly
executed by the Parties.
<PAGE>
11. Neither the fact of this Agreement nor of any of its specific terms shall
constitute or be deemed an admission or acknowledgment of any kind, except
as and to the extent necessary to prove and enforce the terms hereof.
12. This Agreement shall be binding upon the Parties hereto and upon their
respective heirs, successors and assigns.
13. This Agreement may be executed in one or more counterparts and by
different parties on separate counterparts, each of which shall be deemed
an original, but all of which shall constitute one and the same
instrument.
14. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. Actions to enforce this Agreement or
otherwise arising from or concerning this Agreement shall be brought in
Queens County, New York. For purposes of any such action, the Parties
hereby consent to the jurisdiction of the New York Courts and waive any
venue objection(s) that they might otherwise assert.
15. This Agreement shall become effective as of the date first indicated
above.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first above written.
By: /s/ GARY DANZIGER By: /s/ FRED SINGER
--------------------------------------- ---------------------
Gary Danziger, Chief Operating Officer Fred Singer, Board Member
and Board Member
Oak Tree Medical Systems, Inc.
Oak Tree Medical Systems, Inc.
and its subsidiaries
By: /s/ WILLIAM KEDERSHA
--------------------
William Kedersha
By: /s/ HENRY DUBBIN
---------------------------------------
Henry Dubbin, President and Board Member
Oak Tree Medical Systems, Inc.
and its subsidiaries
Exhibit 10.2
AGREEMENT
AGREEMENT dated as of the ______ day of August 1997, by and between Burton
Dubbin, residing at 21394 Marina Cove Road, Unit H-11, North Miami Beach,
Florida 33180 ("Dubbin") and Oak Tree Medical Systems, Inc., having a principal
place of business at 163-03 Horace Harding Expressway, Flushing, New York 11365
(the "Company").
WITNESSETH:
WHEREAS, Dubbin serves as an officer of the Company; and
WHEREAS, Oak Tree and Dubbin are parties to a Stock Option Agreement dated
as of December 3, 1996 (the "Option Agreement"), pursuant to which Dubbin has
been granted options (the "Options") to purchase three hundred seventy five
thousand (375,000) shares of the Company's common stock (the "Option Shares");
and
WHEREAS, the parties desire that Dubbin resign as an officer of the Company
and become a consultant to the Company, and that the Option Agreement be
amended, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein set forth and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
1. RESIGNATION AS OFFICER. Dubbin hereby resigns as an officer of the
Company effective upon execution of this Agreement.
2. AMENDMENT TO OPTION AGREEMENT. The Option Agreement, a copy of which
is annexed hereto as Exhibit A, is hereby amended as follows:
(a) The last sentence of Section 2.1 is hereby deleted in its entirety and
replaced by the following: "The number and kind of shares issuable upon exercise
of the Options and the Exercise Price shall be adjusted upon the occurrence of
the events and in the manner provided on Exhibit B to this Agreement".
(b) Section 2.2 of the Option Agreement is hereby deleted in its entirety
and replaced by the following: "The Options shall vest and become exercisable
immediately upon execution of this Agreement."
<PAGE>
(c) Section 2.3 of the Option Agreement is hereby deleted in its entirety
and replaced by the following: "To the extent not theretofore exercised, the
Options shall terminate and expire at 5:00 p.m., New York time, ten years from
the date hereof.".
(d) Article 5 of the Option Agreement is hereby amended to the extent of
providing that the Company's address for notices shall be 163-03 Horace Harding
Expressway, Flushing, New York 11365.
(e) Section 6.6 of the Option Agreement is hereby amended by permitting
arbitration thereunder to be brought before the American Arbitration Association
of New York, New York or Miami, Florida. Whether such arbitration shall be
maintained in New York or Florida shall be the choice of the party instituting
the arbitration proceeding.
3. APPOINTMENT OF CONSULTANT. Oak Tree hereby engages Dubbin or his
designee ("Consultant") and Consultant hereby agrees to render services to the
Company as a management consultant, strategic planner and advisor.
(a) During the term of this Agreement Consultant shall provide advice to,
undertake for and consult with the Company concerning management, strategic
planning, communicating and negotiating with security holders, corporate
organization and structure, identification of business opportunities and other
general corporate and business matters in connection with the operation of the
business of the Company.
(b) In the event Dubbin designates an entity to serve as Consultant
hereunder, such entity shall accept the terms of the consulting provisions set
forth in this Section 3, in writing, and such writing shall covenant and agree
that the consulting services to be provided by Consultant shall be rendered by
Dubbin.
(c) As consideration for its consulting services hereunder, the Company
agrees to compensate Consultant as described in Section 4.
(d) The term of Consultant's consulting services under this Agreement shall
commence on the date hereof and shall continue for a period of twenty four (24)
months. Except as otherwise specifically provided in this Agreement, no
termination of Consultant's consulting services hereunder shall affect the
Company's other obligations under this Agreement, including without limitation,
the Company's obligations under Sections 2, 5 and 7.
(e) Consultant's services under this Section 3 shall terminate upon the
occurrence of any of the following events: (I) the death of Dubbin; (ii) the
disability of Dubbin, which, for purposes hereof shall mean Consultant's
inability, due to the physical or mental impairment of Dubbin, to perform the
consulting services required hereunder for a period of thirty (30) consecutive
days during any consecutive ninety (90) day
-2-
<PAGE>
period: or (iii) Consultant's failure to perform the consulting duties required
hereunder other than as described in subparagraph (ii) of this paragraph (e). In
the event of the termination of Consultant's services under this Section 3(e),
the Company's obligations under Sections 3 and 4 shall terminate, other than to
pay Consultant all amounts due to it up to the date of termination.
(f) Consultant and the Company hereby acknowledge that Consultant is an
independent contractor. Consultant shall not hold itself out as, nor shall it
take any action from which others might infer, that it is a partner of, agent of
or a joint venturer of the Company. Consultant shall have no authority to bind
the Company to any third party.
4. COMPENSATION TO CONSULTANT. As consideration for consultant's
consulting services, the Company shall compensate Consultant as follows:
(a) The Company shall pay Consultant a fee in the amount of twelve thousand
five hundred dollars ($12,500.00) per month. Such fee shall be payable on or
before the first day of each month, commencing in the month following the month
in which this Agreement is executed, and shall continue for twenty three (23)
consecutive monthly payments thereafter.
(b) Consultant shall be reimbursed by the Company for such reasonable
out-of-pocket expenses as Consultant may incur in performing its services under
this Agreement.
(c) The Company shall issue to Consultant an aggregate of one hundred and
twenty-five thousand (125,000) unregistered shares of the Company's Common Stock
(the "Shares") as follows: (I) a certificate for twenty-five thousand (25,000)
of the Shares, registered in the name of Consultant, shall be delivered to
Consultant simultaneous with the execution of this Agreement; and (ii) twenty
(20) certificates registered in the name of Consultant, each evidencing five
thousand (5,000) of the Shares, shall be delivered to Richard P. Greene, P.A.
(the "Escrowee") simultaneous herewith, to be held by the Escrowee in accordance
with the terms of the Form of Escrow Agreement attached hereto as Exhibit C.
(d) Promptly following the execution of this Agreement, but in no event
later than thirty (30) days following the date hereof, the Company shall prepare
and file a registration statement on Form S-8 (or successor or other applicable
form) under the Securities Act of 1933, as amended (the "Act"). The Company
shall use its best efforts to cause such registration statement to become
effective. Such registration statement shall cover the Shares and, upon the
effective date thereof and subject to the other terms and conditions hereof,
shall entitle Consultant to publicly sell the Shares.
-3-
<PAGE>
(e) Notwithstanding the foregoing:
(i) Dubbin may not sell any of the Shares being held in the escrow
described in paragraph (C) of this Section 4. or any interest therein,
prior to the release of such Shares from escrow;
(ii) Dubbin may not exercise the right to vote any of the Shares
being held in the escrow described in paragraph (C) of this Section 4,
prior to the release of such Shares from escrow; and
(iii) the Company shall neither accrue nor pay dividends on any of
the shares being held in the escrow described in paragraph (C) of this
Section 4, prior to the release of such Shares from escrow.
(e) In the event that the Company terminates Consultant's consulting
services hereunder other than for "Cause" (as defined in Section 1.2 of the
Option Agreement), or Consultant terminates its consulting services hereunder
for "Good Reason" (as defined in Section 1.5 of the Option Agreement), then (I)
all of the Shares then remaining in the escrow described above shall immediately
be delivered to Consultant free and clear of the restrictions set forth in the
Escrow Agreement, and (ii) all unpaid compensation under paragraphs (a) and (b)
of this Section 4 due through the end of the term of Consultant's consulting
services hereunder (as if such termination had not occurred) shall become
immediately due and payable.
5. COVENANT OF THE COMPANY. The Company hereby covenants and agrees that,
for a period of two years following the date hereof, it will not effect a
"reverse split" of its outstanding Common Stock without the prior written
consent of Dubbin.
6. CONFIDENTIALITY. Dubbin will not disclose to any other person, firm or
corporation, nor use for its own benefit, during or after the term of this
Agreement, any trade secrets or other information designated as confidential by
the Company which is or has been acquired by Dubbin in the course of its
performing services to the Company. (A trade secret is information not generally
known to the trade which gives the Company an advantage over its competitors.
Trade secrets can include, by way of example, products or services under
development, production methods and processes, sources of supply, customer
lists, marketing plans and information concerning the filing or pendency of
patent applications). Any management advice rendered by Dubbin pursuant to this
Agreement may not be disclosed publicly in any manner without the prior written
approval of the Company. This provision shall be binding upon Consultant to the
extent that Dubbin designates an entity to perform consulting duties under
Section 3 hereof. The provisions of this Section 6 shall survive the termination
and expiration of this Agreement.
-4-
<PAGE>
7. INDEMNIFICATION. The Company agrees to indemnify and hold Dubbin
harmless from and against all losses, claims, damages, liabilities, costs or
expenses (including reasonable attorneys' fees (collectively the "Liabilities")
joint and several, arising out of this Agreement, whether or not Dubbin is a
party to such dispute. This indemnity shall not apply, however, and Dubbin shall
indemnify and hold the Company, its affiliates, control persons, officers,
employees and agents harmless from and against all liabilities attributable to
the negligence or willful misconduct of Dubbin in the performance of his
services hereunder which gave rise to the losses, claim, damage, liability, cost
or expense sought to be recovered hereunder.
8. CORPORATE AUTHORIZATION. The Company hereby represents and warrants
that this Agreement has been duly authorized by the Company's Board of
Directors and constitutes the valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
9. ASSIGNMENT SUCCESSORS. Except as specifically set forth herein,
Dubbin's rights and duties under this Agreement may not be assigned without the
Company's consent, and any attempted assignment shall be void. Subject to the
foregoing, this Agreement shall be binding on the parties and their respective
successors or assigns.
10. SEVERABILITY. In the event that any term, provision or condition of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of this Agreement shall remain in full force and
effect and shall not be affected, impaired or invalidated thereby.
11. MISCELLANEOUS. This Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and supersedes and cancels
any prior communications, understandings and agreements between the parties.
This Agreement cannot be modified or changed, nor can any of its provisions be
waived, except by written agreement signed by all parties. This Agreement shall
be governed by the laws of the State of Florida. In the event of any dispute as
to the terms of this Agreement, the prevailing party in any litigation shall be
entitled to reasonable attorneys' fees.
-5-
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
OAK TREE MEDICAL SYSTEMS, INC.
By: /s/ GARY DANZIGER
---------------------------------------
Gary Danziger, Chief Operations Officer
/s/ BURTON DUBBIN
-----------------
Burton Dubbin
-6-
Exhibit 23.1
LAW OFFICES
RICHARD P. GREENE, P.A.
INTERNATIONAL BUILDING
2455 EAST SUNRISE BOULEVARD
SUITE 905
FORT LAUDERDALE, FLORIDA 33304
------
TELEPHONE: (954) 564-6616
FAX: (954) 561-0097
March 10, 1998
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Oak Tree Medical Systems, Inc.
Dear Sir or Madam:
This Firm hereby consents to the use of its name in the Registration
Statement on Form S-8 as filed via EDGAR with the Washington, D.C. Office of the
U.S. Securities and Exchange Commission on March 12, 1998, or as soon thereafter
as is reasonably practicable.
Very truly yours,
/s/ RICHARD P. GREENE P.A.
--------------------------
Richard P. Greene
For the Firm
RPG/evb
EXHIBIT 23.2
[LETTERHEAD]
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent the use in this Registration Statement on Form S-8, dated
March 12, 1998, of our report dated November 21, 1997, and December 31, 1997 as
to Notes 13 and 14, relating to the financial statements of Oak Tree Medical
System's, Inc. and Subsidiaries, as of May 31, 1997.
/s/ MOST HOROWITZ & COMPANY, LLP
----------------------------
New York, New York
March 10, 1998
