As filed with the Securities and Exchange Commission on August 21, 1997.
File No. 33-_______
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________-
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________
HEALTH PROFESSIONALS, INC.
(Exact name of issuer as specified in its charter)
Delaware 11-3076108
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2601 East Oakland Park Blvd.
3rd Floor
Fort Lauderdale, Florida 33306
(Address of principal executive offices) (Zip Code)
__________________
AGREEMENT WITH
INTERNATIONAL CORPORATE DEVELOPMENT, INC.
and
CONSULTING AGREEMENT WITH
JIM TILTON & COMPANY
-----------------------------------------
(Full title of the plan)
__________________
William Reiter, President
2601 East Oakland Park Blvd.
3rd Floor
Fort Lauderdale, Florida 33306
Telephone No.: (954) 766-2552
(Name and address of agent for service)
Copy to:
Charles B. Pearlman, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, FL 33301
(954) 763-1200
<PAGE>
================================================================================
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
maximum maximum
offering aggregate Amount of
Title of securities Amount to be price per offering registration
to be registered registered(1) share(1) price(1) fee (1)
================================================================================
Common Stock
($.02 par value) 375,000 shares $0.75 $281,250 $85.23
================================================================================
(1) Pursuant to Rule 457(h), the maximum offering price was calculated based
upon the closing price of the Company's Common Stock on the American Stock
Exchange on August 15, 1997.
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<PAGE>
HEALTH PROFESSIONALS, INC.
CROSS REFERENCE SHEET REQUIRED BY ITEM 501(b) OF REGULATION S-K
Form S-8 Item Number
and Caption Caption in Prospectus
-------------------- ---------------------
1. Forepart of Registration State- Facing Page of Registration
ment and Outside Front Cover Statement and Cover Page of
Page of Prospectus Prospectus
2. Inside Front and Outside Back Inside Cover Page of Pro-
Cover Pages of Prospectus spectus and Outside Cover
Page of Prospectus
3. Summary Information, Risk Fac- Not Applicable
tors and Ratio of Earnings to
Fixed Charges
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Sales by Selling Security
Holders
8. Plan of Distribution Cover Page of Prospectus
and Sales by Selling
Security Holders
9. Description of Securities to be Description of Securities;
Registered Consulting Agreements
10. Interests of Named Experts and Legal Matters
Counsel
11. Material Changes Not Applicable
12. Incorporation of Certain Infor- Incorporation of Certain
mation by Reference Documents by Reference
13. Disclosure of Commission Posi- Indemnification of Direc-
tion on Indemnification for tors and Officers; Under-
Securities Act Liabilities takings
3
<PAGE>
PROSPECTUS
HEALTH PROFESSIONALS, INC.
375,000 Shares of Common Stock
($.02 par value)
Issued Pursuant to
the Company's Consulting Agreement with
International Corporate Development, Inc.
and Consulting Agreement with Jim Tilton & Company
This Prospectus is part of a Registration Statement which registers an
aggregate of 375,000 shares of Common Stock, $.02 par value (such shares being
referred to as the "Shares"), of Health Professionals, Inc. (the "Company" or
"HPI") which have been issued to (i) International Corporate Development, Inc.
("ICD"), a consultant to the Company pursuant to a written Agreement dated July
7, 1997 (the "ICD Consulting Agreement"), providing for the issuance of 300,000
Shares; and (ii) Jim Tilton & Company ("Tilton"), a consultant to the Company,
pursuant to a written Consulting Agreement dated August 5, 1997 (the "Tilton
Consulting Agreement"), providing for the issuance of 75,000 Shares. Tilton is
owned by Jim Tilton and ICD is owned by Donald S. Whitlock. ICD and Tilton
may be sometimes referred to as the "Consultants" and the ICD Consulting
Agreement and the Tilton Consulting Agreement may be referred to as the
"Consulting Agreements." In addition, the Consultants, in their capacity as
selling shareholders, may sometimes hereafter be collectively referred to as the
"Selling Security Holders." All of the Shares are being or have been issued
pursuant to written consulting agreements.
The Company has been advised by the Selling Security Holders that they
may sell all or a portion of the Shares from time to time in the
over-the-counter market, in negotiated transactions, directly or through brokers
or otherwise, and that such Shares will be sold at market prices prevailing at
the time of such sales or at negotiated prices, and the Company will not receive
any proceeds from such sales. The Shares are subject to listing on The American
Stock Exchange.
No person has been authorized by the Company to give any information or to
make any representation other than as contained in this Prospectus, and if given
or made, such information or representation must not be relied upon as having
been authorized by the Company. Neither the delivery of this Prospectus nor any
distribution of the Shares issuable under the terms of the Agreements shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof.
___________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
___________________
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL SECURITIES IN ANY
STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH STATE.
The date of this Prospectus is ___________, 1997.
4
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Common Stock is traded on the American Stock Exchange under the symbol
"HPI."
The Company has filed with the Commission a Registration Statement on Form
S-8 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Act"), with respect to the resale of up to an aggregate of up to 375,000
Shares of the Company's Common Stock, to be issued to Consultants of the Company
pursuant to written Consulting Agreements of HPI. This Prospectus, which is Part
I of the Registration Statement, omits certain information contained in the
Registration Statement. For further information with respect to the Company and
the Shares of the Common Stock offered by this Prospectus, reference is made to
the Registration Statement, including the exhibits thereto. Statements in this
Prospectus as to any document are not necessarily complete, and where any such
document is an exhibit to the Registration Statement or is incorporated by
reference herein, each such statement is qualified in all respects by the
provisions of such exhibit or other document, to which reference is hereby made,
for a full statement of the provisions thereof. A copy of the Registration
Statement, with exhibits, may be obtained from the Commission's office in
Washington, D.C. (at the above address) upon payment of the fees prescribed by
the rules and regulations of the Commission, or examined there without charge.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Securities and
Exchange Commission are incorporated herein by reference and made a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996.
2. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended December 31, 1996.
3. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1997.
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<PAGE>
4. The Company's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1997.
5. All reports and documents filed by the Company pursuant to Section
13, 14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written or oral request of any such person, a copy of any or
all of the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Health
Professionals, Inc., 2601 East Oakland Park Boulevard, 3rd Floor, Fort
Lauderdale, Florida 33306.
THE COMPANY
The Company was formed pursuant to the laws of the State of New York in
1975 under the name Health Extension Services, Inc. In fiscal 1986, following
the merger of its primary operating subsidiary into itself, the Company changed
its name to Professional Care, Inc. ("PCI"). On November 25, 1991, the
shareholders of the Company approved a merger and restructuring whereby each
share of PCI common stock was exchanged for a share of common stock of Health
Professionals, Inc. ("HPI"), a Delaware corporation formed on August 12, 1991
for the purpose of the restructuring. PCI became a wholly-owned subsidiary of
HPI, and the existing subsidiaries of PCI also became subsidiaries of HPI. HPI
and late subsidiaries (and any subsidiaries of such subsidiaries) are sometimes
hereinafter collectively referred to as the "Company." The executive offices of
the Company are located at 2601 East Oakland Park Boulevard, 3rd Floor, Fort
Lauderdale, Florida 33306. The Company's telephone number is (954) 766-2552.
In December, 1991, the Company acquired 100% of Center for Special
Immunology, Inc. ("CSI") and its subsidiaries which have since become the
primary operating businesses of the Company. CSI, owns and operates an
integrated health care delivery and clinical research system that includes a
multi-state network, operating in 8 states, of primary care and clinical
research facilities specializing in immune system disorders, consisting
6
<PAGE>
primarily of HIV, AIDS and Chronic Fatigue Immune Dysfunction Syndrome (CFIDS).
The network also conducts multi-center trials in cooperation with biotechnology
and pharmaceutical companies. CSI was founded in 1986 by William M. Reiter,
M.D., FACP, and Paul J. Cimoch, M.D., FACP, who are both internationally
recognized research physicians. Dr. Reiter is currently Chairman of the Board,
President and Chief Executive Officer of the Company and Dr. Cimoch is an
officer of CSI.
The Company and its subsidiary, CSI, were the subject of a number of
adverse newspaper articles commencing in May 1993. The source of certain of
these negative articles was a former shareholder/employee of CSI who had been
attempting to gain a financial settlement from the Company. The former
shareholder/employee, who had no responsibilities for medical or research
activities during his employment, contacted the Food and Drug Administration
(FDA) in 1993 and alleged that a CSI affiliated medical practice falsified data
in a 1989 study, two years prior to CSI's acquisition by the Company. The FDA
concluded its inquiry into this matter during 1994 and issued a warning letter
to communicate their findings. Certain deficiencies in record-keeping practices
were noted in the warning letter which have been corrected and the Company has
begun receiving new contracts to perform FDA studies. The Company believes that
this adverse publicity had the impact of causing a decline in patient flow and
temporarily halted the procurement of new clinical trials contracts and caused a
decrease in the price of the Company's Common Stock, all both of which limited
the availability of the capital required to add new facilities and diverted
management's attentions towards defending the Company.
A. CONTINUING OPERATIONS
---------------------
General
-------
CSI owns and operates an integrated health care delivery and clinical
research system that includes a multi-state network of primary care and clinical
research facilities specializing in immune system disorders consisting primarily
of HIV, AIDS and CFIDS. The network also conducts multi-center clinical trials
in cooperation with biotechnology and pharmaceutical companies. The Company
became engaged in this health care delivery and research business in December
1991, when it acquired all of the stock of CSI. CSI was founded in 1986 by
William M. Reiter, MD, FACP and Paul J. Cimoch, MD, FACP, internationally
recognized research physicians.
Historical outcomes analysis has demonstrated that the course of HIV
disease can be profoundly and positively altered by the use of early
intervention strategies and by preventive treatment directed against
opportunistic infections. Through its efforts in research and practical
7
<PAGE>
application, CSI has developed protocols for the treatment of HIV patients.
These protocols specify the treatments and therapies to be provided to HIV
patients, depending on the stage of the disease as determined by a
multi-parametric evaluation of clinical status, viral activity and immunologic
function. Treatment of HIV patients at CSI facilities by their affiliated
physicians is offered in accordance with these protocols. CSI has also developed
research protocols which govern the processes and record keeping practices to be
followed in specified studies performed by CSI. These studies may be undertaken
at CSI's initiative or in conjunction with a separate organization (e.g., a
pharmaceutical company), which would typically finance the study and pay certain
fees to CSI in return for conducting its portion of the clinical trial.
CFIDS is believed to result from a genetic failing occurring in the immune
response genes. This defect, when coupled with certain viral infections or other
activating factors, leads to a state of chronic immune activation, which causes
a variety of symptoms, including profound fatigue. CSI has developed treatment
protocols for chronic fatigue patients, the goal of which is to rebalance the
immune system or otherwise alleviate symptoms.
Services provided by CSI (including its CSI Clinical Laboratories, Inc.,
and CSI Therapeutics, Inc., CSI Clinical Trials, Inc. and CSI Managed Care, Inc.
subsidiaries) have accounted for all of the Company's operating revenues from
continuing operations since the Company acquired CSI. After acquiring CSI and
its two (2) operating facilities, the Company has opened three (3) new
facilities and has entered into independent affiliation agreements with an
additional thirteen (13) facilities.
Organization and Operation
--------------------------
The Company through CSI owns and operates 5 facilities located in Fort
Lauderdale, Florida; Miami, Florida; Chicago, Illinois; Irvine, California and
Los Angeles, California. CSI Clinical Laboratories, Inc. ("CSI Clinical
Laboratories") is a licensed clinical laboratory that currently provides
services exclusively to CSI's clinical facilities. CSI Therapeutics, Inc. ("CSI
Therapeutics") provides pharmaceutical distribution, home care and infusion care
in connection with the operation of CSI's facilities. CSI Clinical Trials, Inc.
("CSI Clinical Trials") conducts multi-center clinical trials for biotechnology
and pharmaceutical companies as well as its own internally developed treatment
protocols. CSI Managed Care, Inc. ("CSI Managed Care") markets and administrates
managed care contracts with third party payors, including preferred provider
organizations, health maintenance organizations and self insured organizations.
Each of the five (5) Company-owned facilities is owned by a wholly-owned
subsidiary of CSI. A medical professional association (the "PA") enters into an
8
<PAGE>
Independent Practice Affiliation Agreement (IPAA) with CSI to utilize the
facility in order to provide care to its patients with immunological and related
diseases.
Support Services
----------------
In addition to providing and updating treatment and research protocols,
CSI also offers other support services to its facilities. These currently
include laboratory, pharmaceutical distribution, home care, out-patient infusion
services, clinical trial services and a managed care network.
1. LABORATORY SERVICES: CSI Clinical Laboratories is a licensed
clinical laboratory, operated to research standards. It currently
provides services exclusively to CSI clinical facilities and CSI's
Privately Owned Facility Independent Practice Affiliates. The
laboratory specializes in hematology, immunogenetics and diagnostic
immunology; with particular expertise in flow cytometery and
immunoassay. General laboratory work is provided by a sub-contract
with a national reference laboratory. Laboratory result reporting
from all sources is through CSI's integrated information
technologies system. All information is archived in relational data
bases, enabling customized clinical presentation and post hoc
research analysis.
2. THERAPEUTIC SERVICES: CSI Therapeutics is the umbrella subsidiary
for pharmaceutical distribution, home care and infusion care.
Parenteral pharmaceutical distribution is made to PA's for in office
use of injectable medications by the PA. Oral pharmaceutical
distribution is made to PA's for dispensing by the PA in accordance
with applicable regulation. Home health care and out-patient
infusion care is available to patients of the PA through CSI,
primarily via a national sub-contract arrangements with an
unaffiliated home health care companies.
3. CSI CLINICAL TRIALS: CSI's Clinical Trials Division is responsible
for protocol review, budget development and presentation to the
clinical network of all Clinical Trials conducted for biotechnical
or pharmaceutical companies or CSI's internally developed protocols.
Research physicians and protocol specialists in the Clinical Trials
Division oversee study initiation, quality assurance, administrative
and regulatory matters. All source documentation from study sites
utilizing CSI's Affiliated Physicians Network will be captured on
CSI Information Technologies System clinical and research templates.
Data will be monitored centrally, automatically extracted to study
case report forms and transferred to sponsors for interim analysis.
9
<PAGE>
Manual transcription of data from source documents to case report
forms and to the sponsor's computer data bases will be obviated. All
information will be transformed into electronic records, with
security standards making them acceptable for submission to
governmental regulatory agencies.
4. CSI MANAGED CARE: CSI Managed Care, Inc. markets and administers
discounted fee for service relationships with third party insurers,
preferred provider organizations, health maintenance organizations
and self insured organizations. Once negotiated, the contracts are
made available to CSI's Independent Affiliated Physicians Network
whose physicians have the opportunity to accept or decline the
contract. Once it has accepted a contract, the Affiliate agrees to
honor the fee structure throughout its term. In addition, CSI
Managed Care, Inc. has entered into a Data Management Analysis and
Royalty Agreement with CHOE, a wholly-owned subsidiary of the
Bristol-Myers Squibb Company under which CSI has received $350,000
of income for the sale of its historical data on treatment outcomes
for various treatment protocols. CSI Managed Care intends to develop
capitated care programs which can be marketed independently or in
conjunction with pharmaceutical and other service providers.
Marketing
---------
CSI targets its marketing efforts to a number of audiences, including
third party payors, prospective patients, physicians, and pharmaceutical and
biotechnology companies. Marketing to prospective patients is primarily in the
form of media advertising and seminars conducted for appropriate consumer
groups. CSI maintains its presence among physicians through articles in trade
journals written by CSI physicians as well as through presentations at domestic
and international conventions. Currently, CSI estimates that new patients are
generated equally from three sources: media advertising, physician referrals and
word-of-mouth referrals from current patients.
CSI continues to direct its marketing efforts to address third party
insurance companies, preferred provider organizations, health maintenance
organizations, and self-insured companies including the negotiation of managed
care contracts with some of these groups.
In addition to the above, the Company also markets its services to
pharmaceutical and biotechnology companies in an effort to generate additional
revenues by performing research studies for those companies. Marketing efforts
in this area consist primarily of meetings with executives of such companies
where CSI marketing personnel can demonstrate that due to its large patient base
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as well as the successful completion of similar studies in the past, CSI is well
suited to perform studies required by health care companies to obtain
governmental approval for new drugs or other therapies geared toward patients
with immunological and related diseases.
The Company's strategy is to expand its clinical network through
affiliation with established physician practices, to actively pursue clinical
research studies and to contract with managed care companies and self-insured
employers. The Company feels that this approach offers long term strategic
advantages to facilitate growth as the market for immunologic research and
treatment continues to rapidly expand.
Agreement with ICD
On July 7, 1997, the Company entered into a Consulting Agreement with ICD,
pursuant to which the Company agreed to pay ICD a fee of (i) 300,000 shares of
the Company's Common Stock, payable upon the signing of the Agreement; (ii)
$165,000 worth of free trading Common Stock of the Company based on the current
market price at the end of the 45th day from the date of the Agreement, or, in
the event the stock price is less than $1.00 per share at the end of the 45th
day, then ICD shall receive 165,000 shares of Common Stock of the Company; and
(iii) $165,000 worth of free trading Common Stock of the Company based on the
current market price at the end of the 90th day from the date of the Agreement,
or, in the event the stock price at the end of the 90th day shall be less than
$1.50, then ICD shall receive 110,000 shares of Common Stock of the Company. The
term of the Agreement will be five (5) months, unless sooner terminated as
provided therein.
In particular, ICD shall provide the following enumerated services: (i)
implementation of short term and long term business and financial planning in
order to fully develop HPI's assets, resources and services; (ii) implementation
of a marketing program to assist HPI in broadening the worldwide markets for its
business and services and to promote its image worldwide; (iii) assist HPI in
monitoring the services rendered by its outside consultants and contractors;
(iv) advise HPI relative to the continued development of a stockholder relations
program; and (v) advise and assist HPI in identifying, evaluating and
structuring business combinations.
Consulting Agreement with Tilton
On August 5, 1997, the Company entered into a Consulting Agreement with
Tilton, pursuant to which the Company agreed to issue (1) 25,000 shares of the
Company's Common Stock; (2)warrants to purchase and additional 25,000 shares of
the Company's Common Stock at $1.50 per share for consulting services to be
provided to the Company over an anticipated one-year period commencing on the
date of the Agreement, unless sooner terminated as provided therein.
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<PAGE>
In particular, Tilton shall provide the following enumerated services: (i)
implementation of short term and long term business and financial planning in
order to fully develop the Company's assets, resources and services,
particularly as such relate to the National and International Financial
Community; (ii) implementation of a marketing program to assist the Company in
broadening the worldwide markets for its business and services and to promote
its image worldwide; (iii) assist the Company in monitoring the services
rendered by its outside consultants and contractors; (iv) advise the Company
relative to the continued development of a stockholder relations program; (v)
assist the Company in developing programs and resources to enable and enhance
its capacities to secure regulatory approvals on a worldwide basis; and (vi)
advise and assist the Company in identifying, evaluating and structuring
business combinations.
Federal Income Tax Effects
The following discussion applies to the stock issued under the Consulting
and Compensation Agreements and is based on federal income tax laws and
regulations in effect on March 31, 1997. In connection with the issuance of
stock as compensation payable under the Agreements, these must be included in
gross income the excess of the fair market value of the property received over
the amount, if any, paid for the property in the first taxable year in which the
Consultant's beneficial interest in the property either is "transferable" or is
not subject to a "substantial risk of forfeiture." A substantial risk of
forfeiture exists where rights and property that have been transferred are
conditioned, directly or indirectly, upon the future performance (or refraining
from performance) of substantial services by any person, or the occurrence of a
condition related to the purpose of the transfer, and the possibility of
forfeiture is substantial if such condition is not satisfied. Stock received by
a person who is subject to the short swing profit recovery rule of Section 16(b)
of the Securities Exchange Act of 1934 is considered subject to a substantial
risk of forfeiture so long as the sale of such property at a profit could
subject the stockholder to suit under that section. The rights are treated as
transferable if and when they can sell, assign, pledge or otherwise transfer any
interest in the stock to any person.
Restrictions Under Securities Laws
The sale of any Shares of stock must be made in compliance with federal
and state securities laws. Officers, directors and 10% or greater stockholders
of the Company, as well as certain other persons or parties who may be deemed to
be "affiliates" of the Company under the Federal Securities Laws, should be
aware that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
directors and 10% and greater stockholders are also subject to the "short swing"
profit rule of Section 16(b) of the Securities Exchange Act of 1934.
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SALES BY SELLING SECURITY HOLDERS
The following table sets forth the name of the Selling Security Holders,
the amount of Shares of Common Stock held directly or indirectly, the maximum
amount of Shares of Common Stock to be offered by the Selling Security Holders,
the amount of Common Stock to be owned by the Selling Security Holders following
sale of such Shares of Common Stock and the percentage of Shares of Common Stock
to be owned by the Selling Security Holders following completion of such
offering (based on 5,496,319 Shares of Common Stock of the Company outstanding
at August 5, 1997).
<TABLE>
<CAPTION>
Shares to be
Name of Selling Number of Shares to Owned After Percentage to be
Security Holder Shares Owned be Offered Offering Owned After Offering
- --------------- ------------ ---------- -------- --------------------
<S> <C> <C> <C> <C>
International Corporate
Development, Inc. 300,000 300,000 -0- ---
Jim Tilton & Company 75,000 75,000 -0- ---
</TABLE>
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized by its Certificate of Incorporation to issue
25,000,000 Shares of Common Stock, par value $.02 per Share, of which 5,496,319
were outstanding as of August 5, 1997. The holders of the Company's Common Stock
are entitled to receive dividends at such time and in such amounts as may be
determined by the Company's Board of Directors, and upon liquidation are
entitled to share ratably in the assets of the Company remaining after the
payment of all debts and other liabilities.
All Shares of the Company Common Stock have equal voting rights, each
Share being entitled to one vote per Share for the election of Directors and for
all other purposes. Holders of such Common Stock are not entitled to any
preemptive rights to purchase or subscribe for any of the Company's securities.
All of the Company's Common Stock which are issued and outstanding are fully
paid and non-assessable. Stockholders do not have cumulative voting rights,
which means that the holders of more than 50% of the Shares voting for the
election of Directors are able to elect 100% of the Company's Directors.
It is not contemplated that any dividends will be paid on the Common
Stock, and the future ability to pay dividends will be dependent upon the
success of the Company's operations and the decision by its management at that
time.
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PREFERRED STOCK
The Company is authorized to issue 100,000 shares of Preferred Stock, par
value $1.00 per share, issuable in such series and bearing such voting,
dividend, conversion, liquidation and other rights and preferences as the Board
of Directors may determine. No shares of the Company's Preferred Stock were
outstanding as of the date hereof.
AMEX
The Company's Common Stock is traded on the AMEX under the symbol "HPI."
TRANSFER AGENT
The Company's Transfer Agent is Registrar and Transfer Co., 10 Commerce
Drive, Cranford, New Jersey.
EXPERTS
The financial statements incorporated by reference in this Prospectus have
been audited by BDO Seidman, LLP, independent certified public accountants, to
the extent and for the periods set forth in their report, which contains an
explanatory paragraph regarding the Company's ability to continue as a going
concern, incorporated herein by reference, and are incorporated herein in
reliance upon such report given upon the authority of said firm as experts in
auditing and accounting.
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on AMEX under the symbol "HPI." The
Company's Common Stock was suspended from trading on the AMEX from February 17,
1995 to September 29, 1995 and during such period traded on the over-the-counter
market. The following table sets forth the range of high and low closing sales
or high bid and high asked price quotations for the Common Stock for the periods
indicated.
Common Stock
High Low
---- ---
Fiscal Year
- -----------
1994
1st Quarter................................. 15.625 5.225
2nd Quarter................................. 13 6.875
3rd Quarter................................. 10 5
4th Quarter................................. 13 5.225
1995
1st Quarter................................. 7.50 3.125
2nd Quarter................................. 4.375 .625
3rd Quarter................................. 6.250 .938
4th Quarter................................. 7.50 1.875
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Common Stock
High Low
---- ---
Fiscal Year
- -----------
1996
1st Quarter................................. 5. 1.875
2nd Quarter................................. 5. 1.875
3rd Quarter................................. 5.25 1.875
4th Quarter................................. 4.25 2.563
1997
1st Quarter................................. 3.375 1.375
2nd Quarter................................. 1.5 .875
3rd Quarter................................. .6875 .625
4th Quarter through August 19, 1997......... .625 .875
The Company has not paid any cash dividends on its Common Stock. For the
foreseeable future, the Company anticipates that any earnings that may be
generated from operations will be used to finance the growth of the Company.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., Special Counsel for the Company, Fort Lauderdale, Florida.
INDEMNIFICATION
Pursuant to Section 102(b)(7) of the General Corporation Law of the State
of Delaware (the "GCL"), the state of incorporation of the Company, the
Certificate of Incorporation of the Company, eliminates the liability of the
Company's directors to the Company or its stockholders, except for liabilities
related to breach of duty of loyalty, actions not in good faith, and certain
other liabilities.
The Certificate of Incorporation and the Bylaws of the Company provide for
the indemnification of directors and officers to the fullest extent permitted by
the GCL. Section 145 of the GCL of the State of Delaware generally authorizes
indemnification by a corporation when a person is made a party to any proceeding
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or was serving as a director, officer, employee or
agent of another enterprise, at the request of the corporation, and if such
person acted in good faith and in a manner reasonably believed by him or her to
be in, or not opposed to, the best interests of the corporation. With respect to
any criminal proceeding, such person must have had no reasonable cause to
believe that his or her conduct was unlawful. If it is determined that the
conduct of such person meets these standards, he or she may be indemnified for
15
<PAGE>
expenses incurred and amounts paid in such proceeding (including attorneys'
fees) if actually and reasonably incurred by him or her in connection therewith.
If such a proceeding is brought by or on behalf of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually and
reasonably incurred if he or she acted in good faith and in a manner reasonably
believed by him or her to be in, or not opposed to, the best interests of the
corporation. There can be no indemnification with respect to any matter as to
which such person is adjudged to be liable to the corporation; however, a court
may, even in such case, allow such indemnification to such person for such
expenses as the court deems proper. Where such person is successful in any such
proceeding, he or she is entitled to be indemnified against expenses actually
and reasonably incurred by him or her. In all other cases, indemnification is
made by the corporation upon determination by it that indemnification of such
person is proper because such person has met the applicable standard of conduct.
The Company does not maintain directors' and officers' liability
insurance.
The foregoing indemnification provisions are broad enough to encompass
certain liabilities of directors and officer of Company under the Securities Act
of 1933.
16
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- ------- ---------------------------------------
The documents listed in (a) through (b) below are incorporated by
reference in the Registration Statement. All documents subsequently filed by the
Registrant pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a
post-effective amendment which indicates that all securities offered have been
sold or which deregisters all securities then remaining unsold, shall be deemed
to be incorporated by reference in the Registration Statement and to be part
thereof from the date of filing of such documents.
(a) The Registrant's Annual Report on Form 10-K for the fiscal
year ended September 30, 1996.
(b) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended December 31, 1996.
(c) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended March 31,1997.
(d) The Company's Quarterly Report on Form 10-Q for the quarterly
period ended June 30,1997.
(e) All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by the Registrant's
document referred to in (a) above.
(f) The description of the Common Stock of the Company which is
contained in a Registration Statement dated December 19, 1991, on the Form 8-B
(Reg. No. 1-10966) filed under the Exchange Act, including any amendment or
report filed for the purpose of updating such description.
Item 4. Description of Securities
- ------- -------------------------
A description of the Company's securities is set forth in the Prospectus
incorporated as a part of this Registration Statement.
Item 5. Interests of Named Experts and Counsel
- ------- --------------------------------------
Not Applicable.
Item 6. Indemnification of Directors and Officers
- ------- -----------------------------------------
Pursuant to Section 102(b)(7) of the General Corporation Law of the State
of Delaware (the "GCL"), the state of incorporation of the Company, the
Certificate of Incorporation of the Company, eliminates the liability of the
Company's directors to the Company or its stockholders, except for liabilities
related to breach of duty of loyalty, actions not in good faith, and certain
other liabilities.
i
<PAGE>
The Certificate of Incorporation and the Bylaws of the Company provide for
the indemnification of directors and officers to the fullest extent permitted by
the GCL. Section 145 of the GCL of the State of Delaware generally authorizes
indemnification by a corporation when a person is made a party to any proceeding
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or was serving as a director, officer, employee or
agent of another enterprise, at the request of the corporation, and if such
person acted in good faith and in a manner reasonably believed by him or her to
be in, or not opposed to, the best interests of the corporation. With respect to
any criminal proceeding, such person must have had no reasonable cause to
believe that his or her conduct was unlawful. If it is determined that the
conduct of such person meets these standards, he or she may be indemnified for
expenses incurred and amounts paid in such proceeding (including attorneys'
fees) if actually and reasonably incurred by him or her in connection therewith.
If such a proceeding is brought by or on behalf of the corporation (i.e.,
a derivative suit), such person may be indemnified against expenses actually and
reasonably incurred if he or she acted in good faith and in a manner reasonably
believed by him or her to be in, or not opposed to, the best interests of the
corporation. There can be no indemnification with respect to any matter as to
which such person is adjudged to be liable to the corporation; however, a court
may, even in such case, allow such indemnification to such person for such
expenses as the court deems proper. Where such person is successful in any such
proceeding, he or she is entitled to be indemnified against expenses actually
and reasonably incurred by him or her. In all other cases, indemnification is
made by the corporation upon determination by it that indemnification of such
person is proper because such person has met the applicable standard of conduct.
The Company does not maintain directors' and officers' liability
insurance.
The foregoing indemnification provisions are broad enough to encompass
certain liabilities of directors and officer of Company under the Securities Act
of 1933.
Item 7. Exemption from Registration Claimed
- ------- -----------------------------------
Inasmuch as the Consultants who received the Shares of the Company were
knowledgeable, sophisticated and had access to comprehensive information
relevant to the Company, such transactions were undertaken in reliance on the
exemption from registration provided by Section 4(2) of the Act. As a condition
ii
<PAGE>
precedent to such issuance, the Consultants were required to express an
investment intent and consent to the imprinting of a restrictive legend on each
stock certificate to be received from the Company except upon sale of the
underlying Shares of Common Stock pursuant to a registration statement.
Item 8. Exhibits
- ------- --------
Exhibit Description
- ------- -----------
(4)(a) Agreement with International Corporate Development, Inc.
(4)(b) Consulting Agreement with Jim Tilton & Company
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating
to the issuance of shares of securities pursuant to the
above Agreements
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included
in the opinion filed as exhibit (5) hereto
(23.2) Consent of independent certified public accountants
Item 9. Undertakings
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings 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;
(b) That, for the purposes of determining any liability under the
Act, 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 at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) 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.
iii
<PAGE>
(3) Insofar as indemnification for liabilities arising under the Act 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 the final adjudication of
such issue.
iv
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing 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 Fort Lauderdale and the State of Florida, on the
___ day of August, 1997.
HEALTH PROFESSIONAL, INC.
By:
-----------------------------------------
William Reiter
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
Chairman of the Board,
President and Chief
/s/ William Reiter Executive Officer
- ---------------------- (Principal Executive
William Reiter Officer) August 20, 1997
/s/ Gary Cedeno
- ---------------------- Principal Financial
Gary Cedeno Officer August 20, 1997
/s/ Fred Roa
- ---------------------- Director
Fred Roa August 20, 1997
/s/ John Marsh
- ---------------------- Director August 20, 1997
John Marsh
/s/ Paul J. Cimoch
- ---------------------- Director
Paul J. Cimoch August 20, 1997
v
================================================================================
Agreement with
International Corporate Development, Inc.
================================================================================
CONSULTING AGREEMENT
--------------------
AGREEMENT, made as of this 7th day of July, 1997, by and between HEALTH
PROFESSIONALS, INC., a Delaware corporation having its principal place of
business at 2601 East Oakland Park Boulevard, Suite 8, Fort Lauderdale, Florida
33306 (hereinafter "HPI") and INTERNATIONAL CORPORATE DEVELOPMENT, INC., 450
South Galena, Suite 202, Aspen, Colorado 81611 (hereinafter "ICD").
W I T N E S S E T H:
WHEREAS, ICD possesses significant business and financial contacts
throughout the National and International Financial Community; and
WHEREAS, HPI is desirous of utilizing ICD's extensive network of contacts
for the purpose of expanding its own business as more fully set forth herein;
and
WHEREAS, ICD is willing to provide such services and to be compensated
therefor by receipt of shares of HPI common stock in lieu of cash compensation;
and
WHEREAS, HPI is desirous of entering into such an arrangement.
WHEREAS, ICD has expertise in the financial and management type services
HPI requires and has engaged the services of Donald S. Whitlock ("Consultant")
who has significant experience and expertise in business and financial
management and consulting, particularly as such relates to
financially-distressed companies and so-called "management turn-around"
situations.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto hereby agree as follows.
<PAGE>
1. SERVICES TO BE RENDERED.
(a) During the term of this Agreement, ICD shall render the
following services to HPI: (i) implementation of short term and long term
business and financial planning in order to fully develop HPI's assets,
resources and services; (ii) implementation of a marketing program to assist HPI
in broadening the worldwide markets for its business and services and to promote
its image worldwide; (iii) assist HPI in monitoring the services rendered by its
outside consultants and contractors; (iv) advise HPI relative to the continued
development of a stockholder relations program; (v) advise and assist HPI in
identifying, evaluating and structuring business combinations. Such services
shall be rendered by Consultant in so many hours a week as ICD, in its
sole and absolute discretion, shall see fit, however, ICD shall provide a
minimum of 80 hours per month. All work to be performed and services to be
rendered hereunder shall be in consultation with HPI management. HPI agrees to
make all its senior management, as well as members of its Board of Directors,
available to ICD at all reasonable times during normal business hours during the
term of this Agreement.
(b) The services to be rendered hereunder shall be performed by
ICD and Consultant, and such services may not be subcontracted or otherwise
performed by third parties on behalf of ICD without the prior written permission
of HPI.
(c) The services to be rendered by ICD and Consultant to HPI
may be rendered by ICD at any location of its choosing including, without
limitation, at ICD's offices in Aspen, Colorado.
2
<PAGE>
(d) Nothing contained in this Agreement shall in any way be deemed
as preventing or restricting ICD from in any way performing any other business
services for other individuals or entities or for their own account.
2. COMPENSATION.
(a) As compensation for the full and complete rendition of the
services to be rendered hereunder, HPI shall pay ICD a fee of (i) 300,000 shares
(the "Shares") of its common stock payable upon the signing of this Agreement;
(ii) $165,000 worth of free trading common stock of HPI based on the current
market price of HPI's Common Stock at the end of the 45th day from the date of
this Agreement, or, in the event the stock price is less than $1.00 at the end
of the 45th day, then ICD shall receive 165,000 shares of HPI Common Stock; and
(iii) $165,000 worth of free trading stock based on the current market price of
HPI's Common Stock at the end of the 90th day from the date of this Agreement,
or, in the event the stock price is less than $1.50 at the end of the 90th day,
then ICD shall receive 110,000 shares of HPI Common Stock.
(b) HPI agrees that it will file or cause to be filed with the
Securities and Exchange Commission and the American Stock Exchange, a
Registration Statement or Form S-8 (or similar form), which Registration
Statement shall cover the sale or other disposition by ICD of the Shares and
further that HPI shall use its best efforts to obtain the effectiveness of such
Registration Statement as soon as practicable.
3. TERM OF AGREEMENT. This Agreement shall be for a period of five (5)
months from the date hereof unless terminated sooner as provided herein. In the
event that ICD terminates this agreement before the expiration of the five (5)
3
<PAGE>
month term, then ICD shall be obligated to return to HPI an amount of shares
received equal to the remaining months of the contract over 5 multiplied by the
number of shares received pursuant to Section 2 above or its equivalent in cash.
4. ICD'S AND ICD'S REPRESENTATION AND WARRANTY. ICD represents and
warrants to HPI that it has the authority to enter into this Agreement and to
perform all obligations hereunder.
5. REPRESENTATIONS AND WARRANTIES.
(a) HPI hereby represents and warrants to ICD and its permitted
assigns as follows:
(i) NO CONSENTS. No permit, consent, approval,
authorization, order of, or filing with, any court or governmental authority is
required in connection with the execution and delivery by HPI of this Agreement
or to consummate the transactions contemplated hereby, except for the filing of
the Registration Statement as provided in subsection 2(b).
(ii) AUTHORIZATION OF AGREEMENT, ETC. HPI has full right,
power and authority to execute and deliver this Agreement and any document,
certificate or instrument required hereunder and any agreement to be executed
(collectively, the "Documents") and to perform all of its obligations hereunder
and thereunder or contemplated hereby or thereby. The Documents have been, or
will be, duly executed and delivered by HPI and the execution, delivery and
performance by HPI of the Documents has been duly authorized by all requisite
corporate action by HPI; and each constitutes, or will constitute, the legal,
4
<PAGE>
valid and binding obligation of HPI enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, usury or other similar laws affecting the
enforcement of creditors' rights generally.
(iii) AUTHORIZATION. The (A) authorization, execution,
delivery and performance of the Documents; (B) authorization, issuance, sale and
delivery of the Shares will not (i) violate any provision of law or statute or
any order of any court or other governmental agency; or (ii) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time or both) a default under, or result
in the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of HPI under its charter, the By-laws of HPI or any
indenture, mortgage, lease agreement or other agreement or instrument to which
HPI is a party or by which it or any of its property is bound.
(iv) ISSUANCE OF SECURITIES, ETC. HPI has all requisite
corporate power and authority to issue, sell and deliver the Shares and such
issuance, sale and delivery has been duly authorized by all requisite corporate
action of HPI and when so issued, sold and delivered (i) the Shares will be duly
and validly issued and outstanding, fully paid and nonassessable with no
personal liability attaching to the ownership thereof and will be free and clear
of all liens, charges, claims, encumbrances, restrictions or preemptive or any
other similar rights imposed by or through HPI and HPI shall have paid all
taxes, if any, in respect of the issuance thereof; and (ii) none of the Shares
will be subject to preemptive or any other similar rights of the shareholders of
HPI or others. The offer and sale of the Shares is exempt from the registration
5
<PAGE>
requirements of the Securities Act and the rules and regulations promulgated
thereunder and the Shares will be issued in compliance with all applicable
Federal and state securities laws.
(b) ICD hereby represents and warrants to HPI that it is acquiring
the Shares for their own account for investment purposes and without a view to
the resale or distribution thereof.
6. INDEMNITY OBLIGATIONS.
(a) HPI agrees to indemnify and hold harmless ICD, as follows:
(i) against any and all losses, liabilities, claims, damages
and reasonable expenses whatsoever arising out of any untrue statement or
alleged untrue statement of a fact set forth in the Registration Statement or
the omission or alleged omission therefrom of a fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading unless such statement or omission was made in reliance on
and in conformity with written information furnished to HPI by the ICD expressly
for inclusion in the Registration Statement;
(ii) against any and all losses, liabilities, claims, damages
and expenses whatsoever to the extent of the aggregate amount paid in settlement
of any litigation, commenced or threatened, or any claim whatsoever based upon
(A) any such untrue statement or omission or any such alleged untrue statement
or omission unless such statement or omission was made in reliance on and in
conformity with written information furnished to HPI by ICD expressly for
inclusion in the Registration Statement or (B) the rendition by ICD of any of
its services pursuant to this Agreement, except for any gross negligence,
malfeasance, act of bad faith or breach of trust by ICD or for its failure to
adhere to the terms and conditions of this Agreement; and
6
<PAGE>
(iii) against any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under clause (i) or (ii) above unless such
statement or omission was made in reliance on and in conformity with written
information furnished to HPI by ICD expressly for inclusion in the Registration
Statement.
(b) HPI agrees to indemnify and hold harmless ICD, to the same
extent as the foregoing indemnity, against any and all losses, liabilities,
claims, damages and reasonable expenses whatsoever directly arising out of the
exercise by any person of any right under the Securities Act, the Exchange Act
on account of violations of the representations, warranties or agreements set
forth in Section 5 hereof.
(c) ICD agrees to indemnify and hold harmless HPI, its officers,
directors, employees, agents and counsel and each other person, if any, who
controls HPI, to the same extent as the foregoing indemnity from HPI to ICD in
Sections 6(a) and 6(b) hereof, but only with respect to (i) statements or
omissions, if any, made in the Registration Statement in reliance upon and in
conformity with written information furnished to HPI by ICD expressly for
inclusion in the Registration Statement; and (ii) any action which is the result
of the gross negligence, malfeasance, act of bad faith or breach of trust by ICD
7
<PAGE>
or for ICD's failure to adhere to the terms of this Agreement. If any action
shall be brought against HPI or any other person so indemnified based on the
Registration Statement and in respect of which indemnity may be sought against
ICD pursuant to this Section 6(c), ICD shall have the rights and duties given to
an indemnifying party under Section 6(d) hereof and HPI and each other person so
indemnified shall have the rights and duties given to indemnified parties
pursuant to Section 6(a) hereof. The foregoing agreement to indemnify shall be
in addition to any liability ICD may otherwise have including liabilities
arising under this Agreement.
(d) If any action is brought against either HPI or ICD (each, an
"Indemnified Party" and collectively, "Indemnified Parties"), in respect of
which indemnity may be sought against the other pursuant to Sections 6(a) - 6(c)
above, each such Indemnified Party shall promptly notify the other (the
"Indemnifying Party") in writing of the institution of such action (but the
failure to so notify shall not relieve the Indemnifying Party from any liability
it may have under this Section 6 unless such failure results in the imposition
of a default judgment which cannot be reopened) and the Indemnifying Party shall
promptly assume the defense of such action, including the retention of counsel
(reasonably satisfactory to each such Indemnified Party) and payment of
expenses. Each such Indemnified Party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of each such Indemnified Party unless the employment of such counsel
shall have been authorized in writing by the Indemnifying Party in connection
with the defense of such action or the Indemnifying Party shall have not have
promptly employed counsel reasonably satisfactory to each such Indemnified Party
8
<PAGE>
to have charge of the defense of such action or each such Indemnified Party
shall have reasonably concluded that there may be one or more legal defenses
available to it or them or to other Indemnified Parties which are different from
or additional to those available to one or more of the Indemnifying Parties and
it would be inappropriate for the same counsel to represent both parties due to
actual or potential differing interests between them, in any of which events
such fees and expenses shall be borne by the Indemnifying Party and the
Indemnifying Party shall not have the right to direct the defense of such action
on behalf of each Indemnified Party. Anything in this Section 6(d) to the
contrary notwithstanding, the Indemnifying Party shall not be liable for any
settlement of any such claim or action effected without its written consent,
which consent shall not be unreasonably withheld. HPI agrees to promptly notify
ICD of the commencement of any litigation or proceedings against HPI or any of
its officers or directors in connection with the Registration Statement.
7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that
ICD is being engaged as a self-employed independent contractor and not as an
employee or agent of HPI. HPI will not withhold or pay any taxes relating to any
of ICD's activities hereunder, nor will HPI provide worker's compensation,
disability, health or any other insurance coverage.
8. GENERAL.
(a) This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof, and supersedes all prior
understandings, agreements, and documentation relating to the subject matter
hereof. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto.
9
<PAGE>
(b) The expiration of the term of this Agreement notwithstanding,
provisions which are intended to survive and continue such expiration
(including, without limitation, Section 6 hereof) shall so survive and continue.
(c) All notices which may be given under the provisions of this
Agreement or otherwise shall be conclusively deemed to have been given if
delivered personally or sent by certified mail, return receipt requested, with
postage prepaid, to each of the parties hereto at the respective addresses set
forth above, or to such other address or addresses as either party may
hereinafter designate in writing as his or its address for this purpose in the
manner herein provided for giving notices. The date of giving of such notice
shall be conclusively deemed to be the date of receipt, if delivered personally,
or the date of postmark, if mailed.
(d) No term or provision hereof shall be deemed waived and no
breach excused unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented.
(e) The rights and obligations of the parties hereunder may not be
assigned by any such party without the prior written consent of the other. This
Agreement shall inure to the benefit of and be binding upon the successors (by
operation of law) and the permitted assigns of the parties hereto.
10
<PAGE>
(f) Whenever the sense of this Agreement so requires, the
masculine gender shall be deemed to include the feminine and/or neuter gender,
and the plural, the singular and vice versa.
(g) The titles set forth in this Agreement are for convenience of
reference only and shall not be considered as part of this Agreement in any
respect nor shall they in any way affect the substance of any provision
contained in this Agreement.
(h) This Agreement, its performance and the rights, obligations
and remedies of the parties hereto, shall be construed and governed by the laws
of the State of Florida without regard to its principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the year and date first above written.
HEALTH PROFESSIONALS, INC.
By: /s/ William Reiter
-----------------------------------
William Reiter, CEO
INTERNATIONAL CORPORATE
DEVELOPMENT, INC.
By: /s/ Donald S. Whitlock
-----------------------------------
Donald S. Whitlock, President
11
================================================================================
Consulting Agreement
with
Jim Tilton & Company
================================================================================
CONSULTING AGREEMENT
--------------------
AGREEMENT, made as of this 5th day of August, 1997, by and between HEALTH
PROFESSIONALS, INC., a Delaware corporation having its principal place of
business at 2601 East Oakland Park Boulevard, Suite 8, Fort Lauderdale, Florida
33306 (hereinafter "HPI") and JIM TILTON & COMPANY, 1113 Fox Glen Way,
Louisville, Kentucky 40242 (hereinafter "JTC").
W I T N E S S E T H:
WHEREAS, JTC possesses significant business and financial contacts
throughout the National and International Financial Community; and
WHEREAS, HPI is desirous of utilizing JTC's extensive network of contacts
for the purpose of expanding its own business as more fully set forth herein;
and
WHEREAS, JTC is willing to provide such services and to be compensated
therefor by receipt of shares of HPI common stock in lieu of cash compensation;
and
WHEREAS, HPI is desirous of entering into such an arrangement.
WHEREAS, JTC has expertise in the financial and management type services
HPI requires and has engaged the services of Jim Tilton ("Consultant") who has
significant experience and expertise in business and financial management and
consulting, particularly as such relates to financially-distressed companies and
so-called "management turn-around" situations.
NOW, THEREFORE, in consideration of the mutual promises set forth herein,
the parties hereto hereby agree as follows.
<PAGE>
1. SERVICES TO BE RENDERED.
(a) During the term of this Agreement, JTC shall render the
following services to HPI: (i) implementation of short term and long term
business and financial planning in order to fully develop HPI's assets,
resources and services, particularly as such relate to the National and
International Financial Community; ((ii) implementation of a marketing program
to assist HPI in broadening the worldwide markets for its business and services
and to promote its image worldwide; (iii) assist HPI in monitoring the services
rendered by its outside consultants and contractors; (iv) advise HPI relative to
the continued development of a stockholder relations program; (v) assist HPI in
developing programs and resources to enable and enhance its capacities to secure
regulatory approvals on a worldwide basis; (vi) advise and assist HPI in
identifying, evaluating and structuring business combinations. Such services
shall be rendered by in so many hours a week as JTC, in its sole and absolute
discretion, shall see fit, however, JTC shall provide a minimum of 20 hours per
month rendering said services. All work to be performed and services to be
rendered hereunder shall be in consultation with HPI management. HPI agrees to
make all its senior management, as well as members of its Board of Directors,
available to JTC at all reasonable times during normal business hours during the
term of this Agreement.
(b) The services to be rendered hereunder shall be performed by
JTC and Jim Tilton, and such services may not be subcontracted or otherwise
performed by third parties on behalf of JTC without the prior written permission
of HPI.
2
<PAGE>
(c) The services to be rendered by JTC and Jim Tilton to HPI may
be rendered by JTC at any location of its choosing including, without
limitation, at JTC's offices in Louisville, Kentucky.
(d) Nothing contained in this Agreement shall in any way be deemed
as preventing or restricting JTC from in any way performing any other business
services for other individuals or entities or for their own account.
2. COMPENSATION. As compensation for the full and complete rendition of
the services to be rendered hereunder, HPI shall pay JTC a fee of (1) 25,000
shares (the "Shares") of its common stock, $.02 per share and, (2) warrants to
purchase an additional 25,000 shares of its common stock at $1.00 per share, and
(3) warrants to purchase an additional 25,000 of its common stock at $1.50 per
share.
3. TERM OF AGREEMENT. This Agreement shall be for a period of one (1)
year from the date hereof unless terminated sooner as provided herein. In the
event that JTC terminates this agreement before the expiration of the 1 year
term, then JTC shall be obligated to return to HPI an amount of shares received
equal to the remaining months of the contract over 12 multiplied by 25,000
shares of its equivalent in cash.
4. JTC'S AND JTC'S REPRESENTATION AND WARRANTY. JTC represents and
warrants to HPI that it has the authority to enter into this Agreement and to
perform all obligations hereunder.
5. REPRESENTATIONS AND WARRANTIES.
(a) HPI hereby represents and warrants to JTC and its permitted
assigns as follows:
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(i) NO CONSENTS. No permit, consent, approval,
authorization, order of, or filing with, any court or governmental authority is
required in connection with the execution and delivery by HPI of this Agreement
or to consummate the transactions contemplated hereby, except for the filing of
the Registration Statement as provided in subsection 2(b).
(ii) AUTHORIZATION OF AGREEMENT, ETC. HPI has full right,
power and authority to execute and deliver this Agreement and any document,
certificate or instrument required hereunder and any agreement to be executed
(collectively, the "Documents") and to perform all of its obligations hereunder
and thereunder or contemplated hereby or thereby. The Documents have been, or
will be, duly executed and delivered by HPI and the execution, delivery and
performance by HPI of the Documents has been duly authorized by all requisite
corporate action by HPI; and each constitutes, or will constitute, the legal,
valid and binding obligation of HPI enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, usury or other similar laws affecting the
enforcement of creditors' rights generally.
(iii) AUTHORIZATION. The (A) authorization, execution,
delivery and performance of the Documents; (B) authorization, issuance, sale and
delivery of the Shares will not (i) violate any provision of law or statute or
any order of any court or other governmental agency; or (ii) conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute (with due notice or lapse of time or both) a default under, or result
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in the creation of any lien, security interest, charge or encumbrance upon any
of the properties or assets of HPI under its charter, the By-laws of HPI or any
indenture, mortgage, lease agreement or other agreement or instrument to which
HPI is a party or by which it or any of its property is bound.
(iv) ISSUANCE OF SECURITIES, ETC. HPI has all requisite
corporate power and authority to issue, sell and deliver the Shares and such
issuance, sale and delivery has been duly authorized by all requisite corporate
action of HPI and when so issued, sold and delivered (i) the Shares will be duly
and validly issued and outstanding, fully paid and nonassessable with no
personal liability attaching to the ownership thereof and will be free and clear
of all liens, charges, claims, encumbrances, restrictions or preemptive or any
other similar rights imposed by or through HPI and HPI shall have paid all
taxes, if any, in respect of the issuance thereof; and (ii) none of the Shares
will be subject to preemptive or any other similar rights of the shareholders of
HPI or others. The offer and sale of the Shares is exempt from the registration
requirements of the Securities Act and the rules and regulations promulgated
thereunder and the Shares will be issued in compliance with all applicable
Federal and state securities laws.
(b) JTC hereby represents and warrants to HPI that it is acquiring
the Shares for their own account for investment purposes and without a view to
the resale or distribution thereof.
6. INDEMNITY OBLIGATIONS.
(a) HPI agrees to indemnify and hold harmless JTC, as follows:
(i) against any and all losses, liabilities, claims, damages
and reasonable expenses whatsoever arising out of any untrue statement or
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alleged untrue statement of a fact set forth in the Registration Statement or
the omission or alleged omission therefrom of a fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading unless such statement or omission was made in reliance on
and in conformity with written information furnished to HPI by the JTC expressly
for inclusion in the Registration Statement;
(ii) against any and all losses, liabilities, claims, damages
and expenses whatsoever to the extent of the aggregate amount paid in settlement
of any litigation, commenced or threatened, or any claim whatsoever based upon
(A) any such untrue statement or omission or any such alleged untrue statement
or omission unless such statement or omission was made in reliance on and in
conformity with written information furnished to HPI by JTC expressly for
inclusion in the Registration Statement or (B) the rendition by JTC of any of
its services pursuant to this Agreement, except for any gross negligence,
malfeasance, act of bad faith or breach of trust by JTC or for its failure to
adhere to the terms and conditions of this Agreement; and
(iii) against any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever based upon any such untrue statement or
omission or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under clause (i) or (ii) above unless such
statement or omission was made in reliance on and in conformity with written
information furnished to HPI by JTC expressly for inclusion in the Registration
Statement.
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(b) HPI agrees to indemnify and hold harmless JTC, to the same
extent as the foregoing indemnity, against any and all losses, liabilities,
claims, damages and reasonable expenses whatsoever directly arising out of the
exercise by any person of any right under the Securities Act, the Exchange Act
on account of violations of the representations, warranties or agreements set
forth in Section 5 hereof.
(c) JTC agrees to indemnify and hold harmless HPI, its officers,
directors, employees, agents and counsel and each other person, if any, who
controls HPI, to the same extent as the foregoing indemnity from HPI to JTC in
Sections 6(a) and 6(b) hereof, but only with respect to (i) statements or
omissions, if any, made in the Registration Statement in reliance upon and in
conformity with written information furnished to HPI by JTC expressly for
inclusion in the Registration Statement; and (ii) any action which is the result
of the gross negligence, malfeasance, act of bad faith or breach of trust by JTC
or for JTC's failure to adhere to the terms of this Agreement. If any action
shall be brought against HPI or any other person so indemnified based on the
Registration Statement and in respect of which indemnity may be sought against
JTC pursuant to this Section 6(c), JTC shall have the rights and duties given to
an indemnifying party under Section 6(d) hereof and HPI and each other person so
indemnified shall have the rights and duties given to indemnified parties
pursuant to Section 6(a) hereof. The foregoing agreement to indemnify shall be
in addition to any liability JTC may otherwise have including liabilities
arising under this Agreement.
(d) If any action is brought against either HPI or JTC (each, an
"Indemnified Party" and collectively, "Indemnified Parties"), in respect of
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which indemnity may be sought against the other pursuant to Sections 6(a) - 6(c)
above, each such Indemnified Party shall promptly notify the other (the
"Indemnifying Party") in writing of the institution of such action (but the
failure to so notify shall not relieve the Indemnifying Party from any liability
it may have under this Section 6 unless such failure results in the imposition
of a default judgment which cannot be reopened) and the Indemnifying Party shall
promptly assume the defense of such action, including the retention of counsel
(reasonably satisfactory to each such Indemnified Party) and payment of
expenses. Each such Indemnified Party shall have the right to employ its own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of each such Indemnified Party unless the employment of such counsel
shall have been authorized in writing by the Indemnifying Party in connection
with the defense of such action or the Indemnifying Party shall have not have
promptly employed counsel reasonably satisfactory to each such Indemnified Party
to have charge of the defense of such action or each such Indemnified Party
shall have reasonably concluded that there may be one or more legal defenses
available to it or them or to other Indemnified Parties which are different from
or additional to those available to one or more of the Indemnifying Parties and
it would be inappropriate for the same counsel to represent both parties due to
actual or potential differing interests between them, in any of which events
such fees and expenses shall be borne by the Indemnifying Party and the
Indemnifying Party shall not have the right to direct the defense of such action
on behalf of each Indemnified Party. Anything in this Section 6(d) to the
contrary notwithstanding, the Indemnifying Party shall not be liable for any
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settlement of any such claim or action effected without its written
consent, which consent shall not be unreasonably withheld. HPI agrees to
promptly notify JTC of the commencement of any litigation or proceedings against
HPI or any of its officers or directors in connection with the Registration
Statement.
7. INDEPENDENT CONTRACTOR. It is expressly understood and agreed that
JTC is being engaged as a self-employed independent contractor and not as an
employee or agent of HPI. HPI will not withhold or pay any taxes relating to any
of JTC's activities hereunder, nor will HPI provide worker's compensation,
disability, health or any other insurance coverage.
8. GENERAL.
(a) This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof, and supersedes all prior
understandings, agreements, and documentation relating to the subject matter
hereof. No supplement, modification or amendment of this Agreement shall be
binding unless executed in writing by both parties hereto.
(b) The expiration of the term of this Agreement notwithstanding,
provisions which are intended to survive and continue such expiration
(including, without limitation, Section 6 hereof) shall so survive and continue.
(c) All notices which may be given under the provisions of this
Agreement or otherwise shall be conclusively deemed to have been given if
delivered personally or sent by certified mail, return receipt requested, with
postage prepaid, to each of the parties hereto at the respective addresses set
forth above, or to such other address or addresses as either party may
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hereinafter designate in writing as his or its address for this purpose in the
manner herein provided for giving notices. The date of giving of such notice
shall be conclusively deemed to be the date of receipt, if delivered personally,
or the date of postmark, if mailed.
(d) No term or provision hereof shall be deemed waived and no
breach excused unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented.
(e) The rights and obligations of the parties hereunder may not be
assigned by any such party without the prior written consent of the other. This
Agreement shall inure to the benefit of and be binding upon the successors (by
operation of law) and the permitted assigns of the parties hereto.
(f) Whenever the sense of this Agreement so requires, the
masculine gender shall be deemed to include the feminine and/or neuter gender,
and the plural, the singular and vice versa.
(g) The titles set forth in this Agreement are for convenience of
reference only and shall not be considered as part of this Agreement in any
respect nor shall they in any way affect the substance of any provision
contained in this Agreement.
(h) This Agreement, its performance and the rights, obligations
and remedies of the parties hereto, shall be construed and governed by the laws
of the State of Florida without regard to its principles of conflict of laws.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the year and date first above written.
HEALTH PROFESSIONALS, INC.
By: s/ William Reiter
-----------------------------------
William Reiter, CEO
JIM TILTON & COMPANY
By: s/ Jim Tilton
-----------------------------------
Jim Tilton, President
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Opinion of Atlas, Pearlman, Trop & Borkson, P.A.
relating to the issuance of shares of securities
pursuant to the Agreements
================================================================================
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
Direct Line: (954) 766-7860
August 15, 1997
Health Professionals, Inc.
2601 East Oakland Park Boulevard
3rd Floor
Fort Lauderdale, FL 33306
Re: Registration Statement on Form S-8 - HEALTH PROFESSIONALS, INC.-
Common Stock issued pursuant to Consulting Agreements
Gentlemen:
This opinion is submitted pursuant to the applicable rules of the
Securities and Exchange Commission (the "Commission") with respect to the
registration by Health Professionals, Inc. (the "Company") of an aggregate of
375,000 shares of Common Stock, par value $.02 per share (the "Common Stock"),
issued pursuant to Consulting Agreements with International Corporate
Development, Inc. and Jim Tilton & Company (collectively the "Agreements").
In our capacity as special counsel to the Company, we have examined the
original, certified, conformed, photostat or other copies of the Agreements, the
Company's Certificate of Incorporation (as amended), By-Laws and corporate
minutes provided to us by the Company. In all such examinations, we have assumed
the genuineness of all signatures on original documents, and the conformity to
originals or certified documents of all copies submitted to us as conformed,
photostat or other copies. In passing upon certain corporate records and
documents of the Company, we have necessarily assumed the correctness and
completeness of the statements made or included therein by the Company and we
express no opinion thereon.
<PAGE>
Health Professionals, Inc.
August 15, 1997
Page 2
Based upon and in reliance of the foregoing, we are of the opinion that
the shares of Common Stock when issued in accordance with the terms of the
Agreements, will be validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion in the Registration Statement
on Form S-8 to be filed with the Commission.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
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Consent of independent certified public accountants
================================================================================
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
Health Professionals, Inc.
Fort Lauderdale, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated January
7, 1997, which contains an explanatory paragraph regarding the Company's ability
to continue as a going concern, relating to the consolidated financial
statements of Health Professionals, Inc. appearing in the Company's Annual
Report on Form 10-K for the year ended September 30, 1996.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Seidman, LLP
------------------------------------
BDO Seidman, LLP
Miami, Florida
August 19, 1997
