AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 3, 2000
REGISTRATION NO. 333-30258
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT (1) TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CYBER-CARE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 65-0158479
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1903 SOUTH CONGRESS AVENUE, SUITE 400
BOYNTON BEACH, FLORIDA 33426
(561) 737-2227
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MICHAEL F. MORRELL With copies to: THOMAS PRITCHARD
Cyber-Care, Inc. Brewer & Pritchard, P.C.
1903 South Congress Ave., Suite 400 3 Riverway, 18th Floor
Boynton Beach, Florida 33426 Houston, Texas 77056
(561) 737-2227 (713) 209-2950
Telecopier: (561) 364-8291 Telecopier: (713) 659-2430
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act of 1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH
CLASS OF PROPOSED MAXIMUM OFFERING
SECURITIES TO BE PRICE PROPOSED MAXIMUM AGGREGATE AMOUNT OF REGISTRATION
REGISTERED AMOUNT TO BE REGISTERED PER UNIT OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock, $.0025 18,355,763 (1) $19.3125(2) $ 354,490,110 (3) $ 94,295(1)(4)
par value per share 8,215,643 (5) $12.97(6) $ 106,556,890 $ 28,131
</TABLE>
(1) Pursuant to filing of Form S-3 on February 11, 2000.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended
(the "Securities Act") based on the average of the bid and asked closing
price of the Common Stock, par value $.0025 per share (the "Common Stock")
as reported on the NASDAQ SmallCap Market on February 8, 2000.
(3) Pursuant to Rule 416 under the Securities Act, there are also being
registered such additional number of shares as may be issuable as a result
of the anti-dilution provisions of the securities.
(4) $94,295 has previously been paid.
(5) Additional shares to be registered pursuant to this amendment.
(6) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, as amended
(the "Securities Act") based on the average of the bid and asked closing
price of the Common Stock, par value $.0025 per share (the "Common Stock")
as reported on the NASDAQ on May 3, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Subject to Completion, Dated May 3, 2000
PROSPECTUS
CYBER-CARE, INC.
THE RESALE OF 26,571,406 SHARES OF COMMON STOCK
The selling price for the shares of common stock will be determined by market
factors at the time of their resale.
THE OFFERING
This prospectus relates to the resale by selling shareholders of up to
26,571,406 shares of common stock. The selling shareholders may sell the stock
from time to time in the NASDAQ SmallCap market at the prevailing price or in
negotiated transactions. Of the shares offered:
- up to 3,878,847 shares are issuable upon conversion of convertible
debentures;
- 7,448,340 shares are issuable upon exercise of warrants; and
- 15,244,219 shares are previously issued of which 4,745,661 are subject
to restricted agreements.
We will receive no proceeds from the sale of the shares by the selling
shareholders. However, we may receive proceeds from the exercise of warrants by
certain selling shareholders.
This investment involves a high degree of risk.
Please refer to Risk Factors beginning on Page 4.
The Securities and Exchange Commission and state securities regulators have not
approved these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense and should be
reported immediately to the Securities and Exchange Commission by calling
1-800-SEC-0330.
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TABLE OF CONTENTS
PAGE
WHERE YOU CAN FIND MORE INFORMATION.................................. 5
RISK FACTORS......................................................... 6
BUSINESS............................................................. 24
BUSINESS OPERATIONS.................................................. 24
SELLING SHAREHOLDERS................................................. 29
AGREEMENTS........................................................... 33
PLAN OF DISTRIBUTION................................................. 35
DESCRIPTION OF SECURITIES............................................ 36
LEGAL MATTERS........................................................ 37
EXPERTS.............................................................. 37
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE
TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY,
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER
IN SUCH JURISDICTION. THE DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY
THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission ("SEC"). You may read
and copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on public reference rooms. Our SEC
filings are also available to the public from the SEC's website at
"http://www.sec.gov." The SEC also allows us to "incorporate by reference" the
information we file with them, which means that we can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be part of this prospectus and the
information that we file later with the SEC will automatically update and
supersede this information. We will incorporate by reference the documents
listed below and any future filings we make we will make with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
(a) Annual Report on Form 10-KSB for the calendar year ended December 31,
1999.
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You may request a copy of these filings, at no cost by writing or
telephoning Linda Moore, the Secretary of the Company, at the following address:
Cyber-Care, Inc., 1903 South Congress Avenue, Suite 400, Boynton Beach, Florida
33426 (561) 737-2227.
EXCEPT FOR THE HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS PROSPECTUS UNDER "RISK FACTORS", IN ADDITION TO CERTAIN
STATEMENTS CONTAINED ELSEWHERE IN THIS PROSPECTUS OR IN OUR FILINGS UNDER THE
SECURITIES EXCHANGE ACT OF 1934, (THE "EXCHANGE ACT"), ARE "FORWARD-LOOKING
STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT
OF 1995 AND ARE THUS PROSPECTIVE. SUCH FORWARD-LOOKING STATEMENTS ARE SUBJECT TO
RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH COULD CAUSE ACTUAL FUTURE RESULTS
OR TRENDS TO DIFFER MATERIALLY FROM FUTURE RESULTS OR TRENDS EXPRESSED OR
IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE MOST SIGNIFICANT OF SUCH RISKS,
UNCERTAINTIES AND OTHER FACTORS ARE DISCUSSED IN THIS PROSPECTUS UNDER "RISK
FACTORS" AND PROSPECTIVE INVESTORS ARE URGED TO CAREFULLY CONSIDER SUCH FACTORS.
UPDATED INFORMATION WILL BE PERIODICALLY PROVIDED BY US AS REQUIRED BY THE
SECURITIES ACT AND THE EXCHANGE ACT. WE, HOWEVER, UNDERTAKE NO OBLIGATION TO
PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO SUCH FORWARD-LOOKING STATEMENTS
WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE HEREOF OR TO
REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.
This prospectus is part of a Registration Statement we filed with the SEC.
You should rely only on the information and representations provided in this
prospectus. We have authorized no one to provide you with different information.
We are not making offers for the securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the front of the document.
RISK FACTORS
The shares of our common stock being offered for resale by the selling
shareholders are highly speculative in nature, involve a high degree of risk and
should be purchased only by persons who can afford to lose the entire sum
invested in the common shares. Before purchasing any of the shares of common
stock, you should carefully consider the following factors relating to our
business and prospects. If any of the following risks actually occur, our
business, financial condition or operating results could be materially adversely
affected. In such case, the trading price of our stock could decline, and you
may lose all or part of your investment.
THE HEALTHCARE INDUSTRY IS SUBJECT TO EXTENSIVE LAWS AND REGULATIONS, WHICH
COULD IMPAIR OUR ABILITY TO CONDUCT BUSINESS.
The healthcare industry in general and the medical ancillary service
business in particular is subject to extensive federal, state and local
regulation relating to licensure, conduct of operations, ownership of
facilities, environment rules, pricing and reimbursement policies. Although we
believe that our current operations comply with applicable regulations, we
believe that the healthcare industry will continue to change, requiring us to
modify our agreements
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and operations from time to time. While we believe that we will be able to
structure our agreements and operations in accordance with applicable law, there
can be no assurance that the subsequent adoption of laws or interpretations of
existing laws will not regulate, restrict or otherwise adversely affect our
business.
WE HAVE A HISTORY OF LOSSES AND A SUBSTANTIAL ACCUMULATED DEFICIT.
To date we have been unable to generate revenue sufficient to be
profitable on a consistent basis. Consequently, we have sustained substantial
losses. Net losses for the years ended December 31, 1999 and 1998 were
$10,808,451 and $7,380,953, respectively. As of December 31, 1999, we had
working capital of $12,825,611. Accumulated deficits for the years ended
December 31, 1999and 1998 were $38,451,795 and $27,643,344, respectively. There
can be no assurance that we will ever achieve the level of revenues needed to be
profitable in the future or, if profitability is achieved, that it will be
sustained.
WE INTEND TO ACQUIRE VARIOUS COMPANIES, WHICH WILL SUBJECT US TO ALL OF THE
RISKS ASSOCIATED WITH A GROWING COMPANY.
We intend to grow through acquiring and developing e-commerce businesses.
There can be no assurance that suitable acquisitions will be available or that
acquisitions can be negotiated on acceptable terms, or that the operations of
acquired businesses can be integrated effectively into our operations.
Competition for suitable acquisition candidates is expected to be intense and
many of our competitors will have greater resources than we have. Our failure to
implement our acquisition strategy could have a material adverse effect on our
financial performance and, moreover, the attendant risks of expansion could also
have a material adverse effect on our business.
One of our recent acquisitions, Cybercare, Inc., ("Cybercare") is in the
research and development stage, had losses in prior years, will continue to have
losses in 2000 and will require a significant amount of capital to bring its
products and services to market. There can be no assurance that this company
will be profitable in the future or that it can be successfully integrated into
our operations. Our growth strategy will result in significant additional
demands on our infrastructure, and will place a significant strain on our
management, administrative, operational, financial and technical resources, and
increased demands on our systems and controls. Additional capital may be needed
and there can be no assurance that we will be able to obtain sufficient
resources to support Cybercare and future acquisitions and growth. The inability
to continue to upgrade the operating and financial control systems, the
emergence of unexpected expansion difficulties or failure to manage our proposed
expansion properly could have a material adverse effect on our business,
financial condition and results of operations. The laws and regulations
applicable to financial arrangements in the healthcare industry are complex and
may be subject to varying interpretations.
WE MAY NOT BE ABLE TO PROTECT OUR PATENTS AND PROPRIETARY TECHNOLOGY, WHICH
COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR BUSINESS.
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Our ability to compete effectively in the medical e-commerce industry will
depend on our success in developing and marketing our products and services
and/or acquiring other suitable medical e-commerce businesses and protecting
their proprietary technology, both in the United States and abroad. The patent
positions of medical technology companies generally involve complex legal and
factual questions. We currently have an exclusive license for one patent issued
and one pending with regard to our e-commerce technology. We intend to file for
additional patents under our license agreement on products for which we feel the
cost of obtaining a patent is economically reasonable in relation to the
expected protection obtained and has economic benefit. There can be no
assurances that any patent that we apply for will be issued, or that any patents
issued will not be challenged, invalidated, or circumvented, or that the rights
granted thereunder will provide any competitive advantage. We may incur
substantial costs in defending any patent or license infringement suits or in
asserting any patent or license rights, including those granted by third
parties, the expenditure of which we might not be able to afford.
Although we have and will continue to enter into confidentiality and
invention agreements with our employees and consultants, there can be no
assurance that such agreements will be honored or that we will be able to
adequately protect our rights to our non-patented trade secrets and know-how.
Moreover, there can be no assurance that other individuals or entities will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets and know-how. In
addition, we may be required to obtain licenses to patents or other proprietary
rights from third parties. There can be no assurance that any licenses required
under any patents or proprietary rights would be made available on acceptable
terms, if at all. If we do not obtain required licenses, we could encounter
delays in product development or find that the development, manufacture, or sale
of products requiring such licenses could be foreclosed. Additionally, we may,
from time to time, support or otherwise collaborate in research conducted by
universities and governmental research organizations. There can be no assurance
that we will have or be able to acquire exclusive rights to the inventions or
technical information derived from such collaborations or that disputes will not
arise with respect to rights in derivative or related research programs
conducted by us or such collaborators.
WE CANNOT GUARANTEE YOU THAT OUR PRODUCTS WILL BE FULLY DEVELOPED OR ACCEPTED BY
THE MARKETS.
Due to the early-stage development of our e-commerce products and
services, no assurance can be given that these products or services can be
developed into commercial products, manufactured on a large scale or be
economical to market. Nor can there be any assurance that these products or
services will achieve or sustain market acceptance. There is, therefore,
substantial risk that our product and service development and commercialization
efforts will not prove to be successful.
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There can be no assurance that physicians, medical providers or the
medical community in general will accept and utilize our products and services.
The extent that, and rate of which, these products achieve market acceptance and
penetration will depend on many variables including, but not limited to, a
timely penetration of the market, the establishment and demonstration in the
medical community of the clinical safety, efficacy and cost-effectiveness of
these products and services, the advantage of these products over existing
technology, third-party reimbursements practices and our manufacturing, quality
control, marketing and sales efforts. There can be no assurance that the medical
community and third-party payors will accept our technology or services. Similar
risks will confront any other products and services we develop in the future.
Failure of our products and services to gain market acceptance would have a
material adverse effect on our business, financial condition, and results of
operations.
OUR LIMITED MARKETING AND SALES RESOURCES COULD PREVENT US FROM EFFECTIVELY
MARKETING OUR PRODUCTS AND SERVICES.
We have limited internal marketing and sales resources and personnel. In
order to market any products and services we may develop, we will have to
develop a marketing and sales force with technical expertise and distribution
capability (or outsource such duties to independent contractors). There can be
no assurance that we will be able to establish sales and distribution
capabilities or that we will be successful in gaining market acceptance for any
products or services we may develop. There can be no assurance that we will be
able to recruit and retain skilled sales, marketing, service or support
personnel, that agreements with distributors will be available on terms
commercially reasonable to us, or at all, or that our marketing and sales
efforts will be successful. Failure to successfully establish a marketing and
sales organization, whether directly or through third parties, would have a
material adverse effect on our business, financial condition, cash flows, and
results of operations. To the extent that we arrange with third parties to
market our products or services, the success of such products and services may
depend on the efforts of such third parties. There can be no assurance that any
of our proposed marketing schedules or plans can or will be met.
THE NATURE OF OUR BUSINESS EXPOSES US TO PROFESSIONAL AND PRODUCT LIABILITY
CLAIMS, WHICH COULD MATERIALLY ADVERSELY IMPACT OUR OPERATIONS.
Our business and e-commerce technology exposes us to potential
professional and product liability risks, which are inherent in such businesses
and products. There can be no assurance that we will not be subjected to future
claims and potential liability. While we plan to maintain insurance against
professional and product liability and defense costs, there can be no assurance
that claims against us arising with respect to our products or services will be
successfully defended or that the insurance to be carried by us will be
sufficient to cover liabilities arising from such claims. A successful claim
against us in excess of our insurance coverage could have a material adverse
effect on us. Furthermore, there can be no assurance that we will be able to
continue to obtain or maintain liability insurance on acceptable terms.
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THE LOSS OF CERTAIN MEMBERS OF OUR MANAGEMENT TEAM COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS.
We will be dependent to a significant extent on the continued efforts and
abilities of our Chairman, Michael Morrell, and other key employees.
Notwithstanding our ownership of a one million dollar key-man life insurance
policy on each of Mr. Morrell and our President, Mr. Paul C. Pershes, if we were
to lose the services of either individual or other key employees before a
qualified replacement could be obtained, our business could be materially
adversely affected.
THE HEALTHCARE INDUSTRY IS HIGHLY COMPETITIVE AND WE MAY NOT BE ABLE TO
EFFECTIVELY COMPETE.
The healthcare industry in general and the market for medical services and
equipment in particular, are highly competitive. We compete with companies that
are larger in size and have access to considerably greater financial resources
than we have. We compete by providing more personalized care to the patients
they serve, as well as providing patient transportation and pharmaceutical
delivery.
Key differentiators between Cybercare and its competitors lie primarily in
the network architecture Cybercare is planning to build to serve this market.
Unlike our known competitors, Cybercare is unique in the automatic collection,
transmission, and logging of vital signs measurements to a central database
where the information can be viewed by a caregiver on a real-time basis or
whenever necessary. Known competitive systems require the manual entry of
information. We have patented TCP/IP protocols for the transmission of medical
data in a two-way interactive voice and video session between patients and
caregivers.
In our sleep lab business segment, there are no clear market leaders or
major competition. Most of our competitors are either labs in hospitals or
independent physicians interested in sleep that have started labs as an adjunct
to their local practice.
Our air ambulance business has numerous smaller competitors with
short-range aircraft, but has limited competitors with aircraft capability of
performing international and, in particular, trans-Atlantic flights. Medjet in
Alabama, Kalitta in Detroit and Sky Service in Toronto are the biggest
competitors in the international market.
In our rehabilitation business, there are numerous competitors larger in
size than we are and which have access to considerably greater financial
resources than we have.
Our pharmaceutical business competes directly in the sale and delivery of
prescription drugs to individuals living in adult living facilities. There are
numerous competitors larger in size which have access to considerably greater
financial resources. We rely primarily on reputation and service to market our
services. Our inability to compete with our competitors could have a material
adverse effect on our business.
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SUBSTANTIALLY ALL OF OUR SHARES ARE ELIGIBLE FOR RESALE, WHICH MAY HAVE A
DEPRESSIVE EFFECT ON THE MARKET AND DECREASE THE CURRENT MARKET PRICE.
As of April 1, 2000 we have 57,848,176 shares of our common stock
outstanding, of which substantially all can be sold pursuant to Rule 144 or this
registration statement. Under Rule 144, a person who has held restricted
securities for a period of one year may sell a limited number of shares to the
public in ordinary brokerage transactions. Sales under Rule 144 may have a
depressive effect on the market price of our common stock due to the potential
increased number of publicly held securities. The timing and amount of sales of
common stock that are currently eligible to be resold pursuant to Rule 144 or
pursuant to this registration statement could have a depressive effect on the
future market price of our common stock.
THERE IS ONLY A VOLATILE LIMITED MARKET FOR OUR COMMON STOCK.
Recent history relating to the market prices of public companies indicates
that, from time to time, there may be significant volatility in the market price
of our securities because of factors unrelated, as well as related, to our
operating performance. Factors such as announcements of new services to be
provided by us or our competitors, government regulatory action, and market
conditions for e-commerce company stocks in general could have a significant
impact on the future market price of our common stock.
WE ARE SUBJECT TO A SIGNIFICANT NUMBER OF HEALTHCARE INDUSTRY REGULATIONS AND
RELATED REGULATIONS, WHICH, IF WE FAIL TO COMPLY WITH THEM, COULD MATERIALLY
ADVERSELY AFFECT OUR OPERATIONS.
We are subject to substantial potential liability resulting from a variety
of possible causes, including breach of numerous healthcare laws, malpractice
and product liability. While we currently are not a party to any regulatory
action or material litigation, if any actions or lawsuits in the future are
brought against us, such actions or lawsuits may have a materially adverse
effect on us even if such lawsuits are without merit. We attempt to minimize our
potential liability through adherence to compliance procedures, effective case
supervision and personnel recruitment procedures. We also carry a variety of
insurance policies including policies insuring against certain negligent acts.
There can be no assurance, however, that such insurance policies will adequately
cover our losses resulting from liability, or that we will continue to qualify
for, or be able to afford or obtain, insurance in the future. We currently
maintain general and professional liability insurance for our operations in the
single limit amount and aggregate annual limit amount of $60,000,000. There is
no assurance that any potential claims will or will not exceed this limit.
Our air ambulance transport business is subject to significant federal and
international government regulations relating to airline safety, capital
requirements, licensing, maintenance,
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scheduling, and similar aspects of our operations. Due to the nature of aircraft
operations, applicable regulations and our policy, we incur substantial expenses
associated with the maintenance of our aircraft fleet. Although we believe that
our current operations comply with applicable regulations, there can be no
assurance that the subsequent adoption of laws or interpretations of existing
laws will not regulate, restrict or otherwise adversely affect our business.
Our physical rehabilitation and sleep therapy business are subject to
extensive federal and state regulations related to fee limitations, quality
control requirements and accounting and cost tracking requirements. These
operations are subject to periodic review and inspection of facilities, patient
records and billing policies which, if the applicable regulatory agency finds
deficiencies, may result in reduction or stoppage of reimbursements and/or fines
and penalties. Additionally, these operations are subject to severe restrictions
relative to referrals from and compensation to physicians as provided by the
Federal Stark rules and Florida Self-Referral rules. Violations of any of these
rules can result in penalties and fines and in some cases, criminal sanctions.
See discussion regarding Federal Anti-Kickback Laws and Florida and Federal
Self-Referral Laws.
Our pharmacy business is also subject to extensive federal and state
regulations, many of which are specific to pharmacies and the sale of
over-the-counter drugs. Regulations in this area often require subjective
interpretation, and we cannot be certain that our attempts to comply with these
regulations will be deemed sufficient by the appropriate regulatory agencies.
Violations of any of these regulations could result in various civil and
criminal penalties, including suspension or revocation of our licenses or
registrations, seizure of our inventory, or monetary fines, which could
adversely affect our operations.
The Health Insurance Portability and Accountability Act of 1996 mandates
the use of standard transactions, standard identifiers, security and other
provisions by the year 2000. Regulations have been proposed to implement these
requirements, and we are designing our applications to comply with the proposed
regulations. However, until these regulations become final, possible changes in
these regulations could cause us to use additional resources and lead to delays
as we revise our operations.
We believe that Cybercare's internet products will be subject to
regulation by the Food and Drug Administration. We have filed for 510-K approval
by the Food and Drug Administration. Since we use vital signs measuring devices
which are already approved by the FDA, we believe that obtaining this approval
for our products will be accomplished within 90-120 days from the time
application was made in January 2000. Complying with FDA regulations is time
consuming, burdensome and expensive, and we could be delayed or prevented from
introducing our Internet products and services which would have a material
adverse affect on our business in the U.S.
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WE RECENTLY ACQUIRED CYBERCARE AND ARE SUBJECT TO SUBSTANTIAL RISK RELATING TO
THE INTEGRATION OF CYBERCARE'S BUSINESS AND OPERATIONS WITH OURS.
The continuing successful operation of the businesses acquired in the
Cybercare acquisition is largely dependent upon the retention of the key
management personnel of Cybercare. Because the business acquired represents a
diversification of our business, functionally and geographically, the loss of
any of the key management personnel from Cybercare could have an adverse effect
on our business and upon the realization of the benefits anticipated from the
Cybercare acquisition.
In determining that the Cybercare acquisition was in our best interests,
the Board of Directors assumed the continuation of the business of Cybercare,
and that such business can be assimilated into our operations with relative
ease. Under the terms of the employment agreement with Mr. Haines, the CEO of
Cybercare he will continue his management of the acquired operations in a
largely autonomous manner and with minimal direct oversight by our Board of
Directors and executive officers. The employment agreement is intended to
provide consistent management of the acquired operations; however, the
difficulties of assimilation may be increased by the necessity of coordinating
geographically separated organizations, integrating personnel with disparate
business backgrounds and combining different corporate cultures. The process of
combining the acquired businesses may cause an interruption of, or a loss of
momentum in, our business, which could have an adverse effect on the revenues
and operating results of the combined companies. There is no assurance that we
will be able to retain all key management and other operating personnel or that
we will realize any of the other anticipated benefits of the Cybercare
acquisition.
WE DEPEND ON REIMBURSEMENT FROM THIRD PARTIES FOR A SUBSTANTIAL PORTION OF OUR
REVENUE.
A substantial amount of our services are purchased by patients, managed
care organizations and medical facilities which provide healthcare services to
their patients. Such organizations, facilities or patients typically bill or
seek reimbursement from various third-party payors such as Medicare, Medicaid,
other governmental programs and private insurance carriers for the charges
associated with the provided healthcare services. We believe that our market
success will largely depend upon obtaining favorable contracts and receiving
timely reimbursement for our products and services from such programs and
carriers.
IF WE DO NOT RECEIVE, AND CONTINUE TO RECEIVE, REFERRALS FROM PHYSICIANS AND
OTHER MEDICAL PROVIDERS, OUR BUSINESS COULD BE MATERIALLY ADVERSELY AFFECTED.
A significant portion of our business depends upon, among other things,
the efforts and success of the physicians, medical providers and others who
refer patients and provide services to our businesses and the strength of our
relationships with such physicians and other individuals and entities. Our
business, financial condition and results of operations could be adversely
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affected by the failure of these physicians, medical providers and others to
refer patients, maintain the quality of medical care or otherwise adhere to
required professional guidelines.
Our rehabilitation, and physical therapy business is dependent upon
revenues received as a result of referrals made by physicians. We market each of
the services in various methods, including customer and physician referrals,
reputation in the community and third parties. We rely upon community
reputation, customer referral, physician and other medical resource referrals.
In addition, we have in place a service system that enters local communities and
utilizes a screening program. We also staff exhibit booths at major
industry-specific conventions to attract hospital groups, insurance companies,
assistance companies and managed care organizations. We rely heavily on
referrals to perform high-tech procedures. There can be no guarantee that any
physician will choose to refer patients to us. In addition, physicians
affiliated with us may not, under certain circumstances, refer patients. In the
event that, for any reason, physicians do not use the ancillary medical service
businesses operated by us, such loss of patients could have a material adverse
effect on our business, financial condition and results of operation.
Furthermore, it is possible that third-party payors may refuse to approve
referrals to ancillary medical care facilities owned by us, but rather require
that such referrals be made to other facilities. Such a requirement could have a
material adverse effect on our business, financial condition and results of
operations. Further, our physical rehabilitation companies derive a significant
portion of their revenue from Medicare patients. Recent adjustments to
Medicare's allowances with respect to rehabilitation services have significantly
limited the amount of revenues that we may derive from services rendered to
Medicare patients. There is no assurance that future changes to Medicare's
reimbursement policy will not have a significant adverse effect on revenues
derived from these sources.
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WE MAY BE SUBJECT TO SUBSTANTIAL PENALTIES WHICH COULD MATERIALLY ADVERSELY
AFFECT OUR BUSINESS IF WE FAIL TO COMPLY WITH THE FEDERAL ANTI-KICKBACK LAWS
WHICH ARE VERY BROAD AND DIFFICULT TO INTERPRET.
Federal law, 42 USC ss.1320a-7b (the "Anti-Kickback Law"), prohibits
anyone from knowingly and willfully offering, paying, soliciting or receiving
any remuneration in return for the referral of patients or other business that
is paid for in whole or in part by a federal healthcare program including the
Medicare and Medicaid programs, or in return for inducing a person to recommend
purchasing, leasing or ordering items or services that are paid for, in whole or
in part, by a federal healthcare program. The Anti-Kickback Law is very broad in
scope and its provisions are not well defined by existing case law or
regulation. Violations of the Anti-Kickback Law may result in substantial civil,
criminal and/or administrative penalties under Federal and/or state law for
individuals or entities. A violation of the Anti-Kickback Law is a felony
punishable by a fine of up to $25,000 or imprisonment for up to five years, or
both. A violation may also result in civil monetary penalties of up to $10,000
for each violation, plus three times the amount claimed, and exclusion from
participation in the federal healthcare programs, including Medicare and
Medicaid, as well as serve as the basis for a claim under the United States
False Claims Act. Exclusion from participation in the federal healthcare
programs, as well as the other sanctions available under federal and state law,
if applied to us, would result in significant loss of reimbursement and would
have a material adverse effect on us.
The United States Department of Health and Human Services Office of the
Inspector General ("OIG"), the federal agency with primary responsibility for
enforcing the Anti-Kickback Law, has issued regulations that define
relationships that are immune from prosecution under the Anti-Kickback Law (the
"Safe Harbor" regulations). Each Safe Harbor includes a series of standards, all
of which must be satisfied for a business or compensation arrangement to benefit
from the protection offered by a specific Safe Harbor.
Two of the Safe Harbors address investment interests held by parties who
are in a position to refer patients or other business (1) in entities whose
securities are publicly traded that have more than $50,000,000 in undepreciated
net tangible assets, and (2) in those entities in which (a) no more than 40% of
the value of the investment interests of each class of investors may be held by
investors in a position to make referrals; (b) the terms of an investment
interest offered to a passive investor in a position to make referrals must be
no different than those offered to other passive investors; (c) the terms of an
investment interest offer to an investor in a position to make referrals or
generate business must not be based on the volume or value generated from the
investor to the entity; (d) there is no requirement that a passive investor make
referrals or generate business for the entity as a condition to remaining as an
investor; (e) the entity's services or items must not be marketed to passive
investors differently than non-investors; (f) no more than 40% of the entity's
gross revenue may come from referrals or business generated by investors; (g)
the entity must not loan or guarantee funds to an investor in a position to make
referrals if used to obtain the investment interest; and (h) the amount of
return
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to the investor must be directly proportional to the amount of capital
investment. We believe an investment interest in us will currently satisfy the
standards of this second Safe Harbor.
Other Safe Harbors address the structuring of employment and personal
services agreements. The employment safe harbor protects amounts paid by an
employer to an employee who has a bona fide employment relationship with such
employer, for the employment in the provision of items or services covered by a
federal healthcare program. In order to be protected under the personal services
safe harbor, independent contractor relationships, like our medical director
agreements, must satisfy certain standards. These standards include the
requirement that the aggregate compensation over the term of the arrangement
must be consistent with the fair market value of the services being rendered and
not determined in a manner that takes into account the volume or value of
patient referrals or other business between the parties that is paid for, in
whole or in part, by a federal healthcare program. We believe that we currently
meet the requirements of both of these Safe Harbors.
Notwithstanding our belief that it currently satisfies the investment
interest, employee and personal services Safe Harbors to the Anti-Kickback Law,
no assurance can be given that a federal agency charged with enforcement and/or
interpreting the Anti-Kickback Law, or a private party, will not successfully
assert a contrary position, or that future federal statutes, regulations,
administrative interpretations and/or judicial decisions would cause an
investor's referral to be prohibited, or result in the imposition of penalties
on us or investors. Even the assertion of a violation could have a material
adverse effect upon the financial condition and results of our operation.
Further, in addition to complying with the Anti-Kickback Law, physician
investors must also comply with both federal and Florida laws governing
physician self-referrals discussed below.
The OIG has adopted a procedure whereby it will provide guidance (an
"Advisory Opinion") as to whether a party's participation in a particular
business or compensation arrangement would be viewed as violating the
Anti-Kickback Law. An Advisory Opinion is available to the participants in a
business or compensation arrangement who are willing to disclose certain
information to the OIG. An Advisory Opinion may be relied on only by the
requesting party and is binding on the OIG only with respect to that
transaction; provided, if the OIG later determines the requestor failed to
disclose material information, the OIG will no longer be bound. A prospective
investor should be aware that we do not intend to seek an Advisory Opinion
regarding our compliance with the Anti-Kickback Law from the OIG.
WE MAY ALSO BE SUBJECT TO PENALTIES WHICH COULD MATERIALLY ADVERSELY AFFECT OUR
BUSINESS IF WE FAIL TO COMPLY WITH THE FLORIDA AND FEDERAL SELF-REFERRAL LAWS.
Florida's prohibition on self-referrals prohibits healthcare providers
from referring patients, regardless of payment source (not just Medicare and
Medicaid beneficiaries), for the provision of certain designated health services
("Florida Designated Health Services") to an entity in which the healthcare
provider is an investor or has an investment interest. Under the
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Self-Referral Act, Florida Designated Health Services are defined as clinical
laboratory, physical therapy, comprehensive rehabilitative, diagnostic-imaging
and radiation therapy services. We plan to purchase and currently operate
facilities that provide some or all of these Florida Designated Health Services.
All healthcare products and services not considered Florida Designated Health
Services are classified as "other health services." The Self-Referral Act also
prohibits the referral by a physician of a patient for "other health services"
to an entity in which that physician is an investor, unless (1) the physician's
investment interest is in the registered securities of a publicly traded
corporation whose shares are traded on a national exchange or over-the-counter
market and which has net equity at the end of its most recent fiscal quarter in
excess of $50,000,000; or (2) the physician's investment interest is in an
entity whereby (a) no more than 50% of the value of the investment interests in
the entity may be held by investors who are in a position to make referrals to
the entity; (b) the terms under which an investment interest is offered must be
the same for referring investors and non-referring investors; (c) the terms
under which an investment interest is offered may not be related to the
investor's volume of referrals to the entity; and (d) the investor must not be
required to make referrals or be in the position to make referrals to the entity
as a condition for becoming or remaining an investor.
Entities that meet either exception must also (1) not lend, or guarantee a
loan, to an investor who is in a position to make referrals if the investor uses
any part of that loan to obtain the investment interest, and (2) distribute
profits and losses to investors in a manner that is directly proportional to
their capital investment.
The Self-Referral Act excludes from the definition of "referral" certain
services provided by specific healthcare providers such as referrals by a
cardiologist for cardiac catheterization services. We believe that physician
investors that are cardiologists may refer patients to it for cardiac
catheterization services because of this provision. There are, however, no
assurances that the definition of what constitutes a referral will remain in
place.
The definition of referral also excludes services by a healthcare provider
who is a sole provider or member of a group practice that are provided solely
for the referring healthcare provider's or group practice's own patients.
Physician investors cannot refer to us for Florida Designated Health Services
based upon this exception under the Self-Referral Act because we do not provide
Florida Designated Health Services solely for the referring physician's or his
or her group practice's own patients. So long as physician investors do not
refer to us for Florida Designated Health Services, we believe we will be in
compliance with the Self-Referral Act. Although we will have mechanisms in place
to monitor referrals from physician investors, it is the responsibility of the
physician investors to comply with the Self-Referral Act and there can be no
assurances that physician investors will comply with such law. Violations
thereof could adversely affect us, as well as result in regulatory action
against us.
The Self-Referral Act also imposes certain disclosure obligations on us
and physician investors that are referring physicians. Under the Self-Referral
Act, a physician may not refer a patient to an entity in which he or she is an
investor, even for services that are not Florida
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Designated Health Services, unless, before doing so, the patient is given a
written statement disclosing, among other things, the physician's investment
interest in the entity to which the referral is made. The Self-Referral Act also
imposes disclosure obligations on the entities to which physician investors
refer patients. Appropriate disclosures will be required for physician
investors. It is the responsibility of any referring physician investor to
comply with such statutes, regulations and professional standards. However, this
law may discourage certain physician investors from making referrals to us or
encourage patients to choose alternative healthcare providers. In addition, the
violation thereof could adversely affect us, as well as result in regulatory
action against us.
The Federal statute relating to self-referrals, 42 USC ss.1395 (the "Stark
Law"), restricts the ability of a physician to refer patients for the furnishing
of certain designated health services ("Designated Health Services") to
healthcare entities when the physician (or immediate family member) has a
financial relationship, directly or indirectly, with the entity receiving the
referral. Moreover, the entity may not present or cause to be presented a claim
or bill for the Designated Health Services, either to the Medicare or Medicaid
programs or any other individual or third-party payor. The financial
relationship may be either an investment interest (either equity or debt) or a
compensation arrangement. Designated Health Services for purposes of the Stark
Law include: (1) clinical laboratory services, (2) physical therapy services,
(3) occupational therapy services, (4) radiology services, including magnetic
resonance imaging, computerized axial tomography scans, and ultrasound services,
(5) radiation therapy services and supplies, (6) durable medical equipment and
supplies, (7) parenteral and enteral nutrients, equipment, and supplies, (8)
prosthetics, orthotics, and prosthetic devices and supplies, (9) home health
services, (10) outpatient prescription drugs, and (11) inpatient and outpatient
hospital services.
There are exceptions to the Stark Law that apply (1) to both ownership or
investment interests and compensation arrangements, (2) only to ownership or
investment interests, or (3) only to compensation arrangements. Our current
structure will not meet any of the exceptions to permit a physician investor's
referral for Designated Health Services. Therefore, physician investors cannot
refer to us for Designated Health Services. Although we will have mechanisms in
place to monitor referrals from physician investors, it is the responsibility of
physician investors to comply with the Stark Law and no assurance can be given
that physician investors will comply with such law.
Two of the exceptions that protect only compensation arrangements are for
employees and personal services and their requirements are similar to the Safe
Harbor requirements discussed above. However, unlike the Safe Harbors to the
Anti-Kickback Law, the exceptions to the Stark Law must be complied with fully.
We believe we currently meet the requirements of both of these exceptions.
Notwithstanding our belief that we currently are in compliance with the
Stark Laws, no assurance can be given that a federal agency charged with
enforcement and/or interpreting the Stark Law, or a private party, might not
successfully assert a contrary position, or that future
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federal statutes, regulations, administrative interpretations and/or judicial
decisions would cause an investor's referral to be prohibited, or result in the
imposition of penalties on us or investors. Even the assertion of a violation
could have a material adverse effect upon our financial condition and results of
the operation.
Violations of the Florida and Federal self-referral laws may result in
substantial civil penalties and administrative sanctions for individuals or
entities, including exclusion from participation in the Medicare and Medicaid
programs, as well as the suspension or revocation of a physician's license to
practice medicine and surgery in Florida. Such sanctions, if applied to us or
any of our physician investors, would result in significant loss of
reimbursement and could have a material adverse effect on us.
An Advisory Opinion procedure similar to that discussed above and the
Declaratory Statement procedure also are available for parties seeking guidance
as to whether a specific transaction violates the Stark Law or the Self-Referral
Act, as the case may be. Potential investors should be aware that we do not
intend to seek the guidance available under either of these procedures.
FAILURE TO PROPERLY SUBMIT CLAIMS FOR REIMBURSEMENT COULD ADVERSELY AFFECT
OUR FINANCIAL CONDITION. We are subject to numerous state and federal laws that
govern the submission of claims for reimbursement to third-party payors,
including state and federal healthcare programs (e.g., Medicare and Medicaid).
These laws generally prohibit an individual or entity from presenting a claim
(or causing a claim to be presented) for payment by Medicare, Medicaid or any
other third-party payor that is false or fraudulent. The penalties available for
violations of these statutes include substantial civil and criminal fines,
imprisonment, exclusion from the federal healthcare programs and licensure
revocation.
One of the most prominent of these laws is the Federal False Claims Act,
which may be enforced by the federal government directly, or by a qui tam
plaintiff on the government's behalf. Under the False Claims Act, both the
government and the private plaintiff, if successful, are permitted to recover
substantial monetary penalties, as well as an amount equal to three times actual
damages. The State of Florida has a similar statute that governs claims made to
it. In recent cases, some qui tam plaintiffs have taken the position that
violations of the Anti-Kickback Law and the Stark Law should also be prosecuted
as violations of the Federal False Claims Act. We believe that we have
procedures in place to ensure the accurate completion of claim forms and
requests for payment.
NEW LEGISLATIVE DEVELOPMENTS COULD RESULT IN FINANCIAL HARDSHIP. In
addition, proposed legislation regarding healthcare reform has been introduced
before many state legislatures. Any such reforms at the federal or state level
could significantly alter patient-provider relationships. State and federal
agency rule-making addressing these issues is also expected. No predictions can
be made as to whether future healthcare reform legislation, similar legislation
or rule-making will be enacted or, if enacted, its effect on us. Any federal or
state
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legislation prohibiting investment interests in, or contracting with, us by
physicians or healthcare providers for which there is no statutory exception or
safe harbor would have a material adverse effect on our business, financial
condition and results of operations.
WE MAY NOT BE UNDER MANAGED CARE CONTRACTS. There can be no assurance that
we will be able to obtain managed care contracts. Our future inability to obtain
managed care contracts in our markets could have a material adverse effect on
our business, financial condition or results of operations. In addition, federal
and state legislative proposals have been introduced that could substantially
increase the number of Medicare and Medicaid recipients enrolled in HMOs and
other managed care plans. We currently derive a substantial portion of our
current revenue from Medicare and Medicaid. If such proposals are adopted, we
may be unable to obtain contracts from HMOs and other managed care plans serving
Medicare and Medicaid enrollees. Failure to obtain such contracts could have a
material adverse effect on our business, financial condition and results of
operations.
REGULATORY LIMITATION ON FEE-SPLITTING AND THE CORPORATE PRACTICE OF
MEDICINE COULD AFFECT OUR OPERATIONS. The laws of many states prohibit
physicians from splitting fees with non-physicians (or other physicians) and
prohibit non-physician entities from practicing medicine. These laws vary from
state to state and are enforced by the courts and by regulatory authorities with
broad discretion. Our business operations have not been the subject of judicial
or regulatory interpretation; thus, there can be no assurance that review of our
business by courts or regulatory authorities will not result in determinations
that could adversely affect our operations or that the healthcare regulatory
environment will not change so as to restrict our existing operations or their
expansion. In addition, the regulatory framework of certain jurisdictions may
limit our expansion into such jurisdictions if we are unable to modify our
operational structure to conform with such regulatory framework.
A determination in any state that we are engaged in the corporate practice
of medicine or any unlawful fee-splitting arrangement could render any
management agreement between us and a practice located in such state
unenforceable or subject to modification, which could have a material adverse
effect on us. Regulatory authorities or other parties may assert that we are or
a practice is engaged in the corporate practice of medicine in such states or
that the management fees paid to us by the managed practices constitute unlawful
fee-splitting or the corporate practice of medicine. If such a claim were
asserted successfully, we could be subject to civil and criminal penalties,
managed physicians could have restrictions imposed upon their licenses to
practice medicine, and we or the managed practices could be required to
restructure their contractual arrangements. Such results or the inability of us
or the managed practices to restructure our relationships to comply with such
prohibitions could have a material adverse effect on our financial condition and
results of operations.
CHANGES IN PAYMENT FOR MEDICAL SERVICES COULD HARM OUR BUSINESS. We
believe that trends in cost containment in the healthcare industry will continue
to result in a reduction in per-patient revenues. The federal government has
implemented, through the Medicare program,
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the RBRVS payment methodology for physician services. The RBRVS is a fee
schedule that, except for certain geographical and other adjustments, pays
similarly situated physicians the same amount for the same services. The RBRVS
is adjusted each year and is subject to increases or decreases at the discretion
of Congress. To date, the implementation of RBRVS has reduced payment rates for
certain procedures historically performed by our physicians. There can be no
assurance that any reduced operating margins could be recouped by us through
cost reductions, increased volume, introduction of additional procedures or
otherwise. Rates paid by non-governmental insurers, including those that provide
Medicare supplemental insurance, are based on established physician, ambulatory
surgery center and hospital charges, and are generally higher than Medicare
payment rates. A change in the makeup of the patient mix of our practices as
well as the medical practices under our management that results in a decrease in
patients covered by private insurance or a shift by private payors to RBRVS or
similar payment structures could adversely affect our business, financial
condition or results of operations.
PATIENT BROKERING ACT. Florida also has a criminal prohibition regarding
the offering, soliciting, or receiving of remuneration, directly or indirectly,
in cash or in kind, in exchange for the referral of patients (the "Patient
Brokering Act"). One of the exceptions to this prohibition is for business and
compensation arrangements that do not violate the Anti-Kickback Law.
Accordingly, so long as we are in compliance with the Anti-Kickback Law, then we
will be in compliance with the Patient Brokering Act.
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BUSINESS
GENERAL. Cyber-Care, Inc. was incorporated in September 1989 in the State
of Florida. Our name was changed in August 1999 as a result of the acquisition
of Cybercare, Inc. and our entry into the medical e-commerce business. Our
principal executive offices are located at 1903 S. Congress Ave., Suite 400,
Boynton Beach, Florida 33426 and our telephone number is (561) 737-2227.
Our primary active subsidiaries include: Cybercare, Inc, Pharmacy Care
Specialists, Inc., Your Good Health Network, Inc., and Air Response North, Inc.
BUSINESS OPERATIONS
E-COMMERCE BUSINESS. In August 1999, we acquired Cybercare, Inc.,
("Cybercare") a privately held Georgia corporation, which is developing an
Internet-based solution and interactive system that provides products and
services to support remote delivery of care, patient monitoring and education to
the U.S. healthcare market. Cybercare's executive offices are located in
Atlanta, Georgia as a wholly owned subsidiary of the Company.
OVERVIEW OF CYBERCARE. Cybercare is a development-stage, Internet-based
solution and interactive company that intends to develop, manufacture, operate
and sell Internet-based technology and interactive system for use in assisting
in disease management. These technologies are designed to support the remote
delivery of care, patient monitoring and education to the domestic and
international healthcare markets. Cybercare's initial product system has been
targeted specifically for the high-cost, chronically ill patient population. We
believe that preventive services for this patient population is an untapped $4
billion market segment in the United States alone. We believe that our expertise
in providing services to payors and managed care companies combined with
CyberCare's Internet connectivity technology will allow us to link patients
directly to healthcare professionals.
DESCRIPTION OF CYBERCARE. In January 1996, the Willow Group was formed by
John Haines for the purpose of developing and marketing telemedicine solutions
and technologies. In September of 1997, the Willow Group acquired rights to
technologies which had been developed by the Georgia Institute of Technology and
the Medical College of Georgia for monitoring chronically ill patients in their
homes. The Willow Group was then incorporated as Cybercare, Inc. in October of
1997 in the State of Georgia.
As our wholly owned subsidiary, Cybercare will continue to develop,
refine, produce and market its key technologies for monitoring chronically ill
patients in their homes. Cybercare expects to achieve operational efficiencies
through synergy with our other operating divisionsand the Company's existing
relationships with insurance companies and other payors.
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MATERIAL AGREEMENTS. The technologies which Cybercare uses in its business
are licensed to Cybercare pursuant to an exclusive licensing agreement with
Georgia Tech Research Corporation and the Medical College of Georgia. This
licensing agreement gives Cybercare exclusive worldwide rights to the
intellectual property developed by the universities for tele-homecare and also
gives rights to tele-homecare technologies that may be developed by the
universities in the future. This licensing agreement further provides for
certain royalty payments to the universities. In addition, this licensing
agreement provides for ongoing research and development support by the
universities for Cybercare's activities.
Cybercare also has a joint marketing agreement with Nortel Networks, Inc.,
which provides that Nortel sales personnel to cultivate sales leads for
Cybercare and to work jointly to obtain Cybercare business from Nortel
prospects. Cybercare has a distribution agreement in place with Healthlink
Group, LLC, which provides for Cybercare equipment and services to be marketed
by Healthlink Group for use in assisted living facilities in designated markets
and subject to Healthlink Group attaining certain performance objectives.
Cybercare also has a letter agreement in place with the Mayo Clinic of
Jacksonville, Florida for provision of Cybercare services in support of
tele-medicine projects in Florida.
DESCRIPTION OF MATERIAL PRODUCTS. Cybercare's primary product is the care
management system, which has two major components: the patient module and the
caregiver module. The patient module consists of a multimedia personal computer
with video conferencing capability in a very simple touch-screen user interface.
The patient module also includes interface drivers and medical devices which are
used by the patient to automatically collect vital diagnostic information,
including weight, temperature, blood pressure, ECG, heart and lung sounds
(electronic stethoscope), blood oxygen level, pulse rate, blood sugar levels,
etc. Vital sign information collected by the patient module is automatically
recorded in an electronic patient record maintained by the system within the
network. The caregiver module is also a personal computer-based application with
specialized software to permit a doctor or nurse to monitor a patient's vital
signs information and communicate directly with those patients. Both modules
function together so that measurement devices may be controlled from either end
and results are automatically collected, charted, and maintained for permanent
records. Tentatively scheduled for delivery in 2000, the patient module is a
small, portable unit which a nurse can hand carry into a patient's home for
connection to standard telephone lines or other network interfaces. In addition,
Cybercare plans to provide network services to link these patients together into
a common environment, where resources can be made available 24 hours a day seven
days a week whenever the patient needs assistance.
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COMPLIMENTARY ACQUISITION. The Company acquired, effective November 15,
1999, patents, products and key personnel from Help Innovations, Inc. for
($5,000,000) five million dollars in common stock priced at $3.75 per share.
Help Innovations owns a library of computerized disease management protocols
that will assist Cybercare in the delivery of services via the Internet. Help
Innovations is located in Lawrence, Kansas and additionally owns patented
technology, which will compliment the Cybercare line of products.
OUR OTHER PRIMARY BUSINESSES.
AIR AMBULANCE TRANSPORT. We are taking advantage of the rapidly growing
air ambulance industry through our subsidiaries, Air Response North, Inc.,
Global Air Rescue, Inc. and Global Air Charter, Inc. Through these subsidiaries,
we offer national and international fixed-wing air ambulance transport services
to ill, injured or otherwise incapacitated persons requiring relocation and
possible emergency medical care during flight. Circumstances requiring our
transport services include the relocation of patients requiring specialized
medical procedures such as organ transplants, cancer treatment, specialized
cardiac surgery, burn care, stroke care and advanced brain and spinal cord
surgery, as well as transportation to hospitals and medical facilities
recognized nationally for excellence in their respective fields.
Based in Denver, Colorado, our air ambulance transport companies maintain
an aircraft fleet which includes 15 owned and two leased aircraft. Air Response
has the competitive advantage generated by the long-range capabilities of its
Model 36 Learjets offering worldwide, intercontinental response capabilities. It
also has the added advantage of an in-house maintenance team, providing
expedient flight readiness equipped with state-of-the-art medical equipment
including the lifeport stretcher system, oxygen, suction pumps, compressed air
and a 1500 watt AC inverter.
PHYSICAL THERAPY AND REHABILITATION We acquired Your Good Health Network,
Inc. ("Your Good Health") effective October 16, 1998. Your Good Health was
founded in April 1997 by four individuals, three of whom founded and managed a
similar company which went public and was subsequently acquired by a much larger
publicly-traded company. The business objective of Your Good Health is to
provide physical, occupational, speech therapy and pain rehabilitation services.
Your Good Health intends to develop business operations within specific
geographic locations which can create synergies and operating efficiencies and
satisfy the cost containment requirements of significant payor sources.
Our Physical Therapy and Rehabilitation division currently owns and
operates approximately 100 rehabilitation and therapy clinics. Your Good Health
currently has a total of approximately 450 employees, including nine employees
in its corporate office who provide management and administrative services
through a staff leasing company. Each physical therapy clinic typically has
three staff, including two fully licensed therapists and an administrative
secretary/rehabilitation aide.
Your Good Health services include: specialty programs like pain management
coupled with traditional services such as primary care, orthopedic and
neurological physician services and comprehensive rehabilitation. These services
allow Your Good Health to be a unique healthcare provider. Your Good Health
strategy is to provide services which are less reliant upon governmental
reimbursement and to diversify its payor sources to more of a fee-for-service
basis. Your Good Health is focused to be minimally reliant upon managed care
payors.
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Effective on August 1, 1999, the Company acquired all issued and
outstanding shares of Carolina Rehab, Inc. ("Carolina") in exchange for shares
of Cyber-Care, Inc., to be paid in three installments in accordance with
"earn-out" provisions as follows:
The first installment will be paid to the former shareholders of Carolina
in Cyber-Care shares in an amount equal to the pre-tax net profits of Carolina
calculated in accordance with generally accepted accounting principles ("GAAP"),
times three. Fair market value of each share, for purposes of the first
installment payment, shall be $1.25 per share. The second and third installments
will be paid in Cyber-Care shares equal to the incremental increase in profit,
times three. Fair market value of each share, for purposes of the second and
third installments, shall be the ninety day trailing average of the stock prices
as of the last trading day of the second and third periods.
Carolina is a Medicare certified Comprehensive Outpatient Rehabilitation
Facility ("CORF") providing physical, occupational and speech therapy services
in with numerous locations throughout Florida.
Effective on August 1, 1999, the Company, through its wholly-owned
subsidiary, YGHN Acquisition Company I, Inc., acquired all issued and
outstanding shares of Southeast Medical Centers, Inc. ("Southeast") in exchange
for shares of Cyber-Care, Inc., to be paid in three installments in accordance
with "earn-out" provisions as follows:
Three installments will be paid in common stock of Cyber-care in an amount
equal to Southeast's pre-tax net profits calculated in accordance with GAAP, for
each of the three years ending July 31, following the effective date of the
acquisition. Fair market value of each share, for purposes of the first
installment, shall be the ten day trailing average of the stock price as of the
effective date of the acquisition but not to exceed $400,000. Fair market value
of each share, for purposes of the balance of the first installment in excess of
$400,000, if any, and for the second and third installments, will be the ten day
trailing average of the stock price as of the delivery date.
Southeast provides physical therapy and other health care services with
numerous locations in South Florida.
PHARMACEUTICAL SERVICES. We acquired Pharmacy Care Specialists, Inc.
("Pharmacy Care Specialists") in April 1998. Pharmacy Care Specialists is a
closed network pharmacy employing approximately 50 individuals with its
principal place of business in Lakeland, Florida. Pharmacy Care Specialists
provides unit-dosed medications to over 2,500 residents in assisted-living
facilities across Florida. Pharmacy Care Specialists delivers medications to the
facilities, provides training workshops and does third-party billing. The future
of the pharmacy industry is in a transitional phase. We believe the area with
potential for growth is in the adult living facility, mail order and Internet
pharmacy services. The insurance industry has, in recent years, expanded
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its involvement with mail order pharmacies. In essence, many insurance companies
are requiring their policyholders to order, by mail, their medications from an
approved, contracted pharmacy. This allows them to control expenses by
stipulating the amount each medication will be sold for, thus allowing them to
increase their profit margin. Realizing this, Pharmacy Care Specialists has
targeted its marketing efforts to accelerate the adult living facility mail
order and internet pharmacy services. As the population ages and expands and
many of these older individuals relocate to Florida, the market for
pharmaceuticals to assisted-living facilities and nursing homes increases as
does the direct-mail pharmacy market.
CHANGES IN BUSINESS STRATEGY. Our business strategy currently being
reviewed and developed by the board of directors, is to focus our primary
attention on our EHC System and technology products. We will continue to operate
our other businesses and gradually spin them off to our shareholders or sell the
segments that do not fit into our plans to strategic partners or potential
buyers as the opportunities arise, to maximize shareholder value and increase
technology revenue.
Our long-term strategy is to focus our energies on expanding our business
as follows:
o Primary focus will be the development of the EHC System products and
Internet technology services on a worldwide basis.
o Continue to operate the air ambulance business to increase revenues,
profitability and create synergies for our technology business. We
will look for an appropriate buyer, or spin off the company to
existing shareholders when appropriate, retaining a relationship
with the new company to add value and revenue to our Internet based
technology business.
o Continue to operate our physical therapy and rehabilitation
operations through internal growth and acquisition, while looking
for an appropriate buyer or partner, or spin off the business to
existing shareholders. The future of this business segment will be
based on all factors, including fair market value of the business,
ability to increase technology revenue by providing these services
through our EHC System and optimizing shareholder value.
o Continue to operate our pharmacy business, find an appropriate
strategic partner for our institutional pharmacy business and, if
possible, enter into a strategic alliance to provide e-pharmacy
business through our Electronic HouseCall System. We could
eventually sell this business to the strategic partner.
We believe that by concentrating on our Internet based technology
operations and developing our business to maximize technology revenue and
profitability, our management can focus its energies and resources on our
technology business, retain and grow important healthcare relationships thereby
increasing technology revenue and maximizing shareholder value.
SELLING SHAREHOLDERS
The following table sets forth certain information with respect to the
selling shareholders as of March 31, 2000. The selling shareholders are not
currently affiliates of ours, and have not had a material relationship with us
during the past three years. The selling shareholders are not nor were not,
affiliated with registered broker-dealers.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP OF MAXIMUM NUMBER AMOUNT AND PERCENTAGE
COMMON STOCK OF SHARES OF OF COMMON STOCK
AS OF COMMON STOCK AFTER THE SALE
NAME JANUARY 31, 2000 OFFERED FOR SALE NUMBER %
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HELP Innovations, Inc. 333,500 333,500 1,000,500 2%
Trifina Finanz 147,087(1) 147,087(1) 0 -
Roger B. McOmber 150,000(1) 150,000(1) 0 -
Clyde Smith McGregor 300,000(1) 300,000(1) 0 -
Jonathan Old III 150,000(1) 150,000(1) 0 -
David Palaia 75,000(1) 75,000(1) 0 -
Anthony Tang 150,000(1) 150,000(1) 0 -
CDLM - Weiss Associates 150,000(1) 150,000(1) 0 -
Jonathan Old III 390,000(1) 390,000(1) 0 -
Angela C. Sabella 260,000(1) 260,000(1) 0 -
Anthony M. Tang 260,000(1) 260,000(1) 0 -
Fredrik C. Schreuder 260,000(1) 260,000(1) 0 -
James C. Sullivan 75,000(1) 75,000(1) 0 -
Doug Hannink 32,500(1) 32,500(1) 0 -
Paul A. Bornstein 32,500(1) 32,500(1) 0 -
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Douglas Moore & Laurie
Moore, JTWROS 65,000(1) 65,000(1) 0 -
David J. Prentiss 32,500(1) 32,500(1) 0 -
Robert J. Rosan 65,000(1) 65,000(1) 0 -
William B. Armitage Trust 65,000(1) 65,000(1) 0 -
Harmonious Lineage
Investments, LLC 65,000(1) 65,000(1) 0 -
Derek Speirs 65,000(1) 65,000(1) 0 -
Denno Family Ltd. Prtshp. 65,000(1) 65,000(1) 0 -
Harry S. Scaling 65,000(1) 65,000(1) 0 -
Richard D. Green 97,500(1) 97,500(1) 0 -
Clyde Smith McGregor 65,000(1) 65,000(1) 0 -
Klas & Anette Lifors 32,500(1) 32,500(1) 0 -
Thomas F. Barmann &
Christine C. Barmann JTWROS 32,500(1) 32,500(1) 0 -
Charles H. Carmouche 32,500(1) 32,500(1) 0 -
Alan K. DerKazarian 65,000(1) 65,000(1) 0 -
Ruth Moore Trustee of the
Moore bypass Trust
Created 6-15-89 32,500(1) 32,500(1) 0 -
William A. Petrick 32,500(1) 32,500(1) 0 -
Thomas Stark III 26,000(1) 26,000(1) 0 -
J. Robert Dille 32,500(1) 32,500(1) 0 -
Pedagogue Trust 32,500(1) 32,500(1) 0 -
Donald W. Breech 32,500(1) 32,500(1) 0 -
Paul S. Lee 60,000(1) 60,000(1) 0 -
Anthony Tang 290,000(1) 290,000(1) 0 -
Arnold Curnyn 97,500(1) 97,500(1) 0 -
James E. Heavner 32,500(1) 32,500(1) 0 -
Nellie Green 32,500(1) 32,500(1) 0 -
Peter A. Massaniso 65,000(1) 65,000(1) 0 -
Ponte Vedra Partners Ltd. 65,000(1) 65,000(1) 0 -
Michael Engdall 32,500(1) 32,500(1) 0 -
Kas Stichting Bewaaerbedrijf 162,500(1) 162,500(1) 0 -
Barend H. Steenhuis 65,000(1) 65,000(1) 0 -
The Daniel Lee and Lisa Sue
Lee Trust of 1982 (restated) 65,000(1) 65,000(1) 0 -
Donald Breech MD, PA,
Profit Sharing Plan 32,500(1) 32,500(1) 0 -
ING Baring Private Bank F/B/O
Mandersloot and van Oven
B.V., a corporation 227,500(1) 227,500(1) 0 -
Holloway Playforth Archer
Nighbert Profit Sharing Trust 65,000(1) 65,000(1) 0 -
Mike Daugherty 32,500(1) 32,500(1) 0 -
Edwin J. Nighbert 32,500(1) 32,500(1) 0 -
Alan Chang 105,000(1) 105,000(1) 0 -
Jeff Spetelnick 32,500(1) 32,500(1) 0 -
BSI Limited 195,000(1) 195,000(1) 0 -
Rosario S. Ilacqua 65,000(1) 65,000(1) 0 -
David M. Palaia 32,500(1) 32,500(1) 0 -
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
William Kapner 32,500(1) 32,500(1) 0 -
Dr. Eric Spellman 32,500(1) 32,500(1) 0 -
Giovanni Trivella 32,500(1) 32,500(1) 0 -
New Master Investments Limited 65,000(1) 65,000(1) 0 -
Anthony Tang 195,000(1) 195,000(1) 0 -
ING Baring Private Bank F/B/O
Aufdemstein 65,000(1) 65,000(1) 0 -
ING Baring Private Bank F/B/O
Elizabeth Frazer 32,500(1) 32,500(1) 0 -
ING Baring Private Bank F/B/O
Max Sonderegger 195,000(1) 195,000(1) 0 -
A. Poot 130,000(1) 130,000(1) 0 -
Fortis Bank Luxumbourg SA 325,000(1) 325,000(1) 0 -
Williams de Broe A/C Fund Invest 162,500(1) 162,500(1) 0 -
F. Steltenpool 32,500(1) 32,500(1) 0 -
Giovanni Trivella 130,000(1) 130,000(1) 0 -
Gail Zimmerman as the Trustee
under the Irrevocable Dee of
Trustee for Gail Zimmerman
and descendants 195,000(1) 195,000(1) 0 -
View Far Management Limited 1,040,000(1) 1,040,000(1) 0 -
New Master Investments Limited 116,667(1) 116,667(1) 0 -
Veron International Limited 466,667(1) 466,667(1) 0 -
Advance Medicare Limited 933,333(1) 933,333(1) 0 -
John E. Haines 2,100,666(3) 2,100,666(3) 0 2%
Stephen R. Ratzel 1,420,000(3) 1,420,000(3) 0 -
J. David Richey 1,150,000(3) 1,150,000(3) 0 -
Charles P. Garrison, M.D. 133,332 133,332 0 -
Fidelity National Bank as
custodian F.B.O. Algle
Brown, M.D. as SDIRA 133,332 133,332 0 -
A.C. Brown, M.D. 217,668 217,668 0 -
Canyon Group, LLC 133,333 133,333 0 -
Raymond James & Assoc. as
custodian F.B.O. James E.
Cooke, M.D. as SDIRA 66,666 66,666 0 -
Myles S. Jordan, M.D. 319,999 319,999 0 -
James A. Mankin, Sr. 26,666 26,666 0 -
First National Bank of Griffin
Trustee FBO James A. Mankin,
Jr. U/A dtd 4/29/91 26,666 26,666 0 -
Leonard E. Borg, Jr. 80,000 80,000 0 -
Leonard E. Borg, Jr. 133,334 133,334 0 -
Frank Sadler 26,666 26,666 0 -
Dale L. McCord, M.D. 133,332 133,332 0 -
Kenneth H. Crandall, Jr. 26,668 26,668 0 -
Tony Jatcko 80,000 80,000 0 -
David J. VanderBrook 66,667 66,667 0 -
David J. Wendt 33,334 33,334 0 -
Anna V. Strachura 50,000 50,000 0 -
Anita Sudduth Kiser 15,000 15,000 0 -
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Ronald D. Moffitt 30,000 30,000 0 -
Darrell A. Sudduth 75,000 75,000 0 -
Lucille Sudduth 20,000 20,000 0 -
Patrice E. Martin-Perkins 5,000 5,000 0 -
Summers U. Perkins 10,000 10,000 0 -
Barry Sudduth 75,888 75,888 0 -
Robbie Scott 9,000 9,000 0 -
Gregory Matthews 53,125 53,125 0 -
Gerald M. Gordner II 1,000 1,000 0 -
Dale Giloman 15,000 15,000 0 -
Sam Panchal 42,553 42,553 0 -
John Pelfer 88,648 88,648 0 -
Michael F. Burrow 133,650 133,650 0 -
Andrew T. Hopper 35,887 35,887 0 -
William E. Price 36,250 36,250 0 -
Andrew M. Quay 36,250 36,250 0 -
Mary Simmons 3,263 3,263 0 -
James C. Tolar 53,650 53,650 0 -
Ga. Tech Research Corp. 362,500 362,500 0 -
MCG Research Institute 725,000 725,000 0 -
Richard L. Klass 413,252(2) 413,252(2) 0 -
Mid Market Financial Group, LLC 808,634(2) 808,634(2) 0 -
Paul A. Bornstein 4,500(2) 4,500(2) 0 -
Frantz-Lys Cajuste 28,843(2) 28,843(2) 0 -
Bo Olsson 3,000 3,000
Michael D. Flinn 10,500(2) 10,500(2) 0 -
John Weldon 101,572(2) 101,572(2) 0 -
Sands Brothers & Co., Ltd. 147,825(2) 147,825(2) 0 -
Derek Speirs 22,928(2) 22,928(2) 0 -
London Court, LTD. 4,393(2) 4,393(2) 0 -
ING Baring Private Bank 37,500(2) 37,500(2) 0 -
Southern Territory Group, Ltd. 141,215(2) 141,215(2) 0 -
Ragner U.G. Jongen 3,643(2) 3,643(2) 0 -
Charles Wang 8,571(2) 8,571(2) 0 -
Euxenite Limited 8,571(2) 8,571(2) 0 -
Swartz Equity 425,000(2) 425,000(2) 0 -
Hare and Company 150,000 150,000 0 -
Ronald Mills 75,000(4) 75,000(4) 0 -
Ronald Riewold 137,500 137,500 0 -
Axiom Venture Partners II 200,000 200,000 0 -
Robert C. Ashburn & Associates 20,000 20,000 0 -
E. Nicholas Davis III 100,000 100,000 0 -
ING Baring Private Bank (Schweiz) 1,912,500(1) 1,912,500 0 -
Stichting Bewaaerbedrijf Friesland
Bank Securities, N.V. 344,047(1) 344,047 0 -
BSI 202,381(1) 202,381 0 -
Axiom Venture Partners II 404,762(1) 404,762 0 -
SW Pelham Fund, L.P. 607,142(1) 607,142 0 -
San Fang Chemical Industry 809,524(1) 809,524 0 -
Fortune Victory Investment Ltd. 404,762(1) 404,762 0 -
Billion More Investments Ltd. 202,381(1) 202,381 0 -
Asia Integrated Internet Group Ltd. 607,142(1) 607,142 0 -
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
New Master Investment Limited 303,571(1) 303,571 0 -
</TABLE>
(1) Represents shares of common stock issuable upon conversion of convertible
debentures and upon the exercise of common stock purchase warrants issued
in connection with the debt-financing.
(2) Includes shares of common stock issuable upon the exercise of common stock
purchase warrants.
(3) These shares were issued as a result of our acquisition of Cybercare. The
shares are subject to an agreement which restricts their sale. The terms
of the acquisition and the restricted sale agreement were negotiated on an
arm's length basis by the parties. Prior to the acquisition, Messrs.
Haines, Ratzel and Richey had no relationship with the Company. Mr. Haines
is currently a director of our Company.
(4) These shares are subject to an agreement which restricts their sale. The
terms of the agreement were negotiated on an arm's length basis by the
parties.
29
<PAGE>
AGREEMENTS
ACQUISITION OF YOUR GOOD HEALTH NETWORK, INC.
Effective October 15, 1998, we issued 3,333,333 shares of restricted
common stock valued at $2,500,000 ($.75 a share) for 100% of the outstanding
stock of Your Good Health Network, Inc.
ACQUISITION OF CYBERCARE, INC.
Effective September 1, 1999, we acquired 100% of the outstanding common
stock of CyberCare, Inc. in exchange for 7,324,996 shares of our common stock
valued at $1.12 per share. CyberCare also had outstanding warrants and options
to be converted to Nine Hundred Thirty Five Thousand (934,997) shares of its
common stock. These options and warrants were replaced with like warrants and
options of our securities.
PRIVATE PLACEMENTS
We entered into an agreement with Connecticut Capital Markets, LLC to act
as placement agent offering to accredited investors up to 50 Units at a purchase
price of $100,000 per Unit on a best efforts basis. Each Unit consisted of a
convertible debenture in the principal amount of $100,000 accruing interest at
10 percent and a warrant to purchase 50,000 shares of the Company's common
stock. We are required to make its first interest payment on September 30, 2000
and semi-annually thereafter at a rate of 10 percent with the debentures
maturing on September 30, 2002. We may pay interest in shares of our common
stock. The number of shares paid is determined by dividing the interest payment
by the average closing bid price of our common stock on the twenty days prior to
the interest accrual date.
The debenture and any accrued interest may be initially convertible into
our common stock at 80 percent of the closing bid price of our common stock on
the date we receive the investors' subscription funds but in no event less than
$1.00. If our common stock is listed on a national market and is trading at two
times the then applicable conversion price for the 22 consecutive trading days
during the 30 day period prior to conversion, then the we have the right to
convert all or any portion of the debentures with any accrued interest into
shares of our common stock at the applicable conversion price.
We may also redeem the debentures with any accrued interest after
providing 30 days notice to the debenture holders. If the average bid price of
our common stock during any 22 consecutive trading days during the 30 day period
prior to the redemption is less than two times the applicable conversion price,
then as a protective incentive, the holders of the debenture will be entitled
for a period of six months after such redemption to purchase additional
nonregistered shares of our common stock at the conversion price in effect on
the redemption date.
30
<PAGE>
Each unit includes a warrant which entitles the holder to purchase shares
at 115% of the closing bid price of our common stock on date the we received the
investors subscription funds. We have the right to redeem the warrants if we
give the holder 30 days prior written notice and the average bid price of our
common stock for 22 consecutive trading days exceeds two times the conversion
price.
We entered into three agreements with Connecticut Capital Markets, LLC to
act as a placement agent in three separate private placements with Qualified
Institutional Buyers from December 1, 1999 through April 11, 2000.
From the period of February 15, 2000 through March 1, 2000 a Qualified
Institutional Buyer subscribed for the issuance of 500,000 shares of Common
Stock along with the issuance of a non-transferable warrants to purchase 100,000
shares of common stock at an exercise price of $31.50 per share for an aggregate
amount of $11,000,000. The warrants expire March 1, 2005. The shares are subject
to a 12 month lock-up provision wherein such shares may not be sold or otherwise
transferred. We paid our placement agent a cash commission equal to 10% of the
gross proceeds received.
From the period of March 27, 2000 through April 11, 2000, two Qualified
Institutional Buyers subscribed for the issuance of 1,295,546 shares of Common
Stock at a price of $15.4375 along with the issuance of non-transferable
Warrants to purchase 500,000 shares of Common Stock at an exercise price of
$18.4375 per share for an aggregate amount of $20,000,000. We are required to
register for resale the shares of Common Stock and the shares underlying the
Warrant effective prior to October 10, 2000.
From December 1, 1999 through February 4, 2000 we sold 28.65 units for an
aggregate purchase price of $14,325,000 to ten Qualified Institutional Buyers.
Each unit consisted of a $500,000 10% convertible debenture and 250,000 common
stock purchase warrants. We issued to our placement agent warrants to purchase
613,930 shares of common stock, expiring March 2005, exercisable at $3.50 per
share. The debentures mature February 28, 2003 and interest is payable on the
debentures commencing March 1, 2001 and semi-annually thereafter at the rate of
10% per annum. The warrants expire March 1, 2005 and are exercisable at $4.20
per share. We are required to register for resale, prior to May 9, 2000, the
shares of common stock issuable upon the conversion of the debentures, the
exercise of the warrants and the shares issued to the placement agent.
RECIPROCAL EQUITY INVESTMENT
The Company has entered into an agreement with the parent of SIIC Medical,
Shanghai Industrial Holdings Inc. ("SIHL") (Hong Kong Main Board: 363) to sell
the SIHL 1,500,000 shares of our
31
<PAGE>
common stock at $16.30 per share. The Company, in turn will purchase 7.7 million
shares of SIHL at $1.96 US per share. The agreement may be terminated by either
party under certain circumstances.
PLAN OF DISTRIBUTION
The selling shareholders are free to offer and sell their common shares at
such times, in such manner and at such prices as it may determine. The types of
transactions in which the common shares are sold may include transactions in the
Nasdaq SmallCap market (including block transactions), negotiated transactions,
the settlement of short sales of common shares, or a combination of such methods
of sale. The sales will be at market prices prevailing at the time of sale or at
negotiated prices. Such transactions may or may not involve brokers or dealers.
The selling shareholders have advised us that they have not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities. The selling shareholders
do not have an underwriter or coordinating broker acting in connection with the
proposed sale of the common shares.
The selling shareholders may effect such transactions by selling common
stock directly to purchasers or to or through broker-dealers, which may act as
agents or principals. Such broker-dealers may receive compensation in the form
of discounts, concessions, or commissions from the selling shareholders. They
may also receive compensation from the purchasers of common shares for whom such
broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions).
Information as to whether underwriters who may be selected by the selling
shareholders, or any other broker-dealer, are acting as principals or agents for
the selling shareholders, the compensation to be received by them, and the
compensation to be received by other broker-dealers, in the event that
compensation is in excess of usual and customary commissions, will, to the
extent required, be set forth in a supplement to this prospectus. Any dealer or
broker participating in any distribution of the shares may be required to
deliver a copy of this prospectus, including a prospectus supplement, if any, to
any person who purchases any of the shares from or through that dealer or
broker.
We have advised the selling shareholders that during such times as they
are engaged in a distribution of the shares, included herein, they are required
to comply with Regulation M promulgated under the Securities and Exchange Act.
With certain exceptions, Regulation M precludes any selling shareholder, and the
affiliated purchasers and any broker, dealer or other person who participates in
such distribution from bidding for or purchasing, or attending to induce any
person to bid for purchasing a security, which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may effect the marketability of the common stock.
32
<PAGE>
The selling shareholders also may resell all or a portion of the common
shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided they meet the criteria and conform to the requirements
of such rule.
DESCRIPTION OF SECURITIES
GENERAL
Our authorized capital stock consists of 200,000,000 shares of common
stock, $.0025 par value, and 20,000,000 shares of Preferred Stock. As of April
1, 2000 there were approximately 57,849,176 shares of common stock issued and
outstanding, and no shares of Preferred Stock are currently outstanding. The
number of shares of common stock outstanding does not include shares of common
stock that could be issued in connection with the potential acquisitions or upon
conversation or exercise of stock options, debentures, and other derivative
securities.
COMMON STOCK
Each holder of common stock is entitled to one vote for each share owned
of record on all matters voted upon by shareholders, and a majority vote is
required for all actions to be taken by shareholders. In the event of our
liquidation, dissolution or winding-up, the holders of the common stock are
entitled to share equally and ratably in our assets, if any, remaining after the
payment of all of our debts and liabilities. The common stock has no preemptive
rights, no cumulative voting rights and no redemption, sinking fund or
conversion provision. Holders of common stock are entitled to receive dividends
if, as and when declared by our Board of Directors out of funds legally
available therefor, subject to any dividend restrictions imposed by our
creditors. No dividend or other distribution (including redemptions or
repurchases of shares of capital stock) may be made if, after giving effect to
such distribution, we would not be able to pay our debts as they become due in
the normal course of business, or our total assets would be less than the
minimum of our total liabilities. If we realize net profits in the future, our
policy is likely to retain such earnings for the operation and expansion of our
business.
PREFERRED STOCK
Our Board of Directors is authorized (without any further action of the
shareholders) to issue preferred stock in one or more series and to fix the
voting rights, liquidation preferences, dividend rates, conversion rights,
redemption rights and terms, including sinking fund provisions, and certain
other rights and preferences. Satisfaction of any dividend preferences of
outstanding preferred stock would reduce the amount of funds available for the
payment of dividends, if any, on the common stock. Also, holders of the
preferred stock would normally be entitled to receive a preference payment in
the event of our liquidation, dissolution or winding-up before any
33
<PAGE>
payment is made to holders of common stock. In addition, under certain
circumstances, the issuance of preferred stock may render more difficult or tend
to discourage a merger, tender offer or proxy contest, the assumption of control
by a holder of a large block of our securities, or the removal of incumbent
management. The Board of Directors, without shareholder approval, may issue
preferred stock with dividend, liquidation, redemption, voting and conversion
rights which could adversely affect the holders of common stock.
OPTIONS AND WARRANTS
As of April 1, 2000, options and warrants to purchase collectively
13,349,507 shares of common stock were outstanding.
CONVERTIBLE DEBENTURES
As of April 1, 2000, $8,398,000 principal amount of debentures convertible
into 3,878,847 shares of common stock were outstanding.
TRANSFER AND WARRANT AGENT AND REGISTRAR
Our transfer agent and registrar for the common stock is Corporate Stock
Transfer, Denver, Colorado.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for the Company by Brewer and Pritchard, Houston, Texas.
EXPERTS
The consolidated financial statements of Cyber-Care, Inc. appearing in
Cyber-Care, Inc.'s Annual Report (Form 10-KSB) for the year ended December 31,
1999, have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
The financial statements for the year ended December 31, 1998 incorporated
in the Registration Statement have been audited by Grant Thornton, independent
certified public accountants, to the extent and for the periods set forth in
their report appearing elsewhere herein and in the Registration Statement, and
are included herein in reliance upon such report given upon the authority of
said firm as experts in auditing and accounting.
34
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses payable in connection with the registration and distribution of
the securities being registered hereunder, all of which will be borne by the
Registrant, are as follows:
Registration Fee - Securities and Exchange Commission ..... $ 98,000
Printing and Engraving .................................... 15,000
Legal Fees and Expenses ................................... 25,000
Accounting Fees ........................................... 15,000
Blue Sky Fees and Expenses ................................ --
--------
Total ..................................................... $153,000
========
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Pursuant to our Articles of Incorporation, and as permitted by the Florida
Business Corporation Act, we may indemnify our directors and officers under
certain circumstances against reasonable expenses (including court costs and
attorney's fees), judgments, penalties, fines, and amounts paid in settlement
actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of his being a director, officer, employee, or
agent of the Company if it is determined that he acted in accordance with the
applicable standard of conduct set forth in such statutory provisions. Thus, the
indemnification provisions will protect officers and directors from liability
only if the officer or director meets the applicable standard of conduct and the
Company has the financial ability to honor the indemnity.
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Exhibit
Index commencing at page EX-1 hereof.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement which includes any
material information with respect to
35
<PAGE>
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 purpose of determining any liability under the
Securities 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.
(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.
Insofar as indemnification for liabilities arising under the Securities
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 Securities 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 any 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 Securities Act and will be governed by the final
adjudication of such issue.
36
<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 the
requirements for filing Form S-3 and has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Boynton Beach, State of Florida, on the date below.
DATED: May 3, 2000 CYBER-CARE, INC.
By: /S/ PAUL C. PERSHES
Paul C. Pershes
President and Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
/S/ MICHAEL F. MORRELL Chairman, Director, May 3, 2000
Michael F. Morrell Chief Executive Officer
/S/ ARTHUR KOBRIN Senior Vice President May 3, 2000
Arthur Kobrin of Financial Operations
/S/ LINDA MOORE Senior Vice President and May 3, 2000
Linda Moore Secretary
/S/ JOHN HAINES Senior Vice President and May 3, 2000
John Haines Director
/S/ LOUIS R. CAPECE Director May 3, 2000
Louis R. Capece
/S/ GLEN BARBER Director May 3, 2000
Glen Barber
/S/ TED ORLANDO Director May 3, 2000
Ted Orlando
/S/ DANA PUSATERI Director May 3, 2000
Dana Pusateri
/S/ TERRY LAZAR Director May 3, 2000
Terry Lazar
37
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-3
Registration Statement
Under The Securities Act of 1933
EXHIBITS
CYBER-CARE, INC.
(Exact name of registrant as specified in our charter)
38
<PAGE>
EXHIBIT INDEX
CYBER-CARE, INC.
The following exhibits are included as part of this registration
statement, except those exhibits marked (1), which have previously been filed
with the Securities and Exchange Commission and are incorporated by reference to
another registration statement, report or document. References to the "Company"
in this Exhibit Index mean CYBER-CARE, INC., a Florida corporation.
EXHIBIT NO. DOCUMENT NO.
- ----------- -------- ---
2.1 Stock Exchange Agreement between Medical Industries of
America, Inc. and CyberCare, Inc. (10)
3.1 Amended and Restated Articles of Incorporation (1)
3.2 Amended and Restated Bylaws (1)
3.3 Articles of Amendment to the Articles of Incorporation (11)
4.0 Instruments establishing rights of security holders
4.1 Investment Agreement (9)
4.2 Registration Rights Agreement (9)
4.3 Escrow Agreement and Instructions (9)
4.4 Warrant to Purchase Common Stock of Medical Industries
of America, Inc. ("N" Shares) (9)
4.5 Warrant to Purchase Common Stock of Medical Industries
of America, Inc. ("425,000" Shares) (9)
4.6 Letter to Corporate Stock Transfer (9)
4.7 Agreement (9)
4.8 Acknowledgement (9)
5.0 Opinion re legality
5.1 Legal opinion of Atlas, Pearlman, Attorneys at Law (11)
5.2 Legal opinion of Brewer and Pritchard, P.C. (12)
10.0 Material contracts
10.1 Form of Indemnification Agreement between the Registrant
and each of its directors and certain executive officers (1)
10.2 Form of agreement between the Company and its client hospitals (1)
10.3 Master Lease Agreement, dated October 16, 1991, between the
Registrant and Comdisco Medical Leasing Group, Inc. (1)
10.4 Agreement between the Registrant and Northwest Broward
Invasive Cardiology Associates (1)
10.5 Promissory Note, dated December 9, 1992, executed by
Joseph S. Zinns, M.D. and Marilyn Zinns in favor of Northern
Trust Bank of Florida, N.A. (the "Bank"), Guaranty, dated
December 9, 1992, executed by and between the Registrant and
the Bank. (2)
10.6 Financial Consulting Agreement (1)
10.7 Escrow Agreement, effective as of September 1, 1992, by and
among the Company, Joseph S. Zinns, M.D., Marilyn Zinns,
Milton Barbarosh and Broad and Cassel (1)
10.8 Technomed, Inc. Share Exchange Agreement (3)
10.9 Westmark Group Holdings, Inc. Agreement (4)
10.10 Greenworld Technologies, Inc. Agreement (4)
10.11 Employment Agreement - Harry Kobrin (4)
10.12 Employment Agreement - Dawn M. Drella (4)
39
<PAGE>
10.13 Essential Care Share Exchange Agreement (4)
10.14 Amendment to Essential Care Share Exchange Agreement (4)
10.15 Employment Agreement - Michael Morrell (5)
10.16 Employment Agreement - Arthur Kobrin (6)
10.17 Employment Agreement - Linda Moore (6)
10.18 Share Exchange Agreement between MIOA Acquisition
Company I, Inc. and Global Air Rescue, Inc. (7)
10.19 Share Exchange Agreement between MIOA Acquisition
Company I, Inc. and Global Air Charter, Inc. (7)
10.20 Share Exchange Agreement between MIOA Acquisition
Company I, Inc. and Clearwater Jet Center, Inc. (7)
10.21 Agreement and Plan of Merger between Medical Industries
of America, Inc., MIOA Acquisition Company V, Inc.,
David S. Klein, M.D., P.C. and David S. Klein, M.D. (8)
10.22 Employment Agreement by and between Medical Industries of
America, Inc. and John E. Haines (10)
10.23 Amendment No. 1 to the Employment Agreement by and between
Medical Industries of America, Inc. and John E. Haines (10)
10.24 Agreement of Purchase and Sale by and between HELP
Innovations, Inc., HELP Innovations Acquisition Corp., Inc.,
Cyber-Care, Inc. and Linda L. Roman and Innovative Health of
Kansas, Inc. (11)
10.25 Agreement and Plan of Merger by and among Medical Industries
of America, Inc., MIOA Acquisition Company IV, Inc., Your Good
Health Network, Inc., and Dr. David Vastola, Dana Pusateri, Dr.
Martin Santiago, Juan Cocuy, Irma Espinoza, Randy Davis, Elaine
Callendrillo, Lydia Torregrosa-Greber, Richard Hoffman and Eric
Conn (11)
23.1 Consent of Atlas, Pearlman, Attorneys at Law (included in
Exhibit 5.1) (11)
23.2 Consent of Grant Thornton, Certified Public Accountants (12)
23.3 Consent of Ernst & Young, Certified Public Accountants (12)
23.4 Consent of Brewer and Pritchard, P.C. (included in exhibit 5.2) (12)
23.5 Letter Agreement by and between Axiom Venture Partners and
Cyber-Care, Inc. (12)
23.6 Schedule of Qualified Institutional Buyers (12)
23.7 Agreement and General Release by and between Cyber-Care and
Ronald W. Mills (12)
23.8 Agreement between Robert C. Ashburn & Associaties, Inc. and
CyberCare, Inc. (12)
23.9 Settlement Agreement by and between Cyber-Care, Inc., Ronald
Riewold and Janet Riewold (12)
23.10 Employment Agreement by and between Medical Industries of
America and E. Nicholas Davis, III; Amendment to Employment
Agreement (12)
40
<PAGE>
(1) Incorporated by reference from the Exhibit with the same reference number
in the Company's Registration Statement.
(2) Previously filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1992.
(3) Previously filed as an exhibit to the Company's Form 8-K dated August 23,
1995.
(4) Previously filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995.
(5) Previously filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1996.
(6) Previously filed as an exhibit to the Company's Annual Report on Form
10-KSB for the year ended December 31, 1997.
(7) Previously filed as an exhibit to the Company's Form 8-K dated January 6,
1998.
(8) Previously filed as an exhibit to the Company's Form 8-K dated August 6,
1998.
(9) Previously filed as an exhibit to the Company's Registration Statement on
Form SB-2 filed on November 30, 1999.
(10) Previously filed as an exhibit to the Company's Form 8-K dated July 15,
1999.
(11) Previously filed as an exhibit to the Company's Form S-3 dated February
11, 2000
(12) Filed herewith.
41
EXHIBIT 5.2
April 12, 2000
Board of Directors
Cyber-Care, Inc.
1903 South Congress Avenue, Suite 400
Boynton Beach, Florida 33426
Gentlemen:
As counsel for Cyber-Care, Inc., a Florida corporation ("Company"), you
have requested our firm to render this opinion in connection with the
Registration Statement of the Company on Form S-3 filed under the Securities Act
of 1933, as amended ("Act"), with the Securities and Exchange Commission
relating to the registration of the resale of 30,501,046 shares of Company
common stock.
We are familiar with the registration statement and the registration
contemplated thereby. In giving this opinion, we have reviewed the registration
statement and such other documents and certificates of public officials and of
officers of the Company with respect to the accuracy of the factual matters
contained therein as we have felt necessary or appropriate in order to render
the opinions expressed herein. In making our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents presented to us
as originals, the conformity to original documents of all documents presented to
us as copies thereof, and the authenticity of the original documents from which
any such copies were made, which assumptions we have not independently verified.
Based upon all the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida.
2. The offered shares were validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an to the Registration Statement, and hereby consent to
the use in the Registration Statement of the reference to Brewer & Pritchard,
P.C. under the heading "Legal Matters." This opinion is conditioned upon the
registration statement being declared effective.
Very truly yours,
/S/BREWER & PRITCHARD, P.C.
BREWER & PRITCHARD, P.C.
EXHIBIT 23.2
We have issued our report dated March 26, 1999, accompanying the consolidated
financial statements of Cyber Care, Inc. (formerly Medical Industries of
America, Inc.) and subsidiaries included in Form 10-KSB for the year ended
December 31, 1998 which is incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in the Registration
Statement of the aforementioned report and to the use of our name as it appears
under the caption "Experts."
/s/GRANT THORNTON
Fort Lauderdale, Florida
April 28, 2000
AUDITORS CONSENT
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) for the registration of 29,129,947 shares of
its common stock and to the incorporation by reference therein of our report
dated February 24, 2000, with respect to the consolidated financial statements
of Cyber-Care, Inc. included in its Annual Report (Form 10-KSB) for the year
ended December 31, 1999, filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
May 2, 2000
EXHIBIT 23.5
[CYBER-CARE LOGO]
LETTER AGREEMENT
_______ __, ____
Mr. Alan Mendelson
Axiom Ventures Partners
City Place II
17th Floor
185 Asylum Street
Hartford, CT 06103
Dear Mr. Mendelson:
The purpose of this letter is to memorialize the terms and conditions of
the agreement by and between your company, Axiom Ventures Partners (hereinafter
"Axiom") and Cyber-Care, Inc. (the "Company"). The agreement is as follows:
A. APPOINTMENT AND SERVICES. Company agrees to retain Axiom as their
nonexclusive agent and Axiom agrees to accept such appointment and to perform
the services set forth below all upon the terms and conditions herein set forth.
Axiom agrees to perform or cause to be performed the following services:
1. Advise the Company and its management with respect to any business
finance opportunity with respect to insurance companies that the
Company deems compatible with its business plan;
2. Publicize, as directed, the Company, its businesses and its business
plan to the insurance companies;
3. If requested by the Company, assist Company relative to any
negotiations with the insurance companies and provide Company with
periodic status reports concerning such negotiations;
4. To act as liaison between the Company and the insurance companies;
5. To advise the Company with respect to communications and information
disseminated to and from the insurance companies; and
<PAGE>
6. Promote, develop and implement agreements between the Company and
the insurance companies.
B. OBLIGATIONS OF THE COMPANY. In consideration for the above services,
Company agrees to:
1. Reimburse Axiom for all reasonable and necessary expenses incurred
which are directly related to the performance required by this
agreement. All expenses must be approved in advance. Axiom must
provide appropriate documentation of any expenses incurred. All
other expenses, unless otherwise agreed, shall be paid by Axiom.
2. For services contemplated by this agreement, the Company hereby
grants to Axiom a warrant to purchase 200,000 shares of common stock
at a price of $5.00.
C. TERM AND TERMINATION. The initial term of this Letter Agreement shall
be one (1) year. This Letter Agreement may be terminated at any time by either
party upon a material breach of this Letter Agreement and/or the Confidentiality
Agreement by the other party. After the initial term, either party by providing
the other party with 10 days prior written notice may terminate this Letter
Agreement. The provisions set forth above in respect to the payment of a fee
shall survive a termination of this Letter Agreement, other than as a result of
a material breach of this Agreement or the Confidentiality Agreement, for a
period of one (1) year.
Axiom is not a registered broker-dealer and will not provide any advice
with respect to the purchase or sale of securities.
If the terms set forth in this letter meet with your approval, please
indicate your acceptance by signing a copy of this letter and the
confidentiality agreement and return one executed copy of each to the
undersigned.
Very truly yours,
/s/PAUL C. PERSHES
Paul C. Pershes, President
Agreed to and accepted this ____ day of _________, ____.
/s/ALAN MENDELSON
Alan Mendelson for
Axiom Ventures Partners
EXHIBIT 23.6
CYBER-CARE, INC. - CHASE MANHATTAN ESCROW ACCOUNT #E 12690
CLOSING DECEMBER 23, 1999
<TABLE>
<CAPTION>
INVESTOR AMOUNT DATE OPTIONAL CONVERSION SHARES TO # OF WARRANTS
REC'D PRICE BROKER CONVERTS
<S> <C> <C> <C> <C> <C>
2ND ROUND
1. ING Baring Private Bank (Schweiz) AG $4,725,000 12/9 $3.50 ING 1,350,000 2,362,500
2. Stitchting Bewaaerbedrijf Friesland Bank
Securities, N.V. $ 850,000 12/9 $3.50 ING 242,857 425,000
3. BSI $ 500,000 $3.50 ING 142,857 250,000
4. Axiom Venture Partners II $1,000,000 12/1 $3.50 DS 285,714 500,000
5. SW Pelham Fund, L.P. $1,500,000 $3.50 DS 428,571 750,000
6. San Fang Chemical Industry $2,000,000 12/9 $3.50 CW 571,429 1,000,000
7. Fortune Victory Investments Ltd $1,000,000 12/3 $3.50 ST 285,714 500,000
8. Billion More Investments Ltd $ 500,000 12/3 $3.50 ST 142,857 250,000
9. Asia Integrated Internet Group Ltd $1,500,000 12/1 $3.50 ST 428,571 750,000
</TABLE>
<PAGE>
MEDICAL INDUSTRIES OF AMERICA, INC. - CHASE MANHATTAN ESCROW ACCOUNT #E 12690
<TABLE>
<CAPTION>
INVESTOR AMOUNT DATE OPTIONAL CONVERSION SHARES TO # OF WARRANTS
REC'D PRICE BROKER CONVERTS
<S> <C> <C> <C> <C> <C>
2ND ROUND
10. New Master Investmenet Limited $ 750,000 12/9 $3.50 ST 214,286 89,286
</TABLE>
EXHIBIT 23.7
AGREEMENT AND GENERAL RELEASE
This AGREEMENT AND GENERAL RELEASE (hereinafter referred to as "RELEASE"),
is entered into this 28th day of October, 1999, by and between CYBER-CARE, INC.
f/k/a MEDIAL INDUSTRIES OF AMERICA, INC., (hereinafter referred to as "CYBER")
and RONALD W. MILLS. JR. (hereinafter referred to as "MILLS").
WITNESSETH:
WHEREAS, Mills and Cyber entered into that certain Consulting Agreement
dated March 31,1998 (hereinafter referred to as "CONSULTING AGREEMENT"), whereby
Mills was to perform certain services for Cyber in exchange for certain fees;.
WHEREAS. the parties are in disagreement with respect to certain
performance related issues and as a result, certain disputes have arisen; and
WHEREAS, the parties to this Release desire to amicably terminate the
Consulting Agreement and settle all matters between them all on the following
terms and conditions; and
NOW, THEREFORE, in consideration of the promises and undertakings
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is acknowledged, Cyber and Mills agree as follows:
1. GENERAL RELEASE: Except for the enforcement of the terms of this
Release, Cyber hereby releases, acquits and forever discharges Mills and his
employees, agents, officers, directors, representatives, assigns, heirs and any
and all other persons, firms and corporations, whether herein named or referred
to or not, of and from any and all past, present and future actions, causes of
action. claims, demands, damages, costs, loss of service, expenses,
compensation, third-party actions, suits at law or in equity, including claims
or suits for contribution and/or indemnity, of whatever nature, and all
consequential damage on account of, or in any way growing out of, as a
consequence of, by reason of, or relating in any way to all circumstances,
events occurrences, actions and omissions relating to any and all matters
whatsoever. Likewise, except for the enforcement of the terms of this Release,
Mills hereby releases, acquits and forever discharges Cyber and its
subsidiaries, affiliated companies, employees, officers, directors, agents,
representatives, assigns, successors and any and all other persons, firms and
corporations, whether herein named or referred to nor not, of and from any and
all past, present and future actions, causes of action, claims, demands,
damages, costs, loss of services, expenses, compensation, third-party actions.
suits at law or in equity, including claims or suits for contribution and/or
indemnity, of whatever nature, and all consequential damage on account of, or in
any way growing out of, as a consequence of, by reason of, or relating in any
way to all circumstances, events, occurrences, actions and omissions relating to
relating to any and an matters whatsoever.
2. CONSIDERATION: In consideration of Mills executing this Release and as
full payment of any and all fees that may otherwise be due Mills in connection,
with the acquisition of CyberCare, Inc., a Georgia corporation by Cyber. Cyber
hereby agrees to deliver to Mills within 30 days of the date of this Release
75,000 shares of its restricted voting common stock, $.0025 par value (the
"CYBER SHARES").
3. REGISTRATION RIGHTS: Cyber shall use its reasonable best efforts to
effect a registration on Form S-3, or other appropriate form (the "REGISTRATION
STATEMENT"), and to register the Cyber
1
<PAGE>
Shares to be issued to Mills contemporaneous with the registration of the
Acquisition Shares issued to the CCI stockholders in accordance with that
certain Registration Rights Agreement dated June 16, 1999 by and between Cyber
f/k/a Medical Industries of America, Inc., and CyberCare, Inc.. a Georgia
corporation. By this reference all covenants, terms and conditions of the
Registration Rights Agreement are specifically incorporated herein and hereby
become a material part hereof.
4. RESTRICTIONS ON RESALE: Mills understands and acknowledges that sales
of large blocks of Cyber common stock could negatively impact the trading price
of the Cyber common stock- Accordingly, Mills hereby agrees that for a period of
seven months after the date of the effective f date of the Registration
Statement (the "RESTRICTED SALE PERIOD") he will not, within any 30 day [
period, offer to sell, contract to sell. hypothecate, negotiate, pledge, assign,
encumber, loan, pledge, grant any rights with respect to or otherwise dispose
of, directly or indirectly (collectively, a "DISPOSITION"), a number of Cyber
Shares or securities convertible into or exchangeable or exercisable for any
Cyber Shares now owned or hereafter acquired by Mills which exceeds 10,715
shares, other than a Disposition (i) to any donees who receive such Cyber Shares
as a bona fide gift and who are bound by the terms herein, or (ii) with the
prior written consent of Cyber.
Mills acknowledges and agrees that t1te foregoing restriction also
expressly precludes Mills from engaging in any hedging, short sales or other
transaction which is designed to or reasonably expected to lead to or result in
a Disposition of the Cyber Shares during the Restricted Sale Period, even if
such shares would be disposed of by someone other than Mills. Such prohibited
hedging or other transactions would include, without limitation, any short sale
(whether or not against the box) or any purchase, sale, show of any shares or
grant of any right (including, without limitation, any put or call option) with
respect to any Cyber common stock or with respect to any security (other t1tan a
broad-based market basket or index) that includes, relates to or derives any
significant part of its value from the Cyber common stock.
Mills agrees to submit each certificate for the Cyber Shares to Cyber for
imprinting of the following legends thereon:
"The sale, transfer, hypothecation, negotiation, pledge,
assignment, encumbrance or other disposition of this share
certificate and the shareholdings represented hereby are subject to
all of the terms, conditions and provisions of a Release dated as of
October 28, 1999, by and among Ronald W. Mi1ist Jr. and Cyber-Care,
Inc.. a copy of which may be obtained from the Secretary of
Cyber-Care, Inc."
In furtherance of the foregoing, Cyber and its transfer agent and
registrar are hereby authorized to decline to make any transfer of the Cyber
Shares if such transfer would constitute a violation or breach of this Release.
5. TERMINATION OF CONSULTING AGREEMENT. This Release further memorializes
that the parties have terminated the Consulting Agreement and that no additional
fees, costs or expenses shall be paid to Mills in connection therewith.
6. CONFIDENTIALITY: Each party agrees that they shall not disclose to any
third party the terms and conditions of this Release as well as any other
confidential information learned about the other party.
2
<PAGE>
7. BINDING EFFECT: This Re]ease shall be binding upon the parties and
their respective administrators, successors and assigns, and shall inure to the
benefit of the parties and their respective administrators, successors and
assigns.
8. SEVERABILITY: Should any of the provisions of this Release be
determined to be invalid by a Court of competent jurisdiction, the parties agree
that this shall not affect the validity or enforceability of the remaining
provisions, and that they shall renegotiate and reform any invalid provisions in
good faith to effectuate the purpose of the Release and to conform it to the
law.
9. ENTIRE AGREEMENT: This Release constitutes the entire understanding
between the parties and may not be modified without the express written consent
of the parties.
10. NO IMPROPER INDUCEMENT: The parties represent and acknowledge that in
executing this Release, they do not rely. and have not relied, on any
representation or statement made by any of the parties or their respective
agents. representatives or counsel with regard to the subject matter, bases or
effect of the Release or otherwise, other than as specifically stated in the
Release.
II. KNOWING AND VOLUNTARY: The parties hereto have read the foregoing
Release and fully understand it. The only promises made in connection with this
Release are those stared herein and Cyber and Mills sign this Release knowingly
and voluntarily.
12. COUNTERPARTS: This Release may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument
13. GOVERNING LAW: This Agreement shal1 be governed by and construed in
accordance with the laws of the State of Florida to the exclusion of the law of
any other forum. without regard to the jurisdiction in which any action or
special proceeding may be instituted. Each party hereto agrees to submit to the
personal jurisdiction and venue of the state and/or federal cow1s located in
Palm Beach County, Florida, for resolution of all disputes arising out of or in
connection with or by reason of the interpretation, construction and enforcement
of this Agreement, and hereby waives the claim or defense therein that such
court constitutes in an inconvenient form. As material inducement for this
Agreement each party specifically waives the right to trial by jury for any
issues so trialable.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, the parties hereby execute this Release as of the date
and year first written above.
MILLS: /s/ RONALD W. MILLS
Ronald W. Mills Jr.
October 28, 1999
CYBER: Cyber-Care, Inc.,
By: /s/Paul C. Pershes,
Its: President
4
EXHIBIT 23.8
AGREEMENT BETWEEN
ROBERT C. ASHBURN & ASSOCIATES, INC.
AND
CYBERCARE, INC.
Whereas this agreement between ROBERT C. ASHBURN & ASSOCIATES, INC., hereinafter
referred to as "CONSULTANT", and CyberCare, INC., hereinafter referred to as
"CLIENT", is entered into and provides for consulting services by ROBERT C.
ASHBURN & ASSOCIATES, INC. on behalf of CyberCare, INC.. When used in the
context of this agreement, the term CONSULTANT refers to the direct services
delivered personally by Robert C. Ashburn, Ph.D. The following terms and
conditions apply.
I. Robert C. Ashburn & Associates, Inc. agree to:
A. Provide consultation services to CLIENT as requested t facilitate
and expedite administrative and legislative activities that promote
the development and implementation of agreements between CLIENT and
the legislative and executive branches of Florida's state
Government. As requested by CLIENT, provide liaison between CLIENT
and the Agency for Health Care Administration, the Department of
Education, the Department of Corrections, and other state agencies
for which CLIENT may need such services. In all cases, provide
consultation services with the ultimate goal of meeting the direct
needs of CLIENT
B. Provide consultation services to CLIENT as requested to assist
CLIENT in meeting its goals and objectives.
C. Be available on demand to respond to critical events upon the verbal
request of the CLIENT in the provision of these services.
D. As requested by CLIENT, secure technical and legal assistance from
designated representatives of the CLIENT.
E. Work under the administrative direction of the CLIENT .
II. CyberCare, Inc. agrees to:
A. Compensate Robert C. Ashburn & Associates, INC. in the following
manner:
1. Pay CONSULTANT 10,000 shares of CyberCare, INC. stock for
services rendered as of September 13,1999.
<PAGE>
2. Pay CONSULTANT a minimum of an additional 10,000 shares of
CyberCare, INC. stock when a pilot project is approved by the
Agency for Health Care Administration for the purposes of
evaluating CyberCare, INC.'s product(s) and/or services.
3. Pay CONSULTANT a minimum of an additional 10,000 shares of
CyberCare, INC. stock when an agreement with the Agency for
Health Care Administration is approved to expand the use of
CyberCare, INC. product(s) and/or services. The amount of
shares will be based on a pre-approved share per CyberCare,
INC. unit purchased and/or leased or based on a pre-approved
utilization rate.
4. Pay CONSUL T ANT shares of CyberCare, INC. stock for any
business development that results in the utilization of
CyberCare, INC. products or services. The amount of shares
shall be based on a pre-approved utilization rate of
CyberCare, INC. products and/or services.
5. Reimburse CONSULTANT for necessary and reasonable expenses
related to the perfol1Ilance of services identified in this
agreement. No expenses shall occur until approved by the
CLIENT. Expenses authorized under this agreement will include
necessary and reasonable costs related to travel (including
transportation and per diem) and office supplies and
activities expended to support this agreement (such as
printing, reproduction, postage. envelops, paper, and
telephone charges) in accordance with CLIENT policies and
procedures. CONSUL T ANT will keep appropriate records to
document expenses, which are approved and incurred for
services rendered under the auspices of this agreement.
CONSULTANT will provide upon request invoices with appropriate
documentation to the CLIENT for reimbursement of expenses
incurred in the delivery of services authorized under this
agreement. Invoices submitted to the CLIENT for approval and
payment will include copies of receipts for reimbursable
expenses necessary to support this agreement.
B. Upon advance notice and when unusual or excessive demands arise,
provide CONSULTANT support services, including clerical. copier.
and/or telephone access in the performance of prescribed duties.
C. Provide CONSULTANT with technical assistance when required and
approved by CLIENT on relevant issues to perform services in the
best interests of CLIENT.
D. Identify individuals of the CLIENT who are authorized to speak on
behalf of the CLIENT and commit the CLIENT to positions and/or
changes in positions on relevant issues.
<PAGE>
III. This agreement shall be in effect September 1, 1999, and shall continue
until terminated by either party .The CLIENT or CONSULTANT shall have the
right to terminate this agreement at any time for justifiable reason or
cause. This agreement may be terminated at any time that the personal
services of Robert C. Ashburn are not available for whatever reason. At
any time that this agreement is terminated, there must be at least 90 days
written notice prior to the termination date.
IV .Any services provided by CONSUL T ANT that are deemed by both parties to
be beyond the scope of this Agreement, CONSULTANT may receive additional
compensation from CLIENT by mutual agreement for such services.
V. This agreement may be amended upon mutual consent of both parties at any
time.
/s/ROBERT C. ASHBURN, PH.D. /s/JOHN E. HAINES
Robert C. Ashburn, Ph.D. John E. Haines
President/Owner President
ROBERT C. ASHBURN & ASSOC. INC. CyberCare, INC.
1009 San Luis Road 1903 S. Congress Avenue, Suite 400
Tallahassee FL 32304 Boynton Beach FL 33426
850-576-6969 561-737-2227
850-576-8040 (Fax) 561-265-2869 (Fax)
EXHIBIT 23.9
[MOSKOWITZ, MANDELL, SALIM & SIMOWITZ, P.A. LETTERHEAD]
March 30, 2000
VIA FEDERAL EXPRESS
Dan Bivins, Esquire
Cyber-Care, Inc.
1903 S. Congress Avenue, Suite 400
Boynton Beach, FL 33426
Re: Cyber-Care, Inc. v. Riewold, Ronald
Dear Dan:
I have now received the original General Releases executed by Ron and Janet
Riewold. I have those in my file. I have also received the Settlement Agreement
executed by Ron and Janet Riewold before a Notary Public. I am transmitting to
you the original Settlement Agreement which requires Cyber-Care's signature on
page 11 through an authorized officer. Two witnesses should sign in the witness
column on page 11- In addition, a notary needs to execute the notarization form
on page 12 of the Settlement Agreement.
Kindly arrange to have the Settlement Agreement executed and returned to me in
order that I can conclude this matter. The lawyer for the Riewolds is calling
almost every day for receipt of the documents and finalization of this matter.
I would appreciate receiving the executed Settlement Agreement back as quickly
as possible. Please call me if you have an, questions regarding this matter.
Sincerely
/s/MICHAEL W. MOSKOWITZ
MICHAEL W. MOSKOWITZ
<PAGE>
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("AGREEMENT") is entered into and effective as
of this 20th day of March, 2000, by and between CYBER-CARE, INC., a Florida
corporation (hereafter "CYBER-CARE"); RONALD RIEWOLD (hereafter "RIEWOLD"); and
JANET RIEWOLD (hereafter "JANET RIEWOLD").
R E C I T A L S
WHEREAS, CYBER-CARE is a Florida corporation authorized to do business in
Florida with its principal place of business in Palm Beach County, Florida; and
WHEREAS, CYBER-CARE was formerly known as Medical Industries of America
(hereafter "MIOA"); and
WHEREAS, MIOA and RIEWOLD entered into an Employment Agreement (hereafter
the "Employment Agreement") dated July 1, 1997 pursuant to which MIOA employed
RIEWOLD to serve as a Senior Vice President; and
WHEREAS, on a date after or about July 9, 1999, RIEWOLD's employment with
CYBER-CARE ceased; and
WHEREAS, certain disputes have arisen between RIEWOLD on the one hand and
CYBER-CARE on the other hand regarding their respective rights and obligations
under the Agreement; and
WHEREAS, RIEWOLD instituted the litigation against CYBER-CARE encaptioned
RONALD RIEWOLD V. CYBER-CARE, INC., Case No. 00-00593 (AB), in the Circuit Court
of the 15th Judicial Circuit, in and for Palm Beach County, Florida (hereafter
the "Litigation"); and
WHEREAS, the parties hereto desire to settle and resolve their differences
conditioned upon full performance with the terms and conditions of this
AGREEMENT; and
<PAGE>
WHEREAS, each of the signatory parties have received independent legal
and/or accounting advice as to the nature and obligations of this AGREEMENT, and
each have been fully informed of his or her respective legal rights, obligations
and liabilities as set forth herein; and
WHEREAS, each of the parties, believing this AGREEMENT to be fair, just
and reasonable, has assented freely and voluntarily to its terms.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and in consideration of the obligations and duties assumed by
each party, as well as other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually covenanted and
agreed as follows:
ARTICLE I - INCORPORATION
The foregoing recitals are true and correct, and are incorporated herein
by reference.
ARTICLE II - CONSIDERATION
The consideration for this AGREEMENT is the mutual benefits each accruing
to the other party that presently exist, or are to be obtained by the parties,
and the promises of each to the other. The adequacy of the consideration for
this Agreement is hereby admitted by all parties hereto.
ARTICLE III - CONFIDENTIALITY AND NON-DISPARAGEMENT
Except as expressly set forth herein, or as may be required by any
applicable federal, state or local securities or healthcare regulations or
statutes, including any exchange rules or regulations, the parties hereby agree
that any and
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<PAGE>
all matters embodied by or encompassed within this AGREEMENT are to be kept
strictly confidential, and are to be governed by the following terms and
conditions which are a material and integral part of this AGREEMENT:
A. All parties hereto agree, covenant and represent that they will
not discuss or disclose their respective claims against each other, the terms
and conditions of this AGREEMENT, or any facts pertaining to either of the same,
whether disputed or not, any oral or written information obtained by them,
and/or the contents of any settlement negotiations, the facts of this
settlement, and/or any payment with or to any person or entity hereunder, and
further agree that they shall not, directly or indirectly, either on their own
or through other persons or entities, orally, in writing, or in any form,
disclose, disparage or make comment about their respective claims or this
AGREEMENT, or the conduct or lack of conduct of any party hereto, to or with any
third person, firm, entity, organization, corporation, government entity, media,
or any regulatory, administrative, or review body, whether private, public,
professional, local, county, state, or federal, or any other entity unless
otherwise provided herein or unless required by lawful process of any court or
governmental entity;
B. All parties hereto agree, covenant and represent that they will
not discuss or disclose any evidence or information obtained regarding their
respective claims, including but not limited to any oral or written information
obtained by them, with or to any persons or entities and further agree that they
shall not, directly or indirectly, either on their own or through other persons
or entities, orally, in writing, or in any form, testify, participate, cooperate
or assist the claims of any other persons or entities who have or may have a
claim, action or
3
<PAGE>
lawsuit against any other party hereto, unless otherwise provided, or unless
required by lawful process of any court or governmental entity;
C. All parties hereto agree, covenant, and represent that they will
not consent to be interviewed by the media, nor will they comment in any manner
to the media or others, other than to state that the matter has been amicably
settled. In particular, they will not indicate any measure of satisfaction or
dissatisfaction with the settlement, regardless of the form of the media
communication, regarding the parties' respective claims or regarding the terms
and conditions of this AGREEMENT, any payments given in consideration for this
AGREEMENT, the information protected by this AGREEMENT and/or the existence of
this AGREEMENT, unless otherwise provided or unless required by lawful process
of any court or governmental entity;
D. The parties hereto, agree, covenant and represent that they shall
not disclose, disseminate or reveal, in any way whatsoever, the original or any
copy of any portion of this AGREEMENT, nor any prior memoranda signed by the
parties hereto, nor any other written communication between counsel or anyone
else concerning the parties' respective claims or disagreement, nor any portion
of the AGREEMENT, directly or indirectly, to any person, firm, corporation or
governmental entity, the media, any regulatory, administrative or review body,
whether private, professional, local, county, state, or federal, or other
entity, unless otherwise provided herein or unless required by lawful process of
any court or governmental entity.
E. Disclosure of all matters embodied or encompassed within this
AGREEMENT shall be permitted to attorneys, accountants or other professional
advisors acting in such capacity on behalf of any party hereto.
4
<PAGE>
ARTICLE IV - RELEASE BY RIEWOLD TO CYBER-CARE
Contemporaneous with the execution of this AGREEMENT, RIEWOLD agrees to
execute the General Release unto CYBER-CARE, attached hereto and incorporate
herein as Exhibit "A". This executed General Release shall be delivered to
Michael W. Moskowitz, Esq., Moskowitz, Mandell, Salim & Simowitz, P.A., as
counsel for CYBER-CARE.
ARTICLE V - RELEASE BY CYBER-CARE TO RIEWOLD
Contemporaneous with the execution of this AGREEMENT, CYBER-CARE agrees to
execute the General Release unto RIEWOLD, attached hereto and incorporated
herein as Exhibit "B". This executed General Release shall be delivered to Roy
D. Oppenheim, Esq., Oppenheim & Pilelsky, P.A., as counsel for RIEWOLD.
ARTICLE VI- RELEASE BY JANET RIEWOLD TO CYBER-CARE
In exchange for the assignment provided by Article VIII INFRA and
contemporaneous with the execution of this AGREEMENT, JANET RIEWOLD agrees to
execute the General Release unto CYBER-CARE, attached hereto and incorporate
herein as Exhibit "C". This executed General Release shall be delivered to
Michael W. Moskowitz, Esq., Moskowitz, Mandell, Salim & Simowitz, P.A., as
counsel for CYBER-CARE.
ARTICLE VII - RIEWOLD STOCK PURCHASE
CYBER-CARE hereby agrees to issue or instruct its transfer agent to issue
137,500 unregistered shares of CYBER-CARE common stock to RONALD RIEWOLD upon
the presentation by RIEWOLD of a cashier's check for
5
<PAGE>
$203,500.00, representing $1.48 per share. CYBER-CARE hereby agrees to amend its
current S-3 filing to include the registration of these shares of stock.
CYBER-CARE hereby agrees to use reasonable and best efforts to accomplish the
filing and approval of the S-3 filing. CYBER-CARE makes no representation,
warranty or guarantee of the date of accomplishing the amended S-3 filing, but
believes that it can be accomplished prior to April 15, 2000.
ARTICLE VIII - RIEWOLD STOCK ASSIGNMENT
CYBER-CARE hereby agrees to permit RIEWOLD to assign 50,000 shares of the
137,500 shares of CYBER-CARE unregistered common stock referenced in Article VI,
to his former wife JANET RIEWOLD. This assignment shall occur contemporaneous
with the execution of this AGREEMENT by all parties hereto.
ARTICLE IX - FINAL ORDER OF DISMISSAL
Counsel for the parties hereto shall file with the Court a Stipulation and
Order in the form attached hereto as Exhibit "D", providing for a dismissal of
the Litigation with prejudice.
ARTICLE X - TERMINATION OF PRIOR AGREEMENTS
The Employment Agreement dated June 1, 1997 by and between RONALD RIEWOLD
and MIOA is hereby terminated and of no further force or effect.
The Stock Option Agreement dated July 1, 1998 by and between RONALD
RIEWOLD and MIOA is hereby terminated and of no further force or effect.
ARTICLE XI - NON-INTERFERENCE AND NON-DISPARAGEMENT
From this moment forward, RIEWOLD agrees that he will not, directly or
indirectly, or through his agents or attorneys, take any action to defeat,
impair,
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<PAGE>
impede or otherwise interfere with CYBER-CARE's business and/or reputation, and
will take no action whatsoever to adversely affect the same.
ARTICLE XII - MISCELLANEOUS
1. CLOSING. The execution of this AGREEMENT and all exhibits by all
parties hereto and the payment of all monies must ALL occur no later than March
28, 2000.
2. TAXES. The parties hereto shall each be responsible for the payment of
their own respective tax obligations created as a result of the terms and
conditions of this AGREEMENT, or performance hereunder.
3. GOVERNING LAW. This AGREEMENT has been entered into in the State of
Florida, and it is the intention of the parties that all questions as to
performance, interpretation, validity, legal effect and enforceability of this
AGREEMENT, shall be determined in accordance with the laws of the State of
Florida. The parties hereby further agree that the exclusive venue for any
action under this AGREEMENT shall be the courts of Palm Beach County, Florida,
state and federal, and all parties hereby waive any objections which they may
have to the personal jurisdiction of such courts. Such personal jurisdiction is
hereby conferred without regard to the actual locus or residence of the parties
at the present time, or regardless of any change of residence of any of the
parties that may occur hereafter.
4. ENTIRE AGREEMENT. This AGREEMENT sets forth the entire understanding of
the parties hereto, and supersedes all previous oral and written agreements, if
any, between the parties, and may not be amended, altered or modified except by
written document signed by all of the parties hereto.
7
<PAGE>
5. HEADINGS. The headings used in this AGREEMENT are used for reference
purposes only, and are not deemed controlling with respect to the meaning,
construction or effect of the contents thereof.
6. SEVERABILITY. The invalidity or unenforceability of any particular
provision of this AGREEMENT shall not affect the other provisions hereof, and
this AGREEMENT shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
7. BINDING EFFECT. This AGREEMENT shall be binding upon and inure to the
benefit of, and shall be enforceable by, the respective successors, assigns,
heirs, beneficiaries and personal representatives of the parties hereto.
8. GENDER. Wherever the context shall so require, all words herein any
gender shall be deemed to include the masculine, feminine or neuter gender; all
singular words shall include the plural and all plural shall include the
singular.
9. WAIVER OF BREACH. The waiver of any party of a breach of any provision
of this AGREEMENT by the other shall not operate or be construed as a waiver of
any subsequent breach.
10. ATTORNEYS' FEES AND COSTS. In the event that any party shall be
required to enforce this AGREEMENT through litigation, the prevailing party
shall be entitled to recover its reasonable attorneys' fees and all costs and
expenses incurred in connection with such enforcement, including fees, costs and
expenses incurred upon any appeal or in any bankruptcy proceedings.
11. COUNTERPARTS. This AGREEMENT may be executed in any number of
counterparts, and each such counterpart shall for all purposes be deemed to be
an original.
8
<PAGE>
12. FURTHER COOPERATION. Each of the parties hereto agrees to execute
whatever additional documentation or instruments as are necessary to carry out
the intents and purposes of this AGREEMENT.
13. JOINT AGREEMENT. This AGREEMENT shall be considered the joint product
of all parties hereto, and in the event of any controversy as to the
construction of any provision hereof, such controversy shall not be construed
against any party as the alleged drafter of this AGREEMENT.
14. NOTICE. Any and all notices, consents, offers, acceptances, or any
other communications provided for herein shall be given in writing and shall be
effective upon delivery as evidenced by a receipt executed by or for the party
to whom such notice, consent, offer, acceptance, or any other communication
provided for herein is addressed; which delivery shall occur upon facsimile
transmission, as evidenced by such facsimile transmission verification report OR
upon delivery by (i) certified or registered mail as evidenced by a return
receipt executed by or for the party to whom such mail is addressed, or (ii)
courier service, including, without limitation, United Parcel Service, Federal
Express, Purolator, Airborne Express, or U.S. Postal Service Express Mail, as
evidenced by a receipt executed by or for the party to whom such courier package
is addressed. Notices shall be given to the following:
If to CYBER-CARE, INC..: Dan Bivins, Esquire
Cyber-Care, Inc.
1903 So. Congress Avenue, Suite 400
Boynton Beach, FL 33426
With a copy to: Michael W. Moskowitz, Esquire
Moskowitz, Mandell, Salim &
Simowitz, P.A.
800 Corporate Drive, Suite 510
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<PAGE>
Fort Lauderdale, FL 33334
(954) 491-2000
(954) 491-2051 (FAX)
If to RONALD RIEWOLD Ronald Riewold
6300 La Costa Dr., Apt. M
Boca Raton, FL 33433
With a copy to: Roy D. Oppenheim, Esquire
Oppenheim & Pilelsky, P.A.
1290 Weston Road, Suite 300
Weston, FL 33326
(954) 384-6114
(954) 384-6115 (FAX)
If to JANET RIEWOLD Janet Riewold
2622 Timbercreek Circle
Boca Raton, Florida 33431
With a copy to: Roy D. Oppenheim, Esquire
Oppenheim & Pilelsky, P.A.
1290 Weston Road, Suite 300
Weston, FL 33326
(954) 384-6114
(954) 384-6115 (FAX)
The parties shall provide notice, in writing, of any changes to the aforesaid
notice addresses.
15. TIME. Time shall be of the essence in the performance of any
obligation or the sending of any notice under this AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, with
the intent to be legally bound, on the day and year written below:
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<PAGE>
WITNESSES:
CYBER-CARE, INC., a Florida
corporation
/s/ SIGNATURE ILLEGIBLE BY:/s/ DANIEL W. BIVINS, JR.
/s/ SIGNATURE ILLEGIBLE Sr. Vice President and General Counsel
(Print name and title)
/s/ SIGNATURE ILLEGIBLE BY:/s/ RONALD RIEWOLD
RONALD RIEWOLD
_________________________
/s/ SIGNATURE ILLEGIBLE BY:/s/ JANET RIEWOLD
JANET RIEWOLD
_________________________
11
<PAGE>
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this 31st day of
March, 2000, by Daniel W. Bivins, Jr., Sr. Vice President and General Counsel of
CYBER-CARE, INC., who [X] is personally known to me, or [ ] produced as
______________________________ identification.
[NOTARY SEAL]
/s/ SIGNATURE ILLEGIBLE
NOTARY PUBLIC
My Commission Expires: Print Name: Rachel Flatley
Commission No.:
[NOTARY SEAL]
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this 20th day of
March, 2000, by RONALD RIEWOLD, who [X] is personally known to me, or [ ]
produced ___________________________________________________ as identification.
/s/ SIGNATURE ILLEGIBLE
NOTARY PUBLIC
My Commission Expires: Print Name: Roy D. Oppenheim
Commission No.:
[NOTARY SEAL]
12
<PAGE>
STATE OF FLORIDA )
) SS:
COUNTY OF PALM BEACH )
The foregoing instrument was acknowledged before me this 20th day of
March, 2000, by JANET RIEWOLD, who [X] is personally known to me, or [ ]
produced ___________________________________________________ as identification.
/s/ SIGNATURE ILLEGIBLE
NOTARY PUBLIC
My Commission Expires: Print Name: Roy D. Oppenheim
Commission No.:
[NOTARY SEAL]
13
EXHIBIT 23.10
EMPLOYMENT AGREEMENT
BY AND BETWEEN
MEDICAL INDUSTRIES OF AMERICA, INC.
AND
E. NICHOLAS DAVIS, III
THIS EMPLOYMENT AGREEMENT (the "Agreement") is effective on March 15th,
1998 by and between Medical Industries of America, Inc., a Florida corporation
(the "Company"), and E. Nicholas Davis, ill ("Employee") and shall supersede
that Employment Agreement effective November 1, 1997 by and between the
Company's wholly owned subsidiary , PRN of North Carolina, Inc. ("PRN") and
Employee (the "PRN Agreement").
WHEREAS, PRN and Employee entered into the PRN Agreement; and
WHEREAS, Company desires to utilize the services of Employee relative to
other aspects of its business and Employee is desirous of performing such
services as directed by the Company's CEO and President; and
WHEREAS, PRN and Employee have agreed to terminate the PRN Agreement
contemporaneous with the execution of this Agreement;
WHEREAS, PRN, the Company and Employee desire to enter into this Agreement
to memorialize their oral agreements, to assure the Company of the services of
Employee for the benefit of the Company and to set forth the respective rights
and duties of the parties hereto.
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
terms and conditions set forth herein, PRN, the Company and Employee agree as
follows:
ARTICLE I
EMPLOYMENT
1.1 EMPLOYMENT. Upon the execution of this Agreement by all parties, PRN
and the Employee hereby terminate the PRN Agreement without any further
obligation on the part of either party except that PRN shall be responsible to
Employee for all accrued but unpaid compensation. Contemporaneous with such
termination (the "Commencement Date"), Company employs Employee, and Employee
accepts such employment, all upon the terms and conditions set forth herein.
<PAGE>
1.2 SERVICES. During the Term (as hereinafter defined) hereof, Employee
agrees to perform diligently and in good faith such duties and services for the
Company as directed by the President and CEO of the Company, Employee agrees to
devote all reasonable efforts and substantially all of his full business time,
energies and abilities to .the services to be performed hereunder and for the
exclusive benefit of the Company, Employee shall be vested with such authority
as delegated by the President or CEO of the Company.
1.3 LOCATION. The principal place of employment and the location of
Employee's principal office shall be at 1903 S. Congress Ave., #400, Boynton
Beach, Florida (the "Office"); provided, however, Employee shall, when requested
by the CEO or President, or may. if he determines it to be reasonably necessary
, temporarily perform outside of the Office such services as are reasonably
required for the proper execution of his duties under this Agreement.
1.4 REPRESENTATIONS. Each party represents and warrants to the other that
he/it has full power and authority to enter into and perform this Agreement and
that his/its execution and performance of this Agreement shall not constitute a
default under or breach of any of the terms of any agreement to which he/it is a
party or under which he/it is bound, Other than as provided herein. each parry
represents that no consent or approval of any third party is required for
his/its execution, delivery and performance of this Agreement or that all
consents or approvals of any third party required for his/its execution,
delivery and performance of this Agreement have been obtained.
ARTICLE II
TERM
2.1 TERM. The term of Employee's employment hereunder (the "Term") shall
commence as of the Commencement Date and shall continue through the third
anniversary of the Commencement Date (the "Scheduled Termination Date"} unless
renewed or earlier terminated pursuant to the provisions of this Agreement. This
Agreement shall be automatically renewed for successive two (2) year terms
unless the party electing not to renew provides the other party with written
notice of such election at least ninety (90) days prior to the Scheduled
Termination Date or the last day of the renewal term, as applicable.
ARTICLE III
COMPENSATION
3.1 BASE SALARY. As compensation for the services to be rendered by
Employee, the Company shall pay Employee, during the Term of this Agreement, an
annual base salary of One Hundred Twenty Five Thousand Dollars ($125,000)
commencing March 15th, 1998. Such base salary shall accrue monthly (prorated for
periods less than a month) and shall be paid
-2-
<PAGE>
every two (2) weeks, in arrears. The balance of the deferred and unpaid salary
due Employee from PRN (i.e., the difference between Employee's negotiated salary
of $108,000 and the amounts actually paid prorated for the period November 1,
1997 through March 14d1, 1998) shall be paid on or before December 31St, 1998.
3.2 INCENTIVE COMPENSATION. The Company shall also pay Employee during the
term of this Agreement a fair and reasonable amount as incentive compensation as
determined by the compensation committee of the Company including, without
limitation, bonuses and the grant of favorable stock rights in such Company
subsidiaries so as to allow Employee to participate in any spin-off or public
offering of such subsidiaries securities.
3.3 STOCK OPTIONS. In continuation of the pertinent provisions of the PRN
Agreement relative to stock options, as modified herein, and subject to the
provisions of Section 3.4, the Company grants to Employee options to acquire two
hundred thousand (200,000) shares of the Company's voting common stock (the
"Option Shares"), subject to the following terms and conditions:
(a) The option price per Option Share will be equal to the fair
market value of a share of the Company's common stock on the dare of grant
which, for purposes of this Section 3.3, shall be one dollar and 25/100
($1.25) per share.
(b) The Option Shares shall vest pro rata at the end of each of the
first two (2) years of this Agreement upon the approval of MIOA's
compensation committee.
(c) The right to exercise Option Shares shall expire (unless
previously exercised in accordance with the terms of this Section 3.3), on
December 31, 2005. Vested Option Shares shall be exercisable by Employee,
in whole or in part, on or before such expiration by payment in full, in
cash, by check or any other consideration permitted by applicable law, to
the Company of the aggregate option price for the Option Shares so
acquired.
(d) All unvested Option Shares shall be subject to immediate
forfeiture upon Termination For Cause (as such term is defined in Section
7.1 hereof).
(e) During the Term hereof and for a period of three (3) years
thereafter, Employee shall have piggy-back registration rights relative to
his MIOA's common stock and Option Shares.
3.4 EFFECT OF CHANGES IN CAPITALIZATION.
(a) If the number of outstanding shares of common stock of the
Company is increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company by
reason of any merger, share exchange,
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<PAGE>
consolidation, reorganization, recapitalization, reclassification, stock
split, combination of shares, exchange of shares, stock dividend or other
distribution payable in capital stock, or other increase or decrease in
such shares effected without receipt of consideration by the Company, a
proportionate and appropriate adjustment shall be made by the Company with
respect to the number Option Shares then outstanding under Section 3.3, so
that the proportionate interest of Employee immediately following such
event shall, to the extent practicable, be the same as immediately prior
to such event. Any such adjustment in the number of Option Shares shall
not change the aggregate option price payable with respect to the then
unexercised Option Shares, but shall include a corresponding proportionate
adjustment in the option price per Option Share.
(b) Adjustments under this Section 3.4 relating to Option Shares or
securities of the Company shall be made by the Company's Board of
Directors. No fractional shares or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from
any such adjustment shall be eliminated in each case by rounding upward to
the nearest whole share or unit.
3.5 BENEFITS. Employee shall be entitled, during the Term hereof, to the
same medical. hospital, pension, profit sharing, dental, disability and life
insurance coverage and benefits as are available to the Company's most senior
officers, a description of which is attached hereto as Schedule 3.5. together
with the following additional benefits:
(a) An automobile allowance of four hundred dollars ($400.00) per
month; and
(b) The Company's normal vacation allowance for all employees who
are executive officers of the Company, but not more than three (3) weeks
annually.
3.6 WITHHOLDING. Any and all amounts payable under this Agreement,
including, without limitation, amounts payable under this Article ill, which are
subject to withholding for such federal, state and local taxes as the Company,
in its reasonable judgment, determines to be required pursuant to any applicable
law, rule or regulation wi11 be subject to the applicable withholding
provisions.
ARTICLE IV
WORKING FACILITIES, EXPENSES AND INSURANCE
4.1 Working Facilities and Expenses. Employee shall be furnished with an
office at the principal executive offices of the Company, or at such other
location as agreed to by Employee and the Company, and other working facilities
and secretarial and other assistance suitable to his position and reasonably
required for the performance of his duties hereunder. The
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<PAGE>
Company shall reimburse Employee for all of Employee I s reasonable expenses
incurred while employed and performing his duties under and in accordance with
the terms and conditions of this Agreement, subject to Employee's full and
appropriate documentation, including, without limitation, receipts for all such
expenses in the manner required pursuant to the Company's policies and
procedures and the Internal Revenue Code of 1986, as amended (the "Code") and
applicable regulations as are in effect from time to time.
4.2 INSURANCE. The Company may secure in its own name or otherwise, and at
its own expense, life, disability and other insurance covering Employee or
Employee and others, and Employee shall not have any right, title or interest in
or to such insurance other than r as expressly provided herein. Employee agrees
to assist the Company in procuring such insurance by submitting to the usual and
customary medical and other examinations to be conducted by such I physicians(s)
as the Company or such insurance company may designate and by signing such
applications and other written instruments as may be required by any insurance
company to which application is made for such insurance.
ARTICLE V
ILLNESS OR INCAPACITY
5.1 RIGHT TO TERMINATE. If, during the Term of this Agreement, Employee
shall be unable to perform in all material respects his duties hereunder for a
period exceeding six (6) consecutive months by reason of illness or incapacity ,
this Agreement may be terminated by the Company in its reasonable discretion
pursuant to Section 7.2 hereof.
5.2 RIGHT TO REPLACE. If Employee I s illness or incapacity , whether by
physical or mental cause, renders him unable for a minimum period of thirty (30)
consecutive calendar days to carry out his duties and responsibilities as set
forth herein, the Company shall have the right to designate a person to replace
Employee temporarily in the capacity described in Article I hereof; provided,
however, that if Employee returns to work from such illness or incapacity within
the six (6) month period following his inability due to such illness or
incapacity , he shall be entitled [0 be reinstated in me capacity described in
Article I hereof with all rights, duties and privileges attendant thereto.
5.3 RIGHTS PRIOR TO TERMINATION. Employee shall be entitled to his full
remuneration and benefits hereunder during such illness or incapacity unless and
until an election is made by the Company to terminate this Agreement in
accordance with the provisions of this Article.
5.4 DETERMINATION OF ILLNESS OR INCAPACITY. For purposes of this Article
V, the term "illness or incapacity" shall mean Employee's inability to perform
his duties hereunder substantially on a full-time basis due to physical or
mental illness as determined by a physician
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selected by the Company and the Employee.
ARTICLE VI
CONFIDENTIALITY
6.1 CONFIDENTIALITY. During the Term of this Agreement and thereafter,
Employee agrees to maintain the confidential nature of the Company's trade
secrets, including, without limitation. development ideas, acquisition
strategies and plans, financial information. records, "know-how" , methods of
doing business, customer, supplier and distributor lists and an other
confidential information of the Company. Employee shall not use (other than in
connection with his employment), in any way whatsoever, such trade secrets
except as authorized in writing by the Company. Employee shall, upon the
termination of his employment, deliver to the Company any and all records,
books, documents or any other materials whatsoever (including all copies
thereof) containing such trade secrets, which shall be and remain the property
of the Company.
6.2 NON-REMOVAL OF RECORDS. All documents, papers, materials, notes, boob,
correspondence, drawings and other written and graphic records relating to the
business of the Company which Employee shall prepare or use. or come into
contact with, shall be and remain the sole property of the Company and effective
immediately upon the termination of the Employee's employment for any reason.
such materials shall not be removed from the Company's I premises without the
Company I s prior written consent.
ARTICLE VII
TERMINATION
7.1 TERMINATION FOR CAUSE. This Agreement and the employment of Employee
may be terminated by the Company "For Cause" under anyone of the following
circumstances :
(a) Employee commits any material act of fraud, misappropriation or
theft against the Company.
(b) Employee's default or breach of any material provision of this
Agreement; provided, that Employee shall not be in default or breach
hereunder unless he shall have failed to cure such default or breach
within thirty (30) days of written notice thereof by the Company to
Employee.
(c) Employee engages in willful misconduct in the performance of his
duties hereunder; provided. that Employee shall not be in default
hereunder unless he shall have
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failed to cure such default or breach within thirty (30) days of written
notice thereof by the Company to Employee.
(d) Employee is convicted of a felony offense.
(e) At the election of Employee by giving not less than thirty (30)
days written notice to Company.
A termination For Cause under this Section 7.1 shall be effective upon the
date set forth in a written notice of termination delivered in accordance with
the notice provisions of this Agreement.
7.2 TERMINATION WITHOUT CAUSE. This Agreement and the employment of the
Employee may be terminated "Without Cause" as follows:
(a) By munla1 agreement of the parties hereto.
(b) At the election of the Company (which shall be done by its
giving not less than thirty (30) days written notice to Employee) in the
event of an illness or incapacity described in Article V.
(c) Upon the removal of Employee from his position with the Company
or in the event the Company fails to afford Employee the power and
authority generally commensurate with his position or if the Company is in
breach of this Agreement.
(d) Upon Employee's death.
(e) At the election of the Employee if the Company requires Employee
to relocate his residence outside of Florida.
A termination Without Cause under Section 7.2(b) hereof shall be effective
upon the date set forth in a written notice of termination delivered in
accordance with the notice provisions of such sections. A termination Without
Cause under Sections 7.2(a) or (d) hereof shall be automatically effective upon
the date of mutual agreement or the date of death of the Employee. as the case
may be. A termination Without Cause under Sections 7.2(c) hereof shall be
effective upon the date of such event takes place.
7.3 Effect of Termination For Cause. If Employee's employment is
terminated "For Cause":
(a)Employee shall be entitled to accrued base salary under Section
3.1 hereof through the date of termination.
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(b) Employee sha1l be entitled to receive all benefits as would have
been awarded under Section 3.5 hereof through the date of termination,
which benefits shall be .awarded as and when the same would have been
awarded under the Agreement had it not been terminated.
(c) Employee shall be entitled to accrued incentive compensation
under Section 3.2 hereof through the date of termination.
(d) Employee shall be entitled to reimbursement for expenses accrued
through the date of termination in accordance with the provisions of
Section 4.1 hereof.
(e) All unvested Option Shares under Section 3.3 hereof shall be
forfeited.
(f) Except as provided in Article XI, this Agreement shall thereupon
terminate and cease to be of any further force or effect.
7.4 EFFECT OF TERMINATION WITHOUT CAUSE. If Employee's employment is
terminated "Without Cause ":
(a) Employee shall be entitled to accrued base salary under Section
3.1 hereof through the date of termination.
(b)Employee shall be entitled to receive all benefits as would have
been awarded under Section 3.5 hereof through the date of termination,
which benefits shall be awarded as and when the same would have been
awarded under the Agreement had it not been terminated.
(c) Employee shall be entitled to reimbursement for expenses accrued
through the date of termination in accordance with the provisions of
Section 4.1 hereof.
(d) Employee sha1l be entitled to a lump sum severance payment in an
amount equal to one hundred twenty five thousand dollars ($125,000.00).
(e) Employee shall be entitled to receive an amounts of incentive
compensation as would have been payable under Section 3.2 hereof through
the original term of the Agreement, which amounts shall be paid as and
when the same would have been paid under the Agreement had it not been
terminated.
(f) All unvested Option Shares under Section 3.3 hereof shall
immediately vest in full.
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(g) Except as provided in Article X, this Agreement shall thereupon
terminate and cease to be of any further force or effect.
ARTICLE VIII
NON-COMPETITION AND NON-INTERFERENCE
8.1 NON-COMPETITION. Employee agrees that during the Term of this
Agreement and. in the case of a termination "For Cause" for a period of two (2)
years thereafter. Employee will not, directly, indirectly, or as an agent on
behalf of or in conjunction with any person, firm, partnership, corporation or
other entity, own, manage, control, join, or participate in the ownership,
management, operation, or control of, or be financially interested in or advise,
lend money to, or be employed by or provide consulting services to, or be
connected in any manner with any person engaged in a business the same as or
substantially similar to the Company's business which is located within a one
hundred (100) mile radius of any Company business.
8.2 NON-INTERFERENCE. Employee agrees that during the Term of this
Agreement and, in the case of a termination "For Cause" , for a period of one
(1) year thereafter . Employee will not, directly, indirectly or as an agent on
behalf of or in conjunction with any person, firm, partnership, corporation or
other entity, induce or entice any employee of the Company to leave such
employment or cause anyone else to do so.
8.3 SEVERABILITY .If any covenant or provision contained in Article VIII
is determined to be void or unenforceable in whole or in part, it shall nor be
deemed to affect or impair the validity of any other covenant or provision. If,
in any arbitral or judicial proceeding, a tribunal shall refuse to enforce all
of the separate covenants deemed included in this Article VIII, then such
unenforceable covenants shall be deemed eliminated from the provisions hereof
for the purpose of such proceedings to the extent necessary to permit the
remaining separate covenants to be enforced in such proceedings.
ARTICLE IX
MISCELLANEOUS
9.1 NO WAIVERS. The failure of either party to enforce any provision of
this Agreement shall not be constI1led as a waiver of any such provision, nor
prevent such party thereafter from enforcing such provision or any other
provision of this Agreement.
9.2 NOTICES. Any notice to be given to the Company and Employee under the
terms of this Agreement may be delivered personally, by telecopy, telex or other
form of written
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electronic transmission, or by registered or certified mail, postage prepaid,
and shall be addressed as follows:
IF TO THE COMPANY: Medical Industries of America, Inc.
1903 S. Congress Ave., #400
Boynton Beach. FL 33463
Attn: Paul C. Pershes, President
IF TO EMPLOYEE: E. Nicholas Davis, III
759 Oakmont Lane
Winter Haven, FL 33880
A party may hereafter notify any other party in writing of any change in
address. Any notice shall be deemed duly given (i) when personally delivered,
(ii) when telecopied, telexed or transmitted by other form of written electronic
transmission (upon confirmation of receipt) or (iii) on the third day after it
is mailed by registered or certified mail, postage prepaid, as provided herein.
9.3 SEVERABILITY. The provisions of this Agreement are severable and if
any provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions, or
enforceable parts thereof, shall not be affected thereby.
9.4 SUCCESSORS AND ASSIGNS. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon the
successors and assigns of the Company, including the survivor upon any merger,
consolidation, share exchange or combination of the Company with any other
entity. Employee shall not have the right to assign, delegate or otherwise
transfer any duty or obligation to be performed by him hereunder to any person
or entity.
9.5 ENTIRE AGREEMENT. This Agreement supersedes all prior and
contemporaneous agreements and understandings between the parties hereto, oral
or written, and may not be modified or terminated orally. No modification,
termination or attempted waiver shall be valid unless in writing, signed by the
party against whom such modification, termination or waiver is sought to be
enforced. This Agreement was the subject of negotiation by the parties hereto
and their counsel. The parties agree that no prior drafts of this Agreement
shall be admissible as evidence (whether in any arbitration or court of law) in
any proceeding which involves the interpretation of any provisions of this
Agreement.
9.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Florida without reference to
the conflict of law principles thereof.
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9.7 SECTION HEADINGS. The section headings contained herein are for the
purposes of convenience only and are not intended to define or limit the content
of said sections .
9.8 FURTHER ASSURANCES. Each party hereto shall cooperate and shall take
such further action and shall execute and deliver such further documents as may
be reasonably requested by the oilier party in order to carry out the provisions
and purposes of this Agreement.
9.9 GENDER. Whenever the pronouns "he" or "his" are used herein they shall
also be deemed to mean "he" or "his" or "it" or "its" whenever applicable. Words
in the singular shall be read and construed as though in the plural and words in
the plural shall be read and construed as though in the singular in all cases
where they would so apply.
9.10 COUNTERPARTS. This Agreement may be executed in counterparts, all of
which taken together shall be deemed one original.
9.11 ENFORCEMENT. Notwithstanding anything herein to the contrary, all
claims and disputes relating to this Agreement shall be subject to confidential
binding arbitration in accordance with the National Health Lawyers Association
Alternative Dispute Resolution Rules of Procedure for Arbitration then in force
and with individuals knowledgeable of the medical industry serving as
arbitrators. Written notice of demand for arbitration shall be filed with the
other party to the Agreement and with the National Health Lawyers Association in
Washington, D.C., within a reasonable time after the dispute has arisen. In the
event either party resorts to legal action to enforce the arbitration results or
any other provision of this Agreement, the prevailing party shall be entitled to
recover the costs of such action so incurred, including. without limitation,
reasonable attorneys' fees.
ARTICLE X
SURVIVAL
10.1 SURVIVAL The provisions of Articles VI, VII, VIII, and IX of this
Agreement shall survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Medical Industries of America, Inc.,
a Florida Carolina corporation.
By:/s/ PAUL C. PERSHES
Paul C. Pershes, President
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EMPLOYEE
/s/ E. NICHOLAS DAVIS, III
E. Nicholas Davis, III
AGREEMENT OF PRN OF NORTH CAROLINA, INC.
PRN of North Carolina, Inc. hereby represents that it has the requisite
authority to enter into this Agreement and hereby consents to and agrees to be
legally bound to the provisions set forth in this Agreement which pertain to it.
PRN of North Carolina, Inc.
By: /s/ RANDY LUBINSKY
Randy Lubinsky, CEO
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AMENDMENT TO EMPLOYMENT AGREEMENT
AMENDMENT TO EMPLOYMENT AGREEMENT made this 5th day of February, 1999 by and
between MEDICAL INDUSTRIES OF AMERICA, INC., a Florida corporation (the
"Employer") and NICK DAVIS (the "Employee").
RECITAL:
1. The Employer and the Employee entered into an Employment Agreement dated
March 15, 1998 (the "Agreement") setting forth the terms and conditions of
the employment of the Employee by the Employer.
2. The Employer and the Employee wish to amend the Agreement as set forth
herein
NOW, THEREFORE, based on the foregoing and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
The term of the Agreement shall be extended to December 31, 2003, unless earlier
terminated by either party pursuant to the terms of the Agreement Assuming all
conditions of this Agreement have been satisfied and there has been no breach of
the Agreement during its term, Employee may extend the term for an additional
one (1) year term at Employee's election.
All other provisions of the Agreement shall remain in effect and unchanged.
IN WITNESS WHEREOF, the parties have executed this Amendment to the Employment
Agreement on the date first above written.
MEDICAL INDUSTRIES OF AMERICA, INC.
By:/s/ PAUL C. PERSHES
Paul C. Pershes, President
/s/NICHOLAS DAVIS
Nick Davis
