<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
JUNE 27, 1997
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
NATIONAL DIAGNOSTICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 0-24696 59-3248917
(STATE OR OTHER JURISDICTION (COMMISSION FILE (IRS EMPLOYER
OF INCORPORATION) NUMBER) IDENTIFICATION NO.)
755 WEST BRANDON BOULEVARD, BRANDON, FLORIDA 33511
- -------------------------------------------------- ---------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(813) 661-9501
--------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
--------------------------------
(FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT)
PAGE 1 OF 9
<PAGE> 2
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
Not Applicable
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Not Applicable
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not Applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not Applicable
ITEM 5. OTHER EVENTS
In June of 1997 National Diagnostics, Inc. ("the Company") entered into
certain transactions which were intended to strengthen the Company's financial
position. The transactions may be grouped into two types: first, the conversion
of existing debt into equity by way of issuance of common stock in satisfaction
of the debts; and second, the acquisition of tradeable marketable securities
(with certain restrictions) in exchange for the issuance by the Company
of restricted shares of common stock (see item 9).
Mr. Jugal K. Taneja, Chairman and CEO, and Mr. Curtis L. Alliston,
President and COO accepted individually 115,000 restricted common shares of
stock each as satisfaction for approximately $243,800 owed to them by the
Company. Additionally, the Company's corporate counsel accepted 100,000
restricted common shares of stock as satisfaction for approximately $150,000
owed to them for services previously rendered. The Company's corporate
consultants accepted 14,583 restricted common shares of stock as satisfaction
for approximately $25,500 owed to them for services rendered.
Effective June 27, 1997, the Company acquired 127,773 shares of
Equisure, Inc. Common Stock (net of 14,197 shares given in payment of
commission) valued at $1,800,000 from Sudafric Suisse Trustees (a foreign trust)
in exchange for the issuance by the Company of 1,459,188 shares of Company
Common Stock.
The proforma financial information presented is for the five month
period ending May 31, 1997. The presentation shows the effect of the conversion
of debt to equity upon issuance of the Common Stock as described herein and the
effect of the acquisition by the Company of 127,773 shares of Equisure, Inc.
Common Stock in exchange for 1,459,188 shares of the Company's Common Stock.
ITEM 6. RESIGNATIONS OF REGISTRANT'S DIRECTORS
Not Applicable
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) & (b) Condensed consolidated balance sheet as of March 31, (historical
and proforma) and May 31, 1997 (proforma).
Condensed consolidated statements of operations for year ended
December 31, 1996 and May 31, 1997 (proforma).
2
<PAGE> 3
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
CONSOLIDATED BALANCE SHEETS
as of March 31 and May 31, 1997 proforma.....................4-5
CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31, 1996 and
proforma five months ended May 31, 1997 ........................6
SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS......................7
</TABLE>
3
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NATIONAL DIAGNOSTICS, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, March 31, May 31,
1997 1997 1997
(Unaudited Proforma (Unaudited (Unaudited
Historical) Transactions Proforma) Proforma)
----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
Current Assets:
Cash $ 151,969 $ $ 151,969 $ 82,571
Accounts receivable - net of allowance
of $664,402 and $720,256 in March and 2,349,264 2,349,364 2,474,802
May, 1997, respectively
Prepaid expenses and other current assets 153,972 153,972 138,372
Marketable Securities 1,800,000 a 1,800,000 1,800,000
---------- ------------ -----------
Total current assets 2,655,205 4,455,205 4,495,745
---------- ------------ -----------
Property and Equipment 9,813,530 9,813,530 9,856,634
Less: Accumulated depreciation and
amortization (3,591,870) (3,591,870) (3,810,353)
---------- ------------ -----------
Net property and equipment 6,221,660 6,221,660 6,046,281
---------- ------------ -----------
Other Assets:
Excess of purchase price over net
assets acquired - net of accumulated 422,068 422,068 417,989
Amortization of $61,274 and $71,472
in March and May, 1997, respectively
Deposits 48,063 48,063 48,062
Other 81,454 81,454 63,225
---------- ------------ -----------
Total other assets 551,585 551,585 529,276
---------- ------------ -----------
$9,428,450 $ 11,228,450 $11,071,302
========== ============ -==========
</TABLE>
See Accompanying Notes.
4
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
March 31 March 31 May 31,
1997 1997 1997
(Unaudited Proforma (Unaudited Unaudited
Historical) Transactions Proforma) Proforma)
----------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Current liabilities:
Line of credit $ 1,046,554 $ $ 1,046,554 $ 1,208,047
Note payable, other 160,247 160,247 103,417
Notes due to related parties 220,716 (62,474) b 158,242 127,075
Current installments of 105,000 105,000 105,000
long-term debt
Current installments of obligations
under capital leases 1,104,000 1,104,000 1,104,000
Accounts payable 1,251,569 (150,000) b 1,101,569 1,177,611
Accrued radiologist fees 443,758 443,758 483,731
Accrued expenses, other 805,335 (181,326) b 624,009 594,283
----------- ----------- -----------
Total current liabilities 5,137,179 4,743,379 4,903,164
Long-term liabilities:
Long-term debt, excluding 600,024 600,024 737,152
current installments
Obligations under capital leases,
excluding current installments 3,516,013 3,516,013 3,243,609
Deferred lease payments 221,468 221,468 211,172
----------- ----------- -----------
Total liabilities 9,474,684 9,080,884 9,095,097
----------- ----------- -----------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock - - -
Common stock, no par value,
9,000,000 shares as authorized,
2,628,577 and 4,481,220 shares
issued and outstanding in March
and May (proforma), respectively 686 400 a
69 b 1,155 1,164
Additional paid-in capital 2,320,497 1,799,600 a 11,539,348 4,591,143
419,251 b
Retained earnings (deficit) (2,367,417) (25,520)b (2,392,937) (2,616,102)
----------- ----------- ----------- -----------
Net stockholders' equity (deficit) (46,234) 2,147,566 1,976,205
----------- ----------- -----------
$ 9,428,450 $11,228,450 $11,071,302
=========== =========== ===========
</TABLE>
5
<PAGE> 6
NATIONAL DIAGNOSTICS, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Five Months
Year Ended Ended May 31,
December 31, May 31, 1997 1997
1996 (Unaudited Proforma (Unaudited
(Historical) Historical Adjustments Proforma)
------------ ---------- ----------- ---------
<S> <C> <C> <C> <C>
Net revenue $ 8,876,652 $ 4,444,417 $ 4,444,417
----------- ----------- -----------
Operating expenses:
Direct operating expenses 4,850,088 2,419,775 2,419,775
General and administrative 3,576,087 1,659,155 25,520 b 1,684,675
Depreciation and amortization 1,210,245 610,828 610,828
----------- ----------- -----------
Total operating expenses 9,636,420 4,689,758 4,715,278
----------- ----------- -----------
Operating loss (759,768) (245,341) (270,861)
Interest expense 563,951 292,679 292,679
Other Income 82,058 5,283 5,283
----------- ----------- -----------
Loss before income taxes (1,241,661) (532,737) (558,257)
Income tax (benefit) - - -
----------- ----------- -----------
Net loss $(1,241,661) $ (532,737) $ (558,257)
=========== =========== ===========
Loss per common share $ (.48) $ (.20) $ (.12)
=========== =========== ===========
Weighted average number of
common shares outstanding 2,579,380 2,628,577 4,481,220
=========== =========== ===========
</TABLE>
6
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NATIONAL DIAGNOSTICS, INC.
AND SUBSIDIARIES
SELECTED NOTES TO CONDENSED PROFORMA FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED)
(1) PROFORMA ADJUSTMENTS
(a) This adjustment represents the acquisition of 127,773 shares of
Equisure, Inc. Common Stock (net of 14,197 shares given in payment of
commission) valued at $1,800,000 in exchange for 1,459,188 shares of restricted
Company Common Stock. Equisure, Inc. is a reinsurance company traded on the
American Stock Exchange; shares outstanding approximately 11,000,000 with a
public float of approximately 6,000,000 shares. Financial status as of December
31, 1996:*
Total Assets $76,691,770
Total Liabilities $39,660,824 ($30+m in underwriting reserves)
Shareholder Equity $37,030,946
1996 Revenues $13,265,274
E.P.S. $.42
* Note: source of this information is from the audited financial statements of
Equisure, Inc. for the year ended December 31, 1996.
(b) These adjustments represent the conversion of existing debt owed by
the Company to its officers ($243,800), legal counsel ($150,000), and
consultants ($25,520).
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<PAGE> 8
ITEM 7 -- EXHIBITS
(c) List of exhibits filed as part of this report:
Exhibit
Number
- ------
10.43 Exchange Agreement dated June 27, 1997 by and between National
Diagnostics, Inc. and Sudafric Suisse Trustees.
ITEM 8. CHANGE IN FISCAL YEAR
Not Applicable
ITEM 9. SALE OF EQUITY SECURITIES PURSUANT TO REGULATION S
(a) Date sold: June 27, 1997
Title: Common Shares of National Diagnostics, Inc.
("Issuer")
Amount: 1,459,188 shares
(b) Purchaser: Sudafric Suisse Trustees (a foreign trust)
(c) The Company received in exchange for 1,459,188 shares of
Company Common Stock 141,970 shares of Equisure, Inc. Common
Stock (a publicly traded company on the American Stock
Exchange). The exchange was valued at $2,000,000 less a ten
percent commission paid in Equisure, Inc. shares by Issuer.
(d) The shares of Company Common were issued by the Company
pursuant to Regulation S promulgated under the Securities
Act of 1933, as amended ("Act"). The Purchaser is an
offshore foreign trust and purchased the Company's Common
stock subject to the restriction that the purchaser is
precluded from offering and selling to U.S. persons or the
account or benefit of a U.S. person, for a period of forty
(40) days commencing with the date of the offering. The
Exchange Agreement includes repurchase options in favor of the
Company and the Purchaser which are exercisable during the
first year after June 27, 1997 pursuant to which the Company
and the Purchaser retain the right to re-purchase their
respective shares.
(e) Conversion or exercise privileges:
Item not applicable.
8
<PAGE> 9
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
July 22, 1997 NATIONAL DIAGNOSTICS, INC.
By: /s/ Curtis L. Alliston
--------------------------------
Curtis L. Alliston, President
9
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C> <C>
10.43 EXCHANGE AGREEMENT
Dated June 27, 1997......................................11
</TABLE>
10
<PAGE> 1
EXHIBIT 10.43
11
<PAGE> 2
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT ("Agreement") is made as of the 27th day of
June, 1997, by and among NATIONAL DIAGNOSTICS, INC. ("Shareholder A"), and
SUDAFRIC SUISSE TRUSTEES ("Shareholder B").
WITNESSETH:
WHEREAS, Shareholder B is the holder of securities identified on
Exhibit B hereto (the "B Shares"), which B Shares are publicly traded
securities; and
WHEREAS, Shareholder A desires to exchange its securities identified on
Exhibit A (the "A Shares") for Shareholder B's B Shares, and Shareholder B
desires to exchange its B Shares for Shareholder A's A Shares.
NOW, THEREFORE, for and in consideration of the agreements contained
herein and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged and confessed, the parties agree as follows:
1. Exchange.
a. Exchange of Shares. The A Shares held by Shareholder A will
be exchanged for the B Shares held by Shareholder B, and the B Shares held by
Shareholder B will be exchanged for the A Shares held by Shareholder A, based on
the exchange rates set forth on Exhibit C hereto, in each case on the exchange
dates set forth on Exhibit A and Exhibit B hereto (each, an "Exchange Date"). In
accordance therewith, (i) Shareholder B shall deliver to Shareholder A the
certificate or certificates representing the B Shares held by Shareholder B and
to be exchanged on such Exchange Date for the A Shares pursuant hereto, properly
endorsed for transfer, and (ii) Shareholder A shall deliver to Shareholder B the
certificate or certificates representing the A Shares issued by Shareholder A
and to be exchanged on such Exchange date for the B Shares pursuant hereto (each
such exchange, an "Exchange").
b. Exchange. The initial Exchange shall occur as of the date
of this Agreement (the "Effective Date") , and each subsequent Exchange shall
occur on the subsequent quarterly anniversary date of the Initial Exchange . The
parties agree that, other than as set forth below, there are no other conditions
to the obligations of the parties hereto to exchange the A Shares for the B
Shares and the B Shares for the A Shares.
c. The certificate evidencing the A Shares and the B Shares,
as the case may be, shall be imprinted with legends setting forth the
restrictions set forth in this Section 1(c). The parties shall enter into an
Escrow Agreement in the form attached hereto as Exhibit E.
1
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d. Repurchase Option. At any time on or prior to the
first anniversary of this Agreement, (a) Shareholder A may, at its option,
redeem all or part of the A Shares at the A Shares redemption price set forth
in Schedule 1(d); and (b) Shareholder B may, at its option, repurchase all or
part of the B Shares at the B Shares redemption price set forth in Schedule
1(d). Notice of exercise of the option set forth in the sentence above shall be
delivered to the other party at least 10 days prior to the date for such
repurchase or redemption. Each party further agrees to the placement of a
legend on the certificate or certificates representing the A Shares or the B
Shares, as the case may be, as set forth on Schedule 1(d) hereto.
2. Representations and Warranties of Shareholder A. Shareholder A
represents and warrants to Shareholder B as follows:
a. Shareholder A. Shareholder A is a corporation duly
organized validly existing and in good standing under the laws of the
jurisdiction of its incorporation, as set forth on Schedule 2(a) hereto.
b. Authority. Shareholder A has all necessary corporate
power and authority to enter into and carry out this Agreement. All corporate
actions and proceedings on the part of Shareholder A, its directors and
shareholders necessary for the authorization, execution, delivery and
performance by Shareholder A of this Agreement and the transactions contemplated
hereby have been lawfully and validly taken. This Agreement is the valid and
binding obligation of Shareholder A, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws and principles now or hereafter in
effect relating to or affecting the enforcement of creditors' rights in general
and by general principles of equity and except that the enforcement of the
indemnity provisions of Paragraph 5 may be limited by federal or state
securities laws, other laws or the public policy underlying any such laws.
c. Fully Paid and Non-Assessable Shares. Upon the
Exchange, the A Shares will be duly authorized, validly issued, fully paid and
non-assessable, and will be free of any liens, charges, encumbrances,
restrictions on transfer or preemptive rights (except such that arise by acts of
Shareholder B, under federal, state or foreign securities laws or that exist by
reason of this agreement or any agreement entered into between Shareholder B and
Shareholder A) (each, a "Lien).
d. No Violation. Neither the execution, delivery and
performance by Shareholder A of this Agreement, the consummation of the
transactions contemplated hereby nor the insurance of the A Shares will: (i)
violate any provision of Shareholder A's Articles of Incorporation, as amended
from time to time, or Shareholder A's By-Laws; (ii) violate any provision of any
statute or law or any judgement, decree, order, regulation or rule of any court
or governmental authority to which Issuer or any of its properties or assets is
subject, which violation could have, singly or in the aggregate, a material
adverse effect on the business, properties, condition (financial or otherwise),
results of operations or prospects of Shareholder A; or (iii) violate, breach,
constitute a default under, permit the termination or acceleration of, or result
in the creation of any Liens upon the A Shares or any material property of
Shareholder A under any agreement, instrument or obligation to which Shareholder
A is a party or by which it or any of its properties or assets is bound, which
violation, breach, default, termination, acceleration or Lien could have, singly
or in the aggregate, any material adverse effect on the business, properties,
condition (financial or otherwise), results of operations or prospects of
Shareholder A.
2
<PAGE> 4
e. No Defaults. Shareholder A is not in violation of:
(i) its Articles of Incorporation or By-Laws as in effect on the effective date
of this Agreement; (ii) any statute or law of any judgement, decree, order,
regulation or rule of any court or governmental authority, which violation could
have, singly or in the aggregate a material adverse effect on the business,
properties, condition (financial or otherwise), results of operations or
prospects of Shareholder A; or (iii) any material agreement to which Shareholder
A is a party or by which a material adverse effect on the business, properties,
condition (financial or otherwise), results of operations or prospects of
Shareholder A.
f. No Consents. No notice to or filing with, and no
authorization, consent or approval of, any domestic or foreign court or any
public or governmental body of authority is necessary for the consummation by
Shareholder A of the transactions contemplated by this Agreement or the
insurance of the A Shares except: (i) as may be required under the Securities
Act of 1933, as amended (the "1933 Act"), the securities or Blue Sky laws of any
jurisdiction or the corporate laws of the state of its incorporation, (ii)
notices of filings of which the failure to give or make, or authorizations,
consents and approvals of which the failure to obtain, is based on information
given to Shareholder A by Shareholder B with respect to Shareholder B or its
business, operations or ownership; and (iii) notices or filings of which the
failure to obtain, would not individually or in the aggregate, have a material
adverse effect on the business properties, condition (financial or otherwise),
results of operations or prospects of Shareholder A or adversely affect the
operations or prospects of Shareholder A to consummate the transactions
contemplated by this Agreement.
g. Brokers or Finders. Except for Capital Access Bureau,
Inc. ("CABI"), whose fees, commissions and expenses are set forth on Exhibit D
hereto, Shareholder A has retained no finder or broker in connection
transactions contemplated by this Agreement and hereby agrees to indemnify and
hold Shareholder B harmless from any liability for any commission or
compensation i the nature of an agent's fee to any broker or other individual or
entity (and the costs and expenses of defending against such liability or
asserted liability) arising from any act by Shareholder A or any of its agents.
h. Restricted Securities. The A Shares are "restricted
securities" as such term is defined in Rule 144 promulgated under the Securities
Act of 1933, as amended (the "Securities Act"), and there are resale limitations
with respect to such A Shares as set forth in this Agreement and the related
Escrow Agreement.
3. Representations and Warranties of Shareholder B. Shareholder B
hereby represents and warrants to Shareholder A as follows:
a. Authority. Shareholder B has all necessary power and
authority to enter into and carry out this Agreement. All actions and
proceedings on the part of Shareholder B necessary for the authorization,
execution, delivery and performance by Shareholder B of this Agreement and the
transactions contemplated hereby have been lawfully and validly taken. This
Agreement is the valid and binding obligation of Shareholder, enforceable in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws and principles
now or hereafter in effect relating to or affecting the enforcement of the
indemnity provisions of Paragraph 5 may be limited by federal or state
securities laws, other laws or the public policy underlying any such laws.
3
<PAGE> 5
b. No Liens. Upon the Exchange, the B Shares will be
free of any liens, charges, encumbrances, restrictions on transfer or preemptive
rights (except such that arise by acts of Shareholder A, under federal, state or
foreign securities laws or that exist by reason of this agreement or any
agreement entered into between Shareholder B and Shareholder A) (each, a
"Lien").
c. No Violation. Neither the execution, delivery and
performance by Shareholder B of this Agreement nor the consummation of the
transactions contemplated hereby will: (i) violate any provision of any statute
or law or any judgement, decree, order, regulation or rule of any court or
governmental authority to which Shareholder B or any its properties or assets is
subject, which violation could have, singly or in the aggregate, a material
adverse effect on Shareholder B or its ability to perform its obligations under
this Agreement; or (ii) violate, breach, constitute a default under, permit the
termination or acceleration of, or result in the creation of any Lien upon any
material property of Shareholder B under any agreement, instrument or obligation
to which Shareholder B is a party or by which Shareholder B or any of its
properties or assets is bound, which violation, breach, default, termination,
acceleration or Lien could have, singly or in the aggregate, a material adverse
effect on Shareholder B or its ability to perform its obligations under this
Agreement.
d. No Consents. No notice to or filing with, and no
authorization, consent or approval of, any domestic or foreign court or any
public or governmental body or authority is necessary for the consummation by
Shareholder B of the transactions contemplated by this Agreement or the receipt
of the A Shares except: (i) as may be required under the 1933 Act, the
securities or Blue Sky laws of any jurisdiction or the corporate laws of any
jurisdiction; (ii) notices or filings of which the failure to give or make, or
authorizations, consents and approvals of which the failure to obtain, is based
on information given to Shareholder B by Shareholder A with respect to
Shareholder A or Shareholder A's business, operations or ownership; and (iii)
notices or filings of which the failure to give or make, and authorizations,
consents and approvals of which the failure to obtain, would not individually or
in the aggregate, have a material adverse effect on the Shareholder B or
adversely affect Shareholder B's ability to consummate the transactions
contemplated by this Agreement.
e. Investment Intent. Shareholder B is acquiring the A
Shares solely for Shareholder B's own account and not with a view to, or for
resale in connection with, any distribution thereof. Shareholder B understands
that the A Shares have not been registered under the 1933 Act by reason of
specified exemptions therefrom which depend upon, among other things, the bona
fide nature of the Shareholder B's investment intent as expressed in this
Subparagraph (e).
f. Restricted Securities. Shareholder B understands that
the A Shares may not be sold, transferred or otherwise disposed of without
registration and/or qualification under the 1933 Act and any applicable state
securities laws or Blue Sky Laws, or an exemption therefrom and that int he
absence of appropriate registration and/or qualification, or exemption
therefrom, the A Shares must be held indefinitely. Subject to the provisions of
this Agreement, Shareholder B will not sell, transfer or otherwise dispose of
the A Shares except pursuant to appropriate registration and/or qualification or
an appropriate exemption therefrom. Shareholder B agrees to the placement of a
legend on the certificate or certificates representing the A Shares setting
forth the foregoing restrictions, in addition the legends set forth in
Paragraphs 1(c) and 1(d).
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g. Experience. Shareholder B has such knowledge and
experience in financial and business matters and in making investments of this
type that it is capable of evaluating the merits and risks of acquiring the A
Shares.
h. Receipt of Information. Shareholder B has been
furnished access to Shareholder A's business records relating to the A Shares,
and such additional information and documents as Shareholder B has requested,
and has been afforded an opportunity to ask questions of and receive answers
from representatives of Shareholder A concerning the terms and conditions of
this Agreement and the acquisition of the A Shares.
i. No Brokers or Finders. Except for CCEC, whose fees,
commissions and expenses are set forth on Exhibit D hereto, Shareholder B has
retained no finder or broker in connection transactions contemplated by this
Agreement and hereby agrees to indemnify and hold Shareholder A harmless from
any liability for any commission or compensation in the nature of an agent's fee
to any broker or other individual or entity (and the costs and expenses of
defending against such liability or asserted liability) arising from any act by
Shareholder B or any of its agent.
j. Free Trading Securities. The B Shares are
free-trading securities and are not "restricted securities" as such term is
defined in Rule 144 promulgated under the Securities Act, and there are not
resale limitations with respect to such B Shares except as set forth in this
Agreement and the related Escrow Agreement.
4. Survival of Representations and Warranties. All
representations and warranties set forth in this Agreement shall survive the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated by this Agreement, for the period of any applicable
statutes of limitations.
5. Indemnification. Each party agrees to indemnify, defend and
hold harmless the other party from any claim, demand, loss, liability, damage or
expense, including, without limitation, interest, penalties and reasonable
attorneys' fees and costs of investigation, incurred as a result of any material
inaccuracy, misrepresentation or breach of any representation, warranty,
covenant or agreement on the part of such party under or pursuant to this
Agreement and the Exhibits and Schedules hereto.
6. Certain Fees. Simultaneous with the Exchange, (i) Shareholder
A shall issue or transfer to CABI such number of B Shares and other compensation
as set forth on Exhibit D, and (ii) Shareholder B shall transfer to CCEC such
number of B Shares and other compensation as set forth on Exhibit D.
7. General Provisions.
a. Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if transmitted by
facsimile with receipt acknowledged, or upon delivery, if delivered personally
or by a recognized commercial courier with receipt acknowledged, or upon the
expiration of 72 hours after mailing, if mailed by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
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If to Shareholder A: NATIONAL DIAGNOSTICS, INC.
755 W. BRANDON BLVD.,
BRANDON, FL 33511
Attn: CURTIS L. ALLISTON, PRESIDENT
Telephone No.: (813) 661-9501
Facsimile No.: (813) 661-9601
With a copy to: ______________________________________
______________________________________
Attn:
Telephone No.:
Facsimile No.:
If to Shareholder B: ______________________________________
______________________________________
Attn:
Telephone No.:
Facsimile No.:
Any part from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other parties hereto.
b. Entire Agreement. This agreement (including the
Schedules and Exhibits to this Agreement), along with the related Escrow
Agreement, constitutes the entire agreement between the parties with respect to
its subject matter and no party shall be entitled to benefits other than those
specified herein and therein, and all prior agreements, statements,
representations and warranties with respect to the subject of this Agreement are
superseded by this Agreement.
c. Amendments and Waivers. Neither this Agreement, or
any of its provisions, may be amended or modified in any way, except by express
written agreement of the parties hereto. Neither any obligation of a party to
this Agreement, nor any breach or default by a party under this Agreement, may
be changed, waived, discharged or terminated except by a statement in writing
signed by the party against which the enforcement of such change, waiver,
discharge or termination is sought. No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of the same of any other term or condition of this
Agreement on any future occasion.
d. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of, the parties and their respective
successors, heirs, executors, administrators, legal representatives and assigns.
e. Severability. If any provision of this Agreement
shall be construed as invalid, illegal or unenforceable for any reason and in
any respect, and if the extent of such invalidity, illegality or
unenforceability does not destroy the basis of the bargain herein, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and the remainder of this Agreement shall remain
in full force and effect, enforceable in accordance with its terms as if such
provisions had not been included, or had been modified as provided below, as the
case may be. To carry out the intent of the parties hereto as fully as possible,
the invalid, illegal or unenforceable provision(s), if possible, shall be deemed
modified to the extent necessary and possible to render such provision(s) valid
and enforceable.
6
<PAGE> 8
f. Headings. The captions and headings to the Paragraphs
and Subparagraphs of this Agreement are inserted for purposes of convenience
only, are not part of this Agreement and shall be given no force or effect in
construing or interpreting the meaning of this Agreement or any of it
provisions.
g. Counterparts. This Agreement shall be in writing and
may be executed in one or more counterparts, each of which shall be deemed an
original, and all of which taken together shall constitute one and the same
instrument.
h. Expenses. Shareholder A and Shareholder B shall each
pay its own expenses with respect to this Agreement and the transactions
contemplated hereby.
i. Governing Law and Venue. This Agreement shall be
governed by and construed, interpreted and enforced in accordance with the law
of the State of Florida without reference to the conflict of laws principles
thereof. The courts of Florida in the Ninth Judicial Circuit, and the United
States District Court for the Middle District of Florida (Orlando Division),
shall be the exclusive courts of jurisdiction and venue for any litigation,
special proceeding or other proceeding as between the parties that may be
brought, or arise out of, in connection with, or by reason of this Agreement.
The parties hereby consent to the jurisdiction of such courts.
j. Term. The term of this Agreement will commence on the
Effective Date and continue through and including the date one year from the
Effective Date.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized signatories, effective as the date first set
forth above.
WITNESSES: "Shareholder A"
/s/Dennis Hult NATIONAL DIAGNOSTICS, INC.
- -------------------------------------
/s/Victoria Simmons By:/s/Curtis L. Alliston
- ------------------------------------- ------------------------------
Name: Curtis L. Alliston
Title: President
"Shareholder B"
Sudafric Suisse Trustees
- ------------------------------------
By:/s/Paul Dixon
- ------------------------------------ ------------------------------
Name: Paul Dixon
Title: Trust Manager
7
<PAGE> 9
ACKNOWLEDGMENT
SWORN TO AND SUBSCRIBED before me this __ day of_____________ , 1997,
by __________________________________ who is personally known to me or has
produced ________________________________________________ as identification.
------------------------------
(Notary Signature)
(NOTARY SEAL)
-----------------------------
(Notary Name Printed)
NOTARY PUBLIC
Commission No: .
----------
ACKNOWLEDGMENT
SWORN TO AND SUBSCRIBED before me this __ day of_____________ , 1997,
by __________________________________ who is personally known to me or has
produced ________________________________________________ as identification.
------------------------------
(Notary Signature)
(NOTARY SEAL)
-----------------------------
(Notary Name Printed)
NOTARY PUBLIC
Commission No: .
----------
8
<PAGE> 10
EXHIBIT A
"A Shares"
<TABLE>
<CAPTION>
Issuer Title of Securities Per Value No. Shares Certificate
- ------ ------------------- --------- ---------- -----------
<S> <C> <C> <C>
NATD Common, Restricted No Par 1,459,188
(National
Diagnostics, Inc.)
</TABLE>
9
<PAGE> 11
EXHIBIT B
"B Shares"
<TABLE>
<CAPTION>
Issuer Title of Securities Per Value No. Shares Certificate
- ------ ------------------- --------- ---------- -----------
<S> <C> <C> <C> <C>
EQUISURE, INC. Common 141,970
(EQE)
</TABLE>
10
<PAGE> 12
EXHIBIT C
Exchange Rate
The number of shares to be exchanged will be calculated as follows:
1. The Established Price (as defined below) for each of the A Shares and
the B Shares with respect to such Exchange shall be discounted by the Securities
Block Discount (as defined below) (such price, the "Adjusted Established
Price").
2. The Dollar Value of the Exchange shall be divided by the Adjusted
Established Price for each of the A Shares and the B Shares.
3. The Quarterly Exchanges throughout the term of the Agreement, will be
exchanged based upon a recalculation of the Adjusted Established Price.
"Established Price" shall be the average close price of the related security for
the five (5) trading days immediately preceding the date of the related
Exchange.
The Exchange Dates shall be the Effective Date and the quarterly anniversary
dates of the Effective Date, through and including the one-year anniversary of
the Effective Date.
The "Dollar Value of the Exchange" shall be two million dollars ($2,000,000)
with respect to the initial exchange.
The "Securities Block Discount" shall be 0.15% with respect to the A Shares and
0% with respect to the B Shares.
11
<PAGE> 13
EXHIBIT C-1
Stock Exchange
<TABLE>
<CAPTION>
ESTABLISHED PRICE NATD EQE
-------- ----------
<S> <C> <C>
June 20, 1997 1.500000 14.625000
June 23, 1997 1.750000 14.062500
June 24, 1997 1.437500 14.125000
June 25, 1997 1.687500 13.875000
June 26, 1997 1.687500 13.750000
--------- ---------
Subtotal 8.062500 70.437500
Days averaging 5 5
ESTABLISHED PRICE (BID PRICE) 1.612500 14.087500
Block Discount Rate 15.00% 0.00%
(0.241875) 0.000000
ADJUSTED ESTABLISHED PRICE 1.370625 14.087500
========= =========
Value of Exchange 2,000,000 2,000,000
========= =========
No. of shares to be exchanged 1,459,188 141,970
========= =========
</TABLE>
12
<PAGE> 14
EXHIBIT D
Compensation to CABI and CCEC
1. Shareholder A shall transfer to CABI the following:
a. 14,197 shares of B Shares.
-------------------------------------
b. Other:
2. Shareholder B shall transfer to CCEC the following:
a. shares of B Shares.
-----------------------------------
b. Other:
13
<PAGE> 15
EXHIBIT E
Form of Escrow Agreement
14
<PAGE> 16
SCHEDULE 1(c)
Exceptions to Lock-Up
15
<PAGE> 17
SCHEDULE 1 (d)
Repurchase Option
Redemption Price - A Shares:
The (bid price) for the related shares on the Exchange Date with
respect to such A Shares, including any brokerage fees and finder fees.
Repurchase Price - B Shares:
The (bid price) for the related shares on the Exchange Date with
respect to such A Shares, multiplied by 1.15.
Legends:
A Shares:
NATIONAL DIAGNOSTICS, INC. ("NDI") of 755 W. BRANDON BLVD., BRANDON, FLORIDA,
HOLDS RIGHT OF OPTION TO PURCHASE THE STOCK REPRESENTED BY THIS CERTIFICATE AT
ANY TIME ON OR BEFORE JUNE 30, 1998 AT THE BID PRICE OF ONE AND 61.25/100
DOLLARS ($1.6125), SET ON SUCH DATE, IN ACCORDANCE WITH THE TERMS OF AN EXCHANGE
AGREEMENT DATED AS OF SUCH DATE BETWEEN NDI AND THE HOLDER HEREOF.
B Shares:
SUDAFRIC SUISSE TRUSTEES ("SST") HOLDS RIGHTS OF OPTION TO PURCHASE THE STOCK
REPRESENTED BY THIS CERTIFICATE AT ANY TIME ON OR BEFORE JUNE 30,1998 AT THE BID
PRICE OF FOURTEEN AND 8.75/100 DOLLARS ($14.0875) SET ON SUCH DATE, PLUS 15%, IN
ACCORDANCE WITH THE TERMS OF AN EXCHANGE AGREEMENT DATED AS OF SUCH DATE BETWEEN
SST AND THE HOLDER HEREOF.
16
<PAGE> 18
SCHEDULE 2 (A)
Jurisdiction of Incorporation of Shareholder A
17
