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EXECUTION
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
LIFESCIENCES OPPORTUNITIES, INC.,
AND
DRTATTOFF, LLC
DATED AS OF SEPTEMBER 7, 2007
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TABLE OF CONTENTS
Page No.
ARTICLE I THE
MERGER.........................................................1
1.1 The
Merger.................................................1
1.2 Closing; Effective
Time....................................1
1.3 Effects of
Merger..........................................2
1.4 Certificate of
Incorporation...............................2
1.5
Bylaws.....................................................2
1.6 Directors and
Officers.....................................2
ARTICLE II EFFECT OF THE MERGER ON CAPITAL
STOCK.............................2
2.1 Conversion of Capital
Stock................................2
2.2 Exchange of
Certificates...................................3
2.3 Certain
Adjustments........................................4
2.4
Warrants...................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF DR.
TATTOFF....................5
3.1 Organization and Qualification;
Subsidiaries...............5
3.2 Equity
Investments.........................................5
3.3 Authority to Execute and Perform
Agreement.................5
3.4 Binding
Effect.............................................5
3.5
Capitalization.............................................5
3.6 Vote Required; Managers'
Approval..........................6
3.7
Litigation.................................................6
3.8 Title to Properties; Absence of
Liens......................6
3.9 Compliance with
Laws.......................................6
3.10 Consents and
Approvals.....................................6
3.11
Non-contravention..........................................7
3.12 Company Material
Contracts.................................7
3.13
Taxes......................................................7
3.14 Financial
Statements.......................................8
3.15 Books and
Records..........................................8
3.16 Intellectual
Property......................................8
3.17 Environmental
Matters......................................9
3.18 Real
Property..............................................9
3.19 Broker's
Fees..............................................9
3.20 Labor
Matters..............................................9
3.21 Absence of
Liabilities.....................................9
3.22 Absence of Certain Changes or
Events.......................9
3.23 Full
Disclosure...........................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
COMPANY....................10
4.1 Organization and Qualification;
Subsidiaries..............10
4.2 Equity
Investment.........................................11
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4.3 Authority to Execute and Perform
Agreement................11
4.4 Binding
Effect............................................11
4.5
Capitalization............................................11
4.6 Board
Approval............................................12
4.7 SEC Reports and Financial
Statements......................12
4.8 No Material Adverse
Change................................12
4.9 Books and
Records.........................................13
4.10
Litigation................................................13
4.11 Absence of
Liabilities....................................13
4.12 Title to Properties; Absence of
Liens.....................13
4.13 Compliance with
Laws......................................13
4.14 Intellectual
Property.....................................13
4.15
Non-Contravention.........................................13
4.16 Consents and
Approvals....................................14
4.17 Material
Contracts........................................14
4.18
Taxes.....................................................14
4.19 Environmental
Matters.....................................15
4.20 Real
Property.............................................16
4.21 Broker's
Fees.............................................16
4.22 Labor
Matters.............................................16
4.23 Articles of Incorporation, Bylaws, and Minute
Books.......16
4.24 Full
Disclosure...........................................16
ARTICLE V ADDITIONAL AGREEMENTS OF THE
PARTIES..............................17
5.1 Actions Pending
Closing...................................17
5.2 Post-Effective
Amendment..................................19
5.3 Company Shareholders'
Approval............................19
5.4 Dr. Tattoff Stockholder
Approval..........................19
5.5 Efforts;
Consents.........................................19
5.6 Filing of Tax Returns; Payment of
Taxes...................19
5.7 Access to
Information.....................................20
5.8
Confidentiality...........................................20
5.9 Notification of Certain
Matters...........................21
5.10
Non-Solicitation..........................................21
5.11 Further
Assurances........................................22
5.12 Public
Disclosure.........................................22
5.13 Board of
Directors........................................22
ARTICLE VI CONDITIONS TO
CLOSING............................................23
6.1 Conditions to Each Party's Obligations to Consummate
the Transactions........................................23
6.2 Conditions to Obligations of the Company to Consummate
the Transactions........................................23
6.3 Conditions to Obligations of Dr. Tattoff to Consummate
the Transactions........................................24
ARTICLE VII
TERMINATION.....................................................25
7.1
Termination...............................................25
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7.2 Effect of
Termination.....................................26
7.3 Expenses; Termination
Fees................................26
ARTICLE IX
MISCELLANEOUS....................................................27
8.1 Certain Definitions; Rules of
Construction................27
8.2 Waivers and
Amendments....................................33
8.3 Governing
Law.............................................33
8.4
Notices...................................................33
8.5 Section
Headings..........................................34
8.6
Counterparts..............................................34
8.7
Assignments...............................................34
8.8 Entire Agreement;
Enforceability..........................34
8.9
Severability..............................................34
Exhibits
Exhibit A Investment Letter
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as
of
September 7, 2007, is entered into by and among LIFESCIENCES
OPPORTUNITIES,
INC., a Florida corporation the "Company"), and DRTATTOFF, LLC,
a California
limited liability company ("Dr. Tattoff")
W I T N E S S E T H :
WHEREAS, the respective Boards of Directors of the Company and
Dr. Tattoff
have each approved the merger of Dr. Tattoff with and into the
Company, with the
Company surviving (the "Merger"), on the terms and conditions
contained herein
and in accordance with the Florida Business Corporation Act (the
"FLBCA") and
the Beverly-Killea Limited Liability Company Act (the "CALLCA"),
and have
determined that the Merger and the transactions contemplated
herein are
advisable and in the best interest of their respective
corporations and
stockholders;
WHEREAS, the parties hereto desire to make certain
representations,
warranties, covenants and agreements in connection with the
Merger and to
prescribe various conditions to the Merger; and
WHEREAS, for U.S. federal income tax purposes, it is intended
that the
Merger qualify as a reorganization under the provisions of
Section 368(a) and
Section 351 of the Code, and that this Agreement shall
constitute a "plan of
reorganization" for the purposes of Section 368 and Section 351
of the Code.
NOW THEREFORE, in consideration of the mutual representations,
warranties,
covenants and agreements contained herein, and intending to be
legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions
of
this Agreement, at the Effective Time (as defined below), Dr.
Tattoff shall be
merged with and into the Company in accordance with the
applicable provisions of
the FLBCA and the CALLCA and in accordance with this Agreement,
and the separate
existence of Dr. Tattoff shall cease. The Company shall be the
surviving
corporation in the Merger (hereinafter sometimes referred to as
the "Surviving
Corporation"), and shall continue under the laws of Florida.
1.2. Closing; Effective Time. Subject to the satisfaction or
waiver
of all of the conditions to Closing contained in Article VI, the
closing of the
Merger (the "Closing"), shall take place at the offices of Blank
Rome LLP, 1200
N. Federal Highway, Suite 417, Boca Raton, FL 33432, as soon as
practicable (but
not later than 5 Business Days) after the satisfaction or waiver
of the
conditions to Closing contained in Article VI (other than those
conditions that
by their nature are to be satisfied at the Closing, but subject
to the
fulfillment or waiver of those conditions), unless another date
or place is
agreed to in writing by the parties hereto. The date on which
the Closing
actually occurs is hereinafter referred to as the "Closing
Date." As soon as is
practicable after the Closing, the parties hereto shall cause
the Merger to be
consummated by (i) delivering to the Secretary of State of the
State of Florida
a certificate of merger (the "Florida Certificate of Merger"),
in such form as
required by, and executed and acknowledged in accordance with,
the relevant
provisions of the FLBCA and (ii) delivering to the Secretary of
State of the
State of California a certificate of merger (the "California
Certificate of
Merger"), in such form as required by, and executed and
acknowledged in
accordance with, the relevant provisions of the CALLCA. The
Merger shall become
effective as of the date and at such time (the "Effective Time")
as the Florida
Certificate of Merger is filed with the Secretary of State of
the State of
Florida with respect to the Merger.
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1.3. Effects of Merger. The Merger shall have the effects set
forth
in the applicable provisions of the FLBCA and the CALLCA.
Without limiting the
generality of the foregoing, and subject thereto, at the
Effective Time, all the
properties, rights, privileges, powers and franchises of Dr.
Tattoff shall vest
in the Surviving Corporation, and all debts, liabilities and
duties of Dr.
Tattoff shall become the debts, liabilities and duties of the
Surviving
Corporation.
1.4. Certificate of Incorporation. The Certificate of
Incorporation
of the Company in effect immediately prior to the Effective Time
shall become,
from and after the Effective Time, the Certificate of
Incorporation of the
Surviving Corporation, until amended or repealed in accordance
with the terms
thereof and with Applicable Law.
1.5. Bylaws. The Bylaws of the Company in effect immediately
prior
to the Effective Time shall become, from and after the Effective
Time, the
Bylaws of the Surviving Corporation, until thereafter amended or
repealed in
accordance with the terms thereof and with Applicable Law.
1.6. Directors and Officers. The directors and officers of
Dr.
Tattoff immediately prior to the Effective Time shall become,
from and after the
Effective Time, the directors and officers of the Surviving
Corporation, each to
hold office from the Effective Time in accordance with the
Certificate of
Incorporation and Bylaws of the Surviving Corporation until
their respective
successors are duly elected or appointed and qualify, or they
resign or are
removed.
ARTICLE II
EFFECT OF THE MERGER ON CAPITAL STOCK
2.1. Conversion of Capital Stock. As of the Effective Time,
by
virtue of the Merger and without any action on the part of the
parties or the
registered holders of any shares of capital stock of the Company
(each a
"Company Shareholder," and collectively, the "Company
Shareholders"):
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(a) Each unit of outstanding membership interest of Dr.
Tattoff (the "Membership Interests") shall be converted into and
become 75 fully
paid and non-assessable shares of common stock, par value
$0.0001 per share, of
the Surviving Corporation. The number of shares of Company
Common Stock issued
to each member of Dr. Tattoff (each a "Member" and collectively
the "Members")
in accordance with this Section 2.1(a) shall hereafter be
referred to as the
"Merger Shares". At the Effective Time, all Membership Interests
of Dr. Tattoff
shall no longer be outstanding and shall automatically be
cancelled and retired
and shall cease to exist, and each Dr. Tattoff Member shall
cease to have any
rights with respect thereto, except the right to receive the
Merger Shares.
(b) No fraction of a share of Company Common Stock will be
issued, but in lieu of such issuance, each Dr. Tattoff Member
who would
otherwise be entitled to a fraction of a share of Company Common
Stock as a
result of the conversion and exchange of shares contemplated by
this Article II
shall receive from the Company one (1) additional share of
Company Common Stock.
The fractional share interest of Dr. Tattoff Members shall be
aggregated such
that no Dr. Tattoff Member shall receive more than the one (1)
share of Company
Common Stock with respect to any interest in fractional
shares.
2.2. Exchange of Interests.
(a) Immediately prior to the Closing, the Company shall
deposit, or shall cause to be deposited, with Blank Rome LLP
(the "Exchange
Agent"), for the benefit of the Dr. Tattoff Members certificates
in the names of
each such Dr. Tattoff Member evidencing the number of Merger
Shares to be issued
to such Dr. Tattoff Member in accordance with this Article II.
As soon as
reasonably practicable after the Effective Time, the Company
will instruct the
Exchange Agent to deliver to each holder of Membership Interests
of Dr. Tattoff
a letter of transmittal containing instructions for use in
effecting the
exchange of Membership Interests for certificates evidencing the
relevant number
of Merger Shares. No interest shall be paid on the Merger
Shares. All Merger
Shares issued upon exchange of the Membership Interests of Dr.
Tattoff in
accordance with the terms hereof shall be deemed to have been
issued or paid in
full satisfaction of all rights pertaining to such shares of
Company Common
Stock.
(b) It is understood that the certificates evidencing the
Merger Shares will bear the legends set forth below:
(i) The Securities represented hereby have not been
registered under the Securities Act of 1933, as amended (the
"Act"), or under the securities laws of any other
jurisdictions. These securities are subject to restrictions
on
transferability and resale and may not be transferred or
resold except as permitted under the Act and the applicable
state securities laws, pursuant to registration or exemption
therefrom. Investors should be aware that they may be
required
to bear the financial risks of this investment for an
indefinite period of time. The issuer of these securities
may
require an opinion of counsel in form and substance
satisfactory to the issuer to the effect that any proposed
transfer or resale is in compliance with the Act and any
applicable state securities laws;
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(ii) Any additional legend required by Applicable Law.
The legend set forth in (i) above shall be removed from any
certificate
evidencing such Merger Shares upon delivery to the Company of an
opinion by
counsel, reasonably satisfactory to the Company, that such
security can be
freely transferred without such a registration statement being
in effect and
that such transfer will not jeopardize the exemption or
exemptions from
registration pursuant to which the Company issued such Merger
Shares.
2.3. Certain Adjustments. If after the date hereof and prior to
the
Effective Time and to the extent permitted by this Agreement,
the outstanding
Membership Interests of Dr. Tattoff or Company Common Stock
shall be changed
into a different number, class or series of shares by reason of
any
reclassification, recapitalization or combination, forward stock
split, reverse
stock split (other than the Reverse Stock Split), stock dividend
or rights
issued in respect of such stock, or any similar event shall
occur (any such
action, an "Adjustment Event"), the number of Merger Shares
issued in exchange
for each Membership Interests of Dr. Tattoff shall be adjusted
correspondingly
to provide to the Members of Dr. Tattoff the right to receive
the same economic
effect as contemplated by this Agreement immediately prior to
such Adjustment
Event.
2.4. Warrants. At the Effective Time, to the extent not
exercised
prior to the Effective Time, each outstanding warrant to
purchase Membership
Interests of Dr. Tattoff (a "Dr. Tattoff Warrant") set forth in
Section 2.4 of
the Dr. Tattoff Disclosure Letter shall be automatically be
converted into a
warrant to acquire such number of shares of Company Common Stock
(a "Company
Warrant") as the holder of such Dr. Tattoff Warrants would have
been entitled to
receive as Merger Shares had such holder exercised such Dr.
Tattoff Warrant in
full immediately prior to the Effective Time at an exercise
price per share of
Company Common Stock appropriately adjusted such that the
aggregate exercise
price for such Company Warrant shall be the same as it was prior
to the
Effective Time. At the Effective Time, Dr. Tattoff shall
expressly assume the
due and punctual observance and performance of each and every
covenant contained
in, and condition of, the Dr. Tattoff Warrants to be performed
and observed by
Dr. Tattoff and all the obligations and liabilities
thereunder.
(a) As promptly as practicable after the Effective Time, the
Company shall deliver to each holder of a Dr. Tattoff Warrant a
notice that
contains a calculation in reasonable detail and accurately
reflects the number
of shares of Company Common Stock that each such holder is
entitled to receive
upon the exercise of such holder's Dr. Tattoff Warrant and the
applicable
adjusted exercise price. Together with such notice, or as part
of such notice,
Company shall deliver a duly executed confirmation that Company
has expressly
assumed the due and punctual observance and performance of each
and every
covenant contained in, and condition of, the applicable Dr.
Tattoff Warrant to
be performed and observed by Dr. Tattoff and all the obligations
and liabilities
thereunder.
(b) The number of shares of Company Common Stock issuable
upon
exercise of the Company Warrants shall be reserved by Company
out of authorized
but unissued Company Common Stock for issuance upon exercise in
full of all
Company Warrants after the Effective Time. Notwithstanding the
foregoing, upon
the expiration of the Company Warrants, such Company Common
Stock reserved for
issuance upon the exercise of the Company Warrants shall no
longer be reserved.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF DR. TATTOFF
Except as may be provided in a disclosure letter delivered by
Dr. Tattoff
to the Company on the date hereof (the "Dr. Tattoff Disclosure
Letter"), Dr.
Tattoff hereby represents and warrants to the Company as
follows:
3.1. Organization and Qualification. Dr. Tattoff is a
limited
liability company duly organized, validly existing and in good
standing under
the laws of its jurisdiction of incorporation, has requisite
corporate power and
authority and governmental approvals to own, lease and operate
its properties
and to carry on its business as currently conducted. Dr. Tattoff
is duly
qualified or licensed to do business and is in good standing in
each
jurisdiction in which the ownership or leasing of its property
or the conduct of
its business requires such qualification or licensing, except
where the failure
to be so qualified or licensed or in good standing would not,
individually or in
the aggregate, have a Material Adverse Effect on Dr.
Tattoff.
3.2. Equity Investments. Dr. Tattoff has no subsidiaries and
does
not own any equity interest in any other corporation or in any
partnership,
limited liability company or other form of business entity,
except as set forth
on Schedule 3.2.
3.3. Authority to Execute and Perform Agreement. Dr. Tattoff has
the
requisite power and all authority required to enter into,
execute and deliver
this Agreement and the Transaction Documents to which it is a
party, to perform
its obligations hereunder and thereunder and to consummate the
transactions
contemplated hereby and thereby (collectively, the
"Transactions"). The
execution, delivery and performance by Dr. Tattoff of this
Agreement and the
consummation by Dr. Tattoff of the Transactions have been duly
authorized and
approved by all necessary corporate action.
3.4. Binding Effect. This Agreement has been validly executed
and
delivered by Dr. Tattoff and, assuming the due execution and
delivery hereof by
the Company, constitutes a valid and binding obligation of Dr.
Tattoff,
enforceable against Dr. Tattoff in accordance with its terms,
except to the
extent such enforceability may be limited by (i) bankruptcy,
insolvency,
reorganization, moratorium or other similar laws of general
applicability
affecting or relating to enforcement of creditors' rights
generally, and (ii)
general equitable principles (regardless of whether such
enforceability is
considered in equity or at law).
3.5. Capitalization. Except for the notes and warrants issued
in
connection with the Bridge Financing and except as set forth in
Section 3.5(b)
of the Dr. Tattoff Disclosure Letter, there are no existing
options, rights,
subscriptions, warrants, unsatisfied preemptive rights, calls,
commitments or
agreements relating to (i) the authorized and unissued
membership interests of
Dr. Tattoff, or (ii) any securities or obligations convertible
into or
exchangeable for, or giving any Person any right to subscribe
for or acquire
from Dr. Tattoff, any membership interests of Dr. Tattoff and no
such
convertible or exchangeable securities or obligations are
outstanding.
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3.6. Vote Required; Managers' Approval. The only vote necessary
to
approve the Merger is the affirmative vote of the holders of a
majority of the
outstanding Membership Interests of Dr. Tattoff. The managing
members of Dr.
Tattoff, by resolutions duly adopted at a meeting duly called
and held at which
a quorum was present or by the unanimous written consent in lieu
of such a
meeting, has approved this Agreement, the Merger and the
Transactions in
accordance with the requirements of the CALLCA.
3.7. Litigation. There are no judicial, governmental,
administrative
or arbitral actions, claims, suits or proceedings or
investigations
(collectively, "Legal Proceedings") pending or, to the Knowledge
of Dr. Tattoff,
threatened against or involving Dr. Tattoff or any of its
respective property or
assets. There are no outstanding orders, judgments, injunctions,
awards or
decrees of any court, governmental or regulatory body or
arbitration tribunal
against or involving Dr. Tattoff.
3.8. Title to Properties; Absence of Liens. Dr. Tattoff has (i)
good
and marketable title free and clear of any and all liens and
encumbrances of any
kind in and to all of its assets and properties, excluding
immaterial matters
and (ii) sufficient rights to all of their respective assets and
properties to
permit them to carry on their business as currently
contemplated, whether real,
personal or fixed, free and clear of all Liens, in each case,
except (a) for
Liens set forth in Section 3.8 of the Dr. Tattoff Disclosure
Letter, (b) for
Liens for Taxes not yet due and payable or which Dr. Tattoff is
contesting in
good faith and for which adequate reserves have been
established, (c) for such
properties and assets as may have been sold since the date
hereof in the
ordinary course of business, and (d) for Liens not securing debt
that do not
materially detract from the value or materially interfere with
the use of the
property subject thereto (collectively, "Permitted Liens").
3.9. Compliance with Laws. Dr. Tattoff is not in violation
of,
default under, or conflict with, any applicable order, consent,
approval,
authorization, registration, declaration, filing, judgment,
injunction, award,
decree or writ of any Governmental Body or court of competent
jurisdiction
(collectively, "Orders") or any Applicable Law, except for any
such violations
that would not, individually or in the aggregate, have a
Material Adverse Effect
on the Company.
3.10. Consents and Approvals. Except for (i) those consents,
approvals, orders, authorizations, filings or notices set forth
in Section 3.10
of the Dr. Tattoff Disclosure Letter, (ii) applicable
requirements of the
Securities Act, the Exchange Act or state securities or "blue
sky" laws ("Blue
Sky Laws"), (iii) the Florida Certificate of Merger and (iv) the
California
Certificate of Merger, no consent, approval or authorization of,
filing with, or
notice to, any Governmental Body is required by Dr. Tattoff in
connection with
the execution, delivery and performance by Dr. Tattoff of this
Agreement, each
and every agreement contemplated hereby, and the consummation by
Dr. Tattoff of
the Transactions.
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3.11. Non-contravention. The execution and delivery of this
Agreement and the Transaction Documents by Dr. Tattoff, the
performance by Dr.
Tattoff of its obligations hereunder and thereunder, and the
consummation of the
Transactions contemplated hereby and thereby by Dr. Tattoff (A)
do not and will
not conflict with, or result in a breach or violation of (i) any
provision of
Dr. Tattoff's charter or bylaws, (ii) any applicable laws, (iii)
any material
agreement, contract, lease, license or instrument to which Dr.
Tattoff is a
party or by which it or any of its properties or assets are
bound and (B) will
not result in the creation or imposition of any Lien upon any of
the property or
assets of Dr. Tattoff pursuant to any provision of any contract
or Lien.
3.12. Dr. Tattoff Material Contracts. Except as set forth in
Section
3.12 of the Dr. Tattoff Disclosure Letter, Dr. Tattoff is not in
default under
any Material Contract of Dr. Tattoff, nor to the Knowledge of
Dr. Tattoff does
any condition exist that, with notice or lapse of time or both,
would constitute
a default thereunder. To the Knowledge of Dr. Tattoff, no other
party to any
such Material Contract of Dr. Tattoff is in default thereunder,
nor does any
condition exist that with notice or lapse of time or both would
constitute a
default thereunder. No approval or consent of any person is
needed in order that
the Material Contracts of Dr. Tattoff continue in full force and
effect
following the consummation of the transactions contemplated by
this Agreement.
3.13. Taxes. Except as set forth in Section 3.13 of Dr.
Tattoff
Disclosure Letter:
(a) Filing of Tax Returns. Dr. Tattoff has timely filed, or
has had timely filed on its behalf, with the appropriate Taxing
authorities all
Tax Returns in respect of Taxes it is required to file. The Tax
Returns filed
(including any amendments thereof) are complete and accurate in
all material
respects. Dr. Tattoff has not requested any extension of time
within which to
file any Tax Return in respect of any Taxes, which Tax Return
has not since been
filed in a timely manner. To the Knowledge of Dr. Tattoff, no
claim has ever
been made by any Taxing authority in a jurisdiction where Dr.
Tattoff does not
file Tax Returns, or has Tax Returns filed on its behalf, that
Dr. Tattoff is or
may be subject to taxation by that jurisdiction, or liable for
Taxes owing to
that jurisdiction.
(b) Payment of Taxes. All Taxes owed by Dr. Tattoff (whether
or not shown as due on any Tax Returns) have been paid in full
or adequate
reserves on Dr. Tattoff's books and/or records have been
established. Dr.
Tattoff has withheld and paid all Taxes required to have been
withheld and paid
in connection with amounts paid or owing to any employee,
independent
contractor, creditor, stockholder, or other third party. Dr.
Tattoff has made
all required estimated Tax payments sufficient to avoid any
underpayment
penalties. The unpaid Taxes of Dr. Tattoff (A) do not, as of the
Closing Date,
exceed the reserve for Tax liability (rather than any reserve
for deferred Taxes
established to reflect the timing differences between book and
Tax income) set
forth on the face of Dr. Tattoff's most recent balance sheets
(rather than any
notes thereto) and (B) do not exceed that reserve as adjusted
for the passage of
time through the Closing Date in accordance with the past custom
and practice of
Dr. Tattoff in filing, or having filed on its behalf, its Tax
Returns. The
charges, accruals and reserves on the books of Dr. Tattoff in
respect of any
liability for Taxes (x) based on or measured by net income for
any years not
finally determined, (y) with respect to which the applicable
statute of
limitations has not expired or (z) that has been previously
deferred, are
adequate to satisfy any assessment for such Taxes for any such
years.
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(c) Audits, Investigations or Claims. There is no dispute or
claim which has not been resolved concerning any Tax liability
of Dr. Tattoff
either (A) claimed or raised by any Taxing authority in writing
or (B) as to
which any of the directors and officers (and employees
responsible for Tax
matters) of Dr. Tattoff has Knowledge. There is no currently
pending audit of
any Tax Return of Dr. Tattoff by any Taxing authority, and Dr.
Tattoff has not
been notified in writing that any Taxing authority intends to
audit any Tax
Return of Dr. Tattoff. Dr. Tattoff has not executed any
outstanding waivers or
consents regarding the application of the statute of limitations
with respect to
any Taxes or Tax Returns.
3.14. Financial Statements.
(a) Dr. Tattoff has delivered to the Company copies of its
balance sheets and statements of income for the fiscal years
ended December 31,
2006 and 2005 and its unaudited balance sheets and statements of
income for the
six month period ended June 30, 2007 (the "Dr. Tattoff Financial
Statements").
Dr. Tattoff Financial Statements present fairly the financial
condition and
results of operations of Dr. Tattoff at the dates and for the
periods covered by
the Dr. Tattoff Financial Statements. Dr. Tattoff represents and
warrants that
there has been no material adverse change in the financial
condition of Dr.
Tattoff from that stated in Dr. Tattoff Financial
Statements.
(b) The Dr. Tattoff Financial Statements and any notes
related
thereto comply as to form in all material respects with
applicable accounting
requirements, have been prepared in accordance with United
States generally
accepted accounting principles ("GAAP") applied on a consistent
basis throughout
the periods involved (except as may be indicated in the notes
thereto) and
fairly present in all material respects (subject, in the case of
the unaudited
interim financial statements, to normal, recurring year end
adjustments none of
which are or will be material in amount, individually or in the
aggregate) the
consolidated financial position of Dr. Tattoff as at the dates
thereof and the
consolidated results of their operations and cash flows for the
periods then
ended.
(c) Dr. Tattoff does not have any direct or indirect
liabilities that were not fully and adequately reflected or
reserved against on
the balance sheet or described in the notes to the audited
financial statements
of Dr. Tattoff. Dr. Tattoff has no Knowledge of any
circumstance, condition,
event or arrangement that has taken place at any time that may
hereafter give
rise to any liabilities.
3.15. Books and Records. The books and records, financial
and
otherwise, of Dr. Tattoff are in all material respects complete
and correct and
have been maintained in accordance with sound business and
bookkeeping practices
so as to accurately and fairly reflect, in reasonable detail,
the transactions
and dispositions of the assets and liabilities of Dr.
Tattoff.
3.16. Intellectual Property. Except as set forth in Section 3.16
of
the Dr. Tattoff Disclosure Letter, Dr. Tattoff has no
Intellectual Property for
its business as now conducted and as proposed to be conducted.
To the Knowledge
of Dr. Tattoff, the business as conducted and as proposed to be
conducted by Dr.
Tattoff does not and will not cause Dr. Tattoff to infringe or
violate any of
the Intellectual Property of any other Person.
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3.17. Environmental Matters. (i) Dr. Tattoff is in compliance in
all
material respects with applicable Environmental Laws; (ii) Dr.
Tattoff has all
Permits required pursuant to Environmental Laws and are in
compliance in all
material respects with the terms thereof; (iii) there are no
past or present
events, activities, practices, incidents, actions or plans in
connection with
the operations of Dr. Tattoff which have given rise to or are
reasonably likely
to give rise to any material liability on the part of Dr.
Tattoff under any
Environmental Law; (iv) Dr. Tattoff has not generated, used,
transported,
treated, stored, released or disposed of, or has suffered or
permitted anyone
else to generate, use, transport, treat, store, release or
dispose of any
Hazardous Substance in violation of any Environmental Laws; and
(v) there has
not been any generation, use, transportation, treatment,
storage, release or
disposal of any Hazardous Substance in connection with the
conduct of the
business of Dr. Tattoff or the use of any property or facility
by Dr. Tattoff,
or to the Knowledge of Dr. Tattoff, any nearby or adjacent
properties, in each
case, which has created or might reasonably be expected to
create any material
liability under any Environmental Law or which would require
reporting to or
notification of any Governmental Body.
3.18. Real Property. Dr. Tattoff does not own, and has not
owned,
any real property or any interest in any real property.
3.19. Broker's Fees. Except as set forth in Section 3.19 of the
Dr.
Tattoff Disclosure Letter, no broker, finder, agent or similar
intermediary has
acted on behalf of Dr. Tattoff in connection with this Agreement
or the
Transactions, and there are no brokerage commissions, finders'
fees or similar
fees or commissions payable in connection therewith based on any
agreement,
arrangement or understanding with Dr. Tattoff.
3.20. Labor Matters. Dr. Tattoff is not now, and has not been in
the
last five years, bound by or party to any collective bargaining
agreement and,
to the Knowledge of Dr. Tattoff, no application for
certification of a
collective bargaining agent is pending. Dr. Tattoff is in
compliance with all
Applicable Laws applicable to Dr. Tattoff affecting employment
practices and
terms and conditions of employment.
3.21. Absence of Liabilities. As of June 30, 2007, the date of
Dr.
Tattoff's most recent balance sheet, Dr. Tattoff does not have
any debts,
liabilities or obligations of any kind, whether accrued,
absolute, contingent or
otherwise, and whether due or to become due, that are not
otherwise set forth in
Section 3.21 of the Dr. Tattoff Disclosure Letter, which shall
be updated as of
the Closing Date.
3.22. Absence of Certain Changes or Events. Since June 30, 2007,
Dr.
Tattoff has not:
9
<PAGE>
(a) Conducted any business or engaged in any activities
other
than activities related to the negotiation and execution of this
Agreement or
activities in the ordinary course of its business;
(b) Declared or made any payment of dividends or other
distributions to its stockholders or upon or in respect of any
shares of its
capital stock or purchased, or obligated itself to purchase,
retire or redeem,
any shares of its capital stock or other securities;
(c) Amended its articles of incorporation or bylaws;
(d) Borrowed or agreed to borrow any funds; incurred or
agreed
to incur or become subject to any debts, liabilities or
obligations of any kind
whatsoever (other than (i) in connection with the Bridge
Financing, (ii) in
conjunction with the negotiation and execution of this
Agreement, (iii) legal,
accounting, advisory and board of director fees and expenses,
(iv) obligations
incurred in the ordinary course of business or (v) as set forth
in Section
3.22(d) of the Dr. Tattoff Disclosure Letter); subjected or
agreed to subject
any of the assets or properties of Dr. Tattoff to any lien,
security interest,
charge, interest or other encumbrance or suffered such to be
imposed; or
guaranteed or agreed to guarantee the debts or obligations of
others.
3.23. Full Disclosure. This Agreement (including the Dr.
Tattoff
Disclosure Letter) does not (i) contain any representation,
warranty or
information that is false or misleading with respect to any
material fact, or
(ii) omit to state any material fact necessary in order to make
the
representations, warranties and information contained herein, in
the context in
which made or provided, not false or misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
Except as may be provided in a disclosure letter delivered by
the Company
on the date hereof (the "Company Disclosure Letter"), the
Company hereby
represents and warrants to the Dr. Tattoff as follows:
4.1. Organization and Qualification; Subsidiaries. The Company
is a
corporation, duly incorporated or organized, validly existing
and in good
standing under the laws of its jurisdiction of incorporation or
organization,
has requisite power and authority and governmental approvals to
own, lease and
operate its properties and to carry on its business as currently
conducted. The
Company is duly qualified or licensed to do business and is in
good standing in
each jurisdiction in which the ownership or leasing of its
property or the
conduct of its business requires such qualification or
licensing, except where
the failure to be so qualified or licensed or in good standing
would not,
individually or in the aggregate, have a Material Adverse Effect
on the Company.
The Company has not engaged in any business activities of any
type or kind
whatsoever. The Company does not have any subsidiaries.
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<PAGE>
4.2. Equity Investment. The Company does not own any equity
interest
in any other corporation or in any partnership, limited
liability company or
other form of business entity.
4.3. Authority to Execute and Perform Agreement. The Company has
the
requisite power and all authority required to enter into,
execute and deliver
this Agreement and the Transaction Documents to which it is a
party, to perform
its obligations hereunder and thereunder and to consummate the
Transactions. The
execution, delivery and performance of this Agreement and the
consummation of
the Transactions have been duly authorized by all necessary
corporate action.
4.4. Binding Effect. This Agreement has been validly executed
and
delivered by the Company and, assuming the due execution and
delivery hereof by
Dr. Tattoff, constitutes a valid and binding obligation of the
Company,
enforceable against the Company in accordance with its terms,
except to the
extent such enforceability may be limited by (i) bankruptcy,
insolvency,
reorganization, moratorium or other similar laws of general
applicability
affecting or relating to enforcement of creditors' rights
generally, and (ii)
general equitable principles (regardless of whether such
enforceability is
considered in equity or at law).
4.5. Capitalization.
(a) As of the date hereof, the authorized capital stock of
the
Company consists of (i) Eighty Million (80,000,000) shares of
common stock, par
value $0.0001 per share, of which Forty Five Thousand (45,000)
shares of common
stock are issued and outstanding, all of which are validly
issued, fully paid
and non-assessable and (ii) Twenty Million (20,000,000) shares
of preferred
stock, par value $0.0001 per share, of which none are issued and
outstanding.
(b) Obligations. There are no obligations, contingent or
otherwise, of the Company to repurchase, redeem or acquire
shares of the
Company.
(c) Options, Warrants, etc. There are no existing options,
rights, subscriptions, warrants, unsatisfied preemptive rights,
calls or
commitments relating to (i) the authorized and unissued capital
stock of the
Company, or (ii) any securities or obligations convertible into
or exchangeable
for, or giving any Person any right to subscribe for or acquire
from the Company
any shares of capital stock of the Company and no such
convertible or
exchangeable securities or obligations are outstanding.
(d) Registration. The outstanding shares of the capital
stock
of the Company have been issued in full compliance with the
registration and
prospectus delivery requirements of the Securities Act or in
compliance with
applicable exemptions therefrom, and the registration and
qualification
requirements of all applicable securities laws of states of the
United States.
(e) Merger Shares. The Merger Shares, when paid for and then
issued as provided in this Agreement, will be duly authorized
and validly
issued, fully paid and nonassessable, and will be free of any
Liens or
encumbrances and of restrictions on transfer, other than
restrictions on
transfer under applicable state and federal securities laws or
the Transaction
Documents.
11
<PAGE>
4.6. Board Approval. The Board of Directors of the Company,
by
resolutions duly adopted at a meeting duly called and held at
which a quorum was
present or by the unanimous written consent in lieu of such a
meeting, has
approved this Agreement, the Merger and the Transactions in
accordance with the
requirements of the FLBCA.
4.7. SEC Reports and Financial Statements.
(a) Each form, report, schedule, registration statement,
proxy
statement, information statement, exhibit and any other
document, to the extent
required to be filed in accordance with Applicable Law by the
Company with the
Securities and Exchange Commission (the "SEC") (as such
documents have been
amended prior to the date hereof, the "SEC Reports"), as of its
respective date,
has complied in all material respects with the applicable
requirements of the
Securities Act and Exchange Act and was timely filed (except
where a valid
extension of the filing date was filed and the applicable SEC
Report was filed
within the period permitted by such extension). None of the SEC
Reports, as of
their respective dates, contained any untrue statement of a
material fact or
omitted to state a material fact required to be stated therein
or necessary to
make the statements therein, in the light of the circumstances
under which they
were made, not misleading, except for such statements, if any,
as have been
modified or superseded by subsequent filings prior to the date
hereof.
(b) The consolidated financial statements of the Company
included in such SEC Reports and any notes related thereto
comply as to form in
all material respects with applicable accounting requirements
and with the
published rules and regulations of the SEC with respect thereto,
have been
prepared in accordance with United States generally accepted
accounting
principles ("GAAP") applied on a consistent basis throughout the
periods
involved (except as may be indicated in the notes thereto or, in
the case of the
unaudited interim financial statements, as permitted by Form
10-QSB of the SEC)
and fairly present in all material respects (subject, in the
case of the
unaudited interim financial statements, to normal, recurring
year end
adjustments none of which are or will be material in amount,
individually or in
the aggregate) the consolidated financial position of the
Company as at the
dates thereof and the consolidated results of their operations
and cash flows
for the periods then ended.
(c) The Company does not have any direct or indirect
liabilities that were not fully and adequately reflected or
reserved against on
the balance sheet or described in the notes to the audited
financial statements
of the Company. The Company has no Knowledge of any
circumstance, condition,
event or arrangement that has taken place at any time that may
hereafter give
rise to any liabilities.
4.8. No Material Adverse Change. Except as set forth in SEC
Reports
filed since June 14, 2006 (the "Recent Reports"), since June 14,
2006, the
Company has not conducted any business or engaged in any
activities other than
activities related to the negotiation and execution of this
Agreement or
activities in the ordinary course, consistent
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