Back to top

AGREEMENT AND PLAN OF MERGER

Agreement and Plan of Merger

AGREEMENT AND PLAN OF MERGER | Document Parties: EYE DYNAMICS INC | ORTHONETX, INC | EYE DYNAMICS ACQUISITION CORP You are currently viewing:
This Agreement and Plan of Merger involves

EYE DYNAMICS INC | ORTHONETX, INC | EYE DYNAMICS ACQUISITION CORP

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.
Title: AGREEMENT AND PLAN OF MERGER
Governing Law: Colorado     Date: 9/7/2005
Law Firm: Haddan & Zepfel LLP    

AGREEMENT AND PLAN OF MERGER, Parties: eye dynamics inc , orthonetx  inc , eye dynamics acquisition corp
50 of the Top 250 law firms use our Products every day

 

<PAGE>

 

                                                                     Exhibit 2.1

                          AGREEMENT AND PLAN OF MERGER

                                  BY AND AMONG

                               EYE DYNAMICS, INC.,

                                  ORTHONETX, INC.

                                       AND

                         EYE DYNAMICS ACQUISITION CORP.

 

 

         This AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and

entered into as of September 1, 2005 among Eye Dynamics, Inc., a Nevada

corporation ("Parent"), OrthoNetx, Inc., a Nevada corporation ("OrthoNetx"), and

Eye Dynamics Acquisition Corp., a Nevada corporation and a wholly-owned

subsidiary of Parent ("EYDY Merger Sub").

 

                              EXPLANATORY STATEMENT

                              ---------------------

 

         A. Upon the terms and subject to the conditions of this Agreement and

in accordance with the Nevada Revised Statutes ("NRS"), Parent, OrthoNetx and

EYDY Merger Sub intend to enter into a business combination transaction.

 

         B. The Board of Directors of OrthoNetx (i) has determined that the

Merger (as defined in Section 1.2 below) is consistent with and in furtherance

of the long-term business strategy of OrthoNetx and fair to, and in the best

interests of, OrthoNetx and its stockholders, (ii) has approved this Agreement,

the Merger and the other transactions contemplated by this Agreement, (iii) has

adopted a resolution declaring the Merger advisable, and (iv) has determined to

recommend that the stockholders of OrthoNetx adopt this Agreement.

 

         C. The Board of Directors of Parent (i) has determined that the Merger

is consistent with and in furtherance of the long-term business strategy of

Parent and fair to, and in the best interests of, Parent and its stockholders,

(ii) has approved this Agreement, the Merger and the other transactions

contemplated by this Agreement, (iii) has adopted a resolution declaring the

Merger advisable, and (iv) has approved the issuance of shares of Parent Common

Stock (as defined below) pursuant to the Merger (the "Share Issuance").

 

         D. The Board of Directors of EYDY Merger Sub (i) has determined that

the Merger is consistent with and in furtherance of the long-term business

strategy of EYDY Merger Sub, and fair to and in the best interests of, EYDY

Merger Sub and its stockholders, (ii) has approved this Agreement, the Merger

and the other transactions contemplated by this Agreement, (iii) has adopted a

resolution declaring the Merger advisable, and (iv) has determined to recommend

that the sole stockholder of EYDY Merger Sub adopt this Agreement.

 

         NOW, THEREFORE, in consideration of the foregoing Explanatory Statement

that is made a substantive part of this Agreement and the covenants, promises

and representations set forth herein, and for other good and valuable

consideration, the receipt and sufficiency of which are hereby acknowledged, the

parties agree as follows:

 

 

 

 

 

<PAGE>

 

                                    ARTICLE I

                                   THE MERGER

 

         1.1 THE MERGER. At the Effective Time (as defined in Section 1.2

hereof) and subject to and upon the terms and conditions of this Agreement and

the applicable provisions of the NRS, EYDY Merger Sub shall be merged with and

into OrthoNetx (the "Merger"), the separate corporate existence of EYDY Merger

Sub shall cease and OrthoNetx shall continue as the surviving corporation and

shall become a wholly-owned subsidiary of Parent. The surviving corporation

after the Merger is sometimes referred to hereinafter as the "OrthoNetx

Surviving Corporation."

 

         1.2 EFFECTIVE TIME. Unless this Agreement is earlier terminated

pursuant to Article VII hereof, the closing of the Merger and the other

transactions contemplated by this Agreement (the "Closing") will take place at

the offices of OrthoNetx, at a time and date to be specified by the parties, but

in no event later than two (2) business days following satisfaction or waiver of

the conditions set forth in Article VI hereof. The date upon which the Closing

actually occurs is herein referred to as the "Closing Date." On the Closing

Date, the parties hereto shall cause the Merger to be consummated by filing

Articles of Merger or like instrument ("Articles of Merger") with the Secretary

of State of the State of Nevada, in accordance with the relevant provisions of

Nevada Law (the times at which the Merger has become fully effective (or such

later time as may be agreed in writing by OrthoNetx and specified in the

Articles of Merger) is referred to herein as the "Effective Time").

 

         1.3 EFFECT OF THE MERGER.

 

                  (a) At the Effective Time, the effect of the Merger shall be

as provided in the applicable provisions of Nevada Law. Without limiting the

generality of the foregoing, and subject thereto, at the Effective Time, except

as provided herein, all the property, rights, privileges, powers and franchises

of OrthoNetx and EYDY Merger Sub shall vest in the OrthoNetx Surviving

Corporation, and all debts, liabilities and duties of OrthoNetx and EYDY Merger

Sub shall become the debts, liabilities and duties of the OrthoNetx Surviving

Corporation.

 

                  (b) Prior to or at the Effective Time, the properties and

assets of Parent and its Subsidiaries (as defined in Section 2.1) will be free

and clear of any and all encumbrances, charges, claims equitable interests,

liens, options, pledges, security interests, mortgages, rights of first refusal

or restrictions of any kind and nature (collectively, the "Encumbrances"),

except for such liabilities, accounts payable, debts, adverse claims, duties,

responsibilities and obligations of every kind or nature, whether accrued or

unaccrued, known or unknown, direct or indirect, absolute, contingent,

liquidated or unliquidated and whether arising under, pursuant to or in

connection with any contract, tort, strict liability or otherwise (collectively

the "Liabilities") of Parent which shall be set forth in SCHEDULE 3.5 attached

hereto.

 

                   (c) Promptly following the Effective Time, subject to

stockholder approval, it is expected that Parent will change its name to

"AcuNetx, Inc."

 

 

                                       2

 

 

 

 

<PAGE>

 

         1.4 ARTICLES OF INCORPORATION; BYLAWS.

 

                   (a) Unless otherwise determined by OrthoNetx prior to the

Effective Time, at the Effective Time, the Articles of Incorporation of

OrthoNetx as in effect immediately prior to the Effective Time shall be the

Articles of Incorporation of the OrthoNetx Surviving Corporation at and after

the Effective Time until thereafter amended in accordance with the Nevada Law

and the terms of such Articles of Incorporation.

 

                  (b) Unless otherwise determined by OrthoNetx prior to the

Effective Time, (i) the Bylaws of OrthoNetx as in effect immediately prior to

the Effective Time shall be the Bylaws of the OrthoNetx Surviving Corporation at

and after the Effective Time, until thereafter amended in accordance with Nevada

Law and the terms of Articles of Incorporation of the OrthoNetx Surviving

Corporation and such Bylaws.

 

         1.5 ORTHONETX DIRECTORS AND OFFICERS.

 

                  (a) Unless otherwise determined by OrthoNetx prior to the

Effective Time, the directors of OrthoNetx immediately prior to the Effective

Time shall be the directors of the OrthoNetx Surviving Corporation and at and

after the Effective Time, each to hold the office of a director of the OrthoNetx

Surviving Corporation in accordance with the provisions of Nevada Law and the

Articles of Incorporation and Bylaws of the OrthoNetx Surviving Corporation

until their successors are duly elected and qualified.

 

                  (b) Unless otherwise determined by OrthoNetx prior to the

Effective Time, the officers of OrthoNetx immediately prior to the Effective

Time shall be the officers of the OrthoNetx Surviving Corporation at and after

the Effective Time, each to hold office in accordance with the provisions of the

Bylaws of the OrthoNetx Surviving Corporation.

 

         1.6 EFFECT ON CAPITAL STOCK. Subject to the terms and conditions of

this Agreement, at the Effective Time, by virtue of the Merger and without any

action on the part of Parent, OrthoNetx and EYDY Merger Sub or the holders of

any of the following securities, the following shall occur:

 

         (a) FINAL DISTRIBUTION OF PARENT SECURITIES. Immediately after the

Effective Time, and conditioned on Closing, the Securities of Parent will be

owned in the following proportions: 46.25% owned by shareholders, option holders

and warrant holders of EYDY (collectively "EYDY Stockholders") as of August 26,

2005; 46.25% owned by shareholders, option holders, and warrant holders of

OrthoNetx (collectively "Holders of OrthoNetx Core Securities" as further

defined in Section 1.6(b)); and 7.5% owned by Galen Capital Group, LLC and its

designees ("Galen").

 

Whereas the total number of Common Shares, outstanding options and warrants of

Parent as of Effective Time equals 22,479,879 shares (21,674,880 Common Shares,

405,000 options and 399,999 warrants), the numerical distribution of Parent

Securities at the Effective Time shall be as follows:

 

                                       3

 

 

 

 

<PAGE>

<TABLE>

 

------------------------------------------------------ ------------------------------------------- ----------

OWNERS OF PARENT SECURITIES AT CLOSING                  Parent Securities                                    %

------------------------------------------------------ ------------------------------------------- ----------

<S>                                                      <C>                                             <C>

EYDY STOCKHOLDERS (includes 405,000 Board options       22,479,879   common shares, options, and         46.25%

and 399,999 warrants collectively owned by Donald        warrants combined

Hall, Frank P. Tota and Frank Tota, Sr.)

------------------------------------------------------ ------------------------------------------- ----------

HOLDERS OF ORTHONETX CORE SECURITIES   (excludes         22,479,879 common shares, options, and          46.25%

OrthoNetx common shares to be issued at the Effective    warrants combined

Time to Galen to equal7.5% ownership of Parent

pursuant to Section 1.6(e), and excludes 399,999

warrants to purchase OrthoNetx common shares to be

issued at the Effective Time collectively to Donald

Hall, Frank P. Tota and Frank Tota, Sr. pursuant to

Section 1.6(f))

------------------------------------------------------ ------------------------------------------- ----------

GALEN                                                    3,645,386 common shares                          7.50%

------------------------------------------------------ ------------------------------------------- ----------

                       PARENT TOTAL AT EFFECTIVE TIME   48,605,144   common shares, options, and           100%

                                                       warrants combined

------------------------------------------------------ ------------------------------------------- ----------

</TABLE>

 

To achieve these proportions and to effect the intent of this Agreement,

OrthoNetx, Galen and certain holders of warrants of EYDY will receive Parent

Securities according to a Conversion Factor (the "Conversion Factor") applied

uniformly to all holders of OrthoNetx Securities at the Effective Time, and

under the conditions enumerated in Sections 1.6(b-h) that follow.

 

                  (b) CONVERSION OF ORTHONETX CORE SECURITIES. The "OrthoNetx

Core Securities" are defined as all shares of OrthoNetx Common Stock, par value

$0.001 per share, and all pre-merger options and warrants of OrthoNetx issued

and outstanding immediately prior to the Effective Time, and EXCLUDING 1,200,000

OrthoNetx common shares held by or on behalf of Galen and the additional

OrthoNetx common shares to be issued to Galen necessary to equal 7.5% of Parent

Securities at the Effective Time, and EXCLUDING 399,999 EYDY warrants to be

exchanged for OrthoNetx warrants at the Effective Time. The aggregate shares of

Parent Common Stock and options and warrants of Parent to be exchanged for the

OrthoNetx Core Securities are referred to in this Agreement as the "EYDY Merger

Consideration." The OrthoNetx Core Securities will be automatically converted at

the Effective Time (subject to Sections 1.6(g)) into shares of Parent Common

Shares, $0.001 par value per share, and options and warrants of Parent (the

"Parent Common Stock") using the Conversion Factor. The Conversion Factor will

be calculated at the Effective Time using the EYDY Merger Consideration as the

numerator and the OrthoNetx Core Securities as the denominator. (By way of

example, as of the Effective Time, the OrthoNetx Core Securities are expected to

equal 26,160,353. The Conversion Factor would then be 22,479,879 / 26,160,353 =

0.859311.) This method assures that owners of OrthoNetx Core Securities will

receive 22,479,879 shares of Parent Common Stock and options and warrants of

Parent (other than shares held by holders who have not consented to and approved

the adoption of this Agreement in writing and who qualify under and have

complied with all of the provisions of Section 92A.380 of the NRS).

 

                                                                 ___________

                                                                 ___________

 

                                        4

 

 

 

 

<PAGE>

 

                  All of the foregoing percentage ownerships exclude the

OrthoNetx Common Stock and warrants to be issued to investors in the September

1, 2005 private placement offering of up to $3,000,000 of the securities of

OrthoNetx with all funds held in escrow as set forth in Section 6.1(e) below. If

any shares of OrthoNetx Common Stock outstanding immediately prior to the

Effective Time are unvested or are subject to a repurchase option, risk of

forfeiture or other condition under any applicable restricted stock purchase

agreement or other agreement with OrthoNetx, then the shares of Parent Common

Stock issued in exchange for such shares of OrthoNetx Common Stock will also be

unvested and subject to the same repurchase option, risk of forfeiture or other

condition, and the certificates representing such shares of Parent Common Stock

may accordingly be marked with appropriate legends.

 

                  (c) ORTHONETX STOCK OPTIONS. At the Effective Time, all

options to purchase OrthoNetx Common Stock then outstanding under OrthoNetx's

2005 Stock Option Plan (the "OrthoNetx Option Plan") and the OrthoNetx Option

Plan itself shall be assumed by Parent in accordance with Section 5.4(a) hereof.

 

                  (d) ORTHONETX WARRANTS. At the Effective Time, all warrants to

purchase OrthoNetx Common Stock then outstanding shall be assumed by Parent, and

shall become exercisable for shares of Parent Common Stock in accordance with

Section 5.4(b) hereof.

 

                  (e) ISSUANCE OF ADDITIONAL ORTHONETX COMMON STOCK TO GALEN AND

CONVERSION OF ORTHONETX COMMON STOCK HELD BY GALEN TO PARENT COMMON STOCK.

OrthoNetx, immediately prior to Closing, shall issue to or on behalf of Galen

that number of shares of OrthoNetx Common Stock that, together with shares of

OrthoNetx Common Stock previously held by or on behalf of Galen (1,200,000

common shares), that upon applying the Conversion Factor will equal 7.5%

(3,645,386 shares) of the Parent Common Stock upon conversion to Parent Common

Stock at Closing.

 

                  (f) EXCHANGE OF CERTAIN EYDY WARRANTS FOR ORTHONETX WARRANTS,

CONVERSION OF SAID ORTHONETX WARRANTS TO ORTHONETX COMMON SHARES, AND CONVERSION

OF SAID ORTHONETX COMMON SHARES TO PARENT COMMON SHARES. EYDY and OrthoNetx

agree that, immediately prior to Closing, EYDY warrants currently held by Donald

E. Hall, Frank P. Tota and Frank Tota, Sr. (collectively the "Hall Warrants")

representing an aggregate of 399,999 shares included within the EYDY Common

Stock totaling 22,479,879 as of August 26, 2005. At the Effective Time, the Hall

Warrants will be exchanged for OrthoNetx warrants at the same exercise price.

The number of OrthoNetx warrants issued on exchange of the Hall Warrants will be

such that on conversion to OrthoNetx Common Shares and then applying the

Conversion Factor, 399,999 shares of Parent Common Shares will be issued pro

rata to the owners of the Hall Warrants at Closing.

 

                                                                 ___________

                                                                  ___________

 

                                       5

 

 

 

 

<PAGE>

 

                  (g) ADJUSTMENTS TO EYDY MERGER CONSIDERATION. Except as

described in Section 1.8, the EYDY Merger Consideration shall be adjusted to

reflect appropriately the effect of any stock split, reverse stock split, stock

dividend (including any dividend or distribution of securities convertible into

or exercisable or exchangeable for Parent Common Stock, OrthoNetx Common Stock),

reorganization, recapitalization, reclassification, combination, exchange of

shares or other like change with respect to Parent Common Stock, OrthoNetx

Common Stock occurring or having a record date on or after the date hereof and

prior to the Effective Time.

 

                  (h) FRACTIONAL SHARES. No fraction of a share of Parent Common

Stock will be issued by virtue of the Merger. In lieu thereof any fractional

share will be rounded to the nearest whole share of Parent Common Stock (with .5

being rounded up).

 

         1.7 SURRENDER OF CERTIFICATES.

 

                  (a) PARENT TO PROVIDE COMMON STOCK. Promptly after the

Effective Time, Parent shall make available in accordance with this Article I,

the shares of Parent Common Stock issuable pursuant to Section 1.6(a) in

exchange for outstanding shares of OrthoNetx Common Stock.

 

                  (b) EXCHANGE PROCEDURES. Promptly after the Effective Time,

Parent shall mail to each holder of record as of the Effective Time of a

certificate or certificates, which immediately prior to the Effective Time

represented outstanding shares of OrthoNetx Common Stock (the "Certificates")

(i) a letter of transmittal in customary form, which shall specify that delivery

shall be effected, and risk of loss and title to the Certificates shall pass,

only upon delivery of the Certificates to the Parent, and (ii) instructions for

use in effecting the surrender of the Certificates in exchange for certificates

representing shares of Parent Common Stock pursuant to Section 1.6(a). Upon

surrender of Certificates for cancellation to the Parent, together with such

letter of transmittal, duly completed and validly executed in accordance with

the instructions thereto, the holders of such Certificates shall be entitled to

receive in exchange therefor certificates representing the number of whole

shares of Parent Common Stock into which their shares of OrthoNetx Common Stock

were converted pursuant to Section 1.6(a), and the Certificates so surrendered

shall forthwith be cancelled. Until so surrendered, outstanding Certificates

will be deemed, from and after the Effective Time, to evidence only the

ownership of the number of whole shares of Parent Common Stock into which such

shares of OrthoNetx Common Stock shall have been so converted (including any

voting, notice or other rights associated with the ownership of such shares of

Parent Common Stock under the Articles of Incorporation or Bylaws of Parent or

under the NRS).

 

                  (c) TRANSFERS OF OWNERSHIP. If certificates representing

shares of Parent Common Stock are to be issued in a name other than that in

which the Certificates surrendered in exchange therefor are registered, it will

be a condition of the issuance thereof that the Certificates so surrendered will

be properly endorsed and otherwise in proper form for transfer and that the

persons requesting such exchange will have (i) paid to Parent or any agent

designated by it any transfer or other taxes required by reason of the issuance

of certificates representing shares of Parent Common Stock in any name other

than that of the registered holder of the Certificates surrendered, or (ii)

established to the satisfaction of Parent or any agent designated by it that

such tax has been paid or is not payable.

 

                                                                  ___________

                                                                 ___________

 

                                       6

 

 

 

 

<PAGE>

 

                  (d) REQUIRED WITHHOLDING. Each of the Parent and OrthoNetx

Surviving Corporation shall be entitled to deduct and withhold from any

consideration payable or otherwise deliverable pursuant to this Agreement to any

holder or former holder of OrthoNetx Common Stock such amounts as may be

required to be deducted or withheld therefrom under the United States Internal

Revenue Code of 1986, as amended, (the "Code") or state, local or foreign tax

law. To the extent such amounts are so deducted or withheld, such amounts shall

be treated for all purposes under this Agreement as having been paid to the

person to whom such amounts would otherwise have been paid.

 

                  (e) NO LIABILITY. Notwithstanding anything to the contrary in

this Section 1.7, neither the Parent nor the OrthoNetx Surviving Corporation nor

any party hereto shall be liable to a holder of shares of Parent Common Stock or

OrthoNetx Common Stock for any amount properly paid to a public official

pursuant to any applicable abandoned property, escheat or similar law.

 

         1.8 NO FURTHER OWNERSHIP RIGHTS IN ORTHONETX COMMON STOCK. All shares

of Parent Common Stock issued in accordance with the terms hereof shall be

deemed to have been issued in full satisfaction of all rights pertaining to such

shares of OrthoNetx Common Stock. After the Effective Time, there shall be no

further registration of transfers on the records of the OrthoNetx Surviving

Corporation of shares of OrthoNetx Common Stock which were outstanding

immediately prior to the Effective Time. If, after the Effective Time,

Certificates are presented to the OrthoNetx Surviving Corporation for any

reason, they shall be cancelled and exchanged as provided in this Article I.

 

         1.9 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event that any

Certificates shall have been lost, stolen or destroyed, the Parent shall issue

and pay in exchange for such lost, stolen or destroyed Certificates, upon the

making of an affidavit of that fact by the holder thereof, certificates

representing the shares of Parent Common Stock into which the shares of

OrthoNetx Common Stock represented by such Certificates were converted pursuant

to Section 1.6(a); provided, however, that the Parent may, in its discretion and

as a condition precedent to the issuance of such certificates representing

shares of Parent Common Stock require the owner of such lost, stolen or

destroyed Certificates to deliver a bond in such sum as it may reasonably direct

as indemnity against any claim that may be made against Parent or the OrthoNetx

Surviving Corporation with respect to the Certificates alleged to have been

lost, stolen or destroyed.

 

         1.10 TAX TREATMENT. It is intended by the parties hereto that the

Merger shall constitute a reorganization within the meaning of Section 368(a) of

the Code. Each of the parties hereto adopts this Agreement as a "plan of

reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the

United States Treasury Regulations (the "Regulations"). Both prior to and after

the Closing, each party's books and records shall be maintained, and all

federal, state and local income tax returns and schedules thereto shall be filed

in a manner consistent with the Merger being qualified as a reverse triangular

merger under Section 368(a)(2)(E) of the Code (and comparable provisions of any

applicable state or local laws).

 

                                                                 ___________

                                                                 ___________

 

                                       7

 

 

 

 

<PAGE>

 

          1.11 TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after

the Effective Time, any further action is necessary or desirable to carry out

the purposes of this Agreement and to vest the OrthoNetx Surviving Corporation

(and/or its successor in interest) with full right, title and possession to all

assets, property, rights, privileges, powers and franchises of OrthoNetx and

EYDY Merger Sub, the officers and directors of Parent and the OrthoNetx

Surviving Corporation shall be fully authorized (in the name of EYDY Merger Sub,

OrthoNetx and otherwise) to take all such necessary action.

 

                                   ARTICLE II

                   REPRESENTATIONS AND WARRANTIES OF ORTHONETX

 

         Except as set forth in the corresponding sections or subsections of the

letter of exceptions delivered to Parent by OrthoNetx on or prior to entering

into this Agreement and incorporated herein by this reference (the "OrthoNetx

Schedule"), OrthoNetx hereby represents and warrants to Parent and EYDY Merger

Sub that:

 

         2.1 ORGANIZATION OF ORTHONETX.

 

                  (a) OrthoNetx is a corporation duly organized, validly

existing and in good standing under the laws of Nevada; has the corporate power

and authority to own, lease and operate its assets and property and to carry on

its business as now being conducted; and is duly qualified to do business and in

good standing as a foreign corporation in each jurisdiction in which the failure

to be so qualified would have an OrthoNetx Material Adverse Effect. As used in

this Agreement, the term (i) "Subsidiary" means the subsidiaries of OrthoNetx

set forth in Section 2.1 of the OrthoNetx Schedule and (ii) "OrthoNetx Material

Adverse Effect" means a material adverse effect on the condition (financial or

otherwise), business, assets or results of operations of OrthoNetx and its

Subsidiaries as a whole, or on the ability of OrthoNetx to consummate the

transactions contemplated by this Agreement; it being understood, however, that

OrthoNetx's continuing incurrence of losses, as long as such losses are in the

ordinary course of business shall not, alone, be deemed to be an OrthoNetx

Material Adverse Effect.

 

                  (b) Except as reflected on the OrthoNetx Schedule, OrthoNetx

owns, without any liens or encumbrances, all of the business assets, rights,

patents and other tangible and intangible assets as described in OrthoNetx's

private placement memorandum dated August 26, 2005.

 

                  (c) OrthoNetx has delivered to Parent a true and complete list

of all of OrthoNetx's Subsidiaries, indicating the jurisdiction of incorporation

of each Subsidiary and OrthoNetx's equity interest therein.

 

                  (d) OrthoNetx has delivered or made available to Parent a true

and correct copy of the Articles of Incorporation and Bylaws of OrthoNetx and

similar governing instruments of each of its Subsidiaries, each as amended to

date, and each such instrument is in full force and effect. Neither OrthoNetx

nor any of its Subsidiaries is in violation of any of the provisions of its

Certificate of Incorporation or Bylaws or equivalent governing instruments.

 

                                                                 ___________

                                                                 ___________

 

                                       8

 

 

 

 

<PAGE>

 

         2.2 ORTHONETX CAPITAL STRUCTURE. The authorized capital stock of

OrthoNetx consists of 100,000,000 shares of Common Stock, par value $0.001 per

share, of which there were 26,160,353 shares issued and outstanding as of August

26, 2005 assuming all securities sold in the OrthoNetx $500,000 bridge

financing. All outstanding shares of OrthoNetx Common Stock are duly authorized,

validly issued, fully paid and non-assessable, were issued in compliance with

applicable securities laws and are not subject to preemptive rights created by

statute, the Articles of Incorporation or Bylaws of OrthoNetx, or any agreement

or document to which OrthoNetx is a party or by which it is bound. As of August

26, 2005 OrthoNetx had reserved an aggregate of 1,000,000 shares of OrthoNetx

Common Stock, net of exercises, for issuance to employees, consultants and

non-employee directors pursuant to the OrthoNetx Option Plan, under which no

options are outstanding. All shares of OrthoNetx Common Stock subject to

issuance as aforesaid, upon issuance on the terms and conditions specified in

the instruments pursuant to which they are issuable, would be duly authorized,

validly issued, fully paid and non-assessable. OrthoNetx has issued 100,000

warrants, which upon exercise will allow the purchase of 100,000 common shares.

These warrants are included in the factor calculation for the share exchange

with Parent. Section 2.2 of the OrthoNetx Schedule lists (i) each outstanding

option to acquire shares of OrthoNetx Common Stock as of August 26, 2005, the

name of the holder of such option, the number of shares subject to such option,

the exercise price of such option, the number of shares as to which such option

will have vested at such date, the vesting schedule for such option and whether

the exercisability of such option will be accelerated in any way by the

transactions contemplated by this Agreement or for any other reason and

indicates the extent of acceleration, if any, and (ii) each outstanding

OrthoNetx warrant as of August 26, 2005, the name of the holder of such

OrthoNetx warrant and the exercise price therefor.

 

         2.3 OBLIGATIONS WITH RESPECT TO CAPITAL STOCK. Except as set forth in

Section 2.2, there are no equity securities, partnership interests or similar

ownership interests of any class of OrthoNetx, or any securities exchangeable or

convertible into or exercisable for such equity securities, partnership

interests or similar ownership interests issued, reserved for issuance or

outstanding. Except for securities OrthoNetx owns, directly or indirectly

through one or more Subsidiaries, there are no equity securities, partnership

interests or similar ownership interests of any class of any Subsidiary of

OrthoNetx, or any security exchangeable or convertible into or exercisable for

such equity securities, partnership interests or similar ownership interests

issued, reserved for issuance or outstanding. Except as set forth in Section

2.2, there are no options, warrants, equity securities, partnership interests or

similar ownership interests, calls, rights (including preemptive rights),

commitments or agreements of any character to which OrthoNetx or any of its

Subsidiaries is a party or by which it is bound obligating OrthoNetx or any of

its Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or

sold, or repurchase, redeem or otherwise acquire, or cause the repurchase,

redemption or acquisition, of any shares of capital stock of OrthoNetx or any of

its Subsidiaries or obligating OrthoNetx or any of its Subsidiaries to grant,

extend, accelerate the vesting of or enter into any such option, warrant, equity

security, partnership interest or similar ownership interest, call, right,

commitment or agreement. There are no registration rights and, to the knowledge

of OrthoNetx there are no voting trusts, proxies or other agreements or

understandings with respect to any equity security of any class of OrthoNetx or

with respect to any equity security, partnership interest or similar ownership

interest of any class of any of its Subsidiaries.

 

                                                                 ___________

                                                                 ___________

 

                                        9

 

 

 

 

<PAGE>

 

         2.4 AUTHORITY.

 

                  (a) OrthoNetx has all requisite corporate power and authority

to enter into this Agreement and to consummate the transactions contemplated

hereby and thereby. The execution and delivery of this Agreement and the

consummation of the transactions contemplated hereby, have been duly authorized

by all necessary corporate action on the part of OrthoNetx, subject only to the

adoption of this Agreement by OrthoNetx's stockholders and the filing and

recordation of the Articles of Merger pursuant to the NRS. A vote of the holders

of at least a majority of the outstanding shares of the OrthoNetx Common Stock

is required for OrthoNetx's stockholders to approve and adopt this Agreement and

approve the Merger. This Agreement has been duly executed and delivered by

OrthoNetx and, assuming the due authorization, execution and delivery by Parent

and EYDY Merger Sub, constitutes the valid and binding obligation of OrthoNetx,

enforceable in accordance with its terms, except as enforceability may be

limited by bankruptcy, insolvency, fraudulent transfer, reorganization,

moratorium and other similar laws and general principles of equity. The

execution and delivery of this Agreement by OrthoNetx does not, and the

performance of this Agreement by OrthoNetx will not (i) conflict with or violate

the Articles of Incorporation or Bylaws of OrthoNetx (the "OrthoNetx Charter

Documents") or the equivalent organizational documents of any of its

Subsidiaries, (ii) subject to compliance with the requirements set forth in

Section 2.4(b) below, conflict with or violate any law, rule, regulation, order,

judgment or decree applicable to OrthoNetx or any of its Subsidiaries or by

which its or any of its respective properties is bound or affected, or (iii)

result in any breach of, or constitute a default (or an event that with notice

or lapse of time or both would become a default) under, or impair OrthoNetx's

rights or alter the rights or obligations of any third party under, or to

OrthoNetx's knowledge, give to others any rights of termination, amendment,

acceleration or cancellation of, or result in the creation of a lien or

encumbrance on any of the properties or assets of OrthoNetx or any of its

Subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,

agreement, lease, license, permit, franchise or other instrument or obligation

to which OrthoNetx or any of its Subsidiaries is a party or by which OrthoNetx

or any of its Subsidiaries or its or any of its respective properties are bound

or affected, except to the extent such conflict, violation, breach, default,

impairment or other effect would not, in the case of clause (ii) or (iii),

individually or in the aggregate, reasonably be expected to have an OrthoNetx

Material Adverse Effect.

 

                  (b) No consent, approval, order or authorization of, or

registration, declaration or filing with any court, administrative agency or

commission or other governmental authority or instrumentality (a "Governmental

Entity") is required by or with respect to OrthoNetx in connection with the

execution and delivery of this Agreement, or the consummation of the

transactions contemplated hereby, except for (i) the filing of the Articles of

Merger with the Secretary of State of Nevada, (ii) such consents, approvals,

orders, authorizations, registrations, declarations and filings as may be

required under applicable federal and state securities laws and (iii) such other

consents, authorizations, filings, approvals and registrations which, if not

obtained or made, individually or in the aggregate, would not be reasonably

likely to have an OrthoNetx Material Adverse Effect.

 

                                                                 ___________

                                                                  ___________

 

                                       10

 

 

 

 

<PAGE>

 

         2.5 ORTHONETX FINANCIAL STATEMENTS. Prior to the Effective Time,

OrthoNetx shall provide to Parent, an audited consolidated balance sheet of

OrthoNetx and its Subsidiaries as of December 31, 2004 together with the related

audited statements of income, cash flows and shareholders' equity for the year,

and (ii) an unaudited consolidated balance sheet of OrthoNetx and its

Subsidiaries as of June 30, 2005 (the "OrthoNetx Balance Sheet"), together with

the related unaudited statements of income, cash flows and shareholders' equity

for the period of six months then ended (the "OrthoNetx Financial Statements").

Each of the OrthoNetx Financial Statements (including, in each case, any related

notes thereto) was and will be prepared in accordance with 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 unaudited interim financial statements, as may be permitted by the

Securities Exchange Commission (the "SEC") on form 10-QSB under the Securities

Exchange Act of 1934, as amended (the "Exchange Act")), and each fairly presents

and will fairly present the consolidated financial position of OrthoNetx and its

Subsidiaries as of the respective dates thereof and the consolidated results of

its operations and cash flows and stockholder equity for the periods indicated.

Except as disclosed in the OrthoNetx Financial Statements, OrthoNetx does not

have any liabilities (absolute, accrued, contingent or otherwise) of a nature

required to be disclosed on a balance sheet or in the related notes to the

consolidated financial statements prepared in accordance with GAAP which are,

individually or in the aggregate, material to the business, results of

operations or financial condition of OrthoNetx, except liabilities incurred

since the date of the OrthoNetx Financial Statements in the ordinary course of

business consistent with past practices and which would not reasonably be

expected to have an OrthoNetx Material Adverse Effect.

 

         2.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as contemplated by

this Agreement, since the date of the OrthoNetx Balance Sheet, OrthoNetx and its

Subsidiaries have conducted their respective businesses only in, and have not

engaged in any material transaction other than according to, the ordinary and

usual course of such businesses and there has not been (i) any change that,

individually or in the aggregate, has had or is reasonably likely to have an

OrthoNetx Material Adverse Effect; (ii) any material damage, destruction or

other casualty loss with respect to any material asset or property owned, leased

or otherwise used by OrthoNetx or any of its Subsidiaries, whether or not

covered by insurance; (iii) any declaration, setting aside or payment of any

dividend or other distribution in cash, stock or property in respect of the

capital stock of OrthoNetx, except for dividends or other distributions on its

capital stock publicly announced prior to the date hereof and except as

expressly permitted hereby; (iv) any event that would constitute a violation of

Section 4.1 hereof if such event occurred after the date of this Agreement and

prior to the Effective Time; or (v) any change by OrthoNetx in accounting

principles, practices or methods. Since the date of the OrthoNetx Balance Sheet,

there has not been any increase in the compensation payable or that could become

payable by OrthoNetx to officers or key employees or any amendment of the

OrthoNetx Option Plan other than increases or amendments in the ordinary course

of business or (y) as required by any relevant employment agreement, option

agreement or (z) which, individually or in the aggregate, would not reasonably

be expected to have an OrthoNetx Material Adverse Effect.

 

         2.7 TAXES.

 

                  (a) For purposes of this Agreement, (i) "Taxes" shall mean all

Federal, state, local, foreign, provincial, territorial or other taxes, imports,

tariffs, fees, levies or other similar assessments or liabilities and other

charges of any kind, including income taxes, profits taxes, franchise taxes, ad

valorem taxes, excise taxes, withholding taxes, stamp taxes or other taxes of or

 

                                                                 ___________

                                                                 ___________

 

                                       11

 

 

 

 

<PAGE>

 

with respect to gross receipts, premiums, real property, personal property,

windfall profits, sales, use, transfers, licensing, employment, social security,

workers' compensation, unemployment, payroll and franchises imposed by or under

any law (meaning all laws, statutes, ordinances and regulations of any

governmental authority including all decisions of any court having the effect of

law), and any other taxes, duties or assessments, together with all interest,

penalties and additions imposed with respect to such amounts; (ii) "Tax Returns"

shall mean any declaration, return, report, schedule, certificate, statement or

other similar document (including relating or supporting information) required

to be filed with any Taxing Authority (as defined below), or where none is

required to be filed with a Taxing Authority, the statement or other document

issued by the applicable Taxing Authority in connection with any Tax, including,

without limitation, any information return, claim for refund, amended return or

declaration of estimated Tax; and (iii) "Taxing Authority" shall mean any

domestic, foreign, Federal, national, provincial, state, county or municipal or

other local government or court, any subdivision, agency, commission or

authority thereof, or any quasi-governmental body exercising tax regulatory

authority.

 

                  (b) OrthoNetx and each of its Subsidiaries have (i) timely

filed all Tax Returns that are required to have been filed by it with all

appropriate Taxing Authorities (and all such returns are true and correct and

fairly reflect in all material respects its operations for tax purposes), and

(ii) timely paid all Taxes shown as owing on such Tax Returns or assessed by any

Taxing Authority (other than Taxes the validity of which are being contested in

good faith by appropriate proceedings). Between the date of the OrthoNetx

Balance Sheet and the Closing Date, neither OrthoNetx nor any of its

Subsidiaries has incurred (or will incur) a Tax liability other than a Tax

liability in the ordinary course of business and in accordance with past custom

and practice. The assessment of any additional Taxes for periods for which Tax

Returns have been filed is not expected to exceed reserves made in accordance

with GAAP and reflected in the OrthoNetx Financial Statements and the OrthoNetx

Balance Sheet and, to OrthoNetx's knowledge, there are no material unresolved

questions or claims concerning OrthoNetx's or any Subsidiaries' tax liability.

Neither OrthoNetx's nor any Subsidiaries' Tax Returns have been reviewed or

audited by any Taxing Authority and no deficiencies for any Taxes have been

proposed, asserted or assessed either orally or in writing against OrthoNetx or

any of its Subsidiaries that are not adequately reserved for in accordance with

GAAP. No liens exist for Taxes (other than liens for Taxes not yet due and

payable) with respect to any of the assets or properties of OrthoNetx or any

Subsidiary.

 

                  (c) Neither OrthoNetx nor any Subsidiary has outstanding any

agreements or waivers extending, or having the effect of extending, the statute

of limitations with respect to the assessment or collection of any Tax or the

filing of any Tax Return.

 

                  (d) Neither OrthoNetx nor any Subsidiary is a party to or

bound by any tax-sharing agreement, tax indemnity obligation or similar

agreement, arrangement or practice with respect to Taxes (including any advance

pricing agreement, closing agreement or other agreement relating to Taxes with

any Taxing Authority).

 

                                                                  ___________

                                                                 ___________

 

                                       12

 

 

 

 

<PAGE>

 

                  (e) OrthoNetx shall not be required to include in a taxable

period ending after the Closing Date any taxable income attributable to income

that accrued in a prior taxable period but was not recognized in any prior

taxable period as a result of the installment method of accounting, the

long-term contract method of accounting, the cash method of accounting or

Section 481 of the Code or any comparable provision of state, local or foreign

Tax law, or for any other reason.

 

                  (f) Neither OrthoNetx, nor any of its Subsidiaries or

affiliates, has made with respect to OrthoNetx any consent under Section 341 of

the Code, no property of OrthoNetx is "tax exempt use property" within the

meaning of Section 168(h) of the Code, and none of the assets of OrthoNetx are

subject to a lease under Section 7701(h) of the Code or under any predecessor

section thereof.

 

                  (g) OrthoNetx has complied in all material respects with all

applicable laws relating to the payment and withholding of Taxes (including,

without limitation, withholding of Taxes pursuant to Sections 1441, 1442, 3121,

3402 and 3406 of the Code or any comparable provision of any state, local or

foreign laws) and has, within the time and in the manner prescribed by

applicable law, withheld from and paid over to the proper Taxing Authorities all

amounts required to be so withheld and paid over under applicable laws.

 

                  (h) The net operating losses ("NOL") of OrthoNetx or any of

its Subsidiaries are not, as of the date hereof, subject to Section 382 or 269

of the Code, Regulation Section 1.1502-21(c), or any similar provisions or

Regulations otherwise limiting the use of the NOLs of OrthoNetx or its

Subsidiaries.

 

                  (i) OrthoNetx is not, and has not been for the five years

preceding the Closing, a "United States real property holding company" (as such

term is defined in Section 897(c)(2) of the Code).

 

                  (j) As of the date hereof, to the knowledge of OrthoNetx,

neither OrthoNetx nor any of its Subsidiaries or affiliates has taken or agreed

to take any action or failed to take any action that would prevent the Merger

from constituting a reorganization within the meaning of Section 368(a) of the

Code.

 

                  (k) Any deficiency resulting from any audit or examination

relating to Taxes of OrthoNetx by any Taxing Authority has been timely paid.

 

                  (l) No power of attorney with respect to any Taxes has been

executed or filed with any Taxing Authority by or on behalf of OrthoNetx.

 

         2.8 INTELLECTUAL PROPERTY.

 

                  (a) To its knowledge, OrthoNetx owns, or has the right to use

pursuant to valid license, sublicense, agreement, or permission, all

intellectual property rights used in or necessary for the operation of

OrthoNetx's business as presently conducted and the execution and delivery of

this Agreement and the closing of the transaction contemplated hereby will not

 

                                                                 ___________

                                                                 ___________

 

 

                                        13

 

 

 

 

<PAGE>

 

alter or impair any such rights. To its knowledge, OrthoNetx has taken, and

shall continue to take through the Closing Date, all necessary action to

maintain and protect each item of intellectual property that it owns or uses.

 

                  (b) The OrthoNetx Schedule identifies (i) each patent,

trademark, trade name, service name or copyright with respect to any of

OrthoNetx's intellectual property, all applications and registration statements

therefor and renewals thereof (and sets forth correct and complete copies of all

such patents, registrations and applications (as amended to date).

 

                  (c) OrthoNetx has at all times used reasonable efforts to

protect all trade secrets related to its intellectual property.

 

         2.9 COMPLIANCE; PERMITS; RESTRICTIONS.

 

                  (a) Neither OrthoNetx nor any of its Subsidiaries is in

conflict with, or in default or violation of (i) any law, rule, regulation,

order, judgment or decree applicable to OrthoNetx or any of its Subsidiaries or

by which its or any of their respective properties is bound or affected, or (ii)

any note, bond, mortgage, indenture, contract, agreement, lease, license,

permit, franchise or other instrument or obligation to which OrthoNetx or any of

its Subsidiaries is a party or by which OrthoNetx or any of its Subsidiaries or

its or any of their respective properties is bound or affected except for those

conflicts, defaults or violations which would not be reasonably expected to have

an OrthoNetx Material Adverse Effect. To the knowledge of OrthoNetx, no

investigation or review by any Governmental Entity is pending or threatened

against OrthoNetx or its Subsidiaries, nor has any Governmental Entity indicated

in writing an intention to conduct the same other than those which would not

reasonably be expected to have an OrthoNetx Material Adverse Effect. There is no

agreement, judgment, injunction, order or decree binding upon OrthoNetx or any

of its Subsidiaries which has or would reasonably be expected to have the effect

of prohibiting or materially impairing any business practice of OrthoNetx or any

of its Subsidiaries, any acquisition of material property by OrthoNetx or any of

its Subsidiaries or the conduct of business by OrthoNetx as currently conducted.

 

                  (b) OrthoNetx and its Subsidiaries hold all permits, licenses,

variances, exemptions, orders and approvals from Governmental Entities which

would necessary to the conduct of the business of OrthoNetx except those the

absence of which would not, individually or in the aggregate, reasonably be

likely to have an OrthoNetx Material Adverse Effect (collectively, the

"OrthoNetx Permits"). OrthoNetx and its Subsidiaries are in compliance in all

material respects with the terms of the OrthoNetx Permits.

 

         2.10 LITIGATION. As of the date of this Agreement, there is no action,

suit, proceeding, claim, arbitration or investigation pending, including

derivative suits brought by or on behalf of OrthoNetx or as to which OrthoNetx

or any of its Subsidiaries has received any notice of assertion nor, to

OrthoNetx's knowledge, is there a threatened action, suit, proceeding, claim,

arbitration or investigation against OrthoNetx or any of its Subsidiaries

seeking to delay, limit or enjoin the transactions contemplated by this

Agreement or which might reasonably be expected to have an OrthoNetx Material

Adverse Effect.

 

                                                                 ___________

                                                                  ___________

 

                                       14

 

 

 

 

<PAGE>

 

         2.11 BROKERS' AND FINDERS' FEES. OrthoNetx has not incurred, nor will

it incur, directly or indirectly, any liability for brokerage or finders' fees

or agents' commissions or any similar charges in connection with this Agreement

or any transaction contemplated hereby except for certain commissions to be paid

to Galen Capital Group as set forth in Section 2.11 of the OrthoNetx Schedule

and commissions to be paid in conjunction with the $3,000,000 private placement

referenced in Section 1.6 above.

 

         2.12 LABOR AGREEMENTS AND ACTIONS; EMPLOYEE BENEFIT PLANS.

 

                  (a) OrthoNetx is not bound by or subject to (and none of its

assets or properties is bound by or subject to) any written or oral, express or

implied, contract, commitment or arrangement with any labor union, and no labor

union has requested or, to the knowledge of OrthoNetx, has sought to represent

any of the employees, representatives, or agents of OrthoNetx. There is no

strike or other labor dispute involving OrthoNetx pending or, to the knowledge

of OrthoNetx, threatened, nor is OrthoNetx aware of any labor organization

activity involving its employees.

 

                   (b) Section 2.12(b) of the OrthoNetx Schedule contains a

complete list of each pension, profit-sharing or other retirement, bonus,

deferred compensation, employment agreement, severance agreement, incentive

compensation, stock purchase, stock option, severance or termination pay,

hospitalization or other medical, life or other insurance, long- or short-term

disability, fringe benefit, sick pay, or vacation pay, or other employee benefit

plan, program, agreement, or arrangement or policy, whether formal or informal,

funded or unfunded, written or unwritten, and whether legally binding or not,

sponsored, maintained, contributed to or required to be contributed to by (i)

OrthoNetx with respect to current or former employees or any current or former

director, independent contractor or consultant of OrthoNetx, and/or (ii) any

trade or business, whether or not incorporated, that together with OrthoNetx

would be deemed a "single employer" that includes OrthoNetx within the meaning

of Section 4001(a)(14) of ERISA, and the rules and regulations promulgated

thereunder (collectively the "OrthoNetx Benefit Plans"), including a summary of

each informal or unwritten OrthoNetx Benefit Plan. Section 2.12(b) of the

OrthoNetx Schedule identifies each OrthoNetx Benefit Plan that is a "pension

benefit plan" under Section 3(2) of ERISA ("OrthoNetx Pension Plan"), and

discloses whether each OrthoNetx Benefit Plan that is an "employee welfare

benefit plan" under Section 3(1) of ERISA ("OrthoNetx Welfare Plan") is (i)

unfunded, (ii) insured, or (iii) funded through a "welfare benefit fund" within

the meaning of Section 419(e) of the Code or another funding mechanism.

 

                  (c) All OrthoNetx Benefit Plans that are "employee benefit

plans" within the meaning of Section 3(3) of ERISA covering OrthoNetx Employees

(the "OrthoNetx Plans"), to the extent subject to ERISA, are in substantial

compliance with ERISA, the Code, and all other applicable law. Each OrthoNetx

Pension Plan that is intended to be qualified under Section 401(a) of the Code

either has received a favorable determination letter from the Internal Revenue

Service (the "IRS") stating that it is so qualified, or it is in a prototype or

volume submitter plan document that has been pre-approved by the IRS as is

evidenced by a letter from the IRS, and nothing has occurred that could

reasonably be expected to affect adversely the qualified status of such plan. As

 

                                                                 ___________

                                                                  ___________

 

                                       15

 

 

 

 

<PAGE>

 

of the date hereof, other than claims for benefits submitted in the ordinary

course by participants or beneficiaries under the OrthoNetx Benefit Plans, no

material claim against any OrthoNetx Benefit Plan, and no legal or regulatory

proceeding (including any audit or voluntary compliance resolution or closing

agreement program proceeding) involving, any OrthoNetx Benefit Plan, is pending,

or to the knowledge of OrthoNetx, threatened.

 

                  (d) Neither OrthoNetx nor any of its Subsidiaries has engaged

in a transaction with respect to any OrthoNetx Plan that, assuming the taxable

period of such transaction expired as of the date hereof, could subject

OrthoNetx or any Subsidiary to a tax or penalty imposed by either Section 4975

of the Code or Section 502(i) of ERISA in an amount which would be material.

 

                  (e) No current or former OrthoNetx Pension Plan or pension

plan of any of its Subsidiaries, or any entity which is considered one employer

with OrthoNetx under Section 4001 of ERISA or Section 414 of the Code (an "ERISA

Affiliate"), is or has ever been subject to Title IV of ERISA or Section 412 of

the Code. No OrthoNetx Benefit Plan constitutes a multiemployer plan within the

meaning of Section 3(37) of ERISA.

 

                  (f) All contributions required to be made under the terms of

any OrthoNetx Plan have been timely made or have been reflected on the audited

financial statements of OrthoNetx.

 

                  (g) Neither OrthoNetx nor any of its Subsidiaries has any

obligations for retiree health and life benefits under any OrthoNetx Plan or has

ever represented, promised or contracted (whether in oral or written form) to

any employee(s) that such employee(s) would be provided with retiree health or

life benefits which would have a material impact on OrthoNetx, except as

required under Section 601 of ERISA.

 

                  (h) The consummation of the transactions contemplated by this

Agreement will not (x) entitle any employees of OrthoNetx or any of its

Subsidiaries to severance pay, (y) accelerate the time of payment or vesting or

trigger any payment or funding (through a grantor trust other otherwise) of

compensation or benefits under, increase the amount payable or trigger any other

material obligation pursuant to, any of the OrthoNetx Benefit Plans or (z)

result in any breach or violation of, or a default under, any of the OrthoNetx

Benefit Plans.

 

                  (i) Any amount that could be received (whether in cash,

property, or vesting of property) as a result of the transaction contemplated by

this Agreement by any officer, director, employee or independent contractor of

OrthoNetx or any of its Subsidiaries, who is a "disqualified individual" (as

defined in Treasury Regulation Section 1.280G-1), under any employment

arrangement or OrthoNetx Benefit Plan would not be characterized as an "excess

parachute payment" (as defined in Section 280G of the Code).

 

                   (j) All OrthoNetx Benefit Plans covering current or former

non-U.S. Employees complies in all material respects with applicable law, and no

unfunded liabilities exist with respect to any OrthoNetx Benefit Plan that

covers such non-U.S. Employees.

 

         2.13 ABSENCE OF LIENS AND ENCUMBRANCES. OrthoNetx and each of its

Subsidiaries has good and valid title to, or, in the case of leased properties

and assets, valid leasehold interests in, all of its tangible properties and

assets, real, personal and mixed, used in its business, free and clear of any

 

                                                                 ___________

                                                                 ___________

 

                                       16

 

 

 

 

<PAGE>

 

Liens and Encumbrances except (i) as reflected in the OrthoNetx Financial

Statements and/or the OrthoNetx Schedule, (ii) for liens or taxes not yet due

and payable and (iii) for such imperfections of title and encumbrances, if any,

which would not be reasonably expected to have an OrthoNetx Material Adverse

Effect.

 

         2.14 ENVIRONMENTAL MATTERS.

 

                  (a) HAZARDOUS MATERIALS ACTIVITIES. Except as would not

reasonably be likely to result in a material liability to OrthoNetx (in any

individual case or in the aggregate), (i) neither OrthoNetx nor any of its

Subsidiaries has transported, handled, treated, stored, used, manufactured,

distributed, disposed of, released or exposed its employees or others to

pollutants, contaminants, hazardous w


 
SITE SEARCH

AGREEMENTS / CONTRACTS

Document Title:

Entire Document: (optional)

Governing Law:(optional)


Try our advanced search >>
 

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates
Email:
This is only a partial view of this document. We have millions of legal documents and clauses drafted by top law firms. learn more search for free browse for free learn more