EXHIBIT 2.3
Reorganization Agreement
This
Reorganization Agreement (the "Agreement") is made and entered into
by
and among National Business Holdings,
Inc., a publicly held
Florida corporation
with a class of securities registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended ("Issuer" and the "Exchange Act,"
respectively); Union Dental Corp., a Florida corporation ("Union Dental");
Direct Dental Services, Inc., a Florida corporation
("DDS") and the individuals
listed in Exhibit A annexed hereto and made a part hereof as Exhibit 0.1
("Stockholders"); Issuer, Union Dental, DDS
and the Stockholders being sometimes
hereinafter collectively referred to as the "Parties" or generically as a
"Party").
Preamble:
WHEREAS, the
respective boards of directors of Issuer, DDS and Union Dental
believe it is in the best interests of each corporation and their respective
stockholders that Union Dental and DDS become a wholly
owned subsidiary of
Issuer and, in furtherance thereof, have
approved the Reorganization; and
WHEREAS,
the Issuer currently
has 32,284,831 shares of common stock issued
and outstanding and zero shares of
preferred stock issued and outstanding.
WHEREAS,
pursuant to the terms
of the Reorganization,
as hereinafter set
forth, among other things, all of the
outstanding and reserved securities of DDS
(the "DDS's Securities") will be exchanged for 12,500,0000
shares of Issuer's
common stock, $0.001 par value ("Issuer's
common stock") and 1,000,000 shares of
Issuer's preferred stock, $0.0001 par value with each share
of preferred stock
provides voting rights equal to 15 shares of
Issuer's common stock
(Issuer's
preferred stock), representing approximately 46% and 100% of the issued and
outstanding Issuer common stock and Issuer preferred stock at the time of
Closing; and
WHEREAS,
pursuant to the terms
of the Reorganization,
as hereinafter set
forth, among other things, all of the outstanding
and reserved
securities of
Union Dental (the "Union Dental's
Securities")
will be exchanged for
5,000,000
shares of Issuer's common stock,
$0.001 par value
("Issuer's common stock") and
zero shares of Issuer's preferred stock, no par value, representing
approximately 18% of the issued and outstanding Issuer common stock on the
Closing Date; and
WHEREAS, on or
about December 20, 2004, Union Dental acquired substantially
all of the assets (except the Patient List) of George D. Green
D.D.S., P.A.
(hereinafter referred to as "PA") pursuant
to an Asset Purchase Agreement; and
WHEREAS,
the Parties have
mutually agreed to make certain representations
and warranties and other agreements in connection with the
Reorganization
and
their subsequent operating and business
relationships; and
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WHEREAS,
the Parties intend, by
executing this Agreement, to adopt a plan
of reorganization within the meaning of Section
368(a)(1)(B)
of the Internal
Revenue Code of 1986, as amended (the
"Code"):
NOW,
THEREFORE,
in consideration of the covenants, promises and
representations set forth herein, and for
other good and valuable consideration
the sufficiency of which is acknowledged,
the Parties,
intending to be
legally
bound, hereby agree as follows:
Article I
Plan of Reorganization
1.1 Definitions
The following
terms, whether or not
initially capitalized,
will have the
meanings set forth below:
Accredited
Investor: A person or entity that meets the asset or income
requirements for treatment as an accredited
investor specified in Rule 501 of
Commission Regulation D promulgated under
the Securities Act
Affiliate:
An entity or person
that controls, is controlled by or is under
common control with another person.
Issuer Financial
Statements: Financial
statements,
including all
related
schedules and the notes thereto,
of Issuer included in
the report on Commission
Form 10-KSB for the period ended May 31, 2003, as amended; the reports on
Commission Form 10-QSB filed subsequent to May 31, 2003 and any financial
statements included in current reports on Commission Form 8-K filed since the
dates of the Subsequent Quarterly Reports; all such financial statements
being
hereinafter collectively and generically
referred to as the
"Issuer Financial
Statements,"
Issuer
Schedules: The
schedules referenced
by the Section designations of
this Agreement as to which they apply,
annexed at the
direction of Issuer
to
this Agreement and constituting a material
component of this Agreement.
Capital Stock:
The generic term used for equity securities, whether common,
preferred or otherwise.
Closing: The
event at which the exchange of all of the Union Dental and DDS
securities will be exchanged for
approximately 64% of the outstanding shares of
Issuer's common stock.
Closing Date:
The date on which the Closing takes place.
Commission: The
United States Securities and Exchange Commission.
Code: The
Internal Revenue Code of 1986, as amended.
Exchange Act: The
Securities Exchange Act of 1934, as amended.
Exchange
Act Reports: All reports filed by Issuer with the Commission
pursuant to the Exchange Act, including all
exhibits filed therewith.
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Exchange Agent:
The person or entity responsible following the Closing, for
issuing and delivering the shares of
Issuer's common stock
and preferred
stock
to the Union Dental and DDS
Stockholders.
GAAP: Generally
accepted accounting principles, consistently applied.
IRS: The United
States Internal Revenue Service.
Knowledge:
When used to qualify a
representation
or warranty, the word
"knowledge" or any derivations or
variations thereof,
whether in the form of
a
word or phrase, will mean knowledge after reasonable inquiry by a senior
executive officer of the legal entity on
whose behalf the assertion is made and
will include information that such legal entity
should have had in the exercise
of reasonable diligence.
Target's
Financial Statements:
DDS and PA's financial
statements (balance
sheets, income statements and related
schedules and footnotes) as of and for the
fiscal years ending December 31, 2002 and
2003 (audited), any
calendar quarter
ended between December 31, 2003 and the Closing Date and Union Dental's
financial statements (unaudited),, all prepared in conformity with GAAP and
applicable Commission auditing rules and
regulations.
Target
Schedules: The
schedules referenced
by the Section designations of
this Agreement as to which they apply,
annexed at the
direction of Union Dental
and DDS to this Agreement and constituting a material component of this
Agreement.
Material:
When used to
qualify a representation or warranty, the word
"material" or any derivations or variations
thereof, whether in the form of a
word or phrase, will mean a variance that could have negatively affected a
decision by a reasonably prudent person to engage in the transactions
contemplated by this Agreement, and will be measured both on the occasion in
which such term is referenced as well as on an aggregate basis with other
similar matters.
NASD:
The National
Association
of Securities
Dealers, Inc., a Delaware
corporation and self regulatory
organization registered with the Commission.
OTC Bulletin Board: The over the counter electronic securities market
operated by the NASD.
Securities Act:
The Securities Act of 1933, as amended.
Substantial
Compliance: Compliance
which the Party for whose benefit or at
whose request an act is performed, or for whose benefit or at whose
request an
act is refrained from could under the
circumstances
be reasonably
expected to
accept as full compliance.
Tax: For the
purposes of this Agreement, a "Tax" or, collectively, "Taxes,"
means any and all federal, state, local and
foreign taxes, assessments and other
governmental charges, duties, impositions
and liabilities, including taxes based
upon or measured by gross receipts,
income, profits,
sales, use and occupation,
and value added, ad valorem, transfer, franchise, withholding, payroll,
recapture, employment, excise and property taxes,
together with all
interest,
penalties and additions imposed with
respect to such amounts and any obligations
under any agreements or arrangements
with any other person
with respect to such
amounts.
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Additional
defined terms are
specified in certain sections and subsections
below and are characterized by the use of
initial letter capitalization.
1.2 Reorganization
(A) The Reorganization.
(1) At the Closing on this Agreement all of the Union Dental's
Stockholders will exchange all of their Union Dental securities,
being
an aggregate
of 500 shares of
common stock,
$0.001 par value,
for
5,000,000 shares of
Issuer common
stock, $0.001 par value, which
represents
approximately 18% of
the outstanding
shares of Issuer's
common stock.
(2) At the Closing of this
Agreement,
all of the issued and
outstanding
options to purchase
3,452,250 Union Dental
common stock (the
"Union
Dental Options")
shall be exchanged for an aggregate of 3,452,250
options to purchase
Issuer common stock (the "Issuer Options") upon
the same terms and conditions;
(3) The shares of Issuer's common
stock and preferred stock will be issued
by the Exchange Agent following the Closing and will be transferred
to
the Stockholders
in proportion to their holdings of Union Dental
common stock at the time of Closing.
(4) At the Closing on this
Agreement all of the
DDS's Stockholders
will
exchange all of their DDS securities, being an aggregate of 500
shares
of common stock,
$0.001 par value, for
12,500,000
shares of Issuer
common stock, $0.001 par value, which represents approximately 46% of
the outstanding shares
of Issuer's common stock and 1,000,000 shares
of the Issuer preferred stock, no par value, which represents 100% of
the outstanding shares
of Issuer's preferred
stock, as called for by
this Agreement.
(5) The shares of Issuer's common
stock and preferred stock will be issued
by the Exchange Agent following the Closing and will be transferred
to
the Stockholders
in proportion to their
holdings of DDS common stock
at the time of Closing.
(B) As promptly as practicable after the satisfaction or waiver of the
conditions
set forth in Article VI, the Parties will cause the
Reorganization
to be consummated by effecting the exchange all of Union
Dental's and
DDS's common stock for the shares of Issuer's common stock and
preferred stock,
as described above.
(C) The Closing Date and time of the
Reorganization
will be the date and
time
on which the
Closing of this Reorganization Agreement is consummated, which
shall, in any
event, take place on
or before December 31, 2004, unless the
Parties agree in
writing to further extend the Closing Date.
(1) At the Closing the Parties will
exchange all closing documentation,
certificates, resolutions, exhibits, schedules and opinions called
for
by this Agreement, and
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(2) All of Union Dental and DDS's
outstanding securities will be exchanged
with Issuer for approximately 64% of Issuer's common stock and 100%
of
Issuer's preferred
stock, as specified above; provided that delivery
of the certificates
for the shares of Issuer's common stock and
preferred stock will
be made directly
to Stockholders by Issuer's
stock transfer agent as soon as practicable after the Closing.
1.3 Effect of the Reorganization.
At the Closing,
the effect of the
Reorganization will be that Union Dental
and DDS will each become a wholly owned subsidiary of Issuer and that the
Stockholders immediately prior to the
Closing will become stockholders of Issuer
at the Closing, with no further rights, title or interest in Union Dental
or
DDS, other than indirectly as stockholders
of Issuer.
1.4 Fractional Shares.
No fraction of a
share of Issuer's common stock will be issued, but in lieu
thereof each holder of shares of Union
Dental or DDS's
common stock who will
otherwise be entitled to a fraction of a
share of Issuer's
common stock (after
aggregating all fractional shares of Issuer's common stock to be received by
such holder) will be entitled to receive from
Issuer a whole share of Issuer's
common stock. 1.5 Exchange of
Certificates.
(A) Exchange Agent. Unless modified by Issuer prior to the Closing Date,
Issuer's current
transfer agent, will serve as the Exchange Agent.
(B) Issuer to Provide Common Stock.
Issuer will promptly
make available to the
Exchange Agent
for exchange in accordance with this Article I the shares of
Issuer's
common stock and preferred stock in exchange for all of the
outstanding
shares of Union Dental and DDS's common stock.
(C) Exchange Procedures. All certificates for shares of
Union Dental and DDS's
outstanding
common stock will be
tendered to Issuer at the Closing, with
medallion
signature guarantees or otherwise in proper form for
immediate
transfer to the
order of Issuer,
whereupon Issuer will issue instructions
to the Exchange
Agent to issue
shares of Issuer's
common stock, in the
quantities and
names set forth in Schedule 1.5(C).
(D) Transfers of Ownership.
If any certificate for shares of Issuer's common
stock and
preferred stock is to be issued in a name other than that in
which the
certificate
surrendered in exchange therefor is registered,
it
will be a
condition of the issuance thereof that the certificate so
surrendered
will be properly
endorsed and otherwise in proper form for
transfer and
that the person
requesting such
exchange will have paid to
Issuer or any
agent designated by it
any transfer or other Taxes required
by reason of the
issuance of a
certificate for shares
of Issuer's common
stock and
preferred stock in any name other
than that of the
registered
holder of the
certificate
surrendered, or
established to the satisfaction
of Issuer, or
any agent designated by it, that such Tax has been paid or is
not payable.
(E) No Liability. Notwithstanding anything to the
contrary in this Section 17,
neither the
Exchange Agent,
Issuer, Union Dental,
DDS or any other person
will be liable
to a holder of shares
of Issuer's common stock or Union
Dental or DDS's
Capital Stock for any amount properly paid to a public
official
pursuant to any applicable abandoned property, escheat or similar
law.
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1.6 No Further Ownership Rights in
Union Dental or DDS's Securities.
(A) All shares of Issuer's
common stock and preferred stock issued upon the
surrender for
exchange of shares of Union Dental and DDS's Capital Stock in
accordance with
the terms hereof will be deemed to have been issued in full
satisfaction
of all rights
pertaining
to such shares of
Union Dental and
DDS's Capital
Stock, and there will be no further registration of transfers
on the records
of Union Dental or
DDS, of shares of Union Dental or DDS's
Capital Stock
which were outstanding immediately prior to the Closing.
(B) If, after the Closing,
Certificates
are presented to Union
Dental or DDS,
for any reason,
they will be canceled
and exchanged as provided in this
Article I.
1.7 Lost, Stolen or Destroyed
Certificates.
In the event any
certificates
evidencing
shares of Union Dental
or DDS's
Capital Stock will have been lost,
stolen or destroyed, Union Dental or DDS's
transfer agent or share registrar will, prior to the Closing, have issued in
exchange for such lost, stolen or destroyed
certificates, upon the
making of an
affidavit of that fact by the holder thereof, such shares of its stock;
provided, however, that Issuer may, in its discretion and as a condition
precedent to the issuance of the shares of
Issuer's common stock
and preferred
stock to be exchanged therefor, 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 Issuer or the
Exchange
Agent with respect to the certificates alleged to have been lost,
stolen or
destroyed.
1.8 Tax Consequences and Accounting
Treatment.
It is intended
by the Parties that
the Reorganization
will constitute a
reorganization within the meaning of Section
368(a)(1)(B) of the
Code, and the
Parties agree that if modification of the
non-material
terms of this
Agreement
to attain such qualification is necessary,
they will negotiate in
good faith to
make such required modification.
1.9 Taking of Necessary Action:
Further Action.
If, at any time
after the Closing,
any further action is necessary or
desirable to carry out the purposes of this
Agreement including the vesting in
Issuer of full right, title and possession to all of Union Dental and DDS's
Capital Stock or compliance with the
requirements of Code Section 368(a)(1)(B),
the officers and directors of Issuer,
Union Dental and DDS
are fully authorized
and empowered in the name of their
respective corporations or otherwise to take,
and will take, all lawful and necessary
action.
Article II
Representations and Warranties of Union Dental and DDS
Union
Dental, DDS and the Stockholders hereby represent and warrant to
Issuer, as a material inducement to its
entry into this Agreement, subject only
to the exceptions specifically disclosed in
Schedule 2, as follows:
2.1 Organization of Union Dental and
DDS.
(A) Union Dental and DDS are each a corporation duly organized, validly
existing and in
good standing under the laws of the State of Florida.
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(B) Union Dental and DDS each have the
corporate power to own
its property and
to carry on its
business as now being conducted and as proposed to be
conducted by
Union Dental and DDS.
(C) Union Dental and DDS are each 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 a
material adverse
effect on the
business,
assets
(including intangible
assets), financial
condition, or results
of
operations of
Union Dental and DDS.
(D) Union Dental and DDS each has
delivered a true and correct copy of its
articles of
incorporation and
bylaws (or similar
governing
instruments),
each as amended
to date, to counsel for Issuer.
2.2 Union Dental and DDS's Capital
Structure.
(A) The authorized Capital Stock of Union Dental
consists of 10,000,000 shares
of common stock,
$0.001 par value, and zero shares of preferred stock;
(B) The authorized Capital Stock of DDS consists of 7,500 shares of common
stock, $1.00 par
value, and zero shares of preferred stock;
(C) There are 500 shares of Union
Dental common stock
and zero shares of Union
Dental preferred
stock issued and outstanding, held by the persons, and in
the amounts, set
forth on Schedule 1.5(C).
(D) There are 500 shares of DDS common
stock and zero shares
of DDS preferred
stock issued and
outstanding, held by
the persons, and in the amounts, set
forth on
Schedule 1.5(C).
(E) All outstanding shares of Union Dental and DDS
common or preferred
stock
are duly
authorized, validly
issued, fully paid and non-assessable and not
subject
to preemptive rights created by statute, the articles of
incorporation
or bylaws of Union
Dental, DDS or any agreement to which
Union Dental or
DDS are a party or is bound.
(F) Except as set forth on Schedule
2.2(F), Union Dental and DDS each has no
other
outstanding
securities or
securities reserved
for issuance for any
purpose, there
being no other obligations directly or indirectly obligating
Union
Dental or DDS to issue
any of its securities
to any person for
any
purpose;
and there are no other options, warrants, calls, rights,
commitments
or agreements of any
character to which Union Dental or DDS is
a party or by
which it is bound
obligating Union
Dental or DDS to
issue,
deliver,
sell, repurchase or redeem, or cause to be issued,
delivered,
sold,
repurchased
or redeemed, any shares of the Union Dental or DDS
Capital Stock or
obligating Union
Dental or DDS to grant, extend or enter
into any such
option, warrant, call, right, commitment or agreement.
2.3 Subsidiaries.
Union Dental and
DDS do not have any
subsidiaries, and does
not otherwise
own any shares of stock or any interest in,
or control, directly
or indirectly,
any other corporation, partnership, association, joint venture or business
entity.
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2.4 Authority.
(A) Union Dental and DDS each has all
requisite corporate
power and
authority
to enter into this Agreement and to consummate the transactions
contemplated
hereby.
(B) 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 Union Dental and DDS.
(C) This Agreement has been duly
executed and delivered by Union Dental and DDS
and,
subject to the proper
authorization
of this Agreement by Issuer's
board of
directors and its due
execution and delivery by Issuer to
Union
Dental
and DDS, constitutes the valid and binding obligation of Union
Dental and
DDS.
(D) The execution and delivery of this Agreement by Union Dental and DDS
does
not, and the
consummation of the transactions contemplated hereby will not,
conflict
with, or result in any violation of, or default under (with or
without
notice or lapse of time, or both), or give rise to a right of
termination,
cancellation
or acceleration of any obligation or
loss of a
material
benefit under (i) any
provision of the articles of incorporation
or bylaws of
Union Dental or DDS or (ii) any material mortgage, indenture,
lease,
contract or other
agreement or instrument, permit, concession,
franchise,
license, judgment,
order, decree, statute, law, ordinance, rule
or regulation applicable to Union Dental or DDS or its properties or
assets.
(E) 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 ("Governmental
Entity"),
is required by
or with respect to
Union Dental or DDS in
connection with
the execution
and delivery of this
Agreement or the
consummation
of the
transactions
contemplated
hereby, except for such consents, approvals,
orders,
authorizations,
registrations,
declarations and filings as may be
required
under applicable state and federal securities laws (e.g.,
notification on
Form D) and the laws of any foreign country.
2.5 DDS and PA Financial
Statements.
(A) Schedule 2.5(A) includes Union
Dental's DDS and PA's Financial Statements.
(B) Union Dental, DDS and PA's
Financial Statements are complete and correct in
all material
respects and have been
prepared in accordance GAAP throughout
the periods
indicated.
(C) Union Dental, DDS and PA's Financial Statements present fairly the
financial
condition and operating results of DDS and PA as of the dates
and
during the
periods indicated
therein, subject to normal year-end audit
adjustments,
which will not be material in the aggregate.
(D) Union Dental, DDS and PA's financial statements comply with the
requirements for
material acquisitions
under Commission Regulation S-B and
in a manner
permitting
Issuer to comply with its obligation under the
Securities Act
and the Exchange Act in conjunction therewith
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2.6 No Undisclosed Liabilities.
Union Dental or
DDS each separately
represent and warrant that it does not
have any material liabilities or obligations, either accrued or contingent
(whether or not required to be reflected in
financial statements
in accordance
with generally accepted accounting principles), and whether due or to become
due, which individually or in the aggregate (i) have not
been reflected in the
DDS or PA Balance Sheet (including the notes thereto) or (ii) have not been
specifically described in this Agreement or in the Union Dental or DDS
Schedules.
2.7 Title of Properties, Absence of Liens and Encumbrances & Condition of
Equipment.
(A) Schedule 2.7(A) sets forth a true and
complete list of all
real property
owned and leased
by Union Dental and DDS and the aggregate annual mortgage,
rental or other
fee payable therefor or under any such lease.
(B) All deeds, titles, leases and mortgages are in good
standing, valid and
effective in
accordance with their respective terms, and there is not with
respect to Union
Dental or DDS under any of such deeds, titles, leases or
mortgages,
any existing default or event of default (or
event which with
notice or lapse
of time, or both,
would constitute a default and with
respect
to which Union Dental or DDS has not taken adequate steps to
prevent such
default from
occurring),
except where the lack
of such good
standing,
validity and
effectiveness
or the existence of
such default or
event of default
would not have a material adverse effect on Union Dental
or DDS.
(C) Union Dental and DDS each holds
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 liens, charges, pledges, security interests
or other
encumbrances,
except as reflected in Union Dental and DDS's
Financial
Statements
and except for such imperfections of title and
encumbrances,
if any, which are not
substantial
in character,
amount or
extent,
and which do not
materially detract
from the value, or
interfere
with the present
use, of the property subject thereto or affected thereby
(D) The equipment owned or leased by Union Dental and DDS are listed in
Schedule 2.7(D)
(the "Equipment"),
except individual pieces of equipment
owned by Union
Dental or DDS with an
individual
value of less than
$500.
The Equipment is, taken as a whole, in good operating condition and
regularly and
properly maintained, reasonable wear and tear excepted.
2.8 Litigation.
Schedule 2.8
annexed hereto accurately lists all suits, actions and legal,
administrative, arbitration or other
proceedings and governmental investigations
and all other claims, pending or, to Union Dental and DDS's Knowledge,
threatened or which Union Dental and DDS each expects will ultimately be
threatened or commenced. None of any such suits, actions, proceedings,
investigations or claims seeks to prevent the consummation of the
Reorganization.
2.9 Minute Books.
The minute
books of Union
Dental and DDS made
available to counsel for
Issuer each contain a complete and accurate
summary of all meetings of directors
and stockholders since the time of incorporation of Union Dental and
DDS, and
reflect all transactions referred to in such minutes
accurately in all material
respects.
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2.10 Brokers' and Finders' Fees.
Union Dental and
DDS each 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.
2.11 Regulation SB Disclosure Document
The information
supplied by Union Dental and DDS responding to each Item in
Commission Regulation S-B (other than Items
201, 501, 502, 506, 512 and, to the
extent of audit requirements, Item 310) annexed hereto as Exhibit 2.11 (the
"Regulation S-B Disclosure Documents"), part of which must be included in a
current report on Commission Form 8-K to be
filed by Issuer within four (4) days
after the Closing Date, as well as in all other
reports which Issuer files
thereafter pursuant to the Exchange Act, will
not contain any statement which,
at such time and in light of the
circumstances under
which it is made, is false
or misleading with respect to any Material fact, or will omit to state any
Material fact necessary in order to make
the statements
made therein not
false
or misleading or omit to state any Material fact necessary to correct any
statement which has become false or
misleading.
2.12 Disclosure to Union Dental and DDS's
Stockholders
Each of Union
Dental and DDS's Stockholders hereby represents and warrants
that he, she or it:
(A) Has had access through the
Commission's
Internet web site at
www.sec.gov,
in the EDGAR
Archives sub-cite,
to all of Issuer's
reports filed with the
Commission
during the past two
fiscal years, has reviewed all such reports
and has, either
directly or through a
representative, been
granted access
to all of
Issuer's officers and directors, and to all officers and
directors of
Issuer's operating subsidiaries, for purposes of providing all
disclosure
required under
applicable federal and
state securities laws in
conjunction with the exchange
contemplated by this Agreement;
(B) Has been advised that:
(1) The securities to be issued to them by Issuer in
exchange for their
shares of Union Dental and DDS's common stock have not been
registered
under the Securities
Act, the Exchange Act
or any comparable
state
securities laws,
but rather are being issued in reliance on the
exemption from
registration
under the Securities Act provided by
Section 4(2) thereof;
(2) All certificates for their shares of Issuer's common stock and
preferred stock
will bear legends restricting any transactions
therein, directly or indirectly, unless the Issuer's shares are
first
registered under
applicable federal and
state securities laws or the
proposed transaction
is exempt from such
registration
requirements,
and such facts are
demonstrated to the satisfaction of Issuer and its
legal
counsel, based on such
third party legal
opinions,
affidavits
and transfer agency procedures as Issuer will reasonably
require;
(3) Issuer's transfer agent has been
instructed to decline
transfers of
certificates for their
shares of Issuer's
common stock,
unless the
foregoing requirements have been met and have been confirmed as
having
been met by a duly authorized officer of Issuer.
10
<PAGE>
(C) Has independently determined through his, her or its own legal
counsel,
that all
requirements
of their states of
domicile for the issuance of the
shares of
Issuer's common
stock and preferred stock called for by this
Agreement have
been met, or will have been met, prior to Closing, by such
legal counsel
acting on behalf of the Parties to this Agreement.
2.13 Representations Complete.
None of the
representations
or warranties
made by Union
Dental, DDS or
their stockholders, nor any statement made in any Schedule, Exhibit or
certificate furnished by Union Dental or DDS
pursuant to this
Agreement, when
read in its entirety, contains or will contain any untrue statement of a
Material fact at the time the Closing takes place, or omits or will omit to
state any Material fact necessary in order to make the
statements
contained
herein or therein, in the light of the circumstances under which made, not
misleading.
Article III
Representations and Warranties of Issuer
Issuer
represents
and warrants to Union Dental and DDS as a Material
inducement to its entry into this Agreement, subject to the exceptions
specifically disclosed in the Issuer Schedules or in Issuer's Exchange Act
Reports, as follows:
3.1 Organization, Standing and
Power.
(A) Issuer is a corporation duly organized, validly existing and in good
standing under
the laws of the State of Florida.
(B) Issuer has the corporate
power to own its
properties
and to carry on
its
business as now
being conducted and is duly qualified to do business and is
in good
standing in each jurisdiction in which the failure to be so
qualified would
have a Material adverse effect on Issuer taken as a whole.
(C) A true and correct copy of its
articles of
incorporation
and bylaws,
as
amended to date,
are available at the
Commission's
web site in the
EDGAR
archives, filed
as exhibits to the report on Form 10-KSB for the year ended
May 31, 2003,
and any future
modifications thereof
will be filed with the
Commission and
will also be available at such site.
3.2 Capital Structure.
(A) The authorized stock of Issuer consists of 300,000,000 shares of common
stock,
par value $0.0001 per share, and 25,000,000 shares of Preferred
Stock,
$0.0001 par value per share, the attributes of which are to be
determined on a
case by case basis by Issuer's board of direc
