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Exhibit
10.2
MEMBERSHIP
INTEREST EXCHANGE AGREEMENT
This
Membership Interest Exchange Agreement made this as of the 20th
day of
December 2007 by and among between SFH I Acquisition Corp., a Delaware
corporation, with a principal place of business located at 17395 N. Bay Road
Suite 102 Sunny Isles, Florida 33160, (the “Company” or “the Corporation”),
Pharmco, LLC, a Florida limited liability company with a principal place of
business located at 901 North Miami Beach Blvd., North Miami Beach, Florida
33162(“Pharmco"), together with each of the members of Pharmco (as hereinafter
defined).
Recitals:
A. The
Corporation has offered to issue ten million shares of its common stock, $.0001
par value (the "Common Stock), to the holders of Membership Interests of Pharmco
(the "Pharmco Membership Holders") in exchange for their contribution to the
Corporation of all of the issued and outstanding membership interests of Pharmco
(the “Pharmco Membership Interests”).
B. The
respective Boards of Directors of the Corporation and Pharmco have determined
that, subject to the terms, conditions, agreements, representations and
warranties set forth herein, the exchange contemplated herein will serve the
general welfare and advantage of their respective businesses.
C. Subject
to the terms and conditions set forth herein, the Pharmco Members desire to
contribute and exchange all of the Pharmco Membership Interests for shares
of
Common Stock of the Corporation in the manner hereinafter set forth
herein.
D. The
exchange is intended to comply with the requirements of Section 368 of the
Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder and the interpretive rulings issued pursuant thereto.
NOW,
THEREFORE, in consideration of the foregoing recitals, as well as the mutual
covenants hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
ARTICLE
I
EXCHANGE
PROVISIONS
1.1 Contribution.
Subject
to the terms and conditions hereinafter set forth:
(a) Each
Pharmco Member agrees to contribute, transfer, assign and convey at Closing
all
of their Pharmco Membership Interests to the Corporation, together with all
other rights, claims and interests he or she may have with respect to Pharmco
or
its respective assets, and all claims he may have against its officers and
directors, including, but not limited to, all rights to unpaid dividends and
all
claims and causes of action arising from or in connection with the ownership
of
Pharmco Membership Interests or its issuance, excluding any right, claim or
interest of same arising under this Agreement or in connection with the
transaction contemplated by this Agreement. Each Pharmco Member shall deliver
to
the Company at Closing all of his membership certificates representing the
Pharmco Membership Interests.
(b) The
Corporation agrees to issue to each Pharmco Member the Member’s pro rata portion
of the total number of Membership Interests to be issued to the Pharmco Members.
(c)
Attached hereto and marked Schedule 1.1 is a list of the Pharmco Members, the
number of Membership Interests and/or their pro rata share in the outstanding
Membership Interests each owns as of the date of this Agreement and the number
of shares of Common Stock each will receive at Closing.
1.2
No
Registration.
(a) Each
of
the Pharmco Members acknowledges and agrees that:
(i) The
Common Stock to be issued to the Pharmco Members (the "Exchanged Corporation
Stock") is being issued to Pharmco Members without registration under applicable
federal and state securities laws in reliance upon certain exemptions from
registration under such securities laws;
(ii) Each
member has had the opportunity to ask questions of and receive answers from
the
Corporation, Pharmco and their respective executive officers concerning their
businesses and the Exchanged Corporation Stock and all such inquiries have
been
completed to his satisfaction;
(iii) Each
certificate representing shares of the Exchanged Corporation Stock will bear
a
legend restricting its transfer, sale, conveyance or hypothecation, unless
such
Exchanged Corporation Stock is either registered under applicable securities
laws or an exemption from such registration is applicable, and provided that
if
an exemption from registration is claimed, the Corporation may require an
opinion of legal counsel that, as a result of such exemption, registration
under
the securities laws is not required to transfer, sell, convey or hypothecate
such Exchanged Corporation Stock;
(iv) Each
member shall not transfer any Exchanged Corporation Stock except in compliance
with all applicable securities laws;
(v) Each
member has a pre-existing personal or business relationship with the Company
or
its officers, directors, agents or controlling persons, and has relied, if
at
all, on the advice of such persons in electing to participate in the transaction
herein contemplated and not on any representations of the Corporation other
than
those expressly set forth herein, or by reason of his business or financial
experience could be reasonably assumed to have the capacity to protect his
own
interest in connection with the transaction;
(vi) Each
member is acquiring the Exchanged Corporation Stock for his own account, for
investment purposes only and not with a view to the sale or distribution
thereof;
(vii) He
has
not received any general solicitation or general advertising regarding the
acquisition of the Exchanged Corporation Stock;
(viii) He
is
capable of evaluating the merits and risks of an investment in the Common Stock
because he is a sophisticated investor by virtue of his prior investments and
has experience in investments similar in nature to the Common Stock, including
investments in unlisted and unregistered securities, and has knowledge and
experience in financial and business matters in general; and
(ix.) Each
member agrees and understands that the terms and conditions of this Agreement
were not negotiated in an arm’s length transaction as the manager of Pharmco is
also the president of the Company.
1.6 Closing.
Consummation of the contemplated transaction shall take place on the date that
all the conditions set forth herein are satisfied or waived by the appropriate
parties at the offices of Jeffrey G. Klein, P.A., 2600 North Military Trail,
Suite 270 Boca Raton, FL 33431 or at another time or place that is mutually
agreeable to the parties hereto, or on such other date at such other time as
may
be mutually agreed upon in writing by the parties hereto (the
"Closing").
ARTICLE
II
THE
CORPORATION'S REPRESENTATIONS AND WARRANTIES
The
Corporation hereby makes the following representations and warranties to the
Pharmco Members and Pharmco, each of which the Corporation represents to be
true
and correct on the date hereof and (except as the Corporation may notify Pharmco
in writing prior to the Closing) shall be deemed made again as of the Closing
and represented by the Corporation to be true and correct at the time of the
Closing.
2.1 Organization.
The
Corporation is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. The Corporation has the full
power and authority to conduct the business in which it will engage upon
completion of the transaction contemplated herein. Except as set forth in the
Corporation’s filings with the Securities and Exchange Commission, the
Corporation does not have any subsidiary or equity interest in any entity.
Accurate,
current and complete copies of the Articles of Incorporation and Bylaws of
the
Corporation have been filed with the Securities and Exchange Commission and
are
available at www.sec.gov.
2.2 Stock
Ownership.
The
authorized capital stock of the Corporation consists of one hundred twenty
million shares of
Common
Stock, consisting of one hundred million shares of Common Stock and twenty
million shares of Preferred Stock. There are currently ten million shares of
common stock issued and outstanding. There are no preferred shares outstanding.
The Company is currently in negotiation for the possible issuance of an
additional 45 million shares of common stock in connection with a potential
acquisition.
All
the
issued and outstanding shares of capital stock of the Corporation are duly
authorized, validly issued, fully paid and nonassessable. Upon tender of the
Pharmco membership interests in the manner contemplated in Section 1.1 hereof,
legal and beneficial ownership of the Exchanged Corporation Stock shall be
transferred to and vested in the Pharmco Members free and clear of all
encumbrances,except those required by Rule 144 of the Securities Act,and all
the
Exchanged Corporation Stock shall be duly authorized, validly issued, fully
paid
and nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of the Corporation having the right to vote
(or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which shareholders of the Corporation may vote. Except as set
forth above, there are no outstanding securities, options, warrants, calls,
rights, commitments, agreements, arrangements or undertakings of any kind to
which the Corporation is a party or by which it is bound obligating the
Corporation to issue, deliver or sell, or cause to be issued, delivered or
sold,
additional shares of capital stock or other equity or voting securities of
the
Corporation or obligating the Corporation to issue, grant, extend or enter
into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. There are no outstanding contractual obligations,
commitments, understandings or arrangements of the Corporation to repurchase,
redeem or otherwise acquire or make any payment in respect of any shares of
capital stock of the Corporation.
2.3 Authority
and Approval of Agreement.
(a) The
execution and delivery of this Agreement by the Corporation and the performance
of all the Corporation's obligations hereunder have been duly authorized and
approved by all requisite corporate action on the part of the Corporation
pursuant to applicable law. The Corporation has the power and authority to
execute and deliver this Agreement and to perform all its obligations
hereunder.
(b) This
Agreement and any other documents, instruments and agreements executed by the
Corporation in connection herewith constitute the valid and legally binding
agreements of the Corporation, enforceable against the Corporation in accordance
with their terms, except that (i) enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies of creditors;
and (ii) the availability of equitable remedies may be limited by equitable
principles.
2.4
No
Violations.
Neither
the execution, delivery nor performance of this Agreement or any other
documents, instruments or agreements executed by the Corporation in connection
herewith, nor the consummation of the transactions contemplated hereby: (i)
constitutes a violation of or default under (either immediately, upon notice
or
upon lapse of time) the Articles of Incorporation or Bylaws of the Corporation,
any provision of any contract to which the Corporation may be bound, any
judgment or any law; or (ii) will or could result in the creation or imposition
of any encumbrance upon, or give to any third person any interest in or right
to, the Exchanged Corporation Stock or any other capital stock of the
Corporation; or (iii) will or could result in the loss or adverse modification
of, or the imposition of any fine or penalty with respect to, any license,
permit or franchise granted or issued to, or otherwise held by or for the use
of, the Corporation.
2.5 Financial
Statements.
The
financial statements as filed by the Corporation with the Securities and
Exchange Commission set forth the financial condition of the Company. The
Financial Statements are true, correct and complete, were prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods indicated, and accurately reflect the Corporation's financial
condition and the results of the Corporation's operations for the periods and
as
of the dates which they purport to cover.
2.6 Conduct
Since Date of Balance Sheet.
Except
as disclosed in Schedule
2.6
hereto
or as otherwise set forth herein none of the following has occurred since the
date of the Balance Sheet:
(a) Any
material adverse change in the financial condition, obligations, capitalization,
business, prospects or operations of the Corporation, nor are there any
circumstances known to the Corporation which might result in such a material
adverse change or such an effect;
(b) Any
settlement or other resolution of any dispute or proceeding other than in the
ordinary course of business;
(c) Any
cancellation by the Corporation, without payment in full, of any obligation
to
the Corporation of any shareholder, director, officer or employee of the
Corporation (or any member of their respective families), or any entity in
which
any shareholder, director or officer of the Corporation (or any member of their
respective families) has any direct or indirect interests;
(d) Any
payment, discharge or satisfaction of any obligation or judgment, other than
in
the ordinary course of business; or
(e) Any
agreement obligating the Corporation to do or take any of the actions referred
to in this Section 2.7 outside the ordinary course of business.
2.7 Labor
Matters.
The
Corporation is not and has never been a party to: (i) any profit sharing,
pension, retirement, deferred compensation, bonus, stock option, stock purchase,
retainer, consulting, health, welfare or incentive plan or agreement or other
employee benefit plan, whether legally binding or not; or (ii) any plan
providing for "fringe benefits" to its employees, including, but not limited
to,
vacation, disability, sick leave, Pharmco, hospitalization and life insurance
and other insurance plans, or related benefits; or (iii) any employment
agreement other than with Byron Webb. No former employee of the Corporation
has
any claim against the Corporation (whether under federal or state law, any
employment agreement or otherwise) on account of or for: (i) overtime pay;
(ii)
wages or salary for any period; (iii) vacation, time-off or pay in lieu of
vacation or time-off; or (iv) any violation of any statute, ordinance or
regulation relating to minimum wages or maximum hours of work. No person or
party (including, but not limited to, governmental agencies of any kind) has
any
claim or basis for any action or proceeding against the Corporation arising
out
of any statute, ordinance or regulation relating to discrimination in employment
or to employment practices or occupational safety and health
standards.
2.8 Environmental
Matters.
The
Corporation has not generated any hazardous wastes or engaged in activities
which are or could be interpreted to be potential violations of laws or judicial
decrees in any manner regulating the generation or disposal of hazardous waste.
There are no on-site or off-site locations where the Corporation has stored,
disposed or arranged for the disposal of chemicals, pollutants, contaminants,
wastes, toxic substances, petroleum or petroleum products; there are no
underground storage tanks located on property owned or leased by the
Corporation, and no polychlorinated biphenyls are used or stored at any property
owned or leased by the Corporation.
2.9 Books
and Records.
The
Corporation's books and records are and have been properly prepared and
maintained in form and substance adequate for preparing audited financial
statements in accordance with generally accepted accounting principles, and
fairly and accurately reflect all of the Corporation's assets, obligations
and
accruals, and all transactions (normally reflected in books and records in
accordance with generally accepted accounting principles) to which the
Corporation is or was a party or by which the Corporation or any of its assets
are or were affected.
2.10 Taxes.
Except
as otherwise disclosed in this Agreement, or any applicable SEC filings, all
taxes due, owing and payable by the Corporation have been fully paid. The
amounts set up as provision for taxes on the Balance Sheet are sufficient for
the payment of all accrued and unpaid taxes of the Corporation, whether or
not
disputed. The amount set up as provision for taxes on the Corporation's books
and records for the current fiscal year through the Closing shall be sufficient
for the payment of all accrued and unpaid taxes of the Corporation, whether
or
not disputed, for such period. No claim for any tax due from or assessed against
the Corporation is being contested by the Corporation. None of the Corporation's
tax returns or reports has been audited by the Internal Revenue Service or
any
state or local tax authority, and the Corporation has not received any notice
of
deficiency or other adjustment from the Internal Revenue Service or any state
or
local tax authority. There are no agreements, waivers or other arrangements
providing an extension of time with respect to the assessment of any tax against
the Corporation, nor are there any tax proceedings now pending or threatened
against the Corporation. No state of facts exists or has existed, nor has any
event occurred, which would constitute grounds for the assessment of any further
tax against the Corporation.
2.11 Litigation.
The
Corporation is not a party to, the subject of, or threatened with any litigation
nor, to the best of the Corporation's knowledge, is there any basis for any
litigation. The Corporation is not contemplating the institution of any
litigation.
2.12 Other
Liabilities.
No
claim of breach of contract, tort, product liability or other claim, contingent
or otherwise, has been asserted or threatened against the Corporation nor,
to
the best of the Corporation's knowledge, is capable of being asserted by any
employee, creditor, claimant or other person against the Corporation. No state
of facts exists or has existed, nor has any event occurred, which could give
rise to the assertion of any such claim by any person.
2.13 Judgments.
There
is no outstanding judgment against the Corporation. There is no health or safety
problem involving or affecting the Corporation. There are no open workers
compensation claims against the Corporation, or any other obligation, fact
or
circumstance which would give rise to any right of indemnification on the part
of any current or former shareholder, director, officer, employee or agent
of
the Corporation, or any heir or personal representative thereof, against the
Corporation or any successor to the businesses of the Corporation.
2.14 Improper
Payments.
Neither
the Corporation, nor any of its current or former shareholders, directors,
officers or employees or agents, nor any person acting on behalf of the
Corporation, has, directly or indirectly, made any bribe, kickback or other
payment of a similar or comparable nature, whether lawful or not, to any person,
public or private, regardless of form, whether in money, property or services,
to obtain favorable treatment for business secured or special concessions
already obtained. No funds or assets of the Corporation were donated, lent
or
made available directly or indirectly for the benefit of, or for the purpose
of
supporting or opposing, any government or subdivision thereof, political party,
candidate or committee, either domestic or foreign. The Corporation has not
maintained and does not maintain a bank account, or any other account of any
kind, whether domestic or foreign, which account was not or is not reflected
in
the Corporation's books and records, or which account was not listed, titled
or
identified in the name of the Corporation.
2.15 Full
Disclosure.
All the
representations and warranties made by the Corporation herein or in any
Schedule, and all of the statements, documents or other information pertaining
to the transaction contemplated herein made or given by the Corporation, its
agents or representatives, are complete and accurate, and do not omit any
information required to make the statements and information provided, in light
of the transaction contemplated herein, non-misleading, accurate and
meaningful.
ARTICLE III
PHARMCO'S
REPRESENTATIONS AND WARRANTIES
Pharmco
hereby makes the following representations and warranties to the Corporation,
each of which Pharmco represents to be true and correct on the date hereof
and
(except as Pharmco may notify the Corporation in writing prior to the Closing)
shall be deemed made again as of the Closing and represented by Pharmco to
be
true and correct at the time of the Closing.
3.1 Organization.
Pharmco
is a limited liability corporation duly organized, validly existing and in
good
standing under the laws of the State of Florida and is not required to be
qualified or licensed as a foreign corporation in any other jurisdiction.
Pharmco has the full power and authority to own all its assets and to conduct
its business as and where its business is presently conducted. Accurate, current
and complete copies of the Articles of Incorporation and Bylaws of Pharmco
are
to be attached hereto as Schedule
3.1.
Pharmco
has no subsidiaries or equity interest in any entity.
3.2 Membership
Ownership.
Schedule 1.1 sets forth the owners of all of the issued and outstanding
Membership Interests of Pharmco as of the date hereof. All the issued and
outstanding membership interests are duly authorized, validly issued, fully
paid
and nonassessable. There are no outstanding bonds, debentures, notes or other
indebtedness or other securities of Pharmco having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote)
on
any matters on which members of Pharmco may vote. Except as set forth above,
there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which
Pharmco is a party or by which it is bound obligating Pharmco to issue, deliver
or sell, or cause to be issued, delivered or sold, additional membership
interests or other equity or voting securities of Pharmco or obligating Pharmco
to issue, grant, extend or enter into any such security, option, warrant, call,
right, commitment, agreement, arrangement or undertaking. There are no
outstanding contractual obligations, commitments, understandings or arrangements
of Pharmco to repurchase, redeem or otherwise acquire or make any payment in
respect of any membership interests. Notwithstanding the foregoing, if prior
to
closing, Pharmco shall issue additional membership interest
