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AMHN 8-K [amhn-8k_071811.htm]
 
Exhibit 10.01

 
AGREEMENT AND PLAN OF MERGER
 
THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of July 18, 2011,
is made by and among VitaMedMD, LLC, a Delaware  limited liability company (the
“Company”), AMHN, Inc., a Nevada corporation (“Parent”), and VitaMed
Acquisition, LLC, a Delaware limited liability company and wholly owned
subsidiary of Parent (“Merger Sub”).
 
RECITALS
 
WHEREAS, the Boards of Directors of the Company and Parent and Managing Member
of Merger Sub deem it advisable and in the best interest of their respective
Members and Stockholders to consummate the transactions contemplated by this
Agreement to provide for the acquisition of the Company by Parent on the terms
and subject to the conditions provided for herein;
 
WHEREAS, in furtherance thereof it is proposed that the acquisition be
accomplished by the merger of Merger Sub with and into the Company with the
Company being the surviving limited liability company (the "Merger"), in
accordance with the Limited Liability Company Act of the State of Delaware (the
“DLLCA”);
 
WHEREAS, Parent has an authorized capitalization of 60,000,000 shares consisting
of 50,000,000 shares of Common Stock, $0.001 par value per share (“Parent Common
Stock”) and 10,000,000 shares of Preferred Stock, $0.001 par value per share
(“Parent Preferred Stock”) of which 16,575,209 shares of Parent Common Stock and
zero shares of Parent Preferred Stock are currently issued and outstanding;
 
WHEREAS, prior to the Effective Time, Parent shall (i) effectuate a reverse
split of Parent Common Stock so that each Stockholder shall receive one (1)
share of Parent Common Stock for each one hundred (100) shares of Parent Common
Stock owned by such Stockholder (the “Reverse Split”), (ii) increase the
authorized shares of Parent Common Stock to 250,000,000 shares and change the
name of Parent to TherapeuticsMD, Inc. (by the filing of Articles of Amendment
to the Articles of Incorporation in the form attached hereto as Exhibit B), and
(iii) amend the Parent's 2009 Long Term Incentive Compensation Plan (“LTIP”) to
increase the authorized shares for issuance thereunder to 25,000,000 (in the
form attached hereto as Exhibit C);
 
WHEREAS, the Boards of Directors of the Company and Parent and Managing
Member  of Merger Sub have each approved and adopted this Agreement, the Merger
and the other transactions contemplated hereby; and
 
WHEREAS, the Company, Parent and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
 
NOW THEREFORE, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties and covenants
herein contained, the Parties agree as follows.
 
 
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Unless otherwise specified, all capitalized terms used in this Agreement have
the meanings set forth on Exhibit A.
 
1.           Description of Transaction
 
1.1   Merger of Merger Sub into the Company.  Upon the terms and subject to the
conditions set forth in this Agreement, at the Effective Time, Merger Sub shall
be merged with and into the Company, and the separate existence of Merger Sub
shall cease.  The Company will continue as the surviving limited liability
company in the Merger (the “Surviving Company”).
 
1.2   Effect of the Merger.  The Merger shall have the effects set forth in this
Agreement and in the applicable provisions of the DLLCA.
 
1.3   Closing; Effective Time.  The consummation of the transactions
contemplated by this Agreement (the “Closing”) shall take place at the offices
of the Company at such time and date as the parties may mutually agree.  The
date on which the Closing actually takes place is referred to in this Agreement
as the “Closing Date.”  Contemporaneously with or as promptly as practicable
after the Closing, a properly executed Certificate of Merger shall be filed with
the Secretary of State of the State of Delaware.  The Merger shall become
effective at the time such Certificate of Merger is filed with the Secretary of
State of the State of Delaware (the “Effective Time”).
 
1.4   Certificate of Formation and Limited Liability Company Operating
Agreement.  Unless otherwise determined by Parent and the Company prior to the
Effective Time:
 
(a)           the Certificate of Formation of the Surviving Company shall be the
Certificate of Formation of the Company;
 
(b)           the Operating Agreement of the Company shall be amended and
restated as of the Effective Time in the form attached as Exhibit D.
 
1.5   Directors and Officers of Parent.   At Closing, subject to compliance with
Rule 14f-1 of the Exchange Act, the present sole director of Parent shall
nominate and appoint those persons selected by the Company to the Board of
Directors of Parent, and immediately, thereafter, the sole director of Parent
serving before the Closing shall resign.
 
1.6   Conversion Ratio of Units, Company Options and Company Warrants.  At the
Effective Time, by virtue of the Merger and without any further action on the
part of Parent, Merger Sub, the Company, or any Member, all Units (as defined
and outlined in Section 1.7), Company Options, and Company Warrants, will be
exchanged on a pro-rata basis for shares of Parent Common Stock or rights to
purchase shares of Parent Common Stock, which in the aggregate will total
70,000,000 shares of Parent Common Stock, resulting in a conversion ratio
calculated by the sum of all outstanding Units, Company Options and Company
Warrants divided by 70,000,000 (the “Conversion Ratio”).
 
 
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1.7   Conversion of Units.
 
(a)           Each membership unit of the Company (a “Unit”) outstanding
immediately prior to the Effective Time shall be exchanged for and converted
pursuant to the Conversion Ratio into the right to receive the respective number
of shares of validly issued, fully paid and non-assessable shares of Parent
Common Stock, with all fractional shares to be rounded up to the nearest whole
share.
 
(b)           Each membership unit of Merger Sub outstanding immediately prior
to the Effective Time shall be converted into one membership unit of the
Surviving Company.
 
1.8   Conversion of Employee Stock Options.  At the Effective Time, each
outstanding option issued pursuant to the Company’s 2008 Stock Option Plan (the
“Company's Plan”), whether vested or unvested (an “Employee Option”), shall be
assumed by Parent in accordance with the terms (as in effect as of the date of
this Agreement) of the Company’s Plan and the option agreement by which such
Employee Option is evidenced. All rights with respect to Units under outstanding
Employee Options shall thereupon be exchanged for and converted into rights with
respect to Parent Common Stock.  Accordingly, from and after the Effective Time,
(a) each Employee Option assumed by Parent may be exercised solely for shares of
Parent Common Stock, (b) the number of shares of Parent Common Stock subject to
each assumed Employee Option shall be equal to the number of Units that were
subject to such Employee Option immediately prior to the Effective Time
multiplied by the Conversion Ratio, rounded up to the nearest whole share of
Parent Common Stock, (c) the per share exercise price for the Parent Common
Stock issuable upon exercise of each assumed Employee Option shall be determined
by dividing the exercise price per Unit subject to such Employee Option, as in
effect immediately prior to the Effective Time, by the Conversion Ratio, and
rounding the resulting exercise price up to the nearest whole cent, and (d) all
restrictions on the exercise of each assumed Employee Option shall continue in
full force and effect, and the term, exercisability, vesting schedule and other
provisions of each Employee Option shall otherwise remain unchanged; provided,
however, that each assumed Employee Option shall, in accordance with its terms,
be subject to further adjustment as appropriate to reflect any stock split,
reverse stock split, stock dividend, recapitalization or other similar
transaction effected by Parent after the Effective Time.  The Company and Parent
shall take all action that may be necessary to effectuate the provisions of this
Section 1.8.  Following the Closing, Parent will send to the holder of each
assumed Employee Option (i) a letter of transmittal in customary form and
containing such provisions as Parent may reasonably specify, and (ii)
instructions for the surrender of each Employee Option in exchange for a
replacement Parent option (“Parent Option”) for shares of Parent Common
Stock.  Upon surrender of each Employee Option, together with a duly executed
letter of transmittal and such other documents as may reasonably be required by
Parent, each holder of an Employee Option shall receive in exchange therefor a
Parent Option representing the respective number of shares such holder is
entitled to receive as outlined in clause (b) above, all maintaining the terms
of the assumed Employee Option as outlined in clause (c) above.
 
1.9   Other Options.  At the Effective Time each outstanding option that was not
issued under the Company’s Option Plan shall be assumed by Parent.  All rights
with respect to
 

 
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Company Units under such outstanding options shall thereupon be exchanged for
warrants to purchase Parent Common Stock.  Accordingly, from and after the
Effective Time, (a) each such option assumed by Parent may be exercised solely
for shares of Parent Common Stock, (b) the number of shares of Parent Common
Stock subject to each such assumed option shall be equal to the number of shares
of Company Common Stock that were subject to such option immediately prior to
the Effective Time multiplied by the Conversion Ratio, rounded down to the
nearest whole number of shares of Parent Common Stock, (c) the per share
exercise price for the Parent Common Stock issuable upon exercise of each such
assumed option shall be determined by dividing the exercise price per share of
Company Common Stock subject to such option, as in effect immediately prior to
the Effective Time, by the Conversion Ratio, and rounding the resulting exercise
price up to the nearest whole cent, and (d) all restrictions on the exercise of
each such assumed option shall continue in full force and effect; provided,
however, that each such assumed option shall, in accordance with its terms, be
subject to further adjustment as appropriate to reflect any stock split, reverse
stock split, stock dividend, recapitalization or other similar transaction
effected by Parent after the Effective Time.  Following the Closing, Parent will
send to the holder of each assumed option (i) a letter of transmittal in
customary form and containing such provisions as Parent may reasonably specify,
and (ii) instructions for the surrender of such option in exchange for a warrant
for shares of Parent Common Stock.  Upon surrender of each such option, together
with a duly executed letter of transmittal and such other documents as may
reasonably be required by Parent, each option holder shall receive in exchange
therefore a warrant representing the respective number of shares such holder is
entitled to receive as outlined in clause (b) above, all maintaining the terms
of the assumed option as outlined in clause (d) above.
 
1.10   Conversion of Company Warrants.  At the Effective Time, each outstanding
warrant to purchase Units (a “Company Warrant”) shall be assumed by Parent.  All
rights with respect to Units under outstanding Company Warrants shall thereupon
be exchanged for rights with respect to Parent Common Stock.  Accordingly, from
and after the Effective Time, (a) each Company Warrant assumed by Parent may be
exercised solely for shares of Parent Common Stock, (b) the number of shares of
Parent Common Stock subject to each assumed Company Warrant shall be equal to
the number of Units that were subject to such Company Warrant immediately prior
to the Effective Time multiplied by the Conversion Ratio, rounded up to the
nearest whole share of Parent Common Stock, and (c) the per share exercise price
for the Parent Common Stock issuable upon exercise of each  assumed Company
Warrant shall be determined by dividing the exercise price per Unit subject to
such Company Warrant, as in effect immediately prior to the Effective Time, by
the Conversion Ratio, and rounding the resulting exercise price up to the
nearest whole cent, and (d) all restrictions on the exercise of each  assumed
Company Warrant shall continue in full force and effect; provided, however, that
each assumed Company Warrant shall, in accordance with its terms, be subject to
further adjustment as appropriate to reflect any stock split, reverse stock
split, stock dividend, recapitalization or other similar transaction effected by
Parent after the Effective Time.  Following the Closing, Parent will send to the
holder of each assumed Company Warrant (i) a letter of transmittal in customary
form and containing such provisions as Parent may reasonably specify, and (ii)
instructions for the surrender of each Company Warrant in exchange for a
replacement Parent warrant (“Parent Warrant”) for shares of Parent Common
Stock.  Upon surrender of each Company Warrant, together with a duly executed
letter of transmittal and such other documents
 

 
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as may reasonably be required by Parent, each holder of a Company Warrant shall
receive in exchange therefor a Parent Warrant representing the respective number
of shares such holder is entitled to receive as outlined in clause (b) above,
all maintaining the terms of the assumed Company Warrant as outlined in clause
(d) above.
 
1.11   No Adjustments For The Contemplated Reverse Split. The parties
acknowledge that as a condition precedent to the filing of the Certificate of
Merger, Parent shall, among other things, effectuate the Reverse Split. 
Notwithstanding anything in this Agreement to the contrary, the parties
acknowledge and agree that the Conversion Ratio as applied to the Company Units,
Company Options and Company Warrants issued and outstanding prior to the
Effective Time shall not be adjusted and/or modified as a result of the Reverse
Split.
 
1.12   Closing of the Company’s Transfer Books.  At the Effective Time, the
Members shall cease to have any rights as Members of the Company, and the
transfer books of the Company shall be closed with respect to all Units
outstanding immediately prior to the Effective Time.  No further transfer of any
such Units shall be made on such transfer books after the Effective Time.
 
1.13   Issuance of Certificates.
 
(a)           At or as soon as practicable after the Effective Time, Parent will
send to the Members (i) a letter of transmittal in customary form and containing
such provisions as Parent may reasonably specify, and (ii) instructions for
effecting the surrender of Units in exchange for certificates representing
shares of Parent Common Stock.  Upon surrender of such Units,  together with a
duly executed letter of transmittal and such other documents as may be
reasonably required by Parent, each such Member shall receive in exchange
therefor a certificate representing the number of whole shares of Parent Common
Stock that such Member has the right to receive pursuant to the provisions of
this Section 1.  The letter of transmittal will include the following
representations and warranties which must be confirmed by each Member:
 
(i)           Title to Units:  The Member will confirm that (A) the Member owns
the Units free and clear of all liens, claims, encumbrances and restrictions,
legal or equitable, of every kind, except for certain restrictions on transfer
imposed by federal and state securities laws and the Operating Agreement; (B)
the Member has the full and unrestricted legal right, power and authority to
sell, assign, transfer, or convert the Units without obtaining the consent or
approval of any other person or governmental authority, and the delivery of such
Units for conversion pursuant to this Agreement will transfer valid title
thereto, free and clear of all liens, encumbrances, claims and restrictions of
every kind, except for certain restrictions on transferability imposed by
federal and state securities laws; and (C) the execution of this Agreement and
the consummation of the transactions contemplated hereby will not constitute a
default under any provision of any agreement by which the Member is bound.
 
(ii)           Authorization:  The Member will confirm that when executed and
delivered by Member, the letter of transmittal will constitute the valid and
binding obligations of the Member, enforceable in accordance with its terms.
 

 
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(iii)           Consent:  The Member will confirm that no consent, approval or
authorization of or registration, qualification, designation, declaration or
filing with any governmental authority or private person or entity on the part
of the Member is required in connection with the execution and delivery of the
letter of transmittal or the consummation of any other transaction contemplated
thereby, except as shall have been duly taken or effected prior thereto.
 
(b)           All shares of Parent Common Stock to be received by the
Members  hereunder shall be restricted in their resale as provided in the
Securities Act, shall contain a legend as required by Rule 144 promulgated under
the Securities Act (“Rule 144”), and shall contain an additional legend with
respect to the Lock-Up Agreements pursuant to Section 5.3(g) hereof, which
legends shall read as follows:
 
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.
 
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK-UP AGREEMENT DATED [____], 2011,
BETWEEN THE ISSUER AND THE STOCKHOLDER LISTED ON THE FACE HEREOF.  A COPY OF
SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE
PROVIDED TO THE HOLDER HEREOF UPON REQUEST. NO TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE
WITH THE TERMS OF SUCH LOCK-UP AGREEMENT.
 
(c)           Parent and the Surviving Company shall be entitled to deduct and
withhold from any consideration payable or otherwise deliverable to any Member,
Stockholder, or holder of Company Options and Company Warrants pursuant to this
Agreement, such amounts as Parent or the Surviving Company may be required to
deduct or withhold therefrom under the Code or under any applicable provision of
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.
 
1.14   Tax Consequences.  It is the intention of the parties hereto that this
transaction qualify as a tax-free reorganization under Section 368(a)(2)(E) of
the Internal Revenue Code of 1986, as amended, and related sections thereunder.
 
2.           Representation and Warranties of the Company.  Except as disclosed
in the disclosure schedule delivered by the Company to Parent concurrent with
the execution of this Agreement
 

 
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(the “Company Disclosure Schedule”), which identifies the sections (or, if
applicable, subsections) to which such exceptions relate, the Company represents
and warrants to Parent as follows:
 
2.1   Organizational Matters.
 
(a)           Organization, Standing and Power to Conduct Business.  The Company
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware; has the requisite power and
authority to own, lease and operate its properties and to carry on its business
as now being conducted and as currently contemplated to be conducted; and is
duly qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties makes
such qualification necessary, except where the failure to do so would not cause
a Material Adverse Effect. The Company is duly qualified in each of the
jurisdictions listed on Schedule 2.1(a).
 
(b)           Charter Documents.  The Company has delivered to Parent true and
complete copies of the Certificate of Formation and Operating Agreement of the
Company, in each case as amended to date and currently in effect (such
instruments and documents, the “Company Charter Documents”).  The Company is not
in violation of any of the provisions of the Company Charter Documents.
 
(c)           Subsidiaries.  The Company does not have any subsidiaries and does
not own, hold or have any interest in or right to acquire capital stock or other
equity interests or ownership interests in any entity.
 
(d)           Powers of Attorney.  There are no outstanding powers of attorney
executed by or on behalf of the Company.
 
2.2   Capital Structure.
 
(a)           Membership Interests. As of the date hereof, the Company is
authorized to issue up to 60,000,000 Units, of which 47,585,247 Units are issued
and outstanding.  No Units are held in treasury. The outstanding Units are duly
and validly authorized and issued, fully paid and non-assessable, and held of
record and owned beneficially by the Members in the amounts set forth in
Schedule 2.2(a).  No Units were issued in violation of any preemptive rights.
Except as set forth on Schedule 2.2(a), the Company has no outstanding or
authorized options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, preemptive rights or other contracts or commitments
issued or granted to or in favor of any person to purchase or otherwise acquire
any Units or securities convertible or exchangeable for Units of the Company.
 
(b)           Agreements Relating to Units.  Other than as listed on Schedule
2.2(b), there are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any Units. There are no outstanding or authorized
stock appreciation, phantom stock, or similar rights with respect to the
Company.  There are no voting trusts, proxies, or other agreements or
understandings with respect to the voting, transfer, dividend or other rights of
the Units.  Other than as listed on Schedule 2.2(b) and this Agreement, there
are no agreements, written or oral, to
 

 
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which the Company or, to the Knowledge of the Company, any Member is a party,
or, to the Knowledge of the Company among any the Members, relating to the
issuance, acquisition (including rights of first refusal or preemptive rights),
disposition, registration under the Securities Act or voting of the Units or
other securities of the Company.
 
(c)           Compliance with Laws.  All Units, Company Options and Company
Warrants, and other rights to acquire Units or other securities of the Company,
have been issued in compliance with applicable federal securities laws.
 
2.3   Authority.  The Company has all requisite corporate power to execute,
deliver and perform this Agreement and the other Transaction Documents to which
it is a party and to consummate the transactions contemplated hereby or
thereby.  All necessary corporate action on the part of the Company, its
directors and Members necessary for the authorization, execution and delivery of
this Agreement and the other Transaction Documents to which it is a party and
the performance of the Company hereunder and thereunder has been taken or will
be taken prior to Closing.
 
2.4   Due Execution.  This Agreement and each other Transaction Document to
which the Company is a party has been or will at Closing have been duly executed
and delivered by the Company and, assuming due execution and delivery by Parent
and the other parties hereto and thereto, constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
their respective terms, except to the extent enforcement thereof may be limited
by applicable bankruptcy, reorganization, insolvency or moratorium laws, or
other Applicable Laws affecting the enforcement of creditors rights or by the
principles governing the availability of equitable remedies.
 
2.5   Non-Contravention.  The execution and delivery of this Agreement and each
other Transaction Document by the Company does not, and the performance of this
Agreement and each other Transaction Document by the Company will not,
(i) conflict with or violate the Company Charter Documents, in each case as
amended to date and currently in effect; (ii) conflict with or violate any
Applicable Laws; 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 the rights of the Company or alter the rights or obligations of any
third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the Company’s assets or properties pursuant to, any obligation to which the
Company is a party or by which it may be bound.
 
2.6   Contractual Consents.  Except as provided on Schedule 2.6, no Consent
under any agreement to which the Company is a party is required to be obtained
in connection with the execution, delivery or performance of this Agreement or
any other Transaction Document by the Company or the consummation of the
transactions contemplated hereby or thereby.
 
2.7   Governmental Consents.  Except for the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, no Consent of any
Governmental Entity is required to be obtained or made by the Company in
connection with the execution, delivery and
 

 
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performance of this Agreement or any other Transaction Document by the Company
or the consummation of the transactions contemplated hereby or thereby.
 
2.8   Financial Statements.  The Company has delivered to Parent (i) the audited
consolidated financial statements (consisting of a balance sheet, statement of
operations and statement of cash flows) for the years ended December 31, 2009
and 2010, and (ii) the unaudited consolidated financial statements (consisting
of a balance sheet, statement of operations and statement of cash flows) for the
three month period ended March 31, 2011 (collectively, the “Company Financial
Statements”).  The Company Financial Statements were prepared in accordance with
GAAP consistently applied and in accordance with the Company’s historic past
practice throughout the periods involved and fairly and accurately present in
all material respects the financial position, results of operations and cash
flows of the Company as of the dates, and for the periods, indicated
therein.  The Company maintains a standard system of accounting established and
administered in accordance with GAAP including, but not limited to, complete
books and records in written or electronic form.
 
2.9   Absence of Liabilities.  Except as set forth in the Company Financial
Statements, the Company has no liabilities, whether accrued, absolute,
contingent, matured, unmatured, or otherwise and whether or not required to be
reflected in financial statements prepared in accordance with GAAP, other than
(i) liabilities incurred in the ordinary course of the bona fide performance of
the business subsequent to the date of the Interim Financial Statements,
(ii) obligations under contracts and commitments incurred in the ordinary course
of the bona fide performance of the business that are not required under GAAP to
be reflected in the Company Financial Statements, which liabilities and
adjustments referred to in clauses (i) and (ii) individually or in the
aggregate, are not material to the financial condition or operating results of
the Company and (iii) the liabilities listed on Schedule 2.9.
 
2.10   Indebtedness.  The Company does not have any Indebtedness of any type
(whether accrued, absolute, contingent, matured or unmatured), except for: (i)
Indebtedness set forth on the Interim Financial Statements, or (ii) Indebtedness
described in reasonable detail in Schedule 2.9.  With respect to each item of
Indebtedness, the Company is not in default and no payments are past due, and no
circumstance exists that, with notice, the passage of time or both, could
constitute a default by the Company under any item of Indebtedness.  The Company
has not received any notice of a default, alleged failure to perform or any
offset or counterclaim with respect to any item of Indebtedness that has not
been fully remedied and withdrawn.  Other than as reflected on Schedule 2.10,
the consummation of the transactions contemplated by this Agreement or any other
Transaction Document to which the Company is a party will not cause a default,
breach or an acceleration, automatic or otherwise, of any conditions, covenants
or any other terms of any item of Indebtedness.  The Company is not a guarantor
or otherwise liable for any liability or obligation (including Indebtedness) of
any other Person.
 
2.11   Accounts Receivable and Payable.  All of the Company’s Receivables are
bona fide, legal, valid and binding obligations, arose in the ordinary course of
business and are carried on the records of Company at values determined in
accordance with GAAP, and subject to the reserve for bad debts set forth in the
Interim Financial Statements.  No Person has any Lien on any of such
Receivables, and no request or agreement for any material deduction or discount
has
 

 
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been made with respect to any of such Receivables except as fully and adequately
reflected in reserves for doubtful accounts set forth in the Interim Financial
Statements.  All Receivables represent services actually performed by Company in
the conduct of its business in the ordinary course.  At the Closing Date, all
accounts payable will have been incurred in exchange for goods or services
delivered or rendered to Company in the ordinary course of business.
 
2.12   Litigation.  There are no Legal Proceedings pending, or to the Knowledge
of the Company, threatened against the Company.  There are no pending Legal
Proceedings initiated by the Company or any Member on behalf of the Company, and
to the Knowledge of the Company, no Member intends, nor does the Company intend,
to initiate, against any Legal Proceedings against any other Person related to
the Company.  The Company has not received and, to the Knowledge of the Company,
no Member has received any notice of a Legal Proceeding. To the Knowledge of the
Company, there is no reasonable basis to expect any notice of a Legal
Proceeding.  There is no injunction, judgment, decree or order against the
Company.
 
2.13   Taxes.
 
(a)           Except as listed on Schedule 2.13(a), all Tax Returns required to
be filed by or with respect to the Company have been duly and timely filed;
(ii) all material Tax Items required to be included in each such Tax Return have
been so included and all such Tax Items and any other information provided in
each such Tax Return are true, correct and complete in all material respects;
(iii) all Taxes owed by the Company or for which the Company may be liable that
are or have become due have been timely paid in full; (iv) no material penalty,
interest or other charge is or will become due with respect to the late filing
of any such Tax Return or late payment of any such Tax; (v) all Tax withholding
and deposit requirements imposed on or with respect to the Company have been
satisfied in full in all respects; (vi) there are no Liens (other than Taxes not
yet due and payable) on any of the assets of the Company that arose in
connection with any failure (or alleged failure) to pay any Tax; and (vii) the
Company is not liable in any material respects for any Tax as a transferee or
successor.
 
(b)           Schedule 2.13(b) lists all federal, state, and local income Tax
Returns filed or required to be filed with respect to the Company for the three
(3) taxable years ending prior to the Closing Date, indicates those Tax Returns
that have been audited, indicates those Tax Returns that are currently the
subject of audit and indicates those Tax Returns whose audits have been
closed.  The Company has made available to the Parent true and complete copies
of all income Tax Returns and other material Tax Returns filed by Company for
2008 and 2009 and all correspondence to Company from, or from Company to, a
Taxing Authority relating thereto.
 
(c)           There is no claim against the Company for any Taxes, and no
assessment, deficiency or adjustment has been asserted, proposed, or to the
actual knowledge of the Company, threatened with respect to any Tax Return of or
with respect to the Company, and, to the Knowledge of the Company, there is no
factual or legal basis for the assessment of any deficiency or adjustment with
respect to any Tax Return of or with respect to the Company.  No Tax audits or
administrative or judicial proceedings are being conducted, pending or to the
actual knowledge of the Company, threatened with respect to the Company.  No
claim has ever been made by an authority in a jurisdiction where the Company
does not file Tax Returns that it is or
 

 
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may be subject to taxation in that jurisdiction. There are no matters under
discussion with any Governmental Entity with respect to matters that could
result in an additional amount of Tax.
 
(d)           Other than as listed on Schedule 2.13(a), there is not in force
any extension of time with respect to the due date for the filing of any Tax
Return of or with respect to the Company or any waiver or agreement for any
extension of time for the assessment or payment of any Tax of or with respect to
the Company.
 
(e)           The Company is not a party to or bound by any Tax allocation,
sharing or indemnity agreements or arrangements.
 
(f)           The Company does not own any interest in any controlled foreign
corporation (as defined in Section 957 of the Code), passive foreign investment
company (as defined in Section 1297 of the Code) or other entity the income of
which is or could be required to be included in the income of Company.
 
(g)           The Company does not have any liability for the Taxes of any
Person.  The Company is not and has never been a member of an affiliated,
consolidated, combined or unitary group filing for federal or state income tax
purposes.
 
(h)           The Company has not entered into any agreement or arrangement with
any Taxing Authority that requires the Company to take any action or to refrain
from taking any action.  The Company is not a party to any agreement with any
Taxing Authority that would be terminated or adversely affected as a result of
the transactions contemplated by this Agreement.
 
(i)           Other than as listed on Schedule 2.13(j), there is no material
property or obligation of Company, including uncashed checks to vendors,
customers, or employees, non-refunded overpayments or unclaimed subscription
balances, unapplied cash balances, or dividends escheatable to any state or
municipality under any applicable escheatment laws, as of the date hereof or
that may at any time after the date hereof become escheatable to any state or
municipality under an applicable escheatment laws.
 
(j)           The provision for Taxes set forth on the balance sheets included
in the Company Financial Statements, if any, are sufficient for all accrued and
unpaid Taxes, whether asserted or unasserted, contingent or otherwise, as of the
dates thereof.  The Company has not incurred any liabilities for Taxes since
those dates (i) arising from extraordinary gains or losses, as that term is used
in GAAP, (ii) outside the ordinary course of business, or (iii) inconsistent
with past custom or practice.
 
(k)           To the Knowledge of the Company, no power of attorney that is
currently in force has been granted with respect to any matter relating to Taxes
that could affect the Company.
 

 
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2.14   Property and Assets.
 
(a)           Personal Property.  The Company has and has had at all times in
the past good and marketable title to, or valid leasehold interests in, all
Personal Property used or held for use in its business or reflected in the
Company Financial Statements.  Such Personal Property constitutes all Personal
Property used, necessary or useful to conduct the business of the Company as it
is presently conducted.  None of such Personal Property is owned by any other
Person, including a Member or an Affiliate of a Member.
 
(b)           Liens.  Except as may be set forth in Schedule 2.14, none of the
Personal Property or assets of the Company is subject to any Lien of any nature
whatsoever, other than Permitted Encumbrances.
 
2.15   Leased Real Property.  The Company does not own any real
property.  Schedule 2.15 contains a true and correct description of all Leased
Real Property. With respect to each lease listed in Schedule 2.15:
 
(a)           The lease was entered into on arm's-length terms;
 
(b)           All rental and other payments required to be paid by the Company
have been duly paid, the Company has not received or issued a notice of default
and the Company is not and to be the Company's Knowledge, no other party to the
lease is in breach or default.
 
2.16   Intellectual Property and Related Matters.
 
(a)           Except as set forth on Schedule 2.16(a), the Company exclusively
owns or possesses, valid, exclusive and irrevocable licenses to, the entire
right, title and interest in and to all Intellectual Property used by it in its
business, free and clear of all Liens. The Company owns or possesses, or has the
right or license to use, all of the Intellectual Property used in its business
as currently conducted, in each case without any violation, misappropriation or
infringement of, or other conflict with, the rights of another Person.  The
consummation of this transaction as contemplated by this Agreement shall not
affect the ownership of or right to use the any Intellectual Property that is
licensed to Company as used in its business as currently conducted.
 
(b)           There are no pending Legal Proceedings alleging that the Company
is infringing, misappropriating or otherwise violating any Intellectual Property
of a Person or that seek to limit or challenge the validity, enforceability,
ownership or use any Intellectual Property licensed by the Company and used in
its business.  The Company has not received any claim from any Person alleging
that the Company is infringing, misappropriating or otherwise violating any
Intellectual Property of any Person and the Company is not aware of any
potential basis for such an allegation or of any reason to believe that such an
allegation may be forthcoming. No third party has orally threatened Legal
Proceedings alleging that the Company is infringing, misappropriating or
otherwise violating any Intellectual Property or that seek to limit or challenge
the validity, enforceability, ownership or the Company’s use of any Intellectual
Property licensed by the Company and used in its business; and to the Knowledge
of the
 

 
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Company, the Company has not, infringed, misappropriated, or otherwise violated
the Intellectual Property of any Person.
 
(c)           No current or former Member, director, officer, or employee of the
Company will, after giving effect to each of the transactions contemplated
herein, own or retain any rights in or to, have the right to receive any royalty
or other payment with respect to, any of the Company’s Intellectual Property.
 
2.17   Compliance with Applicable Laws; Permits.
 
(a)           Compliance.  The Company has not failed to comply in any material
respect with or is not in conflict with, or in default or in material violation
of any Applicable Law.  No investigation or review by any Governmental Entity is
pending, or to the Knowledge of the Company, has been threatened, against the
Company.  There is no judgment, injunction, order or decree binding upon the
Company.
 
(b)           Permits.  The Company holds, to the extent required by Applicable
Law, all material Permits for the operation of its business as presently
conducted.  No suspension or cancellation of any such Permit is pending or, to
the Knowledge of the Company, threatened.  Each such Permit is valid and in full
force and effect, and the Company is in compliance in all material respects with
the terms of such Permits.
 
(c)           Export and Import Laws.  The Company has not exported or imported
any goods or products, nor provided any services that would subject the Company
to the jurisdiction of the U.S. Export and Import Laws or Foreign Export and
Import Laws  The Company has at all times been in compliance with all Applicable
Laws relating to trade embargoes and sanctions, and no product, service or
financing provided by the Company has been, directly or indirectly, provided to,
sold to or performed for or on behalf of Cuba, Iran, Libya, North Korea, Sudan,
Syria, or any other country or Person against whom the U.S. maintains economic
sanctions or an arms embargo.
 
(d)           Export Proceedings.  There is no export or import related
proceeding, investigation or inquiry pending, or to the Knowledge of the
Company, threatened against the Company or any officer or director of the
Company, by or before (or, in the case of a threatened matter, that would come
before) any Governmental Entity.
 
2.18   Broker Fees.  The Company has not incurred, nor will it incur, directly
or indirectly, any liability for brokers' or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement or any
other Transaction Document to which the Company is a party or any transaction
contemplated hereby or thereby.  No finder, broker, agent or other intermediary
has acted for or on behalf of the Company in connection with the transactions
contemplated by this Agreement.
 

 
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2.19   Employment Matters.
 
(a)           No officer or other employee who is significant to the Company’s
business of the Company has advised the Company (orally or in writing) that he
or she intends to terminate employment with the Company.
 
(b)           There is no labor strike currently pending or, to the Company’s
knowledge, threatened against or affecting the Company.  The Company has no
collective bargaining agreement.  The Company has not experienced any work
stoppage.  No collective bargaining agreement is currently being negotiated, and
no union representation issue currently exists.
 
2.20   Employee Benefit Plans.  Except as listed on Schedule 2.20, the Company
does not currently maintain any Employee Benefit Plans.
 
2.21   Environmental Matters.
 
(a)           The Company and any other person it is legally responsible for is
and has at all times been, in each case in all material respects, in compliance
with all Environmental Laws, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been made, given,
filed or commenced (or, to the Knowledge of Company, threatened) by any Person
against Company alleging any failure to comply with any Environmental Law or
seeking contribution towards, or participation in, any remediation of any
contamination of any property or thing with Hazardous Materials.  In each case,
and in all material respects, Company has obtained, and is and has at all times
been in compliance with all of the terms and conditions of, all Permits that are
required under any Environmental Law and has at all times complied with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables that are contained in any
applicable Environmental Law.  Neither Company or any other person it is legally
responsible for has manufactured, generated, treated, stored, handled,
processed, released, transported or disposed of any Hazardous Materials on,
under, from or at any of Company’s properties or in connection with Company’s
operations.
 
(b)           All properties and equipment used in the business of Company are
and have been free of Hazardous Materials except for any Hazardous Materials in
small quantities found in products used by Company for office or janitorial
purposes in material compliance with Environmental Law.
 
2.22   Material Contracts.  Schedule 2.22 sets forth a list of all Material
Contracts including the name of the parties thereto, the date of each such
Material Contract.  The Company has performed all of its material obligations
required to be performed through the date hereof under each Material Contract
listed on Schedule 2.22 and the Company is not in material breach or default in
any respect thereunder nor has any event or circumstance occurred which, with
notice or lapse of time or both, would constitute any such material breach or
default.  To the Company’s knowledge, none of the other parties to any Material
Contract is in material breach or
 

 
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default in any respect thereunder nor has any event or circumstance occurred
which, with notice or lapse of the time or both, would constitute any such
material breach or default.
 
2.23   Insurance. Schedule 2.23 includes a true, correct and complete list of
all current policies of insurance to which Company is a party. With respect to
each such insurance policy: (a) the policy is in full force and effect by its
terms; and (b) the Company has not received any written or oral notice from the
insurer disclaiming coverage or reserving rights with respect to a particular
claim or such policy in general.
 
2.24   Transactions with Related Parties.  No employee, officer, director or
Member of the Company, nor any member of his or her immediate family, is
indebted to Company. To the Knowledge of Company, none of such Persons has any
direct or indirect ownership interest in (a) any Person with which the Company
is Affiliated or with which the Company has a business relationship or (b) any
Person that competes with the Company (other than the ownership of less than 5%
of the outstanding class of publicly traded stock in publicly traded companies
that may compete with the Company).  To the Knowledge of Company, no officer,
director or Member, nor any member of his or her immediate family, is, directly
or indirectly, a party to or interested in any Contract with the Company.
 
2.25   Books and Records.  The minute books of Company contain complete and
accurate records of all meetings and other corporate actions of the Members and
board of directors of Company. True and complete copies of the minute books of
Company have been made available to the Parent prior to Closing.
 
2.26   Absence of Changes.  Since March 31, 2011, there has not occurred, and
Company does not have Knowledge of, any Material Adverse Effect.  Except as set
forth on Schedule 2.26, from such date, Company has conducted its business only
in the ordinary course of business consistent with past practices, and Company
has not:
 
(a)           failed to use commercially reasonable efforts to preserve intact
Company’s present business organization and to keep available the services of
its present officers, managerial personnel and key employees or independent
contractors and preserve its relationships with customers; or
 
(b)           failed to use commercially reasonable efforts to maintain its
assets in their current condition, except for ordinary wear and tear, or failed
to repair, maintain, or replace any of its equipment in accordance with the
normal standards of maintenance applicable in the industry; or
 
(c)           amended, terminated, or failed to use commercially reasonable
efforts to renew any Material Contract, or received any written notice or other
notification that any other Person has or intends to take any such actions; or
 
(d)           entered into any Contract outside the ordinary course of business;
or
 

 
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(e)           received notice of cancellation of a Material Contract from any
Person that is a party thereto; or
 
(f)           transferred, granted any license or sublicense of any rights under
or with respect to any of its Intellectual Property other than in the ordinary
course of business consistent with past practice; or
 
(g)           adopted, terminated or amended any Employee Benefit Plan or
materially increased in any manner the compensation or benefits of any officer,
director, or employee or other personnel (whether employees or independent
contractors); or
 
(h)           acquired (including by merger, consolidation, or the acquisition
of any equity interest or assets) or sold (whether by merger, consolidation, or
the sale of an equity interest or assets), leased, or disposed of any material
assets except for fair consideration in the ordinary course of business and
consistent with past practice; or
 
(i)           mortgaged, pledged, or subjected to any Lien any of its assets; or
 
(j)           made any loans, advances or capital contributions to, or
investment in, any other Person; or
 
(k)           entered into any material joint ventures, strategic partnerships
or alliances; or
 
(l)           except as required by GAAP, Applicable Law, or circumstances which
did not exist as of such date, changed any of the accounting principles or
practices used by it; or
 
(m)           changed its practices and procedures with respect to the
collection of accounts receivable or offered to discount the amount of any
account receivable or extended any other incentive (whether to the account
debtor or any employee or third party responsible for the collection of
receivables) with respect thereto; or
 
(n)           declared, paid or set aside assets for any distribution to its
Members, or purchased, redeemed or acquired any Units or other securities of the
Company; or
 
(o)           incurred any Indebtedness not in the ordinary of course of
business ; or
 
(p)           failed to pay any Indebtedness or any other accounts payable as it
became due; or
 
(q)           paid, discharged or satisfied any claim, liability or obligation
(absolute, accrued, asserted, unasserted, contingent or otherwise) other than
immaterial claims, liabilities or obligations arising in the ordinary course of
business, or cancelled, compromised, waived or released any right or claim other
than immaterial rights or claims in the ordinary course of business; or
 

 
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(r)           incurred or committed to incur any capital expenditures, capital
additions or capital improvements other than in the ordinary course of business
consistent with past practice.
 
2.27   Absence of Certain Business Practices.  Neither Company nor any employee,
officer, director or Member of Company, or any other Person acting on behalf of
any of them, has, with respect to, on behalf of or to otherwise further the
interests of Company, (a) used funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (b)
made any direct or indirect unlawful payments to foreign or domestic government
officials or employees, (c) established or maintained any unlawful or unrecorded
funds or other assets or to foreign or domestic political parties or campaigns
or violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or the OECD Convention on Combating Bribery of Foreign Public Officials
in Business Transactions; (d) made any bribe, kickback or other unlawful payment
or (e) made any material favor or gift which is not, in good faith, believed by
such Person to be fully deductible for any income tax purposes and which was, in
fact, so deducted.
 
2.28   Disclosures.  Neither this Agreement (including any Exhibit or Schedule
hereto) nor any other Transaction Document to which the Company is a party, nor
any report, certificate or instrument furnished to Parent or Merger Sub in
connection with the transactions contemplated in this Agreement or any other
Transaction Document to which the Company is a party, when read together,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, not
misleading.
 
3.           Representations and Warranties of Parent.  Except as disclosed in
the disclosure schedule delivered by the Parent to Company concurrent with the
execution of this Agreement (the “Parent Disclosure Schedule”), Parent
represents and warrants to the Company as follows:
 
3.1   Organizational Matters.
 
(a)           Organization, Standing and Power to Conduct Business.  Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada; has the requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted and
as currently contemplated to be conducted; and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its business
or the ownership or leasing of its properties makes such qualification
necessary, except where the failure to do so would not cause a Material Adverse
Effect. Parent is duly qualified in each of the jurisdictions listed on Schedule
3.1(a).
 
(b)           Charter Documents.  Parent has delivered to the Company true and
complete copies of the Articles of Incorporation and Bylaws of Parent, in each
case as amended to date and currently in effect (such instruments and documents,
the “Parent Charter Documents”).  Parent is not in violation of any of the
provisions of Parent Charter Documents.
 

 
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(c)           Subsidiaries.  Other than Merger Sub, Parent does not have any
subsidiaries and does not own, hold or have any interest in or right to acquire
capital stock or other equity interests or ownership interests in any entity.
 
(d)           Powers of Attorney.  There are no outstanding powers of attorney
executed by or on behalf of Parent.
 
3.2   Capital Structure.
 
(a)           Capital Stock. As of the date hereof, the authorized capital stock
of Parent consists of 50,000,000 shares of Parent Common Stock, of which
16,575,209 shares are issued and outstanding, and 10,000,000 shares of Parent
Preferred Stock, of which zero shares are issued and outstanding. After giving
effect to the Reverse Split, there will be approximately 165,752 shares of
Parent Common Stock outstanding, and after giving effect to the increase in the
number of authorized shares there will be 250,000,000 shares of Parent Common
Stock and 10,000,000 shares of Parent Preferred Stock authorized.  No shares of
Parent Common Stock or Parent Preferred Stock are held in treasury.  The
outstanding shares of Parent Common Stock are duly and validly authorized and
issued, fully paid and non-assessable, and held of record and owned beneficially
by the Stockholders in the amounts set forth on Schedule 3.2(a).  No shares of
Parent Common Stock were issued in violation of any preemptive rights.  Other
than the Convertible Notes set forth on Schedule 3.2(b), Parent has no
outstanding options, warrants, purchase rights, subscription rights, conversion
rights, exchange rights, preemptive rights or other contracts or commitments
issued or granted to or in favor of any person to purchase or otherwise acquire
any securities convertible or exchangeable for Parent Common Stock.  There are
no outstanding obligations of Parent to repurchase, redeem or otherwise acquire
any of Parent Common Stock. There are no outstanding or authorized stock
appreciation, phantom stock, or similar rights with respect to Parent.  There
are no voting trusts, proxies, or other agreements or understandings with
respect to the voting, transfer, dividend or other rights of the Parent Common
Stock.
 
(b)           Other Securities.  Except for (i) up to 1,500,000 shares of Parent
Common Stock available for issuance pursuant to option grants to employees,
officers, directors, and consultants of Parent (the “LTIP Options”) pursuant to
the LTIP adopted by the Board of Directors of Parent and approved by Parent’s
stockholders, none of which have been granted, and (ii) Convertible Notes
described on Schedule 3.2(b), there are no shares of Parent Common Stock or
other securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which Parent is a party or by which
it is bound obligating Parent to (A) issue, convert, deliver or sell, or cause
to be issued, delivered or sold, shares of Parent Common Stock or other
securities of Parent, (B) issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking
or (C) issue or distribute to Stockholders of Parent Common Stock any evidences
of indebtedness or assets of Parent.  Parent is not under any obligation to
purchase, redeem or otherwise acquire any shares of Parent Common Stock or any
interest therein or to pay any dividend or make any other distribution with
respect thereto with the exception of unclaimed dividends payable in the
approximate amount of $42,000.  Parent has furnished to the Company a complete
and accurate copy of the LTIP.
 

 
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(c)           No Agreements.  Other than as listed on Schedule 3.2(c) and this
Agreement, there are no agreements, written or oral, to which Parent or, to the
Knowledge of Parent, any Stockholder is a party, relating to the issuance,
acquisition (including rights of first refusal or preemptive rights),
disposition, registration under the Securities Act or voting of the capital
stock or other securities of Parent.
 
3.3   Authority.  Parent has all requisite corporate power to execute, deliver
and perform this Agreement and the other Transaction Documents to which it is a
party and to consummate the transactions contemplated hereby or thereby.  All
necessary corporate action on the part of Parent, its directors and Stockholders
necessary for the authorization, execution and delivery of this Agreement and
the other Transaction Documents to which it is a party and the performance of
Parent hereunder and thereunder has been taken or will be taken prior to
Closing.
 
3.4   Due Execution.  This Agreement and each other Transaction Document to
which Parent is a party has been or will at Closing have been duly executed and
delivered by Parent and, assuming due execution and delivery by the Company and
the other parties hereto and thereto, constitutes the valid and binding
obligation of Parent, enforceable against Parent in accordance with their
respective terms, except to the extent enforcement thereof may be limited by
applicable bankruptcy, reorganization, insolvency or moratorium laws, or other
Applicable Laws affecting the enforcement of creditors rights or by the
principles governing the availability of equitable remedies.
 
3.5   Non-Contravention.  The execution and delivery of this Agreement and each
other Transaction Document by Parent does not, and the performance of this
Agreement and each other Transaction Document by Parent will not, (i) conflict
with or constitute a violation of the Parent Charter Documents, (ii) conflict
with or constitute a violation of any Applicable Laws, or (iii) conflict with,
result in any breach or acceleration of, or constitute a default (or an event
that with notice or lapse of time or both would become a default) under, or
impair the rights of Parent or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any of
the properties or assets of Parent pursuant to any Contract.
 
3.6   Contractual Consents.  Except as set forth on Schedule 3.6, no Consent
under any Contract is required to be obtained in connection with the execution,
delivery or performance of this Agreement or any other Transaction Document by
Parent or the consummation of the transactions contemplated hereby or thereby.
 
3.7   Governmental Consents.  Except for (i) the approval and consent of the
FINRA with respect to the provisions of this Agreement regarding corporate
actions by Parent and (ii) the filing of the Articles of Amendment to the
Articles of Incorporation with the Secretary of State of the State of Nevada and
(iii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, no Consent of any Governmental Entity is required to be
obtained or made by Parent in connection with the execution, delivery and
performance of this Agreement or any other Transaction Document by Parent or the
consummation of the transactions contemplated hereby or thereby.
 

 
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3.8   Financial Statements.  Parent has delivered to the Company (i) the audited
consolidated financial statements for the years ended December 31, 2008, 2009
and 2010, and (ii) the unaudited consolidated financial statements (consisting
of a balance sheet, statement of operations, statement of stockholder's equity
and statement of cash flows) for the three month  period ended March 31, 2011
(collectively, the “Parent Financial Statements”).  The Parent Financial
Statements were prepared in accordance with GAAP consistently applied and in
accordance with Parent’s historic past practice throughout the periods involved
and fairly and accurately present in all material respects the financial
position, results of operations and cash flows of Parent as of the dates, and
for the periods, indicated therein.  Parent maintains a standard system of
accounting established and administered in accordance with GAAP including, but
not limited to, complete books and records in written or electronic form.
 
3.9   Absence of Liabilities.  Except as set forth in the Parent Financial
Statements, Parent has no liabilities, whether accrued, absolute, contingent,
matured, unmatured, or otherwise and whether or not required to be reflected in
financial statements prepared in accordance with GAAP, other than
(i) liabilities incurred in the ordinary course of the bona fide performance of
the business subsequent to the date of the Interim Financial Statements,
(ii) obligations under contracts and commitments incurred in the ordinary course
of the bona fide performance of the business that are not required under GAAP to
be reflected in the Parent Financial Statements, which liabilities and
adjustments referred to in clauses (i) and (ii) individually or in the
aggregate, are not material to the financial condition or operating results of
Parent and (iii) the liabilities listed on Schedule 3.9
 
3.10   Indebtedness.  Parent does not have any Indebtedness of any type (whether
accrued, absolute, contingent, matured or unmatured), except for: (i)
Indebtedness set forth on the Interim Financial Statements, or (ii) Indebtedness
described in reasonable detail in Schedule 3.9.  With respect to each item of
Indebtedness, Parent is not in default and no payments are past due, and no
circumstance exists that, with notice, the passage of time or both, could
constitute a default by Parent under any item of Indebtedness.  Parent has not
received any notice of a default, alleged failure to perform or any offset or
counterclaim with respect to any item of Indebtedness that has not been fully
remedied and withdrawn.  Other than as reflected on Schedule 3.10, the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document to which Parent is a party will not cause a default, breach
or an acceleration, automatic or otherwise, of any conditions, covenants or any
other terms of any item of Indebtedness.  Parent is not a guarantor or otherwise
liable for any liability or obligation (including Indebtedness) of any other
Person.
 
3.11   Accounts Receivable and Payable.  All of Parent’s Receivables are bona
fide, legal, valid and binding obligations, arose in the ordinary course of
business and are carried on the records of Parent at values determined in
accordance with GAAP, and subject to the reserve for bad debts set forth in the
Interim Financial Statements.  No Person has any Lien on any of such
Receivables, and no request or agreement for any material deduction or discount
has been made with respect to any of such Receivables except as fully and
adequately reflected in reserves for doubtful accounts set forth in the Interim
Financial Statements.  All Receivables represent services actually performed by
Parent in the conduct of the Parent's business in the ordinary
 

 
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course.  Deferred revenues are presented on the Parent Financial Statements, in
accordance with GAAP, with respect to Parent’s (a) billed but unearned
Receivables; (b) previously billed and collected Receivables still unearned; and
(c) unearned customer deposits.  At the Closing Date, all accounts payable will
have been incurred in exchange for goods or services delivered or rendered to
Parent in the ordinary course of business.
 
3.12   Litigation.  There are no Legal Proceedings pending, or to the Knowledge
of Parent, threatened against Parent.  There are no pending Legal Proceedings
initiated by Parent or any Stockholder on behalf of Parent, and to the Knowledge
of Parent, no Stockholder intends, nor does Parent intend, to initiate any Legal
Proceeding against any Person related to Parent. Parent has not received and, to
the Knowledge of Parent, no Stockholder has received any notice of a Legal
Proceeding.  To the Knowledge of Parent, there is no reasonable basis to expect
notice of a Legal Proceeding.  There is no injunction, judgment, decree or order
against Parent.
 
3.13   Taxes.
 
(a)           Other than as listed on Schedule 13.3(a), all Tax Returns required
to be filed by or with respect to Parent have been duly and timely filed; (ii)
Tax Items required to be included in each such Tax Return have been so included
and all such Tax Items and any other information provided in each such Tax
Return are true, correct and complete in all material respects; (iii) all Taxes
owed by Parent or for which Parent may be liable that are or have become due
have been timely paid in full; (iv) no material penalty, interest or other
charge is or will become due with respect to the late filing of any such Tax
Return or late payment of any such Tax; (v) all Tax withholding and deposit
requirements imposed on or with respect to Parent have been satisfied in full in
all respects; (vi) there are no Liens (other than Taxes not yet due and payable)
on any of the assets of Parent that arose in connection with any failure (or
alleged failure) to pay any Tax; and (vii) Parent is not liable in any material
respects for any Tax as a transferee or successor.
 
(b)           Schedule 3.13(b) lists all federal, state, and local income Tax
Returns filed or required to be filed with respect to Parent for the three (3)
taxable years ending prior to the Closing Date, indicates those Tax Returns that
have been audited, indicates those Tax Returns that are currently the subject of
audit and indicates those Tax Returns whose audits have been closed.  Parent has
made available to the Company true and complete copies of all income Tax Returns
and other material Tax Returns filed by Parent during the past three (3) years
and all correspondence to Parent from, or from Parent to, a Taxing Authority
relating thereto.
 
(c)           There is no claim against Parent for any Taxes, and no assessment,
deficiency or adjustment has been asserted, proposed, or to the actual knowledge
of Parent, threatened with respect to any Tax Return of or with respect to
Parent, and, to the Knowledge of Parent, there is no factual or legal basis for
the assessment of any deficiency or adjustment with respect to any Tax Return of
or with respect to Parent, other than those disclosed (and to which are attached
true and complete copies of all audit or similar reports) on Schedule
3.13(c).  No Tax audits or administrative or judicial proceedings are being
conducted, pending or to the actual knowledge of Parent, threatened with respect
to Parent, other than those disclosed (and to which are attached true and
complete copies of all correspondence to or from the relevant Taxing
 

 
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Authority pertaining thereto) on Schedule 3.13(c).  No claim has ever been made
by an authority in a jurisdiction where Parent does not file Tax Returns that it
is or may be subject to taxation in that jurisdiction.  There are no matters
under discussion with any Governmental Entity with respect to matters that could
result in an additional amount of Tax.
 
(d)           Other than as listed on Schedule 13.3(a), there is not in force
any extension of time with respect to the due date for the filing of any Tax
Return of or with respect to Parent or any waiver or agreement for any extension
of time for the assessment or payment of any Tax of or with respect to Parent.
 
(e)           Parent is not a party to or bound by any Tax allocation, sharing
or indemnity agreements or arrangements.
 
(f)           None of the property of Parent is held in an arrangement that
could be classified as a partnership for Tax purposes, and Parent does not own
any interest in any controlled foreign corporation (as defined in Section 957 of
the Code), passive foreign investment company (as defined in Section 1297 of the
Code) or other entity the income of which is or could be required to be included
in the income of Parent.
 
(g)           Parent does not have any liability for the Taxes of any
Person.  Parent is not and has never been a member of an affiliated,
consolidated, combined or unitary group filing for federal or state income tax
purposes.
 
(h)           Parent has not entered into any agreement or arrangement with any
Taxing Authority that requires Parent to take any action or to refrain from
taking any action.  Parent is not a party to any agreement with any Taxing
Authority that would be terminated or adversely affected as a result of the
transactions contemplated by this Agreement.
 
(i)           Parent has not participated, within the meaning of Treasury
Regulations Section 1.6011-4(c), in (i) any “reportable transaction” within the
meaning of Section 6011 of the Code and the Treasury Regulations thereunder;
(ii) any “tax shelter” or “confidential corporate tax shelter” within the
meaning of Section 6111 of the Code and the Treasury Regulations thereunder; or
(iii) any “potentially abusive tax shelter” within the meaning of Section 6112
of the Code and the Treasury Regulations thereunder.  Parent has disclosed on
its Tax Returns all positions taken therein that could give rise to a
substantial understatement of Tax within the meaning of Section 6662 of the Code
(or any similar provision of state, local or foreign law).
 
(j)           Other than the unclaimed dividends payable identified in Section
3.2(b), there is no material property or obligation of Parent, including
uncashed checks to vendors, customers, or employees, non-refunded overpayments
or unclaimed subscription balances, unapplied cash balances, or dividends that
is escheatable to any state or municipality under any applicable escheatment
laws, as of the date hereof or that may at any time after the date hereof become
escheatable to any state or municipality under an applicable escheatment laws.
 

 
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(k)           Parent has not made any payments, is not obligated to make any
payments, and is not a party to any plan or agreement that under certain
circumstances could obligate it to make any payments that would not be
deductible under Sections 280G (determined without regard to the exceptions
contained in Sections 280G(b)(4) and 280G(b)(6)) or 404 of the Code.
 
(l)           The provision for Taxes set forth on the balance sheets included
in the Parent Financial Statements, if any, are sufficient for all accrued and
unpaid Taxes, whether asserted or unasserted, contingent or otherwise, as of the
dates thereof.  Parent has not incurred any liabilities for Taxes since those
dates (i) arising from extraordinary gains or losses, as that term is used in
GAAP, (ii) outside the ordinary course of business, or (iii) inconsistent with
past custom or practice.
 
(m)           To the Knowledge of Parent, no power of attorney that is currently
in force has been granted with respect to any matter relating to Taxes that
could affect Parent.
 
3.14   Property and Assets.
 
(a)           Personal Property.  Parent has and has had at all times in the
past good and marketable title to, or valid leasehold interests in, all Personal
Property used or held for use in its business or reflected in the Parent
Financial Statements.  Such Personal Property constitutes all Personal Property
used, necessary or useful to conduct the business of Parent as it is presently
conducted.  None of such Personal Property is owned by any other Person,
including a Stockholder or an Affiliate of a Stockholder.  The Personal Property
(i) is in good operating condition and repair (ordinary wear and tear excepted);
(ii) is available for immediate use in the business and operation of Parent as
currently conducted; and (iii) permits Parent to operate in accordance with
Applicable Laws.
 
(b)           Liens.  None of the Personal Property or assets of the Parent is
subject to any Lien of any nature whatsoever, other than Permitted Encumbrances.
 
3.15   Leased Real Property.  Parent does not own any real
property.  Schedule 3.15 contains a true and correct description of all Leased
Real Property.  With respect to each lease listed in Schedule 3.15:
 
(a)           The lease was entered into on arm’s-length terms for leases of
similar property within the county where the subject property is situated;
 
(b)           All rental and other payments required to be paid by Parent have
been duly paid, Parent has not received or issued a notice of default and Parent
is not and to the Parent’s Knowledge, no other party to the lease is in breach
or default.
 

 
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3.16   Intellectual Property and Related Matters.
 
(a)           Schedule 3.16(a) lists all of the Intellectual Property owned by
Parent (hereafter the “Parent Intellectual Property”), and any proceedings
before any Governmental Entity with regard to such Parent Intellectual Property.
 
(b)           Except as set forth on Schedule 3.16(a), Parent exclusively owns
or possesses, valid, exclusive and irrevocable licenses to, the entire right,
title and interest in and to all Parent Intellectual Property used by it in its
business, free and clear of all Liens, Parent, owns or possesses, or has the
right or license to use, all of the Parent Intellectual Property used in its
business as currently conducted, in each case without any violation,
misappropriation or infringement of, or other conflict with, the rights of
another Person.  Except as set forth on Schedule 3.16(b), the consummation of
this transaction as contemplated by this Agreement shall not affect the
ownership of or right to use the any Parent Intellectual Property that is
licensed to Parent as used in its business as currently conducted.
 
(c)           There are no pending Legal Proceedings alleging that Parent is
infringing, misappropriating or otherwise violating any Intellectual Property of
a Person or that seek to limit or challenge the validity, enforceability,
ownership or use any Intellectual Property licensed by Parent and used in its
business.   Parent has not received any claim from any Person alleging that
Parent is infringing, misappropriating or otherwise violating any Intellectual
Property of any Person and Parent is not aware of any potential basis for such
an allegation or of any reason to believe that such an allegation may be
forthcoming. No third party has orally threatened Legal Proceedings alleging
that Parent is infringing, misappropriating or otherwise violating any
Intellectual Property or that seek to limit or challenge the validity,
enforceability, ownership or Parent’s use of any Intellectual Property licensed
by Parent and used in its business; and to the Knowledge of Parent, Parent has
not infringed, misappropriated, or otherwise violated the Intellectual Property
of any Person.
 
(d)           No current or former partner, director, officer, or employee of
Parent will, after giving effect to each of the transactions contemplated
herein, own or retain any rights in or to, have the right to receive any royalty
or other payment with respect to, any of the Parent Intellectual Property.
 
3.17   Compliance with Applicable Laws; Permits.
 
(a)           Compliance.  Parent has not failed to comply in any material
respect with or is not in conflict with, or in default or in material violation
of any Applicable Law. No investigation or review by any Governmental Entity is
pending, or to the Knowledge of Parent, has been threatened, against
Parent.  There is no judgment, injunction, order or decree binding upon Parent.
 
(b)           Permits.  Parent holds, to the extent required by Applicable Law,
all Permits for the operation of its business as presently conducted.  No
suspension or cancellation of any such Permit is pending or, to the Knowledge of
Parent, threatened.  Each such Permit is valid and in full force and effect, and
Parent is in compliance in all material respects with the
 

 
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terms of such Permits.  Schedule 3.17(b) provides a complete list of all
material Permits held by Parent.
 
(c)           Export and Import Laws.  Parent has not exported or imported any
goods or products, nor provided any services that would subject Parent to the
jurisdiction of the U.S. Export and Import Laws or Foreign Export and Import
Laws  Parent has at all times been in compliance with all Applicable Laws
relating to trade embargoes and sanctions, and no product, service or financing
provided by Parent has been, directly or indirectly, provided to, sold to or
performed for or on behalf of Cuba, Iran, Libya, North Korea, Sudan, Syria, or
any other country or Person against whom the U.S. maintains economic sanctions
or an arms embargo.
 
(d)           Export Proceedings.  There is no export or import related
proceeding, investigation or inquiry pending, or to the Knowledge of the Parent,
threatened against Parent or any officer or director of Parent, by or before
(or, in the case of a threatened matter, that would come before) any
Governmental Entity.
 
3.18   Broker Fees.  Parent has not incurred, nor will it incur, directly or
indirectly, any liability for brokers' or finders’ fees or agents’ commissions
or any similar charges in connection with this Agreement or any other
Transaction Document to which Parent is a party or any transaction contemplated
hereby or thereby.  No finder, broker, agent or other intermediary has acted for
or on behalf of Parent in connection with the transactions contemplated by this
Agreement.
 
3.19   Employment Matters.
 
(a)           Employees.  Schedule 3.19(a) sets forth a complete list of
Parent’s current employees, officers, directors, independent contractors, sales
representatives and other agents.  To the Knowledge of Parent, (i) no third
party has claimed that any present or former employee of Parent has disclosed or
utilized any Trade Secret or proprietary information or documentation of such
third party; (ii) no third party has claimed that any present or former employee
of Parent has interfered in the employment relationship between such third party
and any of its present or former employees; and (iii) no present or former
employee of Parent has employed any Trade Secret, information or documentation
proprietary to any former employer or other third party, or violated any
confidential relationship with any such third party in connection with the
development or sale of any product or the development or sale of any service of
Parent.  No Parent employee or any other person is or will be owed compensation
by Parent in connection with the transactions contemplated by this Agreement,
including, without limitation, cash payments, forgiveness of indebtedness,
assumption of tax liability, severance benefits or vesting acceleration.
 
(b)           WARN Act.  Parent has not had any plant closings, mass layoffs or
other terminations of employees of Parent which would create any obligations
upon or liabilities for Parent under the federal Worker Adjustment and
Retraining Notification Act or any equivalent similar laws.  Parent is not a
party to any agreements or arrangements or subject to any requirement that in
any manner restricts Parent from relocating, consolidating, merging or closing,
in whole or in part, any portion of the business of Parent, subject to
Applicable Law.
 

 
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3.20   Employee Benefit Plans.  Except for the LTIP, Parent does not currently
maintain any Employee Welfare Benefit Plans.  To the Knowledge of Parent, Parent
does not have any liability associated with any past Employee Benefit Plans.
 
3.21   Environmental Matters.
 
(a)           Parent and any other person it is legally responsible for is and
has at all times been, in each case in all material respects, in compliance with
all Environmental Laws, and no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand or notice has been made, given, filed or
commenced (or, to the Knowledge of Parent, threatened) by any Person against
Parent alleging any failure to comply with any Environmental Law or seeking
contribution towards, or participation in, any remediation of any contamination
of any property or thing with Hazardous Materials.  In each case, and in all
material respects, Parent has obtained, and is and has at all times been in
compliance with all of the terms and conditions of, all Permits that are
required under any Environmental Law and has at all times complied with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables that are contained in any
applicable Environmental Law.  Neither Parent or any other person it is legally
responsible for has manufactured, generated, treated, stored, handled,
processed, released, transported or disposed of any Hazardous Materials on,
under, from or at any of Parent’s properties or in connection with Parent’s
operations since July 26, 2009.
 
(b)           No physical condition exists on or under any property that may
have been caused by or impacted by the operations or activities of Parent that
could give rise to any investigative, remedial or other obligation under any
Environmental Law or that could result in any kind of liability to any third
party claiming damage to Person or property as a result of such physical
condition.
 
(c)           All properties and equipment used in the business of Parent are
and have been free of Hazardous Materials except for any Hazardous Materials in
small quantities found in products used by Parent for office or janitorial
purposes in material compliance with Environmental Law.
 
(d)           Parent does not have and has never had in its possession or
control any internal or external environmental audits or studies relating to
Parent and its operations or any correspondence on environmental matters
relating to Parent and its operations.
 
3.22   Material Contracts.  Schedule 3.22 sets forth a list of all Material
Contracts including the name of the parties thereto, the date of each such
Material Contract and each amendment thereto. All Material Contracts are in full
force and effect in all material respects.  Other than as described on
Schedule 3.22, all Material Contracts are valid and enforceable in all material
respects, and not in default, no payments or other material obligations are past
due, and no circumstance exists that, with notice, the passage of time or both,
could constitute a material default under any Material Contract by Parent or, to
the Knowledge of Parent, by any other party thereto.  Parent has not received
any notice of a default, alleged failure to perform or any offset
 

 
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or counterclaim with respect to any Material Contract that has not been, in all
material respects, fully remedied and withdrawn. The consummation of the
transactions contemplated by this Agreement or any other Transaction Document to
which Parent is a party will not constitute a default under, or affect the
enforceability against any Person of, any such Material Contract.  There is no
Material Contract that Parent cannot terminate without penalty. Parent has
provided Parent with true and complete copies of all Material Contracts
including all amendments, terminations and modifications thereof.
 
3.23   Insurance.  Parent does not maintain any type of insurance policies,
including any policies for liability coverage, and there are no self-insurance
arrangements affecting Parent.
 
3.24   Transactions with Related Parties.  Except as set forth on Schedule 3.24,
no employee, officer, director or Stockholder of Parent, nor any member of his
or her immediate family, is indebted to Parent, nor is Parent indebted (or
committed to make loans or extend or guarantee credit) to any of them.  To the
Knowledge of Parent, other than as listed on Schedule 3.24, none of such Persons
has any direct or indirect ownership interest in (a) any Person with which
Parent is Affiliated or with which Parent has a business relationship or (b) any
Person that competes with Parent (other than the ownership of less than 5% of
the outstanding class of publicly traded stock in publicly traded companies that
may compete with Parent).  Except as set forth on Schedule 3.24, to the
Knowledge of Parent, no officer, director or Stockholder, nor any member of his
or her immediate family, is, directly or indirectly, a party to or interested in
any Contract with Parent or its Affiliates.
 
3.25   Books and Records.  The minute books of Parent contain complete and
accurate records of all meetings and other corporate actions of the Stockholders
and board of directors of Parent.  The stock ledger of Parent is complete and
reflects all issuances, transfers, repurchases and cancellations of shares of
capital stock of Parent.  True and complete copies of the minute books and the
stock ledger of Parent have been made available to and will be delivered to the
Company at the Closing.
 
3.26   Absence of Changes.  Since March 31, 2011, there has not occurred, and
Parent does not have Knowledge of, any Material Adverse Effect.  Except as set
forth on Schedule 3.26, from such date, Parent has conducted its business only
in the ordinary course of business consistent with past practices, and Parent
has not:
 
(a)           failed to use commercially reasonable efforts to preserve intact
Parent’s present business organization and to keep available the services of its
present officers, managerial personnel and key employees or independent
contractors and preserve its relationships with customers; or
 
(b)           failed to use commercially reasonable efforts to maintain its
assets in their current condition, except for ordinary wear and tear, or failed
to repair, maintain, or replace any of its equipment in accordance with the
normal standards of maintenance applicable in the industry; or
 

 
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(c)           amended, terminated, or failed to use commercially reasonable
efforts to renew any Material Contract, or received any written notice or other
notification that any other Person has or intends to take any such actions; or
 
(d)           entered into any Contract either (i) that is a Material Contract
or (ii) outside the ordinary course of business; or
 
(e)           accelerated, terminated, modified, or canceled any Material
Contract to which the Parent is a party or by which the Parent or its assets are
bound or received notice of cancellation of a Material Contract from any Person
that is a party thereto; or
 
(f)           transferred, granted any license or sublicense of any rights under
or with respect to any of its Intellectual Property other than in the ordinary
course of business consistent with past practice; or
 
(g)           made or pledged to make any charitable or other capital
contribution; or
 
(h)           adopted, terminated or amended any Employee Benefit Plan or
materially increased in any manner the compensation or benefits of any officer,
director, or employee or other personnel (whether employees or independent
contractors); or
 
(i)           terminated any employee other than in the ordinary course of
business consistent with past practice; or
 
(j)           acquired (including by merger, consolidation, or the acquisition
of any equity interest or assets) or sold (whether by merger, consolidation, or
the sale of an equity interest or assets), leased, or disposed of any material
assets except for fair consideration in the ordinary course of business and
consistent with past practice or, even if in the ordinary course of business and
consistent with past practices, whether in one or more transactions, in no event
involving assets having an aggregate fair market value in excess of $1,000; or
 
(k)           mortgaged, pledged, or subjected to any Lien any of its assets; or
 
(l)           made any loans, advances or capital contributions to, or
investment in, any other Person; or
 
(m)           entered into any material joint ventures, strategic partnerships
or alliances; or
 
(n)           except as required by GAAP, Applicable Law, or circumstances which
did not exist as of such date, changed any of the accounting principles or
practices used by it; or
 
(o)           changed its practices and procedures with respect to the
collection of accounts receivable or offered to discount the amount of any
account receivable or extended any other incentive (whether to the account
debtor or any employee or third party responsible for the collection of
receivables) with respect thereto; or
 

 
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(p)           declared, paid or set aside assets for any dividend or otherwise
declared or made any other distribution with respect to its capital stock, or
purchased, redeemed or acquired any shares of capital stock or other securities
of Parent; or
 
(q)           incurred any Indebtedness not in the ordinary of course of
business ; or
 
(r)           failed to pay any Indebtedness or any other accounts payable as it
became due, or materially changed its existing practices and procedures for the
payment of Indebtedness or other accounts payable; or
 
(s)           paid, discharged or satisfied any claim, liability or obligation
(absolute, accrued, asserted, unasserted, contingent or otherwise) other than
immaterial claims, liabilities or obligations arising in the ordinary course of
business, or cancelled, compromised, waived or released any right or claim other
than immaterial rights or claims in the ordinary course of business; or
 
(t)           incurred or committed to incur any capital expenditures, capital
additions or capital improvements other than in the ordinary course of business
consistent with past practice; or
 
(u)           made any payment or agreement relating to the surrender,
cancellation, amendment or agreement not to exercise any stock option or warrant
issued by Parent; or
 
(v)           authorized, approved, agreed to or made any commitment, orally or
in writing, to take any actions prohibited by this Agreement.
 
3.27   Warranties.  Each product or service sold, licensed, distributed or
delivered by Parent is in conformity with all applicable contractual commitments
and all express warranties in all material respects, and Parent has no liability
(and, to the Knowledge of Parent, there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against Parent giving rise to any liability) for violations thereof or
other damages in connection therewith, subject only to the reserve, if any, set
forth in the Financial Statements. No product sold, licensed, distributed or
delivered by Parent is subject to any guaranty, warranty, or other indemnity
beyond the applicable standard terms and conditions of sale or lease, except for
such guarantees, warranties and indemnities that are implied under Applicable
Law and not disclaimable.
 
3.28   Absence of Certain Business Practices.  Neither Parent nor any employee,
officer, director or Affiliate of Parent, or any other Person acting on behalf
of any of them, has, with respect to, on behalf of or to otherwise further the
interests of Parent, (a) used funds for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity, (b)
made any direct or indirect unlawful payments to foreign or domestic government
officials or employees, (c) established or maintained any unlawful or unrecorded
funds or other assets or to foreign or domestic political parties or campaigns
or violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended, or the OECD Convention on Combating Bribery of
 

 
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Foreign Public Officials in Business Transactions; (d) made any bribe, kickback
or other unlawful payment or (e) made any material favor or gift which is not,
in good faith, believed by such Person to be fully deductible for any income tax
purposes and which was, in fact, so deducted.
 
3.29   Compliance with Securities Laws and Listing Requirements.
 
(a)           Parent has complied with all material provisions relating to the
issuance of securities, and for the registration thereof, under the Securities
Act, other applicable securities laws, and all applicable state securities laws
in connection with any and all of its stock issuances. There are no outstanding,
pending or threatened stop orders or other actions or investigations relating
thereto involving federal and state securities laws. All issued and outstanding
shares of the Parent Common Stock were to the Knowledge of Parent offered and
sold in compliance with federal and state securities laws and were not offered,
sold or issued in violation of any preemptive right, right of first refusal or
right of first offer and are not subject to any right of rescission.
 
(b)           All information regarding Parent which has been provided to the
Company by Parent or set forth in any document or other communication,
disseminated to any former, existing or potential shareholders of Parent or to
the public or filed with FINRA, the SEC, or any state securities regulators or
authorities is to the Knowledge of Parent true, complete, accurate in all
material respects, not misleading, and was and is in full compliance with all
securities laws and regulations.
 
(c)           Parent to its Knowledge has timely filed all required documents,
reports and schedules with the SEC, the FINRA and any applicable state or
regional securities regulators or authorities (collectively, the “Parent SEC
Documents”) except where the failure to so timely file is not or has not been
material to the operations of parent taken as a whole.  As of their respective
dates, the Parent SEC Documents complied in all material respects with the
requirements of the Securities Act, the Exchange Act, FINRA rules and
regulations and state and regional securities laws and  regulations, as the case
may be, and, at the respective times they were filed, none of the Parent SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements (including, in each case, any notes
thereto) of Parent included in the Parent SEC Documents complied as to form and
substance in all material respects with applicable accounting requirements and
the rules and regulations of the SEC with respect thereto, were prepared in
accordance with generally accepted accounting principles (except as may be
indicated therein or in the notes thereto) applied on a consistent basis during
the periods involved (except as may be indicated therein or in the notes
thereto) and fairly presented in all material respects the financial position of
Parent as of the respective dates thereof and the results of its operations and
its cash flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments and to any other adjustments
described therein).
 

 
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(d)           There are no disagreements of any kind presently existing, or
reasonably anticipated by Parent to arise, between the accountants and lawyers
formerly or presently employed by Parent and Parent is current with respect to
any fees owed to its accountants and lawyers.
 
(e)           Parent’s Common Stock currently trades on the Over-The-Counter
Bulletin Board (the “OCTBB”) under the symbol “AMHN.OB” and Parent has and
continues to satisfy all of the requirements of the OTCBB for such listing and
for the trading of Parent Common Stock thereunder.
 
3.30   Disclosures.  Neither this Agreement (including any Exhibit or Schedule
hereto) nor any other Transaction Document to which Parent is a party, nor any
report, certificate or instrument furnished to Company in connection with the
transactions contemplated in this Agreement or any other Transaction Document to
which Parent is a party, when read together, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein, not misleading.
 
4.           Pre-Closing Covenants of the Parties.
 
4.1   Conduct of Business.  Except as contemplated by this Agreement or to the
extent that the other party otherwise consents in writing, from the date of this
Agreement until the Closing, each party covenants and agrees that it will not:
 
(a)           fail to act in the ordinary course of business and consistent with
past practices of such party;
 
(b)           take any action, or fail to take any action, that would be
required to be listed on Schedule 2.26 or Schedule 3.26 if such action or
failure to act had occurred after March 31, 2011 and prior to the date hereof;
 
(c)           (i) merge or consolidate with or into any other Person;
(ii) dissolve or liquidate; (iii) sell, lease or exclusively license all or
substantially all of its assets; or (iv) permit the sale or transfer of any
shares of capital stock or interests therein;
 
(d)           issue, sell, pledge, dispose of, encumber or deliver (whether
through the issuance or granting of any options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any securities of any class or
any options, warrants, calls, rights, commitments, agreements, arrangements or
undertakings to issue, deliver or sell, or cause to be issued, delivered or
sold, securities of any class;
 
(e)           except as specifically contemplated by this Agreement, change,
amend, modify or repeal any provision of its Charter Documents;
 
(f)           guarantee, endorse or otherwise become liable or responsible for
the obligations of any other Person (other than endorsements of checks in the
ordinary course) or make any loans, advances or capital contributions to, or
investments in, any Person;
 

 
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(g)           make any settlement of or compromise any Tax liability, change any
Tax election or Tax method of accounting or make any new Tax election or adopt
any new Tax method of accounting; surrender any right to claim a refund of
Taxes; consent to any extension or waiver of the limitation period applicable to
any Tax claim or assessment; or take any other action that would have the effect
of increasing the Tax liability of such party for any period after the Closing
Date or decreasing any Tax attribute of such party existing on the Closing Date;
 
(h)           except as required by GAAP, Applicable Law or circumstances which
did not exist as of such date, change any of the accounting principles or
practices used by it;
 
(i)           commence a lawsuit, administrative proceeding, mediation,
arbitration or other similar proceeding other than relating to or arising out of
this Agreement or the agreements and transactions contemplated hereby;
 
(j)           make any loan to, or enter into any transaction directly or
indirectly with, any of its Stockholders (with the exception of funds loaned to
Parent from its majority Stockholder), Members directors, officers or employees,
including any member of his or her immediate family or Affiliates, as
applicable, other than transactions contemplated by this Agreement;
 
(k)           declare, pay or set aside assets for any dividend or otherwise or
declare or make any other distribution with respect to its securities, or
purchase, redeem or acquire any securities;
 
(l)           approve, propose, authorize any of, or commit or agree to take any
of, the foregoing actions.
 
4.2   Access and Information.  Subject to Applicable Law, until the Closing,
each party will afford other party and their representatives (including
accountants and counsel) reasonable access to all properties, books, records,
and Tax Returns and all other information with respect to its business, together
with the opportunity to make copies of such books, records and other documents
and to discuss the business of such party with such directors, officers and
counsel as the other party may reasonably request.  In addition to the
foregoing, each party shall deliver to the other party, (a) as soon as
practicable after the end of each quarterly accounting period of such party
following the date hereof, and in any event within 45 days after the end of each
such quarterly period, unaudited financial statements (consisting of a balance
sheet, statement of operations and statement of cash flows) as of the end of
each such quarterly period, in each case prepared in accordance with GAAP,
subject to changes resulting from normal year end audit adjustments, which will
not be material individually or in the aggregate.  All information provided
pursuant to this Agreement will remain subject in all respects to the
Confidentiality Agreement.
 
4.3   Third Party Consents.  After the date of this Agreement and prior to the
Closing, each party will use its best efforts to obtain each Consent under any
Contract required to be obtained in connection with the execution, delivery or
performance of this Agreement or any
 

 
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other Transaction Document by such Party or the consummation of the transactions
contemplated hereby or thereby.
 
4.4   Notification of Certain Matters.  Each party will give prompt notice to
the other party of (a) the discovery of any event, condition, fact or
circumstance that causes, caused, constitutes or constituted a breach in any
material respect of any representation or warranty of the party contained in
this Agreement and (b) the failure of the party to comply with or satisfy in any
material respect any covenant to be complied with by it hereunder.  No such
notification will affect the representations or warranties of the parties or the
conditions to their respective obligations hereunder.
 
4.5   Acquisition Proposal.
 
(a)           No Solicitation. From the date hereof through the earlier of the
termination of this Agreement or the Closing, neither party nor any of the
officers, directors, agents or representatives of such party, will, and each
party will cause its employees, officers, directors, Stockholders, Members,
agents and representatives not to (and will not authorize any of them to),
directly or indirectly (i) solicit, initiate, encourage, knowingly facilitate or
induce any inquiry with respect to, or the making, submission or announcement
of, any Acquisition Proposal with respect to such party; (ii) participate in any
discussions or negotiations regarding, or furnish to any Person any nonpublic
information with respect to, or take any other action to facilitate any
inquiries or the making of any proposal that constitutes or may reasonably be
expected to lead to, any Acquisition Proposal with respect to such party;
(iii) engage in discussions with any Person with respect to any Acquisition
Proposal with respect to such party, except as to the existence of these
provisions; (iv) approve, endorse, recommend or submit to a vote of its
Stockholders or Members any Acquisition Proposal with respect to such party; or
(v) enter into any letter of intent or similar document or any Contract
contemplating or otherwise relating to any Acquisition Proposal or transaction
contemplated thereby with respect to such party.
 
(b)           Notification of Unsolicited Acquisition Proposals.  From the date
hereof until the earlier of the termination of this Agreement or the Closing,
each party will immediately after receipt of any Acquisition Proposal or any
request for nonpublic information or inquiry that it reasonably believes could
lead to an Acquisition Proposal, provide the other party with oral and written
notice of the material terms and conditions of such Acquisition Proposal,
request or inquiry, and the identity of the Person or group making any such
Acquisition Proposal, request or inquiry and a true and complete copy of all
written materials provided in connection with such Acquisition Proposal, request
or inquiry.
 
4.6   Reverse Split and Amendment to Articles of Incorporation.  Parent shall
conduct in accordance with all applicable laws and regulations a reverse split
of Parent Common Stock pursuant to which each outstanding share of Parent Common
Stock  will be combined such that each Parent stockholder will own one (1) share
of Parent Common Stock for every 100 shares of Parent Common Stock previously
owned by such Person; amend its Articles of Incorporation to increase the number
of authorized shares of Parent Common Stock to 250,000,000; and change the name
of Parent to TherapeuticsMD, Inc.
 

 
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4.7   LTIP.  Parent shall amend the LTIP to increase the authorized shares for
issuance thereunder to 25,000,000.
 
4.8   Governmental Consents.  Promptly following the execution of this
Agreement, the parties will proceed to prepare and file with the appropriate
Governmental Entities such Consents that are necessary in order to consummate
the transactions contemplated by this Agreement and will diligently and
expeditiously prosecute, and will cooperate fully with each other in the
prosecution of, such matters.
 
4.9   Efforts to Consummate.  Subject to the terms and conditions of this
Agreement, each party to this Agreement shall act in good faith and use
commercially reasonable efforts to take or cause to be taken all actions, and do
or cause to be done all things, required under Applicable Law in order to
consummate the transactions contemplated hereby as expeditiously as reasonably
practicable, including (a) obtaining all authorizations, consents and approvals
of any Person which are required for or in connection with the consummation of
the transactions contemplated hereby and by the other Transaction Documents;
(b) taking any and all reasonable actions necessary to satisfy the conditions to
the other parties’ obligations hereunder as set forth in Section 5; and
(c) executing and delivering all agreements and documents required by the terms
hereof to be executed and delivered by such party on or prior to the
Closing.  Each party hereto shall refrain from taking any action to frustrate,
hinder or delay the satisfaction of closing conditions for the Closing of the
transactions contemplated by this Agreement.
 
4.10   Confidentiality.  No party shall, and each will cause its Affiliates not
to, disclose to any Person, either directly or indirectly, this Agreement, the
Transaction Documents, the transactions to be performed in connection with this
Agreement or the Transaction Documents, and the terms and conditions of each of
the foregoing, unless otherwise required by Applicable Laws (in which case the
disclosing party will provide sufficient advance written notice of such
disclosure to allow the other party reasonable time to seek temporary, interim
or permanent injunctions to such disclosure with the appropriate Governmental
Entities), without the prior written consent of the other party; provided, that
any party hereto may disclose such information to its Stockholders, Members,
directors, officers, employees, agents, financing sources or advisors (including
attorneys, accountants and financial advisors) who need to know such information
to consummate the transactions contemplated by this Agreement who shall be
instructed that the information is confidentiality and subject to restrictions
on disclosure and use, and provided further, that Parent may provide information
concerning this Agreement and the transactions contemplated hereby, including
delivery of copies of this Agreement or the Transaction Documents to
underwriters and others in connection with the registration of its securities
under the Securities Act, as amended, and any applicable state blue sky laws, as
it may deem necessary or appropriate in connection with a proposed public
offering of its securities.  After the Closing, Parent may provide information
with respect to this Agreement and the transactions contemplated hereby,
including the delivery of copies of this Agreement or the Transaction Documents
as my be required under any Applicable Law or considered appropriate in
connection with any proposed financing, transaction or other business matter
undertaken by Parent.
 

 
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5.           Conditions Precedent.
 
5.1   Conditions to Each Party’s Obligation.  The respective obligations of the
Company and Parent to effect the transactions contemplated by this Agreement are
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
 
(a)           Consents and Approvals.  The Company and Parent shall have
obtained from each Governmental Entity all approvals, waivers and Consents, if
any, necessary to consummate the transactions contemplated by this Agreement and
the other Transaction Documents.
 
(b)           No Injunctions or Restraints.  No action, suit, or proceeding
shall be pending or, to the Knowledge of any Party, threatened, before any court
or quasi-judicial or administrative agency of any federal, state, local, or
foreign jurisdiction, or before any arbitrator, wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would prevent the
consummation of the transactions contemplated by this Agreement or any other
Transaction Document.
 
(c)           Conduct of Business.  No action will have been taken, nor any
statute, rule, regulation, executive order, decree, injunction or other order
(whether temporary, preliminary or permanent) will have been enacted, by any
Governmental Entity that has the effect of materially limiting or restricting  a
Party’s conduct or operation of its business following the Closing, nor will any
proceeding seeking any of the foregoing be pending or threatened.
 
(d)           No Action.  No action shall have been taken, nor shall any
statute, rule or regulation have been enacted, by any Governmental Entity that
makes the consummation of the transactions contemplated by this Agreement or any
other Transaction Document illegal.
 
5.2   Conditions to Obligations of the Company.  The obligation of the Company
to effect the transactions contemplated by this Agreement is subject to the
satisfaction of the following conditions unless waived, in whole or in part, by
the Company:
 
(a)           Representations and Warranties.  Each of the representations and
warranties of Parent set forth in Section 3 shall be true and correct in all
material respects (determined without regard to any materiality or Material
Adverse Effect qualifiers contained in such representations and warranties) as
of the date of this Agreement and (except to the extent such representations and
warranties expressly speak as of an earlier date) as of the Effective Time as
though made on and as of the Effective Time.
 
(b)           Performance of Obligations of Parent.  Parent shall have performed
all obligations in all material respects required to be performed by it under
this Agreement at or prior to the Effective Time.
 
(c)           Material Adverse Effect.  No event or conditions shall have
occurred prior to the Closing Date or be reasonably likely to occur on or after
the Closing Date which,
 

 
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individually or in the aggregate with any other events or conditions, has had or
is reasonably likely to have a Material Adverse Effect.
 
(d)           Consents Under Agreements.  Parent shall have delivered to the
Company the third party consents listed on Schedule 3.6  in a form and substance
reasonably satisfactory to the Company, which consents constitute Consent or
approval of each Person that is a party to a Contract (including evidence of the
payment or any required payment) and whose Consent or approval will be required
in order to permit the consummation of the transactions contemplated hereby or
to prevent a breach of such Contract.
 
(e)           Stockholder Approval.  The holders of a majority of the
outstanding shares of Parent Common Stock shall have approved and adopted this
Agreement, the Merger and the other transactions contemplated hereby, and no
such approval and adoption shall have been withdrawn, rescinded or otherwise
revoked.
 
(f)           SEC Filings.                      Parent shall be current in all
required SEC filings as of the Effective Time.
 
(g)           Parent Reverse Split and Amendment to Articles of
Incorporation.  Parent shall have completed the Reverse Split and filed the
Articles of Amendment to the Articles of Incorporation as provided in Section
4.6.
 
(h)           LTIP.  Parent shall have amended the LTIP as provided in Section
4.7.
 
(i)           Legal Opinion.  The Company shall have received from Sommer &
Schneider, LLP, counsel to Parent, an opinion dated the Closing Date, in
substantially the form attached hereto as Exhibit E.
 
(j)           Resignation of Directors and Officers.  Effective on the Closing
Date, the sole officer, director and employee of Parent shall have resigned and
shall, subject to compliance with Rule 14f-1 of the Exchange Act, have appointed
those persons selected by the Company to the Parent’s board of directors.  The
Company understands that such appointments shall require a filing and
distribution of a notice to the Parent Stockholders in accordance with Rule
14f-1 of the Exchange Act. Each such resignation will state that Parent is in
not any way indebted or obligated to the resigning party for termination pay,
loans, advances, or otherwise and that the Company is fully released from any
and all indemnification obligations under the Parent Charter Documents or any
Contract.
 
(k)           Existing Indebtedness.  Parent shall have provided the Company
with evidence satisfactory to the Company that all liabilities of the Company
(whether listed on Schedule 3.9 or incurred after the date of this Agreement but
prior to Closing) have been satisfied except for the Convertible Notes in the
aggregate amount of $210,000, and the Unclaimed Dividends Payable in the
approximate amount of $42,000.
 
(l)           Conversion of Convertible Notes.  Parent shall have provided the
Company with the written commitment from the holders of the Convertible Notes
agreeing to
 

 
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convert the Convertible Notes to Parent Common Stock upon the earlier of the
closing of the equity purchase outlined in Section 5.2(m) below or thirty (30)
days after the Closing
 
(m)           Commitment for Equity Purchase.  The Company shall have received
one or more commitment letters in a form acceptable to the Company for the
purchase of up to 10,000,000 shares of Parent Common Stock at a purchase price
of no lower than $0.25 per share which purchase shall close within thirty (30)
days after the Closing.
 
(n)           Financial Statements.  Parent will have provided the Company with
a copy of its the unaudited consolidated financial statements (consisting of a
balance sheet, statement of operations and statement of cash flows) for the six
month period ended June 30, 2011, together with a certificate of its chief
financial officer certifying that such financial statements were prepared in
accordance with GAAP consistently applied and in accordance with Parent’s
historic past practice throughout the periods involved and fairly and accurately
present in all material respects the financial position, results of operations
and cash flows of Parent as of the dates, and for the periods, indicated
therein.
 
(o)           Certificate of Good Standing.  Parent will have provided the
Company with a certificate of good standing from the Secretary of State of the
State of Nevada and from those States identified on Schedule 3.1(a).
 
(p)           Certificate.  Parent shall have furnished the Company with a
certificate dated as of the Closing Date signed on its behalf by its Chief
Executive Officer to the effect that the conditions to Closing set forth in
Sections 5.2(a)-(h) have been satisfied and that no additional shares of Parent
Common Stock have been issued since the date of this Agreement.
 
(q)           Closing Deliveries.  All documents, instruments, certificates or
other items required to be delivered at the Closing by Parent and any other
Persons (other than Company) pursuant to this Section 5.2 shall have been
delivered.
 
(r)           Waiver.  The Company may waive any condition specified in this
Section 5.2 if it executes a writing so stating at or prior to Closing or shall
be deemed to have waived such condition if it closes the transaction.
 
5.3   Conditions to Obligations of Parent.  The obligation of Parent to effect
the transactions contemplated by this Agreement is subject to the satisfaction
of the following conditions unless waived, in whole or in part, by Parent:
 
(a)           Representations and Warranties.  Each of the representations and
warranties of the Company set forth in this Agreement shall be true and correct
in all material respects as of the date of this Agreement and (except to the
extent such representations and warranties expressly speak as of an earlier
date) as of the Effective Time as though made on and as of the Effective Time.
 

 
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(b)           Performance of Obligations of the Company.  The Company shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time.
 
(c)           Certificates of Good Standing.  The Company will have provided
Parent with a certificate from the Secretary of State of Delaware as to the
Company’s good standing.
 
(d)           No Material Adverse Effect.  No event or conditions shall have
occurred prior to the Closing Date or be reasonably likely to occur on or after
the Closing Date which, individually or in the aggregate with any other events
or conditions, has had or is reasonably likely to have a Material Adverse Effect
the Company.
 
(e)           Member Approval.  The Members owning a majority of the Units shall
have approved and adopted this Agreement, the Merger and the other transactions
contemplated hereby, and no such approval and adoption shall have been
withdrawn, rescinded or otherwise revoked.
 
(f)           Certificate.  The Company shall have furnished Parent with a
certificate dated as of the Closing Date signed on its behalf by its Chief
Executive Officer to the effect that the conditions to Closing set forth in
Sections 5.3(a), (b), (d) and (e) have been satisfied.
 
(g)           Lock-Up Agreements.  The Company shall have delivered to Parent
the required Lock-Up Agreements in the form attached hereto as Exhibit F.
 
(h)           Legal Opinion.  Parent shall have received from McCarthy, Sweeney
& Harkaway, P.C., counsel to Parent, an opinion dated the Closing Date, in
substantially the form attached hereto as Exhibit G.
 
(i)           Financial Statements.  The Company will have provided Parent with
a copy of its the unaudited consolidated financial statements (consisting of a
balance sheet, statement of operations and statement of cash flows) for the six
month period ended June 30, 2011, together with a certificate of its chief
financial officer certifying that such financial statements were prepared in
accordance with GAAP consistently applied and in accordance with the Company’s
historic past practice throughout the periods involved and fairly and accurately
present in all material respects the financial position, results of operations
and cash flows of the Company as of the dates, and for the periods, indicated
therein.
 
(j)           Closing Deliveries.  All documents, instruments, certificates or
other items required to be delivered at Closing by the Company pursuant to this
Section 5.3 shall have been delivered.
 
(k)           Waiver.  Parent may waive any condition specified in this Section
5.3 if it executes a writing so stating at or prior to the Closing or shall be
deemed to have waived such condition if it closes the transaction.
 

 
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6.           Closing.
 
6.1   Closing.  Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7, and subject to the satisfaction or waiver of the conditions set forth in
Section 5, the Closing shall take place on September 7, 2011 unless another
date, time or place is mutually agreed to in writing by Parent and the
Company.  If any of the conditions set forth in Section 5 are not satisfied or
waived at the time the Closing is to occur pursuant to this Section 6, Parent or
the Company may, by notice to the other, adjourn the Closing to a date specified
in that notice (but not later than the earlier of the second Business Day after
the conditions set forth in Section 5 have been so satisfied or waived and the
Termination Date).
 
6.2   Actions to Occur at Closing. At the Closing, the following documents shall
be delivered and the following actions occur:
 
(a)           The Company will deliver, or will cause to be delivered, to Parent
the following:
 
(i)           a certificate executed by the CEO of the Company as provided in
Section 5.3(f);
 
(ii)           the certificates, and other documents required to be delivered
pursuant to Section 5.2 of this Agreement;
 
(iii)           certified copies of resolutions adopted by the Company’s
directors and Members of the Company authorizing the Merger;
 
(iv)           written confirmation from 1st United Bank approving the Merger;
 
(v)           confirmation that the anti-dilution warrants previously issued to
Members have been canceled; and
 
(vi)            all other items, the delivery of which is a condition precedent
to the obligations of Parent as set forth herein;
 
(b)           Parent will deliver or cause to be delivered to the Company:
 
(i)           a certificate of the President of Parent as provided in Section
5.2(p);
 
(ii)           certified copy of resolution adopted by the Board of Directors of
Parent authorizing the Merger and all related corporate actions;
 
(iii)           a certificate from the State of Nevada and all other
jurisdictions listed in Schedule 3.1(a) dated within five business days of the
Closing to the effect that Parent is in good standing under the laws of Nevada
and such other jurisdictions;
 

 
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(iv)            a certificate from the State of Delaware dated within five
business days of the Closing to the effect that Merger Sub is in good standing
under the laws of Delaware;
 
(v)           the written resignation of the sole officer and director of Parent
and the written appointment of the Company’s nominees as directors as provided
in Section 5.2(k);
 
(vi)           such other instruments and documents as are required to be
delivered pursuant to the provisions of this Agreement; and
 
(vii)           all other items, the delivery of which is a condition precedent
to the obligations of the Company, as set forth herein.
 
7.           Post-Closing Covenants.
 
7.1   Financial Statements.  After the Closing, Parent shall timely file a
current report on Form 8-K to report the Merger. In addition, for a period of 12
months following the Merger, Parent shall use its commercially reasonable
efforts to timely file all reports and other documents required to be filed
under the Exchange Act.
 
7.2   Standard and Poor's Listing.  Parent shall maintain its listing with
Standard and Poor’s.
 
8.           Termination, Amendment and Waiver
 
8.1   Termination.  Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing:
 
(a)           By the mutual written consent of Parent and the Company;
 
(b)           By either party if (i) a claim is threatened or made against the
other party, including without limitation, any civil, criminal or regulatory
proceeding; (ii) there is a material adverse change in the financial condition
of the other party in an amount in excess of $50,000; or
 
(c)           By either party if such party determines in its reasonable good
faith that any of the conditions to Closing set forth in Section 5 will not be
met; provided such party has not materially contributed to the failure of such
condition to Closing; or
 
(d)           Automatically, without any action by any party to this Agreement,
at 5:00 p.m. (Eastern Time) on the 90th day after the date of this Agreement if
any condition to Closing has not then been satisfied or waived, unless such date
is extended by the written agreement of the parties.
 
8.2   Notice of Termination.  Any party to this Agreement desiring to terminate
this Agreement will give written notice of such termination to the other parties
to this Agreement.
 

 
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8.3   Effect of Termination.  If this Agreement is terminated pursuant to
Section 8.1, all further obligations of the parties under this Agreement will be
terminated without further liability of any party to the other party.  If this
Agreement is terminated by either party for any reason other than the reasons
set forth in Section 8.1, the terminating party shall pay the other party a
termination fee of $175,000.  Upon termination this Agreement, all provisions
shall become void and have no effect except for the provisions of this Section
8.3, Section 11.12 (regarding public announcements), Section 10 (regarding
confidentiality) and the other provisions of Section 11.
 
9.           Survival of Representations and Warranties.  Notwithstanding any
investigation conducted at any time by or on behalf of a party, all
representations, warranties, covenants and agreements of the parties in this
Agreement and in any other agreements, documents or certificates executed or
delivered by any party pursuant to this Agreement shall survive the execution,
delivery and performance of this Agreement.
 
10.           Confidentiality.  The Parties will keep confidential all
information and documents obtained from the other, including but not limited to
any information or documents provided pursuant to this Agreement or the
transactions contemplated thereby (except for any information disclosed to the
public pursuant to a press release authorized by the Parent and the Company);
and in the event the Closing does not occur or this Agreement is terminated for
any reason, will promptly return such documents and all copies of such documents
and all notes and other evidence thereof, including material stored on a
computer, and will not use such information for its own advantage, except to the
extent that (i) the information must be disclosed by law, (ii) the information
becomes publicly available by reason other than disclosure by the Party subject
to the confidentiality obligation, (iii) the information is independently
developed without use of or reference to the other Party’s confidential
information, (iv) the information is obtained from another source not obligated
to keep such information confidential, (v) the information is already publicly
known or known to the receiving Party when disclosed as demonstrated by written
documentation in the possession of such Party at such time, or (vi) in
connection with any legal proceeding hereunder.
 
11.           General Provisions.
 
11.1   Reasonable Efforts; Further Assurances.  Subject to the terms and
conditions of this Agreement, each party to this Agreement after the Effective
Time shall act in good faith and use commercially reasonable efforts to take or
cause to be taken all actions, and do or cause to be done all things, required
under Applicable Laws in order to give effect to the transactions contemplated
hereby as expeditiously as reasonably practicable.
 
11.2   No Waiver Relating to Claims for Fraud.  None of the provisions set forth
in this Agreement will be deemed a waiver by any party to this Agreement of any
right or remedy which such party may have at law or equity based on any other
party’s fraudulent acts or omissions, intentional misrepresentation or willful
breach, nor will any such provisions limit, or be deemed to limit (a) the
amounts of recovery sought or awarded in any such claim for fraud, intentional
misrepresentation or willful breach; (b) the time period during which a claim
for fraud, intentional misrepresentation or willful breach may be brought,
subject in any event to any statute of limitations; or (c) the recourse which
any such party may seek against another party
 

 
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with respect to a claim for fraud, intentional misrepresentation or willful
breach; provided, that with respect to such rights and remedies at law or
equity, the parties further acknowledge and agree that none of the provisions of
this Section 11.2 nor any reference to this Section 11.2 throughout this
Agreement, will be deemed a waiver of any defenses which may be available in
respect of actions or claims for fraud, intentional misrepresentation or willful
breach, including defenses of statutes of limitations.
 
11.3   Amendment and Modification.  This Agreement may be amended or modified by
the parties hereto in writing signed by the Company and Parent, provided, that
no amendment shall be made which by Applicable Law requires further approval by
Members or Stockholders without such further approval.
 
11.4   Waiver of Compliance.  Any failure of the Company or Parent to comply
with any obligation, covenant, agreement or condition contained herein may be
waived only if set forth in an instrument in writing signed by the party or
parties to be bound by such waiver (including, if such waiver is after the
Closing, the third-party beneficiaries set forth in Section 9), but such waiver
or failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any other failure.
 
11.5   Severability.  If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any Applicable Law or public
policy, all other terms and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated herein is not affected in any manner materially
adverse to any party.  Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Governmental Entity
making such determination is authorized and instructed to modify this Agreement
so as to effect the original intent of the parties as closely as possible in
order that the transactions contemplated herein are consummated as originally
contemplated to the fullest extent possible.
 
11.6   Expenses and Obligations.  Each party to this Agreement will bear all
fees and expenses incurred by such party in connection with, relating to or
arising out of the negotiation, preparation, execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby,
including financial advisors’, attorneys’, accountants’ and other professional
fees and expenses.
 
11.7   Parties in Interest.  This Agreement will be binding upon and inure
solely to the benefit of each party hereto and their successors and assigns, and
nothing in this Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies of any nature whatsoever under or by reason
of this Agreement.
 
11.8 Notices.  All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered by hand, mailed by registered or
certified mail (return receipt requested), sent by facsimile, sent by Federal
Express or other recognized overnight courier to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
 

 
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If to the Company, to:
 
Mr. Rob Finizio, President
vitaMedMD, LLC
951 Broken Sound Parkway
Suite 300-320
Boca Raton, FL33487
 
with a copy to:
 
Susan J. King, Esq.
McCarthy, Sweeney & Harkaway, P.C.
1825 K St. NW, Suite 700
Washington, DC 20006
 
If to Parent, to:
 
Mr. Jeffrey D. Howes, President
AMHN, Inc.
10611 N. Hayden Rd., Suite D106
Scottsdale, AZ  85260
 
with copy to:
 
Joel C. Schneider, Esq.
Sommer & Schneider, LLP
595 Stewart Avenue, Suite 710
Garden City, NY  11530
 
Any of the above addresses may be changed at any time by notice given as
provided above; provided, that any such notice of change of address shall be
effective only upon receipt.  All notices, requests or instructions given in
accordance herewith shall be deemed received on the date of delivery, if hand
delivered, on the date of receipt, if transmitted by facsimile, three Business
Days after the date of mailing, if mailed by registered or certified mail,
return receipt requested and one Business Day after the date of sending, if sent
by Federal Express or other recognized overnight courier.
 
11.9   Counterparts.  This Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other parties, it being understood that all parties need not sign the same
counterpart.
 
11.10   Time.  Time is of the essence in each and every provision of this
Agreement.
 

 
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11.11   Entire Agreement.  This Agreement (which term shall be deemed to include
the exhibits and schedules hereto and the other certificates, documents and
instruments delivered hereunder), the other Transaction Documents and the
Confidentiality Agreement constitute the entire agreement of the parties hereto
and supersede all prior agreements, letters of intent and understandings, both
written and oral, among the parties with respect to the subject matter of this
Agreement, the other Transaction Documents and the Confidentiality Agreement.
 
11.12   Public Announcements.  Except for statements made or press releases
issued (a) pursuant to the Securities Act or the Exchange Act; (b) pursuant to
any listing agreement with any national securities exchange or the FINRA; or
(c) as otherwise required by law, neither the Company or Parent will not issue
any press release or otherwise make any public statements with respect to this
Agreement or the transactions contemplated hereby without the express prior
written approval of the other Party.
 
11.13   Attorney's Fees.  In any action or proceeding instituted by a party
arising in whole or in part under, related to, based on, or in connection with,
this Agreement or the subject matter hereof, the prevailing party shall be
entitled to receive from the losing party reasonable attorney’s fees, costs and
expenses incurred in connection therewith, including any appeals therefrom.  The
prevailing party shall be the one which substantially receives the relief sought
by it in connection with any arbitration or proceeding.
 
11.14   Assignment.  Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto, whether by
operation of law or otherwise.  Any assignment in violation of the foregoing
shall be null and void.
 
11.15   Governing Law; Jurisdiction and Venue.  THIS AGREEMENT, AND ANY MATTER
OR DISPUTE ARISING HEREUNDER OR IN CONNECTION WITH THIS AGREEMENT, WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA
WITHOUT GIVING EFFECT TO THE LAWS OR RULES OF THE STATE OF FLORIDA RELATING TO
CONFLICT OF LAWS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE EXCLUSIVE
JURISDICTION OF:  (I) ANY STATE COURTS OF THE STATE OF FLORIDA AND (II) ANY
FEDERAL COURT LOCATED IN THE STATE OF FLORIDA, AS WELL AS TO THE JURISDICTION OF
ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR THE PURPOSE OF
ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY HEREBY
EXPRESSLY WAIVES ANY AND ALL RIGHTS TO BRING ANY SUIT, ACTION OR OTHER
PROCEEDING IN OR BEFORE ANY COURT OR TRIBUNAL OTHER THAN THOSE LOCATED IN THE
STATE OF FLORIDA.  IN ADDITION, EACH PARTY CONSENTS TO THE SERVICE OF PROCESS BY
PERSONAL SERVICE OR ANY MANNER IN WHICH NOTICES MAY BE DELIVERED HEREUNDER IN
ACCORDANCE WITH THIS AGREEMENT.
 

 
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11.16   Rules of Construction.
 
(a)           Each of the parties acknowledges that it has been represented by
independent counsel of its choice throughout all negotiations that have preceded
the execution of this Agreement and that it has executed the same with consent
and upon the advice of said independent counsel.  Each party and its counsel
cooperated in the drafting and preparation of this Agreement and the documents
referred to herein, and any and all drafts relating thereto shall be deemed the
work product of the parties and may not be construed against any party by reason
of its preparation. Accordingly, any rule of law or any legal decision that
would require interpretation of any ambiguities in this Agreement against any
party that draft it is of no application and is hereby expressly waived.
 
(b)           All references in this Agreement to Exhibits, Schedules, Sections,
subsections and other subdivisions refer to the corresponding Exhibits,
Schedules, Sections, subsections and other subdivisions of this Agreement unless
expressly provided otherwise.  Titles appearing at the beginning of any
Articles, Sections, subsections or other subdivisions of this Agreement are for
convenience only, do not constitute any part of such Sections, subsections or
other subdivisions, and shall be disregarded in construing the language
contained therein.  The words “this Agreement,” “herein,” “hereby,” “hereunder”
and “hereof” and words of similar import, refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited.  The words “this
Section,” “this subsection” and words of similar import, refer only to the
Sections or subsections hereof in which such words occur.  The word “including”
(in its various forms) means “including, without limitation.”  Pronouns in
masculine, feminine or neuter genders shall be construed to state and include
any other gender and words, terms and titles (including terms defined herein) in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise expressly requires.  Unless the context otherwise
requires, all defined terms contained herein shall include the singular and
plural and the conjunctive and disjunctive forms of such defined terms.  Unless
the context otherwise requires, all references to a specific time shall refer to
Florida time.
 
(c)           Any information set forth in a schedule to this Agreement shall be
deemed to be disclosed solely for purposes of the section of this Agreement to
which such schedule applies, except to the extent that such information is
cross-referenced in another schedule.  If there is any inconsistency between the
statements in the body of this Agreement and those in the schedule, the
statements in the body of this Agreement will control.  Nothing in a schedule
will be deemed adequate to disclose an exception to a representation or warranty
made herein, unless the schedule identifies the exception with reasonable
particularity and describes the relevant facts in reasonable detail.  The mere
listing (or inclusion of a copy) of a document or other item in a schedule will
not be deemed adequate to disclose an exception to a representation or warranty
made in this Agreement (unless the representation or warranty pertains to the
existence of the document or other item itself).
 
(d)           Notwithstanding anything contained in this Agreement to the
contrary, except as otherwise expressly provided in this Agreement, the parties
hereto covenant and agree that no amount shall be (or is intended to be)
included, in whole or in part (either as an increase or a reduction), more than
once in the calculation of (including any component of) the Merger
 

 
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consideration or any component thereof or calculation relating thereto, or any
other calculated amount pursuant to this Agreement if the effect of such
additional inclusion (either as an increase or a reduction) would be to cause
such amount to be over- or under-counted for purposes of the transactions
contemplated by this Agreement.  The parties hereto further covenant and agree
that if any provision of this Agreement requires an amount or calculation to be
“determined in accordance with this Agreement and GAAP” (or words of similar
import), then to the extent that the terms of this Agreement conflict with, or
are inconsistent with, GAAP in connection with such determination, the terms of
this Agreement shall control.
 
[Signature Page Follows]
 

 
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be signed, all
as of the date first written above.
 

   
VITAMEDMD, LLC
               
By:
/s/ Robert Finizio
     
Robert Finizio, President
       

 

   
AMHN, INC.
               
By:
/s/ Jeffrey D. Howes
     
Jeffrey D. Howes, President
       

 

   
VITAMED ACQUISITION, LLC
               
By:
/s/ Jeffrey D. Howes
     
Jeffrey D. Howes, Managing Member
       

 
 

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EXHIBIT A
 
DEFINED TERMS
 
“Acquisition Proposal” means any offer or proposal relating to any transaction
or series of related transactions other than the transactions contemplated by
this Agreement involving (a) any acquisition or purchase by any Person of any
interest in the voting securities or other capital stock of the Company or any
tender offer or exchange offer that if consummated would result in any Person or
group (other than the Stockholders) beneficially owning voting securities or
other capital stock of the Company, or any merger, consolidation, business
combination or similar transaction involving the Company; (b) any sale, lease
(other than in the ordinary course of business), exchange, transfer, license
(other than in the ordinary course of business), acquisition or disposition of
more than 10% of the assets of the Company; or (c) any liquidation or
dissolution of the Company.  “Acquisition Proposal” shall not include any
Promissory Note(s) issued by the Company to any Person in connection with a loan
for working capital between the execution of this Agreement and either the
Closing Date or any termination of this Agreement pursuant to Section 8.
 
“Affiliate” means, with respect to any Person, any other Person controlling,
controlled by or under common control with such Person.  For purposes of this
definition and this Agreement, the term “control” (and correlative terms) means
the power, whether by contract, equity ownership or otherwise, to direct the
policies or management of a Person.
 
“Agreement” has the meaning set forth in the Preamble.
 
“Applicable Laws” means all laws, statutes, constitutions, treaties, directives,
rules, regulations, principles of common law, resolutions, codes, ordinances,
requirements, judgments, orders, decrees, injunctions, and writs of any
Governmental Entity which has, or the Company believes is reasonably likely to
have, jurisdiction over the Company or the businesses, operations or assets of
the Company, as they may be in effect on or prior to the Closing.
 
“Business Day” means any day other than (a) a Saturday, Sunday or federal
holiday or (b) a day on which commercial banks in the state of Florida are
authorized or required to be closed.
 
“Certificate” means a certificate representing any Outstanding Shares.
 
“Closing” has the meaning set forth in Section 1.3.
 
“Closing Date” has the meaning set forth in Section 1.3.
 
“Code” means the United States Internal Revenue Code of 1986, as amended.  All
references to the Code, U.S. Treasury regulations or other governmental
pronouncements shall be deemed to include references to any applicable successor
regulations or amending pronouncement.
 
“Company” has the meaning set forth in the Preamble.
 

 
 

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“Company Charter Documents” has the meaning set forth in Section 2.1(b).
 
“Company Disclosure Schedule” has the meaning set forth in Section 2.
 
“Company Financial Statements” has the meaning set forth in Section 2.8.
 
“Company Options” means the options described in Sections 1.8 and 1.9.
 
“Company Plan” has the meaning set forth in Section 1.8.
 
“Company Units” or “Units” means the membership units of the Company.
 
“Company Warrant” has the meaning set forth in Section 1.10.
 
“Confidentiality Agreement” means the Mutual Confidentiality Agreement, dated as
of July 13, 2011 by and between the Company and Parent.
 
“Consents” means all consents, approvals, orders or authorizations of, or
registration, qualification, designation, declaration or filing with, any
Governmental Entity, and all consents, waivers and approvals of third Persons.
 
“Contract” means any written, oral or other agreement, contract, subcontract,
settlement agreement, lease, binding understanding, instrument, note, option,
warranty, purchase order, license, sublicense, insurance policy, benefit plan or
legally binding commitment or undertaking of any nature to which the reference
Person is a party or by which such Person, or any of its properties or assets,
is bound or affected.
 
“Conversion Ratio” has the meaning set forth in Section 1.6.
 
“Convertible Notes” means any unsecured debt obligation of Parent which is
convertible into shares of Parent Common Stock, as identified in Schedule
3.2(b).
 
“DLLCA” has the meaning set forth in the Recitals.
 
“Effective Time” has the meaning set forth in Section 1.3.
 
“Employee Benefit Plans” means the following, whether written or oral and
regardless of whether voluntarily sponsored or mandatorily sponsored pursuant to
the Applicable Laws of any Governmental Entity:  (a) any nonqualified deferred
compensation or retirement plan or arrangement that is an Employee Pension
Benefit Plan; (b) any qualified defined contribution retirement plan or
arrangement that is an Employee Pension Plan; (c) any qualified defined benefit
retirement plan or arrangement that is an Employee Pension Benefit Plan; (d) any
Employee Welfare Benefit Plan or fringe benefit plan or program; (e) any profit
sharing, bonus, stock option, stock purchase, consulting, employment, severance
or incentive plan, agreement or arrangement; (f) any plan, agreement or
arrangement providing benefits related to clubs, vacation, childcare, parenting,
sabbatical or sick leave; and (g) each other employee benefit plan, agreement,
arrangement, program, practice or understanding that is not described previously
in this definition.
 

 
 

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“Employee Option” has the meaning set forth in Section 1.8.
 
“Employee Pension Benefit Plan” has the meaning set forth in Section 3(2) of
ERISA and specifically includes, but is not limited to, any plan operated
pursuant to the laws of any Governmental Entity other than the United States.
 
“Employee Welfare Benefit Plan” has the meaning set forth in Section 3(1) of
ERISA and specifically includes, but is not limited to, any plan operated
pursuant to the laws of any Governmental Entity other than the United
States.”Environmental Law” means any Applicable Law relating or pertaining to
the public health and safety (including workplace health and safety) or the
environment or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, removal, discharge or
disposal of Hazardous Materials, including, (a) the Solid Waste Disposal Act,
42 U.S.C. § 6901 et seq., as amended; (b) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., as amended;
(c) the Clean Water Act, 33 U.S.C. § 1251 et seq., as amended; (d) the Clean Air
Act, 42 U.S.C. § 7401 et seq., as amended; (e) the Toxic Substances Control Act,
15 U.S.C. § 2601 et seq., as amended; (f) the Emergency Planning and Community
Right To Know Act, 42 U.S.C. § 11001 et seq., as amended; (g) the Occupational
Safety and Health Act, 29 U.S.C. § 651 et seq., as amended; and (h) analogous
laws and regulations implemented in the European Union, its member states, and
any other country in which the Company conducts business.
 
“Environmental Law” means any Applicable Law relating or pertaining to the
public health and safety (including workplace health and safety) or the
environment or otherwise governing the generation, use, handling, collection,
treatment, storage, transportation, recovery, recycling, removal, discharge or
disposal of Hazardous Materials, including, (a) the Solid Waste Disposal Act,
42 U.S.C. § 6901 et seq., as amended; (b) the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq., as amended;
(c) the Clean Water Act, 33 U.S.C. § 1251 et seq., as amended; (d) the Clean Air
Act, 42 U.S.C. § 7401 et seq., as amended; (e) the Toxic Substances Control Act,
15 U.S.C. § 2601 et seq., as amended; (f) the Emergency Planning and Community
Right To Know Act, 42 U.S.C. § 11001 et seq., as amended; (g) the Occupational
Safety and Health Act, 29 U.S.C. § 651 et seq., as amended; and (h) analogous
laws and regulations implemented in the European Union, its member states, and
any other country in which the Company conducts business.
 
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“FINRA” means the Financial Industry Regulatory Authority.
 
“Foreign Export and Import Laws” means the laws and regulations of a foreign
government regulating exports, imports or re-exports to or from the foreign
country, including the export or re-export of any goods, services or technical
data.
 
“GAAP” means generally accepted accounting principles in the United States.
 

 
 

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“Governmental Entity” means any national, state, municipal, provisional, local
or foreign government, ay instrumentality, subdivision, department, ministry,
board, court, administrative agency or commission, or other governmental entity
or instrumentality or political subdivision thereof, or any quasi-governmental
or private body exercising any executive, legislative, judicial, regulatory,
taxing, importing or other governmental functions.
 
“Hazardous Material” means (a) any hazardous waste, hazardous substance, toxic
pollutant, hazardous air pollutant or hazardous chemical (as any of such terms
may be defined under, or for the purpose of, any Environmental Law);
(b) asbestos; (c) polychlorinated biphenyls; (d) petroleum or petroleum
products; (e) underground storage tanks, whether empty, filled or partially
filled with any substance; (f) any substance the presence of which on the
property in question is prohibited under any Environmental Law; or (g) any other
substance that under any Environmental Law requires special handling or
notification of or reporting to any federal, state or local governmental entity
in its generation, use, handling, collection, treatment, storage,
transportation, removal, discharge or disposal.
 
“Indebtedness” without duplication, means (a) all indebtedness (including the
principal amount thereof or, if applicable, the accreted amount thereof and the
amount of accrued and unpaid interest thereon) of a Party, whether or not
represented by bonds, debentures, notes or other securities, for the repayment
of money borrowed, whether owing to banks, financial institutions, on equipment
leases or otherwise; (b) all deferred indebtedness of a Party for the payment of
the purchase price of property or assets purchased; (c) all obligations of a
Party to pay rent or other payment amounts under a lease of real or Personal
Property which is required to be classified as a capital lease or a liability on
the face of a balance sheet prepared in accordance with GAAP; (d) any
outstanding reimbursement obligation of a Party with respect to letters of
credit, bankers’ acceptances or similar facilities issued for the account of a
Party; (e) any payment obligation of a Party under any interest rate swap
agreement, forward rate agreement, interest rate cap or collar agreement or
other financial agreement or arrangement entered into for the purpose of
limiting or managing interest rate risks; (f) all indebtedness for borrowed
money secured by any Lien existing on property owned by a Party, whether or not
indebtedness secured thereby will have been assumed; (g) all guaranties,
endorsements, assumptions and other contingent obligations of a Party in respect
of, or to purchase or to otherwise acquire, indebtedness for borrowed money of
others; (h) all premiums, penalties and change of control payments required to
be paid or offered in respect of any of the foregoing as a result of the
consummation of the transactions contemplated by this Agreement regardless if
any of such are actually paid; and (i) all obligations of a Party, whether
interest bearing or otherwise, owed to any Stockholder, or any Stockholder’s
Affiliates, Member or Member's Affiliates.
 
“Interim Financial Statements” means the financial statements for the three (3)
month period ending March 31, 2011, and, when delivered by a Party, the
financial statements for the six (6) month period ending June 30, 2011.
 
“Intellectual Property” means all intellectual property rights arising under the
laws of the United States or of any other jurisdiction, including all such
rights in any of the following:  (a) patents, patent applications, statutory
invention registrations, including reissues, divisions, continuations,
continuations in part, and reexaminations; (b) trademarks, service marks, trade
dress, logos, slogans, and all identifiers of source, including all goodwill
therein,
 

 
 

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and any and all common law rights, and registrations and applications for
registration thereof, all rights therein, trade names, fictitious business names
(d/b/a’s), URL’s and domain names; (c) copyrights and works of authorship in any
media (including computer programs, Software, databases and compilations, files,
applications, Internet site content, and documentation and related items), moral
rights, mask works, whether or not registered, and registrations and
applications for registration for any of the foregoing; and (d) trade secrets
and confidential information, including all source code, documentation, know
how, processes, technology, formulae, customer lists, business and marketing
plans, inventions, and marketing information.
 
“Knowledge” means, with respect to a specified Person, the actual knowledge of
such specified Person; and as to the Company will also include the actual
knowledge of the Company and the Company’s officers and directors, and as to
Parent, will include the actual knowledge of the Parent and the sole officer of
Parent.
 
“Leased Real Property” means all real property currently leased or otherwise
used or occupied for the operation of business.
 
“Legal Proceeding” means any claim, action, suit, settlement, hearing,
investigation or proceeding, or governmental inquiry.
 
“Lien” and “Liens” means liens, pledges, voting agreements, voting trusts, proxy
agreements, security interests, mortgages, and other possessory interests,
conditional sale or other title retention agreements, assessments, easements,
rights-of-way, covenants, restrictions, rights of first refusal, encroachments,
and other burdens, options or encumbrances of any kind.
 
“Lock-Up Agreements” means the lock-up agreements referred to in Section 5.3(g).
 
“LTIP Options” has the meaning set forth in Section 3.2(b).
 
“LTIP” has the meaning set forth in the Recitals.
 
“Material Adverse Effect” when used with respect to either the Company or Parent
means any result, occurrence, fact, change, event or effect (whether or not
foreseeable or known as of the date of the Closing or covered by insurance)
that, individually or in the aggregate with any such other results, occurrences,
facts, changes, events or effects, is or could reasonably be expected to be
(whether or not such result, occurrence, fact, change, event or effect has,
during the period or at any time in question, manifested itself in such party's
historical consolidated financial statements) materially adverse to the
business, operations, assets, financial condition, results of operations,
prospects or capitalization of the Party or (b) the ability of the party or its
Members or Stockholders to consummate any transaction contemplated by this
Agreement or any Transaction Documents.
 
“Material Contract” means with respect to Parent, any contract that is not
terminable by Parent at any time without penalty and with respect to the
Company, any Contract which involves receipts or expenditures by the Company of
more than $10,000 in any twelve month period or more than $25,000 in the
aggregate.
 

 
 

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“Member” means a Person admitted as a member of the Company.
 
“Merger” has the meaning in the Recitals.
 
“Merger Sub” has the meaning set forth in the Preamble.
 
“OCTBB” has the meaning set forth in Section 3.29(e).
 
“Outstanding Share” or “Outstanding Shares” means the shares of Parent Common
Stock issued and outstanding.
 
“Parent” has the meaning set forth in the Preamble.
 
“Parent Charter Documents” has the meaning set forth in Section 3.1(b).
 
“Parent Common Stock” has the meaning set forth in the Recitals.
 
“Parent Disclosure Schedule” has the meaning set forth in Section 3.
 
“Parent Financial Statements” has the meaning set forth in Section 3.8.
 
“Parent Intellectual Property” has the meaning set forth in Section 3.16.
 
“Parent Option” hast the meaning set forth in Section 1.8.
 
“Parent Preferred Stock” has the meaning set forth in the Recitals.
 
“Parent SEC Documents” has the meaning set forth in Section 3.29(c).
 
“Parent Stockholder” means an owner of shares of Parent Common Stock.
 
“Parent Warrant” has the meaning set forth in Section 1.8.
 
“Permits” means all franchises, permits, certificates, licenses, consents,
filings, sanctions, registrations, variances, exemptions, orders, authorizations
and approvals from, and declarations and filings with Governmental Entities.
 
“Permitted Encumbrances” means (a) statutory Liens for current Taxes not yet
past due and payable or being contested in good faith by appropriate proceedings
and for which adequate reserves are reflected on the Financial Statements;
(b) mechanics’, carriers’, workers’, repairers’ and other similar Liens imposed
by Applicable Law arising or incurred in the ordinary course of business and
consistent with past practices of a Party for obligations that are not yet past
due or that are being contested in good faith by appropriate proceedings and for
which adequate reserves are reflected on the Financial Statements; (c) Liens on
leases of real property arising from the provisions of such leases, including,
in relation to Leased Real Property, any agreements and/or conditions imposed on
the issuance of land use permits, zoning, business licenses, use permits or
other entitlements of various types issued by any Governmental Entity, necessary
or beneficial to the continued use and occupancy of such Leased Real Property or
the continuation of the business conducted by a Party; (d) pledges or deposits
made in the ordinary
 

 
 

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course of business and consistent with past practices of a Party in connection
with workers’ compensation, unemployment insurance and other social security
legislation; (e) zoning regulations and restrictive covenants and easements that
do not detract in any material respect from the value of each party's leasehold
estate in the Leased Real Property and do not materially and adversely affect,
impair or interfere with the use by a Party of any property affected thereby and
(f) utility easements, to serve or serving the Leased Real Property.
 
“Person” means an individual, corporation, partnership, limited liability
company, association, trust, unincorporated organization or other entity.
 
“Personal Property” means all of the machinery, equipment, equipment structures,
machinery, fixtures, hardware, systems, infrastructure, computer programs,
computer software, tools, motor vehicles, furniture, furnishings, leasehold
improvements, office equipment, inventory, supplies, plant, spare parts, and
other tangible or intangible personal property which are owned or leased by a
Party and which are used or held for use in its business or operations.
 
“Receivables” has the means the accounts receivable and trade accounts of a
Party as set forth on the Company Financial Statements and any Interim Financial
Statements.
 
“Reverse Split” has the meaning set forth in the Recitals.
 
“Rule 144” has the meaning set forth in Section 1.13(b).
 
‘SEC” means the U.S. Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Stockholders” means the holders of Parent Common Stock.
 
“Surviving Company” has the meaning set forth in Section 1.1.
 
“Tax” or “Taxes” means (a) any taxes, assessments, fees and other governmental
charges imposed by any Governmental Entity, including income, profits, gross
receipts, net proceeds, alternative or add on minimum, ad valorem, value added,
turnover, sales, use, property, personal property (tangible and intangible),
environmental, stamp, leasing, lease, user, excise, duty, franchise, capital
stock, transfer, registration, license, withholding, social security (or
similar), unemployment, disability, payroll, employment, social contributions,
fuel, excess profits, occupational, premium, windfall profit, severance,
estimated, or other charge of any kind whatsoever, including any interest,
penalty, or addition thereto, whether disputed or not; (b) any liability for the
payment of any amounts of the type described in clause (a) as a result of being
a member of an affiliated, consolidated, combined or unitary group for any
period; and (c) any liability for the payment of any amounts of the type
described in clause (a) or (b) as a result of the operation of law or any
express or implied obligation to indemnify any other Person.
 
“Tax Items” means items of income, gain, loss, deduction and credit or other
such items.
 

 
 

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“Tax Return” means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
 
“Taxing Authority” means, with respect to any Tax, the Governmental Entity or
political subdivision thereof that imposes such Tax, and the agency (if any)
charged with the collection of such Tax for such entity or subdivision,
including any governmental or quasi-Governmental Entity or agency that imposes,
or is charged with collecting, social security or similar charges or premiums.
 
“Transaction Documents” means, collectively, this Agreement, the Confidentiality
Agreement, and each other agreement, document and instrument required to be
executed in accordance herewith.
 
“Unit” has the meaning set forth in Section 1.7.
 
“U.S. Export and Import Laws” means the Arms Export Control Act (22 U.S.C.
2778), the International Traffic in Arms Regulations (ITAR) (22 CFR 120-130),
the Export Administration Act of 1979, as amended (50 U.S.C. 2401-2420), the
Export Administration Regulations (EAR) (15 CFR 730-774), the Foreign Assets
Control Regulations (31 CFR Parts 500-598), the laws and regulations
administered by Customs and Border Protection (19 CFR Parts 1-199) and all other
U.S. laws and regulations regulating exports, imports or re-exports to or from
the United States, including the export or re-export of goods, services or
technical data from the United States of America.
 

 
 

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EXHIBIT B
 
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION
 

 
 

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[ex-10_011.jpg]
 

 
 

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CERTIFICATE OF AMENDMENT AND RESTATEMENT
OF
ARTICLES OF INCORPORATION
OF
AMHN, INC.
A Nevada Corporation
 
The undersigned hereby certifies as follows:
 
1.           He is the duly elected and acting President of AMHN, Inc., a Nevada
corporation (the "Corporation").
 
2.           On _______________, the Board of Directors and a majority of the
shareholders approved the following actions:
 
a)           a name change of the Corporation from AMHN, Inc. to TherapeuticsMD,
Inc. and
 
b)           an increase in the number of shares of common stock authorized to
be issued to 250,000,000.
 
3.           In order to enact the above corporate actions, the Corporation's
Articles are hereby amended and restated to read in full as follows on the next
page:
 

 

 
(Remainder of this page intentionally left blank.)
 

 
 

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AMENDED AND RESTATED
ARTICLES OF INCORPORATED
OF
THERAPEUTICSMD, INC.
A NEVADA CORPORATION
 
ARTICLE I
CORPORATE NAME
 
The name of the corporation is TherapeuticsMD, Inc. (the "Corporation").
 
ARTICLE II
REGISTERED AGENT
 
The registered agent for the Corporation in the State of Nevada is Paracorp
Incorporated, 318 N. Carson Street, Suite 208, Carson City, Nevada  87901.
 
ARTICLE III
DURATION AND PURPOSE
 
The duration of the Corporation shall be perpetual.  The purpose of the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the NRS.
 
ARTICLE IV
CAPITAL STOCK
 
The total number of shares of all classes of capital stock that the Corporation
has the authority to issue is Two Hundred Sixty Million (260,000,000) shares of
which Two Hundred Fifty Million (250,000,000) shares will be designated common
stock, $0.001 par value per share ("Common Stock") and Ten Million (10,000,000)
shares will be designated preferred stock, $0.001 par value per share
("Preferred Stock").
 
The Ten Million (10,000,000) shares of Preferred Stock may be designated from
time to time in one or more series upon authorization of the Corporation's board
of directors.  The Corporation's board of directors, without further approval of
the Corporation's shareholder, will be authorized to fix the dividend rights and
terms, conversion rights, voting rights, redemption rights and terms,
liquidation preferences, and any other rights, preferences, privileges and
restrictions applicable to each series of Preferred Stock so designated.
 
ARTICLE V
NUMBER OF DIRECTORS
 
The business of the Corporation shall be managed by or under the direction of
the Corporation's Board of Directors.  The Corporation must maintain at least
one director at all times and initially sets the number of directors at four
members. The number of individuals comprising the Corporation's Board of
Directors shall be fixed upon resolution of the Board of Directors and
 

 
 

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may be increased or decreased from time to time in the manner provided in the
Corporation's Bylaws.
 
ARTICLE VI
BYLAWS
 
In furtherance and not in limitation of the powers conferred upon the Board of
Directors of the Corporation by the NRS, the Board of Directors shall have the
power to alter, amend, change, add to and repeal, from time to time, the Bylaws
of the Corporation, subject to the rights of the Corporation's shareholders
entitled to vote with respect thereto to alter, amend, change, add to and repeal
the Bylaws adopted by the Board of Directors of the Corporation.
 
ARTICLE VII
LIMITATION ON LIABILITY OF DIRECTORS AND OFFICERS
 
No director or officer of the Corporation shall be personally liable to the
Corporation or any of its shareholders for damages for breach of fiduciary duty
as a director or officer involving any act or omission of any act by such
director or officer, provided, however, that the foregoing provision shall not
eliminate or limit the liability of a director or officer (i) for acts or
omissions which involve intentional misconduct, fraud, or a known violation of
the law, or (ii) the payment of dividends in violation of Section 78.300 of the
NRS.  Any repeal or modification of this Article by the shareholders of the
Corporation shall be prospective only and shall not adversely affect any
limitations on the personal liability of a director or officer of the
Corporation for acts or omissions prior to such repeal or modification.
 
ARTICLE IX
INDEMNIFICATION
 
The Corporation shall, to the fullest extent permitted by the provisions of
78.502 of the NRS, as the same may be amended and supplemented, indemnify any
and all persons whom it shall have power to indemnify under said section from
and against any and all of the expenses, liabilities, or other matters referred
to in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified may
be entitled under the Corporation's Bylaws, agreement, vote of shareholders, or
disinterested directors, or otherwise, both as to action in his official
capacity whole holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such person.
 
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Amendment
and Restatement as of the ___ day of __________, 2011 with an effective date of
August 31, 2011.
 

 

           
Jeffrey D. Howes, President
 

 

 
 

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EXHIBIT C
 
AMHN, INC. 2009 LONG TERM INCENTIVE COMPENSATION PLAN
(as amended)
 

 
 

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AMHN, INC.
 
2009 LONG TERM INCENTIVE COMPENSATION PLAN
 
(As Amended)
 
1.           PURPOSES
 
The purposes of this Long Term Incentive Compensation Plan (the "Plan") are to
promote the long-term success of AMHN, Inc., a Nevada corporation (the
"Company") and to provide financial incentives to employees, members of the
Board, and advisers and consultants of the Company to strive for long-term
creation of stockholder value. The Plan provides long-term incentives to
employees, members of the Board, and advisers and consultants of the Company who
are able to contribute towards the creation of or have created stockholder value
by providing them stock options and other stock and cash incentives.
 
2.           DEFINITIONS
 
The following definitions shall be applicable throughout the Plan:
 
 
(a)
"Award" means an incentive award as described in Section 5(a).

 
 
(b)
"Board" means the Board of Directors of the Company.

 
 
(c)
"Change in Control" means the occurrence of one or more of the change in control
events set forth in Treasury Regulation Section 1.409A-3(i)(5).

 
 
(d)
"Chief Executive Officer" or "CEO" means the Chief Executive Officer of the
Company.

 
 
(e)
"Chief Financial Officer" or "CFO" means the Chief Financial Officer of the
Company.

 
 
(f)
"Code" means the Internal Revenue Code of 1986, as amended.

 
 
(g)
"Committee" means the Compensation Committee of the Board unless another
committee comprised of members of the Board is designated by the Board to
oversee and administer the Plan, provided, that the Committee shall consist of
the CFO and two or more members of the Board as the Board may designate from
time to time, each of whom shall satisfy such requirements as:

 
 
(i)
the Securities and Exchange Commission may establish for administrators acting
under plans intended to qualify for exemption under Rule 16b-3 or its successor
under the Exchange Act;

 
 
(ii)
the rules of a stock exchange on which the securities of the Company are traded
as may be established pursuant to its rule-making authority of such stock
exchange; and

 
 
(iii)
the Internal Revenue Service may establish for outside directors acting under
plans intended to qualify for exemption under Code Section 162(m).

 
 
 

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(h)
"Company" means AMHN, Inc., a Nevada corporation and its subsidiaries.  For
purposes of the Plan, any corporation or other entity in which the Company,
directly or indirectly, owns a 50% or greater interest at the time shall be
deemed a subsidiary.

 
 
(i)
"Covered Employee" shall have the meaning given that term by Code Section 162(m)
and income tax regulations promulgated thereunder.

 
 
(j)
"Disability" means a physical or mental medical condition that prevents the
Participant from performing the duties of his or her position with the Company
and is likely to last at least twelve months or result in death, as determined
by the Committee in its sole discretion.

 
 
(k)
"EVA Award" means the award described in Section 11.

 
 
(l)
"Exchange Act" means the federal Securities Exchange Act of 1934, as amended.

 
 
(m)
"Fair Market Value" means, with respect to the common stock of the Company,

 
 
(i)
the closing sale price of such common stock at 4:00  p.m. (Eastern Time) on the
principal United States national stock exchange on which the common stock of the
Company is traded, as determined by the Committee, or,

 
 
(ii)
if the common stock shall not have been traded on such date, the closing sale
price on such stock exchange on the first day prior thereto on which the common
stock was so traded, or,

 
 
(iii)
if the common stock is not traded on a United States national stock exchange,
such other amount as may be determined by the Committee by any fair and
reasonable means.

 
 
 
Fair Market Value determined by the Committee in good faith shall be final,
binding and conclusive on all parties.

 
 
(n)
"Incentive Stock Option" means an option to purchase the stock of the Company as
described in Code Section 422.

 
 
(o)
"LTIPA" means an agreement establishing the terms and conditions for an Award
granted under the Plan, including any applicable performance goals.

 
 
(p)
"Non-statutory Stock Option" means an option to purchase the stock of the
Company which is designated not to be an Incentive Stock Option.

 
 
(q)
"Participant" means, subject to the provisions of Section 11 with respect to EVA
Awards, a full-time employee of the Company, or a non-employee member of the
Board, a member of an advisory committee, or consultants of the operating
company who meets the requirements of Section 4(b).

 
 
(r)
"Performance Stock" means the award described in Section 9.

 
 
(s)
"Performance Unit" means the award described in Section 10.

 

 
 

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(t)
"Plan" means this AMHN, Inc. 2009 Long Term Incentive Compensation Plan.

 
 
(u)
"Restricted Stock" means the award described in Section 8.

 
 
(v)
"Restricted Stock Unit" means the award described in Section 8, denominated in
units, providing a Participant the right to receive payment at a future date
after the lapse of restrictions or achievement of performance criteria or other
conditions determined by the Committee.

 
 
(w)
"Service" means that the Participant’s service with the Company, whether as an
employee, adviser, consultant or member of the Board, is not interrupted or
terminated. The Participant’s Service shall not be deemed to have been
interrupted or terminated merely because of a change in the capacity in which
the Participant renders service to the Company as an employee, adviser,
consultant or member of the Board or a change in the entity for which the
Participant renders such service, provided, that there otherwise is no
interruption or termination of the Participant’s Service. For example, a change
in status from an employee of the Company to a consultant of an affiliate or a
member of the Board will not constitute an interruption of Service. The
Committee, in its sole discretion, may determine whether Service shall be
considered interrupted in the case of any leave of absence approved by the
Company, including sick leave, military leave or any other personal leave.

 
 
(x)
"Stock Appreciation Right" or "SAR" means the award described in Section 7.

 
 
(y)
"Stock Option" means the award described in Section 6, which may be either an
Incentive Stock Option or a Non-statutory Stock Option, as determined by the
Committee.

 
 
(z)
"Ten Percent Shareholder" means a person who owns (or is deemed to own pursuant
to Code Section 424(d)) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company (as defined
in Code Section 424).

 
3.           POWERS AND ADMINISTRATION
 
The Plan shall be administered by the Committee. The Committee shall have the
authority to construe and interpret the Plan and any Awards granted thereunder,
to establish and amend rules for Plan administration, to change the terms and
conditions of options and other Awards at or after grant, and to make all other
determinations which it deems necessary or advisable for the administration of
the Plan. The determinations of the Committee shall be made in accordance with
its judgment as to the best interests of the Company and its stockholders and in
accordance with the purposes of the Plan. The Committee may take action by a
meeting in which a quorum of the Committee is present. The meeting may be in
person, by telephone or in such other manner in which the members of the
Committee participating in the meeting may communicate directly with each other.
A majority of the members of the Committee shall constitute a quorum, and all
determinations of the Committee shall be made by a majority of its members. Any
determination of the Committee under the Plan may be made without notice or
meeting of the Committee, in writing signed by all the Committee members. The
Committee shall have the authority to reduce (but not increase) the payouts on
such Awards and the Committee shall have the authority to limit (but not waive)
the actual performance-based vesting of such Awards, in both cases in its sole
discretion. The Committee may prescribe rules and procedures for the
administration of the Plan and shall have the authority to delegate ministerial
duties to agents for the Committee (and allocate responsibilities among the
agents appointed by the Committee for the performance of the ministerial duties)
in the administration of the Plan.
 
 
 

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4.           ELIGIBILITY AND PARTICIPATION
 
 
(a)
Eligibility.  Only employees of the Company, members of the Board, and members
of advisory committees of the Company or consultants thereto, who are designated
by the Plan or selected by the Committee to participate in the Plan shall be
eligible to participate in the Plan.

 
 
(b)
Participation.  Each year the CEO shall present to the Committee a list of
employees of the Company that the CEO recommends be designated as Participants
for an upcoming Performance Period (or a concurrent Performance Period with
respect to a newly hired employee of the Company), proposed Awards to such
employees, and proposed terms for the LTIPAs for the proposed Awards to such
employees. In addition, the CEO may present recommended amendments to any
existing LTIPAs and the proposed Phase Level advancement for existing LTIPAs
with respect to EVA Awards. The Committee shall consider the CEO’s
recommendations and shall determine the Awards, if any, to be granted and the
terms of the LTIPAs for such Awards, any amendments to existing LTIPAs (subject
to the restrictions on the authority granted to the Committee in Section 3), and
Phase Level advancements.

 
 
 
Designation of an employee as a Participant for any Performance Period shall not
require the Committee to designate that person to be a Participant or to receive
an Award in any Performance Period or to receive the same type or amount of
Award as granted to the Participant in such year. Grants of Awards to
Participants need not be of the same type or amount and may have different
terms.  Employment with the Company prior to completion of or during a
Performance Period, or service on the Board or as a member of an advisory
committee of the Company and its subsidiaries or consultants thereto, does not
entitle the employee, director, consultant or adviser to participate in the Plan
or vest in any interest in any Award under the Plan. The Committee shall
consider all factors that it deems relevant in selecting Participants and in
determining the type and amount of their respective Awards.

 
5.           AWARDS AVAILABLE
 
 
(a)
Types of Awards.  The Awards available under the Plan shall consist of Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Stock, Performance Units, EVA Awards, and other stock or cash
awards, as described below.

 
 
(b)
Shares Available under the Plan.  There is hereby reserved for issuance under
the Plan an aggregate of Twenty-five Million (25,000,000) shares of the
Company's common stock. All shares issued under the Plan may be either
authorized and unissued shares or issued shares reacquired by the Company.
Shares covered by an Award granted under the Plan shall not be counted as used
unless and until they are actually issued and delivered to a Participant. Any
shares covered by an SAR shall be counted as used only to the extent shares are
actually issued to the Participant upon exercise of the right. In addition, any
shares of common stock exchanged by an optionee as full or partial payment to
the Company of the exercise price under any Stock Option exercised under the
Plan, any shares retained by the Company pursuant to a Participant’s tax
withholding election, and any shares covered by a Award which is settled in cash
shall be added to the shares available for Awards under the Plan. All of the
available shares may, but need not be issued pursuant to the exercise of
Incentive Stock Options.

 
 
 

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(c)
Annual Limit on Total Grants of Restricted Stock, Restricted Stock Units and
Performance Stock.  Notwithstanding anything else in this Section 5, the
Restricted Stock, Restricted Stock Units and Performance Shares granted under
the Plan in any one calendar year shall have annual limits to be determined by
the Committee.

 
 
(d)
Reversion of Shares.  If there is a lapse, expiration, termination or
cancellation of any Stock Option issued under the Plan prior to the issuance of
shares thereunder or if shares of common stock are issued under the Plan and
thereafter are reacquired by the Company, the shares subject to those options
and the reacquired shares shall be added to the shares available for Awards
under the Plan.

 
 
(e)
Limits on Individual Grants.  Under the Plan, no Participant may receive in any
calendar year:

 
 
(i)
Stock Options relating to more than 300,000 shares,

 
 
(ii)
Restricted Stock or Restricted Stock Units that are subject to the attainment of
Performance Goals below hereof relating to more than 250,000 shares,

 
 
(iii)
Stock Appreciation Rights relating to more than 250,000 shares,

 
 
(iv)
Performance Stock relating to more than 500,000 shares, or

 
 
(v)
A cash payment under a single Performance Unit Award, a single EVA Award, or
other cash bonus exceeding $100,000.

 
 
(f)
Adjustments.  The shares reserved for issuance and the limitations set forth
above shall be subject to adjustment in accordance with Sections 16 and 17
hereof.

 
6.           STOCK OPTIONS
 
 
(a)
Grant of Stock Options.  Stock Options may be granted to Participants by the
Committee at any time as determined by the Committee.

 
 
(b)
Terms of Stock Options.  The Committee shall determine the terms and conditions
of each Stock Option, the number of shares subject to the Stock Option, and
whether the Stock Option is an Incentive Stock Option or a Non-statutory Stock
Option. The option price for each Stock Option shall be determined by the
Committee but shall not be less than 100% of the Fair Market Value of the
Company’s common stock on the date the Stock Option is granted. Notwithstanding
the foregoing, a Stock Option may be granted with an exercise price lower than
that set forth in the preceding sentence if such Option is granted pursuant to
an assumption or substitution for another option in a manner satisfying the
provisions of Code Section 424(a).

 
 
(c)
Term of Stock Options.  Each Stock Option shall expire at such time as the
Committee shall determine at the time of grant.

 
 
(d)
Exercisability of Stock Options.  Each Stock Option shall be exercisable at such
time and subject to such terms and conditions as the Committee shall determine;
provided, however, that no Stock Option shall be exercisable later than the
tenth anniversary of its

 
 
 

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grant.  The option price, upon exercise of any Stock Option, shall be payable to
the Company in full by (i) cash payment or its equivalent, (ii) tendering
previously acquired shares (held for at least six months to the extent necessary
to avoid any variable accounting on such option) or purchased on the open market
and having a Fair Market Value at the time of exercise equal to the option
price, or certification of ownership of such previously-acquired shares, (iii)
delivery of a properly executed exercise notice, together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
proceeds from the option shares or loan proceeds to pay the exercise price and
any withholding taxes due to the Company, and (iv) such other methods of payment
as the Committee, at its discretion, deems appropriate, provided, that payment
of the Common Stock's par value shall not be made by deferred payment.

 
 
 
Except as otherwise provided in a LTIPA, in the event the Service of a
Participant holding a Stock Option terminates (other than upon the Participant’s
death or Disability), the Participant may exercise his or her Stock Option (to
the extent that the Participant was entitled to exercise such Stock Option as of
the date of termination) but only within such period of time ending on the
earlier of (i) the date three (3) months following the termination of the
Participant’s Service (or such longer or shorter period specified in the LTIPA
for such Stock Option), or (ii) the expiration of the term of the Stock Option
as set forth in the LTIPA. If, after termination, the Participant does not
exercise his or her Option within the time specified in the LTIPA, the Stock
Option shall thereafter terminate.

 
 
(e)
Vesting.  Subject to the provisions of Sections 5(f), 16 and 24, the total
number of shares of Common Stock subject to a Stock Option shall be subject to
the following vesting provisions of this Subsection 6(e):

 
 
(i)
The total number of shares of Common Stock subject to a Stock Option may, but
need not, vest and therefore become exercisable in periodic installments that
may, but need not, be equal.

 
 
(ii)
The Stock Option may be subject to such other terms and conditions on the time
or times when it may be exercised (which may be based on performance or other
criteria) as the Committee may deem appropriate.

 
 
(iii)
The vesting provisions of individual Stock Options may vary.

 
 
(iv)
The provisions of this Subsection 6(e) are subject to any Stock Option
provisions governing the minimum number of shares of Common Stock as to which a
Stock Option may be exercised.

 
 
(f)
Incentive Stock Option Requirements.  Stock Options granted under the Plan as
Incentive Stock Options shall have such terms as required by Code Sections 422
for an Incentive Stock Option, including, but not limited to, the following
terms in this Section 6(f).

 
 
(i)
Incentive Stock Options shall be granted only to employees of the Company.

 

 
 

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(ii)
The exercise price of each Incentive Stock Option shall be not less than one
hundred percent (100%) of the Fair Market Value of the Common Stock subject to
the Option on the date the Option is granted or one hundred ten percent (110%)
in the case of a grant of an Incentive Stock Option to a Ten Percent
Shareholder. Notwithstanding the foregoing, an Incentive Stock Option may be
granted with an exercise price lower than that set forth in the preceding
sentence if such option is granted pursuant to an assumption or substitution for
another option in a manner satisfying the provisions of Code Section 424(a).

 
 
(iii)
The maximum term of an Incentive Stock Option shall be ten years from the date
of grant provided that the maximum term of an Incentive Stock Option granted to
a Ten Percent Shareholder shall be five years from the date of grant.

 
 
(iv)
To the extent that the aggregate Fair Market Value (determined at the time of
grant) of Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by any Participant during any calendar year
(under all plans of the Company and its affiliated corporations) exceeds one
hundred thousand dollars ($100,000), the Stock Options or portions thereof which
exceed such limit (according to the order in which they were granted) shall be
treated as Non-statutory Stock Options.

 
 
(v)
If any Participant shall make any disposition of shares issued pursuant to the
exercise of an Incentive Stock Option under the circumstances described in Code
Section 421(b) (relating to certain disqualifying dispositions), such
Participant shall notify the Company of such disposition within ten (10)
calendar days thereof.

 
 
(g)
Reduction in Price or Reissuance.  In no event shall the Committee, without
first receiving shareholder approval, (a) cancel any outstanding Stock Option
for the purpose of reissuing the Stock Option to the Participant at a lower
exercise price, or (b) reduce the exercise price of a previously issued Stock
Option.

 
7.           STOCK APPRECIATION RIGHTS
 
 
(a)
Stock Appreciation Rights may be granted to Participants at any time as
determined by the Committee. An SAR may be granted in tandem with a Stock Option
granted under the Plan or on a free-standing basis. The Committee also may, in
its discretion, substitute SARs which can be settled only in stock for
outstanding Stock Options, at any time when the Company is subject to fair value
accounting.

 
 
(b)
The grant price of a tandem or substitute SAR shall be equal to the option price
of the related option. The grant price of a free-standing SAR shall be equal to
the Fair Market Value of the Company’s Common Stock on the date of its grant. An
SAR may be exercised upon such terms and conditions and for the term as the
Committee in its sole discretion determines to apply to the SAR; provided,
however, that the term of the SAR shall not exceed the option term in the case
of a tandem or substitute SAR or ten years in the case of a free-standing SAR,
and the terms and conditions applicable to a substitute SAR shall be
substantially the same as those applicable to the Stock Option which it
replaces.

 
 
 

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

 
 
 
(c)
Upon exercise of an SAR, the Participant shall be entitled to receive payment
from the Company in an amount determined by multiplying the excess of the Fair
Market Value of a share of Common Stock of the Company on the date of exercise
over the grant price of the SAR by the number of shares with respect to which
the SAR is exercised. The payment may be made in cash or stock, at the
discretion of the Committee, except in the case of a substitute SAR which may be
made only in stock.

 
 
(d)
In no event shall the Committee, without first receiving shareholder approval,
(1) cancel any outstanding SAR for the purpose of reissuing the SAR to the
Participant at a lower exercise price, or (2) reduce the exercise price of a
previously issued SAR.

 
8.           RESTRICTED STOCK AND RESTRICTED STOCK UNITS
 
Restricted Stock and Restricted Stock Units may be awarded or sold to
Participants under such terms and conditions as shall be established by the
Committee. Restricted Stock and Restricted Stock Units shall be subject to such
restrictions as the Committee determines, including, without limitation, any of
the following:
 
 
(a)
a prohibition against sale, assignment, transfer, pledge, hypothecation or other
encumbrance for a specified period;

 
 
(b)
a requirement that the holder forfeit (or in the case of shares or units sold to
the Participant resell to the Company at cost) such shares or units in the event
of termination of employment or other service during the period of restriction;
or

 
 
(c)
with respect to Restricted Stock, the Award may be conditioned upon the
Participant making or not making an election under Code Section 83(b). If the
Participant makes an election pursuant to Code Section 83(b), the Participant
shall be required to file a copy of the election with the Company within ten
(10) calendar days.

 
All restrictions shall expire at such times as the Committee shall specify.
 
Except for the restrictions set forth herein and unless otherwise determined by
the Committee, the Participant shall have all the rights of a shareholder with
respect to shares of Restricted Stock, including but not limited to the right to
vote and the right to receive dividends, provided that the Committee, in its
sole discretion, may require that any dividends paid on shares of Restricted
Stock be held in escrow until all restrictions on the shares have lapsed. With
respect to Restricted Stock Units, a Participant shall have no rights of a
shareholder until restrictions lapse and underlying shares, if any, are
delivered; however, the Committee may provide for the payment of dividend
equivalents if so specified in the LTIPA.
 
Payment of Restricted Stock Units may be made in cash, stock, or a combination
of cash and stock, in the Committee’s sole discretion.
 
To the extent a Restricted Stock Unit Award constitutes "deferred compensation"
within the meaning of Code Section 409A, the Committee shall establish LTIPA
terms and provisions that comply with Code Section 409A and regulations
thereunder.
 
9.           PERFORMANCE STOCK
 
The Committee shall designate the Participants to whom long-term performance
stock ("Performance Stock") is to be awarded and determine the number of shares,
the length of the performance period and
 

 
 

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

 

 
the other terms and conditions of each such award; provided the stated
performance period will not be less than twelve (12) months. Each award of
Performance Stock shall entitle the Participant to a payment in the form of
shares of Common Stock of the Company upon the attainment of performance goals
and other terms and conditions specified by the Committee.
 
Notwithstanding satisfaction of any performance goals, the number of shares
issued under a Performance Stock Award may be adjusted by the Committee on the
basis of such further consideration as the Committee in its sole discretion
shall determine. However, the Committee may not, in any event, increase the
number of shares earned upon satisfaction of any performance goal by any
Participant who is a Covered Employee. The Committee may, in its discretion,
make a cash payment equal to the Fair Market Value of shares of Common Stock
otherwise required to be issued to a Participant pursuant to a Performance Stock
Award.
 
To the extent a Performance Stock Award constitutes "deferred compensation"
within the meaning of Code Section 409A, the Committee shall establish LTIPA
terms and provisions that comply with Code Section 409A and regulations
thereunder.
 
10.           PERFORMANCE UNITS
 
The Committee shall designate the Participants to whom long-term performance
units ("Performance Units") are to be awarded and determine the number of units
and the terms and conditions of each such award; provided the stated performance
period will not be less than twelve (12) months. Each Performance Unit award
shall entitle the Participant to a payment in cash upon the attainment of
performance goals and other terms and conditions specified by the Committee.
 
Notwithstanding the satisfaction of any performance goals, the amount to be paid
under a Performance Unit Award may be adjusted by the Committee on the basis of
such further consideration as the Committee in its sole discretion shall
determine. However, the Committee may not, in any event, increase the amount
earned under Performance Unit Awards upon satisfaction of any performance goal
by any Participant who is a Covered Employee and the maximum amount earned by a
Covered Employee in any calendar year may not exceed $250,000. The Committee
may, in its discretion, substitute actual shares of Common Stock for the cash
payment otherwise required to be made to a Participant pursuant to a Performance
Unit Award.
 
To the extent a Performance Unit Award constitutes “deferred compensation”
within the meaning of Code Section 409A, the Committee shall establish LTIPA
terms and provisions that comply with Code Section 409A and regulations
thereunder.
 
11.           EVA AWARDS
 
 
(a)
Definitions.  The following terms shall have the meanings given them below in
this Section 11 for purposes of the EVA Awards granted under the Plan.

 
 
(i)
"Adjusted Basic Award" means the Basic Award adjusted by the percentage
completion of a Target Goal.

 
 
(ii)
"Annual Review" means the annual review by the Committee of each LTIPA entered
into under the Plan. The review will determine the Phase Level attainment by the
Participant, any proposed changes to the LTIPA, evaluate the Participant’s
performance during the Performance Period and provides the basis for the
Committee’s determination of an individual Award.

 
 
 

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

 
 
 
(iii)
"Basic Award" means that monetary value set forth in the LTIPA that could form
the basis of the Award that may be achieved upon full attainment of the Target
Goal.

 
 
(iv)
"EVA" means the net operating profit after taxes, as adjusted to eliminate the
effect of non-economic elements of generally accepted accounting principles
(“NOPAT”), less the weighted average cost of capital employed during the year
(“Employed Capital”). The Committee shall have the discretion to adjust NOPAT to
include or exclude: (i) extraordinary, unusual and/or non-recurring items of
gain or loss, (ii) gains or losses on the disposition of a business, (iii)
changes in tax or accounting regulations or laws, or (iv) the effect of a merger
or acquisition, as identified in the Company’s quarterly and annual earnings
releases. In all other respects, Performance Criteria shall be calculated in
accordance with the Company’s financial statements, generally accepted
accounting principles, or under a methodology established by the Committee prior
to the issuance of an Award that is consistently applied and identified in the
audited financial statements, including footnotes, or the Management Discussion
and Analysis section of the Company’s annual report.

 
 
(v)
"EVA Unit" means the designated unit of EVA identified in the LTIPA.

 
 
(vi)
"Payment Cycle" shall mean that period of time over which an Award, if earned,
may be paid.

 
 
(vii)
"Phase Level" means the level of attainment achieved during a Performance Period
towards accomplishment of a Target Goal. The Phase Level shall be determined
annually by the Committee based on recommendations from the CEO and is a factor
in determining the Award.

 
 
(viii)
"Performance Period" means a period of time designated in the LTIPA during which
performance under the Plan will be measured and may be a period of at least one
year and up to ten years in length and which may overlap, provided that no two
Performance Periods under the Plan of equal length shall coincide.

 
 
(ix)
"Target Goal" means the EVA objective set forth in the LTIPA.

 
 
(b)
Eligibility and Participation.  Only the following employees of the Company
shall be eligible for an EVA Award. Employees employed by the Company on the
last day of the Performance Period, who:

 
 
(i)
are specifically designated as Participants in the Plan by the Committee;

 
 
(ii)
have been designated to be eligible to receive an EVA Award by the Committee;

 
 
(iii)
have executed an LTIPA which is executed by the CEO (or, with respect to the
LTIPA of the CEO, a non-employee member of the Committee);

 
 
(iv)
have achieved relevant LTIPA performance criteria; and

 

 
 

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

 

 
 
(v)
have participated in Annual Reviews of the LTIPA during the Performance Period.

 
 
(c)
EVA Award.  The EVA Award is the Adjusted Basic Award multiplied by the Phase
Level attained by the Participant and a factor the numerator of which is the
average of the closing price of the Common Stock of the Company (on the
principal stock exchange on which the Company’s Common Stock is traded, as
determined by the Company) for the six months preceding the last day of a
Performance Period and the denominator is the average closing price of the
Common Stock of the Company (on the principal stock exchange on which the
Company’s Common Stock is traded, as determined by the Committee) for the six
months preceding the execution of a Participant’s LTIPA ("Beginning Stock
Price"). The factor so determined shall not be less than one.

 
 
 
The Adjusted Basic Award shall be determined based on the EVA Unit’s and the
Participant’s achievement of the Target Goal. At an achievement level of 49.99%,
the Adjusted Basic Award is 0% of the Basic Award. The Adjusted Basic Award is
the percent of the Target Goal achieved (at 50% or higher) multiplied by the
Basic Award, not to exceed 100% of the Basic Award.

 
 
(i)
A Participant’s potential Award shall be earned after the last day of a
Performance Period and upon the final approval of the Committee of the Award.
Portions of the Award are subject to forfeiture during the Payment Cycle as
provided in Section 11(d). The Participant shall have no interest in the Award
until the final approval of the Committee of the Award.

 
 
(ii)
The actual Award granted to a Participant hereunder shall be based upon the
Company’s overall performance, the EVA Unit’s overall performance and the
Participant’s individual performance and shall be determined by the Committee,
in its sole discretion.

 
 
(iii)
No Award will be granted if a Participant’s individual performance is
unsatisfactory, as determined by the Committee in its sole discretion, upon the
advice of the CEO.

 
 
(d)
Form and Time of Payment of EVA Award.  The form of payment shall be in stock or
cash at the sole discretion of the Committee. The amounts paid under an Award
shall be paid to the Participant less applicable federal, state, local income
and employment taxes, during the Payment Cycle after the date on which the Award
has been approved by Committee (but in no event later than March 15th of the
year following the year in which the Award is earned). If the Award is paid in
stock, then sufficient shares shall be withheld to meet withholding obligations
unless other arrangements have been made by the Participant. The shares to be
delivered in payment (including any Deferred Award Payments as provided below)
shall be valued at the average price for the five (5) trading days prior to the
date of payment to the Participant.

 
 
(i)
The Committee shall have the authority to approve, reduce or eliminate any
potential EVA Award and portions thereof. The Payment Cycle shall commence on
the date that an EVA Award is approved by the Committee and shall extend for
twenty-four (24) months after the end of the Performance Period.

 
 
 

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

 
 
 
(ii)
As provided in the LTIPA for the EVA Award, the Committee shall determine in its
discretion what portion, if any, of one-half of the potential EVA Award shall be
paid initially to a Participant (“Initial Award Payment”). The amount of the
Initial Award Payment to be paid shall be paid as soon as administratively
practicable after approval by the Committee of the EVA Award (but in no event
later than March 15th of the year following the year in which the EVA Award is
earned).

 
 
(iii)
The Committee shall determine in its discretion what portion of the remaining
half of the potential EVA Award shall be paid to a Participant ("Deferred Award
Payment"). Except as otherwise provided in the LTIPA for the EVA Award (as
determined by the Committee in its sole discretion), Deferred Award Payments
shall not be vested or earned until the conditions for payment set forth below
or in the LTIPA for the EVA Award under which the Deferred Award Payment would
be paid. The amount of the Deferred Award Payment that may be paid to the
Participant shall be subject to the following forfeiture provisions in this
Section 11(d)(iii):

 
 
(1)
One-half of the approved Deferred Award Payment shall be paid twelve (12) months
after the end of the Performance Period and one-half of the approved Deferred
Award Payment shall be paid twenty-four (24) months after the end of the
Performance Period subject to the following forfeiture provisions.

 
 
(2)
As provided in the Participant’s LTIPA for the EVA Award, (A) failure of the EVA
Unit to achieve the same level of the Target Goal as was obtained during the
Performance Period in the twelve (12) months following the Performance Period
will result in forfeiture of one-half of the Deferred Award Payment, and (B)
failure of the EVA Unit to achieve the Target Goal in the twelve (12) months
beginning twelve (12) months after the ending of the Performance Period and
ending twenty-four (24) months after the end of the Performance Period will
result in the forfeiture of one-half of the Deferred Award Payment. Payment of a
portion of the Deferred Award Payment, if applicable, shall be made as soon as
administratively practicable following the end of the applicable twelve (12)
month period (but in no event later than March 15th of the year following the
year in which the applicable twelve (12) month period ends).

 
 
(3)
Among other conditions to be included in a Participant’s LTIPA, the Committee
may require a Participant who is eligible to receive a Deferred Award Payment to
remain in employment with the Company or its subsidiary through the payment date
as a condition for such payment.

 
 
(e)
Disability, Death and Other Terminations

 
 
(i)
In the event of the termination of a Participant’s employment due to his or her
Disability or death, such Participant (or the Participant’s probate estate, in
the event of his or her death) may receive payment of an EVA Award, consistent
with the terms of the Plan, subject to the terms of the LTIPA for the EVA Award

 

 
 

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

 

 
 
 
and at the sole discretion of the Committee. Any such Award shall be determined
and paid in accordance with the regular procedures of the Plan.

 
 
(ii)
In the event of the Participant’s death, should an EVA Award be approved under
Section 11(e)(i), such EVA Award shall be paid in cash or stock, less applicable
federal, state, and local income and employment taxes, on the normal EVA Award
payout date and subject to the terms of forfeiture, to the Participant’s estate,
or to the person or persons who have acquired, by will or by the laws of descent
and distribution or by other legal proceedings, the right to such Award, in the
determination and discretion of the Committee.

 
 
(iii)
In the event of the termination of a Participant’s employment for reasons other
than his or her Disability or death, such Participant’s right to receive an EVA
Award, if any, shall be determined by the following terms in this Section
11(e)(iii):

 
 
(1)
If the Participant’s employment is terminated during the Performance Period for
the EVA Award, then the Participant shall not be eligible to any payment under
the EVA Award.

 
 
(2)
If the Participant’s employment is terminated following the Performance Period
for the EVA Award and the Committee has approved the payment of the EVA Award to
the Participant, then the EVA Award shall be paid to the Participant subject to
the conditions for the payment of the EVA Award (including the achievement of
the Company’s Target Goals during the two 12-month periods following the
Performance Period required for the payment of the Deferred Award Payments set
forth in Section 11(d)). Any payment made pursuant to this Subsection shall be
made no later than March 15th of the year following the year in which the EVA
Award or Deferred Award Payment is no longer subject to a substantial risk of
forfeiture.

 
 
(f)
No Reallocation of EVA Awards.  In no event may the portion of the potential EVA
Award allocated to a Participant be increased in any way, including as a result
of the reduction of any other Participant’s allocated portion.

 
12.           CASH BONUS AWARDS
 
The Committee may designate the employees of the Company who are eligible to
receive a cash bonus payment in any calendar year based on an incentive pool to
be determined by the Committee. The Committee shall allocate an incentive pool
percentage to each designated Participant for each calendar year.
 
As soon as possible after the determination of the incentive pool for a calendar
year, the Committee shall calculate the Participant’s allocated portion of the
incentive pool based upon the percentage established at the beginning of the
calendar year.  The Participant’s incentive award then shall be determined by
the Committee based on the Participant’s allocated portion of the incentive pool
subject to adjustment in the sole discretion of the Committee.  Unless otherwise
specified by the Committee in writing in compliance with Code Section 409A,
incentive awards shall be paid no later than March 15th of the year following
the year in which the incentive award is earned.  In no event may the portion of
the incentive pool
 

 
 

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

 

 
allocated to a Participant be increased in any way, including as a result of the
reduction of any other Participant’s allocated portion.
 
13.           OTHER STOCK OR CASH AWARDS
 
In addition to the incentives described in Sections 6 through 12 above, the
Committee may grant other incentives payable in cash or in Common Stock under
the Plan as it determines to be in the best interests of the Company and subject
to such other terms and conditions as it deems appropriate.
 
14.           PERFORMANCE GOALS
 
Except as provided with respect to EVA Awards, cash bonus Awards and awards of
Restricted Stock, Restricted Stock Units, Performance Stock, Performance Units
and other incentives under the Plan may be made subject to the attainment of
performance goals relating to any one or more business criteria within the
meaning of Code Section 162(m), including, but not limited to, cash flow; cost;
ratio of debt to debt plus equity; profit before tax; economic profit; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; earnings per share; operating earnings; economic value added;
ratio of operating earnings to capital spending; free cash flow; net profit; net
sales; sales growth; price of the Company's Common Stock; return on net assets,
equity or stockholders’ equity; market share; or total return to stockholders
("Performance Criteria"). Any one or more Performance Criteria may be used to
measure the performance of the Company as a whole or any business unit of the
Company and may be measured relative to a peer group or index.
 
Any Performance Criteria may include or exclude Special Items. Special Items
shall include (i) extraordinary, unusual and/or non-recurring items of gain or
loss, (ii) gains or losses on the disposition of a business, (iii) changes in
tax or accounting regulations or laws, or (iv) the effect of a merger or
acquisition, as identified in the Company’s quarterly and annual earnings
releases. In all other respects, Performance Criteria shall be calculated in
accordance with the Company’s financial statements, generally accepted
accounting principles, or under a methodology established by the Committee prior
to the issuance of an award that is consistently applied and identified in the
audited financial statements, including footnotes, or the Management Discussion
and Analysis section of the Company’s annual report.
 
With respect to Awards subject to Performance Criteria, the Committee shall have
the authority to reduce the payouts on such Awards and shall have the authority
to limit or waive the actual performance-based vesting of such Awards in its
sole discretion.
 
15.           DEFERRAL OF PAYMENT ON AWARDS
 
Subject to the provisions of Code Section 409A and any regulatory guidance
promulgated thereunder, a Participant and the Company may enter into an
agreement under which the payment of amounts payable under a vested Award shall
be deferred on terms and conditions to be established by the Participant and the
Company.
 
16.           ADJUSTMENT PROVISIONS
 
 
(a)
If the Company shall at any time change the number of issued shares of Common
Stock by stock dividend, stock split, spin-off, split-off, spin-out,
recapitalization, merger, consolidation, reorganization, combination, or
exchange of shares, the total number of shares reserved for issuance under the
Plan, the maximum number of shares that may be made subject to an Award or all
Awards in any calendar year, and the number of shares

 
 
 

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

 
 
 
 
covered by each outstanding Award and the price therefor, if any, shall be
equitably adjusted by the Committee, in its sole discretion.

 
 
(b)
In the event of any merger, consolidation or reorganization of the Company with
or into another corporation that results in the outstanding Common Stock of the
Company being converted into or exchanged for different securities, cash or
other property, or any combination thereof, the Company shall have the authority
to provide in the controlling agreement for such transaction (i) that there
shall be substituted, as determined by the Committee in its discretion, for each
share of Common Stock then subject to an Award granted under the Plan, the
number and kind of shares of stock, other securities, cash or other property to
which holders of Common Stock of the Company will be entitled pursuant to the
transaction, (ii) that the acquiring or surviving corporation in the transaction
shall assume the outstanding Awards under the Plan (which may be exercisable
into the securities of the acquiring or surviving corporation), (iii) that all
unexercised Awards shall terminate immediately prior to such transaction unless
exercised prior to the closing of the transaction, or (iv) a combination of the
foregoing.

 
17.           SUBSTITUTION AND ASSUMPTION OF AWARDS
 
Without affecting the number of shares reserved or available hereunder, the
Board or the Committee may authorize the issuance of Awards under the Plan in
connection with the assumption of, or substitution for, outstanding Awards
previously granted to individuals who become employees of the Company as a
result of any merger, consolidation, acquisition of property or stock, or
reorganization other than a Change in Control, upon such terms and conditions as
the Committee may deem appropriate.
 
18.           TRANSFERABILITY
 
Each Award granted under the Plan shall not be transferable otherwise than by
will or the laws of descent and distribution and each Stock Option and SAR shall
be exercisable during the Participant’s lifetime only by the Participant or, in
the event of Disability, by the Participant’s personal representative. In the
event of the death of a Participant, exercise of any Award or payment with
respect to any Award shall be made only by or to the executor or administrator
of the estate of the deceased Participant or the person or persons to whom the
deceased Participant’s rights under the Award shall pass by will or the laws of
descent and distribution.
 
19.           TAXES
 
The Company shall be entitled to withhold the amount of any tax attributable to
any amounts payable or shares deliverable under the Plan, after giving the
person entitled to receive such payment or delivery notice and the Company may
defer making payment or delivery as to any award, if any such tax is payable
until indemnified to its satisfaction. A Participant may pay all or a portion of
any required withholding taxes arising in connection with the exercise of a
Stock Option or SAR or the receipt or vesting of shares hereunder by electing to
have the Company withhold shares of Common Stock, having a fair market value
equal to the amount required to be withheld.
 
20.           OTHER PROVISIONS
 
 
(a)
The grant of any Award under the Plan may also be subject to other provisions
(whether or not applicable to the Award awarded to any other Participant) as the
Committee

 

 
 

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

 

 
 
 
determines appropriate, including provisions intended to comply with federal or
state securities laws and stock exchange requirements, understandings or
conditions as to the Participant’s employment or other service, requirements or
inducements for continued ownership of Common Stock after exercise or vesting of
Awards, forfeiture of awards in the event of termination of employment or other
service shortly after exercise or vesting, or breach of non-solicitation,
non-disparagement, non-competition or confidentiality agreements following
termination of employment or other service, or provisions permitting the
deferral of the receipt of a Award for such period and upon such terms as the
Committee shall determine.

 
 
(b)
In the event any Award under the Plan is granted to an employee, member of the
Board, or adviser who is employed or providing services outside the United
States and who is not compensated from a payroll maintained in the United
States, the Committee may, in its sole discretion, modify the provisions of the
Plan or adopt appendices and/or sub-plans as they pertain to such individuals as
may be necessary or desirable to comply with applicable law, regulation or
accounting rules to assure the viability of the benefits from Awards granted to
such individuals and to meet the objective of the Plan.

 
 
(c)
The Committee, in its sole discretion, may permit or require a Participant to
have amounts or shares of Common Stock that otherwise would be paid or delivered
to the Participant as a result of the exercise or settlement of an award under
the Plan credited to a deferred compensation or stock unit account established
for the Participant by the Committee on the Company’s books of account.

 
 
(d)
As a condition for the receipt of stock Awards under the Plan, a Participant
shall agree to be bound by the employment policies of the Company (or other
applicable policies) pertaining to the securities of the Company, including, but
not limited to, the insider trading restrictions of the Company.

 
21.           NO RESERVE OR TRUST
 
Nothing contained in the Plan shall require the Company to segregate any monies
from its general funds, or to create any trust or make any special deposit in
respect of any amounts payable under the Plan to or for any Participant or group
of Participants. All amounts payable under the Plan shall be paid out of the
general funds of the Company.
 
22.           NO RIGHT TO ASSIGN
 
No right or interest of any Participant in the Plan or in any unpaid Award shall
be assignable or transferable in whole or in part, either voluntarily or by
operation of law or otherwise, or be subject to payment of debts of any
Participant by execution, levy, garnishment, attachment, pledge, bankruptcy or
in any other manner.
 
23.           NO EMPLOYMENT OR SIMILAR RIGHTS CONFERRED
 
Nothing contained in the Plan or any Award shall confer upon any employee,
director or adviser any right with respect to continuation of employment or
other service with the Company in any capacity or interfere in any way with the
right of the Company to terminate an employee’s employment or a
 

 
 

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

 

 
director’s or adviser’s service at any time or guarantee any right of
participation in any other employee benefit or compensation plan of the Company.
 
24.           SUCCESSORS AND MERGERS, CONSOLIDATIONS OR CHANGE IN CONTROL
 
The terms and conditions of the Plan shall inure to the benefit of and bind the
Company, the Participants, their successors, assignees, and personal
representatives. If a Change of Control occurs, then the Plan shall immediately
terminate.
 
Except as otherwise provided in an LTIPA, upon a Change in Control of the
Company, the Committee, in its sole discretion, may (but shall not be required
to) make all outstanding Stock Options and SARs fully vested and exercisable,
all restrictions on Restricted Stock and Restricted Stock Units terminated, all
performance goals deemed achieved at target levels and all other terms and
conditions met, and deliver all Performance Stock, and pay out all Performance
Units and Restricted Stock Units.
 
The Committee shall in its sole discretion determine the status of achievement
of a particular Target Goal and shall specify an Adjusted Basic Award based upon
its determination of achievement of the performance goals under the Awards as of
the Change in Control (“Change in Control Award”). A Change in Control Award
shall be modified as outlined below and shall be paid 30 days after the
consummation of the Change in Control. Any Deferred Award payments outstanding
upon a Change in Control shall be paid within 30 days after the Change in
Control.
 
In the event of a Change in Control, all EVA Awards or cash Awards shall be paid
on a pro-rated basis (as determined by the Committee) based on the portion of
the Performance Goals achieved under the EVA Awards or cash Awards as of the
date of the Change in Control, subject to the discretion of the Committee to
reduce the EVA Awards. Pro-rated EVA Awards or cash Awards shall be paid within
30 days after the Change in Control.
 
25.           GOVERNING STATE LAW AND COMPLIANCE WITH SECURITIES LAWS
 
 
(a)
The Plan and any actions taken in connection herewith shall be governed by and
construed in accordance with the laws of the state of Nevada (without regard to
applicable Nevada principles of conflict of laws).

 
 
(b)
The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the
Stock Awards; provided, however, that this undertaking shall not require the
Company to register under the Securities Act the Plan, any stock Award or any
Common Stock issued or issuable pursuant to any such stock Award. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell Common Stock
upon exercise of such stock Awards unless and until such authority is obtained.

 

 
 

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

 

 
26.           DURATION, AMENDMENT AND TERMINATION
 
The Board or the Committee may amend, suspend, terminate or reinstate the Plan
from time to time or terminate the Plan at any time. However, no such action
shall reduce the amount of any existing Award (subject to the reservation of the
authority of the Committee to reduce payments on Awards) or change the terms and
conditions thereof without the Participant’s consent. No amendment of the Plan
shall be made without stockholder approval to the extent stockholder approval is
expressly required under applicable rules and regulations of the Securities and
Exchange Commission, the applicable rules of a stock exchange on which the
securities of the Company are traded as may be established pursuant to its
rule-making authority of such stock exchange, and the rules and regulations of
the Internal Revenue Service for plans intended to qualify for the
performance-based exemption under Code Section 162(m).
 
Neither the Board nor the Committee may cancel an Award once the Award has been
granted by the Committee, including any Deferred Award Payments. Each year on
the anniversary of the LTIPAs, the CEO shall present to the Committee any
recommendations for changes in the Plan or in the LTIPAs previously approved by
the Committee (subject to the restrictions on the grant of authority to the
Committee in Section 3).
 
27.           SHORT-TERM DEFERRAL; DEFERRED COMPENSATION
 
 
(a)
Short-Term Deferral.  To the extend an Award constitutes nonqualified deferred
compensation subject to Code Section 409A and it has not been designed to comply
with Code Section 409A, in order to be exempt from Code Section 409A pursuant to
Treasury Regulation Section 1.409A-1(b)(4), payment of the Award shall be made
no later than the later of (i) the date that is 2 ½ months from the end of the
Participant's first taxable year in which the amount is no longer subject to a
substantial risk of forfeiture, or (ii) the date that is 2 ½ months from the end
of the Company's first taxable year in which the amount is no longer subject to
a substantial risk of forfeiture.

 
 
(b)
Deferred Compensation.  Notwithstanding any provision in the Plan or any LTIPA
to the contrary, to the extent an Award (i) constitutes "deferred compensation"
within the meaning of Code Section 409A, (ii) is not exempt from the application
of Code Section 409A and (iii) is payable to a specified employee (as determined
in accordance with Code Section 409A(a)(2)(B) and applicable regulations) due to
separation from service (as such term is defined under Code Section 409A),
payment shall be delayed for a minimum of six (6) months from the date of such
separation from service.

 
 
 
If any Award granted under the Plan is considered deferred compensation as
defined under Code Section 409A, and if the Plan or the terms of an Award fail
to meet the requirements of Code Section 409A with respect to such Award, then
such Award shall remain in effect and be subject to taxation in accordance with
Code Section 409A. In this circumstance, the Committee may accelerate
distribution or settlement of an Award in accordance with Code Section 409A. The
Company shall have no liability for any tax imposed on a Participant under Code
Section 409A, and if any tax is imposed on a Participant, the Participant shall
have no recourse against the Company for payment of any such tax.
Notwithstanding the foregoing, if any modification of an Award causes the Award
to be deferred compensation under Code Section 409A, the Committee may rescind
such modification in accordance with Code Section 409A.

 

 
 

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

 

 
28.           SECTION 162(m)
 
The Plan is designed and intended, and all provisions shall be construed in a
manner, to comply, to the extent applicable, with Code Section 162(m) and the
regulations thereunder. To the extent permitted by Code Section 162(m), the
Committee shall have sole discretion to reduce, eliminate or defer payment of
the amount of any Award which might otherwise become payable upon meeting
Performance Criteria.
 
29.           SEVERABILITY
 
If any provision of the Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected.
 
30.           EFFECTIVE DATE AND TERM OF THE PLAN
 
The Plan shall continue for a term of ten (10) years from the date of its
adoption.  The Plan was originally adopted by the Company's Board of Directors
on September 25, 2009, subject to stockholder approval. On March 28, 2010, the
Company's Board of Directors and a majority of its stockholders approved a
revision to the Plan to increase the number of available shares to 1,500,000
shares.  On _____, 2011, pursuant to an Agreement and Plan of Reorganization
between the Company and VitaMedMD, LLC, the Company's Board of Directors and a
majority of its stockholders approved a revision to the Plan to increase the
number of available shares to 25 million shares.
 

 
 

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

 

 
EXHIBIT D
 
OPERATING AGREEMENT OF VITAMEDMD, LLC
 
(as amended)
 

 
 

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

 

 
THIRD AMENDED AND RESTATED OPERATING AGREEMENT
OF
VITAMEDMD, LLC
 
This Limited Liability Company Agreement of VitaMedMD, LLC (the “Company”) is
made and entered into to be effective for all purposes as of the ● day of ●,
2011, by [●.], a Nevada corporation, as the sole member.  All capitalized terms
used herein shall have the meanings set forth in Section 1.8 hereof unless the
context clearly indicates otherwise.
 
ARTICLE I
 
ORGANIZATION AND PURPOSE
 
Section 1.1                      Name.  The name of the Company is “VitaMedMD,
LLC”.  All business and affairs of the Company shall be conducted solely under,
and all Company Assets shall be held solely in, such name unless otherwise
determined by the Managing Member.
 
Section 1.2                      Term.  The term of the Company shall continue
in perpetuity, unless sooner dissolved upon the occurrence of any of the events
specified in Section 5.1 hereof.
 
Section 1.3                      Purposes and Scope of Business; Powers.  The
business and purposes of the Company shall be to engage in any lawful act or
activity for which a limited liability company may be organized under the
Delaware Limited Liability Company Act.  The Company shall possess and may
exercise all the powers and privileges granted by the Delaware Limited Liability
Company Act or by any other law or by this Agreement, together with any powers
incidental thereto, so far as such powers and privileges are necessary or
convenient to the conduct, promotion or attainment of the business purposes or
activities of the Company.
 
Section 1.4                      Documents.  The Managing Member, or anyone
designated by the Managing Member, is hereby authorized to execute any necessary
amendments and/or restatements of the Certificate of Formation in accordance
with the Delaware Limited Liability Company Act and cause the same to be filed
with the Delaware Secretary of State.
 
Section 1.5                      Principal Office.  The principal place of
business and office of the Company shall be at 951 Broken Sound Parkway, Suite
320, Boca Raton, FL, or at such other place or places as may be designated by
the Managing Member.  The Managing Member shall be responsible for maintaining
at the Company’s principal place of business those books and records required by
the Delaware Limited Liability Company Act to be maintained there.
 
Section 1.6                      Registered Agent and Office.  The name of the
Company’s registered agent for service of process shall be Corporation Service
Company, and the address of the Company’s registered agent and the address of
the Company’s registered office in the State of Delaware shall be 2711
Centerville Road, Suite 300, Wilmington, DE.  The registered agent and the
registered office of the Company may be changed from time to time by the
Managing Member.
 
Section 1.7                      Certain Definitions.  As used in this
Agreement, the following terms shall have the meanings specified as follows:
 
 
 

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“Accountant” shall mean a nationally recognized firm of independent certified
public accountants selected by the Managing Member.
 
“Agreement” shall mean this Third Amended and Restated Operating Agreement of
VitaMedMD, LLC, as may from time to time be amended, supplemented or restated.
 
“Capital Contribution” shall mean with respect to any Member, the amount of cash
and the gross fair market value as determined by the Managing Member of any
other property contributed or deemed contributed to the capital of the Company
by or on behalf of such Member reduced by the amount of any liability assumed by
the Company relating to the property and any liability to which such property is
subject.
 
“Certificate of Formation” shall mean the certificate of formation for the
Company, as such certificate may from time to time be amended or restated.
 
“Code” shall mean the Internal Revenue Code of 1986, as amended and as may be
amended.
 
“Company” shall mean VitaMedMD, LLC, a Delaware limited liability company.
 
“Company Assets” shall mean all assets, whether tangible or intangible and
whether real, personal or mixed, at any time owned by the Company.
 
“Indemnified Parties” has the meaning set forth in Section 6.1(a).
 
“Liquidating Member” shall have the meaning set forth in Section 5.1(d).
 
“Managing Member” shall mean [●] a Nevada corporation, and any other Person
admitted to the Company as a Managing Member with the consent of the Managing
Member and in accordance with the Delaware Limited Liability Company Act.
 
“Member” shall mean the Managing Member and any other Person admitted to the
Company as a Member with the consent of the Managing Member and in accordance
with the Delaware Limited Liability Company Act.
 
“Person” shall mean any individual, partnership, corporation, limited liability
company, trust or other legal entity.
 
“Regulations” shall mean the temporary and permanent Treasury Regulations
promulgated under the Code as such Regulations may be amended (including
corresponding provisions of succeeding Regulations).
 
“Delaware Limited Liability Company Act” shall mean the Delaware Code, Title 6,
Chapter 18, as amended and as may be amended, and any successor to such statute.
 
Section 1.8                      Members.  [●.], is the sole Managing Member and
Member of the Company and shall be shown as such on the books and records of the
Company.  No other Person shall be admitted as a Managing Member or Member of
the Company, and no additional interest in the Company shall be issued, without
the approval of the Managing Member and appropriate amendments to this
Agreement.  Until such time as the Company has more than one Member, Member and
Members shall refer to [●.]
 
 
 

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ARTICLE II
 
OPERATIONS
 
Section 2.1                      Management of Company.
 
(a)           The right to manage, control and conduct the business and affairs
of the Company and to take any and all actions on behalf of the Company shall be
vested completely and exclusively in the Managing Member.  The Managing Member
shall have the exclusive authority to act for and on behalf of the Company, and
no third party shall ever be required to inquire into the authority of the
Managing Member to take such action on behalf of the Company.  In addition to
the foregoing, the Managing Member shall have all rights, power and authority
necessary, appropriate or required, as determined by the Managing Member and
subject to the Delaware Limited Liability Company Act, to carry out the purposes
of the Company.
 
(b)           The decisions made by the Managing Member may be implemented
through any Person selected by the Managing Member.  The Managing Member is, to
the extent of its rights and powers set forth in this Agreement, an agent of the
Company for the purpose of the Company’s business, and the actions of the
Managing Member taken in accordance with such rights and powers shall bind the
Company.  The Managing Member shall exercise its authority as such in its
capacity as Managing Member of the Company.  The Company shall not have any
“managers” within the meaning of Section 18-101(10) of the Delaware Limited
Liability Company Act.
 
(c)           The Managing Member shall take any action permitted, including
making any election pursuant to the Regulations under Section 7701 of the Code,
so that the Company is not and does not become subject to tax as a corporation
or an association subject to tax as a corporation.
 
(d)           The Managing Member and the Company hereby adopt the regulations
attached to this Agreement as Schedule I authorizing certain officers to act on
behalf of the Company, all as is more particularly described in Schedule I
hereto.
 
Section 2.2                      Compensation and Reimbursement of Managing
Member.  The Managing Member shall not be compensated for its services as the
Managing Member of the Company.  The Company shall reimburse the Managing Member
on a current basis for its out-of-pocket expenditures made on behalf of the
Company upon submission to the Company of reasonably detailed evidence of such
expenditures.  All reimbursements for out-of-pocket expenditures shall be
reasonable in amount and in the advancement of Company purposes.  Any
out-of-pocket expenditure made by the Managing Member and eligible for
reimbursement pursuant to this Section 2.2 shall not be treated as a Capital
Contribution and any reimbursement of such expenditure shall not be treated as a
Company distribution to the Managing Member.
 
 
 
 

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ARTICLE III
 
FINANCING
 
Section 3.1                      Initial Capital Contributions and
Interests.  The Managing Member has made an initial Capital Contribution to the
capital of the Company.  On the date hereof the Managing Member owns all of the
interests in the Company.
 
Section 3.2                      Additional Capital Contributions.  No Member
shall be required to contribute any capital to the Company other than its
initial Capital Contribution.  The Managing Member may from time to time make
additional Capital Contributions to the Company.
 
Section 3.3                      Liability of the Members.  Except as otherwise
expressly provided in the Delaware Limited Liability Company Act, the debts,
obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, shall be solely the debts, obligations and liabilities of the
Company, and no Member shall be obligated personally for any such debt,
obligation or liability of the Company solely by reason of being a
Member.  Except as otherwise expressly provided in the Delaware Limited
Liability Company Act, the liability of each Member shall be limited to the
amount of Capital Contributions, if any, required to be made by such Member in
accordance with the provisions of this Agreement, but only when and to the
extent the same shall become due pursuant to the provisions of this Agreement.
 
Section 3.4                      Treatment of Capital Contributions.  No Member
shall be entitled to interest on his or its contributions to the capital of the
Company nor shall any Member be entitled to demand the return of all or any part
of such contributions to the capital of the Company.
 
Section 3.5                      Benefits of Agreement.  Nothing in this
Agreement, and, without limiting the generality of the foregoing, in this
Article III, expressed or implied, is intended or shall be construed to give to
any creditor of the Company or to any creditor of any Member or any other person
or entity whatsoever, other than the Managing Member and the Company, any legal
or equitable right, remedy or claim under or in respect of this Agreement or any
covenant, condition or provisions herein contained, and such provisions are and
shall be held to be for the sole and exclusive benefit of the Managing Member
and the Company.
 
ARTICLE IV
 
ACCOUNTING AND DISTRIBUTIONS
 
Section 4.1                      Books, Records, Accounting and Reports.
 
(a)           Books and Records.  The Company shall maintain, or cause to be
maintained, in a manner customary and consistent with good accounting
principles, practices and procedures, a comprehensive system of office records,
books, and accounts (which records, books, and accounts shall be and remain the
property of the Company) in which shall be entered fully and accurately each and
every financial transaction with respect to the ownership and operation of the
property of the Company.  Such books and records of account shall be prepared
and maintained at the principal place of business of the Company or such other
place or places as may from time to time be determined by the Managing
Member.  Each Member or its duly authorized representative shall have the right
to inspect, examine and copy such books and records of account at the Company’s
office during reasonable business hours.  A reasonable charge for copying books
and records may be charged by the Company.
 
 
 
 

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(b)           For federal and state income tax purposes, during such time as the
Managing Member is the sole Member of the Company, all assets, liabilities and
items of income, deduction and credit of the Company shall be treated as assets,
liabilities and such items of the Managing Member.
 
Section 4.2                      Bank Accounts.  Funds of the Company shall be
deposited in a Company account or accounts in the bank or banks as selected by
the Managing Member.  Withdrawals from bank accounts shall only be made by the
Managing Member or such other parties as may be approved by the Managing Member.
 
Section 4.3                      Distributions.  Subject to Section 5.1(d) with
respect to distributions upon liquidation, the Managing Member shall distribute
funds at such times and in such amounts as it may determine.  In determining the
amount of funds to distribute pursuant to this Section 4.3 the Managing Member
may consider such factors as the need to allocate funds to any reserves for
Company contingencies or any other Company purposes that the Managing Member
reasonably deems necessary or appropriate.
 
ARTICLE V
 
DISSOLUTION AND TERMINATION
 
Section 5.1                      Dissolution and Termination of the Company.
 
(a)           The Company shall be dissolved and its business wound up upon the
occurrence of any of the following events:
 
(i)           the sale, exchange or other disposition of all or substantially
all of the Company Assets;
 
(ii)           upon the election of the Managing Member; or
 
(iii)           the entry of a decree of judicial dissolution under Section
13.1-1047 of the Delaware Limited Liability Company Act;
 
No other event, including insolvency, liquidation, dissolution, expulsion or
bankruptcy of the Managing Member, shall cause the existence of the Company to
terminate.
 
(b)           In the event of the dissolution of the Company, there shall be an
orderly liquidation of the Company Assets as described below unless the Managing
Member determines that an immediate sale of all or part of the Company Assets
would cause undue loss to the Members, in which event (i) the liquidation may be
deferred for a reasonable time except as to those assets necessary to satisfy
the liabilities of the Company, or (ii) all or part of the Company Assets may be
distributed in kind, subject to the provisions of and in the same manner as cash
under the applicable provisions of this Section 5.1 and provided that such
distribution of Company Assets is made on a pro rata basis to all of the
Members.
 
 
 

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(c)           Upon any dissolution of the Company, the Accountants shall prepare
a statement setting forth the assets and liabilities of the Company as of the
date of dissolution, and such statement shall be furnished to all Members.
 
(d)           In the event of liquidation of the Company Assets, and subject to
the first sentence of Section 5.1(b) above, the Company Assets shall be
liquidated as promptly as possible, and the Managing Member shall supervise such
liquidation (“Liquidating Member”), which shall be conducted in an orderly and
business-like manner so as not to involve undue sacrifice, as the Liquidating
Member shall determine in its reasonable discretion.  The proceeds thereof shall
be applied and distributed in the following order of priority:
 
(i)           for the payment of the debts and liabilities of the Company
(including any debts and liabilities owed to the Members and their related
entities) and the expenses of liquidation;
 
(ii)           to the setting up of any reserves which the Liquidating Member
reasonably may deem necessary for any contingent or unforeseen liabilities or
obligations of the Company arising out of or in connection with the
Company.  Said reserves may be paid over by the Liquidating Member to an
attorney-at-law, as escrowee, to be held by him for the purpose of disbursing
such reserves in payment of any of the aforementioned contingencies and, at the
expiration of such period as the Liquidating Member shall deem advisable, to
distribute the balance of such reserves to the Members; and
 
(iii)           thereafter, to the Members.
 
(e)           No dissolution of the Company shall release or relieve the Members
of any obligations under this Agreement.
 
Section 5.2                      Provisions Cumulative.  All provisions of this
Agreement relating to the dissolution, liquidation and termination of the
Company shall be cumulative to the extent not inconsistent with other provisions
herein; that is, the exercise or use of one of the provisions hereof shall not
preclude the exercise or use of any other provision of this Agreement to the
extent not inconsistent therewith.
 
 
ARTICLE VI
 
INDEMNIFICATION
 
Section 6.1                      Exculpation and Indemnification.
 
(a)           No officer of the Company, nor the Managing Member, its
affiliates, or their respective directors, officers, shareholders, employees,
agents or representatives (each an “Indemnified Party” and collectively, the
“Indemnified Parties”), shall have any liability, responsibility or
accountability in damages or otherwise to any Member or the Company for, and the
Company agrees to indemnify, pay, protect and hold harmless such Indemnified
Parties from
 
 
 
 

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and against, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, proceedings, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, all reasonable costs
and expenses of attorneys, defense, appeal and settlement of any and all suits,
actions or proceedings instituted or threatened against the Indemnified Parties
or the Company) and all costs of investigation in connection therewith which may
be imposed on, incurred by, or asserted against the Indemnified Parties or the
Company in any way relating to or arising out of, or alleged to relate to or
arise out of, any action or inaction on the part of the Company, on the part of
the Indemnified Parties when acting on behalf of the Company or on the part of
any brokers or agents when acting on behalf of the Company; provided that the
Company shall not be liable to such Indemnified Parties for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
proceedings, costs, expenses or disbursements or any costs of investigation in
connection therewith which result from such Indemnified Party’s or its
affiliates’ fraud, gross negligence or willful misconduct or the payment to or
receipt by such Indemnified Party of benefits in violation of this Agreement.
 
(b)           In any action, suit or proceeding against the Company or any
Indemnified Party relating to or arising, or alleged to relate to or arise, out
of any such action or non-action, the Indemnified Parties shall have the right
to jointly employ, at the expense of the Company, counsel of the Indemnified
Parties’ choice, which counsel shall be reasonably satisfactory to the Company,
in such action, suit or proceeding, provided that if retention of joint counsel
by the Indemnified Parties would create a conflict of interest, each group of
Indemnified Parties which would not cause such a conflict shall have the right
to employ, at the expense of the Company, separate counsel of the Indemnified
Party’s choice, which counsel shall be reasonably satisfactory to the Company,
in such action, suit or proceeding.  The satisfaction of the obligations of the
Company under Section 6.1(a) shall be from and limited to the assets of the
Company and no Member shall have any personal liability on account thereof.
 
(c)           The provision of advances from the Company funds to an Indemnified
Party for legal expenses and other costs incurred as a result of any legal
action or proceeding is permissible if (i) such suit, action or proceeding
relates to or arises out of, or is alleged to relate to or arise out of, any
action or inaction on the part of the Indemnified Party in the performance of
its duties or provision of its services on behalf of the Company; and (ii) the
Indemnified Party undertakes to repay any funds advanced pursuant to this
Section 6.1(c) in cases in which such Indemnified Party would not be entitled to
indemnification under Section 6.1(a).  If advances are permissible under this
Section 6.1(c), the Indemnified Party shall furnish the Company with an
undertaking as set forth in clause (ii) of this paragraph and shall thereafter
have the right to bill the Company for, or otherwise request the Company to pay,
at any time and from time to time after such Indemnified Party shall become
obligated to make payment therefor, any and all reasonable amounts for which
such Indemnified Party is entitled to indemnification under Section 6.1(a).  The
Company shall pay any and all such bills and honor any and all such requests for
payment within 60 days after such bill or request is received by the Managing
Member and the Company’s rights to repayment of such amounts shall be secured by
the Indemnified Party’s interest in the Company.  In the event that a final
determination is made that the Company is not so obligated in respect of any
amount paid by it to a particular Indemnified Party, such Indemnified Party will
refund such amount within 60 days of such final determination, and in the event
that a final determination is made that the Company is so obligated in respect
to any amount not paid by the Company to a particular Indemnified Party,
 
 
 
 

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the Company will pay such amount to such Indemnified Party within 60 days of
such final determination, in either case together with interest at the prime
rate as announced from time to time by The Chase Manhattan Bank, N.A. plus 1%
per annum from the date paid until repaid or the date it was obligated to be
paid until the date actually paid.
 
ARTICLE VII
 
MISCELLANEOUS
 
Section 7.1                      Binding Effect.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective personal representatives, heirs, successors, and permitted
assigns.
 
Section 7.2                      Amendment, Modification, Waiver or
Termination.  No amendment, modification, waiver or termination of this
Agreement, or any part hereof, shall be effective unless made in writing and
signed by the party or parties sought to be bound thereby.  Any amendment,
repeal or modification of Section 6 of this Agreement shall not adversely affect
any right or protection of any director, officer, employee or agent, existing at
the time of, or increase the liability of any director, officer, employee or
agent of the Company with respect to any acts or omissions of such director,
officer, employee or agent occurring prior to, such amendment, repeal or
modification.
 
Section 7.3                      Applicable Laws.  This Agreement shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware without reference to any conflict of law or choice of law
principles of such state that might apply the law of another jurisdiction.
 
Section 7.4                      Captions; Exhibits.  Article, section and other
titles or captions contained in this Agreement are inserted only as a matter of
convenience and for reference, and shall not be construed in any way to define,
limit, extend or describe the scope of this Agreement or the intention of the
provisions thereof.  All exhibits annexed hereto are herewith expressly made a
part of this Agreement, as fully as though completely set forth herein.
 
Section 7.5                      Limitation on Rights of Others.  No person or
entity other than a Member is, nor is it intended that any such other person or
entity be treated as, a direct, indirect, intended or incidental third party
beneficiary of this Agreement for any purpose whatsoever, nor shall any other
person or entity have any legal or equitable right, remedy or claim under or in
respect of this Agreement.
 
Section 7.6                      Gender; Number.  As used in this Agreement, the
masculine, feminine or neuter gender, and the singular or plural number, shall
be deemed to be or include the other genders or number, as the case may be,
whenever the context so indicates or requires.
 
 
 
 

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The undersigned has executed and delivered this Third Amended and Restated
Operating Agreement to be effective as of the date first above written.
 

   
MANAGING MEMBER:
   
[●]
   
a Nevada corporation
               
By:  
       
Name: 
       
Title:
 

 
 

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SCHEDULE I
 
TO OPERATING AGREEMENT
 
REGULATIONS REGARDING APPOINTMENT OF OFFICERS
 
RECITAL
 
WHEREAS, the Managing Member desires to appoint officers of the Company to
exercise the power and authority with respect to the business and affairs of the
Company as described below;
 
OFFICERS
 
RESOLVED, that the Company may have, at the discretion of the Managing Member, a
Chief Executive Officer, a President, one or more Executive Vice Presidents, one
or more Vice Presidents, one or more Assistant Vice Presidents, a Secretary, one
or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers
and/or such other officers as may be appointed by the Managing Member.  One
person may hold two or more offices.  The officers of the Company shall serve at
the discretion of the Managing Member.  No officer shall be deemed a “manager”
of the Company, as that term is defined in Section 13.1-1002 of the Delaware
Limited Liability Company Act, by reason of his or her appointment or by reason
of his or her actions as an officer of the Company.  Any officer may resign at
any time by giving written notice to the Managing Member.  Any such resignation
shall take effect at the date of the receipt of such notice or at any later time
specified therein, and unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
 
DUTIES
 
RESOLVED, that the officers of the Company shall have the powers and authority
described below:
 
CHIEF EXECUTIVE OFFICER.  The Chief Executive Officer will, subject to the
supervision of the Managing Member, have general management and control of the
business and property of the Company in the ordinary course of its business with
all powers with respect to general management and control reasonably incident to
such responsibilities.
 
PRESIDENT.  The President will, subject to the supervision of the Managing
Member, have general management and control of the business and property of the
Company in the ordinary course of its business with all powers with respect to
general management and control reasonably incident to such responsibilities.
 
EXECUTIVE VICE PRESIDENTS.  Each Executive Vice President, if any, will have
those powers and duties assigned to him by the Managing Member, or delegated by
the President.  The Executive Vice Presidents, in the order designated by the
Managing Member or, in the absence of such a designation, as determined by the
length of time each has held the office of Executive
 

 
 

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Vice President, will exercise the powers of the Chief Executive Officer and
President during the absence or inability to act of the Chief Executive Officer
and President.
 
SENIOR VICE PRESIDENTS.  Each Senior Vice President, if any, will have those
powers and duties assigned to him by the Managing Member, or delegated by the
President or an Executive Vice President.
 
VICE PRESIDENTS.  Each Vice President, if any, will have those powers and duties
assigned to him by the Managing Member, or delegated by the President, an
Executive Vice President or a Senior Vice President.
 
SECRETARY.  Except as otherwise provided in these regulations, the Secretary
shall keep the minutes of all meetings of the Members and of any committee
thereof, or consents in lieu of such meetings in the Company’s minute books and
shall cause notice of the meetings to be given when requested by any person
authorized to call a meeting.  The Secretary may sign with the Chief Executive
Officer or the President, in the name of the Company, all contracts of the
Company and affix the Company seal (if any) thereto.  The Secretary may sign
with the Chief Executive Officer or the President all Company certificates, and
is in charge of the certificate books, transfer records, ledgers and any other
stock books and papers as the Managing Member may direct, all of which shall, at
all reasonable times, be open to inspection by any Member at the Company’s
office during business hours.  The Secretary will, in general, perform such
other duties incident to the office of the Secretary, or as assigned by the
Managing Member or delegated by the President.
 
ASSISTANT SECRETARIES.  Each assistant secretary, if any, of the Company will
have those powers and duties assigned to him by the Managing Member or delegated
by the President.  The Assistant Secretaries, in the order as designated by the
Managing Member or, in the absence of such a designation, as determined by the
length of time they have held the office of Assistant Secretary, will exercise
the powers of the Secretary during the Secretary’s absence or inability to act.
 
TREASURER.  The Treasurer will have the care and custody of all of the Company’s
funds and shall deposit them in such banks or other depositories as the Managing
Member or any officer(s), or any officer and agent jointly, duly authorized by
the Managing Member, direct or approve.  The Treasurer shall keep a full and
accurate account of all monies received and paid on account of the Company and
shall render a statement of the Company’s accounts whenever the Managing Member
so requires.  Except as otherwise provided by the Managing Member, the Treasurer
shall perform all other necessary acts and duties in connection with the
administration of the Company’s financial affairs and generally perform all the
duties usually appertaining to the office of the Treasurer.  Whenever required
by the Managing Member, the Treasurer shall give bonds for the faithful
discharge of his duties in such sums and with such securities as the Managing
Member may approve.  In the absence of the Treasurer, the person designated by
the President will perform the Treasurer’s duties.
 
ASSISTANT TREASURERS.  Each assistant treasurer, if any, of the Company will
have those powers and duties assigned to him by the Managing Member, or
delegated by the President.  The Assistant Treasurers, in the order as
designated by the Managing Member or, in the absence of such a designation, as
designated by the length of time they have held the office of Assistant
Treasurer, will exercise the powers of the Treasurer during the Treasurer’s
absence or inability to act.
 
COMPENSATION.  The compensation of the officers of the Company, if any, shall be
fixed from time to time by the Managing Member of the Company.
 
APPOINTMENT OF OFFICERS
 
RESOLVED, that the individuals listed below be, and they hereby are, elected to
the offices set forth opposite their respective names, to serve in such
capacities until removal or replacement by the Managing Member or resignation:
 

 

 
Robert Finizio
Chief Executive Officer
 
____________
Chief Financial Officer
 
_______________
Secretary

 

 
 

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SCHEDULE II
 
TO OPERATING AGREEMENT
 

 
Managing Member
Percentage Interest
Initial
Capital
Contribution
[●]
100.00%
$____________
     

 

 
 

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EXHIBIT E
 
FORM OF LEGAL OPINION FOR AMHN, INC.
 
1.
Parent is a corporation validly existing and in good standing under the laws of
the State of Nevada.  Parent has all requisite corporate power and authority to
own, operate and lease its properties and to carry on its business as it is, to
our knowledge, currently conducted.  Parent is qualified to do business as a
foreign corporation in the State(s) of [_________].

 
2.
Merger Sub is a limited liability company validly existing under the laws of the
State of Delaware.  Merger Sub Parent has all requisite power and authority to
own, operate and lease its properties and to carry on its business as it is
currently conducted.

 
3.
Parent and Merger Sub each have all necessary corporate power and corporate
authority to enter into, execute, deliver and perform its obligations under the
Merger Agreement and to consummate the Merger.  The execution, delivery and
performance by Parent and Merger Sub of the Merger Agreement and the
consummation of the transactions contemplated thereby have been duly and validly
approved and authorized by the Board of Directors and the stockholders of Parent
and the sole member of Merger Sub, and no other corporate proceedings on the
part of Parent or Merger Sub are necessary for the execution, delivery and
performance by Parent or Merger Sub of the Merger Agreement.

 
4.
The Merger Agreement has been duly and validly executed and delivered by the
Parent and Merger Sub.

 
5.
The execution and delivery of the Merger Agreement by Parent and Merger Sub, the
performance by Parent and Merger Sub of their respective obligations under the
Merger Agreement, and the consummation by Parent and Merger Sub of the
transactions contemplated thereby will not (a) conflict with or result in any
breach or violation of the Parent Charter Documents or the Merger Sub Charter
Documents, or (b) to our knowledge, violate any judgment, order, injunction,
decree or other restriction of any Governmental Entity applicable to Parent or
Merger Sub.

 
6.
No consent, approval, order, authorization from, or registration, declaration or
filing with, any Governmental Entity is necessary or required to be made or
obtained for the execution and delivery by Parent or Merger Sub of the Merger
Agreement, the performance by Parent or Merger Sub of its obligations under the
Merger Agreement or the consummation by Parent or Merger Sub of the transactions
contemplated thereby, except for filing of the Certificate of Merger in
accordance with the Delaware Limited Liability Company Act and
[_________________].

 
7.
To our knowledge, there is no judgment, decree injunction, rule or order of any
Governmental Entity or arbitrator outstanding against Parent or Merger Sub that
seeks to prohibit, restrain or enjoin the Merger or the transactions
contemplated by the Merger Agreement.

 
8.
Parent is currently subject to the reporting requirements of section 13 and/or
15(d) of the Exchange Act of 1934 (the “Exchange Act”), as amended, and has
filed or furnished, as applicable, all forms, reports, schedules, statements,
certificates and documents with the SEC that have been required to be filed or
furnished, as applicable, by it under applicable legal requirements and/or as
otherwise required under the Merger Agreement since [date].

 

 
 

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EXHIBIT F
 
FORM OF LOCK-UP AGREEMENT
 

 
 

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LOCK-UP AGREEMENT
 
THIS LOCK-UP AGREEMENT (the "Agreement") is entered into as of this _______ day
of___________, 2011 (the "Effective Date”) by and between _________________ (the
"Shareholder") located at _____________________________________ and AMHN, Inc.,
a Nevada corporation (the "Company"), with a corporate address of 951 Broken
Sound Parkway, Suite 300-320, Boca Raton, FL  33487.
 
WHEREAS, the Company, entered into an Agreement and Plan of Merger dated as of
_________, 2011 (the "Acquisition Agreement") whereby the Company will acquire
100% of the issued and outstanding ownership units and rights to acquire
ownership units of VitaMedMD, LLC, a Delaware limited liability company
("VitaMed") by means of a reverse merger in exchange for the issuance of shares
and rights to acquire shares of the Company's common stock, $0.001 par value
("Common Stock") equaling 70,000,000 shares in the aggregate (the “Merger”); and
 
WHEREAS, included in the 70,000,000 shares of the Company’s Common Stock
discussed above _______ shares of the Common Stock  are being reserved for
issuance upon the exercise of stock options and/or warrants (“Company Options”
or “Company Warrants” as the case may be, and together with the Common Stock,
“Company Securities”) which are being issued by the Company in exchange for
those similar instruments previously issued by VitaMed to such holders prior to
the Merger  ; and
 
WHEREAS, pursuant to the Acquisition Agreement and as a condition to closing the
transactions contemplated thereby, the Shareholder will enter into this
Agreement, which, among other things, will restrict the sale, assignment,
transfer, encumbrance or other disposition of the shares of Common Stock issued
to them or to be issued upon the exercise of Company Options or Company
Warrants; and
 
WHEREAS, the parties hereto desire to restrict the sale, assignment, transfer,
encumbrance or other disposition of the Shares and obligations in respect
thereof as hereinafter provided.
 
NOW THEREFORE, in consideration of the premises and of the terms and conditions
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
 
1.           LOCK-UP OF SECURITIES.
 
(a)           Shareholder agrees that from the Effective Date until eighteen
(18) months after such Effective Date (the "Lock-Up Period"), the Shareholder
will not make or cause any sale of the Company Securities the Shareholder owns
or has the power to control the disposition of, either of record or
beneficially. After the completion of the Lock-Up Period, the Shareholder agrees
to not sell or dispose of more than 2.5 percent (2.5%) of the aggregate Common
Stock or shares reserved for issuance for Company Options and Company Warrants
owned by Shareholder per quarter over the following twelve (12) month period
(the “Dribble Out Period”).  Upon the completion of the Dribble Out Period, this
Agreement shall terminate and Shareholder will be free to transfer or dispose of
the Securities without limitation except that all such transfers or dispositions
shall be in compliance with applicable Securities Laws as described in Section 3
below.
 
(b)           Notwithstanding the foregoing, the restrictions set forth in
Section 1(a) above shall not apply (A) in the event that a change of control of
the Company occur after the Effective Date or (B) to transfers or dispositions
(i) if the undersigned is not a natural person, to its equity holders, (ii) to
the immediate family members of the undersigned or its equity holders, (iii) a
family trust, foundation or
 
 
 
 

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partnership created for the exclusive benefit of the undersigned, its equity
holders or any of their respective immediate family members, (iv) a charitable
foundation controlled by the undersigned, its equity holders or their respective
immediate family members as a bona fide gift or gifts, (iii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the
undersigned, (iv) consummated in a private transaction among the Shareholder and
the transferee wherein the Securities transferred are not sold or otherwise
disposed on the market or exchange in which the Company’s Common Stock is
listed, or (v)  approved in writing by the Company’s Board of Directors prior to
such transfer or disposition, which such approval shall be in the sole
discretion of the Board of Directors except that such approval will not be
unreasonably withheld so long as the Board of Directors determines that such
transfer or disposition will not significantly harm or damage the Company’s
trading or market value, provided that in each such case that the transferee
thereof agrees to be bound by the restrictions set forth herein.  For purposes
of this Agreement, a “change of control” shall mean any event whereby any person
or entity gains or purchases more than fifty percent (50%) of the voting
securities of the Company and “immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first cousin.
 
(c)           Shareholder hereby authorizes the Company during the Lock-Up
Period to cause any transfer agent for the Securities subject to this Lock-Up
Agreement to decline to transfer, and to note stop transfer restrictions on the
stock register and other records relating to the Securities subject to this
Agreement for which the Shareholder is the record holder and, in the case of
Securities subject to Lock-Up Agreement for which the Shareholder is the
beneficial but not the record holder, agrees during the Lock-Up Period to cause
the record holder to cause the relevant transfer agent to decline to transfer,
and to note stop transfer restrictions on the stock register and other records
relating to the Securities subject to this Lock-Up Agreement, if such transfer
would constitute a violation or breach of this Agreement.
 
2.           TRANSFER; SUCCESSOR AND ASSIGNS.
 
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties. As provided
above, any transfer (not limited to, but including any hypothecation) of stock
shall require the transferee to execute a Lock-Up Agreement in accordance with
the same terms set forth herein.  Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
 
3.           COMPLIANCE WITH SECURITIES LAWS.
 
Shareholder shall not at any time during or following the Lock-Up Period make
any transfer, except (i) transfers pursuant to an effective registration
statement under the Securities Act, (ii) transfers pursuant to the provisions of
Rule 144,  or (iii) if such Shareholder shall have furnished the Company with an
opinion of counsel, if reasonably requested by the Company, which opinion and
counsel shall be reasonably satisfactory to the Company, to the effect that the
transfer is otherwise exempt from registration under the Securities Act and that
the transfer otherwise complies with the terms of this Agreement.
 
4.           OTHER RESTRICTIONS.
 
(a)           Legends.  The Shareholder hereby agrees that each outstanding
certificate representing shares of Common Stock issued during the Lock-Up Period
shall bear legends reading substantially as follows:
 
 
 
 

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(i)
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT.

 
 
(ii)
THE SALE OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF A LOCK-UP AGREEMENT DATED [____], 2011,
BETWEEN THE ISSUER AND THE STOCKHOLDER LISTED ON THE FACE HEREOF.  A COPY OF
SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE ISSUER AND WILL BE
PROVIDED TO THE HOLDER HEREOF UPON REQUEST. NO TRANSFER OF SUCH SECURITIES WILL
BE MADE ON THE BOOKS OF THE ISSUER UNLESS ACCOMPANIED BY EVIDENCE OF COMPLIANCE
WITH THE TERMS OF SUCH LOCK-UP AGREEMENT.

 
(b)           Termination of Restrictive Legends. The restrictions referred to
in Section 4(a)(i) shall cease and terminate as to any particular shares (i)
when, in the opinion of counsel for the Company, such restriction is no longer
required in order to assure compliance with the Securities Act or (ii) when such
shares shall have been transferred in a Rule 144 transfer or effectively
registered under the Securities Act. The restrictions referred to in Section
4(a)(ii) shall cease and terminate at the end of the Lock-Up Period. Whenever
such restrictions shall cease and terminate as to any shares, Shareholder shall
be entitled to receive from the Company, in exchange for such legended
certificates, without expense (other than applicable transfer fees and taxes, if
any, if such unlegended shares are being delivered and transferred to any person
other than the registered holder thereof), new certificates for a like number of
shares not bearing the relevant legend(s) set forth in Section 4(a). The Company
may request from Shareholder a certificate or an opinion of counsel of
Shareholder with respect to any relevant matters in connection with the removal
of the legend(s) set forth in Section 4(a)(i) from Shareholder’s stock
certificates, which certificate or opinion of counsel will be reasonably
satisfactory to the Company.
 
(c)           Copy of Agreement. A copy of this Agreement shall be filed with
the corporate secretary of the Company, shall be kept with the records of the
Company and shall be made available for inspection by any shareholder of the
Company.  In addition, a copy of this Agreement shall be filed with the
Company's transfer agent of record.
 
(d)           Recordation. The Company shall not record upon its books any
transfer to any person except transfers in accordance with this Agreement.
 

 
 

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5.           NO OTHER RIGHTS
 
The Shareholder understands and agrees that the Company is under no obligation
to register the sale, transfer or other disposition of Shareholder’s Securities
under the Securities Act or to take any other action necessary in order to make
compliance with an exemption from such registration available.
 
6.           SPECIFIC PERFORMANCE
 
Shareholder acknowledges that there would be no adequate remedy at law if the
Shareholder fails to perform any of its obligations hereunder, and accordingly
agrees that the Company, in addition to any other remedy to which it may be
entitled at law or in equity, shall be entitled to compel specific performance
of the obligations of the Shareholder under this Agreement in accordance with
the terms and conditions of this Agreement. Any remedy under this Section 6 is
subject to certain equitable defenses and to the discretion of the court before
which any proceedings therefor may be brought.
 
7.           NOTICES.
 
All notices, statements, instructions or other documents required to be given
hereunder shall be in writing and shall be given either personally or by mailing
the same in a sealed envelope, first-class mail, postage prepaid and either
certified or registered, return receipt requested, or by telecopy, and shall be
addressed to the Company at its principal offices and to Shareholder at the
respective addresses furnished to the Company by Shareholder.
 
8.           SUCCESSORS AND ASSIGNS.
 
This Agreement shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
 
9.           RECAPITALIZATIONS AND EXCHANGES AFFECTING SHARES.
 
Except as otherwise provided in Section 1(b)(A) above, the provisions of this
Agreement shall apply, to the full extent set forth herein with respect to the
shares, to any and all shares of capital stock or equity securities of the
Company which may be issued by reason of any stock dividend, stock split,
reverse stock split, combination, recapitalization, reclassification or
otherwise.
 
10.           GOVERNING LAW.
 
This Agreement shall be governed by and construed in accordance with the laws of
the State of Nevada.
 
11.           COUNTERPARTS.
 
This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.
 
12.           ATTORNEYS' FEES.
 
If any action at law or in equity (including arbitration) is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorneys' fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled as determined
by such court, equity or arbitration proceeding.
 
 
 
 

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13.           AMENDMENTS AND WAIVERS.
 
Any term of this Agreement may be amended with the written consent of the
Company and the Shareholder.  No delay or failure on the part of the Company in
exercising any power or right under this Agreement shall operate as a waiver of
any power or right.  The Board of Directors of the Company may amend the terms
and conditions of this Agreement or the term of the Lock-Up Period.  In such
event, the Company shall amend the terms and conditions of this Agreement or the
term of the Lock-Up Period on a pro-rata basis for each Shareholder that is
subject to this Agreement at any time so long as the Board reasonably determines
that any such Amendment is in the best interests of the
Company.  Notwithstanding the foregoing, any amendment to this Agreement or the
Lock-Up Period shall in no way mean or be construed as the amendment,
modification or waiver of any other lock-up agreement to which the Company is a
party.
 
14.           SEVERABILITY.
 
If one or more provisions of this Agreement are held to be unenforceable under
applicable law, portions of such provisions, or such provisions in their
entirety, to the extent necessary, shall be severed from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
 
15.           DELAYS OR OMISSIONS.
 
No delay or omission to exercise any right, power or remedy accruing to any
party to this Agreement, upon any breach or default of the other party to this
Agreement shall impair any such right, power or remedy of such holder nor shall
it be construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any breach or default be deemed a waiver of any other breach
or default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party to this Agreement of
any breach or default under this Agreement, or any waiver on the part of any
party of any provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement or by law or otherwise afforded to any
holder shall be cumulative and not alternative.
 
16.           ENTIRE AGREEMENT.
 
This Agreement and the documents referred to herein constitute the entire
agreement between the parties hereto pertaining to the subject matter hereof,
and any and all other written or oral agreements existing between the parties
hereto are expressly canceled.
 
(Signature page follows.)
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
 

     
Company Name
     
AMHN, INC.
                   
Date:
 
, 2011
 
By:
/s/
         
Jeffrey D. Howes
         
Chief Executive Officer

 

     
SHAREHOLDER:
       
Date:
 
, 2011
           
[Name]

 

 
 

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EXHIBIT G
 
FORM OF LEGAL OPINION FOR VITAMEDMD, LLC
 
1.
The Company is a limited liability company validly existing and in good standing
under the laws of the State of Delaware.  The Company has all requisite power
and authority to own, operate and lease its properties and to carry on its
business as it is, to our knowledge, currently conducted.  The Company is
qualified to do business as a foreign corporation in the State of Florida.

 
2.
The Company has all necessary power and authority to enter into, execute,
deliver and perform its obligations under the Merger Agreement and to consummate
the Merger.  The execution, delivery of the Merger Agreement by the Company and
the consummation of the transactions contemplated thereby have been duly and
validly approved and authorized by the Board of Directors and the members of the
Company, and no other proceedings on the part of the Company are necessary for
the execution, delivery and performance by the Company of the Merger Agreement.

 
3.
The Merger Agreement has been duly and validly executed and delivered by the
Company.

 
4.
The execution and delivery of the Merger Agreement by the Company, the
performance by the Company of its obligations under the Merger Agreement, and
the consummation by the Company of the transactions contemplated thereby will
not (a) conflict with or result in any breach or violation of the Company’s
Charter Documents, or (b) to our knowledge, violate any judgment, order,
injunction, decree or other restriction of any Governmental Entity applicable to
the Company.

 
5.
No consent, approval, order, authorization from, or registration, declaration or
filing with, any Governmental Entity is necessary or required to be made or
obtained by the Company for the execution and delivery by the Company of the
Merger Agreement, the performance by the Company of its obligations under the
Merger Agreement or the consummation by the Company of the transactions
contemplated thereby, except for filing of the Certificate of Merger in
accordance with the Delaware Limited Liability Company Act.

 
6.
To our knowledge, there is no judgment, decree injunction, rule or order of any
Governmental Entity or arbitrator outstanding against the Company that seeks to
prohibit, restrain or enjoin the Merger or the transactions contemplated by the
Merger Agreement.