UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 8-K


CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported):    February 28, 2014


WELLNESS CENTER USA, INC.

(Exact name of registrant as specified in its charter)


NEVADA

 

333-173216

 

27-2980395

(State or other jurisdiction of incorporation or organization)

 

Commission File Number

 

(IRS Employee Identification No.)


1014 E Algonquin Rd, Ste. 111, Schaumburg, IL, 60173

 (Address of Principal Executive Offices)


(847) 925-1885

(Issuer Telephone number)


Not Applicable

(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below):


        . Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

        . Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

        . Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

        . Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 1.01 Entry into a Material Definitive Agreement.


On January 28, 2014, the Company entered into an Exchange Agreement (“Exchange Agreement”) to acquire all of the issued and outstanding shares of stock in National Pain Centers, Inc. (“NPC”), a Deer Park, Illinois-based management services provider, for and in consideration of the issuance of 5,000,000 shares of common stock in the Company.  

The Exchange Agreement is included as Exhibit 2.1 to this Current Report and is the legal document that governs the terms of the share exchange described therein and the other actions contemplated by the Exchange Agreement.   The discussion of the Exchange Agreement set forth herein is qualified in its entirety by reference to Exhibit 2.1.

Item 2.01 Completion of Disposition or Acquisition of Assets.

On February 28, 2014, the Company consummated the share exchange and acquired all of the issued and outstanding shares of stock in NPC for and in consideration of the issuance of 5,000,000 shares of its common stock pursuant to the Exchange Agreement.   The shares issued in connection with the share exchange represent 9.9% of the 50,130,671 shares of issued and outstanding common stock of the Company as of the closing and issuance of shares  pursuant to the Exchange Agreement.    NPC is now operated as a wholly-owned subsidiary of the Company.

As noted in Item 3.02, the 5,000,000 shares issued in connection with the share exchange under the Exchange Agreement were issued in reliance upon the exemption from registration requirements under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) thereof and Regulation D thereunder.   As such, the shares may not be offered or sold unless they are registered under the Securities Act or qualify for an exemption from the registration requirements under the Security Act.


Item 3.02 Unregistered Sales of Equity Securities.


The 5,000,000 shares issued in connection with the share exchange under the Exchange Agreement were issued in reliance upon the exemption from registration requirements under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) thereof and Regulation D thereunder.   The Company will rely upon certain representations and warranties of the recipient, including agreements with respect to restrictions on resale, in support of the satisfaction of the conditions contained in Section 4(2) and Regulation D under the Securities Act.   


Item 5.02  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.


We have executed an employment agreement with Jay Joshi, M.D., DABA, DABAPM, FABAPM, who will serve as Chief Medical Officer (CMO) of the Company.  The agreement is for a term of five years beginning February 28, 2014 and provides an annual base salary of $200,000, subject to increase, but not decrease, from time to time as determined by the Board of Directors. It provides a signing stock option to purchase up to 400,000 common shares at an exercise price of $0.40 per share. In addition, provided he remains employed, Dr. Joshi will be granted additional stock options to buy up to an aggregate total of 1,000,000 common shares, at a vesting schedule of 200,000 shares per quarter, starting with the quarter ending September 30, 2014. Each grant of options shall be exercisable at a price equal to the then market closing price, at the end of each quarter. All options will be issued in accordance with the Company’s 2010 Non-Qualified Stock Compensation Plan.


Employment under the agreement is at will and terminable by either party at any time.   If the employment agreement is terminated by Dr. Joshi for good reason (as defined therein), or by the Company other than for cause (as defined therein), Dr. Joshi is entitled to pay through the termination date plus three month’s base pay for each full year of service then remaining. If the employment agreement is terminated by Dr. Joshi for other than good reason, or by the Company for cause, Dr. Joshi is entitled only to pay through the termination date and a portion of Company shares held by him or for his benefit are subject to forfeiture. The agreement contains covenants not to compete, secrecy and non-interference which apply during employment and continue for a period of one year following termination.


This discussion of the employment agreement is qualified in its entirety by reference to the employment agreement, a copy of which is included as Exhibit 5.1 to this Current Report.


In addition to his employment, upon consummation of the exchange transaction, Dr. Joshi was appointed to fill a vacancy in the Board of Directors, to serve until the next annual meeting of the shareholders of the Company. Dr. Joshi is a nationally recognized double board certified Anesthesiologist and fellowship trained Interventional Spine and Pain Management physician who possesses the rare ability to combine clinical medicine, research, creativity, marketing, inventions, and business development. He is considered a National Key Opinion Leader in pain management, has presented to a variety of audiences over 500 times, and has worked internationally at the World Health Organization (WHO). He has been featured on major TV networks, Radio, Print, and the Internet.  He was accepted into medical school at the age of 16 via an accelerated honors BS/MD program with multiple scholarships.



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We have executed an employment agreement with Donald Swanson, who will serve as Chief Operating Officer (“COO”) of the Company. It provides a signing stock option to purchase up to 1,400,000 common shares at an exercise price of $0.40 per share. In addition, provided he remains employed, Mr. Swanson will be granted additional stock options to buy up to an aggregate total of 1,000,000 common shares, at a vesting schedule of 200,000 shares per quarter, starting with the quarter ending September 30, 2014. Each grant of options shall be exercisable at a price equal to the then market closing price, at the end of each quarter. All options will be issued in accordance with the Company’s 2010 Non-Qualified Stock Compensation Plan.  


Employment under the agreement is at will and terminable by either party at any time.   If the employment agreement is terminated by Mr. Swanson for good reason (as defined therein), or by the Company other than for cause (as defined therein), Mr. Swanson is entitled to pay through the termination date plus three month’s base pay for each full year of service then remaining. If the employment agreement is terminated by Mr. Swanson for other than good reason, or by the Company for cause, Mr. Swanson is entitled only to pay through the termination date and the unvested options held by him or for his benefit are subject to forfeiture. The agreement contains covenants not to compete, secrecy and non-interference which apply during employment and continue for a period of one year following termination.


This discussion of the employment agreement is qualified in its entirety by reference to the employment agreement, a copy of which is included as Exhibit 5.2 to this Current Report.


In addition to his employment, Mr. Swanson was appointed to fill a vacancy in the Board of Directors, to serve until the next annual meeting of the shareholders of the Company. Mr. Swanson brings 30 years of diverse background in emerging technologies, mergers and acquisitions, sales and marketing, and managing operations with a market driven approach providing direct and indirect results. Throughout his career as an entrepreneur and corporate executive in both public and private companies, Swanson has demonstrated repeated success transforming emerging companies into revenue generating operating businesses. He brings expertise in managing operations, manufacturing, R&D, brand management and marketing.


Item 9.01 Financial Statements and Exhibits.


(a)

Financial Statements of NPC business acquired on February 28, 2014: None.


(b)

Pro forma financial information.   None.


(c)

Shell Company Transaction. Not applicable.


(d)

Exhibits.


2.1

Exchange Agreement dated January 28, 2014 by and between National Pain Centers, Inc. and Wellness Center

USA, Inc. *

5.1

Employment Agreement dated as of February 28, 2014 by and between Jay Joshi, M.D. and Wellness Center

USA, Inc.

5.2

Employment Agreement dated as of February 28, 2014 by and between Donald Swanson and Wellness Center

USA, Inc.

99.1

Press Release of Wellness Center USA, Inc. dated March 4, 2014.

 


* Exhibits and schedules have been omitted pursuant to Item 601 (b)(2) of Regulation S-K.   The Company hereby undertakes to furnish copies of any omitted exhibits and schedules upon request by the SEC.


EXHIBIT INDEX


Exhibit No.

 

Description

2.1

 

Exchange Agreement dated January 28, 2014 by and between National Pain Centers, Inc.  and Wellness Center USA, Inc.

5.1

 

Employment Agreement dated as of February 28, 2014 by and between Jay Joshi, M.D. and Wellness Center USA, Inc.  

5.2

 

Employment Agreement dated as of February 28, 2014 by and between Donald Swanson and Wellness Center USA, Inc.

99.1

 

Press Release of Wellness Center USA, Inc. dated March 4, 2014.



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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  

WELLNESS CENTER USA, INC.

  

  

Date:  March 4, 2014

By:  

/s/ Andrew J. Kandalepas

  

  

Andrew J. Kandalepas

  

  

Chairman, Chief Executive Officer, Principal Accounting Officer, and Chief Financial Officer








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EXHIBIT 2.1


EXCHANGE AGREEMENT


This Exchange Agreement (“Agreement”) is made this 28 th day of January, 2014 by and between Jay Joshi, MD (hereinafter referred to as a “Executive Shareholder”), being the sole Shareholder, officer, and director of National Pain Centers, Inc., a Nevada corporation (hereinafter referred to as “NPC”), and Wellness Center USA, Inc., a Nevada corporation (hereinafter referred to as the “Company”).


RECITALS:


The Company is engaged in the business of providing healthcare solutions (the “ Project ”).


NPC is engaged in the business of acquisitions and management of top-tier medical practices in the interventional and multi-modal pain management sector. administrative Interventional and Multimodal Pain Management Services (the “ Services ”).


The Company wishes to expand into other areas of the health-care field which are complementary with the Project, so that it might increase the potential value of issued and outstanding shares of common stock in the Company (“ Shares ”).


The Executive Shareholder owns or represents all outstanding shares of common stock in NPC (“ NPC Shares ”), representing 100% voting and ownership control of all issued and outstanding shares of stock in NPC, and wish to expand NPC’s provision of Services so that it might increase the potential value of the NPC Shares.


The Company and the Executive Shareholder believe that their wishes for expansion, and to increase the potential the value of the Shares and the NPC Shares, respectively, may be advanced through an exchange of Shares and NPC Shares pursuant the terms and conditions of this Agreement.


NOW, THEREFORE, in consideration of the foregoing Recitals and the respective representations, warranties and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


ARTICLE I

Certain Definitions


As used in this Agreement, and in addition to any other defined terms used herein, each of the following terms shall have the following meaning:


1.1 Affiliate .  “ Affiliate ” of a Person shall mean a Person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, the first Person.


1.2 Associate .  “ Associate ” of a Person shall mean (i) an Affiliate of such Person; or (ii) a relative or spouse of such Person, or a relative of such spouse; or (iii) any trust or other estate in which such Person (or any relative or spouse of such Person) has a substantial beneficial interest or as to which such Person (or any relative or spouse of such Person, or a relative of such spouse) serves as a trustee or in a similar fiduciary capacity.


1.3 Closing .  “ Closing ” shall mean the delivery of the documents and materials described in Section 3.


1.4 Closing Date .  “ Closing Date ” has the meaning set forth in Section 3.1.


1.5 ERISA .  “ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended.


1.6 Financial Statements .  “ Financial Statements ” shall meaning the financial statements of NPC and the Company, respectively, as further identified herein.


1.7 Indebtedness .  “ Indebtedness ” shall mean (i) all obligations for borrowed money, whether current or funded, secured or unsecured; (ii) all obligations on the deferred purchase price of any property or services; (iii) all obligations created or arising under any conditional sale or other title retention agreement with respect to property acquired (even though the rights and remedies of the seller, owner or lender under such agreement in the event of a default may be limited to repossession or sale or such property); (iv) all obligations secured by a purchase money mortgage or other Lien to secure all or part of the purchase price of property subject to such mortgage or Lien; (v) all obligations under leases which shall have been or should be, in accordance with generally accepted accounting principles, recorded as capital leases; (vi) any obligation in respect of bankers’ acceptances or letters of credit; (vii) any obligations secured by Liens on property, whether or not such obligations were assumed at the time of acquisition of such property; (viii) all obligations of a type referred to in clause (i), (ii), (iii), (iv), (v), (vi) or (vii) above which is directly or indirectly guaranteed by any Affiliate; (ix) any accrued and unpaid interest or other charges on any of the foregoing obligations; (x) present, future or contingent payment obligations under any qualified or non-qualified welfare, benefit or other plan, agreement or arrangement with any former or present employee or Associate of such employee; (xi) Taxes; and (xii) all other forms of obligations except trade accounts payable and accrued expenses incurred in the ordinary course of business.




1.8 Intellectual Property .  “ Intellectual Property ” shall mean  trademarks, service marks, trade names, trade dress, copyrights, and similar rights, including registrations and applications to register or renew the registration of any of the foregoing, patent and patent applications, and inventions, processes, designs, formulae, trade secrets, know-how, confidential information, and all similar intellectual property rights, and licenses of any of the foregoing.


1.9 Lien .  “ Lien ” shall mean any mortgage, trust deed, pledge, security interest, claim, charge or encumbrance of any kind.


1.10 Material and Materially .  “ Material” and “Materially ”, unless otherwise specifically defined, shall mean and include any specified item, event or matter which, in the aggregate, results in, or may have as a result, an impact which exceeds or may exceed $25,000.00.


1.11 Person .  “ Person ” shall mean any individual, business corporation, municipal or not-for-profit corporation, trust, general or limited partnership, limited liability company, joint venture, unincorporated association, joint stock company, or any other entity or organization of any kind, and any governmental entity, including any agency or political subdivision thereof.


1.12 Securities Act .  “ Securities Act ” shall mean the Securities Act of 1933.


1.13 Tax Returns .  “ Tax Returns ” shall mean all returns, amended returns, declarations, statements, reports, information statements, declarations of estimated taxes, backup withholding returns or reports and other documents required to be filed in respect of Taxes.


1.14 Taxes .  “ Taxes ” shall mean all federal, state, municipal, local and foreign taxes, customs, duties, fees, levies, assessments or charges of any kind whatever including, but not limited to, income, alternative minimum income, franchise, profits, windfall profits, gross receipts, excise, sales, use, license, lease, service, service use, transaction, occupation, severance, stamp, premiums, energy, environmental, withholding, payroll, employment, unemployment, Social Security, worker’s compensation, ad valorem, real or personal property, and capital taxes, and any interest, penalties, additions to tax or other additional amounts with respect thereto.


ARTICLE II

Exchange of Shares and NPC Shares


2.1 Exchange of Shares and NPC Shares . Subject to the provisions of this Agreement, the Executive Shareholder is prepared to transfer to the Company 100% of his NPC Shares (5,000,000 Shares) in consideration of the Company’s issuance of Shares to him on a 1:1 exchange ratio.  Provided all NPC Shares are exchanged with Shares of the Company, the Company shall issue a total of 5,000,000 Shares of common stock according to this Agreement.


ARTICLE III

The Closing


3.1 Time and Place of Closing .  The Closing shall take place at the offices of the Company’s attorneys, Rieck and Crotty, P.C., 55 West Monroe Street, Suite 3625, Chicago, Illinois at 11am. Central Standard Time, on February 10, 2014 or at such other time, date or place as may be mutually agreed by the parties (the “Closing Date”).


3.2 Exchange and Transfer of the Shares and NPC Shares .  At the Closing, the Company shall exchange and transfer the Shares to the Executive Shareholder in the manner hereinafter provided, and the Executive Shareholder shall acquire and accept the Shares solely for and in consideration of the NPC Shares, which shall be delivered to the Company at Closing.


3.3 Deliveries by the Executive Shareholder to the Company .  At the Closing, the Executive Shareholder will deliver to the Company the following:


(a)

Certificates and assignments duly executed in favor of the Company and representing 100% of the issued and outstanding NPC Shares;


(b)

Certificate of Good Standing for NPC;


(c)

Any consents required from shareholders and directors of the Company; and


(d)

Any consent required under any Material Contract or Lease relating to the assets or business of NPC including, but not limited to, any and all licenses required to continue operation of NPC’s operations in the manner conducted prior to the Closing, duly executed in favor of the Company.





3.4 Deliveries by the Company to the Executive Shareholder .  At the Closing, the Company will deliver to the Executive Shareholder the following:


(a)

Certificates representing the Shares, issued in the name of the Executive Shareholder;


(b)

Certificate of Good Standing for the Company;


(c)

Any consents required from shareholders and directors of the Company;


(d)

Any consent required under any Material Contract or Lease relating to the assets or business of the Company, duly executed in favor of Executive Shareholder;


(e)

A resolution of the Board of Directors of the Company appointing Jay Joshi, MD to an existing vacant seat on the Company’s Board of Directors.


(f)

An Employment Agreement for the Executive Shareholder, in form acceptable to the Company and the Executive Shareholder, duly executed and including, among other things, non-disclosure, non-solicitation and non-compete provisions effective for the term of employment and extending for a period of one year following termination of employment.


3.5 Non-Deliveries by Executive Shareholder to the Company.  It is acknowledged and understood that the Executive Shareholder shall only deliver what is listed hereinabove, and shall not deliver or divest himself of the stock or ownership of any other company or corporation including but not limited to National Pain Centers, LLC, an Illinois limited liability company wholly owned by the Executive Shareholder.


ARTICLE IV

Representations and Warranties of the Executive Shareholder


Except as disclosed in the Schedules and Exhibits attached hereto (individually referred to as a “ Schedule ” and “Exhibit” and collectively as “ Schedules ” and “Exhibits” ) as referenced to  in the specific Section or Sections hereof to which the disclosure, Exhibit or Schedule pertains, the Executive Shareholder of NPC, executing this Agreement represents and warrants to the Company as follows:


4.1 Title to the NPC Shares .  He, she or it owns, beneficially and of record, all of his, her or its’ NPC Shares in NPC, free and clear of any Liens and Indebtedness.


4.2 Organization; Qualification .  NPC is a company duly organized, validly existing and in good standing under the laws Nevada.  NPC has the corporate power and authority to own all of its properties and assets and to carry on the business as presently conducted and is qualified as a foreign corporation in any  jurisdiction where the failure to be so qualified would have a Material adverse effect on NPC, its business or operations.


4.3 Authority Relative to this Agreement .  The Executive Shareholder has full and complete power and authority to execute and deliver this Agreement on behalf of himself and to consummate the transactions contemplated hereby solely as they relate to such Executive Shareholder.  The execution and delivery of this Agreement by the Executive Shareholder and any and all related agreements and documents, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized.  When executed and delivered, this Agreement, and all related agreements  and documents, shall have been duly and validly executed and delivered by Executive Shareholder and will not violate, constitute or cause a default, or result in any loss of a Material right under, any provision of law or the articles of incorporation of NPC, or any rule, regulation, order, judgment, decree, contract, instrument or agreement to which the Executive Shareholder is subject, or to which either is a party, and will not result in any termination, acceleration or maturity of any liability, Indebtedness or obligation of any Executive Shareholder.  This Agreement constitutes, and when executed and delivered each of the related agreements and documents shall constitute, a valid and binding obligation of the Executive Shareholder.


4.4 Governmental Authorization and Compliance .  Schedule 4.4 sets forth a complete and accurate list of all licenses, franchises, permits and other governmental authorizations relating to the assets and business operations of NPC.  There are no violations of any such license, franchise, permit and other governmental authorization, nor are there any proceedings pending or threatened to revoke or limit any such license, franchise, permit, or other governmental authorization, except for those instances where such violation, revocation or limitation will not have a Material adverse effect the assets or business operations of NPC.


4.5 Capitalization .  Schedule 4.5 includes the records of NPC delivered by the Executive Shareholder to the Company report accurately the authorized capitalization of NPC and the number of NPC Shares presently outstanding and issued to all shareholder, all of which are duly authorized, validly issued, fully paid and non-assessable.  There are no additional outstanding preemptive rights, subscriptions, warrants, options, contracts, calls or other rights of any kind with regard to any NPC Shares or any other security of NPC of any kind, and there are no capital appreciation rights, phantom stock plans, securities with profit participation rights or features, other similar obligations or commitments of NPC relating to any NPC Shares or any other security of any kind.





4.6 Financial Statements .   The Executive Shareholder has previously furnished the Company a complete and accurate copy of the balance sheet for each of the two most recent fiscal year ends, and the related statements of income and retained earnings for said periods (the “ Financial Statements ”).  The Financial Statements fairly present the financial position of NPC as of the respective dates, and the results of its operations and changes in financial position for the periods covered thereby, and except to the extent otherwise set forth in the footnotes contained therein have been prepared in accordance with generally accepted accounting principles consistently applied.


4.7 Title to and Location of Assets .  NPC has good and marketable title to all of its assets, real and personal, tangible and intangible, including those capitalized on or included in the Financial Statements, except only for properties and assets disposed of in the ordinary course of business.


4.8 Leases .  Schedule 4.8 lists all real and personal property leases (“ Leases ”) to which NPC is a party or by which either may be bound.  NPC is not in default in any Material respect under the terms of any Lease.  Each Lease is valid, binding and enforceable, in accordance with its terms, against each party thereto.


4.9 Material Contracts .  Schedule 4.9 lists all Material contracts, agreements, instruments, and commitments arising from or relating to the assets and business operations of NPC or to which it is bound.  All contracts, agreements, instruments, and other commitments described in this Section 4.9 to the knowledge of the Executive Shareholder are in full force and effect and NPC has complied with the provisions thereof.


4.10 Intellectual Property .  Schedule 4.10 sets forth a list of all registered trademarks, registered copyrights, patents and patent applications owned or used by NPC in its business operations.  To the knowledge of the Executive Shareholder, no other Person possesses any right, title or interest in, to or under such Intellectual Property.  There is no pending or, to the knowledge of the Executive Shareholder, threatened claim or litigation against NPC contesting its right, title or interest with respect to any such Intellectual Property and such Intellectual Property does not infringe, violate or require the use of any consent, trademark, trade name, license, copyright, trade secret, or other proprietary asset of any other Person.


4.11 Labor Relations .  To the knowledge of the Executive Shareholder, there are no controversies pending between NPC and any of its present or former employees which: (a) affect, or can reasonably be expected to affect, adversely and Materially, its assets or business operations; or (b) relate to any effort to prevent, restrict or delay consummation of any of the transactions contemplated by this Agreement.


4.12 Employment Agreements .  To the knowledge of the Executive Shareholder, there are no written or oral agreements with any employees of NPC which are not terminable upon notice of ninety (90) days or less.


4.13 Employee Benefit Plans .  There are no employee benefit plans within the meaning of applicable law that affect employees of NPC.


4.14 Maintenance of Tangible Assets .  The assets of NPC have been and will be from the date hereof through the Closing Date, maintained in good and operable condition ordinary wear and tear excepted.


4.15 Accounts Receivable .  Accounts receivable are fairly reported in the Financial Statements, arose in the ordinary course of business and are the result of arm’s length, bona fide transactions.  


4.16 Litigation .  There are no actions, suits, claims, investigations or proceedings legal, administrative or arbitrative) pending against Executive Shareholder, NPC or any officer, manager or employee thereof, whether at law or in equity and whether civil or criminal in nature, before or by any federal, state, municipal or other court, arbitrator, governmental department, commission, agency or instrumentality.


4.17 Absence of Changes .  Since the date of the Financial Statements, NPC has operated in the ordinary course, and there has been no: (a) Material adverse change in the operations, properties or condition (financial or otherwise); (b) damage, destruction or loss (whether or not covered by insurance) Materially and adversely affecting the assets or business operations or that could reasonably be expected to affect, Materially and adversely, the assets or business operations thereof


4.18 Insurance .  Schedule 4.18 is a complete and accurate list of all currently effective policies of insurance of which NPC is the owner or insured or covering any of its assets or business operations, indicating for each policy the carrier, risks insured, the amounts of coverage, deductible, and expiration date.  All such policies are in full force and effect, all premiums due thereon have been paid, and NPC has complied in all Material respects with the provisions of such policies.


4.19 Taxes .  All Tax Returns required to be filed by or on behalf of NPC have been duly filed on a timely basis and such Tax Returns are complete and accurate.  All Taxes due and payable have been paid in full on a timely basis.  NPC has withheld and paid over all Taxes required to have been withheld and paid over in connection with amounts paid or owing to any employee, creditor, independent contractor, or other Person.  The liability for unpaid Taxes for all periods ended on or prior to the date of this Agreement included in the Financial Statements does not exceed the liability accruals for Taxes (excluding reserves for deferred Taxes) reflected in such Financial Statements.





4.20 Environmental Matters.  


(a)

NPC has been, and at the Closing will be, in compliance in all Material respects and with all federal, state and local statutes, laws, ordinances, orders, rules, regulations, and moratoria relating to operation and occupancy of its assets and business operations.  NPC has not at any time received any notice alleging any non-compliance with or potential liability pursuant to any of such statutes, laws, ordinances, orders, rules, regulations, or moratoria.


(b)

There is no underground storage tank or hazardous waste, substance, chemical, or other condition or use of NPC’s assets or their vicinity, whether natural or man-made, which poses a present or potential threat of damage to the health of persons, to property, to natural resources, or to the environment.


(c)

NPC has no liability, responsibility or obligation, whether fixed, unliquidated, absolute, contingent or otherwise, under any federal, state or local environmental laws or regulations, including any liability, responsibility, or obligation for fines or penalties, or for investigation, expense, removal, or remedial action to effect compliance with or discharge any duty, obligation, or claim under any such laws or regulations, and, to the knowledge of NPC there is no reason to believe that any such claims, actions, suits, proceedings, or investigations under such laws or regulations exist or may be brought or threatened.


4.21 Schedules .  All of the Schedules and Exhibits provided by and attached to this Agreement by the Executive Shareholder are complete and accurate in all respects.  Schedules and Exhibits may be attached at any time prior to Closing, and subject to acceptance by each other party.


4.22 Nature of Transaction .  The Company is aware that Executive Shareholder is the senior officer of NPC and the only officer executing this Agreement.  The representations and warranties contained in Article IV of the Executive Shareholder regarding NPC are obligations only of the Executive Shareholder executing this Agreement and not of any other officer thereof.


ARTICLE V

Representations and Warranties of the Company


Except as disclosed in the Schedules and Exhibits attached hereto (individually referred to as a “ Schedule ” and “ Exhibit ” and collectively as “ Schedules ” and “ Exhibits ”) as referenced to  in the specific Section or Sections hereof to which the disclosure, Exhibit or Schedule pertains, the Company represents and warrants to the Executive Shareholder as follows:   


5.1 Organization; Qualification .  The Company is a corporation duly organized, validly existing and in good standing under the laws of its organization.  The Company has the corporate power and authority to own all of its properties and assets and to carry on the business as presently conducted and is qualified as a foreign corporation in any  jurisdiction where the failure to be so qualified would have a Material adverse effect on the Company, its business or operations.  


5.2 Authority Relative to this Agreement .  The Company has full and complete power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby as they relate to the Company.  The execution and delivery of this Agreement by the Company and any and all related agreements and documents, and the consummation of the transactions contemplated hereby and thereby, have been duly and validly authorized.  When executed and delivered, this Agreement, and all related agreements  and documents, shall have been duly and validly executed and delivered by the Company and will not violate, constitute or cause a default, or result in any loss of a Material right under, any provision of law or the articles of incorporation and bylaws of the Company, or any rule, regulation, order, judgment, decree, contract, instrument or agreement to which the Company is subject, or to which it is a party, and will not result in any termination, acceleration or maturity of any liability, Indebtedness or obligation of the Company.  This Agreement constitutes, and when executed and delivered each of the related agreements and documents shall constitute, a valid and binding obligation of the Company.


5.3 Governmental Authorization and Compliance .  Schedule 5.3 sets forth a complete and accurate list of all Material licenses, franchises, permits and other governmental authorizations relating to the assets and business operations of the Company.  There are no violations of any such license, franchise, permit and other governmental authorization, nor are there any proceedings pending or threatened to revoke or limit any such license, franchise, permit, or other governmental authorization, except for those instances where such violation, revocation or limitation will not have a Material adverse effect the assets or business operations of the Company.


5.4 Capitalization .  The corporate records of the Company delivered by the Company to the Executive Shareholder report accurately the authorized capital stock of the Company and the number of shares of stock presently outstanding and issued, all of which is duly authorized, validly issued, fully paid and non-assessable.  Except as set forth in Schedule 5.4, there are no outstanding preemptive rights, subscriptions, warrants, options, contracts, calls or other rights of any kind with regard to any shares of stock or any other security of the Company of any kind, and there are no capital appreciation rights, phantom stock plans, securities with profit participation rights or features, or similar obligations or commitments of the Company.





5.5 Financial Statements .  The Company has previously furnished the Executive Shareholder a complete and accurate copy of the balance sheet for each of the two most recent fiscal year ends, and for the interim period ended December 31, 2013 and the related statements of income and retained earnings for said periods (the “ Financial Statements ”).  The Financial Statements fairly present the financial position of the Company as of the respective dates, and the results of its operations and changes in financial position for the periods covered thereby, and except to the extent otherwise set forth in the footnotes contained therein have been prepared in accordance with generally accepted accounting principles consistently applied.


5.6 Title to and Location of Assets .  The Company has good and marketable title to all of its assets, real and personal, tangible and intangible, including those capitalized on or included in the Financial Statements, except only for properties and assets disposed of in the ordinary course of business.


5.7 Leases .  Schedule 5.7 lists all real and personal property leases (“ Leases ”) to which the Company is a party or by which it may be bound.  The Company is not in default in any Material respect under the terms of any Lease.  Each Lease is valid, binding and enforceable, in accordance with its terms, against each party thereto.


5.8 Material Contracts .  Schedule 5.8 lists all Material contracts, agreements, instruments, and commitments arising from or relating to the assets and business operations of the Company or to which it is bound.  All contracts, agreements, instruments, and other commitments described in this Section 5.8 are in full force and effect and the Company has complied with the provisions thereof.


5.9 Intellectual Property .  Schedule 5.9 sets forth a list of all registered trademarks, registered copyrights, patents and patent applications owned or used by the Company in its business operations.  To the knowledge of the Company, no other Person possesses any right, title or interest in, to or under such Intellectual Property.  There is no pending or, to the knowledge of the Company, threatened claim or litigation against the Company contesting its right, title or interest with respect to any such Intellectual Property and such Intellectual Property does not infringe, violate or require the use of any consent, trademark, trade name, license, copyright, trade secret, or other proprietary asset of any other Person.


5.10 Labor Relations .  There are no controversies pending between the Company and any of its present or former employees which: (a) affect, or can reasonably be expected to affect, adversely and Materially, its assets or business operations; or (b) relate to any effort to prevent, restrict or delay consummation of any of the transactions contemplated by this Agreement.


5.11 Employment Agreements .  There are no written or oral agreements with any employees of the Company which are not terminable upon notice of ninety (90) days or less.


5.12 Employee Benefit Plans .  There are no employee benefit plans within the meaning of applicable law that affect employees of the Company.


5.13 Maintenance of Tangible Assets .  The assets of the Company have been and will be from the date hereof through the Closing Date, maintained in good and operable condition ordinary wear and tear excepted.


5.14 Accounts Receivable .  Accounts receivable are fairly reported in the Financial Statements, arose in the ordinary course of business and are the result of arm’s length, bona fide transactions.


5.15 Litigation .  There are no actions, suits, claims, investigations or proceedings (legal, administrative or arbitrative) pending against the Company or any officer, director or employee thereof, whether at law or in equity and whether civil or criminal in nature, before or by any federal, state, municipal or other court, arbitrator, governmental department, commission, agency or instrumentality.


5.16 Absence of Changes .  Since the date of the Financial Statements, the Company has operated in the ordinary course, and there has been no: (a) Material adverse change in the operations, properties or condition (financial or otherwise); (b) damage, destruction or loss (whether or not covered by insurance) Materially and adversely affecting the assets or business operations or that could reasonably be expected to affect, Materially and adversely, the assets or business operations thereof.


5.17 Insurance .  Schedule 5.17 is a complete and accurate list of all currently effective policies of insurance of which the Company is the owner or insured or covering any of its assets or business operations, indicating for each policy the carrier, risks insured, the amounts of coverage, deductible, and expiration date.  All such policies are in full force and effect, all premiums due thereon have been paid, and the Company has complied in all Material respects with the provisions of such policies.


5.18 Taxes .  All Tax Returns required to be filed by or on behalf of the Company have been duly filed on a timely basis and such Tax Returns are complete and accurate.  All Taxes due and payable have been paid in full on a timely basis.  The Company has withheld and paid over all Taxes required to have been withheld and paid over in connection with amounts paid or owing to any employee, creditor, independent contractor, or other Person.  The liability for unpaid Taxes for all periods ended on or prior to the date of this Agreement included in the Financial Statements does not exceed the liability accruals for Taxes (excluding reserves for deferred Taxes) reflected in such Financial Statements.




5.19 Environmental Matters .


(a)

The Company has been, and at the Closing will be, in compliance in all Material respects and with all federal, state and local statutes, laws, ordinances, orders, rules, regulations, and moratoria relating to operation and occupancy of its assets and business operations.  The Company has not  at any time received any notice alleging any non-compliance with or potential liability pursuant to any of such statutes, laws, ordinances, orders, rules, regulations, or moratoria.


(b)

There is no underground storage tank or hazardous waste, substance, chemical, or other condition or use of the Company’ s assets or their vicinity, whether natural or man-made, which poses a present or potential threat of damage to the health of persons, to property, to natural resources, or to the environment.


(c)

The Company has no liability, responsibility or obligation, whether fixed, unliquidated, absolute, contingent or otherwise, under any federal, state or local environmental laws or regulations, including any liability, responsibility, or obligation for fines or penalties, or for investigation, expense, removal, or remedial action to effect compliance with or discharge any duty, obligation, or claim under any such laws or regulations, and, to the knowledge of the Company there is no reason to believe that any such claims, actions, suits, proceedings, or investigations under such laws or regulations exist or may be brought or threatened.


5.20 Schedules .  All of the Schedules and Exhibits provided by and attached to this Agreement by the Executive Shareholder are complete and accurate in all respects.  Schedules and Exhibits may be attached at any time prior to Closing, and subject to acceptance by each other party.


ARTICLE VI

Other Agreements of the Parties


6.1 Expenses .  Whether or not the transactions contemplated are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby will be paid by the party incurring such costs and expenses.


6.2 Best Efforts .  Subject to the terms and conditions of this Agreement, each of the parties will use its commercially reasonable best efforts to take, or cause to be taken, all action, and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective as soon as practicable the transactions contemplated by this Agreement.


6.3 Further Assurances .  From time to time, without further consideration, the Executive Shareholder at their own expense will execute and deliver, or cause to be executed and delivered, such documents as the Company may reasonably request to more effectively consummate the transactions contemplated hereby.  From time to time, without further consideration, the Company, at its own expense, will execute and deliver, or cause to be executed and delivered, such documents as the Executive Shareholder may reasonably request to more effectively consummate the transactions contemplated hereby.


6.4 Negotiations with Others .  During the period from the date of this Agreement to the Closing Date, neither the Executive Shareholder nor the Company shall, directly or indirectly, engage in discussions or negotiations with any person or entity concerning any possible proposal regarding a sale or transfer of all or any part of the NPC Shares or the assets or business operations of NPC.  The Executive Shareholder agree to disclose to the Company the existence and content of any communication they receive concerning any such possible proposal as soon as practicable after receipt of the communication.


6.5 Indemnification by Company .  Subject to the provisions of Sections 6.5, 6.6, 6.7, 6.8 and 6.9, from and after the Closing Date, Company hereby covenants and agrees to indemnify and hold Executive Shareholder, NPC and their respective Affiliates, directors, officers, partners, trustees, shareholders, employees and agents (each, a “ Executive Shareholder Indemnified Party ” and collectively, the “ NPC Indemnified Parties ”) harmless from, against and in respect of:


(a)

any Loss resulting from the inaccuracy of any representation or warranty by Company under this Agreement or in any certificate or other instrument provided by Company as required by this Agreement; and


(b)

any Loss resulting from any nonfulfillment of any covenant or agreement on the part of Company under this Agreement.


The foregoing matters giving rise to the NPC Indemnified Parties’ rights to indemnification hereunder are hereinafter referred to as “ NPC Claims .”





6.6 Indemnification by Executive Shareholder .  Subject to the provisions of Sections 6.6, 6.7, 6.8 and 6.10, from and after the Closing Date, Executive Shareholder hereby covenants and agrees to indemnify and hold Company, Company’s Affiliates, and their respective Affiliates, members, managers, directors, officers, partners, trustees, shareholder, employees and agents (each, a “ Company Indemnified Party ” and collectively, the “ Company Indemnified Parties ”) harmless from, against and in respect of:


(a)

any Loss resulting from the inaccuracy of any representation or warranty under this Agreement or in any certificate provided by Executive Shareholder to Buyer as required by this Agreement;


(b)

any Loss resulting from any nonfulfillment of any covenant or agreement on the part of Executive Shareholder under this Agreement; and


(c)

any Loss resulting from any claim asserted against any Company Indemnified Party or NPC by any shareholder of NPC not executing this Agreement and not electing to exchange his, her or its NPC Shares for Shares as provided herein.   


The foregoing matters giving rise to the Company Indemnified Parties’ right to indemnification hereunder are hereinafter referred to as “ Company Claims .”


6.7 Third Party Claims; Notification of Claims .


(a)

Promptly after the assertion by any third party of any claim (a “ Third Party Claim ”) against any Person entitled to indemnification under this Article VI (the “ Indemnitee ”) that results or may result in the incurrence by such Indemnitee of any Loss for which such Indemnitee would be entitled to indemnification pursuant to this Article VI, such Indemnitee shall promptly notify in writing (each such notice, a “ Third Party Claim Notice ”) the party or parties from whom such indemnification could be sought under this Article VI (each, an “ Indemnitor ” and collectively, the “ Indemnitors ”) of such Third Party Claim.  The Indemnitor may, at its option, assume the defense of the Indemnitee against any Third Party Claim (including the employment of counsel reasonably satisfactory to the Indemnitee) if the Indemnitor promptly notifies the Indemnitee of its intention to do so and keeps the Indemnitee fully informed as to all matters relating to the defense and settlement of such action.  The Indemnitee shall not settle or compromise any Third Party Claim as to which the Indemnitor has assumed the defense.  The Indemnitor shall in no case settle or compromise a Third Party Claim or consent to the entry of judgment with respect to a Third Party Claim, other than solely for money damages within the limits set forth in Section 6.8, without the prior written consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed) if such settlement, compromise or judgment would adversely affect the Indemnitee in any continuing manner.


(b)

In addition to the provisions set forth in this Section 6.7 (and without limiting such provisions), following the discovery of any facts or circumstances which would reasonably be expected to give rise to a claim for indemnification under Article VI, the Indemnitee shall provide written notice to the Indemnitor reasonably promptly after discovery of such facts or circumstances, setting forth in reasonable detail the specific facts and circumstances relating to such claim, the amount of Losses relating to such claim (or a non-binding, good faith, reasonable estimate thereof if the actual amount is not known or not capable of reasonable calculation), and the specific sections(s) of this Agreement upon which the Indemnitee seeking indemnification is relying in seeking such indemnification (an “Indemnification Notice”).  As additional or different facts and circumstances relating to any pending claim for indemnification under Article VI become known to the Indemnitee, such Indemnitee shall provide to the Indemnitor a supplement to the Indemnification Notice relating to such claim.


6.8 Limitations of Liability .  Neither the Company, nor the Executive Shareholder, shall be required to indemnify any Party with respect to any claim for indemnification that is covered by insurance and neither shall be liable for indemnification of the other, or for indemnification of any other Party, for any consequential damages, including, but not limited to, loss of revenue or income, cost of capital, or loss of business reputation or opportunity relating to the other’s breach or alleged breach of this Agreement.  Each party hereto shall provide each other party hereto with such additional information as such party may reasonably request regarding any claim for indemnification under this Article VI.


6.9 Survival of Company’s Representations and Warranties; Limitation of Certain NPC Claims .  The representations and warranties of Company contained in this Agreement shall survive the Closing for a period ending on the one (1) year anniversary of the Closing Date and any NPC Indemnified Parties Claims made pursuant to Article VI must be made prior to such time.  The limitations set forth above shall not be applicable to any claim for indemnification based on actual fraud or intentional misrepresentation by Company.





6.10 Survival of Executive Shareholder Representations and Warranties; Limitation of Certain Company Claims .  The representations and warranties of Executive Shareholder contained in this Agreement shall survive the Closing for a period ending on the one (1) year anniversary of the Closing Date and any Company Claims must be made prior to such time.  The limitations set forth above shall not be applicable to any claim by Company for indemnification based on actual fraud or intentional misrepresentation by Executive Shareholder.


6.11 Insurance Proceeds .  Notwithstanding the foregoing, each party to this Agreement shall use commercially reasonable efforts to seek recovery under its respective applicable insurance policies, if any, covering any indemnifiable Losses to the same extent as it would if such indemnifiable Losses were not subject to indemnification hereunder.  The amount of any indemnifiable Losses subject to any Claim shall be calculated net of any insurance proceeds (net of any collection expenses) received by the insured party on account of such Claim.  In the event than an insurance recovery is made by any insured party with respect to any claim for which it has been indemnified under this Article VI, then the insured party shall pay to any other party that made any payment of any Claim or portion of any Claim an amount equal to the aggregate amount of the recovery (net of all collection expenses) up to the actual amount of such indemnification payment.


6.12 Exclusive Remedy; Specific Performance .  The remedies set forth in this Article VI (together with the termination rights contained in this Agreement) constitute the parties’ exclusive remedies arising out of or in connection with this Agreement.  Notwithstanding the foregoing, in the event of a party’s willful breach of the terms of this Agreement, the non-breaching party shall be entitled to relief consisting of a judicial order of specific performance by the breaching party, which shall be cumulative with any other legally available remedies.


6.13 Restrictions On Stock.  Company shall place no restrictions as to the sale or transfer of stock given to the Executive Shareholder under this Agreement, other than such restrictions set forth by statute or rule of government.


6.14 Acknowledgement of Medical Practice.  Company acknowledges that Executive Shareholder’s continued ownership and operation of National Pain Centers LLC, an Illinois limited liability company, is not a conflict of interest or breach of duty to Company and that Executive Shareholder would not agree to this Agreement if any restrictions were placed upon him by Company as to the continued ownership and operation of National Pain Centers LLC.


6.15 Assumption of Debt.  Company shall assume all debt and liabilities of NPC at Closing and shall indemnify Executive Shareholder as to such debt whether such debt or liability is in the name of NPC or Executive Shareholder personally. A list of all such personal debt and liability is attached herein as Schedule 6.15. Company shall fully indemnify Executive Shareholder as to all such debt and liability and such obligations shall survive as long as any such obligation to pay such debt or liability remains.


ARTICLE VII

Closing Conditions


7.1 Conditions to Each Party’s Obligations .  The respective obligations of each party to effect the transactions contemplated hereby shall be subject to the fulfillment at or before the Closing Date of the condition that neither the Executive Shareholder and Company shall be subject to any order, decree or injunction of a court of competent jurisdiction which prevents or delays any of the transactions contemplated by this Agreement or the continuation of NPC’s or the Company’s business in the manner conducted prior to the Closing and, further, that this Agreement, and the transaction described herein, be approved by the directors of the Company and NPC.


7.2 Conditions to the Obligations of Executive Shareholder .  The obligations of the Executive Shareholder to effect the transactions contemplated hereby shall be further subject to the fulfillment at or before the Closing Date of the following conditions, any one or more of which may be waived by Executive Shareholder:


(a)

Compliance by the Company .  The Company shall have performed and complied in all material respects with the provisions contained in this Agreement required to be performed and complied with by it at or before the Closing Date.


(b)

Representations and Warranties .  The representations and warranties of the Company set forth in this Agreement were true and correct in all material respects as of the date of this Agreement and shall also be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except as otherwise contemplated by this Agreement.





(c)

Corporate Authority; Consents; Permits .  The Company shall have delivered to Executive Shareholder evidence satisfactory to Executive Shareholder that the Company shall have obtained any and all permits, authorizations, lessor consents and approvals of any Person or public body or authority, including the shareholder and directors of the Company, required effectively to transfer the Shares to Executive Shareholder and to continue business operations of the Company in the manner conducted prior to the Closing Date.


(d)

Capital Infusion .  The Company will support NPC’s financial needs beginning on the Closing Date and going forward on an as needed basis.


7.3 Conditions to the Obligations of the Company .  The obligations of the Company to effect the transactions contemplated hereby shall be further subject to the fulfillment at or before the Closing Date of the following conditions, any one or more of which may be waived by the Company:


(a)

Compliance by the Executive Shareholder .  The Executive Shareholder shall have performed and complied in all material respects with the provisions contained in this Agreement required to be performed and complied with by or before the Closing Date.


(b)

Representations and Warranties .  The representations and warranties of the Executive Shareholder set forth in this Agreement shall have been true and correct in all material respects as of the date of this Agreement and shall also be true and correct in all material respects as of the Closing Date as though made at and as of the Closing Date, except as otherwise contemplated by this Agreement.


(c)

Authority; Consents; Permits .  The Executive Shareholder shall have delivered to the Company evidence satisfactory to the Company that the Executive Shareholder and/or NPC shall have obtained any and all permits, authorizations, lessor consents and approvals of any Person or public body or authority, including Executive Shareholder and managers of NPC, required effectively to transfer the NPC Shares to the Company and to continue business operations of NPC in the manner conducted prior to the Closing Date.


7.4 Other Documents .  Each of the parties will furnish to the other party such certificates of such party’s members, shareholder, officers, directors, employees, Associates or Affiliates, or such other documents, as may be reasonably necessary to evidence fulfillment of the conditions set forth in this Article VII as the other party may reasonably request.


ARTICLE VIII

Termination


8.1 Termination .  This Agreement may be terminated at any time prior to the Closing Date:


(a)

By the written agreement of Executive Shareholder and the Company;


(b)

By either Executive Shareholder or the Company by written notice to the other hereto after 5:00 p.m. Central Standard Time on February 28, 2014 if the transactions contemplated hereby shall not have been consummated pursuant hereto, unless such date is extended by the mutual written consent of Executive Shareholder and the Company; or


(c)

By written notice of the Executive Shareholder to the Company if, in the exercise of the Executive Shareholder absolute discretion, any Schedule  or Exhibit submitted by the Company to the Executive Shareholder after execution of this Agreement by all parties is not satisfactory to the Executive Shareholder.


(d)

By written notice of the Company to the Executive Shareholder if, in the exercise of the Company’s reasonable discretion, any Schedule or Exhibit submitted by the Executive Shareholder to the Company after execution of this Agreement by all parties is not satisfactory to the Company or if the Executive Shareholder do not deliver at Closing certificates representing 100% of the issued and outstanding NPC Shares in consideration of Shares to be exchanged therefore as provided herein.





(e)

By either the Executive Shareholder or the Company if: (i) the representations and warranties of the Executive Shareholder or the Company, shall not have been true and correct in all material respects as of the date when made; (ii) the Executive Shareholder or the Company shall have failed to perform and comply with, in all material respects, all agreements and covenants required by this Agreement to have been performed or complied with by such parties prior to the time of such termination and such failure to perform or comply shall be incurable or shall not have been cured within a reasonable period of time but not less than ten  days in duration following notice of such failure, provided that the terminating party shall have performed and complied with, in all material respects, all agreements and covenants required by this Agreement to have been performed or complied with by such terminating party prior to such time; or (iii) any event shall have occurred or any fact or condition shall exist that shall have made it impossible to satisfy a condition precedent to the terminating party’s obligations to consummate the transactions contemplated by this Agreement, unless the occurrence of such event or existence of such fact or condition shall be due to the failure of the party seeking to terminate this Agreement or any of its Associates or Affiliates to perform or comply with any of the covenants, agreements, or conditions


8.2 Effect of Termination .  In the event this Agreement is terminated pursuant to the provisions of Section 8.1, this Agreement shall become void and have no effect, without any liability on the part of any party hereto, or any of its members, shareholder, directors, officers, employees, agents, consultants, representatives, agents, Associates or Affiliates.


ARTICLE IX

Miscellaneous Provisions


9.1 Entire Agreement .  This Agreement is to be read together with the Employment Agreements to be delivered by the Executive Shareholder pursuant to Section 3.3 (e), and any default under this Agreement or an Employment Agreement shall constitute a default under the other.   This Agreement sets forth the entire agreement between the parties and supersedes all prior agreements and understandings between the parties with respect thereto.


9.2 Amendment and Modification .  This Agreement may be amended, modified or supplemented only by written agreement signed by each of the parties.


9.3 Waiver of Compliance; Consents .  Except as otherwise provided in this Agreement, any failure of any of the parties to comply with any obligation, covenant, agreement or condition herein may be waived by the party entitled to the benefit thereof only by a written instrument signed by the party granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.  Whenever this Agreement requires or permits the consent of any party, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 9.3.


9.4 Investigations; Survival of Representations and Warranties .  Each of the representations and warranties of the parties contained herein or in any Exhibit, Schedule, certificate, or other document delivered before or at the Closing shall continue and survive the Closing Date.


9.5 Notices .  All notices and other communications under this Agreement shall be in writing and shall be deemed given if: (a) delivered personally; or (b) mailed by certified mail (return receipt requested), postage prepaid; or (c) sent by overnight courier; or (d) transmitted by telefacsimile, email or other electronic transmission;  to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof):


 

(a) If to Executive Shareholder:

National Pain Centers, Inc

 

 

21720 W. Long Grove Rd.

 

 

Suite C200

 

 

Deer Park, IL 60010


 

(b) If to the Company::

Wellness Center USA, Inc.

 

 

1014 E. Algonquin Rd

 

 

Suite 111

 

 

Schaumburg, IL 60173




9.6 Assignment .  Neither this Agreement nor any of the rights, NPC Shares or obligations hereunder shall be assigned by any party, nor is this Agreement intended to confer upon any other person except the parties hereto any rights or remedies hereunder.


9.7 Governing Law .  This Agreement shall be governed by the laws of the State of Illinois as to all matters including, but not limited to, matters of validity, construction, effect, performance and remedies, and, as partial consideration for the other party’s execution and performance hereunder each party waives personal service of any and all process upon it, to the extent permitted by law, and consents that all such service of process be made by upon such party at the address and in the manner set forth in Section 9.5 of this Agreement and service so made shall be deemed to be completed upon the earlier of actual receipt or three  days after the same shall have been posted to such party’s address. The parties agree that jurisdiction as to any dispute shall be vested in the Circuit Court of Lake County Illinois only and that all parties agree that such Court is the proper venue for all disputes. In the event of any dispute, the prevailing party shall be entitled to recover its actual attorney’s fees and costs expended.


9.8 Binding Effect and Benefit .  The provisions hereof shall be binding upon, and shall inure to the benefit of, the parties, and their respective heirs, executors, administrators, its successors, and assigns.


9.9 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.


9.10 Severability .  Whenever possible, each of the provisions of this Agreement shall be construed and interpreted in such a manner as to be effective and valid under applicable law.  If any provisions of this Agreement or the application of any provision of this Agreement to any party or circumstance shall be prohibited by, or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition without invalidating the remainder of such provision, any other provision of this Agreement, or the application of such provision to other parties or circumstances.


9.11 Interpretation .  The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement.


IN WITNESS WHEREOF, the Executive Shareholder and the Company have executed this Agreement as of the date set forth above.


Executive Shareholder:

Wellness Center USA, Inc.

 

 

By: Jay Joshi

By: Andrew Kandalepas

      Jay Joshi, CEO

      Andrew Kandalepas, CEO




EXHIBIT 5.1


EMPLOYMENT AGREEMENT


This Employment Agreement (“Agreement”) is made effective as of the 28 th day of February, 2014, by and between Wellness Center USA, Inc., a Nevada corporation (hereinafter referred to as the "Company"), and Jay Joshi, MD, a physician (hereinafter referred to as the "Executive").  


RECITALS:


WHEREAS, the Company and Executive are parties to a certain Exchange Agreement dated as of January 28, 2014 (the “Exchange Agreement”) pursuant to which the Company agreed to acquire from the Executive all of the Executive’s shares of common stock in National Pain Centers, Inc, a Nevada corporation (hereinafter referred to as “NPC"), in exchange for 5,000,000 shares of $0.001 par value common stock in the Company (the “Shares”); and


WHEREAS, the Executive desires to be employed by the Company upon the terms and conditions set forth herein; and


WHEREAS, the Company wishes to employ the Executive upon such terms and conditions; and


WHEREAS, the Executive has received and will be given access by the Company to its confidential business and professional information,


NOW, THEREFORE, for the consideration given and received herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Executive and the Company hereby agree as follows:


1. Recitals Incorporated .  The foregoing recitals and any referenced Exhibits are specifically incorporated in their entirety herein and made a part hereof.


2. Employment . The Company hereby employs the Executive, and the Executive hereby accepts such employment, upon the terms and conditions stated herein.


3. Term .  The Executive’s employment under this Agreement shall commence on the date hereof, and this Agreement shall commence as of that date and shall continue in effect until February 27, 2019.  The parties expressly understand that nothing in this Agreement is a guarantee or assurance of employment for any specific period of time.  Rather, subject to the notice provisions set forth in Section 6(c), the Executive understands that he is an at-will Executive, and that the Company may terminate his employment at any time, and the Executive is similarly free to resign at any time.  The parties also expressly understand that the terms and conditions in Section 6(d) below do not alter the Executive’s at-will employment status but are solely included to set forth amounts and benefits potentially available to the Executive at the cessation of his employment.


4. Duties .  The Executive is engaged to serve as the Chief Medical Officer of the Company and the President and CEO of the Company’s wholly-owned subsidiary, NPC.  Executive shall have such duties as are customarily associated with such positions including but not limited to overall responsibility and authority for general operations, management, and employment matters and relationships, as well as such other senior executive duties as may from time to time be reasonably assigned to him by the Company’s CEO and/or Board of Directors.  He shall within thirty (30) days following the date of this Agreement obtain and deliver to the Company employment agreements for key employees of the Company’s subsidiary as agreed upon by the Executive and the Company and upon terms and conditions acceptable to the Company.  The Executive shall perform such services subject to the direction, supervision, and rules and regulations of the Company and the Company's Board of Directors.  In addition, at every election for the Company's Board of Directors while the Executive is employed by the Company hereunder, the Company will nominate the Executive to be elected to serve on the Board of Directors.


5. Compensation .


(a) Base Salary .  The Company shall pay to the Executive as compensation for services rendered by the Executive hereunder a base annual salary of $200,000, subject to increase, but not decrease, from time to time by the CEO and/or the Board of Directors of the Company.  The base salary paid to the Executive is subject to such payroll and other deductions as may be agreed upon by the parties or required by law.  This salary shall be paid in accordance with Company's customary biweekly payroll procedure.







(b) Benefits .  The Company shall provide the Executive retirement and medical benefits, performance-based bonuses, qualified and/or non-qualified stock options and grants, and vacation in accordance with written agreements executed by the parties and/or the Company’s benefit plans, policies, and procedures for senior executives, whichever is more favorable to the Executive, and which may be amended from time to time by the Company.  Without limiting the foregoing, the Executive shall be entitled to twenty (20) days of paid time off for each calendar year.  All vacation time and sick time shall be deducted from the Executive's allotted paid time off.  No more than ten (10) days of unused paid time off may be carried forward from one calendar year to the next.  In addition, upon the signing of the agreement, Executive shall be issued a signing stock option to purchase 400,000 Shares at an exercise price of $0.40. Further, provided Executive remains employed by the Company, he will be granted additional stock options to buy up to an aggregate total of 1,000,000 shares of the Company’s common stock, at a vesting schedule of 200,000 per quarter, starting with quarter ending September 30, 2014. Each Stock option tranche shall carry an exercise price equal to the then market closing price, at the end of each quarter. All other terms and conditions not specified herein will be treated in accordance with the Company’s 2010 Non-Qualified Stock Compensation Plan. In the event of an acquisition or merger of the Company, all options granted or scheduled to be granted shall convert immediately into the incumbent company’s shares or be paid in cash on a cashless provision.


(c) Business Expenses .  The Executive shall be promptly reimbursed for all usual and customary out-of-pocket expenses incurred as the result of any and all business-related activities pursuant to this Agreement, all in accordance with a uniform policy established by the Company's Board of Directors from time to time; provided, however, that reimbursement under this Section shall not be made until and unless the Executive has furnished the Company with an appropriate receipt or such other documents as may be reasonably required by the Company to substantiate the nature and amount of the expenses incurred by the Executive.


6. Termination of Agreement .


(a) Termination For Cause .  The Company may elect to impose disciplinary sanctions, up to and including termination of this Agreement (a termination "For Cause"), in the event:


(i) The Executive is convicted of a felony;


(ii) The Executive intentionally commits a material act of fraud or a material unethical practice involving the Company;


(iii) The Executive possesses, distributes, sells, transfers, uses or is under the influence of illegal drugs;


(iv) The Executive is materially insubordinate or refuses to comply with reasonable, legal, job-related instructions, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable;


(v) The Executive intentionally and materially disregards regulatory instructions and procedures;


(vi) The Executive materially makes unauthorized use of, or steals, destroys, mutilates, or misuses the Company’s property;


(vii) The Executive intentionally presents, submits or prepares materially fraudulent or false documents and/or records, including employment records and employment information;


(viii) The Executive materially fails or refuses to comply with all reasonable and lawful and applicable policies, procedures, standards and regulations of the Company from time to time established or fails or refuses to perform or observe all other covenants and conditions required to be performed and observed by the Executive under this Agreement; in either case, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable;


(ix) The Executive intentionally commits an act materially damaging to the Company’s reputation in the community, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable; or


(x) The Executive intentionally and materially makes or made any representation or warranty in the Exchange Agreement which is or was false or materially incomplete when made, and which results in material damage to the Company, as determined by a court of competent jurisdiction as specified in Section 15.





(b) Termination for Good Reason .  The Executive may elect to terminate this Agreement for "Good Reason" in the event the Employer takes any action that (i) is directed at the Executive specifically and not at all Executives of comparable classification and performance level and (ii) that (A) has the effect of significantly reducing the Executive's compensation, employment responsibilities, authority, or the accommodations in which the Executive performs his job, (B) requires the Executive to perform services primarily from a location that is more than fifty (50) miles distant from the Executive’s current residence (which shall in no event preclude the Company from requiring customary business travel of the Executive), or (C) constitutes the nonpayment by Employer of compensation due and owing to the Executive under this Agreement, which has not been cured by the Employer within thirty (30) days following receipt of Executive’s notice of default to the Company for non-payment of compensation in the ordinary course.  In such event, the Employer’s obligations to Executive under Section 5 of this Agreement would not abate.


(c) Termination Without Cause .  The Executive or the Company may voluntarily elect to terminate this Agreement (a termination "Without Cause") by delivering to the other party, at least ninety (90) days prior to the date upon which termination is desired, by written notice of such intention to terminate.


(d) Payment Upon Termination .  If at any time on or before the expiration of this employment agreement the employment of the Executive is terminated by the Executive other than for Good Reason, or by the Company For Cause, then the Company shall only pay to the Executive any compensation earned but not paid and honor stock options vested prior to the effective date of such termination, and (i) if such termination occurs on or before the first anniversary of the date hereof, the Executive shall forfeit to the Company 50% of Shares received via the Exchange Agreement and (ii) if such termination occurs after the first anniversary and on or before the second anniversary of the date hereof, the Executive shall forfeit to the Company 25% of Shares received via the Exchange Agreement.  If the employment of the Executive is terminated by the Executive for Good Reason or by the Company Without Cause, then the Company shall pay to the Executive any compensation earned but not paid to the Executive prior to the effective date of such termination, and the Executive shall be entitled to receive severance pay of three (3) months’ base salary for each full year of service then remaining in the term specified in Section 3, and a proportionate amount for any partial year of service then remaining.  In such case where the Executive is terminated for Good Reason or Without Cause by the Company, Executive will be entitled to 100% of any and all Shares registered in the name of, or for the benefit of Executive.  The severance pay shall be payable in a lump sum on the date of termination.  Such payments shall be in full and complete discharge of any and all liabilities or obligations of the Company to the Executive hereunder, and the Executive shall be entitled to no further benefits under this Agreement.  Any amounts owing to the Executive under retirement plans or other compensation arrangements, if any, with the Company shall be handled solely in accordance with the terms of such plans or arrangements and not by the terms of this Agreement.


7. Interests of the Company .  The Executive acknowledges and agrees that:


(a) The Company has, owns or possesses the right to certain legitimate business interests, professional information and confidential information; and


(b) The Company’s possession, ownership and use of such legitimate business interests, professional and confidential information derives actual or potential independent economic value from not being generally known to, and not being readily ascertainable by proper means by other persons who could potentially obtain economic value from its disclosure or use; and


(c) The Company has taken and will continue to undertake substantial efforts that are commercially reasonable under the circumstances to maintain the secrecy of its present and future legitimate business interests, and other professional and confidential information, and requires the Executive to do the same; and


(d) Companies or individuals or other entities that provide goods and services similar to those of the Company and that derive benefit from access to the Company’s confidential and proprietary information gained from a current or former Executive of the Company, without its express permission, regardless of geographic location, would cause irreparable harm and undue hardship, and would materially jeopardize the Company’s business and materially jeopardize the ability of the Company to attain its goals, thus reducing significantly its value should the Executive compete with the Company, or assist, induce or cause other persons to compete with the Company; and


(e) The value of such harm would be substantial and unquantifiable.  As such, Executive agrees that the violation of the restrictive covenants of this Agreement would cause irreparable harm to the Company.





8. Covenant not to Compete .  Recognizing that the business and success of the Company is predicated upon the existence and preservation of its legitimate business interests, and other professional and confidential information, the Executive covenants and agrees that during the term of the Executive's employment, whether pursuant to this Agreement, any renewal hereof, or otherwise, and for a period of one year (the “Restricted Period”) after the later of the expiration of this Agreement or the termination of his employment with the Company, in the State(s) in which the Company conducts business as of the Executive's termination of employment, he will not, directly or indirectly (through one or more intermediaries), whether individually, or as an officer, director, agent, shareholder of 5% or more of the applicable company’s outstanding equity shares, member, partner, joint venturer, investor (other than as a passive trader in publicly traded securities), consultant or otherwise, compete in whole or in part with the business then engaged in by the Company.  This covenant does not apply to Executive practicing medicine.  This Section 8 shall not apply in the event of a termination by the Executive for Good Reason or a termination by the Company Without Cause.


9. Secrecy .  During the term of his employment and during the Restricted Period, the Executive shall not, whether directly or indirectly, use, or cause others to use, communicate, disclose or disseminate any information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company, including, without limitation, its structure, its contacts, its products and services, processes, including information relating to financial condition, statistics, recruiting, marketing and selling, and the Executive shall strictly maintain the foregoing as secret.


10. No Interference .  During the term of his employment and during the Restricted Period, the Executive agrees that he will not, whether for his own account or for the account of any individual, partnership, firm, company or other business organization (other than the Company), directly or indirectly, hire, employ, solicit or endeavor to hire, employ or solicit any person who, at the time of the Executive’s termination, was employed by or otherwise engaged to perform services for the Company to terminate his or her employment or independent contractor relationship with the Company (provided, however, that Executive may so hire and employ any person responding to a general advertisement for employment directed to the general public), nor will the Executive directly or indirectly induce any of the Company’s customers or suppliers to terminate, breach, rescind, forego, or materially modify to Company’s detriment, any of their agreements with Company. This Section 10 shall not apply in the event of a termination by the Executive for Good Reason or a termination by the Company Without Cause.


11. No Violation .  The Executive represents warrants and agrees that his execution of and performance of all the terms of this Agreement does not and will not breach any agreement or duty to which he is subject at the time of execution of this Agreement.  The Executive agrees not to enter into any written or oral agreement in conflict herewith and represents and agrees that he has not brought and will not bring with him to the Company or use in the performance of his responsibilities at the Company any materials or documents of a former company which are not generally available to the public.


12. Certain Equitable Relief .  Without limiting the remedies available to the Company, the Executive acknowledges that a breach of any of Section 8 through 11 of this Agreement would result in material irreparable harm to the Company for which there is no adequate remedy at law, and that it will not be possible to measure damages for such injuries precisely.  In the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary or permanent injunction, or other such equitable and legal relief as may be available.


13. Successors and Assigns .  This Agreement shall be binding upon the Executive, his heirs, executors and administrators; provided, however, the Executive shall not have the right to assign this Agreement.  Further, the Company has the right to assign this Agreement (including without limitation the restrictive covenants contained herein) and hereby expressly authorizes enforcement of this Agreement by its successors and assigns. However, the Company will remain liable to Executive for the financial commitments made to him herein.


14. Severability .  Wherever there is any conflict between any provision of this Agreement (or part thereof), and any statute, law, regulation or judicial precedent, the latter shall prevail, but in such event the provisions of this Agreement thus affected shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law.  In the event that any provision of this Agreement shall be held by a court of proper jurisdiction to be indefinite, invalid or otherwise unenforceable, the entire Agreement shall not fail on account thereof, but the balance of the Agreement shall continue in full force and effect.


15. Choice of Law, Choice of Forum .  This Agreement shall be governed and construed exclusively by laws of the State of Illinois, except for any law, rule or principle which might require application of the substantive law of another jurisdiction.  Exclusive venue and jurisdiction shall lie with the state courts of competent jurisdiction in Lake County, Illinois.  


16. Entire Agreement; Amendment and Waiver .  This Agreement constitutes the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements or understandings with respect to the subject matter hereof among the parties.  This Agreement may be amended, and the observance of any term of this Agreement may be waived only with the written consent of each of the parties hereto.  Any such waiver does not imply or express that any other similar or dissimilar waiver shall be granted or agreed to by the Company.





17. Cost of Enforcement . In the event of any dispute arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs from the non-prevailing party.


18. Section Headings .  The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof.


19. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.


20. Authority . The official executing this Agreement on behalf of the Company represents and warrants having the requisite authority to do so and to bind the Company.


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date first set forth above.




By: Jay Joshi

      Jay Joshi, MD

Wellness Center USA, Inc.


By: Andrew J. Kandalepas

       Andrew J. Kandalepas, CEO




EXHIBIT 5.2


EMPLOYMENT AGREEMENT


This Employment Agreement (“Agreement”) is made effective as of the 28th day of February, 2014, by and between Wellness Center USA, Inc., a Nevada corporation (hereinafter referred to as the "Company"), and Donald Swanson (hereinafter referred to as the "Executive").  


RECITALS:


WHEREAS, the Company and Executive are parties to a certain Exchange Agreement dated as of January 28, 2014 (the “Exchange Agreement”) pursuant to which the Company agreed to acquire from the Executive all of the Executive’s shares of common stock in National Pain Centers, Inc, a Nevada corporation (hereinafter referred to as “NPC"), in exchange for 5,000,000 shares of $0.001 par value common stock in the Company (the “Shares”); and


WHEREAS, the Executive desires to be employed by the Company upon the terms and conditions set forth herein; and


WHEREAS, the Company wishes to employ the Executive upon such terms and conditions; and


WHEREAS, the Executive has received and will be given access by the Company to its confidential business and professional information,


NOW, THEREFORE, for the consideration given and received herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Executive and the Company hereby agree as follows:


1. Recitals Incorporated .  The foregoing recitals and any referenced Exhibits are specifically incorporated in their entirety herein and made a part hereof.


2. Employment . The Company hereby employs the Executive, and the Executive hereby accepts such employment, upon the terms and conditions stated herein.


3. Term .  The Executive’s employment under this Agreement shall commence on the date hereof, and this Agreement shall commence as of that date and shall continue in effect until February 27, 2019.  The parties expressly understand that nothing in this Agreement is a guarantee or assurance of employment for any specific period of time.  Rather, subject to the notice provisions set forth in Section 6(c), the Executive understands that he is an at-will Executive, and that the Company may terminate his employment at any time, and the Executive is similarly free to resign at any time.  The parties also expressly understand that the terms and conditions in Section 6(d) below do not alter the Executive’s at-will employment status but are solely included to set forth amounts and benefits potentially available to the Executive at the cessation of his employment.


4. Duties .  The Executive is engaged to serve as the Chief Medical Officer of the Company and the President and CEO of the Company’s wholly-owned subsidiary, NPC.  Executive shall have such duties as are customarily associated with such positions including but not limited to overall responsibility and authority for general operations, management, and employment matters and relationships, as well as such other senior executive duties as may from time to time be reasonably assigned to him by the Company’s CEO and/or Board of Directors.  He shall within thirty (30) days following the date of this Agreement obtain and deliver to the Company employment agreements for key employees of the Company’s subsidiary as agreed upon by the Executive and the Company and upon terms and conditions acceptable to the Company.  The Executive shall perform such services subject to the direction, supervision, and rules and regulations of the Company and the Company's Board of Directors.  In addition, at every election for the Company's Board of Directors while the Executive is employed by the Company hereunder, the Company will nominate the Executive to be elected to serve on the Board of Directors.


5. Compensation .


(a) Base Salary .  The Company shall pay to the Executive as compensation for services rendered by the Executive hereunder a base annual salary of $200,000, subject to increase, but not decrease, from time to time by the CEO and/or the Board of Directors of the Company.  The base salary paid to the Executive is subject to such payroll and other deductions as may be agreed upon by the parties or required by law.  This salary shall be paid in accordance with Company's customary biweekly payroll procedure.







(b) Benefits .  The Company shall provide the Executive retirement and medical benefits, performance-based bonuses, qualified and/or non-qualified stock options and grants, and vacation in accordance with written agreements executed by the parties and/or the Company’s benefit plans, policies, and procedures for senior executives, whichever is more favorable to the Executive, and which may be amended from time to time by the Company.  Without limiting the foregoing, the Executive shall be entitled to twenty (20) days of paid time off for each calendar year.  All vacation time and sick time shall be deducted from the Executive's allotted paid time off.  No more than ten (10) days of unused paid time off may be carried forward from one calendar year to the next.  In addition, upon the signing of the agreement, Executive shall be issued a signing stock option to purchase 400,000 Shares at an exercise price of $0.40. Further, provided Executive remains employed by the Company, he will be granted additional stock options to buy up to an aggregate total of 1,000,000 shares of the Company’s common stock, at a vesting schedule of 200,000 per quarter, starting with quarter ending September 30, 2014. Each Stock option tranche shall carry an exercise price equal to the then market closing price, at the end of each quarter. All other terms and conditions not specified herein will be treated in accordance with the Company’s 2010 Non-Qualified Stock Compensation Plan. In the event of an acquisition or merger of the Company, all options granted or scheduled to be granted shall convert immediately into the incumbent company’s shares or be paid in cash on a cashless provision.


(c) Business Expenses .  The Executive shall be promptly reimbursed for all usual and customary out-of-pocket expenses incurred as the result of any and all business-related activities pursuant to this Agreement, all in accordance with a uniform policy established by the Company's Board of Directors from time to time; provided, however, that reimbursement under this Section shall not be made until and unless the Executive has furnished the Company with an appropriate receipt or such other documents as may be reasonably required by the Company to substantiate the nature and amount of the expenses incurred by the Executive.


6. Termination of Agreement .


(a) Termination For Cause .  The Company may elect to impose disciplinary sanctions, up to and including termination of this Agreement (a termination "For Cause"), in the event:


(i) The Executive is convicted of a felony;


(ii) The Executive intentionally commits a material act of fraud or a material unethical practice involving the Company;


(iii) The Executive possesses, distributes, sells, transfers, uses or is under the influence of illegal drugs;


(iv) The Executive is materially insubordinate or refuses to comply with reasonable, legal, job-related instructions, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable;


(v) The Executive intentionally and materially disregards regulatory instructions and procedures;


(vi) The Executive materially makes unauthorized use of, or steals, destroys, mutilates, or misuses the Company’s property;


(vii) The Executive intentionally presents, submits or prepares materially fraudulent or false documents and/or records, including employment records and employment information;


(viii) The Executive materially fails or refuses to comply with all reasonable and lawful and applicable policies, procedures, standards and regulations of the Company from time to time established or fails or refuses to perform or observe all other covenants and conditions required to be performed and observed by the Executive under this Agreement; in either case, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable;


(ix) The Executive intentionally commits an act materially damaging to the Company’s reputation in the community, after the Executive has been given written notice of his default and a reasonable opportunity to cure his default, to the extent curable; or


(x) The Executive intentionally and materially makes or made any representation or warranty in the Exchange Agreement which is or was false or materially incomplete when made, and which results in material damage to the Company, as determined by a court of competent jurisdiction as specified in Section 15.





(b) Termination for Good Reason .  The Executive may elect to terminate this Agreement for "Good Reason" in the event the Employer takes any action that (i) is directed at the Executive specifically and not at all Executives of comparable classification and performance level and (ii) that (A) has the effect of significantly reducing the Executive's compensation, employment responsibilities, authority, or the accommodations in which the Executive performs his job, (B) requires the Executive to perform services primarily from a location that is more than fifty (50) miles distant from the Executive’s current residence (which shall in no event preclude the Company from requiring customary business travel of the Executive), or (C) constitutes the nonpayment by Employer of compensation due and owing to the Executive under this Agreement, which has not been cured by the Employer within thirty (30) days following receipt of Executive’s notice of default to the Company for non-payment of compensation in the ordinary course.  In such event, the Employer’s obligations to Executive under Section 5 of this Agreement would not abate.


(c) Termination Without Cause .  The Executive or the Company may voluntarily elect to terminate this Agreement (a termination "Without Cause") by delivering to the other party, at least ninety (90) days prior to the date upon which termination is desired, by written notice of such intention to terminate.


(d) Payment Upon Termination .  If at any time on or before the expiration of this employment agreement the employment of the Executive is terminated by the Executive other than for Good Reason, or by the Company For Cause, then the Company shall only pay to the Executive any compensation earned but not paid and honor stock options vested prior to the effective date of such termination, and (i) if such termination occurs on or before the first anniversary of the date hereof, the Executive shall forfeit to the Company 50% of Shares received via the Exchange Agreement and (ii) if such termination occurs after the first anniversary and on or before the second anniversary of the date hereof, the Executive shall forfeit to the Company 25% of Shares received via the Exchange Agreement.  If the employment of the Executive is terminated by the Executive for Good Reason or by the Company Without Cause, then the Company shall pay to the Executive any compensation earned but not paid to the Executive prior to the effective date of such termination, and the Executive shall be entitled to receive severance pay of three (3) months’ base salary for each full year of service then remaining in the term specified in Section 3, and a proportionate amount for any partial year of service then remaining.  In such case where the Executive is terminated for Good Reason or Without Cause by the Company, Executive will be entitled to 100% of any and all Shares registered in the name of, or for the benefit of Executive.  The severance pay shall be payable in a lump sum on the date of termination.  Such payments shall be in full and complete discharge of any and all liabilities or obligations of the Company to the Executive hereunder, and the Executive shall be entitled to no further benefits under this Agreement.  Any amounts owing to the Executive under retirement plans or other compensation arrangements, if any, with the Company shall be handled solely in accordance with the terms of such plans or arrangements and not by the terms of this Agreement.


7. Interests of the Company .  The Executive acknowledges and agrees that:


(a) The Company has, owns or possesses the right to certain legitimate business interests, professional information and confidential information; and


(b) The Company’s possession, ownership and use of such legitimate business interests, professional and confidential information derives actual or potential independent economic value from not being generally known to, and not being readily ascertainable by proper means by other persons who could potentially obtain economic value from its disclosure or use; and


(c) The Company has taken and will continue to undertake substantial efforts that are commercially reasonable under the circumstances to maintain the secrecy of its present and future legitimate business interests, and other professional and confidential information, and requires the Executive to do the same; and


(d) Companies or individuals or other entities that provide goods and services similar to those of the Company and that derive benefit from access to the Company’s confidential and proprietary information gained from a current or former Executive of the Company, without its express permission, regardless of geographic location, would cause irreparable harm and undue hardship, and would materially jeopardize the Company’s business and materially jeopardize the ability of the Company to attain its goals, thus reducing significantly its value should the Executive compete with the Company, or assist, induce or cause other persons to compete with the Company; and


(e) The value of such harm would be substantial and unquantifiable.  As such, Executive agrees that the violation of the restrictive covenants of this Agreement would cause irreparable harm to the Company.





8. Covenant not to Compete .  Recognizing that the business and success of the Company is predicated upon the existence and preservation of its legitimate business interests, and other professional and confidential information, the Executive covenants and agrees that during the term of the Executive's employment, whether pursuant to this Agreement, any renewal hereof, or otherwise, and for a period of one year (the “Restricted Period”) after the later of the expiration of this Agreement or the termination of his employment with the Company, in the State(s) in which the Company conducts business as of the Executive's termination of employment, he will not, directly or indirectly (through one or more intermediaries), whether individually, or as an officer, director, agent, shareholder of 5% or more of the applicable company’s outstanding equity shares, member, partner, joint venturer, investor (other than as a passive trader in publicly traded securities), consultant or otherwise, compete in whole or in part with the business then engaged in by the Company.  This covenant does not apply to Executive practicing medicine.  This Section 8 shall not apply in the event of a termination by the Executive for Good Reason or a termination by the Company Without Cause.


9. Secrecy .  During the term of his employment and during the Restricted Period, the Executive shall not, whether directly or indirectly, use, or cause others to use, communicate, disclose or disseminate any information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company, including, without limitation, its structure, its contacts, its products and services, processes, including information relating to financial condition, statistics, recruiting, marketing and selling, and the Executive shall strictly maintain the foregoing as secret.


10. No Interference .  During the term of his employment and during the Restricted Period, the Executive agrees that he will not, whether for his own account or for the account of any individual, partnership, firm, company or other business organization (other than the Company), directly or indirectly, hire, employ, solicit or endeavor to hire, employ or solicit any person who, at the time of the Executive’s termination, was employed by or otherwise engaged to perform services for the Company to terminate his or her employment or independent contractor relationship with the Company (provided, however, that Executive may so hire and employ any person responding to a general advertisement for employment directed to the general public), nor will the Executive directly or indirectly induce any of the Company’s customers or suppliers to terminate, breach, rescind, forego, or materially modify to Company’s detriment, any of their agreements with Company. This Section 10 shall not apply in the event of a termination by the Executive for Good Reason or a termination by the Company Without Cause.


11. No Violation .  The Executive represents warrants and agrees that his execution of and performance of all the terms of this Agreement does not and will not breach any agreement or duty to which he is subject at the time of execution of this Agreement.  The Executive agrees not to enter into any written or oral agreement in conflict herewith and represents and agrees that he has not brought and will not bring with him to the Company or use in the performance of his responsibilities at the Company any materials or documents of a former company which are not generally available to the public.


12. Certain Equitable Relief .  Without limiting the remedies available to the Company, the Executive acknowledges that a breach of any of Section 8 through 11 of this Agreement would result in material irreparable harm to the Company for which there is no adequate remedy at law, and that it will not be possible to measure damages for such injuries precisely.  In the event of such a breach or threat thereof, the Company shall be entitled to obtain a temporary or permanent injunction, or other such equitable and legal relief as may be available.


13. Successors and Assigns .  This Agreement shall be binding upon the Executive, his heirs, executors and administrators; provided, however, the Executive shall not have the right to assign this Agreement.  Further, the Company has the right to assign this Agreement (including without limitation the restrictive covenants contained herein) and hereby expressly authorizes enforcement of this Agreement by its successors and assigns. However, the Company will remain liable to Executive for the financial commitments made to him herein.


14. Severability .  Wherever there is any conflict between any provision of this Agreement (or part thereof), and any statute, law, regulation or judicial precedent, the latter shall prevail, but in such event the provisions of this Agreement thus affected shall be curtailed and limited only to the extent necessary to bring it within the requirement of the law.  In the event that any provision of this Agreement shall be held by a court of proper jurisdiction to be indefinite, invalid or otherwise unenforceable, the entire Agreement shall not fail on account thereof, but the balance of the Agreement shall continue in full force and effect.


15. Choice of Law, Choice of Forum .  This Agreement shall be governed and construed exclusively by laws of the State of Illinois, except for any law, rule or principle which might require application of the substantive law of another jurisdiction.  Exclusive venue and jurisdiction shall lie with the state courts of competent jurisdiction in Lake County, Illinois.  


16. Entire Agreement; Amendment and Waiver .  This Agreement constitutes the entire understanding of the parties hereto relating to the subject matter hereof and supersedes all prior agreements or understandings with respect to the subject matter hereof among the parties.  This Agreement may be amended, and the observance of any term of this Agreement may be waived only with the written consent of each of the parties hereto.  Any such waiver does not imply or express that any other similar or dissimilar waiver shall be granted or agreed to by the Company.





17. Cost of Enforcement . In the event of any dispute arising out of this Agreement, the prevailing party shall be entitled to recover reasonable attorneys’ fees and costs from the non-prevailing party.


18. Section Headings .  The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof.


19. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement.


20. Authority . The official executing this Agreement on behalf of the Company represents and warrants having the requisite authority to do so and to bind the Company.


IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered on the date first set forth above.




By: Donald Swanson

      Donald Swanson

Wellness Center USA, Inc.


By: Andrew J. Kandalepas

       Andrew J. Kandalepas, CEO




EXHIBIT 99.1


Wellness Center USA, Inc. Completes Acquisition of National Pain Centers, Inc.


National Pain Centers Inc. is now a wholly owned subsidiary of WCUI.


SCHAUMBURG, IL, March 4, 2014 - Wellness Center USA, Inc. (OTCQB: WCUI), a healthcare and medical solutions provider, today announced the closing of its acquisition of National Pain Centers, Inc. (NPC) on February 28, 2014. NPC manages physician services in three clinics and two surgical centers in the Chicagoland area, providing diagnostic, surgical, treatment, research, advocacy, education, and setting standards and protocols within the interventional and multi-modal pain management.


Wellness Center USA, Inc. has acquired all issued and outstanding shares of National Pain Centers, Inc. in exchange for 5 million WCUI common shares. NPC is now a wholly owned subsidiary of WCUI and is managed by its founder and CEO Dr. Jay Joshi, MD, DABA, DABAPM, FABAPM. Dr. Joshi has also joined WCUI as its Chief Medical Officer (CMO) and a member of its Board of Directors.  


Dr. Joshi is a nationally recognized double board certified Anesthesiologist and fellowship trained Interventional Spine and Pain Management physician who possesses the rare ability to combine clinical medicine, research, creativity, marketing, inventions, and business development. He is considered a National Key Opinion Leader in pain management, has presented to a variety of audiences over 500 times, and has worked internationally at the World Health Organization (WHO). He has been featured on major TV networks, Radio, Print, and the Internet.  He was accepted into medical school at the age of 16 via an accelerated honors BS/MD program with multiple scholarships.


“Being part of the WCUI network will enable us to faster establish treatment facilities across the country and integrate our methods with WCUI’s present capabilities, creating true Wellness Center USA establishments,” stated Dr. Joshi.


As part of the acquisition, WCUI has bolstered its corporate management structure by adding Don Swanson as its Chief Operating Officer (COO) and a member of WCUI’s Board of Directors. Together with Dr. Joshi, Mr. Swanson will spearhead the WCUI expansion and branding strategy of establishing clinical practice locations and product installations nationwide, with Chicago as the center of growth.  


Mr. Swanson brings 30 years of diverse background in emerging technologies, mergers and acquisitions, sales and marketing, and managing operations with a market driven approach providing direct and indirect results. Throughout his career as an entrepreneur and corporate executive in both public and private companies, Swanson has demonstrated repeated success transforming emerging companies into revenue generating operating businesses. He brings expertise in managing operations, manufacturing, R&D, brand management and marketing.


“With the addition of NPC and Dr. Joshi to WCUI’s present pool of subsidiaries, an enormous opportunity for growth is created in the Medical and Healthcare industries,” stated Mr. Swanson.  “I will bring my full attention and experience to the development of controlled and continual revenue generation for WCUI. It is my job to execute on our strategies immediately to take advantage of the opportunities we have at hand with our unique products and services,” continued Swanson.


“Dr. Joshi and Mr. Swanson will play a key role in the execution of WCUI’s “top-down management” structure, aiding in our expansion strategy, product deployment, marketing and branding,” stated Andrew J. Kandalepas, CEO & Chairman of Wellness Center USA, Inc.


NPC’s revenues going forward will be reported consolidated by WCUI starting with the Quarter End March 30 th , 2014. At the time of the acquisition closing, NPC enjoyed respectable profitability and steady growth.


About Wellness Center USA, Inc.  


Wellness Center USA, Inc. (www.wellnesscenterusa.com) an alternative healthcare, medical device solutions and online nutraceutical sales company, was created to address important healthcare and wellness needs; through break-through solutions, centered on the "well-being of the body and mind". Wellness Center USA, Inc.'s three business units are:





National Pain Centers, Inc. (NPC)  (www.nationalpaincenters.com) is an Illinois based company that focuses on diagnosis, treatment, research, advocacy, education, and setting standards and protocols within interventional and multi-modal pain management.  Pain management is the most common and most unknown medical condition in the United States, and costs Americans over $635 billion a year. NPC manages Interventional Spine and Pain procedures that include Epidural Steroid Injections, Selective Nerve Root Blocks, Facet Joint Medial Branch Injections, Radiofrequency Ablation, Sympathetic Blocks, Spinal Cord Stimulators, Percutaneous Discectomy, and Discograms. NPC is also involved in research and progressive treatment options such as Ketamine Infusions and Stem Cell Therapy. These services and procedures are overseen by its well respected physician, Dr. Jay Joshi. Through proper interventional and non-interventional protocols, ethical practices, and innovative treatment options, patients from all over the U.S. have seen relief from their pain.


Psoria-Shield Inc. (www.psoria-shield.com) is a Tampa FL based company specializing in design, manufacturing, and distribution of medical devices to domestic and international markets. PSI employs full-time engineering, production, sales staff, and manufactures within an ISO 13485 certified quality system. PSI's flagship product, Psoria-Light®, is FDA-cleared and CE marked and delivers targeted UV phototherapy for the treatment of certain skin disorders. Psoria-Shield Inc., was acquired by Wellness Center USA Inc. (“WCUI”) in August 2012, and is now a wholly-owned subsidiary.


CNS-Wellness (www.cns-wellness.com) is a Tampa FL based cognitive science clinic business, specializing in the treatment of behavioral health disorders in at least three focus areas: a) stress related disorders including anxiety and panic attacks, depression, and obsessive-compulsive spectrum disorders, b) developmental and learning disorders such as autistic spectrum issues and Asperger's syndrome, AD/HD, learning differences and birth trauma-related issues, and c) purely brain-based issues including epilepsy and seizure disorders, traumatic brain injuries, and related acquired brain syndromes. CNS-Wellness LLC, was acquired by Wellness Center USA Inc. (“WCUI”) in August 2012, and is now a wholly-owned subsidiary.


AminoFactory (www.aminofactory.com), a division of Wellness Center USA, Inc., is an online supplement store that markets and sells a wide range of high-quality nutritional vitamins and supplements. By utilizing AminoFactory’s online catalog, bodybuilders, athletes, and health conscious consumers can choose and purchase the highest quality nutritional products from a wide array of offerings in just a few clicks.


Safe Harbor Statement:


Certain statements contained in this news release that are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the proposed exchange transaction, the anticipated closing date of the transaction and anticipated future results following a closing of the transaction. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” While it is not possible to identify all factors, risks and uncertainties that might relate to, affect or arise from the proposed transaction, and which might cause actual results to differ materially from expected results, such factors, risks and uncertainties include delays in completing the transaction, difficulties in integrating operations following the transaction, difficulties in manufacturing and delivering products, potential market rejection of products or services, increased competitive pressures, changes in general economic conditions, legislative and regulatory changes that adversely affect the business in which the parties are engaged, changes in the securities markets and other factors, risks and uncertainties disclosed from time to time in documents that the Company files with the SEC.


Contact Info:

At Wellness Center USA, Inc.

Tel: (847) 925-1885

www.wellnesscenterusa.com


At National Pain Centers, Inc.

Tel: (847) 701-3250

www.nationalpaincenters.com


Investor Relations Contact:
Arthur Douglas  & Associates, Inc.
Arthur Batson
Phone: 407-478-1120

www.arthurdouglasinc.com