Contract
EXHIBIT
10.1
by
and among
CLINICAL
RESULTS, INC.,
EACH
OF XXXXX XXXXXXX AND XXXXXXX XXXXXXX XXXXX,
as
Sellers
and
HYDRON
TECHNOLOGIES, INC.,
as
Buyer
Dated
as of July 1, 2005
TABLE
OF CONTENTS
Page
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1.
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SALE
AND PURCHASE
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3
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2.
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PURCHASE
PRICE
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3
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3.
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CLOSING;
CLOSING DELIVERIES
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4
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3.1. Closing
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4
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4.
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REPRESENTATIONS
AND WARRANTIES OF BUYER
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4
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4.1. Existence;
Good Standing
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4
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4.2. Authorization,
Validity and Effect of Agreements
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4
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4.3. No
Violation
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4
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4.4. Capital
Stock
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5
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4.5. Issuance
of Hydron Shares
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5
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4.6. No
Brokers
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5
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5.
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND EACH SELLERS
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5
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5.1. Existence;
Good Standing
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5
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5.2. Authorization,
Validity and Effect of Agreements
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5
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5.3. No
Violation
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6
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5.4. No
Brokers
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6
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5.5. Ownership
of Securities
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6
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5.6. Subsidiaries
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6
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5.7. Capitalization
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6
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5.8. Corporate
Records; Books
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7
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5.9. Financial
Statements
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7
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5.10. Undisclosed
Liabilities; Material Defaults
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7
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5.11. Absence
of Certain Changes
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7
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5.12. Title.
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8
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5.13. Litigation
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8
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5.14. Taxes
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8
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5.15. Compliance
with Law and Applicable Governmental and Other Regulations
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8
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5.16. Intellectual
Property
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8
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5.17. Contracts
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9
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5.18. Dealings
with Affiliates
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9
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5.19. Investment
Representations
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9
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6.
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COVENANTS
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10
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6.1. No
Disposition; No Liens
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10
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6.2 Regular
Course of Business
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10
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6.3. Payments;
No Solicitation
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11
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6.4. Certain
Commitments
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11
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6.5. Filings;
Consents; Other Actions
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11
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6.6. Publicity
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12
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7.
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CONDITIONS
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12
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7.1. Conditions
to Obligation of Sellers to Sell the Securities
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12
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7.2. Conditions
to Obligation of Buyer to Purchase the Securities
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13
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-i-
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8.
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INDEMNIFICATION
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14
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8.1. Survival
of Representations and Warranties
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14
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8.2. Indemnification
by the Sellers.
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14
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8.3. Indemnification
by Buyer.
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15
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8.4. Third-Party
Claims
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15
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9.
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NONCOMPETE
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16
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9.1 Non-Competition
Covenant
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16
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9.2 Non-disclosure;
Confidentiality
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18
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10.
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TERMINATION
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20
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10.1 Methods
of Termination
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20
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10.2 Procedure
Upon Termination
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20
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11.
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GENERAL
PROVISIONS
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21
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11.1. Notices
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21
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11.2. Assignment;
Binding Effect
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22
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11.3. Entire
Agreement
|
22
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11.4. Amendment
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22
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11.5. GOVERNING
LAW
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22
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11.6. Counterparts
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22
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11.7. Headings
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22
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11.8. Interpretation
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22
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11.9. Waivers
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22
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11.10. Severability
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23
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11.12. Enforcement
of Agreement
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23
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11.13. Costs
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23
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11.14. Schedules
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23
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11.15.
No Third Party Beneficiaries
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23
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11.16. Due
Diligence
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23
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11.17. Lock-up
Agreements
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23
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11.18 Board
of Directors
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23
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EXHIBITS
Exhibit
A
- Restrictive Legend
-ii-
THIS
AGREEMENT dated as of July 1, 2005 (this “Agreement”),
is
entered into by and among CLINICAL RESULTS, INC., a Delaware corporation
(the
“Company”),
each
of XXXXX XXXXXXX, an individual (“Xxxxxxx”),
and
XXXXXXX XXXXXXX XXXXX, an individual (“Xxxxx”)
(each
of Xxxxxxx and Xxxxx, a "Seller"
and
collectively, the "Sellers")
and
HYDRON TECHNOLOGIES, INC., a New York corporation (the “Buyer”).
W
I T N E S S E T H:
WHEREAS,
each of
the Sellers is the owner of shares (“Shares”)
of
common stock, par value $.01 per share (the "Common
Stock"),
of
the Company, aggregating the total issued and outstanding shares of Common
Stock; and
WHEREAS,
Buyer
desires to purchase from Sellers, and each of the Sellers desires to sell
to
Buyer, the Shares, upon the terms and subject to the conditions set forth
in
this Agreement.
NOW,
THEREFORE,
in
consideration of the mutual benefit to be derived from this Agreement and
of the
representations, warranties, conditions, covenants and agreements hereinafter
contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Buyer, the Company and each
of the
Sellers hereby agree as follows:
1. SALE
AND PURCHASE; INVESTMENT IN COMPANY
(a) Each
Seller hereby agrees to sell, transfer, assign and deliver to Buyer, and
Buyer
hereby agrees to purchase from each such Seller, the Shares owned by each
such
Seller for the Purchase Price (as defined in Section
2 below).
(b) At
the
Closing (as defined in Section
3.1
below),
each Seller will deliver (or cause to be delivered) to Buyer, free and clear
of
all liens, restrictions, claims, charges and encumbrances of any nature
(individually, a “Lien”
and
collectively, “Liens”),
certificates (“Certificates”)
representing the Shares of Common Stock owned by such Seller, together with
such
other documents as may be necessary for transfer of the Common Stock upon
the
transfer books and records of the Company into the name of Buyer, in form
for
good delivery. Such Certificates shall be in negotiable form accompanied
by
stock powers executed in blank.
2. PURCHASE
PRICE. The
consideration to be paid by Buyer to each Seller for the Shares being sold
by
such Seller (the “Purchase
Price”)
shall
be an aggregate of Two Million (2,000,000) shares of common stock, $.01 par
value per share, of the Buyer (the “Hydron
Common Stock”),
evidenced by two stock certificates each evidencing ownership of One Million
(1,000,000) shares of Common Stock registered in the names of Xxxxxxx and
Xxxxx,
respectively, and bearing a restrictive stock legend in the form attached
as
Exhibit
A
hereto
(collectively, the “Hydron
Shares”).
-3-
3. CLOSING.
The
closing of the transactions contemplated hereby (the “Closing”)
shall
take place on the date that all conditions set forth in Sections
7.1 and 7.2
have
been satisfied or waived, but in no event later than July 31, 2005 (the
“Closing
Time”),
at
the offices of Xxxxx XxXxxxxx Xxxxx Xxxxxxxx & Xxxxxxx, P.A., 000 Xxxx
Xxxxxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000, or at such other time
and
location as the parties may agree.
4. REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
hereby represents and warrants to the Company and to each Seller as
follows:
4.1. Existence;
Good Standing.
Buyer
is a corporation duly incorporated, validly existing and in good standing
under
the laws of its jurisdiction of incorporation. The Buyer is duly qualified
or
licensed to do business in good standing in every jurisdiction in which the
conduct of its business requires it to be so qualified or licensed.
4.2. Authorization,
Validity and Effect of Agreements
Buyer
has the requisite corporate power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby to which Buyer
is
a party. The consummation by Buyer of the transactions contemplated hereby
has
been duly authorized by all requisite corporate action. This Agreement
constitutes, and all agreements and documents contemplated hereby (when executed
and delivered pursuant hereto for value received) will constitute, the valid
and
legally binding obligations of Buyer, enforceable against Buyer in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights and general
principles of equity.
4.3. No
Violation.
Neither
the execution and delivery by Buyer of this Agreement, nor the consummation
by
Buyer of the transactions contemplated hereby in accordance with the terms
hereof, will: (a) conflict with or result in a breach of any provisions
of
the Certificate of Incorporation or by-laws of Buyer; (b) violate, or conflict
with, or result in a breach of any provision of, or constitute a default
(or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination or cancellation of, or give rise to a
right
of termination or cancellation of, or accelerate the performance required
by, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the material properties of Buyer or its subsidiaries under, or
result in being declared void, voidable, or without further binding effect,
any
of the terms, conditions or provisions of any note, bond, mortgage, indenture,
deed of trust or any material license, certificate of authority, franchise,
permit, lease, contract, agreement or other instrument, commitment or obligation
to which Buyer is a party, or by which Buyer or any of its properties is
bound
or affected, except for any of the foregoing matters which would not have
a
material adverse effect on the ability of Buyer to perform its obligations
hereunder (a "Buyer
Material Adverse Effect");
or
(c) other than such regulatory approvals and filings as may be required under
applicable securities laws, require any material consent, approval or
authorization of, or declaration, filing or registration with, any domestic
governmental or regulatory authority, the failure to obtain or make which
would
have a Buyer Material Adverse Effect.
-4-
4.4. Capital
Stock.
The
authorized capital stock of Buyer consists of 30,000,000 shares of Common
Stock
and 5,000,000 shares of preferred stock, $.01 par value per share (
“Preferred
Stock”),
of
which as of June 30, 2005, 9,310,336 shares of Common Stock, and no shares
of
Preferred Stock are issued and outstanding.
4.5. Issuance
of Hydron Shares.
The
Hydron Shares that are required to be issued by the Company to the Sellers
pursuant to, in accordance with the terms, and subject to the conditions
set
forth in this Agreement, shall, upon issuance and delivery, be duly authorized,
validly issued, fully paid and non-assessable.
4.6. No
Brokers.
Buyer
has not entered into any contract, arrangement or understanding with any
person
or firm which may result in the obligation of any party hereto to pay any
finder's fees, brokerage or agent's commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby. Buyer is not aware of any claim
for
payment of any finder's fees, brokerage or agent's commissions or other like
payments in connection with the negotiations leading to this Agreement or
the
consummation of the transactions contemplated hereby.
5. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND EACH SELLER
The
Company and each Seller hereby jointly and severally represents and warrants
to
Buyer as follows:
5.1. Existence;
Good Standing.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation. The Company is duly
qualified or licensed to do business in good standing in every jurisdiction
in
which the conduct of its business requires it to be so qualified or
licensed.
5.2. Authorization,
Validity and Effect of Agreements.
The
Company has the requisite power and authority to execute and deliver this
Agreement and all agreements and documents contemplated hereby. The consummation
by the Company of the transactions contemplated hereby has been duly authorized
by all requisite action. This Agreement constitutes, and all agreements and
documents contemplated hereby to which the Company or a Seller is a party
(when
executed and delivered pursuant hereto for value received) will constitute,
the
valid and legally binding obligations of the Company and each such Seller,
enforceable against the Company and each Seller in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, moratorium
or
other similar laws relating to creditors' rights and general principles of
equity.
-5-
5.3. No
Violation.
Neither
the execution and delivery by the Company and each Seller of this Agreement,
nor
the consummation by the Company and each Seller of the transactions contemplated
hereby in accordance with the terms hereof, will: (a) conflict with
or
result in a breach of any provisions of the articles of incorporation or
bylaws
of the Company, (b) violate, or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or
lapse
of time or both, would constitute a default) under any of the terms, conditions
or provisions of any material license, certificate of authority, franchise,
permit, lease, contract, agreement or other instrument, commitment or obligation
to which the Company or any Seller is a party, or by which the Company or
any
Seller or any of their respective properties is bound or affected, except
for
any of the foregoing matters which would not have a material adverse effect
on
the ability of the Company or such Seller to perform its respective obligations
hereunder (a "Seller
Material Adverse Effect");
or
(c) other than such regulatory approvals and filings as may be required under
applicable Common Stock laws, require any material consent, approval or
authorization of, or declaration, filing or registration with, any governmental
or regulatory authority, the failure to obtain or make which would have a
Seller
Material Adverse Effect.
5.4. No
Brokers.
Neither
the Company nor any Seller has entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation
of any
party hereto to pay any finder's fees, brokerage or agent's commissions or
other
like payments in connection with the negotiations leading to this Agreement,
or
the consummation of the transactions contemplated hereby. Neither the Company
nor any Seller is aware of any claim for payment of any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
5.5. Ownership
of Common Stock.
Each
Seller has good and valid title to the Shares of Common Stock owned by him,
free
and clear of all Liens of any nature whatsoever. Each Seller has full power
and
authority to sell, assign and transfer the Common Stock owned by him. Buyer
will
acquire good and valid title to all of the Common Stock, free and clear of
all
Liens of any nature whatsoever. The Company and each Seller, upon request,
will
execute (or cause to be executed) any additional documents necessary or
reasonably desirable to complete the transfer of the Shares of Common Stock
to
Buyer.
5.6. Subsidiaries.
The
Company has no direct or indirect subsidiaries and the Company owns of record
and beneficially all of the assets necessary or useful to operate the business
of the Company.
5.7. Capitalization.
The
authorized capital stock of the Company consists of 1,000,000 shares of common
stock, $0.0001 par value, per share. As of June 30, 2005, there were 1,000
shares of Common Stock issued and outstanding. There are no outstanding (i)
rights, including without limitation, any stock purchase warrants, options
to
purchase stock, securities convertible into shares of capital stock, or other
rights which obligate the Company, or any Seller to issue, transfer or sell
any
shares of capital stock of the Company, or (ii) obligations of the Company
or
the Sellers to purchase, redeem or otherwise acquire any shares of capital
stock
or voting Common Stock convertible or exercisable into or exchangeable for
capital stock or voting Common Stock of the Company.
-6-
5.8. Corporate
Records; Books.
The
corporate minute books of the Company and each of its predecessor companies,
including BioCeutical Research, Inc. and AdvantaChem, Inc. (collectively,
the
“Predecessor
Companies”),
have
been made available to Buyer, are complete and correct in all material respects
and contain all written minutes of the shareholders and board of directors
(including any committees thereof) of the Company and the Predecessor
Companies.
5.9. Financial
Statements.
The
Company has previously provided Buyer with copies of the unaudited balance
sheets, and the related statement of income of the Company for the fiscal
year
ended December 31, 2004 (the “Unaudited
Year-End Financial Statements”)
and
the unaudited balance sheet and the unaudited statement of operations of
the
Company for the four-month period ended April 30, 2005 (the “Unaudited
Interim Financial Statements”).
Each
of the Unaudited Year-End Financial Statements and the Unaudited Interim
Financial Statements fairly present the financial position of the Company
for
and as of their respective periods. The Unaudited Year-End Financial Statements
and the Interim Financial Statements are sometimes collectively referred
to
herein as the “Financial
Statements.”
The
Financial Statements have not been prepared in accordance with generally
accepted accounting principles (“GAAP”);
however, the Company’s books and records are sufficient to permit the
preparation of financial statements prepared in conformity with GAAP in
compliance with the requirements of the Securities Exchange Commission
(“SEC”)
which
may be incorporated into the financial statements of the Buyer for all periods
from and after the Closing.
5.10. Undisclosed
Liabilities; Material Defaults.
Except
as
set forth in the Financial Statements or in Schedule
5.10
attached
hereto, the Company does not have any outstanding material claims, liabilities
or indebtedness, fixed or contingent. Except as set forth in Schedule
5.10,
the
Company is not in default with respect to the material terms or conditions
of
any indebtedness.
5.11. Absence
of Certain Changes.
Except
as set forth in Schedule
5.11
attached
hereto or as contemplated by this Agreement, since April 30, 2005, the Company
has not (a) made any declaration, setting aside or payment of any dividend
or
distribution (whether in payable in cash, stock or property) in respect of
the
Company’s capital stock or (b) made any redemption or other acquisition by the
Company of the capital stock of the Company or any of the Subsidiaries, (c)
suffered or incurred any damage, destruction or loss, whether or not covered
by
insurance having a material adverse effect on the Company’s properties and
business, (d) made any increase in the rate of compensation or in the benefits
payable or to become payable by the Company to its directors, officers,
employees or consultants other than in the ordinary course of business and
consistent with past practices, (e) entered into any contract, agreement,
instrument or other obligation by the Company not in the ordinary course
of
business, including without limitation relating to any borrowing or capital
expenditure, (f) disposed of any material asset other than in the ordinary
course of business and consistent with past practice, (g) licensed or assigned
any of its Intellectual Property (as defined in Section
5.16(a)),
other
than in the ordinary course of business and consistent with past practices
or
(h) changed any accounting methods or principles.
-7-
5.12. Title.
(a)
The
Company has good and valid title to all of the property and assets reflected
on
the balance sheet included in the Interim Financial Statements or acquired
after
the date thereof, free and clear of all Liens, except for Liens which will
be
terminated at the Closing and Liens set forth in Schedule
5.12
attached
hereto, and except for (i) statutory Liens not yet delinquent and (ii) as
reflected in the balance sheets included in the Financial Statements or in
the
notes thereto.
(b) Except
as
set forth in Schedule
5.12,
the
Company does not own or lease any real property.
5.13. Litigation.
There
is
no claim pending or, to the best knowledge of the Sellers, threatened, against
any of the Sellers or the Company which, if adversely determined, would have
a
material adverse affect on the Company, its properties or business.
5.14. Taxes.
The
Company has filed all federal, state and local tax reports, returns, documents
or statements relating to Taxes (as defined below), including any schedule
or
attachment thereto, and including any amendment thereof required to be filed
as
of the date hereof with any federal, state, local or other taxing authorities
in
respect of all relevant taxes, including without limitation, income, gross
receipts, ad valorem, value added, sales, use, property, stamp, excise, use,
withholding, payroll, employment and other tax of any kind whatsoever
(collectively, “Taxes”).
All
Taxes required to be paid through the date of this Agreement have been paid
and
all Taxes for which liability has accrued are set forth in the Financial
Statements or in Schedule
5.14.
5.15. Compliance
with Law and Applicable Governmental and Other
Regulations.
The
Company is in material compliance with all applicable federal, state and
local
laws, rules, regulations and ordinances relating to its operations, property
and
business. There are no claims pending by any governmental authority, nor,
to the
best knowledge of the Sellers, are there any claims threatened, regarding
any
violations of any federal, state, or local laws, rules regulations or ordinances
applicable to the Company, its operations, property or business.
5.16. Intellectual
Property.
(a) The
Company is the owner or licensee of all of the intellectual property rights
(collectively, the “Intellectual
Property Rights”)
used
by the Company in connection with its business, including, but not limited
to,
(i) software (source and executable or object code), algorithms, computer
processing systems, techniques, methodologies, formulae, processes, compilations
of information, drawings, proposals, job notes, reports, records and
specifications and related documents in any media, including all modifications,
enhancements, updates and derivatives, (ii) ideas, discoveries, inventions,
design concepts, unique software and hardware configurations, and all materials
developed therefrom, (iii) patents, patent applications, trademarks, trademark
applications, trade names, logos, service marks, service xxxx applications,
service names, internet domain names, access rights, web sites, electronic
data
links and copyrights and copyright applications,
-8-
(iv)
business plans, customer contacts, licenses, pricing strategy, competitive
data,
(v) any confidential information which is owned by a third party and provided
under a license or confidentiality agreement, (vi) trade secrets which derive
economic value, actual or potential, and any other confidential information
which is determined by a court of competent jurisdiction not to rise to the
level of trade secret under applicable law. Schedule
5.16
attached
hereto sets forth all (x) registered patents, copyrights, trademarks, trade
names and service marks owned or licensed by the Company, (y) applications
for
registrations of Intellectual Property filed by the Company and (z) all
Intellectual Property Rights, URL, website addresses and other rights owned
or
used by the Company which are material to the Company and its business. The
Company has complied in all material respects with all federal and international
laws relating to Intellectual Property Rights and has made all necessary
filings
and has registered its material Intellectual Property Rights in all
jurisdictions necessary to protect each of its Intellectual Property Rights
set
forth or required to be set forth in Schedule
5.16.
The
consummation of the transactions consummated by this Agreement will not impair
any material Intellectual Property Right.
(b) The
Company has the right to use each material Intellectual Property Right listed
on
Schedule
5.16
without
infringing the rights of any third-party. Except as set forth on Schedule
5.16
and
which will terminate at the Closing Time, each of such Intellectual Property
Rights is, and will continue to be at the Closing Time, free and clear of
all
royalty obligations and Liens. There are no claims pending, or, to the best
knowledge of the Sellers, threatened, against the Company or any Seller that
its
use of the Intellectual Property Rights infringes the rights of any person.
The
Company and the Sellers have no knowledge of any third-party’s conflicting use
of any such Intellectual Property Rights that conflicts with the Company’s
Intellectual Property Rights.
5.17. Contracts.
Set
forth on Schedule
5.17
attached
hereto is a list of each agreement, whether written or oral, to (i) perform
contract manufacturing and/or distribution services, (ii) provide consulting
services, (iii) sell any product or provide any service not included in clauses
(i) or (ii), (iv) purchase or lease any real or personal property, (v) engage
any party to provide any service or (vii) license any Intellectual Property
(collectively, “Agreements”).
All
such Agreements are in full force and effect and no party is in breach of
any
such Agreement which would, with notice or the passage of time or both result
in
the termination of such Agreement or the payment of any damages or penalty
pursuant to the terms of such Agreement.
5.18. Dealings
with Affiliates.
Except
as
set forth in Schedule
5.18
attached
hereto, there are no oral or written agreements, arrangements or understandings
to which the Company and any officer, director, or shareholder of the Company
is
a party. The Company is not obligated or liable to any officer, director
or
shareholder of the Company.
5.19. Investment
Representations.
Each
Seller represents and warrants to Buyer that (i) such Seller is acquiring
the
Hydron Shares for his own account and not with a view to distribution (as
such
term is used in Section 2(11) of the Common Stock Act), (ii) such Seller
is an
experienced and sophisticated investor and has such knowledge and experience
in
financial and business matters as are
-9-
necessary
to evaluate the merits and risks of the transactions contemplated by this
Agreement, (iii) such Seller is an “accredited investor” as such term is defined
in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities
Act”),
and
(iv) such Seller has been informed that neither the Company nor Buyer has
registered the transactions contemplated by this Agreement under the Common
Stock Act or any state, Common Stock or “blue sky” law. Each Seller acknowledges
that it has been given a copy of the Buyer’s annual report on Form 10-K for the
year ended December 31, 2004 and its quarterly report on Form 10-Q for the
quarter ended March 31, 2005. Each Seller further acknowledges that it has
been
offered the opportunity to ask questions of, and receive answers from, Buyer;
and the Sellers have been given full and complete access to all available
information and data relating to the business and assets of the Company and
obtained all information which the Sellers have deemed necessary in order
to
evaluate the opportunities, both financial and otherwise with respect to
the
Company.
6. COVENANTS
6.1. No
Disposition; No Liens.
Each
Seller will not, between the date hereof and the Closing Time sell, dispose
of,
cause a Lien to be created against, or in any other manner encumber (other
than
pursuant to this Agreement), any of the Common Stock or enter into any agreement
with any person or entity (other than Buyer) with respect to any of the
foregoing matters.
6.2. Regular
Course of Business
(a) Except
as
contemplated by this Agreement or with the prior written consent of Buyer,
the
Company shall operate its business in the ordinary and usual course, consistent
with past management practices, shall maintain all of its properties in good
order and condition, shall maintain all leases and contracts in effect without
change and shall comply with all laws, rules and regulations applicable to
its
business.
(b) Without
limiting the generality of the foregoing, from the date of this Agreement
through the Closing Time, without the prior written consent of Buyer, the
Company shall not:
| (i) |
hire
new management or key employees or terminate any existing employees
of the
Company;
|
| (ii) |
incur,
or become obligated for, any expense, capital commitment or other
cost
that is outside the ordinary course of business of the Company
or which
are in excess of $5,000;
|
| (iii) |
enter
into any agreement, including without limitation, any agreement
for
borrowed money, material to the Company or its business or which
would be
deemed a long-term liability under GAAP;
|
| (iv) |
make
any changes to the compensation of any employee, including without
limitation, any bonus, increase or change in benefits, or grant
of any
option or right to acquire shares of capital stock of the Company
having a
fair value in excess of $10,000 in aggregate; or
|
| (v) |
issue
any shares of capital stock or rights to acquire shares of capital
stock
of the Company.
|
-10-
6.3. Payments;
No Solicitation.
Each
Seller acknowledges that any non-cash payments to it in respect of dividends
or
distributions on any of the Common Stock declared, set aside or paid are
included as part of the Common Stock for purposes of this Agreement, and
agrees
to assign and deliver to Buyer at the Closing Time such payments. Between
the
date hereof and the Closing Time, neither Seller nor any affiliate or
representative of such Seller shall solicit or encourage any person (other
than
Buyer) to acquire the Common Stock or sell or agree to sell or engage in
a
recapitalization, merger, sale of stock, sale of assets, other business
combination or other similar transaction with or otherwise involving the
Company
or any of its subsidiaries or enter into any agreement with any person or
entity
(other than Buyer) with respect to any of the foregoing.
6.4. Certain
Commitments.
Each
Seller hereby agrees that during the time this Agreement is in effect, at
any
meeting of the stockholders of the Company, however called, and in any action
by
consent of the stockholders of the Company, Seller shall vote the Common
Stock:
(i) in favor of any proposal for any recapitalization, merger, sale of stock,
sale of assets, other business combination or other similar transaction between
or involving the Company or any of its subsidiaries and Buyer or an affiliate
of
Buyer; (ii) after consultation with Buyer, against any proposal for
any
recapitalization, merger, sale of stock, sale of assets, other business
combination or other similar transaction involving the Company or any of
its
Subsidiaries or which is reasonably likely to materially and adversely affect
Buyer or prevent or delay the consummation of the transactions contemplated
by
this Agreement (other than a transaction referred to in clause (i) above);
and
(iii) subject to any required regulatory approvals, with respect to
directors of the Company, in favor of any individuals designated by Buyer
and,
without prior written instructions from Buyer to the contrary, against any
other
individuals.
6.5. Filings;
Consents; Other Actions.
(a)
Subject to the terms and conditions herein provided, (i) each Seller
and
Buyer shall use all reasonable efforts to cooperate with one another in (A)
determining which filings are required to be made prior to the Closing Time
with, and which consents, approvals, permits or authorizations are required
to
be obtained prior to the Closing Time from, governmental or regulatory
authorities of the United States, including without limitation, the SEC,
and the
States of Florida, Delaware and New York, in connection with the execution
and
delivery of this Agreement, the purchase and sale of the Shares, the issuance
of
the Hydron Shares and otherwise in connection with the consummation of the
transactions contemplated hereby, and (B) timely making all such filings
required on its part and timely seeking all such consents, approvals, permits
or
authorizations; and (iii) each Seller and Buyer shall use all reasonable
efforts
to take, or cause to be taken, all other action and do, or cause to be done,
all
other things necessary, proper or appropriate to consummate and make effective
the transactions contemplated by this Agreement. If, at any time after the
Closing Time, any further action on the part of Sellers is necessary or
reasonably desirable to carry out the purpose of this Agreement, each Seller
shall make reasonable efforts to take all such actions.
-11-
(b) Set
forth
on Schedule
6.5
attached
hereto is a list of all consents, and notices of assignment (collectively,
the
“Consents”)
required in connection with the consummation of the transactions contemplated
by
this Agreement, the failure of which to obtain would result in a material
adverse effect on the Company or its business, including, without limitation,
all consents and notices of assignment relating to all material contracts
and
Intellectual Property Rights. The Company at its sole cost and expense shall
obtain the Consents prior to the Closing Time.
(c) Subject
to the terms and conditions herein provided, each Seller shall use all
reasonable efforts to cause the Company and its Subsidiaries to cooperate
with
the parties hereto with respect to the transactions contemplated by this
Agreement. Without limiting the generality of the foregoing, each Seller
shall
use all reasonable efforts consistent with this Agreement to cause the Company
and its Subsidiaries to cooperate with the parties hereto in connection with
any
filings, submissions, consents, approvals, permits, authorizations or other
action referred to in Section
6.5(a).
(d) The
parties hereto shall use all reasonable efforts consistent with this Agreement
to cause each of the conditions precedent to the consummation of the
transactions contemplated by this Agreement applicable to each of them,
respectively, to be met as promptly as practicable.
6.6. Publicity.
Subject
to their respective legal obligations (including without limitation requirements
under the federal securities laws and of stock exchanges and other similar
regulatory bodies), the parties hereto shall consult with each other, and
shall
use reasonable efforts to agree upon the text of any press release, before
issuing any such press release or otherwise making public statements (other
than
filings made pursuant to securities and other laws and regulations applicable
to
Buyer) with respect to the transactions contemplated hereby.
7. CONDITIONS
7.1. Conditions
to Obligation of Sellers to Sell the Shares of Common
Stock.
The
obligation of each Seller to sell the Shares of Common Stock owned by it
shall
be subject to the fulfillment or waiver by Sellers at or prior to the Closing
Time of the following conditions:
(a) Buyer
shall have performed in all material respects its agreements contained in
this
Agreement required to be performed on or prior to the Closing Time and the
representations and warranties of Buyer contained in this Agreement shall
be
true and correct in all material respects as of the date when made and (unless
made as of a specified date) as of the Closing Time, and Sellers shall have
received a certificate of Buyer, dated the date of the Closing Time, certifying
to such effect.
-12-
(b) Neither
the Company or any Seller nor Buyer shall be subject to any order or injunction
of a court of competent jurisdiction which prohibits the consummation of
the
transactions contemplated by this Agreement. If any such order or injunction
shall have been issued against the Company or any Seller, each Seller agrees
to
use its reasonable best efforts to have any such injunction lifted.
(c) All
material consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission, board or other regulatory
body
(including, without limitation, the SEC and the various states in connection
with the merger of the Predecessor Companies with and into the Company) required
in connection with the execution, delivery and performance of this Agreement
shall have been obtained or made.
(d) There
shall be no action, suit or proceeding pending against any of the parties
hereto
which would or would reasonably be expected to prevent or materially delay
transactions contemplated by this Agreement or result in material damages
in
connection herewith.
(e) Buyer
shall have executed and delivered this Agreement, and shall have delivered
at
the Closing Time to the Seller stock certificates representing all of the
Hydron
Shares, executed by the appropriate officers of the Company, or shall deliver
a
copy of its instruction letter to its stock transfer agent to issue and deliver
the Hydron Shares required to be issued and delivered to each Seller at the
Closing Time.
(f) Xxxxxxx
and Xxxxx shall have executed the employment agreements, in the forms attached
as Exhibits
B-1 and B-2
hereto
(collectively, the “Employment
Agreements”)
(g) Buyer
shall have delivered such other documents and instruments required hereunder
or
reasonably requested by the Sellers.
7.2. Conditions
to Obligation of Buyer to Purchase the Shares of Common
Stock.
The
obligations of Buyer to purchase the Shares of Common Stock shall be subject
to
the fulfillment or waiver by Buyer at or prior to the Closing Time of the
following conditions:
(a) Each
of
the Sellers shall have performed in all material respects its agreements
contained in this Agreement required to be performed on or prior to the Closing
Time and the representations and warranties of such Seller contained in this
Agreement shall be true and correct in all material respects as of the date
when
made and (unless made as of a specified date) as of the Closing Time, and
Buyer
shall have received a certificate of such Seller, dated the date of the Closing
Time, certifying to such effect.
(b) Neither
Buyer nor the Company or any Seller shall be subject to any order or injunction
of a court of competent jurisdiction which prohibits the consummation of
the
transactions contemplated by this Agreement. If any such order or injunction
shall have been issued against Buyer, Buyer agrees to use its reasonable
best
efforts to have any such injunction lifted.
-13-
(c) All
material consents, authorizations, orders and approvals of (or filings or
registrations with) any governmental commission, board or other regulatory
body
(including, without limitation, the SEC and the various states in connection
with the merger of the Predecessor Companies with and into the Company) or
any
other third party required in connection with the execution, delivery and
performance of this Agreement shall have been obtained or made.
(d) There
shall be no action, suit or proceeding pending or threatened against any
of the
parties hereto which would or would reasonably be expected to prevent or
materially delay the transactions contemplated by this Agreement or result
in
material damages in connection herewith.
(e) On
or
before the Closing Time, each of the Predecessor Companies shall have been
merged with and into the Company in one or more transactions in which the
Company shall be the surviving corporation (the “Mergers”)
and
the Company shall deliver to the Buyer copies of the articles of merger and
the
certificate of merger certified by the Secretary of State of the State of
Florida and the Secretary of State of the State of Delaware, respectively,
evidencing such Mergers
(f) The
Sellers shall have executed and delivered this Agreement, and shall have
delivered at the Closing to the Buyer stock certificates representing all
of the
Company Shares, duly endorsed for transfer to the Buyer or together with
stock
powers duly executed in blank.
(g) Buyer
shall have executed the Employment Agreements between Buyer and each of Xxxxxxx
and Xxxxx.
(h) Buyer
shall have delivered such other documents and instruments required hereunder
or
reasonably requested by the Sellers.
8. INDEMNIFICATION
8.1. Survival
of Representations and Warranties.
The
representations and warranties made in this Agreement shall not terminate
at the
Closing Time and shall survive until the second anniversary of the Closing
Time.
8.2. Indemnification
by the Sellers.
Each of
the Buyer and its officers, directors, employees, shareholders, representatives
and agents shall be indemnified and held harmless by the Sellers, jointly
and
severally, at all times after the date of this Agreement, against and in
respect
of any and all damage, loss, deficiency, liability, obligation, commitment,
cost
or expense (including the reasonable fees and expenses of counsel) resulting
from, or in respect of, any of the following:
-14-
(a) any
misrepresentation, breach of warranty, or non-fulfillment of any obligation
on
the part of any Seller or the Company under this Agreement, or contained
in any
Schedule or Exhibit to this Agreement or from any material misrepresentation
in
or omission from any certificate, schedule, other agreement or instrument
executed by any Seller or the Company and delivered hereunder; and
(b) any
Taxes
owed by the Company, the Predecessor Companies or the Sellers with respect
to
any Tax year or portion thereof ending on or before the Closing
Time.
8.3. Indemnification
by Buyer.
Each
Seller shall be indemnified and held harmless by the Buyer at all times after
the date of this Agreement, against and in respect of any and all damage,
loss,
deficiency, liability, obligation, commitment, cost or expense (including
the
reasonable fees and expenses of legal counsel) resulting from, or in respect
of,
any of the following:
(a) any
misrepresentation, breach of warranty, or non-fulfillment of any obligation
on
the part of Buyer under this Agreement, or contained in any Schedule or Exhibit
to this Agreement or from any material misrepresentation in or omission from
any
certificate, schedule, other agreement or instrument executed by buyer and
delivered hereunder; and
(b) any
Taxes
owed by the Company or the Sellers with respect to any Tax year or portion
thereof beginning after the Closing Time.
8.4. Third-Party
Claims.
The
following procedures shall be applicable with respect to indemnification
for
third-party Claims (as defined below):
(a) Promptly
after receipt by the party seeking indemnification hereunder (hereinafter
referred to as the “indemnitee”)
of
notice of the commencement of any (a) Tax audit or proceeding for the assessment
of Tax by any taxing authority or any other proceeding likely to result in
the
imposition of Tax liability or obligation or (b) any action or the assertion
of
any Claim, liability or obligation by a third party (whether by legal process
or
otherwise), against which assessment, imposition, Claim, liability, or
obligation any other party to this Agreement (hereinafter the “indemnitor”)
is, or
may be, required under this Agreement to indemnify such indemnitee, the
indemnitee will, if a Claim thereon is to be, or may be, made against the
indemnitor, notify the indemnitor in writing of the commencement or assertion
thereof and give the indemnitor a copy of such Claim, process and all legal
pleadings.
(b) The
indemnitor shall have the right to participate in the defense of such action
with counsel of reputable standing. The indemnitor shall have the right to
assume and control the defense of such action unless such action, if adversely
determined, might (1) result in injunctions or other equitable remedies in
respect of the indemnitee or its business; (2) result in liabilities which,
taken with other then existing claims, would not be fully indemnified hereunder;
or (3) have an adverse impact on the business or financial condition of the
indemnitee after the Closing Time. The indemnitor and the indemnitee shall
cooperate in the defense of such Claims.
-15-
(c) In
the
case that the indemnitor shall assume or participate in the defense of such
audit, assessment or other proceeding as provided herein, the indemnitee
shall
make available to the indemnitor all relevant records and take such other
action
and sign such documents as are necessary to defend such audit, assessment
or
other proceeding in a timely manner. If the indemnitee shall be required
by
judgment or settlement agreement to pay any amount in respect of any obligation
or liability against which the indemnitor has agreed to indemnify the indemnitee
under this Agreement, the indemnitor shall promptly reimburse the indemnitee
in
an amount equal to the amount of such payment plus all reasonable expenses
(including reasonable fees and expenses of legal counsel) incurred by such
indemnitee in connection with such obligation or liability.
(d) Prior
to
paying or settling any Claim, the indemnitee must first supply the indemnitor
with a copy of a final court judgment or decree holding the indemniteee liable
on such Claim, or in the case of a settlement of such Claim, the indemnitee
must
first receive the written approval of the terms and conditions of such
settlement from the indemnitor, which approval may not be unreasonably be
withheld.
(e) An
indemnitee shall have the right to employ its own legal counsel and participate
in any case, but the fees and expenses of such legal counsel shall be at
the
expense of the indemnitee unless (a) the employment of such legal counsel
shall
have been approved in advance by the indemnitor in connection with the defense
of the Claim, or (b) such indemnitee shall have reasonably concluded that
there
may be defenses available to it that would be contrary to, or inconsistent
with,
those available to the indemnitor. In any such case, the indemnitee shall
be
entitled to reimbursement for the fees and expenses of one such legal
counsel.
(f) For
purposes of this Section, a “Claim” means any action, claim, obligation,
liability, expense, lawsuit, demand, suit, inquiry, hearing, investigation,
notice of a violation, litigation, proceeding, arbitration, or other dispute,
whether civil, criminal, administrative
or otherwise.
9. NONCOMPETE
9.1 Non-Competition
Covenant.
(a) As
a
material and valuable inducement for the Buyer to enter into this Agreement,
pay
and issue the shares of Hydron Stock hereunder to Sellers and consummate
the
transactions provided for herein, during the “Restricted
Period”
(as
hereinafter defined), each Seller agrees, unless otherwise permitted by Buyer
in
writing, that he shall not, directly or indirectly, for himself or on behalf
of
or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
-16-
(i) engage,
as an officer, director, shareholder, owner, partner, joint venturer or in
a
managerial capacity, whether as an employee, independent contractor, consultant
or advisor or as a sales representative, in any business of the same nature
or
similar to the business of Buyer, whether conducted by the Company or in
direct
competition with Buyer or the Company or any subsidiary or affiliate of Buyer
(collectively with Buyer, the “Hydron
Entities”
and
each (including Buyer), a “Hydron
Entity”),
within the United States (the “Restricted
Territory”);
(ii) solicit
any person who is, at that time, or who has been within one (1) year prior
to
that time, an employee of any Hydron Entity for the purpose or with the intent
of enticing such employee away form or out of the employ of any Hydron Entity;
or
(iii) solicit
any person or entity which is, at that time, or which has been within one
(1)
year prior to that time, a customer or supplier of any Hydron Entity for
the
purpose of soliciting or selling products or services in competition with
any
Hydron Entity within the Restricted Territory.
(b) Notwithstanding
the above, the foregoing covenant shall not be deemed to prohibit any Seller
from acquiring as an investment not more than two percent (2%) of the capital
stock of a competing business, whose stock is traded on a national securities
exchange or over-the-counter.
(c) As
used
in this Agreement, the term “Restricted
Period”
shall
mean and include with respect to each Seller, (A) in the case of the
prohibitions set forth in Section 9.1(a)(i) and (ii), any time while such
Seller
is employed by any Hydron Entity and (B), in the case of the prohibition
set
forth in Section 9.1(a)(iii), the longer of (x) a period of three (3) years,
from the Closing Time to the third (3rd) anniversary of the Closing Time
or (y)
with respect to each Seller employed by a Hydron Entity for a period of two
(2)
years following the effective date of the termination of such Seller’s
employment with any Hydron Entity (regardless of the cause, reason or
justification of such termination.
(d) In
recognition of the substantial nature of such potential damages and the
difficulty of measuring economic losses to Buyer as a result of a breach
of the
foregoing covenants, and because of the immediate and irreparable damage
that
could be cause to Buyer for which it would have no other adequate remedy,
each
Seller agrees that in the event of breach by such Seller of the foregoing
covenant, Buyer and each Hydron Entity shall be entitled to specific performance
of this provision and injunctive and other equitable relief.
(e) It
is
agreed by the parties that the foregoing covenants in this Section
9.1
impose a
reasonable restraint on the Sellers in light of the activities and business
of
the Company and the Hydron Entities on the date of the execution of this
Agreement and the current plans of the Hydron Entities; but it is also the
intent of Buyer and the Sellers that such covenants be construed and enforced
in
accordance with the changing activities, business and locations of the Hydron
Entities, whether before or after the date of termination of the employment
of
such Seller provided, that the applicable Seller participated in the development
of the changed activity, business or location. For example, if, during the
Restricted Period, a Hydron Entity engages in new and different activities,
enters a new business or establishes new locations for its current activities
or
business in addition to or its existing activities or business or the locations
currently established therefore, then such Seller will be precluded from
soliciting the customers or employees of such new activities or business
or from
such new location and from directly competing with such new business within
the
Restricted Territory or within 100 miles of its then-established operating
location(s) through the Restricted Period if the Seller was involved in the
development of such new businesses, locations or activities.
-17-
(f) The
covenants in this Section
9.1
are
severable and separate, and the unenforceability of any specific covenant
shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions be enforced to the fullest extent which the court
deems
reasonable, and the Agreement shall be reformed in accordance
therewith.
(g) All
the
covenants in this Section
9.1
shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of any Seller against Buyer,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Buyer of such covenants. Further, this
Section
9.1
shall
survive the Closing and the termination of such Seller’s employment with a
Hydron Entity. It is specifically agreed that the Restricted Period, during
which the agreements and covenants of the Seller made in this Section
9.1
shall be
effective, shall be computed by excluding from such computation any time
during
which such Seller is in violation of any provision of this Section
9.1.
9.2 Non-Disclosure;
Confidentiality.
(a) Confidential
Information.
By
virtue of the Sellers’ respective prior or future employment, association or
involvement with the Company of other Hydron Entity, such Seller may have
obtained or may hereafter obtain confidential or proprietary information
developed, or to be developed, by the Company of other Hydron Entity.
“Confidential Information” means all proprietary or confidential business
information, whether in oral, written, graphic, machine-readable or tangible
form, and whether or not registered, and including all notes, plans, records,
documents and other evidence thereof, including but not limited to all: patents,
patent applications, copyrights, trademarks, trade names, service marks,
service
names, “know how,” customer lists, details of client or consulting contracts,
pricing policies, operational methods, marketing plans or strategies, product
development techniques or plans, procurement and sales activities, promotion
and
pricing techniques, credit and financial data concerning customers, business
acquisition plans or any portion or phase of any scientific or technical
information, discoveries, computer software or programs used or developed
in
whole or in part by any Hydron Entity (including source or object codes),
processes, procedures, formulas or improvements of any Hydron Entity;
algorithms; computer processing systems and techniques; price lists, customer
lists; procedures; improvements, concepts and ideas; business plans and
proposals; technical plans and proposals; research and development; budgets
and
projections; technical memoranda, research reports, designs and specifications;
new product and service developments; comparative analyses of competitive
products, services and operating procedures; and other information, data
and
documents now existing or later acquired by an Hydron Entity, regardless
of
whether any of such information, data or documents qualify as a “trade secret”
under applicable Federal or State law. “Confidential Information” shall not
include (a) any information which is in the public domain during the period
of
service by the Sellers or becomes public thereafter, provided such information
is not in the public domain as a consequence of disclosure by any Seller
in
violation of this Agreement, and (b) any information not considered confidential
information by similar enterprises operating in the retail health and beauty
aide industry or otherwise in the ordinary course.
-18-
(b) Non-Disclosure.
Each
Seller agrees that, except as directed by such Seller’s Hydron Entity employer
(if any), as required or otherwise contemplated under this Agreement or such
Seller’s Employment Agreement (if any) or as otherwise required by law, he will
not at any time (including during the term of such Seller’s employment by a
Hydron Entity (if any) or at any time thereafter), except as may be expressly
authorized by the Hydron Entity in writing, disclose to any person or use
any
Confidential Information whatsoever for any purpose whatsoever, or permit
any
person whatsoever to examine and/or make copies of any reports or any documents
or software (whether in written form or stored on magnetic, optical or other
mass storage media) prepared by him or that come into his possession or under
his control by reason of his employment by an Hydron Entity or by reason
of any
consulting or software development services he has performed or may in the
future perform for an Hydron Entity which contain or are derived from
Confidential Information. Each Seller further agrees that while employed
and an
Hydron Entity, no Confidential Information shall be removed from the Hydron
Entity’s business premises, without the prior written consent of such Hydron
Entity. In addition, each of the Sellers hereby acknowledge that he is aware
of
the restrictions imposed by federal securities laws on persons possessing
material non-public information with respect to SEC reporting companies and
agree that neither Seller will effect any transactions in the stock of Buyer
without compliance with such laws.
(c) Hydron
Group Property.
As used
in this Agreement, the term “Hydron
Group Property”
means
all documents, papers, computer printouts and disks, records, customer or
customer lists, files, manuals, supplies, computer hardware and software,
equipment, inventory and other materials that have been created, used or
obtained by any Hydron Entity, or otherwise belonging to any Hydron Entity,
as
well as any other materials containing Confidential Information as defined
above. Each Seller recognizes and agrees that:
(i) All
the
Hydron Group Property shall be and remain the property of the Hydron Entity
to
which such belongs;
(ii) The
Sellers will preserve, use and hold the Hydron Group Property only for the
benefit of Buyer and its affiliates and to carry out the business of the
Hydron
Entity, Buyer and its affiliates; and
(iii) When
any
Seller’s employment is terminated, such Seller will immediately deliver and
surrender to the Hydron Entity all the Hydron Group Property, including all
copies, extracts or any other types of reproductions, which such Seller has
in
his possession or control.
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10. TERMINATION
10.1 Methods
of Termination.
This
Agreement may be terminated and the transactions herein contemplated may
be
abandoned at any time:
(a) by
mutual
consent of the Buyer, the Sellers and the Company;
(b) by
the
Buyer or the Sellers and the Company, collectively, if the transactions
contemplated by the Agreement have not been consummated on or before [July
31,
2005]; provided,
however,
that if
the failure to consummate the transactions contemplated by this Agreement
as of
that date has resulted from the breach or default of any party with respect
to
its respective obligations under this Agreement on or before such date, such
party may not terminate this Agreement pursuant to this Section
10.1(b),
and
each other party to this Agreement shall at its option enforce its rights
against such breaching or defaulting party and seek any remedies against
such
party, in either case as provided hereunder and by applicable law;
or
(c) by
notice
given by each of the Sellers and the Company or the Buyer if as of the Closing
Time (including any extensions) any of the conditions specified in Sections
7.1
or 7.2 of this Agreement, respectively, shall not have been satisfied or
if the
Buyer or either Seller or the Company, respectively, is otherwise in default
under this Agreement.
10.2 Procedure
Upon Termination.
In
the
event of termination and abandonment pursuant to Section
10.1
hereof,
and subject to the proviso contained in Section
10.1(b),
this
Agreement shall terminate and be abandoned, without further action by any
of the
parties hereto. If this Agreement is terminated as provided herein:
(a) each
party shall redeliver all documents and other material of any party relating
to
the transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same;
(b) all
information received by any party hereto with respect to the business of
the
other party or the Company (other than information which is a matter of public
knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for the advantage of,
or
disclosed to third parties by, such party to the detriment of the party
furnishing such information; and
(c) no
party
hereto shall have any further liability or obligation to any other party
under
or in connection with this Agreement; provided,
however,
that
the non-breaching or non-defaulting party shall not be foreclosed from bringing
a Claim or cause of action or otherwise recovering from the breaching or
defaulting party for such breach or default.
-20-
11. GENERAL
PROVISIONS
11.1. Notices.
Any
notice required to be given hereunder shall be sufficient if in writing,
and
sent by facsimile transmission and by courier service (with proof of service),
hand delivery (with proof of delivery) or certified or registered mail (return
receipt requested and first-class postage prepaid), addressed as
follows:
If
to
Buyer:
Hydron
Technologies, Inc.
0000
X.
Xxxxxx Xxxx
Xxxxxxxx
0, Xxxxx 0-X
Xxxxxxx
Xxxxx, XX 00000-0000
Att:
Chief Operating Officer
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
With
a
copy to:
Xxxxx
XxXxxxxx Xxxxx Xxxxxxxx &
Xxxxxxx,
P.A.
000
Xxxx
Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx
Xxxxxxxxxx, XX 00000
Attn:
Xxxxxx X. Brighton, Jr., Esq.
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
If
to
the Company or the Sellers:
Clinical
Results, Inc.
0000
00xx
Xxxxxx
Xxxxx
Xxxxxxxxx
X
Xx.
Xxxxxxxxxx, XX 00000
Facsimile:
(000) 000-0000
Telephone:
(000) 000-0000
Att:
President
With
a
copy to:
Att:
Facsimile:
Telephone:
or
to
such other address as any party shall specify by written notice so given,
and
such notice shall be deemed to have been delivered as of the date so
telecommunicated, personally delivered or mailed.
-21-
11.2. Assignment;
Binding Effect.
Neither
this Agreement nor any of the rights, interests or obligations hereunder
shall
be assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject
to
the preceding sentence, this Agreement shall be binding upon and shall inure
to
the benefit of the parties hereto and their respective successors and assigns.
Until the Closing Time or termination of this Agreement pursuant to Section
10.1,
or
10.2,
the
Common Stock (and any transfer thereof) shall be subject to this
Agreement.
11.3. Entire
Agreement
This
Agreement constitutes the entire agreement among the parties with respect
to the
subject matter hereof and supersedes all prior agreements and understandings
(oral and written) among the parties with respect thereto. No addition to
or
modification of any provision of this Agreement shall be binding upon any
party
hereto unless made in writing and signed by all parties hereto.
11.4. Amendment.
This
Agreement may be amended by the parties hereto by an instrument in writing
signed by or on behalf of each of the parties hereto.
11.5. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF FLORIDA WITHOUT REGARD TO ITS RULES OF CONFLICT OF LAWS.
11.6. Counterparts.
This
Agreement may be executed by the parties hereto (including by facsimile
transmission) with separate counterpart signature pages or in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same
instrument.
11.7. Headings. Headings
of the Sections of this Agreement are for the convenience of the parties
only,
and shall be given no substantive or interpretive effect
whatsoever.
11.8. Interpretation.
In this
Agreement, unless the context otherwise requires, words describing the singular
number shall include the plural and vice versa, and words denoting any gender
shall include all genders and words denoting natural persons shall include
corporations and partnerships and vice versa.
11.9. Waivers. Except
as
provided in this Agreement, no action taken pursuant to this Agreement,
including without limitation any investigation by or on behalf of any party,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants or agreements
contained in this Agreement. The waiver by any party hereto of a breach of
any
provision hereunder shall not operate or be construed as a waiver of any
prior
or subsequent breach of the same or any other provision hereunder.
-22-
11.10. Severability.
Any term
or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent
of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or otherwise affecting
the
validity or enforceability of any of the terms or provisions of this Agreement
in any other jurisdiction. If any provision of this Agreement is so broad
as to
be unenforceable, the provision shall be interpreted to be only so broad
as is
enforceable.
11.12. Enforcement
of Agreement.
The
parties hereto agree that irreparable damage would occur if any of the
provisions of this Agreement were not performed in accordance with its specific
terms or was otherwise breached. It is accordingly agreed that the parties
shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which they may be entitled at law
or in
equity.
11.13. Costs.
Each
of
the Sellers and Buyer shall bear its own respective costs, and the Sellers
shall
bear the costs of the Company.
11.14. Schedules.
Information
or disclosure provided on any Schedule shall constitute disclosure for purposes
of all Schedules to which such information or disclosure would be
responsive.
11.15. No
Third Party Beneficiaries.
Nothing
in this Agreement shall be interpreted to provide to grant, expand, increase,
broaden or enlarge any rights or remedies which third parties would have
against
the Company or any of the Sellers had the parties not entered into this
Agreement and the transactions contemplated hereby not taken place.
11.16. Due
Diligence.
Prior
to
the Closing Time, Sellers and the Company shall provide Buyer with access
to
such information as Buyer may reasonably request regarding the business of
the
Company and the Predecessor Companies, including without limitation, all
financial information, Contracts and corporate documentation relating to
the
Company or the Predecessor Companies.
11.17. Lock-up
Agreements.
Each
Seller agrees, if requested by Buyer and an underwriter of common stock (or
other securities) of Buyer, not to sell or otherwise transfer or dispose
of any
common stock (or other securities) of Buyer held by such Seller during the
90
day period following any registration statement filed by Buyer under the
Securities Act, provided that all executive officers, directors, and chief
executives or presidents of subsidiaries, of Buyer enter into similar
agreements. If requested by the underwriters, the Sellers shall execute a
separate agreement to the foregoing effect. Buyer may impose stop-transfer
instructions with respect to the shares (or securities) subject to the foregoing
restriction until the end of such period.
11.18 Board
of Directors.
Buyer
agrees to appoint and nominate Xxxxxxx and one other designee of Sellers
to the
Board of Directors of the Buyer, and to nominate and use its best efforts
to
cause the election of such nominees or other nominees of Sellers as directors
at
the next annual meeting of the shareholders of the Buyer.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-23-
IN
WITNESS WHEREOF,
the
parties have executed this Agreement and caused the same to be duly delivered
on
their behalf as of the day and year first written above.
BUYER:
HYDRON
TECHNOLOGIES, INC.
By:
/s/
Banakus
Name:
Xxxxxxx Xxxxxxx
Title:
Interim President
THE
COMPANY:
CLINICAL
RESULTS, INC.
By:
/s/ Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
President
SELLERS:
/s/
Xxxxxxx
XXXXX
XXXXXXX, individually
/s/
Xxxxx
R.
XXXXXXX XXXXX, individually
-24-
EXHIBIT
A
RESTRICTIVE
LEGEND
“THE
SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF
1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED
WITHOUT
AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.”
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