EXHIBIT 16.1
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") made this 11th day
of September, 2003, by and between BIO-ONE CORPORATION, a corporation organized
and existing under the laws of Nevada with offices at 0000 Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx 00000, 32708 ("Bio-One"), PNLABS, INC. a
corporation organized and existing under the laws of Nevada and a wholly owned
subsidiary of Bio-One (the "Purchaser"), and PHYSICIANS NUTRACEUTICAL
LABORATORIES, INC., a corporation organized and existing under the laws of
Florida with offices at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxx Xxxxx,
Xxxxxxx 00000 ("Seller").
W I T N E S S E T H:
WHEREAS, Seller is willing to sell to Purchaser and Purchaser is
willing to buy from Seller, upon the terms and conditions hereinafter set forth,
all right, title and interest of the Seller in and to its Assets (as hereinafter
defined) (such business is hereinafter collectively called the "Seller's
Business"), as more fully set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINED TERMS
1.1 "DEFINED TERMS" Where used herein or in any amendments hereto, the
following terms shall have the following meanings except as defined otherwise in
this Agreement.
1.2 "ASSETS" means those assets to be conveyed hereunder as more fully
set forth in the attached Schedule A.
1.3 "BUSINESS" means the business operations presently and heretofore
carried on by Seller at its current place of business located at 000 Xxxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxx Xxxxx, Xxxxxxx 00000.
1.4 "BUSINESS DAY" means any day except Saturday, Sunday, or any
statutory holiday in the State of Florida.
1.5 "CLOSING DATE" means the 11th day of September, 2003 or such other
date as may be mutually agreed upon in writing by the parties hereto.
1.6 "PURCHASE DOCUMENTS" means this Agreement and all other
agreements, documents or instruments to be executed in connection with this
Agreement.
2. PURCHASE OF ASSETS AND PURCHASE PRICE
2.1. Assets. Upon the terms and subject to the conditions provided in
this Agreement, Seller shall, at the Closing and as of the Closing Date (as said
terms are hereinafter defined), convey, sell, transfer, assign and deliver to
Purchaser, and Purchaser shall purchase from Seller, all of Seller's right,
title and interest in and to the Products and certain of Seller's assets used in
the conduct of Seller's Business, whether constituting real or personal,
tangible or intangible personal property, and whether or not in the possession
or control of Seller, (hereinafter collectively referred to as the "Assets")
including, but without limitation, all of the Assets shown on the Seller's
Balance Sheet attached hereto as Schedule A. All Assets are to be in good
working condition and the inventory of product in good and saleable condition.
2.2 Liabilities. The Purchaser shall assume no liabilities or other
obligations, commercial or otherwise, of Seller, known or unknown, fixed or
contingent, xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured
or otherwise, except for any taxes that may become due on or about the time of
Closing, but not to exceed $1,000.
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A. Without in any way limiting the generality of the foregoing,
Purchaser shall not assume any obligation or liability of Seller with respect to
the following (i) any transaction involving Seller occurring after the Closing
Date; (ii) any liability of Seller for federal, state or local taxes, fees,
assessments or other similar charges (including without limitation income taxes,
real estate taxes, payroll taxes and sales taxes); (iii) any liability for
services performed by Seller on or prior to the Closing Date; (iv) any
responsibility of Seller with respect to salary, wages, vacation pay, savings
plans, severance pay, deferred compensation, or other obligations for the
benefit of any employee of Seller, including pension benefits accrued (vested or
unvested), or arising out of their employment through the Closing Date for which
Seller shall be liable; (v) any liability or obligation incurred in connection
with or related to the transfer of the Assets pursuant hereto including, but not
limited to sales taxes, transfer taxes or stamp taxes; (vi) any liability of any
kind whatsoever resulting from the failure of Seller to comply with the
requirements of all applicable building, fire, zoning and environmental laws,
laws relating to occupational health and safety and other laws applicable to
Seller or the conduct of its business; (vii) any liability under any Assumed
Contract to the extent such liability arises out of Seller's failure to perform
its obligations thereunder to the extent performance is due on or prior to the
Closing Date; (viii) any liability of Seller to Seller's stockholders or their
relatives or friends; (ix) any indebtedness of Seller to any banks or other
lending institutions; (x) liabilities in respect of any pension, profit sharing
or other employee benefit plan (as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) of Seller.
2.3 Purchase Price. Purchaser shall pay to Seller for the Assets a
purchase price (the "Purchase Price") of Five Percent (5%) Royalty on all
monthly sales (less sales tax and returns) of PNLabs, Inc. during the ensuing 5
years. This shall be paid monthly in cash. Within five (5) days after the end of
each calendar month after the Closing Date, the Purchaser shall pay to the
Seller a royalty of five percent (5%) of the sales in the immediately preceding
calendar month (such payments are hereinafter collectively referred to as the
"Royalty Payments"). Within five (5) days after the end of each calendar month
after the Closing Date, the Purchaser shall render to the Seller a written
statement, on the amount of Royalty Payment due hereunder and shall set forth
(i) the Purchaser's sales of products during the immediately preceding calendar
month; (ii) the calculation of sales during such calendar month; and (iii) a
calculation of the Royalty Payment due hereunder. Such statement shall be
accompanied by a check in the full amount of such Royalty Payment. This Royalty
Payment would survive any future sale of PNLabs, Inc. to a third party prior to
the expiration of the five (5) year obligation.
A. Purchase Price Adjustment. The Purchase Price shall be decreased
by the amount, if any, that the "Net Asset Amount" as stated in the July 31,
2003 Balance Sheet is less than $106,000.00 (the "Purchase Price Adjustment").
Any Purchase Price Adjustment shall be applied to the next available Royalty
Payment as described in Paragraph 2.3 on a dollar for dollar basis.
B. Purchaser's Obligations. At the Closing, Purchaser shall provide
payment of $50,000 cash for working capital. In addition, Purchaser shall
provide $1,400,000 for agreed upon marketing programs ("Marketing Program
Investment") All cash payments will be deposited into the newly formed entity
PNLabs, Inc., which in turn, will disburse funds as per this Agreement. The
terms of the Marketing Program Investment would be in the form of a guaranteed
$50,000 per month during September, October, November and December 2003.
In the event that Purchaser defaults on any of the payments in 2003,
the Assets shall revert back to the Seller and the Agreement shall be
terminated.
During 2004 the payments would increase to $100,000 per month for 12
months. The Marketing Program Investment Criteria for 2004 would be based upon
PNLabs, Inc. having achieved its 2003 sales and EBITDA Business Plan goals. Each
60 days during 2004 the PNLabs, Inc. performance would be compared to its sales
and EBITDA Business Plan goals and the $100,000 investment per month would
continue for so long as PNLabs, Inc. achieved its 2004 sales and EBITDA Business
Plan goals. If PNLabs, Inc. is not achieving its sales and EBITDA Business Plan
goals then Purchaser may, in its sole discretion, elect to reduce or discontinue
the Marketing Program Investment. PNLabs, Inc. will act in good faith to use
reasonable commercial effort to market its products and optimize sales and
EBITDA. A copy of the projected sales and EBITDA is attached as Schedule B.
2.4. Allocation of the Purchase Price. The Purchase Price shall be
allocated amongst the Assets as provided in Schedule A attached hereto, and each
party shall file in a manner consistent therewith (i) the reports required under
Section 1060 of the Internal Revenue Code of 1986, as amended, and (ii) their
respective Federal, state and local tax returns.
3. DOCUMENTS TO BE DELIVERED AT CLOSING
3.1. At the Closing:
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A. Seller shall execute and deliver to Purchaser a Xxxx of Sale fully
executed and in the form of Schedule C attached hereto, conveying, selling,
transferring and assigning to Purchaser all of the Assets free and clear of any
and all defects, liens, encumbrances, charges and equities whatsoever.
B. Seller shall execute or endorse and deliver to Purchaser other
duly executed separate instruments of sale, assignment or transfer, including,
but not limited to assignments of contract rights or leases in form suitable,
where appropriate, for filing or recording with the appropriate office or agency
for various items of the Assets or other rights of Seller to be conveyed
hereunder, where, in Purchaser's reasonable judgment, the same are necessary or
desirable in order to vest or evidence title hereto in Purchaser.
C. Purchaser shall pay the Purchase Price for the Assets in
accordance with the terms of Section 2 hereof.
D. Seller shall deliver to Purchaser copies, certified by the
Secretary of Seller, of (i) certificates of good standing in the jurisdiction of
the Seller's incorporation and in each other jurisdiction in which the Seller is
doing or transacting business, and (ii) the written approval of the Board of
Directors certifying that a majority of the stockholders of Seller have
authorized this Agreement and the other agreements and instruments to be
delivered pursuant thereto and the transactions contemplated hereby and thereby.
E. Purchaser shall deliver to Seller copies, certified by the
Secretary of Purchaser, of (i) certificates of good standing in the jurisdiction
of the Purchaser's incorporation and in each other jurisdiction in which the
Purchaser is doing or transacting business, and (ii) the written approval of the
Board of Directors of Purchaser authorizing this Agreement and the other
agreements and instruments to be delivered pursuant thereto and the transactions
contemplated hereby and thereby.
F. Seller shall deliver to the Purchaser all books and records of the
Seller relating to the Seller's Business, the Customers and the Assets.
G. Seller shall deliver to the Purchaser all necessary consents of
third parties to the execution and delivery of this Agreement and the
consummation of the transactions contemplated including, without limitation, the
written consent of the Landlord for the assignment of the Seller's leasehold
obligation at its Business location.
4. CLOSNG. The Closing of the transactions contemplated by this
Agreement, and all deliveries to be made at such time in connection therewith
shall take place at the office of the Seller, such Closing to take place by
delivery of executed counterparts of this Agreement and all other documents,
instruments and certificates required to be delivered by Seller or Purchaser at
the Closing (Said Closing and said date thereof, herein referred to as the
"Closing" and the "Closing Date", respectively). The effective date of this
Agreement shall be the date of execution by the last signatory to this
Agreement.
5. REPRESENTATIONS AND WARRANTIES BY SELLER.
5.1. Seller represents and warrants to Purchaser as follows:
A. Seller is a corporation duly organized and validly existing under
the laws of the State of Florida. Seller has full power and authority to own the
Assets and conduct its business and that the Assets are owned free and clear of
all liabilities of any kind or nature without any liens or encumbrances.
B. The execution, delivery and performance of the Purchase Documents
by Seller, and the consummation of the transactions contemplated hereby, will
not with or without the giving of notice or the lapse of time or both:
(i) violate any provision of law, statute, rule or regulation
to which Seller is subject,
(ii) violate any judgment, order, writ or decree to which
Seller is a party or by which it is or may be bound; or
(iii) to the knowledge of Seller, result in the breach of or
conflict with any term, covenant, condition or provision of, or result in the
modification or termination of, or constitute a default under or result in the
creation or imposition of any lien, security interest, charge or encumbrance
upon any of the Assets being purchased hereunder, under the corporate charter or
by-laws or any other agreement, understanding or instrument to which Seller is a
party or by which it is or may be bound or affected.
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C. All necessary corporate action has been taken by Seller to
authorize the execution, delivery and performance of the Purchase Documents. The
Purchase Documents have been duly and validly authorized, executed and delivered
by Seller and constitute the valid and binding obligation of Seller enforceable
against it in accordance with their respective terms.
D. All consents and approval required for transferring the Assets to
Purchaser hereunder and for assigning the agreements, including without
limitation all amendments, modifications, and supplements, whether written or
oral ("Agreements") and for performing Seller's obligations under the Purchase
Documents have been obtained or will be obtained. No consent of any court,
governmental agency or other public authority is required as a condition to the
enforceability of the Purchase Documents.
E. Seller has good and merchantable title to all Assets and
acknowledges that the Assets being transferred per Schedule "A" are not
encumbered by any liens or the subject matter of any known or anticipated
litigation.
F. To the best of its knowledge Seller has conducted its business in
compliance with all applicable federal, state and local laws, regulations and
ordinances.
G. Seller has not received any notice that it is infringing upon the
research, development, processes, methods, techniques, inventions, know how
patents, patent rights, trade name, trademarks and service marks of any other
party.
H. Seller has paid all personal and intangible property taxes due as
a result of the ownership of the assets and there are no amounts due and owing
for personal property or intangible property taxes.
I. There is (and has not been since its inception) no claim,
litigation, action, suit or proceeding, administrative or judicial, pending or
threatened against or affecting Seller, or involving any of the Assets, at law
or in equity or before any foreign, federal, state, local or other governmental
authority, including, without limitation, any claim, proceeding, or litigation
for the purpose of enjoining or preventing the consummation of this Agreement,
or the transactions contemplated hereby, or otherwise claiming this Agreement,
or any of the transactions contemplated hereby or the consummation thereof, is
illegal or otherwise improper, nor to Seller's knowledge is there any basis upon
which any such claim, litigation, action, suit or proceeding could be brought or
initiated. Seller is not (and has not been within the past three years) subject
to or in default under any judgment, order, writ, injunction or decree of any
court or any governmental authority, and no replevins, attachments, or
executions have been issued or are now in force against Seller, except for the
settlement agreement with UPS. No petition in bankruptcy or receivership has
ever been filed by or against Seller.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER
6.1 Purchaser hereby represents and warrants to Seller as follows:
A. Purchaser is a corporation duly organized and validly existing
under the laws of the State of Nevada has full power and authority to own its
property and conduct its business.
B. The execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, will not with or without
the giving of notice or the lapse of time or both:
(i) violate any provision of law, statute, rule or regulation
to which Purchaser is subject;
(ii) violate any judgment, order, writ or decree to which
Purchaser is a party or by which Purchaser is bound; or
(iii) result in the modification or termination of, or
constitute a default under the corporate charter or by-laws or any other
agreement, understanding or instrument to which Purchaser is a party or by which
Purchaser is or may be bound or affected.
C. All necessary corporate action has been taken by Purchaser to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transaction contemplated hereby. This Agreement has been
duly and validly authorized and is a binding obligation of Purchaser enforceable
against it in accordance with its terms.
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D. Purchaser has the necessary funds to fulfill its obligations under
this Agreement through its parent company, Bio-One Corporation.
E. There is (and has not been since its inception) no claim,
litigation, action, suit or proceeding, administrative or judicial, pending or
threatened against or affecting Purchaser, or involving any of the Assets, at
law or in equity or before any foreign, federal, state, local or other
governmental authority, including, without limitation, any claim, proceeding, or
litigation for the purpose of enjoining or preventing the consummation of this
Agreement, or the transactions contemplated hereby, or otherwise claiming this
Agreement, or any of the transactions contemplated hereby or the consummation
thereof, is illegal or otherwise improper, nor to Purchaser's knowledge is there
any basis upon which any such claim, litigation, action, suit or proceeding
could be brought or initiated. Purchaser is not subject to or in default under
any judgment, order, writ, injunction or decree of any court or any governmental
authority, and no replevins, attachments, or executions have been issued or are
now in force against Purchaser. No petition in bankruptcy or receivership has
ever been filed by or against Purchaser.
7. CONDITIONS TO THE OBLIGATIONS OF SELLER TO CLOSE
7.1 All obligations of Seller hereunder are, at the option of Seller,
subject to the conditions that, at the Closing Date:
A. All representations and warranties made in this Agreement by
Purchaser shall be true and correct as of the Closing Date in all material
respects.
B. Purchaser shall have tendered the required documents and
certificates at the Closing as set forth in Section 3 hereof.
C. The Purchase Price described in Section 2.3 hereof due at the
Closing shall have been paid by Purchaser.
D. All corporate action necessary to authorize (A) the execution,
delivery and performance by Purchaser of this Agreement and any other agreements
or instruments contemplated hereby to which Purchaser is a party and (B) the
consummation of the transactions and performance of its other obligations
contemplated hereby and thereby shall have been duly and validly taken by
Purchaser, and the Seller shall have been furnished with copies of all
applicable resolutions adopted by the board of directors of Purchaser, certified
by the Secretary or Assistant Secretary of Purchaser.
8. CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO CLOSE
8.01 All obligations of Purchaser hereunder are, at the option of
Purchaser, subject to the conditions that, at the Closing Date:
A. All representations and warranties of Seller contained in this
Agreement shall be true and correct as of the Closing Date in all material
respects.
B. Seller shall have performed all commitments hereunder up to the
Closing Date and shall have tendered the required documents, instruments and
certificates as set forth in Section 3 hereof.
C. No action, suit, proceeding or investigation by or before any
court, administrative agency or other governmental authority shall have been
instituted or threatened to restrain, prohibit or invalidate the transactions
contemplated by this Agreement or which may affect the right of Purchaser to
own, operate or control after the Closing Date the Assets and the Seller's
Business.
D. All corporate action, necessary to authorize (A) the execution,
delivery and performance by the Seller of this Agreement and any other
agreements or instruments contemplated hereby or thereby to which Seller is a
party and (B) the consummation of the transactions contemplated hereby and
thereby shall have been duly and validly taken by Seller, and Purchaser shall
have been furnished with copies of all applicable resolutions of Seller
certified by the Secretary or Assistant Secretary of the Seller.
E. The Seller shall have obtained the approvals, consents and
authorizations of all third parties and/or governmental agencies necessary for
the communication of the transactions contemplated hereby in accordance with the
requirements of applicable laws and agreements.
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F. Leases. Seller shall at its own cost and expense assign the
current existing lease to the Purchaser and obtain all required landlord
consents. Any costs assessed by the Landlord in the assignment of the leasehold
obligation shall be borne by Seller. In the alternative, Purchaser may prior to
Closing negotiate a new lease for the premises. In the event that Purchaser is
not able to secure a new lease from the Landlord, Purchaser agrees to indemnify
and hold Seller harmless as a result of any liability arising following the
Closing. Nothing contained herein shall be construed to impose any liability on
the Purchaser for any rental obligations accruing prior to Closing.
G. Employment Agreements. Purchaser shall enter into an employment
agreement with Xxxx Xxxx on terms mutually agreeable to the Purchaser and the
respective party and the said party shall work on a full time basis and devote
his full attention to the business of the Purchaser. A copy of the employment
agreement is attached as Schedule D. Purchaser shall enter into employment
agreements with the four existing employees of Seller.
9. INDEMNIFICATIONS
9.01 Seller agrees to indemnify and hold harmless Purchaser from:
A. Any and all damages or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfillment of any covenants on the
part of Seller under this Agreement.
B. Any and all actions, suits, proceedings, demands, assessments,
judgments, costs, reasonable attorneys fees, expenses incident to any of the
foregoing.
C. Any and all liabilities as they relate to the personal property
being transferred under this Purchase and Sale Agreement which are not
specifically set forth.
9.02 Purchaser agrees to indemnify and hold Seller harmless from:
A. Any and all damages or deficiencies resulting from any
misrepresentation, breach of warranty or non- fulfillment of any covenant on the
part of Purchaser under this Agreement
B. Any and all actions, suits, proceeding, demands, assessments,
judgments, costs, reasonable attorney's fees and expenses incident to any of the
foregoing.
9.03 Any party having an indemnification claim hereunder (Indemnitee")
shall give the other party ("Indemnitor") prompt notice in writing of any claim
by any third party which gives rise to a claim for indemnification hereunder,
and of any alleged breach of any of the representations and warranties contained
in this Agreement. As to any alleged breach of the representations or
warranties, written notice shall contain a statement setting forth the nature of
the alleged breach or breaches. The Indemnitor shall have thirty (30) days after
the delivery of such notice to cure or contest any such claim by a third party
or any such alleged breach or breaches. At its option, to be exercised within
thirty (30) days of such notice, the Indemnitor may defend against any such
action or proceeding with counsel of its choice, at the Indemnitor's expense, it
being understood, however, that the Indemnitor's designation of counsel shall be
subject to the approval of the indemnitee, which approval shall not be
unreasonably withhold. Additionally, at its own expense the Indemnitee may
participate in any such defense with counsel of its choice. As long as the
defense is being handled by the Indemnitor, the Indemnitee shall not settle any
such claim, action or proceeding without prior written consent of the
Indemnitor, except that if the Indemnitee does elect to settle the matter
without such consent, the Indemnitor shall be released from the terms of this
indemnification. Notwithstanding the foregoing, in the event the Indemnitor
elects not to defend any such claim, action, or proceeding, the Indemnitee may
do so, in which event the Indemnitor shall continue to indemnify the Indemnitee
for any liabilities, losses and damages incurred by the Indemnitee, including
any settlement payments and for the reasonable costs and expenses of this
counsel.
9.04 All indemnifications made herein by Purchaser and Seller shall
survive the closing of this transaction and shall enure to the benefit of the
Purchaser's and Seller's heirs, assigns, agents, principals, members and/or
shareholders.
10. TERMINATION DEFAULT REMEDIES
10.01 Termination. If either Purchaser or Seller materially defaults
in the due and timely performance of any of its warranties, covenants or
agreements or in the event of the failure to satisfy or fulfill any of the
conditions, the non-defaulting party may on the Closing Date give notice of
termination. The notice shall specify the default or defaults upon which the
notice is based. The termination shall be effective ten (10) days after the
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Closing Date, unless the specified default or defaults have been cured on or
before the effective date of the termination.
10.02 Default; Remedies. Notwithstanding Section 10.01, in the event
of a default, the non-defaulting party may seek specific performance of this
Agreement against the defaulting party from a court of competent jurisdiction,
or alternatively, such non-defaulting party may seek damages from the defaulting
party.
10.03 Litigation Costs. If any legal action or other proceeding is
brought for the enforcement of this Agreement or to remedy its breach, the
prevailing party in such action or proceeding shall be entitled to recover its
actual attorney's fees and other costs incurred in the action or proceeding, in
addition to such other relief to which it may be entitled.
11. MISCELLANEOUS.
11.01 This Agreement may not be assigned by Purchaser without the prior
written consent of Seller whose consent shall not be unreasonably withheld.
11.02 Survival or Representations. The representations and warranties
set forth herein shall survive the execution of this Agreement.
11.03 Entire Agreement. This Agreement, together with all documents
incorporated herein by reference constitutes the complete and exclusive
statement of the agreement between the parties hereto and supersedes any and all
prior express or implied agreements or understandings between the parties hereto
concerning the subject matter hereof. No amendment, waiver or other alteration
of this Agreement may be made except by mutual agreement in writing.
11.04 Governing Law and Disputes. This Agreement shall be in all
respects, governed by, construed, and enforced in accordance with the laws of
the State of Florida, including all matters of construction, validity and
performance. Any action to enforce or interpret the terms of this Agreement
shall be instituted and maintained in the state court located in Palm Beach
County, Florida. The Seller hereby consents to the jurisdiction of such court
and waives any objections to such jurisdiction. In any action or proceeding
arising out of this Agreement, the party prevailing in such action shall be
entitled to recover its reasonable attorney's fees and costs.
11.05 Captions. The captions herein are for the convenience of the
parties and are not to be constructed as part of the terms of this Agreement.
11.06 Waiver. Any waiver by either party of any breach of this
Agreement shall not be considered a waiver of any subsequent breach.
11.07 Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and mailed by registered or certified
mail, postage prepaid return receipt requested, to the party to whom it is to be
given.
11.08 Severability: If any term or provision of this Agreement is
determined to be illegal, unenforceable, or invalid in whole or in part for any
reason, such illegal, unenforceable, or invalid provisions or part(s) thereof
shall be stricken from this Agreement and such provision shall not affect the
legality, enforceability, or validity of the remainder of this section, then the
stricken provision shall be replaced, to the extent possible, with a legal,
enforceable, and valid provision that is similar in tenor to the stricken
provision as is legally possible.
11.09 Expenses. Each of the parties hereto shall bear its own expenses
in connection with the transactions contemplated.
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11.10 Finders Fees. Neither Seller nor Purchaser has incurred any
liabilities for finders' fees or commission except for the finder's fee that
Purchaser intends to pay to Xxxxxx Xxxxxxxx.
11.11 Additional Documentation: The parties agree that without the
payment of additional consideration, each party will provide the other with such
information as may be necessary to carry out the terms and conditions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement under
seal on the day and year first above written.
SELLER:
ATTEST: PHYSICIANS NUTRACEUTICAL LABORATORIES, INC.
/s/ XXXX XXXX
------------------------------ -------------------------------------------
BY: XXXX XXXX
ITS: President & CEO
PURCHASER:
ATTEST: PNLABS, INC.
/s/ XXXXXX XXXXXXXXX
------------------------------ -------------------------------------------
BY: XXXXXX XXXXXXXXX
ITS: Chairman
PURCHASER:
ATTEST: BIO-ONE CORPORATION
/s/ XXXXXX XXXXXXXXX
------------------------------ -------------------------------------------
BY: XXXXXX XXXXXXXXX
ITS: President & CEO
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SCHEDULE A
PHYSICIAN NUTRACEUTICAL LABORATORIES
BALANCE SHEET, JUNE 30, 2003 (UNAUDITED)
Cash $ 900
Accounts Receivables 20,758
Inventory 59,584
Property and Equipment, Net 20,709
Other Assets 4,202
-----------
Total Assets 106,153
Accounts Payables 302,885
Other Current Liabilities 3,966
Notes Payables 592,598
Other Long-term Liabilities 312,000
-----------
Total Liabilities 1,211,449
Preferred Stock 514
Common Stock 2,906
Paid in Capital 2,775,355
Retained earnings (3,692,156)
Net Income (191,915)
Total Capital (1,105,296)
Total Liabilities & Capital 106,153
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SCHEDULE B
PNLabs. Inc. TOTAL 04
2003-2004 Budgets and Projections
Income Statement
SALES $7,641,170
Less Discounts and Returns 76,412
Net Sales $7,564,758 100.00%
COST OF SALES
Product Costs $2,887,351 38.17%
GROSS PROFIT $4,677,407 61.83%
Shipping $ 458,470 6.06%
GROSS PROFIT AFTER FREIGHT & SHIPPING $4,218,937 55.77%
SELLING & MARKETING EXPENSES
Sales Salaries $ 340,580 4.50%
Sales Payroll Taxes/Payroll Burdens $ 68,116 0.90%
Sales Commissions $ 44,263 0.59%
Sales Promotions $ 378,238 5.00%
Sales Telephone Cost $ 58,325 0.77%
Fulfillment Costs $ 237,059 3.13%
Email Expense $ 144,000 1.90%
Infomercial Expense $ 516,667 6.83%
Radio Expense (Including Prod. Cost) $ 115,000 1.52%
Direct Mail Expense $ 329,750 4.36%
Physician Network Commission $ 46,200 0.61%
TOTAL SELLING AND MARKETING EXPENSES $2,288,197 30.25%
GENERAL & ADMINISTRATIVE EXPENSES
Administrative Salaries $ 354,625 4.69%
Payroll Burdens $ 70,925 0.94%
Accounting and Audit Expenses $ 35,000 0.46%
Telephone Expenses $ 12,000 0.16%
Rent $ 30,000 0.40%
Equipment Lease $ 36,300 0.48%
Office Supplies $ 13,000 0.17%
Product Insurance Expense $ 50,000 0.66%
Royalty Expense $ 399,822 5.29%
Postage $ 2,400 0.03%
Workers Compensation $ 5,665 0.07%
TOTAL GENERAL & ADMINISTRATIVE EXPENSE $1,009,737 13.35%
EBITDA $ 921,003 12.17%
11
SCHEDULE C
XXXX OF SALE
KNOWN ALL MEN BY THESE PRESENTS THAT PHYSICIANS NUTRACEUTICAL
LABORATORIES, INC., a Florida corporation having offices located at 000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxx Xxxxx, Xxxxxxx 00000 ("Seller") for
good and valuable consideration, receipt of which is hereby acknowledged, does
hereby bargain, sell, grant, convey, transfer, deliver and assign unto PNLABS,
INC., a Nevada corporation having offices located at 0000 Xxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx 00000 ("Purchaser"), its successors and
assigns, all of Seller's right, title and interest in and to the "Assets" more
particularly described in that certain Asset Purchase and Sale Agreement dated
as of the date hereof between Seller as seller and Purchaser as purchaser
("Purchase Agreement").
TO HAVE AND TO HOLD the same unto Purchaser, its successors and
assigns, forever.
Seller does hereby warrant, covenant and agree that it:
(a) has good and marketable title to the Assets hereby sold, assigned,
transferred, conveyed and delivered, free and clear of all liens, charges,
claims and encumbrances whatsoever; and
(b) will warrant and defend the sale of said Assets against all and
every person or persons whomsoever claiming or to claim against any or all of
the same, subject to the terms and provisions of the Purchase Agreement.
(c) All representations and warranties made in the Purchase Agreement
by Seller with respect to the acquired Assets are incorporated herein by
reference and shall survive the Closing.
Seller covenants, from time to time on or after the date hereof,
without further consideration and upon the reasonable request of Purchaser to
execute and deliver or cause to be executed and delivered, to Purchaser such
further instruments of conveyance, transfer and confirmation and to take such
other action as Purchaser may reasonably request in order to more effectively
convey and transfer the Assets which is the subject of this Xxxx of Sale to, and
vest and confirm such Assets in Purchaser, and to enable Purchaser to realize
upon or otherwise enjoy the Assets to the extent heretofore enjoyed by Seller.
IN WITNESS WHEREOF, Seller has caused this instrument to be duly
executed as of the ____ day of September 2003.
PHYSICIANS NUTRACEUTICAL LABORATORIES, INC
By: /s/ Xxxx Xxxx
----------------------------------------
ITS: President
12
SCHEDULE D
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of September 11, 2003 by and
between PNLABS, INC., a Nevada Corporation with its principal office located
at 0000 Xxxxxx Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx 00000 ("CORPORATION"),
and XXXX XXXX, ("EXECUTIVE").
RECITALS
WHEREAS, the Corporation is engaged in the business of distributing
nutritional supplements worldwide; and
WHEREAS, the Corporation desires to employ the Executive in an
executive capacity and the Executive desires to accept such employment, all upon
the terms and subject to the conditions set forth in this Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants herein contained and the monies to be paid hereunder, the parties
agree to the following terms and conditions:
Recitals. The above recitals are true and correct and are incorporated
herein by reference.
1.0 EMPLOYMENT.
1.1 Employment and Term. The Corporation hereby employs the
Executive, as its President and Chief Executive Officer, and the Executive
hereby agrees to such employment, on the terms and conditions described in this
Agreement. The Executive is being employed directly by the Corporation as a
salaried employee who will be compensated for the services rendered as herein
provided.
1.2 Duties of Executive. During the term of this Agreement,
the Executive shall serve as an executive of the Corporation, shall diligently
perform all executive and supervisory services as may be assigned to him by the
Corporation's Board of Directors ("Board") and shall exercise such power and
authority as may from time to time be delegated to him by the Board. The
Executive shall devote his full time and attention to the business and affairs
of the Corporation, render such services to the best of his ability, and use his
best efforts to promote the interests of the Corporation.
2.0 COMPENSATION.
2.1 Base Salary. The Executive shall receive an initial base
salary at the annual rate of one hundred twenty thousand dollars ($120,000.00)
(the "Base Salary"), with such Base Salary payable in installments consistent
with the Corporation's normal payroll schedule (but not less than twice
monthly), subject to the employee's portion of applicable withholding and other
taxes. On an annual basis, the Board shall, in its sole discretion, consider
increasing the Executive's Base Salary.
2.2 Performance Bonus. The Corporation shall pay to the
Executive a Performance Bonus as determined by the Board, in its sole
discretion. Notwithstanding the prior sentence, the first twelve (12) months
Performance Bonus formula shall be as follows:
i.) Profit Sharing. The Executive shall participate
in a "profit pool" equal to ten percent (10%) of the Corporation's earnings
before income taxes, depreciation and amortization ("EBITDA"). This "Profit
pool" shall be allocated fifty percent (50%) to the Executive and fifty percent
(50%) to all other entitled Employees of the Corporation, on a rewards basis
determined by the Board, in its sole discretion.
ii.) Stock Options. After the first twelve (12)
months of employment, the Executive shall be eligible to participate in Bio-One
Corporation's Stock Option Plan ("Bio-One Plan"), if and when a Bio-One Plan is
13
established. The yet to be finalized plan would be based upon Bio-One
Corporation's goals for revenues and profits as established annually and as
agreed upon by Management and the Board of Directors. Based upon the percentage
of attainment of each goal, a specific number of shares of common stock Options
shall be allocated. The Board of Directors shall set the allocation annually.
During the first twelve (12) months the allocation shall be five million
(5,000,000) Options available for all employees. Fifty percent (50%) of the
options shall be allocated to the Management Team and fifty percent (50%) to all
other entitled Employees of the Bio-One Plan. During the first twelve (12)
months the sales revenue and profits allocation shall be Two hundred and fifty
thousand (250,000) options for each ten million dollars ($10,000,000) of revenue
and two hundred and fifty thousand (250,000) options for each one million
dollars ($1,000,000) of EBITDA.
2.3 Reimbursement of Expenses. During the term of Executive's
employment hereunder, upon the submission of proper substantiation by the
Executive, and subject to such rules and guidelines as the Corporation may from
time to time adopt, the Corporation shall reimburse the Executive for all
reasonable expenses actually paid or incurred by the Executive in the course of
and pursuant to the business of the Corporation. The Executive shall account to
the Corporation in writing for all expenses for which reimbursement is sought
and shall supply to the Corporation copies of all relevant invoices, receipts or
other evidence reasonably requested by the Corporation.
2.4 Benefits. The Employee shall be entitled to any benefits
generally made available to all other executives of the Corporation including
without limitation medical, disability and life insurance plans and programs
established by the Corporation subject however to any eligibility requirements
and other provisions of such plans. The Employee shall also be entitled to
receive such fringe benefits as may be generally provided by the Corporation
from time to time to its employees, in accordance with the policies of the
Corporation in office from time to time.
2.5 Withholding. Anything to the contrary notwithstanding, all
payments required to be made by the Corporation hereunder to the Executive or
the Executive's estate or beneficiaries shall be subject to the withholding of
such amounts, if any, relating to tax and other payroll deductions as the
Corporation may reasonably determine it should withhold pursuant to any
applicable law or regulation.
3.0 TERM OF AGREEMENT.
The Corporation shall employ the Executive, and the Executive accepts
such employment, on the terms and subject to the conditions set forth in this
Agreement, for an initial one (1) year term commencing on the Effective Date and
expiring on the ___ day of September 2004 (the "Initial Term"). The term of this
Agreement shall automatically be extended for a period of one (1) year (a
"Renewal Term"), unless the Party wishing not to renew this Agreement provides
the other Party with written notice of its election not to renew ("Termination
Election Notice") on or before the 30th day prior to termination of the Term or
earlier terminated in accordance with the provisions of Section 4.0. For
purposes of this Agreement, the word "Term" means the Initial Term and all
Renewal Terms. All provisions of this Agreement shall remain in effect during
the Initial Term and all Renewal Terms.
4.0 TERMINATION OF EMPLOYMENT.
4.1 Resignation by Executive. The Executive shall at all times
have the right, upon ninety (90) days written notice to the Corporation, to
resign his employment hereunder ("Resignation Notice"). Upon any resignation
pursuant to this Section 4.1, the Corporation shall (i) pay to the Executive any
unpaid Base Salary through the effective date of the resignation specified in
such notice. Upon termination of Executive's, employment, Executive shall be
entitled to continue to receive the compensation and benefits as described in
Section 2.1 for a period of one hundred and eighty (180) days following the
effective date of such termination, if by Executive, and thirty (30) days if by
Corporation "for cause." The Company shall have no further liability hereunder
other than for reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 2.3.
Notwithstanding this Section 4.1, the Corporation, upon receiving the
Executive's Resignation Notice, may accelerate the Executive's resignation date
to any date greater than thirty (30) days after receipt of the Resignation
Notice.
4.2 Termination for Cause. The Corporation shall at all times
have the right, upon written notice to the Executive, to terminate the
Executive's employment hereunder, for cause. For purposes of this Agreement, the
term "cause" shall mean (i) an action or omission of the Executive which
constitutes a willful and material breach of this Agreement which is not or
cannot be cured within ten (10) days after receipt by the Executive of written
notice of same; (ii) dishonesty, fraud, making derogatory statements concerning
the Corporation or embezzlement in connection with his services hereunder; (iii)
misappropriation of any corporate opportunity or conviction of any crime which
involves a felony; (iv) misappropriation of funds for personal gain or in
violation of any law, judgment, decree, or order of any governmental authority,
or (v) addiction to drugs and/or alcohol determined by diagnosis of a licensed
physician who is a specialist in the area of addiction which cannot be cured or
otherwise remedied after a good faith attempt at rehabilitation. Any termination
for cause shall be made in writing to the Executive, which notice shall set
14
forth the reasons upon which the Corporation is relying for such termination.
The Executive shall have the right to address the Board regarding the acts set
forth in the notice of termination. Upon any termination pursuant to this
Section 4.2, the Corporation shall pay to the Executive his Base Salary to the
date of termination.
The Corporation shall have no further liability hereunder other than
for reimbursement for reasonable business expenses incurred prior to the date of
termination, subject, however, to the provisions of Section 2.3.
4.3 Death. In the event of the death of the Executive during
the Term of his employment hereunder, the Corporation shall pay to the estate of
the deceased Executive any unpaid Base Salary through the Executive's date of
death. The Corporation shall have no further liability hereunder other than for
reimbursement for reasonable business expenses incurred prior to the date of the
Executive's death.
4.4 Survival. The provisions of this Article 4 shall survive
the termination of this Agreement, as applicable.
5.0 RESTRICTIVE COVENANTS.
5.1 The Executive hereby agrees that during the term of the
Executive's employment by the Corporation, the Executive will not, directly or
indirectly, own, manage, operate, join, control or participate in the ownership,
management, operation or control, of or be connected with, in any manner, any
business of the Corporation established or managed during the term of the
Executive's employment by the Corporation, which shall be in competition with
any business engaged in by the Corporation as of the termination of the
Executive's employment. The Executive agrees that the remedy at law for any
breach by the Executive of the foregoing will be inadequate and that the
Corporation shall be entitled to injunctive relief. If any provisions of this
paragraph shall be held invalid, the Executive agrees that such provisions shall
be severed and the balance thereof shall remain valid and enforceable. In the
event that a court of competent jurisdiction determines that the scope of
business restricted or the time or geographic limitations imposed are too broad
to be capable of enforcement, the Executive agrees that such court may ignore
such provisions and instead enforce the provisions as to such scope, time and
geographical area as the court deems proper.
5.2 Nondisclosure. The Executive shall not at any time
divulge, communicate, use to the detriment of the Corporation or for the benefit
of any other person or persons, or misuse in any way, any Confidential
Information (as hereinafter defined) pertaining to the business of the
Corporation. Any Confidential Information or data now or hereafter acquired by
the Executive with respect to the business of the Corporation (which shall
include, but not be limited to, information concerning the Corporation's
financial condition, prospects, technology, customers, suppliers, sources of
leads and methods of doing business) shall be deemed a valuable, special and
unique asset of the Corporation that is received by the Executive in confidence
and as a fiduciary, and Executive shall remain a fiduciary to the Corporation
with respect to all such information. For purposes of this Agreement,
"Confidential Information" means information disclosed to the Executive or known
by the Executive as a consequence of or through his employment by the
Corporation (including information conceived, originated, discovered or
developed by the Executive) prior to or after the date hereof, and not generally
known, about the Corporation or its business. Notwithstanding the foregoing,
nothing herein shall be deemed to restrict the Executive from disclosing
Confidential Information to the extent required by law.
5.3 Covenant not to Disparage. The Employee hereby irrevocably
covenants and agrees that during the term of this Agreement and after its
termination, he will refrain from making any remarks that could be construed by
anyone, under any circumstances, as disparaging, directly or indirectly,
specifically, through innuendo or by inference, whether or not true, about the
Corporation, its constituent members, or their officers, directors,
stockholders, employees, agent or affiliates.
5.4 Corporation's Property. All tangible, confidential
information, books, records, and accounts relating in any manner to the
customers or clients of the Corporation and any other documentation, whether
prepared by the Executive or otherwise coming into the Executive's possession,
shall be the exclusive property of the Corporation and shall be returned
immediately to the Corporation on termination of the Executive's employment
hereunder or on the Corporation's request at any time. Thereafter, Executive
shall not reduce to writing or otherwise record any of the proprietary or
confidential information disclosed to him during Executive's employment.
5.5 Reformation by Court. In the event that a court of
competent jurisdiction shall determine that any provision of this Section 5 is
15
invalid or more restrictive than permitted under the governing law of such
jurisdiction, then only as to enforcement of this Section 5 within the
jurisdiction of such court, such provision shall be interpreted and enforced as
if it provided for the maximum restriction permitted under such governing law.
5.6 Survival. The provisions of this Section 5 shall survive
the termination of this Agreement, as applicable.
6.0 ARBITRATION.
If a dispute arises from or relates to this Agreement or the
breach thereof or otherwise from the relationship of the parties or its
termination and if the dispute cannot be settled through direct discussions, the
parties agree to endeavor first to settle the dispute in an amicable manner by
mediation administered by the American Arbitration Association under its
Commercial Mediation Rules before resorting to arbitration.
Thereafter, any unresolved controversy or claim arising from
or relating to this Agreement or breach thereof shall be settled by arbitration
administered by the American Arbitration Association in accordance with its
Commercial Arbitration Rules and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
7.0 MISCELLANEOUS.
7.1 Entire Agreement. This Agreement constitutes the entire
agreement between the Corporation and the Executive with respect to the subject
matter hereof and, upon its effectiveness, shall supersede all prior agreements,
understandings and arrangements, both oral and written, between the Executive
and the Corporation with respect to such subject matter. This Agreement may not
be modified in any way unless by written instrument signed by both the
Corporation and the Executive.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida. The venue of any
dispute arising under this Agreement shall be Seminole County, Florida.
7.3 Assignment. This Agreement is assignable by the
Corporation with the written consent of the Executive; such consent shall not be
unreasonably withheld. However, the Agreement is not assignable by the
Executive.
7.4 Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be personally delivered by courier, sent
by registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three (3) days after deposit in the U.S. mail.
7.5 Benefits; Binding Effect. This Agreement shall be for the
benefit of and binding upon the parties hereto and their respective heirs,
personal representatives, legal representatives, successors and, where
applicable, assigns, including, without limitation, any successor to the
Corporation, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.
7.6 Severability. The invalidity of any one or more of the
words, phrases, sentences, clauses or sections contained in this Agreement shall
not affect the enforceability of the remaining portions of this Agreement or any
part thereof, all of which are inserted conditionally on their being valid in
law, and in the event that any one or more of the words, phrases, sentences,
clauses or sections contained in this Agreement shall be declared invalid, this
Agreement shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted. If such invalidity is caused by length of time or size of
area, or both, the otherwise invalid provision will be considered to be reduced
to a period or area that would cure such invalidity.
7.7 Waivers. The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be
construed as a waiver of any subsequent breach or violation.
7.8 Damages. Nothing contained herein shall be construed to
prevent the Corporation or the Executive from seeking and recovering from the
other damages sustained by either or both of them as a result of its or his
16
breach of any term or provision of this Agreement. In the event that either
party hereto brings suit for the collection of any damages resulting from, or
the injunction of any action constituting, a breach of any of the terms or
provisions of this Agreement, then the party found to be at fault shall pay all
reasonable court costs and attorneys' fees of the other.
7.9 Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.10 No Third Party Beneficiary. Nothing expressed or implied
in this Agreement is intended, or shall be construed, to confer upon or give any
person other than the Corporation, the parties hereto and their respective
heirs, personal representatives, legal representatives, successors and assigns,
any rights or remedies under or by reason of this Agreement.
7.11 Execution in Counterparts. This Agreement may be executed
in several counterparts, by original or facsimile signature, each of which so
executed shall be deemed to be an original and such counterparts together shall
be deemed to be one and the same instrument, which shall be deemed to be
executed as of the date first above written.
7.12 Further Assurances. The parties hereto shall sign such
further documents and do and perform and cause to be done and performed such
further and other acts and things as may be necessary or desirable in order to
give full effect to this Agreement and every party thereof.
7.13 Construction. This Agreement shall be construed within
the fair meaning of each of its terms and not against the party drafting the
document.
IN WITNESS WHEREOF, the undersigned have hereunto executed the
Agreement on the date set forth above.
"EXECUTIVE" "CORPORATION"
XXXX XXXX PN LABS, INC.
Signature: /s/ Xxxx Xxxx Signature: /s/ Xxxxxx Xxxxxxxxx
---------------------------- -------------------------
By: Xxxxxx Xxxxxxxxx, Chairman
BIO-ONE CORPORATION:
Signature: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
By: Xxxxxx Xxxxxxxxx, President & CEO
17
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE is made and entered into this
_____ day of September 2003, by and between PHYSICIANS NUTRACEUTICAL
LABORATORIES, INC., a Florida corporation ("Assignor"), and PNLABS, INC., a
Nevada corporation ("Assignee").
For and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00)
and the mutual covenants herein contained, the receipt and sufficiency of the
foregoing consideration being hereinafter acknowledged by the parties hereto,
Assignor hereby transfers, grants, conveys, and assigns to Assignee all of
Assignor's right, title and interest in, to and under that certain lease (the
"Lease") as more particularly described on Exhibit "A" attached hereto and
incorporated herein by reference.
Assignee, by its acceptance hereof, does hereby accept the assignment
contained herein and assumes and agrees to perform any and all obligations and
duties of Assignor, as tenant, under the Lease arising from and after the date
hereof.
Assignee hereby indemnifies and holds Assignor harmless from and
against any claims, causes of action, damages, and expenses (including, without
limitation, court costs and reasonable attorneys' fees) resulting from any act
or omission of Assignee occurring after the date hereof with respect to any
obligations of Assignor under the Lease.
This Assignment shall inure to the benefit of, and be binding upon, the
respective legal representatives, successors, and assigns of the parties hereto.
This Assignment shall be governed by, and construed under, the laws of
the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption of Lease as of the date first above written.
ASSIGNOR: PHYSICIANS NUTRACEUTICAL LABORATORIES, INC.,
--------- a Florida corporation
By: /s/ Xxxx Xxxx
-----------------------------------------------
Xxxx Xxxx, President
ASSIGNEE: PNLABS, INC.,
--------- a Nevada corporation
By: /s/ Xxxxxx Xxxxxxxxx
-----------------------------------------------
Xxxxxx Xxxxxxxxx, Chairman
18
COVENANT NOT TO COMPETE AGREEMENT
THIS COVENANT NOT TO COMPETE AGREEMENT ("Agreement"), made this 11th
day of September 2003, by and between BIO-ONE CORPORATION, a corporation
organized and existing under the laws of Nevada with offices at 0000 Xxxxxx
Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx 00000, PNLABS, INC., a corporation
organized and existing under the laws of Nevada and a wholly owned subsidiary of
Bio-One Corporation (collectively the "Company") and PHYSICIANS NUTRACEUTICAL
LABORATORIES, INC., a corporation organized and existing under the laws of
Florida with offices at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxx Xxxx Xxxxx,
Xxxxxxx 00000 ("Covenanter").
W I T N E S S E T H:
WHEREAS, the Company and Covenanter are parties to a certain Asset
Purchase and Sale Agreement (the "Agreement") of even date herewith, whereby the
Company has agreed to purchase certain of the assets of the Covenanter;
WHEREAS, the Company and Covenanter are desirous of restricting the
competition of Covenanter, as provided herein.
NOW THEREFORE, in consideration of ten dollars ($10.00) in hand paid
and other good and valuable consideration, the receipt and sufficiency whereof
are hereby acknowledged, and in further consideration of the covenants and
agreements contained herein, the parties hereto agree with each other, as
follows:
1. Covenant Not to Compete. Covenanter agrees and covenants that
Covenanter shall not, without the prior written consent of the Company, directly
or indirectly, anywhere within the territory in which the Covenanter conducts
its business (the "Restricted Territory") for a period from the date hereof
until two (2) years following the date hereof: (1) form, acquire, finance,
assist, support, or become associated as an employee, agent, partner,
shareholder, coventurer or otherwise, directly or indirectly, with, or engage
in, a business which is similar to the Seller's Business (as defined in the
Agreement) (any such business is hereinafter referred to as a "Competitive
Business"); (2) for the purpose of conducting or engaging in any Competitive
Business, call upon, solicit, advise or otherwise do, or attempt to do business
with any suppliers, customers or accounts of the Company or take away or
interfere or attempt to interfere with any customer, trade, business or
patronage of the Company; or (3) interfere with or attempt to interfere with or
hire any officers, employees, representatives or agents of the Company, or any
of the Company's subsidiaries or affiliates, or induce or attempt to induce any
of them to leave the employ of the Company or any of the Company's subsidiaries
or affiliates, or violate the terms of their contract with any of them.
Covenanter shall not use or disclose, after the date hereof, any proprietary
information or know-how of the Company in any Competitive Business. In the event
of a breach or a threatened breach by Covenanter or any of its affiliates of
this Section 1, the Company shall be entitled to an injunction restraining such
breach without posting bond, but nothing herein shall be construed to prohibit
the Company from pursuing any remedy available to the Company for such breach or
such threatened breach.
2. Saving Clause. The Company and Covenanter intend that the covenants
of Section 1 shall be deemed to be a series of separate covenants, one for each
county of each and every state, country, province, municipality, territory or
jurisdiction located in the Restricted Territory and one for each month of the
period specified above. If, in any judicial proceeding, a court shall refuse to
enforce any of such covenants, then such unenforceable covenants shall be deemed
eliminated from the provisions hereof for the purpose of such proceedings to the
extent necessary to permit the remaining separate covenants to be enforced in
such proceedings.
3. Successors and Assigns; Gender. This Agreement shall inure to the
benefit of the Company, its successors and assigns and may not be terminated,
amended or modified, except by an instrument in writing executed by Covenanter
and the Company. The masculine gender shall be deemed to include the feminine
and neuter genders in this Agreement.
4. Governing Law. The provisions of this Agreement shall be construed,
and the performance thereof shall be enforced, in accordance with the laws of
Florida. The parties hereby irrevocably and unconditionally submit to the
exclusive jurisdiction and venue of the courts of Palm Beach County, Florida and
the federal courts of the United States of America located in such State and
County in the event of any dispute hereunder.
5. Designation of Agent. Covenanter represents, warrants and covenants
that it is subject to service of process in Florida and that it will remain so
19
subject so long as this Agreement is in effect. If for any reason Covenanter
should not be so subject, Covenanter hereby designates and appoints, without
power or revocation, the Secretary of the State of Florida as its agent upon
whom may be served all process, pleadings, notices or other papers which may be
served upon Covenanter as a result of any of its obligations under this
Agreement.
Covenanter further acknowledges that it will materially, directly or
indirectly, receive financial benefit from the underlying transactions.
Covenanter agrees that the execution of this Agreement and performance of its
obligations hereunder shall be deemed to have a Palm Beach County, Florida
situs, and Covenanter shall be subject to the personal jurisdiction of the
courts of Florida with respect to any action the Company, its successors or
assigns may commence hereunder. Accordingly, Covenanter hereby specifically and
irrevocably (a) agrees that any suit, action or other legal proceedings arising
out of this Agreement may be brought in the courts of record of Palm Beach,
Florida or the courts of the United States located in such state; (b) consents
to the jurisdiction of each such court in any such suit, action or proceeding;
and (c) waives any objection which Covenanter may have to the laying of venue of
any such suit, action or proceeding in any of such courts. For such time as any
obligation under this Agreement or any liabilities remain outstanding,
Covenanter's agent designated in Section 5 hereof shall accept and acknowledge
service on Covenanter's behalf of any and all process in any such suit, action
or proceeding brought in any such court. Covenanter agrees and consents that any
such services of process upon such agent and written notice of such service to
Covenanter by registered mail shall be valid personal service upon Covenanter
and that any such service of process shall be of the same force and validity as
if service were made upon Covenanter according to the laws governing the
validity and requirements of such service in such state and waives all claims of
error by reason of any such service.
IN WITNESS WHEREOF, the parties have each executed and delivered this
Agreement as of the day and year first above written.
ATTEST: PHYSICIANS NUTRACEUTICAL LABORATORIES, INC.
/s/ Xxxx Xxxx
-------------------------- ----------------------------------------------
BY: XXXX XXXX
ITS: President & CEO
ATTEST: PNLABS, INC.
/s/ Xxxxxx Xxxxxxxxx
-------------------------- ----------------------------------------------
BY: XXXXXX XXXXXXXXX
ITS: Chairman
ATTEST: BIO-ONE CORPORATION
/s/ Xxxxxx Xxxxxxxxx
-------------------------- ----------------------------------------------
BY: XXXXXX XXXXXXXXX
ITS: President & CEO
20
WRITTEN CONSENT OF THE SOLE DIRECTOR
OF
PNLABS, INC.
The undersigned, being all the members of the Board of Directors of
PNLabs, Inc., a Nevada corporation (the "Corporation"), hereby adopt the
following resolutions in lieu of a meeting:
RESOLVED, that the execution and delivery, by the officers of the
Corporation, of an Asset Purchase Agreement by and between the Corporation,
BIO-ONE CORPORATION, its parent company and PHYSICIANS NUTRACEUTICAL
LABORATORIES, INC., and such other documents, instruments and agreements as may
be required thereby, and the taking of such actions as they may deem necessary
or appropriate to complete the transactions contemplated thereby is hereby
approved; and be it further
RESOLVED, that the officers of the Corporation be, and each of them
hereby is, without the others, authorized in the name and on behalf of the
Corporation to execute and deliver such documents, instruments and agreements
and to take other actions as may be necessary or desirable and proper to
consummate the transactions contemplated by the foregoing resolution the
necessity or desirability and property thereof being conclusively evidenced by
the execution and delivery of such documents; instruments and agreements of the
taking of such actions; and be it further
This unanimous written consent may be executed in counterparts, each of
which shall be deemed an original and all of which, when taken together shall be
deemed an original and all of which, when taken together, shall be deemed one
and the document. This unanimous written consent may be executed by facsimile.
IN WITNESS WHEREOF, the undersigned have set his hand as of the 11th
day of September 2003.
/s/ Xxxxxx Xxxxxxxxx
--------------------------
Xxxxxx Xxxxxxxxx, Chairman
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