AGREEMENT AND PLAN OF MERGER
BY AND AMONG
VAIREX CORPORATION
AND
GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
AND
GUARDIAN ACQUISITION CORP.
DATED AS OF FEBRUARY 19, 2001
TABLE OF CONTENTS
SECTION 1:GENERAL DEFINITIONS. . . . . . . . . . . . . . . 1
1.2 Best Knowledge . . . . . . . . . . . . . . . . . 1
1.3 Control. . . . . . . . . . . . . . . . . . . . . 1
1.4 Exchange Act . . . . . . . . . . . . . . . . . . 2
1.5 Fiscal Year. . . . . . . . . . . . . . . . . . . 2
1.6 Governmental Authority . . . . . . . . . . . . . 2
1.7 Governmental Requirement . . . . . . . . . . . . 2
1.8 Legal Requirements . . . . . . . . . . . . . . . 2
1.9 Net Worth . . . . . . . . . . . . . . . . . . . 2
1.10 Person . . . . . . . . . . . . . . . . . . . . . 2
1.11 Exhibit . . . . . . . . . . . . . . . . . . . . 2
1.12 Section . . . . . . . . . . . . . . . . . . . . 2
1.13 Securities Act . . . . . . . . . . . . . . . . . 2
1.14 Taxes . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2:THE MERGER . . . . . . . . . . . . . . . . . . . 3
2.1 The Merger . . . . . . . . . . . . . . . . . . . 3
2.2 Filing . . . . . . . . . . . . . . . . . . . . . 3
2.3 Effective Time of the Merger . . . . . . . . . . 3
2.4 Closing: Closing Date . . . . . . . . . . . . . 3
SECTION 3:APPROVALS. . . . . . . . . . . . . . . . . . . . 3
3.1 Guardian Board of Director Approvals . . . . . 3
3.2 Guardian Shareholder Approval. . . . . . . . . . 4
3.3 Guardian Shareholders Meeting. . . . . . . . . . 4
3.4 Vairex Approvals . . . . . . . . . . . . . . . . 4
3.5 Dissenter Rights . . . . . . . . . . . . . . . . 4
3.6 Nasdaq Approval. . . . . . . . . . . . . . . . . 4
SECTION 4:CONVERSION OR CANCELLATION OF SHARES . . . . . . 5
4.1 Conversion or Cancellation of Shares . . . . . . 5
4.2 Stock Options and Warrants . . . . . . . . . . . 5
4.3 Surrender and Payment . . . . . . . . . . . . . 6
4.4 Subscription Agreements . . . . . . . . . . . . 6
4.5 No Further Transfers . . . . . . . . . . . . . . 6
4.6 Compliance with Securities Laws. . . . . . . . . 6
SECTION 5:CERTAIN EFFECTS OF MERGER . . . . . . . . . . . 7
5.1 Effect of Merger . . . . . . . . . . . . . . . . 7
5.2 Further Assurances . . . . . . . . . . . . . . . 7
SECTION 6:POST-MERGER GOVERNANCE . . . . . . . . . . . . . 7
6.1 Amendment to Articles of Incorporation and
Bylaws . . . . . . . . . . . . . . . . . . . . . 7
6.2 Directors, Officers and Employees . . . . . . . 8
SECTION 7:ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . 8
7.1 Vairex Bridge Financing. . . . . . . . . . . . . 8
7.2 Guardian Bridge. . . . . . . . . . . . . . . . . 9
7.3 Guardian Private Placement . . . . . . . . . . . 9
7.4 Vairex Recapitalization and Debt Restructure . . 9
7.5 Guardian Dividend. . . . . . . . . . . . . . . .10
7.6 Guardian Registration Statement. . . . . . . . .10
7.7 Notification of Certain Matters. . . . . . . . .11
7.8 Further Action . . . . . . . . . . . . . . . . .11
7.9 Public Announcements . . . . . . . . . . . . . .11
7.10 Cooperation in Securities Filings. . . . . . . .11
7.11 Additional Documents . . . . . . . . . . . . . .11
SECTION 8:COVENANTS AND CONDITIONS OF CLOSING . . . . . .11
8.1 Covenants Regarding the Closing . . . . . . . .11
8.2 Conditions to Obligation of Guardian . . . . . .11
8.3 Conditions to Obligation of Vairex . . . . . . .15
8.4 Specific Items to be Delivered at the Closing. .18
SECTION 9:REPRESENTATIONS AND WARRANTIES BY VAIREX . . . .20
9.1 Organization and Standing . . . . . . . . . . .20
9.2 Subsidiaries, etc. . . . . . . . . . . . . . . .20
9.3 Qualification . . . . . . . . . . . . . . . . .20
9.4 Corporate Authority. . . . . . . . . . . . . . .20
9.5 Financial Statements . . . . . . . . . . . . . .21
9.6 Financial Information. . . . . . . . . . . . . .21
9.7 Capitalization of the Corporation . . . . . . .21
9.8 Taxes. . . . . . . . . . . . . . . . . . . . . .22
9.9 No Actions, Proceedings, etc.. . . . . . . . . .22
9.10 Post Balance Sheet Changes . . . . . . . . . . .22
9.11 No Breaches . . . . . . . . . . . . . . . . . .23
9.12 Condition of Guardian's Assets . . . . . . . . .23
9.13 Inventory . . . . . . . . . . . . . . . . . . .23
9.14 Accounts Receivable . . . . . . . . . . . . . .23
9.15 Corporate Acts and Proceedings . . . . . . . . .23
9.16 Registered Rights and Proprietary Information. .24
9.17 Changes in Suppliers and Customers . . . . . . .25
9.18 No Liens or Encumbrances . . . . . . . . . . . .25
9.19 Employee Matters . . . . . . . . . . . . . . . .25
9.20 Legal Proceedings and Compliance with Law. . . .26
9.21 Contract Schedules . . . . . . . . . . . . . . .26
9.22 Labor Matters . . . . . . . . . . . . . . . . .27
9.23 Insurance . . . . . . . . . . . . . . . . . . .27
9.24 Environmental . . . . . . . . . . . . . . . . .27
9.25 Disclosure of Information. . . . . . . . . . . .29
9.26 Representation and Warranties. . . . . . . . . .29
SECTION 10: COVENANTS OF GUARDIAN . . . . . . . . . . . .29
10.1 Preservation of Business . . . . . . . . . . . .29
10.2 Ordinary Course . . . . . . . . . . . . . . . .29
10.3 Negative Covenants . . . . . . . . . . . . . . .30
10.4 Additional Covenants . . . . . . . . . . . . . .30
10.5 Access to Books and Records, Premises, etc. . .31
10.6 Compensation . . . . . . . . . . . . . . . . . .31
10.7 No Solicitation. . . . . . . . . . . . . . . . .32
SECTION 11: REPRESENTATIONS AND WARRANTIES OF GUARDIAN . .32
11.1 Organization and Standing . . . . . . . . . . .33
11.2 Subsidiaries, etc. . . . . . . . . . . . . . . .33
11.3 Qualification . . . . . . . . . . . . . . . . .33
11.4 Corporate Authority. . . . . . . . . . . . . . .33
11.5 Financial Statements . . . . . . . . . . . . . .33
11.6 Capitalization of the Corporation . . . . . . .34
11.7 No Actions. Proceedings, etc.. . . . . . . . . .34
11.8 Post Balance Sheet Changes . . . . . . . . . . .35
11.9 No Breaches. . . . . . . . . . . . . . . . . . .35
11.10 Corporate Acts and Proceedings . . . . . . . . .35
11.11 Legal Proceedings and Compliance with Law. . . .36
11.12 Contract Schedules . . . . . . . . . . . . . . .36
SECTION 12: COVENANTS OF VAIREX. . . . . . . . . . . . . .36
12.1 Preservation of Business . . . . . . . . . . . .36
12.2 Ordinary Course. . . . . . . . . . . . . . . . .37
12.3 Negative Covenants . . . . . . . . . . . . . . .37
12.4 Additional Covenants . . . . . . . . . . . . . .37
12.5 Access to Books and Records,. Premises, etc. . .38
12.6 Delivery of Additional Filings . . . . . . . . .39
SECTION 13: TERMINATION. . . . . . . . . . . . . . . . . .39
13.1 Termination. . . . . . . . . . . . . . . . . . .39
13.2 Effect of Termination. . . . . . . . . . . . . .39
SECTION 14: INDEMNIFICATION AND REMEDIES FOR BREACH. . . .39
14.1 Indemnification by Guardian and GAC . . . . . .39
14.2 Indemnification by Vairex . . . . . . . . . . .40
14.3 Additional Notice. . . . . . . . . . . . . . . .41
14.4 Determination of Damages and Related Matters . .41
14.5 Remedies for Breach. . . . . . . . . . . . . . .42
SECTION 15: NONDISCLOSURE OF CONFIDENTIAL INFORMATION. . .42
15.1 Nondisclosure of Confidential Information. . . .42
15,2 No Publicity . . . . . . . . . . . . . . . . . .43
SECTION 16: EXPENSES . . . . . . . . . . . . . . . . . . .43
SECTION 17: MISCELLANEOUS. . . . . . . . . . . . . . . . .44
17.1 Attorney's Fees. . . . . . . . . . . . . . . . .44
17.2 Survival and Incorporation of Representations. .44
17.3 Incorporation by Reference . . . . . . . . . . .44
17.4 Parties in Interest. . . . . . . . . . . . . . .44
17.5 Amendments and Waivers . . . . . . . . . . . . .44
17.6 Waiver . . . . . . . . . . . . . . . . . . . . .44
17.7 Governing Law - Construction . . . . . . . . . .44
17.8 Representations and Warranties . . . . . . . . .45
17.9 Notices. . . . . . . . . . . . . . . . . . . . .45
17.10 Fax/Counterparts . . . . . . . . . . . . . . . .45
17.11 Captions . . . . . . . . . . . . . . . . . . . .45
17.12 Severabilitv . . . . . . . . . . . . . . . . . .45
17.13 Good Faith Cooperation and Additional Documents.45
17.14 Specific Performance . . . . . . . . . . . . . .45
17.15 Assignment . . . . . . . . . . . . . . . . . . .46
17.16 Time . . . . . . . . . . . . . . . . . . . . . .46
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is made and entered
into this 19th day of February, 2001, by and among VAIREX CORPORATION, a
Colorado corporation ("Vairex"), GUARDIAN TECHNOLOGIES INTERNATIONAL, INC., a
Delaware corporation ("Guardian") and GUARDIAN ACQUISITION CORP., a Colorado
Subsidiary of Guardian ("GAC"). Vairex and GAC shall each be sometimes
referred to as a Constituent Corporation.
WITNESETH:
WHEREAS, the Boards of Directors of each Constituent Corporation deems it
advisable for the general welfare of its Constituent Corporation and its
shareholders that the Constituent Corporations merge into a single corporation
pursuant to this Agreement and the applicable laws of the State of Colorado;
and
WHEREAS, the Constituent Corporations desire to adopt this Agreement and
to consummate the merger in accordance with the provisions of Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, for and in consideration of the premises, the mutual
representations, warranties and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1: GENERAL DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings set forth below:
1.1 AFFILIATE. "Affiliate" of any Person shall mean any Person
Controlling, controlled by or under common Control with such Person.
1.2 BEST KNOWLEDGE. "Best Knowledge" shall mean both what a Person knew
as well as what the Person should have known had the Person exercised
reasonable diligence. When used with respect to a Person other than a natural
person, the term "Best Knowledge" shall include matters that are known to the
directors, officers, partners, trustees, administrators, executors, managers,
employees, consultants and agents of the Person.
1.3 CONTROL. "Control" and all derivations thereof shall mean the
ability to either (i) vote (or direct the vote of) 50% or more of the voting
interests in any Person or (ii) direct the affairs of another, whether through
voting power, contract or otherwise.
1.4 EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
1.5 FISCAL YEAR. "Fiscal Year" shall mean a twelve-month period
beginning January 1;
1.6 GOVERNMENTAL AUTHORITY. "Governmental Authority "shall mean any and
all foreign, federal, state or local governments, governmental institutions,
public authorities and governmental entities of any nature whatsoever, and any
subdivisions or instrumentalities thereof, including, but not limited to,
departments, boards, bureaus, commissions, agencies, courts, administrations
and panels, and any division or instrumentalities thereof, whether permanent
or ad hoc and whether now or hereafter constituted or existing.
1.7 GOVERNMENTAL REQUIREMENT. "Governmental Requirement" shall mean any
and all laws (including, but not limited to, applicable common law
principles), statutes, ordinances, codes, rules regulations, interpretations,
guidelines, directions, orders, judgments, writs, injunctions, decrees,
decisions or similar items or pronouncements, promulgated, issued, passed or
set forth by any Governmental Authority.
1.8 LEGAL REQUIREMENTS. "Legal Requirements" means applicable common
law and any statute, ordinance, code or other laws, rule, regulation,
order, technical or other standard, requirement, judgment, or procedure
enacted, adopted, promulgated, applied or followed by any governmental
authority, including, without limitation, any order, decree, award, verdict,
findings of fact, conclusions of law, decision or judgment, whether or not
final or appealable, of any court, arbitrator, arbitration board or
administrative agency.
1.9 NET WORTH. "Net Worth" shall mean the assets of a Person minus the
liabilities of the Person, as of a given date as determined in accordance with
generally accepted accounting principles.
1.10 PERSON. "Person" shall mean any natural person, any Governmental
Authority and any entity the separate existence of which is recognized by any
Governmental Authority or Governmental Requirement, including, but not limited
to, corporations, partnerships, joint ventures, joint stock companies, trusts,
estates, companies and associations, whether organized for profit or
otherwise.
1.11 EXHIBIT. Unless otherwise stated herein, the term "Exhibit" when
used in this Agreement shall refer to the Exhibits to this Agreement. The
Exhibits to this Agreement may be attached to this Agreement or may be set
forth in a separate document denoted as the Exhibits to this Agreement, or
both.
1.12 SECTION. Unless otherwise stated herein, the term "Section" when
used in this Agreement shall refer to the Sections of this Agreement.
1.13 SECURITIES ACT. "Securities Act" shall mean the Securities Act of
1933, as amended.
1.14 TAXES. "Tax" and "Taxes" shall mean any and all income, excise,
franchise or other taxes and all other charges or fees imposed or collected by
any Governmental Authority or pursuant to any Governmental Requirement, and
shall also include any and all penalties, interest, deficiencies, assessments
and other charges with respect thereto.
SECTION 2: THE MERGER
2.1 THE MERGER. Subject to the terms and conditions of this Agreement,
at the Effective Time (as defined in Section 2.3 herein). GAC shall be merged
(the "Merger") with and into Vairex upon the terms and conditions set forth
herein as permitted by and in accordance with the Colorado Corporation Code
(the "Colorado Corporation Law"). Thereupon, the separate existence of GAC
shall cease, and Vairex, as the surviving corporation in the Merger (the
"Surviving Corporation"), shall continue to exist under and be governed by the
Colorado Corporation Law, with all its purposes, objects, rights, privileges,
immunities, powers and franchises continuing unaffected and unimpaired by the
Merger. The name of the Surviving Corporation shall be "Vairex Corporation."
2.2 FILING. As soon as practicable following fulfillment or waiver of
the conditions specified in Sections 3, 7, 8, 9 and 11 hereof, and provided
that this Agreement has not been terminated pursuant to Section 12 hereof, GAC
and Vairex will cause a short form Agreement and Plan of Merger, in the form
attached hereto as Exhibit 2.2, to be executed, acknowledged and filed with
the Secretary of State of each of Colorado as provided in Section 7-7-104 of
the Colorado Business Corporation Act ("CBCA") and obtain a copy of the
Articles of Merger, certified by the Secretary of State of the State of
Colorado.
2.3 EFFECTIVE TIME OF THE MERGER. The Merger shall become effective
immediately upon the filing of the Articles of Merger with the Secretary of
State of the State of Colorado in accordance with the CBCA. The date and time
of the completion of such filings is herein sometimes referred to as the
"Effective Time".
2.4 CLOSING: CLOSING DATE. Subject to the terms and conditions set
forth herein, the consummation of the transactions referenced above shall take
place (the "Closing") five (5) business days following the satisfaction or
waiver of all conditions precedent to the obligations of the parties
hererunder, or such other date as the parties shall mutually agree, at the
offices of Xxxxxx & Xxxxxxx, Xxxxxx-Xxxxxx House, 1507 Pine Street, Boulder,
Colorado, or at such other time, date and place as Vairex and GAC shall
designate (the "Closing Date").
SECTION 3: APPROVALS
3.1 GUARDIAN BOARD OF DIRECTOR APPROVALS. Subject to the provisions
hereof, the Board of Directors of Guardian shall, by written unanimous consent
approve the transactions contemplated by this Agreement in its capacity as the
sole shareholder of GAC; provided, however, that such approval shall be
subject to their satisfaction that the issuance of the Common Stock of
Guardian to the Vairex Shareholders shall be and is exempt from the
registration requirements of the Securities Act, is undertaken without
violation of the anti-fraud provisions of the Securities Act and has been
consummated in conformity with all other applicable Legal Requirements.
3.2 GUARDIAN SHAREHOLDER APPROVAL. As promptly as practicable following
the execution of this Agreement, Guardian shall prepare and file with the
Securities and Exchange Commission (the "Commission") a preliminary form of
proxy statement and other proxy materials related thereto ("Proxy Statement")
for use in connection with a special meeting of the shareholders of Guardian
to be scheduled and held to obtain shareholder approval of the Merger and the
other transactions provided for herein. Guardian and Vairex agree to use all
reasonable efforts, after consulting with the other party, to respond promptly
to any comments made by the Commission with respect to the Proxy Statement;
and each shall cause its respective representatives to fully cooperate with
the other party and its respective representatives in the preparation of the
Proxy Statement and shall, upon request, furnish the other party with all
information concerning it and its affiliates, directors, officers and
stockholders as the party may reasonably request in connection with the
preparation of the Proxy Statement. As promptly as practicable after the
Proxy Statement shall have been cleared by the Commission, Guardian shall
cause such Proxy Statement to be mailed to its shareholders. Thereafter,
Vairex shall notify Guardian as promptly as practicable upon becoming aware of
any event or circumstance which should be described in an amendment to or
supplement to the Proxy Statement.
3.3 GUARDIAN SHAREHOLDERS MEETING. Guardian shall call and hold a
Shareholders meeting as promptly as practicable for the purpose of voting upon
the approval of the Merger. Guardian shall use reasonable effort to solicit
from its Shareholders proxies in favor of the approval of the Merger and,
subject to applicable fiduciary duties of the Board of Directors, as
determined in the good faith by the Board of Directors after consultation with
and based upon the advice of legal counsel, shall take all other action
necessary or advisable to secure the vote and consent of the Shareholders
required by the CBCA and the Nasdaq Stock Market Rules of Governance.
3.4 VAIREX APPROVALS. As promptly as practicable after the date hereof,
Vairex shall take all action necessary or appropriate under the CBCA, and the
Articles of Incorporation and Bylaws of Vairex, to convene a meeting of its
Shareholders as promptly as practicable for the purpose of considering and
voting upon appropriate resolutions approving the transactions contemplated by
this Agreement.
3.5 DISSENTER RIGHTS. At all times, and as applicable, Vairex shall
comply with applicable Legal Requirements including, without limitation, the
payment of cash for dissenting shares related to the Merger.
3.6 NASDAQ APPROVAL. As soon as practicable following the execution of
this Agreement, Guardian shall notify the Nasdaq Stock Market ("Nasdaq") of
the execution and delivery of this Agreement and shall use reasonable efforts
to insure that the Merger and other transactions provided for in this
Agreement shall have obtained the approval of Nasdaq such that upon the
Effective Time of the Merger, Guardian's Common Stock shall continue to be
eligible for listing on the Nasdaq SmallCap Market. Each party agrees to
cause its representatives to fully cooperate with the other party and its
representatives in the furnishing of such information as Nasdaq may reasonably
request and to take such actions as may be reasonably required of Nasdaq to
insure its approval and the continuing listing of Guardian's securities on the
Nasdaq SmallCap Market upon the effective date of the Merger.
SECTION 4: CONVERSION OR CANCELLATION OF SHARES
4.1 CONVERSION OR CANCELLATION OF SHARES. At the Effective Time, the
issued and outstanding shares of Common Stock of Vairex ("Vairex Common
Stock") and the issued and outstanding shares of Preferred Stock of Vairex
("Vairex Preferred Stock") (the Vairex Common and Preferred Stock may
collectively be referred to as the "Vairex Stock") shall, by virtue of the
Merger, be cancelled and converted into shares of the capital stock of
Guardian, as follows:
(a) Subject to compliance with Sections 5 and 17(a) of the
Securities Act, the shares of Vairex Common Stock and Preferred Stock issued
and outstanding immediately prior to the Effective Time, excluding any such
shares held in the treasury of Vairex, shall be converted into the right to
receive a number of shares of Common Stock of Guardian, $.0005 par value per
share (the "Guardian Stock"). Such right may be exercised by the surrender of
the certificates representing such shares of Vairex Common and Preferred Stock
in accordance with Section 4.2 hereof. The number of shares of Guardian Stock
issued upon surrender shall be calculated as follows:
The aggregate number of shares of Guardian Stock so issuable in
the conversion of the Vairex Common and Preferred Stock shall be 28.3 million,
subject to the adjustment provided for in Section 4.2(c) below. The Guardian
Stock shall be allocated to the holders of Vairex Stock in accordance with
Exhibit 4.1(a) hereto.
(b) Each share of Guardian Stock, issued under paragraph (a) above
shall be Restricted Stock pursuant to Rule 144 promulgated under the
Securities Act.
(c) Each share of Vairex Common Stock, if any, held in Vairex's
treasury immediately prior to the Effective Time shall be canceled and retired
and no payment shall be made in respect thereof.
4.2 STOCK OPTIONS AND WARRANTS.
(a) At the Effective Time, the obligation, if any, to issue shares
under each outstanding option or warrant to purchase Vairex Stock shall be
deemed assumed by Guardian and each such option or warrant shall be deemed to
constitute an option or warrant to acquire, on the same terms and conditions
as were applicable under such stock option or warrant prior to the Effective
Time, the whole number (disregarding any fractional shares) of Guardian Stock
as the holder of such stock option or warrant would have been entitled to
receive pursuant to the merger had such holder exercised such option or
warrant in full immediately prior to the Effective Time, at a price per share
equal to the exercise price of the stock option or warrant; provided, however,
that the exercisability or other vesting of the assumed stock options or
warrants and the underlying stock shall continue to be determined by reference
to the stock option or warrant agreements executed between the holder thereof
and Vairex.
(b) As soon as practicable after the Effective Time, Guardian shall
deliver to each holder of an outstanding stock option or warrant an
appropriate notice setting forth such holder's rights pursuant thereto and
such stock option or warrant shall continue in effect on the same terms and
conditions.
(c) All shares of Guardian Common Stock reserved for issuance
pursuant to the exercise of Vairex options or warrants assumed by Guardian
pursuant to this Section 4.2 shall be credited against the aggregate 28.3
million shares of Guardian Common Stock issuable to the holders of Vairex
Stock and shall result in a reduction in the number of shares of Guardian
Common Stock issuable to the holders of Vairex Common Stock and Preferred
Stock on the Effective Date of the Merger.
4.3 SURRENDER AND PAYMENT. Subject to compliance with Sections 5 and
17(a) of the Securities Act, after the Effective Time, each holder of a
certificate representing an issued and outstanding share of Vairex Stock shall
be entitled upon surrender of such certificate along with a fully executed
Subscription Agreement in the form of Exhibit 4.3, to Guardian, to receive the
Guardian stock as set forth in Section 4.1 above. Until so surrendered, each
certificate which immediately prior to the Effective Time represented an
issued and outstanding share of Vairex Stock shall, upon and after the
Effective Time, be deemed for all purposes to represent and evidence only the
right to receive Guardian Stock as set forth in Section 4.1. If any exchange
for shares of Vairex Stock is to be made in a name other than that in which
the certificate therefor surrendered for exchange is registered, it shall be a
condition of such payment that the certificate so surrendered be properly
endorsed or otherwise in proper form for transfer and that the person
requesting such payment either pay to Guardian any transfer or other similar
taxes required by reason of the payment to a person other than the registered
holder of the certificate surrendered or establish to the satisfaction of
Guardian that such tax has been paid or is not payable.
4.4 SUBSCRIPTION AGREEMENTS. Each of the Vairex Shareholders receiving
Guardian Stock pursuant to the terms hereof shall have delivered a fully
executed Subscription Agreement in the form included on Exhibit 4.4.
4.5 NO FURTHER TRANSFERS. On and after the Effective Time, no transfer
of the shares of Vairex Stock issued and outstanding immediately prior to the
Effective Time shall be made on the stock transfer books of Vairex.
4.6 COMPLIANCE WITH SECURITIES LAWS. The Merger provided for in this
Agreement shall be undertaken in reliance upon an exemption from the
registration requirements contained in Section 5 of the Securities Act set
forth in Section 4(2) and Rule 506 of Regulation D thereunder. Guardian shall
take such actions as may be necessary or advisable in order to consummate the
Merger in conformity with applicable laws, including, without limitation,
federal and state securities laws; and Vairex, together with its directors and
officers, agrees to take such actions as may be necessary or advisable upon
the reasonable request of Guardian to consummate the Merger in conformity with
such Legal Requirements.
SECTION 5: CERTAIN EFFECTS OF MERGER
5.1 EFFECT OF MERGER. On and after the Effective Time, the separate
existence of GAC shall cease and GAC shall be merged with and into Vairex,
which as the Surviving Corporation shall, consistently with its Articles of
Incorporation succeed to, and without other transfer, possess all the rights,
privileges, immunities, powers and franchises of public as well as private
nature, and be subject to all restrictions, disabilities and duties of GAC;
and all rights, privileges, immunities, powers and franchises of GAC, and all
property, real, personal and mixed, causes of action and every other asset of,
and all debts due to GAC on whatever account as well as stock subscriptions
and all other things in action or belonging to GAC shall vest in the Surviving
Corporation; and all property, rights, privileges, immunities, powers and
franchises, and all and every other interest shall be thereafter as
effectually the property of the Surviving Corporation as they were of GAC, and
the title to any real estate vested by deed or otherwise in GAC, shall not
revert or be in any way impaired but all rights of creditors and all liens
upon any property of GAC shall be preserved unimpaired, and all debts,
liabilities and duties of GAC shall thenceforth attach to the Surviving
Corporation, and may be enforced against it to the same extent as if such
debts, liabilities and duties had been incurred or contracted by it. Any
action or proceeding pending by or against GAC may be prosecuted to judgment,
which shall bind the Surviving Corporation, or the Surviving Corporation may
be proceeded against or substituted in its place.
5.2 FURTHER ASSURANCES. If at any time after the Effective Time the
Surviving Corporation shall consider any further deeds, assignments or
assurances in law or any other action necessary, desirable or proper (a) to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation
the title to any property or rights of GAC acquired or to be acquired by
reason of, or as a result of, the Merger, or (b) otherwise to carry out the
purposes of this Agreement, GAC agrees that it and its proper officers and
directors shall and will execute and deliver all such property, deeds,
assignments and assurances in law and take all other action necessary,
desirable or proper to vest, perfect or confirm title to such property or
right in the Surviving Corporation and otherwise to carry out the purposes of
this Agreement.
SECTION 6: POST-MERGER GOVERNANCE
6.1 AMENDMENT TO ARTICLES OF INCORPORATION AND BYLAWS. At the
Effective Time, the Articles of Incorporation of Vairex as in effect
immediately prior to the Effective Time, shall be amended to provide for the
following:
(a) At the Effective Time, the name of Guardian shall be changed to
"Vairex Technologies, Inc." or some other name approved by the Guardian Board
of Directors with the consent of the Guardian Shareholders.
(b) The authorized capital stock of Guardian shall be increased to
consist of (i) 100 million shares of Common Stock, $.0005 par value and (ii)
20 million shares of Preferred Stock, $.01 par value. The Bylaws of Guardian
as in effect immediately prior to the Effective Time shall be and continue to
be the Bylaws of Guardian at the Effective Time.
6.2 DIRECTORS. OFFICERS AND EMPLOYEES.
(a) DIRECTORS OF GUARDIAN. On Closing, the current members of the
Board of Directors of Guardian shall, in accordance with the DGCL and the
Articles of Incorporation and By-Laws of Guardian, cause the Board of
Directors of Guardian to be reconstituted to consist of a total of five (5)
persons, to be designated by the management of Vairex. The current members
of the Guardian Board of Directors shall resign their respective board
memberships.
(b) EXECUTIVE OFFICERS OF GUARDIAN. Immediately after the Effective
Time, the newly constituted Board of Directors of Guardian shall elect persons
to serve as Executive Officers of Guardian any persons serving as Executive
Officers of Guardian immediately prior to the Effective Time who will not
continue in such capacity immediately after the Effective Time shall tender
their resignations in accordance with applicable Legal Requirements.
(c) DIRECTORS OF VAIREX. Immediately after the Effective Time, the
Board of Directors of Vairex shall be reconstituted to consist of one (1) or
more persons as shall be appointed by a majority vote of the newly constituted
Board of Directors of Guardian.
(d) EXECUTIVE OFFICERS OF VAIREX. Immediately after the Effective
Time, any person serving as an executive officer of Vairex immediately prior
to the Effective Time who will not continue in such capacity immediately after
the Effective Time shall tender their resignation in accordance with
applicable legal requirements. The executive officers of Vairex immediately
after the Effective Time shall be persons duly appointed by the newly
constituted directors of Vairex.
(e) DIRECTORS AND EXECUTIVE OFFICERS OF GUARDIAN STEEL, INC.
("GSI"), GUARDIAN SECURITY AND SAFETY PRODUCTS, INC. ("GSSP") AND PALO VERDE,
INC. ("PALO VERDE"). Immediately after the Effective Time, the Board of
Directors and executive officers of GSI, GSSP and Palo Verde immediately prior
to the Effective Time shall continue in their respective capacities until such
time as GSI, GSSP and/or Palo Verde is either sold, liquidated or distributed
to the shareholders of Guardian immediately prior to the Effective Time as
provided for in Section 7.5 below.
SECTION 7: ADDITIONAL AGREEMENTS
7.1 VAIREX BRIDGE FINANCING. As soon as practicable following the
execution of this Agreement, and prior to the Effective Time, Vairex agrees to
undertake a private offering of shares of its equity securities exclusively to
persons who qualify as "accredited investors" within the meaning of 501(a) of
Regulation D under the Securities Act ("Accredited Investors") (the "Vairex
Bridge"). The Vairex Bridge shall raise gross proceeds of up to $1,300,000.
Investors in the Vairex Bridge, and their shares of equity securities, shall
be included in the Vairex Stock outstanding at the Effective Time for purposes
of the conversion provisions of Section 4.1 of this Agreement. The Vairex
Bridge shall be undertaken without registration under the Securities Act in
reliance upon an exemption from such registration requirements contained in
Rule 506, Regulation D thereunder. Vairex agrees to undertake the Vairex
Bridge in conformity with all applicable legal requirements including, without
limitation, applicable federal and state securities laws. The completion of
the Vairex Bridge shall be a condition precedent to the obligations of the
parties to consummate the Merger.
7.2 GUARDIAN BRIDGE. As soon as practicable following the execution of
this Agreement, Guardian agrees to undertake a private offering of its equity
securities exclusively to persons who qualify as Accredited Investors (the
"Guardian Bridge"). The Guardian Bridge shall provide equity financing of at
least $500,000. Such Guardian Bridge shall be calculated to increase
Guardian's net assets to a level to satisfy the maintenance requirements of
Nasdaq pending consummation of the Merger. The Guardian Bridge shall be
undertaken without registration under the Securities Act in reliance upon an
exemption from such registration requirements contained in Rule 506,
Regulation D thereunder. Guardian agrees to undertake the Guardian Bridge in
conformity with all applicable legal requirements including, without
limitation, applicable federal and state securities laws. The completion of
the Guardian Bridge shall be a condition precedent to the obligations of the
parties to consummate the Merger.
7.3 GUARDIAN PRIVATE PLACEMENT. In addition to the Guardian Bridge,
Guardian shall undertake a second private offering of its equity securities
exclusively to persons who qualify as Accredited Investors. The private
offering shall be calculated to result in Guardian realizing net proceeds of
the offering, after deducting expenses of the offering and placement agent
fees, of an amount to be agreed upon by Vairex and Guardian, considering
factors to include qualification for Nasdaq listing and the provision of
sufficient working capital (the "Guardian Private Offering"). The Guardian
Private Offering shall be undertaken for the purpose of providing working
capital following the Effective Time and for the purpose of satisfying the net
asset requirements for continued listing of Guardian securities on Nasdaq. If
permitted by Nasdaq without jeopardizing Guardian's continued listing on
Nasdaq, the Guardian Private Offering shall be undertaken as soon as
practicable following the Effective Time. However, if required by Nasdaq as a
condition that must be satisfied prior to the Effective Time for continued
Nasdaq listing, the Guardian Private Offering shall be undertaken prior to the
Effective Time and shall be a condition precedent to the obligations of the
parties to consummate the Merger. In either case, the Guardian Private
Offering shall be undertaken without registration under the Securities Act in
reliance upon an exemption from such registration requirements contained in
Rule 506, Regulation D thereunder. Guardian agrees to undertake the Guardian
Bridge in conformity with all applicable legal requirements including, without
limitation, applicable federal and state securities laws.
7.4 VAIREX RECAPITALIZATION AND DEBT RESTRUCTURE. Prior to the
Effective Time of the Merger, Vairex shall effect a recapitalization and debt
restructure to include the following:
(a) The convertible debt and warrants held by CapEx LP shall be
restructured and modified upon terms and conditions satisfactory to Vairex and
Guardian.
(b) Affiliated and related party debt of Vairex shall be converted
to equity upon terms and conditions satisfactory to Vairex and Guardian.
(c) All outstanding options, warrants and other securities
exercisable to purchase or convertible into shares of Vairex Common Stock
shall be either surrendered for cancellation, converted into shares of Vairex
Common Stock or otherwise included in the options and warrants outstanding and
to be assumed by Guardian pursuant to the provisions of Section 4.2 hereof.
(d) Vairex may, but shall not be required, to undertake a rights
offering of its equity securities to existing securityholders ("Vairex Rights
Offering") in order to raise capital necessary to satisfy certain current
liabilities. Any equity securities sold in such a Rights Offering will be
included in the Vairex Stock to be converted into shares of Guardian Common
Stock on the Effective Time of the Merger. Any such Rights Offering shall be
undertaken without registration under the Securities Act and shall be made
solely to persons who qualify as Accredited Investors in reliance upon an
exemption from the registration requirements of the Securities Act contained
in Rule 506 of Regulation D thereunder. Vairex agrees to undertake the rights
offering in conformity with all applicable legal requirements, including,
without limitation, applicable federal and state securities laws.
(e) All securities issued by Vairex pursuant to the undertakings
set forth in this section 7.4 shall be included in the Vairex Stock
outstanding immediately prior to the Effective Time for the purposes of
Section 4.1 and 4.2 hereof.
7.5 GUARDIAN DIVIDEND. The date immediately preceding the Effective
Time of the Merger shall be deemed the Record Date for a contingent dividend
which may be paid and declared by Guardian in the future to its shareholders
of record on the date immediately preceding the Effective Date of the Merger.
Such dividend may consist of (i) a cash dividend utilizing the proceeds from
the future sale of one or all of Guardian's pre-merger subsidiaries: Guardian
Steel, Inc. or Guardian Security and Safety Products, Inc. or Palo Verde
Group, Inc. (collectively "Guardian Pre-merger Subs"), or (ii) the
distribution by way of a spinoff of the shares of the Guardian Pre-merger Subs
to the Guardian shareholders as of the Record Date. The purpose of
establishing the Record Date is to provide that the post-merger economic
impact of the Guardian Pre-merger Subs inures to the benefit or detriment
exclusively of the Guardian pre-merger shareholders.
7.6 GUARDIAN REGISTRATION STATEMENT. As soon as practicable following
the Effective Time of the Merger, Guardian shall prepare and file a Post-
Effective Amendment to its Registration on Form SB-2, SEC File No. 333-38044
(the "Registration Statement"), registering for resale under the Securities
Act shares of the Company's Common Stock held by certain selling shareholders
or which may be acquired by such selling shareholders pursuant to the exercise
of outstanding options and warrants. Guardian agrees to take all action
necessary or advisable to prepare and file such Post-Effective Amendment to
Registration Statement, and have same declared effective and to maintain the
effectiveness of such Registration Statement until all of Guardian's
outstanding Class A, B, C, D, E and F Warrants have been exercised or expired
in accordance with their terms.
7.7 NOTIFICATION OF CERTAIN MATTERS. Vairex shall give prompt notice to
Guardian and Guardian shall give prompt notice to Vairex of (i) the occurrence
or non-occurrence of any event which would cause any representation or
warranty made by the respective parties in this Agreement to be materially
untrue or inaccurate and (ii) any failure of Guardian or Vairex, as the case
may be, to materially comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice pursuant to this section shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice and, provided further, that the failure to give such notice shall not
be treated as a breach of covenant for the purposes of this Agreement unless
the failure to give such notice results in material prejudice to the other
party.
7.8 FURTHER ACTION. Upon the terms and subject to the conditions
hereof, each of the parties hereto shall use reasonable efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all necessary waivers, consents and approvals and to
effect all necessary registrations and filings, and to otherwise satisfy or
cause to be satisfied all conditions precedent to its obligations under this
Agreement.
7.9 PUBLIC ANNOUNCEMENTS. Vairex and Guardian shall consult with each
other before issuing any press release or other public statement with respect
to the acquisition or this Agreement and shall not issue any such press
release or make any such public statement without the prior consent of the
other party, which consent shall not be unreasonably withheld; provided,
however, that a party may, without the prior consent of the other party, issue
such press release or make such public statement as may, upon the advice of
counsel, be required by law if it has used reasonable efforts to first consult
with the other party.
7.10 COOPERATION IN SECURITIES FILINGS. Vairex shall provide such
information regarding Vairex, its business, its officers, directors and
affiliates, as is reasonably required by Guardian for purposes of preparing
any notices, reports and other filings with the Commission.
7.11 ADDITIONAL DOCUMENTS. The parties shall deliver or cause to be
delivered such documents or certificates as may be necessary, in the
reasonable opinion of counsel for either of the parties, to effectuate the
transactions provided for in this Agreement. If at any time the parties or
any of their respective successors or assigns shall determine that any further
conveyance, assignment or other document or any further action is necessary
desirable to further effectuate the transactions set forth herein or
contemplated hereby, the parties and their officers, directors and agents
shall execute and deliver, or cause to be executed and delivered, all such
documents as may be reasonably required to effectuate such transactions.
SECTION 8: COVENANTS AND CONDITIONS OF CLOSING
8.1 COVENANTS REGARDING THE CLOSING. The parties hereto hereby covenant
and agree that they shall (i) use reasonable efforts to cause all of their
respective representations and warranties set forth in this Agreement to be
true on and as of the Closing Date, (ii) use reasonable efforts to cause all
of their respective obligations that are to be fulfilled on or prior to the
Closing Date to be so fulfilled, (iii) use reasonable efforts to cause all
conditions to the Closing set forth in this Agreement to be satisfied on or
prior to the Closing Date, and (iv) deliver to each other at the Closing the
certificates, updated lists, opinion of counsel, notices, consents,
authorizations, approvals, agreements, transfer documents, receipts and
amendments contemplated by Sections 8, 9 and 11 (with such additions or
exceptions to such items as are necessary to make the statements set forth in
such items accurate, provided that if any such additions or exceptions cause
any of the conditions to the parties' obligations hereunder as set forth in
Sections 8, 9 and 11 below not to be fulfilled, such additions and exceptions
shall in no way limit the rights of the parties to terminate this Agreement or
refuse to consummate the transactions contemplated hereby.) All
indemnifications, guarantees, covenants, agreements, representations and
warranties made by the parties hereunder or pursuant hereto or in connection
with the transactions contemplated hereby shall survive the Closing regardless
of any investigation at any time made by or on behalf of the parties.
8.2 CONDITIONS TO OBLIGATION OF GUARDIAN. The obligation of Guardian to
complete the Exchange on the Closing Date on the terms set forth in this
Agreement is, at the option of Guardian, subject to the satisfaction or
written waiver by Guardian of each of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by Vairex in this Agreement shall be true
and correct in all material respects on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on the Closing Date, except to the extent that such representations and
warranties expressly relate to an earlier date in which case they shall have
been true and correct as of such earlier date.
(b) COMPLIANCE WITH COVENANTS. All covenants which Vairex is
required to perform, satisfy or comply with on or before the Closing Date
shall have been fully complied with or performed in all material respects.
(c) CORPORATE APPROVALS. Any action required to be taken by the
Board of Directors or Shareholders of Guardian and Vairex to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken.
(d) CONSENTS AND APPROVALS. To the extent that any material lease,
mortgage, deed of trust, contract or agreement to which Vairex is a party
shall require the consent of any person to the Exchange or any other
transaction provided for herein, such consent shall have been obtained and
Guardian shall have received reasonably satisfactory evidence thereof;
provided, however, that Vairex shall not make, as a condition for the
obtaining of any such consent, any agreements or undertakings not approved in
writing by Guardian to the extent that such condition otherwise has an effect
on Guardian. Guardian shall have been furnished with evidence satisfactory to
it of the timely consent or approval of, filing with or notice to, each
Governmental Authority or Person which in the good faith judgment of Guardian
is necessary or required with respect to the execution and delivery by Vairex
and the consummation by Vairex of the transactions contemplated hereby.
(e) REVIEW AND DUE DILIGENCE. Guardian, its investment bankers,
legal counsel and/or auditors shall have had the opportunity to complete, and
shall have completed, a satisfactory due diligence investigation of Vairex,
together with a satisfactory review of Vairex's corporate status and Vairex's
property, all of which shall be satisfactory in form and substance to Guardian
in its sole discretion.
(f) NO LITIGATION, ETC. No action, investigation, litigation or
arbitration or proceeding by or before any Governmental Authority, or before
any arbitral, mediation panel or tribunal of any kind shall have been
instituted or threatened (i) to restrain or prohibit the transactions
contemplated by this Agreement, or (ii) to claim that the consummation of any
such transaction is illegal or (iii) which, if determined adversely, would
effect adversely Guardian or Vairex following consummation of the transactions
contemplated hereby and Vairex shall have delivered to Guardian a certificate
dated as of the Closing Date and executed by Vairex, stating that to its Best
Knowledge, no such items exist. No governmental authority or arbitral,
mediation panel or tribunal of any kind shall have taken any other action as a
result of which the management of Guardian, in its sole discretion, reasonably
deems it inadvisable to proceed with the transactions contemplated by this
Agreement.
(g) NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, property or assets of Vairex shall have occurred, and no loss or
damage to any of the assets, whether or not covered by insurance, with respect
to Vairex hereto has occurred, and Vairex shall have delivered to Guardian a
certificate dated as of the Closing Date to such effect.
(h) UPDATE OF CONTRACTS. Vairex shall have delivered to Guardian
an accurate list, as of the Closing Date, showing (i) all agreements,
contracts and commitments of the type listed on Exhibit 8.2(h) entered into
since the date of this Agreement; and (ii) all other agreements, contracts and
commitments related to the businesses or the assets of Vairex entered into
since the date of this Agreement, together with true, complete and accurate
copies of all such documents (the "Vairex New Contracts"). Guardian shall
have had the opportunity to review and approve the Vairex New Contracts of the
other, and any of the Companies shall have the right to delay the Closing for
up to ten (10) days if it in its sole discretion deems such delay necessary to
enable it to adequately review the Vairex New Contracts.
(i) NO ADVERSE INFORMATION. The investigations with respect to
Vairex, the assets and the respective businesses performed by Guardian's
respective professional advisors and other representatives shall not have
revealed any information concerning Vairex, its assets, liabilities or its
business that has not been made known to Guardian, in writing prior to the
date of this Agreement and that, in the opinion of such party and its
advisors, materially and adversely affects the business or assets of the other
party or the viability of the transaction contemplated by this Agreement.
(j) ORDINARY COURSE OF BUSINESS. During the period from the date
of this Agreement until the Closing Date, Vairex shall have carried on its
business in the ordinary and usual course, and shall have delivered to
Guardian a certificate to that effect.
(k) LIENS. Vairex shall have delivered to Guardian a reasonably
7current lien and judgment search (both state and county levels in each
jurisdiction where the party is qualified to or is doing business or owns
material assets) confirming the absence of any judicial liens, security
interests, tax liens and similar such liens ("Liens") affecting any of its
business or assets, except for liens acceptable to Guardian.
(l) APPROVAL OF COUNSEL. All actions, proceedings, instruments and
documents required or incidental to carry out this Agreement, including all
schedules and exhibits thereto, and all other related legal matters shall have
been approved by Xxxxxx & Xxxxxxx, LLC, counsel to Guardian.
(m) OTHER DOCUMENTS. Vairex shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Guardian or its attorneys may have reasonably requested.
(n) COMPLIANCE WITH SECURITIES LAWS. Guardian shall have
undertaken all actions necessary or advisable to consummate the Merger in
conformity with all Governmental and Legal Requirements including, without
limitation, applicable federal and state securities laws.
(o) APPRAISAL RIGHTS AND/OR DISSENTERS' RIGHTS. At or prior to
Closing, no beneficial or record owner of any outstanding shares of Vairex
Common Stock shall have exercised or shall have given notice to Guardian or
Vairex of their intent to exercise any rights under applicable state law, if
any, to dissent from the Merger or obtain the payment of the fair market value
of such shares of Vairex Common Stock in lieu of participating in the Merger
in accordance with the terms and subject to the conditions set forth herein.
(p) NON-DISCLOSURE. On or prior to Closing, all current directors,
officers and other personnel of Guardian and all agents, advisors and
consultants to Guardian with access to the Guardian Registered Rights and the
Guardian Proprietary Information and/or the Vairex Registered Rights and the
Vairex Proprietary Information, shall have executed and delivered to Guardian
a confidential information agreement restricting such person's right to
disclose any confidential or proprietary information of Guardian or of Vairex.
(q) FINANCIAL ADVISORY FEES. At or prior to Closing, all
obligations or commitments of Guardian and Vairex to their respective
financial advisors and investment bankers shall have been paid or otherwise
satisfied upon terms satisfactory to the parties, and Guardian and Vairex
shall each have been delivered and received such written consents, approvals,
estoppel certificates or other instruments or undertakings from its advisors
or other third parties as each may deem reasonable, necessary or advisable.
(r) NASDAQ APPROVAL. The Acquisition and other transactions
contemplated by this Agreement shall have been approved by NASDAQ and Guardian
Common Stock shall otherwise continue to be eligible for listing on NASDAQ
following consummation of the Acquisition.
(s) PRIVATE OFFERINGS. The Guardian Bridge, Vairex Bridge, Vairex
Rights Offering and Guardian Private Offering, if necessary, shall have been
successfully completed and closed upon terms and conditions satisfactory to
Guardian.
(t) VAIREX RECAPITALIZATION AND DEBT RESTRUCTURE. The Vairex
recapitalization and debt restructure provided for in Section 7.4 above shall
have been successfully completed upon terms and conditions satisfactory to
Guardian.
(u) COMPLIANCE WITH SECTIONS 5 AND 17 OF THE SECURITIES ACT. The
Board of Directors of Guardian shall be satisfied that consummation of the
Merger and the issuance of Common Stock to the Vairex securityholders is in
compliance with the provisions of Sections 5 and 17 of the Securities Act.
8.3 CONDITIONS TO OBLIGATION OF VAIREX. The obligations of Vairex on
the Closing Date under the terms set forth in this Agreement are, at the
option of Vairex, subject to the satisfaction or written waiver by Vairex of
each of the following conditions:
(a) ACCURACY OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties made by Guardian in this Agreement shall be
true and correct in all material respects on and as of the Closing Date with
the same force and effect as though such representations and warranties had
been made on the Closing Date, except to the extent that such representations
and warranties expressly relate to an earlier date in which case they shall
have been true and correct as of such earlier date.
(b) COMPLIANCE WITH COVENANTS. All covenants which Guardian are
required to perform, satisfy or comply with on or before the Closing Date
shall have been fully complied with or performed in all material respects.
(c) CORPORATE APPROVALS. Any action required to be taken by the
Board of Directors or Shareholders of Guardian and Vairex to authorize the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby shall have been duly and validly taken.
(d) CONSENTS AND APPROVALS. To the extent that any material lease,
mortgage, deed of trust, contract or agreement to which Guardian is a party
shall require the consent of any person to the exchange of Guardian's shares
of Common Stock or any other transaction provided for herein, such consent
shall have been obtained and Vairex shall have received reasonably
satisfactory evidence thereof; provided, however, that Guardian shall not
make, as a condition for the obtaining of any such consent, any agreements or
undertakings not approved in writing by Vairex to the extent that such
condition otherwise has an effect on Vairex or Guardian. Vairex shall have
been furnished with evidence satisfactory to it of the timely consent or
approval of, filing with or notice to, each Governmental Authority or Person
which in the good faith judgment of Vairex is necessary or required with
respect to the execution and delivery by Guardian and the consummation by
Guardian of the transactions contemplated hereby.
(e) REVIEW AND DUE DILIGENCE. Vairex, its investment bankers,
legal counsel and/or auditors shall have had the opportunity to complete, and
shall have completed, a satisfactory due diligence investigation of Guardian,
its assets and liabilities, together with a satisfactory review of Guardian's
corporate status and the marketability of title to Guardian's property, all of
which shall be satisfactory in form and substance to Vairex in its sole
discretion.
(f) NO LITIGATION, ETC. No action, investigation, litigation or
arbitration or proceeding by or before any Governmental Authority, or before
any arbitral, mediation panel or tribunal of any kind shall have been
instituted or threatened (i) to restrain or prohibit the transactions
contemplated by this Agreement or (ii) to claim that the consummation of any
such transaction is illegal or (iii) which, if determined adversely, would
effect adversely Guardian or Vairex following consummation of the transactions
contemplated hereby and the Companies shall have delivered to each other
certificates dated as of the Closing Date and executed by such parties,
stating that to their Best Knowledge, no such items exist. No Governmental
Authority or arbitral or mediation panel or tribunal of any kind shall have
taken any other action as a result of which the management of Vairex, in its
sole discretion, reasonably deems it inadvisable to proceed with the
transactions contemplated by this Agreement.
(g) NO MATERIAL ADVERSE CHANGE. No material adverse change in the
business, property, assets or liabilities of any Company shall have occurred,
and no loss or damage to any of the assets, whether or not covered by
insurance, with respect to Guardian hereto has occurred, and Guardian shall
have delivered to Vairex a certificate dated as of the Closing Date to such
effect.
(h) NO ADVERSE INFORMATION. The investigations with respect to
Guardian, the assets, liabilities and their respective businesses performed by
Vairex's respective professional advisors and other representatives shall not
have revealed any information concerning Guardian, its assets, liabilities or
business that has not been made known to Vairex, in writing prior to the date
of this Agreement and that, in the opinion of Vairex and its advisors,
materially and adversely affects the business, liabilities or assets of
Guardian or the viability of the transactions contemplated by this Agreement.
(i) ORDINARY COURSE OF BUSINESS. During the period from the date
of this Agreement until the Closing Date, Guardian shall have undertaken no
material business operations and shall have delivered to Vairex a certificate
to that effect.
(j) APPROVAL OF COUNSEL. All actions, proceedings, instruments and
documents required or incidental to carry out this Agreement, including all
schedules and exhibits thereto, and all other related legal matters shall have
been approved as to substance and form by counsel to Vairex.
(k) OTHER DOCUMENTS. Guardian shall have delivered or caused to be
delivered all other documents, agreements, resolutions, certificates or
declarations as Vairex or its attorneys may have reasonably requested.
(l) COMPLIANCE WITH SECURITIES LAWS. Guardian shall otherwise have
undertaken all actions necessary or advisable to consummate the Private
Offering in conformity with all Governmental Requirements, including, without
limitation, applicable federal and state securities laws.
(m) NO INJUNCTIONS OR RESTRAINTS. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Exchange shall be in effect.
(n) FINANCIAL ADVISORY FEES. At or prior to Closing, all
obligations or commitments of Guardian and Vairex to their respective
financial advisors and investment bankers shall have been paid or otherwise
satisfied on terms satisfactory to the parties, and Guardian and Vairex shall
each have been delivered and received such written consents, approvals,
estoppel certificates or other instruments or undertakings from its advisors
or other third parties as each may deem reasonable, necessary or advisable.
(o) GUARDIAN CAPITALIZATION. On the Effective Time of the Merger,
and giving effect to the issuance of securities in the Guardian Bridge, but
excluding shares issued in the Guardian Private Offering, Guardian shall have
no more than 5,000,000 shares of common stock issued and outstanding. In
addition, Guardian shall have outstanding (i) options to purchase 300,000
shares of common stock granted under an employment agreement and (ii) warrants
and options exercisable to purchase an additional 5,698,712 shares of common
stock. To the extent options and warrants are exercised prior to the Merger,
the number of outstanding shares of common stock shall be increased and the
number of outstanding options and warrants shall be decreased by the same
amount.
(p) PRIVATE OFFERINGS. The Guardian Bridge, Vairex Bridge, Vairex
Rights Offering and Guardian Private Offering, if necessary, shall have been
successfully completed and closed upon terms and conditions satisfactory to
Vairex.
(q) VAIREX RECAPITALIZATION AND DEBT RESTRUCTURE. The Vairex
recapitalization and debt restructure for in Section 7.4 above shall have been
successfully completed upon terms and conditions satisfactory to Vairex.
(r) COMPLIANCE WITH SECTIONS 5 AND 17 OF THE SECURITIES ACT. The
Board of Directors of Vairex shall be satisfied that consummation of the
Merger and the issuance of Common Stock to the Vairex securityholders is in
compliance with the provisions of Sections 5 and 17 of the Securities Act.
8.4 SPECIFIC ITEMS TO BE DELIVERED AT THE CLOSING. The parties shall
deliver the following items to the appropriate party at the Closing of the
transactions contemplated by this Agreement.
(a) To be delivered by Vairex (in duplicate original):
(i) Copy of corporate resolutions authorizing the execution of
this Agreement, and the consummation by Vairex of the transactions
contemplated by this Agreement.
(ii) A certificate of the President of Vairex stating that the
representations and warranties of Vairex set forth in this Agreement are true
and correct. Said certificate shall further verify and affirm that all
consents or waivers, if any, which may be necessary to execute and deliver
this Agreement have been obtained and are in full force and effect.
(iii) A certificate dated the Closing Date, signed by the
Chief Executive Officer and the Chief Financial Officer of Vairex, in form and
substance satisfactory to the other party and its legal counsel, certifying
that all conditions precedent set forth in this Agreement to the obligations
of Vairex to close, have been fulfilled, and that no event of default
hereunder and no event which, with the giving of notice or passage of time, or
both, would be an event of default, has occurred as of such date.
(iv) Certificates dated the Closing Date, signed by the
Secretary of Vairex, (i) certifying resolutions duly adopted by the Board of
Directors and Shareholders of Vairex, authorizing the execution of this
Agreement and all of the other transactions to be consummated pursuant
thereto; (ii) certifying the names and incumbency of the officers of Vairex
who are empowered to execute the foregoing documents for and on behalf of such
company; (iii) certifying the authenticity of copies of the Articles of
Incorporation and Bylaws of Vairex; and (iv) certifying the authenticity of a
reasonably current Certificate of Good Standing, from all jurisdictions in
which the company is qualified to conduct business.
(b) To be delivered by Shareholders of Vairex (in duplicate
original):
(i) Certificate or certificates representing 100% of the
issued and outstanding equity securities of Vairex, which stock certificates
shall be endorsed in favor of Guardian.
(ii) Fully executed Subscription Agreements from all
securityholders of record of Vairex substantially in the form of Exhibit 4.4.
(c) To be delivered by Guardian (in duplicate original):
(i) Certificate or certificates representing 28.3 million
shares of Guardian Common Stock, as adjusted pursuant to Section 4.2(c) which
stock certificates shall be issued in the names of each Shareholder in the
numbers set forth on Exhibit 4.1 hereof;
(ii) Copy of corporate resolution authorizing the execution of
this Agreement and the consummation by Guardian and GAC of the transactions
contemplated by this Agreement, including, but not limited to, the issuance
of Guardian Common Stock in the amounts and manner set forth in Section 4.1
above;
(iii) A certificate dated the Closing Date, signed by the Chief
Executive Officer and the Chief Financial Officer of Guardian and GAC, in form
and substance satisfactory to the other party and its legal counsel,
certifying that all conditions precedent set forth in this Agreement to the
obligations of Guardian and GAC to close, have been fulfilled, and that no
event of default hereunder and no event which, with the giving of notice or
passage of time, or both, would be an event of default, has occurred as of
such date.
(iv) Certificates dated the Closing Date, signed by the
Secretary of Guardian and GAC, (i) certifying resolutions duly adopted by the
Board of Directors of Guardian and GAC, authorizing the execution of this
Agreement and all of the other transactions to be consummated pursuant
thereto; (ii) certifying the names and incumbency of the officers of Guardian
and GAC who are empowered to execute the foregoing documents for and on behalf
of such company; (iii) certifying the authenticity of copies of the Articles
of Incorporation and Bylaws of Guardian and GAC; and (iv) certifying the
authenticity of a reasonably current Certificate of Good Standing, from all
jurisdictions in which Guardian and GAC are qualified to conduct business.
SECTION 9: REPRESENTATIONS AND WARRANTIES BY VAIREX
As a material inducement to Guardian to enter into this Agreement and
with the understanding and expectations that Guardian will be relying thereon
in consummating the Merger contemplated hereunder, Vairex (hereinafter
collectively referred to as the "Corporation" or "Vairex" for the purposes of
this Section 9 only) represents and warrants as follows:
9.1 ORGANIZATION AND STANDING. Vairex is a corporation duly organized,
validly existing and in good standing under the laws of the State of Colorado
and has all requisite corporate power and authority to own its assets and
properties and to carry on its business as it is now being conducted.
9.2 SUBSIDIARIES, ETC. Except as set forth on Exhibit 9.2, the
Corporation does not have any direct or indirect Ownership Interest in any
corporation, partnership, joint venture, association or other business
enterprise.
9.3 QUALIFICATION. Except as set forth on Exhibit 9.3 and for any
jurisdiction where the failure to be qualified to engage in business as a
foreign corporation would not have a material adverse affect on the
Corporation, the Corporation is not qualified to engage in business as a
foreign corporation in any state and there is no other jurisdiction wherein
the character of the properties presently owned by the Corporation or the
nature of the activities presently conducted by the Corporation makes
necessary the qualification, licensing or domestication of the Corporation as
a foreign corporation.
9.4 CORPORATE AUTHORITY. Except as set forth on Exhibit 9.4 hereto,
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby nor compliance by the Corporation with
any on the provisions hereof will:
(a) Conflict with or result in a breach of any provision of its
Articles of Incorporation or By-Laws;
(b) Result in a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which the Corporation is a party, or by which any
of its properties or assets may be bound except for such default (or right of
termination, cancellation, or acceleration) as to which requisite waivers or
consents shall either have been obtained by the Corporation prior to the
Closing Date or the obtaining of which shall have been waived by Guardian; or
(c) Violate any order, writ, injunction, decree or, to the
Corporation's Best Knowledge, any statute, rule or regulation applicable to
the Corporation or any of its properties or assets. No consent or approval by
any Governmental Authority is required in connection with the execution and
delivery by the Corporation of this Agreement or the consummation by the
Corporation of the transactions contemplated hereby.
9.5 FINANCIAL STATEMENTS. Except as otherwise provided, the following
statements will be attached to this Agreement as Exhibit 9.5:
(a) Audited financial statements of the Corporation containing
balance sheets, together with statements of operation, statements of cash
flows, and statements of stockholders' equity as of and for the fiscal years
ended December 31, 2000, and December 31, 1999.
(b) Unaudited financial statements of the Corporation containing
balance sheets, together with statements of operation, statements of cash
flows, and statements of stockholders' equity as of and ford the three months
ended March 31, 2001.
Such financial statements, together with and subject to the
disclosures and notes thereto: (i) are in accordance with the books and
records of the Corporation; (i) present fairly and accurately the financial
condition of the Corporation as of the dates of the balance sheets; (iii)
present fairly and accurately the results of operations for the periods
covered by such statements; (iv) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis; and
(v) include all adjustments (consisting of only normal recurring accruals)
which are necessary for a fair presentation of the financial condition of the
Corporation, and of the results of operations of the Corporation for the
periods covered by such statements.
As of the date hereof and as of the Closing Date, the Corporation
does not have any liabilities or payables (absolute or contingent, known or
unknown), except for liabilities or payables set forth in the Financial
Statements or otherwise disclosed in writing to Guardian.
9.6 FINANCIAL INFORMATION. In connection with the investigations
performed by and audit to be undertaken by Guardian of Vairex, Vairex
furnished certain financial information and data including, without
limitation, tax and accounting records, financial records, statements,
worksheets and other information requested by Buyer and its auditors necessary
to undertake the complete the audited financial examinations. Vairex and
Shareholders jointly and severally represent and warrant that any and all such
information furnished in connection with the conduct of such investigations
and audits shall be true, accurate and complete in all material respects and
shall not contain any material misstatements nor any material omissions of
fact or information respecting the financial condition or results of operation
of the business for the respective periods covered by the audits.
9.7 CAPITALIZATION OF THE CORPORATION. The authorized capital stock of
Vairex consists of 100,000,000 shares of Common Stock, .001 par value, and
50,000,000 shares of preferred stock, $.01 par value. As of the date of this
Agreement, there are 10,865,000 shares of Common Stock issued and outstanding.
The names of the record owners of the issued and outstanding Common Stock are
set forth on Exhibit 9.7(a) hereto. All issued and outstanding shares of
Vairex Common Stock have been duly authorized and validly issued and are fully
paid and non-assessable. Exhibit 9.7(b) hereto sets forth all issued and
outstanding rights, options, warrants, subscriptions and convertible
securities outstanding on the date of this Agreement. There are no other
outstanding rights, options, warrants, subscriptions, calls, convertible
securities or agreement of any character or nature under which the Company is
or may become obligated to issue any shares of its capital stock of any kind,
other than those shares indicated in this Section as presently outstanding and
shares issuable in accordance with the terms of this Agreement.
9.8 TAXES. Except as set forth in Exhibit 9.8:
(a) The Corporation has filed (or has obtained extensions for
filing) all income, excise, sales, corporate franchise, property, payroll and
other tax returns or reports required to be filed by it, as of the date hereof
by the United States of America, any state or other political subdivision
thereof or any foreign country and has paid all Taxes or assessments relating
to the time periods covered by such returns or reports; and
(b) The Corporation has paid all tax liabilities imposed or
assessed by any governmental authority for all periods prior to the Closing
Date for which such taxes have become due and payable and has received no
notice from any such governmental authority of any deficiency or delinquency
with respect to such obligation. The Corporation is not currently undergoing
any audit conducted by any taxing authority and has received no notice of
audit covering any prior period for which taxes have been paid or are or will
be due and payable prior to the Closing Date. There are no present disputes
as to taxes of any nature payable by the Corporation.
9.9 NO ACTIONS, PROCEEDINGS, ETC. Except as listed on the attached
Exhibit 9.9, there is no action or proceeding (whether or not purportedly on
behalf of the Corporation) pending or to its knowledge threatened by or
against the Corporation which might result in any material adverse change in
the condition, financial or otherwise, of the Corporation's business or
assets. No order, writ or injunction or decree has been issued by, or
requested of any court or Governmental Agency which does nor may result in any
material adverse change in the Corporation's assets or properties or in the
financial condition or the business of the Corporation. Except for
liabilities referred to in attached Exhibit 9.9, the Corporation is not liable
for damages to any employee or former employee as a result of any violation of
any state, federal or foreign laws directly or indirectly relating to such
employee or former employee.
9.10 POST BALANCE SHEET CHANGES. Except as set forth on the attached
Exhibit 5.9 and as contemplated by this Agreement, since December 31, 2000,
the Corporation has not (a) issued, bought, redeemed or entered into any
agreements, commitments or obligations to sell, buy or redeem any shares of
its capital stock; (b) incurred any obligation or liability (absolute or
contingent), other than current liabilities incurred, and obligations under
contracts entered into, in the ordinary course of business; (c) discharged or
satisfied any lien or encumbrance or paid any obligation or liability
(absolute or contingent), other than current liabilities incurred in the
ordinary course of business; (d) mortgaged, pledged or subjected to lien
charges, or other encumbrance any of its assets, other than the lien of
current or real property taxes not yet due and payable; (e) waived any rights
of substantial value, whether or not in the ordinary course of business; (f)
suffered any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting its assets or its business; (g) made or
suffered any amendment or termination of any material contract or any
agreement which adversely affects its business; (h) received notice or had
knowledge of any labor trouble other than routine grievance matters, none of
which is material; (i) increased the salaries or other compensation of any of
its directors, officers or employees or made any increase in other benefits to
which employees may be entitled, other than employee salary increases made in
the ordinary course of business and reflected on an exhibit hereto; (j) sold,
transferred or otherwise disposed of any of its assets, other than in the
ordinary course of business; (k) declared or made any distribution or payments
to any of its shareholders, officers or employees, other than wages and
salaries made to employees in the ordinary course of business; (l) revalued
any of its assets; or (m) entered into any transactions not in the ordinary
course of business.
9.11 NO BREACHES. The Corporation is not in violation of, and the
consummation of the transactions contemplated hereby do not and will not
result in any material breach of, any of the terms or conditions of any
mortgage, bond, indenture, agreement, contract, license or other instrument or
obligation to which the Corporation is a party or by which its assets are
bound; nor will the consummation of the transactions contemplated hereby cause
Vairex to violate any statute, regulation, judgment, writ, injunction or
decree of any court, threatened or entered in a proceeding or action in which
the Corporation is, was or may be bound or to which any of the Corporation's
assets are subject.
9.12 CONDITION OF THE CORPORATION'S ASSETS. Except as set forth on
Exhibit 9.12, Vairex's assets are currently in good and usable condition and
there are no defects or other conditions which, in the aggregate, materially
and adversely affect the operation or values of such assets taken as a whole.
Except as disclosed on Exhibit 9.12, no person other than Vairex (including
any officer or employee of the Corporation) has any proprietary interest in
any know-how or other intangible assets used by the Corporation in the conduct
of its business.
9.13 INVENTORY. Except as otherwise set forth on Exhibit 9.13, all
inventories reflected in the Financial Statements in excess of the reserves
for excess or obsolete inventories are stated at the lowest of cost,
replacement cost or market and, as so stated, are in good condition and usable
or salable in the category in which they are inventoried, in the ordinary
course of business of the Corporation, without discounts other than normal
trade discounts regularly offered by the Corporation, for prompt payment or
quantity purchase.
9.14 ACCOUNTS RECEIVABLE. The accounts receivable of the Corporation
represent valid and enforceable obligations due to the Corporation and, except
to the extent of the reserve reflected in the latest financial statements,
shall be collectible by the Corporation in the ordinary course of business.
Except as set forth on the attached Exhibit 9.14, the Corporation has not
received any notice of any material counterclaim or set-off with respect to
such accounts receivable.
9.15 CORPORATE ACTS AND PROCEEDINGS. This Agreement has been duly
authorized by all necessary corporate action on behalf of Vairex, has been
duly executed and delivered by an authorized officer of Vairex, and is a valid
and binding Agreement on the part of Vairex that is enforceable against Vairex
in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, fraudulent transfers,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and to judicial limitations on the enforcement of the remedy
of specific performance and other equitable remedies.
9.16 REGISTERED RIGHTS AND PROPRIETARY INFORMATION.
(a) Exhibit 9.16 hereto contains a true and complete list of all
patents, letters patent and patent applications, service marks, trademark and
service xxxx registrations and applications, copyright, copyright
registrations and applications, grants of licenses and rights to the
Corporation with respect to the foregoing, both domestic and foreign, claimed
by the Corporation or used or proposed to be used by the Corporation in the
conduct of its business (collectively herein, "Vairex Registered Rights").
Exhibit 9.16 hereto also contains a true and complete list of all and every
trade secret, know-how, process, formula, discovery, development, research,
design, technique, customer and supplier list, contracts, product development
plans, product development concepts, author contracts, marketing and
purchasing strategy, invention, and any other matter required for, incident
to, or related to the conduct of its business (hereafter collectively the
"Vairex Proprietary Information"). Except as described in Exhibit 9.16
hereto, the Corporation is not obligated or under any liability whatever to
make any payments by way of royalties, fees or otherwise to any owner or
licensor of, or other claimant to, any Vairex Registered Right or Vairex
Proprietary Information with respect to the use thereof in the conduct of its
business or otherwise.
(b) Except as described in Exhibit 9.16 hereto, to the
Corporation's Best Knowledge, the Corporation owns and has the unrestricted
right to use the Vairex Registered Rights and Vairex Proprietary Information
required for or incident to the design, development, manufacture, operation,
sale and use of all products and services sold or rendered or proposed to be
sold or rendered by the Corporation or relating to the conduct or proposed
conduct of its business free and clear of any right, title, interest, equity
or claim of others. As soon as practicable following the execution of this
Agreement, and except as described in Exhibit 5.16 hereto, the Corporation
agrees to take all necessary steps (including without limitation entering into
appropriate confidentiality, assignment of rights and non-competition
agreements with all officers, directors, employees and consultants of the
Corporation and others with access to or knowledge of the Vairex Proprietary
Information) to safeguard and maintain the secrecy and confidentiality of, and
its proprietary rights in, the Vairex Proprietary Information and all related
documentation and intellectual property rights therein necessary for the
conduct or proposed conduct of its business.
(c) Except as described in Exhibit 9.16 hereto, the Corporation has
not sold, transferred, assigned, licensed or subjected to any right, lien,
encumbrance or claim of others, any Vairex Proprietary Information, including
without limitation any Vairex Registered Right, or any interest therein,
related to or required for the design, development, manufacture, operation,
sale or use of any product or service currently under development or
manufactured, or proposed to be developed, sold or manufactured, by it.
Exhibit 9.16 contains a true and complete list and description of all licenses
of Vairex Proprietary Information granted to the Corporation by others or to
others by the Corporation. Except as described in Exhibit 9.16 hereto, there
are no claims or demands of any person pertaining to, or any proceedings that
are pending or threatened, which challenge the rights of the Corporation in
respect of any Vairex Proprietary Information used in the conduct of its
business.
(d) Except as described in Exhibit 9.16 hereto, the Corporation
owns and on the Closing Date shall own, has and shall have, holds and shall
hold, exclusively all right, title and interest in the Vairex Registered
Rights, free and clear of all liens, encumbrances, restrictions, claims and
equities of any kind whatsoever, has and shall have the exclusive right to
use, sell, license or dispose of, and has and shall have the exclusive right
to bring action for the infringement of the Vairex Registered Rights and the
Vairex Proprietary Information. To the Best Knowledge of Corporation, the
marketing, promotion, distribution or sale by the Corporation of any products
or interests subject to the Vairex Registered Rights or making use of Vairex
Proprietary Information shall not constitute an infringement of any patent,
copyright, trademark, service xxxx or misappropriation or violation of any
other party's proprietary rights or a violation of any license or agreement by
the Corporation. Except as described in Exhibit 9.16 hereto, to the knowledge
of the Corporation after due inquiry no facts or circumstances exist that
could result in the invalidation of any of the Vairex Registered Rights.
9.17 CHANGES IN SUPPLIERS AND CUSTOMERS. Except as disclosed on Exhibit
9.17, the Corporation is not aware of any fact which indicates that any of the
suppliers supplying products, components or materials to the Corporation
intends to cease selling such products to the Corporation nor is the
Corporation aware of any fact which indicates that any major customer of the
Corporation intends to terminate its business relations with the Corporation.
9.18 NO LIENS OR ENCUMBRANCES. The Corporation has good and marketable
title to all of the property and assets, tangible and intangible, employed in
the operations of its business, free of any material mortgages, security
interests, pledges, easements or encumbrances of any kind whatsoever except as
set forth on the attached Exhibit 9.18 and except for such property and assets
as may be leased by Vairex.
9.19 EMPLOYEE MATTERS. Exhibit 9.19 attached hereto contains a true,
complete and accurate list of all employees of the Corporation and the
remuneration of each (including wages, salaries and fringe benefits). The
Corporation has no information or facts indicating that any employee listed on
Exhibit 9.19 intends to terminate his/her employment relationship with the
Corporation prior or subsequent to the Closing Date, except as may be required
by this Agreement. Except as specifically described on Exhibit 9.19, the
Corporation has no employee benefit plans (including, but not limited to,
pension plans and health or welfare plans), arrangements or understandings,
whether formal or informal. The Corporation does not now and has never
contributed to a "multi-employer plan" as defined in Section 400(a)(3) of the
ERISA. The Corporation has complied with all applicable provisions of ERISA
and all rules and regulations promulgated thereunder, and neither the
Corporation nor any trustee, administrator, fiduciary, agent or employee
thereof has at any time been involved in a transaction that would constitute a
"prohibited transaction" within the meaning of Section 406 of ERISA as to any
covered plan of the Corporation. The Corporation is not a party to any
collective bargaining or other union agreement. The Corporation has not,
within the past five (5) years had, or been threatened with, any union
activities, work stoppages or other labor trouble with respect to its
employees which had a material adverse effect on the Corporation, its business
or assets. Except as set forth in Exhibit 9.19, the Corporation has not made
any commitment or agreements to increase the wages or modify the conditions or
terms of employment of any of the employees of the Corporation used in
connection with its business, and between the date of this Agreement and the
Closing Date, the Corporation will not make any agreement to increase the
wages or modify the conditions or terms of employment of any of the employees
of the Corporation used in the conduct of its business, without the prior
written consent of all parties hereto.
9.20 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. Except as set forth in
Exhibit 9.20, Vairex has not received notice of any legal, administrative,
arbitration or other proceeding or governmental investigation pending or
threatened (including those relating to the health, safety, employment of
labor, or protection of the environment) pertaining to Vairex which might
result in the aggregate in money damages payable by Vairex in excess of
insurance coverage or which might result in a permanent injunction against
Vairex. Except as set forth in such Exhibit 9.20, Vairex has substantially
complied with, and is not in default in any respect under any laws,
ordinances, requirements, regulations, or orders applicable to the business of
Vairex, the violation of which might materially and adversely affect it.
Except as set forth in such Exhibit 9.20, Vairex is not a party to any
agreement or instrument, nor is it subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree, rule,
regulation, code or ordinance which materially and adversely affects, or might
reasonably be expected materially and adversely to affect the business,
operations, prospects, property, assets or condition, financial or otherwise,
of Vairex.
9.21 CONTRACT SCHEDULES. Attached as Exhibit 9.21 hereto is an accurate
list of the following:
(a) All contracts, leases, agreements, covenants, licenses,
instruments or commitments of Vairex pertaining to the business of Vairex
calling for the payment of Five Thousand Dollars ($5,000) or more or which is
otherwise material to the business of Vairex, including, without limitation,
the following:
(i) Licenses and contracts held in the ordinary course of
business;
(ii) Executory contracts for the purchase, sale or lease of any
assets;
(iii) Management or consulting contracts;
(iv) Patent, trademark and copyright applications,
registrations or licenses, and know-how, intellectual property and trade
secret agreements or other licenses;
(v) Note agreements, loan agreements, indentures and the like,
other than those entered into and executed in the ordinary course of business;
(vi) All sales, agency, distributorship or franchise
agreements; and
(vii) Any other contracts not in the ordinary course of
business.
(b) All labor contracts, employment agreements and collective
bargaining agreements to which Vairex is a party.
(c) All instruments evidencing any liens or security interest
securing any indebtedness of Vairex covering any asset of Vairex.
(d) All profit sharing, pension, stock option, severance pay,
retirement, bonus, deferred compensation, group life and health insurance or
other employee benefit plans, agreements, arrangements or commitments of any
nature whatsoever, whether or not legally binding, and all agreements with any
present or former officer, director or shareholder of the Corporation.
(e) Any and all documents, instruments and other writings not
listed in any other schedule hereto which are material to the business
operations of Vairex.
Except as set forth in Exhibit 9.21, all of such contracts,
agreements, leases, licenses, plans, arrangements and commitments and all
other such items set forth above are valid, binding and in full force and
effect in accordance with their terms and conditions, except as the
enforceability thereof may be limited by bankruptcy, insolvency, moratorium,
fraudulent transfer, reorganization or other similar laws affecting the
enforcement of contracts generally, and there is no existing material default
thereunder or breach thereof by the Corporation, or to Vairex's knowledge by
any party to such contracts, or any conditions which, with the passage of time
or the giving of notice or both, might constitute such a default by the
Corporation or by any other party to the contracts.
9.22 LABOR MATTERS. There are no strikes, slowdowns, stoppages,
organizational efforts, discrimination charges or other labor disputes pending
or, to the knowledge of Vairex or any of its agent or employees, threatened
against Vairex.
9.23 INSURANCE. Vairex maintains in full force and effect insurance
coverage on its assets and business in such amounts and against such risks and
losses as set forth in Exhibit 9.23.
9.24 ENVIRONMENTAL. Except as disclosed on Exhibit 9.24, Vairex has
never owned or operated any real property except for leased office space:
(a) To the Best Knowledge of Vairex, no real property (or the
subsurface soil and the ground water thereunder) now or previously leased by
Vairex (the "Leased Premises") either contains any Hazardous Substance (as
hereinafter defined) or has underneath it any underground fuel or liquid
storage tanks;
(b) To the Best Knowledge of Vairex, there has been no generation,
transportation, storage, treatment or disposal of any Hazardous Substance on
or beneath the Leased Premises, now or in the past;
(c) Vairex is not aware of any pending or threatened litigation or
proceedings before any court or administrative agency in which any person
alleges, or threatens to allege, the presence, release, threat of release,
placement on or in the Leased Premises, or the generation, transportation,
storage, treatment or disposal at the Leased Premises, of any Hazardous
Substance;
(d) Vairex has not received any written notice and has no knowledge
that any Governmental Authority or any employee or agent thereof has
determined or alleged, or is investigating the possibility, that there is or
has been any presence, release, threat of release, placement on or in the
Leased Premises, or any generation, transportation, storage, treatment or
disposal at the Leased Premises, of any Hazardous Substance;
(e) To the Best Knowledge of Vairex, there have been no
communications or agreements with any Governmental Authority or agency
(federal, state, or local) or any private person or entity (including, without
limitation, any prior owner of the Leased Premises and any present or former
occupant or tenant of the Leased Premises) relating in any way to the
presence, release, threat of release, placement on or in the Leased Premises,
or any generation, transportation, storage, treatment or disposal at the
Leased Premises, of any Hazardous Substance. Vairex further agrees and
covenants that Vairex will not store or deposit on, otherwise release or bring
onto or beneath, the Leased Premises any Hazardous Substance prior to the
Closing Date; and
(f) There is no litigation, proceeding, citizen's suit or
governmental or other investigation pending, or, to Vairex's Best Knowledge,
threatened, against Vairex, and Vairex knows of no facts or circumstances
which might give rise to any future litigation, proceeding, citizen's suit or
governmental or other investigation, which relate to Vairex's compliance with
environmental laws, regulations, rules, guidelines and ordinances.
For purposes of this Section 9.24, "Hazardous Substance" shall mean
and include (i) a hazardous substance as defined in 42 U.S.C. Section
9601(14), the Regulations at 40 C.F.R. Part 302, (2) any substance regulated
under the Emergency Planning and Community Right to Know Act (including
without limitation any extremely hazardous substances listed at 40 C.F.R. Part
355 and any toxic chemical listed at 40 C.F.R. Part 372), (iii) hazardous
wastes and hazardous substances as specified under any California state or
local Governmental Requirement governing water pollution, groundwater
protection, air pollution, solid wastes, hazardous wastes, spills and other
releases of toxic or hazardous substances, transportation of hazardous
substances, materials and wastes and occupational or employee health and
safety, and (iv) any other material, gas or substance known or suspected to be
toxic or hazardous (including, without limitation, any radioactive substance,
methane gas, volatile hydrocarbon, industrial solvent, and asbestos) or which
could cause a material detriment to, or materially impair the beneficial use
of, the Leased Premises, or constitute a material health, safety or
environmental risk to any person exposed thereto or in contact therewith. For
purposes of this Section 9.24, "Hazardous Substance" shall not mean and shall
not include the following, to the extent used normally and required for
everyday uses or normal housekeeping or maintenance: (a) fuel oil and natural
gas for heating, (b) lubricating, cleaning, coolant and other compounds
customarily used in building maintenance, (c) materials routinely used in the
day-to-day operations of an office, such as copier toner, (d) consumer
products, (e) material reasonably necessary and customarily used in
construction and repair of an office project, and (f) fertilizers, pesticides
and herbicides commonly used for routine office landscaping.
9.25 DISCLOSURE OF INFORMATION. The Corporation represents and warrants
that all statements, data and other written information provided by it to any
party hereto as well as their respective consultants and representatives have
been accurate copies or true originals. The Corporation represents and
warrants that, to its Best Knowledge, (i) there exists no material information
concerning the Corporation which has been requested but not been disclosed to
or made available to the other parties and their representatives or
consultants and which would be material to a decision to consummate the
transactions provided for in this Agreement and (i) in the aggregate, such
information does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements made in
them, in light of the circumstances under which they are made, not misleading.
9.26 REPRESENTATION AND WARRANTIES. The representations and warranties
contained in this Agreement shall be true on and as of the Closing Date with
the same force and effect as though such representations and warranties had
been made on and as of the Closing Date. Such representations and warranties
shall survive the Closing Date and shall remain operative in full force and
effect for the period of time set forth in Section 17.8(a) hereof regardless
of any investigation at any time made by or on behalf of Guardian and shall
not be deemed merged in any document or instruction so executed and/or
delivered by Vairex.
SECTION 10: COVENANTS OF VAIREX
10.1 PRESERVATION OF BUSINESS. Until Closing, Vairex shall use its best
efforts to:
(a) Preserve intact the present business organization of Vairex;
(b) Maintain its property and assets in its present state of
repair, order and condition, reasonable wear and tear excepted;
(c) Preserve and protect the goodwill and advantageous
relationships of Vairex with its customers and all other persons having
business dealings with Vairex;
(d) Preserve and maintain in force all licenses, permits,
registrations, franchises, patents, trademarks, tradenames, trade secrets,
service marks, copyrights, bonds and other similar rights of Vairex; and
(e) Comply with all laws applicable to the conduct of its business
10.2 ORDINARY COURSE. Until Closing, Vairex shall conduct its business
only in the usual, regular and ordinary course, in substantially the same
manner as previously, and shall not make any substantial change to its methods
of management or operation in respect of such business or property. Without
limiting the foregoing, Vairex shall not, with respect to Vairex:
(a) Sell, mortgage, pledge or encumber or agree to sell, mortgage,
pledge or encumber, any of its property or assets, other than in the ordinary
course of business;
(b) Incur any obligation (contingent or otherwise) or purchase,
acquire, transfer, or convey, any material assets or property or enter into
any contract or commitment, except in the ordinary course of business.
10.3 NEGATIVE COVENANTS. Until Closing, except as contemplated by this
Agreement or disclosed in exhibits to this Agreement, from the date hereof
until the Closing Date, unless and until Guardian otherwise consents in
writing, Vairex will not (a) change or alter the physical contents or
character of the tangible and intangible assets so as to materially affect the
nature of Vairex's business; (b) incur any obligations or liabilities
(absolute or contingent) other than current liabilities incurred and
obligations under contracts entered into in the ordinary course of business;
(c) mortgage, pledge or voluntarily subject to lien, charge or other
encumbrance any assets, tangible or intangible, other than the lien of current
property taxes not due and payable; (d) sell, assign or transfer any of its
assets or cancel any debts or claims, other than in the ordinary course of
business; (e) waive any right of any substantial value; (f) declare or make
any payment or distribution to Shareholders or issue, purchase or redeem any
shares of its capital stock or other equity securities or issue or sell any
rights to acquire the same; (g) grant any increase in the salary or other
compensation of any of its directors, officers, or employees or make any
increase in any benefits to which such employees might be entitled; (h)
institute any bonus, benefit, profit sharing, stock option, pension,
retirement plan or similar arrangement, or make any changes in any such plans
or arrangements presently existing; or (i) enter into any material
transactions or series of transactions other than in the ordinary course of
business.
10.4 ADDITIONAL COVENANTS.
(a) Vairex will promptly pay and discharge, or cause to be paid and
discharged, when due and payable, all lawful taxes, assessments, and
governmental charges or levies imposed upon the income, profits, property or
business of Vairex or any subsidiary; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if Vairex
shall have set aside on its books adequate reserves therefor; and provided,
further, that Vairex will pay all such taxes, assessments, charges or levies
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor. Vairex will promptly pay or cause to be
paid when due, or in conformance with customary trade terms, all other
indebtedness incident to the operations of Vairex;
(b) Vairex will keep its properties and those of its subsidiaries
in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto; and Vairex will at all times
comply with the provisions of all material leases to which any of them is a
party or under which any of them occupies property so as to prevent any loss
or forfeiture thereof or thereunder;
(c) Vairex will keep its assets that are of an insurable character
insured by financially sound and reputable insurers against loss or damage by
fire, extended coverage and explosion insurance in amounts customary for
companies in similar businesses similarly situated; and Vairex will maintain,
with financially sound and reputable insurers, insurance against other
hazards, risks and liabilities to persons and property to the extent and in
the manner customary for companies in similar businesses similarly situated;
(d) Vairex will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with its past practices
consistently applied;
(e) Vairex will comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, a breach of
which could have a material adverse effect on its business or credit;
(f) Vairex shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
patents, processes, licenses, trademarks, trade names or copyrights owned or
possessed by it or any subsidiary and deemed by Vairex to be necessary to the
conduct of its business;
(g) Vairex will, consistent with its practices in the ordinary
course of business, endeavor to retain its business relationships with its
customers and suppliers that it believes to be advantageous; and
(h) Vairex shall deliver to guardian copies of its statements of
operation and financial condition and similar statements as and when prepared
(if at all) in the ordinary course of its business.
10.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. From the date of this
Agreement through the Closing Date, Vairex will grant Guardian and its
authorized representatives reasonable access to its books and records,
premises, products, employees and customers and other parties with whom it has
contractual relations during reasonable business hours and in a manner not to
disrupt or interfere with Vairex's business relationships for purposes of
enabling Guardian to fully investigate the business of Vairex. Vairex will
also deliver copies of its monthly statements of operations and financial
condition for the period subsequent to its financial statements referred to in
Section 5.5 to Guardian within a reasonable time of such statements becoming
available.
10.6 COMPENSATION. Except as contemplated by this Agreement, Vairex
shall not enter into or agree to enter into any employment contract or
agreement for consulting, professional, or other services which will adversely
and materially affect the operation of Vairex prior to the Closing Date,
except for any extensions of said contracts or agreements on substantially the
same terms and conditions as were previously in effect.
10.7 NO SOLICITATION.
(a) Except in connection with the transactions contemplated by this
Agreement, Vairex shall not, nor shall it permit any of its subsidiaries to,
nor shall it authorize or permit any officer, director or employee of or any
investment banker, attorney or other advisor or representative of, Vairex or
any of its subsidiaries to, (i) solicit, initiate or encourage the submission
of, any takeover proposal, (i) enter into any agreement with respect to any
takeover proposal or (iii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take
any other action to facilitate any inquiries or the making of any proposal
that constitutes, or may reasonably be expected to lead to, any takeover
proposal. Without limiting the foregoing, it is understood that any violation
of the restrictions set forth in the preceding sentence by any executive
officer of Vairex or any of its subsidiaries or any investment banker,
attorney or other advisor or representatives of Vairex or any of its
subsidiaries or otherwise, shall be deemed to be a breach of this Section by
Vairex. For purposes of this Agreement, "takeover proposal" means any
proposal for a merger, consolidation or reorganization or other business
combination involving Vairex or any of its subsidiaries or any proposal or
offer to acquire in any manner, directly or indirectly, an equity interest in,
any voting securities of, or options, rights, warrants or other interests
convertible or exercisable for or into such voting securities, or a
substantial or material portion of the assets or business of Vairex or any of
its subsidiaries, other than the transactions contemplated by this Agreement.
(b) Except upon a material breach of this Agreement by Guardian or
following termination hereof, except for action permitted or contemplated by
this Agreement, including a party's right to terminate this Agreement under
certain circumstances, neither the Board of Directors of Vairex nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Guardian, the approval or recommendation by
such Board of Directors of any such committee of this Agreement or the
Exchange or (i) approve or recommend, or propose to approve or recommend, any
takeover proposal.
(c) Vairex promptly shall advise Guardian orally and in writing of
any takeover proposal or any inquiry with respect to or which could lead to
any takeover proposal and the identity of the person making any such takeover
proposal or inquiry. Vairex will keep Guardian fully informed of the status
and details of any such takeover proposal or inquiry.
(d) The provisions of this Section 10.7 shall not be construed to
prevent any investment banker, attorney or other advisor or representative of
Vairex to engage in discussions with third parties in the ordinary course of
business with respect to transactions not involving the parties to this
Agreement.
SECTION 11: REPRESENTATIONS AND WARRANTIES OF GUARDIAN
As a material inducement to Vairex to enter into this Agreement and with
the understanding and expectations that Vairex will be relying thereon in
consummating the Exchange contemplated hereunder, Guardian (hereinafter
Guardian shall be referred to as the "Corporation" unless the context
otherwise requires for the purposes of this Section 11 only) hereby represents
and warrants as follows:
11.1 ORGANIZATION AND STANDING. Guardian is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware, and has all requisite corporate power and authority to own its
assets and properties and to carry on its business as it is now being
conducted.
11.2 SUBSIDIARIES, ETC. Except as set forth on Exhibit 11.2 hereto, the
Corporation does not have any direct or indirect Ownership Interest in any
corporation, partnership, joint venture, association or other business
enterprise.
11.3 QUALIFICATION. Except as set forth on Exhibit 11.3 and for any
jurisdiction where the failure to be qualified to engage in business as a
foreign corporation would not have a material adverse effect on the
corporation, the Corporation is not qualified to engage in business as a
foreign corporation in any state other than Arizona, and there is no other
jurisdiction wherein the character of the properties presently owned by the
Corporation or the nature of the activities presently conducted by the
Corporation makes necessary the qualification, licensing or domestication of
the Corporation as a foreign corporation.
11.4 CORPORATE AUTHORITY. Except as set forth on Exhibit 11.4 hereto,
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby nor compliance by Guardian with any on
the provisions hereof will:
(a) Conflict with or result in a breach of any provision of its
Articles of Incorporation or By-Laws or similar documents of any Subsidiary;
(b) Result in a default (or give rise to any right of termination,
cancellation, or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which the Corporation is a party, or by which any
of its properties or assets may be bound except for such default (or right of
termination, cancellation, or acceleration) as to which requisite waivers or
consents shall either have been obtained by the Corporation prior to the
Closing Date or the obtaining of which shall have been waived by Vairex; or
(c) Violate any order, writ, injunction, decree or, to the
Corporation's Best Knowledge, any statute, rule or regulation applicable to
the Corporation or any of its properties or assets. No consent or approval by
any Governmental Authority is required in connection with the execution and
delivery by the Corporation of this Agreement or the consummation by the
Corporation of the transactions contemplated hereby, except for possible
notice under plant closing laws.
11.5 FINANCIAL STATEMENTS. Except as otherwise provided, the following
statements will be attached to this Agreement as Exhibit 11.5:
(a) Audited financial statements of the Corporation containing
balance sheets, together with statements of operation, statements of cash
flows, and statements of stockholders' equity as of and for the fiscal years
ended December 31, 2000, and December 31, 19910.
(b) Unaudited financial statements of the Corporation containing
balance sheets, together with statements of operation, statements of cash
flows, and statements of stockholders' equity as of and ford the three months
ended March 31, 2001.
Such financial statements, together with and subject to the
disclosures and notes thereto: (i) are in accordance with the books and
records of the Corporation; (i) present fairly and accurately the financial
condition of the Corporation as of the dates of the balance sheets; (iii)
present fairly and accurately the results of operations for the periods
covered by such statements; (iv) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis; and
(v) include all adjustments (consisting of only normal recurring accruals)
which are necessary for a fair presentation of the financial condition of the
Corporation, and of the results of operations of the Corporation for the
periods covered by such statements.
As of the date hereof and as of the Closing Date, the Corporation
does not have any liabilities or payables (absolute or contingent, known or
unknown), except for liabilities or payables set forth in the Financial
Statements or otherwise disclosed in writing to Vairex.
11.6 CAPITALIZATION OF THE CORPORATION. The authorized capital stock of
Guardian consists entirely of fifteen million (15,000,000) shares of Common
Stock having a par value of $.0005 per share, and one million (1,000,000)
shares of Preferred Stock having a par value of $.01 per share. As of the
Effective Time, there will be no more than 5,000,000 shares of Common Stock
issued and outstanding and no shares of Preferred Stock issued and
outstanding. All outstanding shares of Guardian's capital stock have been
validly issued, are fully paid and non-assessable, and are not subject to pre-
emptive rights. The shares of Common Stock to be issued on the Effective Time
of the Merger in accordance with Sections 2.1 hereof have been duly approved
by the Directors of Guardian and will, upon their issuance, have been validly
issued and will be fully paid and non-assessable. As of the Effective Time,
there will be no more than 5,998,712 shares of Common Stock reserved for
issuance for issuance pursuant to the exercise of issued and outstanding
options, warrants, contracts, calls, commitments, convertible securities or
other purchase rights. Except as described in Guardian's reports filed with
the Commission under Section 13(a) of the Exchange Act, there are no equity
securities of Guardian authorized, issued or outstanding, and there are no
authorized, issued or outstanding subscriptions, options, warrants, contracts,
calls, commitments or other purchase rights of any nature or character
relating to any of Guardian's capital stock, equity securities, debt or other
securities convertible into stock or equity securities of Guardian. As of the
date of this Agreement, there are no outstanding contractual obligations of
Guardian to repurchase, redeem or otherwise acquire any shares of capital
stock of Guardian.
11.7 NO ACTIONS, PROCEEDINGS, ETC. Except as listed on the attached
Exhibit 11.7, there is no action or proceeding (whether or not purportedly on
behalf of the Corporation) pending or to its knowledge threatened by or
against the Corporation, which might result in any material adverse change in
the condition, financial or otherwise, of the Corporation's business or
assets. No order, writ or injunction or decree has been issued by, or
requested of any court or Governmental Agency which does nor may result in any
material adverse change in the Corporation's assets or properties or in the
financial condition or the business of the Corporation. The Corporation is not
liable for damages to any employee or former employee as a result of any
violation of any state, federal or foreign laws directly or indirectly
relating to such employee or former employee.
11.8 POST BALANCE SHEET CHANGES. Except as set forth on Exhibit 11.8 and
as contemplated by this Agreement, since the date of the latest financial
statements, the Corporation has not (a) issued, bought, redeemed or entered
into any agreements, commitments or obligations to sell, buy or redeem any
shares of its capital stock; (b) incurred any obligation or liability
(absolute or contingent), other than current liabilities incurred, and
obligations under contracts entered into, in the ordinary course of business;
(c) discharged or satisfied any lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities incurred in
the ordinary course of business; (d) mortgaged, pledged or subjected to lien
charges, or other encumbrance any of its assets, other than the lien of
current or real property taxes not yet due and payable; (e) waived any rights
of substantial value, whether or not in the ordinary course of business; (f)
suffered any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting its assets or its business; (g) made or
suffered any amendment or termination of any material contract or any
agreement which adversely affects its business; (h) received notice or had
knowledge of any labor trouble other than routine grievance matters, none of
which is material; (i) increased the salaries or other compensation of any of
its directors, officers or employees or made any increase in other benefits to
which employees may be entitled, other than employee salary increases made in
the ordinary course of business and reflected on an exhibit hereto; (j) sold,
transferred or otherwise disposed of any of its assets, other than in the
ordinary course of business; (k) declared or made any distribution or payments
to any of its shareholders, officers or employees, other than wages and
salaries made to employees in the ordinary course of business; (l) revalued
any of its assets; or (m) entered into any transactions not in the ordinary
course of business.
11.9 NO BREACHES. Except as set forth on Exhibit 11.9 , the Corporation
is not in violation of, and the consummation of the transactions contemplated
hereby do not and will not result in any material breach of, any of the terms
or conditions of any mortgage, bond, indenture, agreement, contract, license
or other instrument or obligation to which the Corporation is a party or by
which its assets are bound; nor will the consummation of the transactions
contemplated hereby cause Guardian or any Subsidiary to violate any statute,
regulation, judgment, writ, injunction or decree of any court, threatened or
entered in a proceeding or action in which the Corporation is, was or may be
bound or to which any of the Corporation's assets are subject.
11.10 CORPORATE ACTS AND PROCEEDINGS. This Agreement has been duly
authorized by all necessary corporate action on behalf of Guardian, has been
duly executed and delivered by authorized officers of Guardian, and is a valid
and binding Agreement on the part of Guardian that is enforceable against
Guardian in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, insolvency, moratorium, fraudulent transfers,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and to judicial limitations on the enforcement of the remedy
of specific performance and other equitable remedies. All corporate action
necessary to issue and deliver to the Vairex Shareholders the Guardian Common
Stock, Options and Warrants has been taken by Guardian.
11.11 LEGAL PROCEEDINGS AND COMPLIANCE WITH LAW. Except as set forth in
Exhibit 11.11, the Corporation has not received notice of any legal,
administrative, arbitration or other proceeding or governmental investigation
pending or threatened (including those relating to the health, safety,
employment of labor, or protection of the environment) pertaining to the
Corporation which might result in the aggregate in money damages payable by
the Corporation in excess of insurance coverage or which might result in a
permanent injunction against the Corporation. Except as set forth in such
exhibit, the Corporation has substantially complied with, and is not in
default in any respect under any laws, ordinances, requirements, regulations,
or orders applicable to the business of the Corporation, the violation of
which might materially and adversely affect it. Except as set forth in such
exhibit, the Corporation is not a party to any agreement or instrument, nor is
it subject to any charter or other corporate restriction or any judgment,
order, writ, injunction, decree, rule, regulation, code or ordinance which
materially and adversely affects, or might reasonably be expected materially
and adversely to affect the businesses, operations, prospects, property,
assets or condition, financial or otherwise, of the Corporation.
11.12 REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement shall be true on and as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on and as of the Closing Date. Such representations
and warranties shall survive the Closing Date and shall remain operative in
full force and effect for the period of time set forth in Section 15.5(a)
hereof regardless of any investigation at any time made by or on behalf of
Vairex and shall not be deemed merged in any document or instruction so
executed and/or delivered by Guardian.
SECTION 12: COVENANTS OF GUARDIAN
12.1 PRESERVATION OF BUSINESS. Until Closing, Guardian shall use its
best efforts to :
(a) Preserve intact the present business organization of the
Corporation;
(b) Maintain its property and assets in its present state of
repair, order and condition, reasonable wear and tear excepted;
(c) Preserve and protect the goodwill and advantageous
relationships of the Corporation with its customers and all other persons
having business dealings with the Corporation;
(d) Preserve and maintain in force all licenses, permits,
registrations, franchises, patents, trademarks, tradenames, trade secrets,
service marks, copyrights, bonds and other similar rights of the Corporation;
and
(e) Comply with all laws applicable to the conduct of its business.
12.2 ORDINARY COURSE. Until Closing, Guardian shall not, without the
prior written consent of Vairex:
(a) Sell, mortgage, pledge or encumber or agree to sell, mortgage,
pledge or encumber, any of the property or assets of Guardian or the
Subsidiaries; and
(b) Incur any obligation (contingent or otherwise) or purchase,
acquire, transfer, or convey, any material assets or property or enter into
any contract or commitment.
12.3 NEGATIVE COVENANTS. Until Closing, except as contemplated by this
Agreement or as disclosed in Exhibits to this Agreement, from the date hereof
until the Closing Date, unless and until Vairex otherwise consents in writing,
Guardian and the Subsidiaries will not (a) change or alter the physical
contents or character of the inventories of its business, so as to materially
affect the nature of the Corporation's business or materially and adversely
change the total dollar valuation of such inventories from that reflected on
the financial statements referred to in Section 11.5 other than in the
ordinary course of business; (b) incur any obligations or liabilities
(absolute or contingent) other than current liabilities incurred and
obligations under contracts entered into in the ordinary course of business;
(c) mortgage, pledge or voluntarily subject to lien, charge or other
encumbrance any assets, tangible or intangible, other than the lien of current
property taxes not due and payable; (d) sell, assign or transfer any of its
assets or cancel any debts or claims, other than in the ordinary course of
business; (e) waive any right of any substantial value; (f) declare or make
any payment or distribution to Shareholders or issue, purchase or redeem any
shares of its capital stock or other equity securities or issue or sell any
rights to acquire the same; (g) grant any increase in the salary or other
compensation of any of its directors, officers, or employees or make any
increase in any benefits to which such employees might be entitled; (h)
institute any bonus, benefit, profit sharing, stock option, pension,
retirement plan or similar arrangement, or make any changes in any such plans
or arrangements presently existing; or (i) enter into any transactions or
series of transactions other than in the ordinary course of business.
12.4 ADDITIONAL COVENANTS.
(a) Guardian will promptly pay and discharge, or cause to be paid
and discharged, when due and payable, all lawful taxes, assessments, and
governmental charges or levies imposed upon the income, profits, property or
business of Guardian or any subsidiary; provided, however, that any such tax,
assessment, charge or levy need not be paid if the validity thereof shall
currently be contested in good faith by appropriate proceedings and if
Guardian shall have set aside on its books adequate reserves therefor; and
provided, further, that Guardian will pay all such taxes, assessments, charges
or levies forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor. Guardian will promptly pay or
cause to be paid when due, or in conformance with customary trade terms, all
other indebtedness incident to the operations of Guardian;
(b) Guardian will keep its properties and those of its subsidiaries
in good repair, working order and condition, reasonable wear and tear
excepted, and from time to time make all needful and proper repairs, renewals,
replacements, additions and improvements thereto; and Guardian will at all
times comply with the provisions of all material leases to which any of them
is a party or under which any of them occupies property so as to prevent any
loss or forfeiture thereof or thereunder;
(c) Guardian will keep its assets that are of an insurable
character insured by financially sound and reputable insurers against loss or
damage by fire, extended coverage and explosion insurance in amounts customary
for companies in similar businesses similarly situated; and Guardian will
maintain, with financially sound and reputable insurers, insurance against
other hazards, risks and liabilities to persons and property to the extent and
in the manner customary for companies in similar businesses similarly
situated;
(d) Guardian will keep true records and books of account in which
full, true and correct entries will be made of all dealings or transactions in
relation to its business and affairs in accordance with its past practices
consistently applied;
(e) Guardian will comply with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority, a breach of
which could have a material adverse effect on its business or credit;
(f) Guardian shall maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use
patents, processes, licenses, trademarks, trade names or copyrights owned or
possessed by it or any subsidiary and deemed by Guardian to be necessary to
the conduct of its business;
(g) Guardian will, consistent with its practices in the ordinary
course of business, endeavor to retain its business relationships with its
customers and suppliers that it believes to be advantageous; and
(h) Guardian shall deliver to Vairex copies of its statements of
operation and financial condition and similar statements as and when prepared
(if at all) in the ordinary course of its business.
12.5 ACCESS TO BOOKS AND RECORDS, PREMISES, ETC. From the date of this
Agreement through the Closing Date, Guardian will grant Vairex and its
authorized representatives reasonable access to its and the Subsidiaries'
books and records, premises, products, employees and customers and other
parties with whom it has contractual relations during reasonable business
hours for purposes of enabling Vairex to fully investigate the business of
Guardian and the Subsidiaries. Guardian will also deliver copies of the
monthly statements of operations and financial condition for the period
subsequent to the latest financial statements to Vairex within a reasonable
time of such statements becoming available.
12.6 DELIVERY OF ADDITIONAL FILINGS. Following the execution of this
Agreement and until the Closing Date, Guardian shall provide Vairex with
copies of any and all reports, filings, notices or other information which
Guardian may prepare and file with or receive from the Commission, Nasdaq or
any other regulatory authority, (and shall give Vairex an opportunity to
review and comment on any such filings) as well as copies of any pleadings,
notices or other filings made in connection with any pending litigation,
arbitration, investigation or proceeding in which Guardian or any Subsidiary
is party or otherwise involved.
SECTION 13: TERMINATION
13.1 TERMINATION. This Agreement may be terminated and abandoned solely
as follows:
(a) At any time until the Closing Date by the mutual agreement of
Guardian and Vairex.
(b) By any party hereto, if for any reason the parties have failed
to close this Agreement on or before June 30, 2001, provided that the party
requesting termination is not then in default thereunder.
(c) By any party hereof, if the other party shall have breached any
representation, warranty or covenant contained in this Agreement and shall
have failed to cure such breach within ten (10) days following written notice
thereof by the party seeking termination.
(d) By any party hereof, in the event any of the conditions
precedent, as set forth in this Agreement, to such terminating party's
obligations under this Agreement are not fulfilled on or prior to the
Effective Time; provided that any such termination shall not limit the
remedies otherwise available to such party as a result of misrepresentations
of or breaches by the other party.
In the event of any termination pursuant to this Section 13.1(b) or
(c), written notice setting forth the reasons therefor shall forthwith be
given by the terminating party to all of the other parties hereto.
13.2 EFFECT OF TERMINATION. If the Exchange is terminated and abandoned
as provided for in this Section 13, this Agreement shall forthwith become
wholly void and of no effect without liability to any party to this Agreement;
provided, however, that no such termination shall terminate or limit the
rights of any such terminating party to enforce any remedy otherwise available
for any breach hereof.
SECTION 14: INDEMNIFICATION AND REMEDIES FOR BREACH
14.1 INDEMNIFICATION BY GUARDIAN.
(a) Guardian shall defend, indemnify and hold Shareholders and
Vairex harmless against and in respect of any damage, loss, liability, cost or
expense, including expert witness fees and reasonable attorneys' fees, whether
or not recoverable under applicable state law, resulting or arising from or
incurred in connection with:
(i) Any misrepresentation, breach of warranty, or
nonfulfillment or nonperformance of any agreement on the part of Guardian
under this Agreement, or any misrepresentation or omission from any exhibit,
schedule, list, certificate or other instrument furnished or to be furnished
by it under this Agreement, or any noncompliance on the part of Guardian with
applicable law.
(ii) Any and all liabilities of Guardian of any nature
whatsoever, whether accrued, absolute, contingent or otherwise and whether
known or unknown, except to the extent that any such liability arises from
Vairex's failure to perform or discharge, when due, Vairex's future
obligations; and
(iii) Any actions, suits, proceedings, damages, assessments,
judgments, costs or expenses incident to any of the foregoing.
(b) Promptly after the receipt by Vairex of notice of any claim
asserted by a third party that may give rise to Guardian's liability to Vairex
under this Section, Vairex shall give to Guardian written notice of such
claim, and Guardian shall be entitled to participate at its own expense in the
defense of any such claim. Vairex shall not pay, acknowledge, compromise or
settle any such claim without the written consent of Guardian, unless such
payment, acknowledgment, compromise or settlement results in a full and
complete release and discharge of Guardian from any liability.
14.2 INDEMNIFICATION BY VAIREX.
(a) Vairex shall defend, indemnify and hold Guardian harmless
against and in respect of any damage, loss, liability, cost or expense,
including expert witness fees and reasonable attorneys' fees, whether or not
recoverable under applicable state law, resulting or arising from or incurred
in connection with:
(i) Any misrepresentation, breach of warranty, or
nonfulfillment or nonperformance of any agreement on the part of Vairex under
this Agreement, or any misrepresentation or omission from any exhibit,
schedule, list, certificate or other instrument furnished or to be furnished
by it under this Agreement.
(ii) Any and all liabilities of Vairex of any nature
whatsoever, whether accrued, absolute, contingent or otherwise and whether
known or unknown, except to the extent that any such liability arises from
Guardian's failure to perform or discharge, when due, Guardian's future
obligations;
(iii) Any actions, suits, proceedings, damages, assessments,
judgments, costs or expenses incident to any of the foregoing.
(b) Promptly after the receipt by Guardian of notice of any claim
asserted by a third party that may give rise to Vairex's liability to Guardian
under this Section, Guardian shall give to Vairex written notice of such claim
and Vairex shall be entitled to participate at its own expense in the defense
of any such claim. Guardian shall not pay, acknowledge, compromise or settle
any such claim without the written consent of Vairex, unless such payment,
acknowledgment, compromise or settlement results in a full and complete
release and discharge of Vairex from any liability.
14.3 ADDITIONAL NOTICE. Notwithstanding the provisions of Sections 14.1
or 14.2 above, promptly after the receipt by any party hereto of notice of any
claim asserted by a third party that may give rise to the liability of any
party for which the right to indemnification may be claimed under this
Section, such party shall give to each other party written notice of such
claim as soon as practicable. The provisions of this Section 14.3 in addition
to and not in lieu of the covenants of the parties contained in Sections 14.1
or 14.2 above.
14.4 DETERMINATION OF DAMAGES AND RELATED MATTERS.
(a) Upon the occurrence of any event which would give rise to a
claim by Guardian against, or to a right of defense and indemnity against
Vairex pursuant to this Section 14.4, or in the event that any suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which Vairex may become obligated to Guardian hereunder, Guardian shall give
notice to Vairex of the occurrence of such event and shall identify Guardian's
choice of counsel to represent such investigation, claim or proceedings,
provided that the failure of Guardian to give notice shall not affect the
indemnification obligations of Vairex hereunder. Guardian shall have the
exclusive right to so defend, contest or protect against such matter utilizing
the counsel of Guardian's choice (who shall be reasonably acceptable to a
representative of Vairex). Vairex shall have the right, but not the
obligation, to participate, at its own expense, in the defense thereof by
counsel of their choice.
(b) As Guardian incurs expenses for which indemnification hereunder
is provided and after any final judgment or award shall have been rendered by
a court, arbitration board or administrative agency of competent jurisdiction,
and the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, Guardian shall forward to Vairex notice of any
sums due and owing by them pursuant to this Agreement with respect to such
matter and they shall be required to pay all of the sums so due and owing to
Guardian within ten (10) days of such notice.
(c) Upon the occurrence of any event which would give rise to a
claim by Vairex against, or to a right of defense and indemnity against
Guardian pursuant to this Section 14.4, or in the event that any suit, action,
investigation, claim or proceeding is begun, made or instituted as a result of
which Guardian may become obligated to Vairex hereunder, Vairex shall give
notice to Guardian of the occurrence of such event and shall identify their
choice of counsel to represent such investigation, claim or proceedings,
provided that the failure of either or both of them to give notice shall not
affect the indemnification obligations of Guardian hereunder. Vairex shall
have the exclusive right to so defend, contest or protect against such matter
utilizing the counsel of their choice (who shall be reasonably acceptable to a
representative of Guardian). Guardian shall have the right, but not the
obligation, to participate, at its own expense, in the defense thereof by
counsel of its choice.
(d) As Vairex incurs expenses for which indemnification hereunder
is provided and after any final judgment or award shall have been rendered by
a court, arbitration board or administrative agency of competent jurisdiction,
and the expiration of the time in which to appeal therefrom, or a settlement
shall have been consummated, Vairex shall forward to Guardian notice of any
sums due and owing by it pursuant to this Agreement with respect to such
matter and shall be required to pay all of the sums so due and owing to Vairex
by certified or bank cashier's check within ten (10) days of such notice.
14.5 REMEDIES FOR BREACH. In the event of any breach of any of the
provisions of this Agreement, including but not limited to any breach of any
covenant, warranty or representation made by any party hereto, the breaching
or defaulting party shall be liable pursuant to the provisions hereof. In
the event of any material breach by any party of any provision under this
Agreement, either party may file suit. Nothing contained in this Agreement
shall be deemed to preclude a party to xxx for or seek specific performance of
the provisions of this Agreement in the appropriate circumstance.
SECTION 15: NONDISCLOSURE OF CONFIDENTIAL INFORMATION
15.1 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. Each of the parties
hereto recognizes and acknowledges that it has and will have access to certain
nonpublic information of the others which shall be deemed the confidential
information of the other Companies (including, but not limited to, business
plans, costs, trade secrets, licenses, research projects, profits, markets,
sales, customer lists, strategies, plans for future development, financial
information and any other information of a similar nature) that after the
consummation of the transactions contemplated hereby will be valuable, special
and unique property of the Companies. Information received by the other party
or its representatives shall not be deemed Confidential Information and
afforded the protections of this Section 15.1 if, on the Closing Date, such
information has been (i) developed by the receiving party independently of the
disclosing party, (i) rightfully obtained without restriction by the receiving
party from a third party, provided that the third party had full legal
authority to possess and disclose such information, (iii) publicly available
other than through the fault or negligence of the receiving party, (iv)
released without restriction by the disclosing party to anyone, including the
United States government, or (v) properly and lawfully known to the receiving
party at the time of its disclosure, as evidenced by written documentation
conclusively established to have been in the possession of the receiving party
on the date of such disclosure. Each of the parties hereto agrees that it
shall not disclose, and that it shall use its best efforts to prevent
disclosure by any other Person of, any such confidential information to any
Person for any purpose or reason whatsoever, except to authorized
representatives of the Companies who agree to be bound by this confidentiality
agreement. Notwithstanding, a party may use and disclose any such
confidential information to the extent that a party may become compelled by
Legal Requirements to disclose any such information; provided, however, that
such party shall use all reasonable efforts and shall have afforded the other
Companies the opportunity to obtain an appropriate protective order or other
satisfactory assurance of confidential treatment for any such information
compelled to be disclosed. In the event of termination of this Agreement,
each party shall use all reasonable efforts to cause to be delivered to the
other parties, and to retain no copies of, any documents, work papers and
other materials obtained by such party or on such party's behalf during the
conduct of the matters provided for in this Agreement, whether so obtained
before or after the execution hereof. Each of the Companies recognizes and
agrees that violation of any of the agreements contained in this Section 15.1
will cause irreparable damage or injury to the Companies, the exact amount of
which may be impossible to ascertain, and that, for such reason, among others,
the Companies shall be entitled to an injunction, without the necessity of
posting bond therefor, restraining any further violation of such agreements.
Such rights to any injunction shall be in addition to, and not in limitation
of, any other rights and remedies the Companies may have against each other.
The provisions of this Section 15.1 shall survive any termination of this
Agreement.
15.2 NO PUBLICITY. Until the Closing or the termination of this
Agreement in accordance with its terms, neither Guardian nor Vairex shall,
directly or indirectly, issue any press release, or make any public statement,
concerning the transactions contemplated by this Agreement without the prior
written consent of Guardian (in the case of such a release or statement by
Vairex) or of Vairex (in the case of such a release or statement by Guardian).
This Section 15.2 shall not, however, preclude any party from making any
disclosure required by applicable law, and in the event any party, or any
officer, director, employee, agent or representative of a party, believes that
any press release, public statement or other disclosure is so required, such
party will notify and consult with the other parties with respect thereto as
promptly as is practicable under the circumstances.
SECTION 16: EXPENSES
Each of the parties will pay all costs and expenses of its performance
and compliance with this Agreement. Notwithstanding the foregoing, if the
Agreement is not consummated by reason of a default of one of the Companies,
then the expenses of each of the Companies in connection with the transaction
contemplated herein shall be paid by such defaulting Company. In no event
will any party to this Agreement be liable to any other party for incidental
damages, lost profits, income tax consequences, lost savings or any other
consequential damages, even if such party has been advised of the possibility
of such damages, or for punitive damages, resulting from the breach of any
obligation under this Agreement. The provisions of this Section 16 shall
survive any termination hereof.
SECTION 17: MISCELLANEOUS
17.1 ATTORNEY'S FEES. In any action at law or in equity or in any
arbitration proceeding, for declaratory relief or to enforce any of the
provisions or rights or obligations under this Agreement, the unsuccessful
party to such proceeding, shall pay the successful party or parties all
statutorily recoverable costs, expenses and reasonable attorneys' fees
incurred by the successful party or parties including without limitation
costs, expenses, and fees on any appeals and the enforcement of any award,
judgment or settlement obtained, such costs, expenses and attorneys' fees
shall be included as part of the judgment. The successful party shall be that
party who obtained substantially the relief or remedy sought, whether by
judgment, compromise, settlement or otherwise.
17.2 SURVIVAL AND INCORPORATION OF REPRESENTATIONS. The representations,
warranties, covenants and agreements made herein or in any certificates or
documents executed in connection herewith shall survive the execution and
delivery thereof, and all statements contained in any certificate or other
document delivered by any party hereunder or in connection herewith shall be
deemed to constitute representations and warranties made by that party to this
Agreement.
17.3 INCORPORATION BY REFERENCE. All Exhibits to this Agreement and all
documents delivered pursuant to or referred to in this Agreement are herein
incorporated by reference and made a part hereof.
17.4 PARTIES IN INTEREST. Nothing in this Agreement, whether express or
implied, is intended to, or shall, confer any rights or remedies under, or by
reason of, this Agreement, on any person other than the parties hereto and
their respective and proper successors and assigns and indemnitees. Nothing
in this Agreement shall act to relieve or discharge the obligation or
liability of any third persons to any party to this Agreement.
17.5 AMENDMENTS AND WAIVERS. This Agreement may not be amended, nor may
compliance with any term, covenant, agreement, condition or provision set
forth herein be waived (either generally or in a particular instance and
either retroactively or prospectively) unless such amendment or waiver is
agreed to in writing by all parties hereto.
17.6 WAIVER. No waiver of any breach of any one of the agreements,
terms, conditions, or covenants of this Agreement by the parties shall be
deemed to imply or constitute a waiver of any other agreement, term,
condition, or covenant of this Agreement. The failure of any party to insist
on strict performance of any agreement, term, condition, or covenant, herein
set forth, shall not constitute or be construed as a waiver of the rights of
either or the other thereafter to enforce any other default of such agreement,
term, condition, or covenant; neither shall such failure to insist upon strict
performance be deemed sufficient grounds to enable either party hereto to
forego or subvert or otherwise disregard any other agreement, term, condition,
or covenants of this Agreement.
17.7 GOVERNING LAW - CONSTRUCTION. This Agreement, and the rights and
obligations of the respective parties, shall be governed by and construed in
accordance with the laws of the State of Delaware. Notwithstanding the
preceding sentence, it is acknowledged that each party hereto is being
represented by, or has waived the right to be represented by, independent
counsel. Accordingly, the parties expressly agree that no provision of this
Agreement shall be construed against any party on the ground that the party or
its counsel drafted the provision. Nor may any provision of this Agreement be
construed against any party on the grounds that party caused the provision to
be present.
17.8 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Sections 9 and 11 of this Agreement shall survive the Closing
Date and shall remain operative in full force and effect for the period of one
(1) year regardless of any investigation at any time made by or on behalf of
either Guardian or Vairex and shall not be deemed merged in any document or
instrument so executed or delivered by either Guardian or Vairex.
17.9 NOTICES. Any notice, communication, offer, acceptance, request,
consent, reply, or advice (herein severally and collectively, for convenience,
called "Notice"), in this Agreement provided or permitted to be given, served,
made, or accepted by any party or person to any other party or parties, person
or persons, hereunder must be in writing, addressed to the party to be
notified at the address set forth below, or such other address as to which one
party notifies the other in writing pursuant to the terms of this Section
14.10, and must be served by (i) telefax or other similar electronic method,
or (i) depositing the same in the United States mail, certified, return
receipt requested and postage paid to the party or parties, person or persons
to be notified or entitled to receive same, or (iii) delivering the same in
person to such party.
Notice shall be deemed to have been given immediately when sent by
telefax and confirmed received or other electronic method and seventy-two
hours after being deposited in the United States mail, or when personally
delivered in the manner herein above described. Notice provided in any manner
not specified above shall be effective only if and when received by the party
or parties, person or persons to be, or provided to be notified.
All notices, requests, demands and other communications required or
permitted under this Agreement shall be addressed as set forth below:
If Guardian, to: GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.
ATTN: J. Xxxxxx Xxxxxx, President
00 Xxxxxxx Xxxxxx, Xxxxx 00
Xxxxxxxx, Xxxxxxx 00000
Fax: (000) 000-0000
With copy to: Xxxxxxxx X. Xxxxxx, Esq.
Xxxxxx & Xxxxxxx, LLC
0000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
If Vairex, to: VAIREX CORPORATION
ATTN: Ski Xxxxxxx
3026 Valmont
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Any party receiving a facsimile transmission shall be entitled to rely
upon a facsimile transmission to the same extent as if it were an original.
Any party may alter the address to which communications or copies are to be
sent by giving notice of such change of address in conformity with the
provisions of this Section 17.9 for the giving of notice.
17.10 FAX/COUNTERPARTS. This Agreement may be executed by telex,
telecopy or other facsimile transmission, and such facsimile transmission
shall be valid and binding to the same extent as if it were an original.
Further, this Agreement may be signed in one or more counterparts, all of
which when taken together shall constitute the same documents. For all
evidentiary purposes, any one complete counter set of this Agreement shall be
considered an original.
17.11 CAPTIONS. The caption and heading of various sections and
paragraphs of this Agreement are for convenience only and are not to be
construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
17.12 SEVERABILITY. Wherever there is any conflict between any
provision of this Agreement and any Governmental Requirement or judicial
precedent, the latter shall prevail, but in such event the provisions of this
Agreement thus affected shall be curtailed and limited only to the extent
necessary to bring it within the requirement of the law. In the event that
any part, section, paragraph or clause of this Agreement shall be held by a
court of proper jurisdiction to be invalid or unenforceable, the entire
Agreement shall not fail on account thereof, but the balance of the Agreement
shall continue in full force and effect unless such construction would clearly
be contrary to the intention of the parties or would result in unconscionable
injustice.
17.13 GOOD FAITH COOPERATION AND ADDITIONAL DOCUMENTS. The parties
shall use their best good faith efforts to fulfill all of the conditions set
forth in this Agreement over which it has control or influence. Each party
covenants and agrees to cooperate in good faith and to enter into and deliver
such other documents and papers as the other party reasonably shall require in
order to consummate the transactions contemplated hereby, provided in each
instance, any such document is in form and substance approved by the parties
and their respective legal counsel.
17.14 SPECIFIC PERFORMANCE. The obligations of the parties under
Sections 2 and 3 are unique. If either party should default in its
obligations under said Section, the parties each acknowledge that it would be
extremely difficult and impracticable to measure the resulting damages;
accordingly, the non-defaulting party, in addition to any other available
rights and remedies, may xxx in equity for injunction (mandatory or
prohibitive) or specific performance (all without the need to post a bond or
undertaking of any nature), and the parties each expressly waive the defense
that a remedy at law in damages is adequate.
17.15 ASSIGNMENT. Neither party may directly or indirectly assign or
delegate, by operation of law or otherwise, all or any portion of
its/their/his rights, obligations or liabilities under this Agreement without
the prior written consent of all other parties, which consent may be withheld
in their respective sole and absolute discretion. Any purported assignment or
delegation without such consent shall be null and void.
For purposes of this Section, the term "Agreement" shall include this
Agreement and the Exhibits and other documents attached hereto or described in
this Section 17.15. This Agreement, and other documents delivered pursuant to
this Agreement, contain all of the terms and conditions agreed upon by the
parties relating to the subject matter of this Agreement and supersede all
prior and contemporaneous agreements, letters of intent, representations,
warranties, disclosures, negotiations, correspondence, undertakings and
communications of the parties, oral or written, respecting that subject
matter.
17.16 TIME. Time is of the essence of this Agreement and each of its
provisions.
IN WITNESS WHEREOF, the parties have signed the Agreement the date and
year first above written.
GUARDIAN: GUARDIAN TECHNOLOGIES INTERNATIONAL, INC.,
a Delaware corporation
By:
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VAIREX: VAIREX CORPORATION, a Colorado corporation,
By:
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