EXHIBIT 10.24
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (the "Agreement") is entered into this
29th day of October, 1999, by and between HELP Innovations, Inc., a Kansas
corporation, (hereinafter referred to as "Seller") HELP Innovations Acquisition
Corp, Inc., a Florida corporation, (hereinafter referred to as "Buyer"),
Cyber-Care Inc., a Florida corporation, (hereinafter referred to as "CYBR") and
Xxxxx X. Xxxxx and Innovative Health of Kansas, Inc. (hereinafter referred to as
"Principal Shareholders").
WITNESSETH:
WHEREAS, Seller is the owner and operator of a technology-assisted disease
management company operating under the trade name "HELP Innovations" (the
Business") with its principle business location at 0000 Xxxxxxxx Xxxxx, Xxxxx
0000, Xxxxxxxx, Xxxxxx 00000 (the "Business Location"); and
WHEREAS, Seller is desirous of selling certain assets of the Business and
Buyer is desirous of buying certain assets all on the following terms and
conditions.
In consideration of the mutual promises and covenants herein contained and
the sum of $10.00 and other good and valuable consideration paid by Buyer to
Seller, receipt of which is hereby acknowledged by Seller, it is mutually
covenanted and agreed by the parties hereto as follows:
1. PURCHASE AND SALE OF ASSETS
1.1. ASSETS TO BE TRANSFERRED. Subject to the terms and conditions of this
Agreement, on the Closing Date (as hereinafter defined), and except as otherwise
stated, Seller shall sell, transfer, convey, assign, and deliver to Buyer or
upon Buyer's request, to Corp, and Buyer shall purchase and accept, unless
otherwise excluded as provided herein, all of the business, rights, claims and
assets (of every kind, nature, character and description, whether real, personal
or mixed, tangible or intangible, accrued, contingent, intellectual or
otherwise, and wherever situated) of Seller, used, held for use or acquired or
developed for use in the Business, or developed in the course of conducting the
Business or by persons employed in the Business (collectively the "Purchased
Assets"). The Purchased Assets shall include, but not be limited to, all the
following assets or rights of the Seller, to the extent so used, held, acquired
or developed:
1.1.(a) LEASED REAL PROPERTY. The lease of real property with
respect to Business Location (the "Real Property Lease") described on
Schedule 1.1.(b).
1.1.(b) PERSONAL PROPERTY. All computers, equipment, automobiles,
trucks, vans, tools, supplies, furniture, fixtures and all other personal
property not included in inventory (other than personal property leased
pursuant to Personal Property Leases as hereinafter defined).
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1.1.(c) INVENTORY. All inventories including without limitation, all
rights interest and materials relating to intellectual property, software,
development, design, supplies, merchandise and equipment on the Closing
Date, together with related packaging and delivery materials (collectively
the "Inventory").
1.1.(d) PERSONAL PROPERTY LEASES. All leases of equipment and other
personal property leased by Seller for use in the Business (the "Personal
Property Leases") described in Schedule 1.1.(d).
1.1.(e) TRADE RIGHTS. Seller's interest in any and all Trade Rights
of the Company. As used herein, the term "Trade Rights" shall mean and
include: (i) all trademark rights, business identifiers, trade dress,
service marks, trade names and brand names, all registrations thereof and
applications therefor and all goodwill associated with the foregoing; (ii)
all copyrights, copyright registrations and copyright applications, and
all other rights associated with the foregoing and the underlying works of
authorship; (iii) all intellectual property, all patents and patent
applications, and all international proprietary rights associated
therewith; (iv) all contracts or agreements granting any right, title,
license or privilege under the intellectual property rights of any third
party; (v) all inventions, mask works and mask work registrations,
know-how, discoveries, improvements, designs, trade secrets, shop and
royalty rights, employee covenants and agreements respecting intellectual
property and non-competition and all other types of intellectual property;
and (vi) all claims for infringement or breach of any of the foregoing.
1.1.(f) CONTRACTS. All Seller's rights in, to and under all
contracts, agreements, license agreements, purchase orders, and commitment
sales orders (hereinafter "Contracts") of Seller. To the extent that any
Contract for which assignment to Buyer provided herein is not assignable
without the consent of another party, this Agreement shall not constitute
an assignment or an attempted assignment thereof if such assignment or
attempted assignment would constitute a breach thereof. Seller and Buyer
agree to use their reasonable best efforts (without any requirement on the
part of Buyer to pay any money or agree to any change in the terms of any
such Contract) to obtain the consent of such other party to the assignment
of any such Contract to Buyer in all cases in which such consent is or may
be required for such assignment. If any such consent shall not be
obtained, Seller agrees to cooperate with Buyer in any reasonable
arrangement designed to provide for Buyer the benefits intended to be
assigned to Buyer under the relevant Contract, including enforcement at
the cost and for the account of Buyer of any and all rights of Seller
against the other party thereto arising out of the breach or cancellation
thereof by such other party or otherwise. If and to the extent that such
arrangement cannot be made, Buyer, upon notice to Seller, shall have no
obligation with respect to any such Contract and any such Contract shall
not be deemed to be a Purchased Asset hereunder.
1.1.(g) COMPUTER SOFTWARE. All computer programs and other software,
documentation and related property and information of Seller.
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1.1.(h) LITERATURE. All reference materials, sales literature,
promotional literature, catalogs and similar materials.
1.1.(i) RECORDS AND FILES. All records, files, invoices, customer
lists, specifications, designs, drawings, accounting records, business
records, disease management protocols, operating data and other data.
1.1.(j) LICENSES; PERMITS. All licenses, permits and approvals
necessary to operate the Business.
1.1.(k) BUSINESS NAME. The name "HELP Innovations" and all rights to
use or allow others to use such name.
1.1.(l) GENERAL INTANGIBLES. All prepaid items, all causes of action
arising out of occurrences before or after the Effective Date, and other
intangible rights and assets including, without limitation, telephone
numbers, directory listings, and prepaid advertisements.
1.1.(m) INTELLECTUAL PROPERTY. All intellectual property, trade
secrets, patents, patents in process, ideas developed or otherwise,
applications, protocols developed or otherwise which Seller may own or lay
claim.
1.2. EXCLUDED ASSETS. Section 1.1 notwithstanding, Seller shall not sell,
transfer, assign, convey or deliver to Buyer, and Buyer will not purchase or
accept the following assets of Seller:
1.2.(a) CONSIDERATION. The consideration delivered by Buyer to
Seller pursuant to this Agreement.
1.2.(b) OBLIGATIONS OF AFFILIATES. Notes, drafts, accounts
receivable or other obligations for the payment of money, owed to Seller
by any Affiliate of Seller. For purposes of this Agreement, the term
"Affiliate" shall mean and include all shareholders, directors and
officers of Seller; the spouse of any such person; any person who would be
the heir or descendant of any such person if he or she were not living;
and any entity in which any of the foregoing has a direct or indirect
interest.
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2. ASSUMPTION OF LIABILITIES
2.1. LIABILITIES NOT TO BE ASSUMED. Buyer is not assuming any Liabilities
of Seller and all such Liabilities shall be and remain the responsibility of
Seller, except for those listed on Schedule 1.1.(e).
2.2. TAXES ARISING FROM TRANSACTION. Buyer shall not assume or be
responsible for any taxes applicable to, imposed upon or arising out of the sale
or transfer of the Purchased Assets to Buyer and the other transactions
contemplated by this Agreement, including but not limited to any income,
transfer, sales, use, gross receipts or documentary stamp taxes.
2.3. INCOME AND FRANCHISE TAXES. Buyer shall not assume or be responsible
for any Liability of Seller for Federal income taxes and any state or local
income, profit or franchise taxes (and any penalties or interest due on account
thereof).
2.4. PRODUCT AND SERVICE LIABILITY. Buyer shall not assume or be
responsible for any Liability of Seller arising out of or in any way relating to
or resulting from any product manufactured, developed, assembled or sold or any
service performed prior to the Effective Date (including any Liability of Seller
for claims made for injury to person, damage to property or other damage,
whether made in product liability, tort, breach of warranty or otherwise).
2.5. LITIGATION MATTERS. Buyer shall not assume or be responsible for any
Liability of Seller with respect to any action, suit, proceeding, arbitration,
investigation or inquiry, whether civil, criminal or administrative
("Litigation") and Seller shall indemnify Buyer for any such costs incurred.
2.6. INFRINGEMENTS. Buyer shall not assume or be responsible for any
Liability of Seller with respect to a third party for infringement of such third
party's Trade Rights.
2.7. TRANSACTION EXPENSES. Buyer shall not assume or be responsible for
any Liabilities incurred by Seller in connection with this Agreement and the
transactions contemplated herein.
2.8. LIABILITY FOR BREACH. Buyer shall not assume or be responsible for
any Liabilities of Seller for any breach or failure to perform any of Seller's
covenants and agreements contained in, or made pursuant to, this Agreement, or,
prior to the Closing, any other contract, whether or not assumed hereunder,
including breach arising from assignment of contracts hereunder without consent
of third parties.
2.9. LIABILITIES TO AFFILIATES. Except as specifically set forth herein,
Buyer shall not assume or be responsible for any Liabilities of Seller to its
present or former Affiliates.
2.10. VIOLATION OF LAWS OR ORDERS. Buyer shall not assume or be
responsible for any Liabilities of Seller for any violation of or failure to
comply with any statute, law, ordinance, rule or regulation (collectively,
"Laws") or any order, writ, injunction, judgment, plan or decree
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(collectively, "Orders") of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, foreign or other (collectively, "Government
Entities").
3. PURCHASE PRICE - PAYMENT
3.1. PURCHASE PRICE. The purchase price (the "Purchase Price") for the
Purchased Assets shall be 1,334,000 shares of Buyer's restricted voting common
stock ("Acquisition Shares"); at Closing or as soon thereafter as reasonably
possible, Buyer shall deliver to Seller the Acquisition Shares.
3.2. NO REGISTRATION. The Shareholders acknowledge and agree that:
3.2.(a) Except as otherwise provided herein, the Acquisition Shares
are being granted and issued without registration under applicable federal
and state securities laws in reliance upon certain exemptions from
registration under such securities laws;
3.2.(b) Each certificate representing the Acquisition Shares will
bear a legend restricting its transfer, sale, conveyance or hypothecation,
unless such Acquisition Shares are either registered under applicable
securities laws or as exemption from such registration is applicable;
3.2.(c) The Shareholders shall not transfer all of any of the
Acquisition Shares except in compliance with all applicable securities
laws including Rule 144 of the Securities Act of 1933. Rule 144 presently
allows a sale, within limitations, of the Acquisition Shares after one (1)
year from the date the Acquisition Shares are unconditionally earned
pursuant to this Agreement;
3.2.(d) The Shareholders are acquiring the Acquisition Shares for
their own account, for investment purposes only and not with a view to the
sale or distribution thereof.
3.3. REGISTRATION; CREDITOR SHARES. Twenty-five percent of the Acquisition
Shares are designated solely for use in negotiating the full and complete
satisfaction of all outstanding liabilities of Seller (hereinafter "Creditor
Shares"). Buyer shall use his reasonable best efforts to effect a registration
of Creditor Shares on Form S-3 or other appropriate form (the Registration
Statement) prior to December 31, 1999.
Notwithstanding the foregoing, the Principal Shareholders shall, in any
event, have piggyback registration rights with respect to those Acquisition
Shares they receive for which a registration is not effected by Seller or resale
is not otherwise available pursuant to Rule 144(k) of the Securities Act.
Notwithstanding, if Seller's underwriter or Seller, in good faith, determines
that market factors or underwriting conditions prohibit or otherwise require a
limitation of the number of shares to be underwritten, the underwriter or Seller
may exclude the Acquisition Shares in the
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same proportion, as nearly as practicable, as the other selling shareholders of
Seller participating in such registration (proportional to the number of shares
requested to be registered by each) or the underwriter or Seller may limit the
number of Acquisition Shares to be included in the registration and underwriting
to a specified percentage of the total offering to be distributed through the
underwriting in the same proportion, as nearly as practicable, to other selling
shareholders of Seller participating in such registration (proportional to the
number of shares requested to be registered by each).
The Creditor Shares shall be held in escrow from the Closing Date until
the registration of such Creditor Shares becomes effective pursuant to that
certain Stock Pledge and Escrow Agreement executed same even date herewith. Upon
registration the escrow agent shall release 10% of the Creditor Shares each
month to Xxxxxx Xxxxxx Financial on account of the Seller to be held for sale
and used for payment to the satisfaction of the Creditors.
3.4. LICENSE OF ASSET. From the Closing Date until the Creditor Shares are
registered pursuant to Section 3.3 Seller does hereby grant an exclusive license
of all assets of any kind to be acquired hereunder to Buyer for Buyer's sole and
exclusive use, unfettered by any claim. In the event any claim resulting from
activity prior to closing date is asserted Seller will defend, indemnify and
hold harmless Buyer for any cost incurred therein. Furthermore should Buyer
elect to satisfy any claim or cost incurred resulting from a prior claim, Buyer
shall be entitled to be reimbursed therefor on a first priority basis from the
proceeds of the sale of Creditor Shares contemplated by Section 3.3.
3.5. OTHER PAYMENTS AND ADJUSTMENTS. The amount of wages and other
remuneration due in respect of periods prior to the Effective Date to employees
of the Business and the amount of bonuses due to such employees for all such
periods will be paid by Seller directly to such employees.
3.6. ALLOCATION OF PURCHASE PRICE. The aggregate Purchase Price (including
the assumption by Buyer of the Assumed Liabilities) shall be allocated among the
Purchased Assets for tax purposes in accordance with Schedule 3.5. Seller and
Buyer will follow and use such allocation in all tax returns, filings or other
related reports made by them to any governmental agencies. To the extent that
disclosures of this allocation are required to be made by the parties to the
Internal Revenue Service ("IRS") under the provisions of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code") or any regulations
thereunder, Buyer and Seller will disclose such reports to the other prior to
filing with the IRS.
3.7 CREDITORS LOAN. From the Closing Date until the Creditor Shares are
registered pursuant to Section 3.3 Buyer does hereby agree to advance funds as
may be necessary to maintain the Seller's plan to satisfy Creditors and
otherwise operate. These advances shall not exceed $20,000 per month provided,
the registration shall have occurred on or before December 31, 1999. These
advances shall in no way operate as a guarantee by the Buyer of any claim
against the Seller. These advances shall be repaid from the proceeds of the sale
of Creditor Shares as available and contemplated by Section 3.3 after the
Seller's monthly payment to satisfy Seller's Creditor Plan as set forth on
Schedule 3.7.
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4. REPRESENTATIONS AND WARRANTIES OF SELLER AND PRINCIPAL SHAREHOLDERS
Seller and its Principal Shareholders, hereby make the following
representations and warranties to Buyer, each of which is true and correct on
the date this Agreement is executed and shall remain true and correct to and
including the Effective Date, shall be unaffected by any investigation
heretofore or hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the disclosure schedules delivered to Buyer at the
time of the execution of this Agreement, and shall survive the Closing of the
transactions provided for herein. For the purposes of this Agreement, "Principal
Shareholder" shall be Xxxxx X. Xxxxx and Innovative Health of Kansas, Inc.
4.1. CORPORATE.
4.1.(a) ORGANIZATION. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Kansas.
4.1.(b) CORPORATE POWER. Seller has all requisite corporate power
and authority to own, operate and lease its properties, to carry on its
business as and where such is now being conducted, to enter into this
Agreement and the other documents and instruments to be executed and
delivered by Seller pursuant hereto and to carry out the transactions
contemplated hereby and thereby.
4.2. AUTHORITY. The execution and delivery of this Agreement and the other
documents and instruments to be executed and delivered by Seller pursuant hereto
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by the shareholders and the Board of Directors of Seller.
No other or further corporate act or proceeding on the part of Seller or its
shareholders is necessary to authorize this Agreement or the other documents and
instruments to be executed and delivered by Seller pursuant hereto or the
consummation of the transactions contemplated hereby and thereby. This Agreement
constitutes, and when executed and delivered, the other documents and
instruments to be executed and delivered by Seller pursuant hereto will
constitute, valid binding agreements of Seller, enforceable in accordance with
their respective terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and by
general equitable principles.
4.3. NO VIOLATION. Neither the execution and delivery of this Agreement or
the other documents and instruments to be executed and delivered by Seller
pursuant hereto, nor the consummation by Seller of the transactions contemplated
hereby and thereby (a) will violate any applicable Law or Order, (b) will
require any authorization, consent, approval, exemption or other action by or
notice to any Government Entity or (c) will violate or conflict with, or
constitute a default (or an event which, with notice or lapse of time, or both,
would constitute a default) under, or will result in the termination of, or
accelerate the performance required by, or result in the creation of any Lien
(as defined in Section 4.9.), upon any of the assets of Seller under, any term
or provision
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of the Articles of Incorporation or By-laws of Seller or of any contract,
commitment, understanding, arrangement, agreement or restriction of any kind or
character to which Seller is a party or by which Seller or any of its assets or
properties may be bound or affected.
4.4. TAX MATTERS. Except as set forth on Schedule 4.4: (i) all state,
foreign, county, local and other tax returns relating primarily to the Business
or the Purchased Assets, or required to be filed by or on behalf of Seller in
any jurisdiction or any political subdivision thereof, have been timely filed
and the taxes paid or adequately accrued; (ii) Seller has duly withheld and paid
all taxes which it is required to withhold and pay relating to salaries and
other compensation heretofore paid to the employees of the Business; and (iii)
Seller has not received any notice of underpayment of taxes or other deficiency
which has not been paid and there are outstanding agreements or waivers
extending the statutory period of limitations applicable to any tax return or
report relating primarily to the Business or the Purchased Assets, or required
to have been filed by Seller in any jurisdiction or political subdivision
thereof.
4.5. NO LITIGATION. Except as set forth in Schedule 4.6 there is no
Litigation pending or threatened against Seller, or its employees, agents,
officers or directors (in such capacity) that in any way involves the Business,
the Purchased Assets or the Assumed Liabilities, nor does Seller know, or have
grounds to know, of any basis for any Litigation. Except as set forth in
Schedule 4.6, neither Seller, the Purchased Assets nor the Assumed Liabilities
is subject to any order of any Government Entity.
4.6. COMPLIANCE WITH LAWS AND ORDERS.
4.6.(a) COMPLIANCE. Except as set forth in Schedule 4.8(a), the
Business (including each and all of its operations, practices, properties
and assets) is in compliance with all applicable laws and orders,
including, without limitation, those applicable to discrimination in
employment, Medicare, insurance xxxxxxxx, providing of medical services,
sales of medication and durable medical equipment, occupational safety and
health, trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and labor
relations, and product advertising. Except as set forth in Schedule
4.7(a), Seller has not received notice of any violation or alleged
violation of, and is subject to no Liability for past or continuing
violation of, any laws or orders with respect to the operations of the
Business. All reports and returns required to be filed by Seller with any
Government Entity have been filed, and were accurate and complete when
filed. Without limiting the generality of the foregoing:
(i) The operation of the Business as it is now conducted does
not, nor does any condition existing at the Business Location, in
any manner constitute a nuisance or other tortuous interference with
the rights of any person or persons in such a manner as to give rise
to or constitute the grounds for a suit, action, claim or demand by
any such person or persons seeking compensation or damages or
seeking to restrain, enjoin or otherwise prohibit any aspect of the
conduct of the Business or the manner in which it is now conducted.
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(ii) Seller has made all required payments to its unemployment
compensation reserve accounts with the appropriate governmental
departments where it is required to maintain such accounts with
respect to the operations of the Business, and each of such accounts
has a positive balance.
4.6.(b) LICENSES AND PERMITS. Seller has all licenses, permits,
approvals, authorizations and consents of all Government Entities and
insurance and all certificates, licenses and permits required for the
conduct of the Business. Except as set forth in Schedule 4.6.(b), the
Business (including its operations, properties and assets) is and has been
in compliance with all such permits and licenses, approvals,
authorizations and consents.
4.7. TITLE TO AND CONDITION OF PROPERTIES.
4.7.(a) MARKETABLE TITLE. Seller upon registration of Creditor
Shares, shall have good and marketable title to all the Purchased Assets,
free and clear of all mortgages, liens (statutory or otherwise), security
interests, claims, pledges, licenses, equities, options, conditional sales
contracts, assessments, levies, covenants, reservations, restrictions,
exceptions, limitations, charges or encumbrances of any nature whatsoever
(collectively, "Liens") except those described in Schedule 4.7.(a). None
of the Purchased Assets are subject to any restrictions with respect to
the transferability thereof. Seller has complete and unrestricted power
and right to sell, assign, convey and deliver the Purchased Assets to
Buyer as contemplated hereby. Upon registration of Creditor Shares, Buyer
will receive good and marketable title to all the Purchased Assets, free
and clear of all Liens of any nature whatsoever except those described in
the appropriate Schedule.
4.7.(b) CONDITION. All tangible assets constituting Purchased Assets
hereunder are in good operating condition and repair, free from any
defects (except such minor defects as do not interfere with the use
thereof in the conduct of the normal operations of Seller), have been
maintained consistent with the standards generally followed in the
industry and are sufficient to carry on the business of Seller as
conducted during the preceding 3 months. All buildings and other
structures owned or otherwise utilized by Seller in operating the Business
are in good condition and repair and have no structural defects or defects
affecting the plumbing, electrical, sewerage, or heating, ventilating or
air conditioning systems.
4.7.(c) NO CONDEMNATION OR EXPROPRIATION. Neither the whole nor any
portion of the Purchased Assets is subject to any order to be sold or is
being condemned, expropriated or otherwise taken by any Government Entity
with or without payment of compensation therefor, nor to the best of
Seller's knowledge has any such condemnation, expropriation or taking been
proposed.
4.8. INSURANCE Set forth in Schedule 4.8 is a complete and accurate list
and description of all policies of fire, liability, product liability, workers
compensation, health and other forms of insurance presently in effect with
respect to the Business and the Purchased Assets, true and correct
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copies of which have heretofore been delivered to Buyer. Schedule 4.8 includes,
without limitation, the carrier, the description of coverage, the limits of
coverage, retention or deductible amounts, amount of annual premiums, date of
expiration and the date through which premiums have been paid with respect to
each such policy, and any pending claims in excess of $5,000.00. All such
policies are valid, outstanding and enforceable policies and provide insurance
coverage for the Business and the Purchased Assets, of the kinds, in the amounts
and against the risks customarily maintained by organizations similarly
situated; and no such policy (nor any previous policy) provides for or is
subject to any currently enforceable retroactive rate or premium adjustment,
loss sharing arrangement or other actual or contingent liability arising wholly
or partially out of events arising prior to the date hereof. Schedule 4.8
indicates each policy as to which (a) the coverage limit has been reached or (b)
the total incurred losses from the beginning of the most recent fiscal year to
date equal 25% or more of the coverage limit. No notice of cancellation or
termination has been received with respect to any such policy, and neither
Seller or the Principal Shareholders have any information or knowledge of any
act or omission of Seller which could result in cancellation of any such policy
prior to its scheduled expiration date. Seller has not been refused any
insurance with respect to any aspect of the operations of the Business nor has
its coverage been limited by any insurance carrier to which it has applied for
insurance or with which it has carried insurance during the last three years.
Seller has duly and timely made all claims it has been entitled to make under
each policy of insurance. There is no claim by Seller pending under any such
policies as to which coverage has been questioned, denied or disputed by the
underwriters of such policies, and neither Seller or the Principal Shareholders
know of any basis for denial of any claim under any such policy. Seller has not
received any written notice from or on behalf of any insurance carrier issuing
any such policy that insurance rates therefor will hereafter be substantially
increased (except to the extent that insurance rates may be increased for all
similarly situated risks) or that there will hereafter be a cancellation or an
increase in a deductible (or an increase in premiums in order to maintain an
existing deductible) or non-renewal of any such policy. Such policies are
sufficient in all material respects for compliance by Seller with all
requirements of law and with the requirements of all material contracts to which
Seller is a party.
4.9. CONTRACTS AND COMMITMENTS.
4.9.(a) REAL PROPERTY LEASES. Except as set forth in Schedule
1.1.(a) Seller has no leases of real property used or held for use in
connection with the Business or the Purchased Assets.
4.9.(b) PERSONAL PROPERTY LEASES. Except as set forth in Schedule
1.1.(d) Seller has no leases of personal property used or held for use in
connection with the Business or the Purchased Assets.
4.9.(c) PURCHASE COMMITMENTS. Seller has no purchase commitments for
inventory items or supplies in connection with the Business.
4.9.(d) SALES COMMITMENTS. Except as set forth in Schedule 4.10(d)
Seller has no sales contracts or commitments to customers or distributors
in connection with or affecting
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the Business or the Purchased Assets. Seller has no sales contracts or
commitments in connection with or affecting the Business or the Purchased
Assets except those made in the ordinary course of business, at arm's
length, and no such contracts or commitments are for a sales price which
would result in a loss to the Business.
4.9.(e) CONTRACTS WITH AFFILIATES AND CERTAIN OTHERS. Seller has no
agreement, understanding, contract or commitment (written or oral) in
connection with or affecting the Business or the Purchased Assets with any
Affiliate or any other officer, employee, agent, consultant, distributor,
dealer or franchisee.
4.9.(f) POWERS OF ATTORNEY. The Seller has not given a power of
attorney, which is currently in effect, to any person, firm or corporation
for any purpose whatsoever in connection with or affecting the Business or
the Purchased Assets.
4.9.(g) LOAN AGREEMENTS. Except as set forth in Schedule 4.9(g)
Seller is not obligated under any loan agreement, promissory note, letter
of credit, or other evidence of indebtedness as a signatory, guarantor or
otherwise, which obligation constitutes or gives rise or could by its
terms, through the giving of notice or any other events short of judgment
by a court, give rise to a lien against any Purchased Asset.
4.9.(h) GUARANTEES. Except as set forth in Schedule 4.9(h) Seller
has not guaranteed the payment or performance of any person, firm or
corporation, agreed to indemnify any person or act as a surety, or
otherwise agreed to be contingently or secondarily liable for the
obligations of any person, in connection with the Business or in any other
way which affects the Business or the Purchased Assets.
4.9.(i) GOVERNMENT CONTRACTS. Except as shown in Schedule 4.9(i)
Seller is not a party to any contract with any governmental body.
4.9.(j) BURDENSOME OR RESTRICTIVE AGREEMENTS. Seller is not a party
to nor is it bound by any agreement, deed, lease or other instrument in
connection with or affecting the Business or the Purchased Assets which is
so burdensome as to materially affect or impair the operation of the
Business. Without limiting the generality of the foregoing, Seller is not
a party to nor is it bound by any such agreement requiring Seller to
assign any interest in any trade secret or proprietary information
constituting Purchased Assets hereunder, or prohibiting or restricting
Seller in its operation of the Business from competing in any business or
geographical area or soliciting customers or otherwise restricting it from
carrying on the Business anywhere in the world.
4.9.(k) NO DEFAULT. Except as shown in Schedule 4.9(j)Seller is not
in default under any lease, license, contract or commitment in its
operation of the Business, nor has any event or omission occurred which
through the passage of time or the giving of notice, or both, would
constitute a default thereunder or cause the acceleration of any of
Seller's obligations or result in the creation of any Lien on any
Purchased Asset. No third party is in default
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under any such lease, contract or commitment to which Seller is a party,
nor has any event or omission occurred which, through the passage of time
or the giving of notice, or both, would constitute a default thereunder,
or give rise to an automatic termination, or the right of discretionary
termination thereof.
4.10. TRADE RIGHTS. Schedule 4.10. lists all Trade Rights of the type
described in Section 1.1.(d) which are or were used, held for use, or acquired
or developed for use in the Business, or developed in the course of conducting
the Business or by persons employed in the Business, specifying whether such
Trade Rights are owned, controlled, used or held (under license or otherwise) by
Seller, and also indicating which of such Trade Rights are registered. Seller is
not infringing and has not infringed any Trade Rights of another in the
operation of the Business, nor is any other person infringing the Trade Rights
of Seller. Seller has not granted any license or made any assignment of any
Trade Right listed on Schedule 4.10, and no other person has any right to use
any such Trade Right. Seller does not pay any royalties or other consideration
for the right to use any Trade Rights of others. There is no Litigation pending
or threatened to challenge Seller's right, title and interest with respect to
its continued use and right to preclude others from using any Trade Rights of
Seller. All Trade Rights of Seller are valid, enforceable and in good standing,
and there are no equitable defenses to enforcement based on any act or omission
of Seller.
4.11. PRODUCT WARRANTY AND PRODUCT LIABILITY. There are no warranties,
commitments or obligations with respect to the return, repair or replacement of
Products. There are no defects in design, construction or manufacture of
Products which would adversely affect performance or create an unusual risk of
injury to persons or property. None of the Products has been the subject of any
replacement, field fix, retrofit, modification or recall campaign and, to
Seller's knowledge, no facts or conditions exist which could reasonably be
expected to result in such a recall campaign. As used in this Section 4.11, the
term "Products" means any and all medication and other products currently or at
any time previously manufactured, compounded, mixed, formulated, distributed or
sold by Seller, or by any predecessor of Seller under any brand name or xxxx
under which products are or have been manufactured, distributed or sold by
Seller, in or through the Business.
4.12. ASSETS NECESSARY TO BUSINESS. The Purchased Assets include all
property and assets (except for the Excluded Assets), tangible and intangible,
and all leases, licenses and other agreements, which are necessary to permit
Buyer to carry on, as currently used or held for use in, the Business as
presently conducted.
4.13. NO BROKERS OR FINDERS. Neither Seller nor any of its directors,
officers, employees, shareholders or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.
4.14. FINANCIAL STATEMENTS. Included as Schedule 4.14 are true and
complete copies of the financial statements of the Seller consisting of (i)
balance sheets of the Seller as of December 31, 1998, and 1997, and the related
statements of operations for the years then ended (including the notes contained
therein or annexed thereto), which financial statements are not audited, and
(ii) an unaudited balance sheet of the Seller as of August 31, 1999 (the "RECENT
BALANCE SHEET"), and the
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related unaudited statements of operations for the twelve (12) months then ended
(the "RECENT STATEMENT OF OPERATIONS") and for the corresponding period of the
prior year (including the notes and schedules contained therein or annexed
thereto). All of such financial statements (including the notes and schedules
contained therein or annexed thereto) are true, complete and accurate, have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, have been prepared in accordance with the books and records
of the Seller and fairly present, in accordance with generally accepted
accounting principles, the assets with adequate provision made for doubtful
accounts, liabilities and financial position, the results of operations of the
Seller as of the dates and for the years and periods indicated.
4.15. CONDUCT SINCE DATE OF RECENT BALANCE SHEET. Except as set forth in
this Agreement and as disclosed in Schedule 4.15 hereto, none of the following
has occurred since the date of the Recent Balance Sheet:
4.15.(a) NO ADVERSE CHANGE. Any material adverse change in the
financial condition, Purchased Assets, Assumed Liabilities, Business,
prospects or operations of the Seller;
4.15.(b) NO DAMAGE. Any material loss, damage or destruction,
whether covered by insurance or not, affecting the Seller's Business or
the Purchased Assets;
4.15.(c) NO INCREASE IN COMPENSATION. Any increase in the
compensation, salaries or wages payable or to become payable to any
employee or agent of the Seller (including, without limitation, any
increase or change pursuant to any bonus, pension, profit sharing,
retirement or other plan or commitment), or any bonus or other employee
benefit granted, made or accrued, that exceeds in the aggregate a seven
percent (7%) increase in the total compensation or benefits payable to any
single employee or agent of the Seller;
4.15.(d) NO LABOR DISPUTES. There are no labor dispute or
disturbance, other than routine individual grievances which are not
material to the Business or the Purchased Assets;
4.15.(e) NO COMMITMENTS. Any commitment or transaction by the Seller
(including, without limitation, any borrowing or capital expenditure)
other than in the ordinary course of business consistent with past
practice;
4.15.(f) NO DISPOSITION OF PROPERTY. Any sale, lease or other
transfer or disposition of any properties or assets of the Seller, except
in the ordinary course of business;
4.15.(g) NO LIENS. Except as set forth in Schedule 4.8(a) any
mortgage, pledge, lien or encumbrance made on any of the Purchased Assets;
4.15.(h) NO AMENDMENT OF CONTRACTS. Any entering into, amendment or
termination by the Seller of any Assumed Liability, or any waiver of
material rights thereunder, other than in the ordinary course of business;
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4.15.(i) CREDIT. Any grant of credit to any customer or distributor
on terms or in amounts more favorable than those which have been extended
to such customer or distributor in the past, any other change in the terms
of any credit heretofore extended, or any other change of the Seller's
policies or practices with respect to the granting of credit; or
4.15.(j) NO UNUSUAL EVENTS. Any other event or condition not in the
ordinary course of business of the Seller.
4.16. SUBSIDIARIES. Seller has no subsidiaries or interests in any other
entity nor does the Seller own or control, directly or indirectly, any capital
stock of any corporation or interest in any partnership, trust or unincorporated
association, or any interest or investment in any other corporation, association
or other business entity.
4.17. ACCOUNTS RECEIVABLE. All accounts receivable of the Seller reflected
on the Recent Balance Sheet, and as incurred in the normal course of business
since the date thereof, represent arm's length sales actually made in the
ordinary course of business; are collectible (net of the reserve shown on the
Recent Balance Sheet for doubtful accounts) in the ordinary course of business
without the necessity of commencing legal proceedings; are subject to no
counterclaim or setoff; and are not in dispute. Schedule 4.17 contains an aged
schedule of accounts receivable included in the Recent Balance Sheet.
4.18. ENVIRONMENTAL MATTERS. The applicable Laws relating to pollution or
protection of the environment, including Laws relating to emissions, discharges,
generation, storage, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes ("WASTE") into the environment (including,
without limitation, ambient air, surface water, ground water, land surface or
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Waste
including, without limitation, the Clean Water Act, the Clean Air Act, the
Resource Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act ("CERCLA"), as
amended, and their state and local counterparts are herein collectively referred
to as the "ENVIRONMENTAL LAWS". Without limiting the generality of the foregoing
provisions of this Section, Seller is in full compliance with all limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or contained in any
regulations, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder. Except as set forth
in Schedule 4.18, there is no Litigation nor any demand, claim, hearing or
notice of violation pending or threatened against the Seller relating in any way
to the Environmental Laws or any Order issued, entered, promulgated or approved
thereunder. Except as set forth in Schedule 4.18, there are no past or present
or future events, conditions, circumstances, activities, practices, incidents,
actions, omissions or plans which may interfere with or prevent compliance or
continued compliance with the Environmental Laws or with any Order issued,
entered, promulgated or approved thereunder, or which may give rise to any
liability, including, without limitation, liability under CERCLA or similar
state or local Laws, or otherwise form the basis of any Litigation, hearing,
notice of violation, study or investigation, based
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on or related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Waste.
4.19. PERSONNEL. Schedule 4.19 attached hereto contains accurate and
complete information as to names and rates of compensation (whether in the form
of salaries, bonuses, commissions or other supplemental compensation now or
hereafter payable) of all personnel of the Seller, together with information as
to any contracts with any such personnel. Seller has no pension, profit-sharing,
bonus, incentive, insurance or other employee benefit plans (including without
limitation any such plans within the meaning of Section 3 (3) of the Employee
Retirement Income Security Act of 1974, as amended) in which any employees of
the Seller participate, except as set forth on the Schedule 4.19.
4.20. DISCLOSURE. No representation or warranty by Seller or the Principal
Shareholders in this Agreement, nor any statement, certificate, schedule or
exhibit hereto furnished or to be furnished by or on behalf of Seller or the
Principal Shareholders pursuant to this Agreement or in connection with
transactions contemplated hereby, contains or shall contain any untrue statement
of material fact or omits or shall omit a material fact necessary to make the
statements contained therein not misleading. All statements and information
contained in any certificate, instrument, disclosure schedules or document
delivered by or on behalf of Seller or the Principal Shareholders shall be
deemed representations and warranties by Seller and the Principal Shareholders.
5. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and warranties to the
Seller and the Principal Shareholders, each of which Buyer represents to be true
and correct on the date hereof, shall remain true and correct to and including
the Effective Date, shall be unaffected by any investigation heretofore or
hereafter made by the Shareholders, or any knowledge of the Shareholders other
than as specifically disclosed in the disclosure schedules delivered to the
Seller.
5.1. SHARES. All of the Acquisition Shares will be validly issued to the
Seller, fully paid and non-assessable. Buyer will deliver, good and marketable
title to the Acquisition Shares, which shares shall be fully paid and
non-assessable and except as otherwise provided in this Agreement shall be free
and clear of all Liens.
5.2. ORGANIZATION. Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida and is not required
to be qualified or licensed as a foreign corporation in any other jurisdiction.
Buyer has the full power and authority to own all its assets and to conduct its
business as and where its business is presently conducted. Accurate, current and
complete copies of the Article of Incorporation and Bylaws of the Company are
attached hereto as Schedule 5.2.
5.3. AUTHORITY AND APPROVAL OF AGREEMENT.
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5.3.(a) The execution and delivery of this Agreement by Buyer and
the performance of all Buyer's obligations hereunder have been duly
authorized and approved by all requisite corporate action on the part of
Buyer pursuant to applicable law. Buyer has the power and authority to
execute and deliver this Agreement and to perform all its obligations
hereunder.
5.3.(b) This Agreement and each of the other documents, instruments
and agreements executed by Buyer in connection herewith constitute the
valid and legally binding agreements of Buyer, enforceable against Buyer
in accordance with their terms, except that:
(i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies of
creditors; and
(ii) the availability of equitable remedies as may be limited
by equitable principles.
5.4. NO VIOLATIONS Neither the execution, delivery nor performance of this
Agreement or any other documents, instruments or agreements executed by the
Buyer in connection herewith, nor the consummation of the transactions
contemplated hereby: (a) constitutes a violation of or default under (either
immediately, upon notice or upon lapse of time) the Articles of Incorporation or
Bylaws of Buyer, any provision of any contract to which Buyer or its assets may
be bound, any judgment to which Buyer is bound or any law applicable to Buyer;
or (b) result in the creation or imposition of any encumbrance upon, or give any
third person any interest in or right to, any or all of the Initial Shares or
any other capital stock of Buyer or any of the assets of Buyer; or (c) result in
the loss or adverse modification of, or the imposition of any fine or penalty
with respect to, any license, permit or franchise granted or issued to, or
otherwise held by or for the use of, Buyer.
5.5. CONSENTS. The execution, delivery and performance by Buyer of this
Agreement and the consummation by Buyer of the transactions contemplated hereby
do not require any consent that has not been received prior to the date hereof.
5.6. BROKERS. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which the Shareholder or the Company could
become liable or obligated.
5.7. FULL DISCLOSURE. To the best knowledge of Buyer, no representation or
warranty by Buyer in this Agreement, nor any statement, certificate, schedule,
document or exhibit hereto furnished or to be furnished by or on behalf of Buyer
pursuant to this Agreement or in connection with transactions contemplated
hereby, contains or shall contain any untrue statement of material fact or omits
or shall omit a material fact necessary to make the statements contained therein
not materially misleading.
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6. REPRESENTATIONS AND WARRANTIES OF CYBR
CYBR hereby makes the following representations and warranties to Seller
and the Principal Shareholders, each of which CYBR represents to be true and
correct on the date hereof, shall remain true and correct to and including the
Effective Date, shall be unaffected by any investigation heretofore or hereafter
made by the Shareholders, or any knowledge of the Shareholders other than as
specifically disclosed in the disclosure schedules delivered to Seller.
6.1. SHARES. All of the Acquisition Shares will be validly issued to
Seller, fully paid and non-assessable. CYBR will deliver, good and marketable
title to the Acquisition Shares, which shares shall be fully paid and
non-assessable and except as otherwise provided in this Agreement shall be free
and clear of all Liens.
6.2. ORGANIZATION. CYBR is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida and is not required
to be qualified or licensed as a foreign corporation in any other jurisdiction.
CYBR has the full power and authority to own all its assets and to conduct its
business as and where its business is presently conducted. Accurate, current and
complete copies of the Article of Incorporation and Bylaws of the Company are
attached hereto as Schedule 5.2.
6.3. AUTHORITY AND APPROVAL OF AGREEMENT.
6.3.(a) The execution and delivery of this Agreement by CYBR and the
performance of all CYBR's obligations hereunder have been duly authorized
and approved by all requisite corporate action on the part of CYBR
pursuant to applicable law. CYBR has the power and authority to execute
and deliver this Agreement and to perform all its obligations hereunder.
6.3.(b) This Agreement and each of the other documents, instruments
and agreements executed by CYBR in connection herewith constitute the
valid and legally binding agreements of CYBR, enforceable against CYBR in
accordance with their terms, except that:
(i) enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application affecting the enforcement of the rights and remedies of
creditors; and
(ii) the availability of equitable remedies as may be limited
by equitable principles.
6.4. NO ENCUMBRANCES ON SECURITIES. Except as set forth in this Agreement,
the Acquisition Shares being transferred by CYBR to Seller are free and clear of
any liens, claims, encumbrances or restrictions of any kind, and none of those
shares is subject to options, rights, warrants, or other agreements or
commitments other than set forth in this Agreement.
7. OTHER MATTERS
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7.1. NONCOMPETITION; CONFIDENTIALITY. Subject to the Closing, and as an
inducement to Buyer to execute this Agreement and complete the transactions
contemplated hereby, and in order to preserve the goodwill associated with the
Business, Seller and the Principal Shareholders, Xxxxx X. Xxxxx, and subject to
an Employment Agreement of even date, hereby covenant and agree as follows:
7.1.(a) COVENANT NOT TO COMPETE. For a period of three (3) years
from the Effective Date, they will not, directly or indirectly:
(i) engage in, continue in or carry on any business which
competes with the Business or is substantially similar thereto,
including owning or controlling any financial interest in any
corporation, partnership, firm or other form of business
organization which is so engaged;
(ii) consult with, advise or assist in any way, whether or not
for consideration, any corporation, partnership, firm or other
business organization which is now or becomes a competitor of Buyer
in any aspect with respect to the Business or Purchased Assets which
Buyer is acquiring hereunder, including, but not limited to,
advertising or otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving as an
intermediary for any such competitor; loaning money or rendering any
other form of financial assistance to or engaging in any form of
business transaction on other than an arms' length basis with any
such competitor;
(iii) offer new employment to an employee of the Business,
without the prior written consent of Buyer; or
(iv) engage in any practice the purpose of which is to evade
the provisions of this covenant not to compete or to commit any act
which adversely affects the Business, Purchased Assets or Assumed
Liabilities; provided, however, that the foregoing shall not
prohibit the ownership of securities of corporations which are
listed on a national securities exchange or traded in the national
over-the-counter market in an amount which shall not exceed 5% of
the outstanding shares of any such corporation. The parties agree
that the geographic scope of this covenant not to compete shall
extend throughout the state of Florida. The parties agree that Buyer
may sell, assign or otherwise transfer this covenant not to compete,
in whole or in part, to any person, corporation, firm or entity that
purchases all or part of the Business or the Purchased Assets. In
the event a court of competent jurisdiction determines that the
provisions of this covenant not to compete are excessively broad as
to duration, geographical scope or activity, it is expressly agreed
that this covenant not to compete shall be construed so that the
remaining provisions shall not be affected, but shall remain in full
force and effect, and any such over broad provisions shall be
deemed, without further action on the part of any person, to be
modified,
18
amended and/or limited, but only to the extent necessary to render
the same valid and enforceable in such jurisdiction.
7.1.(b) COVENANT OF CONFIDENTIALITY. Seller shall not at any time
subsequent to the Closing, except as explicitly requested by Buyer, (i)
use for any purpose, (ii) disclose to any person, or (iii) keep or make
copies of documents, tapes, discs or programs containing, any confidential
information concerning the Business, the Purchased Assets or the Assumed
Liabilities. For purposes hereof, "confidential information" shall mean
and include, without limitation, all Trade Rights which are Purchased
Assets, all customer lists and customer information of the Business, and
all other information concerning the processes, apparatus, equipment,
services offered, packaging, products, marketing and distribution methods
of the Business, not previously disclosed to the public directly by
Seller.
7.1.(c) EQUITABLE RELIEF FOR VIOLATIONS. Seller agrees that the
provisions and restrictions contained in this Section are necessary to
protect the legitimate continuing interests of Buyer in acquiring the
Business through the purchase of the Purchased Assets and the assumption
of the Assumed Liabilities, and that any violation or breach of these
provisions will result in irreparable injury to Buyer for which a remedy
at law would be inadequate and that, in addition to any relief at law
which may be available to Buyer for such violation or breach and
regardless of any other provision contained in this Agreement, Buyer shall
be entitled to injunctive and other equitable relief as a court may grant
after considering the intent of this Section.
7.2. USE OF NAME. Following the Effective Date, neither Seller nor any
Affiliate shall, without the prior written consent of Buyer, make any use of the
name "HELP Innovations, Inc." or any other name confusingly similar thereto,
except as may be necessary for Seller to pay its liabilities, prepare tax
returns and other reports, and to otherwise wind up and conclude its business.
7.3 AFTER CLOSING. After the Closing, each party will afford the other
party, its counsel, accountants and other representatives, during normal
business hours, reasonable access to the books, records and other data in such
party's possession relating directly or indirectly to the properties,
liabilities or operations of the Business, with respect to periods prior to the
Closing, and the right to make copies and extracts therefrom, to the extent that
such access may be reasonably required by the requesting party for any proper
business purpose. Each party agrees for a period extending three years after the
Closing not to destroy or otherwise dispose of any such records without first
offering in writing to surrender such records to the other party, which party
shall have ten (10) days after such offer to agree in writing to take possession
thereof. All representations and warranties of Seller shall survive the Closing.
8. FURTHER COVENANTS OF SELLER AND PRINCIPAL SHAREHOLDERS
Seller and the Principal Shareholders covenant and agree as follows:
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8.1. CONDUCT OF BUSINESS PENDING THE CLOSING. From the date of this
Agreement until the Effective Date, unless this Agreement is terminated as
provided for herein, and except as otherwise approved in writing by the Buyer:
8.1.(a) ACCESS TO INFORMATION AND RECORDS. Seller shall give Buyer,
its counsel, accountants and other representatives(i)access during normal
business hours to all of the properties, books, records, contracts and
documents of Seller relating to the Business or the Purchased Assets or
Assumed Liabilities for the purpose of such inspection, investigation and
testing as Buyer deems appropriate (and Seller shall furnish or cause to
be furnished to Buyer and its representatives all information with respect
to the Business Buyer may request); (ii) access to employees, agents and
representatives of the Business for the purpose of conducting business,
meetings and communications as Buyer reasonably desires; and (iii) access
to vendors, customers, manufacturers of its medication and equipment, and
others having business dealings with the Business.
8.1.(b) MAINTAIN ORGANIZATION. Seller and the Principal Shareholders
will take such action as may be necessary to maintain, preserve, renew and
keep in favor and effect the existence, rights and franchises of the
Business and will use their best efforts to preserve the Business intact,
to keep available to Buyer the present officers and employees of the
Business, and to preserve for Buyer its present relationships with
suppliers and customers and others having business relationships with the
Business.
8.1.(c) NO BREACH. Seller and the Principal Shareholders will not do
or omit any act, or permit any omission to act, which may cause a breach
of any contract, commitment or obligation material to the Business, or any
breach of any representation, warranty, covenant or agreement made by
Seller or the Principal Shareholders herein, or which would have required
disclosure pursuant to this Agreement.
8.1.(d) NO MATERIAL CONTRACTS. No contract or commitment will be
entered into, and no purchase of medication, equipment, inventory, or
supplies and no sale of goods or services (real, personal, or mixed,
tangible or intangible) will be made, by or on behalf of Seller in
connection with its operation of the Business.
8.1.(e) MAINTENANCE OF INSURANCE. Seller shall maintain all of the
insurance set forth in Schedule 4.10.
8.1.(f) NO NEGOTIATIONS. Seller and the Principal Shareholders will
not directly or indirectly (through a representative or otherwise) solicit
or furnish any information to any prospective buyer, commence, or conduct
presently ongoing, negotiations with any other party or enter into any
agreement with any other party concerning the sale of the Business or the
Purchased Assets or any part thereof (an "acquisition proposal"), and
Seller and the Principal Shareholders shall immediately advise Buyer of
the receipt of any acquisition proposal.
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8.1(g) INTERIM FINANCIALS. The Seller will provide Buyer with
interim monthly financial statements and other management reports as and
when they are available.
8.2. CONSENTS. Seller and the Principal Shareholders will use their best
efforts prior to Closing to obtain all consents necessary for the consummation
of the transactions contemplated hereby.
8.3. OTHER ACTION. Seller and the Principal Shareholders shall use their
best efforts to cause the fulfillment at the earliest practicable date of all of
the conditions to the parties' obligations to consummate the transactions
contemplated in this Agreement.
8.4. DISCLOSURE. Seller and the Principal Shareholders shall have a
continuing obligation to promptly notify Buyer in writing with respect to any
matter hereafter arising or discovered which, if existing or known at the date
of this Agreement, would have been required to be set forth herein or described
in the disclosure schedules, but no such disclosure shall cure any breach of any
representation or warranty which is inaccurate.
8.5. SATISFACTION OF CREDITORS. Seller and its Principal Shareholders
shall obtain informed consent of its primary creditors, including but not
limited to the Internal Revenue Service and First State Bank and Trust, of
Tonganoxie, KS, to this transaction. For the purposes of this paragraph a
"primary creditor" shall be one in which their balance exceeds $10,000.00 except
for Ernst & Young and Xxxxxxxxx Xxxxx.
9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Buyer's obligations to consummate the
transaction contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Section 8, except to the extent that
such satisfaction is waived by Buyer in writing.
9.1. REPRESENTATIONS AND WARRANTIES TRUE ON THE EFFECTIVE DATE. Each of
the representations and warranties made by Seller in this Agreement, and the
statements contained in the disclosure schedules or in any instrument, list,
certificate or writing delivered by Seller pursuant to this Agreement, shall be
true and correct in all material respects when made and shall be true and
correct in all material respects at and as of the Effective Date as though such
representations and warranties were made or given on and as of the Effective
Date, except for any changes permitted by the terms of this Agreement or
consented to in writing by Buyer.
9.2. COMPLIANCE WITH AGREEMENT. Seller shall have in all material respects
performed and complied with all of its agreements and obligations under this
Agreement which are to be performed or complied with by Seller prior to or on
the Effective Date, including the delivery of the closing documents specified in
this Agreement.
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9.3. ABSENCE OF LITIGATION. No Litigation shall have been commenced or
threatened, and no investigation by any Government Entity shall have been
commenced, against Buyer, Seller or any of the affiliates, officers or directors
of any of them, with respect to the transactions contemplated hereby.
9.4. CONSENTS AND APPROVALS. All approvals, consents and waivers that are
required to effect the transactions contemplated hereby shall have been
received, and executed counterparts thereof shall have been delivered to Buyer
not less than two (2) business days prior to the Effective Date. Notwithstanding
the foregoing, receipt of the consent of any third party to the assignment of a
Contract which is not (and is not required to be) disclosed in the disclosure
schedules shall not be a condition to Buyer's obligation to close, provided that
the aggregate of all such Contracts does not represent a material portion of the
sales or expenditures of the Business. After the Closing, Seller will continue
to use its best effects to obtain any such consents or approvals, and Seller
shall not hereby be relieved of any liability hereunder for failure to perform
any of its covenants or for the inaccuracy of any representation or warranty.
9.5. ESTOPPEL CERTIFICATES. Buyer shall have obtained Buyer on or prior to
the Effective Date an estoppel certificate or status letter from the landlord
under the lease for the Business Location to be assumed pursuant to this
Agreement which estoppel certificate or status letter will certify (i) the lease
is valid and in full force and effect; (ii) the amounts payable by Seller under
the lease and the date to which the same have been paid; (iii) whether there
are, to the knowledge of said landlord, any defaults thereunder, and, if so,
specifying the nature thereof; and (iv) that the transactions contemplated by
this Agreement will not constitute default under the lease and that the landlord
consents to the assignment of the lease to Buyer.
9.6. COMPLETION OF DUE DILIGENCE, SCHEDULES & EXHIBITS. If Buyer does not
complete its due diligence or the disclosure schedules and Exhibits are not
completed and delivered to the appropriate party or if either party is not
reasonably satisfied as to all such matters by October 31, 1999, then this
Agreement and all other collateral documents executed in connection with the
transactions contemplated by this Agreement may be terminated by either Buyer or
Seller. Unless otherwise agreed in writing, if written termination notice to
such effect is not so given on or prior to November 15, 1999, then this
Agreement may not be terminated by reason of this Section 9.6.
10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Notwithstanding the execution and delivery of this Agreement or the
performance of any part hereof, Seller's obligations to consummate the
transaction contemplated by this Agreement shall be subject to the satisfaction
of each of the conditions set forth in this Section 9, except to the extent that
such satisfaction is waived in writing by Seller.
10.1 REPRESENTATIONS AND WARRANTIES TRUE ON THE EFFECTIVE DATE. Each of
the representations and warranties made by Buyer in this Agreement shall be true
and correct in all material respects when made and shall be true and correct in
all material respects at and as of the
22
Effective Date as though such representations and warranties were made or given
on and as of the Effective Date.
10.2. COMPLIANCE WITH AGREEMENT. Buyer shall have in all material respects
performed and complied with all of Buyer's agreements and obligations under this
Agreement which are to be performed or complied with by Buyer prior to or on the
Effective Date, including the delivery of the closing documents specified in
this Agreement.
11. INDEMNIFICATION
11.1. BY SELLER. Seller hereby agrees to indemnify, defend and hold
harmless Buyer, Seller and its directors, officers, employees and controlled and
controlling persons (hereinafter "Buyer's affiliates"), from and against all
Claims asserted against, resulting to, imposed upon, or incurred by Buyer,
Buyer's affiliates, the Business or the Purchased Assets, directly or
indirectly, by reason of, arising out of or resulting from (a) the inaccuracy or
breach of any representation or warranty of Seller contained in or made pursuant
to this Agreement (regardless of whether such breach is deemed "material"); (b)
the breach of any covenant of Seller contained in this Agreement (regardless of
whether such breach is deemed "material"); or (c) any Claim of or against
Seller, the Purchased Assets or the Business not specifically assumed by Buyer
pursuant hereto. As used in this Article 11, the term "Claim" shall include (i)
all Liabilities; (ii) all losses, damages (including, without limitation,
consequential damages), judgments, awards, settlements, costs and expenses
(including, without limitation, interest (including prejudgment interest in any
litigated matter), penalties, court costs and attorneys fees and expenses); and
(iii) all demands, claims, actions, costs of investigation, causes of action,
proceedings and assessments, whether or not ultimately determined to be valid.
11.2. BY BUYER. Buyer hereby agrees to indemnify, defend and hold harmless
Seller, its directors, officers, employees and controlling persons, from and
against all Claims asserted against, resulting to, imposed upon or incurred by
any such person, directly or indirectly, by reason of or resulting from (a) the
inaccuracy or breach of any representation or warranty of Buyer contained in or
made pursuant to this Agreement (regardless of whether such breach is deemed
"material"); (b) the breach of any covenant of Buyer contained in this Agreement
(regardless of whether such breach is deemed "material"); or (c) all Claims of
or against Seller specifically assumed by Buyer pursuant hereto.
12. CLOSING
12.1 CLOSING DATE. Consummation of the contemplated transaction (the
"CLOSING") shall take place on November 15, 1999 or on such other date or at
such other time or place as may be mutually agreed upon in writing by the
parties hereto (the "CLOSING DATE"). Notwithstanding the foregoing Closing Date,
the parties hereby agree that unless otherwise agreed in writing that the
Closing shall not be effective until the satisfaction or waiver of the
conditions precedent set forth in Sections 9 and 10 of this Agreement (the
"EFFECTIVE DATE"). The Closing shall take place at the
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offices of Buyer in Boynton Beach, Florida, or at such other place as the
parties hereto shall agree upon. Such date is referred to in this Agreement as
the "Closing Date".
12.2. DOCUMENTS TO BE DELIVERED BY SELLER. At the Closing, Seller shall
deliver to Buyer the following documents, in each case duly executed or
otherwise in proper form:
12.2.(a) BILLS OF SALE. Bills of sale and such other instruments of
assignment, transfer, conveyance and endorsement as will be sufficient in
the opinion of Buyer and its counsel to transfer, assign, convey and
deliver to Buyer the Purchased Assets as contemplated hereby.
12.2.(b) COMPLIANCE CERTIFICATE. A certificate signed by the chief
executive officer of Seller that each of the representations and
warranties made by Seller in this Agreement is true and correct in all
material respects on and as of the Effective Date with the same effect as
though such representations and warranties had been made or given on and
as of the Effective Date (except for any changes permitted by the terms of
this Agreement or consented to in writing by Buyer), and that Seller has
performed and complied with all of Seller's obligations under this
Agreement which are to be performed or complied with on or prior to the
Effective Date.
12.2.(c) CERTIFIED RESOLUTIONS. A certified copy of the resolutions
of the Board of Directors of Seller authorizing and approving this
Agreement and the consummation of the transactions contemplated by this
Agreement.
12.2.(d) INCUMBENCY CERTIFICATE. Incumbency certificates relating to
each person executing any document executed and delivered to Buyer
pursuant to the terms hereof.
12.2.(e) OTHER DOCUMENTS. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Buyer may reasonably request.
12.3. DOCUMENTS TO BE DELIVERED BY BUYER. At the Closing, Buyer shall
deliver to Seller the following documents, in each case duly executed or
otherwise in proper form:
12.3.(a) PURCHASE PRICE. To Seller the 1,334,000 Shares of voting
common stock required by Section 3.2 hereof.
12.3.(b) ASSUMPTION OF LIABILITIES. Such undertakings and
instruments of assumption as will be reasonably sufficient in the opinion
of Seller and its counsel to evidence the assumption of the Assumed
Liabilities.
12.3.(c) COMPLIANCE CERTIFICATE. A certificate signed by the
President of Buyer that the representations and warranties made by Buyer
in this Agreement are true and correct on and as of the Effective Date
with the same effect as though such representations and
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warranties had been made or given on and as of the Effective Date (except
for any changes permitted by the terms of this Agreement or consented to
in writing by Seller), and that Buyer has performed and complied with all
of Buyer's obligations under this Agreement which are to be performed or
complied with on or prior to the Effective Date.
12.3.(d) CERTIFIED RESOLUTIONS. A certified copy of the resolutions
of the Board of Directors of Buyer authorizing and approving this
Agreement and the consummation of the transactions contemplated by this
Agreement.
12.3.(e) INCUMBENCY CERTIFICATE. Incumbency certificates relating to
each person executing any document executed and delivered to Seller by
Buyer pursuant to the terms hereof.
12.3.(f) OTHER DOCUMENTS. All other documents, instruments or
writings required to be delivered to Seller at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Seller may reasonably request.
13. TERMINATION
13.1. RIGHT OF TERMINATION WITHOUT BREACH. This Agreement may be
terminated without further liability of any party at any time prior to the
Effective Date:
13.1.(a) by mutual written agreement of Buyer and Seller, or
13.1.(b) by either Buyer or Seller if any of the conditions set
forth in Sections 9 and 10 hereof are not satisfied at or before October
31, 1999, unless waived in writing.
13.2. TERMINATION FOR BREACH.
13.2.(a) TERMINATION BY BUYER. If (i) there has been a material
violation or breach by Seller of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in
writing by Buyer, or (ii) there has been a failure of satisfaction of a
condition to the obligations of Buyer which has not been so waived, or
(iii) Seller shall have attempted to terminate this Agreement under this
Article 13 or otherwise without grounds to do so, then Buyer may, by
written notice to Seller at any time prior to the Closing that such
violation, breach, failure or wrongful termination attempt is continuing,
terminate this Agreement with the effect set forth in Section 13.2.(c)
hereof.
13.2.(b) TERMINATION BY SELLER. If (i) there has been a material
violation or breach by Buyer of any of the agreements, representations or
warranties contained in this Agreement which has not been waived in
writing by Seller, or (ii) there has been a failure of satisfaction of a
condition to the obligations of Seller which has not been so waived, or
(iii) Buyer shall have attempted to terminate this Agreement under this
Article 13 or otherwise without
25
grounds to do so, then Seller may, by written notice to Buyer at any time
prior to the Effective that such violation, breach, failure or wrongful
termination attempt is continuing, terminate this Agreement with the
effect set forth in Section 13.2.(c) hereof.
13.2.(c) EFFECT OF TERMINATION. Termination of this Agreement
pursuant to this Section 13.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof. In addition to
the right of any party under common law to redress for any such breach or
violation, each party whose breach or violation has occurred prior to
termination shall jointly and severally indemnify each other party for
whose benefit such representation, warranty, covenant, agreement or other
provision was made ("indemnified party") from and against all losses,
damages (including, without limitation, consequential damages), costs and
expenses (including, without limitation, interest (including prejudgment
interest in any litigated matter), penalties, court costs, and attorneys
fees and expenses) asserted against, resulting to, imposed upon, or
incurred by the indemnified party, directly or indirectly, by reason of,
arising out of or resulting from such breach or violation.
14. MISCELLANEOUS
14.1. DISCLOSURE SCHEDULES. Information set forth in the Disclosure
schedules specifically refers to the article and section of this Agreement to
which such information is responsive and such information shall not be deemed to
have been disclosed with respect to any other article or section of this
Agreement or for any other purpose. The Disclosure schedules shall not vary,
change or alter the language of the representations and warranties contained in
this Agreement and, to the extent the language in the Disclosure schedules does
not conform in every respect to the language of such representations and
warranties, such language shall be disregarded and be of no force or effect.
14.2. FURTHER ASSURANCE. From time to time, at Buyer's request and without
further consideration, Seller will execute and deliver to Buyer such documents
and take such other action as Buyer may reasonably request in order to
consummate more effectively the transactions contemplated hereby and to vest in
Buyer good, valid and marketable title to the business and assets being
transferred hereunder.
14.3. ASSIGNMENT; PARTIES IN INTEREST
14.3.(a) ASSIGNMENT. Except as expressly provided herein, the rights
and obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other party.
Notwithstanding the foregoing, Buyer may, without consent of the other
party, cause one or more subsidiaries of Buyer to carry out all or part of
the transactions contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of its obligations, and those of any
such subsidiary, to Seller hereunder.
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14.3.(b) PARTIES IN INTEREST. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective successors
and permitted assigns of the parties hereto. Nothing contained herein
shall be deemed to confer upon any other person any right or remedy under
or by reason of this Agreement.
14.4. LAW GOVERNING AGREEMENT. This Agreement may not be modified or
terminated orally, and shall be construed and interpreted according to the
internal laws of the State of Florida, excluding any choice of law rules that
may direct the application of the laws of another jurisdiction.
14.5. AMENDMENT AND MODIFICATION. Buyer and Seller may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
14.6. NOTICE. All notices, requests, demands and other communications
hereunder shall be given in writing and shall be: (a) personally delivered; (b)
sent by telecopier, facsimile transmission or other electronic means of
transmitting written documents; or (c) sent to the parties at their respective
addresses indicated herein by registered or certified U.S. mail, return receipt
requested and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
(a) If to Buyer, to: Cyber-Care, Inc.
0000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
HELP Innovations Acquisition Corp., Inc.
0000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
or to such other person or address as Buyer shall furnish to Seller in writing.
(b) If to Seller, to: HELP Innovations, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxx
Facsimile: (000) 000-0000
or to such other person or address as Seller and Principal Shareholders shall
furnish to Buyer in writing. If personally delivered, such communication shall
be deemed delivered upon actual receipt; if electronically transmitted pursuant
to this paragraph, such communication shall be deemed delivered the next
business day after transmission (and sender shall bear the burden of proof of
27
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S. mail
pursuant to this paragraph, such communication shall be deemed delivered as of
the date of delivery indicated on the receipt issued by the relevant postal
service, or, if the addressee fails or refuses to accept delivery, as of the
date of such failure or refusal. Any party to this Agreement may change its
address for the purposes of this Agreement by giving notice thereof in
accordance with this Section.
14.7. EXPENSES. Regardless of whether or not the transactions contemplated
hereby are consummated:
14.7.(a) BROKERAGE. Seller and Buyer each represent and warrant to
each other that there is no broker involved or in any way connected with
the transfer provided for herein. Buyer agrees to hold Seller harmless
from and against all claims for brokerage commissions or finder's fees
incurred through any act of Buyer in connection with the execution of this
Agreement or the transactions provided for herein. Seller agrees to hold
Buyer harmless from and against all claims for brokerage commissions or
finder's fees incurred through any act of Seller in connection with the
execution of this Agreement or the transactions provided for herein.
14.7.(b) EXPENSES TO BE PAID BY SELLER. Seller shall pay, and shall
indemnify, defend and hold Buyer harmless from and against, each of the
following:
(i) TRANSFER TAXES. Any sales, use, excise, transfer or other
similar tax imposed with respect to the transactions provided for in
this Agreement, and any interest or penalties related thereto.
(ii) PROFESSIONAL FEES. All fees and expenses of Seller's
legal, accounting, investment banking and other professional counsel
in connection with the transactions contemplated hereby.
14.7.(c) OTHER. Except as otherwise provided herein, each of the
parties shall bear its own expenses and the expenses of its counsel and
other agents in connection with the transactions contemplated hereby.
14.7.(d) COSTS OF LITIGATION OR ARBITRATION. The parties agree that
the prevailing party in any action brought with respect to or to enforce
any right or remedy under this Agreement shall be entitled to recover from
the other party or parties all reasonable costs and expenses of any nature
whatsoever incurred by the prevailing party in connection with such
action, including without limitation attorneys' fees and prejudgment
interest.
14.8. ENTIRE AGREEMENT. This instrument embodies the entire agreement
between the parties hereto with respect to the transactions contemplated herein,
and there have been and are no agreements, representations or warranties between
the parties other than those set forth or provided for herein.
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14.9. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14.10. HEADINGS. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"SELLER" "CYBR" "BUYER"
HELP Innovations, Inc. Cyber-Care, Inc. HELP Innovations
Acquisition Corp., Inc.
By: /s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXXXX By: /s/ XXXX XXXXXX
Attest: /s/ XXXXX X. XXXXXXX Attest: /s/ XXXXX XXXXXXXX Attest: /s/ XXXXX XXXXXXXX
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AGREEMENT OF PRINCIPAL SHAREHOLDERS
The undersigned principal shareholders of the Seller hereby enters into
and agrees to be individually bound by and a party to the provisions of Sections
4, 7, 8, 11 and 14 of this Agreement.
/s/ XXXXX X. XXXXX
Xxxxx X. Xxxxx
Attest: /s/ XXXXX X. XXXXXXX
Innovative Health of Kansas, Inc.
By: /s/ XXXXX X. XXXXX
Attest: /s/ XXXXX X. XXXXXXX
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