1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") entered into as
of the 20th day of May, 1998 between SAFETY DISPOSAL SYSTEM, INC., a Florida
corporation, MED/WASTE, INC., a Delaware corporation and BIOMADE PLASTICS, INC.,
a Minnesota corporation.
R E C I T A L S
A. The Company owns reusable molds of plastic containers, lids
and products and accessories together with Intangible Rights used in the
disposal of sharps medical waste;
B. Buyer desires to purchase certain of the Company's assets and
the Company desires to sell such assets, upon the terms and subject to the
conditions set forth herein.
C. The Company desires to make certain representations,
warranties and agreements in connection with this Agreement and also to
prescribe various conditions to the agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
benefits to be derived therefrom and of the respective mutual covenants and
agreements hereinafter set forth and such other good and valuable consideration,
the adequacy and receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE 1. - DEFINITIONS
All capitalized terms used in this Agreement are used as defined
in this Article I or elsewhere in this Agreement.
1.1 BUSINESS - shall mean the management and disposal of sharps
medical waste, using reusable products and handlers manufactured for the Company
with molds owned by the Company, together with the transportation, opening,
emptying and washing of reusable sharps containers the services related thereto
and the marketing thereof.
1.2 BUYER - shall mean SAFETY DISPOSAL SYSTEM, INC., a Florida
corporation.
1.3 CLOSING DATE - shall mean June 20, 1998, or such other date
as may be agreed upon in writing by the parties hereto.
1.4 COLLATERAL AGREEMENTS - shall mean and include any and all
agreements, instruments, certificates or documents required or expressly
provided for in this Agreement to be executed and delivered in connection with
the transaction contemplated by this Agreement.
1.5 COMPANY - shall mean BIOMADE PLASTICS, INC., a Minnesota
corporation.
1.6 CONTRACTS - shall mean and include any and all contracts,
agreements understandings, arrangements, leases, licenses, registrations,
authorizations, easements, servitudes, rights of way, mortgages, bonds, notes,
guaranties, liens, indebtedness, approvals, or other instruments or undertaking
to which such person is a party or to which or by which such person or the
property of such person is subject or bound, excluding any Permits.
- 1 -
2
1.7 DAMAGES - shall mean any and all damages, liabilities,
obligations, penalties, fines, judgments, claims, deficiencies, losses, costs,
expenses and assessments, including all attorneys' fees and costs, and interest
accruing on such Damages.
1.8 DISCLOSURE SCHEDULE - shall mean the Disclosure Schedule
prepared by the Company, which includes the disclosures, exhibits and schedules
required by the Company in accordance with this Agreement.
1.9 ENVIRONMENTAL CLAIM - shall mean any investigation, notice,
violation, demand, allegation, action, suit, injunction, judgment, order,
consent, decree, penalty, fine, lien, proceeding, or claim (whether
administrative, judicial or private in nature) arising (a) pursuant to, or in
connection with, an actual or alleged violation of any Environmental Law, (b) in
connection with any Hazardous Material, Medical Waste or actual or alleged
Hazardous Material Activity, (c) from any abatement, removal, remedial,
corrective or other response action in connection with a Hazardous Material or
Medical Waste, Environmental law or other order of a Governmental Authority, or
(d) from any actual or alleged damage, injury, threat or harm to health, safety,
natural resources or the environment.
1.10 ENVIRONMENTAL LAW - shall mean any current or future legal
requirement pertaining to (a) the protection of health, safety and the indoor or
outdoor environment, (b) the conservation, management or use of natural
resources and wildlife, (c) the protection or use of surface water and
groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material (e) the management, treatment, disposal or handling of
Medical Waste, or (e) pollution (including any Release to air, land, surface
water, and groundwater), and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. SECTION
9601, et seq., Solid Waste Disposal Act of 1976 and Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C. SECTION 6901, et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. SECTION 1251,
et seq., Clean Air Act of 1966, as amended, 42 U.S.C. SECTION 7401, et seq.,
Toxic Substance Control Act of 1976, 15 U.S.C. SECTION 2601, et seq., Hazardous
material Transportation Act, 49 U.S.C. App. SECTION 1801, et seq., Occupational
Safety and Health Act of 1970, as amended, 29 U.S.C. SECTION 651, et seq., Oil
Pollution act of 1990, 33 U.S.C. SECTION 2701, et seq., Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. SECTION 11001, et seq., National
Environmental Policy Act of 1969, 42 U.S.C. SECTION 4321, et seq., Safe Drinking
Water Act of 1974, as amended, 42 U.S.C. SECTION 300(f), et seq., any similar,
implementation or successor law, and any amendment, rule, regulation, order or
directive issued thereunder.
1.11 ERISA - shall mean the Federal Employment Retirement Income
Security Act of 1974, as amended.
1.12 FINANCIAL STATEMENTS - shall mean the Company's unaudited
financial statements with respect to the Business consisting of balance sheets
as of December 31, 1997 and March 31, 1998 and statements of income and expenses
for the year ended December 31, 1997, and for the three months ended March 31,
1998, respectively, all as attached to the Disclosure Schedule.
1.13 GOVERNMENTAL AUTHORITY - shall mean and include any nation,
country (including, but not limited to the United States of America)
commonwealth, state, territory or possession thereof and any political
subdivision of any of the foregoing, including, but not limited to courts,
departments, commissions, boards, bureaus, agencies, ministries or other
instrumentalities.
- 2 -
3
1.14 HAZARDOUS MATERIAL - shall mean any substance, chemical,
compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant,
or material which is hazardous or toxic, and includes, without limitation, (a)
any medical waste, (b) asbestos, polychlorinated biphyenls and petroleum
(including crude oil or any fraction thereof) and (c) any such material
classified or regulated as "hazardous" or "toxic" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund amendments and Reauthorization Act of 1986, 42 U.S.C. SECTION
9601, et seq., Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous an Solid Waste Amendments of 1984, 42
U.S.C. SECTION 6901, et seq., Federal Water Pollution Control Act, as amended by
the Clean Water Act of 1977, 33 U.S.C. SECTION 1251, et seq., Clean Air Act of
1966, as amended, 42 U.S.C. SECTION 7401, et seq., Toxic substances Control Act
of 1976, 15 U.S.C. SECTION 2601, et seq., or Hazardous Materials Transportation
Act, 49 U.S.C. App. SECTION 1801, et seq.
1.15 HAZARDOUS MATERIAL ACTIVITY - shall mean any activity, event
or occurrence involving a Hazardous Material, including, without limitation, the
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, Release, threatened Release, abatement, removal, remediation,
handling of or corrective or response action to any Hazardous Material.
1.16 INTANGIBLE RIGHTS - shall mean and include any and all
information, trade secrets, patents, copyrights, trademarks, trade names and
other intangible properties that are necessary or customarily used by the
Company in the operation of its BusineSECTION
1.17 LAST REPORTED SALE PRICE - shall mean the last reported sale
price of MWI Common Stock as reported by the National Association of Securities
Dealers Automated Quotation System ("NASDAQ"), or if the MWI Common Stock is not
reported on the NASDAQ System, on such securities exchange on which sales of MWI
Common Stock are thereafter reported, on the date the determination of such
price is required in accordance with the terms of this Agreement.
1.18 MARKET VALUE - shall mean the product of (a) the Last
Reported Sales Price of the MWI Common Stock, as reported by NASDAQ on the five
(5) business days preceding the Closing Date, times (b) the number of shares to
be issued to the Company in accordance with Section 3.1. herein.
1.19 MEDICAL WASTE - shall mean and include any waste which may
cause an infectious disease or can reasonably be suspected of harboring
pathogenic organisms, including predominately all materials that come in contact
with human and animal body fluids.
1.20 MWI - shall mean MED/WASTE, INC., a Delaware corporation.
1.21 MWI COMMON STOCK - shall mean the common stock, $.001 par
value of MWI as described in MWI's Certificate of Incorporation, as presently
amended.
1.22 ORDINARY COURSE OF BUSINESS - shall mean the conduct and
operation of the business of the Company only in the manner in which it
conducted and operated such Business during the twelve months prior to the
execution of this Agreement, following its usual and ordinary accounting
practices, making ordinary accruals, incurring ordinary liabilities and
expenditures, and making ordinary commitments for merchandise, insurance,
rentals, and other ordinary Business purposes as reflected in the Financial
Statements.
- 3 -
4
1.23 PERMITS - shall mean and include any and all permits,
licenses, agencies, orders or contracts granted by any Governmental Authority
necessary or used in the operation of the Business as presently conducted.
1.24 RELEASE - shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the indoor or outdoor environment, including, without
limitation, the abandonment or discarding of barrels, drums, containers, tanks
and other receptacles containing or previously containing any Hazardous Material
or Medical Waste.
1.25 TAXES - shall mean any federal, state, local or foreign,
income, gross receipt, license, payroll, employment, excise, communications,
severance, stamp, occupation, premium, windfall profits, environmental, customs,
duties, capital stock, franchise profits, withholding, social security,
unemployment, disability, real property, personal property, sales, use,
transaction, transfer, registration, value added, alternative, estimated or
other tax of any kind whatsoever, including any interest, penalty or addition
thereto.
ARTICLE 2. - SALE AND PURCHASE OF ASSETS
2.1 SALE AND PURCHASE OF ASSETS - On the terms and subject to the
conditions of this Agreement, on the Closing Date the Company shall sell,
convey, assign, transfer, and deliver to Buyer, and Buyer shall purchase,
acquire, and accept delivery of, the following assets and properties owned by
the Company as of the Closing Date and used by the Company in its Business:
(a) Twelve molds for the manufacture of reusable
sharps containers, lids and accessories as listed on Schedule 2.1(b) to the
Disclosure Schedule, including all governmental approvals received in connection
therewith;
(b) All license agreements related to the
Business and which are listed on Schedule 2.1(b) to the Disclosure Schedule
together with any License Agreement executed by the Company following the date
of this Agreement in accordance with the provisions of this Agreement (the
"License Agreements");
(c) All product in inventory and other materials
related to the Business, including all inventory in transit or on order and not
yet delivered as of five (5) days prior to the Closing Date;
(d) All proprietary knowledge, patents, 510k
approvals, trade secrets, referral lists, technical information, quality control
data, processes (whether secret or not), methods and other similar know how or
rights used in the conduct of the Business;
(e) The "Sharps Away" trade name, Permits,
licenses, customer and vendor telephone numbers and addresses, customer lists,
vendor lists, contracts, advertising material and data, and accounts
receivables, if any;
(f) All other Intangible Rights used in
connection with the Business. The aforesaid assets and properties to be
transferred to Buyer hereunder are hereinafter collectively referred to as the
"Assets."
- 4 -
5
2.2 METHOD OF CONVEYANCE - The sale, transfer, conveyance,
assignment, and delivery by the Company of the Assets to the Buyer in accordance
with Section 2.1 hereof shall be through the delivery of a duly executed Xxxx of
Sale in form and substance satisfactory to the Buyer, as well as various
assignments of License Agreements, leases, contracts and other matters.
2.3 NO LIENS - The Company shall transfer good and marketable
title to the Assets to Buyer free and clear of all liens, charges, claims,
security interests, adverse interests, and encumbrances of any kind whatsoever
owed to, owed by, accrued to, or in favor of any person or party whatsoever.
2.4 NO LIABILITIES - The Buyer shall not assume any liabilities of
the Company. The Company shall be responsible for all liabilities of the
Business incurred prior to the Closing Date including: (a) the Company's payroll
expenses; (b) the Company's indebtedness for borrowed money; (c) any liability
of the Company for Taxes; (d) any liability of the Company in connection with
any employee benefit plan or program including, without limitation, any
liability of the Company under ERISA; (e) any liability of the Company under any
Federal, state or local law, rule, regulation, ordinance, program or permit
relating to health, safety, Hazardous Waste and other Environmental matters; (f)
any product liabilities pertaining to any products sold, manufactured or
otherwise performed or services rendered prior to the Closing Date, (g) any
claims by any Governmental Authority; or (h) any liability for services provided
by the Company, under any Contract or otherwise, arising prior to the Closing
Date. The Company agrees to satisfy and discharge, as the same shall become due,
all obligations and liabilities of the Company not specifically assumed by Buyer
hereunder.
ARTICLE 3. - PURCHASE PRICE AND METHOD OF PAYMENT
3.1 PURCHASE PRICE - As consideration for the Assets purchased by
the Buyer, and subject to compliance by the Company, with its warranties and
undertakings contained in this Agreement, Buyer shall pay the purchase price of
$1,188,000, payable as set forth below (the "Purchase Price"):
3.1.1 CASH - Buyer shall pay to the Company aggregate
cash consideration of $638,000 on the Closing Date, provided however, that
payments aggregating $125,000 referred to in Section 3.2 herein, shall be
credited toward the cash portion of the purchase price; and further provided
that Buyer shall receive a credit in the amount of $88,000 against the cash
portion of the Purchase Price for modification of the reusable sharps, lids and
delidding machine.
3.1.2 MWI COMMON STOCK - MWI shall cause to be issued to
the Company on the Closing Date that number of shares of MWI's unregistered and
previously unissued MWI Common Stock with an aggregate Market Value of $550,000.
3.2 OPTION PAYMENT - The parties agree and acknowledge that MWI
has previously paid to the Company an option payment of $25,000 which is to be
credited to the purchase price herein. Upon full execution of this Agreement,
MWI shall pay to the Company an additional option payment of $100,000. The
option payments made shall be fully credited against the cash consideration
required under Section 3.1.1 herein. Such option payments shall be refunded to
MWI by the Company only in the event that the transaction is not consummated in
accordance with Section 4.4.2.
- 5 -
6
3.3 REGISTRATION RIGHTS. MWI shall file a registration statement
with the Securities and Exchange Commission ("SEC"), within ninety (90) days
following the Closing Date, for the purpose of registering the MWI Common Stock
issued pursuant to Section 3.1.2 herein. MWI shall use its best efforts to have
the registration statement declared effective within one hundred fifty (150)
days following the Closing Date. MWI shall pay all costs associated with such
registration, other than counsel fees of the Company or its selling expenses. If
such registration statement is not declared effective by the SEC within one
hundred fifty (150) days following the Closing Date, the Company shall have a
right to "put" the MWI Common Stock to MWI for an aggregate purchase price of
$550,000. Such "put" shall be payable in cash and must be exercised within
thirty (30) days following the expiration of the one hundred fifty (150) day
period. The "put" may only be exercised in whole, not in part.
3.4 INVESTMENT RESTRICTIONS - All MWI Common Stock to be acquired
by the Company shall be "Restricted Securities" as that term is defined pursuant
to the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "1933 Act"). The Company hereby represents that the
MWI Common Stock is being acquired for investment purposes only and not with a
view to the distribution thereof except as may be permitted by the 1933 Act.
Certificates representing MWI Common Stock when issued shall contain a
restrictive legend to the effect that the MWI Common Stock have not been
registered pursuant to the 1933 Act or any state having jurisdiction thereof and
may not be sold, transferred or otherwise disposed of except in compliance with
the 1933 Act or unless the MWI receives an opinion of counsel reasonably
satisfactory to it that an exemption from registration is available. A stop
transfer order shall be placed on the MWI Common Stock with MWI's transfer
agent.
ARTICLE 4. - CLOSING
4.1 CLOSING - Subject to the terms and conditions of this
Agreement, the Closing shall take place at 9:30 a.m. on the Closing Date, or
such other date as is mutually agreed between the parties. The Closing shall
take place at the offices of Wallace, Bauman, Legon, Fodiman & Xxxxxxx, P.A.,
0000 Xxxxx xx Xxxx Xxxxxxxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxxxxxx 00000.
4.2 COMPANY PERFORMANCE AT CLOSING - At or prior to the Closing,
the Company shall deliver, or cause to be delivered, to Buyer:
4.2.1 a duly executed Xxxx of Sale;
4.2.2 a certificate duly executed by the president of the
Company to the effect that:
(a) all of the representations and warranties
made by the Company in this Agreement are true and correct in all material
respects as of the Closing Date;
(b) none of the covenants made by the Company in
this Agreement have been breached in any material respect as of the Closing
Date;
(c) there have been no material adverse changes
in the condition of the Business since the date of the Financial Statements,
whether financial or otherwise, through the Closing Date;
- 6 -
7
4.2.3 all approvals and consents of all appropriate
Governmental Authorities, if any;
4.2.4 assignments of each License Agreement;
4.2.5 assignments of all Intangible Rights;
4.2.6 a certified copy of the corporate actions taken by
the Company authorizing and approving this Agreement and the transactions
contemplated by it;
4.2.7 a certificate of incumbency duly executed by the
Company's secretary;
4.2.8 duly executed Non-Competition Agreement by the
Company, Ark Industries, Inc. and their respective officers, directors and
employees (other than Xxxxxx Xxxxx, Xx., a director of the Company) in form
substantially similar to Section 9.4 herein;
4.2.9 An investment letter in a form acceptable to
counsel for Buyer signed by the Company pertaining to the MWI Common Stock;
4.2.10 Possession of the Assets and all originals and
copies of all agreements, instruments, documents, deeds, books, records, files
and other data and information within the possession of the Company pertaining
to the Business ;
4.2.11 Any and all assignments or other instruments of
conveyance necessary to vest good, marketable and complete title in and to the
Assets in Buyer;
4.2.12 an opinion of counsel in form and substance
satisfactory to Buyer and its counsel that:
(a) The Company has been duly incorporated and
is validly existing and in good standing under the laws of the State of
Minnesota and is duly qualified to do business and is in good standing in each
jurisdiction in which the character and location of the properties owned by it
or the nature of the business transacted by it makes such qualification
necessary.
(b) The Company has the full power to conduct
its business as presently conducted and to execute and deliver this Agreement
and to perform its obligations hereunder; and has authorized the execution,
delivery and performance of the Agreement by all necessary corporate and
shareholder action.
(c) The execution and delivery of the Agreement,
performance by the Company of its obligations under the Agreement and the
exercise by the Company of the rights created by the Agreement do not (i)
violate the Company's Articles of Incorporation or by-laws; (ii) constitute a
breach of or a default under any agreement or instrument to which the Company is
a party or by which they or their assets are bound, or result in the creation of
a mortgage, security interest or other encumbrance upon the assets of the
Company; (iii) violate any judgment, decree or order of any court or
administrative tribunal; (iv) require the consent of any bankruptcy court; or
(v) any Federal or state law, rule or regulation;
- 7 -
8
(d) No further notice, report or other filing or
registration with, and no further consent, approval or authorization of, any
Governmental Authority is required to be submitted, made or obtained by the
Company in connection with the execution, delivery and performance of the
Agreement.
(e) The Agreement is a valid and binding
obligation of the Company enforceable against the Company under the laws of the
State of Florida and the Federal law of the United States.
(f) There are no pending or threatened legal
proceedings, actions, claims, investigations or other proceedings against the
Company pertaining to the Business.
(g) The Company has good and marketable title to
all of the Assets free and clear of all liens, mortgages, pledges, conditional
sales agreements, security interests, restrictions, judgments, options, charges,
claims or encumbrances of any kind.
(h) The instruments of conveyance and assignment
delivered by the Company to Buyer in accordance with their terms will have
vested in Buyer all right, title, and interest to the Assets;
(i) The Company is in compliance with all
federal, state and local laws regarding the operation of the Business;
4.3 BUYER'S PERFORMANCE AT CLOSING - At or prior to Closing, Buyer
and MWI, as the case may be, shall deliver or cause to be delivered to the
Company the following:
4.3.1 The cash to close as required in Section 3.1.1,
subject to the provisions of Section 3.2 herein;
4.3.2 A certificate representing the MWI Common Stock
issued in the name of the Company, as required in Section 3.1.2 herein;
4.3.3 a certificate executed by an officer of Buyer to
the effect that all of the representations and warranties made by Buyer in this
Agreement are true and correct as of the Closing Date;
4.3.4 written evidence that Buyer's board of directors
approved consummation of the transaction.
4.4 TERMINATION IN ABSENCE OF CLOSING -
4.4.1 TERMINATION. If by the close of business on the
Closing Date, the Closing has not occurred, then any party may thereafter
terminate this Agreement by written notice to the other parties hereto, without
liability of or to any other party to this Agreement, unless the reason for
closing having not occurred is (i) such party's breach of any of its
obligations, representations, warranties or covenants or other provisions of
this Agreement; or (ii) the failure of such party to perform its obligations
hereunder. The defaulting party shall be liable to all other parties for all
Damages incurred by the non-defaulting parties, including but not limited to all
expenses, costs and attorney fees incurred in due
- 8 -
9
diligence, negotiation of this Agreement, the drafting of this Agreement and all
Collateral Agreements and otherwise representing such non-defaulting parties.
4.4.2 TERMINATION BY BUYER. This Agreement and the
transaction contemplated herein may be terminated and abandoned at any time on
or prior to the Closing Date by Buyer, if:
(a) any representation or warranty made herein
by the Company for the benefit of Buyer or any certificate, schedule or document
furnished by the Company to Buyer pursuant to this Agreement is untrue; or
(b) the Company shall have defaulted in any
respect in the performance of any obligation under this Agreement;
(c) a material adverse change has occurred to
the Business. In the event that Buyer terminates this Agreement in accordance
with the provisions contained in this Section 4.4.2, then the Company shall be
liable to Buyer for all Damages incurred by Buyer including, but not limited to,
all expenses, costs and attorney's and accounting fees incurred in the due
diligence, negotiation and drafting of this Agreement in contemplation of the
transaction contained herein. In addition, the $125,000 paid by MWI in
accordance with Section 3.2 herein shall be reimbursed by the Company to MWI
immediately upon such termination.
ARTICLE 5. - REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer and MWI that the
representations and warranties contained in this Article 5 are true and correct
as of the date hereof (except for such items that will be cured by the Closing
Date) and as of the Closing Date:
5.1 ORGANIZATION OF COMPANY - The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Minnesota. The Company has the corporate power to own, manage, lease and hold
its assets and engage in its businesses where such assets are located, is duly
qualified to do business and is in good standing in each jurisdiction in which
the character and location of the properties owned by it or the nature of the
business transacted by it makes such qualification necessary.
5.2 AUTHORITY - The Company has full power and authority to enter
into this Agreement and to consummate the transaction contemplated hereby. This
Agreement and any Collateral Agreement executed in connection with the Closing
constitutes, or upon execution and delivery will constitute, the legal, valid
and binding obligations of such parties enforceable in accordance with their
terms. No consent of any Federal, state, municipal or other Governmental
Authority is required for the execution, delivery or performance of this
Agreement.
5.3 FINANCIAL STATEMENTS - The Financial Statements attached to
the Disclosure Statement are correct and complete and present fairly the
financial condition of the Business as of the date of such Financial Statements
and the results of its operations for the periods of such statements of
operations and have been prepared on a consistent basis with all prior periods
and in accordance with generally accepted accounting principles ("GAAP"). Since
the date of the Financial Statements,
- 9 -
10
there has been no material adverse change in the assets, liabilities, business,
operations or condition, financial or otherwise, of the Business from that shown
on the Financial Statements.
5.4 TITLE TO ASSETS - The Disclosure Schedule contains a list of
all Assets owned by the Company and related to the Business. The Company has
good and marketable title to the Assets, free and clear of any and all liens,
mortgages, pledges, conditional sales assignments, security interests,
judgments, options, adverse claims, encumbrances or other restrictions or
limitations whatsoever. The Assets listed on the Disclosure Schedule represent
all of the assets necessary to operate the Business in the same manner as
operated prior to the date hereof and for the balance of their estimated useful
lives will be suitable and sufficient for the conduct of the Business in the
same manner as presently conducted.
5.5 CONTRACTS AND COMMITMENTS - Except as set forth on the
Disclosure Schedule, the Company is not a party to, or bound or affected by any
contract, lease, agreement, covenant, license, instrument or commitment (whether
written or oral) of any type, including the following:
5.5.1 contracts for the employment or compensation of any
officer or individual employee, not terminable without further liability at any
time:
5.5.2 contracts with any labor union;
5.5.3 continuing contracts for the future purchase of
materials, supplies or equipment;
5.5.4 continuing contracts for the future provision of
its services;
5.5.5 distribution or agency contracts, License
Agreements, franchise contracts, or advertising commitments;
5.5.6 pension, profit sharing, deferred compensation,
retirement or stock option or stock purchase plans in effect with respect to
officers, employees or others;
5.5.7 leases under which it is lessor or lessee;
5.5.8 underwriting agreements or agreements with a broker
or finder;
5.5.9 consulting agreements;
5.5.10 contracts for the acquisition of a business, or
substantially all of the property, assets, or stock of a business under which
there are any continuing or unperformed obligations on the part of any of the
parties thereto; or
5.5.11 Any other contract, agreement, or commitment
involving $1,000 or more or which is not terminable without further liability to
the Company upon no more than thirty (30) days' notice.
There have been delivered to Buyer true and correct copies of each of the
Contracts, listed in the Disclosure Schedule. All Contracts are valid, binding
and in full force and effect and are enforceable in accordance with their terms
against all other parties to such Contracts. The Company have
- 10 -
11
performed all obligations required to be performed by it to date and is not in
default in any material respect under any Contract to which it is a party. None
of the Contracts were arrived at, or otherwise reflect, less than arms length
negotiations or bargaining.
5.5 INSPECTION OF RECORDS - The Company has made, or will make,
available for inspection by Buyer full and complete information concerning the
Company's customers, suppliers, vendors and all aspects of the Company's
Business, including complete copies of any customer, vendor, or supplier
contracts.
5.5 INVENTORIES - The inventory of the Company as of the Closing
Date shall, in all material respects, consist of items of a quality, condition
and quantity consistent with normal inventory levels of the Company and be
useable and saleable in the Ordinary Course of Business for the purposes for
which intended. Such inventory is carried on the Company's books of account in
accordance with GAAP, consistently applied.
5.5 EQUIPMENT AND OTHER TANGIBLE PROPERTY - The Company's tangible
personal property related to the Business and included in the Assets shall, as
of the Closing Date, be in all material respects suitable for the purposes for
which intended and in good operating condition and repair consistent with normal
industry standards, except for reasonable and ordinary wear and tear.
5.6 AUTHORIZATIONS - The Company has all material and relevant
authorizations necessary to own, operate, use and/or maintain its Assets and the
Business in all locations where the Company conduct such Business, all of which
are listed on the Disclosure Schedule. The reusable products manufactured for
the Company from the molds owned by the Company and included in the Assets have
been authorized to be to be marketed in the United States by the United States
Federal Food and Drug Administration ("FDA") pursuant to the Federal Food, Drug
and Cosmetic Act ("FFDCA"). No proceeding is pending or threatened to modify,
suspend, revoke, withdraw, terminate or otherwise limit any authorizations which
could adversely affect the ability of the Company own, operate, use or conduct
the Business currently operated. No assignment or approval by any Governmental
Authority is necessary to vest all rights to sell or market the Assets with
Buyer as they pertain to FDA approval.
5.7 INTANGIBLE RIGHTS - Listed on the Disclosure Schedule is all
of the Intangible Rights owned or used by the Company in the Business. The
Company is the legal and equitable owner or has the right to use all of the
Intangible Rights listed on the Disclosure Schedule. The conduct of the Business
does not infringe or conflict with, and has not in the past infringed or
conflicted with, and the Company are not in receipt of any notice or complaint
of conflict with or infringement of, the asserted rights of others in any
Intangible Rights of others.
5.8 LITIGATION - There are no actions, suits, proceedings or
investigations, either ad ministrative or judicial (whether or not on behalf of
the Company) pending or, threatened against or affecting the Company or the
Assets. The Company is not in default with respect to any order, writ,
injunction or decree of any court or Governmental Authority. The Company is in
compliance in all material respects with all laws, rules, regulations and orders
materially applicable to its Business.
5.9 COMPLIANCE WITH LAWS - The Company is and has been in
compliance in all respects with any and all laws, regulations, ordinances,
rules, orders or decrees applicable to the Company , including, but not limited
to all Environmental Laws, the FFDCA and any regulations thereunder. The Company
has not received or entered into any citation, complaints, consent order,
- 11 -
12
compliance agreements or other similar enforcement order or received written
notice from any Governmental Authority that would indicate that the Company is
not currently in compliance with all such laws, regulations, ordinances, rules,
orders or decrees.
5.10 ABSENCE OF MATERIAL CHANGES - Except as set forth in the
Disclosure Schedule, from the date of the Financial Statements to the date
hereof, the Company has not:
5.10.1 incurred any obligations or liabilities (absolute
or contingent) except current liabilities incurred, and obligations under
Contracts entered into, in the Ordinary Course of Business;
5.10.2 discharged or satisfied any lien or encumbrance or
paid any obligation or liability (absolute or contingent) other than obligations
or liabilities discharged or satisfied in the Ordinary Course of Business;
5.10.3 mortgaged, pledged, or subjected to any lien,
charge, or other encumbrance, any of its assets, tangible or intangible, other
than liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings;
5.10.4 sold or transferred any of its tangible assets or
canceled any debts or claims, except in each case in the Ordinary Course of
Business;
5.10.5 sold, assigned, or transferred any Intangible
Rights;
5.10.6 suffered any material operating or extraordinary
loss or waived any right of substantial value;
5.10.7 entered into any transaction other than in the
Ordinary Course of Business;
5.10.8 received any notice of termination of any
contract, lease or other Agreement;
5.10.9 entered into any Contracts for which the Company
expects to incur a loss from the provision of services.
5.11 TAX RETURNS - The Company is a wholly-owned subsidiary of
BioMed, Inc. ("BioMed") and files a consolidated tax return with BioMed as its
parent. BioMed was recently reorganized under Chapter 11 of the United States
Bankruptcy Code. As part of its reorganization, BioMed entered into an agreement
with the U.S. Internal Revenue Service ("IRS") establishing all of its tax
liabilities through the date of its plan confirmation (May 1, 1998). A copy of
the agreement by and between BioMed and the IRS (the "IRS Agreement") will be
provided to the Buyer by the Company. The Company represents and warrants that
it and BioMed have made in full all payments required to be made to date, under
the IRS Agreement; and is not required to make any estimated payments. The IRS
Agreement does not in any way limit or prohibit the performance of the Company
under the terms of this Agreement. As part of the BioMed consolidated group, the
company has the benefit of a significant net operating loss carry forward which
the Company expects will shelter it from the payment for any federal income
taxes otherwise payable in the near future. With regard to Taxes accruing after
May 1, 1998, the Company shall timely remit all withholding, 1099's, 1120's,
employment, sales, ad valorem, personal property and estimated income taxes due
and payable to date and which becomes due prior to, or on, the Closing Date.
- 12 -
13
5.12 ACCOUNTS RECEIVABLE - The accounts receivable and other
receivables shown on the Financial Statements or thereafter acquired prior to
the Closing Date arose from bona fide transactions in the Ordinary Course of
Business and the goods and services involved have been sold, delivered and
performed for the Company's customers as covered by the account obligor. No
further goods are required to be provided and no services are required to be
rendered in order to complete the sales and to entitle the Company to collect
the accounts receivable. None of the accounts receivable are subject to set-off
or counterclaim. Since the date of the Financial Statements, there has been no
reduction in the accounts receivable and other receivables of the Company.
5.13 COMPLIANCE WITH INSTRUMENTS - The consummation of the
transaction contemplat ed by this Agreement will not result in a breach or
violation of any of the terms, provisions or conditions of, or constitute a
default under, or result in the creation of any lien, charge or encumbrance on
any property or assets of the Company pursuant to its Articles of Incorporation,
all amendments thereto, By-Laws, any provision of law, judgment, decree,
indenture, Agreement or instrument to which the Company is a party or by which
it is bound.
5.14 BROKERS' COMMISSIONS - The Company has not entered into any
agreement or understanding with any person, firm or entity or have become
indirectly a party to any agreement for the payment or any commission, finders
or brokerage fee in connection with this Agreement and the transaction
contemplated hereof. The Company, hereby agrees to indemnify and hold harmless
the Buyer and MWI from any claims for a commission, finder's or broker's fee.
5.15 BOOKS AND RECORDS - The books of account and other records of
the Company are materially complete and correct and in the aggregate present and
reflect all of the transactions entered into by it or to which it is a party.
The Company has no knowledge of any condition whether pending or threatened
which would have a material adverse effect upon the Business of the Company or
prevent such Business from being carried on in substantially the same manner in
which it is presently carried on.
5.16 ACCURACY OF INFORMATION - All information provided to Buyer
by the Company as an inducement to Buyer and MWI to enter into this Agreement or
in compliance with the provisions of this Agreement are accurate and complete
and do not contain any untrue statement of a material fact or omit any material
fact necessary to make the information provided not misleading. All information
relating to the Company or the Business which is known to, or would on
reasonable inquiry be known to the Company and which may be material to an
intending purchaser for value, has been disclosed to Buyer and MWI.
5.17 ENVIRONMENTAL LAWS - The Business and the Company are in
compliance with all applicable federal, state and local Environmental Laws and
regulations governing the environment, public health and safety and employee
health and safety (including all provisions of the Occupational Safety and
Health Act) and no Environmental Claim has been filed or commenced against the
Company alleging any failure to comply with any such Environmental Law or
regulation. The Company nor any of its affiliates, agents or licensees have
engaged in the storage, Release, holding, emission, discharge, generation,
processing, disposition, handling or transportation of any substance or material
designated as a Hazardous Material or Medical Waste in violation of any
Environmental Law, ordinance or regulation. There are no Hazardous Materials or
Medical Waste at, on or in any of the Company's properties in violation of any
Environmental Laws, ordinances or regulations and there is no proceeding
- 13 -
14
or inquiry pending or threatened by any federal, state or local Governmental
Authority with respect thereto.
ARTICLE 6. - REPRESENTATIONS AND WARRANTIES OF BUYER AND MWI
Buyer and MWI represent and warrant to the Company that:
6.1 ORGANIZATION - Buyer is duly organized and validly existing as
a corporation in good standing under the laws of the State of Florida and has
full corporate power to carry on its business as now conducted and is entitled
to own or lease its properties and to carry on its business as now conducted in
the places where such properties are now leased, owned or operated or such
business is now conducted.
6.2 ORGANIZATION - MWI is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware and has
full corporate power to carry on its business as now conducted and is entitled
to own or lease its properties and to carry on its business as now conducted in
the places where such properties are now leased, owned or operated or such
business is now conducted.
6.3 AUTHORITY - Buyer and MWI have full power and authority to
enter into this Agreement and the consummation of the transaction contemplated
by this Agreement will not result in any breach of any of the terms, provisions,
or conditions of, or constitute a default under, or result in the creation of,
any lien, charge, or encumbrance of any property or assets of Buyer or MWI
pursuant to their respective Articles of Incorporation, By-Laws or any
indenture, Agreement, instrument, order, judgment, or decree to which they are a
party or by which they are bound.
6.4 FINANCIAL STATEMENTS - The financial statements contained in
MWI's Form 10-KSB for the fiscal year ended December 31, 1997 and in MWI's Form
10-QSB for the quarter ended March 31, 1998 with the Securities and Exchange
Commission (the SEC") are, and any other filing with the SEC following the date
hereof through the Closing Date will be, correct and complete and present fairly
the financial condition of MWI as of the dates of such balance sheets and the
results of its operations for the periods of such statements of operations and
have been prepared on a basis consistent with all prior periods and in
accordance with generally accepted accounting principles. Since March 31, 1998,
there has been no material adverse change in the assets, liabilities, business,
operations or financial condition of MWI as shown on the financial statements
contained in the Form 10-KSB.
6.5 ABSENCE OF MATERIAL CHANGES - From March 31, 1998 to the date
hereof, except as may be disclosed in its Form 10-KSB or Form 10-QSB as a
subsequent event, MWI has not:
(a) suffered any material operating or extraordinary loss
or waived any right of substantial value;
(b) had any union or labor difficulties or work stoppage;
(c) received any notice of termination of any contract,
lease, or other agreement which in the aggregate would have a Material Adverse
Effect on MWI.
- 14 -
15
ARTICLE 7. - OBLIGATIONS PRIOR TO CLOSING
7.1 OPERATION OF BUSINESS - The Company agrees that, from the date
hereof to the Closing Date, the Company shall conduct its Business and affairs
only in the Ordinary Course of Business.
7.2 ACCESS TO BOOKS AND RECORDS - From and after the date hereof,
the Company shall (a) afford to the officers, employees and representatives of
Buyer and MWI full and free access to its assets, personnel, properties, records
and books of account at all reasonable times during business hours, (b) to
furnish to such officers, employees and representatives such other information
as Buyer and MWI may reasonably request, and (c) to authorize its accountants
and auditors to permit Buyer's and MWI's independent public accountants and
representatives to examine all records pertaining to the Company's Financial
Statements and other books and records of the Company. Buyer and MWI agree to
treat all such material as confidential and not make use of such materials
except for the purposes expressed in this Agreement unless such use comes into
the public domain.
7.3 NEGATIVE COVENANTS - The Company covenants that from and after
the date hereof and through the Closing Date, without the prior written consent
of Buyer and MWI, the Company will not:
7.3.1 enter into any written or oral contract, agreement,
or commitment of any type pertaining to the Assets of the Business.
7.3.2 mortgage, pledge or subject to any lien, charge or
other encumbrance any of its tangible or intangible Assets;
7.3.3 dispose of any of its Assets;
7.3.4 enter into any other transaction, other than in the
Ordinary Course of Business.
7.4 AFFIRMATIVE COVENANTS - The Company covenants that from and
after the date hereof and through the Closing Date, the Company will:
7.4.1 keep the Assets insured consistent with prior
practices in respect thereto;
7.4.2 perform in the Ordinary Course of Business all of
its obligations under Contracts and documents relating to or affecting the
Assets and Business;
7.4.3 materially preserve intact its Business,
organization, and goodwill, to the end that the Buyer shall continue to operate
the Assets as a going business as now constituted, after the consummation of the
transaction contemplated hereunder.
7.5 CONSUMMATION OF TRANSACTIONS - Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all such actions and to do, or cause to
be done, all other things necessary to carry out its obligations hereunder and
to consummate and make effective, as soon as reasonably practicable, the
transactions contemplated by this Agreement, including satisfying the conditions
to the obligations of the other party and obtaining all waivers, permits,
consents and approvals and effecting all registrations, filings and notices with
or to third parties or governmental or public bodies or authorities which are
necessary in
- 15 -
16
connection with the transactions contemplated by this Agreement; provided that
this Section 7.5 shall not require either party to waive any condition for its
benefit or any performance hereunder by the other party or to make any payment
to any third party, whether private or governmental, or to expend any funds or
incur any economic burden in connection with obtaining the consent of any third
party, whether private or governmental; and provided further that this Section
7.5 shall not require any party to take any action the result of which, in its
reasonable judgment, would be to impose material limitations on its ability to
consummate and retain the full benefits of the transactions contemplated hereby.
7.6 NO NEGOTIATIONS - Except in the furtherance of the
transactions contemplated hereby, prior to the Closing Date, the Company agrees
that (a) neither it nor any of its affiliates shall, and each of them shall
direct and use its best efforts to cause its respective directors, officers,
employees, representatives or agents (including, without limitation, any
investment banker, attorney or accountant retained by it or any of its
affiliates) not to, directly or indirectly, initiate, solicit or encourage any
inquiries or the making or implementation of any proposal or offer (including,
without limitation, any proposal or offer to its stockholders), with respect to
any merger, acquisition, consolidation, share exchange, business combination or
other transaction involving, or which would result in, (i) the acquisition of a
majority of the outstanding capital stock in the Company, or (ii) the
acquisition of a material part of the Assets of the Company (any such proposal
or offer being hereinafter referred to as an "Acquisition Proposal"), or engage
in any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person or entity relating to an
Acquisition Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal; (b) it shall immediately cease and cause to
be terminated any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any of the foregoing, and it shall
take the necessary steps to inform any such parties of the obligations
undertaken in this Section 7.6; and (c) it shall notify Buyer immediately if any
such inquiries or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with, it.
7.7 DAMAGE OR DESTRUCTION OF ASSETS - In the event that any loss
or damage to or destruction of any of the Assets shall occur prior to the
Closing, Buyer shall have the option of either (a) terminating this Agreement,
in which case neither Buyer nor the Company shall have any further obligations
or rights hereunder other than for the Company's obligations to reimburse MWI
for the option payments made in accordance with Section 3.2 herein, or (b)
reducing the Purchase Price by the replacement cost of such Assets.
7.8 COMPANY EMPLOYEES - The Company shall terminate the employment
of all employees of the Business listed in Schedule 5.12 of the Disclosure
Schedule at the close of business on the day immediately prior to the Closing
Date. The Buyer shall have the right, but not the obligation to offer employment
to all such terminated employees. All claims of the employees arising out of
their employment by the Company before the Closing Date or termination thereof
whether or not hired by Buyer shall be the sole liability of the Company and the
Company will indemnify and hold the Buyer harmless from all claims or damages
arising therefrom. The Company will directly pay all terminated employees,
including any employees thereafter hired by the Buyer for earned and unused
vacation, in accordance with the Company's prior practices.
- 16 -
17
ARTICLE 8. - CONDITIONS PRECEDENT TO THE CLOSING
8.1 CONDITIONS TO OBLIGATIONS OF BUYER AND MWI- The obligations of
Buyer and MWI to consummate this Agreement shall be subject to, and be
conditioned upon, each of the following conditions:
8.1.1 PROPERTIES INTACT - No Assets of the Company shall
have suffered any
destruction or damage by fire, accident or other casualty or act of God
affecting in a material way the conduct of the Business of the Company.
8.1.2 REPRESENTATIONS AND WARRANTIES - The
representations and warranties made by the Company in Article 5 hereof shall be
correct in all respects 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; none of the covenants of the Company contained in this
Agreement shall have been breached in any respect as of the Closing Date.
8.1.3 NO ADVERSE CHANGES - That since the date of the
Financial Statements there has been no adverse change in the condition of the
Company, financial or otherwise, from that set forth in the Financial
Statements.
8.1.4 APPROVALS AND CONSENTS - All consents, approvals,
authorizations or orders of any individual, entity, court or Governmental
Authority or administrative body, if any, shall have been obtained and in effect
on the Closing Date, which are required for the consummation of the transaction
be contemplated by this Agreement.
8.1.5 AUTHORIZATION OF AGREEMENT BY THE COMPANY - All
actions of the Company's Board of Directors and their shareholders necessary to
authorize the execution, delivery and performance of this Agreement by the
Company shall have been duly and validly taken.
8.1.6 NO LITIGATION - No claim, proceeding,
investigation, or litigation, either administrative or judicial, shall be
threatened or be pending against the Buyer, MWI or the Company which, in the
opinion of counsel for Buyer, presents a reasonable probability that the
transaction contemplated by this Agreement would be enjoined or prevented or
that the right of Buyer to continue the operations of the Business would be
materially affected.
8.1.7 DUE DILIGENCE - Buyer shall have completed its due
diligence investigation and the results thereof shall not have revealed that any
of the representations, warranties or covenants made by the Company in this
Agreement are untrue or incorrect in any material respect or otherwise be
unsatisfactory to Buyer.
8.1.8 NO CHANGE IN LAW - There shall have not been
proposed or enacted (including without limitation, any threatened proposal or
enactment of) any statute, rule, regulation, policy, guideline, or official
interpretation, or any modification in or to any existing statute, rule,
regulation, policy or guideline, which prohibits or delays or threatens to
prohibit or delay, the performance of the transaction contemplated by this
Agreement or which changes, or threatens to change, in an adverse manner, the
Business, financial condition, revenues, income, liabilities (whether absolute,
contingent or otherwise) reserves or prospects of the Company from that
reflected in the Financial Statements.
8.1.9 NO LIENS - Buyer shall have received written
evidence in form and substance satisfactory to it of the termination of any and
all liens that encumber any of the Assets.
- 17 -
18
8.1.10 NO VIOLATIONS OF LAW - At the Closing Date, there
shall exist no violations of any Federal, state or local law, ordinance or
regulation affecting the Assets or Business of the Company.
8.1.11 PERFORMANCE BY THE COMPANY - All of the terms and
conditions of this Agreement to be complied with and performed by the Company on
or before the Closing Date shall have been complied with and performed.
8.1.12 PROCEEDINGS AND INSTRUMENTS SATISFACTORY - All
proceedings, corporate or other to be taken in connection with the transaction
contemplated by the Agreement and all documents incident thereto, including any
Collateral Agreement, shall be satisfactory in form and substantive to Buyer and
Buyer's counsel.
8.1.13 NON-COMPETITION AGREEMENT - Each person set forth
in the Disclosure Schedule shall have executed the Non-Competition Agreements as
required in Section 4.2 herein.
8.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY - The obligations of
the Company to consummate this Agreement are subject to and shall be conditioned
upon each of the following conditions:
8.2.1 REPRESENTATIONS AND WARRANTIES - The
representations and warranties made by Buyer and MWI herein shall be correct in
all material respects on and as of the Closing Date with the same force and
effect as though such representations had been made on and as of the Closing
Date. The covenants of Buyer and MWI contained herein shall not have been
breached in any material respects as of the Closing Date.
8.2.2 PERFORMANCE BY BUYER AND MWI - All of the terms,
covenants and conditions of this Agreement to be complied with and performed by
Buyer and MWI on or before the Closing Date shall have been complied with and
performed.
8.2.3 CONSENTS AND APPROVALS - No consent, approval,
authorization or order of any individual, entity, court or governmental agency
or administrative body not obtained and in effect on the Closing Date shall be
required for the consummation of the transaction contemplated by this Agreement.
8.2.4 NO ADVERSE CHANGES - That since March 31, 1998
there has been no adverse change in the condition of MWI, financial or
otherwise, from that set forth in MWI's Form 10- QSB for the quarter ended March
31, 1998.
8.2.5 AUTHORIZATION OF AGREEMENT BY THE BUYER AND MWI -
All actions of the Buyer's and MWI's respective Boards of Directors and their
shareholders, if applicable, necessary to authorize the execution, delivery and
performance of this Agreement by Buyer and MWI shall have been duly and validly
taken.
- 18 -
19
ARTICLE 9. - POST-CLOSING OBLIGATIONS
9.1 SURVIVAL OF THE CLOSING - All covenants, agreements,
representations, and warranties made hereunder and in any certificates delivered
at the Closing pursuant hereto shall be deemed to have been relied upon by
Buyer, MWI and the Company, and shall survive the Closing for the applicable
statute of limitation period.
9.2 FURTHER ASSURANCES - Following the Closing, each of the
Company, MWI and Buyer shall execute and deliver such documents, and take such
other action as shall be reasonably requested by any other party hereto to carry
out the transaction contemplated by this Agreement.
9.3 INDEMNIFICATION BY COMPANY - The Company agrees to indemnify,
reimburse and hold Buyer and MWI harmless against and from:
9.3.1 All Damages suffered, incurred, or sustained by
Buyer or MWI as a result of (i) the existence on or before the Closing Date of
any liabilities, absolute or contingent, of the Company which were not paid by
the Company; (ii) the untruth of any representation or the breach of any
warranty made in this Agreement; (iii) the untruth of any certificate required
under this Agreement to be delivered by the Company to Buyer or MWI on the
Closing Date; (iv) the breach of this Agreement by the Company.
9.3.2 Buyer and MWI shall give the Company prompt notice
of any claim to indemnification it may wish to assert pursuant to this Article 9
as soon as reasonably practicable. Before being required to make any payments
pursuant to this Section 9.3, the Company may, in their discretion and at their
expense, take all necessary steps properly to contest any claim or liability or
action in respect thereof involving third parties, or to prosecute such contest
or action to conclusion or settlement satisfactory to Buyer and the Company.
Buyer and MWI shall cooperate fully with the Company in the reasonable conduct
of any such contest or action, legal proceedings, negotiation, or settlement and
will not permit compromise voluntarily or settle any such contest, action, legal
proceeding, claim or demand without prior notice to the Company.
9.3.3 Upon the payment to Buyer or MWI by the Company of
any amount which Buyer or MWI is entitled to receive by way of indemnification
under this Section 9.3, Buyer and MWI shall forthwith assign to the Company all
of its right, title, and interest in any item for which indemnification shall so
be made, including claims against third parties relating therewith.
9.3.4 In the event that the Company shall dispute the
right of Buyer or MWI to be indemnified under this Section 9.3, or any item with
respect to which Buyer or MWI shall so request indemnification, or if the
Company shall dispute the amount which Buyer or MWI shall be entitled to receive
with respect to such item by way of indemnification, such dispute shall be
submitted to arbitration in the City of Miami, in accordance with the rules then
in effect of the American Arbitration Association.
9.4 NON-COMPETITION AGREEMENT. The Company hereby agrees as
follows:
9.4.1 The Company will not, for a period of five (5)
years from the Closing Date without the prior written consent of Buyer, be an,
independent contractor, agent, director, stockholder or owner (except of not
more than one percent (1%) of the securities of a publicly traded entity),
partner, consultant, financial backer, creditor or be otherwise directly or
indirectly connected with or participate in the management, operation or control
of any business, firm, proprietorship, corporation, partnership, association,
entity or venture engaged in a business similar to the Business within the
United States.
- 19 -
20
9.4.2 The Company covenants and agrees that for a period
of five (5) years from the Closing Date without the prior written consent of
Buyer, they will not contact, call upon, solicit business from, sell or render
services to any customer of the Business with respect to the provision of any
services or supplies similar to the Business or otherwise directly or indirectly
aid or assist any other person, firm or entity to do any of the aforesaid acts,
except on behalf of the Buyer or its subsidiaries or affiliates.
9.4.3 The Company covenants and agrees that for a period
of five (5) years from the Closing Date without the prior written consent of
Buyer, they will not directly or indirectly as principal, agent, owner, partner,
stockholder, officer, director, employee, independent contractor or consultant
or in any individual or representative capacity for itself or on behalf of any
business firm, corporation, partnership, association or proprietorship enter
into any agreements with or solicit, or directly or indirectly cause others to
solicit, the employment of any officer or other employee of the Buyer or any of
its subsidiaries and affiliates for the purpose of causing said officer or
employee to terminate employment with the Buyer or its subsidiaries and
affiliates.
9.4.4 The Company agrees that it shall not at any time
disclose directly or indirectly to any person, firm or entity any confidential
information about the Business or any information concerning their respective
financial condition, customers, sources of patients and methods of obtaining
business or any other methods generally of doing and operating the Business,.
9.4.5 It is recognized and acknowledged by the parties
hereto that a breach, threatened breach, or violation by the Company of any of
the covenants and agreements contained in Section 9.4 may cause irreparable harm
and Damage to the Buyer and the Business in a monetary amount which may be
impossible to ascertain. The Company agree that the Buyer and MWI shall be
entitled to an injunction from any court of competent jurisdiction enjoining or
restraining any breach or violation of any or all of the covenants and
agreements contained in this Section 9.4 and that such right to injunction shall
be cumulative and in addition to whatever other rights or remedies the Buyer or
MWI may possess hereunder at law or in equity.
9.5 PUBLICITY - The Company shall not issue or make, or cause to
have made, any public release or announcement concerning this Agreement or the
transaction contemplated hereby, without the advance written approval of the
form and substance by Buyer.
ARTICLE 10. - MISCELLANEOUS
10.1 COSTS AND EXPENSES - Except as otherwise provided herein in
this Agreement, if this Agreement is terminated in accordance with Section 4.4,
each of the parties to this Agreement shall bear their own expenses incurred in
connection with the negotiation, preparation, execution and closing of this
Agreement and the transaction contemplated hereby, including but not limited to,
transfer taxes, legal fees and accounting fees.
10.2 REMEDIES - The right and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any party hereto shall
not preclude or constitute a waiver of its right to use any and all other
remedies. Such rights and remedies are given in addition to any other rights and
remedies a party may have by law, statute or otherwise.
- 20 -
21
10.3 DISCLOSURE SCHEDULE - The Disclosure Schedule shall in each
instance, include the Schedules and the Exhibits referred to herein and therein.
The Disclosure Schedule shall be deemed an integral part hereof and is
incorporated herein by this reference.
10.4 ATTORNEYS' FEES - In the event of any litigation or
arbitration arising out of this Agreement, the prevailing party shall be
entitled to an award of its attorneys' fees and costs (including any fees and
costs incurred in Appellate proceedings) against the losing party.
10.5 RISK OF LOSS - Prior to the Closing, the risk of loss, damage
to, or destruction of any assets of the Company shall remain with the Company.
10.6 ASSIGNMENT AND AMENDMENT OF AGREEMENT - This Agreement shall
not be assignable by any of the parties hereto except with the written consent
of the other party. This Agreement may not be amended except by written
agreement executed by all of the parties hereto.
10.7 NOTICES - Any notice or communication given pursuant hereto
by either party to the other party shall be in writing and delivered or mailed
by certified mail, return receipt requested, postage prepaid, as follows:
If to Buyer or MWI: MED/WASTE, INC.
0000 X.X. 000xx Xxxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, President
Copy to: Wallace, Bauman, Legon, Fodiman & Xxxxxxx, P.A.
0000 Xxxxx xx Xxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company: BIOMADE PLASTICS, INC.
0000 Xxxx Xxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx, President
Copy to: Angel & Xxxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx Xxxxx, Esq.
or at such other address as hereafter shall be furnished in writing by any party
hereto to the other parties.
10.8 ENTIRE AGREEMENT - This Agreement, together with the
Disclosure Schedule, is the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written of the
parties. No other agreement not specifically referred to herein, oral or
otherwise, shall be deemed to exist or to bind any of the parties. No officer or
employee of any party has any authority to make any representation or promise
not contained in this Agreement and each of the parties agrees that it has not
executed this agreement in reliance upon any such representation or promise.
- 21 -
22
10.9 WAIVER - Any forbearance, failure or delay by any of the
parties hereto to exercise any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy and any single or partial
exercise of any such right, power or remedy hereunder shall not preclude the
further exercise thereof and every right, power or remedy of either party shall
continue in full force and effect unless waived specifically by an instrument in
writing executed by such party.
10.10 GOVERNING LAW - This Agreement shall be construed in
accordance with the laws of the State of Florida.
10.11 COUNTERPARTS - This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
10.12 CAPTIONS - The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
10.13 SUCCESSORS AND ASSIGNS - All of the terms of this Agreement
shall be binding upon and inure to the benefit of, and be enforceable by and
against the parties and their respective successors and assigns.
10.14 INTERPRETATION - Handwritten provisions inserted in this
Agreement, initialed in ink, shall control all typewritten provisions in
conflict therewith. This Agreement shall not be construed more strongly against
or in favor of any party, regardless of who is responsible for its preparation.
10.15 SEVERABILITY - In the event any provision of this Agreement
or the application of such provision to any part shall be held by a court of
competent jurisdiction to be contrary to any rule of law or public policy, the
remaining provisions of this Agreement shall remain in full force and effect.
10.16 RIGHTS OF THIRD PARTIES - Except as may otherwise be
specifically provided in this Agreement, nothing expressed or implied in this
Agreement is intended, or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
shareholders, any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Reorganization as of the date set forth above.
MED/WASTE, INC., a Delaware corporation
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
XXXXXX X. XXXXXXX, President
SAFETY DISPOSAL SYSTEM, INC., a Florida
corporation
By: /s/ XXXXXX X. XXXXXXX
-------------------------------------
Name: XXXXXX X. XXXXXXX
-------------------------------------
Title: PRESIDENT
-------------------------------------
- 22 -
23
BIOMADE PLASTICS, INC., a Minnesota
corporation
By: /s/ XXXXXX XXXXXX
-------------------------------------
XXXXXX XXXXXX, President
- 23 -
