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EXHIBIT 2.1
PLAN OF MERGER AND ACQUISITION AGREEMENT
among
LIFEQUEST MEDICAL, INC.
a Delaware corporation
VAL-U-MED ACQUISITION CO.,
a Nevada corporation
and
VAL-U-MED, INC.
a Georgia corporation
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THIS PLAN OF MERGER AND ACQUISITION AGREEMENT ("Agreement") made this
13th day of December, 1996 by and among VAL-U-MED, INC., a Georgia corporation
("Seller"), the persons whose names are set forth on Annex A hereto,
individuals, as the stockholders of Seller (individually referred to as the
Stockholders and collectively referred to as the "Stockholders"), LIFEQUEST
MEDICAL, INC., a Delaware corporation ("LifeQuest"), and VAL-U-MED ACQUISITION
CO., a Nevada corporation ("Purchaser," and together with LifeQuest, the
"LifeQuest Parties").
W I T N E S S E T H:
WHEREAS, LifeQuest is primarily in the business of developing and
commercializing minimally invasive surgical products.
WHEREAS, in connection with the transactions contemplated by this
Agreement, LifeQuest previously caused Purchaser to be organized and to issue
to LifeQuest all of the issued and outstanding stock of Purchaser; and
WHEREAS, Seller is in the business of distributing minimally invasive
surgical products in the southeastern region of the United States; and
WHEREAS, Stockholders are individuals constituting the sole stockholders
of Seller holding all of the issued and outstanding stock of Seller; and
WHEREAS, the respective boards of directors of Purchaser and Seller have
approved the merger of Seller with and into Purchaser (the "Merger") pursuant
to the terms and subject to the conditions of this Agreement; and
WHEREAS, this Agreement is intended to qualify under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree that Seller shall be merged with and into
Purchaser and that the terms and conditions of the Merger, the method of
carrying the Merger into effect and certain other provisions relating thereto
shall be as hereinafter set forth and as set forth:
ARTICLE 1
DEFINITIONS
Defined Terms. As used herein, the terms below shall have the following
meanings herein specified applicable to both the singular and plural forms of
any of the terms.
1.1 "Affiliate" shall mean, with respect to a Person, any Person
that, directly or indirectly, controls or is controlled by or is under common
control with the Person.
1.2 "Assets" shall mean the assets, properties and rights of Seller
of every nature, kind and description, wherever located, tangible and
intangible, real, personal and mixed, whether or not reflected in the books and
records of Seller necessary or
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desirable to permit the business of Seller to be carried on in the manner as is
presently conducted.
1.3 "Benefit Plans" shall mean bonus, deferred compensation,
severance, pension, profit sharing, retirement, stock purchase, stock option,
medical, hospitalization, accident insurance or any other employee benefit
plan, arrangement or practice, whether written or unwritten, which covers
employees of Seller.
1.4 "Business" shall mean the distribution and marketing of minimally
invasive surgical devices.
1.5 "Certificate" shall mean each stock certificate representing
shares of Seller Stock.
1.6 "Closing" shall mean the meeting held on the Closing Date.
1.7 "Closing Date" shall have the meaning assigned to it in Article
7.
1.8 "Conversion Ratio" shall mean the fraction resulting from one
divided by the total number of shares of Seller Stock issued and outstanding.
1.9 "Effective Time" shall mean the time at which a properly executed
certificate of merger in substantially the form attached to this agreement as
Exhibit A (together with other documents required by law to effect the Merger)
shall have been filed with the Secretary of State of Nevada, and in any other
jurisdiction where such a certificate of merger is required.
1.10 "Environmental Conditions" shall mean material conditions with
respect to soil, surface waters, ground waters, stream sediments, underground
tanks, asbestos and similar conditions on-site and off-site of properties
owned, occupied or used by Seller, as the case may be, related to the presence
or Release of Hazardous Substances, which conditions could require remedial
action or may result in claims, demands and liabilities against, upon or,
respectively, by third parties, including without limitation, governmental
entities, adjacent property owners and any individuals suffering property
damage or personal injury.
1.11 "Environmental Laws" shall mean all federal, state and local
laws, rules, regulations, codes, judgments and decrees concerning pollution or
protection of the environment.
1.12 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.13 "Financial Statements" shall mean the balance sheets, statements
of income and retained earnings and changes in cash flows for the years or
periods ended September 30, 1996, December 31, 1995 and December 31, 1994.
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1.14 "Former Seller Stockholders" shall mean each Person who was,
immediately before the Effective Time, a holder of issued and outstanding
shares of Seller Stock.
1.15 "Government Authority" shall mean any and all foreign, federal,
state or local governments, governmental institutions, public authorities and
governmental entities of any nature whatsoever, and any subdivisions or
instrumentalities thereof, including, but not limited to, departments, boards,
bureaus, commissions, agencies, courts, administrations and panels, and any
divisions or instrumentalities thereof, whether permanent or ad hoc and whether
now hereafter constituted or existing.
1.16 "Governmental Requirement" shall mean any and all laws
(including, but not limited to applicable common law principals), statutes,
ordinances, codes, rules, regulations, interpretations, guidelines, directions,
orders, judgments, writs, injunctions, decrees, decisions or similar
pronouncements, promulgated, issued, passed or set forth by any Governmental
Authority.
1.17 "Hazardous Substances" shall include any dangerous substances,
toxic substances, hazardous materials or hazardous substances as defined in or
pursuant to the Resource Conservation and Recovery Act (42 U.S.C. Section 6901,
et seq.), as amended, the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601, et seq.) ("CERCLA")), as amended, or
any other Environmental Law.
1.18 "Intellectual Property" shall have the meaning assigned to it in
Section 3.8.
1.19 "IRS" shall mean the Internal Revenue Service.
1.20 "LifeQuest SEC Documents" shall mean each report, schedule,
registration statement and definitive proxy statement filed by LifeQuest with
the SEC since January 1, 1994.
1.21 "LifeQuest Stock" shall mean the common stock, $.001 par value of
LifeQuest.
1.22 "Losses" shall mean all damages, losses, obligations,
liabilities, claims, encumbrances, deficiencies, costs and expenses including,
without limitation, reasonable attorneys' fees and other costs and expenses
incident to any suit, action, investigation, claim or proceeding.
1.23 "Merger Consideration" shall have the meaning assigned to it in
Section 2.6.
1.24 "Notice" shall mean any summons, citation, directive, order,
claim, litigation, proceeding, judgment, letter or other communication, written
or oral, actual or threatened, from the United States Environmental Protection
Agency or other federal, state or local agency or authority or any other entity
or any individual concerning any intentional or unintentional act or omission
which has resulted or may result in the Release of Hazardous Substances into
waters, or into the "environment"
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as such term is defined in CERCLA, from or on property owned, occupied or used
by Seller, and shall include the imposition of any lien on property occupied or
used by Seller, pursuant to any violation of any Environmental Law, or any
knowledge, after due inquiry and investigation, of any acts that could give
rise to any of the above.
1.25 "Other Party" shall mean any party required to indemnify the
LifeQuest Parties.
1.26 "Person" shall mean an individual, corporation, partnership,
joint venture, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
1.27 "Purchaser Stock" shall mean the common stock, $.01 par value of
Purchaser.
1.28 "Release" shall mean releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping.
1.29 "SEC" shall mean the United States Securities and Exchange
Commission.
1.30 "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.31 "Seller Stock" shall mean the common stock, par value $.01 of
Seller.
1.32 "Seller's Accountants" shall mean ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
1.33 "Seller's Contracts" shall mean (a) the contracts described on
Schedule 3.12, (b) purchase orders from customers accepted in the ordinary
course of business, and (c) employment contracts terminable on not more than 30
days' notice.
1.34 "Subsidiary" shall mean, with respect to any Person (the
"parent"), (i) any corporation, association, joint venture, partnership or
other business entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power or beneficial interest
are, at the time as of which any determination is being made, owned or
controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent and (ii) any joint venture or
partnership of which the parent or any Subsidiary of the parent is a general
partner or has responsibility for its management (provided, however, that the
term "Subsidiary" shall not include joint operating agreements).
1.35 "Surviving Corporation" shall mean the corporation existing at
and after the Effective Time as a result of the Merger.
1.36 "Taxes" shall mean any and all income, excise, franchise, or
other taxes and all other charges or fees imposed or collected by any
Governmental Authority or pursuant to any Governmental Requirement, and shall
also include any and all penalties, interest, deficiencies, assessments, and
other charges with respect thereto.
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ARTICLE 2
MERGER
2.1 The Merger. Subject to the terms and conditions of this
agreement, Seller shall be merged with and into Purchaser in accordance with
all applicable laws, with Purchaser being the Surviving Corporation. Purchaser
and Seller shall cause a certificate of merger to be filed with the Secretary
of State of Nevada, and in any other jurisdiction where such a certificate of
merger is required, within two business days after the Closing Date, unless
legally prohibited from doing so. The Merger shall be effective at the
Effective Time.
2.2 Surviving Corporation. From and after the Effective Time, the
Surviving Corporation shall have the name "Val-U-Med, Inc." and shall possess
all assets and property of every description, and every interest in the assets
and property, wherever located, and the rights, privileges, immunities, powers,
franchises and authority, of a public as well as of a private nature, of each
of Seller and Purchaser, and all debts and all other things in action or
belonging or due to each of Seller and Purchaser, all of which shall be vested
in the Surviving Corporation without further act or deed, and title to any real
estate or any interest in the real estate vested in either Seller or Purchaser
shall not revert or in any way be impaired.
2.3 Liabilities. The Surviving Corporation shall be liable for all
the debts, liabilities and duties of each of Seller and Purchaser; any action
or proceeding pending, by or against either Seller or Purchaser, may be
prosecuted to judgment, with right of appeal, as if the Merger had not taken
place, or the Surviving Corporation may be substituted in its place, and all
the rights of creditors of each of Seller and Purchaser shall be preserved
unimpaired, and all liens upon the property of each of Seller and Purchaser
shall be preserved unimpaired, on only the property affected by the liens
immediately prior to the Effective Time.
2.4 Certificate of Incorporation and Bylaws. The certificate of
incorporation and bylaws of Purchaser in effect immediately prior to the
Effective Time shall be the certificate of incorporation and bylaws of the
Surviving Corporation following the Merger until otherwise amended or repealed.
2.5 Directors and Officers. The directors and officers of Purchaser
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation until their successors are duly elected or appointed
and qualified in the manner provided in the bylaws of the Surviving
Corporation, or as otherwise provided by law.
2.6 Conversion or Cancellation of Stock Upon Merger. In
consideration for the Merger and the non-competition agreement in Section 14
hereof, as of the Effective Time, by virtue of the Merger and without any
action on the part of the holders of any shares of Seller Stock, or the holder
of the shares of Purchaser Stock, (a) the Seller Stock outstanding immediately
before the Effective Time shall be converted into the right to receive, subject
to Section 2.7 below, an aggregate of 1,200,000 shares of LifeQuest Stock (the
"Stock Merger Consideration"), and cash in the aggregate amount of $400,000, to
be allocated among the respective Stockholders as set forth on Annex
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A (the Stock Merger Consideration and such cash are collectively referred to
herein as the "Merger Consideration"), and (b) each share of Purchaser Stock
outstanding immediately before the Effective Time shall be converted into one
share of common stock of the Surviving Corporation.
2.7 Fractional Shares. Notwithstanding Section 2.6, no certificates
or scrip representing fractional shares of LifeQuest Stock shall be issued upon
the surrender for exchange of certificates that prior to the Effective Time
represented shares of Seller Stock, no dividend or distribution of LifeQuest
shall relate to any fractional share interest and no fractional share interest
shall entitle the owner thereof to vote or to exercise any rights of a
stockholder of LifeQuest. In the event that any Former Seller Stockholder
shall be entitled to any fractional share interest then any fractional amount
shall be rounded up to the nearest whole share.
2.8 Exchange Procedures.
2.8.1 Purchaser shall, no later than the Closing, deliver to
each holder of record of Seller Stock all instruments of transfer, terms
and conditions required or imposed by Purchaser in connection with the
exchange of Certificates and the payment of Merger Consideration.
2.8.2 After the Effective Time, each outstanding Certificate
shall, until duly surrendered to Purchaser as contemplated by this
Section 2.8, be deemed to represent only the right to receive the Merger
Consideration.
2.8.2.1 After the Effective Time, there shall be no further
transfer on the records of Seller of Certificates, and each share of
Seller Stock presented or surrendered to Purchaser shall be canceled in
exchange for the Merger Consideration as contemplated by Section 2.6.
Purchaser shall not be obligated to deliver Merger Consideration to any
holder of a Certificate until such holder surrenders such Certificate as
provided herein.
2.9 Interim Dividends. No dividends or other distributions declared
after the Effective Time on LifeQuest Stock issuable pursuant to the Merger and
payable to Former Seller Stockholders after the Effective Time shall be paid to
the holder of any unsurrendered certificates formerly representing shares of
Seller Stock until the certificates shall be surrendered as provided herein,
provided, however, that (a) upon surrender there shall be paid to the
stockholder in whose name the certificates representing the shares of LifeQuest
Stock shall be issued the amount of unpaid dividends with respect to the
holder's shares of LifeQuest Stock and (b) at the appropriate payment date, or
as soon as practicable thereafter, there shall be paid to the stockholder the
amount of dividends declared with respect to whole shares of LifeQuest Stock
with a record date on or after the Effective Time but before surrender and a
payment date subsequent to surrender, subject in any case to any applicable
escheat laws. No interest shall be payable with respect to the payment of
dividends or other distributions on surrender of outstanding certificates.
2.10 Reservation of Right. Purchaser may at any time change the
method of effecting the acquisition of Seller by Purchaser (including without
limitation, the
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provisions of this Article 2) if and to the extent it deems such change to be
desirable; provided, however, that no such change shall (a) alter or change the
amount, kind or timing of consideration to be paid by Purchaser under this
Agreement, or (b) in the reasonable opinion of Seller, adversely affect the
tax-free treatment of the transaction to the Stockholders.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders, jointly and severally, represent and warrant to the
LifeQuest Parties as follows:
3.1 Corporate Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of Georgia, and has full
power and authority to own its properties and to carry on its business as and
in the places where such properties are now owned or such business is now being
conducted. Complete and correct copies of the Certificate of Incorporation of
Seller and all amendments thereto, certified in each case by the Secretary of
State of the State of Georgia, and of the Bylaws of Seller and all amendments
thereto, certified by the Secretary of Seller, heretofore have been delivered
to LifeQuest. Seller is duly qualified to do business and is in good standing
in all jurisdictions (each such jurisdiction is set forth on Schedule 3.1
attached hereto and made a part hereof) in which such qualification is
necessary because of the character of the properties owned, leased or operated
by it or the nature of its activities, unless otherwise indicated on Schedule
3.1. Seller has not knowingly taken any action, or failed to take any action
which action or failure will preclude or prevent Seller's business from being
conducted in substantially the same manner in which Seller has heretofore
conducted the same.
3.2 Subsidiaries. Seller has no subsidiaries.
3.3 Capitalization. Seller's authorized capital stock consists of
1,000 shares of Seller Stock, of which 400 shares are issued and outstanding
and are owned of record and beneficially as set forth on Schedule 3.3 attached
hereto and made a part hereof, in each case free and clear of all liens,
encumbrances or other obligations and in each case issued without violation of
the preemptive, subscriptive or other similar rights of any person or entity.
There are no outstanding subscriptions, options, warrants, rights or other
agreements obligating Seller to issue any additional shares of Seller Stock,
except as set forth on Schedule 3.3 attached hereto and made a part hereof.
3.4 Authorization. Seller has full power and authority, corporate
and otherwise, to enter into this Agreement and to assume and perform its
obligations hereunder. The execution and delivery of this Agreement and the
performance by Seller of its obligations hereunder have been duly authorized by
the Board of Directors and the stockholders of Seller and no further action or
approval, corporate or otherwise, by Seller is required in order to constitute
this Agreement as a binding and enforceable obligation of Seller. The
execution and delivery of this Agreement and the performance by Seller of its
obligations hereunder do not and will not violate any provisions of the
Certificate of Incorporation or Bylaws of Seller and do not and will not
conflict with or result in any breach of any condition or provisions of, or
constitute
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a default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any of the Assets by reason of the terms of any contract,
mortgage, lien, lease, agreement, indenture, instrument or judgment to which
Seller is a party, or which is or purports to be binding upon Seller or which
affects or purports to affect any of the Assets.
3.5 Approvals and Consents. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary as to Seller or the Stockholders
in order to constitute this Agreement as a valid, binding and enforceable
obligation of Seller or the Stockholders in accordance with its terms.
3.6 Permits, Licenses, Etc. Seller has all permits, licenses, orders
and approvals, exclusive of those required under Environmental Laws (as that
term is hereinafter defined), of all federal, state, or local governmental or
regulatory bodies required for it to conduct its business as presently
conducted. All such permits, licenses, orders and approvals are in full force
and effect and no suspension or cancellation of any of them is threatened.
Seller is operating in compliance with all such permits, licenses, orders and
approvals, and none of such permits, licenses, orders or approvals will be
adversely affected by the consummation of the transactions contemplated by this
Agreement. Seller is in compliance with each law, rule and regulation other
than Environmental Laws applicable to its business including, without
limitation, laws, rules and regulations respecting occupational safety and
employment practices. The conduct of the business of Seller and all assets and
properties utilized by Seller therein are in conformance with the requirements
and regulations of the Occupational Safety and Health Administration ("OSHA").
3.7 Environmental Laws. Seller has all permits, licenses, orders and
approvals of, and has made all required filings with, all federal, state or
local governmental or regulatory bodies relating to, arising under or required
by the Environmental Laws. All such permits, licenses, orders and approvals
are in full force and effect and no suspension or cancellation of any of them
is pending or threatened. None of such permits, licenses, orders or approvals
will be adversely affected by the consummation of the transactions contemplated
by this Agreement. Seller is in compliance with all such permits, licenses,
orders and approvals and with all limitations, conditions, standards and
requirements contained in Environmental Laws applicable to it and the business
conducted by it. Schedule 3.7 attached hereto and made a part hereof contains
a description of each summons, citation, order, letter or other written
communication received by Seller from any federal, state or local governmental
or regulatory body under any of the Environmental Laws during the five-year
period ending on the date hereof.
There are no currently existing Environmental Conditions with respect to
properties owned, occupied or used by Seller. Seller has received no Notice
with respect to any Environmental Condition at any time prior to the date
hereof.
3.8 Intellectual Property and Other Intangible Assets. Schedule 3.8
sets forth a description of all intellectual property owned, licensed or
claimed by Seller. Seller (a)
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owns or has the right to use all inventions, discoveries, patents, copyrights,
trademarks, trade names, service marks, corporate names, licenses, trade
secrets and know how and all other intellectual property rights with respect to
the foregoing, used in or necessary for the conduct of its business as now
conducted or proposed to be conducted without infringing upon or otherwise
acting adversely to the right or claimed right of any Person under or with
respect to any of the foregoing (such inventions, discoveries, patents,
copyrights, trademarks, trade names, service marks, corporate names, licenses,
trade secrets and know how and all other intellectual property rights with
respect thereto being herein referred to as the "Intellectual Property") and
(b) is not obligated or under any liability or claim whatsoever to make any
payments by way of royalties, fees or otherwise to any owner or licensee of, or
other claimant to, any inventions, discoveries, patents, copyrights,
trademarks, trade names, service marks, corporate names, licenses, trade
secrets and know how and all other intellectual property rights, with respect
to the use thereof or in connection with the conduct of its business or
otherwise. A list of all such Intellectual Property and a statement whether
such Intellectual Property is owned or licensed is set forth in Schedule 3.8
hereto. Except as specifically set forth in Schedule 3.8 hereto, the
Intellectual Property has been duly registered or patented or sought to be
registered or patented with appropriate state, federal and foreign
jurisdictions and Seller is the sole and exclusive owner or has the sole and
exclusive right to use the Intellectual Property.
3.9 Financial Statements. Attached hereto as Schedule 3.9 and made a
part hereof are the Financial Statements which have been prepared by Seller's
Accountants in accordance with U.S. generally accepted accounting principles
consistently applied throughout the periods indicated. The Financial
Statements (a) are true, correct and complete, (b) are in accordance with the
books and records of Seller, (c) fairly, completely and accurately present the
financial position of Seller at the dates specified and the results of its
operations for the period covered, and (d) reflect expenses and liabilities of
Seller in a consistent manner throughout the periods to which the Financial
Statements relate. At the date of the Financial Statements, Seller had no
liabilities or obligations of any kind or nature, fixed or contingent, matured
or unmatured or otherwise, which are not fully reflected or reserved against on
the Financial Statements; nor does Seller have any liability or obligation of
any kind or nature arising since that date other than those incurred in the
ordinary course of business consistent with past practices, none of which are
material. Seller owns outright and has good and indefeasible title to all of
the Assets, including without limitation, all of the assets and properties
reflected on the Financial Statements or acquired thereafter, free and clear of
any mortgage, lien, pledge, charge, claim, conditional sales or other
agreement, lease, right or encumbrance of any sort except: (x) to the extent
stated or reserved against on the Financial Statements and for changes
occurring in the ordinary course of business after the date thereof, none of
which changes is adverse, and (y) as set forth on Schedule 3.9A attached hereto
and made a part hereof. Each such asset and item is in good operating
condition and repair, subject to ordinary wear and tear, and is adequate and
suitable for the purposes for which it is intended in the ordinary course. The
Assets include all assets and properties (real, personal and mixed, tangible
and intangible) and all rights necessary or desirable to permit Seller's
business to be carried on as presently conducted by Seller and Seller has
complete and unrestricted power and the unqualified right to transfer, convey
and assign the Assets.
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3.10 Material Adverse Changes Since the Date of the Financial
Statements. Since September 30, 1996, there has been no material adverse
change in the financial condition, assets, liabilities, properties, or business
of Seller. Since September 30, 1996, Seller has not:
(a) issued or sold any stock, notes, bonds or other
securities, or any option to purchase the same, or entered into any
agreement with respect thereto;
(b) declared, set aside or made any dividend or other
distribution on its capital stock or redeemed, purchased or acquired any
shares thereof or entered into any agreement in respect of the
foregoing;
(c) incurred any damage, destruction or similar loss, whether
or not covered by insurance, materially affecting its business or
properties;
(d) other than in the ordinary course of business, sold,
assigned or transferred any of its tangible assets or any trade name,
franchise, design, or other intangible assets or property;
(e) other than in the ordinary course of business, mortgaged,
pledged or granted or suffered to exist any lien or other encumbrance or
charge on any of its assets or properties, tangible or intangible;
(f) other than in the ordinary course of business, waived any
rights of material value or canceled or modified any material debts or
claims;
(g) incurred any liability or obligation for borrowed money to
any stockholder of Seller or any Affiliate of Seller;
(h) incurred any obligation or liability (absolute or
contingent) except current liabilities and obligations incurred in the
ordinary course of its business or paid any liability or obligation
(absolute or contingent) other than current liabilities and obligations
incurred in the ordinary course of business, none of which were
material;
(i) entered into any transaction other than in the ordinary
course of business except for the execution, delivery and performance of
this Agreement;
(j) became obligated to make any payment to any stockholder or
any Affiliate of Seller in any capacity, or entered into any transaction
of any nature with any stockholder or any Affiliate of Seller in any
capacity, except in respect of the foregoing for compensation to
stockholders or Affiliates who are employees of Seller in their capacity
as such;
(k) except for increases in the ordinary course and customary
in the business of Seller, which increases did not inure to officers,
directors or stockholders of Seller or to consultants to Seller,
increased the compensation payable to any employee of Seller or became
obligated to increase any such compensation; or their capacities as
such; or
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(l) entered into any transaction with any Affiliate of Seller,
except in respect of the foregoing for compensation to Affiliates who
are employees of Seller in their capacity as such.
3.11 Tax Returns. Seller has duly filed all federal, state, county
and local income, excise, sales and other tax returns and reports required to
have been filed by it to the date hereof, after giving effect to any extensions
of time to file duly obtained by Seller. Each such return and report is true
and correct and Seller has paid all taxes, interest and penalties shown on such
returns or reports to be due or claimed to be due prior to the date hereof to
any federal, state, county, local or other taxing authority. Seller has no
liability for any taxes, assessments, amounts, interest or penalties of any
nature whatsoever other than as shown on the Financial Statements and there is
no basis for any additional claim or assessment. The IRS has not examined the
Federal income tax returns of Seller. No waiver of the statute of limitations
has been given with respect to any taxable year of Seller. No government or
governmental authority is now asserting or threatening to assert any deficiency
or assessment for additional taxes or any interest, penalties or fines with
respect to Seller. Complete and correct copies of the federal income tax
return of Seller for the fiscal year ended December 31, 1995, as well as any
other tax returns requested by LifeQuest, have been heretofore delivered to
LifeQuest.
3.12 Contracts. Except as set forth on Schedule 3.12, Seller is not a
party to nor has any contract or commitment of any kind or nature whatsoever,
written or oral, including, without limitation, any lease, license, franchise,
employment, consultant or commission agreement, pension, profit sharing, bonus,
stock purchase, retirement, hospitalization, insurance or other plan or
arrangement involving employee benefits, contract with any labor union or
contract for services, materials, supplies or equipment or for the sale or
purchase of any of its products or assets. Except as set forth therein, each
of the Seller's Contracts referred to on Schedule 3.12 is valid and existing,
in full force and effect and enforceable in accordance with its terms and no
party thereto is in default and no claim of default by any party has been made
or is now pending and there does not exist any event that with notice or the
passing of time or both would constitute a default or would excuse performance
by any party thereto. Except as described on Schedule 3.12, none of Seller's
Contracts requires any consents or approvals by any party to such contract to
prevent a breach or to protect and preserve the rights of the Surviving
Corporation thereunder subsequent to the consummation of the Merger. Seller
has heretofore delivered to LifeQuest complete and correct copies of each of
Seller's Contracts.
3.13 Tangible Personal Property. Schedule 3.13 attached hereto and
made a part hereof is a true and complete list of all tangible personal
property owned by Seller having a book value at the date of the Financial
Statements. Seller owns and has good and indefeasible title in fee to all of
its assets and properties, including without limitation, all of the assets and
properties reflected in the Financial Statements and those identified on
Schedule 3.13, free and clear of any mortgage, lien, pledge, charge, claim,
conditional sales or other agreement, lease, right or encumbrance except (a) to
the extent stated or reserved against in the Financial Statements, (b) vendors'
or other statutory liens which may have resulted in the ordinary course of
business, (c) minor imperfections of title, liens and encumbrances which do not
materially detract from the
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value or the utility of the property subject thereto or materially impair the
operations of the owner thereof, and (d) as set forth in Schedule 3.13 attached
hereto and made a part hereof.
3.14 Real Property. Schedule 3.14 attached hereto and made a part
hereof is a complete and correct list of (a) all real property or premises
owned in whole or in part by Seller together with, in each case, a brief
description of such property or premises, including the area and the current
uses thereof, the record title holder thereof, the location thereof, the
material improvements thereon and all indebtedness secured by a lien, mortgage
or deed of trust thereon and (b) all real property or premises leased in whole
or in part by Seller, together with, in each case, a brief description of such
property or premises, including the area and the current uses thereof, the name
of the lessor and other material provisions of the applicable leases with
respect thereto including any requirement of consent of the lessor to the
transfer, assignment or subletting thereof. Complete and correct copies of all
such deeds, mortgages, deeds of trust, leases, guarantees of leases and other
documents concerning such real property and the interests of Seller have been
heretofore delivered to LifeQuest. None of such premises or properties has
been condemned or otherwise taken by any public authority, no condemnation or
taking is threatened or contemplated, and none thereof is subject to any claim,
contract or law which might affect its use or value for the purposes now made
of it, and each thereof is in good condition and repair.
3.15 Insurance. Schedule 3.15 attached hereto and made a part hereof,
is a true and complete list and brief description of all policies of fire,
liability and other forms of insurance owned or held by Seller. All of such
policies are valid and binding and in full force and effect as of the date
hereof and are in such amounts and cover such risks as are customarily carried
by other businesses similar to those conducted by Seller.
3.16 Banking. Schedule 3.16 attached hereto and made a part hereof is
a true and complete list setting forth the names and locations of all banks at
which Seller has an account or safe deposit box, the numbers of the accounts
and the names of all persons authorized to draw thereon.
3.17 Litigation. There are no actions, suits, proceedings or
investigations pending or threatened against or affecting the assets or the
business, operations or financial condition of Seller, at law or in equity, in
any court or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, nor is there
any basis for any such action, suit, proceeding or investigation. There are no
judgments outstanding against Seller and Seller is not in default in respect of
any judgment, order, writ, injunction, or decree of any court or any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality.
3.18 Labor. There are no threats of strikes, work stoppages or
demands for collective bargaining by any union or labor organization against or
including Seller, no grievances, disputes or controversies with any union or
any other organization of the
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employees of Seller, and no pending or threatened arbitration proceedings
involving an employment grievance, dispute or controversy.
3.19 Employee Benefit Plans. Except as set forth on Schedule 3.19
attached hereto and made a part hereof, Seller has no Benefit Plans, including,
without limitation, any "employee pension benefit plan" or "employee welfare
benefit plan" within the meaning of the Employee Retirement Income Security Act
of 1974, as amended (29 U.S.C. Section 1001, et seq.) ("ERISA"), and the final
regulations thereunder. True and complete copies of each written Benefit Plan
sponsored by Seller have heretofore been delivered to LifeQuest. Seller has no
commitment, written or oral, and whether legally binding or not, to create any
Benefit Plans in addition to those shown on Schedule 3.19. Seller has no
benefit plan that is a defined benefit plan within the meaning of ERISA Section
3(35) maintained or contributed to by Seller and that covers employees of
Seller. Seller has no liability on account of any Benefit Plans, including but
not limited to liability for (a) additional contributions accruing under such
Benefit Plans with respect to periods commencing on or prior to the Closing
Date; (b) fiduciary breaches by Seller, the trustees under the trust created
under any of such plans, or any other persons under ERISA, or any other
applicable statute, regulation or rule; or (c) income taxes by reason of non-
qualification of such Benefit Plans. There are no pending claims against any
Benefit Plan (other than for benefits in accordance with its terms), nor has
any claim been threatened in writing by any participant thereof or beneficiary
thereunder. Without limiting the generality of the foregoing, all Benefit
Plans are in full compliance with all applicable reporting, disclosure, filing
and other administrative requirements pertaining to employee benefit plans set
forth in the Code and ERISA and rules and regulations promulgated under either.
3.20 Inventory. Inventory reflected on the Financial Statements as of
the date thereof was stated, on an aggregate basis, at the actual cost (based
on the specific identification method) or market value and consists solely of
merchandise usable or saleable in the ordinary course of business at not less
than gross cost. The inventory conforms to customary trade standards for
marketable goods. Since the date of the Financial Statements, there have been
no changes in the inventory reflected on the Financial Statements except in the
ordinary course of business, none of which have been material.
3.21 Accounts Receivable. Each account receivable reflected on the
Financial Statements constitutes a bona fide receivable resulting from a bona
fide sale to a customer in the ordinary course of business, the amount of which
was actually due on the date thereof and has been or will be collected in the
ordinary course of business, net of the allowance for doubtful accounts
reflected on the Financial Statements. There are no defenses, claims of
disabilities, counterclaims, offsets, refusals to pay or other rights of set-
off against any accounts receivable and there is no threatened, intended or
proposed defense, claim of disability, counterclaim, offset, refusal to pay or
other right of set-off with respect thereto. Each account receivable, each
document and instrument and each transaction underlying or relating thereto
conforms, including, without limitation, in respect of interest rates charged,
notices given and disclosures made, to the requirements and provisions of each
applicable law, rule, regulation or other relating to credit, consumer credit,
credit practices, credit advertising, credit reporting, retail installment
sales, credit cards, collections, usury, interest rates and truth-in-
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lending, including, without limitation, the Federal Truth in Lending Act, as
amended, and Regulation Z issued by the Board of Governors of the Federal
Reserve System thereunder. Each account receivable existing on the Closing
Date will be paid in full by not later than the 120th day after the closing.
Such reserves and allowances have been established on the basis of historical
experience in accordance with U.S. generally accepted accounting principles
consistently applied.
3.22 Employee and Other Compensation. Schedule 3.22 attached hereto
and made a part hereof is a complete and correct list of the names and current
annual salary, bonus, commission and perquisite arrangements, written or
unwritten, for each director, officer and employee of Seller, including those
whose compensation was paid in whole or in part by persons or entities other
than Seller. No current or former stockholder, director, officer, employee or
Affiliate of Seller or any relative, associate or agent of such stockholder,
director, officer, employee or Affiliate has any interest in any property of
Seller except as a stockholder, or is a party, directly or indirectly, to any
contract for employment or otherwise or any lease or has entered into any
transaction with Seller including, without limitation, any contract for the
furnishing of services by, or rental of real or personal property from or to,
or requiring payments to, any such stockholder, director, officer, employee,
Affiliate, relative, associate or agent. To the best knowledge of Seller and
the Stockholders, no employee listed thereon intends to terminate his
employment relationship with Seller and Seller has no contract for the future
employment of any officer or employee not listed on Schedule 3.22.
3.23 Customers and Suppliers. Schedule 3.23 attached hereto and made
a part hereof is a complete and correct list of the names and addresses of the
10 largest customers and suppliers, respectively, of Seller during the last
fiscal year, and the total sales to or purchases from such customers and
suppliers made by Seller during the last fiscal year. No supplier or customer
of Seller representing in excess of 5% of Seller's purchases or sales during
the last fiscal year has advised Seller, formally or informally, that it
intends to terminate, discontinue or substantially reduce its business with
Seller by reason of the transactions contemplated by this Agreement or
otherwise.
3.24 No Omission of Material Fact. No representation or warranty by
the Stockholders in this Agreement or under any documents, instruments,
certificates or schedules furnished pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading.
3.25 Closing Date Effect. All of the representations and warranties
of the Stockholders are true and correct as of the date hereof and shall be
true and correct on and as of the Closing Date, with the same force and effect
as if such representations and warranties were made by the Stockholders to the
LifeQuest Parties on the Closing Date.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE LIFEQUEST PARTIES
The LifeQuest Parties jointly and severally represent and warrant to the
Stockholders as follows:
4.1 LifeQuest Corporate Organization. LifeQuest is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to own its properties and to carry on
its business as and in the places where such properties are now owned or such
businesses are now being conducted.
4.2 Purchaser Corporate Organization. Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada and has full power and authority to own its properties and to
carry on its business as and in the places where such properties are now owned
or such businesses are now being conducted.
4.3 Authorization. The LifeQuest Parties have full power and
authority, corporate and otherwise, to enter into this Agreement and to assume
and perform their respective obligations hereunder. The execution and delivery
of this Agreement and the performance by the LifeQuest Parties of their
respective obligations hereunder have been or will be duly authorized by the
Boards of Directors of the LifeQuest Parties and no further action or approval,
corporate or otherwise, by the LifeQuest Parties is or will be required in
order to constitute this Agreement as a binding and enforceable obligation of
the LifeQuest Parties.
4.4 LifeQuest Intent. It is the current intent of LifeQuest to
facilitate the expansion of the business of the Surviving Corporation
throughout the United States and not to prevent such expansion to any area in
which it is in the best interests of LifeQuest to expand, including areas in
which other subsidiaries of LifeQuest are then distributing products, whether
or not competitive with products of the Surviving Corporation.
4.5 Budget Plan. Following the Closing, LifeQuest will provide funds
to the Surviving Corporation sufficient to fund the forecasted deficit in the
Budget Plan furnished to LifeQuest by Seller on the date hereof and thereby
contribute to the implementation of such Plan, which includes, as represented
by Seller, adequate personnel for forecasted geographic expansion and the lease
of appropriate facilities in Atlanta, Georgia required for implementation of
such Budget Plan.
ARTICLE 5
LIFEQUEST STOCK AND LIFEQUEST SEC DOCUMENTS
5.1 LifeQuest SEC Documents. LifeQuest has furnished the
Stockholders with a true and complete copy of the LifeQuest SEC Documents. As
of its filing date (and, with respect to any registration statement, the date
on which it was declared effective), each LifeQuest SEC Document was in
compliance, in all material respects, with the
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requirements of its form, contained no untrue statement of a material fact and
did not omit any statement of a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of LifeQuest
included in the LifeQuest SEC Documents complied, at the time of filing with
the SEC (and, with respect to any registration statement, the date on which it
was declared effective), as to form, in all material respects, with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(subject, in the case of unaudited statements, to the omission of certain
footnotes) and fairly present, in all material respects (subject, in the case
of the unaudited statements, to normal, recurring year-end audit adjustments)
the consolidated financial position of LifeQuest as at the dates thereof and
the consolidated results of their operations and changes in financial position
for the periods then ended. The consolidated financial statements of LifeQuest
as of June 30, 1996, included in the LifeQuest SEC Documents disclose all
liabilities of LifeQuest required to be disclosed therein and contained
adequate reserves for taxes and all other material accrued liabilities. Since
June 30, 1996, there has not been any change in the business, assets,
properties, condition (financial or otherwise), results of operations or
prospects of LifeQuest, and no condition exists, which in any case would have
or be a material adverse effect on, or with respect to, LifeQuest.
5.2 No Omission of Material Fact. No representation or warranty by
the LifeQuest Parties in this Agreement or under any documents, instruments,
certificates or schedules furnished pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading.
5.3 Closing Date Effect. All of the representations and warranties
of the LifeQuest Parties are true and correct as of the date hereof and shall
be true and correct on and as of the Closing Date with the same force and
effect as if such representations and warranties were made by the LifeQuest
Parties to Seller on the Closing Date.
ARTICLE 6
AGREEMENT AND PLAN OF REORGANIZATION
6.1 Tax Treatment. Seller and the Stockholders, LifeQuest and
Purchaser intend that the transactions contemplated hereunder constitute a tax-
free reorganization (a "Reorganization") under Section 368 of the Code, and
agree to treat and report the transactions hereunder as a Reorganization. This
Agreement shall be construed in a manner to result in treatment of the
transactions hereunder as a Reorganization.
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ARTICLE 7
CLOSING
7.1 The closing of the transactions contemplated hereby shall take
place within five business days following the approval by the stockholders of
LifeQuest of the transactions contemplated by this Agreement but not later than
April 15, 1997. The date of closing so determined is herein sometimes called
the "closing" or the "Closing Date."
ARTICLE 8
COVENANTS OF SELLER AND THE STOCKHOLDERS
PRIOR TO CLOSING DATE
Seller and the Stockholders hereby covenant and agree that between the
date of this Agreement and the Closing Date:
8.1 Access to Information. Seller shall afford to the officers and
authorized representatives of LifeQuest access to the properties, books and
records of Seller related to the Assets and the Business and shall furnish
LifeQuest with such financial and operating data and other information
regarding the Assets and the Business and as LifeQuest may from time to time
reasonably request.
8.2 General Affirmative Covenants. Seller shall and the Stockholders
shall cause Seller to:
(a) conduct the Business only in the ordinary course;
(b) maintain the Assets in good working order and condition,
ordinary wear and tear accepted;
(c) perform all its obligations under agreements relating to
or affecting the Assets or the Business;
(d) keep in full force and effect adequate insurance coverage
on the Assets and the operation of the Business;
(e) use its best efforts to maintain and preserve the
Business, and retain its present employees, customers, suppliers and
others having business relations with it;
(f) duly and timely file all reports or returns required to be
filed with any Governmental Authority, and promptly pay all Taxes levied
or assessed upon it or its properties or upon any part thereof;
(g) duly observe and conform to all Governmental Requirements
relating to the Assets or its properties or to the operation and conduct
of its business and all covenants, terms and conditions upon or under
which any of its properties are held;
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(h) duly and timely take all actions necessary to carry out
the transactions contemplated hereby;
(i) deliver to LifeQuest on or before the 15th day of each
month true and correct unaudited monthly balance sheets and statements
of income for the Business for the immediately preceding month, with
such financial statements for the month of November, 1996, to be
delivered at the time of execution of this Agreement; and
(k) preserve and maintain the goodwill of the Business.
8.3 General Negative Covenants. Seller shall not take, and
Stockholders will not permit Seller to take, any of the following actions
without the prior written consent of LifeQuest:
(a) entering into or amending or assuming any contract,
agreement, obligation, lease, license or commitment related to the
Business or the Assets (or of a type included in the Assets) unless such
action is approved in writing by LifeQuest;
(b) entering into or amending or assuming any mortgage,
pledge, conditional sale or other title retention agreement, lien,
encumbrance or charge of any kind upon any of the Assets, or selling,
leasing, abandoning or otherwise disposing of any of the Assets,
including, but not limited to, real property, machinery, equipment or
other operating properties;
(c) engaging in any activities or transactions that might
adversely affect the Assets or the Business; or
(d) increasing the compensation of any officer or employee of
Seller, other than normal compensation adjustments in the ordinary
course of the Business consistent with past practice.
ARTICLE 9
COVENANTS REGARDING THE CLOSING
9.1 Covenants of Seller. Seller and the Stockholders hereby covenant
and agree that they shall (i) use commercially reasonable efforts to cause all
of their representations and warranties set forth in this Agreement to be true
on and as of the Closing Date, (ii) use commercially reasonable efforts to
cause all of their obligations that are to be fulfilled on or prior to the
Closing Date to be so fulfilled, (iii) use commercially reasonable efforts to
cause all conditions to the Closing set forth in this Agreement to be satisfied
on or prior to the Closing Date, and (iv) deliver to the LifeQuest Parties at
the Closing the certificates, updated lists, opinion of counsel, notices,
consents, authorizations, approvals, agreements, leases, transfer documents,
receipts, and amendments contemplated by Section 10.1 (with such additions or
exceptions to such items as are necessary to make the statements set forth in
such items accurate, provided that if any of such additions or exceptions cause
any of the conditions to the LifeQuest Parties' obligations hereunder as set
forth in Section 10.1
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not to be fulfilled, such additions and exceptions shall in no way limit the
rights of the LifeQuest Parties under Section 10.1 to terminate this Agreement
or refuse to consummate the transactions contemplated hereby).
9.2 Covenants of LifeQuest Parties. The LifeQuest Parties hereby
covenant and agree that they shall (i) use commercially reasonable efforts to
cause all of their representations and warranties set forth in this Agreement
to be true on and as of the Closing Date, (ii) use commercially reasonable
efforts to cause all of its obligations that are to be fulfilled on or prior to
the Closing Date to be so fulfilled, (iii) use commercially reasonable efforts
to cause all conditions to the Closing set forth in this Agreement to be
satisfied on or prior to the Closing Date, and (iv) deliver to Seller at the
Closing the certificate contemplated by Section 10.2 (with such additions or
exceptions to such certificate as are necessary to make the statements set
forth in such certificate accurate, provided that if any of such additions or
exceptions cause any of the conditions to Seller's obligations hereunder as set
forth in Section 10.2 not to be fulfilled, such additions and exceptions shall
in no way limit the rights of Seller under Section 10.2 to terminate this
Agreement or to refuse to consummate the transactions contemplated hereby).
ARTICLE 10
CONDITIONS OF CLOSING
10.1 LifeQuest Parties. The obligation of the LifeQuest Parties to
close hereunder shall be subject to the satisfaction of the following
conditions or the written waiver thereof by the LifeQuest Parties:
(a) Each of the agreements and covenants of Seller and the
Stockholders to be performed under this Agreement at or prior to the
Closing shall have been duly performed in all material respects.
(b) The representations and warranties of Seller and the
Stockholders in this Agreement shall be true and correct in all
material respects on and as of the Closing Date and the LifeQuest
Parties shall have received a certificate to that effect dated the
Closing Date and executed by the Chief Executive Officer of Seller and
each of the Stockholders.
(c) No injunction or restraining order shall be in effect to
forbid or enjoin the consummation of the transactions contemplated by
this Agreement and no Federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits, restricts or delays
the consummation hereof.
(d) All consents, authorizations, orders or approvals of, and
filings or negotiations with, any Federal, state, local or foreign
governmental agency, commission, board or other regulatory body which
are required for or in connection with the execution, delivery and
performance of this Agreement by Seller and the Stockholders and the
consummation of the transactions contemplated hereby, and in order to
permit or enable the Surviving Corporation, after the Closing to operate
a business substantially similar to Seller's business as conducted by
Seller as of the date hereof, shall have been
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duly obtained or made, including, but not limited to, any approvals
required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvement Act.
(e) LifeQuest shall have received a certified copy of
resolutions duly adopted by the Board of Directors and stockholders of
Seller authorizing and approving the execution and delivery of this
Agreement and performance by Seller of its obligations hereunder.
(f) During the period from the date of this Agreement until
Closing, Seller shall have carried on its business in the ordinary and
usual course and the Seller shall have delivered to LifeQuest at Closing
a certificate to that effect.
(g) The Stockholders of LifeQuest shall have approved this
Agreement and the consummation by LifeQuest of the transactions
contemplated hereby.
(h) ▇. ▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ shall each have executed and
delivered to the Company an Employment Agreement in the form attached
hereto as Exhibit B.
(i) LifeQuest shall have received such further certificates
and documents as shall have been reasonably requested by the LifeQuest
Parties, including consents of all requisite third parties.
(j) The LifeQuest Parties shall have completed their due
diligence activities to their satisfaction.
10.2 Stockholders and Seller. The obligation of the Stockholders and
Seller to close hereunder shall be subject to the satisfaction of the following
conditions or the written waiver thereof by the Stockholders and Seller:
(a) Each of the agreements and covenants of the LifeQuest
Parties to be performed under this Agreement at or prior to the Closing
shall have been duly performed in all material respects.
(b) The representations and warranties of the LifeQuest
Parties in this Agreement shall be true and correct in all material
respects on and as of the Closing Date and the Stockholders shall have
received certificates to that effect dated the Closing Date and executed
by the Chief Executive Officer of the LifeQuest Parties.
(c) No injunction or restraining order shall be in effect to
forbid or enjoin the consummation of the transactions contemplated by
this Agreement and no Federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits, restricts or delays
the consummation hereof.
(d) The Board of Directors of LifeQuest shall include two
members designated by the Stockholders with the approval of the Board of
Directors of LifeQuest, and ▇. ▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ shall have been
elected as Chief Operating Officer and Vice President -- Sales of the
Surviving Corporation,
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respectively, as Vice President and Vice President, respectively, of
LifeQuest, and as members of a Management Committee to have such other
members, duties and responsibilities as shall be determined from time to
time by the Board of Directors of LifeQuest. So long as the
Stockholders are the beneficial owners of at least 20% of the
outstanding shares of LifeQuest Stock, LifeQuest shall request that the
Board of Directors nominate two persons designated by the Stockholders
with the approval of the Board of Directors for election as directors of
LifeQuest.
(e) The Stockholders shall have received the Merger
Consideration.
(f) The Stockholders shall have received such further
certificates and documents as shall have been reasonably requested by
them.
ARTICLE 11
REMEDIES FOR BREACH
11.1 Arbitration. The LifeQuest Parties and the Stockholders agree
that any dispute or controversy arising out of or in connection with this
Agreement or any alleged breach hereof shall be settled by arbitration in San
Antonio, Texas pursuant to the rules of the American Arbitration Association.
If the two parties cannot jointly select a single arbitrator to determine the
matter, one arbitrator shall be chosen by each party (or, if a party fails to
make a choice, by the American Arbitration Association on behalf of such party)
and the two arbitrators so chosen will select a third. The decisions of the
single arbitrator jointly selected by the parties, or, if three arbitrators are
selected, the decision of any two of them, will be final and binding upon the
parties and the judgment of a court of competent jurisdiction may be entered
thereon. Fees of the arbitrators and costs of arbitration shall be borne by
the parties in such manner as shall be determined by the arbitrator or
arbitrators.
11.2 Survival of Representations, Warranties and Agreements. All of
the representations, warranties, covenants and agreements made by the parties
to this Agreement shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder until 11:59
p.m., Central Time, on the day before the fourth anniversary of the Closing
Date.
ARTICLE 12
INDEMNIFICATION
12.1 Indemnification. The Stockholders, jointly and severally, shall
defend and indemnify the LifeQuest Parties and save and hold them harmless
from, against, for and in respect of, and pay any and all Losses suffered,
sustained, incurred or required to be paid by the LifeQuest Parties by reason
of any breach or failure of observance or performance of any representation,
warranty, covenant, agreement or commitment made by Seller or the Stockholders
hereunder or relating to or as a result of any such representation, warranty,
covenant, agreement or commitment being untrue or incorrect, but only in the
event the aggregate Losses exceed $30,000.
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12.2 Procedure for Indemnification. In the event that the
Stockholders shall be obligated to the LifeQuest Parties pursuant to this
Article, or in the event that a suit, action, investigation, claim or
proceeding is begun, made or instituted as a result of which the Stockholders
may become obligated to the LifeQuest Parties hereunder, the LifeQuest Parties
shall give prompt written notice to the Stockholders of the occurrence of such
event. The Stockholders agree to defend, contest or otherwise protect against
any such suit, action, investigation, claim or proceeding at the Stockholders'
own cost and expense. The LifeQuest Parties shall have the right, but not the
obligation, to participate, at its own expense, in the defense thereof by
counsel of its own choice. In the event that the Stockholders fail timely to
defend, contest or otherwise protect against any such suit, action,
investigation, claim or proceeding, the LifeQuest Parties shall have the right
to defend, contest or otherwise protect against the same, and, upon 10 days'
written notice to the Stockholders, make any compromise or settlement thereof
and recover the entire cost thereof from the Stockholders, including, without
limitation, reasonable attorneys' fees, disbursements and all amounts paid as a
result of such suit, action, investigation, claim or proceeding or compromise
or settlement thereof.
ARTICLE 13
REQUIREMENTS OF SECURITIES LAWS
13.1 Accredited Investors. The Stockholders recognize that the Stock
Merger Consideration is not being registered under the Securities Act in
reliance upon an exemption from the Securities Act which is predicated, in
part, on the representations and agreements of the Stockholders set forth in
this Agreement. The Stockholders represent and warrant to the LifeQuest
Parties that each of Stockholders is an "accredited investor" as that term is
defined in Rule 501(a) of the Securities Act and that the Stock Merger
Consideration is being acquired solely for his own account for investment and
not with a view to, or for offer or resale in connection with, a distribution
thereof within the meaning of the Securities Act. The Stockholders understand
that the effect of such representation and warranty is that the Stock Merger
Consideration must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration is available at the
time for any proposed sale or other transfer thereof. The Stockholders also
understand that, except as otherwise provided herein, LifeQuest is under no
obligation to file a registration statement under the Securities Act covering
the Stock Merger Consideration or to take any other action to enable the
Stockholders to transfer or otherwise dispose of the Stock Merger
Consideration. The Stockholders represent that they have consulted with their
counsel in regard to the Securities Act and that they are fully familiar with
the circumstances under which they are required to hold the Stock Merger
Consideration and the limitations upon the transfer or other disposition
thereof. The Stockholders acknowledge that the LifeQuest Parties are relying
upon the truth and accuracy of the foregoing representations and warranties in
issuing the Stock Merger Consideration under the Securities Act. The
Stockholders agree to indemnify and hold the LifeQuest Parties harmless against
all liabilities, costs and expenses, including reasonable attorneys' fees,
incurred by the LifeQuest Parties as a result of any sale, transfer or other
disposition by the Stockholders of all or any part of the Stock Merger
Consideration in violation of the Securities Act.
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13.2 The Stock Merger Consideration shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION
THEREFROM UNDER SAID ACT.
13.3 The Stockholders acknowledge that they have been furnished by the
LifeQuest Parties with (a) a copy of the Annual Report on Form 10-K of
LifeQuest for the fiscal year ended December 31, 1995, in the form filed with
the SEC, and (b) copies of all filings since December 31, 1995, by LifeQuest
with the SEC in compliance with Section 13 or 14 of the Exchange Act. The
Stockholders represent that they have reviewed the foregoing documents and
acknowledge that they have been afforded the opportunity to obtain any
additional information necessary to verify the accuracy of the information
contained in the foregoing documents, including the opportunity to ask
questions of, and receive answers from, officers and representatives of
LifeQuest concerning the LifeQuest Parties and the terms and conditions of the
transactions contemplated by this Agreement. The Stockholders acknowledge that
▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C., attorneys at law, have advised them during the course of
the negotiation of this Agreement, and that they have consulted ▇▇▇▇ ▇. ▇▇▇▇▇▇,
P.C., attorneys at law, with respect to the transactions contemplated by this
Agreement.
13.4 Notwithstanding anything herein to the contrary, none of the
Stockholders shall sell, transfer or otherwise dispose of any of the Stock
Merger Consideration until the expiration of a period of one year from the
Closing Date.
13.5 Registration. LifeQuest shall be obligated to the Stockholders
as follows:
(a) If, at any time between one year following the Closing
Date and two years following the Closing Date, LifeQuest proposes to
register any of the LifeQuest Stock (whether unissued, yet to be
authorized or held by any person) under the Securities Act, it shall, at
least 30 days prior to the filing under the Securities Act of the
registration statement relating thereto, give written notice to the
Stockholders of its intention to do so, and, upon the written request of
the Stockholders given within 10 days after the giving of any such
notice (which request shall state the proposed method of distribution),
LifeQuest shall include or cause to be included in any such registration
statement the Stock Merger Consideration; provided, however, that
LifeQuest may at any time withdraw or cease proceeding with any such
registration if it shall at the time withdraw or cease proceeding with
the registration of such LifeQuest Stock originally proposed to be
registered; and provided further, that if the registration proposed by
LifeQuest relates to an underwritten offering, the Stockholders shall
not have any right to sell the Stock Merger Consideration in any manner
or through any underwriter other than in the manner and through the
managing underwriter or underwriters being used by LifeQuest.
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(b) Notwithstanding any other provision of Section 13.5(a), if
a registration pursuant to Section 13.5(a) involves a firm commitment,
underwritten offering of the securities so being registered and if the
managing underwriter of such offering informs LifeQuest and the
Stockholders by letter of its belief that marketing factors require a
limitation of the number of shares to be underwritten, LifeQuest may
limit the amount of the Stock Merger Consideration to be included in the
registration and underwriting; provided that no such reduction shall
reduce the securities being offered by LifeQuest for its own account;
and provided that those shares which are excluded from the underwritten
offering shall be withheld from the market by the holders thereof for a
period, not to exceed 180 days, which the managing underwriter
reasonably determines as necessary in order to effect the underwritten
offering.
(c) In addition to any registration statement pursuant to
subparagraph (a) above, during the one-year period beginning on one year
following the Closing Date and ending two years following the Closing
Date, the Company will, if it is a registrant entitled to use Form S-3,
to register the Stock Merger Consideration, as soon as practicable,
after written request (the "Request") by Stockholders holding at least
600,000 shares of the Stock Merger Consideration which cannot then be
sold pursuant to Rule 144 under the Securities Act, use its best efforts
to file a registration statement on Form S-3 (or any successor to Form
S-3) with the Commission and such applications or other filings as
required under applicable state securities or blue sky laws sufficient
to permit the public offering of the Stock Merger Consideration, and
shall use its best efforts to cause such Stock Merger Consideration to
be registered for the offering on such Form; provided, however, that the
Company shall only be obligated to file one such registration statement
on Form S-3 under this Section 13.5(c). Notwithstanding the foregoing,
the Company shall not be obligated to effect a registration pursuant to
this Section 13.5(c): (i) in any particular jurisdiction in which
LifeQuest would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance
unless LifeQuest is already subject to service in such jurisdiction and
except as may be required by the Securities Act; (ii) if LifeQuest,
within ten (10) days of the receipt of the Request gives notice of its
bona fide intention to effect the filing of a registration statement
with the Commission within ninety (90) days of receipt of such request;
(iii) during the period starting with the date thirty (30) days prior to
LifeQuest's good faith estimated date of filing of, and ending on the
date six (6) months immediately following the effective date of any
registration statement pertaining to securities of LifeQuest, provided
that LifeQuest is actively employing in good faith all reasonable
efforts to cause such registration statement to become effective; (iv)
if LifeQuest shall furnish to Stockholders a certificate signed by the
President of LifeQuest stating that in the good faith judgment of the
Board of Directors the filing of a registration statement would require
the disclosure of material information that LifeQuest has a bona fide
business purpose for preserving as confidential and that is not then
otherwise required to be disclosed, then LifeQuest's obligation to use
its best efforts to file a registration statement shall be deferred for
a period not to exceed ninety (90) days from the receipt of the request
to file such registration by such
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Stockholders; provided, however, that LifeQuest shall not utilize this
right more than once in any twelve (12) month period.
(d) Registration Procedures and Expenses. If and whenever
LifeQuest is required to include the Stock Merger Consideration in a
registration statement under the Securities Act, as provided in Section
13.5 hereof, LifeQuest shall, as expeditiously as is reasonably
practicable, do each of the following:
(i) prepare and file with the SEC a registration
statement with respect to the Stock Merger Consideration and,
subject to the limitations under Section 13.5 hereof, use its
best efforts to cause such registration statement to become
effective;
(ii) cooperate with the Stockholders and any underwriter
who shall sell the Stock Merger Consideration in connection with
their review of LifeQuest made in connection with such
registration;
(iii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective for 120 days from the date of
its effectiveness, and to comply with the provisions of the
Securities Act and the Exchange Act with respect to the
disposition of all the Stock Merger Consideration covered by such
registration statement for such period;
(iv) furnish to the Stockholders such number of copies
of the prospectus forming a part of such registration statement
(including each preliminary prospectus), in conformity with the
requirements of the Securities Act, and such other documents as
the Stockholders may reasonably request in order to facilitate
the disposition of the Stock Merger Consideration; and
(v) LifeQuest shall (a) notify the Stockholders at any
time when a prospectus relating to the Stock Merger Consideration
is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus
forming a part of such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances then existing, and (b) at the request of the
Stockholders, prepare and furnish to the Stockholders a
reasonable number of copies of any supplement to or any amendment
of such prospectus that may be necessary so that, as thereafter
delivered to the purchasers of the Stock Merger Consideration,
such prospectus shall not include any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
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(e) Agreement by the Stockholders. In the event that the
Stockholders participate, pursuant to this Section 13.5, in the offering
of the Stock Merger Consideration, the Stockholders shall;
(i) furnish LifeQuest all material information
reasonably requested by LifeQuest concerning the Stockholders and
the proposed method of sale or other disposition of the Stock
Merger Consideration and such other information and undertakings
as shall be reasonably required in connection with the
preparation and filing of the registration statement covering the
Stock Merger Consideration in order to ensure full compliance
with the Securities Act and the rules and regulations of the SEC
thereunder;
(ii) cooperate in good faith with LifeQuest and its
underwriters, if any, in connection with such registration,
including placing the Stock Merger Consideration in escrow or
custody to facilitate the sale and distribution thereof provided
that such escrow or custody arrangement shall be no more
restrictive upon the Stockholders than upon any other holder of
LifeQuest Stock for the benefit of whom such registration is
undertaken; and
(iii) make no further sales or other dispositions, or
offers therefor, of the Stock Merger Consideration under such
registration statement if, during the effectiveness of such
registration statement, an intervening event should occur which,
in the opinion of counsel to LifeQuest, makes the prospectus
included in such registration statement no longer comply with the
Securities Act, so long as written notice containing the facts
and legal conclusions relied upon by LifeQuest in this regard has
been received by the Stockholders from LifeQuest, until such time
as the Stockholders have received from LifeQuest copies of a new,
amended or supplemented prospectus complying with the Securities
Act, which prospectus shall be delivered to the Stockholders by
LifeQuest as soon as practicable after such notice.
(f) Allocation of Expenses. If and whenever LifeQuest is
required by the provisions of this Section 13.5 to use its best efforts
to effect the registration of the Stock Merger Consideration under the
Securities Act, LifeQuest shall pay the costs and expenses in connection
therewith up to a maximum of $25,000; provided, however, that the
Stockholders shall pay all other costs and expenses and, in all events,
all underwriting discounts, selling commissions and stock transfer taxes
attributable to the Stock Merger Consideration under such registration
statement.
(g) Indemnification. In the event of any registration of any
of the Stock Merger Consideration under the Securities Act pursuant to
this Section 13.5, the Stockholders shall indemnify and hold harmless,
LifeQuest, each director of LifeQuest, each officer of LifeQuest who
shall sign such registration statement, each underwriter and any person
who controls LifeQuest or such underwriter within the meaning of the
Securities Act, with respect to
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any statement in or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereto, if such statement or omission was made
in reliance upon and in conformity with written information furnished to
LifeQuest or its underwriter through an instrument duly executed by any
of the Stockholders specifically for use in the preparation of such
registration statement, preliminary prospectus, final prospectus or
amendment or supplement.
(h) Rule 144 Stock. Notwithstanding the foregoing provisions
of this Article 13, the Company shall not be obligated to effect a
registration pursuant to Section 13.5(b) or (c) with respect to Stock
Merger Consideration which could then be sold pursuant to Rule 144 under
the Securities Act.
ARTICLE 14
NON-COMPETITION AGREEMENT
14.1 As a material inducement to the LifeQuest Parties to enter into
this Agreement and pay the Merger Consideration, ▇.▇. ▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ (the
"Principals") each hereby covenants and agrees that, commencing on the Closing
Date and ending on the second anniversary of the Closing Date, he shall not,
directly or indirectly, as proprietor, partner, stockholder, director, officer,
employee, consultant, joint venturer, investor or in any other capacity, engage
in, or own, manage, operate or control, or participate in the ownership,
management, operation or control, of any entity which engages anywhere in the
United States or Canada in any business activity in which the Seller or
LifeQuest participates or participated as of the Closing Date; provided,
however, the foregoing shall not prohibit either of the Principals from
purchasing and holding as an investment not more than 1% of any class of
publicly traded securities of any entity which conducts a business in
competition with the business of the LifeQuest Parties, so long as such
Principal does not participate in any way in the management, operation or
control of such entity.
14.2 Judicial Reformation. Each of the Principals acknowledges that,
given the nature of the LifeQuest Parties' business, the covenants contained in
Section 14.1 establish reasonable limitations as to time, geographic area and
scope of activity to be restrained and do not impose a greater restraint than
is reasonably necessary to protect and preserve the goodwill of the LifeQuest
Parties' business and to protect their legitimate business interests. If,
however, Section 14.1 is determined by any court of competent jurisdiction to
be unenforceable by reason of its extending for too long a period of time or
over too large a geographic area or by reason of it being too extensive in any
other respect or for any other reason, it will be interpreted to extend only
over the longest period of time for which it may be enforceable and/or over the
largest geographic area as to which it may be enforceable and/or to the maximum
extent in all other aspects as to which it may be enforceable, all as
determined by such court.
14.3 Customer Lists; Non-Solicitation. Each of the Principals hereby
further covenants and agrees that such Principal shall not, directly or
indirectly, (a) use or make known to any person or entity the names or
addresses of any clients or customers of Seller or the LifeQuest Parties or any
other information pertaining to them, (b) call on, solicit, take away or
attempt to call on, solicit or take away any clients or customers
-27-
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of Seller or the LifeQuest Parties, nor (c) recruit, hire or attempt to recruit
or hire any employees of Seller or the LifeQuest Parties.
14.4 Covenants Independent. The covenants of each of the Principals
contained in Sections 14.1, 14.2 and 14.3 of this Agreement will be construed
as independent of any other provision in this Agreement; and the existence of
any claim or cause of action by the Principals against the LifeQuest Parties
will not constitute a defense to the enforcement by the LifeQuest Parties of
said provisions. Each of the Principals understands that the provisions
contained in Sections 14.1, 14.2 and 14.3 are essential elements of the
transactions contemplated by this Agreement and, but for the agreement of the
Principals to Sections 14.1, 14.2 and 14.3, the LifeQuest Parties would not
have agreed to enter into this Agreement and the transactions contemplated
herein. Each of the Principals has been advised to consult with counsel in
order to be informed in all respects concerning the reasonableness and
propriety of Sections 14.1, 14.2 and 14.3 with specific regard to the nature of
the business conducted by Seller and the LifeQuest Parties and each of the
Principals acknowledges that Sections 14.1, 14.2 and 14.3 are reasonable in all
respects.
14.5 Remedies. In the event of a breach or a threatened breach by
either of the Principals of any of the provisions contained in Sections 14.1,
14.2 or 14.3 of this Agreement, such Principal acknowledges that the LifeQuest
Parties will suffer irreparable injury not fully compensable by money damages
and, therefore, will not have an adequate remedy available at law.
Accordingly, the LifeQuest Parties shall be entitled to obtain such injunctive
relief or other equitable remedy from any court of competent jurisdiction as
may be necessary or appropriate to prevent or curtail any such breach,
threatened or actual. The foregoing shall be in addition to and without
prejudice to any other rights that the LifeQuest Parties may have under this
Agreement, at law or in equity, including, without limitation, the right to ▇▇▇
for damages.
ARTICLE 15
CONFIDENTIALITY
15.1 Non-disclosure. The Stockholders shall not, without the prior
written consent of the Board of Directors of LifeQuest, disclose or use for any
purpose confidential information or proprietary data of Seller, Purchaser or
LifeQuest (or any of their respective subsidiaries), except as required by
applicable law or legal process; provided, however, that confidential
information shall not include any information known generally to the public or
ascertainable from public or published information (other than as a result of
unauthorized disclosure by such Stockholders) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to the conducted by Seller or LifeQuest (or any of their
respective subsidiaries).
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ARTICLE 16
GENERAL PROVISIONS
16.1 Expenses. Each of the parties hereto shall pay all expenses
incurred by it incident to preparing for, entering into and carrying into
effect this Agreement.
16.2 Notices. Any notice, report, demand or payment required,
permitted or desired to be given pursuant to any of the provisions of this
Agreement shall be deemed to have been sufficiently given or served for all
purposes if hand delivered or delivered by responsible overnight courier or
sent by certified or registered air mail, return receipt requested, and postage
prepaid as follows:
If to the LifeQuest Parties:
LifeQuest Medical, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with a copy to: Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Stockholders: Val-U-Med, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
1201 Peachtree Street, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Any of the foregoing parties may at any time and from time to time
change the address to which notice shall be sent hereunder, by notice to the
other parties given under this subsection. The date of the giving of such
notice delivered by hand or by responsible overnight courier shall be the date
of its delivery, and the date of the giving of such notice by certified or
registered mail shall be the date three days after the posting of the mail.
16.3 Finders. Except for 57,000 shares of LifeQuest Stock to be paid
to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. by LifeQuest in full satisfaction of a finder's
fee, each of the parties covenants and represents to the other that there are
no claims for brokerage commissions or finder's fees in connection with the
negotiation of this Agreement and the performance of the transactions
contemplated hereunder resulting from any action taken by it. Each of the
parties agrees to indemnify and hold harmless the other in
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31
respect of any and all Losses (which is deemed to exclude 57,000 shares of
LifeQuest Stock payable by LifeQuest to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.) sustained
by the other as a result of liability to any broker or finder on the basis of
any arrangement, agreement or acts made by or on behalf of such party with any
other person or persons whatsoever, and Seller and the Stockholders
specifically agree to jointly and severally indemnify and hold the LifeQuest
Parties harmless in respect of any and all Losses sustained by the LifeQuest
Parties as a result of any liability to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. for an
amount in excess of the payment to ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. of 57,000
shares of LifeQuest Stock.
16.4 Complete Agreement. The representations, warranties, covenants
and agreements set forth in this Agreement and in any financial statement,
schedule or exhibit delivered pursuant hereto, constitute all of the
representations, warranties, covenants and agreements among the parties hereto
and upon which the parties have relied, and, except as may be specifically
provided herein, no change, modification, addition or termination of the
Agreement or any part thereof shall be valid unless in writing and signed by or
on behalf of the party to be charged therewith.
16.5 Prior Agreements. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes prior agreements relating thereto.
16.6 No Waiver. No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, either of similar or different nature unless
expressly so stated in writing.
16.7 Headings. The headings or captions under Sections of this
Agreement are for convenience and reference only, and do not form a part
hereof, and do not in any way modify, interpret or construe the intent of the
parties or affect any of the provisions of this Agreement.
16.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
16.9 Assignment. Neither this Agreement nor the rights of the parties
hereto shall not be assignable, unless otherwise specifically provided.
16.10 No Public Announcement or Negotiation with Others.
(a) The parties hereto shall not issue any press release or
make any public statement regarding the transactions contemplated by
this Agreement without obtaining the prior consent of the other party,
which consent shall not be unreasonably withheld.
(b) Prior to the Closing Date, neither any Stockholder, Seller
nor any of the officers or directors of Seller, nor any Affiliates of
any of them whom they are able to influence shall:
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32
(i) directly or indirectly, encourage, solicit,
initiate or participate in any discussions or negotiations with
any corporation, partnership, Person or other entity or group
(other than Purchaser or an affiliate or an associate of
Purchaser) concerning any merger, sale of substantial assets,
business combination, sale of shares of capital stock or similar
transactions involving the business of Seller or any Asset,
whether by providing non-public information or otherwise; or
(ii) disclose, directly or indirectly, any information
not customarily disclosed to any Person concerning their business
and properties, afford to any other Person access to their
properties, books or records or otherwise assist or encourage any
Person in connection with any of the foregoing.
In the event Seller or the Stockholders shall receive any offer for a
transaction of the type referred to in this Section 16.10, Seller or
Stockholders shall promptly inform Purchaser as to any such offer.
16.11 Severability. If any term or provision of this Agreement shall
be held to be invalid or unenforceable for any reason, such term or provision
shall be ineffective to the extent of such invalidity or unenforceability
without invalidating the remaining terms and provisions hereof, and this
Agreement shall be construed as if such invalid or unenforceable term or
provision had not been contained herein. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed on the date and year first above written.
LIFEQUEST MEDICAL, INC.
By: /s/
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
VAL-U-MED ACQUISITION CO.
By: /s/
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
VAL-U-MED, INC.
By: /s/
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
STOCKHOLDERS
/s/ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇, ▇▇.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ C/F ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
UGFMA/FL
-32-
34
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
-------------------------------------
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
-------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇-TTEE, F/B/O
-------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇-TTEE, F/B/O
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Trust U/T/O 2-21-90
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ DIRK STORY
-------------------------------------
Dirk Story
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35
/s/ ▇▇▇▇▇ STORY
-------------------------------------
▇▇▇▇▇ Story
/s/ R. ▇▇▇▇ ▇▇▇▇▇
-------------------------------------
R. ▇▇▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, TTEE, F/B/O
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, TTEE, F/B/O
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Revocable Trust
4/6/92
-34-
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ANNEX A
STOCKHOLDERS OF SELLER
37
SCHEDULES
Schedule 3.1 Corporate Organization
Schedule 3.3 Capitalization/List of Stockholder
Schedule 3.7 Environmental
Schedule 3.8 Intellectual Property and Other Tangible Assets
Schedule 3.9 Financial Statements
Schedule 3.9A Exceptions to Financial Statements
Schedule 3.12 Contracts
Schedule 3.13 Tangible Personal Property
Schedule 3.14 Real Property
Schedule 3.15 Insurance
Schedule 3.16 Banking
Schedule 3.19 Employee Benefit Plans
Schedule 3.22 Employee and Other Compensation
Schedule 3.23 Customers and Suppliers
Schedule 10.1 Indemnification
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LIST OF EXHIBITS
Exhibit A - Certificate of Merger
Exhibit B - Employment Agreement of ▇. ▇. ▇▇▇▇▇
Exhibit C - Employment Agreement of ▇▇▇ ▇▇▇▇▇
