ASSET PURCHASE AGREEMENT
By and Among
Medi-Hut Co., Inc.
and
Spectrum Biotech, Inc.
Dated as of January 2002
ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS......................................................4
SECTION 1.1 ACCOUNTING, TERM.............................................4
SECTION 1.2 DEFINED TERMS................................................4
ARTICLE II CLOSING.........................................................5
SECTION 2.1 CLOSING......................................................5
ARTICLE III PURCHASE, SALE AND DELIVERY....................................5
SECTION 3.1 ACQUISITION ASSETS...........................................5
SECTION 3.2 PURCHASE PRICE...............................................5
SECTION 3.3 PURCHASE AGREEMENT...........................................5
SECTION 3.4 STOCK LEGEND AND REGISTRATION RIGHTS.........................6
ARTICLE IV LIABILITIES AND OBLIGATIONS.....................................6
SECTION 4.1 LIABILITIES NOT ASSUMED BY PURCHASER.........................6
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER.........................7
SECTION 5.1 ORGANIZATIONS; QUALIFICATION.................................7
SECTION 5.2 AUTHORITY ENFORCEABILITY.....................................7
SECTION 5.3 BINDING AGREEMENT............................................7
SECTION 5.4 No DEFAULT; COMPLIANCE WITH LAWS AND REGULATIONS.............7
SECTION 5.5 ABSENCE OF CERTAIN CHANGES...................................8
SECTION 5.6 ACTIONS PENDING..............................................8
SECTION 5.7 TITLE TO PROPERTIES..........................................8
SECTION 5.8 SOLVENCY.....................................................8
SECTION 5.9 CONDITION OF ACQUISITION ASSETS..............................8
SECTION 5.10 COPIES OF DOCUMENTS.........................................9
SECTION 5.11 DISCLOSURE..................................................9
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER.....................9
SECTION 6.1 CORPORATE EXISTENCE..........................................9
SECTION 6.2 AUTHORITY; ABSENCE OF CONFLICTS; ENFORCEABILITY..............9
SECTION 6.3 BINDING AGREEMENT...........................................10
SECTION 6.4 REGULATORY APPROVALS........................................10
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ARTICLE VII COVENANTS.....................................................10
SECTION 7.1 SELLER'S AND SELLER'S COVENANTS.............................10
SECTION 7.2 PURCHASER'S COVENANTS.......................................11
ARTICLE VIII CONDITIONS TO CLOSING........................................11
SECTION 8.1 CONDITIONS TO OBLIGATIONS OF PURCHASER......................11
SECTION 8.2 CONDITIONS TO OBLIGATIONS OF SELLER.........................12
ARTICLE IX TERMINATION....................................................13
SECTION 9.1 GROUNDS FOR TERMINATION.....................................13
SECTION 9.2 EFFECTS OF TERMINATION......................................13
ARTICLE X INDEMNIFICATION.................................................14
SECTION 10.1 SELLER'S INDEMNITY OBLIGATIONS.............................14
SECTION 10.2 PURCHASER'S INDEMNITY OBLIGATIONS..........................14
SECTION 10.3 INDEMNIFICATION PROCEDURES.................................14
SECTION 10.4 DETERMINATION OF INDEMNIFIED AMOUNTS.......................16
ARTICLE XI MISCELLANEOUS..................................................16
SECTION 11.1 COMMISSIONS................................................16
SECTION 11.2 SURVIVAL...................................................16
SECTION 11.3 EXPENSES...................................................16
SECTION 11.4 NOTICE.....................................................17
SECTION 11.5 ENTIRE AGREEMENT...........................................17
SECTION 11.6 GOVERNING LAW; VENUE.......................................18
SECTION 11.7 ASSIGNMENTS AND THIRD PARTIES..............................18
SECTION 11.8 SEVERABILITY...............................................18
SECTION 11.9 AMENDMENTS; No WAIVER......................................18
SECTION 11.10 NO THIRD PARTY BENEFICIARIES..............................18
SECTION 11.11 HEADINGS; USE OF CERTAIN TERMS............................18
SECTION 11.12 COUNTERPARTS..............................................18
SECTION 11.13 ARMS-LENGTH TRANSACTION...................................19
SECTION 11.14 ANCILLARY DOCUMENTS SIMULTANEOUSLY EXECUTED...............19
TABLE OF EXHIBITS
EXHIBIT A LIST OF PATENTS AND PATENTS PENDING
EXHIBIT B FDA 510K
EXHIBIT C MEDI-HUT AVERAGE DAILY CLOSING COST FOR PAST 45 DAYS
EXHIBIT D MEMORANDUM OF UNDERSTANDING
EXHIBIT E SPECTRUM BIOTECH, INC ATTORNEY OPINION LETTER
EXHIBIT F MEDI-HUT CO., INC. INDEPENDENT APPRAISAL
iii
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") dated January 9, 2002 is
entered into by and among Spectrum Biotech, Inc., and or assigns, a Nevada
corporation ("Seller"), Medi-Hut Co., Inc., a Nevada corporation
("Purchaser").
WHEREAS, Seller is a corporation disposing of the Assets, as herein
defined; and
WHEREAS, Purchaser wishes to purchase from Seller and Seller wishes to
sell, transfer, assign and deliver to Purchaser all of the ownership of the
technology entitled "Needle Chanel Attachment Device for A Disposable Syringe"
including, but not limited to, all U.S. and foreign patents, attached hereto
as Exhibit A and Company 510 K FDA approvals and assignment of the 510 K FDA
approval to Medi-Hut and/or it's assigns, attached hereto as Exhibit B.
Acquisition Assets on the terms and subject to the conditions set forth
herein; and
WHEREAS, Seller desires to sell, transfer, assign and deliver to
Purchaser the Acquisition Assets on the terms and subject to the conditions
set forth herein and Purchase Agreement the obligations of the Purchaser
hereunder; and
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements stated herein, the parties hereto
covenant and agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Accounting Terms.
All accounting terms not specifically defined herein shall be construed
in accordance with generally accepted accounting principles and on a basis not
inconsistent with those applied in the preparation of the financial statements
referred to in this Agreement.
Section 1.2 Defined Terms.
As used in this Agreement, the following terms have the meanings
specified in this Agreement. Other capitalized terms have the meanings
assigned to them elsewhere in this Agreement.
Governmental Authority: means any nation or government, any state or
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of, or
pertaining to, government.
Lien: means any mortgage, pledge, hypothecation, security interest,
encumbrance, right of first refusal, option, lien, charge, condition,
restriction or burden of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any lease
in the nature thereof, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code of any jurisdiction).
Material Adverse Effect: means any material adverse effect on the assets,
or on the business, financial condition, properties, prospects, net worth or
results of operations of the Person with respect to which such term is used.
Person: means any individual, partnership, joint venture, corporation,
limited liability company, association, trust, unincorporated organization,
government or agency or subdivision thereof or any other entity.
ARTICLE II
CLOSING
Section 2.1 Closing.
The closing of the purchase and sale provided for herein (the "Closing")
shall take place on or before February 15, 2002, or at such other time or date
as may be agreed upon in writing by the parties hereto (the "Closing Date").
ARTICLE III
PURCHASE, SALE AND DELIVERY
Section 3.1 Acquisition Assets.
Subject to the terms and conditions of this Agreement, and on the basis
of the representations and warranties hereinafter set forth, at the Closing
Seller shall sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser shall acquire from Seller, all ownership and transferability of the
technology entitled "Needle Channel Attachment Device for a Disposable
Syringe" including but not limited to all of the U.S. and foreign patents
(attached hereto as Exhibit A) and a complete understanding of the Company's
510 K FDA application and the assignment of the 510 K application to Medi-Hut
or its assignees (attached hereto as Exhibit B).
Section 3.2 Purchase Price.
At closing, Spectrum and the shareholders of Spectrum shall receive pro
rata, $3,500,000 ("Purchase Price") worth of restricted common stock of
Medi-Hut ("Purchase Shares"). The stock price employed in the purchase shall
be priced as follows: the average daily closing share price of Medi-Hut common
stock for the forty-five trading days prior to December 21, 2001; or a total
consideration paid for the Asset Purchase agreement of 356,456 of the
Purchaser's common restricted shares. The final Purchase price will be subject
to the Purchasers final Appraisal, attached hereto as Exhibit C. The final
Appraisal must be acceptable to both Purchaser and Seller prior to the
execution of the Agreement.
Section 3.3 Purchase Agreement
At the time of closing the Seller will have the proper executed
assignment of all patents pending and patents, as well as an executed
assignment of the 510K FDA acceptance. A legal opinion from the Seller's
attorney opining to the assignment of the technology, intellectual properties,
patents, patents pending and any or all FDA licensing, as well as opining to
the free and clear title to these acquisition assets will also be provided at
the time of closing.
The Purchaser will have executed subscription agreement representing each
shareholder of the Seller's company , as well as a stock certificate for each
of these subscription holders of the Purchaser's common restricted shares in a
total amount of 356,456 shares.
Section 3.4 Stock Legend and Registration Rights.
The certificates evidencing the shares of the Public Company stock shall
bear the legend set forth below (or substantially equivalent legends),
together with other legends required by the laws of the Stae of Nevada:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 AS
AMENDED, HAVING BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW
TO REDISTRIBUTE. THEY MAY NOT BE SOLD OR OFFERED FOR IN ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THE SHARES UNDER THE SECURITIES ACT OF
1933 AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION AND
AN EXEMPTION FROM THE SECURITIES ACT OF 1933 AS AMENDED, IS AVAILABLE AND THAT
SUCH REGISTRATION IS NOT REQUIRED, OR IN THE ALTERNATIVE THAT SUCH SHARES MAY
NOT BE SOLD UNDER RULE 144 AS PROMULGATED BY THE SECURITIES AND EXCHANGE
COMMISSION OF THE UNITED STATES.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a certificate issued upon the
completion of a public distribution of the shares represented thereby) shall
also bear such legend. The legend set forth above shall be removed by the
Public Company from any certificate evidencing the shares upon delivery to the
Public Company of an option by counsel, which opinion and counsel shall be
reasonably satisfactory to the Public Company, that a registration statement
under the Securities Act of 1933 (the "Act") is at that time in effect with
respect to the legend-bearing security or that the transfer of such security
is exempt from registration under the Act.
The Company agrees to piggyback registration rights to these common
shares on any subsequent registration over $1,000,000 (one million U.S.
dollars) of the Company's common shares.
ARTICLE IV
LIABILITIES AND OBLIGATIONS
Section 4.1 Liabilities Not Assumed by Purchaser.
Purchaser does not assume or agree to pay, perform or discharge, and
shall not be responsible for, any liabilities or obligations of Seller,
whether accrued, absolute, contingent or otherwise (collectively, the
"Excluded Liabilities"), including, without limitation, liabilities or
obligations based on, arising out of or in connection with the following:
(a) any indebtedness (whether short-term or long-term) for borrowed
money of Seller, and any liability or obligation of Seller under any
contracts;
(b) any taxes for which Seller is liable, including, without
limitation, any taxes owned or payable on or as a result of the original
purchase of the Acquisition Assets by Seller, and any taxes incurred with
respect to the Acquisition Assets since their acquisition by Seller;
(c) any liability or obligation (contingent or otherwise) of Seller
arising out of any claim, litigation or proceeding threatened or pending on or
before the Closing Date or any claim, litigation or proceeding threatened or
initiated after the Closing Date, to the extent based on an act or omission of
Seller occurring before the Closing Date.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represent, warrant and agree to and with Purchaser as follows,
which representations and warranties shall be true also as of the Closing Date
and deemed made as of such date as a result of consummation of the Closing;
Section 5.1 Organizations; Qualification.
Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Seller has heretofore
delivered to Purchaser true, correct and complete copies of the patents and
patents pending and/or all other intellectual property relating to this
technology and patents, as well as all applications and approval of the
Sellers FDA 510K.
Section 5.2 Authority; Enforceability.
Seller has all requisite corporate power and authority to own and sell
its assets to enter into this Agreement and to perform under this Agreement.
The execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all requisite
corporate action on the part of Seller (including approval by Seller as such
shareholder thereof). This Agreement has been duly and validly executed and
delivered by Seller. There is no action, claim, suit, arbitration,
investigation or proceeding pending or threatened against Seller which
purports to affect the validity or enforceability of this Agreement or that
seeks to prohibit, restrict or delay the consummation of the transaction
contemplated hereby.
Section 5.3 Binding Agreement.
This Agreement constitutes, a general Agreement that will be subject to
appraisal of the Sellers assets, and this Agreement and all documents and
instruments required hereunder to be executed and delivered by Seller at
Closing will constitute, on the Closing Date, legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms. This Agreement also constitutes, as of the date hereof, and
this Agreement and all documents and instruments required hereunder to be
executed and delivered by Seller at Closing will constitute, on the Closing
Date, legal, valid and binding obligations of Seller enforceable against
Seller in accordance with their respective terms unless amended and agreed to
by both parties in writing.
Section 5.4 No Default, Compliance with Laws and Regulations.
(a) Seller is not in default under, and no condition exists that with
notice or lapse of time or both would constitute a default under, (i) any
Purchase or credit agreement, indenture, evidence or indebtedness or other
instrument evidencing borrowed money to which Seller is a party or by which
Seller or any of their respective properties is bound, (ii) any judgment,
order or injunction of any court or Governmental Authority or (iii) any other
material agreement, contract, lease or license.
(b) Seller is not in violation of any law, regulation, order, judgment or
decree of any federal or state court or Governmental Authority applicable to
its assets, properties, business or operation.
(c) No taxes or assessments are or, based on events or occurrences
through the Closing, will be, payable in connection with or related to the
Acquisition Assets (other than sales taxes, if any, payable in connection with
the sale and purchase contemplated herein, which sales taxes Seller agrees to
pay) that could in any way become a liability of Purchaser or create a Lien
against the Acquisition Assets.
Section 5.5 Absence of Certain Changes.
Since December 15, 2001 there has not been:
(a) any material damage, destruction or loss to any of the
Acquisition Assets, whether covered by insurance or not;
(b) any write-up or write-down of the value of any of Seller's
assets, except for write-ups or write-downs in accordance with generally
accepted accounting principles and in the ordinary course of business and
consistent with past practice;
Section 5.6 Actions Pending.
There is no action, claim, suit, investigation or proceeding pending or
threatened against Seller or involving any properties or rights of Seller by
or before any court, arbitrator or Governmental Authority.
Section 5.7 Title to Properties.
Seller has good and marketable title to the Acquisition Assets and the
Acquisition Assets are not subject to any Lien.
Section 5.8 Solvency.
Seller is not insolvent and neither will be rendered insolvent by the
occurrence of the transactions contemplated by this Agreement. In addition,
immediately after giving effect to the consummation of the transactions
contemplated by this Agreement. As used in this Agreement "insolvent" means,
for any reason, that such Person is unable to pay its obligations as they
become due in the usual course of its affairs, and that the sum of the present
fair saleable value of its assets does not and/or will not exceed its debts
and other probably liabilities, and the term "debts" includes any legal
liability, whether matured or unmatured, liquidated or unliquidated, absolute,
fixed or contingent, disputed or undisputed or secured or unsecured.
Section 5.9 Condition of Acquisition Assets.
Seller has no knowledge of any problems with the Acquisition Assets.
Section 5.10 Copies of Documents.
Seller has provided Purchaser with true, complete and correct copies of
as attached hereto are true, complete and correct copies of such documents;
and all documents furnished by Seller in connection with Purchaser's due
diligence activities related to the purchase and sale contemplated herein,
including all documents listed in Schedule A and B are true, correct and
complete documents.
Section 5.11 Disclosure.
Purchaser has provided Seller with Appraisal report on the technology
known as "Needle Channel Attachment Device for a Disposable Syringe" and all
the U.S. and foreign patents prepared by a Registered Professional.
Purchaser and Seller relies solely on reports made by this Registered
Professional and makes no representation other than those reports.
There is no fact known to Seller that has specific application to Seller,
or the Acquisition Assets (other than general economic or industry conditions)
that would have a Material Adverse Effect with respect to any of the foregoing
that has not been set forth in this Agreement or in the schedules attached
hereto. Seller is not aware of any document or information other than as
disclosed in Schedule 5.13 that contains information relevant to the condition
of or title to the Acquisition Assets or any of the transactions or
activities.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, warrants and agrees to and with Seller as
follows:
Section 6.1 Corporate Company Existence.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Purchaser is duly licensed or
qualified as a foreign entity to do business, and, is in good standing, in New
Jersey.
Section 6.2 Authority; Absence of Conflicts; Enforceability.
Purchaser has all requisite corporate power and authority to carry on its
business as presently conducted, to enter into this Agreement and to perform
its obligations under this Agreement. The execution, delivery and performance
of this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all requisite corporate action on the part of Purchaser.
This Agreement has been duly and validly executed and delivered by Purchaser.
The consummation of the transactions contemplated by this Agreement will not
violate, or be in conflict with, any provision of Purchaser's charter, bylaws,
any agreement or instrument to which Purchaser is a party or by which
Purchaser is bound or any law applicable to Purchaser. There is no action,
claim, suit, arbitration, investigation of proceeding pending or threatened
against Purchaser which purports to affect the validity or enforceability of
this Agreement or that seeks to prohibit, restrict or delay the consummation
of the transactions contemplated hereby.
Section 6.3 Binding Agreement.
This Agreement constitutes, as of the date hereof, and this Agreement and
all documents and instruments required hereunder to be executed and delivered
by Purchaser at Closing will constitute, on the Closing Date, legal, valid and
binding obligations of Purchaser enforceable against Purchaser, as the case
may be, in accordance with their respective terms.
Section 6.4 Regulatory Approvals.
SEC reports and/or other Nasdaq regulatory notifications are required to
be filed and/or obtained by Purchaser in connection with the execution,
delivery and performance by Purchaser of this Agreement prior to the
consummation of the transactions contemplated herein.
ARTICLE VII
COVENANTS
Section 7.1 Seller Covenants.
Seller jointly and severally covenant and agree with Purchaser as
follows:
(a) Access. Except as permitted hereunder or contemplated hereby or
as consented to in writing by Purchaser, through the Closing Date Seller will
permit Purchaser to have full access to the Acquisition Assets.
(b) Public Announcements and Disclosure of Company Information.
Subject to applicable law, at all times until the Closing, Seller will
promptly advise Purchaser before issuing, or permitting any of Seller's
directors, officers, representatives or agents to issue any press release with
respect to this Agreement or the transactions contemplated hereby.
(c) Other Officers. Except in connection with the transactions
contemplated by this Agreement, from and after the date hereof, Seller shall
not, knowingly permit any of its officers, directors, representatives or
agents to, directly or indirectly, solicit, initiate or knowingly encourage
any offer or proposal for, or any indication of interest in, a merger or
business combination involving Seller or the acquisition of an equity interest
in Seller, or all or any a substantial portion of the Acquisition Assets.
(d) Representations and Warranties. Seller will cause the
representations and warranties contained in Article V hereof to be true and
correct through the Closing Date and shall ensure the satisfaction of the
conditions to Closing set forth in Section 8.1 hereof (other than Section 8.1
(g)).
(e) Further Assistance. Seller shall execute and deliver to
Purchaser, at the Closing or promptly thereafter, any other instrument which
may be requested by Purchaser and which is reasonably appropriate to perfect
or evidence the sales, assignments, transfers or conveyances contemplated by
this Agreement.
(f) Actions Related to Acquisition Assets.
Section 7.2 Purchaser's Covenants.
Purchaser covenants and agrees with Seller as follows:
(a) Public Announcements and Disclosure of Company Information.
Subject to applicable law, at all times until the Closing, Purchaser will
promptly advise, and obtain the approval of, Seller before issuing, or
permitting any of Purchaser's directors, officers, employees, representatives,
agents or subsidiaries to issue, any press release with respect to this
Agreement or the transactions contemplated hereby.
(b) Representations and Warranties. Purchaser will cause the
representations and warranties contained in Article VI hereof to continue to
be true and correct through the Closing Date and ensure the satisfaction of
the conditions to Closing set forth in Section 8.2 hereof (other than Section
8.2(d)).
ARTICLE VIII
CONDITIONS TO CLOSING
Section 8.1 Conditions to Obligations of Purchaser.
The obligations of Purchaser to consummate the transactions contemplated
herein are subject, at the option of Purchaser, to satisfaction of the
following conditions:
(a) Compliance. Seller shall have complied with their covenants and
agreements contained herein, and the representations and warranties contained
in Article V hereof shall be true and correct on the date hereof and as of the
Closing Date as if made on such date.
(b) Seller's Affidavits. Purchaser shall have received a sworn
affidavit, dated the Closing Date, of Seller and of an executive officer of
Seller certifying as to the matters specified in Section 8.1(a) hereof.
(c) Sellers Resolutions. Seller shall deliver to Purchaser certified
copies of resolutions duly adopted by the board of directors of Seller
authorizing and approving the execution and delivery of this Agreement,
including the exhibits and schedules hereto, and the consummation of the
transactions contemplated herein.
(d) Transfer Documents. Seller shall execute and deliver to
Purchaser such bills of sale and other instruments of sale, transfer,
conveyance, assignment and delivery covering the Acquisition Assets or any
part thereof, executed by Seller or other appropriate parties, as Purchaser
may reasonably require to secure the full and effective sale, transfer,
conveyance, assignment and delivery to Purchaser of the Acquisition Assets,
including, but not limited to, the following:
(i) a general conveyance (the "Xxxx of Sale and Assignment")
transferring to Purchaser good and marketable title to all of the Acquisition
Assets, substantially in the form of a legal opinion from the Seller's
attorney, attached hereto as Exhibit D;
(ii) such other instruments of transfer and assignment in
respect of the Acquisition Assets as Purchaser shall reasonably require and as
shall be consistent with the terms and provisions of this Agreement. Prior to
the Closing Date, Seller will take such reasonable steps as may be requisite
or appropriate so that no later than the close of business on the Closing
Date, Purchaser will be in actual ownership and control of all of the
Acquisition Assets only subject to this Agreement.
(e) Orders, No action, suit or proceeding shall have been commenced
or shall be pending or threatened, and no statute, rule, regulation or order
shall have been enacted, promulgated, issued or deemed applicable to the
transactions contemplated by this Agreement, by any Governmental Authority or
court that reasonably may be expected to (i) prohibit Purchaser's ownership or
operation of all or a material portion of the Acquisition Assets as a result
of the transactions contemplated by this Agreement or (ii) prohibit
consummation of the transaction contemplated by this Agreement.
(f) Consents. All consents and approvals required in connection with
the execution, delivery and performance by Seller of this Agreement shall have
been obtained.
(g) Other Documents. Seller shall deliver to Purchaser such other
documents, instruments and certificates as may be reasonably requested by
Purchaser.
(h) Condemnation; Condition. No condemnation proceedings shall have
been initiated or threatened with respect to any of the Acquisition Assets.
Section 8.2 Conditions to Obligations of Seller.
The obligations of Seller to consummate the transactions contemplated
herein are subject, at the option of Seller, to satisfaction of the fo1lowing
conditions:
(a) Compliance. Purchaser shall have complied with its covenants and
agreements contained herein, and the representations and warranties contained
in Article VI hereof shall be true and correct on the date hereof and as of
the Closing Date.
(b) Purchaser's Certificate. Seller shall have received a
certificate, dated the Closing Date, of an executive officer of Purchaser
certifying as to the matters specified in Section 8.2(a) hereof.
(c) Purchaser's Resolutions. Purchaser shall deliver to Seller
certified copies of resolutions duly adopted by the board of directors of
Purchaser authorizing and approving the execution and delivery of this
Agreement and the consummation of the transactions contemplated herein.
(d) Orders, No action, suit or proceeding shall have been commenced
or shall be pending or threatened, and no statute, rule, regulation or order
shall have been enacted, promulgated, issued or deemed applicable to the
transactions contemplated by this Agreement, by any Governmental Authority or
court that reasonably may be expected to prohibit consummation of the
transactions contemplated by this Agreement.
(e) Consents. All consents and approvals required in connection with
the execution, delivery and performance by Purchaser of this Agreement and
Purchase Payment Agreement shall have been obtained.
(f) Other Documents. Purchaser shall deliver to Seller such other
documents, instruments and certificates as may be reasonably required by
Seller.
ARTICLE IX
TERMINATION
Section 9.1 Grounds for Termination.
This Agreement may be terminated at any time prior to the Closing Date:
(a) By the mutual written agreement of Seller and Purchaser;
(b) By Purchaser if any of the conditions set forth in Section 8.1
hereof shall have become incapable of fulfillment and shall not have been
waived by Purchaser;
(c) By Seller if any of the conditions set forth in Section 9.2
hereof shall have been incapable of fulfillment and shall not have been waived
by Seller;
(d) By Seller or Purchaser by written notice thereof to the other if
the transactions contemplated hereby shall not have been consummated on or
before February 15, 2002, or such other date, if any, as Seller and Purchaser
shall agree upon in writing; or
(e) By Seller or Purchaser if the consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or Government Authority having competent jurisdiction
enjoining, restraining or otherwise preventing, or awarding substantial
damages in connection with, or imposing a material adverse condition upon, the
consummation of this Agreement or the transactions contemplated hereby;
provided, however, that a party shall not be allowed to exercise any right of
termination pursuant to this Section 9.1 if the event giving rise to such
termination right shall be due to the failure of the party seeking to
terminate this Agreement to perform or observe in any material respect any of
the covenants or agreements set forth herein to be performed or observed by
such party or the breach of warranty of such party.
Section 9.2 Effects of Termination.
The following provisions shall apply in the event of a termination of
this Agreement:
(a) Subject to subsections (b) and (c) of this Section 9.2, if this
Agreement is terminated by Seller or by Purchaser as permitted under Section
9.1 hereof, such termination shall be without liability to any party to this
Agreement or any stockholder, director, officer, employee, agent or
representative of such party.
(b) If this Agreement is terminated as a result of breach of
warranty of Purchaser, or failure of Purchaser, to perform their respective
obligations hereunder, Seller shall have all available rights and remedies at
law and in equity, including the right to enforce specific performance.
(c) The parties hereto hereby agree that the provisions of Sections
9.2, 11.1 and 11.5 and 11.7 hereof and Article X hereof shall survive any
termination of this Agreement.
ARTICLE X
INDEMNIFICATION
Section 10.1 Seller's Indemnity Obligations.
Seller, shall indemnify and hold Purchaser (including its affiliates and
their respective officers, directors, employees and agents) harmless from and
against any and all claims, actions, causes of action, arbitration's,
proceedings, losses, damages, liabilities, judgments and expenses (including,
without limitation, reasonable attorneys' fees) ("Indemnified Amounts")
incurred by Seller as a result of (a) any breach or misrepresentation in any
of the representations and warranties made by or on behalf of Seller in this
Agreement, (b) any violation or breach by Seller of or default by Seller under
the terms of this Agreement, (c) any act or omission by Seller, (d) any
action, claim, suit, arbitration, investigation or proceeding initiated by
Seller which purports to affect the validity or enforceability of this
Agreement or that seeks to prohibit, restrict or delay the consummation of the
transactions contemplated hereby, or (e) any liabilities or obligations of
Seller retained by Seller pursuant to this Agreement.
Section 10.2 Purchaser's Indemnity Obligations.
Purchaser shall indemnify and hold Seller (including its officers,
directors and agents) harmless from and against any and all Indemnified
Amounts incurred by Seller, as the case may be, as a result of (a) any breach
or misrepresentation in any of the representations and warranties made by or
on behalf of Purchaser in this Agreement, (b) any violation or breach by
Purchaser of or default by Purchaser under the terms of this Agreement, (c)
except for liabilities and obligations retained by Seller pursuant to this
Agreement, any act or omission occurring after the Closing Date by Purchaser
with respect to the Acquisition Assets.
Section 10.3 Indemnification Procedures.
All claims for indemnification under this Agreement shall be asserted and
resolved as follows:
(a) A party claiming indemnification under this Agreement (an
"Indemnified Party") shall with reasonable promptness (i) notify the party
from whom indemnification is sought (the "Indemnifying Party") of any
third-party claim or claims asserted against the Indemnified Party ("Third
Party Claim") for which indemnification is sought and (ii) transmit to the
Indemnifying Party a copy of all papers served with respect to such claim (if
any) and a written notice ("Claim Notice") containing a description in
reasonable detail of the nature of the Third Party Claim, an estimate of the
amount of damages attributable to the Third Party Claim to the extent feasible
(which estimate shall not be conclusive of the final amount of such claim) and
the basis of the Indemnified Party's request for indemnification under this
Agreement.
Within 30 days after receipt of any Claim Notice (the "Election Period"),
the Indemnifying Party shall notify the Indemnified Party (i) whether the
Indemnifying Party disputes its potential liability to the Indemnified Party
with respect to such Third Party Claim and (ii) whether the Indemnifying Party
desires, at the sole cost and expense of Indemnifying Party, to defend the
Indemnified Party against such Third Party Claim.
If the Indemnifying Party notifies the Indemnified Party within the
Election Period that the Indemnifying Party elects to assume the defense of
the Third Party Claim, than the Indemnifying Party shall have the right to
defend, at its sole cost and expense (if the Indemnified Party is entitled to
indemnification hereunder), such Third Party Claim by all appropriate
proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 10.3(a). The Indemnifying
Party shall have full control of such defense and proceedings. The Indemnified
Party is hereby authorized, at the sole cost and expense of the Indemnifying
Party (but only if the Indemnified Party is entitled to indemnification
hereunder), to file, during the Election Period, any motion, answer or other
pleadings that the Indemnified Party shall reasonably deem necessary or
appropriate to protect its interests or those of the Indemnifying Party and
not prejudicial to the Indemnifying Party (it being understood and agreed that
if an Indemnified Party takes any such action that is materially prejudicial
and causes a final adjudication that is adverse to the Indemnifying Party, the
Indemnifying Part shall be relieved of its obligations hereunder with respect
to such Third Party Claim). If requested by the Indemnifying Party, the
Indemnified Party agrees to cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim that the Indemnifying Party elects
to contest, including, without limitation, the making of any related
counterclaim against the person asserting the Third Party Claim or any
cross-complaint against any person. Except as otherwise provided herein, the
Indemnified Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying Party and
shall bear its own costs and expenses with respect to such participation.
If the Indemnifying Party fails to notify the Indemnified Party within
the Election Period that the Indemnifying Party elects to defend the
Indemnified Party pursuant to the preceding paragraph, or if the Indemnifying
Party elects to defend the Indemnified Party but fails to prosecute or settle
the Third Party Claim as herein provided, then the Indemnified Party shall
have the right to defend, at the sole cost and expense of the Indemnifying
Party (if the Indemnified Party is entitled to indemnification hereunder), the
Third Party Claim by all appropriate proceedings, which proceedings shall be
promptly and vigorously prosecuted by the Indemnified Party to a final
conclusion or settled. The Indemnified Party shall have full control of such
defense and proceedings. Notwithstanding the foregoing, if the Indemnifying
Party has delivered a written notice to the Indemnified Party to the effect
that the Indemnifying Party disputes its potential liability to the
Indemnified Party under this Article X and if such dispute is resolved in
favor of the Indemnifying Party, the Indemnifying Party shall not be required
to beat the costs and expenses of the Indemnified Party's defense pursuant to
this Section 10.3 or of the Indemnifying Party's participation therein at the
Indemnified Party's request, and the Indemnified Party shall reimburse the
Indemnifying Party in full for all costs and expenses of such litigation. The
Indemnifying Party may participate in, but not control, any defense or
settlement controlled by the Indemnified Party pursuant to this Section 10.3,
and the Indemnifying Party shall bear its own costs and expenses with respect
to such participation.
The Indemnifying Party shall not settle or compromise any Third Party
Claim unless (i) the terms of such compromise or settlement require no more
than the payment of money (i.e., such compromise or settlement does not
require the Indemnified Party to admit any wrongdoing or take or refrain from
taking any action), (ii) the full amount of such monetary compromise or
settlement will be paid by the Indemnifying Party, and (iii) the Indemnified
Party receives as part of such settlement a legal, binding and enforceable
unconditional satisfaction and/or release, in form and substance reasonably
satisfactory to it, providing that such Third Party Claim and any claimed
liability of the Indemnified Party with respect thereto is being fully
satisfied by reason of such compromise or settlement and that the Indemnified
Party is being released from any and all obligations or liabilities it may
have with respect thereto. The Indemnified Party shall not settle or admit
liability to any Third Party Claim without the prior written consent of the
Indemnifying Party.
(b) In the event any Indemnified Party should have a claim against
any Indemnifying Party hereunder that does not involve a Third Party Claim,
the Indemnified Party shall transmit to the Indemnifying Party a written
notice (the "Indemnity Notice") describing in reasonable detail the nature of
the claim, an estimate of the amount of damages attributable to such claim to
the extent feasible (which estimate shall not be conclusive if the final
amount of such claim) and the basis of the Indemnified Party's request for
indemnification under this Agreement.
Section 10.4 Determination of Indemnified Amounts.
The Indemnified Amounts payable by an Indemnifying Party hereunder shall
be determined (i) by the written agreement of the parties, (ii) by a final
judgment or decree of any court of competent jurisdiction, or (iii) by any
other means agreed to in writing by the parties. A judgment or decree of a
court shall be deemed final when the time for appeal, if any, shall have
expired and no appeal shall have been taken or when all appeals taken have
been fully determined. The Indemnified Party shall have the burden of proving
the Indemnified Amounts suffered by the Indemnified Party.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Commissions.
Seller and Purchaser each represent and warrant that it has done nothing
to create any liability for the payment of any commission or compensation in
the nature of a finder's fee or similar fee to any broker or any other Person
in connection with this Agreement and the transactions contemplated hereby.
Seller, shall indemnify and hold Purchaser harmless from and against any and
all claims for finders' fees, brokers' commissions or similar fees made by any
party as a result of this Agreement and the transactions contemplated
hereunder to the extent that any such commission or fee was incurred, or
alleged to have been incurred, by, through or under Seller. Purchaser shall
indemnify and hold Seller harmless from and against any and all claims for
finders' fees, brokers' commissions or similar fees made by any party as a
result of this Agreement and transactions contemplated hereunder to the extent
that any such commission was incurred, or alleged to have been incurred, by,
through or under Purchaser.
Section 11.2 Survival.
Except as otherwise provided herein, the representations and warranties
set forth in this Agreement and in any certificate or instrument delivered in
Connection herewith shall be continuing and shall survive the Closing for a
period of five (5) years, notwithstanding any investigation at any time made
by or on behalf of Purchaser, but shall thereafter terminate and be of no
further force or effect; provided, however, that in the case of all
representations and warranties, there shall be no such termination with
respect to any such representation or warranty as to which a bona fide claim
has been asserted by written notice of such claim delivered to the party or
parties making such representation or warranty prior to the expiration of the
survival period.
Section 11.3 Expenses.
Except as other expressly provided herein, each party shall bear its own
expenses incurred in connection with the negotiation, preparation and
execution of this Agreement and the transactions contemplated hereby,
including its own consultant's fees, attorneys' fees, accountants' fees,
Purchase fees and other similar costs and expenses.
Section 11.4 Notice.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been received only if and when (i) personally
delivered or (ii) on receipt after mailing, by United States mail, first
class, postage prepaid, by certified mail return receipt requested, (iii) by
facsimile transmission to the respective parties, addressed in each case as
follows (or to such other address as may be specified by like notice):
(1) If to Seller, to:
Spectrum Biotech, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X0X0
Fax:
(2) If to Purchaser, to
Medi-Hut Co., Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Fax: 000-000-0000
with a copy to:
Xxxxx Shy, Esq.
000 Xxxxx 000 Xxxx
Xxxx xxxx Xxxx, Xxxx 00000
Fax: 000-000-0000
Section 11.5 Entire Agreement.
This Agreement, including all schedules and exhibits hereto, which
schedules or exhibits are incorporated herein by reference and deemed to be a
part of this Agreement, constitutes the entire agreement of the parties with
respect to the subject matter hereof, and may not be modified, amended or
terminated except by a written instrument specifically referring to this
Agreement signed by all the parties hereto.
Section 11.6 Governing Law; Venue.
This Agreement shall be governed, construed and enforced in accordance
with the laws of the State of New Jersey without giving effect to the
principles of conflicts of laws thereof. Any legal action or proceeding with
respect to this Agreement shall be brought in the federal district courts
located in New Jersey. The parties waive any objection to jurisdiction or
venue in such jurisdiction.
Section 11.7 Assignments and Third Parties.
Except as otherwise provided herein, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns. No party hereto shall assign this Agreement or any part hereof
without the prior written consent of the other party. No assignment shall
release a party of any of its obligations under this Agreement.
Section 11.8 Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any of the parties hereto. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 11. 9 Amendments; No Waiver.
Any provision of this Agreement may be amended or waived prior to the
Closing Date if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by all parties hereto, or in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by any party to exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
Section 11.10 No Third Party Beneficiaries.
Nothing in this Agreement shall entitle any Person other than the parties
hereto or their respective successors and assigns permitted hereby to any
claim, cause of action, remedy or right of any kind.
Section 11.11 Headings; Use of Certain Terms.
The headings and table of contents herein are for convenience only and
shall have no significance in the interpretation hereof. Unless the context
shall otherwise require, the singular shall include the plural and vice versa,
and each pronoun in any gender shall include all other genders.
Section 11.12 Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed for all purposes to be as original, but all of which
together shall constitute one and the same agreement.
Section 11.13 Arms-Length Transaction.
Seller acknowledges that this Agreement and the transactions contemplated
hereby constitute arms-length transactions and that Seller is receiving
reasonably equivalent value in exchange for the transfers contemplated by this
Agreement.
Section 11.14 Ancillary Documents Simultaneously Executed.
Simultaneously with the execution and deliver of this Agreement, the
parties and Escrow Agent are executing and delivering to one another an Escrow
Agreement providing for the handling of the escrow agent of the deposit. In
addition, Seller is delivering a Guaranty Agreement guaranteeing the
performance of the obligations of Seller under this Agreement.
Section 11.15 Spectrum Legal and Accounting
The closing of this transaction is subject to Spectrum's legal and
accounting advisers input.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement oil
the date first above written.
PURCHASER:
MEDI-HUT CO., INC.
01/09/02 /s/ Xxxxxx Xxxxxxxxx
Date:__________________ By:_________________________________
Xxxxxx Xxxxxxxxx, President
SELLER:
SPECTRUM BIOTECH, INC.
01/09/02 /s/ Xxxxx Xxxxxxx
Date:__________________ By: ________________________________
Xxxxx Xxxxxxx, President
ADDENDUM TO ASSET PURCHASE AGREEMENT
The undersigned parties to the Asset Purchase Agreement by and through
Medi-Hut Co., Inc. and Spectrum Biotech, Inc. dated as of January 9, 2002
("Asset Purchase Agreement") do hereby agree as follows:
1. Spectrum Biotech, Inc. ("Spectrum") does hereby agree to deliver
to Medi-Hut Co., Inc. ("Medi-Hut") on or before January 31, 2002, engineering
drawings for the 1cc version of the Needle Chanel Attachment Device for A
Disposable Syringe.
2. Spectrum agrees that from the date of closing of the Asset
Purchase Agreement until the delivery of the above-referenced drawings and
engineering, the 356,456 shares of Medi-Hut common stock to be issued and
delivered to Spectrum under the terms of the Asset Purchase Agreement shall be
placed into escrow and held in escrow pending the delivery of said
information.
3. Spectrum agrees further that if the above-referenced drawings and
specifications is not delivered to Medi-Hut on or before January 31, 2002,
then one-half of the shares held in escrow shall remain in escrow until
February 15, 2002 at which time they will be returned to Medi-Hut for
cancellation, and the remaining 178,428 shares shall be released to Spectrum
and accepted by Spectrum as full and complete consideration for the transfer
of assets governed by the Asset Purchase Agreement.
DATED this _9th_ day of January, 2002.
SPECTRUM BIOTECH, INC.
/s/ Xxxxx Xxxxxxx
By: _______________________________
Xxxxx Xxxxxxx, President
MEDI-HUT CO., INC.
/s/ Xxxxxx Xxxxxxxxx
By: _______________________________
Xxxxxx Xxxxxxxxx, President
AMENDMENT TO
ASSET PURCHASE AGREEMENT
January 9, 2002
This Amendment No. 2 is made and entered into this 25th day of February,
2002, between Medi-Hut Co., Inc. ("Medi") and Spectrum Biotech, Inc., a Nevada
corporation ("Spectrum").
RECITALS
A. Medi and Spectrum executed and delivered an Asset Purchase
Agreement dated as of January 9, 2002 (the "Agreement") pursuant
to which Medi agreed to purchase and Spectrum agreed to sell
certain assets and properties of Spectrum.
B. The Parties desire to amend the Agreement in the particulars set
forth herein and otherwise reaffirm the other provisions hereof.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency whereof are hereby acknowledged, the parties covenant and agreed
as follows:
1. Unless otherwise defined, capitalized terms used herein shall have the
meanings set forth in the Agreement.
2. The parties stipulate and agree that all conditions precedent to the
obligations of either party to consummate and close the transactions provided
for in the Agreement have been either satisfied or, by the Amendment, are
hereby waived by the party for whose favor the condition precedent was
provided.
3. The closing of the Agreement shall occur on February 25th, 2002, unless
modified by mutual agreement of the parties.
4. Notwithstanding any other provision of the Agreement to the contrary, the
parties stipulate and agree that the purchase price ("Purchase Price") to be
paid by Medi to Spectrum for the Assets shall consist of 700,000 shares of
restricted common stock of Medi, (the "Shares") based upon a mutually agreed
upon fair market value of the common stock of $5.00 per share ("Market
Value").
5. Medi will grant "Piggy-Back" registration rights to Spectrum and its
shareholders which shall allow them to include their shares in any
registration of Medi's securities to be sold into a secondary market. Said
registration rights shall extend for a period of one year from the date of
this Agreement. Said registrant shall give Spectrum and/or its
shareholders the right to register their shares for resale under the
Securities Act of 1933, as amended (the "Securities Act"). Medi shall use
reasonable efforts to assist Spectrum's shareholders in the sale of their
respective securities, through a registration and/or provide assistance with a
secondary market.
6. The terms and conditions of this Amendment shall be deemed to modify and
supercede the Agreement and in the event of any conflict or inconsistency
between the terms of this Amendment and the terms of the agreement, the terms
of this Amendment shall control. Unless otherwise modified, the remaining
terms of the Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on the date
set forth above.
Medi-Hut Co., Inc.
/s/ Xxxxxx X. Xxxxxxxxx
Date: 2/25/02 Xxxxxx X. Xxxxxxxxx, President
Spectrum Biotech, Inc.
/s/ Xxxxx Xxxxxxx
Date: 2/25/02 Xxxxx Xxxxxxx, President
