---------------------------------------------------------------
STOCK PURCHASE AGREEMENT
BETWEEN
THERMOLASE CORPORATION,
as Seller
AND
TGH, LLC,
as Buyer
Dated: June 27, 1999
===============================================================
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of the 27th day of June,
1999, by and among TGH, LLC, a Pennsylvania limited liability company, and
THERMOLASE CORPORATION, a Delaware corporation.
W I T N E S S E T H:
WHEREAS, Seller owns all of the issued and outstanding capital stock
(consisting of two thousand (2000) common shares) of the Company (as defined
below), which is engaged primarily in the business of owning and operating the
Destination Spa (as defined below); and
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell
to Buyer, upon the terms and subject to the conditions set forth in this
Agreement, all of the Shares (as defined below).
NOW, THEREFORE, in consideration of the promises and the mutual covenants
herein contained, intending to be legally bound hereby, the parties hereto agree
as follows:
A. DEFINITIONS.
1. "Affiliate" of a Person means any Person which, directly or
indirectly, through one or more intermediaries, Controls, is
Controlled by, or is under common Control with such Person. An
Affiliate of Seller shall include ThermoTrex Corporation and
ThermoElectron Corporation and Affiliates thereof.
2. "Agreement" means this Stock Purchase Agreement, and all Exhibits
and Schedules attached hereto, as the same shall be amended from
time to time.
3. "Benefit Plan" means any Plan of Seller, or any predecessor or
Affiliate of Seller, existing prior to or as of the date hereof
to which Seller contributes or has contributed on behalf of any
Employee, or under which any Employee or any beneficiary thereof
is covered, or is eligible for coverage or has benefit rights.
4. "Books and Records" of any Person mean all files, documents,
instruments, papers, books and records relating to the business,
operations, condition of (financial or other), results of
operations and business of such Person, including without
limitation financial statements, Tax Returns and related work
papers and letters from accountants, budgets, pricing guidelines,
ledgers, journals, deeds, title policies, contracts, customer
lists, computer files and programs, retrieval programs, operating
data and plans and environmental studies and plans.
5. "Business Day" means any calendar day which is not a Saturday,
Sunday or public holiday under the Laws of the United States of
America.
1
6. "Buyer" means TGH, LLC, a Pennsylvania limited liability company.
7. "Claim" means any written or oral demand, claim, suit, Lien,
action, expense, including counsel fees, cause of action,
investigation or notice by any Person alleging actual or
potential liability.
8. "Closing" means the execution of this Agreement by Seller and
Buyer.
9. "Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder or with respect
thereto.
10. "Collateral Documents" means collectively each of the documents,
agreements and instruments to be executed, delivered and
performed in connection with this Agreement.
11. "Company" means the Greenhouse Spa, Inc., a Pennsylvania
corporation.
12. "Control" (including, with correlative meaning, the terms
"Controlled by" and "under common Control with"), as used with
respect to any Person, means the possession, directly or
indirectly, of the power to elect a majority of the board of
directors or to direct or cause the direction of the management
and policies of such Person, whether through the ownership of
voting securities, by contract, family relationship or otherwise
and, in any event and without limitation of the foregoing, any
Person owning fifty percent (50%) or more of the voting
securities of another Person shall be deemed to control that
Person.
13. "Default" means (a) a breach of or default under any contract,
(b) the occurrence of an event which with the passage of time or
the giving of notice or both would constitute a breach of or
default under any contract, or (c) the occurrence of an event
that (with or without the passage of time or the giving of notice
or both) would give rise to a right of damages, specific
performance, termination, renegotiation or acceleration under any
contract.
14. "Destination Spa" means the Greenhouse Spa which is a health
spa/personal fitness facility located at 0000 000xx Xxxxxx,
Xxxxxxxxx, Xxxxx.
15. "Employee" means any employee, former employee or any employee
who is on paid leave of absence or disability leave of the
Company or any employee of Seller who is employed by Seller
primarily to provide services to the Company.
16. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated
thereunder or with respect thereto.
17. "Exhibits" mean the exhibits, attached to, referenced in and
delivered pursuant to this Agreement.
2
18. "GAAP" means generally accepted accounting principles
consistently applied, as applied in the United States of America.
19. "Governmental Entity" means any government and political
subdivisions thereof, court, arbitral tribunal, administrative
agency, tribunal or commission or any other governmental or
regulatory body, instrumentality or authority, whether federal,
state or local.
20. "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
21. "Indebtedness" of any Person means all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds,
debentures or similar instruments, (iii) for the deferred
purchase price of goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) under
capital leases, and (v) in the nature of guarantees of the
obligations described in clauses (i) through (iv) above of any
other Person.
22. "Indemnified Party" means any Person claiming indemnification
under any provision of Section I.
23. "Indemnifying Party" means any Person against whom a claim for
indemnification is being asserted under any provision of Section
I.
24. "Intellectual Property" means collectively, all copyrights,
patents, trademarks, trade names, brand names, brand marks,
logos, licenses, computer software, computer systems and related
proprietary documentation, trade secrets and related data,
inventions, inventor's work papers and notebooks, disclosure of
inventions, proprietary technology, formulae, processes, research
and development in progress, know-how, designs, and all other
proprietary information and similar intangible rights.
25. "Known" or "Knowledge" or words of similar import mean, with
regard to a particular fact or other matter, that the Person is
actually aware of such fact or other matter or a prudent
individual could be expected to know. Knowledge of Seller shall
not include Knowledge of facts or matters solely as a result of
the Knowledge of Xxxxxx or Xxxxx Xxxxxxx or employees reporting
to them. With respect to the Knowledge of Seller, it is further
limited by the fact that Buyer's Affiliate owned the Destination
Spa prior to June 12, 1998 and thereafter officers and employees
of Buyer operated it on a day to day basis.
26. "Laws" mean all laws, statutes, ordinances, governmental
regulations, orders, decrees, edicts, rules or other requirements
of any Governmental Entity, including without limitation, those
covering environmental, safety, health, transportation, bribery,
record keeping, employment, Tax, anti-discrimination, antitrust,
wage and hour and price and wage control matters.
3
27. "Liabilities" mean all Indebtedness, obligations and other
liabilities, and any Loss, damage, cost, unpaid expense, claim,
deficiency, guaranty or endorsement of or by any Person.
28. "Lien" means any mortgage, lien (including federal, state and
local Tax liens), security interest, pledge, negative pledge,
encumbrance, assessment, title retention agreement, restriction
or restraint on transfer, defect of title, charge in the nature
of a lien or security interest, or option (whether consensual,
statutory or otherwise) or any conditional sale contract, title
retention contract or other contract to give any of the
foregoing.
29. "Litigation" means any action, lawsuit, arbitration, criminal
prosecution, tax audit, administrative or other proceeding or
investigation, or any inquiry asserting a violation of any Law,
by, before or for any Governmental Entity.
30. "Loss" means any and all damages, losses, obligations,
deficiencies, liabilities, encumbrances, penalties, fines, costs
and expenses, including without limitation interest, court costs,
reasonable fees of attorneys, accountants and other experts or
other reasonable expenses of Litigation or other proceedings or
of any Claim, Default or assessment, other than consequential
damages.
31. "Material Adverse Effect" means an effect which is or would be
materially adverse to the Company.
32. "Person" means any natural person, sole proprietorship,
corporation, partnership, joint venture, association, trust, or
any other entity or organization, including a government or a
political subdivision, agency or instrumentality thereof.
33. "Plan" means any bonus, incentive compensation, deferred
compensation, pension, profit sharing, retirement, stock
purchase, stock option, stock ownership, stock appreciation
rights, phantom stock, leave of absence, layoff, vacation, day or
dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance,
severance, separation or other employee benefit plan, practice,
policy or arrangement of any kind, whether written or oral,
including, but not limited to, any "employee benefit plan" within
the meaning of Section 3(3) of ERISA.
34. "Post-Closing Periods" mean any taxable period beginning (or
deemed pursuant to Section D.8.b.iv.(b.) to begin) after the date
hereof.
35. "Pre-Closing Periods" mean any taxable period during which Seller
owned the Company that ends (or is deemed pursuant to Section
D.8.b.iv to end) on or before the date hereof.
4
36. "Relevant Contracts" mean any and all contracts to which Seller
or its Affiliate is a party relating to the Company entered into
in the ordinary course of business at any time prior to the date
hereof.
37. "Right of First Refusal" means a right of first refusal in favor
of SMK Group, LLC, to purchase the Company, which right will be
terminated as of the date hereof.
38. "Schedules" mean the schedules, attached to, referenced in and
delivered pursuant to this Agreement.
39. "Seller" means ThermoLase Corporation, a Delaware corporation.
40. "Seller's Deed of Trust" means the deed of trust given by the
Company securing the Destination Spa (as more specifically
described therein) as collateral for the Ten Million Dollar
($10,000,000) note from Buyer to Seller.
41. "Shares" mean all of the shares of common stock of the Company
constituting a one hundred percent (100%) ownership interest in
the Company.
42. "Survival Date" means the date which is two (2) years after the
date hereof.
43. "Xxxxxxxxx Agreement" means a license agreement with Xxxxxxxx
Xxxxxxxxx dated as of February 10, 1993, a copy of which is
attached hereto as Exhibit "F".
44. "Tax(es)" mean all taxes, and all charges, fees, levies or other
assessments in the nature of a tax, including but not limited to
all net income, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, hotel, withholding,
payroll, employment, social security, unemployment, excise,
estimated, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever,
including all interest and penalties thereon, and additions to
tax or additional amounts imposed by any taxing authority,
domestic or foreign upon a Person, or any of its Affiliates or
properties.
45. "Tax Returns" mean all returns, declarations and reports,
estimates and information returns and statements required by
applicable law to be filed with respect to Taxes.
5
B. ACQUISITION OF THE STOCK.
1. Purchase and Sale. Subject to the terms and conditions of this
Agreement, on the date hereof, Buyer hereby purchases and
acquires from Seller and Seller hereby sells and transfers to
Buyer the Shares, for the consideration delivered to Seller
pursuant to Section C below. In furtherance thereof, Seller
shall, on the date hereof, deliver to Buyer the certificates
representing all of the Shares, duly endorsed for transfer or
accompanied by stock powers executed in blank for transfer.
2. Books and Records. On the date hereof, in addition to the
delivery and transfer of the Shares to Buyer, Seller shall
deliver to Buyer any of the Books and Records of the Company
which are within the control of Seller or any of its Affiliates.
C. CONSIDERATION TO SELLER. As the sole consideration for the Shares to be
sold by Seller to Buyer, Buyer shall execute and deliver to Seller or its
nominee, effective as of the date hereof a promissory note in the amount of
Ten Million Dollars ($10,000,000.00) and a security agreement, and Buyer
shall cause the Company to execute and deliver Seller's deed of trust; a
guaranty of Buyer's obligations under the Ten Million Dollar
($10,000,000.00) promissory note, and a security agreement, all in favor of
Seller and all in the form attached hereto as Exhibits "A", "B", "C", "D"
and "E", respectively.
D. REPRESENTATIONS AND WARRANTIES OF SELLER. In connection with the sale of the
Shares to Buyer, Seller hereby represents and warrants to Buyer as follows:
1. Organization, Power, Standing and Qualification of Seller. Seller
is a corporation duly organized, validly existing, and in good
standing under the Laws of the State of Delaware and all other
jurisdictions in which the failure to be in good standing would
have a Material Adverse Effect. Seller has full power and
authority (corporate and otherwise) to carry on its businesses as
it is now being conducted and to own and operate the properties
and assets now owned and operated by it.
2. Corporate Power and Authority. Seller has the requisite corporate
power and authority to execute, deliver and perform this
Agreement and the Collateral Documents and to transfer the Shares
to Buyer. The execution, delivery and performance of this
Agreement and each of the Collateral Documents and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action (corporate or
otherwise) on the part of Seller and requires no further
authorization or consent by Seller or any other party. All
resolutions by the Board of Directors of Seller authorizing the
actions taken in connection with the sale of the Shares,
including the execution and delivery of this Agreement, are in
accordance with the Articles and By-Laws of Seller and were duly
adopted and continue in full force and effect. All corporate
consents and authorizations required to be obtained by Seller
with regard to this Agreement and consummation of the
transactions contemplated hereby have been obtained. The officers
of Seller executing this Agreement and the documents executed and
delivered pursuant to or in connection with this Agreement are
incumbent officers of Seller and are authorized to do so. This
6
Agreement and the Collateral Documents required to be executed on
the date hereof, have been duly and validly executed and
delivered by Seller. This Agreement and the Collateral Documents
constitute the legal, valid and binding obligation of Seller,
enforceable in accordance with their terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or similar Laws affecting the enforcement of
creditors' rights generally.
3. Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement and each of the Collateral
Documents and the consummation of the transactions contemplated
hereby and thereby do not and will not: (a) violate, breach or
contravene any of the terms, conditions or provisions of the
Articles of Incorporation or By-Laws of Seller; (b) violate,
breach, be in conflict with, constitute a Default under, cause
the acceleration of any payments pursuant to, or otherwise impair
the good standing, validity or effectiveness of any contract
relating to the Company or the Shares; (c) violate any provision
of Law applicable to Seller or any of its properties or assets;
(d) require any consent, approval, waiver, authorization or
permit of, or filing or registration with or notification to, any
Governmental Entity or any other Person to be obtained by Seller;
(e) result in the creation or imposition of any Lien; or (f)
otherwise adversely affect the good standing, validity or
effectiveness of any contract which would have a Material Adverse
Effect on the operation of the Company. To Seller's Knowledge,
there is no proceeding pending or threatened before any court or
Governmental Entity in which it is being sought to restrain or
prohibit the consummation of the transactions contemplated
hereby.
4. Title to the Shares. Seller is the valid and lawful record and
beneficial owner of all of the Shares of the Company, all of
which has been duly authorized and validly issued and is fully
paid and non-assessable, and is free and clear of all pledges,
Liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever, except any restrictions
which may be created by operation of state or federal securities
Laws, and except for the Right of First Refusal. On the date
hereof, Buyer shall receive from Seller good, valid and
marketable title to all of the Shares, free and clear of all
pledges, Liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever (except any restrictions
which may be created by operation of state or federal securities
Laws).
5. Organization, Good Standing and Qualification of the Company. The
Company is a corporation duly organized, validly existing and in
good standing under the Laws of the Commonwealth of Pennsylvania,
with full corporate power and authority to own its assets and
conduct its business as owned and conducted on the date hereof.
The Company is duly qualified and in good standing as a foreign
corporation in the State of Texas. True and complete copies of
the Articles of Incorporation and By-Laws of the Company
(including all amendments thereto) have been previously delivered
to Buyer, and a correct and complete list of the officers and
directors of the Company is attached hereto as Schedule D.5,
which is incorporated herein.
7
6. Capital Structure; Equity Ownership.
a. The authorized capital stock of the Company consists of
one million (1,000,000.00) shares with par value of One
Dollar ($1.00) per share, two thousand (2,000) shares of
which are issued and outstanding in the name of Seller.
b. Except for the Right of First Refusal, there are no
outstanding subscriptions, options, rights, warrants,
convertible securities or other agreements or calls,
demands or commitments obligating the Company to
issue, transfer or purchase any shares of its capital
stock, or obligating Seller to transfer any shares of
capital stock of the Company. No shares of capital
stock of the Company are in the Company's treasury,
or are reserved for issuance pursuant to stock
options, warrants, agreements or other rights to
purchase capital stock.
7. Subsidiaries and Investments. The Company does not own, directly
or indirectly, any stock or other equity securities of any
corporation or entity, or have any direct or indirect equity or
ownership interest in any person, firm, partnership, corporation,
venture or business other than the business conducted by the
Company.
8. Tax Matters.
a. Past Tax Matters.
i. The Company has submitted to Seller Tax Returns for the
Company for the period from January 1, 1998 to June 12,
1998, which must be approved by Seller before filing,
which filing may be no later than September 15, 1999 to
be timely. Seller represents that it has obtained
extensions to file said Tax Returns until September 15,
1999 and will review such Tax Returns and timely advise
the Company of any comments with regard thereto so that
the Tax Returns can be timely filed. The failure of
Seller to advise the Company of any comments to the Tax
Returns in writing by September 1, 1999 shall
constitute a waiver by Seller of its rights to provide
any comments to said Tax Returns.
ii. The Company has submitted to Seller Tax Return
information for the period from June 13, 1998 to
December 31, 1998, which when approved by Seller will
form a part of the consolidated Tax Returns of Seller,
which Seller will timely file and, to the extent
required, pay any Taxes due thereon.
8
iii. Within one hundred twenty (120) days of the date
hereof, the Company will submit to Seller Tax Return
information for the period from January 1, 1999 until
the date hereof, which when approved by Seller will
form a part of the consolidated Tax Returns of Seller,
which Seller will timely file and, to the extent
required, pay any Taxes due thereon.
iv. In addition to the information and obligations set
forth in Sections D.8.a.i, D.8.a.ii, and D.8.a.iii,
hereinabove, Seller has filed or will timely file all
Tax Returns required to be filed by it with respect to
the Company, and has paid or will timely pay all Taxes,
and other impositions as and to the extent required by
applicable law. Without limitation of the foregoing,
Seller, with respect to the Company, has made all
required filings and payments to the date hereof with
respect to Taxes to the extent such filings and
payments are not made directly by the Company, and
there are no outstanding or pending claims,
deficiencies or assessments with respect to any Taxes
of Seller with respect to the Company. With respect to
any accrued Tax obligations regarding the Company,
which are not yet due and payable, Seller has paid or
will pay in full all Taxes on or before the time when
the same become due and payable, and Seller will be
responsible for and shall indemnify the Company and
Buyer for all such Tax obligations accruing during the
period of its ownership of the Company regardless of
when payment was or is actually due.
v. To the Knowledge of Seller, there are no audits pending
with respect to any Tax Returns of or with respect to
the Company, and no waiver of statutes of limitations
have been given or requested with respect to any Taxes
of or with respect to the Company. To the extent that
there are any Tax liabilities with respect to the
period of Seller's ownership of the Company, imposed on
Seller or the Company, Seller agrees to remain liable
for such Taxes, whether it is imposed on the Company or
Seller.
b. Consolidated Tax Returns.
i. Preparation and Filing of Seller's Consolidated 1999
Tax Return.
(a.) Seller shall cause to be prepared and timely filed
all Tax Returns of the Company attributable to any
period ending on or before the date hereof.
(b.) Buyer shall prepare and timely file or shall cause
to be prepared and timely filed all other Tax
Returns with respect to the Company.
9
ii. Tax Indemnification by Seller.
(a.) Seller shall indemnify Buyer and the Company in respect
of, and hold Buyer and the Company harmless, on an
after-tax basis (which shall mean that any damage
resulting to Buyer or the Company is reduced by the
amount of any Tax benefit received by the Company or
Buyer in connection with any payments made which gave
rise to the claim for indemnification), against (x)
damages resulting from, relating to, or constituting a
breach of any Tax representation set forth in this
Agreement, (y) the failure to perform any covenant or
agreement set forth in this Section D.8.b, and (z)
without duplication, the following Taxes with respect
to the Company:
(i.) Any and all Taxes due and payable by the Company
for any period during which Seller owned the
Company; and
(ii.)Any liability of such entities for Taxes of
other entities whether pursuant to Treasury
Regulation Section 1.1502-6 (or comparable or
similar provision under state, local or foreign
law), as transferee or successor or pursuant to
any contractual obligation for any period that
ends (or is deemed pursuant to Section D.8.b.iv.
(b.) to end) on or before the date hereof for
periods during which Seller owned the Company,
The amounts specified in paragraphs (i.) and (ii.)
shall be reduced (but not below zero) by the amount of
any accruals for Taxes on the balance sheet of the
Company as of the date hereof (exclusive of any
accruals for "deferred taxes" or similar items that
reflect timing differences between Tax and financial
accounting principles). For purposes of Section
D.8.b.ii.(a.)(i.), any and all transactions or events
contemplated by this Agreement that occur at or prior
to the date hereof shall be deemed to have occurred in
a Pre-Closing Period.
(b.) All claims for indemnification pursuant to this Section
D.8.b shall be made in accordance with Section I of
this Agreement.
iii. Tax Indemnification by Buyer. Buyer and the Company shall
indemnify and hold Seller harmless, on an after-Tax basis,
from and against, the following Taxes with respect to the
Company:
10
(a.) Any and all Taxes for Post-Closing Periods, due or
payable by the Company; and
(b.) Any and all Taxes due and payable by the Company for
any Pre-Closing Period to the extent of the amounts of
any accruals for Tax liabilities on the balance sheet
of the Company as of the date hereof (exclusive of any
accruals for "deferred taxes" or similar items that
reflect timing differences between Tax and financial
accounting principles).
(c.) As stated above, all claims for indemnification
pursuant to this Section D.8.b shall be made in
accordance with Section I of this Agreement.
iv. Allocation of Certain Taxes. In the case of any Taxes that
are attributable to the taxable period which begins before
the date hereof and ends after the date hereof, the amount
of Taxes attributable to the Pre-Closing Period and the
Post-Closing Period shall be determined as follows:
(a.) Buyer and Seller agree that if the Company is permitted
but not required under applicable federal, state or
local tax Laws to treat the date hereof as the last day
of a taxable period, Buyer and Seller shall treat such
day as the last day of a taxable period.
(b.) Except to the extent provided in Section D.8.b.iv.(a.),
in the case of ad valorem Taxes imposed on the Company
and franchise or similar Taxes imposed on the Company
based on capital (including net worth or long-term
debt) or number of shares of stock authorized, issued
or outstanding, such Taxes shall be allocated between
the Pre-Closing Period and the Post-Closing Period
based upon the respective number of days in each such
period.
(c.) Except to the extent provided in Sections D.8.b.iv.(a.)
and D.8.b.iv.(b.), all other Taxes shall be allocated
between the Pre-Closing Period and the Post-Closing
Period based upon an interim closing of the books of
the Company as of the end of the day of the date hereof
and the computation of the Tax for each resulting
period as if the period were a separate taxable period;
provided, however, that in no event shall the
hypothetical Tax for any period be less than zero.
11
v. Cooperation on Tax Matters.
(a.) Buyer and Seller and their respective Affiliates shall
cooperate in the preparation of all Tax Returns, or
relate to any examination or audit of Tax Returns, for
any tax periods for which one party could reasonably
require the assistance of the other party in obtaining
any necessary information. Such cooperation shall
include, but not be limited to, furnishing prior years'
Tax Returns or return preparation packages illustrating
previous reporting practices or containing historical
information relevant to the preparation of such Tax
Returns, and furnishing such other information within
such party's possession requested by the party filing
such Tax Returns as is relevant to their preparation.
Such cooperation and information also shall include
without limitation promptly forwarding copies of
appropriate notices and forms or other communications
received from or sent to any taxing authority which
relate to the Company, and providing copies of all
relevant Tax Returns, together with accompanying
schedules and related workpapers, documents relating to
rulings or other determinations by any taxing authority
and records concerning the ownership and tax basis of
property, which the requested party may possess. Buyer
and the Company and Seller and its Affiliates shall
make their respective employees and facilities
available on a mutually convenient basis to provide
explanation of any documents or information provided
hereunder.
(b.) For a period of ten (10) years after the date hereof or
such longer period as may be required by law, Buyer
shall, and shall cause the Company to, retain and not
destroy or dispose of any Tax Returns (including
supporting materials), books and records (including
computer files) of, or with respect to the activities
or Taxes of, such entities for all taxable periods
ending or deemed, pursuant to Section D.8.b.iv.(c.), to
end on or prior to the date hereof to the extent Buyer
or the Company received or had possession of such
records on the date hereof.
(c.) For a period of ten (10) years after the date hereof or
such longer period as may be required by law, Seller
(or its Affiliates) shall retain and not destroy or
dispose of any Tax Returns (including supporting
materials), books and records (including computer
files) of, or with respect to the activities or Taxes
of, the Company for all taxable periods ending (or
deemed, pursuant to Section D.8.b.iv.(c.) to end) on or
prior to the date hereof to the extent Seller did not
deliver such records to Buyer or the Company.
Thereafter, Seller shall not destroy or dispose of any
such Tax Returns, books or records unless it first
offers them to Buyer in writing and Buyer fails to
accept such offer within sixty (60) days of it being
made.
12
(d.) If Buyer or the Company (as the case may be) on the one
hand, or Seller on the other, fails to provide any
information requested by the other party in the time
specified herein, or if no time is specified pursuant
to this Section D.8.b.v, within a reasonable period, or
otherwise fails to do any act required of it under this
Section D.8.b.v, then the party failing to so provide
the information or do such act shall be obligated,
notwithstanding any other provision of this Agreement,
to indemnify the party requesting the information or
act and shall so indemnify the requesting party and
hold such party harmless from and against any and all
costs, claims or damages, including, without
limitation, all Taxes or deficiencies thereof, payable
as a result of such failure. Notwithstanding the
foregoing, the party that failed to deliver the
information or do the act requested, shall in no event
be obligated to make any payments pursuant to this
Section D.8.b.v.(d.) or otherwise be liable, if such
party used all reasonable commercial efforts to provide
the requested information or perform the requested act.
(e.) Buyer shall control any Tax audits of the Company for
all periods; provided, however, that Buyer shall notify
Seller of any audit in which items with respect to
which Seller has indemnified Buyer pursuant to this
Section D.8.b are in issue and shall thereafter keep
Seller informed on a timely basis of any material
developments in the audit relating to such items. In no
event shall Buyer settle any issue with a taxing
authority relating to any such item without Seller's
consent, provided that Seller shall first have
acknowledged in writing its obligation to indemnify
Buyer with respect to any and all damages relating to
such item and an adverse resolution of such item would
not have a material adverse effect on the business or
operations of Buyer or the Company.
vi. Termination of Tax-Sharing Agreements. All Tax sharing
agreements or similar arrangements with respect to or
involving the Company shall be terminated prior to the date
hereof and, after the date hereof, the Company shall not be
bound thereby or have any liability thereunder for amounts
due in respect of periods ending on or before the date
hereof.
13
vii. Certain Tax Elections.
(a.) Seller shall not elect, cause to be elected or
participate in any election pursuant to Treasury
Regulation Section 1.1502-76(b)(2) (or any comparable
provisions of foreign or state law) to allocate items
of income and expense of the Company between the
taxable year of Seller ending on the date hereof and
its taxable year commencing on the day after the date
hereof on a proportionate method based on the number of
days contained in each such taxable year.
(b.) To the maximum extent permitted by applicable law,
neither Buyer nor any of its Affiliates will carry-back
to any taxable period of Seller or any of its
Affiliates any loss, credit or deduction incurred or
generated in, or attributable to any period commencing
after the date hereof that would affect any Tax Return
or Tax of Seller or any of its Affiliates, and Buyer
agrees to make or exercise, or cause to be made or
exercised, any and all necessary or permitted elections
(including elections pursuant to Section 1723(b)(3)(C)
of the Code) available under applicable law to avoid
any such carryback.
(c.) Neither Seller nor any of its Affiliates shall make an
election pursuant to Treasury Regulation Section
1.1502-20(g) to re-attribute all or any portion of any
net operating losses of the Company to Seller.
9. Benefit Plans.
a. Compliance. Each Benefit Plan affecting an Employee is, has
been and will be in compliance in all material respects and
is, has been and will be administered in all material
respects in accordance with the applicable provisions of
ERISA, the Code, and any other applicable law.
b. Funding. Seller or its Affiliates have made and will make
all payments and contributions to all Benefit Plans on a
timely basis as required by the terms of each such plan and
any applicable law.
c. Participation. With respect to all Employees of the Company,
participation in and coverage under all Benefit Plans will
terminate as of the date hereof, unless continued
participation and coverage is required by operation of law.
10. Litigation; Compliance. Except as set forth in Schedule D.10,
attached hereto and incorporated herein, there is no suit,
action, Claim, arbitration, administrative or legal or other
proceeding, or governmental investigation pending or, to Seller's
Knowledge threatened, against or related to Seller with respect
to or against the Company, nor any failure to comply with, nor
any Default under, any Law, or order applicable to, nor any
violation of or Default with respect to any order, writ,
injunction, judgment, or decree of any court or Governmental
Entity or other instrumentality issued or pending against Seller
or the Company which is reasonably expected to have a Material
Adverse Effect.
14
11. Intellectual Property Rights.
a. To Seller's Knowledge, as of the date hereof, the Company
has the right to use all Intellectual Property necessary or
appropriate for the operation of the Company, free and clear
of all Liens, and such Intellectual Property will not be
adversely affected by the transactions contemplated by this
Agreement or the Collateral Documents. As of the date
hereof, Seller has not received notice since June 12, 1998
that it is infringing upon any Intellectual Property of any
other Person in connection with the operation of the
Company.
b. Seller and its Affiliates have not entered into any
agreement to make any payments by way of royalties, fees or
otherwise to any owner or licensee of, or other claimant to,
any Intellectual Property used in the Company, except
pursuant to the Xxxxxxxxx Agreement.
c. Seller will enter into a license agreement with the Company
granting the Company the perpetual right to use the
Intellectual Property which is the subject of the Xxxxxxxxx
Agreement, and Buyer shall make any and all payments due
thereunder with respect to the use of such Intellectual
Property.
12. Product Liability Claims. Seller is a named insured under all
policies of insurance relating to product liability listed on
Schedule D.12, attached hereto and incorporated herein, for and
against any Claim for product liability based on any event
occurring prior to the date hereof, which insurance coverage will
continue in effect for the benefit of Seller after the date
hereof for a period of not less than two (2) years.
13. Bank Accounts. All cash in all Bank Accounts maintained by Seller
and the Company shall be the property of Seller. Buyer and Seller
shall cooperate with each other to remove the name of any person
who should not longer be an authorized signatory on any of the
accounts of Seller and the Company.
14. Finder's or Broker's Fees. Buyer and Seller represent and warrant
that no broker or other person is entitled to any commission or
finder's fee in connection with any of the transactions
contemplated by this Agreement.
15. Governmental Approvals and Filings. No consent, approval or
action of, filing with or notice to, any Governmental Entity on
the part of Seller is required in connection with the execution,
delivery and performance of this Agreement or in connection with
the consummation of the transactions contemplated hereby or
thereby.
15
E. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby represents and
warrants to Seller as follows:
1. Organization, Power, Standing and Qualification. Buyer is a
limited liability company duly organized, validly existing, and
in good standing under the Laws of the Commonwealth of
Pennsylvania, and has full power and authority to own the Shares.
2. Power and Authority. Buyer has the requisite power and authority
to execute, deliver and perform this Agreement and the Collateral
Documents to which it is a party and to purchase the Shares. The
execution, delivery and performance of this Agreement and each of
the Collateral Documents to which Buyer is a party and the
consummation of the transactions contemplated hereby and thereby
have been duly authorized by all necessary action on the part of
Buyer and requires no further authorization or consent by Buyer.
All consents and authorizations required to be obtained by Buyer
with regard to this Agreement and consummation of the
transactions contemplated hereby have been obtained. The manager
of Buyer executing this Agreement and the documents executed and
delivered pursuant to or in connection with this Agreement is the
incumbent manager of Buyer and is authorized to do so. This
Agreement and the Collateral Documents, to the extent Buyer is a
party thereto, constitute the legal, valid and binding
obligations of Buyer, enforceable in accordance with their terms,
except as such enforcement may be limited by applicable
bankruptcy, insolvency, moratorium or similar Laws affecting the
enforcement of creditors' rights generally.
3. Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement, and each of the Collateral
Documents, and the consummation of the transactions contemplated
hereby and thereby do not and will not: (a) violate, breach or
contravene any provision of the organizational documents of
Buyer; (b) violate, breach, be in conflict with, constitute a
Default under, cause the acceleration of any payments pursuant
to, or otherwise impair the good standing, validity or
effectiveness of any contract by which Buyer or Buyer's property
is bound or subject any property or asset of Buyer to any
contract to which Buyer is a party or by which Buyer is bound;
(c) violate any provision of Law or any permit applicable to
Buyer or its properties or assets; or (d) require any consent,
approval, waiver, authorization, or permit of, or filing or
registration with, or notification to, any Governmental Entity or
other Person to be obtained by Buyer except as has been made or
waived. To Buyer's Knowledge, there is no proceeding pending or
threatened before any court or Governmental Entity in which it is
being sought to restrain or prohibit the consummation of the
transactions contemplated hereby, and no investigation that might
eventuate in any such suit, action or proceeding is pending or
threatened.
16
4. Inspection Opportunity. Buyer acknowledges that its authorized
agents have been operating the Company on behalf of Seller and
therefore have been given an opportunity to examine such
instruments, documents and other information relating to the
Company as they have deemed necessary or advisable in order to
make an informed decision relating to the purchase of the Shares
and their suitability as an investment for Buyer and that they
have been afforded an opportunity to ask questions and to obtain
any additional information necessary in order to verify the
accuracy of the information furnished and that such parties have,
in fact, asked all such questions and reviewed all such
instruments, documents and other information as they have deemed
necessary under the circumstances. Notwithstanding the foregoing,
the parties hereto acknowledge and agree that (i) Buyer is
relying upon the accuracy of the representations, warranties and
covenants of Seller contained in this Agreement and the
Collateral Documents, and (ii) Buyer has been induced to enter
into this Agreement and the Collateral Documents and to
consummate the transactions contemplated hereby and thereby as a
result of Seller's willingness to make accurate representations
and warranties and to undertake to perform the covenants
contained in this Agreement and the Collateral Documents.
5. HSR Act. Buyer has reviewed the rules relating to the size-of-
parties test under the HSR Act and Buyer is not a Ten Million
Dollar ($10,000,000.00) person for the purposes thereof.
6. Access to Information. Following the date hereof, Seller will
cooperate fully with Buyer and shall provide Buyer and its
accountants, counsel, and other representatives (including
without limitation, its bankers and other lending sources,
auditors and engineers), during normal business hours, and
provide full access to the Books and Records, Relevant Contracts,
and other documents, records, and information of Seller with
respect to the Company, as Buyer or its representatives may
reasonably request.
F. RESIGNATIONS. Seller shall have delivered to Buyer the written
resignations, dated and effective on the date hereof, of such of the
officers and directors of the Company as may be requested by Buyer.
G. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Notwithstanding any
investigation made by or on behalf of Seller or Buyer prior to or after the
date hereof, except for (a) representations or warranties made by any party
as provided herein or in any Collateral Document which were (i) not true
when made and (ii) were made by such party fraudulently or with intent to
defraud or mislead, which representations and warranties shall survive in
accordance with the applicable statute of limitations, and (b)
representations and warranties relating to Tax matters and relating to
environmental matters, which shall survive in accordance with the
applicable statute of limitations, all representations and warranties made
by Seller and Buyer in this Agreement or pursuant hereto shall survive the
date hereof until the Survival Date, and thereafter as to any Claims or
Losses notice of which is given prior to the Survival Date.
H. CONDUCT OF SELLER AND BUYER AFTER CLOSING. Seller will cooperate with Buyer
after the date hereof to effect the orderly transfer of the Shares. In
addition, after the date hereof, at the request of either party and at the
requesting party's expense, but without additional consideration, the other
party shall execute and deliver from time to time such further instruments
of assignment, conveyance and transfer, shall cooperate in the conduct of
Litigation and the processing and collection of insurance claims, and shall
take such other actions as may reasonably be required to convey and deliver
more effectively to Buyer the Shares.
17
I. INDEMNIFICATION.
1. General.
a. Subject to Section I.2 below, Seller shall defend, indemnify
and hold harmless Buyer from, against and with respect to
any and all Claims, Losses, costs, expenses, obligations,
Liabilities, damages, recoveries and deficiencies, including
costs of investigation, interest, penalties and reasonable
attorneys' fees, that Buyer may incur, sustain or suffer as
a result of any breach of, or failure by Seller to perform,
any of the representations, warranties, covenants or
agreements of Seller contained in this Agreement, in any
Exhibit or Schedule furnished by or on behalf of Seller
under this Agreement, the Collateral Documents, or as a
result of the conduct of Seller with respect to the Company
prior to the date hereof.
b. Subject to Section I.2 below, Buyer shall defend, indemnify
and hold harmless Seller from, against and with respect to
any and all Claims, Losses, costs, expenses, obligations,
Liabilities, damages, recoveries and deficiencies, including
costs of investigation, interest, penalties and reasonable
attorneys' fees, that Seller may incur, sustain or suffer as
a result of any breach of, or failure by Buyer to perform,
any of the representations, warranties, covenants or
agreements of Buyer contained in this Agreement, in any
Exhibit or Schedule furnished by or on behalf of Buyer under
this Agreement, the Collateral Documents, or as a result of
the conduct of Buyer with respect to the Company on or after
the date hereof.
2. Claims for Indemnity. Whenever a Claim shall arise for which any party
shall be entitled to indemnification hereunder, the Indemnified Party
shall notify the Indemnifying Party in writing within ten (10) days of
the Indemnified Party's first receipt of notice of, or the Indemnified
Party's obtaining Knowledge of, such Claim, and in any event within
such shorter period as may be necessary for the Indemnifying Party to
take appropriate action to resist such Claim. Such notice shall
specify all facts Known to the Indemnified Party giving rise to such
indemnity rights and shall estimate (to the extent reasonably
possible) the amount of potential liability arising therefrom. If the
Indemnifying Party shall be duly notified of such dispute, the parties
shall attempt to settle and compromise the same or shall submit the
same to arbitration in accordance with Section L.6 and any rights of
indemnification established by reason of such settlement, compromise,
or arbitration shall promptly thereafter be paid and satisfied by any
Indemnifying Party obligated to make indemnification hereunder.
18
3. Right to Defend. Subject to Sections B.8.b.v.(e), if the facts giving
rise to any Claim for indemnification shall involve any actual or
threatened action or demand by any third party against the Indemnified
Party or any of its Affiliates, the Indemnifying Party shall be
entitled (without prejudice to the Indemnified Party's right to
participate at its own expense through counsel of its own choosing),
at its expense and through a single counsel of their own choosing, to
control the defense or prosecution of such Claim in the name of the
Indemnifying Party, or if necessary, in the name of the Indemnified
Party. In any event, the Indemnified Party shall give the Indemnifying
Party advance written notice of any proposed compromise or settlement
of any such Claim. If the remedy sought in any such action or demand
is solely money damages, the Indemnifying Party shall have fifteen
(15) days after receipt of such notice of settlement to object to the
proposed compromise or settlement, and if it does so object, the
Indemnifying Party shall be required to undertake, conduct and
control, through counsel of its own choosing and at its sole expense,
the settlement or defense thereof, and the Indemnified Party shall
cooperate with the Indemnifying Party in connection therewith.
4. Limitations. With respect to breaches of representations and
warranties only given under Xxxxxxxx X.0, X.0, X.0, X.0, X.0, X.0, and
E.5, no party shall be entitled to indemnification hereunder with
respect to such a breach until the total of all damages incurred by
such party with regard to such breaches exceeds Fifty Thousand Dollars
($50,000.00). With respect to breaches of all other representations
and warranties, no party shall be entitled to indemnification
hereunder with respect to such a breach until the total of all damages
incurred by such party with regard to such breaches exceeds Two
Hundred Thousand Dollars ($200,000.00). Notwithstanding anything
stated above to the contrary, the limitations set forth in this
Section shall not apply to a breach of any of the representations and
warranties of which the Indemnifying Party had Knowledge at any time
prior to the date on which such representation and warranty was made
or any breach by the Indemnifying Party of any covenant or obligation
set forth in this Agreement, the Collateral Documents or any other
agreement contemplated hereunder. The total liability of any party
(for indemnification or otherwise) with respect only to a breach of
such representations and warranties shall not exceed an amount equal
to the purchase price set forth in Section X.
X. POST-CLOSING EVENTS.
1. Cooperation. From time to time from and after the date hereof, the
parties will execute and deliver to each other any and all further
agreements, instruments, certificates and other documents as may
reasonably be requested by the other party in order more fully to
consummate the transactions contemplated hereby, and to effect an
orderly transition of the business being acquired by Buyer hereunder.
2. Accounts Payable.
a. Seller shall be liable for all accounts payable of the Company
incurred in the ordinary course of business through the date
hereof.
19
b. Buyer shall immediately deliver to Seller any invoices it
receives following the date hereof which relate to the Company
for obligations incurred by the Company in the ordinary course of
business prior to the date hereof. Seller shall pay such invoices
and all obligations which relate to the Business incurred by
Seller in the ordinary course of business prior to the date
hereof in a timely manner (but on no less than twenty (20) days
notice) so as not to cause the addition of any late fees or other
additional costs as a result of late payment. To the extent such
invoices are not paid timely or Seller and Buyer disagree as to
whose is responsible to pay the invoice, such dispute will be
subject to arbitration in accordance with Section L.6.
K. FORM OF AGREEMENT.
1. Effect of Headings. The Section headings used in this Agreement and
the titles of the Exhibits or Schedules hereto are included for
purposes of convenience only, and shall not affect the construction or
interpretation of any of the provisions hereof or of the information
set forth in such Exhibits or Schedules.
2. Entire Agreement; Waivers. This Agreement and the other agreements and
instruments referred to herein constitute the entire agreement between
the parties pertaining to the subject matter hereof, and supersede all
prior agreements or understandings as to such subject matter. No party
hereto has made any representation or warranty or given any covenant
to the other except as set forth in this Agreement, the Exhibits and
Schedules hereto, and the other agreements and instruments referred to
herein. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provisions, whether
or not similar, nor shall any waiver constitute a continuing waiver.
No waiver shall be binding unless executed in writing by the party
making the waiver.
3. Counterparts and Facsimile Signatures. This Agreement, any document or
instrument entered into, given or made pursuant to this Agreement or
authorized hereby, and any amendment or supplement thereto may be
executed in two or more counterparts and signature pages may be
transmitted by facsimile and, when so executed and transmitted, will
have the same force and effect as though all signatures were originals
and appeared on a single document. Any signature page of this
Agreement or of such an amendment, supplement, document or instrument
may be detached from any counterpart without impairing the legal
effect of any signatures thereon, and may be attached to another
counterpart identical in form thereto but having attached to it one or
more additional signature pages.
20
4. Construction of Certain Terms and Phrases. Unless the context of this
Agreement otherwise requires, (i) words of any gender include each
other gender; (ii) words using the singular or plural number also
include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to
this entire Agreement; and (iv) the term "Section" refers to the
specified Section of this Agreement. Whenever this Agreement refers to
a number of days, such number shall refer to calendar days unless
Business Days are specified. Any representation or warranty contained
herein as to the enforceability of a contract shall be subject to the
effect of any bankruptcy, insolvency, reorganization, moratorium or
other similar law affecting the enforcement of creditors' rights
generally and to general equitable principles (regardless of whether
such enforceability is considered in a proceeding in equity or at
law).
L. ADDITIONAL AGREEMENTS OF THE PARTIES; MISCELLANEOUS PROVISIONS.
1. Renovation of the Destination Spa. The Company has presented to Seller
bills with respect to the renovation of the Destination Spa. Seller
shall pay to the Company by wire Three Hundred Thousand Dollars
($300,000.00) within three (3) days following the date hereof to
satisfy such bills.
2. Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been
duly given on the date of service if served personally on the party to
whom notice is to be given, on the day after the delivery thereof to a
recognized overnight courier service for next-day delivery with all
charges prepaid or billed to the account of the sender, or on the
third day after mailing if mailed to the party to whom notice is to be
given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
If to Seller: ThermoLase Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: President
with a copy to: ThermoLase Corporation
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
If to Buyer: TGH, LLC
0 Xxxx Xxxxxxxx Xxxx
Xxxxxx, XX.
Attn: Xxxxxx Xxxxxxx, Manager
21
with a copy to: Xxxxxx Xxxxxxx Xxxxxx Xxxxxx &
Xxxxx, P.C.
350 Sentry Parkway, Building 640
X.X. Xxx 0000
Xxxx Xxxx, Xxxxxxxxxxxx 00000-0000
Attn: L. Xxxxxxx Xxxxx, Esq.
or to such other address as either party shall have specified by
notice in writing given to the other party.
3. Press Releases and Announcements. No party shall issue any press
release or public disclosure relating to the subject matter of this
Agreement without the prior approval of the other party, which shall
not be unreasonably delayed or withheld; provided that Seller may make
any public disclosure it believes in good faith is required by law,
regulation or stock exchange rule (in which case Seller shall advise
Buyer and provide it with a copy of the proposed disclosure prior to
making the disclosure).
4. Additional Agreements and Instruments. On or before the date hereof,
Seller and Buyer shall execute, deliver and file all exhibits,
schedules, agreements, certificates, instruments and other documents,
not inconsistent with the provisions of this Agreement and the
Collateral Documents, which, in the opinion of counsel to the parties
hereto, shall reasonably be required to be executed, delivered and
filed in order to consummate the transactions contemplated by this
Agreement and the Collateral Documents.
5. Governing Law; Jurisdiction; Arbitration. This Agreement shall be
construed and interpreted and the rights granted herein governed in
accordance with the Laws of the State of Texas, except if otherwise
provided in the Exhibits. Except with regard to any Claims for
Specific Performance as provided in Section L.10 and except if
otherwise provided in the Exhibits, any Claim, dispute or controversy
arising under or in connection with this Agreement or any actual or
alleged breach hereof shall be settled exclusively by arbitration to
be held before a single arbitrator in any locale or venue as legal
jurisdiction may otherwise be had over the party against whom the
proceeding is commenced, in accordance with the commercial arbitration
rules of the American Arbitration Association then in effect. As part
of his or her award, the arbitrator shall make a fair allocation of
the fee of the American Arbitration Association, the cost of any
transcript, and the parties' reasonable attorneys' fees, taking into
account the merits and good faith of the parties' Claims and defenses.
Judgment may be entered on the award so rendered in any court having
jurisdiction. Any process or other papers hereunder may be served by
registered or certified mail, return receipt requested, or by personal
service, provided that a reasonable time for appearance or response is
allowed.
6. Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties named herein and their successors
and permitted assigns. No party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the
prior written approval of the other party.
7. Amendments. The parties may mutually amend any provision of this
Agreement at any time. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by both
of the parties hereto.
22
8. Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the
final judgment of a court of competent jurisdiction declares that any
term or provision hereof is invalid or unenforceable, the parties
agree that the court making the determination of invalidity or
unenforceability shall have the power to reduce the scope, duration,
or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest
to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable as so modified
after the expiration of the time within which the judgment may be
appealed.
9. Specific Performance. Each of the parties acknowledges and agrees that
the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of
the parties agrees that the other party shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of
this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of
the United States or any state thereof having jurisdiction over the
parties and the matter, in addition to any other remedy to which it
may be entitled at law or in equity.
10. Construction. The language used in this Agreement shall be deemed to
be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction shall be applied against
any party. Any reference to any federal, state, local, or foreign
statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires
otherwise.
11. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and
made a part hereof.
23
IN WITNESS WHEREOF, the parties have executed this Agreement on and as of
the date first set forth above.
WITNESS/ATTEST: BUYER:
TGH, LLC, a Pennsylvania
limited liability company
--------------------------- By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, Manager
WITNESS/ATTEST: Seller:
THERMOLASE CORPORATION, a Delaware
corporation
--------------------------- By: /s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx, President
EXHIBIT "A"
PROMISSORY NOTE
(See Attached)
EXHIBIT "B"
SECURITY AGREEMENT BETWEEN TGH, LLC AND
THERMOLASE CORPORATION
(See Attached)
EXHIBIT "C"
SELLER'S DEED OF TRUST
(See Attached)
EXHIBIT "D"
GUARANTY
(See Attached)
EXHIBIT "E"
SECURITY AGREEMENT BETWEEN THE GREENHOUSE SPA, INC. AND THERMOLASE CORPORATION
(See Attached)
EXHIBIT "F"
LICENSE AGREEMENT WITH XXXXXXXX XXXXXXXXX
(See Attached)
SCHEDULE D.5
LIST OF OFFICERS & DIRECTORS
President: Xxxxxx Xxxxxxx
Vice President of
Operations: Xxxxx Xxxxxxx
Treasurer: Xxxxxxx X. Xxxxxxxx
Secretary: Xxxxxx X. Xxxxxxx
Assistant Secretary: Xxxxxx X. Xxxxxxxxxx
Assistant Secretary
and General Counsel: Xxxx X. Xxxxxxxxx
Assistant Secretary: Xxxx X. Xxxxxxxx
Assistant Secretary: Xxxxx X. Pan
SCHEDULE D.10
PENDING OR THREATENED LITIGATION
1. LaserSpas, Inc. et al. v. ThermoLase Corporation, filed in Cuyahoga
County, Ohio, Court of Common Pleas. (plaintiffs claim that they have
sustained substantial business losses as a result of the poor performance
of the SoftLight Laser, and that ThermoLase violated the Ohio Business
Opportunity Act by failing to provide a disclosure document required by
that act)
2. Xxxxxx Xxxxxx v. ThermoLase, et al., filed in Los Angeles County,
California, Superior Court. (plaintiff claims that her face and neck were
permanently injured by the SoftLight treatment and that she consulted
dermatologists and plastic surgeons to repair the damage)
3. Xxxxxx Xxxxxxxx et al. v. ThermoLase Corporation, filed in Riverside
County, California, Superior Court. (plaintiffs claim that ThermoLase
violated the California Unfair Trade Practices on the grounds that
marketing claims relating to SoftLight laser hair removal were misleading)
4. Xxxxxxx Xxxxxxxx v. ThermoLase et al., filed in San Diego County,
California, Superior Court. (plaintiff claims wrongful termination
following disagreement with ThermoLase management regarding licensure to
perform SoftLight hair removal and skin resurfacing procedures)
5. Xxxxx Xxxxxxx. (letter addressed to Boca Raton Greenhouse Spa dated May
20, 1999 makes non-specific claims of "severe bodily injuries" resulting
from negligence of The Greenhouse Spa, and requests insurance coverage
information)
6. Xxxxxxx Xxxxxx v. The Greenhouse Spa. (claim before EEOC for
employment discrimination based on complainant's religion)
SCHEDULE D.12
PRODUCT LIABILITY INSURANCE
Carrier: Medmarc Casualty Insurance Company
Policy No.: 99MA380019
Policy Period: July 1, 1999 to July 1, 2000
Insurance Coverage: damages and expenses for covered claims resulting from
the manufacture, distribution and sale of medical products
The general aggregate limit and the limit per occurrence is not less than $3
million
