Exhibit 10.1
ASSET PURCHASE AGREEMENT, dated as of March 28, 2006, between CABLE &
CO. WORLDWIDE, INC., a Delaware corporation with offices at 000 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "PURCHASER"); and LIFEHEALTHCARE,
INC., a Delaware corporation with offices located at 000 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "SELLER").
INTRODUCTION
The Purchaser desires to acquire substantially all the properties and
assets and the portion of the business and goodwill of Seller specified herein
in exchange for 600,000,000 shares of common stock, par value $0.001 per share,
of the Purchaser (the "PURCHASER COMMON STOCK"), and (ii) the assumption by the
Purchaser of certain obligations and liabilities of Seller as hereinafter
provided, and Seller desires to effect such exchange.
The parties hereto, intending to be legally bound, hereby agree as
follows:
I. DEFINITIONS
ACCRUED BENEFITS. As defined in Section 2.08(a) hereof.
ACCRUED LIABILITIES. As defined in Section 2.08(a) hereof.
CLOSING. As defined in Section 4.02 hereof.
CODE. Internal Revenue Code of 1986, as amended.
EMPLOYMENT AGREEMENT. As defined in Section 8.07 hereof.
EMPLOYEE BENEFIT PLAN. As defined in Section 3(3) of ERISA.
ENVIRONMENTAL LAWS. As defined in Section 2.06(f) hereof.
ERISA. The Employee Retirement Income Security Act of 1974, as amended.
EXCHANGE ACT. Securities Exchange Act of 1934, as amended, including
the rules and regulations of the SEC thereunder.
HAZARDOUS SUBSTANCES. Any hazardous waste, as defined by 42 U.S.C.
Section 6903(5), any hazardous substance, as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant, as defined by 42 U.S.C. Section
9601(33), and all toxic substances, hazardous materials, or other chemical
substances regulated by any other law, rule, or regulation.
INTANGIBLES. Any patent, patent application, trademark, trademark
application, trade name, service xxxx, copyright, copyright application,
franchise, trade secret, computer program (on object or source code or
otherwise), or other intangible property or asset.
LAST PURCHASER BALANCE SHEET. The consolidated balance sheet, and the
notes thereto, of Purchaser as of the Last Balance Purchaser Sheet Date.
LAST PURCHASER BALANCE SHEET DATE. September 30, 2005.
LAST PURCHASER FINANCIAL STATEMENTS. The financial statements of the
Purchaser at and for the year ended September 30, 2005.
LAST SELLER BALANCE SHEET. The balance sheet, and the notes thereto, of
Seller as of the Last Seller Balance Sheet Date.
LAST SELLER BALANCE SHEET DATE. December 31, 2005.
LAST SELLER FINANCIAL STATEMENTS. The financial statements of the
Seller at and for the three months ended December 31, 2005.
OTC. As defined in Section 2.14(i) hereof.
PARTICIPATE IN. As defined in Section 7.09 hereof.
PENSION PLAN. As defined in Section 3(2) of ERISA.
PURCHASER. As defined in the introductory paragraph hereof.
PURCHASER COMMON STOCK. As defined in the introduction hereto.
PURCHASER DISCLOSURE LETTER. As defined in Article II hereof.
PURCHASER INDEMNITIES. The Purchaser and its officers, directors,
employees, counsel, agents, and stockholders, in each case past, present, or as
they may exist at any time after the date of this Agreement, and each person, if
any, who controls, controlled, or will control any of them within the meaning of
Section 15 of the Securities Act or Section 20(a) of the Securities Exchange
Act.
PURCHASER SEC DOCUMENTS. As defined in Section 2.16(a) hereof.
RELEASE. As defined in 42 U.S.C. Section 9601(22).
RELEASE TIME. As defined in Section 7.01 hereof.
SEC. United States Securities and Exchange Commission.
SECURITIES ACT. Securities Act of 1933, as amended, including the rules
and regulations of the SEC thereunder.
SELLER. As defined in the introductory paragraph hereof.
SELLER CAPITAL STOCK. As defined in Section 3.02 hereof.
SELLER COMMON STOCK. Common Stock, par value $0.01 per share, of the
Seller.
SELLER DISCLOSURE LETTER. As defined in Article III hereof.
-2-
TAKEOVER PROPOSAL. As defined in Section 7.06 hereof.
TAX RETURNS. Any return, report, document, statement, or form required
to be filed (whether on a consolidated, combined, separate, or unitary basis)
with respect to any Taxes (including any schedules required to be attached
thereto), including, without limitation, information returns, claims for refund,
amended returns, and declarations of estimated Tax.
TAXES. All taxes, charges, fees, levies, penalties, or other
assessments imposed by any United States federal, state, local, or foreign
taxing authority, including any interest, penalties, or additions thereto.
II. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Purchaser hereby represents and warrants to, and agrees with, Seller
that the statements set forth in this Article II are true, correct, and complete
as of the date of this Agreement, except as otherwise set forth in the
corresponding numbered section of the disclosure letter, of even date herewith,
from Purchaser to Seller (the "PURCHASER DISCLOSURE LETTER"), to be delivered by
Purchaser to Seller in accordance with Section 8.07 hereof, or in the Purchaser
SEC Documents (as hereinafter defined):
SECTION 2.01 ORGANIZATION AND QUALIFICATION.
The Purchaser has no subsidiaries or affiliated corporation or owns any
interest in any other enterprise (whether or not such enterprise is a
corporation). Purchaser is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Delaware, with all requisite
power and authority, and all necessary consents, authorizations, approvals,
orders, licenses, certificates, and permits of and from, and declarations and
filings with, all federal, state, local, and other governmental authorities and
all courts and other tribunals, to own, lease, license, and use its properties
and assets and to carry on the businesses in which it is now engaged and the
businesses in which it contemplates engaging. Other than as set forth in the
Purchaser Disclosure Letter or the Purchaser SEC Documents, Purchaser is duly
qualified to transact the businesses in which it is engaged and is in good
standing as a foreign corporation in every jurisdiction in which its ownership,
leasing, licensing, or use of property or assets or the conduct of its
businesses makes such qualification necessary.
SECTION 2.02 CAPITALIZATION.
The authorized capital stock of Purchaser consists of 1,500,000,000
shares of Purchaser Common Stock, of which 334,365,000 shares are outstanding,
and 5,000,000 shares of "blank check" preferred stock, none of which is
outstanding. Each of such outstanding shares of Purchaser Common Stock is
validly authorized, validly issued, fully paid, and nonassessable, has not been
issued and is not owned or held in violation of any preemptive or similar right
of stockholders. Except as disclosed in the Purchaser SEC Documents, there is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of capital stock of
Purchaser or any security or other instrument convertible into, exercisable for,
or exchangeable for capital stock of Purchaser. Purchaser SEC
-3-
Documents, there is outstanding no security or other instrument convertible
into, or exchangeable or exercisable for, capital stock of Purchaser.
SECTION 2.03 FINANCIAL CONDITION.
Chisolm Bierwolf & Xxxxxx LLC, which has examined the financial
statements of the Purchaser, together with the related schedules and notes, for
the years ended September 30, 2004 and 2005, filed with the SEC as a part of the
SEC Documents, are independent accountants within the meaning of the Securities
Act, the Exchange Act, and the rules and regulations promulgated thereunder. The
Purchaser has filed with the SEC true and correct copies of the following:
audited balance sheets of the Purchaser as of June 25, 2004 and 2005; unaudited
balance sheets of the Purchaser as of December 31, 2004 and 2005; audited
statements of income, statements of stockholders' equity, and statements of cash
flows of the Purchaser for the years ended September 30, 2004 and 2005; and the
unaudited statements of income, statements of stockholders' equity, and
statements of cash flows of the Purchaser for the three months ended December
31, 2004 and 2005. Each such balance sheet presents fairly the financial
condition, assets, liabilities, and stockholders' equity of the Purchaser as of
its respective date; each such statement of income and statement of
stockholders' equity presents fairly the results of operations of the Purchaser
for the period indicated; and each such statement of cash flows presents fairly
the information purported to be shown therein. The financial statements referred
to in this Section 2.05 have been prepared in accordance with generally accepted
accounting principles in the United States consistently applied throughout the
periods involved, are in accordance with the books and records of the Purchaser,
and complied and will comply as to form in all material respects with all
applicable accounting requirements, and the rules and regulations of the SEC
with respect thereto where filed. Since December 31, 2005:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Purchaser.
(ii) Purchaser has not authorized, declared, paid, or effected
any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of Purchaser.
(iii) The operations and businesses of Purchaser have been
conducted in all respects only in the ordinary course, except as
described in the Purchaser Disclosure Letter.
There is no fact known to Purchaser which materially adversely affects or in the
future (as far as Purchaser can reasonably foresee) may materially adversely
affect the financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Purchaser; provided, however, that
Purchaser expresses no opinion as to political or economic matters of general
applicability. Seller has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy, or
completeness thereof.
-4-
SECTION 2.04 TAX AND OTHER LIABILITIES.
The Purchaser does not have any material liability of any nature,
accrued or contingent, including, without limitation, liabilities for Taxes, and
liabilities to customers or suppliers, other than the following:
(i) Liabilities for which full provision has been made on the
Last Purchaser Balance Sheet and referred to in Section 2.01(c); and
(ii) Other liabilities arising since the Last Purchaser
Balance Sheet Date and prior to Closing in the ordinary course of
business (which shall not include liabilities to customers on account
of defective products or services) which are not inconsistent with the
representations and warranties of Purchaser or any other provision of
this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Purchaser Balance Sheet are sufficient for all
accrued and unpaid Taxes of Purchaser, whether or not due and payable and
whether or not disputed, under tax laws, as in effect on the Last Purchaser
Balance Sheet Date or now in effect, for the period ended on such date and for
all fiscal periods prior thereto. The Internal Revenue Service has audited and
settled or the statute of limitations has run upon all federal income tax
returns of the Purchaser for all taxable years up to and including the taxable
year ended December 31, 1998. The Purchaser has filed all federal, state, local,
and foreign tax returns required to be filed by it; has made available to the
Seller true and correct copy of each such return which was filed in the past six
years; has paid (or has established on the Last Purchaser Balance Sheet a
reserve for) all Taxes, assessments, and other governmental charges payable or
remittable by it or levied upon it or its properties, assets, income, or
franchises which are due and payable; and has made available to the Seller a
true and correct copy of any report as to adjustments received by it from any
taxing authority during the past six years and a statement as to any litigation,
governmental or other proceeding (formal or informal), or investigation pending,
threatened, or in prospect with respect to any such report or the subject matter
of such report.
SECTION 2.05 LITIGATION AND CLAIMS.
Except as described in the Purchaser Disclosure Letter, there is no
litigation, arbitration, claim, governmental or other proceeding (formal or
informal), or investigation pending or, to the best of Purchaser's knowledge,
threatened, or in prospect (or any basis therefor known to Purchaser) with
respect to Purchaser or any of its businesses, properties, or assets. Purchaser
is not affected by any present or threatened strike or other labor disturbance
nor to the knowledge of Purchaser, is any union attempting to represent any
employee of Purchaser as collective bargaining agent. Purchaser is not in
violation of, or in default with respect to, any law, rule, regulation, order,
judgment, or decree which violation or default would have a material adverse
effect on Purchaser; nor is Purchaser required to take any action in order to
avoid such violation or default.
-5-
SECTION 2.06 PROPERTIES.
(a) Purchaser owns no real property. Purchaser has good and marketable
title to all personal properties and assets material to Purchaser and used in
its businesses or owned by it (except real and other properties and assets
material to Purchaser as are held pursuant to leases or licenses described in
the Purchaser Disclosure Letter), free and clear of all liens, mortgages,
security interests, pledges, charges, and encumbrances (except such as are
listed in the Purchaser SEC Documents or the Purchaser Disclosure Letter).
(b) Set forth in the Purchaser Disclosure Letter is a true and complete
list of all tangible properties and assets owned by Purchaser or leased or
licensed by Purchaser from or to a third party (including inventory but not
including Intangibles (as hereinafter defined)), and with respect to such
properties and assets leased or licensed by Purchaser from or to a third party,
a description of such lease or license. All such properties and assets
(including Intangibles) owned by Purchaser are reflected on the Last Purchaser
Balance Sheet (except for acquisitions subsequent to the Last Purchaser Balance
Sheet Date and prior to the Closing Date (as hereinafter defined), which are
either noted in the Purchaser Disclosure Letter, disclosed in the Purchaser SEC
Documents, or are approved in writing by the Seller). All tangible properties
and assets owned by Purchaser or leased or licensed by Purchaser from or to a
third party are in good and usable condition (reasonable wear and tear which is
not such as to affect adversely the operation of the businesses of Purchaser
excepted).
(c) To the best of Purchaser's knowledge, no real property leased or
licensed by Purchaser from or to a third party lies in an area which is, or will
be, subject to zoning, use, or building code restrictions which would prohibit,
and, to the best of Purchaser's knowledge, no state of facts relating to the
actions or inaction of another person or entity or his or its ownership,
leasing, or licensing of any real or personal property exists or will exist
which would prevent, the continued effective ownership, leasing, or licensing of
such real property in the businesses in which Purchaser is now engaged or the
businesses in which it contemplates engaging.
(d) The properties and assets (including Intangibles (as hereinafter
defined)) owned by Purchaser (other than those leased or licensed by Purchaser
to a third party) or leased or licensed by Purchaser from a third party
constitute all such properties and assets which are necessary to the businesses
of Purchaser as presently conducted.
(e) Purchaser has not caused or permitted its businesses properties, or
assets to be used to generate, manufacture, refine, transport, treat, store,
handle, dispose of, transfer, produce, or process any Hazardous Substance,
except in compliance with all applicable laws, rules, regulations, orders,
judgments, and decrees, and has not caused or permitted the Release (as such
term is defined in this Section 2.01(f)(v)) of any Hazardous Substance on or off
the site of any property of Purchaser.
(f) Except as set forth in the Purchaser SEC Documents, (A) Purchaser
is in compliance in all material respects with all rules, laws and regulations
relating to the use, treatment, storage and disposal of toxic substances and
protection of health or the environment ("ENVIRONMENTAL LAWS") that are
applicable to its business, (B) Purchaser has not received notice from any
governmental authority or third party of an asserted claim under Environmental
Laws,
-6-
which claim is required to be disclosed in the Purchaser SEC Documents, (C) to
the best knowledge of Purchaser, Purchaser is not likely to be required to make
future material capital expenditures to comply with Environmental Laws, (D) no
property which is owned, leased or occupied by Purchaser has been designated as
a Superfund site pursuant to the Comprehensive Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et seq.), or otherwise
designated as a contaminated site under applicable state or local law, and (E)
Purchaser is not in violation of any federal or state law or regulation relating
to occupational safety or health.
SECTION 2.07 CONTRACTS AND OTHER INSTRUMENTS.
The Purchaser Disclosure Letter contains a true and correct description
of all material contracts, agreements, instruments, leases, licenses,
arrangements, or understandings with respect to Purchaser. Purchaser has made
available to the Seller (i) the certificate of incorporation (or other charter
document) and by-laws of Purchaser and all amendments thereto, as presently in
effect, and (ii) the following: (A) true and correct copies of all material
contracts, agreements, and instruments referred to in the Purchaser Disclosure
Letter or the Purchaser SEC Documents; (B) true and correct copies of all
material leases and licenses referred to in the Purchaser Disclosure Letter; and
(C) true and correct written descriptions of all material supply, distribution,
agency, financing, or other arrangements or understandings referred to in the
Purchaser Disclosure Letter. To the best of Purchaser's knowledge, neither
Purchaser nor (to the knowledge of Purchaser) any other party to any such
material contract, agreement, instrument, lease, or license is now or expects in
the future to be in violation or breach of, or in default with respect to
complying with, any term thereof, and each such material contract, agreement,
instrument, lease, or license is in full force and is (to the best of
Purchaser's knowledge in the case of third parties) the legal, valid, and
binding obligation of the parties thereto and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) is enforceable as to them in accordance with its respective terms.
Each such material supply, distribution, agency, financing, or other arrangement
or understanding is a valid and continuing arrangement or understanding; neither
Purchaser nor any other party to any such arrangement or understanding has given
notice of termination or taken any action inconsistent with the continuance of
such arrangement or understanding; and the execution, delivery, and performance
of this Agreement will not prejudice any such arrangement or understanding in
any way. Purchaser enjoys peaceful and undisturbed possession under all material
leases and licenses under which it is operating. Purchaser is not party to, or
bound by, any contract, agreement, instrument, lease, license, arrangement, or
understanding, or subject to any charter or other restriction, which has had or
(to the knowledge of Purchaser) may in the future have a material adverse effect
on the financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Purchaser. Purchaser has not engaged
within the last five years in, is not engaging in, and does not intend to engage
in any transaction with, and has not had within the last five years, does not
now have, and does not intend to have any material contract, agreement,
instrument, lease, license, arrangement, or understanding with, any stockholder
of Purchaser, any director, officer, or employee of Purchaser (except for
employment agreements listed in the Purchaser Disclosure Letter and employment
and compensation arrangements described in the Purchaser Disclosure Letter), any
relative or affiliate of any stockholder of Purchaser or of any such director,
officer, or employee, or any other corporation or enterprise in
-7-
which any stockholder of Purchaser, any such director, officer, or employee, or
any such relative or affiliate then had or now has a 5% or greater equity or
voting or other substantial interest, other than those listed and so specified
in the Purchaser Disclosure Letter or the Purchaser SEC Documents. The stock
ledgers and stock transfer books relating to all issuances and transfers of
stock by Purchaser and the minute book records of Purchaser and all proceedings
of the stockholders and the Board of Directors and committees thereof of
Purchaser since its incorporation made available to counsel to the Seller are
the original stock ledgers and stock transfer books and minute book records of
Purchaser or exact copies thereof. Purchaser is not in violation or breach of,
or in default with respect to, any term of its certificate of incorporation (or
other charter document) or by-laws.
SECTION 2.08 EMPLOYEES.
(a) Purchaser does not have, or contribute to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan (as defined in Section 3(3) of ERISA), or has any obligation to or
customary arrangement with employees for bonuses, incentive compensation,
vacations, severance pay, sick pay, sick leave, insurance, service award,
relocation, disability, tuition refund, or other benefits, whether oral or
written, except as set forth in the Purchaser Disclosure Letter. Purchaser has
made available to Seller: (A) true and correct copies of all documents
evidencing plans, obligations, or arrangements referred to in the Purchaser
Disclosure Letter or the Purchaser SEC Documents (or true and correct written
summaries, so initialed, of such plans, obligations, or arrangements to the
extent not evidenced by documents) and true and correct copies, so initialed, of
all documents evidencing trusts, summary plan descriptions, and any other
summaries or descriptions relating to any such plans; (B) the two most recent
annual reports (Form 5500's), if any, including all schedules thereto and the
most recent annual and periodic accounting of related plan assets with respect
to each Employee Benefit Plan; (C) the two most recent actuarial valuations with
respect to each Pension Plan (as defined in Section 3(2) of ERISA) subject to
Title IV of ERISA; and (D) the most recent determination letter issued by the
Internal Revenue Service with respect to each Pension Plan.
(b) If any Employee Benefit Plan of Purchaser were to be
terminated on the day prior to Closing Date, (A) no liability under Title IV of
ERISA would be incurred by Purchaser or the Seller and (B) all Accrued Benefits
(as defined in this Section 2.01(h)(ii)) to such day prior to the Closing Date
(whether or not vested) would be fully funded in accordance with the assumptions
contained in the regulations of the Pension Benefit Guaranty Corporation
governing the funding of terminated defined benefit plans. For purposes hereof,
"ACCRUED BENEFITS" shall include the value of disability, pre-retirement, death
benefits, and all supplements, subsidized, ancillary, and optional forms of
benefits. All Accrued Liabilities (for contributions or otherwise) (as defined
in this Section 2.08(b)) of Purchaser as of the Closing Date to each Employee
Benefit Plan and with respect to each obligation to, or customary arrangement
with, employees for bonuses, incentive compensation, vacations, severance pay,
sick pay, sick leave, insurance, service award, relocation, disability, tuition
refund, or other benefits, whether oral or written, have been paid or accrued
for all periods ending prior to the Closing Date and no payment to any Employee
Benefit Plan or with respect to any such obligation or arrangement since the
Last Purchaser Balance Sheet Date has been disproportionately large compared to
prior payments. For purposes hereof, "ACCRUED LIABILITIES" shall include a pro
rata contribution to
-8-
each Employee Benefit Plan or with respect to each such obligation or
arrangement for that portion of a plan year or other applicable period which
commences prior to, and ends after, the Closing Date, and Accrued Liabilities
for any portion of a plan year or other applicable period shall be determined by
multiplying the liability for the entire such year or period by a fraction, the
numerator of which is the number of days preceding the Closing Date in such year
or period and the denominator of which is the number of days in such year or
period, as the case may be.
(c) There has been no violation of the reporting and
disclosure requirements imposed either under ERISA or the Code for which a
penalty has been or may be imposed with respect to any Employee Benefit Plan of
Purchaser. There has been no breach of fiduciary duty or responsibility with
respect to any Employee Benefit Plan of Purchaser. No Employee Benefit Plan of
Purchaser or related trust has any liability of any nature, accrued or
contingent, including without limitation liabilities for Taxes, other than for
routine payments to be made in due course to participants and beneficiaries,
except as set forth in the Purchaser Disclosure Letter. Purchaser does not have
any formal plan or commitment, whether or not legally binding, to create any
additional or modify any existing Employee Benefit Plan or benefit obligation or
arrangement described in Section 2.08(a)). Each Employee Benefit Plan of
Purchaser which is a group health plan within the meaning of Section 5000(b)(1)
of the Code is and has been maintained in full compliance with the applicable
requirements of Section 4980B of the Code. Other than the health care
continuation requirements of Section 4980B of the Code, Purchaser does not have
any obligation to provide post-retirement medical benefits or life insurance
coverage or any deferred compensation benefits to any present or former
employees. There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or (to
the best of Purchaser's knowledge) in prospect (or any basis therefor known to
Purchaser) with respect to any Employee Benefit Plan of Purchaser or related
trust or with respect to any fiduciary, administrator, or sponsor (in its
capacity as such) of any Employee Benefit Plan. No Employee Benefit Plan of
Purchaser or related trust and no such obligation or arrangement is in violation
of, or in default with respect to, any law, rule, regulation, order, judgment,
which violation or default would have a material adverse effect thereon or
decree nor is Purchaser, any Employee Benefit Plan of Purchaser, or any related
trust required to take any action in order to avoid any such violation or
default. No event has occurred, or is (to the best of Purchaser's knowledge)
threatened or about to occur, which would constitute a prohibited transaction
under Section 406 of ERISA.
(d) Each Pension Plan maintained for the employees of
Purchaser has been qualified, from its inception, under Section 401(a) of the
Code and any related trust has been an exempt trust for such period under
Section 501 of the Code. Each Pension Plan has been operated in accordance with
its terms. No Pension Plan which is subject to Title IV of ERISA has an
accumulated or waived funding deficiency within the meaning of Section 412 of
the Code. No investigation or review by the Internal Revenue Service is
currently pending or (to the knowledge of Purchaser) is contemplated in which
the Internal Revenue Service has asserted or may assert that any Pension Plan is
not qualified under Section 401(a) of the Code or that any related trust is not
exempt under Section 501 of the Code. Neither Purchaser, nor any organization to
which Purchaser is a successor or parent corporation, within the meaning of
Section 4069(b) of ERISA, has divested itself of any entity maintaining or with
an obligation to contribute to any Pension Plan which had an "AMOUNT OF UNFUNDED
BENEFIT LIABILITIES," as defined
-9-
in Section 4001(a)(18) of ERISA, at the time of such divestiture. No assessment
of any federal taxes with respect to any Employee Benefit Plan of Purchaser has
been made or (to the knowledge of Purchaser) is contemplated against Purchaser,
or any related trust of any Pension Plan of Purchaser, and nothing has occurred
which would result in the assessment of unrelated business taxable income under
the Code with respect to any Employee Benefit Plan of Purchaser. Form 5500's
have been timely filed with respect to all Pension Plans of Purchaser. No event
has occurred or (to the knowledge of Purchaser) is threatened or about to occur
which would constitute a reportable event within the meaning of Section 4043(b)
of ERISA. No notice of termination has been filed by the plan administrator
pursuant to Section 4041 of ERISA or issued by the Pension Benefit Guaranty
Corporation pursuant to Section 4042 of ERISA with respect to any Pension Plan
of Purchaser.
(e) Purchaser does not currently contribute to, and since
September 16, 1980 has not effectuated either a complete or partial withdrawal
from, any multiemployer Pension Plan within the meaning of Section 3(37) of
ERISA.
(f) The Purchaser Disclosure Letter contains a true and
correct statement of the names, relationship with Purchaser, present rates of
compensation (whether in the form of salary, bonuses, commissions, or other
supplemental compensation now or hereafter payable), and aggregate compensation
for the fiscal year ended September 30, 2005 of (A) each director, officer, or
other employee of Purchaser whose aggregate compensation for the fiscal year
ended September 30, 2005 exceeded US$25,000 or whose aggregate compensation
presently exceeds the rate of US$25,000 per annum and (B) all sales agents,
dealers, or distributors of Purchaser. Since September 30, 2005, Purchaser has
not changed the rate of compensation of any of its directors, officers,
employees, agents, dealers, or distributors, nor has any Employee Benefit Plan
or program of Purchaser been instituted or amended to increase benefits
thereunder. There is no contract, agreement, plan, arrangement, or understanding
covering any person that, individually or collectively, could give rise to the
payment of any amount that would not be deductible by Purchaser by reason of
Section 280G of the Code.
(g) Purchaser has not, since at least December 31, 2004,
extended or maintained credit, arranged for the extension of credit, or renewed
an extension of credit, in the form of a personal loan to or for any director or
executive officer (or equivalent thereof) thereof.
SECTION 2.09 PATENTS, TRADEMARKS, ET CETERA.
The Purchaser does not own or have pending, and is not licensed or
otherwise permitted to use, any material Intangibles, other than as described in
the Purchaser Disclosure Letter or the Purchaser SEC Documents. Each Intangible
is validly issued and is currently in force and uncontested in all jurisdictions
in which it is used or in which such use is contemplated. The Purchaser
Disclosure Letter contains a true and correct listing of: (i) all Intangibles
which are owned (either in whole or in part), used by, or licensed to Purchaser
or which otherwise relate to the businesses of Purchaser, and a description of
each such Intangible which identifies its owner, registrant, or applicant; (ii)
all contracts, agreements, instruments, leases, and licenses and identification
of all parties thereto under which Purchaser owns or uses any Intangible
(whether or not under license from third parties), together with the
identification of the owner, registrant, or applicant of each such Intangible;
(iii) all contracts, agreements, instruments, leases, and
-10-
licenses and identification of all parties thereto under which Purchaser grants
the right to use any Intangible; (iv) all validity, infringement, right-to-use,
or other opinions of counsel (whether in-house or outside) which concern the
validity, infringement, or enforceability of any Intangible owned or controlled
by a party other than Purchaser which relates to the businesses, properties, or
assets of Purchaser. Except as specified in the Purchaser Disclosure Letter or
the Purchaser SEC Documents, to the knowledge of Purchaser: (v) Purchaser is the
sole and exclusive owner or licensee of, and (other than those exclusively
licensed by Purchaser to a third party) has the right to use, all Intangibles;
(vi) no Intangible is subject to any order, judgment, decree, contract,
agreement, instrument, lease, or license restricting the scope of the use
thereof; (vii) during the last five years, Purchaser has not been charged with,
and has not charged others with, unfair competition, infringement of any
Intangible, or wrongful use of confidential information, trade secrets, or
secret processes; and (viii) Purchaser is not using any patentable invention,
confidential information, trade secret, or secret process of others. There is no
right under any Intangible necessary to the businesses of Purchaser as presently
conducted or as it contemplates conducting, except such as are so designated in
the Purchaser Disclosure Letter or the Purchaser SEC Documents. Except as
described in the Purchaser Disclosure Letter or the Purchaser SEC Documents,
Purchaser has not infringed, is not infringing, and has not received notice of
infringement in respect of the Intangibles or asserted Intangibles of others,
nor has Purchaser been advised by counsel or others that it is infringing or may
infringe the Intangibles or asserted Intangibles of others if any currently
contemplated business activity is effectuated. To the knowledge of Purchaser,
there is no infringement by others of Intangibles of Purchaser. As far as
Purchaser can reasonably foresee, there is no Intangible or asserted Intangible
of others that may materially adversely affect the financial condition, results
of operations, businesses, properties, assets, liabilities, or future prospects
of Purchaser. All material contracts, agreements, instruments, leases, and
licenses pertaining to Intangibles to which Purchaser is a party, or to which
any of its businesses, properties, or assets are subject, are in compliance in
all material respects with all laws, rules, regulations, orders, judgments, and
decrees binding on Purchaser or to which any of its businesses, properties, or
assets are subject. Purchaser did not register any trademark, tradename or
service xxxx, design, or name used by Purchaser to identify its products,
businesses, or services. Neither any stockholder of Purchaser, any director,
officer, or employee of Purchaser, any relative or affiliate of any stockholder
of Purchaser, any such director, officer, or employee, nor any other corporation
or enterprise in which any stockholder of Purchaser, any such director, officer,
or employee, or any such relative or affiliate had or now has a 5% or greater
equity or voting or other substantial interest, possesses any Intangible which
relates to the businesses of Purchaser.
SECTION 2.10 QUESTIONABLE PAYMENTS.
Neither Purchaser, nor any director, officer, agent, employee, or other
person associated with, or acting on behalf of, Purchaser, nor any stockholder
of Purchaser has, directly or indirectly: used any corporate funds for unlawful
contributions, gifts, entertainment, or other unlawful expenses relating to
political activity; made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback, or other unlawful payment.
-11-
SECTION 2.11 AUTHORITY.
The Purchaser has all requisite power and authority to execute,
deliver, and perform this Agreement. All necessary corporate proceedings of
Purchaser have been duly taken to authorize the execution, delivery, and
performance of this Agreement thereby. This Agreement has been duly authorized,
executed, and delivered by Purchaser, constitutes the legal, valid, and binding
obligation of Purchaser, and is enforceable as to Purchaser in accordance with
its terms. Except as otherwise set forth in this Agreement, no consent,
authorization, approval, order, license, certificate, or permit of or from, or
declaration or filing with, any federal, state, local, or other governmental
authority or any court or other tribunal is required by Purchaser for the
execution, delivery, or performance of this Agreement by Purchaser. No consent
of any party to any material contract, agreement, instrument, lease, license,
arrangement, or understanding to which Purchaser is a party, or to which it or
any of its businesses, properties, or assets are subject, is required for the
execution, delivery, or performance of this Agreement (except such consents
referred to in the Purchaser Disclosure Letter); and the execution, delivery,
and performance of this Agreement will not (if the consents referred to in the
Purchaser Disclosure Letter are obtained prior to the Closing) violate, result
in a breach of, conflict with, or (with or without the giving of notice or the
passage of time or both) entitle any party to terminate or call a default under,
entitle any party to receive rights or privileges that such party was not
entitled to receive before this Agreement was executed under, or create any
obligation on the part of Purchaser to which it was not subject immediately
before this Agreement was executed under, any term of any such material
contract, agreement, instrument, lease, license, arrangement, or understanding,
or violate or result in a breach of any term of the certificate of incorporation
(or other charter document) or by-laws of Purchaser, or (if the provisions of
this Agreement are satisfied) violate, result in a breach of, or conflict with
any law, rule, regulation, order, judgment, or decree binding on Purchaser or to
which any of its businesses, properties, or assets are subject, which violation
or breach would have a material adverse effect on Purchaser. Neither Purchaser,
nor any of its officers, directors, employees, or agents has employed any broker
or finder or incurred any liability for any fee, commission, or other
compensation payable by any person on account of alleged employment as a broker
or finder, or alleged performance of services as a broker or finder, in
connection with or as a result of this Agreement or the transactions
contemplated hereby and in connection herewith.
SECTION 2.12 STATUS OF SHARES OF PURCHASER COMMON STOCK TO BE ISSUED.
Assuming without investigation that the shares of Seller Capital Stock
outstanding on the Closing Date are validly authorized, validly issued, fully
paid, and nonassessable, the shares of Purchaser Common Stock to be issued
pursuant to this Agreement are validly authorized and, when the such shares of
Purchaser Common Stock have been duly delivered pursuant to the terms of this
Agreement, such shares of Purchaser Common Stock will be validly issued, fully
paid, and nonassessable and will not have been issued, owned or held in
violation of any preemptive or similar right of stockholder.
SECTION 2.13 INSURANCE.
The Purchaser currently maintains no insurance; however, the Company
has at no time been refused any insurance coverage sought or applied for
-12-
SECTION 2.14 TRADING MATTERS.
At the date hereof and at the Closing Date:
(i) the Purchaser Common Stock is traded and quoted in the
over-the-counter market (the "OTC");
(ii) Purchaser has and shall have performed or satisfied all
of its undertakings to, and of its obligations and requirements with,
the SEC;
(iii) Purchaser has not, and shall not have taken any action
that would preclude, or otherwise jeopardize, the inclusion of the
Purchaser Common Stock for quotation on the OTC Bulletin Board or the
Nasdaq Stock Market.
SECTION 2.15 COMPLETENESS OF DISCLOSURE.
No representation or warranty by Purchaser in this Agreement contains
or, and at the Closing Date will contain, an untrue statement of material fact
or omits or, at the Closing Date, will omit to state a material fact required to
be stated therein or necessary to make the statements made not misleading.
SECTION 2.16 PERIODIC REPORTING.
(a) The Purchaser Common Stock has been registered under
Section 12(g) of the Exchange and Purchaser is subject to the periodic reporting
requirements of Section 13 of the Exchange Act. Purchaser has heretofore made
available to the Seller true, complete, and correct copies of all forms,
reports, schedules, statements, and other documents required to be filed by it
under the Exchange Act since at least as such documents have been amended since
the time of the filing thereof (together with any of the foregoing to be filed
prior to the Closing, the "PURCHASER SEC DOCUMENTS"). The Purchaser SEC
Documents, including, without limitation, any financial statements and schedules
included therein, at the time filed or, if subsequently amended, as so amended,
(i) did not contain any untrue statement of a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading and (ii) complied in all respects with the applicable requirements of
the Exchange Act and the applicable rules and regulations thereunder. The
financial statements included in the Purchaser SEC Documents complied when filed
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with generally accepted accounting principles in the
United States, applied on a consistent basis during the periods involved (except
as may be indicated in the notes thereto or, in the case of unaudited financial
statements, as permitted by the rules and regulations of the SEC) and fairly
present, subject in the case of the unaudited financial statements, to customary
year end audit adjustments, the financial position of Purchaser as at the dates
thereof and the results of its operations and cash flows.
(b) The Purchaser maintains disclosure controls and procedures
required by Rule 13a-15 or 15d-15 under the Exchange Act; such controls and
procedures are effective to ensure that all material information concerning the
Purchaser is made known on a timely basis to
-13-
the individuals responsible for the preparation of the Purchaser's filings with
the SEC and other public disclosure documents. Purchaser has made available to
the Seller copies of, all written descriptions of, and all policies, manuals and
other documents promulgating, such disclosure controls and procedures. As used
in this Section, the term "FILE" shall be broadly construed to include any
manner in which a document or information is furnished, supplied or otherwise
made available to the SEC.
SECTION 2.17 COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS.
(a) The Purchaser is in compliance with, and is not in
violation of, applicable federal, state, local or foreign statutes, laws and
regulations (including without limitation, any applicable building, zoning or
other law, ordinance or regulation) affecting its properties or the operation of
its business. The Purchaser is not subject to any order, decree, judgment or
other sanction of any court, administrative agency or other tribunal.
(b) Each of Purchaser, its directors and its senior financial
officers has consulted with Purchaser's independent auditors and with
Purchaser's outside counsel with respect to, and (to the extent applicable to
Purchaser) is familiar in all material respects with all of the requirements of,
Xxxxxxxx-Xxxxx Act of 2002. The Purchaser intends to compliant with the
provisions of such act applicable to it as of the date hereof and intends to
implement such programs and reasonable steps, upon the advice of Purchaser's
independent auditors and outside counsel, respectively, to ensure such future
compliance (not later than the relevant statutory and regulatory deadlines
therefore) with all provisions of such act which shall become applicable thereto
after the date hereof.
SECTION 2.18 LEGAL PROCEEDINGS AND HISTORY.
The Purchaser hereby represents that, to the knowledge of Purchaser, no
officer, director or affiliate of Purchaser, has been, within the five years
ending on the Closing Date, a party to any bankruptcy petition against such
person or against any business of which such person was affiliated; convicted in
a criminal proceeding or subject to a pending criminal proceeding (excluding
traffic violations and other minor offenses); subject to any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting their involvement in any type of business,
securities or banking activities; or found by a court of competent jurisdiction
in a civil action, by the SEC or the Commodity Futures Trading Commission to
have violated a federal or state securities or commodities law, and the judgment
has not been reversed, suspended or vacated.
SECTION 2.19 MATERIAL CHANGES.
Subsequent to the respective dates as of which information is given in
the Purchaser SEC Documents, there has not been (i) any material adverse change
in the business, prospects, financial condition or results of operations of
Purchaser, (ii) any transaction committed to or consummated that is material to
Purchaser, (iii) any obligation, direct or contingent, that is material to
Purchaser incurred by Purchaser, except such obligations as have been incurred
in the ordinary course of
-14-
business, (iv) any change in the capital stock or outstanding indebtedness of
Purchaser that is material to Purchaser, (v) any dividend or distribution of any
kind declared, paid, or made on the capital stock of Purchaser, or (vi) any loss
or damage (whether or not insured) to the property of Purchaser which has a
material adverse effect on the business, prospects, condition (financial or
otherwise), or results of operations thereof.
SECTION 2.20 STABILIZATION.
The Purchaser has not, and no person acting on behalf thereof, has
taken or will take, directly or indirectly, any action designed to, or that
might reasonably be expected to cause or result in, stabilization in violation
of law, or manipulation, of the price of the Purchaser Common Stock.
SECTION 2.21 CERTAIN LOANS.
There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by Purchaser to, or for the benefit of, any of the officers,
directors, or director-nominees of Purchaser or any of the members of the
families of any of them.
SECTION 2.22 FINDERS.
The Purchaser has not incurred any liability, direct or indirect, for
finders' or similar fees on behalf of or payable by Purchaser or Seller in
connection with this Agreement or any other transaction contemplated hereby.
SECTION 2.23 THIRD PARTY REGISTRATION RIGHTS.
No stockholder of Purchaser has any right to request or require
Purchaser to register the sale of any shares owned by such stockholder under the
Securities Act on any registration statement.
SECTION 2.24 VALIDITY OF SHARES.
The shares of Purchaser Common Stock to be delivered to Seller pursuant
to this Agreement, when issued in accordance with the terms and provisions of
this Agreement, will be validly authorized and issued, fully paid, and
nonassessable.
III. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to, and agrees with, Purchaser
that the statements set forth in this Article III are true, correct, and
complete as of the date of this Agreement except as otherwise set forth in the
corresponding numbered section of the letter, dated even date herewith, from
Seller to Purchaser (the "SELLER DISCLOSURE LETTER"), to be delivered by Seller
to Purchaser in accordance with Section 7.10 hereof:
-15-
SECTION 3.01 ORGANIZATION AND QUALIFICATION.
Seller has no subsidiaries or affiliated corporation or owns any
interest in any other enterprise (whether or not such enterprise is a
corporation). Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Delaware, with all requisite power
and authority, and all necessary consents, authorizations, approvals, orders,
licenses, certificates, and permits of and from, and declarations and filings
with, all federal, state, local, and other governmental authorities and all
courts and other tribunals, to own, lease, license, and use its properties and
assets and to carry on the businesses in which it is now engaged and the
businesses in which it contemplates engaging. Other than as set forth in the
Seller Disclosure Letter, Seller is duly qualified to transact the businesses in
which it is engaged and is in good standing as a foreign corporation in every
jurisdiction in which its ownership, leasing, licensing, or use of property or
assets or the conduct of its businesses makes such qualification necessary.
SECTION 3.02 CAPITALIZATION.
The authorized capital stock of Seller consists of 2,000 shares of
Seller Common Stock, of which 200 shares are issued and outstanding. Each of the
outstanding shares of Seller Common Stock is validly authorized, validly issued,
fully paid, and nonassessable, has not been issued and is not owned or held in
violation of any preemptive right of stockholders and by the owners set forth in
the Seller Disclosure Letter, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, stockholders' agreements, and voting
trusts. Except as set forth in the Seller Disclosure Letter, there is no
commitment, plan, or arrangement to issue, and no outstanding option, warrant,
or other right calling for the issuance of, any share of Seller Capital Stock or
any security or other instrument convertible into, exercisable for, or
exchangeable for Seller Capital Stock. Except as set forth in the Seller
Disclosure Letter, there is outstanding no security or other instrument
convertible into or exercisable or exchangeable for Seller Capital Stock.
SECTION 3.03 FINANCIAL CONDITION.
Chisolm Bierwolf & Xxxxxx LLC, which has examined the financial
statements of the Company, together with the related schedules and notes, for
the period from inception through September 30, 2005 and the three months ended
December 31, 2005, are independent accountants within the meaning of the
Securities Act, the Exchange Act, and the rules and regulations promulgated
thereunder. Seller has provided to Purchaser true and correct copies of the
following: audited balance sheets of Seller as of September 30, 2005; unaudited
balance sheets of Seller as of December 31, 2005; audited statements of income,
statements of stockholders' equity, and statements of cash flows of Seller for
the period ended September 30, 2005; and the unaudited statements of income,
statements of stockholders' equity, and statements of cash flows of Seller for
the three months ended December 31, 2005. Each such balance sheet presents
fairly the financial condition, assets, liabilities, and stockholders' equity of
Seller as of its respective date; each such statement of income and statement of
stockholders' equity presents fairly the results of operations of Seller for the
period indicated; and each such statement of cash flows presents fairly the
information purported to be shown therein. The financial statements referred to
in this Section 3.03 will have been prepared in accordance with generally
accepted
-16-
accounting principles in the United States consistently applied throughout the
periods involved, are in accordance with the books and records of Seller, and
complied and will comply in all material respects with all applicable accounting
requirements. Since the Last Seller Balance Sheet Date:
(i) There has at no time been a material adverse change in the
financial condition, results of operations, businesses, properties,
assets, liabilities, or future prospects of Seller.
(ii) Seller has not authorized, declared, paid, or effected
any dividend or liquidating or other distribution in respect of its
capital stock or any direct or indirect redemption, purchase, or other
acquisition of any stock of Seller.
(iii) The operations and businesses of Seller have been
conducted in all respects only in the ordinary course, except as
described in the Seller Disclosure Letter.
There is no fact known to Seller which materially adversely affects or in the
future (as far as Seller can reasonably foresee) may materially adversely affect
the financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Seller; provided, however, that Seller
expresses no opinion as to political or economic matters of general
applicability. Seller has made known, or caused to be made known, to the
accountants or auditors who have prepared, reviewed, or audited the
aforementioned consolidated financial statements all material facts and
circumstances which could affect the preparation, presentation, accuracy, or
completeness thereof.
SECTION 3.04 TAX AND OTHER LIABILITIES.
Neither Seller nor any Seller Subsidiary has any material liability of
any nature, accrued or contingent, including, without limitation, liabilities
for Taxes, and liabilities to customers or suppliers, other than the following:
(i) Liabilities for which full provision has been made on the
Last Seller Balance Sheet and the notes thereto; and
(ii) Other liabilities arising since the Last Seller Balance
Sheet Date and prior to the Closing Date in the ordinary course of
business (which shall not include liabilities to customers on account
of defective products or services) or in connection with the
transactions contemplated hereby or in connection herewith which are
not inconsistent with the representations and warranties of Seller or
any other provision of this Agreement.
Without limiting the generality of the foregoing, the amounts set up as
provisions for Taxes on the Last Seller Balance Sheet are sufficient for all
accrued and unpaid Taxes of Seller, whether or not due and payable and whether
or not disputed, under tax laws, as in effect on the Last Seller Balance Sheet
Date or now in effect, for the period ended on such date and for all fiscal
periods prior thereto. The execution, delivery, and performance of this
Agreement by Seller will not cause any Taxes to be payable other than by the
stockholders of Seller or cause any lien, charge,
-17-
or encumbrance to secure any Taxes to be created either immediately or upon the
nonpayment of any Taxes other than on the properties or assets of the
stockholders of Seller. Seller has not been required to file any tax returns by
any overseas tax authorities or required to pay any taxes, assessments, and
other governmental charges payable or remittable by it or levied upon it or its
properties, assets, income, or franchises which are due and payable. Seller is
not subject to any litigation, governmental or other proceeding (formal or
informal), or investigation pending, threatened, or in prospect with respect to
any such report or the subject matter of such report.
SECTION 3.05 LITIGATION AND CLAIMS.
There is no litigation, arbitration, claim, governmental or other
proceeding (formal or informal), or investigation pending, threatened, or, to
the best of Seller's knowledge, in prospect (or any basis therefor known to
Seller), with respect to Seller or any of its businesses, properties, or assets,
except as described in the Seller Disclosure Letter. Seller is not affected by
any present or threatened strike or other labor disturbance nor to the knowledge
of Seller is any union attempting to represent any employee of Seller as
collective bargaining agent. Seller is not in violation of, or in default with
respect to, any law, rule, regulation, order, judgment, or decree which
violation or default would have a material adverse effect upon Seller; nor is
Seller required to take any action in order to avoid such violation or default.
SECTION 3.06 PROPERTIES.
(a) Seller owns any legal or equitable interest in any real
property. Seller has good and marketable title to all other properties and
assets material thereto, used in its business or owned by it (except real and
other properties and assets as are held pursuant to leases or licenses described
in the Seller Disclosure Letter), free and clear of all liens, mortgages,
security interests, pledges, charges, and encumbrances (except such as are
listed in the Seller Disclosure Letter).
(b) All accounts and notes receivable reflected on the Last
Seller Balance Sheet, or arising since the Last Seller Balance Sheet Date, have
been collected, or are and will be good and collectible, in each case at the
aggregate recorded amounts thereof without right of recourse, defense,
deduction, return of goods, counterclaim, offset, or set off on the part of the
obligor, and, if not collected, can reasonably be anticipated to be paid within
180 days of the date incurred.
(c) Set forth in the Seller Disclosure Letter is a true and
complete list of all tangible properties and assets owned by Seller or leased or
licensed by Seller from or to a third party (including inventory but not
including Intangibles), and with respect to such properties and assets leased or
licensed by Seller from or to a third party, a description of such lease or
license. All such properties and assets (including Intangibles) owned by Seller
are reflected on the Last Seller Balance Sheet (except for acquisitions
subsequent to the Last Seller Balance Sheet Date and prior to the Closing Date,
which are either noted in the Seller Disclosure Letter or are approved in
writing by Seller). All tangible properties and assets owned by Seller or leased
or licensed by Seller from or to a third party are in good and usable condition
(reasonable wear and tear which is not such as to affect adversely the operation
of the businesses of Seller excepted).
-18-
(d) To the best of Seller's knowledge, no real property owned
by Seller or leased or licensed by Seller from or to a third party lies in an
area which is, or will be, subject to zoning, use, or building code restrictions
which would prohibit, and, to the best of Seller's knowledge, no state of facts
relating to the actions or inaction of another person or entity or his or its
ownership, leasing, or licensing of any real or personal property exists or will
exist which would prevent, the continued effective ownership, leasing, or
licensing of such real property in the businesses in which Seller or such Seller
Subsidiary is now engaged or the businesses in which it contemplates engaging.
(e) The properties and assets (including Intangibles) owned by
Seller (other than those leased or licensed by Seller or any Seller Subsidiary
to a third party) or leased or licensed by Seller from a third party constitute
all such properties and assets which are necessary to the business of Seller as
presently conducted or as they contemplate conducting.
(f) Seller has not caused or permitted its businesses
properties, or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose of, transfer, produce, or process any Hazardous
Substance except in compliance with all applicable laws, rules, regulations,
orders, judgments, and decrees, and has not caused or permitted the Release of
any Hazardous Substance on or off the site of any property of Seller.
(g) Except as set forth in the Seller Disclosure Letter, (A)
Seller is in compliance in all material respects with all Environmental Laws
that are applicable to its business, (B) Seller has not received notice from any
governmental authority or third party of an asserted claim under Environmental
Laws, which claim is required to be disclosed in the Seller Disclosure Letter,
(C) to the best knowledge of Seller, Seller is not likely to be required to make
future material capital expenditures to comply with Environmental Laws, (D) no
property which is owned, leased or occupied by Seller has been designated as a
Superfund site pursuant to the Comprehensive Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. ss. 9601, et seq.), or otherwise
designated as a contaminated site under applicable state or local law, and (E)
Seller is not in violation of any federal or state law or regulation relating to
occupational safety or health.
SECTION 3.07 CONTRACTS AND OTHER INSTRUMENTS.
The Seller Disclosure Letter contains a true and correct description of
all material contracts, agreements, instruments, leases, licenses, arrangements,
or understandings with respect to Seller taken as a whole. Seller has made
available to Purchaser: (i) the certificate of incorporation and by-laws of
Seller (or, in each case, the comparable charter documents, if any, under
applicable law) and all amendments thereto, as presently in effect, certified by
the Secretary thereof or an authorized signatory thereof and (ii) the following:
(A) true and correct copies of all material contracts, agreements, and
instruments referred to in the Seller Disclosure Letter; (B) true and correct
copies of all material leases and licenses referred to in the Seller Disclosure
Letter; and (C) true and correct written descriptions of all material supply,
distribution, agency, financing, or other arrangements or understandings
referred to in the Seller Disclosure Letter. Except as set forth in Section the
Seller Disclosure Letter, Seller is not party to any employment agreement with
any employee thereof. To the best of Seller's knowledge, none of Seller, or any
other party to any such contract, agreement, instrument, lease, or license is
-19-
now or expects in the future to be in violation or breach of, or in default with
respect to complying with, any term thereof, and each such material contract,
agreement, instrument, lease, or license is in full force and is (to the best of
Seller's knowledge in the case of third parties) the legal, valid, and binding
obligation of the parties thereto and (subject to applicable bankruptcy,
insolvency, and other laws affecting the enforceability of creditors' rights
generally) is enforceable as to them in accordance with its terms. Each such
material supply, distribution, agency, financing, or other arrangement or
understanding is a valid and continuing arrangement or understanding; none of
Seller or any other party to any such arrangement or understanding has given
notice of termination or taken any action inconsistent with the continuance of
such arrangement or understanding; and the execution, delivery, and performance
of this Agreement will not prejudice any such arrangement or understanding in
any way. Seller enjoys peaceful and undisturbed possession under all leases and
licenses under which it is operating. Seller is party to, or bound by, any
contract, agreement, instrument, lease, license, arrangement, or understanding,
or subject to any charter or other restriction, which has had or, to the best of
Seller's knowledge, may in the future have a material adverse effect on the
financial condition, results of operations, businesses, properties, assets,
liabilities, or future prospects of Seller, and, following the consummation of
the transactions contemplated hereby, Purchaser. Seller has not engaged within
the last five years in, is engaging in, or intends to engage in any transaction
with, or has had within the last five years, now has, or intends to have any
contract, agreement, instrument, lease, license, arrangement, or understanding
with, any stockholder of Seller, any director, officer, or employee of Seller
(except for employment agreements listed in the Seller Disclosure Letter and
employment and compensation arrangements described in the Seller Disclosure
Letter), any relative or affiliate of any stockholder of Seller, any such
director, officer, or employee, or any other corporation or enterprise in which
any stockholder of Seller, any such director, officer, or employee, or any such
relative or affiliate then had or now has a 5% or greater equity or voting or
other substantial interest, other than those listed and so specified in the
Seller Disclosure Letter. The stock ledgers and stock transfer books and the
minute book records of Seller relating to all issuances and transfers of stock
by Seller and all proceedings of the stockholders and the Board of Directors and
committees thereof of Seller since its incorporation made available to Purchaser
are the original stock ledgers and stock transfer books and minute book records
thereof or exact copies thereof. Seller is not in violation or breach of, or in
default with respect to, any term of its certificate of incorporation or by-laws
(or the comparable charter document, if any, under applicable law).
SECTION 3.08 EMPLOYEES.
(a) Seller has not had, or contributed to, any pension,
profit-sharing, option, other incentive plan, or any other type of Employee
Benefit Plan or has any obligation to or customary arrangement with employees
for bonuses, incentive compensation, vacations, severance pay, sick pay, sick
leave, insurance, service award, relocation, disability, tuition refund, or
other benefits, whether oral or written.
(b) The Seller does not have, and has not ever had, employees.
(c) Seller has complied and is complying in all material
respects with all laws relating to the employment of labor, including, without
limitation, any provision thereof relating to wages, hours, collective
bargaining, employee health, safety and welfare, and the payment of
-20-
social security and similar taxes. Seller is not a party to any collective
bargaining or union contract, and to the best of Seller's knowledge, there
exists no current union organizational effort with respect to any employee of
Seller. Seller has not experienced any material labor difficulties, including,
without limitation, strikes, slowdowns, or work stoppages, within the five-year
period preceding the date hereof.
SECTION 3.09 PATENTS, TRADEMARKS, ET CETERA.
Seller does not own or have pending, or is licensed or otherwise
permitted to use, any material Intangible, other than as described in the Seller
Disclosure Letter. Each Intangible is validly issued and is currently in force
and uncontested in all jurisdictions in which it is used or in which such use is
contemplated. The Seller Disclosure Letter contains a true and correct listing
of: (i) all Intangibles which are owned (either in whole or in part), used by,
or licensed to Seller or which otherwise relate to the businesses of Seller, and
a description of each such Intangible which identifies its owner, registrant, or
applicant; (ii) all contracts, agreements, instruments, leases, and licenses and
identification of all parties thereto under which Seller owns or uses any
Intangible (whether or not under license from third parties), together with the
identification of the owner, registrant, or applicant of each such Intangible;
(iii) all contracts, agreements, instruments, leases, and licenses and
identification of all parties thereto under which Seller grants the right to use
any Intangible; and (iv) all validity, infringement, right-to-use, or other
opinions of counsel (whether in-house or outside) which concern the validity,
infringement, or enforceability of any Intangible owned or controlled by a party
other than Seller which relates to the businesses, properties, or assets of
Seller. Except as specified in the Seller Disclosure Letter: (v) Seller is the
sole and exclusive owner or licensee of, and (other than those licensed by
Seller to a third party) has the right to use, all Intangibles; (vi) no
Intangible is subject to any order, judgment, decree, contract, agreement,
instrument, lease, or license restricting the scope of the use thereof; (vii)
during the last five years, Seller has not been charged with, or has charged
others with, unfair competition, infringement of any Intangible, or wrongful use
of confidential information, trade secrets, or secret processes; and (viii)
Seller is not using any patentable invention, confidential information, trade
secret, or secret process of others. There is no right under any Intangible
necessary to the businesses of Seller as presently conducted or as it
contemplates conducting, except such as are so designated in the Seller
Disclosure Letter. Seller has not infringed, is not infringing, and has not
received notice of infringement in respect of the Intangibles or asserted
Intangibles of others, nor has Seller been advised by counsel or others that it
is infringing or may infringe the Intangibles or asserted Intangibles of others
if any currently contemplated business activity is effectuated. To the knowledge
of Seller, there is no infringement by others of Intangibles of Seller. As far
as Seller can foresee, there is no Intangible or asserted Intangible of others
that may materially adversely affect the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Seller. All contracts, agreements, instruments, leases, and licenses pertaining
to Intangibles to which Seller is a party, or to which any of its businesses,
properties, or assets are subject, are in compliance with all laws, rules,
regulations, orders, judgments, and decrees binding on Seller or to which any of
its businesses, properties, or assets are subject. The trademarks, tradenames,
and service marks used by Seller to identify its businesses, and services are as
set forth in the Seller Disclosure Letter. Neither any director, officer, or
employee of Seller, any relative or affiliate of the foregoing or any such
director, officer, or employee, nor any other corporation or enterprise
-21-
in which, any such director, officer, or employee, or any such relative or
affiliate had or now has a 5% or greater equity or voting or other substantial
interest, possesses any Intangible which relates to the businesses of Seller.
SECTION 3.10 QUESTIONABLE PAYMENTS.
Neither Seller, nor any director, officer, agent, employee, or other
person associated with, or acting on behalf of, Seller, has, directly or
indirectly: used any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political activity; made
any unlawful payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from corporate funds;
violated any provision of the Foreign Corrupt Practices Act of 1977, as amended;
or made any bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment.
SECTION 3.11 AUTHORITY.
Seller has all requisite power and authority to execute, deliver, and
perform this Agreement. All necessary corporate proceedings of Seller have been
duly taken to authorize the execution, delivery, and performance of this
Agreement by Seller. This Agreement has been duly authorized, executed, and
delivered by Seller, constitutes the legal, valid, and binding obligation of
Seller, and is enforceable as to Seller in accordance with its terms. Except as
otherwise set forth in this Agreement, no consent, authorization, approval,
order, license, certificate, or permit of or from, or declaration or filing
with, any federal, state, local, or other governmental authority or any court or
other tribunal is required by Seller for the execution, delivery, or performance
of this Agreement by Seller. No consent of any party to any material contract,
agreement, instrument, lease, license, arrangement, or understanding to which
Seller is a party, or to which its or any of its businesses, properties, or
assets are subject, is required for the execution, delivery, or performance of
this Agreement (except such consents referred to in the Seller Disclosure
Letter); and the execution, delivery, and performance of this Agreement will not
violate, result in a breach of, conflict with, or (with or without the giving of
notice or the passage of time or both) entitle any party to terminate or call a
default under, entitle any party to receive rights or privileges that such party
was not entitled to receive immediately before this Agreement was executed
under, or create any obligation on the part of Seller or Purchaser to which it
was not subject immediately before this Agreement was executed under, any term
of any such material contract, agreement, instrument, lease, license,
arrangement, or understanding, or violate or result in a breach of any term of
the certificate of incorporation or by-laws of Seller (or the comparable charter
documents, if any, under applicable law), or (if the provisions of this
Agreement are satisfied) violate, result in a breach of, or conflict with any
law, rule, regulation, order, judgment, or decree binding on Seller or to which
any of its businesses, properties, or assets are subject. Except as set forth in
the Seller Disclosure Letter, neither Seller nor any of its officers, directors,
employees, or agents has employed any broker or finder or incurred any liability
for any fee, commission, or other compensation payable by any person on account
of alleged employment as a broker or finder, or alleged performance of services
as a broker or finder, in connection with or as a result of this Agreement or
the other transactions contemplated hereby and in connection herewith.
-22-
SECTION 3.12 INSURANCE.
All policies of fire and other insurance against casualty and other
losses and public liability insurance carried by Seller are described in the
Seller Disclosure Letter (including the risks covered and limits of such
policies) and are in full force and effect. A full and complete copy of each
such insurance policy has been provided to Purchaser, and such policies are
summarized in the Seller Disclosure Letter. All premiums in respect of such
policies for which premium notices have been received have been paid in full as
the same become due and payable. Seller has not failed to give any notice or
present any claim under any insurance policy in due and timely fashion. There
are no actual claims or claims threatened in writing against Seller which could
come within the scope of such coverage nor are any such policies currently
threatened with cancellation. There are no outstanding requirements or
recommendations by any insurance company that issued a policy with respect to
any of the assets, the businesses, or operations of Seller or by any Board of
Fire Underwriters or other body exercising similar functions or by any
governmental authority requiring or recommending any repairs or other work to be
done on, or with respect to, any of the assets of Seller or requiring or
recommending any equipment or facilities to be installed on any premises from
which the businesses of Seller is conducted or in connection with any of the
assets thereof. Seller has no knowledge of any material proposed increase in
applicable insurance rates or of any conditions or circumstances applicable to
the businesses thereof that might result in such increases. No such policy is
terminable by virtue of the transactions contemplated by this Agreement.
SECTION 3.13 BUSINESS CONDUCTED IN NO OTHER NAME.
All business of Seller has been conducted for its benefit and there are
no parties related or affiliated with Seller, either directly or indirectly,
which are competing for the business thereof.
SECTION 3.14 CUSTOMERS AND SUPPLIERS.
There has been no termination or cancellation of any relationship
between Seller and any material supplier, or any customer or group of customers
which, individually or in the aggregate, represented more than five (5%) percent
of the gross revenues of Seller nor is there any reason to believe that any such
terminations or cancellations of such magnitudes are pending or threatened.
SECTION 3.15 COMPLETENESS OF DISCLOSURE.
No representation or warranty by Seller in this Agreement contains, or
at the Closing Date will contain, an untrue statement of material fact or omits
or at the Closing Date will omit to state a material fact required to be stated
therein or necessary to make the statements made not misleading.
SECTION 3.16 COMPLIANCE WITH LAW AND GOVERNMENT REGULATIONS.
Seller is in compliance in all material respects with, and is not in
violation of, applicable local or foreign statutes, laws and regulations
(including without limitation, any applicable building, zoning or other law,
ordinance or regulation) affecting its properties or the operation of its
business. Seller is not subject to any order, decree, judgment or other sanction
of any court,
-23-
administrative agency or other tribunal.
SECTION 3.17 STABILIZATION.
Seller has not, and no person acting on behalf thereof, has taken or
will take, directly or indirectly, any action designed to, or that might
reasonably be expected to cause or result in, stabilization in violation of law,
or manipulation, of the price of the Purchaser Common Stock.
SECTION 3.18 CERTAIN LOANS.
There are no outstanding loans, advances (except normal advances for
business expenses in the ordinary course of business) or guarantees of
indebtedness by Seller to, or for the benefit of, any of the officers,
directors, or director-nominees of Seller or any of the members of the families
of any of them, except as disclosed in the Seller Disclosure Letter.
SECTION 3.19 FINDERS.
Seller has not incurred any liability, direct or indirect, for finders'
or similar fees on behalf of or payable by Seller or Seller in connection with
this Agreement or any other transaction involving Purchaser and Seller.
SECTION 3.20 THIRD PARTY REGISTRATION RIGHTS.
No stockholder of Seller has any right to request or require Seller to
register the sale of any shares owned by such stockholder under the Securities
Act on any registration statement.
SECTION 3.21 INVESTMENT REPRESENTATIONS AND COVENANTS.
(a) The Seller is acquiring the shares of Purchaser Common
Stock to be issued pursuant hereto for its own account and for investment only
and not with a view to distribution or resale thereof within the meaning of
such phrase as defined under the Securities Act. The Seller shall not dispose
of any part or all of such shares of Purchaser Common Stock in violation of
the provisions of the Securities Act and the rules and regulations promulgated
under the Securities Act by the SEC and all applicable provisions of state
securities laws and regulations.
(b) The certificate or certificates representing the shares of
Purchaser Common Stock shall bear a legend in substantially the form set forth
in Section 4.01(f) hereof.
(c) The Seller acknowledges being informed that the shares of
Purchaser Common Stock to be issued pursuant hereto shall be unregistered,
shall be "RESTRICTED SECURITIES" as defined in paragraph (a) of Rule 144 under
the Securities Act, and must be held indefinitely unless (a) they are
subsequently registered under the Securities Act, or (b) an exemption from
such registration is available. The Seller further acknowledges that the
Purchaser does not have an obligation to currently register such securities
for the account of the Seller.
-24-
(d) The Seller acknowledges that it has been afforded access
to all material information which they have requested relevant to their
decision to acquire the shares of Purchaser Common Stock and to ask questions
of Purchaser's management and that, except as set forth herein, neither
Purchaser nor anyone acting on behalf of Purchaser has made any
representations or warranties to the Seller which have induced, persuaded, or
stimulated the Seller to acquire such shares of Purchaser Common Stock.
(e) Either alone, or together with their investment
advisor(s), the Seller has the knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of the
prospective investment in the shares of Purchaser Common Stock, and the Seller
is and will be able to bear the economic risk of the investment in such shares
of Purchaser Common Stock.
IV. THE EXCHANGE
SECTION 4.01 TERMS OF THE EXCHANGE.
On the basis of the representations, warranties, covenants, and
agreements contained in this Agreement and subject to the terms and conditions
of this Agreement:
(a) Seller shall sell, assign, transfer, and convey as a going
concern to the Purchaser at the Closing all properties and assets of Seller at
the date of the Closing of every kind and nature whatsoever, including the
names, trademarks, contractual rights, books and records (other than stock
ledgers and stock transfer books), business, and goodwill of Seller; and, in
consideration therefor, the Purchaser shall deliver at the Closing to Seller (i)
a stock certificate registered in its name for an aggregate of 600,000,000
shares of Purchaser Common Stock, and (ii) an Assignment and Assumption in the
form attached hereto as Exhibit 4.01(a).
(b) The Purchaser shall not assume or be responsible for any
obligation or liability of Seller set forth in Schedule 4.01(b) hereto.
(c) The consideration paid by the Purchaser shall be allocated
among Seller's assets as set forth in Schedule 4.01(c) hereof.
(d) With respect to any properties or assets sold hereunder
that cannot be physically delivered to the Purchaser because they are in the
possession of third parties, or otherwise, Seller shall give irrevocable
instructions to the party in possession thereof, if such be the case, with
copies to the Purchaser, that all right, title, and interest therein have been
vested in the Purchaser and that the same are to be held for the Purchaser's
exclusive use and benefit.
(e) To the extent that the assignment by Seller to the
Purchaser of any contract, agreement, instrument, lease, license, understanding,
or arrangement to be assigned to the Purchaser hereunder shall require the
consent of a party other than Seller which has not been obtained by the Closing
and if the Purchaser shall nevertheless elect to consummate the transactions
contemplated by this Agreement, this Agreement shall not constitute an agreement
to assign the same if an attempted assignment without such consent would
constitute a breach thereof unless the Purchaser before, at, or after the
Closing elects in a writing delivered to Seller,
-25-
specifically identifying such absent consent, to waive such consent. Nothing in
this Section 4.01(e) regarding such non-assignment or such election shall limit
any rights the Purchaser may have against Seller as a result of the failure to
obtain such consent.
(f) All shares of Purchaser Common Stock to be issued
hereunder shall be deemed "RESTRICTED SECURITIES" as defined in paragraph (a) of
Rule 144 under the Securities Act of 1933, as amended (the "SECURITIES Act"),
and the Seller represents herein that it is acquiring said shares for investment
purposes only and without the intent to make a further distribution of such
shares. All shares of Purchaser Common Stock to be issued under the terms of
this Agreement shall be issued pursuant to an exemption from the registration
requirements of the Securities Act, under Section 4(2) of the Securities Act and
the rules and regulations promulgated thereunder. Certificates representing the
shares of FSG Common Stock to be issued hereunder shall bear a restrictive
legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.
SECTION 4.02 THE CLOSING.
The closing (the "CLOSING") of the transactions contemplated by Section
4.01 shall take place at the offices of Reitler Xxxxx & Xxxxxxxxxx LLC, counsel
to the Purchaser, 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., local time, on March 28, 2006 (the "CLOSING DATE"). The closing may
occur at such different place, such different time, or such different date or a
combination thereof as the Purchaser and Seller agree in writing. The Purchaser
and Seller agree that the Closing may be completed by the attachment of
facsimile signatures hereto. If the Closing shall not take place by March 28,
2006, then the parties not at fault shall, in addition to all other rights and
remedies available at law or in equity against the defaulting parties, have the
right to cancel and terminate this Agreement.
SECTION 4.03 TRANSACTIONS AT THE CLOSING.
The following transactions shall take place at the Closing:
(a) Seller shall deliver to the Purchaser all such warranty
deeds in form for recording, bills of sale, assignments, evidences of consent,
certificates representing all the outstanding shares of capital stock of the
Seller Subsidiaries and certificates representing all other securities (in each
case duly endorsed in blank or accompanied by stock or other powers duly
endorsed in blank, with signatures guaranteed by a commercial bank located in
the City of New York or a member of the firm of the New York Stock Exchange,
Inc., and with all stock transfer and any other required documentary stamps
affixed thereto), and other instruments or documents as in the opinion of
counsel to the Purchaser may be necessary or desirable to evidence or perfect
the sale, assignment, transfer, and conveyance of good and marketable title in
fee simple absolute to all real properties and of good title to all other
properties and assets to be sold to the Purchaser by Seller hereunder, in each
case free and clear of all liens, mortgages,
-26-
security interests, pledges, charges, and encumbrances (except such as are
listed in paragraph 3.06(a) of the Seller Disclosure Letter). Seller shall also
deliver to the Purchaser such of the books and records of Seller (except stock
ledgers and stock transfer books, which shall always be available for inspection
by the Purchaser) as shall be reasonably requested by the Purchaser; provided,
however, that Seller and its officers, employees, counsel, and agents shall be
afforded free and full access to its tax and accounting records relating to
periods prior to the Closing and shall be permitted to make extracts from and
copies of such records.
(b) The Purchaser shall deliver to Seller a certificate
registered in its name for 600,000,000 shares of Purchaser Common Stock.
(c) The Purchaser shall deliver to Seller an Assignment and
Assumption of the obligations and liabilities of Seller which the Purchaser has
agreed to assume pursuant to Section 4.01, substantially in the form of Exhibit
4.01(a). In addition, the Purchaser shall deliver a specific instrument of
assumption of any contractual obligation of Seller which the Purchaser has
agreed to assume pursuant to Section 4.01(a) if a party thereto (other than
Seller) shall condition the assignment thereof to the Purchaser on receipt of
such specific instrument.
SECTION 4.04 INDEMNITY AGAINST LIABILITIES.
(a) Seller agrees to indemnify and hold harmless the Purchaser
Indemnitees against any and all losses, liabilities, damages, and expenses
whatsoever (which shall include for all purposes of this Section 4.04 and
Section 9.01, but not be limited to counsel fees and any and all expenses
whatsoever incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever, and any and all
amounts paid in settlement of any claim or litigation) as and when incurred
arising out of, based upon, or in connection with (A) any breach of any
representation, warranty, covenant, or agreement of Seller contained in this
Agreement or any other Transaction Agreement, (B) any obligation or liability of
any nature, accrued or contingent, not assumed by the Purchaser in accordance
with Section 4.01(a)(v); and
(b) if the Closing takes place, any act, alleged act,
omission, or alleged omission occurring at or prior to the Closing (including
without limitation any which arise out of, are based upon, or are in connection
with any of the transactions contemplated hereby). The foregoing agreement to
indemnify shall be in addition to any liability Seller may otherwise have,
including liabilities arising under this Agreement.
V. CONDITIONS TO OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser under this Agreement are subject, at
the option of the Purchaser, to the following conditions:
SECTION 5.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS.
All representations and warranties of Seller contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing as though such representations and warranties were then made in
exactly the same language by Seller and regardless of knowledge or lack thereof
on the part of Seller or changes beyond its control; as of the Closing,
-27-
Seller shall have performed and complied with all covenants and agreements and
satisfied all conditions required to be performed and complied with by it at or
before such time by this Agreement; and the Purchaser shall have received
certificates executed by the chief executive officer and the chief financial
officer of Seller, dated the date of the Closing, to that effect, substantially
in the form of Exhibits 5.01 A and 5.01B, respectively.
SECTION 5.02 OTHER CLOSING DOCUMENTS.
Seller shall have delivered to the Purchaser at or prior to the Closing
such other documents (including certificates of officers of Seller) as the
Purchaser may reasonably request in order to enable the Purchaser to determine
whether the conditions to their obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
SECTION 5.03 REVIEW OF PROCEEDINGS.
All actions, proceedings, instruments, and documents required to carry
out the Agreement and each of the documents contemplated thereby or in
connection therewith and all other related legal matters shall be subject to the
reasonable approval of Reitler Xxxxx & Xxxxxxxxxx LLC, counsel to the Purchaser,
and Seller shall have furnished such counsel such documents as such counsel may
have reasonably requested for the purpose of enabling them to pass upon such
matters.
SECTION 5.04 LEGAL ACTION.
There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or any document contemplated
thereby or in connection therewith, or to obtain substantial damages with
respect thereto.
SECTION 5.05 NO GOVERNMENTAL ACTION.
There shall not have been any action taken, or any law, rule,
regulation, order, or decree proposed, promulgated, enacted, entered, enforced,
or deemed applicable to the transactions contemplated by, or in connection with,
this Agreement by any federal, state, local, or other governmental authority or
by any court or other tribunal, including the entry of a preliminary or
permanent injunction, which, in the sole judgment of the Purchaser, (a) makes
any of the transactions contemplated by this Agreement illegal, (b) results in a
delay in the ability of the Purchaser to consummate any of the transactions
contemplated by this Agreement, (c) requires the divestiture by the Purchaser of
a material portion of the business of either the Purchaser or of Seller, (d)
imposes material limitations on the ability of the Purchaser effectively to
exercise full rights of ownership with respect to the properties and assets
purported to be sold pursuant to this Agreement, or (e) otherwise prohibits,
restricts, or delays consummation of any of the transactions contemplated by
this Agreement or impairs the contemplated benefits to the Purchaser of any of
the transactions contemplated by this Agreement.
-28-
SECTION 5.06 APPROVAL OF SELLER'S STOCKHOLDERS.
The consummation of the transactions contemplated by, and in connection
with, this Agreement shall have been approved at or before the Closing by the
affirmative vote of the holders of the holders of the Seller Capital Stock.
SECTION 5.07 GOVERNMENTAL APPROVAL.
The parties to this Agreement shall have obtained at or prior to the
Closing all required consents and unconditional written approvals of all
governmental agencies having the legal or administrative right or obligation to
consent to, or approve this Agreement and to the execution, delivery, and
performance thereof.
SECTION 5.08 BLUE-SKY LAW COMPLIANCE.
The Purchaser shall have received at or prior to the Closing a permit
from all appropriate blue-sky or securities law administrator(s) with regard to
the issuance of Purchaser Common Stock as contemplated by this Agreement.
SECTION 5.09 CONTRACTUAL CONSENTS NEEDED.
The parties to this Agreement shall have obtained at or prior to the
Closing all consents required for the consummation of the transactions
contemplated by, or in connection with, this Agreement from any party to any
contract, agreement, instrument, lease, license, arrangement, or understanding
to which any of them is a party, or to which any of them or any of its
businesses, properties, or assets are subject.
SECTION 5.10 DUE DILIGENCE.
The Purchaser shall be satisfied with its due diligence review of the
Seller, including the form and substance of the Seller Disclosure Letter
VI. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject, at the
option of Seller, to the following conditions:
SECTION 6.01 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS.
All representations and warranties of Purchaser contained in this
Agreement shall be accurate when made and, in addition, shall be accurate as of
the Closing as though such representations and warranties were then made in
exactly the same language by Purchaser or Seller and regardless of knowledge or
lack thereof on the part of Purchaser or Seller or changes beyond their control;
as of the Closing, each of Purchaser and Seller shall have performed and
complied with all covenants and agreements and satisfied all conditions required
to be performed and complied with by it at or before such time by this
Agreement; and the Seller shall have received certificates executed by the chief
executive officer and the chief financial officer of each of Purchaser, dated
the date of the Closing, to that effect, substantially in the form of Exhibits
-29-
6.01 A and 6.01B, respectively.
SECTION 6.02 OTHER CLOSING DOCUMENTS.
The Purchaser shall have delivered to the Seller at or prior to the
Closing such other documents (including certificates of officers of Purchaser)
as the Seller may reasonably request in order to enable the Seller to determine
whether the conditions to their obligations under this Agreement have been met
and otherwise to carry out the provisions of this Agreement.
SECTION 6.03 REVIEW OF PROCEEDINGS.
All actions, proceedings, instruments, and documents required to carry
out this Agreement and each of the documents contemplated thereby or in
connection therewith and all other related legal matters shall be subject to the
reasonable approval of Seller, and Purchaser shall have furnished Seller such
documents as Seller may have reasonably requested for the purpose of enabling
them to pass upon such matters.
SECTION 6.04 LEGAL ACTION.
There shall not have been instituted or threatened any legal proceeding
relating to, or seeking to prohibit or otherwise challenge the consummation of,
the transactions contemplated by this Agreement, or any document contemplated
thereby or in connection therewith, or to obtain substantial damages with
respect thereto.
SECTION 6.05 NO GOVERNMENTAL ACTION.
There shall not have been any action taken, or any law, rule,
regulation, order, or decree proposed, promulgated, enacted, entered, enforced,
or deemed applicable to the transactions contemplated by, or in connection with,
this Agreement by any federal, state, local, or other governmental authority or
by any court or other tribunal, including the entry of a preliminary or
permanent injunction, which, in the sole judgment of the Seller, (a) makes any
of the transactions contemplated by Agreement's illegal, (b) results in a delay
in the ability of the Seller to consummate any of the transactions contemplated
by this Agreement, (c) requires the divestiture by the Purchaser of a material
portion of the business of either the Purchaser, or of Seller, (d) imposes
material limitations on the ability of the Purchaser effectively to exercise
full rights of ownership with respect to the properties and assets purported to
be sold pursuant to this Agreement, or (e) otherwise prohibits, restricts, or
delays consummation of any of the transactions contemplated by this Agreement or
impairs the contemplated benefits to Seller of any of the transactions
contemplated hereby.
SECTION 6.06 APPROVAL OF SELLER'S STOCKHOLDERS.
The consummation of the transactions contemplated by, and in connection
with, any of this Agreement, shall have been approved at or before the Closing
by the affirmative vote of the holders of the Seller Capital Stock.
-30-
SECTION 6.07 GOVERNMENTAL APPROVAL.
The parties to this Agreement shall have obtained at or prior to the
Closing the consent and unconditional written approval of all governmental
agencies having the legal or administrative right or obligation to consent to,
or approve, this Agreement and the execution, delivery, and performance hereof.
SECTION 6.08 BLUE-SKY LAW COMPLIANCE.
The Purchaser shall have received at or prior to the Closing a permit
from all appropriate blue-sky or securities law administrator(s) with regard to
the issuance of Purchaser Common Stock as contemplated by this Agreement.
SECTION 6.09 CONTRACTUAL CONSENTS NEEDED.
The parties to this Agreement shall have obtained at or prior to the
Closing all consents required for the consummation of the transactions
contemplated by, or in connection with, from any party to any contract,
agreement, instrument, lease, license, arrangement, or understanding to which
any of them is a party, or to which any of them or any of their respective
businesses, properties, or assets are subject.
SECTION 6.10 DUE DILIGENCE.
The Seller shall be satisfied with its due diligence review of the
Purchaser, including the form and substance of the Purchaser Disclosure Letter.
VII. COVENANTS AND AGREEMENTS OF SELLER
Seller covenants and agree as follows:
SECTION 7.01. ACCESS.
Until the earlier of the Closing and the rightful abandonment or
termination of this Agreement pursuant to Article IV or otherwise (the "RELEASE
TIME"), Seller will afford the officers, employees, counsel, agents, investment
bankers, accountants, and other representatives of the Purchaser and lenders,
investors, and prospective lenders and investors free and full access to the
plants, properties, books, and records of Seller, will permit them to make
extracts from and copies of such books and records, and will from time to time
furnish the Purchaser with such additional financial and operating data and
other information as to the financial condition, results of operations,
businesses, properties, assets, liabilities, or future prospects of Seller as
the Purchaser from time to time may request. Until the Release Time, Seller will
make available to the Purchaser and its independent certified public accountants
the work papers relating to the audits of Seller referred to in Section 3.03.
SECTION 7.02 CONDUCT OF BUSINESS.
Until the Release Time, Seller will conduct its affairs so that at the
Closing no representation or warranty of Seller will be
-31-
inaccurate, no covenant or agreement of Seller will be breached, and no
condition in this Agreement will remain unfulfilled by reason of the actions or
omissions of Seller. Except as otherwise requested by the Purchaser in writing,
until the Release Time, Seller will, use its best efforts to preserve the
business operations of Seller intact, to keep available the services of its
present personnel, to preserve in full force and effect the contracts,
agreements, instruments, leases, licenses, arrangements, and understandings of
Seller, and to preserve the good will of its suppliers, customers, and others
having business relations with any of them. Until the Release Time, Seller will
conduct its business and operations in all respects only in the ordinary course.
SECTION 7.03 ADVICE OF CHANGES.
Until the Release Time, Seller will immediately advise the Purchaser in
a detailed written notice of any fact or occurrence or any pending or threatened
occurrence of which it obtains knowledge and which (if existing and known at the
date of the execution of this Agreement) would have been required to be set
forth or disclosed in or pursuant to this Agreement or a Schedule or an Exhibit
hereto, which (if existing and known at any time prior to or at the Closing)
would make the performance by any party of a covenant contained in this
Agreement impossible or make such performance materially more difficult than in
the absence of such fact or occurrence, or which (if existing and known at the
time of the Closing) would cause a condition to any party's obligations under
this Agreement not to be fully satisfied.
SECTION 7.04 CONFIDENTIALITY.
Seller shall insure that all confidential information which Seller, any
of its officers, directors, employees, counsel, agents, investment bankers, or
accountants, or any stockholder of the Seller, any of its counsel, agents,
investment bankers, or accountants may now possess or may hereafter create or
obtain relating to the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of Seller, the Purchaser,
any affiliate of any of them, or any customer or supplier of any of them or any
such affiliate shall not be published, disclosed, or made accessible by any of
them to any other person or entity at any time or used by any of them except
pending the Closing in the business and for the benefit of Purchaser, in each
case without the prior written consent of the Purchaser; provided, however, that
the restrictions of this sentence shall not apply (a) after this Agreement is
rightfully terminated, but only to the extent such confidential information
relates to the financial condition, results of operations, business, properties,
assets, liabilities, or future prospects of Seller, of any affiliate of any of
them, or (insofar as such confidential information was obtained directly by
Seller, or any such affiliate from any customer or supplier of any of them) of
any such customer or supplier, (b) as may otherwise be required by law, (c) as
may be necessary or appropriate in connection with the enforcement of this
Agreement, or (d) to the extent such information shall have otherwise become
publicly available. Seller shall, and shall cause all other such persons and
entities to, deliver to the Purchaser all tangible evidence of such confidential
information to which the restrictions of the foregoing sentence apply at the
Closing or the earlier rightful termination of this Agreement.
SECTION 7.05 PUBLIC STATEMENTS.
Before Seller shall release any information concerning thus Agreement
or any document contemplated hereby or in connection herewith, or the
transactions contemplated by, which is intended for or may result in public
dissemination thereof, it shall cooperate with the Purchaser, shall furnish
drafts of all documents or proposed oral statements to the Purchaser for
comments, and shall not release any such information without the written consent
of the Purchaser. Nothing contained herein shall prevent Seller from releasing
any information to any governmental authority if required to do so by law.
SECTION 7.06 OTHER PROPOSALS.
Seller shall not, and shall neither authorize nor permit any officer,
director,
-32-
employee, counsel, agent, investment banker, accountant, or other representative
of Seller or of any Seller Subsidiary, directly or indirectly, to: (a) initiate
contact with any person or entity in an effort to solicit any Takeover Proposal
(as such term is defined in this Section 7.06); (b) cooperate with, or furnish
or cause to be furnished any non-public information concerning the business,
properties, or assets of Seller to, any person or entity in connection with any
Takeover Proposal; (c) negotiate with any person or entity with respect to any
Takeover Proposal; or (d) enter into any agreement or understanding with the
intent to effect a Takeover Proposal. Seller will immediately give written
notice to the Purchaser of the details of any Takeover Proposal of which any of
them becomes aware. As used in this Section 7.06, "TAKEOVER PROPOSAL" shall mean
"any proposal, other than as contemplated by this Agreement, (e) for a merger,
consolidation, reorganization, other business combination, or recapitalization
involving Seller, for the acquisition of a 5% or greater interest in the equity
or in any class or series of capital stock of Seller, for the acquisition of the
right to cast 5% or more of the votes on any matter with respect to Seller, or
for the acquisition of a substantial portion of any of its assets other than in
the ordinary course of its businesses, or (f) the effect of which may be to
prohibit, restrict, or delay the consummation of any of the transactions
contemplated by this Agreement or impair the contemplated benefits to the
Purchaser of any of the transactions contemplated by the Transaction
Agreements."
SECTION 7.07 BULK SALES.
The Purchaser hereby waives compliance by Seller with the provisions of
any applicable bulk sales laws.
SECTION 7.08 CONSENTS WITHOUT ANY CONDITION.
Seller shall not make any agreement or reach any understanding not
approved in writing by the Purchaser as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
-33-
SECTION 7.09 FILE TAX RETURN.
If the Closing takes place, Seller agrees to file, within the time
allowed by law, all federal, state, local, and foreign tax returns with the
appropriate jurisdictions, for the period the end of the fiscal year during
which the Closing shall take place, to include therein all information required
to be contained therein relating to Seller for such period, and to pay all Taxes
with respect to Seller for such period in a manner consistent with the
allocation of the consideration paid by the Purchaser made pursuant to Section
4.01.
SECTION 7.10 DELIVERY OF SELLER DISCLOSURE LETTER.
Seller shall deliver the Seller Disclosure Letter to Purchaser no less
than three business days prior to the Closing Date
VIII. COVENANTS AND AGREEMENTS OF THE PURCHASER
The Purchaser covenants and agrees as follows:
SECTION 8.01 CAPITAL STOCK CHANGES.
If, prior to the time for issuance of any shares of Purchaser Common
Stock pursuant to Section 4.01, the Purchaser Common Stock shall be
recapitalized or reclassified or the Purchaser shall effect any stock dividend,
stock split, or reverse stock split of the Purchaser Common Stock or the
Purchaser shall merge, consolidate, reorganize, or enter into another business
combination with any other corporation or shall sell or exchange all or
substantially all of its assets, then the shares of Purchaser Common Stock to be
delivered thereafter under Section 4.01 shall be appropriately and equitably
adjusted to the kind and amount of shares of stock and other securities and
property which the holders of such shares of Purchaser Common Stock would have
been entitled to receive had such stock been issued and outstanding as of the
record date for determining stockholders entitled to participate in such
corporate event. The provisions of this Section 8.01 shall apply to successive
mergers, consolidations, reorganizations, and combinations.
SECTION 8.02 ACCESS.
Until the Release Time, Purchaser will afford the officers, employees,
counsel, agents, investment bankers, accountants, and other representatives of
the Seller and lenders, investors, and prospective lenders and investors free
and full access to the plants, properties, books, and records of Purchaser, will
permit them to make extracts from and copies of such books and records, and will
from time to time furnish the Seller with such additional financial and
operating data and other information as to the financial condition, results of
operations, businesses, properties, assets, liabilities, or future prospects of
Purchaser as the Seller from time to time may request. Until the Release Time,
Seller will cause the independent certified public accountants of Purchaser to
make available to the Seller and its independent certified public accountants
the work papers relating to the audits of Purchaser referred to in Section 2.03.
-34-
SECTION 8.03 ADVICE OF CHANGES.
Until the Release Time, Purchaser will immediately advise the Seller in
a detailed written notice of any fact or occurrence or any pending or threatened
occurrence of which it obtains knowledge and which (if existing and known at the
date of the execution of this Agreement) would have been required to be set
forth or disclosed in or pursuant to this Agreement or a Schedule or an Exhibit
hereto, which (if existing and known at any time prior to or at the Closing)
would make the performance by any party of a covenant contained in this
Agreement impossible or make such performance materially more difficult than in
the absence of such fact or occurrence, or which (if existing and known at the
time of the Closing) would cause a condition to any party's obligations under
this Agreement not to be fully satisfied.
SECTION 8.04 CONFIDENTIALITY.
Purchaser shall insure that all confidential information which
Purchaser, any of its officers, directors, employees, counsel, agents,
investment bankers, or accountants, or any stockholder or of the Purchaser, any
of their respective counsel, agents, investment bankers, or accountants may now
possess or may hereafter create or obtain relating to the financial condition,
results of operations, business, properties, assets, liabilities, or future
prospects of Purchaser, the Seller, any affiliate of any of them, or any
customer or supplier of any of them or any such affiliate shall not be
published, disclosed, or made accessible by any of them to any other person or
entity at any time or used by any of them except pending the Closing in the
business and for the benefit of Purchaser, in each case without the prior
written consent of the Seller; provided, however, that the restrictions of this
sentence shall not apply (a) after this Agreement is rightfully terminated, but
only to the extent such confidential information relates to the financial
condition, results of operations, business, properties, assets, liabilities, or
future prospects of Purchaser, of any affiliate of any of them, or (insofar as
such confidential information was obtained directly by Purchaser, or any such
affiliate from any customer or supplier of any of them) of any such customer or
supplier, (b) as may otherwise be required by law, (c) as may be necessary or
appropriate in connection with the enforcement of this Agreement, or (d) to the
extent such information shall have otherwise become publicly available.
Purchaser shall, and shall cause all other such persons and entities to, deliver
to the Seller all tangible evidence of such confidential information to which
the restrictions of the foregoing sentence apply at the Closing or the earlier
rightful termination of this Agreement.
SECTION 8.05 PUBLIC STATEMENTS.
Before Purchaser shall release any information concerning this
Agreement or any document contemplated thereby or in connection therewith, or
the transactions contemplated by, which is intended for or may result in public
dissemination thereof, it shall cooperate with the Seller, shall furnish drafts
of all documents or proposed oral statements to the Seller for comments, and
shall not release any such information without the written consent of the
Seller. Nothing contained herein shall prevent Purchaser from releasing any
information to any governmental authority if required to do so by law.
-35-
SECTION 8.06 CONSENTS WITHOUT ANY CONDITION.
Purchaser shall not make any agreement or reach any understanding not
approved in writing by the Seller as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit required for the
consummation of the transactions contemplated by this Agreement.
SECTION 8.07 DELIVERY OF PURCHASER DISCLOSURE LETTER.
Purchaser shall deliver the Purchaser Disclosure Letter to Seller no
less than three business days prior to the Closing Date.
IX. MISCELLANEOUS
SECTION 9.01 BROKERAGE FEES.
If any person shall assert a claim to a fee, commission, or other
compensation on account of alleged employment as a broker or finder, or alleged
performance of services as a broker or finder, in connection with or as a result
of any of the transactions contemplated by this Agreement, Seller shall (subject
to the next sentence) indemnify and hold harmless the Purchaser Indemnitees
against any and all losses, liabilities, claims, damages, and expenses
whatsoever as and when incurred arising out of, based upon, or in connection
with such claim by such person, and Seller shall at its sole expense defend any
and all suits, actions, proceedings (formal or informal), or investigations
involving such claim that may at any time be brought against any Indemnitee and
satisfy promptly any settlement or judgment arising therefrom; but if Seller
fails to defend such suit, action, proceeding, or investigation in a timely
manner, the Purchaser or any Purchaser Indemnitee made a defendant therein or a
party thereto shall have the right to defend and settle the same and pay any
judgment or settlement pertaining thereto as it or he may reasonably deem
appropriate at the cost and expense of Seller. If, however, it is ultimately
determined in any such suit, action, or proceeding (in which the Purchaser and
all Purchaser Indemnitees made a defendant therein or a party thereto were
afforded the opportunity to have their counsel participate in the defense) that
the Purchaser or any Purchaser Indemnitee made a defendant therein or a party
thereto was the sole employer of such broker or finder or services were
performed solely for the Purchaser or any Purchaser Indemnitee made a defendant
therein or a party thereto, then Seller shall not be responsible under this
Section 9.01 and amounts theretofore paid by them by reason of this Section 9.01
shall be reimbursed by the Purchaser or the Indemnitee, as the case may be, who
was the sole employer.
SECTION 9.02 FURTHER ACTIONS.
At any time and from time to time, each party agrees, at its or his
expense, to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
SECTION 9.03 AVAILABILITY OF EQUITABLE REMEDIES.
Since a breach of the provisions of this Agreement could not adequately
be compensated
-36-
by money damages, any party shall be entitled, either before or after the
Closing, in addition to any other right or remedy available to it, to an
injunction restraining such breach or a threatened breach and to specific
performance of any such provision of this Agreement, and in either case no bond
or other security shall be required in connection therewith, and the parties
hereby consent to the issuance of such an injunction and to the ordering of
specific performance.
SECTION 9.04 SURVIVAL.
The covenants, agreements, representations, and warranties contained in
or made pursuant to this Agreement shall survive the Closing and any delivery of
the consideration described in Section 4.01 hereof by the Purchaser,
irrespective of any investigation made by or on behalf of any party. The
statements contained in any document executed by Seller relating hereto or
thereto or delivered to the Purchaser in connection with the transactions
contemplated hereby or thereby, or in any statement, certificate, or other
instrument delivered by or on behalf of Seller, pursuant hereto or thereto or
delivered to the Purchaser in connection with the transactions contemplated
hereby or thereby shall be deemed representations and warranties, covenants and
agreements, or conditions, as the case may be, of Seller hereunder for all
purposes of this Agreement (including all statements, certificates, or other
instruments delivered pursuant hereto or thereto or delivered in connection with
the transactions contemplated hereby or thereby).
SECTION 9.05 MODIFICATION.
This Agreement and the Schedules and Exhibits hereto set forth the
entire understanding of the parties with respect to the subject matter hereof
(except as provided in Section 9.04), supersede all existing agreements among
them concerning such subject matter, and may be modified only by a written
instrument duly executed by each party with the approval of the Board of
Directors or by an officer of each corporate party.
SECTION 9.06 NOTICES.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested (or by the most nearly comparable method if mailed from or to
a location outside of the United States) or by Federal Express, Express Mail, or
similar overnight delivery or courier service or delivered (in person or by
telecopy, telex, or similar telecommunications equipment) against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 9.06)
with a copy to each of the other parties hereto. Any notice given to any
corporate party shall be addressed to the attention of the Corporate Secretary.
Notice to the estate of any party shall be sufficient if addressed to the party
as provided in this Section 9.06. Any notice or other communication given by
certified mail (or by such comparable method) shall be deemed given at the time
of certification thereof (or comparable act), except for a notice changing a
party's address which will be deemed given at the time of receipt thereof. Any
notice given by other means permitted by this Section 9.06 shall be deemed given
at the time of receipt thereof.
-37-
SECTION 9.07 WAIVER.
Any waiver by any party of a breach of any term of this Agreement shall
not operate as or be construed to be a waiver of any other breach of that term
or of any breach of any other term of this Agreement. The failure of a party to
insist upon strict adherence to any term of this Agreement on one or more
occasions will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement. Any waiver must be in writing and, in the case of a corporate
party, be authorized by a resolution of the Board of Directors or by an officer
of the waiving party.
SECTION 9.08 BINDING EFFECT.
The provisions of this Agreement shall be binding upon and inure to the
benefit of Seller, the Purchaser and its successors and shall inure to the
benefit of each Purchaser Indemnitee and its successors and assigns (if not a
natural person) and his assigns, heirs, and personal representatives (if a
natural person).
SECTION 9.09 NO THIRD PARTY BENEFICIARIES.
This Agreement does not create, and shall not be construed as creating,
any rights enforceable by any person not a party to this Agreement (except as
provided in Section 9.08).
SECTION 9.10 SEPARABILITY.
If any provision of this Agreement is invalid, illegal, or
unenforceable, the balance of this Agreement shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
SECTION 9.11 HEADINGS.
The headings in this Agreement are solely for convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
SECTION 9.12 COUNTERPARTS; GOVERNING LAW.
(a) This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement will be
deemed to be made in and in all respects will be interpreted, construed and
governed by and in accordance with the law of the State of New York, without
regard to the conflict of law principles thereof.
(b) EACH OF THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
OF THE FEDERAL COURTS SITTING IN THE STATE OF NEW YORK IN ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH OF THE PARTIES
AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT MUST BE LITIGATED EXCLUSIVELY IN ANY SUCH STATE OR, TO THE EXTENT
-38-
PERMITTED BY LAW, FEDERAL COURT THAT SITS IN THE COUNTY OF NEW YORK, AND
ACCORDINGLY, EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN
ANY SUCH COURT. EACH PARTY FURTHER IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN SECTION 9.06. NOTHING IN THIS AGREEMENT OR
ANY OTHER TRANSACTION DOCUMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS
AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(c) EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH OF THE PARTIES (I) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (II) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.12.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]
-39-
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first written above.
CABLE & CO. WORLDWIDE, INC.
By:
--------------------------------------
Xxxxxxx Xxxxxxxx
Chairman of the Board of Directors
LIFEHEALTHCARE, INC.
By:
--------------------------------------
Xxxxxx X. Xxxxx
Chairman of the Board of Directors
-40-
