Exhibit 10.02
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ASSET AND RIGHTS PURCHASE AGREEMENT
between
NEW ENGLAND ACQUISITIONS, INC.
and
ADM TRONICS UNLIMITED, INC.
dated
MARCH 21, 2002
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ASSET AND RIGHTS PURCHASE AGREEMENT
This Asset and Rights Purchase Agreement (this Agreement) is entered
into this 21st day of March 2002, by and between ADM Tronics Unlimited, Inc.,
a Delaware corporation, (ADM) and New England Acquisitions, Inc., a Florida
corporation (NEAI).
W I T N E S S E T H:
WHEREAS, ADM has developed a pain relieving lotion for temporary
relief of pain associated with minor xxxxx (the Burn Lotion), a brushless
shave cream for use by individuals with a condition known as
pseudofolliculitus barbae (the Ethnic Shaving Cream) and an electronic
device for the treatment and control of Tinnitus (the Aurex-3"); and
WHEREAS, NEAI desires to acquire certain rights to the Burn Lotion,
the Ethnic Shaving Cream and the Aurex-3, (collectively, the ADM Products);
and
WHEREAS, ADM desires to purchase and NEAI desires and to sell 150,375
shares of NEAI's Common Stock, $.00001 par value (the Shares) upon the terms
and conditions contained herein.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto covenant and
agree as follows:
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ARTICLE 1
PLAN OF ACQUISITION
1.1 Assets, Properties and Rights to be Purchased. On the terms and
subject to the conditions set forth herein, effective on the Closing
Date (as defined below), except as set forth in Exhibit 1.1 hereto,
ADM shall sell, assign, convey, transfer and deliver to NEAI, its
successors and assigns, and NEAI shall purchase and acquire from ADM,
the following assets, properties and certain rights of ADM used in the
sale and rental of ADM Products (collectively with the rights
described in Sections 1.2 and 1.5 hereof, the Assets and Rights),
free and clear of any and all liens, claims and encumbrances.
The Assets and Rights shall consist of:
(a) with respect to Aurex-3, the rights to the use of the trade
names, logos and other trade designations, including all
applications therefor and registrations thereof and all other
statutory or common law rights ADM has or may have therein;
(b) two (2) demonstration units of the Aurex-3;
(c) all rights relating to (i) the Ethnic Shave Cream for sale by
NEAI under its own label, commonly referred to as private
label and (ii) the Burn Lotion, neither of which may be sold
by NEAI under any trademarks, trade names or designations
used by ADM as of the date hereof.
(d) with respect to the Aurex-3, use of all permits, approvals,
licenses and authorizations held by ADM relating to the
marketing of the Aurex-3, all as listed and described on
Schedule 1.1(d) hereto;
(e) with respect to the Aurex-3, all reasonably available
marketing materials, including but not limited to, trade show
displays, masters, proofs, photos, computer files and artwork
in ADM's possession relating to the ADM Products;
(f) subject to the provisions of Exhibit 1.1 hereto, all rights
relating to any other shave creams developed by or to be
developed by ADM or any subsidiary (Other Shave Creams)
thereof subject only to the payment of minimum royalties as
set forth in Schedule 1.5.; and
(g) All of ADM's rights with respect to enforcement of any and all
noncompetition, nonsolicitation, confidential and proprietary
information obligations between ADM and the employees or
former employees of ADM not employed by NEAI after the Closing
(as defined below) with respect to the ADM Products, provided,
however, that ADM makes no representation or warranty as to
the enforceability of ADM's rights.
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1.2 NEAI's Freedom to Practice Under ADM's Patents. Except as otherwise
expressly set forth in Schedule 1.2, from and after the Closing Date,
ADM hereby grants NEAI freedom, under ADM's Patents, as that term is
hereinafter defined, to exclusively market the Aurex-3 subject to the
conditions set forth herein. Nothing herein shall constitute an
assignment of ADM's Patents to NEAI. If in the opinion of patent
counsel acceptable both to ADM and to NEAI, any of ADM's Patents is
infringed by a third party who manufactures and markets a product
deemed substantially equivalent to any of the ADM Products, then, if
requested to do so by NEAI, ADM shall file an infringement action in a
Federal Court against the third party to enjoin such infringement and
to collect damages therefor. All legal and other expenses incurred in
this action shall be borne by NEAI and all damages recovered in this
action shall be transferred to NEAI.
1.3 Certain Definitions.
(a) ADM's Patents as used herein shall mean patents and patent
applications listed on Exhibit 1.2 hereto, continuations,
continuations-in- part, divisions and reissues thereof.
(b) ADM's ATechnology and Know-how as used herein shall mean all
reasonably available data, information, design specifications
(electrical and mechanical designs and redesigns) and
operating instructions and procedures owned by ADM related to
the ADM Products.
1.4 Certain rights Reserved by ADM. Notwithstanding anything herein to the
contrary, ADM expressly reserves the sole right to research, have
researched, develop, have developed, manufacture, have manufactured,
market and have marketed all products based on ADM's Patents and ADM's
Technology and Know-how for use, throughout the world, other than for
or in connection with the ADM Products and, subject to the provisions
of Schedule 1.5, Other Shave Creams, or improvements or modifications
thereof. Nothing contained in this paragraph shall detract from the
rights granted to NEAI in Section 1.2 hereof, and any new innovations
made by NEAI independently of the use of ADM's Patents or ADM's
Technology and Know-how shall be the joint property of NEAI and ADM.
1.5 NEAI's Rights to Additional Information and Know-how of ADM. From and
after the Closing Date, ADM further agrees to provide to NEAI the
following for use by NEAI in the marketing of the ADM Products, to the
extent in ADM's possession:
(a) copies of all manuals and documents relating to operating
procedures for the Aurex-3;
(b) copies of all FDA related documentation concerning Aurex-3,
customer complaint files, FDA audit results and closing letters, any
FDA communications or follow-up letters, any unredacted FDA filings
and correspondence.
1.6 Assets Not Purchased: Except for the Assets and Rights, ADM
specifically does not agree to sell, assign or otherwise convey to
NEAI any other assets or properties, all of which other assets and
properties shall remain the sole property of ADM, including without
limitation but not limited to, the following assets and properties:
(a) furniture, fixtures and other assets used by ADM in the
business of developing, manufacturing or marketing ADM Products; and
(b) accounts receivable of ADM accruing prior to the Closing Date,
including open orders for sales of ADM Products;.
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1.7 Consideration. In full consideration of the sale and transfer of the
Assets and Rights, NEAI shall deliver to ADM 150,375 shares of $.00001
par value common stock of NEAI (NEAI Stock) registered in the name
of ADM and shall make the payments as described in Schedule 1.5 and in
Exhibit 4.7 attached hereto (the Purchase Price).
1.8 Liabilities Not Assumed. NEAI does not assume or agree to pay or
discharge any debts, liabilities or obligations of ADM.
1.9 Effective Date and Closing Date. The Effective Date of this Agreement
shall be the date this Agreement is executed by all parties. The
closing of the transactions contemplated by this Agreement (the
Closing) shall take place as of the close of business, New York City
time, at the offices of ADM at 000-X Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx
Xxxxxx 00000 not more than ten days after all of the conditions to
Closing hereinbelow set forth are satisfied or waived (the date on
which the Closing takes place being the Closing Date) or at such
other time and place as the parties hereto shall agree. If the
Closing Date has not occurred on or before September 30, 2002, each
party shall have the right to terminate this Agreement as hereinbelow
provided.
1.10 Execution and Delivery of Closing Documents. At the Closing, (a) ADM
will deliver to NEAI such assignments, consents to assignments and
good and sufficient instruments of transfer and conveyance as shall
be necessary to transfer, assign and convey to, and to vest in, NEAI
good and merchantable title to the Assets and Rights, free and clear
of all liens, claims and encumbrances and such lists and descriptions
of the Assets and Rights and such other documents as NEAI may
reasonably request and (ii) NEAI will deliver to ADM the NEAI Shares
and any payments required pursuant to Schedule 1.5 due at closing. At
the Closing, each party also will execute and deliver such other
appropriate and customary documents as any other party reasonably may
request for the purpose of consummating the transactions contemplated
by this Agreement. All actions taken at the Closing will be deemed to
have been taken simultaneously at the time the last of any such
actions is taken or completed.
1.11 Covenant to Defend Title. Effective as of the Closing Date, ADM
hereby binds itself, and its successors and assigns, at ADM's sole
cost and expense, to warrant and defend title to the Assets unto NEAI,
and its successors and assigns against every person whomsoever
lawfully claiming the same or any part thereof.
1.12 Minimum Purchase of Aurex-3. In the event that NEAI does not purchase
a minimum of 90 Aurex-3 devices from ADM within one year immediately
subsequent to the closing, with such minimum to increase by 10% above
the previous year's minimum for each year thereafter, ADM shall have
the right to terminate this Agreement solely with respect to any
provisions related to the NEAI's exclusivity with respect to the
Aurex-3.
1.13 Further Assurances. After the Closing, the parties hereto shall
execute and deliver such additional documents and take such additional
actions as either party may reasonably deem to be practical and
necessary or advisable in order to consummate the transactions
contemplated by this Agreement and to vest more fully in NEAI the
ownership of and rights to the Assets and Rights granted hereunder as
they existed immediately prior to the Closing and to vest more fully
in ADM the ownership of and rights to the NEAI Shares
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ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ADM
ADM represents and warrants to NEAI as follows:
2.1 Organization and Good Standing of ADM. ADM is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware.
2.2 Power and Authority. ADM has the corporate power and authority to
own, lease and operate its properties and assets and to carry on its
business relating to the Assets as currently being conducted.
2.3 Authorization and Validity. ADM has the corporate power and authority
to execute, deliver and perform its obligations under this Agreement
and the other documents executed or required to be executed by it in
connection with this Agreement. This Agreement and the other
documents executed or required to be executed by ADM in connection
with this Agreement have been or will be duly authorized by all
necessary corporate action.
2.4 Binding Effect. This Agreement and the other documents executed or
required to be executed by ADM in connection with this Agreement have
been or will have been duly executed and delivered by ADM and are or
will be, when executed and delivered, the legal, valid and binding
obligations of ADM enforceable in accordance with their terms except
to the extent that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(c) rights to indemnification may be limited by considerations of
public policy.
2.5 No Violation. Neither the execution and performance of this Agreement
or the agreements described herein nor the consummation of the
transactions described herein or therein will:
(a) result in a violation or breach of (i) the certificate of
incorporation or by-laws of ADM; or (ii) any material
agreement or other material instrument under which ADM is
bound or to which any of the Assets are subject, or result in
the creation or imposition of any lien, charge or encumbrance
upon any of the Assets, or
(b) violate, in any material respect, any applicable law or
regulation or any judgment or order of any court or
governmental agency.
To the best of its knowledge, ADM has complied in all material
respects with all applicable laws, regulations and licensing
requirements, and has filed with the proper authorities all necessary
statements, applications, notices, reports and any other filings with
respect to ADM's business, except where the failure to do so would not
reasonably be expected to have a material adverse effect on the Assets
or the intended use thereof by NEAI.
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2.6 Permits and Licenses; Compliance. To the best of its knowledge, ADM
possesses all necessary governmental licenses, franchises, permits,
approvals, authorizations, and rights necessary for NEAI to engage in
the marketing of the ADM Products and that, if not possessed, could
not reasonably be expected to have a material adverse effect on the
Assets and Rights or the intended use thereof by NEAI. To the best of
its knowledge, ADM is in compliance with all such governmental
licenses, franchises, permits, approvals, authorizations, or rights,
and all federal, state or local laws or regulations applicable to the
Assets except where the failure to be in compliance would not
reasonably be expected to have a material adverse effect on the Assets
or the intended use thereof by NEAI.
2.7 Title to Assets. ADM owns the Assets free and clear of all liens,
claims and encumbrances. Upon consummation of the transactions
contemplated hereby, NEAI shall receive good and valid title to the
Assets, free and clear of all liens, claims and encumbrances.
2.8 Consents. No authorization, consent, approval, permit or license of,
or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to
authorize, or is required in connection with, the execution, delivery
and performance of this Agreement or the agreements or transactions
contemplated hereby on the part of ADM.
2.9 Description of the ADM Products. No document heretofore furnished by
ADM or any person acting on its behalf to NEAI or any person acting on
its behalf with respect to the ADM Products (collectively, the
Disclosure Documents) contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statement
therein, in light of the circumstances under which they were made, not
misleading. To the extent any of the ADM Products are described in
ADM's Annual Report on Form 10-KSB for the fiscal year ended March 31,
2001, such description does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statement therein, in light of the circumstances under which they were
made, not misleading. Since the date of which information has been
furnished in such Annual Report and the Disclosure Documents,
respectively, there has not been any material adverse change in or
event affecting any of the ADM Products , the Assets or the rights to
be acquired by NEAI hereunder.
2.10 Litigation. No legal or administrative or other adversary proceeding
or investigation is currently pending against ADM and, to the best
knowledge of ADM, none is threatened or contemplated by any
governmental agency or other third party with respect to the Assets or
the ADM Products. ADM is not subject to any continuing court or
administrative order, writ, injunction or decree applicable
specifically to the Assets or which would affect the obligations of
ADM or the rights of NEAI hereunder. In connection with any of the
ADM Products, ADM has not received any notice from a customer for any
claim that could be made by such customer based upon inadequate or
negligent services, defective products, or improper performance of or
other breach of any contract with such customer by ADM.
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2.11 Patents, Trademarks and Copyrights. Other than as expressly set forth
in Exhibit 2.11, ADM owns or is licensed to use all patents,
trademarks, and copyrights, if any, necessary to manufacture and
market the Aurex-3 without conflict with the rights of others and
following the Closing, NEAI shall be entitled to use all such patents,
trademarks and copyrights as are necessary to market the Aurex-3.
Schedule 1.2 contains a true and correct description of the following:
(a) all trademarks, trade names, service marks, and other trade
designations, common law rights, registrations, and
applications for registration, and all patents, copyrights,
and applications currently owned, in whole or in part, by ADM
and used in the manufacture and marketing of the Aurex-3; and
(b) all material agreements relating to technology, know-how or
processes that ADM is licensed or authorized to use by others
and used in the manufacture and marketing of the Aurex-3.
2.12 Finder's Fee. ADM has not incurred any obligation for any finder's,
broker's, or agent's fee in connection with this Agreement or the
transactions contemplated hereby.
2.13 Environmental and Other Matters. ADM has manufactured and marketed
the ADM Products with valid permits, licenses, authorizations,
certificates, consents, exemptions and approvals (collectively,
Permits) required under any applicable law, rule or regulation
relating to or addressing the environment, health, safety or hazardous
materials (collectively, Environmental Law), including Permits
necessary for the ownership of the Assets or the operation of ADM's
business. There are no unresolved past or pending or, to ADM's
knowledge, threatened claims under any Environmental Law against ADM
with respect to the Assets, nor to ADM's knowledge are there any
circumstances that may form a basis of any such claim.
2.14 Full Disclosure. There are no facts pertaining to ADM or the business
of ADM that are reasonably likely to have a material adverse effect on
the Assets that have not been disclosed in this Agreement or the
attached Schedules. No representation or warranty of ADM in this
Agreement, any attached Schedule, any certificate furnished or to be
furnished by ADM to NEAI pursuant to this Agreement, or in connection
with the transactions contemplated by this Agreement, contains or will
contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements contained
herein or therein not misleading.
2.15 Liens on Assets. ADM represents that there are no liens held by any
party on the Assets.
2.16 FDA Matters. Set forth on Schedule 2.16 is a list of all complaints
received since January 1, 1997 by ADM or its distributors or agents
from customers and others with respect to the ADM Products. ADM has
notified the FDA of such complaints to the extent required by
applicable law.
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2.17 Disclaimer. Notwithstanding anything in this Agreement or elsewhere to
the contrary, ADM does not warrant that NEAI will be successful,
either in a business or a technical sense (for example, the design of
products, materials or processes used in manufacture or in the sales
and marketing methods used by ADM), as a result of purchasing the
Assets or exercising the rights granted by ADM to NEAI hereunder. In
addition, ADM makes no representation or warranty with respect to the
efficacy of the ADM Products or that any design, drawing, computer
software, documentation, materials used, equipment used or processes
used or adapted for the development or manufacture of the Assets or
the use thereof by NEAI is sufficient or is fit for a particular
purpose and ADM makes no representation or warranty that NEAI should
rely on such design, drawings, materials, documentation, equipment or
process. ADM makes no representation or warranty that NEAI can or
should continue to conduct the business of marketing of ADM Products
in the same manner as it was conducted by ADM. ADM has advised NEAI
that there are many competing and overlapping patents, proprietary
rights and trade secret claims in this area of business, and that NEAI
shall rely on its own independent evaluation of the patents,
proprietary rights and trade secrets in the conduct of its business.
2.18 Investment Representations and Warranties.
(a) The NEAI Shares will be acquired by ADM for its own account
and not with a view to or for sale or other disposition in
connection with any transaction that will not be exempt form
the registration requirements of the Securities Act of 1933
(the Securities Act) and any applicable state securities
laws.
(b) ADM is capable of evaluating the merits and risks of an
investment in such NEAI Shares and has such knowledge,
experience and skill in financial and business matters that it
is capable of evaluating the merits and risks of the
investment in NEAI Shares and the suitability of the NEAI
Shares as an investment and can bear the economic risk of an
investment therein for an indefinite period of time. No
guarantees have been made or can be made with respect to the
future value, if any, of the NEAI Shares or the profitability
or success of the business of NEAI.
(c) ADM understands that the NEAI Shares will not have been
registered under the Securities Act or any applicable state
securities laws, that the NEAI Shares will be characterized as
restricted securities under federal securities laws, and
that under such laws and applicable regulations the NEAI
Shares cannot be sold or otherwise disposed of without
registration under the Securities Act or an exemption
therefrom. In this connection, ADM represents that it is
familiar with Rule 144 promulgated under the Act, as currently
in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Stop transfer instructions
may be issued to the transfer agent for securities of NEAI (or
a notation may be made in the appropriate records of NEAI) in
connection with the NEAI Shares, but only to the extent
customary for securities which are restricted securities.
(d) ADM understands that NEAI is the only person that can register
the NEAI Shares under the Securities Act of 1933 and NEAI has
no obligation or intension to do so.
(e) ADM consents to the placement of a legend on the certificate
evidencing the NEAI Shares stating that they have not been
registered under the Securities Act or under any other
applicable securities laws, setting forth or referring to the
restrictions on transferability and sale thereof and including
placement of any additional language as may be required by
applicable state securities laws.
(f) ADM is (i) aware that NEAI is a blank Check company as that
term is used in Rule 419 (ARule 419") under the Securities Act
of 1933 (the Act), (ii) is familiar with the provisions of
Rule 419 and (iii) is aware that NEAI and this Agreement is
subject to the provisions of Rule 419.
(g) ADM has downloaded, printed and carefully reviewed NEAI's
filings made with the Securities and Exchange Commission the
(SEC).
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF NEAI
Subject to the provisions of Rule 419, NEAI represents and warrants to ADM as
follows:
3.1 Organization and Good Standing. NEAI is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Florida..
3.2 Power and Authority. NEAI has the corporate power and authority to
own, lease and operate its respective properties and assets and to
carry on its respective business as currently being conducted and NEAI
has the corporate power and authority to issue the NEAI Shares as
herein provided.
3.3 Authority and Validity. NEAI has the corporate power and authority to
execute, deliver and perform its respective obligations under this
Agreement and the other documents executed or required to be executed
by it in connection with this Agreement, and this Agreement and the
other documents executed or required to be executed by NEAI in
connection with this Agreement have been duly authorized by all
necessary corporate action of NEAI.
3.4 Binding Effect. This Agreement and the other documents executed or
required to be executed by NEAI in connection with this Agreement have
been or will have been duly authorized, executed and delivered by NEAI
and are or will be, when executed and delivered, the legal, valid and
binding obligations of NEAI enforceable in accordance with their terms
except to the extent that:
(a) enforceability may be limited by bankruptcy, insolvency or
other similar laws affecting creditors' rights;
(b) the availability of equitable remedies may be limited by
equitable principles of general applicability; and
(c) rights to indemnification may be limited by considerations of
public policy.
3.5 No Violation. Neither the execution and performance of this Agreement
or the agreements described herein nor the consummation of the
transactions described herein or therein will:
(a) result in a violation or breach of (i) the Articles or by-laws
of NEAI or (ii) any material agreement or other material
instrument under which NEAI is bound or to which the assets of
NEAI are subject, or result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets or
properties of NEAI; or
(b) violate, in any material respect, any applicable law or
regulation or any judgment or order of any court or
governmental agency.
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NEAI has complied in all material respects with all applicable laws,
regulations and licensing requirements, and has filed with the proper
authorities all necessary statements, applications, notices, reports and any
other filings with respect to NEAI's business, as applicable, except where the
failure to do so would not reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), assets, properties or
prospects of NEAI.
3.6 Consents. No authorization, consent, approval, permit or license of,
or filing with, any governmental or public body or authority, any
lender or lessor or any other person or entity is required to
authorize, or is required in connection with, the execution, delivery
and performance of this Agreement or the agreements or transactions
contemplated hereby on the part of NEAI.
3.7 Finder's Fee. NEAI has not incurred any obligation for any finder's,
broker's or agent's fee in connection with the transactions
contemplated hereby.
3.8 Securities Compliance. NEAI has timely filed all required forms,
statements and documents with the SEC, all of which have complied in
all material respects with all applicable requirements of the
Securities Act and the Securities Exchange Act of 1934, as amended
(the SEC Documents). As of their respective dates, the SEC
Documents did not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements contained in the SEC Documents are true, complete
and correct in all material respects and were prepared in accordance
with generally accepted accounting principles applied on a consistent
basis, and fairly present the financial position of NEAI as of the
dates and for the periods indicated. Since the date that the last SEC
Document was filed with the SEC, no event or condition has occurred
(other than this Asset Purchase Agreement) that (i) may reasonably be
expected to result in a material adverse effect on the condition
(financial or otherwise) of NEAI or on its assets, properties or
prospects or (ii) requires the filing by NEAI of any form, statement
or document with the SEC. Since the date of the last financial
statements included in the SEC Documents, NEAI has not incurred any
material liabilities other than liabilities incurred in the ordinary
and usual course of business consistent with past practice.
3.9 Captialization. The authorized capitalization of NEAI is as set forth
in its Quarterly Report on Form 10-QSB for the quarterly period ended
December 31, 2001. NEAI has outstanding 3,007,500 shares of its
$.00001 par value Common stock. There is not outstanding any
security, right, subscription, warrant, option, stock appreciation
right or other agreement or other security that is convertible into,
exercisable for, or entitles the holder to purchase or acquire any
capital stock from NEAI..
3.10 Permits and Licenses; Compliance. NEAI possesses all necessary
governmental licenses, franchises, permits, approvals, authorizations,
and rights, whether federal, state, local or foreign, that are
necessary for NEAI to engage in its business and that, if not
possessed, could reasonably be expected to have a material adverse
effect on the condition of NEAI financial or otherwise) or on its
assets, properties or prospects. NEAI is in compliance with all such
governmental licenses, franchises, permits, approvals, authorizations,
or rights, and all federal, state or local laws or regulations
applicable to its business except where the failure to be in
compliance could not reasonably be expected to have a material adverse
effect on the condition of NEAI (financial or otherwise) or on its
assets, properties or prospects.
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3.11 Absence of Certain Changes. Since December 31, 2001, NEAI has not:
(a) suffered any material adverse change in its business;
(b) suffered any damage or destruction or loss that could
reasonably be expected to or does materially and adversely
affect the condition of NEAI (financial or otherwise) or its
respective assets, properties or prospects;
(c) acquired or disposed of any assets or properties other than in
the ordinary course of business; or
(d) entered into any other commitment or transaction (other than
the sale of 7,500 shares of its Common stock at $2.00 per
share) or experienced any other event that is material to this
Agreement or to any of the other agreements and documents
executed or to be executed pursuant to this Agreement or to
the transactions described herein or therein, or that could
reasonably be expected to have, or has had, a material adverse
effect on the condition of NEAI (financial or otherwise) or on
its assets, properties or prospects.
3.12 Litigation. No material legal or administrative or other adversary
proceeding or investigation is currently pending against NEAI and, to
the best knowledge of NEAI, none is threatened or contemplated by any
governmental agency or other third party. NEAI is not subject to any
continuing court or administrative order, writ, injunction or decree.
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ARTICLE 4
COVENANTS OF ADM
4.1 Exclusive Negotiations. Until the earlier of the Closing Date or the
termination of this Agreement, and subject to the fiduciary duties of
the directors of ADM, ADM agrees that none of ADM or any of the
officers, directors or other agents of ADM will, directly or
indirectly, solicit or accept from any person or entity any offer or
expression of interest in, or with respect to an acquisition,
combination, merger or similar transaction involving ADM with respect
to the Assets. Upon receipt of any unsolicited bona fide offer or
expression of interest in or with respect to any such transaction, ADM
agrees to promptly inform NEAI of the existence and terms of such
offer or expression of interest.
4.2 Non-Compete. Except as otherwise expressly set forth in Exhibit 4.2,
for a period of five years from the Closing Date or until this
Agreement is terminated, (i) ADM agrees neither to manufacture and
sell nor to assist a third party (other than NEAI and its affiliates)
to manufacture a product that is equivalent or substantially
equivalent to the ADM Products.
4.3 Sales and Use Tax. Although, NEAI shall be responsible for any sales
or use tax payable in connection with the sale of the Assets
hereunder; ADM will reasonably assist NEAI to minimize any such sales
or use tax. Such assistance shall include, but not be limited to,
changing of the situs of the Closing to Delaware.
4.4 Exclusive Manufacturing Agreement. At the Closing, ADM shall execute
the Manufacturing Agreement in substantially the form set forth in
Exhibit 4.7 hereto.
4.5 Filing of Post-Effective Amendment by NEAI. ADM will assist NEAI in
describing the Assets, Rights and the ADM Products in the Post-
Effective Amendment to be filed by NEAI in compliance with Rule 419
(the Post-Effective Amendment).
4.6 Product Liability Insurance. ADM will continue to maintain product
liability insurance in amounts not less than the amount presently in
force and such insurance will inure to the benefit of NEAI, its
customers and end users.
13
ARTICLE 5
COVENANTS OF NEAI
5.1 Post-Effective Amendment. NEAI will use its reasonable commercial
efforts to prepare and file the Post-Effective Amendment with the SEC
and have it declared effective as soon as reasonably practicable.
5.2 Exclusive Negotiations. Until the earlier of the Closing Date or the
termination of this Agreement, and subject to the fiduciary duties of
the directors of NEAI, NEAI agrees that none of NEAI or any of the
officers, directors or other agents of NEAI will, directly or
indirectly, solicit or accept from any person or entity any offer or
expression of interest in, or with respect to a similar transaction
involving NEAI with respect to a product or a business that competes,
directly or indirectly, with the commercial use of the Assets ).
5.3 Exclusive Manufacturing Agreement. At the Closing, NEAI shall execute
the Manufacturing Agreement in substantially the form set forth in
Exhibit 4.7 hereto.
14
ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of ADM. The obligations of ADM to
consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing of each of the
following conditions in all material respects:
(a) Representations, Warranties and Covenants. The
representations and warranties of NEAI contained in this
Agreement shall have been true and correct as of the date they
were made or deemed to have been made and shall be true and
correct as of the Closing Date, with the same force and effect
as if made as of the Closing Date, except for such changes as
are permitted or contemplated by this Agreement, and other
than such representations and warranties as are made as of
another date. The covenants and agreements contained in this
Agreement to be complied with by NEAI on or before the Closing
Date shall have been complied with. ADM shall have received a
certificate from NEAI to such effect, dated as of the Closing
Date and signed by the Chief Executive Officer of NEAI.
(b) No Proceeding or Litigation. No legal or regulatory action
shall have been commenced or threatened by or before any court
or any federal, state or local governmental authority
(collectively, Governmental Authority) against ADM or NEAI
seeking to restrain or adversely alter the transactions
contemplated by this Agreement or which is likely to render it
impossible or unlawful to consummate such transactions, or
which could reasonably be expected to have a material adverse
effect on the condition of NEAI (financial or otherwise) or on
its assets, properties or prospects.
6.2 Conditions to Obligations of NEAI. The obligations of NEAI to
consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the
following conditions in all material respects:
(a) Representations, Warranties and Covenants. The
representations and warranties of ADM contained in this
Agreement shall have been true and correct as of the date as
of which they were made or deemed to have been made and shall
be true and correct as of the Closing Date, with the same
force and effect as if made as of the Closing Date except for
such changes as are permitted or contemplated by this
Agreement, other than such representations and warranties as
are made as of another date. The covenants and agreements
contained in this Agreement to be complied with by ADM on or
before the Closing Date shall have been complied with. NEAI
shall have received a certificate from ADM to such effect
dated as of the Closing Date and signed by the Chief Executive
Officer of ADM;
(b) No Proceeding or Litigation. No legal or regulatory action
shall have been commenced or threatened by or before any
Governmental Authority against ADM or NEAI seeking to restrain
or adversely alter the transactions contemplated hereby or
which is likely to render it impossible or unlawful to
consummate the transactions contemplated by this Agreement or
which could have a material adverse effect on the Assets.
(c) Effectiveness of Post-Effective Amendment and Confirmation of
Shareholders. The Post-Effective Amendment shall have been
declared effective by the SEC and the holders of not less than
the 7,000 shares purchased in NEAI's public offering duly
confirm their investments in accordance with the provisions of
Rule 419.
15
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification.
(a) Subject to the terms and conditions of this Article 7, NEAI
hereby agrees to indemnify, defend and hold each of ADM and
its officers, directors, agents, attorneys and affiliates
harmless from and against all losses, obligations,
assessments, penalties, liabilities, costs, damages,
reasonable attorneys' fees and expenses (collectively,
Damages) asserted against or incurred by ADM or such
identified persons by reason of or resulting from (i) a
representation or warranty made by NEAI herein being
materially incorrect or untrue or (ii) a breach by NEAI of any
covenant contained herein or in any of the agreements executed
pursuant hereto.
(b) Subject to the terms and conditions of this Article 7, ADM
hereby agrees to indemnify, defend and hold each of NEAI, its
assignee and its officers, directors, agents, attorneys and
affiliates harmless from and against all Damages asserted
against or incurred by NEAI or such identified persons by
reason of or resulting from (i) a representation or warranty
made by ADM herein being materially incorrect or untrue or
(ii) a breach by ADM of any covenant made by ADM contained
herein or in any of the agreements executed pursuant hereto.
(c) The parties agree to cooperate with each other in the event of
any settlement negotiated with regard to the indemnification
provided herein. In no event shall the total amount payable
pursuant to this Section 7.2(c) with respect to the
incorrectness of a representation or warranty exceed the
Purchase Price or with respect to a breach of a covenant or
agreement exceed the sum of the Purchase Price plus the net
profit earned by NEAI with respect to the operation of the
Assets (including all rights granted to NEAI hereunder).
7.2 Assertion and Resolution of Indemnification Claim.
(a) Any permitted indemnitee under Sections 7.1 (an Indemnified
Party) shall give notice to the person responsible for
indemnification (an Indemnifying Party) of any claim as to
which indemnification may be sought as soon as possible after
the Indemnified Party has actual knowledge thereof and the
amount thereof, if known. The Indemnified Party shall supply
to the Indemnifying Party any other information in the
possession of the Indemnified Party regarding such claim, and
will permit the Indemnifying Party (at its expense) to assume
the defense of any third party claim and any litigation
resulting therefrom, provided that counsel for the
Indemnifying Party who shall conduct the defense of such claim
or litigation shall be reasonably satisfactory to the
Indemnified Party, and provided further that the failure by
the Indemnified Party to give notice as provided herein will
not relieve the Indemnifying Party of its indemnification
obligations hereunder except to the extent that the
Indemnifying Party is damaged as a result of the failure to
give notice. If the Indemnifying Party has assumed the
defense of a third party claim, the Indemnifying Party shall
not be entitled to settle such third party claim without the
prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld, provided that such consent
shall not be required if such settlement involves only the
payment of money and the claimant provides to the Indemnified
Party, in form and substance reasonably satisfactory to such
Indemnified Party, a release from all liability in respect of
such third party claim.
(b) The Indemnified Party shall have the right at all times to
participate in the defense, settlement, negotiations or
litigation relating to any third party claim or demand at its
own expense. If the Indemnifying Party does not assume the
defense of any matter as above provided, then the Indemnified
Party shall have the right to defend any such third party
claim or demand, and will be entitled to settle any such claim
or demand in its discretion for the account or benefit of the
Indemnified Party. In any event, the Indemnified Party will
cooperate in the defense of any such action at the expense of
the Indemnifying Party and the records of each party shall be
available to the other with respect to such defense.
7.3 Indemnification of Negligence of Indemnitee. The indemnification
provided in this Article 7 shall be applicable whether or not
negligence of the indemnified party is alleged or proven.
16
ARTICLE 8
TERMINATION
8.1 Termination by ADM.
(a) ADM shall have the right to terminate this Agreement if the
conditions in Section 6.1 have not been satisfied or waived by
ADM on or before September 30, 2002.
(b) ADM shall have the right to terminate this Agreement if any
payments required to be made to it by NEAI hereunder remain
unpaid after thirty days notice of such non-payment has been
given to NEAI by ADM.
8.2 Termination by NEAI. NEAI shall have the right to terminate this
Agreement if the conditions in Section 6.2 have not been satisfied or
waived by NEAI on or before September 30, 2002.
8.3 Termination by Agreement of ADM and NEAI. ADM and NEAI may terminate
this Agreement at any time by their mutual consent.
8.4 Damages. If this Agreement is terminated pursuant to this Article 8,
the parties shall retain any rights they may have against each other
for any breach of any of the terms and conditions of this Agreement.
8.5 Bankruptcy or Insolvency. This Agreement may be terminated by ADM if
NEAI shall file a petition for bankruptcy or shall become insolvent.
17
ARTICLE 9
MISCELLANEOUS
9.1 Expenses. Each party hereto shall pay its own expenses incurred in
connection with this Agreement and the transactions contemplated
hereby.
9.2 Entire Agreement. This Agreement and the schedules and exhibits
hereto contain the complete agreement among the parties with respect
to the transactions contemplated hereby and supersede all prior
agreements and understandings among the parties with respect to such
transactions.
9.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original, and such counterparts together shall constitute
only one original.
9.4 Notices. All notices, demands, requests, or other communications that
may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall
be mailed by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by hand delivery, telegram,
facsimile, or telex, addressed as follows:
If to ADM: If to NEAI:
ADM Tronics Unlimited, Inc. New England Acquisitions, Inc.
000-X Xxxxxxx Xxxxxx 0 Xxxxx Xxxx
Xxxxxxxxx, XX 00000 Cos Xxx, XX 00000
Attn: Xxxxx Xx Xxxx Attn: Xxxx Xxxxx
Facsimile: 000- 000-0000 Facsimile: 000-000-0000
Each party may designate by notice in writing a new address to which any
notice, demand, request or communication may thereafter be so given, served or
sent. Each notice, demand, request or communication that is mailed, delivered
or transmitted in the manner described above shall be deemed sufficiently
given, served, sent and received for all purposes at such time as it is
delivered to the addressee, with the return receipt, the delivery receipt, the
affidavit of messenger, or (with respect to a telecopy or telex) the
answerback or confirmation of receipt being deemed conclusive evidence of such
delivery, or at such time as delivery is refused by the addressee upon
presentation.
18
9.5 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws
effective during the term hereof, the provision shall be fully
severable and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision were never a part
hereof; and the remaining provisions hereof shall remain in full force
and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there shall
be added automatically as part of this Agreement a provision as
similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
9.6 Successors and Assigns. This Agreement and the rights, interests and
obligations hereunder shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and
permitted assigns.
9.7 Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be governed, construed and enforced in accordance
with the laws of the State of New Jersey and exclusive venue shall lie
in the state and federal courts in the State of Jersey.
9.8 Amendment, Waiver and Other Action. This Agreement may be amended,
modified or supplemented only by a written instrument executed by the
parties against which enforcement of the amendment, modification or
supplement is sought.
9.9 Legal Representation. All of the parties to this Agreement
acknowledge that they have been advised that they should seek and have
had the opportunity to seek counsel to review this Agreement and to
obtain the advice of such counsel relating thereto.
9.10 Assignment. Neither this Agreement nor any right created hereby shall
be assignable by either party hereto without the consent of the other
party, which consent shall not be unreasonably withheld, provided that
NEAI may assign this Agreement to a wholly owned subsidiary which has
not yet been formed.
9.11 Confidentiality. Other than as required by law, each party shall
maintain the confidentiality of, and not divulge or disclose to any
other person, the existence of or any terms and conditions of this
Agreement or any of the financial or other information provided to it
by the other party to this Agreement.
19
9.12 Captions. The captions in this Agreement are for convenience of
reference only and shall not limit or otherwise affect any of the
terms or provisions hereof.
9.13 Number and Gender. Whenever the context requires, references in this
Agreement to the singular number shall include the plural; the plural
number shall include the singular; and words denoting gender shall
include the masculine, feminine, and neuter.
9.14 Public Announcements. Except to the extent that ADM or NEAI believes
on the advice of counsel that public disclosure is required by law, no
party to this Agreement shall make, or cause to be made, any press
release or public announcement in respect of this Agreement or the
transactions contemplated hereby or otherwise communicate with any
news media without prior notification to the other parties. The
parties shall cooperate as to the time and contents of any such press
release or public announcement, but if they are unable to reach an
agreement as to the time and contents of such press release or public
announcement, each shall be free to make such press release or public
announcement as it deems necessary.
9.15 Survival of Representations and Warranties. The representations and
warranties of the respective parties shall survive the Closing or
termination of this Agreement, as the case may be.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year set forth above.
NEW ENGLAND ACQUISITIONS, INC. ADM TRONICS UNLIMITED, INC.
By: /s/ Xxxx Xxxxx By: /s/ Andre' Di Mino
Its: President Its: President
Date: March 21, 2002 Date: March 21, 2002
20
Exhibit 1.1 - Exception to Assets and Rights Purchased
See Schedule 1.2. ADM may market Other Shave Creams without limitations to
Xx. Xxxxxx Xxxxxxx, CSC Laboratories, Pegasus Marketing, Professional Makeup
Customers. Unless NEAI pays ADM minimum royalties of (a) $10,000 within one
year from the Closing, (b) an additional $14,000 within two years from the
Closing and (c) additional amounts each year thereafter of not less than 110%
of the minimum royalty for the immediately preceding year, ADM may market
Other Shave Creams to others without limitation.
Exhibit 1.2 - Patent List
Patent Number 6,210,321 Electronic Stimulator System for Treating Tinnitus
Disorders
Patent Number 5,788,656 Electronic Stimulation System for Treating Tinnitus
Disorders
Exhibit 2.11 - Exceptions to Intellectual Property Rights - referred to
elsewhere herein.
Exhibit 4.2 - Non-Compete Exceptions - referred to elsewhere herein.
Exhibit 4.7 - Manufacturing Agreement - to be attached separately.
Schedule 1.1(d) - Permits, approvals, licenses and authorizations
Pre-Market Notification 510K #981704 Aurex-3
Schedule 1.2 - Exclusion to market rights for Aurex-3
Aurex-3 - All countries other than the United States of America and the
customers of Pegasus Marketing (the PM Customers)
21
Schedule 1.5 - Payments
1. A royalty of 6% on gross sales less discounts, returns and allowances
of the ADM Products. Such royalties to be paid by NEAI to ADM on the
15th of each month for sales in the immediately preceding month,
together with a report describing, in sufficient detail, how such
monthly royalty was computed.
2. Consulting fees and related expenses for time expended by ADM
Employees for any services related to the ADM Products other than
manufacturing activities, to be agreed upon by the parties in writing
in advance of any such service. Such payments are to be made by NEAI
to ADM upon receipt of invoices from ADM.
3. A payment of $25,000 due in advance of the initiation of production of
the Burn Lotion for expenses and establishment of regulatory support
and processes for NEAI's distribution of the Burn Lotion.
Notwithstanding anything herein to the contrary, if such amount is not
paid within one year from the Closing, the exclusive rights of NEAI
with respect to the Burn Lotion shall thereupon terminate.
4. During such times that NEAI has the exclusive rights to market and
sell the Aurex-3 limited only by the provisions of Schedule 1.2 above,
NEAI shall promptly reimburse ADM for ADM's cost for normal recurring
patent and regulatory fees and related costs applicable solely to the
marketing of the Aurex-3 in the United States. Such fees include, but
are not limited to, patent maintenance fees, third party regulatory
inspection fees and FDA filing fees. It is anticipated that such cost
shall not exceed $6,000 per annum. Notwithstanding the foregoing, to
the extent that the Aurex-3 is sold for use in the United States to
the PM Customers, the amount to be reimbursed by NEAI shall be on a
pro rata basis based on the number of Aurex-3 devices sold by ADM to
NEAI and the PM Customers for use in the United States. Such amounts
to be paid by NEAI to ADM upon receipt of invoices from ADM.
Schedule 2.16 - Complaint List
On August 30, 1999 an Aurex-3 user reported that the applicator cable would
not remain attached to the unit. The unit was replaced and the defect was
corrected in all subsequent units. This complaint did not require the filing
of an MDR report with the FDA as it did not result in any injury to a user.
22
Exhibit 4.7
EXCLUSIVE MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT ("Agreement"), made and entered into this
_____ day of March, 2002 by and between New England Acquisitions Incorporated,
a Florida Corporation ("NEAI") and ADM Tronics Unlimited, Inc., a Delaware
corporation ("ADM").
WITNESSETH:
WHEREAS, ADM is engaged in the business of developing and manufacturing
various chemical preparations, in particular, products used for certain
cosmetic or over-the-counter topical formulations and medical electronic
devices, in particular, a medical device used for the treatment and control of
Tinnitus, and
WHEREAS, pursuant to an Asset and Rights Purchase Agreement between NEAI and
ADM (the "Purchase Agreement"), NEAI will be securing certain marketing rights
with respect to the ADM Products as that term is defined in the Purchase
Agreement.
WHEREAS, ADM and NEAI desire to enter into an exclusive manufacturing
agreement whereby ADM will (i) bulk manufacture for NEAI the Burn Lotion and
Ethnic Shave Cream, as those terms are defined in the Purchase Agreement (the
"Bulk Products") and the Aurex-3 as that term is defined in the Purchase
Agreement, pursuant to the terms and conditions as set forth herein, and (ii)
maintain raw material supplies and finished goods necessary for supply of the
Bulk Products and Aurex-3 to NEAI or its designee, and (iii) provide to NEAI
oversight and guidance with respect to regulatory requirements regarding the
marketing of the Bulk Products and Aurex-3, and
WHEREAS, ADM will exclusively manufacture all other medical products, topical
and cosmetic products to be acquired and distributed by NEAI ("Other NEAI
Products").
NOW, THEREFORE, in furtherance of the foregoing premises and in consideration
of the mutual covenants and obligations hereinafter set forth, the Parties
hereto, intending to be legally bound hereby, do agree as follows:
23
ARTICLE 1
DEFINITIONS
As used in this Agreement, the following terms will have the following
meanings, applicable both to the singular and the plural forms of the terms
defined:
Agreement - has the meaning ascribed thereto in the preamble.
Confidential Information - means any information, whether or not protected by
patents or copyright (including, without limitation, programs, files,
specifications, drawings, procedures, xxxx of materials, artwork, customer
lists, supplier lists, channel of distribution, pricing, models, samples,
business information, records and technical information or other data) that is
provided by one party to the other party in connection with this Agreement,
and marked or designated as "Confidential."
Facility - shall mean the manufacturing facility of ADM Tronics Unlimited,
Inc. at 000 X Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
Indemnified Person - means a NEAI Indemnified Person or an ADM Indemnified
Person.
Intellectual Property Rights - means any and all patent, copyright, tradename,
trade or service xxxx, trade secret or similar intellectual property rights.
Order - has the meaning ascribed thereto in Section 3.1.
Person - means any individual, partnership, joint venture, corporation, trust,
unincorporated organization, government (and any department or agency thereof)
or other entity.
Product - means any of the ADM Products and Other NEAI Products to be
purchased by NEAI from ADM and proposed to be manufactured and sold by ADM to
NEAI pursuant to this Agreement.
Product Specifications - means, with respect to any Product proposed to be
manufactured and sold pursuant to this Agreement, the Product Specifications
for such Product identified in or established pursuant hereto.
Purchase Price - means, with respect to any Product proposed to be
manufactured and sold pursuant to this Agreement, the Purchase Price set forth
herein.
Subsidiary - means, with respect to any Person (Parent Company), a corporation
or other Person (i) the majority of whose shares or other securities entitled
to vote for election of directors (or other managing authority) is now or
hereafter owned or controlled by such Parent Company either directly or
indirectly or (ii) which does not have outstanding shares or securities but
the majority of whose ownership interest representing the right to control
such Person is now or hereafter owned or controlled by such Parent Company
either directly or indirectly; but any such corporation or other Person shall
be deemed to be a subsidiary of such Parent Company only as long as such
control or ownership and controls exits.
Warranty Expiration Date - means, with respect to each Product, the warranty
expiration date for such Product set forth herein.
24
ARTICLE II
Exclusive Manufacturing
2.1 Pursuant to the Purchase Agreement, ADM has granted certain rights to
the use of ADM's Patents as more fully described in Schedule 1.2 to
the Purchase Agreement. ADM will manufacture the Aurex-3 for NEAI
pursuant to the terms of this Agreement and will manufacture the
Aurex-3 at the Facility for other customers not in conflict with the
rights so purchased by NEAI.
2.2 ADM shall manufacture a modified version of the Burn Lotion and Ethnic
Shaving Cream on a private label basis for NEAI, such versions being
exclusive to NEAI.
2.3 ADM shall be the exclusive manufacturer of all Other NEAI Products to
be acquired and distributed by NEAI.
ARTICLE III
PLACEMENT OF ORDERS; PRODUCT PURCHASE COMMITMENT; PRICING
3.1 Placement of orders: NEAI shall place orders with ADM for the purchase
of any Products by providing ADM with an Order ("Order") for such
Products. Each Order shall be subject to acceptance by ADM and shall
include the following items:
(i) the date of the Order;
(ii) the Order number;
(iii) billing address and instructions;
(iv) a list of the Products to be purchased, including the quantity
of each Product;
(v) the Purchase Price for each unit of Product to be purchased;
(vi) the location where Product is to be delivered (including
street, city and state), routing and shipping instructions and
the name and telephone number of the person to contact upon
delivery or arrival;
(vii) requested delivery dates and shipment dates; and
(viii) any special term, conditions and requirements as agreed to by
NEAI and ADM.
(ix) payment for the Products in the Order excluding shipping
charges which shall be billed separately at the time of
shipping.
25
3.2 Form of Communication. - Orders shall be communicated by the parties
as mutually acceptable to them either in writing signed by a duly
authorized representative of the applicable party and transmitted via
facsimile. ADM agrees to acknowledge to NEAI each order within (1)
business day of receipt thereof.
3.3 Individual Minimum Order Amount. - NEAI agrees to purchase from ADM,
and ADM agrees to manufacture and sell to NEAI, Products in such
quantities as may be ordered by NEAI during the term of this
Agreement; provided, however, that orders for the Bulk Products shall
be in lots of not less than one 55 gallon drum of each individual
product and orders for Aurex-3 shall not be less than 10 units
(Minimum Order Quantity). With respect to Other NEAI Products, prior
to commencement of manufacture of such products, ADM will notify NEAI
of the Individual Minimum Order Amount and NEAI agrees to order such
products in such amounts.
3.4 Pricing - Subject to Section 6.3 herein, prices to be paid by NEAI for
each Product shall be the applicable purchase price established
pursuant to Schedule A attached hereto; provided if NEAI and ADM agree
in writing upon an alternate purchase price for any Product sold
hereunder, then such alternate purchase price shall be applicable
during the term of this Agreement and any renewal thereof. A written
purchase order from NEAI to ADM specifying such alternate pricing
structure, accepted by ADM may serve as the agreement of an alternate
purchase price.
3.5 Delayed Delivery of Products - In the event ADM ascertains that it
will not be able to deliver the Product on the delivery date specified
in an Order, ADM shall, as soon as possible, provide notice to NEAI of
the delay in delivery and the proposed delivery date of such Product.
3.6 Variation of Terms - NEAI and ADM shall use their respective good
faith and reasonable best efforts to accommodate any reasonable
requests of the other party to vary the terms of Article III hereof to
accommodate the requirements good for both parties with respect to
Product ordering, delivery, pricing and related matters.
26
ARTICLE IV
INVOICES, PAYMENTS AND TAXES
4.1 Invoices and Payments - NEAI shall pay to ADM the price of Products on
each order at the time of placing the order with ADM. ADM shall
provide an invoice for the Products and shipping charges to NEAI upon
shipment of such Products, at no charge to NEAI, in written form via
facsimile, in such detail and format as is mutually acceptable to the
parties. The shipping charges stated on each invoice shall be paid by
NEAI within ten (10) days of the shipment date of the Products.
4.2 Taxes - NEAI shall reimburse ADM for state and local sale and use
taxes (and excise taxes in the nature of sales and use taxes), as
applicable, for Products sold by ADM to NEAI. Taxes payable by NEAI
will be billed as separate items on all invoices and shall not be
included in the purchase price for Products. If applicable, NEAI will
supply to ADM a tax resale certificate.
ARTICLE V
REGULATORY CORRESPONDENCE
5.1 Regulatory Correspondence. - ADM shall provide to NEAI a copy of all
Food and Drug Administration (FDA) inspection and regulatory
correspondence received with respect to the Products as soon as
reasonably practical.
ARTICLE VI
CONDITIONS OF MANUFACTURE
6.1 Product Specifications - In the case of the ADM Products, ADM shall
manufacture the Products in compliance with the applicable Product
Specifications previously developed by ADM. With respect to the
Other NEAI Products, ADM shall manufacture such Other NEAI Products in
compliance with Product Specifications provided by NEAI to ADM.
6.2 Raw Materials, Subassemblies and Parts - Any raw materials,
subassemblies and parts needed to fulfill an Order that are not used
in the Products produced for such Order which remain in inventory at
the Facility ("Unused Inventory") shall be deemed to be the property
of NEAI and NEAI shall be obligated to pay a storage fee for such
unused materials if such are not used within 60 days of receipt.
6.3 Tooling and Non-Reoccurring Engineering Services - NEAI shall
reimburse ADM for any Tooling or Non-Reoccuring Engineering services
("NRE") that are required to be secured in support of the
manufacturing of the Products for NEAI, such NRE to be apportioned
amongst products other than those to be used exclusively for NEAI.
6.4 Technical Support - During the course of this Agreement, ADM shall
provide technical support that is reasonably requested by NEAI at the
Facility to NEAI as part of the Consulting Fee as described in
Schedule 1.5 to the Purchase Agreement. However, should NEAI require
technical support at locations other than the Facility, NEAI shall
reimburse ADM for any expenses for travel or lodging related to such
technical support.
27
ARTICLE VII
DELIVERY AND RISK OF LOSS
7.1 Delivery - Unless otherwise indicated by NEAI or provided in the Order
with respect to any Products, ADM shall: (i) ship such Products to the
destination and in accordance with the shipping instructions set forth
in such order; (ii) place the applicable Order number on all shipping
and related documents and xxxx the Order number on all {packages}; and
(iii) enclose a packing memorandum with each shipment and, when more
than one package is included in a shipment, identify the package
containing the memorandum. The Products will be packaged in
accordance with customary packing practices in the industry. Shipping
instructions shall be furnished by NEAI in writing.
7.2 Title and Risk of Loss - All sales of Products shall be F.O.B.
Northvale, New Jersey. Title and risk of loss and damage to each
Product purchased by NEAI from ADM shall vest in NEAI when such
Product has been shipped at Northvale, New Jersey in accordance with
such shipping instructions.
7.3 Freight Cost and Routing Instructions. - All freight costs shall be
prepaid by ADM and billed to NEAI, unless the parties mutually agree
(in a particular case) to ship the Product freight collect.
ARTICLE VIII
WARRANTIES
8.1 Warranties - Electronic products shall be warranted from defects in
materials and workmanship for a period of 1 year from the date of
shipment and excludes any damage from use or misuse of the electronic
products.
8.2 Limitations on Warranties - ADM'S WARRANTIES SET FORTH HEREIN WITH
RESPECT TO THE PRODUCTS ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER
EXPRESS AND IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE IX
IDEMNIFICATION, DAMAGES AND REMEDIES
9.1 Property Damage and Personal Injury; Title; Product Recall. - ADM
shall save, protect, indemnify and hold harmless each NEAI Indemnified
Person from and against all liabilities (including tax liabilities),
costs (including attorney's fees and disbursements), claims and
charges arising from or relating to (i) any tangible personal property
damage or personal injury arising from or relating to any negligence
by ADM (or ADM's employees, subcontractors or agents) in connection
with the manufacture, delivery, supply, labeling, repair or
replacement of Products, (ii) any breach of ADM's representations,
warranties, covenants and agreements contained in this Agreement ,
(iii) any recall of any Product purchased hereunder and (iv) the
infringement or violation (whether actual or alleged) of any
Intellectual Property rights of any Person arising out of or related
to ADM's manufacture and supply of the ADM Products under this
Agreement.
9.2 Indemnity Obligations of NEAI. - NEAI shall save, protect, indemnify
and hold harmless each ADM Indemnified Person from and against all
liabilities, costs (including attorney's fees an d disbursements),
claims and charges arising from or relating to the infringement or
violation (whether actual or alleged) of any Intellectual Property
rights of any Person arising out of or related to ADM's manufacture
and supply of the Other NEAI Products under this Agreement, provided
that this duty to indemnify shall not apply in the event that such
infringement or violation arises out of ADM's failure to manufacture
the Products in accordance with the Product Specifications.
ARTICLE X
TERM AND TERMINATION
10.1 Term - The term of this Agreement shall be 5 years and shall be
automatically renewed for successive 5 year periods unless earlier
terminated pursuant to the provisions herein or the Purchase
Agreement.
10.2 Termination by NEAI
(a) NEAI may terminate this Agreement upon written notice if ADM
commences or has filed against it any bankruptcy,
reorganization, liquidation or insolvency proceeding under any
law in any country for the relief of debtors which is not
dismissed within 60 days; or if any receiver, trustee,
liquidator or custodian is appointed to take possession of any
substantial portion of the assets of ADM not dismissed within
60 days.
(b) NEAI may terminate this Agreement at any time if ADM breaches
any material provision of this Agreement fails to cure the
breach within 30 days after receiving written notice
describing the breach.
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10.3 Termination by ADM
(a) ADM may terminate this Agreement upon written notice if NEAI
commences or has filed against it any bankruptcy,
reorganization, liquidation or insolvency proceeding under any
law in any country for the relief of debtors which is not
dismissed within 60 days; or if any receiver, trustee,
liquidator or custodian is appointed to take possession of any
substantial portion of the assets of NEAI not dismissed within
60 days.
(b) ADM may terminate this Agreement at any time if NEAI breaches
any material provision of this Agreement and fails to cure the
breach within 30 days after receiving written notice
describing the breach.
10.4 Survival - The provisions of Section 6.2, 12.2, 12.3 and Articles VIII
and IX shall survive the termination of this Agreement.
ARTICLE XI
GOVERNING LAW
11.1 Governing Law - The construction, interpretation and performance of
this Agreement and all transactions hereunder shall be governed by the
laws of the State of New Jersey.
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ARTICLE XII
MISCELLANEOUS
12.1 Confidentiality - Each of the parties shall, and shall cause its
Affiliates to, treat this Agreement and any Confidential Information
obtained by it pursuant to this Agreement as privileged and
confidential and shall not, without the prior consent of the other
party, disclose, or cause to be disclosed, this Agreement or such
Confidential Information to any Person, except that this Agreement and
Confidential Information may be disclosed:
(i) to such party's Affiliates, agents, directors, officers,
employees, representatives, accountants, counsel or special
counsel to whom such documents or information is needed to be
disclosed in connection with the performance, enforcement or
evaluation of this Agreement and who have been instructed to
have a duty to keep such documents or information confidential
in accordance with the terms hereof;
(ii) to the extent required pursuant to applicable law or any
governmental authority; provided that, if practicable, the
party required to make such disclosure shall give prior notice
thereof to the other party and, if so requested by the other
party, shall cooperate with such party to obtain a protective
order or other ruling so as to prevent disclosure of all or a
portion of the documents or information required to be
disclosed;
(iii) in the case of Confidential Information only, to the extent
such Confidential Information is independently developed by
the recipient or any affiliated Person or lawfully received
from an unrelated source having the right to so furnish such
Information; and
(iv) to the extent such documents or information become generally
available to the public without breach of this Agreement by
the recipient or any affiliated Person.
12.2 Exclusivity - ADM shall not, directly or indirectly, though any
affiliate or other Person or under any arrangement or agreement,
manufacture or sell to any Person at any time any of the Other NEAI
Products manufactured or sold to NEAI hereunder nor will ADM undertake
to manufacture or assist in the manufacture of any similar products.
31
12.3 Identification - Neither ADM nor NEAI shall make any use of any
identification of the other or its Affiliates in its advertising or
its promotional efforts in relation to the Products or any activities
undertaken by it under this Agreement without the other party's prior
written consent. The term "identification" includes any trade name,
trademark, service xxxx, insignia, symbol or any simulation thereof,
and any code, drawing, specification, or evidence of inspection.
12.4 Force Majeure - Neither party shall be held responsible for any delay
or failure in performance of any part of this Agreement to the extent
such delay or failure is caused by fire, flood, explosion, war,
strike, embargo, government requirement, civil or military authority,
act of God ("force majeure conditions"). If any force majeure
conditions occurs the party delayed or unable to perform shall give
immediate notice to the other party, stating he nature of the force
majeure condition and any action being taken to avoid or minimize its
effect, and the party affected by the other's delay or inability to
perform may elect (i) to suspend this Agreement or any or all Orders
for the duration of the force majeure condition and (x) at its option
buy, sell or obtain elsewhere the Products to be bought, sold or
obtained under this Agreement and deduct from any commitment set forth
herein the quantity bought, sold or obtained or for which commitments
have been made elsewhere and (y) once the force majeure condition
ceases, resume performance under this Agreement with an option in the
affected party to extend the period of this Agreement up to the length
of time the force majeure condition endured; and/or (ii) when the
delay or nonperformance continues for a period of at least 30 days,
cancel at no charge any Orders relating to Products not already
shipped or services not already performed.
12.5 Independent Contracts - Nothing contained in the Agreement shall be
construed in any manner to constitute the creation of a partnership or
a principal and agent relationship between the parties and the parties
shall at all times be and remain independent contractors with respect
to the subject matter of this Agreement. Any individuals furnished by
either party shall be solely that party's employees or agents and
shall remain under its sole and exclusive direction and control and
shall not be considered employees of the other party for any purpose.
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12.6 Severability - If any provision of this Agreement or the application
of any such provision to any party or circumstances will be determined
by any court of competent jurisdiction or duly authorized arbitration
tribunal to be invalid, illegal or unenforceable to any extent, the
remainder of this Agreement or such provision or the application of
such provision to such party or circumstances, other than those to
which it is so determined to be invalid, illegal or unenforceable,
will remain in full force and effect to the fullest extent permitted
by law and will not be affected thereby, unless such a construction
would be unreasonable.
12.7 Successors and Assigns: No Third Party Beneficiaries - This Agreement
will be binding upon and inure to the benefit of the parties hereto
and their successor and permitted assigns.
12.8 Amendments - This Agreement cannot be amended or terminated orally,
but only by a writing duly executed by or on behalf of the parties
hereto.
12.9 Notices - All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) five business
days after mailing if mailed by certified or registered mail, return
receipt requested, (ii) one business day after delivery to Federal
Express or other nationally recognized overnight express carrier, if
sent for overnight delivery with fee prepaid, (iii) upon receipt if
sent via facsimile with receipt confirmed, or (iv) upon receipt if
delivered personally, addressed as follows or to such other address or
addresses of which the respective party shall have notified the other:
(a) if to NEAI , to: New England Acquisitons, Inc.
0 Xxxxx Xxxx
Xxx Xxx, XX 00000
Attn: Xxxx Xxxxx
Facsimile: 000-000-0000
(b) if to ADM. To: ADM Tronics Unlimited, Inc.
000-X Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Andre' Di Mino
Facsimile: 000-000-0000
12.10 Headings - The article headings and the section headings and
subheadings contained in this Agreement are intended solely for
convenience of reference and will not affect in any manner the meaning
or interpretation of this Agreement.
12.11 Counterparts - This Agreement may be executed in one or more
counterparts, each of which will be deemed an original instrument, but
all of which together will constitute one and the same agreement, and
will become binding when one or more counterparts have been executed
and delivered by each of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
NEAI
By:_________________________________
Name:
Title
ADM TRONICS UNLIMITED, INC.
By:_________________________________
Name:
Title:
33
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Schedule A
Pricing
1. Burn Lotion and Ethnic Shave Cream
The pricing for the Burn Lotion and Ethnic Shave Cream that will be
paid by NEAI to ADM shall be computed as follows:
The cost of all raw materials plus the cost of all supplies and direct
labor and an overhead allocation based on reasonable production
utilization factors used in the manufacture, processing and quality
assurance of the formulation, such total to be multiplied by 120% to
arrive at a per pound or per 55 gallon drum price to be paid by NEAI
to ADM.
2. Aurex-3
The pricing for the Aurex-3 that will be paid by NEAI to ADM shall be
computed as follows:
The cost of all parts plus the cost of all supplies and direct labor
and an overhead allocation based on reasonable production utilization
factors used in the manufacture, assembly and quality assurance of the
device, such total to be multiplied by 120% to arrive at a per unit or
per 10 unit price to be paid by NEAI to ADM.
3. Other NEAI Products
The pricing for all Other NEAI Products that will be paid by NEAI to
ADM shall be computed in a similar manner as to the foregoing based
upon the cost of appropriate product components or raw materials,
direct labor and an overhead allocation based on reasonable production
utilization factors used in the manufacture and quality assurance of
such products multiplied by 120% to arrive at a price to be paid by
NEAI to ADM.
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