SPLIT-OFF AGREEMENT
Exhibit
10.5
SPLIT-OFF AGREEMENT, dated as
of December [_], 2009 (this “Agreement”), by and
among Med Control, Inc., a Nevada corporation (“Seller” or the “Company”), Ms. Xxxxxx
Xxxxxx Xxxx (“Buyer”), and MCI
Acquisition Corp., a Nevada corporation (“MCI”).
R
E C I T A L S:
WHEREAS, Seller is the owner of
all of the issued and outstanding shares of capital stock of MCI.
WHEREAS, MCI is a wholly owned
subsidiary of Seller that was organized to acquire, and prior to the closing of
the contemplated transaction has acquired, substantially all the assets and
liabilities of Seller. Seller has no other business or operations.
WHEREAS, Buyer desires to
purchase the Shares (as defined in Section 1.1) from
Seller, and to assume, as between Seller and Buyer, all responsibilities for any
debts, obligations and liabilities of MCI, on the terms and subject to the
conditions specified in this Agreement.
WHEREAS, Seller desires to
sell and transfer the Shares to the Buyer, on the terms and subject to the
conditions specified in this Agreement.
NOW, THEREFORE, in
consideration of the premises and the covenants, promises, and agreements herein
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, agree as follows.
I.
PURCHASE
AND SALE OF STOCK.
1.1
Purchased
Shares. Subject to the terms and conditions provided below, Seller shall
sell and transfer to Buyer and Buyer shall purchase from Seller, on the Closing
Date (as defined in Section 1.3), all the
issued and outstanding shares of capital stock of MCI (the
“Shares”).
1.2
Purchase
Price. The purchase price for the Shares shall be the transfer and
delivery by Buyer to Seller of 6,000,000 shares of common stock of Seller that
buyer owns (the “Purchase Price Shares”), deliverable as provided in Section 2.2 and the
Buyer hereby agrees to cancel any outstanding indebtedness owed by the Seller to
the Buyer as further described in the Seller’s most recent financial statements
as filed with the Securities and Exchange Commission, currently in the amount of
$9,785.
1.3
Closing.
The closing of the transactions contemplated in this Agreement (the “Closing”)
shall take place as soon as practicable following the execution of this
Agreement. The date on which the Closing occurs shall be referred to herein as
the Closing Date (the “Closing Date”).
II.
CLOSING.
2.1
Transfer
of Shares. At the Closing, Seller shall deliver to Buyer certificates
representing the Shares, duly endorsed to Buyer or as directed by Buyer, which
delivery shall vest Buyer with good and marketable title to all of the issued
and outstanding shares of capital stock of MCI, free and clear of all liens and
encumbrances.
2.2
Payment
of Purchase Price. At the Closing, Buyer shall deliver to Seller a
certificate or certificates representing the Purchase Price Shares duly endorsed
to Seller, which delivery shall vest Seller with good and marketable title to
the Purchase Price Shares, free and clear of all liens and
encumbrances. The Purchase Price Shares shall be delivered to the
Seller’s Transfer Agent with instructions that the Purchase Price Shares be
cancelled and returned to treasury.
2.3
Transfer
of Records. On or before the Closing, Seller shall arrange for transfer
to MCI all existing corporate books and records in Seller’s possession relating
to MCI and its business, including but not limited to all agreements, litigation
files, real estate files, intellectual property, Internet domain names,
personnel files and filings with governmental agencies; provided, however, when any such
documents relate to both Seller and MCI, only copies of such documents need be
furnished. On or before the Closing, Buyer and MCI shall transfer to Seller all
existing corporate books and records in the possession of Buyer or MCI relating
to Seller, including but not limited to all corporate minute books, stock
ledgers, certificates and corporate seals of Seller and all agreements,
litigation files, real property files, personnel files and filings with
governmental agencies; provided, however, when any such
documents relate to both Seller and MCI or its business, only copies of such
documents need be furnished.
III.
BUYER’S
REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to Seller
that:
3.1
Capacity
and Enforceability. Buyer has the legal capacity to execute and deliver
this Agreement and the documents to be executed and delivered by Buyer at the
Closing pursuant to the transactions contemplated hereby. This Agreement and all
such documents constitute valid and binding agreements of Buyer, enforceable in
accordance with their terms.
3.2
Compliance.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby by Buyer will result in the breach of any term
or provision of, or constitute a default under, or violate any agreement,
indenture, instrument, order, law or regulation to which Buyer is a party or by
which Buyer is bound.
3.3
Purchase
for Investment. Buyer is financially able to bear the economic risks of
acquiring an interest in MCI and the other transactions contemplated hereby, and
has no need for liquidity in this investment. Buyer has such knowledge and
experience in financial and business matters in general and with respect to
businesses of a nature similar to the business of MCI so as to be capable of
evaluating the merits and risks of, and making an informed business decision
with regard to, the acquisition of the Shares. Buyer is acquiring the Shares
solely for his own account and not with a view to or for resale in connection
with any distribution or public offering thereof, within the meaning of any
applicable securities laws and regulations, unless such distribution or offering
is registered under the Securities Act of 1933, as amended (the “Securities
Act”), or an exemption from such registration is available. Buyer has (i)
received all the information he has deemed necessary to make an informed
investment decision with respect to the acquisition of the Shares; (ii) had an
opportunity to make such investigation as he has desired pertaining to MCI and
the acquisition of an interest therein and to verify the information which is,
and has been, made available to him; and (iii) had the opportunity to ask
questions of Seller concerning MCI. Buyer acknowledges that Buyer is an officer
and director of Seller and MCI and, as such, has actual knowledge of the
business, operations and financial affairs of MCI. Buyer has received no public
solicitation or advertisement with respect to the offer or sale of the Shares.
Buyer realizes that the Shares are “restricted securities” as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission under
the Securities Act, the resale of the Shares is restricted by federal and state
securities laws and, accordingly, the Shares must be held indefinitely unless
their resale is subsequently registered under the Securities Act or an exemption
from such registration is available for their resale. Buyer understands that any
resale of the Shares by him must be registered under the Securities Act (and any
applicable state securities law) or be effected in circumstances that, in the
opinion of counsel for MCI at the time, create an exemption or otherwise do not
require registration under the Securities Act (or applicable state securities
laws). Buyer acknowledges and consents that certificates now or hereafter issued
for the Shares will bear a legend substantially as follows:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT, THE
EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT AND RULE 144
THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF THESE
SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE
AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT
VIOLATE THE SECURITIES LAWS.
Buyer
understands that the Shares are being sold to him pursuant to the exemption from
registration contained in Section 4(1) of the Securities Act and that the Seller
is relying upon the representations made herein as one of the bases for claiming
the Section 4(1) exemption.
3.4
Liabilities.
Following the Closing, Seller will have no liability for any debts, liabilities
or obligations of MCI or its business or activities, and there are no
outstanding guaranties, performance or payment bonds, letters of credit or other
contingent contractual obligations that have been undertaken by Seller directly
or indirectly in relation to MCI or its business and that may survive the
Closing.
3.5
Title to
Purchase Price Shares. Buyer is the sole record and beneficial owner of
the Purchase Price Shares. At Closing, Buyer will have good and marketable title
to the Purchase Price Shares, which Purchase Price Shares are, and at the
Closing will be, free and clear of all options, warrants, pledges, claims,
liens, and encumbrances and any restrictions or limitations prohibiting or
restricting transfer to Seller, except for restrictions on transfer as
contemplated by applicable securities laws.
IV.
SELLER’S
AND MCI’ REPRESENTATIONS AND WARRANTIES. Seller and MCI, jointly and
severally, represent and warrant to Buyer that:
4.1
Organization
and Good Standing. Seller is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of Nevada. MCI is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Nevada.
4.2
Authority
and Enforceability. The execution and delivery of this Agreement and the
documents to be executed and delivered at the Closing pursuant to the
transactions contemplated hereby, and performance in accordance with the terms
hereof and thereof, have been duly authorized by Seller and all such documents
constitute the valid and binding agreements of Seller enforceable in accordance
with their terms.
4.3
Title to
Shares. Seller is the sole record and beneficial owner of the Shares. At
Closing, Seller will have good and marketable title to the Shares, which Shares
are, and at the Closing will be, free and clear of all options, warrants,
pledges, claims, liens and encumbrances, and any restrictions or limitations
prohibiting or restricting transfer to Buyer, except for restrictions on
transfer as contemplated by Section 3.3 above.
The Shares constitute all of the issued and outstanding shares of capital stock
of MCI.
4.4
WARN
Act. MCI does not have a sufficient number of employees to make it
subject to the Worker Adjustment and Retraining Notification Act (“WARN
Act”).
V.
OBLIGATIONS
OF BUYER PENDING CLOSING. Buyer covenants and agrees that between the
date hereof and the Closing:
5.1
Not
Impair Performance. Buyer shall not take any intentional action that
would cause the conditions upon the obligations of the parties hereto to effect
the transactions contemplated hereby not to be fulfilled, including, without
limitation, taking or causing to be taken any action that would cause the
representations and warranties made by any party herein not to be true, correct
and accurate as of the Closing, or in any way impairing the ability of Seller to
satisfy its obligations as provided in Article
VI.
5.2
Assist
Performance. Buyer shall exercise its reasonable best efforts to cause to
be fulfilled those conditions precedent to Seller’s obligations to consummate
the transactions contemplated hereby which are dependent upon actions of Buyer
and to make and/or obtain any necessary filings and consents in order to
consummate the sale transaction contemplated by this Agreement.
VI.
OBLIGATIONS
OF SELLER PENDING CLOSING. Seller covenants and agrees that between the
date hereof and the Closing:
6.1
Business
as Usual. MCI shall operate and Seller shall cause MCI to operate in
accordance with past practices and shall use best efforts to preserve its
goodwill and the goodwill of its employees, customers and others having business
dealings with MCI. Without limiting the generality of the foregoing, from the
date of this Agreement until the Closing Date, MCI shall (a) make all normal and
customary repairs to its equipment, assets and facilities, (b) keep in force all
insurance, (c) preserve in full force and effect all material franchises,
licenses, contracts and real property interests and comply in all material
respects with all laws and regulations, (d) collect all accounts receivable and
pay all trade creditors in the ordinary course of business at intervals
historically experienced, and (e) preserve and maintain MCI’s assets in their
current operating condition and repair, ordinary wear and tear excepted. MCI
shall not (i) amend, terminate or surrender any material franchise, license,
contract or real property interest, or (ii) sell or dispose of any of its assets
except in the ordinary course of business. Neither MCI nor Buyer shall take or
omit to take any action that results in Seller incurring any liability or
obligation prior to or in connection with the Closing.
6.2
Not
Impair Performance. Seller shall not take any intentional action that
would cause the conditions upon the obligations of the parties hereto to effect
the transactions contemplated hereby not to be fulfilled, including, without
limitation, taking or causing to be taken any action which would cause the
representations and warranties made by any party herein not to be materially
true, correct and accurate as of the Closing, or in any way impairing the
ability of Buyer to satisfy his obligations as provided in Article
V.
6.3
Assist
Performance. Seller shall exercise its reasonable best efforts to cause
to be fulfilled those conditions precedent to Buyer’s obligations to consummate
the transactions contemplated hereby which are dependent upon the actions of
Seller and to work with Buyer to make and/or obtain any necessary filings and
consents. Seller shall cause MCI to comply with its obligations under this
Agreement.
VII.
SELLER’S
AND MCI’ CONDITIONS PRECEDENT TO CLOSING. The obligations of Seller and
MCI to close the transactions contemplated by this Agreement are subject to the
satisfaction at or prior to the Closing of each of the following conditions
precedent (any or all of which may be waived by Seller in writing):
7.1
Representations
and Warranties; Performance. All representations and warranties of Buyer
contained in this Agreement shall have been true and correct, in all material
respects, when made and shall be true and correct, in all material respects, at
and as of the Closing, with the same effect as though such representations and
warranties were made at and as of the Closing. Buyer shall have performed and
complied with all covenants and agreements and satisfied all conditions, in all
material respects, required by this Agreement to be performed or complied with
or satisfied by Buyer at or prior to the Closing.
7.2
Additional
Documents. Buyer shall deliver or cause to be delivered such additional
documents as may be necessary in connection with the consummation of the
transactions contemplated by this Agreement and the performance of their
obligations hereunder.
7.3
Release
by MCI. At the Closing, MCI shall execute and deliver to Seller a general
release which in substance and effect releases Seller from any and all
liabilities and obligations that Seller may owe to MCI in any capacity and from
any and all claims that MCI may have against Seller or its managers, members,
officers, directors, stockholders, employees and agents (other than those
arising pursuant to this Agreement or any document delivered in connection with
this Agreement).
VIII. BUYER’S
CONDITIONS PRECEDENT TO CLOSING. The obligation of Buyer to close the
transactions contemplated by this Agreement is subject to the satisfaction at or
prior to the Closing of each of the following conditions precedent (any and all
of which may be waived by Buyer in writing):
8.1
Representations
and Warranties; Performance. All representations and warranties of Seller
and MCI contained in this Agreement shall have been true and correct, in all
material respects, when made and shall be true and correct, in all material
respects, at and as of the Closing with the same effect as though such
representations and warranties were made at and as of the Closing. Seller and
MCI shall have performed and complied with all covenants and agreements and
satisfied all conditions, in all material respects, required by this Agreement
to be performed or complied with or satisfied by them at or prior to the
Closing.
IX.
OTHER
AGREEMENTS.
9.1
Expenses.
Each party hereto shall bear its expenses separately incurred in connection with
this Agreement and with the performance of its obligations
hereunder.
9.2
Confidentiality.
The parties hereto shall not make any public announcements concerning this
transaction other than in accordance with mutual agreement reached prior to any
such announcement(s) and other than as may be required by applicable law or
judicial process. If for any reason the transactions contemplated hereby are not
consummated, then Buyer shall return any information received by Buyer from
Seller or MCI, and Buyer shall cause all confidential information obtained by
Buyer concerning MCI and its business to be treated as such.
9.3
Brokers’
Fees. No party to this Agreement has employed the services of a broker
and each agrees to indemnify the other against all claims of any third parties
for fees and commissions of any brokers claiming a fee or commission related to
the transactions contemplated hereby.
9.4
Access
to Information Post-Closing; Cooperation.
(a)
Following the Closing, Buyer and MCI shall afford to Seller and its authorized
accountants, counsel, and other designated representatives reasonable access
(and including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours to
allow records, books, contracts, instruments, computer data and other data and
information (collectively, “Information”) within the possession or control of
Buyer or MCI insofar as such access is reasonably required by Seller.
Information may be requested under this Section 9.4(a) for,
without limitation, audit, accounting, claims, litigation and tax purposes, as
well as for purposes of fulfilling disclosure and reporting obligations and
performing this Agreement and the transactions contemplated hereby. No files,
books or records of MCI existing at the Closing Date shall be destroyed by Buyer
or MCI after Closing but prior to the expiration of any period during which such
files, books or records are required to be maintained and preserved by
applicable law without giving the Seller at least 30 days’ prior written notice,
during which xxxx Xxxxxx shall have the right to examine and to remove any such
files, books and records prior to their destruction.
(b)
Following the Closing, Seller shall afford to MCI and its authorized
accountants, counsel and other designated representatives reasonable access
(including using reasonable efforts to give access to persons or firms
possessing information) duplicating rights during normal business hours to
Information within Seller’s possession or control relating to the business of
MCI. Information may be requested under this Section 9.4(b) for,
without limitation, audit, accounting, claims, litigation and tax purposes as
well as for purposes of fulfilling disclosure and reporting obligations and for
performing this Agreement and the transactions contemplated hereby. No files,
books or records of MCI existing at the Closing Date shall be destroyed by
Seller after Closing but prior to the expiration of any period during which such
files, books or records are required to be maintained and preserved by
applicable law without giving the Buyer at least 30 days prior written notice,
during which time Buyer shall have the right to examine and to remove any such
files, books and records prior to their destruction.
(c)
At all times following the Closing, Seller, Buyer and
MCI shall use reasonable efforts to make available to the other party on written
request, the current and former officers, directors, employees and agents of
Seller or MCI for any of the purposes set forth in Section 9.4(a) or (b)
above or as witnesses to the extent that such persons may reasonably be required
in connection with any legal, administrative or other proceedings in which
Seller or MCI may from time to be involved.
(d)
The party to whom any Information or witnesses are provided under
this Section
9.4 shall reimburse the provider thereof for all out-of-pocket expenses
actually and reasonably incurred in providing such Information or
witnesses.
(e)
Seller, Buyer, MCI and their respective employees and agents shall
each hold in strict confidence all Information concerning the other party in
their possession or furnished by the other or the other’s representative
pursuant to this Agreement with the same degree of care as such party utilizes
as to such party’s own confidential information (except to the extent that such
Information is (i) in the public domain through no fault of such party or (ii)
later lawfully acquired from any other source by such party), and each party
shall not release or disclose such Information to any other person, except such
party’s auditors, attorneys, financial advisors, bankers, other consultants and
advisors or persons with whom such party has a valid obligation to disclose such
Information, unless compelled to disclose such Information by judicial or
administrative process or, as advised by its counsel, by other requirements of
law.
(f)
Seller, Buyer and MCI shall each use their best efforts to forward
promptly to the other party all notices, claims, correspondence and other
materials which are received and determined to pertain to the other
party.
9.5
Guarantees,
Surety Bonds and Letter of Credit Obligations. In the event that Seller
is obligated for any debts, obligations or liabilities of MCI by virtue of any
outstanding guarantee, performance or surety bond or letter of credit provided
or arranged by Seller on or prior to the Closing Date, Buyer and MCI shall use
best efforts to cause to be issued replacements of such bonds, letters of credit
and guarantees and to obtain any amendments, novations, releases and approvals
necessary to release and discharge fully Seller from any liability thereunder
following the Closing. Buyer and MCI, jointly and severally, shall be
responsible for, and shall indemnify, hold harmless and defend Seller from and
against, any costs or losses incurred by Seller arising from such bonds, letters
of credits and guarantees and any liabilities arising therefrom and shall
reimburse Seller for any payments that Seller may be required to pay pursuant to
enforcement of its obligations relating to such bonds, letters of credit and
guarantees.
9.6
Filings
and Consents. Buyer, at its risk, shall determine what, if any, filings
and consents must be made and/or obtained prior to Closing to consummate the
purchase and sale of the Shares. Buyer shall indemnify the Seller Indemnified
Parties (as defined in Section 11.1 below)
against any Losses (as defined in Section 11.1 below)
incurred by any Seller Indemnified Parties by virtue of the failure to make
and/or obtain any such filings or consents. Recognizing that the failure to make
and/or obtain any filings or consents may cause Seller to incur Losses or
otherwise adversely affect Seller, Buyer and MCI confirm that the provisions of
this Section
9.6 will not limit Seller’s right to treat such failure as the failure of
a condition precedent to Seller’s obligation to close pursuant to Article VII
above.
9.7
Insurance.
Buyer acknowledges that on the Closing Date, effective as of the Closing, all
insurance coverage and bonds provided by Seller for MCI, and all certificates of
insurance evidencing that MCI maintains any required insurance by virtue of
insurance provided by Seller, will terminate with respect to any insured damages
resulting from matters occurring subsequent to Closing.
9.8
Agreements
Regarding Taxes.
(a)
Tax
Sharing Agreements. Any tax sharing agreement between Seller and MCI is
terminated as of the Closing Date and will have no further effect for any
taxable year (whether the current year, a future year, or a past
year).
(b)
Returns
for Periods Through the Closing Date. Seller will include the income and
loss of MCI (including any deferred income triggered into income by Reg.
§1.1502-13 and any excess loss accounts taken into income under Reg. §1.1502-19)
on Seller’s consolidated federal income tax returns for all periods through the
Closing Date and pay any federal income taxes attributable to such income.
Seller and MCI agree to allocate income, gain, loss, deductions and credits
between the period up to Closing (the “Pre-Closing Period”) and the period after
Closing (the “Post-Closing Period”) based on a closing of the books of MCI and
both Seller and MCI agree not to make an election under Reg.
§1.1502-76(b)(2)(ii) to ratably allocate the year’s items of income, gain, loss,
deduction and credit. Seller, MCI and Buyer agree to report all transactions not
in the ordinary course of business occurring on the Closing Date after Buyer’s
purchase of the Shares on MCI’s tax returns to the extent permitted by Reg.
§1.1502-76(b)(1)(ii)(B). Buyer agrees to indemnify Seller for any additional tax
owed by Seller (including tax owned by Seller due to this indemnification
payment) resulting from any transaction engaged in by MCI during the Pre-Closing
Period or on the Closing Date after Buyer’s purchase of the Shares. MCI will
furnish tax information to Seller for inclusion in Seller’s consolidated federal
income tax return for the period which includes the Closing Date in accordance
with MCI’s past custom and practice.
(c)
Audits.
Seller will allow MCI and its counsel to participate at MCI’s expense in any
audits of Seller’s consolidated federal income tax returns to the extent that
such audit raises issues that relate to and increase the tax liability of MCI.
Seller shall have the absolute right, in its sole discretion, to engage
professionals and direct the representation of Seller in connection with any
such audit and the resolution thereof, without receiving the consent of Buyer or
MCI or any other party acting on behalf of Buyer or MCI, provided that Seller
will not settle any such audit in a manner which would materially adversely
affect MCI after the Closing Date unless such settlement would be reasonable in
the case of a person that owned MCI both before and after the Closing Date. In
the event that after Closing any tax authority informs the Buyer or MCI of any
notice of proposed audit, claim, assessment, or other dispute concerning an
amount of taxes which pertain to the Seller, or to MCI during the period prior
to Closing, Buyer or MCI must promptly notify the Seller of the same within 15
calendar days of the date of the notice from the tax authority. In the event
Buyer or MCI does not notify the Seller within such 15-day period, Buyer and
MCI, jointly and severally, will indemnify the Seller for any incremental
interest, penalty or other assessments resulting from the delay in giving
notice. To the extent of any conflict or inconsistency, the provisions of this
Section 9.8 shall control over the provisions of Section 11.2
below.
(d)
Cooperation
on Tax Matters. Buyer, Seller and MCI shall cooperate fully, as and to
the extent reasonably requested by the other party, in connection with the
filing of tax returns pursuant to this Section and any audit, litigation or
other proceeding with respect to taxes. Such cooperation shall include the
retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder. MCI shall (i) retain all books and records with respect to tax
matters pertinent to MCI relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by Seller, any extensions thereof) of the respective taxable
periods, and to abide by all record retention agreements entered into with any
taxing authority, and (ii) give Seller reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
Seller so requests, Buyer agrees to cause MCI to allow Seller to take possession
of such books and records.
9.9
ERISA.
Effective as of the Closing Date, MCI shall terminate its participation in, and
withdraw from, all employee benefit plans sponsored by Seller, and Seller and
Buyer shall cooperate fully in such termination and withdrawal. Without
limitation, MCI shall be solely responsible for (i) all liabilities under those
employee benefit plans notwithstanding any status as an employee benefit plan
sponsored by Seller, and (ii) all liabilities for the payment of vacation pay,
severance benefits, and similar obligations, including, without limitation,
amounts which are accrued but unpaid as of the Closing Date with respect
thereto. Buyer and MCI acknowledge that MCI is solely responsible for providing
continuation health coverage, as required under the Consolidated Omnibus
Reconciliation Act of 1985, as amended (“COBRA”), to each person, if any,
participating in an employee benefit plan subject to COBRA with respect to such
employee benefit plan as of the Closing Date, including, without limitation, any
person whose employment with MCI is terminated after the Closing
Date.
X.
TERMINATION.
This Agreement may be terminated at, or at any time prior to, the Closing by
mutual written consent of Seller and Buyer.
If this
Agreement is terminated as provided herein, it shall become wholly void and of
no further force and effect and there shall be no further liability or
obligation on the part of any party except to pay such expenses as are required
of such party.
XI.
INDEMNIFICATION.
11.1
Indemnification
by Buyer. Buyer covenants and agrees to indemnify, defend, protect and
hold harmless Seller, and its officers, directors, employees, stockholders,
agents, representatives and affiliates (collectively, together with Seller, the
“Seller Indemnified Parties”) at all times from and after the date of this
Agreement from and against all losses, liabilities, damages, claims, actions,
suits, proceedings, demands, assessments, adjustments, costs and expenses
(including specifically, but without limitation, reasonable attorneys’ fees and
expenses of investigation), whether or not involving a third party claim and
regardless of any negligence of any Seller Indemnified Party (collectively,
“Losses”), incurred by any Seller Indemnified Party as a result of or arising
from (i) any breach of the representations and warranties of Buyer set forth
herein or in certificates delivered in connection herewith, (ii) any breach or
non-fulfillment of any covenant or agreement (including any other agreement of
Buyer to indemnify Seller set forth in this Agreement) on the part of Buyer
under this Agreement, (iii) any debt, liability or obligation of MCI, (iv) the
conduct and operations of the business of MCI whether before or after Closing,
(v) claims asserted against MCI whether before or after Closing, or (vi) any
federal or state income tax payable by Seller and attributable to the
transaction contemplated by this Agreement.
11.2
Third
Party Claims.
(a)
Defense.
If any claim or liability (a “Third-Party Claim”) should be asserted against any
of the Seller Indemnified Parties (the “Indemnitee”) by a third party after the
Closing for which Buyer has an indemnification obligation under the terms of
Section 11.1,
then the Indemnitee shall notify Buyer and MCI (the “Indemnitor”) within 20 days
after the Third-Party Claim is asserted by a third party (said notification
being referred to as a “Claim Notice”) and give the Indemnitor a reasonable
opportunity to take part in any examination of the books and records of the
Indemnitee relating to such Third-Party Claim and to assume the defense of such
Third-Party Claim and in connection therewith and to conduct any proceedings or
negotiations relating thereto and necessary or appropriate to defend the
Indemnitee and/or settle the Claim. The expenses (including reasonable
attorneys’ fees) of all negotiations, proceedings, contests, lawsuits or
settlements with respect to any Third-Party Claim shall be borne by the
Indemnitor. If the Indemnitor agrees to assume the defense of any Third-Party
Claim in writing within 20 days after the Claim Notice of such Third-Party Claim
has been delivered, through counsel reasonably satisfactory to Indemnitee, then
the Indemnitor shall be entitled to control the conduct of such defense, and any
decision to settle such Third-Party Claim, and shall be responsible for any
expenses of the Indemnitee in connection with the defense of such Third-Party
Claim so long as the Indemnitor continues such defense until the final
resolution of such Third-Party Claim. The Indemnitor shall be responsible for
paying all settlements made or judgments entered with respect to any Third-Party
Claim the defense of which has been assumed by the Indemnitor. Except as
provided on subsection (b) below, both the Indemnitor and the Indemnitee must
approve any settlement of a Third Party Claim. A failure by the Indemnitee to
timely give the Claim Notice shall not excuse Indemnitor from any
indemnification liability except only to the extent that the Indemnitor is
materially and adversely prejudiced by such failure.
(b)
Failure
to Defend. If the Indemnitor shall not agree to assume the defense of any
Third-Party Claim in writing within 20 days after the Claim Notice of such
Third-Party Claim has been delivered, or shall fail to continue such defense
until the final resolution of such Third-Party Claim, then the Indemnitee may
defend against such Third-Party Claim in such manner as it may deem appropriate
and the Indemnitee may settle such Third-Party Claim on such terms as it may
deem appropriate. The Indemnitor shall promptly reimburse the Indemnitee for the
amount of all settlement payments and expenses, legal and otherwise, incurred by
the Indemnitee in connection with the defense or settlement of such Third-Party
Claim. If no settlement of such Third-Party Claim is made, then the Indemnitor
shall satisfy any judgment rendered with respect to such Third-Party Claim
before the Indemnitee is required to do so, and pay all expenses, legal or
otherwise, incurred by the Indemnitee in the defense against such Third-Party
Claim.
11.3
Non-Third-Party
Claims. Upon discovery of any claim for which Buyer has an
indemnification obligation under the terms of Section 11.3 which
does not involve a claim by a third party against the Indemnitee, the Indemnitee
shall give prompt notice to Buyer of such claim and, in any case, shall give
Buyer such notice within 30 days of such discovery. A failure by Indemnitee to
timely give the foregoing notice to Buyer shall not excuse Buyer from any
indemnification liability except to the extent that Buyer is materially and
adversely prejudiced by such failure.
11.4
Survival.
Except as otherwise provided in this Section 11.4, all
representations and warranties made by Buyer, MCI and Seller in connection with
this Agreement shall survive the Closing. Anything in this Agreement to the
contrary notwithstanding, the liability of all Indemnitors under this Article XI shall
terminate on the third (3rd)
anniversary of the Closing Date, except with respect to (a) liability for any
item as to which, prior to the third (3rd)
anniversary of the Closing Date, any Indemnitee shall have asserted a Claim in
writing, which Claim shall identify its basis with reasonable specificity, in
which case the liability for such Claim shall continue until it shall have been
finally settled, decided or adjudicated, (b) liability of any party for Losses
for which such party has an indemnification obligation, incurred as a result of
such party’s breach of any covenant or agreement to be performed by such party
after the Closing, (c) liability of Buyer for Losses incurred by a Seller
Indemnified Party due to breaches of their representations and warranties in
Article III of
this Agreement, and (d) liability of Buyer for Losses arising out of Third-Party
Claims for which Buyer has an indemnification obligation, which liability shall
survive until the statute of limitation applicable to any third party’s right to
assert a Third-Party Claim bars assertion of such claim.
XII.
MISCELLANEOUS.
12.1
Exercise
of Rights and Remedies. Except as otherwise provided herein, no delay of
or omission in the exercise of any right, power or remedy accruing to any party
as a result of any breach or default by any other party under this Agreement
shall impair any such right, power or remedy, nor shall it be construed as a
waiver of or acquiescence in any such breach or default, or of any similar
breach or default occurring later; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default occurring before or
after that waiver.
12.2
Time.
Time is of the essence with respect to this Agreement.
12.3
Reformation
and Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal and enforceable but so as to most nearly
retain the intent of the parties, and if such modification is not possible, such
provision shall be severed from this Agreement, and in either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
12.4
Further
Acts. Seller, Buyer and MCI shall execute any and all documents and
perform such other acts that may be reasonably necessary to effectuate the
purposes of this Agreement.
12.5
Entire
Agreement; Amendments. This Agreement contains the entire understanding
of the parties relating to the subject matter contained herein. This Agreement
cannot be amended or changed except through a written instrument signed by all
of the parties hereto.
12.6
Assignment.
No party may assign his or its rights or obligations hereunder, in whole or in
part, without the prior written consent of the other parties.
12.7
Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Nevada, without giving effect to principles of
conflicts or choice of laws thereof.
12.8
Counterparts.
This Agreement may be executed in one or more counterparts, with the same effect
as if all parties had signed the same document. Each such counterpart shall be
an original, but all such counterparts taken together shall constitute a single
agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page was an original
thereof.
12.9
Section
Headings and Gender. The Section headings used herein are inserted for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement. All personal pronouns used in this Agreement
shall include the other genders, whether used in the masculine, feminine or
neuter, and the singular shall include the plural, and vice versa, whenever and as
often as may be appropriate.
12.10
Specific
Performance; Remedies. Each of Seller and Buyer and MCI acknowledges and
agrees that the Company would be damaged irreparably if any provision of this
Agreement is not performed in accordance with its specific terms or is otherwise
breached. Accordingly, each of Buyer and MCI agrees that the Company will be
entitled to seek an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and its
terms and provisions in any action instituted in any court of the United States
or any state thereof having jurisdiction over the parties and the matter,
subject to Section
12.7, in addition to any other remedy to which they may be entitled, at
law or in equity. Except as expressly provided herein, the rights, obligations
and remedies created by this Agreement are cumulative and in addition to any
other rights, obligations or remedies otherwise available at law or in equity,
and nothing herein will be considered an election of remedies.
12.11
Submission
to Jurisdiction; Process Agent; No Jury Trial.
(a)
Each party to the Agreement hereby submits to the jurisdiction of any state or
federal court sitting in the State of New York, in any action arising out of or
relating to this Agreement and agrees that all claims in respect of the action
may be heard and determined in any such court. Each party to the Agreement also
agrees not to bring any action arising out of or relating to this Agreement in
any other court. Each party to the Agreement agrees that a final judgment in any
action so brought will be conclusive and may be enforced by action on the
judgment or in any other manner provided at law or in equity. Each party to the
Agreement waives any defense of inconvenient forum to the maintenance of any
action so brought and waives any bond, surety, or other security that might be
required of any other Party with respect thereto.
(b)
EACH PARTY TO THE AGREEMENT HEREBY AGREES TO WAIVE HIS OR HER RIGHTS TO JURY
TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER
AGREEMENTS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY DEALINGS
AMONG THEM RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this
waiver is intended to be all encompassing of any and all actions that may be
filed in any court and that relate to the subject matter of the transactions,
including, contract claims, tort claims, breach of duty claims, and all other
common law and statutory claims. Each party to the Agreement hereby acknowledges
that this waiver is a material inducement to enter into a business relationship
and that they will continue to rely on the waiver in their related future
dealings. Each party to the Agreement further represents and warrants that it
has reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED ORALLY OR IN WRITING, AND THE
WAIVER WILL APPLY TO ANY AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the
event of commencement of any action, this Agreement may be filed as a written
consent to trial by a court.
12.12 Construction.
The parties hereto have participated jointly in the negotiation and drafting of
this Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as if drafted jointly by the parties hereto and
no presumption or burden of proof will arise favoring or disfavoring any party
because of the authorship of any provision of this Agreement. Any reference to
any federal, state, local, or foreign law will be deemed also to refer to law as
amended and all rules and regulations promulgated thereunder, unless the context
requires otherwise. The words “include,” “includes,” and “including” will be
deemed to be followed by “without limitation.” The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party
hereto has breached any representation, warranty, or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which that party has not breached will not detract from or
mitigate the fact that such party is in breach of the first representation,
warranty, or covenant.
[Signature
page follows this page.]
IN WITNESS WHEREOF, the
parties hereto have hereunto set their hands as of the day and year first above
written.
SELLER:
MED
CONTROL, INC.
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By:
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Name:
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Xx.
Xxxx Xxxxx
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Title:
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Chief
Executive Officer
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MCI:
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MCI
ACQUISITION CORP:
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By:
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Name:
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Ms.
Xxxxxx Xxxxxx Xxxx
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Title:
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Chief
Executive Officer
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BUYER:
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Ms.
Xxxxxx Xxxxxx Xxxx
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