MERGER AND REORGANIZATION AGREEMENT
THIS MERGER AND REORGANIZATION AGREEMENT dated as of April 4, 2000, is
entered into among PRE-CELL SOLUTIONS, INC., a Colorado corporation
("Pre-Cell"), PRE-PAID ACQUISITIONS CORP., a Florida corporation and
wholly-owned subsidiary of Pre-Cell ("Merger Subsidiary"), PRE-PAID SOLUTIONS,
INC., a Florida corporation ("Pre-Paid"), Xxxxxx X. Xxxxxx ("Xxxxxx") and each
of the other stockholders of Pre-Paid listed on Exhibit A (Xxxxxx and such other
stockholders being referred to collectively herein as, the "Stockholders").
WHEREAS, the Stockholders are the owners of all of the outstanding
capital stock of Pre-Paid in the respective amounts set forth in Exhibit A;
WHEREAS, subject to the terms and conditions of this Merger and
Reorganization Agreement ("Agreement"), the Parties desire to consummate a
merger, as contemplated herein, pursuant to which the Merger Subsidiary shall be
merged with and into Pre-Paid so that Pre-Paid becomes a wholly-owned subsidiary
of Pre-Cell; and
WHEREAS, for Federal income tax purposes, the parties intend that such
merger qualify as a reorganization under the provisions of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code").
IT IS AGREED:
ARTICLE I
THE MERGER
Section 1.1 The Merger. Upon the terms and subject to the conditions
hereof, and in accordance with the relevant provisions of the Florida Business
Corporation Act (the "BCA"), the Merger Subsidiary and Pre-Paid shall consummate
a merger (the "Merger") of the Merger Subsidiary with and into Pre-Paid at the
Effective Time (as hereinafter defined) in accordance with the provisions of
this Agreement. Following the Merger, Pre-Paid shall continue as the surviving
corporation (the "Surviving Corporation") and shall continue its existence under
the laws of the State of Florida and the separate corporate existence of Merger
Subsidiary shall cease.
Section 1.2 Effective Time. At the Closing, Pre-Paid and the Merger
Subsidiary shall file with the Florida Secretary of State in accordance with the
BCA an executed copy of the Articles of Merger in the form of Exhibit B hereto
(the "Articles of Merger") reflecting the Merger. The Merger shall become
effective at such time as the Articles of Merger are so filed with the Florida
Secretary of State (the "Effective Time"). To the extent permitted under law,
the Stockholders hereby waive publication of the Articles of Merger. The
Stockholders hereby agree to the adoption and filing of this Agreement and the
Plan of Merger as required under the BCA, and acknowledge and agree that their
respective signatures hereto shall constitute their written consent for purposes
of authorizing the foregoing by unanimous written consent of stockholders as
provided under the BCA.
Section 1.3 Effects of the Merger. The Merger shall have the effects
set forth in Section 607.1106 of the BCA.
Section 1.4 Certificate of Incorporation and By-Laws. The Articles of
Incorporation and the By-Laws of Merger Subsidiary shall be the Articles of
Incorporation and By-Laws of the Surviving Corporation at the Effective Time.
Section 1.5 Directors and Officers of the Surviving Corporation. At the
Effective Time, the Board of Directors and Officers of the Surviving Corporation
shall consist of the persons listed in Schedule 1.5, each to serve until his or
her successor is elected and qualified.
ARTICLE II
CONVERSION OF SHARES AND RELATED MATTERS
Section 2.1 Conversion of Outstanding Stock of the Merger Subsidiary
and Exchange for Stock of Surviving Corporation. Upon consummation of the
Merger, all 100 shares of the common stock, no par value, of the Merger
Subsidiary ("Merger Subsidiary Stock") outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any action on the part
of the holder thereof, be converted into and exchanged for 100 shares of the
common stock, no par value, of Pre-Paid ("Surviving Corporation Stock"), which
shall represent all of the issued and outstanding shares of capital stock of the
Surviving Corporation immediately after the Effective Time. All shares of
Surviving Corporation Stock shall be fully paid and non-assessable. Promptly
after the Effective Time, the Surviving Corporation shall issue to Pre-Cell a
stock certificate representing the 100 shares of Surviving Corporation Stock in
exchange for the certificate or certificates which formerly represented 100
shares of Merger Subsidiary Stock, which stock certificates shall be immediately
canceled.
Section 2.2 Conversion of Pre-Paid Shares. Subject to the provisions of
Section 1.2, all of the outstanding shares of common stock, no par value, of
Pre-Paid that are outstanding immediately prior to the Effective Time (the
"Pre-Paid Shares") shall be converted into the right to receive, at or after the
Closing, an aggregate of 20,219,145 shares (the "Stock Consideration") of
Pre-Cell's common stock, par value $.01 per share ("Pre-Cell Stock"),
Section 2.3 Pre-Cell Stock. The Pre-Cell Stock, upon issuance under
Section 2.2 shall be subject to the restrictions of Rule 144 promulgated by the
United States of America Securities and Exchange Commission (the "SEC") under
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the Securities Act of 1933, as amended (the "Securities Act"), until properly
disposed of in accordance with the terms and conditions of Rule 144 or another
exemption to the registration requirements of the Securities Act. The number of
shares of Pre-Cell Stock constituting the consideration payable to any
Stockholder shall be rounded up or down to the nearest whole number of shares.
Section 2.4 Registration Rights.
(a) General. As soon as practicable after the Closing Date, but no
later than October 31, 2000 in any event, Pre-Cell shall file a registration
statement with the United States Securities and Exchange Commission ("SEC") to
register (i) the Pre-Cell Shares issued to Pre-Paid Stockholders as the Merger
Consideration hereunder, and (ii) those Pre-Cell Shares to be issued to the
holders of the Converted Options upon the exercise of the Converted Options as
contemplated thereby (collectively, the "Holders") under the Securities Act of
1933, as amended (the "Securities Act"), or shall include all such Pre-Cell
Shares in a registration statement which has been filed but not been declared
effective, if allowable under the Securities Act and the rules promulgated
thereunder, so that they may be sold by the Holders to the extent legally
permissible. Pre-Cell shall use its reasonable efforts to cause such
registration statement to be declared effective by the SEC no later than
December 31, 2000, and once such registration statement is declared effective,
to keep it effective until all securities registered thereby are either sold or
can be sold under an exemption from the registration requirements of the
Securities Act. Pre-Cell shall bear all fees and expenses incurred by it in
connection with the preparation and filing of such registration statement. Each
Holder will pay all brokerage discounts and commissions with respect to the sale
of his Pre-Cell Shares and any fees and expenses of separate counsel and
accountants which may be retained by the Holders. Each person for whom Pre-Cell
Shares are to be registered for resale under such registration statement will be
required to execute a lock-up agreement in the form annexed hereto as Exhibit D
pursuant to which he shall agree to (i) not sell any Pre-Cell Shares acquired by
him hereunder until the six month anniversary of the Closing Date; and (ii) only
to sell that percentage of the Pre-Cell Shares owned by him during any
three-month period beginning six months after the Closing Date and ending
eighteen months after the closing date as determined by the Pre-Cell board of
directors.
Notwithstanding any other provision of this Section 2.4, (i) Pre-Cell
shall have no obligation hereunder to register the Pre-Cell Shares on behalf of
a Holder unless (a) such Holder executes a lock-up agreement as described above
and (b) the Holder provides Pre-Cell with all of the information and documents
with respect to his ownership of the Pre-Cell Shares, compliance with the law,
manner of proposed disposition and such other matters as Pre-Cell shall
reasonably request for disclosure in the registration statement; (ii) Pre-Cell
shall not be obligated to register any of the Pre-Cell Shares unless such
registration is then permitted by law and the policy of the SEC; and (iii) it is
understood and agreed that there may be periods of up to 90 days in duration in
any year during which the registration statement filed in accordance with this
Section lapses into noneffectiveness as a result of (a) the unavailability of
financial statements required to update such registration statement or (b) the
occurrence of material events which require the filing of an amendment to such
registration statement.
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(b) Indemnification
(i) Pre-Cell shall indemnify and hold harmless, to the extent
permitted by law, each Holder, its officers and directors and each person who
controls a Holder (within the meaning of Section 15 of the Securities Act or
Section 20(a) of the Exchange Act) against all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees, costs and
expenses) caused by any untrue or alleged untrue statement of material fact
contained in any registration statement filed pursuant to Section 2.5(a),
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto, or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as the same are caused by or contained in or omitted from any
information furnished in writing to Pre-Cell by such Holder for use therein.
(ii) In connection with any registration statement in which a
Holder is participating, such Holder will furnish to Pre-Cell such information
as Pre-Cell reasonably requests for use in connection with any such registration
statement or prospectus, and to the extent permitted by law, will indemnify
Pre-Cell, its directors and officers and each person who controls Pre-Cell
(within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) against any losses, claims, damages, liabilities and expenses
(including reasonable attorneys' fees, costs and expenses) resulting from any
untrue statement of material fact contained in the registration statement,
prospectus or preliminary prospectus or any amendment thereof or supplement
thereto or any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in or omitted from any
information so furnished by such Holder in writing which states that such
information is for use in such registration statement, prospectus or preliminary
prospectus or any amendment or supplement thereto.
(iii) Any person entitled to indemnification under this Section
2.4(b) will (i) give prompt written notice to the indemnifying party of any
claim with respect to which it seeks indemnification; provided, that the failure
to give such notice shall not relieve the indemnifying party of its obligations
hereunder; and (ii) unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
with respect to such claim, permit such indemnifying party to assume the defense
of such claim with counsel reasonably satisfactory to the indemnified party and
such indemnifying parties shall promptly and vigorously assume such defense at
its cost and expense. If such defense is assumed, the indemnifying party will
not be subject to any liability for any settlement made by the indemnified party
without its consent (but such consent will not be unreasonably withheld). An
indemnifying party who is not entitled to, or elects not to, assume the defense
of a claim shall promptly pay all costs and expenses of the indemnified party's
defense, but will not be obligated to pay the fees and expenses of more than one
counsel for each party indemnified by such indemnifying party with respect to
such claim.
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Section 2.5 Conversion of Pre-Paid Options. At the Effective time,
all outstanding options and warrants to purchase Pre-Paid Shares listed on
Schedule 2.5 ("Pre-Paid Options") shall automatically be converted into options
and warrants ("Converted Options") to purchase Pre-Cell Shares on the basis of
2.81915 Pre-Cell Shares for each Pre-Paid Share entitled to be purchased under
the Pre-Paid Options, at the per-share price equal to the quotient of (i) the
price contained in the Pre-Paid Options, divided by (ii) 2.81915. Additionally
the vesting of the Converted Options shall be as accelerated such that all of
the Converted Options shall be immediately vested on the consummation of the
Merger. Other than the foregoing changes, each holder's Converted Options shall
have the same exercise terms as his Pre-Paid Options.
ARTICLE III
Closing
Section 3.1 Time and Place of the Closing. Subject to the terms and
conditions of this Agreement, the consummation of the transactions contemplated
by this Agreement pursuant hereto shall take place at a closing (the "Closing")
to be held concurrently with the execution of this Agreement, at the offices of
Xxxxx & Xxxxx, P.A., 0000 Xxxx Xxxxxxxx Xxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, on
a date and at a time mutually agreeable to the parties (the "Closing Date").
Section 3.2 Procedure at the Closing. At the Closing, the parties agree
to take the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
(a) Pre-Cell shall deliver the certificates representing the Stock
Consideration to the Stockholders in accordance with Exhibit A;
(b) The Stockholders shall deliver to Pre-Cell certificates
representing their respective shares of Pre-Paid common stock, duly endorsed or
accompanied by duly executed stock powers and with all requisite transfer tax
stamps;
(c) Merger Subsidiary and Pre-Paid shall duly execute the Articles of
Merger and file the Articles of Merger with the State of Florida Secretary of
State.
(d) Pre-Paid shall deliver to Pre-Cell certified copies of resolutions
of the Stockholders and directors of Pre-Paid authorizing the execution and
delivery of this Agreement by Pre-Paid and the performance of Pre-Paid's
obligations hereunder and its consummation of the transaction contemplated
hereby;
(e) Merger Subsidiary shall deliver to the Stockholders certified
copies of resolutions of the directors of Merger Subsidiary authorizing the
execution and delivery of this Agreement by Merger Subsidiary and the
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performance of Merger Subsidiary's obligations hereunder and its consummation of
the transaction contemplated hereby;
(f) Pre-Cell shall deliver to the Stockholders certified copies of
resolutions of the directors of Pre-Cell authorizing the execution and delivery
of this Agreement by Pre-Cell and the performance of Pre-Cell's obligations
hereunder and its consummation of the transaction contemplated hereby;
(g) Pre-Paid shall deliver the corporate books and records,
correspondence and employment records to Merger Subsidiary; and
(h) Each of the Stockholders shall execute and deliver to Pre-Cell a
Lock-Up Agreement (the "Lock-Up Agreement(s")) substantially in the form annexed
to this Agreement as Exhibit D.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PRE-PAID
In order to induce Pre-Cell and Merger Subsidiary to enter into this
Agreement and to consummate the transactions contemplated under this Agreement,
Pre-Paid hereby makes the following representations and warranties each of which
is relied upon by Pre-Cell and Merger Subsidiary regardless of any other action,
omission to act, investigation made or information obtained by Pre-Cell and
Merger Subsidiary.
Section 4.1 Organization, Power and Authority of Pre-Paid. Pre-Paid is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Florida and Pre-Paid has the requisite corporate power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. Pre-Paid is duly qualified as a foreign corporation and is
in good standing under the laws of each other jurisdiction in which the conduct
of its business or the ownership of its assets requires such qualification,
except where the failure to qualify would not result in a material adverse
effect on Pre-Paid or its business. Pre-Paid has no subsidiaries.
Section 4.2 Due Authorization; Binding Obligation. Pre-Paid has the
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. This Agreement has
been duly and validly executed and delivered by Pre-Paid and is the legal, valid
and binding obligation of Pre-Paid, enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, preferential transfer, moratorium or
similar laws relating to enforcement of creditors' rights generally and general
principles of equity. Except for any corporate action required by Pre-Paid, no
other action on the part of any individual or other person or entity is
necessary to authorize this Agreement or for the consummation of the
transactions contemplated by this Agreement. Pre-Paid has duly executed this
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Agreement and authorized the execution of this Agreement and the consummation of
the transactions contemplated by this Agreement as required under the Florida
BCA. Neither the execution and delivery of this Agreement nor the consummation
of the transactions contemplated by this Agreement will: (i) conflict with or
violate any provision of Pre-Paid's Articles of Incorporation or by-laws, or any
law, ordinance or regulation or any decree or order of any court or
administrative or other governmental body which is either applicable to, binding
upon or enforceable against Pre-Paid; (ii) result in any material breach of or
default under any material mortgage, other contract, agreement, indenture, will,
trust or other instrument which is either binding upon or enforceable against
Pre-Paid or any of Pre-Paid's Assets; (iii) result in any breach of or default
under any contract; (iv) violate any legally protected right of any individual
or entity or give to any individual or entity a right or claim against Pre-Paid
or Pre-Cell; or, (v) impair or in any way limit any material governmental or
official license, approval, permit or authorization of Pre-Paid to conduct its
business. Attached to this Agreement and marked as Exhibit E are true, correct
and complete copies of the Articles of Incorporation, as amended, and Bylaws, as
amended, of Pre-Paid.
Section 4.3 Financial Statements. Attached to this Agreement as Exhibit
F are true, correct and complete copies of the unaudited financial statements of
Pre-Paid as of June 30, 1999 and December 31, 1999 and the related statements of
earnings and changes in financial position for the period then ended
(collectively, the "Financial Statements"). The June 30, 2000 financial
statements have been prepared in accordance with generally accepted accounting
principles ("GAAP"), consistently applied, on a basis consistent with past
practices. Additionally, the Financial Statements (i) are true, complete and
correct; (ii) fairly present the financial condition of Pre-Paid as of their
respective dates and results of its operations for the periods ending on their
respective dates; and (iii) do not include or omit to state any fact which
renders those statements misleading.
Section 4.4 No Undisclosed Liabilities. Pre-Paid has no liabilities or
obligations (whether secured, unsecured, absolute, accrued, asserted, contingent
or otherwise) of any nature, whether as principal, agent, partner, co-venturer,
guarantor or in any other capacity except: (i) the liabilities and obligations
of Pre-Paid that are reflected in the Financial Statements and only to the
extent reflected; (ii) liabilities incurred or accrued in the ordinary course of
business since December 31, 1999 which do not, either individually or in the
aggregate, have a material adverse effect on the financial condition of
Pre-Paid; or (iii) liabilities otherwise disclosed in Schedule 4.4.
Section 4.5 Licenses; Compliance. Pre-Paid possesses all licenses and
other required governmental or official approvals, permits, consents and
authorizations necessary for the operation of the Business, all of which are
listed on Schedule 4.5 (collectively the "Authorizations"). Pre-Paid is in
material compliance with: (i) the terms of all Authorizations; (ii) all laws,
ordinances, statutes and regulations where noncompliance would have a material
adverse effect on Pre-Paid and its business or assets; and, (iii) all judgments,
orders, rulings or other decisions of any governmental or other regulatory
authority, court or arbitrator having jurisdiction over Pre-Paid. Neither the
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execution, delivery or performance of this Agreement nor the performance of the
transactions contemplated by this Agreement will affect the validity of any
Authorizations and the same shall remain in full force and effect upon the
consummation of the transactions contemplated by this Agreement, except for
Authorizations which by their terms are not transferable.
Section 4.6 Consents and Approvals. No approval, consent or
authorization must be obtained by Pre-Paid for the execution, delivery or
performance of this Agreement or for the consummation of the transactions
contemplated by this Agreement, including, without limitation, the filing or
registration with any governmental or other regulatory authority.
Section 4.7 No Stockholder or Affiliate Relationships with Pre-Paid'
Customers; Pre-Paid' Interest in Other Businesses. Neither Pre-Paid nor any of
the Stockholders or their respective affiliates (as such term is defined in Rule
405 promulgated by the SEC under the Securities Act ("Affiliate") has, or during
the past 5 years had, any direct or indirect material interest in any of
Pre-Paid's customers. Pre-Paid does not have any financial interest in any
person, firm or corporation which is, or during the past 5 years was, directly
or indirectly, (a) engaged in the business engaged in by Pre-Paid or (b) a
customer or supplier of Pre-Paid, other than ownership of not more than 1% of
the equity securities of a company whose common stock is publicly traded.
Section 4.8 Litigation, Orders and Decrees. Except as listed on
Schedule 4.8, there are no actions, suits, claims, governmental investigations
or arbitration proceedings pending or to the best of Pre-Paid's knowledge,
threatened against or affecting Pre-Paid or the Business, assets, or financial
condition of Pre-Paid and there are no facts or circumstances which are
reasonably likely to create a basis for any of the foregoing, which, either
individually or in the aggregate, would have a material adverse affect on
Pre-Paid, its business or financial condition. There are no outstanding orders,
decrees or stipulations issued by any local, state or federal judicial authority
in any proceeding to which Pre-Paid is or was a party which may have a material
adverse effect on Pre-Paid.
Section 4.9 Real Property Owned or Leased. Pre-Paid does not own any
real property. Attached to this Agreement as Schedule 4.9 are true and complete
copies of all leases of real property (the "Leased Real Property") to which
Pre-Paid is a party, including all amendments and modifications thereto (the
"Real Property Leases"). Pre-Paid enjoys peaceful and undisturbed possession of
the Leased Real Property, and the Real Property Leases are the valid and legally
binding obligations of Pre-Paid and the respective lessors, enforceable against
Pre-Paid and the respective lessors in accordance with their respective terms,
and are in full force and effect. Pre-Paid (i) has not received written notice
of default under any of the Real Property Leases, (ii) is not in material
default of any Real Property Leases and (iii) no event has occurred which, with
the passage of time or the giving of notice or both, would constitute a material
default under any of the Real Property Leases.
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Section 4.10 Personal Property Leased and Purchase Options. Attached as
Schedule 4.10 is a list of all leases of personal property (the "Personal
Property Leases") to which Pre-Paid is a party. Pre-Paid has provided to
Pre-Cell true and complete copies of the Personal Property Leases, including all
amendments and modifications thereto and true and complete copies of all
agreements regarding Pre-Paid's rights to purchase the leased personal property
which is the subject of the Personal Property Leases ("the Leased Personal
Property") on or before the expiration of the Personal Property Leases,
including all amendments and modifications thereto (the "Purchase Options").
Pre-Paid enjoys peaceful and undisturbed possession of the Leased Personal
Property, and the Personal Property Leases and Purchase Options are the valid
and legally binding obligations of Pre-Paid and the respective lessors and
option grantors, enforceable against Pre-Paid and the respective lessors and
option grantors in accordance with their respective terms, subject to the effect
of any bankruptcy or other similar law affecting creditors' rights generally,
and are in full force and effect. Pre-Paid (i) has not received written notice
of default under any of the Personal Property Leases, (ii) is not in default of
any Personal Property Leases, and (iii) no event has occurred which, with the
passage of time or the giving of notice or both, would constitute a material
default under any of the Personal Property Leases. None of the Purchase Options,
if any, have expired.
Section 4.11 Title to Purchased Assets. Pre-Paid has good and
marketable title to all of its property, tangible or intangible, subject to
liens for current taxes and assessments not yet due and payable. All of
Pre-Paid's property is free and clear of restrictions on or conditions to
transfer or assignment, and free and clear of any mortgage, lien, charge,
encumbrance, security interest or other restrictions.
Section 4.12 Condition of Purchased Assets. All of the tangible assets
of Pre-Paid and the Leased Personal Property are in good condition, in good
operating order and are fit for the purposes for which those assets are used or
intended to be used, subject to normal wear and tear.
Section 4.13 Material Contracts. Attached as Schedule 4.13 is a
complete and correct list of each of the following types of contracts or
commitments (whether oral or written) to which Pre-Paid is a party (collectively
the "Contracts"): (i) Contracts for the employment of any officer or employee
and all bonus, incentive compensation, profit-sharing, retirement, pension,
group insurance, death benefit or other fringe benefit plans, deferred
compensation or post-termination obligations; (ii) Contracts for the future
purchase of materials, inventory, supplies, services or equipment; (iii)
distributor agreements and contracts for the purchase or sale of inventory or
supplies; (iv) agreements or arrangements for the purchase, sale or lease of any
other assets; (v) pledges, sales contracts, leases, security agreements or other
similar agreements with respect to Pre-Paid's properties; (vi) leases of
machinery or equipment; (vii) loan agreements, promissory notes, guarantees,
subordination or similar type agreements; (viii) consulting agreements; and,
(ix) any contract not otherwise covered by clauses (i) through (viii) above
which involves annual or aggregate payments in excess of $1,000. Pre-Paid has
furnished to Pre-Cell true, complete and accurate copies of all Contracts that
are in writing and has provided, in the case of oral contracts, complete and
accurate descriptions of all Contracts that are not in writing. Except as set
forth in Schedule 4.13, Pre-Paid has performed all of the obligations required
to be performed by it to date under the Contracts, and is not in default (with
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notice or lapse of time or both) under any of Contracts. Pre-Paid has obtained
all necessary consents with respect to any Pre-Paid Contract requiring consent
on or prior to the date hereof. Except as set forth on Schedule 4.13, the
consummation of the transactions contemplated by this Agreement will not
materially affect the continuation, validity or effectiveness of any of
Contracts.
Section 4.14 Contracts with Customers. Schedule 4.14 sets forth a list
of (a) all Contracts or other understandings or arrangements to which Pre-Paid
is a party relating to the sale or furnishing by it of goods or services where
the consideration for such sale is $1,000 or more, in any single case, (b) any
claims by parties other than Pre-Paid with respect thereto, (c) product
guarantees or warranties made by Pre-Paid relating to its goods or services, and
(d) any pending claims by Pre-Paid with respect thereto. None of the customers,
suppliers or other persons which is a party to any of the Contracts listed in
Schedule 4.14 has notified Pre-Paid of any intention to terminate its contract
or arrangement for service.
Section 4.15 Contracts Valid; No Default. All Contracts required to be
listed in any of the Schedules referred to in this Agreement are valid and
binding, enforceable in accordance with their respective terms, subject to the
effect of any bankruptcy or other similar law affecting creditors' rights
generally, and are in full force and effect. Except as set forth in such
Schedules, there is not under any such Contract, (a) any existing default by
Pre-Paid, or any event which, after notice or lapse of time, or both, would
constitute a default by Pre-Paid or result in a right to accelerate by any other
person or a loss of any rights of Pre-Paid and (b) to the best of Pre-Paid's
knowledge, any default by any other person, or any event which, after notice or
lapse of time, or both, would constitute a default by any such person or result
in a right to accelerate by Pre-Paid or a loss of any rights of any such person.
No existing Contract relating to the business of Pre-Paid is cancelable by any
other party thereto or is likely to be canceled or is subject to re-negotiation.
Except as disclosed in such Schedules, Pre-Paid is not a party to or bound by
any Contract which, upon performance, is reasonably expected to result in any
loss or liability to Pre-Paid. True and complete copies of all Contracts and
other documents listed on such Schedules (together with any and all amendments
thereto) have been delivered to Pre-Cell.
Section 4.16 Labor Matters. Pre-Paid is not a party to any collective
bargaining agreements with its employees. Pre-Paid is in compliance with all
federal, state and local laws regarding employment and employment practices,
conditions of employment, wages and hours and occupational laws, the violation
of which would have a material adverse effect on Pre-Paid. Pre-Paid is not
engaged in unfair labor practices, and there are no unfair labor practice
complaints pending or, to the best of Pre-Paid's knowledge, threatened against
Pre-Paid before the National Labor Relations Board or any other governmental or
regulatory board or agency performing similar functions. There is no labor
strike, slowdown, work stoppage or dispute pending or threatened against or
involving Pre-Paid. To the best of Pre-Paid's knowledge, none of Pre-Paid's
employees are engaged in organizing or are members of any union or other
employee group that is seeking recognition as a bargaining unit.
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Section 4.17 Absence of Changes. Except as set forth in Schedule 4.17,
since December 31, 1999, there has not been: (i) any material adverse change in
the financial condition, assets, liabilities, Business or operations of
Pre-Paid; (ii) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, financial
condition or business of Pre-Paid; (iii) any change in the outstanding capital
stock of Pre-Paid; (iv) declared, paid or set aside for payment any dividend or
other distribution (whether in cash, stock, property or any combination thereof)
in respect of Pre-Paid's common stock or any cancellation, exercise or
redemption or other acquisition by Pre-Paid of any shares of Pre-Paid's common
stock; (v) any increase in the rate or terms of compensation payable or to
become payable by Pre-Paid to any of its officers, directors or key employees or
any increase in the rate or terms of contribution to any employee benefit plans,
except as required by law; (vi) any liabilities or obligations incurred or
agreed to be incurred (whether absolute, accrued, contingent or otherwise),
except as incurred in the ordinary course of business consistent with past
practices; (vii) any material capital expenditure or commitment for replacements
or additions or improvements; (viii) any change by Pre-Paid in accounting
methods, principles or practices; (ix) any disposal, mortgage, pledge or other
disposition of any of its assets other than in the ordinary course of business;
or (x) receipt by Pre-Paid of any notice of termination of any contract, lease
or other agreement.
Section 4.18 Accuracy of Documents, Exhibits and Schedules. All
contracts, instruments, agreements and other documents delivered by Pre-Paid to
Pre-Cell for Pre-Cell's review in connection with this Agreement and the
transactions contemplated hereby, including all articles of incorporation,
by-laws, corporate minutes, stock record books, financial statements and tax
returns are true, correct and complete copies of all those contracts,
instruments, agreements and other documents. All Exhibits and Schedules to this
Agreement are true correct and complete as of the date hereof. No statement
contained in this Agreement or in any certificate, Exhibit, Schedule or
instrument furnished to Pre-Cell pursuant to the provisions of this Agreement or
in connection with the consummation of the contemplated transactions contains or
will contain any materially untrue statement or does not include or omit to
state any fact which renders those statements misleading.
Section 4.19 Investment Representations. All shares of Pre-Cell Stock
to be acquired by the Stockholders pursuant to this Agreement will be acquired
for his/her own account and not with a view towards distribution thereof.
Pre-Paid and the Stockholders understand that they must bear the economic risk
of the investment in the Pre-Cell Stock, which cannot be sold by them unless
they are registered under the Securities Act, or an exemption therefrom is
available, and such sale is permitted under the terms of the Lock-Up Agreement.
The Stockholders, acting through their representatives, have had both the
opportunity to ask questions and receive answers from the officers and directors
of Pre-Cell and all persons acting on its behalf concerning the business and
operations of Pre-Cell and to obtain any additional information to the extent
Pre-Cell possesses or may possess such information or can acquire it without
unreasonable effort or expense necessary to verify the accuracy of such
information. The Stockholders acknowledge receiving copies of the SEC Filings
Page 11
referred to in Section 5.5. The certificates representing the shares of Common
Stock shall bear the legends set forth in Exhibit G.
Section 4.20 Proprietary Rights.
(a) Except as listed on Schedule 4.20(a), there are no trademarks,
trademark applications, trade names, assumed names, service marks, logos,
patents, patent applications, copyrights and copyright registrations, owned or
licensed by Pre-Paid and used in or necessary for the conduct of the business
and operation of Pre-Paid (the foregoing together with all inventions, trade
secrets, customer lists and confidential processes, and all other similar rights
presently owned or licensed by Pre-Paid are the "Proprietary Rights"). Pre-Paid
owns or possesses the royalty-free license or other right to use all of the
Proprietary Rights which are required to be listed on Schedule 4.20(a) or which
are necessary to conduct its business as presently operated, and, except as set
forth on Schedule 4.20(a), no person, firm, corporation or other entity is
entitled to restrain Pre-Paid from using any such Proprietary Rights. No other
Proprietary Rights are used in or are necessary for the conduct of the business
and operation of Pre-Paid as presently conducted.
(b) To the best of Pre-Paid's knowledge, except as disclosed in
Schedule 4.20 (b), no Proprietary Rights or know-how used in or necessary for
the conduct of the business and operation of Pre-Paid conflict with or infringe
upon any similar rights or services of any other person. Except as disclosed in
Schedule 4.20 (b), no claims have been asserted by any person with respect to
the ownership, validity, license or use of the Proprietary Rights or the
provision of any services by Pre-Paid and there is no basis for any such claim.
(c) Schedule 4.20(c) accurately identifies all material databases and
computer software owned, licensed or otherwise used in connection with
Pre-Paid's business. Except as set forth on Schedule 4.20(c), Pre-Paid has, and
is assigning to Pre-Cell, as part of the Purchased Assets, all the databases and
computer software used or necessary to conduct Pre-Paid's business.
Section 4.21 Records. The books and records, correspondence, employment
records and files of or relating to the Business Pre-Paid are complete and
correct in all material respects, and there have been, and will be, no material
transactions which are required to be set forth therein which have not been so
set forth.
Section 4.22 Taxes, Tax Returns. All federal, state, local and foreign
income, property, sales, and other taxes, assessments, governmental charges,
penalties, interest and fines due and payable by Pre-Paid and by any other
person, firm or corporation which will or may be liabilities of Pre-Paid
("Taxes"), for all periods ending on or before the Balance Sheet Date, have been
paid in full or have been fully reserved against on the Balance Sheet. Pre-Paid
has filed all federal, state, local and foreign income, excise, property, sales,
withholding, social security, information returns, and other tax returns,
reports and related information ("Returns") required to have been filed by it to
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the date hereof, and no extension of the time for filing a Return is presently
in effect. The Returns that have been filed have been accurately prepared and
have been duly and timely filed. Pre-Paid's federal income tax returns have not
been audited by the Internal Revenue Service for all fiscal years through the
year ended December 31, 1998. There are no agreements, waivers or other
arrangements providing for an extension of time with respect to the filing of
any Return, or payment of any tax, governmental charge or assessment or
deficiency, by Pre-Paid; and there are no actions, suits, proceedings,
investigations or claims now threatened or pending against Pre-Paid in respect
of taxes, governmental charges or assessments, or any matter under discussion
with any governmental authority relating to taxes, governmental charges or
assessments asserted by any such authority.
Section 4.23 Environmental Matters; Health and Safety Laws. Pre-Paid is
in material compliance with all federal, state and local laws, regulations,
permits, orders and decrees relating to protection of the environment and
employee health and safety ("Applicable Requirements"). Pre-Paid has not
received any notice to the effect that its operations are not in compliance with
any of the Applicable Requirements or the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or other substance (including petroleum
products) into the environment and Pre-Paid knows of no facts which could
constitute the basis for any thereof.
Section 4.24 Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Pre-Paid.
Section 4.25 Nature and Survival of Representations and Warranties of
Pre-Paid. All statements contained in any Schedule, document, certificate or
other instrument delivered by or on behalf of Pre-Paid pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed
representations, warranties, covenants and agreements made by Pre-Paid. Each
representation, warranty, covenant and agreement made or deemed made by Pre-Paid
shall survive the Closing. The representations, warranties, covenants and
agreements made or deemed made by Pre-Paid in this Agreement shall not be
affected or deemed waived by reason of the fact that Pre-Cell or its
representative knew or should have known that any such representations,
warranties, covenants or agreement is or might be inaccurate in any respect. Any
furnishing of information to Pre-Cell by Pre-Paid or pursuant to, or otherwise
in connection with, this Agreement, including, without limitation, any
information contained in any document, contract, book or record of Pre-Paid or
to which Pre-Cell shall have access or any information obtained by, or made
available to, Pre-Cell as a result of any investigation made by or on behalf of
Pre-Cell prior to or after the date of this Agreement, shall not affect
Pre-Cell's right to rely on any representation, warranty, covenant or agreement
made or deemed made by Pre-Paid in this Agreement and shall not be deemed a
waiver thereof.
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Section 4.26 Capitalization. The number of authorized, issued and
outstanding shares of capital stock of Pre-Paid is 7,172,061. The Stockholders
(and their respective residential addresses) as set forth on Exhibit A, and are
the record and beneficial owners of all of the outstanding capital stock of
Pre-Paid, free and clear of all liens, encumbrances or restrictions to transfer.
Except as set forth on Schedule 2.5, there are no options, warrants or other
contractual rights outstanding which require, or give any person the right to
require, the issuance of any capital stock of Pre-Paid, whether or not such
rights are presently exercisable.
Section 4.27 Employee Benefit Plans. Pre-Paid has no employee benefit
plans (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), programs and arrangements maintained for the
benefit of any current or former employee, officer or director of Pre-Paid
(collectively, the "Pre-Paid Benefit Plans"). Each Network Benefit Plan and any
related trust intended to be qualified under Sections 401(a) and 501(a) of the
Code has received a favorable determination letter from the Internal Revenue
Service that it is so qualified and nothing has occurred since the date of such
letter that could reasonably be expected to materially adversely affect the
qualified status of such Pre-Paid Benefit Plan or related trust. Each Pre-Paid
Benefit Plan has been operated in all material respects in accordance with the
terms and requirements of applicable law and all required returns and filings
for each Pre-Paid Benefit Plan have been timely made. Neither Pre-Paid nor any
entity under common control with Pre-Paid has incurred any direct or indirect
liability under, arising out of or by operation of Title I or Title IV of ERISA
in connection with any Pre-Paid Benefit Plan and no fact or event exists that
could reasonably be expected to give rise to any such liability. All
contributions due and payable on or before the date hereof in respect of each
Pre-Paid Benefit Plan have been made in full and in proper form.
Section 4.28 Insurance Policies; Claims. Schedule 4.28 sets forth all
insurance policies and bonds maintained by or on behalf of Pre-Paid. Except as
disclosed in Schedule 4.28, the insurance policies and bonds set forth in
Schedule 4.28, are provided by reputable insurers or issuers, and provide
adequate coverage for all normal risks incident to the businesses of Pre-Paid
and its assets. No claims have been made against Pre-Paid as a result of
allegedly defective products and none of the Stockholders or Pre-Paid knows of
any basis for the assertion of any such claim. No insurance policy issued to or
on behalf of Pre-Paid has ever been canceled by the policy issuer.
Section 4.29 Bank Accounts. Schedule 4.29 sets forth the name of each
bank in which Pre-Paid has an account or safe deposit box, vault, lock-box or
other arrangement, the account number and description of each account at each
bank and the names of all persons authorized to draw thereon or to have access
thereto; and the names of all persons, if any, holding tax or other powers of
attorney from Pre-Paid.
Section 4.30 Records. The books of account, minute books, stock
certificate books and stock transfer ledgers of Pre-Paid are complete and
correct in all material respects, and there have been no material transactions
involving Pre-Paid of the type typically recorded in such records that have not
been recorded.
Page 14
Section 4.31 No Illegal or Improper Transactions. Neither Pre-Paid nor
any officer, director, employee, agent or affiliate of Pre-Paid has offered,
paid or agreed to pay to any person or entity (including any governmental
official) or solicited, received or agreed to receive from any such person or
entity, directly or indirectly, any money or anything of value for the purpose
or with the intent of (i) obtaining or maintaining business for the benefit of
Pre-Paid, (ii) illegally or improperly facilitating the purchase or sale of any
product or service, or (iii) avoiding the imposition of any fine or penalty, in
any manner which is in violation of any applicable ordinance, regulation or law.
Section 4.32 Related Transactions. Except as disclosed in Schedule
4.32, and for compensation and related arrangements with employees for services
rendered consistent with past practices, no current or former director, officer,
employee or stockholder of Pre-Paid has been, (a) a party to any transaction
with Pre-Paid (including, but not limited to, any contract, agreement or other
arrangements providing for the furnishing of services by, or rental of real or
personal property from, or otherwise requiring payments to, any such director,
officer, employee or shareholder), or (b) the direct or indirect owner of an
interest in any corporation, firm, association or business organization which is
a present competitor, supplier or customer of Pre-Paid, nor does any such person
receive income from any source other than Pre-Paid which relates to the business
of, or should properly accrue to, Pre-Paid.
Section 4.33 Software. Pre-Paid owns all right, title and interest in
and to the software which is the subject of United States Patent Application
Number 00-000-000 (the "Software"). The marketing, reproduction or use of the
Software, does not infringe upon any patent, copyright, trademark, trade secret
or other proprietary right of any third party. No proceedings have been
instituted, are pending or are threatened which challenge the rights of Pre-Paid
under or the validity of the Software, none of the intellectual property rights
relating to the Software is being infringed upon by others and none of the
intellectual property rights relating to the Software is subject to any
outstanding order or judgment. Pre-Paid has taken all steps reasonably necessary
to protect the intellectual property rights in the Software, including, but not
limited to, utilization of the proper statutory form of copyright notice on all
copies of the Software and any documentation relating of the Software that has
been commercially distributed prior to the Closing Date.
ARTICLE V
Representations and Warranties of Pre-Cell
In order to induce Pre-Paid and the Stockholders to enter into this
Agreement and to consummate the transactions contemplated under this Agreement,
Pre-Cell and Merger Subsidiary hereby make the following representations and
warranties each of which is relied upon by Pre-Paid and the Stockholders
regardless of any other action, omission to act, investigation made or
information obtained by Pre-Paid or the Stockholders:
Page 15
Section 5.1 Organization, Power and Authority. Pre-Cell and Merger
Subsidiary are corporations duly organized and validly existing under the laws
of the States of Colorado and Florida, respectively, with full corporate power
and authority to enter into this Agreement and perform their obligations under
this Agreement.
Section 5.2 Due Authorization; Binding Obligation. The execution,
delivery and performance of this Agreement, the consummation of the transactions
contemplated by this Agreement and the issuance of the Stock Consideration have
been duly authorized by all necessary corporate action of Pre-Cell and Merger
Subsidiary. This Agreement has been duly executed and delivered by Pre-Cell and
Merger Subsidiary and is the valid and binding obligation of Pre-Cell and Merger
Subsidiary, enforceable in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the transactions contemplated
by this Agreement will: (i) conflict with or violate any provision of the
articles of incorporation or by-laws of Pre-Cell or Merger Subsidiary, or of any
law, ordinance or regulation or any decree or order of any court or
administrative or other governmental body which is either applicable to, binding
upon or enforceable against Pre-Cell or Merger Subsidiary; (ii) result in any
material breach of or default under any material mortgage, contract, agreement,
indenture, will, trust or other instrument which is either binding upon or
enforceable against Pre-Cell or Merger Subsidiary or their respective assets.
Section 5.3 Shares. When issued in accordance with the terms of this
Agreement, the Pre-Cell Stock to be issued to the Stockholders shall be validly
issued, fully paid and non-assessable.
Section 5.4 Consents and Approvals. The execution and delivery of this
Agreement by Pre-Cell do not, and the performance of this Agreement by Pre-Cell
will not, require Pre-Cell to obtain any consent, approval, authorization or
other action by, or to make any filing with or notification to, any governmental
or regulatory authority.
Section 5.5 SEC Reports. Pre-Cell has delivered to the Stockholder its
reports (the "SEC Filings") filed pursuant to the Securities And Exchange Act of
1934, as amended (the "Securities And Exchange Act"). Each of the SEC Filings,
including the financial statements contained therein, as of their filing dates,
complied in all material respects with the requirements of the rules and
regulations promulgated by the Securities and Exchange Commission (the
"Commission") with respect thereto and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
Section 5.6 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Pre-Cell.
Page 16
Section 5.7 Limitation of Liabilities. Notwithstanding anything
contained herein to the contrary, Pre-Cell shall have no liability to the
Shareholders if any of the representations and warranties contained in this
Article V are inaccurate or for a breach of any representation or warranty
contained herein.
ARTICLE VI
Covenants of the Stockholders
Section 6.1 Further Assurances. From time to time after the date of
this Agreement, the Stockholders shall execute and deliver such other
instruments and shall take such other actions as Pre-Cell may reasonably request
to effectuate the transactions contemplated by this Agreement.
Section 6.2 Press Releases. Neither the Stockholders nor any of their
Affiliates shall issue or cause to be issued any press release in connection
with or referring to any of the transactions contemplated by this Agreement.
Section 6.3 Non-use of Name. From and after the date hereof, no
Stockholder or any of their Affiliates shall establish or otherwise be
associated with, as an owner, partner, shareholder, employee or otherwise, any
firm which utilizes the name "Pre-Paid," "EZ Prepaid" or any variant thereof
(collectively, the "Names") as part of its business name other than in
connection with their employment by Pre-Cell itself after the Closing Date or
grant to any person or entity the right to use the Names or any variant thereof.
Section 6.4 Maintenance of Pre-Paid Employee Medical Benefits. From the
date hereof, through the last day of the month in which the Closing takes place,
Pre-Paid shall continue to afford coverage under its existing health and medical
plans to those employees of Pre-Paid that are covered under such plans as of the
date hereof.
Section 6.5 Lock-Up Agreements. Concurrently with the execution of this
Agreement, each of the Stockholders will execute and deliver to Pre-Cell a
Lock-Up Agreement substantially in the form of Exhibit D annexed to this
Agreement pursuant to which they agree to not sell any shares of Common Stock
acquired by them for the period of time indicated on Exhibit D.
ARTICLE VII
Covenants of Pre-Cell
Section 7.1 Further Assurances. From time to time after the date of
this Agreement, Pre-Cell shall execute and deliver such other instruments and
shall take such other actions as the Stockholders may reasonably request to
effectuate the transactions contemplated by this Agreement.
Section 7.2 Disclosure. Pre-Cell will not be required to obtain the
prior written consent of the Stockholders to disclose the existence or any term
Page 17
or condition of this Agreement if Pre-Cell believes (based upon the advice of
counsel) such disclosure is required under the securities laws of the United
States.
ARTICLE VIII
Miscellaneous
Section 8.1 Survival of Representations and Warranties. All of the
respective representations and warranties of the parties to this Agreement shall
survive the consummation of the transactions contemplated by this Agreement. All
covenants of the parties to this Agreement shall survive the consummation of the
transactions contemplated by this Agreement.
Section 8.2 Amendment and Modification. The parties to this Agreement
may amend, modify and supplement this Agreement but only in writing and such
writing must be signed by all the parties.
Section 8.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, assigns,
heirs, estates, beneficiaries, executors and legal and personal representatives.
Section 8.4 Entire Agreement. This instrument and the Exhibit and
Schedules attached to this Agreement contain the entire agreement of the parties
with respect to the acquisition and the other transactions contemplated in this
Agreement, and supersede all prior understandings and agreements of the parties
with respect to the subject matter of this Agreement. Any reference in this
Agreement shall be deemed to include the Exhibits and the Schedules.
Section 8.5 Headings. The descriptive headings in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.
Section 8.6 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original.
Section 8.7 Notices. Any notice, request, information or other document
to be given hereunder to any of the parties by any other party shall be in
writing and delivered personally, sent by reputable overnight courier delivery,
prepaid, or by facsimile transmission as follows:
If to Pre-Cell: Pre-Cell Solutions, Inc.
000 Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx,
Chief Executive Officer
Facsimile: (000) 000-0000
Page 18
With a copy to: Xxxxx & Xxxxx, P.A.
0000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx, Esq.
Facsimile: (000) 000-0000
If to the Stockholders: At the addresses indicated on Exhibit A
with a copy to: Holland & Knight, LLP
0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
Any party may change the address to which notices under this Agreement
are to be sent to it by giving written notice of a change of address in the
manner provided in this Agreement for giving notice. Any notice delivered
personally shall be deemed to have been given on the date it is so delivered,
and any notice delivered by reputable overnight courier delivery or by fax shall
be deemed to have been given on the date it is received.
Section 8.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida applicable to
contracts made and to be performed in Florida without reference to the choice of
law principles. Each Party hereby submits to the exclusive jurisdiction of the
courts (city, state and federal) located in the County of Palm Beach, State of
Florida, pursuant to this Agreement or any other agreement, instrument or other
document any action, proceeding or claim brought by any other Party executed and
delivered in connection with this Agreement or pursuant hereto. Service of
process in any such action or proceeding brought against a Party may be made by
registered mail addressed to such Party at the address set forth in Section 8.7
or to such other address as such Party shall notify the other Party in writing
is to be used for such purpose pursuant to Section 8.7. For purposes hereof, the
address designated for Pre-Paid shall also be the address designated for the
Stockholders.
Section 8.9 Expenses. All accounting, legal and other costs and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring those fees,
costs and expenses.
Section 8.10 Waiver. Any party to this Agreement may extend the time
for or waive the performance of any of the obligations of the other, waive any
inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement. Any such extension or waiver shall be in writing and signed by
the parties. No such waiver shall operate or be construed as a waiver of any
subsequent act or omission of the parties.
Page 19
Section 8.11 Severability. The invalidity or unenforceability of any
one or more of the words, phrases, sentences, clauses, or sections contained in
this Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if such invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or unenforceability is caused by the length of any period of time
or the size of any area set forth in any part of this Agreement, the period of
time or area, or both, shall be considered to be reduced to a period or area
which would cure the invalidity or unenforceability.
Section 8.12 Attorney's Fees. In the event of any arbitration or
litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
Section 8.13 No Breach. The parties agree that the execution of this
Agreement shall not be deemed to be an assignment of any contract where consent
to such assignment is required by the terms of the contract provided that the
foregoing shall not affect Pre-Paid's obligation to obtain all consents as
provided in this Agreement.
Section 8.14 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Agreement to be drafted. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the party against whom the
words are construed, this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
Section 8.15 No Jury Trial EACH PARTY WAIVES ALL RIGHTS TO ANY TRIAL BY
JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
Page 20
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date hereof.
PRE-CELL SOLUTIONS, INC.,
a Colorado corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx,
Chief Executive Officer
PRE-PAID ACQUISITIONS CORP.
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx,
Chief Executive Officer
PRE-PAID SOLUTIONS, INC,
a Florida corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx,
Chief Executive Officer
Page 21
