EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
by and among
ADVANCED PLANT PHARMACEUTICALS, INC.
as "SELLER"
and
AMAZIN NUTRITIONALS, INC.
as "BUYER"
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement"), dated as of January 2, 2004, is by
and among AMAZING NUTRITIONALS, Inc., a Delaware corporation doing business at
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("ANI" or "Buyer") and
ADVANCED PLANT PHARMACEUTICALS, INC., a Delaware Corporation, doing business at
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, ("Seller").
RECITALS
A. Seller owns certain assets which it uses in its conduct of the Business (as
defined below).
B. Buyer desires to purchase from Seller, and Seller desires to sell to Buyer,
such assets as more specifically identified below and in Schedules attached
hereto, upon the terms and subject to the conditions of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the following
meanings. Any of such terms, unless the context otherwise requires, may be used
in the singular or plural, depending upon the reference.
1.2 "Affiliate" shall have the meaning set forth in the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
1.3 "Ancillary Agreements" shall mean the Xxxx of Sale, executed as of the
Closing Date.
1.4 "Assets" shall mean all of the right, title and interest of Seller in and to
the business, properties, assets and rights of any kind, whether tangible or
intangible, and constituting, or used or useful in connection with, or related
to, the Business, including without limitation all of Seller's right, title and
interest in the following (but not including, in any case, the Excluded Assets),
as set forth on Schedule 1.4, including:
1.5 "Balance Sheet" shall mean the balance sheet of Seller at the date indicated
thereon, together with the notes thereon.
1.6 "Books and Records" shall mean (a) all records and lists of Seller
pertaining to the Assets, (b) all records and lists which pertain to the
Business, customers of the Business, suppliers of the Business, or personnel of
Seller working in connection with the Business, (c) all product, business and
marketing plans of Seller, and (d) all books, ledgers, trial balances, files,
reports, plans, drawings and operating records of every kind maintained by
Seller relating to the Assets, but excluding the originals of Seller's minute
books, stock books, tax returns and accounting ledgers (provided that Buyer will
be provided copies of tax returns and accounting records if it so requests).
1.7 "Business" shall mean Seller's product to be sold pursuant to this
Agreement.
1.8 "Closing" or "Closing Date" shall mean a date occurring as soon as possible,
but not more than forty-five (45) days, after satisfaction of all conditions to
Closing set forth in Article VII of this Agreement, or such other date as Buyer
and Seller shall mutually agree upon.
1.9 "Closing Balance Sheet" shall mean the Balance Sheet dated the as of the
Closing Date.
1.10 "Closing Financial Statements" shall mean the Closing Balance Sheet and the
income statement dated as of the Closing Date.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder.
1.12 "Consent" shall mean any consent, approval, authorization, waiver, permit,
grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to,
any person or entity, including but not limited to any governmental authority.
1.13 "Contract" shall mean any agreement, contract, note, loan, evidence of
indebtedness, purchase, order, letter of credit, franchise agreement,
undertaking, covenant not to compete, employment agreement, license, instrument,
obligation or commitment to which Seller is a party or is bound and which
relates to the Business or the Assets, whether oral or written.
1.14 "Damages" shall mean any and all claims, damages, costs, losses (including
without limitation diminution in value), Taxes, liabilities, judgments,
penalties, fines, obligations, lawsuits, deficiencies, demands and expenses
(whether or not arising out of third-party claims), including without limitation
interest, penalties, costs of mitigation, losses in connection with any
environmental law (including without limitation any clean-up or remedial
action), lost profits and other losses resulting from any shutdown or
curtailment of operations, damages to the environment, attorneys' fees, experts'
fees and all amounts paid in investigation, defense or settlement of any of the
foregoing.
1.15 "Encumbrance" shall mean any claim, lien, pledge, option, charge, easement,
security interest, deed of trust, mortgage, right-of-way, encroachment, building
or use restriction, conditional sales agreement, encumbrance or other right of
third parties, whether voluntarily incurred or arising by operation of law, and
includes, without limitation, any agreement to give any of the foregoing in the
future, and any contingent sale or other title retention agreement or lease in
the nature thereof.
1.16 "Equipment" shall mean the office equipment of Seller exclusively used to
operate in connection with the Business and all tools, supplies, equipment,
machinery, signs and other tangible personal property owned by Seller and used
in connection with the Business.
1.17 "Financial Statements" shall mean the Year-End Financial Statements, the
Interim Financial Statements and the Closing Financial Statements.
1.18 "Intellectual Property" shall mean any and all United States and foreign:
(a) patents (including reexaminations, design patents, industrial designs and
utility models) and patent applications (including docketed patent disclosures
awaiting filing, provisional applications, reissues, divisions, continuations,
continuations-in-part and extensions), patent disclosures awaiting filing
determination, inventions and improvements thereto; (b) trademarks, service
marks, trade names, trade dress, logos, business and product names, slogans, and
registrations and applications for registration thereof; (c) copyrights
(including software) and registrations thereof; (d) inventions, processes,
designs, formulae, trade secrets, know-how, industrial models, confidential and
technical information, manufacturing, engineering and technical drawings,
product specifications and confidential business information; (e) mask work and
other rights and registrations thereof; (f) intellectual property rights similar
to any of the foregoing; (g) copies and tangible embodiments thereof (in
whatever form or medium, including electronic media).
1.19 "Inventory" shall mean all of Seller's finished goods, accessory goods and
raw materials inventory, and all of Seller's new and/or usable repair or
replacement parts, supplies, and packaging items and similar items with respect
to the Business, in each case, wherever the same may be located.
1.20 "Material Adverse Effect" or "Material Adverse Change" shall mean with
respect to the Business or the Assets any significant and substantial adverse
effect or change in the condition (financial or other), business, results of
operations, prospects, assets, liabilities or operations of the Business and/or
the Assets or on the ability of Seller to consummate the transactions
contemplated hereby, or any event or condition which would, with the passage of
time, constitute a "Material Adverse Effect" or "Material Adverse Change.
1.21 "Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other person,
necessary or desirable for the past, present or anticipated conduct of, or
relating to the operation of, the Business.
1.22 "Representative" shall mean any officer, director, principal, attorney,
agent, employee or other representative.
1.23 "Tax" shall mean any federal, state, local, foreign or other tax, levy,
impost, fee, assessment, custom duty, or other government charge, including
without limitation income, estimated income, business, occupation, franchise,
property, payroll, personal property, sales, transfer, use, employment,
commercial rent, occupancy, franchise or withholding taxes, and any premium,
including without limitation interest, penalties and additions in connection
therewith.
1.24 "Warranties" shall mean standard and customary warranties provided by
Seller in connection with products sold by Seller in connection with the
Business, as set forth on Schedule 4.18.
1.25 "Year-End Financial Statements" shall mean the Balance Sheets and income
statements dated as the Seller's fiscal year ended 2003.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Transfer of Assets. Upon the terms and subject to the conditions contained
herein, at the Closing, Seller will sell, convey, transfer, assign and deliver
to Buyer free and clear of any Encumbrance (other than Assumed Liabilities), and
Buyer will acquire from Seller, the Assets.
2.2 Purchase Price.
2.2.1 Purchase Price. Upon the terms and subject to the conditions set forth
herein, at the Closing, the Buyer shall pay to Seller, in consideration for the
Assets, the following (the "Purchase Price") and issue to Seller THREE MILLION
THREE HUNDRED THOUSAND SHARES (3,300,000) of ANI's common stock , $0.001 par
value, delivered directly to the Seller (the "Closing Shares"); and
2.2.2 Allocation of Purchase Price. The Purchase Price shall be allocated among
the Assets in the manner required by Section 1060 of the Code and regulations
thereunder. Buyer and Seller agree to each prepare and file on a timely basis
with the Internal Revenue Service substantially identical initial and
supplemental Internal Revenue Service Forms 8594 "Asset Acquisition Statements
Under Section 1060."
2.3 Closing Date. The transaction shall close on as of January 1, 2004, at a
place and time to be determined by the parties.
2.4 Closing Costs; Transfer Taxes and Fees. Seller shall be responsible for
paying (i) any documentary and transfer taxes and any sales, use or other taxes
imposed by reason of the transfers of Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto and (ii) all costs
of obtaining the transfer of existing Permits which may be lawfully transferred,
(iii) all fees and costs of recording or filing all applicable conveyancing
instruments described in Section 3.1, and (iv) all fees and costs of recording
or filing all UCC termination statements and other releases of Encumbrances.
2.5 Risk of Loss. All risk of loss with respect to the Assets and Business of
Seller on or before the Closing Date shall remain the sole risk of Seller.
ARTICLE III
CLOSING
3.1 Conveyances at Closing by Seller. To effect the sale and transfer referred
to in Section 2.1 hereof and subject to satisfaction or waiver by Seller of the
conditions set forth in Section 7.2 hereof, at Closing, Seller agrees to execute
and deliver to Buyer, or file with such governmental authorities as may be
appropriate:
3.1.1 one or more bills of sale, each in the form of Exhibit A attached hereto,
conveying in the aggregate all of Seller's owned personal property included in
the Assets, free and clear of all Encumbrances;
3.1.2 the Closing Financial Statements;
3.1.3 the certificates and other documents described in Article VII hereof;
3.1.4 all documents necessary to release the Assets from all Encumbrances;
3.1.5 resolutions adopted by Seller's board of directors and, to the extent
necessary, shareholders approving this Agreement, certified by the secretary of
Seller;
3.1.6 a certificate from the Secretary of State of the State of Pennsylvania as
to Seller's good standing as of the date of the Closing; and
3.1.7 such other instruments as shall be reasonably requested by Buyer to vest
in Buyer title in and to the Assets in accordance with the provisions hereof,
all of which instruments including those specifically listed above shall be in
form and substance acceptable to Seller and its counsel.
3.2 Conveyances at Closing by Buyer. To effect the assumption of liabilities
referred to in Section 2.2 hereof and the payment obligations set forth in
Section 2.4 hereof, subject to satisfaction or waiver by Buyer of the conditions
set forth in Section 7.1 hereof, at Closing, Buyer agrees to execute which will
be retained by Buyer, deliver to Seller, or file with such governmental
authorities as may be appropriate:
3.2.1 the Closing Shares pursuant to Section 2.4.1.1.1 hereof;
3.2.2 the certificates and other documents described in Article VII hereof;
3.2.3 such other instruments as shall be reasonably requested by Seller in
accordance with the provisions hereof, all of which instruments including those
specifically listed above shall be in the form and substance reasonably
acceptable to Buyer and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows, which representations
and warranties as of the dates of delivery of the respective Schedules and as of
the Closing Date shall be true and correct:
4.1 Organization of Seller. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Pennsylvania.
Copies of the Certificate of Incorporation and Bylaws of Seller, and all
amendments thereto, heretofore delivered to Buyer are accurate and complete as
of the date hereof. Other than as listed on Schedule 4.1, Seller has no direct
or indirect stock or other equity or ownership interest (whether controlling or
not) in any corporation, association, partnership, joint venture or other entity
which engages in a business substantially similar to the Business.
4.2 Authorization. Seller has all requisite corporate power and authority, and
has taken all corporate action necessary, to own, lease and operate the Assets,
to conduct the Business as it is presently being conducted, to execute and
deliver this Agreement and each Ancillary Agreement to which it will be a party,
to consummate the transactions contemplated hereby and to perform its
obligations hereunder. This Agreement has been duly executed and delivered by
Seller and is a legal, valid and binding obligation of Seller enforceable
against it in accordance with its terms. Following their execution and delivery
by Seller and the other parties thereto each of the Ancillary Agreements and
other documents delivered by Seller at Closing will be a legal, valid and
binding obligation of Seller, enforceable against it in accordance with their
terms.
4.3 No Changes to the Assets. Other than as set forth on Schedule 4.3, since the
Interim Balance Sheet Date:
4.3.1 there has been no actual or threatened adverse change in the financial
condition or results of operation, the Business or the Assets or any event,
condition or state of facts, in either case that is, or would result in a
Material Adverse Change in the Assets or the Business or the prospects for the
Business, including without limitation the loss of any material customers;
4.3.2 there has not been any sale or other disposition, except in the ordinary
course of Seller's Business, of any of the assets of the Business, or any
Encumbrance placed on the Assets;
4.3.3 Seller has operated the Business in the ordinary course consistent with
Seller's past practice so as to preserve the Business intact, and to preserve
the Business and the goodwill of Seller's suppliers, customers, distributors and
others having business relations with it;
4.3.4 Seller has not changed its accounting methods or practices (including any
change in depreciation or amortization policies or rates) or revalued any of its
assets.
4.4 Assets. Seller has good and marketable fee simple title to the Assets and
upon the consummation of the transactions contemplated hereby will transfer to
Buyer good and marketable title to all of the Assets, free and clear of any
Encumbrances, except for any Encumbrance that Buyer, in its sole discretion,
specifically accepts in writing. The Assets constitute all assets necessary for
the conduct of the Business as presently conducted.
4.5 Permits and Consents. Seller has all Permits required to conduct the
Business, except where the failure to obtain such Permits would not have a
Material Adverse Effect on the Assets or the Business. All Permits of Seller
related to the Business are valid and in full force and effect and are listed on
Schedule 4.6. Except as disclosed on Schedule 4.6, no notice to, declaration,
filing or registration with, or authorization, or Consent or approval of, or
Permit from, any governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by Seller in connection
with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated hereby, except where the failure
to comply with such requirement would not have a Material Adverse Effect on the
Assets or the consummation of the transactions contemplated hereby. Schedule 4.6
sets forth all Consents required for the assignment by Seller to Buyer of the
Assumed Contracts. All of the Assumed Contracts will be enforceable by Buyer
after the Closing to the same extent as if the transactions contemplated by this
Agreement had not been consummated.
4.6 No Conflict or Violation. After giving effect to Consents and lien releases
that have been obtained from third parties or will be so obtained prior to the
Closing Date, neither the execution and delivery of this Agreement by Seller,
nor the consummation of the transactions contemplated hereby, nor compliance by
Seller with any of the provisions hereof, will (a) violate or conflict with any
provision of the Certificate of Incorporation or Bylaws of Seller, (b) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any Encumbrance upon any of the Assets
under, any of the terms, conditions or provisions of any Contract, Permit,
agreement, or other instrument or obligation (i) to which Seller is a party or
(ii) by which the Assets are bound, (c) violate, except where such violation
would not, individually or in the aggregate, have a Material Adverse Effect on
the Assets or the Business, any statute, rule, regulation, ordinance, code,
order, judgment, ruling, writ, injunction, decree or award or (d) impose any
Encumbrance, restriction or charge on the Assets or the Business.
4.7 Financial Statements. Attached hereto as Schedule 4.8 are the Financial
Statements of Seller. The Financial Statements (a) are in accordance with the
underlying books and records of Seller, (b) have been prepared in accordance
with generally accepted accounting principles consistently applied throughout
the periods covered thereby (except as otherwise described in Schedule 4.8) and
(c) fairly and accurately present the assets, liabilities (including all
reserves) and financial position of Seller as of the respective dates thereof
and the results of operations and changes in cash flows for the periods then
ended (subject, in the case of the Interim Financial Statements, to normal
year-end adjustments). At the respective dates of the Financial Statements,
there were no liabilities of Seller, which, in accordance with generally
accepted accounting principles, should have been shown or reflected in the
Financial Statements or the notes thereto, which are not shown or reflected in
the Financial Statements or the notes thereto.
4.8 Books and Records. Seller has made and kept (and given Buyer access to)
Books and Records and accounts, which, in reasonable detail, accurately and
fairly reflect the activities of Seller in connection with the Business. A copy
of the minute book of Seller has been previously delivered to Buyer. The copies
of the stock book records of Seller previously delivered to Buyer are true,
correct and complete, and accurately reflect all transactions effected in
Seller's stock through and including the date hereof.
4.9 Litigation. Except as set forth on Schedule 4.10, there is no action, order,
writ, injunction, judgment or decree outstanding or any claim, suit, litigation,
proceeding, labor dispute, arbitral action, governmental audit or investigation
(collectively, "Actions") pending, or to the best knowledge of Seller,
threatened or anticipated (a) against, related to or affecting Seller, the
Business or the Assets or (b) seeking to delay, limit or enjoin the transactions
contemplated by this Agreement. Seller is not in default with respect to or
subject to any judgment, order, writ, injunction or decree of any court or
governmental agency, and there are no unsatisfied judgments against Seller, the
Business or the Assets.
4.10 Labor Matters. Seller is not a party to any labor agreement with respect to
its employees with any labor organization, union, group or association and there
are no employee unions (nor any other similar labor or employee organizations)
under local statutes, custom or practice. Seller has not experienced any attempt
by organized labor or its representatives to make Seller conform to demands of
organized labor relating to its employees or to enter into a binding agreement
with organized labor that would cover the employees of Seller.
4.11 Compliance with Law. Seller, the conduct of the Business and the operation
of the Facilities have not violated and are in compliance with all laws,
statutes, ordinances, regulations, rules and orders of any foreign, federal,
state or local government and any other governmental department or agency, and
any judgment, decision, decree or order of any court or governmental agency,
department or authority, including without limitation environmental laws,
relating to the Assets, Facilities or Business or operations of Seller, except
where the violation or failure to comply, individually or in the aggregate,
would not have a Material Adverse Effect on the Facilities, the Assets or the
Business. Seller and the conduct of the Business and the operation of the
Facilities are in conformity with all energy, public utility, zoning, building
and health codes, regulations and ordinances, OSHA and environmental laws and
all other foreign, federal, state, and local governmental and regulatory
requirements, except where any nonconformity would not have a Material Adverse
Effect on the Facilities, the Assets or the Business. Seller has not received
any notice to the effect that, or otherwise been advised that, it is not in
compliance with any such statutes, regulations, rules, judgments, decrees,
orders, ordinances or other laws, and Seller has no reason to anticipate that
any existing circumstances are likely to result in violations of any of the
foregoing, which non-compliance or violation could, in any one case or in the
aggregate, have a Material Adverse Effect on the Facilities, the Assets or the
Business.
4.12 No Brokers. Neither Seller nor any of its respective officers, directors,
employees, shareholders or Affiliates has employed or made any agreement with
any broker, finder or similar agent or any person or firm which will result in
an obligation to pay any finder's fee, brokerage fees or commission or similar
payment in connection with the transactions contemplated hereby.
4.13 No Other Agreements to Sell the Assets. Neither Seller nor any of its
respective officers, directors, shareholders or Affiliates have any commitment
or legal obligation, absolute or contingent, to any other person or firm other
than the Buyer to sell, assign, transfer or effect a sale of any of the Assets
(other than inventory in the ordinary course of business), or to effect a
liquidation, dissolution or other reorganization of Seller.
4.14 Intellectual Property.
4.14.1 Intellectual Property. Schedule 4.15 contains a complete and correct list
and a brief description, of all Intellectual Property in which Seller has any
interest whatsoever and that is primarily related to, used in, held for use in
connection with, or necessary for the conduct of, or otherwise material to, the
Business (the "Intellectual Property Assets"). The Intellectual Property Assets
listed in Schedule 4.15 are all those used by Seller in connection with the
Business and are identified as "owned" and "licensed" Intellectual Property
Assets.
4.14.2 Royalties and Licenses. Except as set forth on Schedule 4.15, no person
has a right to receive a royalty or similar payment in respect of any
Intellectual Property Assets. Except as set forth on Schedule 4.15, Seller has
no licenses granted, sold or otherwise transferred by or to it or other
agreements to which it is a party, relating in whole or in part to any of the
Intellectual Property Assets.
4.14.3 Ownership and Protection of Intellectual Property. As applicable, Seller
owns or has the right to use pursuant to license, sublicense, agreement, or
permission all Intellectual Property Assets free from any Encumbrances, and as
to the owned Intellectual Property Assets, free from any requirement of any
past, present, or future royalty payments, license fees, charges or other
payments, or conditions or restrictions whatsoever. None of the owned
Intellectual Property Assets are involved in any pending or to the best
knowledge of Seller, threatened litigation, none of the licensed Intellectual
Property Assets are involved in any pending or, to the best knowledge of Seller,
threatened litigation involving Seller and, to the best of Seller's knowledge,
none of the licensed Intellectual Property Assets are involved in any pending or
threatened litigation involving parties other than Seller. Seller has not
received any notice of invalidity or infringement of any rights of others with
respect to such Intellectual Property Assets. To the best of Seller's knowledge
after reasonable investigation, the conduct of the Business does not infringe or
otherwise conflict with any rights of any other firm, corporation, association
or person in respect of any Intellectual Property. To the best knowledge of
Seller after reasonable investigation, none of the owned Intellectual Property
Assets are being infringed or otherwise used or available for use by any other
firm, corporation, association or person. Seller has taken all reasonable and
prudent steps to protect the owned Intellectual Property Assets from
infringement by any other firm, corporation, association or person. Seller's use
of the Intellectual Property Assets is not, to the best of Seller's knowledge
after reasonable investigation, infringing upon or otherwise violating the
rights of any third party in or to such Intellectual Property Assets, nor, to
the best of Seller's knowledge after reasonable investigation, has such
infringement been alleged by any third party. All of the Intellectual Property
Assets are valid and enforceable rights of Seller, and the owned Intellectual
Property Assets, will be quit-claimed to Buyer and will not cease to be valid
and in full force and effect by reason of the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement.
4.15 Tax Matters.
4.15.1 Filing of Tax Returns. Seller has timely filed with the appropriate
taxing authorities all returns (including without limitation information returns
and other material information) in respect of Taxes required to be filed through
the date hereof and will timely file any such returns required to be filed on or
prior to the Closing Date. The returns and other information filed are complete
and accurate in all material respects. Neither Seller, nor any group of which
Seller now or was a member, has requested any extension of time within which to
file returns (including without limitation information returns) in respect of
any taxes.
4.15.2 Payment of Taxes. All Taxes, in respect of periods beginning before the
Closing Date, have been timely paid, or will be timely paid, or an adequate
reserve has been established therefor, as set forth in the Financial Statements,
and Seller does not have any liability for Taxes in excess of the amounts so
paid or reserves so established. There are no liens for Taxes (other than as
could be asserted for current Taxes not yet due and payable) on the Assets.
4.15.3 Audits, Investigations or Claims. There are no pending or, to the best of
Seller's knowledge, threatened audits, investigations or claims for or relating
to any material additional liability in respect of Taxes, and there are no
matters under discussion with any governmental authorities with respect to Taxes
that in the reasonable judgment of Seller, or its counsel, is likely to result
in a material additional liability for Taxes. Seller has not been notified that
any taxing authority intends to audit a return for any period. No extension of a
statute of limitations relating to Taxes is in effect with respect to Seller.
4.15.4 No Withholding. The transaction contemplated herein is not subject to the
tax withholding provisions of Section 3406 of the Code, or of Subchapter A of
Chapter 3 of the Code or of any other provision of law.
4.16 Customers. Seller has previously provided to Buyer true and correct lists
of (a) the names and addresses of all domestic customers of the Business that
ordered products, goods, or services from Seller during the twelve (12) month
period ended as of the date of the Interim Balance Sheet, and (b) the amount for
which each such customer was invoiced during such period related to the
Business. Except as set forth in Schedule 4.17, Seller has received no notice
and Seller has no reason to believe that any customer of Seller (i) has ceased,
or will cease, to use the products, goods, or services of Seller which relate to
the Business, (ii) has substantially reduced, or will substantially reduce, the
use of products, goods, or services of Seller which relate to the Business or
(iii) has sought, or is seeking, to reduce the price it will pay for products,
goods or services of Seller, which relate to the Business, including in each
case after the consummation of the transactions contemplated hereby. To the best
of Seller's knowledge, no customer of Seller with respect to the Business has
otherwise threatened to take any action described in the preceding sentence as a
result of the consummation of the transactions contemplated by this Agreement.
4.17 Warranties. Except as set forth in Schedule 4.18, (a) there are no
warranties, express or implied, written or oral, with respect to the products of
the Business and (b) other than as have occurred in the ordinary course of
Seller's business, there are no pending or threatened claims with respect to any
such warranty, and (c) Seller has not, and to the best knowledge of Seller,
neither Buyer nor any of its affiliates will have, any liability, after the
Closing with respect to any such warranty, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, other than
customary returns in the ordinary course of the Business which are reserved
against in accordance with generally accepted accounting principles in the most
recent Financial Statements of Seller. Other than as disclosed in writing to
Buyer, Seller has received no material complaints from customers relating to the
Business.
4.18 Liabilities. Except as set forth on Schedule 4.19, Seller has no
liabilities or obligations with respect to the Business or the Assets to be
transferred (absolute, accrued, contingent or otherwise) except (i) liabilities
which are reflected on the Interim Balance Sheet or which are not required under
generally accepted accounting principles to be reflected on the Interim Balance
Sheet, (ii) liabilities incurred in the ordinary course of the business and
consistent with past practice since the Interim Balance Sheet Date, and (iii)
liabilities arising under the Contracts previously furnished to Buyer.
4.19 Securities Law Matters.
4.19.1 Seller confirms that it is acquiring the ANI Shares for its own account
as principal, for investment purposes only, and not with a view to, or for,
resale or distribution thereof, and no other person has or will have a direct or
indirect beneficial interest in the ANI Shares.
4.19.2 Seller understands that the offering and sale of the ANI Shares is
intended to a be a transaction by an issuer not involving any public offering
exempt from registration under the Securities Act of 1933 (the "Securities Act")
by virtue of Section 4(2) of the Securities Act and the rules and regulations of
the Securities and Exchange Commission (the "Commission") thereunder;
4.19.3 Seller represents that it is an "accredited investor" as such term is
defined in Rule 501 under the Securities Act;
4.19.4 Seller understands and acknowledges that there are substantial risks of
loss of investment involved in an investment in the ANI Shares, and that the
investment in the ANI Shares is an illiquid investment subject to transfer
restrictions, and Seller represents and warrants that it has the financial
ability to bear the economic risk of such investment;
4.19.5 Seller has such knowledge and experience in financial and business
matters, including investments of the type represented by the ANI Shares, as to
be capable of evaluating the merits of investment therein;
4.19.6 Seller has been furnished with a copy of the most recent periodic reports
filed by Buyer with the Commission and any document requested by Seller, and
Seller has carefully read and understands such materials and has evaluated the
risks of an acquisition of the ANI Shares;
4.19.7 Seller has been given the opportunity to ask questions of, and receive
answers from, Representatives of Buyer in order for it to evaluate the merits
and risks of investment in the ANI Shares;
4.19.8 Seller has not been furnished with or relied upon any oral or written
representation, warranty or information in connection with the offering of the
ANI Shares except as set forth in this Agreement.
4.19.9 The instruments evidencing the ANI Shares shall bear a restrictive legend
in substantially the following form: "The securities represented by this
certificate have not been registered under the Securities Act of 1933, as
amended (the "Act"). These securities have been acquired for investment and not
with a view to distribution or resale, and may not be sold, offered for sale,
pledged or hypothecated in the absence of an effective registration statement
for such shares under the Act or an opinion of counsel satisfactory in form and
content to the issuer that such registration is not required under such Act."
4.20 Disclosure. Neither this Agreement nor any of the Schedules or Exhibits
hereto contains or shall contain when delivered at Closing any untrue statement
of a material fact or shall omit to state a material fact necessary to make the
statements contained herein or therein, in light of the circumstances in which
they were made, not misleading; and there is no fact with respect to the
Business which has not been disclosed to Buyer which Materially Adversely
Affects or could reasonably be anticipated to Materially Adversely Affect the
Assets being transferred, financial condition or results of operations,
customer, employee or supplier relations, business condition or prospects of
Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows, which representations
and warranties are, and as of the Closing Date shall be, true and correct:
5.1 Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.2 Authorization. Buyer has all requisite corporate power and authority, and
has taken all corporate action necessary, to execute and deliver this Agreement
and each Ancillary Agreement to which it will be a party, to consummate the
transactions contemplated hereby and to perform its obligations hereunder. This
Agreement has been duly executed and delivered by Buyer and is a legal, valid
and binding obligation of Buyer enforceable against it in accordance with its
terms. Following their execution and delivery by Buyer and the other parties
thereto each of the Ancillary Agreements and other documents delivered by Buyer
at Closing will be a legal, valid and binding obligation of Buyer, enforceable
against it in accordance with their terms.
5.3 No Conflict or Violation. Neither the execution, delivery or performance of
this Agreement or the Ancillary Agreements nor the consummation of the
transactions contemplated hereby or thereby, nor compliance by Buyer with any of
the provisions hereof or thereof, will (a) violate or conflict with any
provision of the Certificate of Incorporation or Bylaws of Buyer, or (b) violate
any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award binding upon Buyer.
5.4 Consents and Approvals. No notice to, declaration, filing or registration
with, or authorization, Consent or approval of, or permit from, any governmental
or regulatory body or authority, or any other person or entity, is required to
be made or obtained by Buyer in connection with the execution, delivery and
performance of this Agreement or the Ancillary Agreements and the consummation
of the transactions contemplated hereby or thereby, except (a) as may be
required by Buyer to operate the Business after the Closing, or (b) as has been
obtained on or prior to the date hereof.
5.5 No Brokers. Neither Buyer nor any of its respective officers, directors,
employees, shareholders, or Affiliates has employed or made any agreement with
any broker, finder, or similar agent or any person or firm which will result in
an obligation to pay any finder's fee, brokerage fees, or commission or similar
payment in connection with the transactions contemplated hereby.
5.6 ANI Shares. The ANI Shares to be issued pursuant to this Agreement, when
issued and delivered in accordance with the terms of this Agreement, will be
duly authorized, validly issued, fully paid, and nonassessable and free of
preemptive rights.
5.7 SEC Information Furnished Concerning Buyer. For the period from January 1,
2003 to the date hereof, Buyer has, or will, file with the Commission those
filings and reports required pursuant to the Securities and Exchange Act of 1934
(the "SEC Documents"). The audited consolidated financial statements for the
year ended December 31, 2003, contained within the SEC Documents have been
prepared in accordance with generally accepted accounting principles
consistently applied (except as may be otherwise noted therein) and fairly
present the consolidated financial position of Buyer and its subsidiaries as of
such date and the consolidated results of operations of Buyer and its
subsidiaries for the year then ended. To Buyer's knowledge, as of their
respective dates, the SEC Documents, including, but not limited to, the
financial statements contained therein, did not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
ARTICLE VI
COVENANTS OF SELLER AND BUYER
Buyer and Seller each covenant with the other as follows:
6.1 Further Assurances. Upon the terms and subject to the conditions contained
herein, each of the parties hereto agrees, both before and after the Closing,
(i) to use all reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement,
(ii) to execute any documents, instruments or conveyances of any kind which may
be reasonably necessary or advisable to carry out any of the transactions
contemplated hereunder, and (iii) to cooperate with each other in connection
with the foregoing, including using their respective best efforts (A) to obtain
all necessary waivers, Consents and approvals from other parties to the
Contracts to be assumed by Buyer; provided, however, that Buyer shall not be
required to make any payments, commence litigation or agree to modifications of
the terms thereof in order to obtain any such waivers, Consents or approvals,
(B) to obtain all necessary Permits as are required to be obtained under any
federal, state, local or foreign law or regulations, (C) to effect all necessary
registrations and filings, including without limitation submissions of
information requested by governmental authorities, and (D) to fulfill all
conditions to this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligations of Buyer. The obligations of Buyer to consummate
the transactions contemplated hereby shall be subject to the fulfillment (or
waiver by Buyer, in its sole discretion) on or prior to the Closing Date of the
following additional conditions, which Seller agrees to use reasonable good
faith efforts to cause to be fulfilled:
7.1.1 Representations, Performance. All representations and warranties of Seller
contained in this Agreement shall be true and correct in all respects at and as
of the date hereof, and shall be repeated and shall be true and correct in all
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date.
7.1.2 Performance of Covenants and Conditions. Seller shall have duly performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date.
7.1.3 Consents. Seller shall have obtained and shall have delivered to Buyer
copies of (i) all governmental approvals required to be obtained by Seller in
connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) all Consents
(including, without limitation, all Consents set forth on Schedule 4.6),
necessary to be obtained in order to consummate the transactions contemplated by
this Agreement.
7.1.4 Closing Financial Statements. Buyer shall have received the Closing
Financial Statements.
7.1.5 No Material Adverse Effect. No event, occurrence, fact, condition, change,
development or effect shall have occurred, exist or come to exist since the date
of the Interim Balance Sheet that, individually or in the aggregate, has
constituted or resulted in, or could reasonably be expected to constitute or
result in, a Material Adverse Effect.
7.1.6 No Proceedings or Litigation. No Action by any governmental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby and which could
reasonably be expected to damage Buyer materially if the transactions
contemplated hereby are consummated, including without limitation any Material
Adverse Effect on the right or ability of Buyer to own, operate, possess or
transfer the Assets after the Closing. There shall not be any statute, rule or
regulation that makes the purchase and sale of the Business or the Assets
contemplated hereby illegal or otherwise prohibited.
7.1.7 Conveyancing Documents; Release of Encumbrances. Seller shall have
executed and delivered each of the documents described in Article III hereof so
as to effect the transfer and assignment to Buyer of all right, title and
interest in and to the Assets and Seller shall have filed (where necessary) and
delivered to Buyer all documents necessary to release the Assets from all
Encumbrances, which documents shall be in a form reasonably satisfactory to
Buyer and its counsel.
7.1.8 Permits. Buyer shall have obtained or been granted the right to use all
Permits necessary to its operation of the Business
7.1.9 Due Diligence Review. Buyer and its Representatives shall have conducted a
due diligence review of Seller's Books and Records, Financial Statements, and
other records and accounts of the Business, and in the sole discretion of Buyer,
Buyer shall be satisfied with such review. Such review shall have no effect
whatsoever on the liability of Seller to Buyer under this Agreement or otherwise
for breach of any representations, warranties, or covenants of Seller or
hereunder. Seller shall have also delivered to Buyer all Schedules to be
supplied hereunder at least two (2) business days prior to Closing, which shall
be satisfactory to Buyer.
7.2 Conditions to Obligations of Seller. The obligations of Seller to consummate
the transactions contemplated hereby shall be subject to the fulfillment (or
waiver by Seller, in its sole discretion) on or prior to the Closing Date of the
following additional conditions, which Buyer agrees to use reasonable good faith
efforts to cause to be fulfilled.
7.2.1 Representations, Performance. All representations and warranties of Buyer
contained in this Agreement shall be true and correct in all respects at and as
of the date hereof, and shall be repeated and shall be true and correct in all
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date.
7.2.2 Performance of Covenants and Conditions. Buyer shall have duly performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or on the Closing Date.
7.2.3 No Proceedings or Litigation. No Action by any govern1mental authority or
other person shall have been instituted or threatened which questions the
validity or legality of the transactions contemplated hereby. There shall not be
any statute, rule or regulation that makes the purchase and sale of the Business
or the Assets contemplated hereby illegal or otherwise prohibited.
7.2.4 Conveyances. Buyer shall have delivered, or cause to be delivered, to
Seller items or documents identified in Article III hereof.
ARTICLE VIII
CONDUCT OF SELLER AND BUYER PENDING THE CLOSING
8.1 Seller Covenants. Seller hereby covenants and agrees that from the date
hereof to the Closing Date:
8.1.1 Conduct of Business Pending the Closing. Except as specifically
contemplated in this Agreement or as disclosed in any Schedule hereto, the
Business of Seller shall be conducted only in, and Seller shall take no action
except in, the ordinary course, on an arm's length basis, and in accordance with
all applicable laws, rules, and regulations and past custom and practice,
including, without limitation, making any loans or any cash payments, or
transferring any other assets or properties of Seller to any employee, officer,
shareholder, or director of Seller; and Seller will not, directly or indirectly,
do or permit to occur any of the following:
8.1.1.1 Cancel or terminate or permit to be canceled or terminated its current
insurance (or reinsurance) policies or permit any of the coverage thereunder to
lapse, unless simultaneous with such termination, cancellation, or lapse,
replacement policies providing coverage equal to or greater than the coverage
under the canceled, terminated, or lapsed policies are in full force and effect;
8.1.1.2 Default under any material contract, agreement, commitment, or
undertaking;
8.1.1.3 Knowingly violate or fail to comply with any laws applicable to it or
the Business;
8.1.1.4 Commit any act or permit the occurrence of any event or the existence of
any condition of the type described in Section 4.3 hereof;
8.1.1.5 Except in the ordinary course of business consistent with historical
practices, enter into or modify any employment, severance, or similar agreements
or arrangements with, or grant any bonuses, salary increases, or severance or
termination pay to, any officers, directors, employees, or consultants, or adopt
or amend any bonus, profit sharing, compensation, stock option, pension,
retirement, deferred compensation, employment, or other benefit plan, trust,
fund, or group arrangement for the benefit or welfare of any officers,
directors, or employees;
8.1.1.6 Directly or indirectly enter into or modify any contract, agreement, or
understanding or enter into any transaction not in the ordinary course of
business;
8.1.1.7 Cancel, without full payment, any note, loan, or other obligation owing
to Seller relating to the Business except in the ordinary course of business;
8.1.1.8 Acquire (by merger, exchange, consolidation, acquisition of stock or
assets, or otherwise) any corporation, partnership, joint venture, or other
business organization or division or material assets thereof;
8.1.1.9 Issue any additional shares of capital stock or permit the transfer of
any outstanding shares of Seller's capital stock or declare any dividends or
distributions;
8.1.1.10 Issue or create any warrants, obligations, subscriptions, options,
convertible securities, or other commitments under which any additional shares
of its capital stock might be directly or indirectly authorized, issued, or
transferred from treasury, or incur any indebtedness for borrowed money or issue
any debt securities except the borrowing of working capital in the ordinary
course of business and consistent with past practice;
8.1.1.11 Pay any obligation or liability, fixed or contingent, except in the
ordinary course of business;
8.1.1.12 Waive or compromise any right or claim, other than as required to
resolve any pending or threatened litigation disclosed in the Schedules attached
hereto;
8.1.1.13 Agree to do any of the actions described in the preceding clauses
8.1.1.1 through 8.1.1.12
8.1.2 Business Relationships. Seller will exercise its best efforts to preserve
intact its business organization and goodwill, keep available the services of
its officers and employees as a group, and maintain satisfactory relationships
with suppliers, distributors, customers, and others having business
relationships with it.
8.1.3 Notification of Certain Matters. Seller shall (i) confer on a regular
basis with Representatives of Buyer and report operational matters and the
general status of ongoing operations, (ii) notify Buyer of any Material Adverse
Change in the normal course of its business and of any governmental or third
party complaints, investigations, or hearings (or communications indicating that
the same may be contemplated); and (iii) promptly notify Buyer if Seller shall
discover that any representation or warranty made by it in this Agreement was
when made, or has subsequently become, untrue.
8.1.4 Transfer of Permits. Seller will use its best efforts to assist Buyer to
effect the assignment or other transfer of Permits from Seller to Buyer as of or
as soon as practicable after the Closing Date.
8.1.5 Closing. Seller shall use its best efforts to cause the conditions
specified in Article VII hereof to be satisfied at or prior to the Closing Date.
8.2 No Negotiations. Seller shall not, directly or indirectly, through any
officer, director, agent, or otherwise, solicit, initiate, or encourage
submission of any proposal or offer from any person or entity (including any of
its or their officers or employees) relating to any liquidation, dissolution,
recapitalization, merger, consolidation, or acquisition or purchase of all or a
material portion of the assets of, or any equity interest in, Seller or other
similar transaction or business combination involving Seller, or participate in
any negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist, participate in,
facilitate, or encourage, any effort or attempt by any other person or entity to
do or seek any of the foregoing. Seller shall promptly notify Buyer if any such
proposal or offer, or any inquiry from or contact with any person with respect
thereto, is made and shall promptly provide Buyer with such information
regarding such proposal, offer, inquiry, or contact as Buyer may request.
8.3 Public Announcements. The parties hereto shall not issue any press release
or public announcement, including announcements by any party for general
reception by or dissemination to employees, agents, or customers, with respect
to this Agreement and the other transactions contemplated by this Agreement
without the prior written consent of the other parties hereto (which consent
shall not be withheld unreasonably); provided, however, that Buyer may make any
disclosure of announcement of information, it is obligated to make pursuant to
applicable law or regulation, including any applicable law or regulation of the
Nasdaq Over the Counter Bulletin Board or any national securities exchange, as
applicable.
8.4 Confidentiality. Each party hereto, and its officers, directors, agents, and
affiliates, will hold in strict confidence, and will not divulge, communicate,
use to the detriment of any other party hereto or for the benefit of any other
person or persons, or misuse in any way, any financial information or other data
obtained in connection with this Agreement, including, without limitation, any
confidential information or trade secrets of such other party, personnel
information, secret processes, know how, customer lists, formulas, or other
technical data; and if the transactions contemplated by this Agreement are not
consummated, each party hereto, and its officers, directors, agents and
Affiliates, will return to each other party all such data an information,
including without limitation, work sheets, test reports, manuals, lists,
memoranda, and other documents prepared by or made available in connection with
this transaction (and all copies of same). The parties hereto may disclose such
information to their respective attorneys, accountants and other agents so long
as they agree to keep such information confidential. Notwithstanding the
foregoing, confidential information shall not include any information which a
party can demonstrate: (i) was already in such party's possession prior to
negotiations related to this transaction; (ii) is or becomes publicly and openly
known and in the public domain through no fault of such party; or (iii) is
received by such party in a non-confidential manner from a third party having
the right to disclose such information.
ARTICLE IX
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
9.1 Books and Records; Payment of Liabilities.
9.1.1 Books and Records. Each party agrees that it will cooperate with and make
available to the other party, during normal business hours, all Books and
Records, information and employees (without substantial disruption of
employment) retained and remaining in existence after the Closing which are
necessary or useful in connection with any tax inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter related to the
Business or the Assets requiring any such Books and Records, information or
employees for any reasonable business purpose.
9.1.2 Cooperation and Records Retention. Seller and Buyer shall (i) each provide
the other with such assistance as may reasonably be requested by any of them in
connection with the preparation of any return, audit, or other examination by
any taxing authority or judicial or administrative proceedings relating to
liability for Taxes, (ii) each retain and provide the other with any records or
other information that may be relevant to such return, audit or examination,
proceeding or determination, and (iii) each provide the other with any final
determination of any such audit or examination, proceeding, or determination
that affects any amount required to be shown on any tax return of the other for
any period. Without limiting the generality of the foregoing, Buyer and Seller
shall each retain, until the applicable statutes of limitations (including any
extensions) have expired, copies of all tax returns, supporting work schedules,
and other records or information, in a timely manner, as and that may be
relevant to such returns for all tax periods or portions thereof ending on or
before the Closing Date and shall not destroy or otherwise dispose of any such
records without first providing the other party with a reasonable opportunity to
review and copy the same.
9.2 Survival of Representations, Etc. All statements contained in any
certificate, schedule, exhibit, instrument or conveyance delivered by or on
behalf of the parties pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the parties hereunder. The representations and warranties of
Seller and Buyer contained herein and all claims and causes of action with
respect thereto (other than the provisions of Sections 4.4, 4.16 and this
Section 9.3, and all claims and causes of action with respect thereto) shall
survive for a period of three (3) years from the Closing Date, except that the
representations and warranties in Section 4.4 shall survive forever. The
representations and warranties in Section 4.16 shall survive until the
expiration of the applicable statute of limitations (with extensions) with
respect to the matters addressed in such section. The termination of the
representations and warranties provided herein shall not affect the rights of a
party in respect of any Claim made by such party in a writing received by the
other party prior to the expiration of the applicable survival period provided
herein.
9.3 Indemnifications.
9.3.1 By Seller. Regardless of Seller's knowledge of the existence of an
Indemnifiable Event (as defined below), Seller shall indemnify, defend, save and
hold harmless Buyer, its Affiliates and subsidiaries, and their respective
Representatives, from and against any and all Damages incurred in connection
with, arising out of, resulting from or incident to (i) any breach of any
representation or warranty, or the inaccuracy of any representation or warranty,
made by Seller in or pursuant to this Agreement (it being understood and agreed
that, notwithstanding anything to the contrary contained in this Agreement, to
determine if there had been an inaccuracy or breach of a representation or
warranty of the Seller and the losses arising from such inaccuracy or breach,
such representation or warranty shall be read as if it were not qualified by
materiality, including, without limitation, qualifications indicating accuracy
in all material respects, or accuracy except to the extent the inaccuracy will
not have a Material Adverse Effect); (ii) any breach of any covenant or
agreement made by Seller in or pursuant to this Agreement; (iii) any Excluded
Liability; (iv) any liability imposed upon Buyer by reason of Buyer's status as
transferee of the Business or the Assets except to the extent such liability
arises out of or results from Buyer's operation of the Business after the
Closing Date; (v) any liability arising under any environmental law on account
of the conduct of Seller or prior owners or users of the Facilities or other
persons, or on account of the operation of the Business or the Facilities, or
related to any environmental condition (collectively, the "Indemnifiable
Events").
9.3.2 By Buyer. Buyer shall indemnify, defend, save and hold harmless Seller,
its Affiliates and its Representatives from and against any and all Damages
incurred in connection with, arising out of, resulting from or incident to (i)
any breach of any representation or warranty, or the inaccuracy of any
representation or warranty, made by Buyer in or pursuant to this Agreement (it
being understood and agreed that, notwithstanding anything to the contrary
contained in this Agreement, to determine if there had been an inaccuracy or
breach of a representation or warranty of the Buyer and the losses arising from
such inaccuracy or breach, such representation or warranty shall be read as if
it were not qualified by materiality, including, without limitation,
qualifications indicating accuracy in all material respects, or accuracy except
to the extent the inaccuracy will not have a Material Adverse Effect); (ii) any
breach of any covenant or agreement made by Buyer in or pursuant to this
Agreement; or (iii) any Assumed Liability insofar as such Assumed Liability
arises from and after the Closing.
9.3.3 Cooperation. The indemnified party shall cooperate in all reasonable
respects with the indemnifying party and such party's attorneys in the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified party may, at its own
cost, participate in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. The parties shall cooperate with each
other in any notifications to insurers.
9.3.4 Defense of Claims. If a claim for Damages (a "Claim") is to be made by a
party entitled to indemnification hereunder against the indemnifying party, the
party claiming such indemnification shall, subject to Section 9.3, give written
notice (a "Claim Notice") to the indemnifying party as soon as practicable after
the party entitled to indemnification becomes aware of any fact, condition or
event which may give rise to Damages for which indemnification may be sought
under this Section 9.4. If any lawsuit or enforcement action is filed against
any party entitled to the benefit of indemnity hereunder, written notice thereof
shall be given to the indemnifying party as promptly as practicable (and in any
event within fifteen (15) calendar days after the service of the citation or
summons). The failure of any indemnified party to give timely notice hereunder
shall not affect rights to indemnification hereunder, except to the extent that
the indemnifying party demonstrates actual damage caused by such failure. After
such notice, if the indemnifying party shall acknowledge in writing to the
indemnified party that the indemnifying party shall be obligated under the terms
of its indemnity hereunder in connection with such lawsuit or action, then the
indemnifying party shall be entitled, if it so elects, (i) to take control of
the defense and investigation of such lawsuit or action, (ii) to employ and
engage attorneys of its own choice (which shall be reasonably acceptable to the
indemnified party) to handle and defend the same, at the indemnifying party's
cost, risk and expense unless the named parties to such action or proceeding
include both the indemnifying party and the indemnified party and the
indemnified party has been advised in writing by counsel that there may be one
or more legal defenses available to such indemnified party that are different
from or additional to those available to the indemnifying party, and (iii) to
compromise or settle such claim, which compromise or settlement shall be made
only with the written consent of the indemnified party, such consent not to be
unreasonably withheld; provided, however, if the remediation or resolution of
any such Claim is reasonably expected to have a Material Adverse Effect on the
indemnified party's business operations, then, notwithstanding the foregoing,
the indemnified party shall be entitled to control such remediation or
resolution, including without limitation to take control of the defense and
investigation of such lawsuit or action, to employ and engage attorneys of its
own choice to handle and defend the same, at the indemnifying party's cost, risk
and expense, and to compromise or settle such Claim. If the indemnifying party
fails to assume the defense of such claim within fifteen (15) calendar days
after receipt of the Claim Notice, the indemnified party against which such
claim has been asserted will (upon delivering notice to such effect to the
indemnifying party) have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such claim on behalf
of and for the account and risk of the indemnifying party. In the event the
indemnified party assumes the defense of the claim, the indemnified party will
keep the indemnifying party reasonably informed of the progress of any such
defense, compromise or settlement. The indemnifying party shall be liable for
any settlement of any action effected pursuant to and in accordance with this
Section 9.4 and for any final judgment (subject to any right of appeal), and the
indemnifying party agrees to indemnify and hold harmless an indemnified party
from and against any Damages by reason of such settlement or judgment.
9.3.5 Liability and Remedies, etc. Nothing herein shall relieve either party of
any liability to make any payment expressly required to be made by such party
pursuant to this Agreement. The term "Damages" as used in this Section 9.4 is
not limited to matters asserted by third parties against Seller or Buyer, but
includes Damages incurred or sustained by Seller or Buyer in the absence of
third party claims. Payments by Buyer of amounts for which Buyer is indemnified
hereunder, and payments by Seller of amounts for which Seller is indemnified,
shall not be a condition precedent to recovery. Seller's obligation to indemnify
Buyer, and Buyer's obligation to indemnify Seller, shall not limit any other
rights, including without limitation rights of contribution which either party
may have under statute or common law.
9.4 Taxes. Subject to Section 2.6, Seller shall pay, or cause to be paid, when
due all Taxes for which Seller is or may be liable or that are or may become
payable with respect to all taxable periods ending on or prior to the Closing
Date. Buyer shall pay, or cause to be paid, when due all Taxes for which Buyer
is or may be liable or that are or may become payable with respect to all
taxable periods ending after the Closing Date.
9.5 Further Action. After the Closing, Seller shall take all actions reasonably
necessary to effect the conveyance of the Assets to Buyer free and clear of all
Encumbrances.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement will terminate upon the occurrence of any of
the following events:
10.1.1 Upon the written agreement of Seller and Buyer; or
10.1.2 At such time as Seller or Buyer provides written notice to the other
party if the transactions contemplated hereby shall not have been consummated
pursuant hereto by 5:00 p.m. New York time on November 21, 2003, unless such
date shall be extended by the mutual written consent of Seller and Buyer; or
10.1.3 At such time as Buyer provides written notice to Seller if (i) the
representations and warranties of Seller shall not have been true and correct in
all material respects as of the date when made, (ii) if any of the conditions
set forth in Section 7.1 shall not have been, or if it becomes apparent that any
of such conditions will not be, fulfilled by 5:00 p.m. New York time on November
21, 2003, or (iii) if Seller violates the provisions of Section 8.2 herein; or
10.1.4 At such time as Seller provides written notice to Buyer if (i) the
representations and warranties of Buyer shall not have been true and correct in
all material respects as of the date when made or (ii) if any of the conditions
set forth in Section 7.2 shall not have been, or if it becomes apparent that any
of such conditions will not be fulfilled by 5:00 p.m. New York time on November
21, 2003.
10.2 Effect of Termination. In the event of the termination of this Agreement
pursuant to the provisions of Section 10.1, this Agreement shall become void and
have no effect, without any liability to any person or entity in respect hereof
or of the transactions contemplated hereby on the part of any party hereto, or
any of its directors, officers, employees, agents, consultants, representatives,
advisers, stockholders or affiliates.
ARTICLE XI
MISCELLANEOUS
11.1 Assignment. Neither this Agreement nor any of the rights or obligations
hereunder may be assigned by any party without the prior written consent of the
other parties; except that Buyer may, without such consent, assign all such
rights to any lender as collateral security and assign all such rights and
obligations to a wholly-owned subsidiary (or a partnership or other entity
controlled by Buyer) or subsidiaries of Buyer or to a successor in interest to
Buyer which shall assume all obligations and liabilities of Buyer under this
Agreement. Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns, and no other person shall have any right, benefit or
obligation under this Agreement as a third party beneficiary or otherwise.
11.2 Notices. All notices, requests, demands and other communications which are
required or may be given under this Agreement shall be in writing and shall be
deemed to have been duly given when received if personally delivered; when
transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
If to Buyer, addressed to:
If to Seller, addressed to:
Mr. Xxxxx Xxxxxxxxx, President
Advanced Plant Pharmaceuticals, Inc. 00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11.3 Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of New
York (without reference to the choice of law provisions thereof), except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
11.4 Entire Agreement; Amendments and Waivers. This Agreement, together with all
exhibits and schedules hereto, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
11.5 Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.6 Expenses. Except as otherwise specified in this Agreement, each party
hereto shall pay its own legal, accounting, out-of-pocket and other expenses
incident to this Agreement and to any action taken by such party in preparation
for carrying this Agreement into effect.
11.7 Invalidity. In the event that any one or more of the provisions contained
in this Agreement or in any other instrument referred to herein, shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, then to
the maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any
other such instrument.
11.8 Titles. The titles, captions or headings of the Articles, Sections and
subsections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
11.9 Cumulative Remedies. All rights and remedies of either party hereto are
cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to
be duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
AMAZING NUTRITIONALS, INC.,
By:
Name:
Its: President
ADVANCED PLANT PHARMACEUTICALS, INC.,
By:
------------------------------------
Name: Xxxxx Xxxxxxxxx
Its: President
Schedule 1.4
Assets Purchased
All rights, title patents, trademarks, processes and related items of LHM123.
DESCRIPTION OF ASSET PURCHASED:
LHM 123 is a natural composition for the treatment of senile dementias,
particularly Alzheimer's disease. The composition which is composed of five
natural ingredients can be therapeutically delivered by any appropriate
pharmaceutical method, preferably oral delivery in pill, or most preferably,
capsule form.
Alzheimer's disease is a progressive neurodegenerative disease characterized by
progressive memory loss, poor judgment, language deterioration, and impaired
visuospatial skills. Alzheimer's disease usually begins after the age of 65, but
may occur as early as (early onset type) 40 years old. It usually begins with
minor impairment in short-term memory with such experiences as frequently losing
keys, and eventually progresses to include severe short-term and long-term
memory loss, as well as affecting most other areas of an individual's cognitive
functioning. Alzheimer's disease eventually destroys cognition, personality and
ability to function. In the earliest stages it may be difficult to differentiate
from normal aging, but as it progresses it totally destroys an individual's
ability to function.
