NY3 - 383651.10
Exhibit 2.1
[Schedules and attachments have been omitted but will be provided to the
Commission upon request]
Execution Copy
CONFIDENTIAL
------------
ASSET PURCHASE AGREEMENT
by and among
XXXXXX CAPITAL CORP.
and
XXXXXX PRODUCTS IP HOLDINGS CORP.
(as "Buyers")
and
INDIAN RIVER LABS, L.L.C.
PHARLO CITRUS TECHNOLOGIES, INC.
PHARLO CITRUS PROPERTIES PARTNERSHIP, LLLP
and
COAST TO COAST LABORATORIES, LLC
(as "Sellers")
July 15, 2005
ARTICLE I. DEFINITIONS...............................................1
ARTICLE II. CLOSING; PURCHASE AND SALE................................9
2.1 Effective Time............................................9
2.2 Purchased Assets..........................................9
2.3 Assets Not Purchased.....................................12
2.4 Payments.................................................12
2.5 Agreement Regarding the Consideration Shares.............12
2.6 Allocation Reporting.....................................12
2.7 Concurrent Deliveries....................................13
ARTICLE III. LIABILITIES AND OBLIGATIONS..............................13
3.1 Obligations Assumed......................................13
3.2 Liabilities and Obligations Not Assumed..................14
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF SELLERS................14
4.1 Organization.............................................14
4.2 Authority................................................14
4.3 Consents.................................................14
4.4 Legal Actions............................................15
4.5 Personal Property, Title to Purchased Assets,
and Intellectual Property................................15
4.6 Contracts................................................15
4.7 Tax Matters..............................................16
4.8 Applicable Laws and Permits..............................16
4.9 Certain Changes..........................................17
4.10 Brokers..................................................17
4.11 WARN Act Notices.........................................17
4.12 Real Property............................................17
4.13 Environmental and Safety Laws............................17
4.14 Employment Matters.......................................18
4.15 Employee Benefit Plans...................................18
4.16 Product Liability........................................18
4.17 Related Party Transactions...............................18
4.18 Status of Xxxxxx and Sellers.............................18
4.19 Consideration Shares.....................................18
4.20 Opportunity to Consult...................................19
4.21 Resales..................................................19
4.22 Legends..................................................19
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYERS.................20
5.1 Organization.............................................20
5.2 Authority................................................20
5.3 Consents.................................................21
5.4 Capitalization...........................................21
5.5 SEC Filings; Financial Statements........................21
5.6 Legal Actions............................................22
5.7 Certain Changes..........................................22
5.8 Applicable Laws..........................................23
5.9 Opportunity to Consult...................................23
5.10 Brokers..................................................23
ARTICLE VI. COVENANTS................................................23
6.1 Employees of the Businesses..............................23
6.2 Consents; Failure to Obtain Consents.....................24
6.3 Name Change..............................................24
6.4 Further Assistance.......................................24
6.5 Tax Returns..............................................24
6.6 Proration................................................24
6.7 Covenant Not to Compete..................................25
6.8 Mail Received After Closing..............................26
6.9 Confidentiality..........................................26
6.10 Certain Expenses.........................................26
6.11 Waiver of Bulk Sales Compliance..........................27
6.12 Cooperation on Tax Matters...............................27
6.13 Retention................................................27
6.14 Transition Cooperation...................................27
6.15 Covenant Regarding Registration of
Consideration Shares.....................................27
6.16 Offer and Sale of Offered Shares.........................34
6.17 Xxxx Xxxxx Agreement.....................................34
6.18 Issuance of Phitex LP Participating Units................34
ARTICLE VII. SURVIVAL; INDEMNIFICATION................................35
7.1 Agreement to Indemnify...................................35
7.2 Survival of Representations and Warranties...............36
ARTICLE VIII. MISCELLANEOUS............................................36
8.1 Notice...................................................36
8.2 Assignability............................................37
8.3 Exhibits and Schedules...................................37
8.4 Sections and Articles....................................37
8.5 Entire Agreement.........................................37
8.6 Headings.................................................38
8.7 Attribution of Knowledge.................................38
8.8 Controlling Law, Submission to Jurisdiction..............38
8.9 No Third Party Beneficiaries.............................38
8.10 Amendments and Waivers...................................38
8.11 Number and Gender of Words; Interpretations..............39
8.12 Invalid Provisions.......................................39
8.13 Multiple Counterparts....................................39
8.14 Joint Drafting...........................................39
8.15 Expenses.................................................39
8.16 Seller Representative....................................39
8.17 Current Buyer Agreements and Promissory Notes............40
EXHIBITS
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Exhibit A Form of Consideration Note
Exhibit B Form of Cummins License Agreement
Exhibit C Form of Pharlo IP Sublicense Agreement
Exhibit D Form of Cummins Lock-Up Agreement
Exhibit E Form of Xxxxxxx/Xxxxxxxxx/Xxxxx Lock-Up Agreement
SCHEDULES
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Schedule 1.1 Promissory Notes
Schedule 2.2(a)(iii) IRL Contracts
Schedule 2.2(a)(v) IRL Permits
Schedule 2.2(b)(i) PCTI Transferred Patents
Schedule 2.2(b)(ii) PCTI Transferred Trademarks
Schedule 2.2(c)(iii) PCPP Contracts
Schedule 2.2(c)(vi) PCPP Permits
Schedule 2.2(d)(iii) C2C Transferred Trademarks
Schedule 2.2(d)(v) C2C Contracts
Schedule 2.2(d)(vi) C2C Permits
Schedule 2.4(a) Allocation of Consideration Shares
Schedule 2.4(b) Allocation of Cash Consideration
Schedule 2.5(b) Distribution of Consideration Shares
Schedule 4.3 Seller Consents
Schedule 4.4 Seller Legal Actions
Schedule 4.5(a) Equipment Locations
Schedule 4.5(c) Intellectual Property Matters
Schedule 4.6(b) Contract Matters
Schedule 4.7 Tax Matters
Schedule 4.8 Applicable Laws and Permits
Schedule 4.9 Certain Seller Changes
Schedule 4.12 Real Property
Schedule 4.13 Hazardous Materials
Schedule 4.14(a) Employees
Schedule 4.14(b) Employee Matters
Schedule 4.16 Product Liability
Schedule 5.3 Buyer Consents
Schedule 5.6 Buyer Legal Actions
Schedule 5.7 Certain Buyer Changes
Schedule 6.1 Hired Employees
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"),( dated as of July 15, 2005, is
entered into by and among XXXXXX CAPITAL CORP., a Nevada corporation ("Xxxxxx"),
XXXXXX PRODUCTS IP HOLDINGS CORP., a Delaware corporation and wholly-owned
subsidiary of Xxxxxx ("Xxxxxx Products" and, together with Xxxxxx, "Buyers"),
INDIAN RIVER LABS, L.L.C., a Florida limited liability company ("IRL"), PHARLO
CITRUS TECHNOLOGIES, INC., a Florida corporation ("PCTI"), PHARLO CITRUS
PROPERTIES PARTNERSHIP, LLLP, a Florida limited liability limited partnership
("PCPP"), and COAST TO COAST LABORATORIES, LLC, a Florida limited liability
company ("C2C" and, together with IRL, PCTI and PCPP, "Sellers").
R E C I T A L S:
WHEREAS, IRL, PCPP and C2C are in the business of licensing (as licensee) U.S.
Patent No. 5,989,595 titled, "Acidic Composition of Matter for Use to Destroy
Microorganisms," U.S. Patent No. 6,242,011 B1 titled, "Acidic Composition of
Matter for Use to Destroy Microorganisms," and U.S. Serial No. 10/453,805
titled, "Reissue Application for U.S. Patent No. 6,242,011" and manufacturing,
marketing and selling certain products in the Fields of Use based on and/or
including such intellectual property and PCTI owns certain patent applications
in the Fields of Use included in the Intellectual Property (collectively, the
"Businesses"); and
WHEREAS, on the terms and conditions hereof, Buyers wish to purchase from
Sellers and Sellers wish to sell, transfer, assign and deliver to Buyers certain
assets and rights relating to, used in or held for use in the Businesses and
Buyers wish to assume certain liabilities of Sellers related to the Businesses.
NOW, THEREFORE, in consideration of the premises, and the mutual
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following terms have the following meanings for purposes of this Agreement:
"Additional Shares" has the meaning set forth in Section 2.4(a).
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person.
"Agreement" has the meaning set forth in the preamble.
"Assumed Obligations" has the meaning set forth in Section 3.1.
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Danbury, Connecticut are authorized or required by
law to close.
"Businesses" has the meaning set forth in the recitals.
"Buyers" has the meaning set forth in the preamble.
"Buyer Indemnitees" has the meaning set forth in Section 7.1(a)
"Buyer Material Adverse Effect" means a material adverse change in, or
material adverse effect on, the business, operations, Liabilities, results of
operations, properties, assets or financial condition of Xxxxxx and its
subsidiaries, taken as a whole.
"Buyer Related Documents" has the meaning set forth in Section 5.2.
"Buyer SEC Reports" means any reports, registrations, prospectuses,
schedules, forms, statements and other documents (including all exhibits to any
of the foregoing), together with any required amendments thereto, that Xxxxxx is
required to file with the Commission, including Forms 10-KSB, 10-QSB, 8-K and
proxy statements.
"Cash Consideration" means a cash amount equal to One Million Four Hundred
Twenty-Eight Thousand Dollars ($1,428,000).
"C2C" has the meaning set forth in the preamble.
"C2C Contracts" has the meaning set forth in Section 2.2(d)(v).
"C2C Equipment" has the meaning set forth in Section 2.2(d)(i).
"C2C Permits" has the meaning set forth in Section 2.2(d)(vi).
"C2C Purchased Assets" has the meaning set forth in Section 2.2(d).
"C2C Transferred Trademarks" has the meaning set forth in Section
2.2(d)(iii).
"Change in Control" means:
(a) the consummation of a merger or consolidation of Xxxxxx with or
into another entity or any other corporate reorganization involving Xxxxxx, if
all or substantially all of the individuals and entities who were the beneficial
owners of the outstanding Common Shares immediately prior to such merger,
consolidation or other reorganization do not beneficially own, directly or
indirectly, more than 50% of the combined voting power of the continuing or
surviving entity's securities outstanding immediately after such merger,
consolidation or other reorganization in substantially the same proportions as
their ownership, immediately prior to such merger, consolidation or other
reorganization, of the outstanding Common Shares;
(b) the sale, transfer or other disposition of all or substantially
all of Xxxxxx'x assets;
(c) a change in the composition of the Board of Directors of Xxxxxx
(the "Board") , as a result of which fewer than two-thirds of the incumbent
directors are directors who either (i) had been directors of Xxxxxx on the date
24 months prior to the date of the event that may constitute a Change in Control
(the "original directors") or (ii) were elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the aggregate of
the original directors who were still in office at the time of the election or
nomination and the directors whose election or nomination was previously so
approved or (iii) satisfy any combination of (i) and (ii); or
(d) any transaction as a result of which any person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934, as amended (the "Exchange Act")), directly or indirectly, of securities
of Xxxxxx representing at least 50% of the total voting power represented by
Xxxxxx'x then outstanding voting securities. For purposes of this clause (d),
the term "person" shall have the same meaning as when used in Sections 13(d) and
14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary
holding securities under an employee benefit plan of Xxxxxx or of a parent or
subsidiary of Xxxxxx and (ii) a corporation owned directly or indirectly by the
stockholders of Xxxxxx in substantially the same proportions as their ownership
of the Common Shares of Xxxxxx.
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A transaction shall not constitute a Change in Control if its sole purpose
is to change the state of Xxxxxx'x incorporation or to create a holding company
that will be owned in substantially the same proportions by the persons who held
Xxxxxx'x securities immediately before such transaction.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Commission" means the United States Securities and Exchange Commission,
or any successor governmental agency or authority.
"Common Share Fair Market Value" means the volume weighted average price
per share of the Common Shares trading on a "regular way" basis as reported on
the OTC Bulletin Board on the last full trading day immediately preceding the
date hereof.
"Common Shares" means shares of Xxxxxx'x common stock, par value $0.001
per share.
"Confidential Information" means any and all confidential or proprietary
technical, business, and other information of Sellers used in the Businesses to
the extent related to the Fields of Use which derives value, actual or
potential, from not being generally known to the public or to other persons,
including, without limitation, confidential or proprietary technical or
non-technical data, compositions, devices, methods, techniques, drawings,
inventions, processes, financial data, financial plans, product plans, lists of
actual or potential customers or suppliers and information regarding the
acquisition and investment plans and strategies, business plans or operations of
the Businesses, in each case to the extent related to the Fields of Use.
"Consideration Note" has the meaning set forth in Section 2.4(b).
"Consideration Shares" means Eighteen Million Seven Hundred Ninety-Two
Thousand Three Hundred Eighty-Eight (18,792,388) Common Shares.
"Convertible Debentures" has the meaning set forth in Section 5.4.
"Xxxxxxx/Xxxxxxxxx/Xxxxx Lock-Up Agreements" means the Lock-Up Agreements
by and between Xxxxxx and each of Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxxx
Xxxxx, substantially in the form attached hereto as Exhibit E.
"Cummins License Agreement" means the License Agreement effective
retroactive to March 18, 2005 between Xxxxx Xxxxxxx and Pharlo IP, LLC,
substantially in the form attached hereto as Exhibit B.
"Cummins Lock-Up Agreement" means the Lock-Up Agreement by and between
Xxxxxx and Xxxxx Xxxxxxx, substantially in the form attached hereto as Exhibit
D.
"Current Buyer Agreements" means the following:
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(i) General Contract for Products dated as of September 16, 2004
between IRL and Xxxxxx,
(ii) General Contract for Products dated as of September 20, 2004
between IRL and Xxxxxx, and
(iii) General Contract for Products made effective as of February 1,
2005 between IRL and C2C.
"Damages" means all losses, damages, costs, expenses, liabilities,
judgments, awards, fines, sanctions, penalties, charges and amounts paid in
settlement (including, without limitation, reasonable costs, fees and expenses
of attorneys, experts, accountants, appraisers, consultants, witnesses,
investigators and any other agents of such Person), whether or not resulting
from third party claims.
"Deferral Notice" has the meaning set forth in Section 6.15(c)(vi).
"Designated Subsidiary" has the meaning set forth in Section 6.18.
"Effective Date" has the meaning set forth in Section 6.16(a).
"Effective Time" has the meaning set forth in Section 2.1.
"Effectiveness Period" means the period beginning on the date the
Registration Statement is declared effective by the Commission and ending on the
earlier of (i) the date when all Registrable Securities covered by the
Registration Statement (A) cease to be outstanding or otherwise to be
Registrable Securities or (B) may be resold without restriction pursuant to Rule
144(k) under the Securities Act and no Holder is an Affiliate of Xxxxxx or (ii)
April 30, 2008 (or such later date as extended pursuant to Section 6.15(c)(vi)).
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" has the meaning set forth in Section 2.3.
"Excluded Liabilities" has the meaning set forth in Section 3.2.
"Fair Market Value" means the volume weighted average price per share of
the Common Shares trading on a "regular way" basis as reported on the OTC
Bulletin Board.
"Fields of Use" means the following:
(i) pre-harvest food processing and safety applications, including
treatment for plants and animals,
(ii) post-harvest food processing and safety applications, including
treatment for plants and animals, including the following:
(a) antimicrobial processing aide and food additive including
specific seafood applications; and
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(b) antimicrobial for airborne contaminants on cooked food,
(iii) breath and mouthwash applications, (iv) hangover and alcohol
abatement applications,
(v) topical palliative for dermatological disorders, including skin
moisturizing applications, anti-wrinkle applications and burn treatment
applications,
(vi) pet product applications and
(vii) antimicrobial water treatment applications.
"Filing Deadline" has the meaning set forth in Section 6.15(a)(i).
"Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, arbitral panel, government organization,
commission or tribunal or any regulatory, administrative or other agency, or any
political or other subdivision, department or branch, of any of the foregoing.
"GP Participating Units" has the meaning set forth in Section 6.18.
"Hired Employees" has the meaning set forth in Section 6.1(a).
"Holders" means Sellers, the Persons to whom Consideration Shares will be
transferred pursuant to Section 2.5(b) and any permitted transferee of
Registrable Securities held by Sellers or any such Persons or transferees.
"Holder Indemnified Parties" has the meaning set forth in Section
6.15(e)(i).
"Holders' Counsel" has the meaning set forth in Section 6.15(d).
"Initial Registration Deadline" has the meaning set forth in Section
6.15(a)(i)
"Intellectual Property" means the PCTI Transferred Patents, the C2C
Transferred Trademarks and the PCTI Transferred Trademarks.
"IRL" has the meaning set forth in the preamble.
"IRL Contracts" has the meaning set forth in Section 2.2(a)(iii).
"IRL Equipment" has the meaning set forth in Section 2.2(a)(i).
"IRL Permits" has the meaning set forth in Section 2.2(a)(v).
"IRL Purchased Assets" has the meaning set forth in Section 2.2(a).
"Laws" means any statute, law, rule, regulation or ordinance.
"Leased Real Property" means the real property subject to the lease
agreements constituting Purchased Contracts.
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"Liability" means any liability or obligation, whether known or unknown,
asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated
or unliquidated and whether due or to become due.
"Lien" has the meaning set forth in Section 2.2(a).
"Liquidated Damages Payment Amount" has the meaning set forth in Section
6.15(b)(i).
"Lock-Up Agreements" means the Xxxxxxx/Xxxxxxxxx/Xxxxx Lock-Up Agreements
and the Cummins Lock-Up Agreement.
"Locked-Up Shares" means Consideration Shares held by a Holder that is a
party to a Lock-Up Agreement that are at such time subject to restrictions on
transfer contained in such Lock-Up Agreement, other than restrictions on
transfer which cease upon the effectiveness of the Shelf Registration Statement
(whether or not such effectiveness has occurred).
"LP Participating Units" has the meaning set forth in Section 6.18.
"Material Adverse Effect" means a material adverse change in, or material
adverse effect on, the business, operations, Liabilities, results of operation,
properties, assets or financial condition of the Businesses, taken as a whole.
"Material Event" has the meaning set forth in Section 6.15(c)(vi).
"Offered Shares" means all of the Consideration Shares that are not then
subject to restrictions contained in any Lock-Up Agreement on the Effective Date
of the Shelf Registration Statement.
"Options" has the meaning set forth in Section 5.4.
"Order" means any order, writ, injunction, judgment, decree or other
requirement of any Governmental Authority.
"PCPP" has the meaning set forth in the preamble.
"PCPP Contracts" has the meaning set forth in Section 2.2(c)(iii).
"PCPP Equipment" has the meaning set forth in Section 2.2(c)(i).
"PCPP Permits" has the meaning set forth in Section 2.2(c)(v).
"PCPP Purchased Assets" has the meaning set forth in Section 2.2(c).
"PCTI" has the meaning set forth in the preamble.
"PCTI Purchased Assets" has the meaning set forth in Section 2.2(b).
"PCTI Transferred Patents" has the meaning set forth in Section 2.2(b)(i).
"PCTI Transferred Trademarks" has the meaning set forth in Section
2.2(b)(ii).
"Permits" means licenses, permits, permit applications, qualifications,
certificates, franchises, approvals, authorizations, exemptions and
registrations of any Governmental Authority and all applications therefor,
including without limitation any of the above required pursuant to any
environmental Law.
6
"Permitted Liens" means (i) Liens for taxes not yet due and payable, (ii)
Liens imposed by applicable law and incurred in the ordinary course of business
for obligations not yet due and payable to landlords, carriers, warehousemen,
laborers, materialmen and the like, and (iii) other Liens that do not materially
restrict the use of the property affected as presently used or materially impair
the value of the Businesses.
"Person" means any individual, sole proprietorship, partnership,
corporation, limited liability entity, joint venture, unincorporated society or
association, trust or other legal entity or Governmental Authority.
"Pharlo IP Sublicense Agreement" means the Sublicense Agreement by and
among Xxxxxx, Xxxxxx Products and Pharlo IP, LLC, substantially in the form
attached hereto as Exhibit C.
"Phitex" has the meaning set forth in Section 6.18.
"Proceeding" means any action, suit, claim, proceeding, hearing or
arbitration (whether public or private) of any nature before any Governmental
Authority.
"Promissory Notes" means all loan agreements, promissory notes (other than
the promissory note dated March 28, 2005 by Xxxxx Xxxxxxx in favor of Xxxxxx in
the original principal amount of $625,000) and similar instruments outstanding
on the date hereof evidencing the borrowing of money by any Seller, Xxxxx
Xxxxxxx, Xxxxx Xxxxxxx or Xxxxx Xxxxxxxxx from Xxxxxx or any of its
subsidiaries, including, without limitation, the loan agreements and promissory
notes set forth in Schedule 1.1.
"Prospectus" means the prospectuses included in any Registration
Statement, as amended or supplemented by any amendment or prospectus supplement,
including post-effective amendments, and all materials incorporated by reference
or explicitly deemed to be incorporated by reference in such Prospectus.
"Purchase Price" has the meaning set forth in Section 2.4(b).
"Purchased Assets" means the IRL Purchased Assets, the PCTI Purchased
Assets, the PCPP Purchased Assets and the C2C Purchased Assets.
"Purchased Contracts" means the IRL Contracts and the PCPP Contracts.
"Purchased Permits" means the IRL Permits, the PCPP Permits and the C2C
Permits.
"Registrable Securities" means all of the Consideration Shares and any
Additional Shares held by the Holders, until the earliest of (a) their resale in
accordance with a Registration Statement covering such securities and (b) their
sale pursuant to an exemption from registration under the Securities Act or in
any other transaction in which the applicable purchaser does not receive
"restricted securities" (as such term is defined for the purposes of Rule 144
under the Securities Act).
"Registration Expenses" means all fees and expenses incurred by Xxxxxx in
connection with the performance of its obligations under Section 6.15, whether
or not a Registration Statement is filed or becomes effective, including (i) all
preparation, registration and filing fees, (ii) printing expenses, (iii) all
listing fees and expenses, if any and (iv) fees and disbursements of counsel for
Xxxxxx in connection with the Registration Statements relating to the
Registrable Securities.
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"Registration Statement" means any registration statement of Xxxxxx that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including a Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Seller Employee Plan" means, with respect to each Seller, every employee
benefit, health, hospitalization, welfare, disability, dental, legal,
"cafeteria" or Section 125, severance, bonus, incentive compensation, life
insurance, pension, profit-sharing, savings, 401(k), stock option, stock
appreciation, deferred compensation, vacation benefit, sick pay and personal
time plans and benefits, and any other fringe benefit or similar plan, program,
arrangement, or practice, including any "employee benefit plan" within the
meaning of Section 3(3) of ERISA, sponsored by such Seller, to which such Seller
contributes, or with respect to which such Seller has any liability.
"Seller Indemnitees" has the meaning set forth in Section 7.1(b).
"Seller Related Documents" has the meaning set forth in Section 4.2(a).
"Seller Representative" has the meaning set forth in Section 8.16(a).
"Sellers" has the meaning set forth in the preamble.
"Shelf Registration Statement" has the meaning set forth in Section
6.15(a)(i).
"Subsequent Registration Default" has the meaning set forth in Section
6.15(b)(ii).
"Subsequent Shelf Registration Statement" has the meaning set forth in
Section 6.15(a)(iii).
"Surviving Representations" means the representation and warranty of
Sellers contained in Section 4.5(b) and the representations and warranties of
Buyers contained in Section 5.4.
"Tax" or "Taxes" shall mean any federal, state, local, or foreign income,
gross receipts, license, payroll, employment, excise, severance, stamp,
occupation, premium, windfall profits, environmental (including taxes under Code
ss. 59A), customs, capital stock, franchise, profits, withholding, social
security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated, or other tax, duty or imposition of any kind whatsoever,
including any interest, penalty, or addition thereto, whether disputed or not.
"Tax Return" means any return, declaration, report, claim for refund, or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Transaction Documents" means, collectively, this Agreement, the Buyer
Related Documents and the Seller Related Documents.
"WARN Act" means the Federal Workers Adjustment and Retraining
Notification Act.
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"Xxxx Xxxxx Agreement" means the Exclusive Field of Use License Agreement
and Product Sale Agreement made effective as of September 16, 2004, as amended,
by and between Xxxxxx, Xxxx Xxxxx Special Products, LLC, PCTI, IRL and Pharlo
IP, LLC, as in effect on the date hereof.
ARTICLE II
CLOSING; PURCHASE AND SALE
2.1 Effective Time. The purchase and sale of the Purchased Assets
hereunder and the assumption of the Assumed Obligations hereunder shall be
effective as of 12:01 a.m., Eastern Time, on the date hereof (the "Effective
Time").
2.2 Purchased Assets. Subject to the terms and conditions of this
Agreement:
(a) IRL hereby sells, transfers, conveys, assigns and delivers to Xxxxxx,
and Xxxxxx hereby purchases from IRL, free and clear of all liens, pledges,
mortgages, security interests, conditional sales contracts, charges,
hypothecations, title defects or monetary encumbrances whatsoever (each, a
"Lien") (other than Permitted Liens), all right, title and interest of IRL in
and to the following assets, properties and rights used, or held for use, by IRL
in connection with the Businesses (collectively, the "IRL Purchased Assets"), as
the same shall exist as of the date hereof:
(i) all machinery, office furniture, office and computer equipment
and supplies and other equipment owned by IRL, together with all parts,
tools and accessories and all assignable warranties of third parties with
respect thereto (the "IRL Equipment");
(ii) all inventory of raw materials, work-in-process, finished
goods, wrapping, operating supplies and packaging items owned by IRL that
are located at IRL's facilities on the date hereof;
(iii) the lease and other agreements identified on Schedule
2.2(a)(iii) (the "IRL Contracts"), including all options to renew or
extend the terms of such IRL Contracts;
(iv) (A) all records, files, books and operating data, whether in
print, electronic or other media, to the extent relating to the Purchased
Assets, including, without limitation, Confidential Information relating
to the Purchased Assets and (B) all customer, supplier and distributor
lists and other information and data to the extent relating to customers
or suppliers of the Businesses in the Fields of Use;
(v) the Permits identified on Schedule 2.2(a)(v) to the extent the
same are freely assignable (the "IRL Permits"); and ------------------
(vi) all claims, warranties, choses in action, causes of action,
rights of recovery and rights of set-off of any kind against third parties
who are not Affiliates, partners, members, stockholders, officers,
directors, employees, agents or representatives of any Seller to the
extent relating to the assets described in clauses (i) - (v) above (other
than any claims, counterclaims, warranties, choses in action, causes of
action and rights to the extent relating to, or constituting a defense or
counterclaim as to, any Excluded Assets or Excluded Liabilities) and the
right to receive and retain mail and other communications to the extent
relating to the assets described in clauses (i) - (v) above.
(b) PCTI hereby sells, transfers, conveys, assigns and delivers to Xxxxxx
(in the case of the assets listed in clauses (iii) and (iv) below) and to Xxxxxx
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Products (in the case of the assets listed in clauses (i) and (ii) below), and
Xxxxxx (in the case of the assets listed in clauses (iii) and (iv) below) and
Xxxxxx Products (in the case of the assets listed in clauses (i) and (ii) below)
hereby purchase from PCTI, free and clear of all Liens (other than Permitted
Liens), all right, title and interest of PCTI in and to the following assets,
properties and rights used, or held for use, by PCTI in connection with the
Businesses (collectively, the "PCTI Purchased Assets"), as the same shall exist
as of the date hereof:
(i) the patent applications used or held for use in the Businesses
that are listed on Schedule 2.2(b)(i) (the "PCTI -------------------
Transferred Patents");
(ii) the trade name and trademark, and applications and
registrations therefor, used in the Businesses that are listed on Schedule
2.2(b)(ii), together with the goodwill associated therewith (the "PCTI
Transferred Trademarks");
(iii) (A) all records, files, books and operating data, whether in
print, electronic or other media, to the extent relating to the Purchased
Assets, including, without limitation, Confidential Information relating
to the Purchased Assets and (B) all customer, supplier and distributor
lists and other information and data to the extent relating to customers
or suppliers of the Businesses in the Fields of Use; and
(iv) all claims, warranties, choses in action, causes of action,
rights of recovery and rights of set-off of any kind against third parties
who are not Affiliates, partners, members, stockholders, officers,
directors, employees, agents or representatives of any Seller to the
extent relating to the assets described in clauses (i) - (iii) above
(other than any claims, counterclaims, warranties, choses in action,
causes of action and rights to the extent relating to, or constituting a
defense or counterclaim as to, any Excluded Assets or Excluded
Liabilities) and the right to receive and retain mail and other
communications to the extent relating to the assets described in clauses
(i) - (iii) above.
(c) PCPP hereby sells, transfers, conveys, assigns and delivers to Xxxxxx,
and Xxxxxx hereby purchases from PCPP, free and clear of all Liens (other than
Permitted Liens), all right, title and interest of PCPP in and to the following
assets, properties and rights used, or held for use, by PCPP in connection with
the Businesses (collectively, the "PCPP Purchased Assets"), as the same shall
exist as of the date hereof:
(i) all machinery, office furniture, office and computer equipment
and supplies and other equipment owned by PCPP, together with all parts,
tools and accessories and all assignable warranties of third parties with
respect thereto (the "PCPP Equipment");
(ii) all inventory of raw materials, work-in-process, finished
goods, wrapping, operating supplies and packaging items owned by PCPP that
are located at PCPP's facilities on the date hereof;
(iii) the lease and other agreements identified on Schedule
2.2(c)(iii) (the "PCPP Contracts"), including all options to renew or
extend the terms of such PCPP Contracts;
(iv) (A) all records, files, books and operating data, whether in
print, electronic or other media, to the extent relating to the Purchased
Assets, including, without limitation, Confidential Information relating
to the Purchased Assets and (B) all customer, supplier and distributor
lists and other information and data to the extent relating to the
customers or suppliers of the Businesses in the Fields of Use;
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(v) the Permits identified on Schedule 2.2(c)(v) to the extent the
same are freely assignable (the "PCPP Permits"); and
(vi) all claims, warranties, choses in action, causes of action,
rights of recovery and rights of set-off of any kind against third parties
who are not Affiliates, partners, members, stockholders, officers,
directors, employees, agents or representatives of any Seller to the
extent relating to the assets described in clauses (i) - (v) above (other
than any claims, counterclaims, warranties, choses in action, causes of
action and rights to the extent relating to, or constituting a defense or
counterclaim as to, any Excluded Assets or Excluded Liabilities) and the
right to receive and retain mail and other communications to the extent
relating to the assets described in clauses (i) - (v) above.
(d) C2C hereby sells, transfers, conveys, assigns and delivers to Xxxxxx
(in the case of the assets listed in clauses (i), (ii), (iv), (v), (vi) and
(vii) below) and to Xxxxxx Products (in the case of the assets listed in clause
(iii) below), and Xxxxxx (in the case of the assets listed in clauses (i), (ii),
(iv), (v), (vi) and (vii) below) and Xxxxxx Products (in the case of the assets
listed in clause (iii) below) hereby purchase from C2C, free and clear of all
Liens (other than Permitted Liens), all right, title and interest of C2C in and
to the following assets, properties and rights used, or held for use, by C2C in
connection with the Businesses (collectively, the "C2C Purchased Assets"), as
the same shall exist as of the date hereof:
(i) all machinery, office furniture, office and computer equipment
and supplies and other equipment owned by C2C, together with all parts,
tools and accessories and all assignable warranties of third parties with
respect thereto (the "C2C Equipment");
(ii) the accounts receivable owed to C2C that are from third parties
who are not a Seller, Buyer or Affiliates of any Seller or Buyer;
(iii) the trade name and trademark, and applications and
registrations therefor, used in the Businesses that are listed on Schedule
2.2(d)(iii), together with the goodwill associated therewith (the "C2C
Transferred Trademarks");
(iv) (A) all records, files, books and operating data, whether in
print, electronic or other media, to the extent relating to the Purchased
Assets, including, without limitation, Confidential Information relating
to the Purchased Assets and (B) all customer, supplier and distributor
lists and other information and data to the extent relating to the
customers or suppliers of the Businesses in the Fields of Use;
(v) all lease and other written agreements to which C2C is a party,
including those identified on Schedule 2.2(d)(v) (the "C2C Contracts"),
including all options to renew or extend the terms of such C2C Contracts;
(vi) the Permits identified on Schedule 2.2(d)(vi) to the extent the
same are freely assignable (the "C2C Permits"); and
(vii) all claims, warranties, choses in action, causes of action,
rights of recovery and rights of set-off of any kind against third parties
who are not Affiliates, partners, members, stockholders, officers,
directors, employees, agents or representatives of any Seller to the
extent relating to the assets described in clauses (i) - (vi) above (other
than any claims, counterclaims, warranties, choses in action, causes of
action and rights to the extent relating to, or constituting a defense or
counterclaim as to, any Excluded Assets or Excluded Liabilities) and the
right to receive and retain mail and other communications to the extent
relating to the assets described in clauses (i) - (vi) above.
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Buyers and Sellers acknowledge and agree that immediately after the Effective
Time, the Purchased Assets may, at the sole discretion of Buyers, be sold,
transferred, conveyed, assigned, and delivered, in whole or in part, to one or
more of Xxxxxx'x subsidiaries.
2.3 Assets Not Purchased. Other than the Purchased Assets specifically
listed in Section 2.2 above, Sellers are not selling, transferring, conveying,
assigning or delivering to Buyers any right, title or interest in or to any
assets, properties or rights (the "Excluded Assets").
2.4 Payments. In consideration for the Purchased Assets, concurrently with
the execution and delivery hereof:
(a) Xxxxxx is issuing to Sellers, free and clear of any Liens, the
Consideration Shares and, on or after the date hereof, Xxxxxx will issue to a
third party designated by PCTI, free and clear of any Liens, an additional
200,000 Common Shares (the "Additional Shares") in connection with certain
claims. The Consideration Shares shall be allocated among the Sellers as set
forth on Schedule 2.4(a). If the Additional Shares are returned to Buyer, Buyer
shall promptly deliver them to PCTI;
(b) Xxxxxx is issuing and delivering to IRL a promissory note, dated the
date hereof, in the principal amount of One Million Nine Hundred Thirty-One
Thousand Nine Hundred Seventy-Three Dollars and Thirty-Seven Cents
($1,931,973.37) in the form attached hereto as Exhibit A (the "Consideration
Note"); and
(c) Buyers are paying to Sellers (to such account or accounts as Sellers
have designated), by wire transfer of immediately available funds, an aggregate
amount equal to the Cash Consideration (together with the Consideration Shares,
the Additional Shares and the Consideration Note, the "Purchase Price"). The
Cash Consideration shall be allocated among the Sellers as set forth on Schedule
2.4(b).
2.5 Agreement Regarding the Consideration Shares.
-------------------------------------------------
(a) Subject to Sections 2.5(b), 6.15 and 6.16, the parties intend that the
Consideration Shares are being issued in a transaction exempt from registration
under the Securities Act, by reason of Section 4(2) and/or Regulation D of the
Securities Act. The parties acknowledge and agree that as a condition to
effecting the issuance pursuant to Section 4(2) of the Securities Act, Xxxxxx
will be relying upon the representations and warranties provided by Sellers set
forth in Article IV of this Agreement.
(b) Anything to the contrary contained in this Agreement (including,
without limitation, Section 2.5(a) and Article IV) notwithstanding, Buyers and
Sellers acknowledge and agree that, on the date hereof, certain of the
Consideration Shares will be distributed to those persons and in such amounts as
are described on Schedule 2.5(b), and Xxxxxx will issue new certificates for
Consideration Shares in connection therewith.
2.6 Allocation Reporting. Buyers and Sellers agree to allocate the
payments set forth in this Article II (and the Assumed Obligations set forth in
Section 3.1) among the Purchased Assets in accordance with Section 1060 of the
Code, which allocation shall be prepared and mutually agreed to by Xxxxxx and
Seller Representative within thirty days after the date hereof.
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2.7 Concurrent Deliveries. Concurrently with the execution and delivery
hereof:
(i) Xxxxx Xxxxxxx and Pharlo IP, LLC are executing and delivering
the Cummins License Agreement;
(ii) Xxxxxx, Xxxxxx Products and Pharlo IP, LLC are executing and
delivering the Pharlo IP Sublicense Agreement;
(iii) Xxxxxx and Xxxxx Xxxxxxx are executing and delivering the
Cummins Lock-Up Agreement;
(iv) Xxxxxx and each of Xxxxx Xxxxxxx, Xxxxx Xxxxxxxxx and Xxxxxxx
Xxxxx are executing and delivering a Xxxxxxx/Xxxxxxxxx/Xxxxx Lock-Up
Agreement;
(v) Each Seller is delivering to Xxxxxx a Certificate of the
Secretary of such Seller, dated the date hereof, certifying as to the
organizational documents of such Seller, the resolutions of the Board of
Directors/Management Committee and, if necessary, the shareholders/members
of such Seller approving the execution, delivery and performance of this
Agreement and the Seller Related Documents to which such Seller is a
party, and the incumbency of the officers of such Seller executing any of
this Agreement or the Seller Related Documents;
(vi) Sellers are delivering to Xxxxxx certificates of good standing,
dated not more than fifteen days prior to the date hereof, with respect to
each Seller issued by the appropriate authority of the State of Florida;
(vii) Each Buyer is delivering to Sellers a Certificate of the
Secretary of such Buyer, dated the date hereof, certifying as to the
articles of incorporation/or certificate of incorporation and bylaws of
such Buyer, the resolutions of the Board of Directors of such Buyer
approving the execution, delivery and performance of this Agreement and
the Buyer Related Documents, and the incumbency of the officers of such
Buyer executing any of this Agreement or the Buyer Related Documents; and
(viii) Each Buyer is delivering to Sellers certificates of good
standing, dated not more than fifteen days prior to the date hereof, with
respect to such Buyer and its material subsidiaries issued by the
appropriate authority of such entity's jurisdiction of organization.
ARTICLE III
LIABILITIES AND OBLIGATIONS
3.1 Obligations Assumed. As part of the consideration for the Purchased
Assets, effective at the Effective Time, Xxxxxx hereby assumes, and agrees to
pay, perform and discharge, in a timely manner and in accordance with the terms
thereof, only the following Liabilities and obligations of Sellers (the "Assumed
Obligations"):
(a) All Liabilities of Sellers relating to periods on or after the date
hereof under the Purchased Contracts and the Purchased Permits (in the case of
the Purchased Permits, to the extent legally assigned to a Buyer), but excluding
any obligations or Liabilities arising from or related to any default, breach or
violation of the Purchased Contracts or Purchased Permits by Sellers to the
extent occurring prior to the date hereof; and
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(b) The reasonable legal and accounting fees incurred by Sellers in
connection with this Agreement.
3.2 Liabilities and Obligations Not Assumed. Other than as specifically
listed in Section 3.1 above and each Buyer's obligations under this Agreement,
Buyers shall assume no obligation whatsoever of Sellers, whether or not arising
from or related to the Businesses (the "Excluded Liabilities").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller severally represents and warrants to Buyers, as of the date of this
Agreement, the following:
4.1 Organization. Such Seller, in the case of IRL and C2C, is a limited
liability company, in the case of PCTI, is a corporation, and in the case of
PCPP, is a limited liability limited partnership, each duly qualified, validly
existing and in good standing under the laws of the State of Florida. Such
Seller is duly qualified or licensed as a foreign entity and is authorized to
conduct its Business in each state in which the nature of the Business of such
Seller or the Purchased Assets to be purchased from such Seller makes such
qualification or license necessary, except where the failure to be so qualified
or licensed or to have such authority would not have a Material Adverse Effect.
4.2 Authority.
(a) Such Seller has full corporate, partnership or limited liability
company (as applicable) power and authority to execute, deliver and perform this
Agreement and all documents and instruments executed and delivered by such
Seller pursuant to this Agreement (the "Seller Related Documents"). This
Agreement and the Seller Related Documents have been duly executed and delivered
by such Seller and constitute, legal, valid and binding obligations of such
Seller, enforceable against such Seller in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
(b) Such Seller has full corporate, partnership or limited liability
company (as applicable) power and authority necessary to conduct the Business
conducted by such Seller as being conducted on the date hereof and to own, lease
and operate the Purchased Assets owned, leased and operated by such Seller on
the date hereof.
(c) Such Seller has taken or will take all corporate, partnership or
limited liability company (as applicable) action required by law to authorize
the execution and delivery of this Agreement and the Seller Related Documents to
which such Seller is a party and the consummation by such Seller of the
transactions contemplated hereby and thereby.
4.3 Consents.
(a) Except as listed on Schedule 4.3, the execution and delivery of this
Agreement and the Seller Related Documents to which such Seller is a party by
such Seller does not, and the performance of this Agreement and the Seller
Related Documents to which such Seller is a party by such Seller will not: (i)
require any material authorization, approval, consent, waiver, amendment or
other action by, or registration, declaration or filing with or notice to, any
Governmental Authority; (ii) result in a material violation of any Law or of any
Order binding upon such Seller related to the Businesses or the Purchased
Assets; (iii) result in the creation of any Lien (other than Permitted Liens) on
any of the Purchased Assets; or (iv) violate the articles (or certificate) of
incorporation, bylaws or other organizational documents or instruments of such
Seller, as applicable.
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4.4 Legal Actions. Except as set forth on Schedule 4.4, there are no
material Proceedings pending or, to Sellers' knowledge, threatened against such
Seller relating to the Purchased Assets. Except as set forth on Schedule 4.4,
such Seller has not received written notice of any, and, to Sellers' knowledge,
there are no, material investigations pending or threatened against such Seller
related to the Purchased Assets by or before any Governmental Authority. No
Governmental Authority or other Person or entity has notified such Seller in
writing of any material challenge of the legal right of such Seller to offer or
sell any of the products or services related to the Businesses currently offered
and sold by such Seller in the present manner thereof. There is no Proceeding
pending or, to Sellers' knowledge, threatened against such Seller, that in any
manner challenges or seeks to prevent, enjoin, alter or delay, or reasonably
could be expected to prevent, enjoin, alter or delay, any of the transactions
contemplated by this Agreement or that challenges the validity of this Agreement
or any of the transactions contemplated hereby.
4.5 Personal Property, Title to Purchased Assets, and Intellectual
Property.
(a) Except as disclosed on Schedule 4.5(a), substantially all of the IRL
Equipment, the PCPP Equipment and the C2C Equipment owned by such Seller are
located at the Leased Real Property.
(b) Such Seller has good and valid title to all of the Purchased Assets to
be sold by such Seller to Buyers hereunder (other than any Purchased Assets
which are leased by such Seller from third parties), free and clear of any and
all Liens except for Permitted Liens.
(c) Except as set forth on Schedule 4.5(c), to Sellers' knowledge, such
Seller is not bound by or a party to any material options, licenses or
agreements of any kind with respect to the patents, trademarks, service marks,
trade names, domain names, copyrights, trade secrets, information, proprietary
rights and/or processes of any other Person who is not a Seller, Buyer, or an
Affiliate of any Seller or Buyer. To Sellers' knowledge, such Seller has not
violated in any material respect any of the patents, trademarks, service marks,
trade names, copyrights or trade secrets or other proprietary rights of any
other Person. To Sellers' knowledge, none of such Seller's employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with the use of his or
her legally required efforts to promote the interests of such Seller and the
Business of such Seller or Buyers (following the date hereof) or that would
conflict with the Business of such Seller as presently conducted. To Sellers'
knowledge, no consent is required for the sale of any Intellectual Property
owned by such Seller to Buyers pursuant hereto and no governmental registration
of any of the Intellectual Property owned by such Seller has lapsed or expired
or been canceled, abandoned, opposed, or the subject of any reexamination
request. Except as set forth in Schedule 4.5(c) and except for the licenses to
which Xxxxxx or any of Xxxxxx'x subsidiaries is a party, no current licenses for
the use of, or options or agreements relating to, any of the Intellectual
Property owned by such Seller have been entered into by such Seller with any
third parties who are not a Seller, Buyer or an Affiliate of any Seller or Buyer
and, to Sellers' knowledge, none of the Intellectual Property is being used by
any unaffiliated unauthorized Person.
4.6 Contracts.
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(a) True and correct copies of the Purchased Contracts have previously
been delivered to Xxxxxx.
(b) Except as set forth on Schedule 4.6(b) and except as would otherwise
not have a Material Adverse Effect, (i) such Seller has not breached, violated
or defaulted under (or taken or failed to take any action that, with the giving
of notice, the passage of time or both would constitute a default under) any
Purchased Contract to which such Seller is a party, (ii) such Seller has not
received written notice that such Seller has breached, violated or defaulted
under (or taken or failed to take any action that, with the giving of notice,
the passage of time or both would constitute a default under), any Purchased
Contract to which such Seller is a party, (iii) to Sellers' knowledge, no other
party obligated to such Seller pursuant to a Purchased Contract to which such
Seller is a party is in default under any obligation under such Purchased
Contract, and (iv) each Purchased Contract to which such Seller is a party is in
full force and effect, enforceable against such Seller in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity (whether applied
in a proceeding at law or in equity).
4.7 Tax Matters.
(a) All Taxes owed by such Seller (whether or not shown on any Tax Return)
have been paid to the extent that the failure to pay any thereof could result in
a Lien on any Purchased Asset owned by such Seller (other than Permitted Liens)
or in Buyers' reasonably being expected to be liable for such Taxes. Such Seller
has no liability with respect to Taxes that would reasonably be expected to have
an adverse effect upon Buyers' right, title and interest in or to, or Buyers'
right to use or enjoy (free and clear of any Lien, other than Permitted Liens),
any Purchased Asset owned by such Seller.
(b) To Sellers' knowledge, no Governmental Authority has notified such
Seller in writing that it will or intends to assess any additional Taxes against
such Seller for any period for which any Tax Returns have been filed, in respect
of the Business of such Seller or Purchased Assets owned by such Seller, which
could result in a Lien on any Purchased Asset owned by such Seller (other than
Permitted Liens) or in Buyers' reasonably being expected to be liable for any
such Taxes. Except as indicated on Schedule 4.7, to Sellers' knowledge, there is
no dispute or claim concerning any Tax Liability of such Seller claimed or
raised by any Governmental Authority, either in respect of the Business of such
Seller or the Purchased Assets owned by such Seller, that could result in a Lien
on any Purchased Asset owned by such Seller or in Buyers' reasonably being
expected to be liable for such Taxes.
(c) Such Seller has not waived any statute of limitations in respect of
any Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency with respect to the Business of such Seller, the Purchased Assets
owned by such Seller, or income therefrom, that could result in a Lien on any
Purchased Asset owned by such Seller or in Buyers' reasonably being expected to
be liable for any such Taxes.
4.8 Applicable Laws and Permits. Schedule 4.8 sets forth a list of all of
the material Permits of such Seller relating to the Business of such Seller.
Such Seller has heretofore delivered or caused to be delivered to Xxxxxx true
and correct copies of all such Permits as presently in effect. Except as listed
in Schedule 4.8 and except as would otherwise not have a Material Averse Effect:
(a) such Permits of such Seller are in full force and effect; (b) the Business
of such Seller has been and is being conducted in compliance with all applicable
Laws and Orders and all such Permits; (c) there are no pending Permit
applications with respect to the Business of such Seller; and (d) such Seller
has not within the past twelve months received any written notice of any
violation, breach or default of any such Laws, Orders or Permits.
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4.9 Certain Changes. Since January 1, 2005, each Seller has conducted its
Business solely in the ordinary course of business consistent with past
practices and, except as specifically listed on Schedule 4.9, since January 1,
2005, there has not been, with respect to the Business of such Seller, any:
(a) material adverse change of any nature whatsoever in the business,
operations, Liabilities, results of operation, properties, assets or financial
condition of the Businesses, taken as a whole, or any event or circumstance that
would, individually or in the aggregate, reasonably be expected to result in
such a material adverse change;
(b) material revaluation or write-down of any of the Purchased Assets of
such Seller;
(c) amendment or termination of any Purchased Contract other than in the
ordinary course of business or as contemplated in this Agreement;
(d) disposal of Purchased Assets owned by such Seller outside of the
ordinary course of business, including any transfer to any Affiliate of such
Seller; or
(e) agreement by Sellers to do, either directly or indirectly, any of the
things described in the preceding clauses (a) through (d).
4.10 Brokers. Such Seller has not incurred any obligation or liability, or
agreed to pay any amount, to any Person for any brokerage fees, commissions,
finder's fees or similar payment in connection with the execution or delivery of
this Agreement or the consummation by such Seller of the transactions
contemplated by this Agreement.
4.11 WARN Act Notices. Any notice required under the WARN Act that is or
has been required of such Seller to its employees or former employees by reason
of its acts prior to the date hereof has been or will be given by such Seller.
4.12 Real Property. Schedule 4.12 identifies all material real property
leased by such Seller used in the conduct of the Business of such Seller. Such
Seller does not own any material real property used in the Business of such
Seller.
4.13 Environmental and Safety Laws. To Sellers' knowledge, such Seller is
not in violation in any material respect of any applicable statute, law or
regulation relating to the environment or occupational health and safety. To
Sellers' knowledge, except as set forth in Schedule 4.13, no Hazardous Materials
(as defined below) are used or have been used, stored, or disposed of by such
Seller or by any other Person on any property owned or leased by such Seller in
a manner that constitutes a material violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety. For
the purposes of the preceding sentence, "Hazardous Materials" shall mean (a) all
materials which are listed or otherwise defined as "hazardous" or "toxic" under
any applicable local, state, federal and/or foreign laws and regulations that
govern the existence and/or remedy of contamination on property, the protection
of the environment from contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building materials and (b)
any petroleum products or nuclear materials.
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4.14 Employment Matters.
(a) Schedule 4.14(a) lists: (i) all employees of the Sellers as of the
date hereof and (ii) each such employee's annual base salary or hourly rate of
compensation as of the date hereof.
(b) Except as listed in Schedule 4.14(b): (i) all officers and employees
of such Seller are employees at-will, terminable without penalty; and (ii) there
are no outstanding agreements to which such Seller is a party with respect to
severance payments payable to its employees.
4.15 Employee Benefit Plans. To Sellers' knowledge, no action or inaction
on the part of such Seller or on the part of any fiduciary, party in interest,
or disqualified Person with respect to any of such Seller's Seller Employee
Plans and no provision or design feature of any of such Seller's Seller Employee
Plans would reasonably be expected to cause Buyers to have any liability or
obligation with respect to any of such Seller's Seller Employee Plans. To
Sellers' knowledge, no failure of any of such Seller's Seller Employee Plans to
comply in form and in operation in all material respects with its terms or the
requirements of applicable Law, including ERISA and the Code, has occurred that
would reasonably be expected to cause Buyers to have any liability or obligation
with respect to any of such Seller's Seller Employee Plans.
4.16 Product Liability. Except as set forth on Schedule 4.16, there is no
currently pending or, to Sellers' knowledge, threatened, Proceeding relating to
product liability or warranty by any third party (whether based on contract or
tort and whether relating to personal injury, including death, property damage
or economic loss) arising from: (a) services rendered by such Seller in
connection with the Business of such Seller, (b) the sale or distribution of
products by such Seller, or the manufacture of products by such Seller or (c)
the operation of the Business of such Seller or the ownership of the Purchased
Assets owned by such Seller.
4.17 Related Party Transactions. Such Seller does not have, and to
Sellers' knowledge, no employee, shareholder, member, officer, director or
manager of such Seller or any member of his or her immediate family has, any
direct or indirect ownership interest in any business that competes with such
Seller in the Fields of Use.
4.18 Status of Xxxxxx and Sellers. Each of the Sellers acknowledges that
Xxxxxx is a reporting company under Section 12 of the Exchange Act and that such
Seller has had an opportunity to review the Buyer SEC Reports filed since
January 1, 2005.
4.19 Consideration Shares. Each Seller represents, subject to Section
2.5(b) and Xxxxxx'x obligations under Section 6.15:
(a) That the Consideration Shares have not been registered under the
Securities Act and are being offered and sold pursuant to an exemption from
registration contained in the Securities Act based in part upon the
representations of each Seller contained herein;
(b) That such Seller knows of no public solicitation or advertisement of
an offer in connection with the proposed allotment of the Consideration Shares;
(c) That such Seller is familiar with Section 4(2) of the Securities Act;
(d) That such Seller has received and reviewed such information concerning
Xxxxxx which such Seller deems necessary or advisable to review in order to
evaluate the risks and merits of entering into the transactions contemplated
herein and acquiring the Consideration Shares to be issued under this Agreement;
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(e) That such Seller is either an "accredited investor" (as that term is
defined in Rule 501(a) under the Securities Act) or has such knowledge and
experience in financial and business matters that such Seller is capable of
evaluating the merits and risks of acquiring the Consideration Shares;
(f) That the Consideration Shares have not been registered with the
Commission under the Securities Act and, therefore, cannot be sold unless they
are subsequently registered under the Securities Act or an exemption from such
registration is available;
(g) Xxxxxx has made available to Sellers the opportunity to ask questions
and receive answers concerning the terms and conditions of the transactions
contemplated in this Agreement and to obtain additional information which Xxxxxx
possesses or could acquire without unreasonable effort or expense that is
necessary to verify the accuracy of information furnished to Sellers; and
(h) Except as set forth in Section 2.5(b), such Seller is acquiring the
Consideration Shares to be issued and sold hereunder for his or its own account
for investment and not as a nominee and not with a view to the distribution
thereof.
4.20 Opportunity to Consult. Such Seller acknowledges that it has had the
opportunity to review this Agreement and the transactions contemplated by this
Agreement with its own legal, financial and tax advisers. Such Seller is relying
solely on such advisers and not on any statements or representations of Buyers
or any of Buyers' agents for legal, financial or tax advice with respect to the
Consideration Shares.
4.21 Resales. Such Seller acknowledges and agrees that following the
distribution of the Consideration Shares contemplated by Section 2.5(b), the
Consideration Shares may only be resold (a) pursuant to registration statement
under the Securities Act or (b) pursuant to an exemption from registration under
the Securities Act. Such Seller acknowledges and agrees that any resale or other
transfer, or attempted resale or other transfer, made other than in compliance
with the restrictions stated in the immediately preceding sentence shall not be
recognized by Xxxxxx in respect of the Consideration Shares and that Xxxxxx may
deliver a corresponding stop-transfer order to its stock transfer agent to that
effect.
4.22 Legends.
(a) Such Seller acknowledges and agrees that the certificates representing
the Consideration Shares issued to persons to whom the Consideration Shares will
be distributed pursuant to Section 2.5(b) shall bear the following legend:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES
REGULATORY AUTHORITY OF ANY STATE OF THE UNITED STATES OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED,
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION EXCEPT
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, SUCH
REGISTRATION REQUIREMENTS. IN THE CASE OF ANY TRANSFER OR OTHER
DISPOSITION MADE OTHERWISE THAN PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR AS DESCRIBED IN SECTION 2.5(b) OF
THE ASSET PURCHASE AGREEMENT DATED AS OF JULY 15, 2005 BY AND AMONG THE
ISSUER HEREOF, XXXXXX PRODUCTS IP HOLDINGS CORP., INDIAN RIVER LABS,
L.L.C., PHARLO CITRUS TECHNOLOGIES, INC., PHARLO CITRUS PROPERTIES
PARTNERSHIP, LLLP AND COAST TO COAST LABORATORIES, LLC, THE HOLDER HEREOF
SHALL BE REQUIRED TO PROVIDE TO THE ISSUER HEREOF AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE ISSUER THAT SUCH TRANSFER IS EXEMPT FROM,
OR NOT SUBJECT TO, REGISTRATION UNDER THE SECURITIES ACT AND IN COMPLIANCE
WITH ALL APPLICABLE STATE SECURITIES LAWS.
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(b) In addition, such Seller acknowledges that each certificate
representing Consideration Shares that are subject to any Lock-Up Agreement
shall also bear the following legend (until such Consideration Shares are no
longer subject to any Lock-Up Agreement):
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF A CERTAIN LOCK-UP AGREEMENT DATED AS OF JULY 15, 2005 BY AND
BETWEEN XXXXXX CAPITAL CORP. AND THE HOLDER HEREOF.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYERS
Each Buyer jointly and severally represents and warrants to Sellers, as of
the date of this Agreement, the following:
5.1 Organization. Xxxxxx is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada. Xxxxxx Products is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each Buyer is duly qualified or licensed as a foreign
corporation and is authorized to conduct its business in each state in which the
nature of such business makes such qualification or license necessary, except
where the failure to be so qualified or licensed or to have such authority would
not have a Buyer Material Adverse Effect.
5.2 Authority.
(a) Each Buyer has full corporate power and authority to execute, deliver
and perform this Agreement and all documents and instruments executed and
delivered by such Buyer pursuant to this Agreement (the "Buyer Related
Documents"). This Agreement and the Buyer Related Documents have been duly
executed and delivered by each Buyer party thereto and constitute, legal, valid
and binding obligations of such Buyer, enforceable against such Buyer in
accordance with their respective terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by general
principles of equity (whether applied in a proceeding at law or in equity).
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(b) Buyers and their subsidiaries have full corporate power and authority
necessary to conduct their business as being conducted on the date hereof and to
own, lease and operate the assets and properties owned, leased and operated by
Buyers and their subsidiaries on the date hereof.
(c) Each Buyer has taken all corporate action required by law to authorize
the execution and delivery of this Agreement and the Buyer Related Documents and
the consummation by such Buyer of the transactions contemplated hereby and
thereby.
5.3 Consents. Except as set forth on Schedule 5.3, the execution and
delivery of this Agreement and the Buyer Related Documents by Buyers does not,
and the performance of this Agreement and the Buyer Related Documents by Buyers
will not: (a) require any material authorization, approval, consent, waiver,
amendment or other action by, or registration, declaration or filing with or
notice to any Governmental Authority; (b) result in a material violation of any
Laws or Orders binding upon any Buyer or any of its subsidiaries; (c) result in
a material violation or breach of, or a default under, any material contract to
any Buyer or any of its subsidiaries is party; or (d) violate the articles of
incorporation, certificate of incorporation or bylaws of any Buyer.
5.4 Capitalization. The entire authorized capital stock of Xxxxxx consists
of 300,000,000 Common Shares. As of July 6, 2005, 64,747,162 of such Common
Shares were issued and outstanding and none of such Common Shares were held in
Xxxxxx'x treasury. There are outstanding options to purchase an aggregate of
18,614,999 Common Shares and outstanding warrants entitling the holders thereof
to purchase an additional 7,815,078 Common Shares (collectively, the "Options").
In addition, there are outstanding convertible debentures that are convertible
into 2,640,000 Common Shares (the "Convertible Debentures"). Except as set forth
in the immediately preceding three sentences, no shares of capital stock or
other securities of Xxxxxx are issued, reserved for issuance or outstanding.
Since December 31, 2004 there has been no change in the authorized capital stock
of Xxxxxx. Except for the Options, the Convertible Debentures and rights granted
to Sellers under this Agreement, (i) there are no outstanding options, warrants,
calls, demands, stock appreciation rights, contracts or other rights of any
nature to purchase, obtain or acquire or otherwise relating to, or any
outstanding securities or obligations convertible into or exchangeable for, or
any voting agreements with respect to, any shares of capital stock of Xxxxxx or
any other securities of Xxxxxx, (ii) there are no equity equivalent interests in
the ownership or earnings of Xxxxxx or similar rights and (iii) none of Xxxxxx
or any of its Affiliates is obligated, pursuant to any securities, options,
warrants, calls, demands, contracts or other rights of any nature or otherwise,
now or in the future, contingently or otherwise, to issue, deliver, sell,
purchase, repurchase, redeem or otherwise acquire any capital stock or other
securities of Xxxxxx to or from any Person or to issue, deliver, sell, purchase
or redeem any stock appreciation rights or other contracts relating to any
capital stock or other securities of Xxxxxx to or from any Person. The
Consideration Shares have been duly authorized for issuance and are validly
issued, fully paid and nonassessable, and have not been issued in violation of
any preemptive or similar rights. Each of the Common Shares (including the
Consideration Shares) has one vote per share on all matters on which the
shareholders of Xxxxxx are entitled to vote. There are no bonds, debentures,
notes or other indebtedness of any type whatsoever of Xxxxxx having the right to
vote (or convertible into, or exchangeable for, securities having the right to
vote) on any matters on which any holders of Common Shares may vote. The entire
authorized capital stock of Xxxxxx Products consists of 1,000 shares of common
stock, $0.01 par value per share. As of the date hereof, 100 shares of Xxxxxx
Products common stock are issued and outstanding and all of such shares are
owned by Xxxxxx.
5.5 SEC Filings; Financial Statements.
(a) Since January 1, 2003, Xxxxxx has filed all required Buyer SEC
Reports. The Buyer SEC Reports (i) at the time filed (and at the time of any
amendment to such Buyer's SEC Reports), complied and will comply in all material
respects with the applicable requirements of the securities laws and (ii) did
not, at the time they were filed (or, if amended by a filing prior to the date
hereof, then on the date of such filing) contain any untrue statement of a
material fact or omit to state a material fact required to be stated in such
Buyer SEC Reports or necessary in order to make the statements in such Buyer SEC
Reports, in light of the circumstances under which they were made, not
misleading.
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(b) The financial statements contained in the Buyer SEC Reports referenced
above complied as to form in all material respects with the applicable published
rules and regulations of the SEC with respect thereto, were prepared in
accordance with United States generally accepted accounting principles applied
on a consistent basis throughout the periods involved (except as may be
indicated in the notes to such financial statements or, in the case of unaudited
interim statements, as permitted by Form 10-QSB of the Commission), and fairly
present in all material respects the consolidated financial position of Xxxxxx
and its subsidiaries as at the respective dates and the consolidated results of
Xxxxxx'x and its subsidiaries' operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were subject
to normal and recurring year-end adjustments which were not material in amount
or effect.
5.6 Legal Actions. Except as set forth on Schedule 5.6, there are no
material Proceedings pending or, to the knowledge of Xxxxxx, threatened against
any Buyer or any of its subsidiaries. Except as set forth on Schedule 5.6, no
Buyer has received written notice of any, and, to the knowledge of Xxxxxx, there
are no, material investigations pending or threatened against any Buyer or any
of its subsidiaries by or before any Governmental Authority. Schedule 5.6 sets
forth, with respect to any such pending or threatened Proceeding or
investigation, the forum, the parties thereto, and the subject matter thereof.
No Governmental Authority or other Person or entity has notified any Buyer in
writing of any material challenge of the legal right of any Buyer or any of its
subsidiaries to offer or sell any of its products or services in the present
manner thereof. There is no Proceeding pending or, to the knowledge of Xxxxxx,
threatened against any Buyer, that in any manner challenges or seeks to prevent,
enjoin, alter or delay, or reasonably could be expected to prevent, enjoin,
alter or delay, any of the transactions contemplated by this Agreement or that
challenges the validity of this Agreement, or any of the transactions
contemplated hereby.
5.7 Certain Changes. Since January 1, 2005, Buyers and their subsidiaries
have conducted their business solely in the ordinary course of business
consistent with past practices and, except as specifically listed on Schedule
5.7, since January 1, 2005, there has not been, with respect to any Buyer's and
its subsidiaries' business, any:
(a) material adverse change of any nature whatsoever in the business,
operations, Liabilities, results of operation, properties, assets or financial
condition of Buyers' and their subsidiaries' business, taken as a whole, or any
event or circumstance that would, individually or in the aggregate, reasonably
be expected to result in such a material adverse change;
(b) material revaluation or write-down of any of any Buyer's or its
subsidiaries' assets; (c) amendment or termination of any material contract to
which any Buyer or any of its subsidiaries is party other than in the ordinary
course of business;
(d) disposal of assets used or held for use in any Buyer's or its
subsidiaries' business outside of the ordinary course of business, including any
transfer to any Affiliate or other division of or within any Buyer; or
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(e) agreement by any Buyer or any of its subsidiaries to do, either
directly or indirectly, any of the things described in the preceding clauses (a)
through (d).
5.8 Applicable Laws. Except as could not have a Buyer Material Adverse
Effect, Buyers' and their subsidiaries' business has been and is being conducted
in compliance with all applicable Laws, Orders and Permits; and no Buyer has
within the past twelve months received any written notice of any violation,
breach or default of any such Laws, Orders or Permits.
5.9 Opportunity to Consult. Buyers are relying solely on its own legal,
financial and tax advisers and not on any statements or representations of any
Seller or any of Sellers' agents for legal, financial or tax advice with respect
to the transactions contemplated hereby.
5.10 Brokers. No Buyer has incurred any obligation or liability, or agreed
to pay any amount, to any Person for any brokerage fees, commissions, finder's
fees or similar payment in connection with the execution or delivery of this
Agreement or the consummation by such Buyer of the transactions contemplated by
this Agreement.
ARTICLE VI
COVENANTS
6.1 Employees of the Businesses.
(a) Xxxxxx (or a subsidiary or Affiliate of Xxxxxx, in Xxxxxx'x sole
discretion) shall make offers of employment, effective as of the date hereof, to
the employees of Sellers set forth on Schedule 6.1 (such employees who accept
the terms and conditions of such offer and who are employed by Xxxxxx (or a
subsidiary or Affiliate of Xxxxxx) are hereinafter referred to as "Hired
Employees"). The offers of employment described in the preceding sentence shall
be for employment with the relevant entity until at least two years following
the date hereof (subject to the employing entity's right to terminate such Hired
Employee for "Cause" as defined in the agreement governing such employment
relationship), shall be at the initial starting salary set forth on Schedule 6.1
and, except as set forth below, shall be on such other terms and conditions as
determined by Xxxxxx (or such subsidiary or Affiliate of Xxxxxx). Subject to
Section 6.1(d), each Seller shall remain solely responsible for all (i) claims
by Hired Employees employed by such Seller relating to periods of employment by
such Seller prior to the date hereof (including claims relating to salaries and
benefits accrued, earned and/or payable for periods of employment prior to the
date hereof) and (ii) employees that are not Hired Employees and claims related
thereto.
(b) Sellers shall pay or shall cause to be paid all amounts due to
Sellers' employees prior to the date hereof, including without limitation
amounts due as wages or salary or on account of severance, health claims, bonus
and other benefits for such employees through the date hereof when and as the
same become due (it being understood that Buyer has funded Sellers' payroll for
periods commencing on May 1, 2005 and the amounts so funded are evidenced by
Promissory Notes which are being canceled pursuant to Section 8.17).
(c) Subject to Section 6.1(d), Buyers will not assume or continue, and
will have no responsibility or liability to the Hired Employees or any other
Person under or with respect to, any of the Seller Employee Plans.
(d) For a period of 60 days after the date hereof, each Seller shall use
its commercially reasonable efforts to cause the Hired Employees employed by
such Seller prior to the Closing to continue to be covered by such Seller's
medical plans with unaffiliated third parties in effect on the date hereof.
Xxxxxx shall pay to Sellers the full amount of all premiums and other amounts
required to be paid by Sellers in connection therewith at least two Business
Days prior to the date Sellers are required to pay the same. Sellers'
obligations under this Section 6.1(d) shall terminate if Xxxxxx shall fail to
make any such payment to Sellers.
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(e) The provisions of this Agreement are for the benefit of Buyers and
Sellers only, and no employee of Sellers or any other Person shall have any
rights hereunder. Nothing herein expressed or implied shall confer upon any
employee of Sellers, any other employee or legal representatives or
beneficiaries thereof, any rights or remedies, including any right to employment
or continued employment for any specified period or to be covered under or by
any employee benefit plan or arrangement, or shall cause the employment status
of any employee to be other than terminable at will.
6.2 Consents; Failure to Obtain Consents. For a period of three months
after the date hereof, Sellers will use commercially reasonable efforts to
obtain or cause to be obtained any consents required under any Purchased
Contract or Purchased Permit in connection with the transactions contemplated
hereby that are requested by Buyers and that have not been previously obtained
prior to or at the date hereof. In the event any consent to the assignment of
any Purchased Contract or Purchased Permit is required in connection with the
transactions contemplated hereby and has not been obtained as of the date
hereof, then, until all of such consents are obtained, Sellers shall cooperate
in any arrangement reasonably satisfactory to Xxxxxx and Sellers designed to
fulfill all Sellers' obligations thereunder and to afford the applicable Buyer
the full benefits thereof. Notwithstanding anything to the contrary set forth
herein, this Agreement shall not constitute an assignment or attempt to assign
or transfer any interest in any instrument, contract, lease, permit or other
agreement or arrangement of the Businesses or any claim, right or benefit
arising thereunder or resulting therefrom, if an assignment or transfer without
the consent of a third party would constitute a breach or violation thereof or
adversely affect the rights of any Seller or Buyer.
6.3 Name Change. Within ten Business Days after the date hereof, C2C will
file any documents necessary with the appropriate Government Authorities to
change its name to another name not including the words "Coast to Coast" or any
confusingly similar name.
6.4 Further Assistance. Buyers on the one hand and Sellers on the other
shall, from time to time on or after the date hereof and without further
consideration, take such actions (including executing and delivering or causing
to be executed and delivered to the other additional instruments) reasonably
requested by the other that is necessary or reasonably required to perfect or
evidence any of the sales, assignments, transfers, conveyances, undertakings or
agreements made in this Agreement, the Seller Related Documents or the Buyer
Related Documents.
6.5 Tax Returns. Each Seller shall duly file or cause to be filed all tax
returns related to Taxes of any nature with respect to the Business of such
Seller or the Purchased Assets owned by such Seller for all periods ending on or
prior to the date hereof and pay all Taxes due with respect to such periods.
6.6 Proration. Notwithstanding anything herein to the contrary, any Taxes
imposed on the Purchased Assets and other expense items such as utilities and
similar expenses with respect to the Purchased Assets that relate to a period
beginning before the date hereof and ending after the date hereof shall be
apportioned as of the date hereof such that Sellers shall be liable for (and
shall reimburse Buyers to the extent that Buyers shall have paid) that portion
of such Taxes and other expense items relating to, or arising in respect of,
periods through the date hereof and Buyers shall be liable for (and shall
reimburse Sellers to the extent Sellers shall have paid) that portion of such
Taxes and other expense items relating to, or arising in respect to, periods on
and after the date hereof. Appropriate settlement of any such Taxes or other
expenses will be made within thirty days after the amount of any such item is
finally known.
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6.7 Covenant Not to Compete.
(a) Each Seller agrees that, without the consent of Xxxxxx, it will not,
for any reason, for its own account, or on behalf of, or together with, any
other Person, directly or indirectly, as principal, agent, shareholder,
participant, partner, promoter, manager, member, equity owner, consultant, sales
representative or otherwise:
(i) during the period beginning on the date hereof and ending on the
fifth anniversary of the date hereof, own, control, manage, assist or
otherwise participate in, engage in, carry on, or have a financial
interest in, any business or entity that is engaged in the conduct of all
or any portion of the Businesses within the Fields of Use, other than (A)
such Seller's ownership in Xxxxxx contemplated by this Agreement and (B)
in connection with the performance of activities contemplated by the
Pharlo IP Sublicense Agreement; or
(ii) during the period beginning on the date hereof and ending on
the second anniversary of the date hereof, contact any natural Person then
employed by Xxxxxx (or any subsidiary or Affiliate of Xxxxxx), while such
Person is an employee of Xxxxxx (or any subsidiary or Affiliate of
Xxxxxx), in the Businesses in any technical, managerial or sales capacity
with the purpose or intent of soliciting that Person from the employ of
Xxxxxx (or such subsidiary or Affiliate) provided that this subsection
shall not prohibit Sellers from placing or making general solicitations of
employment not directed specifically to such Person or to the employees of
Xxxxxx (or its subsidiaries or Affiliates).
(b) Because of the difficulty in measuring the economic losses that may be
incurred by Xxxxxx as a result of any breach by Sellers of any of the covenants
in Section 6.7(a), and because of the immediate and irreparable damage that
would be caused to Xxxxxx for which it would have no other adequate remedy,
Sellers agree that Xxxxxx may enforce the provisions of Section 6.7(a) by any
equitable or legal means, including by injunction or restraining order against
Sellers if any Seller breaches or threatens to breach any provision of Section
6.7(a).
(c) The parties hereto each agree that Section 6.7(a) imposes a reasonable
restraint on Sellers in light of the activities and Businesses of Sellers on the
date hereof, the current business and future business plans of Xxxxxx, and the
consideration to be received by Sellers from Buyers as a result of the purchase
of assets. Notwithstanding anything herein to the contrary, it shall not be a
breach of the covenant contained in Section 6.7(a)(i) above for a Seller to own,
(i) in the aggregate, not more than five percent (5%) of the publicly traded
equity interests of any entity or (ii) equity or other interests in Xxxxxx or
any successor to Xxxxxx.
(d) The covenants in Section 6.7(a) are severable and separate, and the
unenforceability of any specific covenant in Section 6.7(a) is not intended by
any party hereto to, and shall not, affect the provisions of any other covenant
in Section 6.7(a). If any court of competent jurisdiction shall determine that
the scope, time, or territorial restrictions set forth in Section 6.7(a) are
unreasonable as applied to Sellers, the parties hereto acknowledge their mutual
intention and agreement that those restrictions be enforced to the fullest
extent the court deems reasonable, and thereby shall be reformed to that extent
as applied to Sellers.
(e) Buyers and Sellers hereby agree that Section 6.7 is a material and
substantial part of the transactions contemplated hereby.
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6.8 Mail Received After Closing.
(a) Following the date hereof, Buyers may receive and open all mail
addressed to Sellers at the Leased Real Property and, to the extent that such
mail and the contents thereof relate to the Purchased Assets (and not to any
Excluded Assets or Excluded Liabilities), deal with the contents thereof at its
discretion. From and after the date hereof, (i) Sellers shall promptly forward
or cause to be forwarded to Xxxxxx any mail received by Sellers that relates to
the Purchased Assets or the Assumed Obligations and (ii) Buyers shall promptly
forward or cause to be forwarded to the applicable Seller any mail received by
any Buyer or any of its subsidiaries that relates to the Excluded Assets or the
Excluded Liabilities.
(b) Sellers hereby grant to Buyers the power, right and authority, coupled
with an interest, to receive, endorse, cash, deposit, and otherwise deal with,
in the name of Sellers, any checks, drafts, documents and instruments evidencing
payment of any accounts receivable included in the Purchased Assets and which
are payable to, payable to the order of, or endorsed in favor of, Sellers or any
agent of Sellers.
(c) Sellers agree promptly to endorse and pay over or cause to be endorsed
and paid over to the applicable Buyer, without deduction or offset, the full
amount of any payment received by Sellers after the Closing constituting
Purchased Assets. Buyers agree promptly to endorse and pay over or cause to be
endorsed and paid over to the applicable Seller, without deduction or offset,
the full amount of any payment received by any Buyer or any of its subsidiaries
after the Closing constituting Excluded Assets.
6.9 Confidentiality. For a period of two (2) years from and after the date
hereof, Sellers will, and will use reasonable efforts to cause its officers,
directors, employees and agents to: (a) keep in confidence and not disclose to
any Person any Confidential Information and (b) refrain from using any of the
Confidential Information, except, in any such case, to enable Sellers to perform
their obligations or enforce their rights under this Agreement, the Seller
Related Documents and the Buyer Related Documents. Notwithstanding the
foregoing, any Confidential Information that constitutes a trade secret under
applicable law shall not be disclosed or used in any way by Sellers so long as
such information remains a trade secret, other than in accordance with this
Agreement or to enable Sellers to perform their obligations or enforce their
rights under this Agreement, the Seller Related Documents and the Buyer Related
Documents. Notwithstanding the foregoing, the restrictions contained in this
Section 6.9 shall not apply to any information that is generally known or
available to the public other than as a result of unauthorized or unlawful
disclosure directly or indirectly by Sellers. In the event any Seller is
requested or required (by oral question or request for information or documents
in any legal proceeding, interrogatory, subpoena, civil investigative demand, or
similar process) to disclose any Confidential Information, Sellers will notify
Xxxxxx promptly of the request or requirement so that Xxxxxx may, at its sole
expense, seek an appropriate protective order or waive compliance with the
provisions of this Section. If, in the absence of a protective order or the
receipt of a waiver hereunder, Sellers, on the advice of counsel, are compelled
to disclose any Confidential Information to or by any tribunal, Sellers may
disclose the Confidential Information to or as required by the tribunal.
Confidential Information includes information of third parties held by Sellers
in connection with the Businesses that Sellers are obligated to keep or treat as
confidential.
6.10 Certain Expenses. Buyers shall be responsible for all (and shall
reimburse Sellers for any amounts paid by Sellers in respect of any) sales, use,
excise, transfer, value added and similar Taxes due and payable that are imposed
by any Governmental Authority in any jurisdiction in connection with any
Sellers' sale of the Purchased Assets, Xxxxxx'x assumption of the Assumed
Obligations and Buyers' payment of the Purchase Price, as contemplated by this
Agreement. Sellers and Buyers shall cooperate with each other and use their
reasonable commercial efforts to minimize the Taxes attributable to the transfer
of the Purchased Assets, Xxxxxx'x assumption of the Assumed Obligations and
Buyers' payment of the Purchase Price, subject to applicable Law, and provided
that this sentence shall not require Buyers to agree to any modification of the
allocation agreed to pursuant to Section 2.6. Xxxxxx shall also be responsible
for all Registration Expenses pursuant to Section 6.15 and fees and expenses
pursuant to Section 6.16(e). For the avoidance of doubt, Sellers (and not
Buyers) shall be responsible for income taxes payable in respect of the sale of
the Purchased Assets by Sellers.
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6.11 Waiver of Bulk Sales Compliance. Buyers and Sellers hereby waive
compliance with the bulk sales laws of any applicable jurisdiction in connection
with the sale of the Purchased Assets pursuant to this Agreement, and each
Seller hereby agrees to indemnify and hold harmless Buyers from and against any
claims arising out of or due to the failure of such Seller to comply with such
bulk sales laws.
6.12 Cooperation on Tax Matters.
(a) Each of Buyers and Sellers agree to furnish or cause to be furnished
to the other, upon request, as promptly as practicable, such information
(including access to books and records) and assistance relating thereto as is
reasonably necessary for the filing of any Tax Return, the preparation for any
Tax audit, or the prosecution or defense of any claim, suit or proceeding
relating to any proposed Tax adjustment relating to the Purchased Assets or the
Businesses. Buyers and Sellers shall keep all such information and documents
received by them confidential unless otherwise required by law.
(b) Buyers and Sellers shall reasonably cooperate with each other in the
conduct of any audit or other actions for any Tax purposes relating to the
Purchased Assets.
6.13 Retention. Buyers and Sellers agree to retain or cause to be retained
all books and records pertinent to the Purchased Assets until the applicable
period for assessment of Taxes under applicable law has expired. Buyers and
Sellers agree to give the other reasonable notice prior to transferring,
discarding or destroying any such books and records relating to Tax matters and,
if so requested, Buyers and Sellers shall allow the requesting party to take
possession of such books and records.
6.14 Transition Cooperation. Sellers agree to reasonably cooperate with
Xxxxxx to facilitate the transfer, effective on the date hereof, of all
utilities used by the Businesses into Xxxxxx'x name (or the name of any
subsidiary or Affiliate of Xxxxxx designated by Xxxxxx), including the transfer
of any telephone numbers, electrical service, water and sewage, as applicable.
6.15 Covenant Regarding Registration of Consideration Shares.
(a) Shelf Registration.
(i) Xxxxxx shall, for the benefit of the Holders, at Xxxxxx'x cost,
(A) prepare and file with the Commission, as soon as practicable after the
date hereof, a registration statement (a "Shelf Registration Statement")
on an appropriate form under the Securities Act permitting registration of
the Registrable Securities for resale by the Holders to be made on a
delayed or continuous basis (and will use its best efforts to file the
Shelf Registration Statement with the Commission within 30 days following
the date hereof (the "Filing Deadline")), (B) use its best efforts to
cause the Shelf Registration Statement to be declared effective as soon as
practicable, but in any event not later than 105 days after the date
hereof (the "Initial Registration Deadline"), and (C) use its best efforts
to keep the Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act
until the expiration of the Effectiveness Period. Notwithstanding the
above, no Holder shall be entitled to have the Registrable Securities held
by such Holder covered by the Shelf Registration Statement unless such
Holder agrees in writing to be bound by the provisions of this Section
6.15 applicable to such Holder.
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(ii) At the time the Shelf Registration Statement is declared
effective, each Holder shall be named as a selling securityholder in the
Shelf Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law.
(iii) If the Shelf Registration Statement ceases to be effective for
any reason at any time during the Effectiveness Period, Xxxxxx shall use
its best efforts to obtain the prompt withdrawal of any order suspending
the effectiveness thereof, and in any event shall within 30 days of such
cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order
suspending the effectiveness thereof, or promptly file an additional Shelf
Registration Statement covering all of the securities that as of the date
of such filing are Registrable Securities (a "Subsequent Shelf
Registration Statement"). If a Subsequent Shelf Registration Statement is
filed, Xxxxxx shall use its best efforts to cause the Subsequent Shelf
Registration Statement to become effective as promptly as is practicable
after such filing and to keep such Subsequent Shelf Registration Statement
continuously effective under the Securities Act until the expiration of
the Effectiveness Period.
(iv) Xxxxxx shall supplement and amend the Shelf Registration
Statement (or any Subsequent Shelf Registration Statement) if required by
the rules, regulations or instructions applicable to the registration form
used by Xxxxxx for such Shelf Registration Statement, if required by the
Securities Act or as reasonably requested by a Holder.
(v) Notwithstanding any other provisions of this Agreement to the
contrary, Xxxxxx shall cause the Registration Statement and the Prospectus
and any amendment or supplement thereto, as of the effective date of the
Registration Statement, amendment or supplement, (A) to comply in all
material respects with the applicable requirements of the Securities Act
and (B) not to 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.
(b) Liquidated Damages.
(i) If the Shelf Registration Statement to be filed with the
Commission pursuant to Section 6.15(a)(i) (A) has not been so filed on or
prior to the 30th day after the Filing Deadline and/or (B) has not been
declared effective by the Commission on or prior to the 30th day after the
Initial Registration Deadline, Xxxxxx shall pay to each Holder an amount
equal to one percent (1%) of the value of the Consideration Shares held by
such Holder that are not then Locked-Up Shares based on the Common Share
Fair Market Value (the "Liquidated Damages Payment Amount") within three
(3) Business Days after the 30th day after the Filing Deadline or the 30th
day after the Initial Registration Deadline, as the case may be, and for
each 30-day period (or portion thereof until the date such Shelf
Registration Statement is filed or declared effective, as the case may be)
after the 30th day after the Filing Deadline or the 30th day after the
Initial Registration Deadline, as the case may be, Xxxxxx shall pay to
each Holder the Liquidated Damages Payment Amount on the third Business
Day after the end of such 30-day period (or after the date such Shelf
Registration Statement is filed or declared effective, as the case may be,
if prior to the end of a full 30-day period) until such time as such Shelf
Registration Statement shall have been filed or declared effective, as the
case may be.
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(ii) If (A) any Subsequent Shelf Registration Statement has not been
declared effective by the Commission on or prior to the date that is 60
days after the filing of a Subsequent Shelf Registration Statement with
the Commission or (B) if any Subsequent Shelf Registration Statement is
filed and declared effective but shall thereafter cease to be effective or
fail to be usable for any period of thirty (30) consecutive days other
than as a result of a suspension pursuant to a Deferral Notice as provided
in Section 6.15(c)(vi) (each a "Subsequent Registration Default"), Xxxxxx
agrees to pay liquidated damages in an amount equal to one percent (1%) of
the value of the Registrable Securities not then constituting Locked-Up
Shares that are subject to such Subsequent Shelf Registration Statement
based on the Common Share Fair Market Value, on the date of a Subsequent
Registration Default and for each 30 day period (or portion thereof until
the Subsequent Registration Default is cured) during which the Subsequent
Registration Default continues, which shall accrue from the date such
Subsequent Registration Default occurs until the default is cured.
Liquidated damages accrued and unpaid under this Section 6.15(b)(ii) shall
be paid within three (3) Business Days after the date of the Subsequent
Registration Default and the end of each 30-day period following such
Subsequent Registration Default or, if earlier, the date the relevant
Subsequent Registration Default is cured.
(c) Registration Procedures. In connection with the registration
obligations of Xxxxxx under Section 6.15(a):
(i) As far in advance as practical, but not less than 10 Business
Days, before filing a Prospectus, Registration Statement or any amendment
or supplement thereto, Xxxxxx shall furnish to Holders copies of
reasonably complete drafts of all such documents proposed to be filed
(including exhibits) and shall use its reasonable best efforts to reflect
in each such document, when so filed with the Commission, such comments as
Holders' Counsel (as defined in Section 6.15(d)) reasonably may propose.
(ii) As promptly as practicable, Xxxxxx shall give notice to Holders
(A) when any Prospectus, prospectus supplement, Registration Statement or
post-effective amendment to a Registration Statement has been filed with
the Commission and, with respect to a Registration Statement or any
post-effective amendment, when the same has been declared effective, (B)
of any request, following the effectiveness of a Registration Statement
under the Securities Act, by the Commission or any other Federal or state
governmental authority for amendments or supplements to any Registration
Statement or related Prospectus or for additional information, (C) of the
issuance by the Commission or any other Federal or state governmental
authority of any stop order suspending the effectiveness of any
Registration Statement or the initiation or threatening of any proceedings
for that purpose, (D) of the receipt by Xxxxxx of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (E) of the occurrence of and details concerning a Material Event
and (F) of the determination by Xxxxxx that a post-effective amendment to
a Registration Statement will be filed with the Commission, which notice
may, at the discretion of Xxxxxx (or as required pursuant to Section
6.15(c)(vi)), state that it constitutes a Deferral Notice, in which event
the provisions of Section 6.15(c)(vi) shall apply. As promptly as
practicable after receipt thereof, Xxxxxx shall give Holders copies of any
comments received from the Commission with respect to any Registration
Statement and responses thereto.
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(iii) Xxxxxx shall use its best efforts to obtain the prompt
withdrawal of any order suspending the effectiveness of a Registration
Statement or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for
sale in any jurisdiction in which they have been qualified for sale.
(iv) During the Effectiveness Period, Xxxxxx shall deliver to each
Holder in connection with any sale of Registrable Securities pursuant to a
Registration Statement, without charge, as many copies as such Holder may
reasonably request, of (A) the Prospectus or Prospectuses relating to such
Registrable Securities and any amendment or supplement thereto and (B)
such other documents and information as Xxxxxx may be required to deliver
with the Prospectus under the Securities Act, including, but not limited
to, copies of Xxxxxx'x latest Annual Report on Form 10-KSB or annual
report to securityholders meeting the requirements of Rule 14a-3 and
latest Quarterly Report on Form 10-QSB.
(v) Prior to any public offering of the Registrable Securities
pursuant to any Registration Statement, Xxxxxx shall register or qualify
or cooperate with the Holders and their counsel in connection with the
registration or qualification of the Registrable Securities for offer and
sale under the securities or "blue sky" laws of such states of the United
States as any Holder reasonably requests in writing and do any and all
other acts or things necessary or advisable to enable the offer and sale
in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that Xxxxxx shall not be
required to (A) qualify generally to -------- ------- do business in any
jurisdiction where it is not then so qualified or (B) take any action
which would subject it to general service of process or to taxation in any
jurisdiction where it is not then so subject. In the event that Xxxxxx'x
common stock is listed or admitted for trading on any national securities
exchange or quotation on any national-automated quotation system, Xxxxxx
shall cause all Registrable Securities to be included in such listing or
admission.
(vi) Upon (A) the issuance by the Commission of a stop order
suspending the effectiveness of the Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) or the initiation of proceedings
with respect to the Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) under the Securities Act, (B) the occurrence of
any event or the existence of any fact (a "Material Event") as a result of
which (1) any Registration Statement shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, or (2)
any Prospectus shall contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development with respect to Xxxxxx that may (1)
interfere with or affect the negotiation or completion of a transaction
that is being contemplated by Xxxxxx or (2) involve initial or continuing
disclosure obligations that are not in the best interests of Xxxxxx'x
stockholders at such time, that, in the reasonable discretion of Xxxxxx,
makes it appropriate to suspend the availability of the Shelf Registration
Statement (or any Subsequent Shelf Registration Statement) and the related
Prospectus(es), then (y) in the case of clause (B) above, Xxxxxx shall, as
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promptly as practicable, prepare and file a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or
any document incorporated therein by reference or file any other required
document that would be incorporated by reference into such Registration
Statement and Prospectus so that such Registration Statement does not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and such Prospectus does not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, as thereafter delivered to the purchasers of the Registrable
Securities being sold thereunder, and, in the case of a post-effective
amendment to a Registration Statement, use its best efforts to cause it to
be declared effective as promptly as is reasonably practicable, and (z)
Xxxxxx shall give notice to Holders that the availability of the Shelf
Registration Statement (or any Subsequent Shelf Registration Statement) is
suspended (a "Deferral Notice") and, upon receipt of any Deferral Notice,
each Holder agrees not to sell any Registrable Securities pursuant to such
Registration Statement until such Holder's receipt of copies of the
supplemented or amended Prospectus provided for in clause (y) above, and
until such Holder is advised in writing by Xxxxxx that the existing,
supplemented or amended Prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated or deemed
incorporated by reference in the applicable Prospectus, provided, that, in
the case of a Deferral Notice with respect to clause (C) above, no such
suspension of the availability of the Shelf Registration Statement (or any
Subsequent Shelf Registration Statement) or the related Prospectus(es)
shall extend for a period of more than 45 consecutive days or an aggregate
of 90 days in any twelve-month period. If Xxxxxx provides the Holders with
a Deferral Notice, then the date set forth in clause (ii) of the
definition of Effectiveness Period shall be extended by the number of days
from and including the date of the giving of such Deferral Notice to and
including the date when the Holders shall have received such amended or
supplemented Prospectus pursuant to this Section 6.15(c)(vi). Xxxxxx shall
use its best efforts to ensure that the use of the Prospectus may be
resumed (1) in the case of clause (A) above, as promptly as is
practicable, (2) in the case of clause (B) above, as soon as, in the good
faith judgment of Xxxxxx, public disclosure of such Material Event would
not be materially prejudicial to or contrary to the interests of Xxxxxx
or, if necessary to avoid unreasonable burden or expense, as soon as
reasonably practicable thereafter and (3) in the case of clause (C) above,
as soon as, in the good faith judgment of Xxxxxx, such suspension is no
longer appropriate.
(vii) Xxxxxx shall cooperate with each Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities sold pursuant to a Registration Statement free of any
restrictive legends and in such denominations and registered in such names
as such Holder may request a reasonable period of time prior to sales of
the Registrable Securities pursuant to the Shelf Registration Statement
(or any Subsequent Shelf Registration Statement).
(d) Registration Expenses. Xxxxxx shall be responsible for and shall pay
all Registration Expenses. In addition, Xxxxxx shall be responsible for and
shall reimburse the Holders the reasonable fees (not to exceed $40,000 in the
aggregate) and disbursements of not more than one counsel designated by the
Seller Representative to act as counsel for the Holders in connection with this
Section 6.15 ("Holders' Counsel").
(e) Indemnification.
(i) Xxxxxx agrees to indemnify and hold harmless each Holder and
each person, if any, who controls the Holder within the meaning of the
Securities Act or the Exchange Act (each Holder, and such controlling
persons are referred to collectively as the "Holder Indemnified Parties")
from and against any losses, claims, damages or liabilities, joint or
several, or any actions in respect thereof (including, but not limited to,
any losses, claims, damages, liabilities or actions relating to purchases
and sales of the Registrable Securities) to which each Holder Indemnified
Party may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
31
Prospectus including any document incorporated by reference therein, or in
any amendment or supplement thereto or in any preliminary Prospectus
relating to the Registration Statement, or arise out of, or are based
upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse, as incurred, the Holder Indemnified
Parties for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action in respect thereof; provided, however, that Xxxxxx
shall not be liable in any such case to the extent that such loss, claim,
damage or liability arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made in any
Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus relating to the Registration
Statement in reliance upon and in conformity with written information
pertaining to the Holder furnished to Xxxxxx by or on behalf of the Holder
specifically for inclusion therein; provided, further, that this indemnity
agreement will be in addition to any liability which Xxxxxx may otherwise
have to the Holder Indemnified Party. Xxxxxx shall also indemnify any
underwriters, their officers and directors and each person who controls
such underwriters within the meaning of the Securities Act or the Exchange
Act to the same extent as provided above with respect to the
indemnification of the holders of the Registrable Securities if requested
by the Holders.
(ii) Each Holder, severally and not jointly, will indemnify and hold
harmless Xxxxxx, its officers and directors and each person, if any, who
controls Xxxxxx within the meaning of the Securities Act or the Exchange
Act from and against any losses, claims, damages or liabilities or any
actions in respect thereof, to which Xxxxxx or any such controlling person
may become subject under the Securities Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus relating to the Registration Statement, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity
with written information pertaining to such Holder furnished to Xxxxxx by
or on behalf of such Holder specifically for inclusion therein and,
subject to the limitation set forth immediately preceding this clause,
shall reimburse, as incurred, Xxxxxx for any legal or other expenses
reasonably incurred by Xxxxxx or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or
action in respect thereof. This indemnity agreement will be in addition to
any liability which the Holder may otherwise have to Xxxxxx or any of its
controlling persons.
(iii) Promptly after receipt by an indemnified party under this
Section 6.15(e) of notice of the commencement of any action or proceeding
(including a governmental investigation), such indemnified party will, if
a claim in respect thereof is to be made against the indemnifying party
under this Section 6.15(e), notify the indemnifying party of the
commencement thereof; but the failure to notify the indemnifying party
shall not relieve it from any liability that it may have under Section
6.15(e)(i) or Section 6.15(e)(ii) above except to the extent that it has
been materially prejudiced (through the forfeiture of substantive rights
or defenses) by such failure; and provided further that the failure to
notify the indemnifying party shall not relieve it from any liability that
it may have to an indemnified party otherwise than under Section
6.15(e)(i) or Section 6.15(e)(ii) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to participate therein and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof the indemnifying party will not be liable to such indemnified
party under this Section 6.15(e) for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying
party shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity
could have been sought hereunder by such indemnified party unless such
settlement (x) includes an unconditional release of such indemnified party
from all liability on any claims that are the subject matter of such
action, and (y) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified
party. No indemnified party shall effect any settlement of any pending or
threatened action without the prior written consent of the indemnifying
party, which such consent shall not be unreasonably withheld or delayed.
32
(iv) If (A) the indemnification provided for in this Section 6.15(e)
is unavailable or insufficient to hold harmless an indemnified party under
Section 6.15(e)(i) or Section 6.15(e)(ii) above, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified
party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to in Section 6.15(e)(i) or Section
6.15(e)(ii) above in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party or parties on the one
hand and the indemnified party on the other from the sale of the
Registrable Securities, pursuant to the Registration Statement, or (B) the
allocation provided by the foregoing clause (A) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (A) above but also the
relative fault of the indemnifying party or parties on the one hand and
the indemnified party on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities (or
actions in respect thereof) as well as any other relevant equitable
considerations. The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence
of this Section 6.15(e)(iv) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of
this Section 6.15(e)(iv). Notwithstanding any other provision of this
Section 6.15(e)(iv), no Holder shall be required to contribute any amount
in excess of the amount by which the net proceeds received by such Holder
from the sale of the Registrable Securities pursuant to the Shelf
Registration Statement exceeds the amount of damages which such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation.
(v) The agreements contained in this Section 6.15(e) shall survive
the sale of the Registrable Securities pursuant to the Shelf Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by
or on behalf of any indemnified party.
(f) Holders' Obligations. Each Holder agrees promptly to furnish to Xxxxxx
all information with respect to such Holder as may be required to be disclosed
in the Registration Statement under applicable law or pursuant to Commission
comments or as Xxxxxx may reasonably request and all material information with
respect to such Holder required to be disclosed in order to make the information
previously furnished to Xxxxxx by such Holder not false or misleading.
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6.16 Offer and Sale of Offered Shares.
(a) Xxxxxx hereby agrees, on the terms and conditions set forth in this
Section 6.16, to use its best efforts to find qualified purchasers to purchase
the Offered Shares on or within seven Business Days after the date that the
Shelf Registration Statement is declared effective by the Commission (the
"Effective Date") at a cash purchase price per Offered Share that is mutually
agreed upon by Buyer and the Seller Representative.
(b) Unless otherwise agreed by Xxxxxx and the Holders, offers of the
Offered Shares will be made by Xxxxxx, and any person acting on its behalf,
including any affiliate or sales or marketing agent, only through the
Prospectus. Any offers and sales of the Offered Shares shall be made in full
compliance with the applicable requirements of the Securities Act and Xxxxxx
shall be responsible for delivering to the purchasers of the Offered Shares a
copy of the Prospectus and such other documents as shall be required pursuant to
the Securities Act. Xxxxxx will communicate to the Holders, in writing, each
offer to purchase Offered Shares. Each Holder may, in his, her or its sole
discretion, reject any purchase in whole or in part of such Holder's Offered
Shares.
(c) The Holders shall make no representations or warranties to the
purchasers of the Offered Shares other than each Holder's ownership of the
Offered Shares.
(d) Except as provided in Section 6.15(e)(ii) or with respect to a breach
of the representations and warranties of the Holders made pursuant to Section
6.16(c), no claim shall be made against any Holder by Xxxxxx or any purchaser of
Offered Shares to recover any losses, claims, damages or liabilities, or any
actions in respect thereof, to which Xxxxxx or any purchaser of Offered Shares
may become subject, by reason of, arising out of or otherwise in connection with
the offer or sale of the Offered Shares pursuant to this Section 6.16. In
addition to indemnification provided by Section 6.15(e), Xxxxxx agrees to
indemnify and hold harmless each Holder Indemnified Party from and against any
and all losses, claims, damages or liabilities, or any actions in respect
thereof, to which such Holder Indemnified Party may become subject, by reason
of, arising out of or otherwise in connection with the performance of Xxxxxx'x
obligations with respect to the offer or sale of the Offered Shares pursuant to
this Section 6.16. For purposes of this Section 6.16(d), the procedures of
Section 6.15(e)(iii) shall apply to any indemnification claims made pursuant to
this Section 6.16(d).
(e) Xxxxxx shall be responsible for and shall pay all fees and expenses
incurred in connection with the offer and sale of the Offered Shares, other than
any sales, stock transfer or other taxes related to the transfer of the Offered
Shares from a Holder to the purchasers of the Offered Shares, for which the
applicable Holder shall be responsible.
6.17 Xxxx Xxxxx Agreement. Xxxxxx hereby agrees that, without the prior
written consent of Pharlo IP, LLC, Xxxxxx shall not amend, agree to amend,
terminate or otherwise modify or waive (by waiver, inaction or otherwise) the
terms of the Xxxx Xxxxx Agreement as in effect on the date hereof. Xxxxxx
further hereby agrees that any amendment, modification or waiver of the Xxxx
Xxxxx Agreement will not affect the receipt by Pharlo IP, LLC of royalty
payments as contemplated by Section 4(c) of the Xxxx Xxxxx Agreement as in
effect on the date hereof.
6.18 Issuance of Phitex LP Participating Units.
(a) Subject to the satisfaction of the conditions set forth in 6.18(b)
below, Sellers shall cause Phitex Ltd. LLLP ("Phitex") to issue to Xxxxxx or a
subsidiary of Xxxxxx designated by Xxxxxx (a "Designated Subsidiary"), within
ten Business Days after satisfaction of such conditions, LP Participating Units
of Phitex ("LP Participating Units") representing 19.9% of the then total
outstanding GP Participating Units of Phitex ("GP Participating Units") and LP
Participating Units on a fully diluted basis.
34
(b) Sellers' obligation to cause the issuance of the LP Participating
Units to Xxxxxx or a Designated Subsidiary pursuant to Section 6.18(a) shall be
subject to the satisfaction of the following conditions:
(i) The Shelf Registration Statement registering the Registrable
Shares shall have been declared effective by the Commission;
(ii) Buyers shall be in compliance with all of their obligations
under the Agreement, including Section 6.16;
(iii) None of the circumstances described in clauses (1) or (2) of
Section 6.18(b)(iv)(B) shall have occurred; and
(iv) Xxxxxx and any Designated Subsidiary shall have entered into a
written agreement with Phitex, in form and substance satisfactory to
Phitex, pursuant to which Xxxxxx and such Designated Subsidiary agree that
(A) Xxxxxx and such Designated Subsidiary will not sell, transfer or
otherwise dispose of, directly or indirectly, any of the LP Participating
Units issued to Xxxxxx and such Designated Subsidiary, except in
connection with a sale, transfer or disposition of all outstanding GP
Participating Units and LP Participating Units by all the holders thereof
and (B) the LP Participating Units issued to Xxxxxx and any Designated
Subsidiary shall be subject to Phitex's right to purchase from Xxxxxx and
such Designated Subsidiary, and Xxxxxx'x and the Designated Subsidiary's
obligation to sell to Phitex, at Phitex's request, all such LP
Participating Units for an aggregate purchase price of $100 upon the
occurrence of (1) a Change in Control of Xxxxxx or (2) a change in, or
resignation, removal, death or disability of, any of the following
officers of Xxxxxx, for any reason whatsoever: Xxxxxx'x chief executive
officer, president or chief operating officer.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
7.1 Agreement to Indemnify.
(a) Buyers, their Affiliates and their respective officers, directors,
employees, agents and representatives (in their capacities as such)
(collectively, the "Buyer Indemnitees") shall each be indemnified, defended and
held harmless by a Seller, severally and not jointly, from and against any and
all Damages incurred or suffered by any Buyer Indemnitee arising out of or as a
result of any inaccuracy in or breach of the representation and warranty made by
such Seller in Section 4.5(b).
(b) Sellers, their Affiliates and their respective officers, directors,
employees, agents, stockholders and representatives (in their capacities as
such) (collectively, the "Seller Indemnitees") shall each be indemnified,
defended and held harmless by Buyers, jointly and severally, from and against
any and all Damages incurred or suffered by any Seller Indemnitee arising out of
or as a result of any inaccuracy in or breach of the representations and
warranties made by Buyers in Section 5.4.
(c) Nothing set forth in this Article VII shall be deemed to prohibit or
limit any Buyer's or any Seller's right to seek injunctive or other equitable
relief for the failure of Sellers or any Buyer, as applicable, to perform any
covenant or agreement contained in this Agreement or any Seller Related Document
or Buyer Related Document, as applicable.
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7.2 Survival of Representations and Warranties. No investigation
heretofore or hereafter made by or on behalf of any party hereto shall limit or
affect the representations, warranties or covenants of any other party, each of
which shall survive any such investigation (subject to the following provisions
of this Section 7.2). Except for the Surviving Representations (which shall
survive the date hereof without time limitation), all representations and
warranties of each Seller, Sellers or Buyers contained in this Agreement
(including, without limitation, those contained in Article IV and Article V,
other than the Surviving Representations) or in any Seller Related Document or
Buyer Related Document and all claims of any party or any other Person in
respect of any inaccuracy in or breach of any representation or warranty
contained in this Agreement (other than the Surviving Representations) or in any
Seller Related Document or Buyer Related Document (including any indemnification
with respect thereto) shall terminate on the date hereof and from and after the
date hereof, all representations and warranties of each Seller, Sellers or
Buyers contained in this Agreement (other than the Surviving Representations) or
in any Seller Related Document or Buyer Related Document shall be of no further
force or effect and no party or any other Person shall have any obligation to
provide indemnification or any other Liability in respect thereof. No provision
of this Agreement shall limit the right of any party hereto to pursue a claim
against any other party hereto based on fraud.
ARTICLE VIII
MISCELLANEOUS
8.1 Notice.
(a) Except as expressly set forth to the contrary in this Agreement, all
notices, requests, consents and other communications provided for or permitted
to be given under this Agreement must be in writing and shall be deemed
delivered: (i) upon delivery if delivered in person, (ii) upon transmission if
sent via facsimile, with a confirmation copy sent via overnight courier as
provided in clause (iii) below; provided that confirmation of such overnight
delivery is received, or (iii) one (1) day after deposit with a national
overnight courier; provided that confirmation of such overnight courier is
received. Such notices, requests, consents and other communications shall be
sent to each party at the address or facsimile number indicated below.
If to any Seller or Seller Representative:
Xxxxx X. Xxxxxxxxx
Pharlo Citrus Technologies, Inc.
00 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax No.: 000.000.0000
with copies (which copies shall not constitute notice) to:
Xxxxx X. Xxxxxxxx, Esq.
00 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Fax No.: 000.000.0000
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If to any Buyer:
Xxxxxx Capital Corp.
00 Xxx Xxxxxxxxx Xxxx
Xxxxx 00
Xxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, CFO
Fax No.: 000.000.0000
with copies (which copies shall not constitute notice) to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx, Xxxxxx-Xxxxx & Xxxxxxxxx, P.C.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Fax No.: 000.000.0000
or, in any such case, to such other address or facsimile number as shall be
designated from time to time by written notice in accordance with this Section
8.1 by the Person entitled to such notice.
(b) To the extent any notice provision in any other agreement, instrument
or document executed or required to be executed by the parties in connection
with the transactions contemplated herein contains a notice provision which is
different from the notice provision contained in this Section 8.1, with respect
to matters arising under such other agreement, instrument or document, the
notice provision in such other agreement, instrument or document shall control.
8.2 Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof nor any of the
documents executed in connection herewith may be assigned by any Buyer without
the prior written consent of Sellers or by any Seller without the prior written
consent of Xxxxxx; provided, however, that each Buyer and each Seller shall have
the right to assign any of its rights under this Agreement to any Affiliate of
such party without obtaining any such consent. Nothing contained herein, express
or implied, is intended to confer upon any Person other than the parties hereto
and their successors in interest and permitted assignees any rights or remedies
under or by reason of this Agreement unless so stated herein to the contrary,
except for the Holders who shall be third party beneficiaries to the rights
under Sections 6.15 and 6.16 and except as provided in Section 6.17 and Section
7.1.
8.3 Exhibits and Schedules. The Exhibits and Schedules (and any appendices
thereto) referred to in this Agreement are and shall be incorporated herein and
made a part hereof. Section references in the Schedules refer to the specific
Section of the Agreement with respect to which Sellers are making a disclosure.
A disclosure under one Section referenced in the Schedules shall be deemed
disclosed for any other Section of the Schedules for which it is reasonably
apparent to be responsive.
8.4 Sections and Articles. Unless the context otherwise requires, all
Sections, Articles, Schedules and Exhibits referred to herein are, respectively,
Sections and Articles of, and Schedules and Exhibits to, this Agreement.
8.5 Entire Agreement. This Agreement, along with the documents and
agreements to be executed pursuant hereto, constitutes the full understanding of
the parties relating to the subject matter hereof and supersedes any and all
prior agreements, whether written or oral, that may exist between or among the
parties with respect thereto. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a breach if such action is taken or condition exists.
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8.6 Headings. Headings of particular Articles and Sections are for
convenience only and are in no way to be construed as part of this Agreement or
as a limitation of the scope of the particular Articles or Sections to which
they refer.
8.7 Attribution of Knowledge. For the purposes of this Agreement, the
phrase "to Sellers' knowledge" and variations of it when used with respect to
Sellers or any Seller shall refer to: (a) all matters actually known by Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxx and Xxxxxxx Xxxxx or (b) any matter that
any of the foregoing persons would reasonably be expected to discover or
otherwise become aware of upon conducting a reasonable investigation of
applicable files in such person's possession.
8.8 Controlling Law, Submission to Jurisdiction.
(a) THE VALIDITY, INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT AND ANY
DISPUTE CONNECTED HEREWITH SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK (OTHER THAN THE PRINCIPLES OF CONFLICTS OF
LAWS THEREOF).
(b) EACH PARTY HERETO HEREBY AGREES THAT ANY SUIT, ACTION OR PROCEEDING IN
RESPECT THEREOF MAY BE BROUGHT IN ANY STATE COURT SITTING IN NEW YORK CITY, NEW
YORK OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK;
AND EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH
COURTS AND ANY APPELLATE COURT THEREOF FOR THE PURPOSE OF ANY SUIT, ACTION OR
PROCEEDING (AND WAIVES FOR SUCH PURPOSE ANY DEFENSE BASED ON LACK OF PERSONAL
JURISDICTION).
(c) EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT BROUGHT IN ANY STATE COURT SITTING
IN NEW YORK CITY, NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
8.9 No Third Party Beneficiaries. Except for the Holders who shall be
third party beneficiaries to the rights under Sections 6.15 and 6.16 and as
provided in Section 6.17 and Section 7.1, no Person not a party to this
Agreement shall have rights under this Agreement as a third party beneficiary or
otherwise.
8.10 Amendments and Waivers. This Agreement may be amended by Xxxxxx on
behalf of the Buyers and Seller Representative on behalf of the Sellers by an
instrument in writing signed by Xxxxxx and Seller Representative. Any term or
provision of this Agreement may be waived in writing at any time by the party
that is entitled to the benefits thereof. Unless otherwise stated in a writing
signed by the party to be bound, no waiver by any party with respect to any
breach or default or of any right or remedy and no course of dealing shall be
deemed to constitute a continuing waiver of any other breach or default or of
any other right or remedy. Failure of a party to exercise any right shall not be
deemed a waiver of such right or rights in the future.
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8.11 Number and Gender of Words; Interpretations. Whenever herein the
singular number is used, the same shall include the plural (and vice versa),
where appropriate, and words of any gender shall include each other gender where
appropriate. For the purposes of this Agreement, (i) the terms "hereof",
"herein", and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement, and (ii) the word "including" and words
of similar import when used in this Agreement shall mean "including, without
limitation".
8.12 Invalid Provisions. If any provision of this Agreement that is not
essential to accomplishing its purposes is held to be illegal, invalid, or
unenforceable under present or future laws, such provisions shall be fully
severable as if such invalid or unenforceable provisions had never comprised a
part of the Agreement; and the remaining provisions of the Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of such illegal, invalid or unenforceable provision, there
shall be automatically as a part of this Agreement, a provision as similar in
terms to such illegal, invalid or unenforceable provision as may be possible and
be legal, valid and enforceable.
8.13 Multiple Counterparts. This Agreement may be executed in any number
of identical counterparts. If so executed, each of such counterparts is to be
deemed an original for all purposes and all such counterparts shall,
collectively, constitute one agreement, but, in making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart.
8.14 Joint Drafting. All of the parties hereto have been represented by
counsel in the negotiations and preparation of this Agreement; therefore, this
Agreement will be deemed to be drafted by each of the parties hereto, and no
rule of construction will be invoked respecting the authorship of this
Agreement.
8.15 Expenses. Except as provided otherwise in Sections 3.1(b), 6.10, 6.15
and 6.16, each of the parties shall bear all of their own expenses in connection
with the negotiation and execution of this Agreement and consummation of the
transactions contemplated hereby. If litigation, arbitration or any other
Proceeding is commenced between or among the parties concerning any dispute
arising out of or relating to this Agreement, the prevailing party in any
contested proceeding or Proceeding will be entitled, in addition to any other
award that may be made, to recover its reasonable attorneys' fees and expenses,
unless otherwise ordered by the court or arbitrator.
8.16 Seller Representative.
(a) The Sellers hereby appoint Xxxxx Xxxxxxxxx (the "Seller
Representative") as their representative to act on their behalf in connection
with matters under this Agreement and the other Transaction Documents,
including, without limitation, the power to:
(i) modify, amend or waive provisions of this Agreement and the
other Transaction Documents;
(ii) give and receive any notices, settle any disputes and receive
and distribute any payments to the Sellers hereunder;
39
(iii) agree to, negotiate and enter into settlements and
compromises, demand dispute resolution, comply with orders of courts and
awards or arbitrators; and
(iv) give consents and instructions or contest any claims.
(b) Buyers are entitled to rely upon the authority of the Seller
Representative to act on behalf of the Sellers as provided in this Agreement
until Xxxxxx receives written notice signed by all of the Sellers stating that a
successor has been appointed and identifying the successor. Thereafter, Buyers
will be entitled to rely upon the authority of the successor until Xxxxxx
receives written notice signed by the Sellers stating that another successor has
been appointed and identifying that other successor. Any payment by Buyers to
the Seller Representative or any such successor for distribution to the Sellers
in accordance with this Agreement will discharge Buyers' obligation to make the
corresponding payment to the Sellers.
8.17 Current Buyer Agreements and Promissory Notes. Sellers and Buyers
acknowledge and agree that, effective as of the date hereof, (i) the Current
Buyer Agreements shall automatically terminate without any action on the part of
any Person and (ii) the Promissory Notes will be automatically cancelled and
will be of no further force or effect without any action on the part of any
Person or any payment with respect thereto.
[signature page to follow]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
SELLERS:
INDIAN RIVER LABS, L.L.C.
By:________________________
Name: ____________________
Title: ___________________
PHARLO CITRUS TECHNOLOGIES, INC.
By:________________________
Name:______________________
Title:_____________________
PHARLO CITRUS PROPERTIES PARTNERSHIP, LLLP
By: Pharlo Citrus Properties Management, LLC, its General Partner
By:_______________________
Name:_____________________
Title:____________________
COAST TO COAST LABORATORIES, LLC
By:________________________
Name:______________________
Title:_____________________
BUYERS:
XXXXXX CAPITAL CORP.
By:________________________
Name:______________________
Title:_____________________
XXXXXX PRODUCTS IP HOLDINGS CORP.
By:________________________
Name:______________________
Title:_____________________
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