Exhibit 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated September 1, 2009, is made and
entered into among MEDX SYSTEMS, INC., a Florida corporation (the "Purchaser"),
PHARMACITY CORPORATION, a Nevada corporation (the "Company"), WI ACQUISITION,
INC., a Florida corporation and wholly owned subsidiary of the Company
("Subsidiary") and Xxxxx Xxxxxxxx ("Stockholder").
WHEREAS, the parties desire that on the terms and subject to the conditions
contained in this Agreement, Purchaser merge with and into the Subsidiary, with
the Subsidiary surviving the transaction; and
WHEREAS, for federal income tax purposes, it is intended that the Merger
will be a reorganization described in Section 368 of the Code.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter contained, and intending to be legally bound, the parties to this
Agreement hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms, as used herein, shall have the
following meanings:
(a) "Action" means any action, claim, dispute, proceeding, suit or
investigation (whether civil, criminal, administrative or investigative), or any
appeal therefrom.
(b) "Affiliate" means any Person, a spouse of such Person, any child
or parent sharing the same household with such Person, any director or officer
of such Person, and any other Person directly or indirectly controlling or
controlled by or under direct or indirect common control with such Person.
(c) "Agreement" means this Agreement and Plan of Merger and shall
include all of the Schedules and Exhibits attached hereto.
(d) "Approval" means any approval, authorization, consent, license,
franchise, order, registration, permit or other confirmation of or by, or filing
with, a Person.
(e) "Business Day" means any day other than a Saturday, a Sunday, a
legal holiday in the State of Florida or a day on which commercial banks in the
State of Florida are permitted or authorized to close.
(f) "Code" means the Internal Revenue Code of 1986, as amended, and
the regulations thereunder.
(g) "Company Common Stock" means the common stock, par value $0.00001
per share, of the Company.
(h) "Condition" means, with respect to a Person, the business,
liabilities, properties, prospects, assets, operations, results of operations
and/or condition (financial or otherwise) of such Person.
(i) "Damages" means any claim, loss, deficiency (financial or
otherwise), Liability, cost or expense (including, without limitation,
reasonable attorneys' fees, costs and expenses) or damage of any kind or nature
whatsoever.
(j) "Environmental Laws" means all currently existing foreign,
federal, state and local laws, regulations, rules and ordinances relating to
pollution or protection of the environment or human health and safety,
including, without limitation, laws relating to releases or threatened releases
of Hazardous Materials into the indoor or outdoor environment (including,
without limitation, ambient air, surface water, groundwater, land, surface and
subsurface strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, release, transport or handling of
Hazardous Materials and all laws and regulations with regard to record keeping,
notification, disclosure and reporting requirements respecting Hazardous
Materials, and all laws relating to endangered or threatened species of fish,
wildlife and plants and the management or use of natural resources.
(k) "FBCA" means the Florida Business Corporation Act.
(l) "Forward Split" means a forward split of the Company's Common
Stock at the ratio of 19 shares of Company Common Stock for each share of
Company Common Stock outstanding immediately prior thereto.
(m) "GAAP" means United States generally accepted accounting
principles.
(n) "Governmental Authority" means any United States federal, state,
local, foreign or other governmental, administrative or regulatory authority,
body, agency, court, tribunal or similar entity.
(o) "Hazardous Materials" means any substance: (i) the presence of
which requires or may require investigation or remediation of any kind under any
Environmental Laws; (ii) which is defined as "hazardous waste," "hazardous
material," "residual waste," "hazardous substance," "pollutant" or "contaminant"
under any federal, state or local statute, regulation, rule or ordinance or
amendments thereto including, without limitation, CERCLA and/or the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.) or (iii) which is
otherwise regulated pursuant to any applicable Environmental Law.
(p) "Indemnified Party" means any party entitled to indemnification
pursuant to Section 10.1 hereof.
(q) "Indemnifying Party" means any party required to indemnify an
Indemnified Party pursuant to Section 10.1 hereof.
(r) "Law" means any federal, state, local or foreign law, statute,
rule, regulation, ordinance, standard, requirement, administrative ruling, order
or process (including, without limitation, any zoning or land use law or
ordinance, building code, Environmental Law, securities, blue sky, civil rights
or occupational health and safety law or regulation) or administrative
interpretation thereof, and any court, or arbitrator's order or process.
(s) "Liability" means any debt, liability, commitment or obligation of
any kind, character or nature whatsoever, whether known or unknown, secured or
unsecured, accrued, fixed, absolute, contingent or otherwise, and whether due or
to become due.
(t) "Lien" means any lien, statutory lien, pledge, mortgage, security
interest, charge, encumbrance, easement, right of way, covenant, claim,
restriction, right, option, conditional sale or other title retention agreement
of any kind or nature.
(u) "Material Adverse Effect" means, with respect to a Person, any
change or effect that is materially adverse to the Condition of such Person.
(v) "Person" means any individual, partnership, corporation, limited
liability company, association, business trust, joint venture, governmental
entity, business entity or other entity of any kind or nature, including any
business unit of such Person.
(w) "Purchaser Common Stock" means the common stock of the Purchaser.
(x) "Representatives" means with respect to any Person, its
stockholders, employees, officers, directors, investment bankers, attorneys,
agents, representatives or Affiliates.
(y) "Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations thereto.
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(z) "Stockholder Shares" means 2,000,000 shares of pre-Forward Split
Company Common Stock held of record in the name of the Stockholder, or
80,000,000 shares of post-Forward Split Company Common Stock held of record in
the name of the Stockholder, as the case may be.
(aa) "Tax" means any United States federal, state or local or foreign
income, gross receipts, license, severance, occupation, premium, environmental
(including taxes under Code Section 59A), customs, duties, profits, disability,
registration, alternative or add-on minimum, estimated, withholding, payroll,
employment, unemployment insurance, social security (or similar), excise, sales,
use, value-added, occupancy, franchise, real property, personal property,
business and occupation, windfall profits, capital stock, stamp, transfer,
workmen's compensation or other tax, fee or imposition of any kind whatsoever,
including any interest, penalties, additions, assessments or deferred liability
with respect thereto, whether disputed or not.
(bb) "Tax Law" means the Law (including any applicable regulations or
any administrative pronouncement) of any Governmental Authority relating to any
Tax.
(cc) "Tax Return" means any federal, state, local or foreign return,
declaration, report, claim for refund, amended return, declaration of estimated
Tax or information return or statement relating to Taxes, and any schedule,
exhibit, attachment or other materials submitted with any of the foregoing, and
any amendment thereto.
1.2 Accounting Terms. All accounting terms not specifically defined in
this Agreement shall be construed in accordance with GAAP consistently applied.
1.3 Singular and Plural Forms. The use herein of the singular form also
denotes the plural form, and the use of the plural form herein also denotes the
singular form, as in each case the context may require.
1.4 Gender Forms. The use herein of any gender word (such as "he" or "his")
includes both the male and female genders.
ARTICLE II
THE MERGER
2.1 Upon Execution of this Agreement. Notwithstanding any other terms of
this Agreement:
(a) Concurrently with the execution of this Agreement, the Stockholder
has deposited in escrow with Purchaser's counsel stock certificates representing
the Stockholder Shares. Each such stock certificate shall be accompanied by a
stock power executed in blank, medallion guaranteed. The form of escrow
agreement is attached hereto as Exhibit A.
(b) Concurrently with the execution of this Agreement, Purchaser shall
pay Stockholder a nonrefundable payment of $100,000, in immediately available
funds.
(c) In the event the transactions set forth in this Agreement close
pursuant to the terms hereof, on or before the Effective Time the Stockholder
Shares shall be released from escrow and returned to the Company's transfer
agent for cancellation.
(d) In the event this Agreement is terminated for any reason,
concurrently with, or as soon as possible thereafter, the Stockholder Shares
shall be released from escrow and transferred to Purchaser.
(e) The Company hereby appoints Xxxx Xxxxxxx as the assistant
secretary of the Company, and authorizes and directs Xx. Xxxxxxx to execute, on
behalf o the Company, all documentation necessary to effectuate the closing of
the transactions set forth herein.
2.2 The Merger. Subject to the terms and conditions set forth in this
Agreement and in accordance with the FBCA, at the Effective Time, Purchaser
shall be merged with and into the Subsidiary in accordance with this Agreement
and the separate existence of Purchaser shall cease (the "Merger"). The
Subsidiary shall survive the Merger and the Company and shall continue to be
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governed by the laws of the State of Florida (as such, the "Surviving
Corporation"). The Merger shall have the effects set forth in the FBCA.
2.3 Closing. The closing of the Merger (the "Closing") shall take place (i)
at the offices of Xxxxxxx & Xxxxxxx, Ft. Lauderdale, Florida, as soon as
practicable, but in any event within three Business Days after the day on which
the last to be fulfilled or waived of the conditions set forth in Articles VII
and VIII (other than those conditions that by their nature are to be fulfilled
at the Closing, but subject to the fulfillment or waiver of such conditions)
shall be fulfilled or waived in accordance with this Agreement or (ii) at such
other place and time or on such other date as the parties may agree in writing
(the "Closing Date").
2.4 Effective Time of the Merger. The Merger shall become effective on the
date and at the time at which a properly executed certificate of merger (the
"Certificate of Merger") is duly filed with the Secretary of State of the State
of Florida, or at such later date and time as may be specified therein. The
Certificate of Merger filing shall be made as soon as practicable on or after
the Closing Date. When used in this Agreement, the term "Effective Time" means
the date and time on which such Certificate of Merger is so filed or such later
time as the parties shall designate therein.
2.5 Certificate of Incorporation. The Certificate of Incorporation of the
Subsidiary as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation unless and until
amended as provided by Law and the Certificate of Incorporation.
2.6 By-Laws. The by-laws of the Subsidiary as in effect immediately prior
to the Effective Time shall be the by-laws of the Surviving Corporation unless
and until amended in accordance with their terms and the Certificate of
Incorporation of the Surviving Corporation.
2.6 Directors.
(a) Of the Surviving Corporation. The directors of Purchaser at the
Effective Time shall be the initial directors of the Surviving Corporation and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualify in the manner provided in the Certificate
of Incorporation and by-laws of the Surviving Corporation or as otherwise
provided by Law.
(b) Of the Company. The directors of Purchaser at the Effective Time
shall be the directors of the Company and shall hold office from the Effective
Time until their respective successors are duly elected or appointed and qualify
in the manner provided in the Certificate of Incorporation and by-laws of the
Company or as otherwise provided by Law.
2.7 Officers.
(a) Of the Surviving Company. The officers of the Purchaser at the
Effective Time shall be the initial officers of the Surviving Corporation and
shall hold office from the Effective Time until their respective successors are
duly elected or appointed and qualify in the manner provided in the Certificate
of Incorporation and by-laws of the Surviving Corporation, or as otherwise
provided by Law.
(b) Of the Company. The officers of Purchaser at the Effective Time
shall be the officers of the Company and shall hold office from the Effective
Time until their respective successors are duly elected or appointed and qualify
in the manner provided in the Certificate of Incorporation and by-laws of the
Company or as otherwise provided by Law.
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ARTICLE III
CONVERSION OF SHARES
3.1 Effect on Capital Stock.
(a) Common Stock. At the Effective Time, by virtue of the Merger and
without any action on the part of any stockholder of Subsidiary, the Company, or
Purchaser, each share of Purchaser Common Stock issued and outstanding
immediately prior to the Effective Time shall be converted into the right to
receive 0.135319 shares of Company Common Stock pre-Forward Split, or 5.4127574
shares of Company Common Stock post-Forward Split, as the case may be. Each of
the shares of Purchaser Common Stock converted in accordance with this Section
3.1 shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of a certificate representing
any such shares of Purchaser Common Stock shall cease to have any rights with
respect thereto, except the right to receive the consideration set forth in this
Section 3.1, upon the surrender of such certificate in accordance with Section
3.2 hereof. Each share of Subsidiary Common stock outstanding immediately prior
to the Effective Time shall remain outstanding after the Effective Time.
(b) Options and Warrants. At the Effective Time, by virtue of the
Merger and without any action on the part of any holder of an option or warrant
issued by the Purchaser and outstanding as of the Effective Time (the
"Options/Warrants"), the Company shall assume the obligations of Purchaser under
the Options/Warrants, such that upon the exercise of any such Option/Warrant
pursuant to the terms thereof, the Option/Warrant holder shall receive 0.135319
shares of Company Common Stock pre-Forward Split, or 5.4127574 shares of Company
Common Stock post-Forward Split, as the case may be, for each 1 share of Common
Stock of the Purchaser the Option/Warrant holder would have received otherwise.
Other than as set forth in this Section 3.1(b), all terms of the
Options/Warrants shall remain unchanged (e.g. exercise price, term, etc.). The
Company shall also assume and adopt the Purchaser's 2008 Equity Incentive Plan.
3.2 Surrender of Certificates Representing Shares. At the Effective Time,
each shareholder of Purchaser, upon surrender to the Company of one or more
certificates in valid form representing the shares of Purchaser Common Stock,
duly endorsed in blank or accompanied by duly executed stock powers, shall be
entitled to receive the consideration set forth in Section 3.1 in respect of the
shares of capital stock represented by such certificates. Until so surrendered,
each such certificate shall, after the Effective Time, represent for all
purposes only the right to receive such consideration as set forth in Section
3.1 Each certificate representing shares of Company Common Stock issued upon
surrender of Purchaser Common Stock shall bear a legend stating:
"THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND THESE SECURITIES MAY NOT BE SOLD OR
TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SALE OR TRANSFER
IS EFFECTIVE UNDER THE ACT OR (II) THE TRANSACTION IS EXEMPT FROM REGISTRATION
UNDER THE ACT, AND IF THE ISSUER REQUESTS, AN OPINION SATISFACTORY TO THE
CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL."
3.3 No Fractional Shares. No certificates or scrip representing fractional
shares of Purchaser Common Stock shall be issued upon the surrender for exchange
of certificates representing shares of Purchaser Common Stock. In lieu of any
such fractional shares of Company Common Stock, each holder of shares of
Purchaser Common Stock who would otherwise have been entitled to a fraction of a
share of Company Common Stock upon surrender of stock certificates for exchange
pursuant to this Article III will be issued one full share of Company Common
Stock in consideration of said fractional share of Purchaser Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDER
The Company and the Stockholder hereby represent and warrant to the
Purchaser, as of the date hereof and as of the Closing Date, as follows:
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4.1 Organization and Good Standing. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Nevada and has the requisite power and authority and all governmental
licenses, authorizations, consents and approvals required to own, operate and
lease its properties and assets and to conduct its business as it is now being
owned, operated, leased and conducted. The Company is not required to be
qualified or licensed to do business as a foreign corporation in any
jurisdiction.
4.2 Corporate Records. Copies of the certificate of incorporation of the
Company, certified by the Secretary of State of the State of Nevada, and of the
by-laws of the Company, certified by the Secretary of such corporation,
heretofore delivered to the Purchaser are true and complete copies of such
instruments as amended to the date of this Agreement. Such certificate of
incorporation and by-laws of the Company are in full force and effect. The
Company is not in violation of any provision of its certificate of incorporation
or by-laws.
4.3 Corporate Power and Authority. The Company has the requisite corporate
power and authority to execute and deliver this Agreement, perform its
obligations hereunder and consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Company, the performance by it
of its obligations hereunder, and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate and
stockholder actions on the part of the Company. This Agreement constitutes the
legal, valid and binding obligation of the Company, enforceable against it in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws now or hereafter in
effect relating to creditors' rights generally and subject to general principles
of equity.
4.4 Capitalization.
(a) The authorized capital stock of the Company consists solely of
75,000,000 shares of Company Common Stock, par value $0.00001 per share. There
are 2,404,000 shares of Company Common Stock outstanding, of which 2,000,000
shares are being cancelled concurrently with the Closing. No shares of Company
Common Stock are held as treasury shares.
(b) All of the issued and outstanding shares of Company Common Stock
are validly issued, fully paid and nonassessable and free of preemptive rights
and were issued in compliance with all applicable Laws concerning the issuance
of securities. There are not any shares of capital stock of the Company issued
or outstanding or any options, warrants, subscriptions, calls, rights,
convertible securities or other agreements or commitments obligating the Company
to issue, transfer, sell, redeem, repurchase or otherwise acquire any shares of
its capital stock or securities. There are not any notes, bonds, debentures or
other indebtedness of the Company having the right to vote (or convertible into
or exchangeable for securities having the right to vote) on any matters upon
which the Company's stockholders may vote. There are no outstanding contractual
obligations, commitments, understandings or arrangements of the Company to
repurchase, redeem or otherwise acquire or make any payment in respect of or
measured or determined based on the value or market price of any shares of
capital stock of the Company, and there are no irrevocable proxies with respect
to shares of capital stock of the Company. There are no agreements or
arrangements pursuant to which the Company is or could be required to register
shares of Company Common Stock or other securities under the Securities Act.
4.5 Subsidiaries. The Company does not own, directly or indirectly, any
capital stock or other ownership interest in any corporation, partnership,
limited liability company, joint venture or other business association or
entity, other than 100 shares (100%) of common stock of Subsidiary, which
Subsidiary was formed for the purpose of entering into the transactions set
forth herein, and has no business operations, assets, or liabilities,
whatsoever.
4.6 No Violation. Except for the filing of the Certificate of Merger,
neither the execution and delivery of this Agreement by the Company, the
performance by it of its obligations hereunder, nor the consummation by it of
the transactions contemplated hereby, will (a) contravene any provision of the
certificate of incorporation or bylaws of the Company; (b) violate, be in
conflict with, constitute a default under, permit the termination of, cause the
acceleration (whether after the giving of notice or the lapse of time or both)
of the maturity of, any debt or obligation of the Company or binding on the
Surviving Corporation after the Closing, require the consent of any other party
to, constitute a breach of, create a loss of a benefit under, or result in the
creation or imposition of any Lien upon any of the properties or assets of the
Company under, any note, bond, license, mortgage, indenture, lease, contract,
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agreement, instrument or commitment relating to the Company to which it is a
party or by which it or any of its assets or properties constituting part of the
business of the Company are bound.
4.7 Approvals.
(a) Except for the filing of the Certificate of Merger, no
declaration, filing or registration with, notice to, nor Approval of, any
Governmental Authority is required to be made, obtained or given by or with
respect to the Company or Subsidiary in connection with the execution, delivery
or performance by the Company or Subsidiary of this Agreement, the performance
by it of its obligations hereunder or the consummation by it of the transactions
contemplated hereby.
(b) The Company and Subsidiary have all Approvals required for its
operation and the use and ownership or leasing of its properties and assets that
constitute part of the business, as currently operated, used, owned or leased.
All of such Approvals are valid, in full force and effect and in good standing,
except where the failure to be so would not, individually or in the aggregate,
have a Material Adverse Effect on the Condition of the Company. There is no
proceeding pending or, to the knowledge of the Company, threatened, that
disputes the validity of any such Approval or that is likely to result in the
revocation, cancellation or suspension, or any adverse modification of any such
Approval.
4.8 No Undisclosed Liabilities; Company Records. The Company does not have,
and as a result of the transactions contemplated by this Agreement, will not
have, any Liabilities (whether absolute, accrued, contingent or otherwise, and
whether due or to become due). The minute books and stock record books of the
Company have been maintained in accordance with sound business practices. The
minute books of the Company contain accurate and complete records of all
meetings held of, and corporate action taken by, the Company's stockholders, the
Board of Directors, and committees of the Board of Directors of the Company.
4.9 Leases of Personal Property; Material Contracts; No Default.
(a) The Company does not have any leases for personal property.
(b) Schedule 4.9(b) hereto sets forth a true and complete list of all
agreements to which the Company is a party or by which it or any of its
properties or assets are bound (collectively, the "Contracts"). The Company has
delivered or made available to the Purchaser a true and complete copy of each of
the Contracts or other agreements listed on Schedule 4.9(b) hereto.
(c) Except as set forth on Schedule 4.9(c) hereto, the Company has
performed in all material respects, or is now performing in all material
respects, its obligations under, and is not in default (and would not by the
lapse of time or the giving of notice or both be in default) under, or in breach
or violation of, nor has it received notice of any asserted claim of a material
default by the Company under, or a material breach or violation by the Company
of any Contracts and, to the knowledge of the Company, the other party or
parties thereto are performing in all material respects and are not in violation
thereunder.
4.10 Litigation. There is no Action pending against or affecting or, to the
knowledge of the Company, threatened against or affecting, the Company or any of
its assets, properties or rights before any court or arbitrator or any other
Governmental Authority. To the knowledge of the Company, there are no facts that
would likely result in any such Action.
4.11 Compliance with Laws. The Company is in compliance in all material
respects with all Laws applicable thereto. The Company is not at present charged
with or, to the knowledge of the Company, threatened with any charge concerning
or under any investigation with respect to, any violation, in any material
respect, of any provision of any Law, and the Company is not in violation of or
in default under, and to the knowledge of the Company, no event has occurred
which, with the lapse of time or the giving of notice or both, would result in
the violation of or default under, the terms of any judgment, decree, order,
injunction or writ of any court or other Governmental Authority.
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4.12 Taxes.
(a) The Company has (x) duly and timely filed (or there has been filed
on its behalf) with the appropriate Governmental Authorities all Tax Returns
required to be filed by it, and all such Tax Returns are true, correct and
complete and (y) timely paid (or properly accrued on the Company's books) or
there has been paid on its behalf all Taxes due from it or claimed to be due
from it by any Governmental Authority (whether or not set forth on any Tax
Return).
(b) The Company has complied in all material respects with all
applicable Tax Laws relating to the payment and withholding of Taxes and has,
within the time and manner prescribed by law, withheld and paid over to the
proper Governmental Authority all amounts required to be withheld and paid over
under all applicable Tax Laws.
(c) There are no Liens for Taxes upon the assets or properties of the
Company except for statutory Liens for current Taxes not yet due.
(d) The Company has not requested any extension of time within which
to file any Tax Return in respect of any taxable year which has not since been
filed, and no outstanding waivers or comparable consents regarding the
application of the statute of limitations with respect to any Taxes or Tax
Returns has been given by or on behalf of the Company.
(e) No federal, state, local or foreign audits, review, or other
Actions ("Audits") exist or have been initiated with regard to any Taxes or Tax
Returns of the Company, and the Company has not received any notice of such an
Audit.
4.13 Insurance. The Company does not have any insurance policies or binders
maintained by or for the benefit of the Company, its directors, officers,
employees or agents.
4.14 Employee Benefit Plans.
(a) The Company does not have any Company Employee Plans. For purposes
of this Agreement, the term "Company Employee Plans" shall mean and include:
each management, consulting, non-compete, employment, severance or similar
contract, plan, including, without limitation, all Company Stock Plans,
arrangement or policy applicable to any director, former director, employee or
former employee of the Company and each plan, program, policy, agreement or
arrangement (written or oral), providing for compensation, bonuses,
profit-sharing, stock option or other stock related rights or other forms of
incentive or deferred compensation, vacation benefits, insurance coverage
(including any self-insured arrangements), health or medical benefits,
disability benefits, workers' compensation, supplemental unemployment benefits,
severance benefits and post-employment or retirement benefits (including
compensation, pension, health, medical or life insurance benefits) or other
employee benefits of any kind, whether funded or unfunded, which is maintained,
administered or contributed to by the Company and covers any employee or
director or former employee or director of the Company, or under which the
Company has any Liability contingent or otherwise (including but not limited to
each material "employee benefit plan," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), but
excluding any such plan that is a "multiemployer plan," as defined in Section
3(37) of ERISA). Neither the Company nor any of its Affiliates contributes to,
or is required to contribute to, any "multiemployer plan" as defined in Section
3(37) of ERISA.
(b) The Company is in compliance with all applicable federal, state,
local and foreign statutes, laws (including, without limitation, common law),
judicial decisions, regulations, ordinances, rules, judgments, orders and codes
respecting employment, employment practices, labor, terms and conditions of
employment and wages and hours, and no work stoppage or labor strike against the
Company is pending or threatened, nor is the Company involved in or threatened
with any labor dispute, grievance, or litigation relating to labor matters
involving any employees, in each case except as would not, individually or in
the aggregate, have a Material Adverse Effect on the Company. There are no
suits, Actions, disputes, claims (other than routine claims for benefits),
investigations or audits pending or, to the knowledge of the Company, threatened
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in connection with any Company Employee Plan, but excluding any of the foregoing
which would not have a Material Adverse Effect on the Company.
4.15 Environmental Matters. No written notice, notification, demand,
request for information, citation, summons, complaint or order has been received
by, and no investigation, Action, claim, suit, proceeding or review is pending
or, to the knowledge of the Company, threatened by any Person against, the
Company, and no penalty has been assessed against the Company, in each case,
with respect to any matters relating to or arising out of any Environmental Law;
the Company is in compliance with all Environmental Laws; and there are no
Liabilities of or relating to the Company relating to or arising out of any
Environmental Law and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a Liability.
4.16 Personal Property. Schedule 4.16 hereto sets forth a true and complete
list of all equipment and fixtures owned by the Company.
4.17 Real Property.
(a) The Company does not own any real property.
(b) Set forth on Schedule 4.17(b) hereto is a list of all leases,
subleases, licenses and other agreements (collectively, the "Real Property
Leases") under which the Company uses or occupies or has the right to use or
occupy any real property used by the Company (the land, buildings and other
improvements covered by the Real Property Leases being herein called the "Leased
Real Property").
(c) The Company has performed in all material respects, or is now
performing in all material respects, its obligations under, and is not in
default (and would not by the lapse of time or the giving of notice or both be
in default) under, or in breach or violation of, nor has it received notice of
any asserted claim of a material default by the Company under, or a material
breach or violation by the Company of, any of the Real Property Leases and, to
the knowledge of the Company, the other party or parties thereto are performing
in all material respects and are not in violation thereunder.
4.18 Accounts Receivable. The Company does not have any accounts
receivable.
4.19 Inventory. The Company does not maintain any inventory.
4.20 Finders' or Advisors' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Company or the Company's stockholders who might be entitled to
any fee or commission in connection with the transactions contemplated by this
Agreement.
4.21 Related-Party Transactions. No employee, officer, or director of the
Company or member of his or her immediate family is currently indebted to the
Company, nor is the Company indebted (or committed to make loans or extend or
guarantee credit) to any of such individuals. No employee, director, or officer
of the Company and no member of the immediate family of any employee, officer,
or director of the Company is directly or indirectly interested in any material
contract with the Company.
4.22 Securities. None of the outstanding shares of the Company's Common
Stock were issued at a time the Company was a "shell company," as that term is
defined in Securities Act Rule 144. The Company's Common Stock is currently, and
will be at Closing, traded on the OTCBB. The Stockholder Shares to be delivered
by the Stockholder are owned by the Stockholder, free and clear of all liens,
charges, encumbrances and security interests (except for those restrictions
imposed on the shares by federal and state securities laws), and concurrently
with the execution of this Agreement the Stockholder will deliver good and
marketable title to the Stockholder Shares to the Purchaser.
4.23 Disclosure. Neither this Agreement, nor any of the Exhibits or
Schedules hereto nor any list, certificate, schedule or other instrument,
document, agreement or writing furnished or to be furnished to, or made with,
Purchaser pursuant hereto or in connection with the negotiation, execution or
9
performance hereof, contains any untrue statement by the Company of a material
fact or omits to state any material fact necessary to make any statement herein
or therein not misleading.
4.24 SEC Reporting. The Company has filed all reports required to be filed
by it under the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof (the foregoing materials (together with any materials filed by the
Company under the Exchange Act, whether or not required) being collectively
referred to herein as the "SEC Reports"). As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
promulgated thereunder, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all
material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis
during the periods involved ("GAAP"), except as may be otherwise specified in
such financial statements or the notes thereto, and fairly present in all
material respects the financial position of the Company and its consolidated
subsidiaries as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments. All material
agreements to which the Company or any Subsidiary is a party or to which the
property or assets of the Company or any Subsidiary are subject are included as
part of or specifically identified in the SEC Reports.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
5.1 Organization and Good Standing. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Florida and has the requisite power and authority and all governmental
licenses, authorizations, consents and approvals required to own, operate and
lease its properties and assets and to conduct its business as it is now being
owned, operated, leased and conducted. Purchaser is duly qualified or licensed
to do business as a foreign corporation, and is in good standing as a foreign
corporation, in every jurisdiction in which the failure to be so qualified or
licensed or in good standing would have a Material Adverse Effect on Purchaser's
business or operations or would adversely affect its ability to consummate the
transactions provided for or contemplated by this Agreement.
5.2 Corporate Records. Copies of the certificate of incorporation of the
Purchaser certified by the Secretary of State of the State of Florida, and of
the by-laws of the Purchaser, certified by the Secretary of Purchaser, are
available for review by the Company. Such certificates of incorporation and
by-laws of the Purchaser are in full force and effect. Purchaser is not in
violation of any provision of its certificate of incorporation or by-laws.
5.3 Corporate Power and Authority. The Purchaser has the requisite
corporate power and authority to execute and deliver this Agreement, perform its
obligations hereunder and consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Purchaser, the performance by it
of its obligations hereunder and the consummation by it of the transactions
contemplated hereby have been duly authorized by all necessary corporate actions
of the Purchaser. This Agreement constitutes the legal, valid and binding
obligation of the Purchaser, enforceable against it in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws now or hereafter in effect relating
to creditors' rights generally and subject to general principles of equity.
5.5 Finders' or Advisors' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Purchaser who might be entitled to any fee or commission in
connection with the transactions contemplated by this Agreement.
5.6 No Violation. Except for the filing of the Certificate of Merger and
any filings required pursuant to federal or state securities laws, neither the
execution and delivery of this Agreement by the Purchaser, the performance by
10
Purchaser of its obligations hereunder, nor the consummation by Purchaser of the
transactions contemplated hereby, will (a) contravene any provision of the
certificate of incorporation or bylaws of the Purchaser; (b) violate, be in
conflict with, constitute a default under, permit the termination of, cause the
acceleration (whether after the giving of notice or the lapse of time or both)
of the maturity of, any debt or obligation of the Purchaser, require the consent
of any other party to, constitute a breach of, create a loss of a benefit under,
or result in the creation or imposition of any Lien upon any of the properties
or assets of the Purchaser under, any note, bond, license, mortgage, indenture,
lease, contract, agreement, instrument or commitment relating to the Purchaser
to which it is a party or by which it or any of its assets or properties
constituting part of its businesses is bound.
5.7 Approvals. Except for the filing of the Certificate of Merger, and any
filings required pursuant to federal or state securities laws, no declaration,
filing or registration with, notice to, nor Approval of, any Governmental
Authority is required to be made, obtained or given by or with respect to the
Purchaser in connection with the execution, delivery or performance by the
Purchaser of this Agreement, the performance by Purchaser of its obligations
hereunder or the consummation by them of the transactions contemplated hereby.
ARTICLE VI
COVENANTS OF THE COMPANY
The Company covenants and agrees that from the date of this Agreement until
the Closing Date, except as otherwise consented to by the Purchaser in writing:
6.1 Conduct of the Company. From the date of this Agreement until the
Closing, the Company shall conduct its business in the ordinary course
consistent with past practice and shall use its commercially reasonable best
efforts to preserve intact its business organization. Without limiting the
generality of the foregoing and, without the prior written consent of the
Purchaser, from the date of this Agreement until the Closing:
(a) The Company will not adopt or propose any change in its
certificate of incorporation or by-laws;
(b) The Company will not adopt a plan or agreement of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of the Company;
(c) The Company will not issue or sell any shares of, or securities
convertible into or exchangeable for, or options, warrants, calls, commitments
or rights of any kind to acquire, any shares of capital stock of any class or
series of the Company;
(d) The Company will not (i) split, combine, subdivide or reclassify
its outstanding shares of capital stock, or (ii) declare, set aside or pay any
dividend or other distribution payable in cash, stock or property with respect
to its capital stock;
(e) The Company will not redeem, purchase or otherwise acquire
directly or indirectly any shares of capital stock of the Company;
(f) The Company will not (i) grant any severance or termination pay to
(or amend any such existing arrangement with) any director, officer or employee
of the Company, (ii) enter into any employment, deferred compensation or other
similar agreement (or any amendment to any such existing agreement) with any
director, officer or employee of the Company, (iii) increase any benefits
payable under any existing severance or termination pay policies or employment
agreements, (iv) increase (or amend the terms of) any compensation, bonus or
other benefits payable to directors, officers or employees of the Company, or
(v) permit any director, officer or employee who is not already a party to an
agreement or a participant in a plan providing benefits upon or following a
"change in control" to become a party to any such agreement or a participant in
any such plan;
(g) The Company will not sell, lease, license or otherwise dispose of
any assets or property except pursuant to existing contracts or commitments or
except in the ordinary course of business consistent with past practice;
11
(h) The Company will not enter into any joint venture, partnership or
other similar arrangement;
(i) The Company will not take any action that would make any
representation or warranty of the Company hereunder inaccurate in any material
respect at, or as of any time prior to, the Closing Date;
(j) The Company will not make or change any material Tax election,
settle any material audit or file any material amended Tax Returns;
(k) The Company will not incur any indebtedness, other than ordinary
trade payables incurred in the ordinary course (it being understood and agreed
that the accrual of interest with respect to indebtedness in existence on the
date of this Agreement shall not be deemed to be incurrence of indebtedness);
and
(l) The Company will not agree or commit to do any of the foregoing.
6.2 Consents and Approvals. The Company and Subsidiary shall use their best
efforts to obtain at the earliest practicable date, and in any event prior to
Closing, all Approvals reasonably requested by the Purchaser with respect to the
Company's Contracts or that are necessary to obtain fulfillment of the
conditions set forth in Article VII hereof.
6.3 No Solicitation of Transaction. The Company shall not, and shall use
its best efforts to cause its Representatives not to, directly or indirectly,
take any of the following actions with any Person other than the Purchaser
without the prior written consent of the Purchaser: (A) solicit, initiate,
facilitate or encourage, or furnish information with respect to the Company, in
connection with, any inquiry, proposal or offer with respect to any merger,
consolidation or other business combination involving the Company or the
acquisition of all or a substantial portion of the assets of, or any securities
of, the Company (an "Alternative Transaction"); (B) negotiate, discuss, explore
or otherwise communicate or cooperate in any way with any third party with
respect to any Alternative Transaction; or (C) enter into any agreement,
arrangement or understanding with respect to an Alternative Transaction or
requiring the Company to abandon, terminate or refrain from consummating a
transaction with the Purchaser.
ARTICLE VII
CONDITIONS PRECENT TO THE OBLIGATIONS OF THE PURCHASER
The obligations of the Purchaser to effect the Closing hereunder are
subject to the satisfaction, at or prior to the Closing, of all of the following
conditions:
7.1 Representations and Warranties True. The representations and warranties
contained in Article IV hereof, in the Schedules to this Agreement, and in all
certificates delivered by the Company and Subsidiary to the Purchaser pursuant
hereto or in connection with the transactions contemplated hereby shall be true
and accurate as of the date when made and shall be deemed to be made again at
and as of the Closing Date and shall then be true and accurate (except for
changes contemplated by this Agreement and except for representations and
warranties that by their terms speak as of the date of this Agreement or some
other date which shall be true and correct only as of such date).
7.2 Performance of Covenants. The Company and Subsidiary shall have
performed and complied with each and every covenant, agreement and condition
required by this Agreement to be performed or complied with by them prior to or
on the Closing Date.
7.3 No Governmental Proceeding. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) that is in effect and prohibits the
consummation of the transactions contemplated by this Agreement.
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7.4 Certificates. The Company and Subsidiary shall have furnished the
Purchaser with such certificates to evidence compliance with the conditions set
forth in this Article VII as may be reasonably requested by Purchaser.
7.5 Consents. The Company and Subsidiary shall have obtained all consents
which, the failure to so obtain would have a Material Adverse Effect on the
Condition of the Company.
7.6 Rescission Agreement. The Purchaser and Welltek Incorporated shall have
entered into and effectuated the terms of that certain Rescission Agreement,
pursuant to which all transactions between the parties and their Affiliates were
rescinded, including, but not limited to, the merger transaction that closed on
or about August 29, 2008.
7.8 No Material Adverse Effect. There shall have been, between the date of
this Agreement and the Closing Date, no Material Adverse Effect on the Company.
7.9 Delivery of Good Standing Certificates and Corporate Resolutions. The
Purchaser shall have received certificates of good standing with respect to the
Company and Subsidiary issued by the jurisdiction of its incorporation. The
Purchaser shall have received copies of the resolutions of the Company and
Subsidiary approving this Agreement, the Merger and the transactions
contemplated herein, certified by an appropriate officer.
7.10 Director and Officer Resignations. Effective as of the Effective Time,
each of the Company's and Subsidiary's directors and officers shall have
resigned.
7.11 Due Diligence. The Purchaser shall, in its sole discretion, have
completed and be satisfied with its business, accounting, and legal due
diligence review of the Company.
7.12 Name Change and Forward Split. The Company shall have filed all
paperwork with the State of Florida and FINRA to effectuate, and shall have
effectuated, the changing of the Company's name to Welltek Incorporated (or a
derivative thereof approved by Purchaser) and the Forward Split of the Company
Common Stock.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE COMPANY AND SUBSIDIARY
The obligations of the Company and Subsidiary to effect the Closing
hereunder are subject to the satisfaction, at or prior to the Closing, of all of
the following conditions:
8.1 Representations and Warranties True. The representations and warranties
contained in Article V hereof and in all certificates delivered by the Purchaser
to the Company pursuant hereto or in connection with the transactions
contemplated hereby shall be true and accurate as of the date when made and
shall be deemed to be made again at and as of the Closing Date and shall then be
true and accurate (except for changes contemplated by this Agreement and except
for representations and warranties that by their terms speak as of the date of
this Agreement or such other date which shall be true and accurate only as of
such date).
8.2 Performance of Covenants. The Purchaser shall have performed and
complied with each and every covenant, agreement and condition required by this
Agreement to be performed or complied with by Purchaser prior to or on the
Closing Date.
8.3 No Governmental Proceeding. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered into
any statute, rule, regulation, judgment, decree, injunction or other order
(whether temporary, preliminary or permanent) that is in effect and prohibits
the consummation of the transactions contemplated by this Agreement.
8.4 Certificates. The Purchaser shall have furnished the Company with such
certificates to evidence compliance with the conditions set forth in this
Article VIII as may be reasonably requested by the Company.
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date:
(a) by mutual consent of the Purchaser and the Company;
(b) by either the Purchaser or the Company if the Closing has not
occurred prior to September 30, 2009, provided that the right to terminate this
Agreement under this Section 9.1(b) shall not be available to either party whose
material misrepresentations, breach of warranty or failure to fulfill any
obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date;
(c) by either the Purchaser or the Company if there has been a
material misrepresentation or material breach on the part of the other party in
the representations, warranties or covenants set forth in this Agreement which
is not cured within ten Business Days after such other party has been notified
in writing of the intent to terminate this Agreement pursuant to this clause
(c);
(d) by either the Purchaser or the Company, if any permanent
injunction or action by any court or other Governmental Authority of competent
jurisdiction enjoining, denying Approval of or otherwise prohibiting
consummation of any of the transactions contemplated by this Agreement shall
become final and nonappealable;
9.2 Effect of Termination. In the event of termination of this Agreement as
expressly permitted under Section 9.1 hereof, this Agreement shall forthwith
become void (except for Section 2.1, Section 9.2, Article X, Section 11.3 and
Section 12.2) and there shall be no Action on the part of the Company, the
Company's stockholders, the Purchaser or their respective officers, directors or
affiliates; provided, that, if such termination shall result from a material
misrepresentation by a party or the willful breach by a party of the covenants
of such party contained in this Agreement, such party shall be fully liable for
any and all Damages sustained or incurred as a result of such breach.
9.3 Amendment. This Agreement may not be amended, except by an instrument
in writing signed on behalf of each of the parties hereto.
9.4 Extension; Waiver. At any time prior to the Closing, the parties hereto
may (i) extend the time for the performance of any of the obligations or other
acts of any other party hereto, (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid if set forth in writing in an instrument
signed by or on behalf of such party. The waiver by any party hereto of a breach
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
ARTICLE X
INDEMNITY
10.1 Indemnification. Each of the Company, the Subsidiary, and the
Stockholder, jointly and severally, covenants and agrees to indemnify, defend,
protect and hold harmless the Purchaser and its officers, directors, members,
managers, employees, stockholders, assigns, successors and Affiliates
(individually, a "Buyer Party" and collectively "Buyer Parties") from, against
and in respect of all Damages, Actions, and interest (including interest from
the date of such Damages) suffered, sustained, incurred or paid by any Buyer
Party, in any Action (x) between a Buyer Party and the Company, the Subsidiary,
or any Major Stockholder or (y) between a Buyer Party and a third party, in
connection with, resulting from or arising out of, directly or indirectly: (i)
the inaccuracy of any representation or the breach of any warranty set forth in
this Agreement or certificates delivered on the part of the Company or
Subsidiary in connection with the Closing; (ii) the nonfulfillment of any
covenant or agreement on the part of the Company, the Subsidiary or any Major
Stockholder set forth in this Agreement or in any agreement or certificate
executed and delivered by the Company, the Subsidiary or any Major Stockholder
pursuant to this Agreement or in the transactions contemplated hereby; (iii)
claims (whether based on contract, tort, fiduciary or any other theory) of any
14
actual or purported, beneficial or record, current or past, holder of the
Company's or Subsidiary's debt or equity securities (or any interest or right
therein) in connection with, resulting from or arising out of, directly or
indirectly, such debt or equity securities (or any interest or right therein)
that is based on any action taken at or prior to the Effective Time.
10.2 Notice of Claims. An Indemnified Party shall notify the Indemnifying
Party within a reasonable period of time after becoming aware of any Damages
which the Indemnified Party shall have determined has given or could give rise
to a claim for indemnification under Section 10.1 hereof. Such notice shall
include an estimate of the Damages that the Indemnified Party has determined may
be incurred. As soon as practicable after the date of such notice, the
Indemnified Party shall provide to the Indemnifying Party all information and
documentation necessary to support and verify the Damages so claimed and the
Indemnifying Party and its agents shall be given access to all books and records
in the possession or control of the Indemnified Party which the Indemnifying
Party reasonably determines to be related to such claim. If the Indemnifying
Party notifies the Indemnified Party that it does not dispute the claim or the
estimated amount of Damages described in such notice, or fails to notify the
Indemnified Party within 30 days after delivery of such notice by the
Indemnified Party whether the Indemnifying Party disputes the claim or the
estimated amount of Damages described in such notice, the estimated Damages in
the amount specified in the Indemnified Party's notice will be conclusively
deemed a liability of the Indemnifying Party and the Indemnifying Party shall
pay the amount of such Damages to the Indemnified Party.
10.3 Matters Involving Third Parties.
(a) If any third party shall commence an Action against any
Indemnified Party with respect to any matter (a "Third Party Claim") which may
give rise to a claim for indemnification under Section 10.1, the Indemnified
Party shall notify the Indemnifying Party in writing as soon as practicable.
(b) The Indemnifying Party shall have the right to defend the
Indemnified Party against the Third Party Claim with counsel of its choice and
reasonably acceptable to the Indemnified Party so long as (i) the Indemnifying
Party shall notify the Indemnified Party in writing (within 30 days after its
receipt of notice, in accordance with Section 12.5, of the Third Party Claim as
provided in Section 10.2 or, if the Indemnifying Party has disputed the claim
for indemnification, then within ten days of a final determination that such
claim is a valid claim under Section 10.1) that the Indemnified Party will be
entitled to indemnification under Section 10.1 hereof from and against any
Damages the Indemnified Party may suffer arising out of the Third Party Claim
and (ii) the Indemnifying Party diligently conducts the defense of the Third
Party Claim. It is agreed that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party of a claim (including any Third Party Claim)
will relieve the Indemnifying Party thereby unless said Indemnifying Party is
prejudiced by such failure to give notice.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 10.3(b) above, (i) the Indemnified
Party may retain separate co-counsel, at its sole cost and expense, and
participate in the defense of the Third Party Claim, (ii) the Indemnified Party
shall not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or delayed,
(iii) the Indemnified Party shall cooperate within reason with the Indemnifying
Party's defense of such Third Party Claim and (iv) the Indemnifying Party shall
not consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of the
Indemnified Party, which consent shall not be unreasonably withheld or delayed.
ARTICLE XI
OTHER AGREEMENTS
The parties hereto agree that:
11.1 Best Efforts. The Company, the Subsidiary and the Purchaser shall each
cooperate with the others and use (and shall cause their respective Subsidiaries
to use) their respective commercially reasonable best efforts to promptly (i)
take or cause to be taken all necessary actions, and do or cause to be done all
things, necessary, proper or advisable under this Agreement and applicable laws
to consummate and make effective the Merger and the other transactions
15
contemplated by this Agreement as soon as practicable, including, without
limitation, preparing and filing promptly and fully all documentation to effect
all necessary filings, notices, petitions, statements, registrations,
submissions of information, applications and other documents and (ii) obtain all
Approvals required to be obtained from any third party necessary, proper or
advisable to consummate the Merger and other transactions contemplated by this
Agreement.
11.2 Public Announcements. At the proper time, as determined by the parties
hereto in good faith consultation with each other, the Company shall issue a
press release or make a public statement concerning this Agreement and the
related transactions containing disclosure which is mutually agreeable to the
parties; provided, that prior to the issuance of a press release, none of the
parties hereto shall make any announcement of such transaction or disclose the
existence of and/or particulars of any negotiations related thereto, including,
but not limited to, the terms, conditions, consideration to be paid or other
facts related to this Agreement and the related transactions.
11.3 Expenses. The Purchaser, the Subsidiary, and the Company shall each
bear their own expenses (including those of counsel, accountants and investment
bankers) incurred by any of them in connection with this Agreement and the
transactions contemplated herein.
ARTICLE XII
MISCELLANEOUS
12.1 Entire Agreement. This Agreement (including the documents and
instruments referred to herein) embody the entire agreement and understanding of
the parties with respect to the transactions contemplated hereby and supercede
all other prior commitments, arrangements or understandings, both oral and
written, between the parties with respect thereto. There are no agreements,
covenants, representations or warranties with respect to the transactions
contemplated hereby other than those expressly set forth herein.
12.2 Governing Law; Jurisdiction; Venue. This Agreement is made in the
State of Florida and the validity of this Agreement, the construction,
interpretation, and enforcement thereof, and the rights of the parties thereto
shall be determined under, governed by, and construed in accordance with the
internal laws of the State of Florida, without regard to principles of conflicts
of law. The parties further: (i) agree that any legal suit, action or proceeding
arising out of or relating to this Agreement shall be instituted exclusively in
a Federal or State court of competent jurisdiction within Broward County,
Florida, (ii) waive any objection that they may have now or hereafter to the
venue of any such suit, action or proceeding, and (iii) irrevocably consent to
the in personam jurisdiction of any Federal or State court of competent
jurisdiction within Broward County, Florida in any such suit, action or
proceeding. The parties each further agree to accept and acknowledge service of
any and all process which may be served in any such suit, action or proceeding
in a Federal or State court of competent jurisdiction within Broward County,
Florida, and that service of process upon the parties mailed by certified mail
to their respective addresses shall be deemed in every respect effective service
of process upon the parties, in any such action or proceeding.
12.3 Headings and Exhibits. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof. Schedules and documents referred to
in this Agreement are an integral part of this Agreement.
12.4 Survival of Representations, Warranties and Covenants. All
representations and warranties made by any party in or pursuant to this
Agreement or in any document delivered pursuant hereto shall survive for two
years after the Closing; provided, however, that in the event of fraud by any
party, the representations and warranties of the party shall survive the Closing
for an indefinite period of time. Notwithstanding the foregoing, if a claim
notice is sent pursuant to Section 10.2, the representation or warranty with
respect to which such claim notice is sent, and the related indemnification
obligations set forth in Article X with respect to the claim notice, shall
survive until the resolution of the claim for Damages to which such claim notice
relates, or such longer period as provided in the preceding sentence. All
covenants made by any party pursuant to this Agreement shall survive the Closing
pursuant to their terms.
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12.5 Notices. Any notices or other communications required or permitted
hereunder shall be in writing and personally delivered at the addresses
designated below, by facsimile transmission to the respective facsimile numbers
designated below (with electronic confirmation of delivery), or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows, or to such other address or addresses as may hereafter be
furnished by one party to the other party in compliance with the terms hereof:
If to the Purchaser or the Surviving Corporation:
Welltek Incorporated
0000 X. Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy (which shall not constitute notice) to:
Xxxxxxx & Xxxxxxx
X.X. Xxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esquire
Facsimile No.: (000) 000-0000
If to the Company or the Subsidiary:
c/o Pharmacity Corporation
____________________________
____________________________
Attention: Xxxxx Xxxxxxxx
Facsimile No.: _______________
or to such other address as the Person to whom notice is to be given may have
specified in a notice duly given to the sender as provided herein. Such notice,
request, claim, demand, waiver, consent, approval, or other communication shall
be deemed to have been given as of the date personally delivered or telefaxed,
five Business Days after deposit with the U.S. Postal Service if mailed, and, if
given by any other means, shall be deemed given only when actually received by
the addressees.
12.6 Counterparts. This Agreement may be executed in any number of
counterparts (which may be by facsimile) each of which, when executed, shall be
deemed to be an original and all of which together shall be deemed to be one and
the same instrument.
12.7 Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such a
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the fullest extent
possible.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
MedX Systems, Inc.
Signature: /s/ Xxxx Xxxxxxx
------------------------------
Print Name: Xxxx Xxxxxxx
Title: Chief Financial Officer
Pharmacity Corporation
Signature: /s/ Xxxxx Xxxxxxxx
------------------------------
Print Name: Xxxxx Xxxxxxxx
Title: President
WI Acquisition, Inc.
Signature: /s/ Xxxxx Xxxxxxxx
------------------------------
Print Name: Xxxxx Xxxxxxxx
Title: President
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
18
EXHIBIT A
ESCROW AGREEMENT
