SHARE EXCHANGE AGREEMENT
SHARE
EXCHANGE AGREEMENT (the “Agreement”), dated June 9, 2008, by and amongst
| 1. |
SFH
I Acquisition Corp., a Delaware corporation, incorporated under the
laws
of U.S. and having its registered office at 0000 XX 000xx
Xxxxxx Xxxxx 000, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000, with authorized
capital of 100 million shares of which 10,793,650 shares are issued
and
outstanding (hereinafter referred to as “Buyer”, which expression shall
include its successors and permitted assigns).
|
|
2.
|
|
a.
|
Xxxxxx
Xxxxx Xxxxx, son of Sh.
Uday Xxxxxx Xxxxx
residing at X-0000 Xxxxxxxxxxx Xxxx, Xxx
Xxxxx-000000
|
|
b.
|
Xxxx
Xxxxx Xxxxx, son of Sh.
Uday Xxxxxx Xxxxx,
residing at X-0000 Xxxxxxxxxxx Xxxx, Xxx
Xxxxx-000000
|
|
x.
|
Xxxx
Xxxxxx Xxxxx, son of Sh.
Uday Xxxxxx Xxxxx,
residing at X-0000 Xxxxxxxxxxx Xxxx, Xxx
Xxxxx-000000
|
(hereinafter
collectively referred to as “Sellers”, which expression shall include its
successors, legal heirs, and nominees)
|
3.
|
Protech
Biosystems Pvt. Ltd. an entity organized under the laws of India
(“Company”), having its registered office at X-0000, Xxxxxxxxxxxx Xxxx,
Xxx Xxxxx, Xxxxx 000000.
|
WITNESSETH:
WHEREAS,
Company
is carrying on the business of
manufacturing and exporting Pharmaceuticals, Healthcare, cosmetics etc. The
Authorised Share Capital of the Company is Rs. 50,000,000/-, divided into
5,000,000 shares of Rs. 10 each. The issued, subscribed and paidup Capital
of
the Company is Rs. 600,324, divided into 60,324 shares of Rs. 10
each
WHEREAS, Sellers
own one hundred percent (100%) of the issued and paidup shares of the Company
(the “Purchase Shares”); and
WHEREAS,
Buyer
is
engaged in the business of seeking the acquisition of, or merger with, one
or
more existing operating companies desirous of being a publicly held corporation,
and is registered with the U.S. Securities and Exchange Commission under Section
12(g) of the Securities Exchange Act of 1934, and has had limited operations
to
date; and
WHEREAS,,
Buyer
has
an authorized share capital of 100 million shares $0.001 per share of which
10,793,650 shares are issued and outstanding as of the date of this agreement;
WHEREAS, Buyer
desires to acquire from Sellers one hundred percent (100%) of the Purchase
Shares in the Company solely in exchange for six million one hundred thousand
(6.1 million) shares of the Buyer’s common stock at the of the Closing (the
“Consideration Shares”); and
WHEREAS, Sellers
desire to sell to Buyer the Purchase Shares, representing a 100% share in
Company, solely in exchange for the Consideration Shares; and
1
of 45
WHEREAS, Prior
to
the date hereof, the respective boards of directors or analogous governing
body
of each of Buyer and the Company have determined that it is desirable to effect
this share exchange and have approved and adopted this Agreement.
NOW
THEREFORE, in consideration of the mutual covenants and agreements herein,
and
other good and valuable consideration, the adequacy, sufficiency and receipt
of
which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
AND USAGE
SECTION
1.1 DEFINITIONS.
Certain
capitalized terms used in this Agreement are defined in Exhibit
1.1
attached
hereto.
SECTION
1.2 USAGE.
(a) Interpretation.
In this
Agreement, unless a clear contrary intention appears: (i) the singular number
includes the plural number and vice versa; (ii) reference to any Person includes
such Person's successors and assigns, if applicable, unless prohibited by this
Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or in such Person’s individual capacity; (iii)
reference to any gender includes each other gender; (iv) reference to any
agreement, document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof; (v) reference to any Legal Requirement means such Legal
Requirement as amended, modified, codified, replaced or reenacted, in whole
or
in part, and in effect from time to time, including rules and regulations
promulgated thereunder, and reference to any section or other provision of
any
Legal Requirement means that provision of such Legal Requirement from time
to
time in effect and constituting the substantive amendment, modification,
codification, replacement or reenactment of such section or other provision;
(vi) "hereunder," "hereof," "hereto," and words of similar import shall be
deemed references to this Agreement as a whole and not to any particular
Article, Section or other provision hereof; (vii) "including" (and with
correlative meaning "include") means including without limiting the generality
of any description preceding such term; (viii) "or" is used in the inclusive
sense of "and/or"; (ix) with respect to the determination of any period of
time,
"from" means "from and including" and "to" means "to but excluding"; and (x)
references to documents, instruments or agreements shall be deemed to refer
as
well to all addenda, exhibits, schedules or amendments thereto.
(b) Accounting
Terms and Determinations.
Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted and all accounting determinations hereunder shall be made in
accordance with United States GAAP.
(c) Legal
Representation of the Parties.
The
parties agree that each party was either represented by its own separate and
independent counsel or had an opportunity to be so represented in connection
with this Agreement. This Agreement was negotiated by the parties with the
benefit of legal representation, and any rule of construction or interpretation
otherwise requiring this Agreement to be construed or interpreted against any
party shall not apply to any construction or interpretation hereof.
2
of 45
ARTICLE
II.
EXCHANGE
OF SHARES; CONSIDERATION; CLOSING
SECTION
2.1 THE EXCHANGE.
Upon the
terms and subject to the conditions of this Agreement, at the
Closing:
(a) Sellers
shall sell, transfer, convey and assign to Buyer, and Buyer shall purchase
from
Seller, the Purchase Shares, representing a 100% share in Company, and any
and
all rights in the Purchase Shares to which Seller is entitled, and by doing
so
Seller shall be deemed to have assigned all of its rights, title and interest
in
and to the Purchase Shares to Buyer. Attached hereto and marked Exhibit
A
is the
list of shareholders in the Company together with the number of shares of common
stock each is to receive.
(b) In
consideration thereof, Buyer shall issue to Seller the “Consideration Shares”,
consisting of 6.1 million shares of common stock, having a face value of $..039
per share, which after issuance will amount to approximately, 36.1% of the
issued and outstanding capital stock of Buyer. The Consideration Shares to
be
issued to each of the shareholders in such proportions as set forth in Exhibit
A.
Notwithstanding
the foregoing, nothing contained herein shall prohibit the Buyer from selling
additional shares of its common stock pending closing provided however, that
prior to the closing, Buyer shall so advise Seller as to the number of
additional shares issued and the consideration received.
SECTION
2.2 CLOSING.
The
closing of the purchase and sale transaction provided for in this Agreement
(the
"Closing") will take place at such location mutually agreed to by Company,
Seller, and Buyer, as soon as practicable after the fulfillment of the
conditions to Closing set forth in Articles
VII
and
VIII
but in no event later than July 31, 2008 unless extended by the mutual consent
of the parties.
SECTION
2.3 CLOSING OBLIGATIONS.
In
addition to any other documents to be delivered under any other provisions
of
this Agreement, at the Closing:
(a) Seller
or
Company, as the case may be, shall deliver to Buyer:
(i) All
documents and instruments of transfer necessary for transfer of the Purchase
Shares to Buyer, including the Transfer Deeds, Members Register and Governing
Documents of the Company duly amended and registered to reflect Buyer as new
owner of the Purchase Shares, in form and substance reasonably satisfactory
to
Buyer;
(ii) The
minute books, and seals of Company;
(iii)
Any
information from Company or Seller required to be filed pursuant to the Exchange
Act with the SEC by Buyer in connection with the Closing;
(iv)
certificates
executed by Seller and Company representing and warranting to Buyer that each
of
Seller’s and Company’s representations and warranties in this Agreement was
accurate in all respects as of the date of this Agreement and is accurate in
all
respects as of the Closing Date as if made on the Closing Date (giving full
effect to any additional documentation or information required to be delivered
by Company or Seller to Buyer after the date hereof and any supplements
delivered to Buyer prior to the Closing Date in accordance with Section
5.6);
3
of 45
(v)
An
opinion from Seller’s legal counsel that is satisfactory to Buyer;
(vi) such
documents and instruments of transfer necessary for completion of the transfer
and registration of all rights, title and interest in the Real Property to
the
Company on, and effective as of, the Closing, as described in Section
3.7;
(vii)
Audited financial statements in accordance with U.S. Generally Accepted
Accounting Principles and prepared by an audit firm that is a member in good
standing of the PCAOB.
(viii)
Such
other documents or certificates and other instruments of transfer and conveyance
as may be requested by Buyer, each in form and substance satisfactory to Buyer
and its legal counsel and executed by Seller, if necessary.
(ix) Subject
to paragraph 2(b) below, the officers and directors of the Company will tender
their resignation at Closing.
(x) Approval
from the regulatory authorities including but not limited to FIPB approval
and
RBI approval
|
(b)
|
On
the Closing Date, the following resolutions should be passed by the
Board
of Directors of the Company
|
|
a.
|
Persons
nominated by Buyer shall be appointed as officers and directors of
the
Company.
|
|
b.
|
Resignations
of Nominees of Seller shall be accepted by the Buyer’s Board in their
discretion.
|
|
c.
|
Transfer
of Purchase shares from Sellers to Buyer shall be approved and filing
of
necessary documents with Registrar of Companies (ROC) and rectification
of
Register of members of the Company to reflect the change in ownership
shall be authorized by the Board.
|
(c) Buyer
shall deliver to Seller a certificate executed by Buyer as to the accuracy
of
its representations and warranties as of the date of this Agreement and as
of
the Closing and as to its compliance with and performance of its covenants
and
obligations to be performed or complied with at or before the Closing.
(d) On
the
Closing Date, Buyer shall issue to Seller the “Consideration Shares”, consisting
of 6.1 million shares of common stock, the stock certificates evidencing the
Consideration Shares. Would be delivered to the Buyer within 5 days from closing
date.
4
of 45
ARTICLE
III.
REPRESENTATIONS
AND WARRANTIES OF SELLERS AND COMPANY
Company
and Sellers, jointly and severally, represent and warrant to Buyer, as of the
date hereof and as of the Closing Date, as follows:
SECTION
3.1 ORGANIZATION AND GOOD STANDING.
(a) Company
is a limited liability company duly organized, validly existing and in good
standing under the laws of India, with full corporate power and authority to
conduct its business as it is now being conducted, to own or use the properties
and assets that it purports to own or use, and to perform all its obligations
under all Company Contracts
(b) On
or
before the Compliance Date, Company shall deliver to Buyer complete and accurate
copies of the Governing Documents of Company.
SECTION
3.2 ENFORCEABILITY; AUTHORITY; NO CONFLICT.
(a) This
Agreement constitutes the legal, valid and binding obligation of Seller and
of
Company, enforceable against each of them in accordance with its terms. Upon
the
execution and delivery by Seller and Company of this Agreement and each other
document to be executed or delivered by Seller at the Closing (collectively,
“Seller’s Closing Documents”), Seller’s Closing Documents will constitute the
legal, valid and binding obligation of Seller and of Company, enforceable
against each of them in accordance with its terms. Each of Seller and of Company
has the absolute and unrestricted right, power and authority to execute and
deliver this Agreement and Seller’s Closing Documents to which it is a party and
to perform its obligations under this Agreement and Seller’s Closing Documents,
and such action has been duly authorized by all necessary action of Seller
and
Company. Each of Seller and Company has all necessary legal capacity to
enter into and deliver this Agreement and Seller’s Closing Documents to which it
is a party and to perform such its obligations hereunder and thereunder.
(b) Neither
the execution and delivery of this Agreement nor the consummation or performance
of any of the Contemplated Transactions will, directly or indirectly (with
or
without notice or lapse of time):
(i) breach
(A) any provision of any of the Governing Documents of or (B) any resolution
adopted by the board of directors or analogous governing body or shareholders
of
Company.
(ii) breach
or
give any Governmental Body or other Person the right to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any relief under
any Legal Requirement or Order to which Company or Seller, or any Assets of
Company , may be subject;
(iii) contravene,
conflict with or result in a violation or breach of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Governmental Authorization that is
held by Company or that otherwise relates to the Assets of Company or to the
business of Company;
(iv) breach
any provision of, or give any Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or performance of, or payment
under, or to cancel, terminate or modify, any Company Contract; or
5
of 45
(v) Result
in
the imposition or creation of any Encumbrance upon or with respect to any of
Assets of Company.
(c) Neither
Company nor Sellers are required to give any notice to or obtain any Consent
from any Person in connection with the execution and delivery of this Agreement
or any of the Seller’s Closing Documents or the consummation or performance of
any of the Contemplated Transactions.
SECTION
3.3 CAPITALIZATION.
(a) Sellers
are and will be on the Closing Date the registered and beneficial owner of
all
of the Purchase Shares, free and clear of all Encumbrances. The Purchase Shares
constitute one hundred percent (100%) of the capital of, and one hundred percent
(100%) of all rights, title and interest in, Company. The Purchase Shares have
been duly authorized and validly issued and registered in compliance with all
pertinent Legal Requirements and are fully paid and non-assessable.
(b) There
are
no Contracts relating to the issuance, sale or transfer of any shares of or
interests in Company, including but not limited to, any of the following:
options, warrants, agreements, or other rights relating to the acquisition
of
shares in Company or of Company’s capital; securities or other obligations of
Company convertible into shares in Company or Company's capital; or sale
agreements, shareholder agreements, pledges, proxies, voting trusts, powers
of
attorney, restrictions on transfer or other agreements or instruments binding
up
on Seller (exclusive of any agreement to which Buyer is a party) and that relate
to the ownership, voting or transfer of any shares of Company.
(c) Upon
the
consummation of the transactions contemplated by this Agreement and the
registration of the Purchase Shares being transferred by Seller to the name
of
Buyer, Buyer will own all of the Purchase Shares, which shall include, without
limitation, the entirety of Seller’s capital and profits interest in Company,
the Assets of Company, Seller’s distribution and liquidation rights in the
Company, and Seller’s voting and management rights and powers in the Company,
free and clear of any and all Encumbrances.
SECTION
3.4 FINANCIAL STATEMENTS.
The
Financial Statements to be delivered by Company to Buyer pursuant to
Section
5.1
present
fairly the financial condition of Company as of the respective dates thereof
and
the results of their operations and cash flows for the periods indicated. The
Financial Statements have been prepared by a member of a Public Company
Accounting Oversight Board (“PCAOB”) approved accounting firm in accordance with
GAAP.
SECTION
3.5 BOOKS AND RECORDS.
The
books of account and other financial and other Records of Company all of which
shall be made available to Buyer on or before the Compliance Date, are complete
and correct, represent actual, bona fide transactions, and have been maintained
in accordance with sound business practices. The minute books of Company all
of
which shall be made available to Buyer on or before the Compliance Date, contain
accurate and complete Records of (a) all shareholder meetings held and all
shareholder action taken, and (b) all meetings of Company’s board of directors
or other analogous bodies and committees thereof, and no meeting of any such
shareholders, board of directors or other analogous bodies or committees has
been held for which minutes have not been prepared or are not contained in
such
minute books.
6
of 45
SECTION
3.6 TANGIBLE PERSONAL PROPERTY; SUFFICIENCY OF ASSETS.
(a) On
or
before the Closing Date, Company shall provide Buyer with a complete and
accurate schedule describing, and specifying the location of, all Tangible
Personal Property of Company. Company owns good and marketable title to all
of
its Tangible Personal Property, free and clear of any Encumbrances, and none
of
its Tangible Personal Property is held under any lease, security agreement,
conditional sales contract, license, or other title retention or security
arrangement, or is located other than in the possession of Company.
(b)
The
Assets of Company (i) constitute all of the assets, tangible and intangible,
of
any nature whatsoever, necessary to operate Company's business in the manner
presently operated by Company and (ii) include all of the operating assets
of
Company.
SECTION
3.7 REAL PROPERTY.
(a) Prior
to
the date hereof, Company has provided Buyer with a schedule of all Real Property
in which Company has a leasehold interest or uses in connection with the
business of Company. which consist of the premises where the principal offices
of Company is located and three additional locations, and an accurate
description of all Real Property Leases. Company shall update this list as
necessary prior to Closing and provide Buyer with a complete list of real
property dated as of the Closing Date.
(b) The
Company presently has no ownership interest in any Real Property except as
set
forth in Exhibit 3.7(B). Notwithstanding the foregoing, on or before the
Closing, and as a condition precedent to the Closing, Company and Seller will
cause the transfer of all rights, title and interest in the Real Property from
the owners thereof to Company, without any additional consideration payable
therefore by Buyer.
SECTION
3.8 TITLE TO THE REAL PROPERTY.
Upon
transfer of the Real Property from the owners thereof to Company as provided
in
Section
3.7(b),
Buyer
will own good and marketable title to the Real Property, free and clear of
any
Encumbrances, other than liens for Taxes for the current tax year which are
not
yet due and payable ("Real Property Encumbrances"). On or before the Closing,
true and complete copies of (A) all deeds, existing title insurance policies
and
surveys of or pertaining to the Real Property and (B) all instruments,
agreements and other documents evidencing, creating or constituting any Real
Property Encumbrances shall be delivered to Buyer.
SECTION
3.9 CONDITION OF FACILITIES.
(a) Use
of
the Real Property by Company for the various purposes for which they are
presently being used are permitted as of right under all applicable zoning
requirements and are not subject to "permitted nonconforming" use or structure
classifications. All Improvements are in compliance with all applicable Legal
Requirements, including those pertaining to zoning, building and the disabled,
are in good repair and in good condition, ordinary wear and tear excepted,
and
are free from latent and patent defects. No part of any Improvement encroaches
on any real property not included in the definition of Real Property as it
pertains to Company , and there are no buildings, structures, fixtures or other
Improvements primarily situated on adjoining real property that encroach up
on
any part of the Land. The Land for each owned Facility abuts on and has direct
vehicular access to a public road or has access to a public road via a
permanent, irrevocable, appurtenant easement benefiting such Land and comprising
a part of the Real Property, is supplied with public or quasi-public utilities
and other services appropriate for the operation of the Facilities located
thereon and is not located within any flood plain or area subject to wetlands
regulation or any similar restriction. There is no existing or proposed plan
to
modify or realign any street or highway or any existing or proposed eminent
domain proceeding that would result in the taking of all or any part of any
Facility or that would prevent or hinder the continued use of any Facility
as
heretofore used in the conduct of the business of Company.
7
of 45
(b) Each
item
of Tangible Personal Property of Company is in good repair and good operating
condition, ordinary wear and tear excepted, is suitable for immediate use in
the
Ordinary Course of Business and is free from latent and patent defects. No
item
of Tangible Personal Property of Company is in need of repair or replacement
other than as part of routine maintenance in the Ordinary Course of Business.
All Tangible Personal Property used in Company's business is in the possession
of Company.
SECTION
3.10 ACCOUNTS RECEIVABLE.
All
Accounts Receivable of Company that are reflected in the most recent balance
sheet of the Financial Statements (the “Last Balance Sheet”) or in the
accounting Records of Company as of the Closing Date represent or will represent
valid obligations arising from sales actually made or services actually
performed by Company in the Ordinary Course of Business. Except to the extent
paid prior to the Closing Date, such Accounts Receivable are or will be as
of
the Closing Date current and collectible net of the respective reserves shown
on
the Last Balance Sheet (which reserves are adequate and calculated consistent
with past practice). Subject to such reserves, each of such Accounts Receivable
either has been or will be collected in full, without any setoff, within ninety
(90) days after the day on which it first becomes due and payable. There is
no
contest, claim, defense or right of setoff, other than returns in the Ordinary
Course of Business of Company, under any Contract with any account debtor of
an
Account Receivable relating to the amount or validity of such Account
Receivable.
SECTION
3.11 INVENTORIES.
All
items included in the Inventories of Company consist of a quality and quantity
usable and, with respect to finished goods, saleable, in the Ordinary Course
of
Business of Company. Company is not in possession of any inventory not owned
by
it, including goods already sold, and no items included in the Inventories
have
been pledged as collateral or are held on consignment from others. Inventories
now on hand that were purchased after the date of the Last Balance Sheet were
purchased in the Ordinary Course of Business of Company at a cost not exceeding
market prices prevailing at the time of purchase. The quantities of each item
falling within the definition of Inventories (whether raw materials,
work-in-process or finished goods) are not excessive but are reasonable in
the
present circumstances of Company. Work-in-process Inventories are now valued,
and will be valued on the Closing Date, according to GAAP.
SECTION
3.12 NO UNDISCLOSED LIABILITIES.
Neither
Company has any Liabilities except for Liabilities reflected or reserved against
in the Financial Statements, and current Liabilities incurred in the Ordinary
Course of Business of Company since the date of the Last Balance Sheet, which
will not, individually or in the aggregate, have a material adverse effect
on
Company.
8
of 45
SECTION
3.13 TAXES.
(a) Tax
Returns Filed and Taxes Paid.
Company
has filed or caused to be filed on a timely basis all Tax Returns and all
reports with respect to Taxes that are or were required to be filed pursuant
to
all applicable Legal Requirements. All Tax Returns and reports filed by Company
are true, correct and complete. Company has paid, or made provision for the
payment of, all Taxes that have or may have become due for all periods covered
by the Tax Returns or otherwise, or pursuant to any assessment received by
Company, except such Taxes, if any, as are listed in a schedule provided by
Company to Buyer on or before the Compliance Date and are being contested in
good faith and as to which adequate reserves (determined in accordance with
GAAP) have been provided in the Last Balance Sheet. Company currently is not
the
beneficiary of any extension of time within which to file any Tax Return. No
claim has ever been made or is expected to be made by any Governmental Body
in a
jurisdiction where Company does not file Tax Returns that it is or may be
subject to taxation in that jurisdiction. There are no Encumbrances on any
of
the Assets of Company that arose in connection with any failure (or alleged
failure) to pay any Tax, and Company has no Knowledge of any basis for assertion
of any claims attributable to Taxes which, if adversely determined, would result
in any such Encumbrance.
(b) Delivery
of Tax Returns and Information Regarding Audits and Potential
Audits.
On or
before the Compliance Date, Company shall deliver or make available to Buyer
copies of all Tax Returns of Company. On or before the Compliance Date, Company
shall deliver to Buyer a complete and accurate list of all Tax Returns of
Company that have been audited or are currently under audit and which accurately
describes any deficiencies or other amounts that were paid or are currently
being contested. To the Knowledge of Company, no undisclosed deficiencies are
expected to be asserted with respect to any such audit. All deficiencies
proposed as a result of such audits have been paid, reserved against, settled
or
are being contested in good faith by appropriate proceedings as described in
the
schedule to be provided by Company to Buyer on or before the Compliance Date.
Company will deliver, or make available to Buyer, copies of any examination
reports, statements or deficiencies or similar items with respect to such
audits. Company has no Knowledge that any Governmental Body is likely to assess
any additional Taxes for any period for which Tax Returns of Company have been
filed. There is no dispute or claim concerning any Taxes of Company either
(i)
claimed or raised by any Governmental Body in writing or (ii) as to which
Company has Knowledge. On or before the Compliance Date, Company shall provide
Buyer with a list of all Tax Returns of Company for which the applicable statute
of limitations has not run. Except as disclosed by Company to Buyer in writing
on or before the Compliance Date, Company has not given or been requested to
give waivers or extensions (or is or would be subject to a waiver or extension
given by any other Person) of any statute of limitations relating to the payment
of Taxes by Company or for which Company may be liable.
(c) Proper
Accrual.
The
charges, accruals and reserves with respect to Taxes on the Records of Company
are adequate (determined in accordance with GAAP) and are at least equal to
Company's liability for Taxes.
SECTION
3.14 NO MATERIAL ADVERSE CHANGE.
Since
the date of the Last Balance Sheet, there has not been any material adverse
change in the business, operations, prospects, Assets, results of operations
or
condition (financial or otherwise) of Company and no event has occurred or
circumstance exists that may result in such a material adverse change. Since
the
date of the Last Balance Sheet, Company has conducted its respective business
only in the Ordinary Course of Business and there has not been any:
(a) change
in
Company's ’s authorized or issued share capital, grant of any option or right to
purchase shares of or interests in Company or issuance of any security
convertible into such shares or interests;
(b) Amendment
to the charter or foundation documents of Company or any other Governing
Documents of Company;
9
of 45
(c) payment
(except in the Ordinary Course of Business) or increase by of any bonuses,
salaries or other compensation to Seller, or any director, officer or employee
of Company or entry into any employment, severance or similar Contract with
any
director, officer or employee of Company;
(d) Adoption
of, amendment to, or increase in the payments to or benefits arising under,
any
Employee Plan of Company;
(e) Damage
to
or destruction or loss of any Assets of Company, whether or not covered by
insurance;
(f) entry
into, termination of or receipt of notice of termination of (i) any license,
distributorship, dealer, sales representative, joint venture, credit or similar
Contract to which Company is a party, or (ii) any Contract or transaction
involving a total remaining commitment by Company of at least
$10,000;
(g) sale
(other than sales of Inventories in the Ordinary Course of Business), lease
or
other disposition of any Asset or property of Company or any Asset or property
(including the Intellectual Property Assets) or the creation of any Encumbrance
on any Asset of Company ;
(h) Cancellation
or waiver of any claims or rights with a value to Company in excess of
$10,000;
(i) Indication
by any customer or supplier of an intention to discontinue or change the terms
of its relationship with Company;
(j) Material
change in the accounting methods used by Company; or
(k) Entry
by
Company into any Contract to do any of the foregoing.
SECTION
3.15 PERSONNEL MATTERS.
(a)
On
or
before the Compliance Date, Company will deliver to Buyer a correct and complete
list of each director, officer, employee, independent contractor, consultant
and
agent of Company whose aggregate compensation for the calendar year ended
December 31, 2007 exceeded $30,000, including but not limited to, each employee
on leave of absence or layoff status. No retired employee, director, of officer
of Company is receiving benefits or scheduled to receive benefits in the
future.
(b) The
Company is not a party to any employment, consulting or similar agreement,
written or oral, with any Person.
(c)
No
employees of Company is represented by any labor union or similar organization.
Company is not party to any collective bargaining or similar agreement
covering any of its employees. No labor union or similar organization or group
of employees has made a demand for recognition, filed a petition seeking a
representation proceeding or given Company notice of any intention to hold
an
election of a collective bargaining representative at any time during the past
three (3) years.
10
of 45
(d) Except
as
set forth on a schedule provided by Company to Seller on or before the
Compliance Date, the Company does not maintain any bonus, pension, profit
sharing, deferred compensation, incentive compensation, share ownership, share
purchase, share option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical plan, or other plan,
arrangement or understanding (whether or not legally binding) providing benefits
to any current or former employee, officer or director of Company (collectively,
“Employee Plans”). Except as set forth on a schedule provided by Company to
Seller on or before the Compliance Date there are not any severance or
termination agreements or arrangements between Company and any current or former
employee, officer of director of Company , nor does Company have any general
severance plan or policy.
(e)
Company
has complied in all respects with all Legal Requirements relating to employment
practices, terms and conditions of employment, equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective bargaining,
the payment of social security and similar Taxes and occupational safety and
health. Company is not liable for the payment of any Taxes, fines, penalties,
or
other amounts, however designated, for failure to comply with any of the
foregoing Legal Requirements.
(f) To
the
Knowledge of Seller or Company, no officer, director, agent, employee,
consultant, or contractor of Company is bound by any Contract that purports
to
limit the ability of such officer, director, agent, employee, consultant, or
contractor to engage in or continue or perform any activity, duties or practice
relating to the business of Company. No former or current employee of Company
is
a party to, or is otherwise bound by, any Contract that in any way has adversely
affected, affects, or will affect the ability of Company or Buyer to conduct
the
business as heretofore carried on by Company.
SECTION
3.16 COMPLIANCE WITH LEGAL REQUIREMENTS; GOVERNMENTAL AUTHORIZATIONS.
(a) Company
is and at all times has been, in full compliance with each Legal Requirement
that is or was applicable to it or to the conduct or operation of its business
or the ownership or use of any of its Assets. No event has occurred or
circumstance exists that (with or without notice or lapse of time) may
constitute or result in a violation by Company of, or a failure on the part
of
Company to comply with, any Legal Requirement or may give rise to any obligation
on the part of Company to undertake, or to bear all or any portion of the cost
of, any remedial action of any nature. Company has not received any notice
or
other communication (whether oral or written) from any Governmental Body or
any
other Person regarding any actual, alleged, possible or potential violation
of,
or failure to comply with, any Legal Requirement or any actual, alleged,
possible or potential obligation on the part of to undertake, or to bear all
or
any portion of the cost of, any remedial action of any nature.
(b) On
or
before the Compliance Date, Company shall provide Buyer with a schedule
containing a complete and accurate list of each Governmental Authorization
that
is held by Company or that otherwise relates to Company's business or its
Assets. Each Governmental Authorization listed or required to be listed in
said
schedule is valid and in full force and effect. Except as set forth in said
schedule:
(i) Company
is, and has been, in full compliance with all of the terms and requirements
of
each Governmental Authorization identified or required to be identified in
said
schedule;
11
of 45
(ii) no
event
has occurred or circumstance exists that may (with or without notice or lapse
of
time) (A) constitute or result directly or indirectly in a violation of or
a
failure to comply with any term or requirement of any Governmental Authorization
listed or required to be listed in said schedule or (B) result directly or
indirectly in the revocation, withdrawal, suspension, cancellation or
termination of, or any modification to, any Governmental Authorization listed
or
required to be listed in said schedule;
(iii) Company
has not received any notice or other communication (whether oral or written)
from any Governmental Body or any other Person regarding (A) any actual,
alleged, possible or potential violation of or failure to comply with any term
or requirement of any Governmental Authorization or (B) any actual, proposed,
possible or potential revocation, withdrawal, suspension, cancellation,
termination of or modification to any Governmental Authorization;
and
(iv) all
applications required to have been filed for the renewal of the Governmental
Authorizations listed or required to be listed in said schedule have been duly
filed on a timely basis with the appropriate Governmental Bodies, and all other
filings required to have been made with respect to such Governmental
Authorizations have been duly made on a timely basis with the appropriate
Governmental Bodies.
(v) The
Governmental Authorizations listed in said schedule collectively constitute
all
of the Governmental Authorizations necessary to permit Company to lawfully
conduct and operate its business in the manner in which it currently conducts
and operates such business and to permit Company to own and use its Assets
in
the manner in which it currently owns and uses such Assets.
SECTION
3.17 LEGAL PROCEEDINGS; ORDERS.
(a) There
is
no pending or threatened Proceeding: (i) by or against Company that otherwise
relates to or may affect the business of, or any of the Assets owned or used
by,
Company ; or (ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with, any of the Contemplated
Transactions. To the Knowledge of Company or Seller, no event has occurred
or
circumstance exists that is reasonably likely to give rise to or serve as a
basis for the commencement of any such Proceeding.
SECTION
3.18 CONTRACTS; NO DEFAULTS.
(a) On
or
before the Compliance Date, Company will provide Buyer with an accurate and
complete list of, and accurate and complete copies of, each Company Contract.
Said schedule will include a summary of all material terms of such Contracts,
including the parties thereto, the amount of the remaining commitment of Company
under the Contracts, and the location where the executed copies of such
Contracts are located.
(b) Except
as
set forth in said schedule, Seller has no rights and is not subject to any
obligations or liabilities under, any Contract that relates to the business
of
Company or any of the Assets of Company.
(c) Except
as
set forth in said schedule:
(i) Each
Contract identified or required to be identified in said schedule is in full
force and effect and is valid and enforceable in accordance with its
terms;
12
of 45
(ii) To
the
Knowledge of Company and Seller, no Contract identified or required to be
identified in said schedule will, upon completion or performance thereof, have
a
material adverse effect on the business, Assets or condition of Company.
(d) Except
as
set forth in said schedule:
(i) Company
is, and at all times has been, in compliance with all applicable terms and
requirements of each Contract applicable to it;
(ii) each
other Person that has or had any obligation or liability under any Company
Contract is, and at all times has been, in full compliance with all applicable
terms and requirements of such Contract;
(iii) no
event
has occurred or circumstance exists that (with or without notice or lapse of
time) may contravene, conflict with or result in a Breach of, or give Company
or
any other Person the right to declare a default or exercise any remedy under,
or
to accelerate the maturity or performance of, or payment under, or to cancel,
terminate or modify, any Company Contract;
(iv) No
event
has occurred or circumstance exists under or by virtue of any Contract that
(with or without notice or lapse of time) would trigger the creation of any
Encumbrance affecting any of the Assets of Company; and
(v) The
Company has given to or received from any other Person any notice or other
communication (whether oral or written) regarding any actual, alleged, possible
or potential violation or Breach of, or default under, any Contract;
(e) There
are
no renegotiations of, attempts to renegotiate or outstanding rights to
renegotiate any material amounts paid or payable to Company under any Contracts
with any Person having the contractual or statutory right to demand or require
such renegotiation and no such Person has made oral or written demand for such
renegotiation.
(f) Each
Contract relating to the sale, design, manufacture or provision of products
or
services by Company has been entered into in the Ordinary Course of Business
of
Company and has been entered into without the commission of any act alone or
in
concert with any other Person, or any consideration having been paid or
promised, that is or would be in violation of any Legal
Requirement.
SECTION
3.19 INSURANCE.
(a) On
or
before the Compliance Date, Company shall deliver to Buyer accurate and complete
copies of all policies of insurance (and correspondence relating to coverage
thereunder) to which Company is a party.
(b) On
or
before the Compliance Date, Company shall deliver to Buyer a schedule describing
all obligations of Company to provide insurance coverage to Third Parties (for
example, under Leases or service agreements) and identifying the policy under
which such coverage is provided.
13
of 45
(c) All
policies of insurance to which Company is a party or that provide coverage
to
Company : (i) are valid, outstanding and enforceable; (ii) are issued by an
insurer that is financially sound and reputable; (iii) taken together, provide
adequate insurance coverage for the Assets and the operations of Company for
all
risks normally insured against by a Person carrying on the same business or
businesses as Company in the same location or locations and for all risks to
which Company is normally subject; and (iv) are sufficient for compliance with
all Legal Requirements and Company Contracts Contracts;
(d) Company
has not received (i) any refusal of coverage or any notice that a defense will
be afforded with reservation of rights or (ii) any notice of cancellation or
any
other indication that any policy of insurance is no longer in full force or
effect or that the issuer of any policy of insurance is not willing or able
to
perform its obligations thereunder. Company has paid all insurance premiums
as,
and when due, and have otherwise
performed all of its obligations under each policy of insurance to which it
is a
party or that lists Company as a beneficiary. Company has given notice to all
insurers of any claims that may be submitted under said policies of
insurance.
SECTION
3.20 ENVIRONMENTAL MATTERS.
Except
as disclosed in a schedule provided by Company to Buyer on or before the
Compliance Date:
(a) Company
is and at all times have been, in full compliance with, and have not been and
are not in violation of or liable under, any Environmental Law. Neither
Company nor Seller has any basis to expect, nor has any of them or any other
Person for whose conduct they are or may be held deemed responsible received
any
actual or threatened Order, notice or other communication from (i) any
Governmental Body or private citizen acting in the public interest or (ii)
the
current or any prior owner or operator of any Facilities, of any actual or
potential violation or failure to comply with any Environmental Law, or of
any
actual or potential liability for any Environmental, Health and Safety
Liabilities with respect to any Facility or other property or Asset (whether
real, personal or mixed) in which Company has or had an interest, or at which
Hazardous Materials were generated, manufactured, refined, transferred,
imported, used or processed by Company or any other Person for whose conduct
it
is or may be held responsible, or from which Hazardous Materials have been
transported, treated, stored, handled, transferred, disposed, recycled or
received.
(b) There
are
no pending or, to the Knowledge of Company or Seller, threatened claims,
Encumbrances, or other restrictions of any nature resulting from any
Environmental, Health and Safety Liabilities or arising under or pursuant to
any
Environmental Law affecting any Facility or any other property or asset (whether
real, personal or mixed) in which Company has or had an interest.
(c) Neither
Company nor Seller has any Knowledge of or any basis to expect, nor has any
of
them, or any other Person for whose conduct any of them are or may be held
responsible, received, any citation, directive, inquiry, notice, Order, summons,
warning or other communication that relates to Hazardous Activity, Hazardous
Materials, or any alleged, actual, or potential violation or failure to comply
with any Environmental Law, or of any alleged, actual, or potential obligation
to undertake or bear the cost of any Environmental, Health and Safety
Liabilities with respect to any Facility or property or Asset (whether real,
personal or mixed) in which Company has or had an interest, or at which
Hazardous Materials were generated, manufactured, refined, imported, used or
processed by Company or any other Person for whose conduct it is or may be
held
responsible, or from which Hazardous Materials have been transported, treated,
stored, handled, transferred, disposed, recycled or received.
14
of 45
(d) Neither
Company nor any other Person for whose conduct Company is or may be held
responsible has any Environmental, Health and Safety Liabilities with respect
to
any Facility or, to the Knowledge of Company or Seller, with respect to any
other property or Asset (whether real, personal or mixed) in which Company
(or
any predecessor) has or had an interest or at any property geologically or
hydrologically adjoining any Facility or any such other property or
Asset.
(e) There
are
no Hazardous Materials present on or in the Environment at any Facility or
at
any geologically or hydrologically adjoining property, including any Hazardous
Materials contained in barrels, aboveground or underground storage tanks,
landfills, land deposits, dumps, equipment (whether movable or fixed) or other
containers, either temporary or permanent, and deposited or located in land,
water, dumps, or any other part of the Facility or such adjoining property,
or
incorporated into any structure therein or thereon. Neither Company nor any
Person for whose conduct Company is or may be held responsible, or to the
Knowledge of Company or Seller, any other Person, has permitted or conducted,
or
is aware of, any Hazardous Activity conducted with respect to any Facility
or
any other property or Assets (whether real, personal or mixed) in which Company
has or had an interest except in full compliance with all applicable
Environmental Laws.
(f) There
has
been no Release or, to the Knowledge of Company or Seller, threat of release,
of
any hazardous materials at or from any facility or at any other location where
any hazardous materials were generated, manufactured, refined, transferred,
produced, imported, used, or processed or from any other property or Asset
(whether real, personal or mixed) in which Company has or had an interest,
or to
the Knowledge of Company or Seller any geologically or hydrologically adjoining
property, whether by Company or any other Person.
(g) On
or
before the Compliance Date, Company shall deliver to Buyer true and complete
copies and results of any reports, studies, analyses, tests, or monitoring
possessed or initiated by Company pertaining to Hazardous Materials or Hazardous
Activities in, on, or under the Facilities, or concerning compliance, by Company
or any other Person for whose conduct it is or may be held responsible, with
Environmental Laws.
SECTION
3.21 INTELLECTUAL PROPERTY ASSETS.
(a) The
term
"Intellectual Property Assets" means all intellectual property owned or licensed
(as licensor or licensee) by or to Company , as the case may be, including:
(i)
Company's ’s name, all assumed fictional business names, trade names, registered
and unregistered trademarks, service marks and applications (collectively,
"Marks"); (ii) all patents, patent applications and inventions and discoveries
that may be patentable (collectively, "Patents"); (iii) all registered and
unregistered copyrights in both published works and unpublished works
(collectively, "Copyrights"); (iv) all rights in mask works; (v) all know-how,
trade secrets, confidential or proprietary information, customer lists,
Software, technical information, data, process technology, plans, drawings
and
blue prints (collectively, "Trade Secrets"); and (vi) all rights in internet
web
sites and internet domain names presently used by Company (collectively "Net
Names").
(b) On
or
before the Compliance Date, Company shall deliver to Buyer, a complete and
accurate list and summary description, including any royalties paid or received
by Company, and accurate and complete copies, of all Company Contracts relating
to the Intellectual Property Assets of Company. There are no outstanding and
no
threatened disputes or disagreements with respect to any such
Contract.
15
of 45
(c)
The
Intellectual Property Assets of Company are all those necessary for the
operation of Company's business’s business as it is currently conducted. Company
is the owner or licensee of all right, title and interest in and to each of
the
Intellectual Property Assets of Company, free and clear of all Encumbrances,
and
has the right to use without payment to a Third Party all of the Intellectual
Property Assets, other than in respect of licenses which shall be listed in
a
schedule and provided by Company to Buyer on or before the Compliance Date.
(d)
All
former and current employees of Company have executed written Contracts with
Company assigning to Company all rights to any inventions, Improvements,
discoveries or information relating to the business of Company.
(e) On
or
before the Compliance Date, Company shall deliver to Buyer a
complete and accurate list and summary description of all Patents of Company.
All of the issued Patents are currently in compliance with formal legal
requirements (including payment of filing, examination and maintenance fees
and
proofs of working or use), are valid and enforceable, and are not subject to
any
maintenance fees or taxes or actions falling due within ninety (90) days after
the Closing Date. No Patent has been or is now involved in any interference,
reissue, reexamination, or opposition Proceeding. There is no potentially
interfering patent or patent application of any Third Party.
(f) Except
as
set forth in a disclosure schedule provided by Company to Buyer on or before
the
Compliance Date, (A) no Patent is infringed or, to the Knowledge of Company
or
Seller, has been challenged or threatened in any way and (B) none of the
products manufactured or sold, nor any process or know-how used, by Company
infringes or is alleged to infringe any patent or other proprietary right of
any
other Person.
(g) All
products made, used or sold under the Patents have been marked with the proper
Patent notice.
(h) On
or
before the Compliance Date, Company shall deliver to Buyer a
complete and accurate list and summary description of all Marks of Company
identifying the place(s) of registration of the Marks. All Marks are currently
in compliance with all formal Legal Requirements, are valid and enforceable
and
are not subject to any maintenance fees or Taxes or actions falling due within
ninety (90) days after the Closing Date. No Xxxx has been or is now involved
in
any opposition, invalidation or cancellation Proceeding and, to the Knowledge
of
Company or Seller, no such action is threatened with respect to any of the
Marks. To the Knowledge of Company or Seller, there is no potentially
interfering trademark or trademark application of any other Person. No Xxxx
is
infringed or, to Company's Knowledge, has been challenged or threatened in
any
way. None of the Marks used by Company infringes or is alleged to infringe
any
trade name, trademark or service xxxx of any other Person. All products and
materials containing a Xxxx xxxx the proper federal registration notice where
permitted by law.
(i) On
or
before the Compliance Date, Company shall deliver to Buyer a complete and
accurate list and summary description of all Copyrights of Company. All of
the
registered Copyrights are currently in compliance with formal Legal
Requirements, are valid and enforceable, and are not subject to any maintenance
fees or taxes or actions falling due within ninety (90) days after the date
of
Closing. No Copyright is infringed or, to the Knowledge of Company or Seller,
has been challenged or threatened in any way. None of the subject matter of
any
of the Copyrights infringes or is alleged to infringe any copyright of any
Third
Party or is a derivative work based upon the work of any other Person. All
works
encompassed by the Copyrights have been marked with the proper Copyright
notice.
16
of 45
(j) With
respect to each Trade Secret of Company the documentation relating to such
Trade
Secret is current, accurate and sufficient in detail and content to identify
and
explain it and to allow its full and proper use without reliance on the
Knowledge or memory of any individual. Company has taken all reasonable
precautions to protect the secrecy, confidentiality and value of all its Trade
Secrets (including the enforcement by Company of a policy requiring each of
their respective employees or contractors to execute proprietary information
and
confidentiality agreements, and all current and former employees and contractors
of Company have executed such an agreement). Company has good title to and
an
absolute right to use its Trade Secrets. The Trade Secrets of Company are not
part of the public Knowledge or literature and, to the Knowledge of Company
or
Seller, have not been used, divulged or appropriated either for the benefit
of
any Person (other than Company ) or to the detriment of Company . No Trade
Secret is subject to any adverse claim or has been challenged or threatened
in
any way or infringes any intellectual property right of any other
Person.
(k) On
or
before the Compliance Date, Company shall deliver to Buyer a complete and
accurate list and summary description of all Net Names of Company.
SECTION
3.22 SECURITIES LAW MATTERS.
(a) Seller
understands that the Consideration Shares are being offered and made in reliance
on one or more exemptions from the registration requirements of United States
federal and state securities laws and that Buyer is relying upon the truth
and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of Seller set forth herein in order to determine the
applicability of such exemptions and the suitability of Seller to acquire
the Consideration Shares.
(b) Sellers
are acquiring the Consideration Shares for Seller’s own account and not with a
view to their distribution within the meaning of Section 2(11) of the Securities
Act. Sellers are not a U.S. person (as that term is defined in Regulation S
Promulgated under the Securities Act). Except as otherwise set forth in a
schedule provided by Company to Buyer on or before the Compliance Date, Sellers
are “accredited investors” (as that term is defined in Rule 501 of the General
Rules and Regulations under the Securities Act by reason of Rule 501(a)(3)),
and
Seller is (i) experienced in making investments of the kind described in this
Agreement and the related documents, (ii) able, by reason of the business and
financial experience of its officers (if an entity) and professional advisors
(who are not affiliated with or compensated in any way by Buyer or any of its
affiliates or selling agents), to protect its own interests in connection with
the Contemplated Transactions, and (iii) able to afford the entire loss of
its
investment in the Consideration Shares. Sellers have been provided an
opportunity for a reasonable period of time prior to the date hereof to obtain
additional information concerning the Consideration Shares, Buyer, and all
other
information to the extent Buyer possesses such information or can acquire
it without unreasonable effort or expense.
17
of 45
(c) Sellers
understand that the Consideration Shares shall be “restricted” (as that term is
defined in Rule 144 promulgated under the Securities Act), and each certificate
representing the Consideration Shares shall be endorsed with the following
restrictive legend or one that is substantially similar to it, in addition
to
any other legend required to be placed thereon by applicable federal or state
securities laws:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR
FOREIGN SECURITIES LAWS. SUCH SHARES MAY NOT BE SOLD, PLEDGED, TRANSFERRED
OR
ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE AND FOREIGN SECURITIES LAWS, PURSUANT
TO
AN EFFECTIVE REGISTRATION STATEMENT OR IN A TRANSACTION OTHERWISE IN COMPLIANCE
WITH APPLICABLE FEDERAL, STATE AND FOREIGN SECURITIES LAWS.”
(d) They
will
rank pari-passu with the already existing shares
SECTION
3.23 DISCLOSURE.
(a) No
representation, warranty or other statement made by Company or Sellers in this
Agreement, or the schedules or other documentation provided by Company or
Sellers pursuant to this Agreement, any supplement thereto, or the certificates
delivered pursuant to Section
2.3(a)
or
otherwise in connection with the Contemplated Transactions contains any untrue
statement of material fact or omits to state a material fact necessary to make
any of them, in light of the circumstances in which it was made, not
misleading.
(b) None
of
the Sellers nor the Company has Knowledge of any fact that has specific
application to Company (other than general economic or industry conditions)
or
the Purchase Shares and that may materially adversely affect the Purchase Shares
or the Assets, business, prospects, financial condition or results of operations
of Company that has not been set forth in this Agreement. No event, condition,
or other matter, or any series of events, conditions or other matters, currently
exists that, individually or in the aggregate, adversely affects the Purchase
Shares or the Assets, business, prospects, financial condition or results of
its
operations of Company that has not been specifically disclosed to Buyer in
writing by Company.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF BUYER
Buyer
represents and warrants to Company and Seller, as of the date hereof and as
of
the Closing Date, as follows:
SECTION
4.1 ORGANIZATION AND GOOD STANDING.
Buyer is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware with full corporate power and authority to conduct
its business as it is now conducted.
18
of 45
SECTION
4.2 AUTHORITY; NO CONFLICT.
(a) This
Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms. Upon the execution
and
delivery by Buyer of the other documents to be executed or delivered by Buyer
at
Closing (collectively, the "Buyer's Closing Documents"), each of the Buyer's
Closing Documents will constitute the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its respective terms. Buyer
has the absolute and unrestricted right, power and authority to execute and
deliver this Agreement and the Buyer's Closing Documents and to perform its
obligations under this Agreement and the Buyer's Closing Documents, and such
action has been duly authorized by all necessary corporate action.
(b) Neither
the execution and delivery of this Agreement by Buyer nor the consummation
or
performance of any of the Contemplated Transactions by Buyer will give any
Person the right to prevent, delay or otherwise interfere with any of the
Contemplated Transactions pursuant to: (i) any provision of Buyer's Governing
Documents; (ii) any resolution adopted by the board of directors of Buyer;
(iii)
any Legal Requirement or Order to which Buyer may be subject; or (iv) any
Contract to which Buyer is a party or by which Buyer may be bound. Buyer is
not
and will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
SECTION
4.3 CAPITALIZATION. On
or
before the Compliance Date, Buyer shall deliver to Company and Seller a schedule
that correctly and completely sets forth the authorized share capital of
Buyer.
SECTION
4.4 FILINGS WITH THE SEC.
As of
their respective dates, the documents filed by Buyer with the SEC (the “SEC
Documents”) complied in all material respects with the requirements of the
Securities Act of or the Exchange Act, as the case may be, and other federal,
state and local laws, rules and regulations applicable to such SEC Documents,
and none of the SEC Documents 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 light of the circumstances under
which they were made, not misleading. Any financial statements of Buyer included
in the SEC Documents comply as to form and substance in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC or other applicable rules and regulations with respect thereto.
Such
financial statements have been prepared in accordance with GAAP on a consistent
basis during the periods involved (except (a) as may be otherwise indicated
in
such financial statements or the notes thereto or (b) in the case of unaudited
interim statements, to the extent they may not include footnotes or may be
condensed or summary statements) and fairly present in all material respects
the
financial position of Buyer as of 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 year-end audit adjustments).
SECTION
4.5 VALID ISSUANCE.
The
Consideration Shares, issued in accordance with the terms hereof and on the
basis of the representations and warranties of Seller set forth herein, may
and
shall be properly issued by Buyer to Seller pursuant to any applicable federal
or state law.
SECTION
4.6 CERTAIN PROCEEDINGS.
There is
no pending Proceeding that has been commenced against Buyer that challenges
or
may have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the Contemplated Transactions. To Buyer's Knowledge,
no
such Proceeding has been threatened.
19
of 45
ARTICLE
V
COVENANTS
AND AGREEMENTS PRIOR TO CLOSING
SECTION
5.1 FINANCIAL
STATEMENTS.
At least
three days prior to Closing, Company shall provide Buyer with such audited
financial statements of the Company as may be required by the SEC (“Financial
Statements”). The Financial Statements shall be prepared by a member of a PCAOB
approved accounting firm in accordance with GAAP, and shall be true and correct
and not contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements and representation therein not
misleading.
SECTION
5.2 ACCESS AND INVESTIGATION.
Between
the date of this Agreement and the Closing Date, and upon reasonable advance
notice, Seller and Company, on the one hand, and Buyer on the other hand, shall
(a) afford the other Party(ies) and their respective Representatives full and
free access, during regular business hours, to their respective employees,
officers, directors and agents, properties, Contracts, Governmental
Authorizations, books and Records and other documents and data, such rights
of
access to be exercised in a manner that does not unreasonably interfere with
their respective operations; (b) furnish the other Party(ies) with copies of
all
such Contracts, Governmental Authorizations, books and Records and other
existing documents and data as the other Party(ies) may reasonably request;
(c)
furnish the other Party(ies) with such additional financial, operating and
other
relevant data and information as the other parties may reasonably request;
and
(d) otherwise cooperate and assist, to the extent reasonably requested by the
other Party(ies), with the other Party(ies)’ investigation of the properties,
Assets and financial condition. In addition, the other Parties shall have the
right to have the real property and Tangible Personal Property inspected by
them, at their sole cost and expense, for purposes of determining the physical
condition and legal characteristics of the real property and Tangible Personal
Property.
SECTION
5.3 OPERATION OF THE BUSINESS AND CONDUCT OF COMPANY PRIOR TO
CLOSING.
(a)
Between
the date of this Agreement and the Closing, Company shall, (and Seller shall
cause Company to):
(i) conduct
its business only in the Ordinary Course of Business;
(ii) except
as
otherwise directed by Buyer in writing, and without making any commitment on
Buyer's behalf, use its Best Efforts to maintain its respective business
organizations intact, keep available the services of its officers, employees
and
agents, and maintain its relationship and good will with suppliers, customers,
landlords, creditors, employees, agents and others having business relationships
with it;
(iii) Confer
with Buyer prior to the implementation of operational decisions of a material
nature with respect to Company;
(iv) Otherwise
report periodically to Buyer concerning the status of the business, operations
and finances of Company;
(v) Make
no
material changes in employment status of employees having managerial
responsibilities or officers or directors without prior consultation with
Buyer;
20
of 45
(vi) Maintain
its Assets in a state of repair and condition that complies with Legal
Requirements and is consistent with the requirements and normal conduct of
its
business;
(vii) keep
in
full force and effect, without amendment, all material contractual and other
contractual and other rights relating to Company's business;
(viii) Comply
with all Legal Requirements and contractual obligations applicable to the
operations of Company’s’s business;
(ix) Continue
insurance coverage in full force and effect under existing policies of insurance
or substantially equivalent policies;
(x) cooperate
with Buyer and assist Buyer in identifying the Governmental Authorizations
required for Buyer to operate the business from and after the Closing Date
and
either transferring existing Governmental Authorizations of Company to Buyer,
where permissible, or obtaining new Governmental Authorizations for
Buyer;
(xi) upon
request of Buyer from time to time, execute and deliver all documents, make
all
truthful oaths, testify in any Proceedings and do all other acts that may be
reasonably necessary or desirable in the opinion of Buyer to consummate the
Contemplated Transactions, all without further consideration; and
(xii) Maintain
all books and Records of Company relating to its respective businesses in the
Ordinary Course of Business.
(b)
Between
the date of this Agreement and the Closing, Seller shall not:
(i)
Sell,
transfer or otherwise dispose of any of the Purchase Shares or any interest
in
the Purchase Shares and/or agree to do any of the foregoing;
(ii) Accept
any dividend or other distribution in respect of any of the Purchase
Shares;
(iii)
Incur,
make, assume or suffer to exist any Encumbrance or other matter affecting title
to any of the Purchase Shares;
(iv)
enter
into any shareholder agreements, voting trusts, restrictions on transfer or
other agreements or instruments that would be binding on the Buyer as the owner
of the Purchase Shares; or
(v)
Take
any
action, that would result in any of the Seller’s representations and warranties
in this Agreement being untrue and incorrect and Seller shall use its best
efforts to prevent the occurrence of any event or the existence of any
condition.
SECTION
5.4 NEGATIVE COVENANT.
Except
as otherwise expressly permitted herein, between the date of this Agreement
and
the Closing Date, Company shall not, and Seller shall not permit Company to,
without the prior written Consent of Buyer, (a) take any affirmative action,
or
fail to take any reasonable action within its control, as a result of which
any
of the changes or events listed in Section
3.14
would be
likely to occur; (b) make any modification to any material Contract or
Governmental Authorization; (c) allow the levels of raw materials, supplies
or
other materials included in the Inventories to vary materially from the levels
customarily maintained in the Ordinary Course of Business; or (d) enter into
any
compromise or settlement of any litigation, proceeding or governmental
investigation relating to Company, , or the Assets or business of Company
.
21
of 45
SECTION
5.5 REQUIRED APPROVALS.
As
promptly as practicable after the date of this Agreement, Company shall make
all
filings required by Legal Requirements to be made by it in order to consummate
the Contemplated Transactions. Company and Seller also shall cooperate with
Buyer and its Representatives with respect to all filings that Buyer elects
to
make or, pursuant to Legal Requirements, shall be required to make in connection
with the Contemplated Transactions. Company and Seller also shall cooperate
with
Buyer and its Representatives in obtaining all Material Consents.
SECTION
5.6 NOTIFICATION.
Between
the date of this Agreement and the Closing, Seller and Company shall promptly
notify Buyer in writing upon becoming aware of (a) any fact or condition that
causes or constitutes a Breach of any of Company's or Seller’s representations
and warranties made as of the date of this Agreement or (b) the occurrence
after
the date of this Agreement of any fact or condition that would or be reasonably
likely to (except as expressly contemplated by this Agreement) cause or
constitute a Breach of any such representation or warranty had that
representation or warranty been made as of the time of the occurrence of, or
Company's or such Seller's discovery of, such fact or condition. Should any
such
fact or condition require any change to the representations and warranties
made
herein, the Company and Seller shall promptly deliver to Buyer a written
supplement specifying such change. Such delivery shall not affect any rights
of
Buyer under Section
9.2
and
Article
11.
During
the same period, Company and Seller shall also promptly notify Buyer of the
occurrence of any Breach of any covenant of Company or Seller or of the
occurrence of any event that may make the satisfaction of the conditions set
forth in Article
7
impossible or unlikely.
SECTION
5.7 NO NEGOTIATION.
Until
such time as this Agreement shall have been terminated pursuant to Section
9.1,
neither
Company nor Seller shall directly or indirectly solicit, initiate, encourage
or
entertain any inquiries or proposals from, discuss or negotiate with, provide
any nonpublic information to or consider the merits of any inquiries or
proposals from any Person (other than Buyer) relating to any business
combination transaction involving Company, including but not limited to the
sale
by Seller of any shares of Company, the merger or consolidation of Company
or
the sale of Company's business or any of its Assets (other than in the Ordinary
Course of Business). Company and Seller shall notify Buyer of any such inquiry
or proposal within twenty-four (24) hours of receipt or awareness of the same
by
Company or Seller.
SECTION
5.8 BEST EFFORTS.
Company
and Seller shall use their Best Efforts to cause the conditions in Article
7
and
Section
8.3
to be
satisfied.
SECTION
5.9 PAYMENT OF LIABILITIES.
Company
shall pay or otherwise satisfy in the Ordinary Course of Business all of its
Liabilities and obligations.
SECTION
5.10 COOPERATION WITH RESPECT TO FINANCIAL REPORTING.
After
the date of this Agreement, Seller and Company shall reasonably cooperate with
Buyer in connection with Buyer's preparation of financial statements and other
information required for Buyer’s filings with the SEC under the Exchange Act,
including but not limited to, Buyer’s Form 8-K that is to be filed with the SEC
pursuant to the Exchange Act in connection with the Closing.
22
of 45
SECTION
5.11 TRANSFER
OF REAL PROPERTY.
On or
before the Closing, Company and Seller shall cause the transfer of all rights,
title and interest in the Real Property from the owners thereof to the Company,
without any additional consideration payable therefore by Buyer, as provided
in
Section
3.7.
ARTICLE
VI
ADDITIONAL
COVENANTS OF BUYER
SECTION
6.1 BEST EFFORTS.
Buyer
shall use its Best Efforts to cause the conditions in Article
8
and
Section
7.4
to be
satisfied.
ARTICLE
VII
CONDITIONS
PRECEDENT TO BUYER’S OBLIGATION TO CLOSE
Buyer's
obligation to purchase the Purchase Shares and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction,
at
or prior to the Closing, of each of the following conditions (any of which
may
be waived by Buyer, in whole or in part):
SECTION
7.1 RECEIPT
OF FINANCIAL STATEMENTS.
Company
shall have provided Buyer with Company’s ’s Financial Statements at least three
days prior to closing but in no event later than June 30, 2008 unless extended
by the mutual consent of the parties. The Financial Statements shall be true
and
correct and not contain any untrue statement of a material fact or omit to
state
any material fact necessary to make the statements therein not misleading.
SECTION
7.2 ACCURACY OF REPRESENTATIONS.
All of
Seller’s and Company’s representations and warranties in this Agreement
(considered collectively), and each of these representations and warranties
(considered individually), shall have been accurate in all material respects
as
of the date of this Agreement, and shall be accurate in all material respects
as
of the time of the Closing as if then made, without giving effect to any
supplement provided by Seller or Company to Buyer pursuant to Section
5.6.
SECTION
7.3 COMPANY'S PERFORMANCE.
All of
the covenants and obligations that Company and Seller are required to perform
or
with which Company and Seller are required to comply pursuant to this
Agreement at or prior to the Closing (considered collectively), and each of
these covenants and obligations (considered individually), shall have been
duly
performed and complied with in all material respects.
SECTION
7.4 CONSENTS. Each
of
the Consents identified in a schedule to be provided by Buyer to Company and
Seller on or before the Compliance Date (the "Material Consents") shall have
been obtained and shall be in full force and effect.
SECTION
7.5 ADDITIONAL DOCUMENTS.
Company
and Seller shall have caused the documents and instruments required by
Section
2.3(a)
and the
following documents to be delivered (or tendered subject only to Closing) to
Buyer:
(a) The
charter and foundation documents of Company and any amendments thereto, duly
certified as of a recent date by the appropriate officials of the jurisdiction
of Company's ’s organization;
23
of 45
(b) If
requested by Buyer, any Consents or other instruments that may be required
to
permit Buyer's qualification in each jurisdiction in which Company is licensed
or qualified to do business as a foreign corporation under the name "Protech” or
“Protech Biosystems” or any derivative thereof;
(c) Releases
of all Encumbrances on the Assets, if any;
(d) Certificates
dated as of a date not earlier than the third Business Day prior to the Closing
as to the good standing of Company, executed by the appropriate officials in
each jurisdiction in which Company is licensed or qualified to do business
as a
foreign corporation; and
(e) Such
other documents as Buyer may request for the purpose of: (i) evidencing the
accuracy of any of Company's or Seller’s representations and warranties; (ii)
evidencing the performance by Company or Seller of, or the compliance by Company
or Seller with, any covenant or obligation required to be performed or complied
with by Company or Seller; (iii) evidencing the satisfaction of any condition
referred to in this Article
7;
or (iv)
otherwise facilitating the consummation or performance of any of the
Contemplated Transactions.
SECTION
7.6 NO PROCEEDINGS. Since
the
date of this Agreement, there shall not have been commenced or threatened
against Buyer, or against any Related Person of Buyer, any Proceeding (a)
involving any challenge to, or seeking Damages or other relief in connection
with, any of the Contemplated Transactions or (b) that may have the effect
of
preventing, delaying, making illegal, imposing limitations or conditions on
or
otherwise interfering with any of the Contemplated Transactions.
SECTION
7.7 NO CONFLICT. Neither
the consummation nor the performance of any of the Contemplated Transactions
will, directly or indirectly (with or without notice or lapse of time),
contravene or conflict with or result in a violation of or cause Buyer or any
Related Person of Buyer to suffer any adverse consequence under (a) any
applicable Legal Requirement or Order or (b) any Legal Requirement or Order
that
has been published, introduced or otherwise proposed by or before any Government
Body.
SECTION
7.8 GOVERNMENTAL AUTHORIZATIONS. Buyer
shall have received such Governmental Authorizations as are necessary or
desirable to allow Buyer to operate the Company’s business from and after the
Closing including the RBI/FIBI approvals.
SECTION
7.9 DUE DILIGENCE; SATISFACTION WITH DUE DILIGENCE.
(a) Seller
and the Company shall have provided to the Company the information required
to
be set forth in the schedules referred to in the relevant provisions of this
Agreement or otherwise required to be disclosed or provided to Buyer pursuant
to
this Agreement.
(b) Buyer
shall have completed its legal, accounting, and business due diligence of the
Company and the results thereof shall be satisfactory to Buyer in its sole
and
absolute discretion.
SECTION
7.10 OTHER INFORMATION REQUIRED FOR SEC. Company
and Seller shall have prepared and delivered to Buyer any other information
from
Company or Seller required to be filed pursuant to the Exchange Act with the
SEC
by Buyer in connection with the Closing.
24
of 45
SECTION
7.11 SECURITIES LAW MATTERS.
The
offer and issuance of the Consideration Shares shall not be in violation of
the
applicable federal or state securities laws.
SECTION
7.12 TRANSFER
OF REAL PROPERTY. On
or
before the Closing, Company and Seller shall have caused the transfer of all
rights, title and interest in the Real Property from the owners thereof to
Buyer, without any additional consideration payable therefore by Buyer, as
provided in Section
3.7.
ARTICLE
VIII
CONDITIONS
PRECEDENT TO SELLER’S AND COMPANY’S OBLIGATION TO CLOSE
Seller’s
obligation to sell the Purchase Shares and to take the other actions required
to
be taken by Seller at the Closing, and Company’s obligation to take such actions
required by Company at the Closing, is subject to the satisfaction, at or prior
to the Closing, of each of the following conditions (any of which may be waived
by Seller and Company in whole or in part):
SECTION
8.1 ACCURACY OF REPRESENTATIONS.
All of
Buyer's representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), shall have been accurate in all material respects as of the
date
of this Agreement and shall be accurate in all material respects as of the
time
of the Closing as if then made.
SECTION
8.2 BUYER’S PERFORMANCE.
All of
the covenants and obligations that Buyer is required to perform or with which
Buyer is required to comply pursuant to this Agreement at or prior to the
Closing (considered collectively), and each of these covenants and obligations
(considered individually), shall have been performed and complied with in all
material respects.
SECTION
8.3 CONSENTS.
Each of
the Consents identified in a schedule to be provided by Company and Seller
to
Buyer on or before the Compliance Date shall have been obtained and shall be
in
full force and effect.
SECTION
8.4 ADDITIONAL DOCUMENTS.
Buyer
shall have caused the documents and instruments required by Section
2.3(b)
and the
following documents to be delivered (or tendered subject only to Closing) to
Company and Seller as well as such other documents as Company and Seller may
reasonably request for the purpose of (i) evidencing the accuracy of any
representation or warranty of Buyer, (ii) evidencing the performance by Buyer
of, or the compliance by Buyer with, any covenant or obligation required to
be
performed or with which Buyer is required to comply or (iii) evidencing the
satisfaction of any condition referred to in this Article
8.
SECTION
8.5 NO INJUNCTION.
No Legal
Requirement, injunction or other Order shall be in effect that (a) prohibits
the
consummation of the Contemplated Transactions and (b) has been adopted or
issued, or has otherwise become effective, since the date of this
Agreement.
25
of 45
ARTICLE
IX
TERMINATION
SECTION
9.1 TERMINATION EVENTS.
By
written notice given prior to or at the Closing, subject to Section
9.2,
this
Agreement may be terminated by the Party or Parties referenced below as
follows:
(a) by
Buyer,
if Company or Seller is in material Breach of any representation, warranty,
covenant, or agreement of such Party contained in this Agreement, or any such
representation or warranty shall have become untrue (unless such Breach results
primarily from Buyer breaching any representation, warranty, covenant or
agreement in this Agreement), and such Breach has not been waived by Buyer
or
rectified within five (5) days;
(b) By
Buyer,
if Buyer shall have not received from Company the Company’s Financial Statements
on or before June 30, 2008 unless extended by the mutual consent of the parties;
(c) by
Buyer,
if Buyer shall have not received from Seller or the Company the information
required to be set forth in the schedules referred to in the relevant provisions
of this Agreement or otherwise required to be disclosed or provided to Buyer
pursuant to this Agreement, and Buyer has not granted an extension of time
to
Seller or Company;
(d) By
Buyer,
if Buyer shall have completed its legal, accounting, and business due diligence
of the Company, and the results thereof are not deemed satisfactory to Buyer
in
its sole and absolute discretion;
(e) by
Buyer,
if any condition in Article
7
has not
been satisfied as of the End Date, other than the Company’s obligation to
provide Financial Statements which must be satisfied on or before June 30,
2008
unless Buyer grants an extension to Seller or Company, as applicable, (unless
the failure results primarily from Buyer breaching any representation, warranty,
covenant, or agreement contained in this Agreement), and Buyer has not waived
such condition on or before such date or rectified within five(5) days;
(f) by
Seller, if Buyer is in material Breach of any representation, warranty,
covenant, or agreement of Buyer, or any such representation or warranty shall
have become untrue (unless such Breach results primarily from Seller or Company
breaching any representation, warranty, covenant or agreement in this
Agreement), and such Breach has not been waived by Seller
or Company;
(g) by
Seller, if any condition in Article
8
has not
been satisfied as of the End Date (unless the failure results primarily from
Seller or Company breaching any representation, warranty, or covenant contained
in this Agreement), and Company and Seller have not waived such condition on
or
before such date;
(h) By
mutual
consent of Buyer, Seller, and Company; or
(i) By
Buyer,
if the Closing has not occurred on or before July 31, 2008 or Buyer has not
extended the date for the Closing.
26
of 45
SECTION
9.2 EFFECT OF TERMINATION.
Each
party's right of termination under Section
9.1
is in
addition to any other rights it may have under this Agreement, at law or in
equity, and the exercise of such right of termination will not be an election
of
remedies to the exclusion of any others. If this Agreement is terminated
pursuant to Section
9.1,
all
obligations of the parties under this Agreement will terminate, except that
the
obligations of the parties in this Section
9.2
and
Articles
12
and
13
will
survive; provided, however, that, if this Agreement is terminated because of
a
Breach of this Agreement by the non-terminating party or because one or more
of
the conditions to the terminating party's obligations under this Agreement
is
not satisfied as a result of the non-terminating party's failure to comply
with
its obligations under this Agreement, the terminating party's right to pursue
all legal remedies will survive such termination unimpaired.
ARTICLE
X
ADDITIONAL
COVENANTS
SECTION
10.1 FURTHER ASSURANCES.
From and
after the date hereof, and continuing after the Closing, the parties shall
cooperate reasonably with each other and with their respective Representatives
in connection with any steps required to be taken as part of their respective
obligations under this Agreement, and shall (a) furnish upon request to each
other any further information that any party hereto may reasonably require;
(b)
execute and deliver to each other party such other documents as such other
parties may reasonably require; and (c) do such other acts and things as the
other parties may reasonably request for the purpose of carrying out the intent
of this Agreement and the Contemplated Transactions.
SECTION
10.2 POST-CLOSING SEC FILINGS. As
soon
as practicable following the Closing, Buyer shall cause the transactions
contemplated hereunder to be memorialized and disclosed by making all filings
or
recordings required under applicable law. Seller hereby covenants and agrees
to
aid Buyer, as specifically requested by Buyer, in preparing and making such
filings or recordings.
SECTION
10.3 SOUTH EASTERN FINANCIAL HOLDINGS, LLC.
Sellers
acknowledge that SOUTHEASTERN FINANCIAL HOLDINGS, LLC, and/or its wholly owned
subsidiary BASIS FINANCIAL, LLC, has provided, or will be providing financial
consulting services to Buyer relating to the contemplated acquisition
transactions.
SECTION
10.4 SHAREHOLDERS’
AGREEMENT. The
principal Shareholders of the Buyer(s) and all of the Seller(s), once they
are
allotted the Consideration Shares, shall enter into a Shareholders’ Agreement in
the form satisfactory to the parties, which is annexed to this document as
Exhibit B
SECTION
10.5 EMPLOYMENT AGREEMENT. The
Buyer
and Dr. Xxxxxx shall enter into an Employment Agreement in the form satisfactory
to the parties, which is annexed to this document as Exhibit C
SECTION
10.6 CONSULTING AGREEMENT.
The
Buyer shall enter into a Consulting
Agreement with South Eastern Financial Holdings LLC in the form satisfactory
to
the parties, which annexed to this document as Exhibit D.
27
of 45
ARTICLE
XI
INDEMNIFICATION;
REMEDIES
SECTION
11.1 SURVIVAL.
(a)
All
representations, warranties, covenants and obligations in this Agreement, the
schedules or other documentation provided pursuant to this Agreement, any
supplements thereto, the certificates delivered pursuant to Section
2.3,
and any
other certificate or document delivered pursuant to this Agreement shall survive
the Closing and the consummation of the Contemplated Transactions until the
expiration of their respective statutes of limitations.
(b)
The
right
to indemnification, reimbursement or other remedy based upon such
representations, warranties, covenants and obligations shall not be affected
by
any investigation (including any environmental investigation or assessment)
conducted with respect to, or any Knowledge acquired (or capable of being
acquired) at any time, whether before or after the execution and delivery of
this Agreement or the Closing Date, with respect to the accuracy or inaccuracy
of or compliance with any such representation, warranty, covenant or obligation.
The waiver of any condition based upon the accuracy of any representation or
warranty, or upon the performance of or compliance with any covenant or
obligation, will not affect the right to indemnification, reimbursement or
other
remedy based upon such representations, warranties, covenants and
obligations.
SECTION
11.2 INDEMNIFICATION AND REIMBURSEMENT BY SELLER.
Seller
and Company shall, jointly and severally, indemnify and hold harmless Buyer,
and
its Representatives, shareholders, directors, officers, employees, agents,
subsidiaries, and affiliates (collectively, the "Buyer Indemnified Persons"),
and shall reimburse the Buyer Indemnified Persons for any loss, Liability,
claim, damage, expense (including costs of investigation and defense and
reasonable attorneys' fees and expenses) or diminution of value, whether or
not
involving a Third Party Claim (collectively, "Damages"), arising from or in
connection with:
(a)
any
Breach of any representation or warranty made by Seller or Company in this
Agreement and any other certificate, document, writing or instrument delivered
by Seller or Company pursuant to this Agreement;
(b)
Any
Breach of any covenant or obligation of Seller or Company in this Agreement
or
in any other certificate, document, writing or instrument delivered by Seller
or Company pursuant to this Agreement;
(c)
any
Liability arising out of the operation of Company or the business or Assets
of
Company prior to the Closing Date;
(d)
any
product or any services sold, included in Inventory, or otherwise provided
by,
Company , in whole or in part, prior to the Closing Date, including claims
for
Breach of warranty or product Liability;
(e)
Any
Liability under any Company Contract entered into prior to the Closing
Date;
(f)
Any
Liability for Taxes, including (i) any Taxes arising as a result of the
Company’s operation of its Business or ownership of its Assets prior to the
Closing Date, and (ii) any Taxes that will arise as a result of the sale of
the
Purchase Shares pursuant to this Agreement;
28
of 45
(g)
any
Liability relating to payroll, vacation, sick leave, workers' compensation,
unemployment benefits, pension benefits, employee stock option or profit-sharing
plans, health care plans or benefits or any other employee plans or benefits
of
any kind for Company's ’s employees or former employees or both;
(h)
Any
Liability relating to the payment of all wages and other remuneration due to
any
Company employees with respect to their services as employees of Company through
the close of business on the Closing Date, including pro rata bonus payments
and
all vacation pay earned prior to the Closing Date and the payment of any
termination or severance payments.
(i)
any
Liability arising out of any Proceeding commenced after the Closing Date and
arising out of or relating to any occurrence or event happening prior to the
Closing Date, and any Liability under any Company Contract that arises after
the
Closing but that arises out of or relates to any Breach that occurred prior
to
the Closing, and any such other Liability;
(j)
Any
Liability arising out of or resulting from Company's compliance or noncompliance
with any Legal Requirement or Order of any Governmental Body;
(k)
Any
Liability of Company under this Agreement or any other document executed in
connection with the Contemplated Transactions; and
(l)
Any
Liability of Company based upon Seller’s acts or omissions occurring after
the Closing Date.
SECTION
11.3 INDEMNIFICATION AND REIMBURSEMENT BY BUYER.
Buyer
will indemnify and hold harmless Seller and Company, and will reimburse Seller
and Company, for any Damages arising from or in connection with:
(a) Any
Breach of any representation or warranty made by Buyer in this Agreement or
in
any certificate, document, writing or instrument delivered by Buyer pursuant
to
this Agreement; or
(b) Any
Breach of any covenant or obligation of Buyer in this Agreement or in any other
certificate, document, writing or instrument delivered by Buyer pursuant to
this
Agreement.
SECTION
11.4 THIRD-PARTY CLAIMS.
(a) Promptly
after receipt by a Person entitled to indemnity under Section
11.2
or
11.3
(an
"Indemnified Person") of notice of the assertion of a Third-Party Claim against
it, such Indemnified Person shall give notice to the Person obligated to
indemnify it under such Section (an "Indemnifying Person") of the assertion
of
such Third-Party Claim, provided that the failure to notify the Indemnifying
Person will not relieve the Indemnifying Person of any liability that it may
have to any Indemnified Person, except to the extent that the Indemnifying
Person demonstrates that the defense of such Third-Party Claim is prejudiced
by
the Indemnified Person's failure to give such notice.
29
of 45
(b) If
an
Indemnified Person gives notice to the Indemnifying Person pursuant to
Section
11.4(a)
of the
assertion of a Third-Party Claim, the Indemnifying Person shall be entitled
to
participate in the defense of such Third-Party Claim and, to the extent that
it
wishes (unless (i) the Indemnifying Person is also a Person against whom the
Third-Party Claim is made and the Indemnified Person determines in good faith
that joint representation would be inappropriate or (ii) the Indemnifying Person
fails to provide reasonable assurance to the Indemnified Person of its financial
capacity to defend such Third-Party Claim and to provide indemnification with
respect to such Third-Party Claim), to assume the defense of such Third-Party
Claim with counsel satisfactory to the Indemnified Person. After notice from
the
Indemnifying Person to the Indemnified Person of its election to assume the
defense of such Third-Party Claim, the Indemnifying Person shall not, so long
as
it diligently conducts such defense, be liable to the Indemnified Person under
this Article
11
for any
fees of other counsel or any other expenses with respect to the defense of
such
Third-Party Claim, in each case subsequently incurred by the Indemnified Person
in connection with the defense of such Third-Party Claim, other than reasonable
costs of investigation. If the Indemnifying Person assumes the defense of a
Third-Party Claim, (i) such assumption will conclusively establish for purposes
of this Agreement that the claims made in that Third-Party Claim are within
the
scope of and subject to indemnification, and (ii) no compromise or settlement
of
such Third-Party Claims may be effected by the Indemnifying Person without
the
Indemnified Person's Consent unless (A) there is no finding or admission of
any
violation of Legal Requirement or any violation of the rights of any Person;
(B)
the sole relief provided is monetary damages that are paid in full by the
Indemnifying Person; and (C) the Indemnified Person shall have no liability
with
respect to any compromise or settlement of such Third-Party Claims effected
without its Consent. If notice is given to an Indemnifying Person of the
assertion of any Third-Party Claim and the Indemnifying Person does not, within
ten (10) days after the Indemnified Person's notice is given, give notice to
the
Indemnified Person of its election to assume the defense of such Third-Party
Claim, the Indemnifying Person will be bound by any determination made in such
Third-Party Claim or any compromise or settlement effected by the Indemnified
Person.
(c) Notwithstanding
the foregoing, if an Indemnified Person determines in good faith that there
is a
reasonable probability that a Third-Party Claim may adversely affect it or
its
Related Persons other than as a result of monetary damages for which it would
be
entitled to indemnification under this Agreement, the Indemnified Person may,
by
notice to the Indemnifying Person, assume the exclusive right to defend,
compromise or settle such Third-Party Claim, but the Indemnifying Person will
not be bound by any determination of any Third-Party Claim so defended for
the
purposes of this Agreement or any compromise or settlement effected without
its
Consent (which may not be unreasonably withheld).
(d) Notwithstanding
the provisions of Section
13.4,
Company
and Seller hereby consent to the nonexclusive jurisdiction of any court in
which
a Proceeding in respect of a Third-Party Claim is brought against any Buyer
Indemnified Person for purposes of any claim that a Buyer Indemnified Person
may
have under this Agreement with respect to such Proceeding or the matters alleged
therein and agree that process may be served on Company and Seller with respect
to such a claim anywhere in the world.
(e) With
respect to any Third-Party Claim subject to indemnification under this
Article
11:
(i)
both the Indemnified Person and the Indemnifying Person, as the case may be,
shall keep the other Person fully informed of the status of such Third-Party
Claim and any related Proceedings at all stages thereof where such Person is
not
represented by its own counsel, and (ii) the parties agree (each at its own
expense) to render to each other such assistance as they may reasonably require
of each other and to cooperate in good faith with each other in order to ensure
the proper and adequate defense of any Third-Party Claim.
30
of 45
(f) With
respect to any Third-Party Claim subject to indemnification under this
Article
11,
the
parties agree to cooperate in such a manner as to preserve in full (to the
extent possible) the confidentiality of all Confidential Information and the
attorney-client and work-product privileges. In connection therewith, each
party
agrees that: (i) it will use its Best Efforts, in respect of any Third-Party
Claim in which it has assumed or participated in a defense, to avoid production
of Confidential Information (consistent with applicable law and rules of
procedure), and (ii) all communications between any party hereto and counsel
responsible for or participating in the defense of any Third-Party Claim shall,
to the extent possible, be made so as to preserve any applicable attorney-client
or work-product privilege.
SECTION
11.5 OTHER CLAIMS.
A claim
for indemnification for any matter not involving a Third-Party Claim may be
asserted by notice to the party from whom indemnification is sought and shall
be
paid promptly after such notice.
SECTION
11.6 INDEMNIFICATION DESPITE NEGLIGENCE, STRICT LIABILITY OR LIABILITY WITHOUT
FAULT.
IT
IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PARTY TO BE INDEMNIFIED
PURSUANT TO THIS ARTICLE 11 SHALL BE INDEMNIFIED AND HELD HARMLESS FROM AND
AGAINST ALL INDEMNIFIED LOSSES AS TO WHICH INDEMNITY IS PROVIDED FOR UNDER
THIS
ARTICLE 11 NOTWITHSTANDING THAT ANY SUCH INDEMNIFIED LOSSES ARISE OUT OF OR
RESULT FROM THE (I) THE ORDINARY, STRICT, SOLE, OR CONTRIBUTORY NEGLIGENCE,
OR
(II) STRICT LIABILITY (OR OTHER LIABILITY WITHOUT FAULT) OF SUCH PARTY AND
REGARDLESS OF WHETHER ANY OTHER PARTY (INCLUDING ANOTHER PARTY TO THIS
AGREEMENT) IS OR IS NOT ALSO NEGLIGENT OR OTHERWISE LIABLE WITH RESPECT TO
THE
MATTER IN QUESTION.
ARTICLE
XII
CONFIDENTIALITY
SECTION
12.1 CONFIDENTIAL INFORMATION.
(a) Each
Party agrees that, unless and until the Closing has been consummated, each
Party
will hold in strict confidence, and will not use to the detriment of any other
Party, any data and information obtained in connection with this Agreement
or
the Contemplated Transactions, except insofar as this data and information
may
be required by law to be included in documents required to be filed by Buyer
with the SEC under the Exchange Act and the rules and regulations promulgated
thereunder or may be required in connection with financing efforts undertaken
by
or on behalf of Buyer.
31
of 45
(b) "Confidential
Information" means all items, materials and information which belong to a Party
and are not generally known to the public that has been or may hereafter be
disclosed to the other Party(ies) by such Party or by the directors, officers,
employees, agents, consultants, advisors or other representatives, including
legal counsel, accountants and financial advisors of such Party, irrespective
of
the form of the disclosure. Confidential Information is intended to be
interpreted broadly and includes trade secrets and other proprietary or
confidential information concerning the business and affairs of a Party, product
specifications, data, know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions and ideas, past,
current, and planned research and development, current and planned manufacturing
or distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, supplier lists, market studies, business
plans, computer software and programs (including object code and source code),
computer software and database technologies, systems, structures and
architectures (and related processes, formulae, composition, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, methods
and information); financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans, the names
and backgrounds of key personnel, and personnel training techniques and
materials. Confidential Information also includes all notes, analyses,
compilations, studies, summaries and other material containing or based, in
whole or in part, upon any Confidential Information.
ARTICLE
XIII
GENERAL
PROVISIONS
SECTION
13.1 EXPENSES.
Except
as otherwise provided in this Agreement, each Party to this Agreement will
bear
its own fees and expenses incurred in connection with the preparation,
negotiation, execution and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of its Representatives. If this
Agreement is terminated, the obligation of each Party to pay its own fees and
expenses will be subject to any rights of such Party arising from a Breach
of
this Agreement by another Party.
SECTION
13.2 PUBLIC ANNOUNCEMENTS.
Any
public announcement, press release or similar publicity with respect to this
Agreement or the Contemplated Transactions will be issued, if at all, at such
time and in such manner as Buyer determines. Except with the prior consent
of
Buyer or as permitted by this Agreement, neither Company, Seller nor any of
their Representatives shall disclose to any Person (a) the fact that any
confidential information of Company or Seller has been disclosed to Buyer or
its
Representatives, that Buyer or its Representatives have inspected any portion
of
the Confidential Information of Company or Seller, that any Confidential
Information of Buyer has been disclosed to Company, Seller or their
Representatives or that Company, Seller or their Representatives have inspected
any portion of the Confidential Information of Buyer or (b) any information
about the Contemplated Transactions, including the status of such discussions
or
negotiations, the execution of any documents (including this Agreement) or
any
of the terms of the Contemplated Transactions or the related documents
(including this Agreement). Company, Seller and Buyer will consult with each
other concerning the means by which Company's employees, customers, suppliers
and others having dealings with Company will be informed of the Contemplated
Transactions, and Buyer will have the right to be present for any such
communication.
32
of 45
SECTION
13.3 NOTICES.
All
notices, Consents, waivers and other communications required or permitted by
this Agreement shall be in writing and shall be deemed given to a party when
(a)
delivered to the appropriate address by hand (with written confirmation of
receipt) or by nationally recognized overnight courier service (costs prepaid);
(b) sent by facsimile with confirmation of transmission by the transmitting
equipment; or (c) sent to the addressee by certified mail, return receipt
requested, in each case to the following addresses or facsimile numbers (or
to
such other address, facsimile number, e-mail address or Person as a party may
designate by notice to the other parties):
| Company: |
Protech
Biosystems Pvt. Ltd.
|
X-0000
Xxxxxxxxxxxx
Xxxx
Xxx
Xxxxx, Xxxxx 000000
| Seller(s): |
1)
Xxxxxx
Xxxxx Singh
|
E.
000
X.X. Xxxx
Xxx
Xxxxx, Xxxxx 000000
2)
Xxxx Xxxxx Xxxxx
E.
000
X.X. Xxxx
Xxx
Xxxxx, Xxxxx 000000
3)
Rana Xxxxxx Xxxxx
E.
000
X.X. Xxxx
Xxx
Xxxxx, Xxxxx 000000
| Buyer: |
0000
XX
000xx
Xxxxxx
Xxxxx 000
Xxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
SECTION
13.4 RESOLUTION OF DISPUTES.
(a) In
the
event that any dispute, controversy or claim arising out of or relating to
this
Agreement or the breach, termination or validity thereof should arise between
the Parties (a “Dispute”), the Party wishing to declare a Dispute shall deliver
to the other Party(ies) a written notice identifying the disputed
issue.
(b) Any
Party
may give the other Party (ies) written notice of any Dispute not resolved in
the
normal course of business. Executives of the Parties shall meet at a mutually
acceptable time and place within ten (10) Business Days after delivery of such
notice and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the Dispute. In such meetings
and
exchanges, a Party shall have the right to designate as confidential any
information that such Party offers. If the matter has not been resolved in
the
aforementioned manner within thirty (30) Days of the disputing Party’s notice
having been issued, or if the Parties fail to meet within ten (10) Business
Days
as required above, any of the Parties may initiate legal action in Miami-Dade
County, Florida in either the state or federal court. By entering into this
Agreement, both parties agree to the jurisdiction of the state and federal
courts located in Miami-Dade County, Florida. This Agreement shall be
interpreted, enforced and governed by the laws of the State
of
Florida without regard to principals of conflict or choice of laws.
In
the
event of any litigation arising out of this Agreement, the prevailing party
shall be entitled to recover all costs including attorneys’ fees.
SECTION
13.5 ENFORCEMENT OF AGREEMENT.
Company
and Seller acknowledge and agree that Buyer will be irreparably damaged if
any
of the provisions of this Agreement are not performed in accordance with their
specific terms and that any Breach of this Agreement by Company or Seller will
be incapable of being adequately compensated by monetary damages alone. In
addition to any other right or remedy, any Party shall be entitled to enforce
any provision of this Agreement by a decree of specific performance and by
temporary, and permanent injunctive relief to prevent Breaches or
threatened Breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.
33
of 45
SECTION
13.6 WAIVER; REMEDIES CUMULATIVE.
The
rights and remedies of the Parties are cumulative and not alternative. Neither
any failure nor any delay by any Party in exercising any right, power or
privilege under this Agreement or any of the documents referred to in this
Agreement will operate as a waiver of such right, power or privilege, and no
single or partial exercise of any such right, power or privilege will preclude
any other or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege. To the maximum extent permitted by
applicable law, (a) no claim or right arising out of this Agreement or any
of
the documents referred to in this Agreement can be discharged by one Party,
in
whole or in part, by a waiver or renunciation of the claim or right unless
in
writing signed by the other Parties; (b) no waiver that may be given by a Party
will be applicable except in the specific instance for which it is given; and
(c) no notice to or demand on one Party will be deemed to be a waiver of any
obligation of that Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.
SECTION
13.7 ENTIRE AGREEMENT AND MODIFICATION.
This
Agreement supersedes all prior agreements, whether written or oral, between
the
Parties with respect to its subject matter (including any letter of intent
and
any confidentiality agreement between Buyer, on the one hand, and Seller or
Company, on the other hand) and constitutes (along with the schedules, Exhibits
and other documents delivered pursuant to this Agreement) a complete and
exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended, supplemented,
or otherwise modified except by a written agreement executed by the Party to
be
charged with the amendment.
SECTION
13.8 SCHEDULES.
(a) The
information contained in the schedules or other written disclosures constitute
(i) exceptions to particular representations, warranties, covenants and
obligations of Seller and Company as set forth in this Agreement or (ii)
descriptions or lists of Assets and Liabilities and other items referred to
in
this Agreement. If there is any inconsistency between the statements in this
Agreement and those in the schedules or other written disclosures (other than
an
exception expressly set forth as such in the schedules or other written
disclosures with respect to a specifically identified representation or
warranty), the statements in this Agreement will prevail.
(b) The
statements in the schedules or other written disclosures, and those in any
supplement thereto, relate only to the provisions in the Section of this
Agreement to which they expressly relate and not to any other provision in
this
Agreement.
SECTION
13.9 ASSIGNMENTS, SUCCESSORS AND NO THIRD-PARTY RIGHTS.
No Party
may assign any of its rights or delegate any of its obligations under this
Agreement without the prior written consent of the other Parties, and any such
attempted assignment shall be null and void and of no force or effect. Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon and inure to the benefit of the successors and permitted assigns
of the Parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy or claim under or with respect to this Agreement
or
any provision of this Agreement, except such rights as shall inure to a
successor or permitted assignee pursuant to this Section
13.9.
34
of 45
SECTION
13.10 SEVERABILITY.
If any
provision of this Agreement is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Agreement will remain
in
full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to
the
extent not held invalid or unenforceable.
SECTION
13.11 CONSTRUCTION.
The
headings of Articles and Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references
to
"Articles," "Sections," and “Exhibits” refer to the corresponding Articles,
Sections, and Exhibits of this Agreement.
SECTION
13.12 TIME OF ESSENCE.
With
regard to all dates and time periods set forth or referred to in this Agreement,
time is of the essence.
SECTION
13.13 GOVERNING LAW.
This
Agreement will be governed by and construed under the laws of the State of
Florida, without regard to conflicts-of-laws rules or any principles that would
require the application of any other law.
SECTION
13.14 EXECUTION OF AGREEMENT.
This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same instrument. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for all purposes.
SECTION
13.15 SELLER AND COMPANY LIABILITY; SELLER’S RELEASE.
(a)
Wherever
in this Agreement provision is made for any action to be taken or not taken
by
Company, Seller undertakes to cause Company to take or not take such action,
as
the case may be. Without limiting the generality of the foregoing, Seller and
Company shall be jointly and severally liable for the indemnities set forth
in
Article
11.
(b)
The
Liability of Company prior to Closing shall be joint and several with Seller.
Upon Closing, Company shall be forever discharged and released from all
Liabilities hereunder, including any claims of contribution from Seller. In
addition, in consideration for the Contemplated Transactions, as of the Closing,
Seller and its directors, officers, shareholders, representatives, heirs,
executors, successors and assigns (the "Waiving Parties"), release, waive and
forever discharge, in all capacities, including as shareholder of Company,
from
and after the Closing any and all claims, known or unknown, that the Waiving
Parties ever had, now have or may have against Company and its officers,
directors, employees or agents in connection with or arising out of any act
or
omission of Company or its officers, directors, employees, advisers or agents,
in such capacity, at or prior to the Closing.
35
of 45
This
Agreement shall be effective upon signature by the last signatory hereto.
IN
WITNESS WHEREOF, the parties have executed this Stock Purchase Agreement as
of
the date first written above.
| BUYER: | COMPANY: | |
| SFH I ACQUISITION CORP. | Protech Biosystems, Pvt. Ltd. | |
| By:/s/ Xxxxx Xxxxxxxxxx | By:/s/ Xxxxxx Xxxxx Singh | |
| Name: Xxxxx Xxxxxxxxxx | Name: Xxxxxx Xxxxx Singh | |
| Title: President | Title: | |
| Date: June 9, 2008 | Date: June 9, 2008 | |
| SELLING SHAREHOLDERS: | PERCENTAGE OF OWNERSHIP | |
| /s/ Xxxxxx Xxxxx Xxxxx | ||
| Xx. Xxxxxx Xxxxx Singh | 33.70% | |
| Date: June 9, 2008 | ||
| /s/ Xxxx Xxxxx Xxxxx | ||
| Xx. Xxxx Xxxxx Singh | 33.15% | |
| Date: June 9, 2008 | ||
| /s/ Rana Xxxxxx Xxxxx | ||
| Xx. Xxxx Xxxxxx Xxxxx | 33.15% | |
| Date: June 9, 2008 | ||
| TOTAL | 100% |
36
of 45
EXHIBIT
1.1
DEFINITIONS
For
purposes of this Agreement, the following terms and variations thereof have
the
meanings specified or referred to in Section
1.1
of the
Agreement:
"Accounts
Receivable" means (a) all trade accounts receivable and other rights to payment
from customers of Company , as the case may be, and the full benefit of all
security for such accounts or rights to payment, including all trade accounts
receivable representing amounts receivable in respect of goods shipped or
products sold or services rendered to customers of Company , (b) all other
accounts or notes receivable of Company and the full benefit of all
security for such accounts or notes and (c) any claim, remedy or other right
related to any of the foregoing.
"Assets"
means all real property; all Tangible Personal Property; all Inventories ;
all
Accounts Receivable; all Contracts; all data and Records related to the
operations of Company , as the case may be; and all of the intangible rights
and
property of Company , including Intellectual Property Assets, going concern
value, goodwill, telephone, facsimile and e-mail addresses .
"Balance
Sheet" has the meaning set forth in Section
3.10.
"Best
Efforts" means the efforts that a prudent Person desirous of achieving a result
would use in similar circumstances to achieve that result as expeditiously
as
possible; provided, however, that a Person required to use Best Efforts under
this Agreement will not be thereby required to take actions that would result
in
a material adverse change in the benefits to such Person of this Agreement
and
the Contemplated Transactions or to dispose of or make any change to its
business, expend any material funds or incur any other material
burden.
"Breach"
means any breach of, or any inaccuracy in, any representation or warranty or
any
breach of, or failure to perform or comply with, any covenant or obligation,
in
or of this Agreement or any other Contract, or any event which, with the passing
of time or the giving of notice or both, would constitute such a breach,
inaccuracy or failure.
"Business
Day" means any day other than (a) Saturday or Sunday or (b) any other day on
which banks are permitted or required to be closed in the State of New York
or
in India.
"Buyer"
has the meaning set forth in the first paragraph of this Agreement.
"Buyer
Indemnified Persons" has the meaning set forth in Section
11.2.
"Closing"
has the meaning set forth in Section
2.2.
"Closing
Date" means the date on which the Closing actually takes place.
"Code"
means the Internal Revenue Code of 1986.
"Company"
has the meaning set forth in the first paragraph of this Agreement.
37
of 45
"Company
Contract" means any Contract (a) under which Company has or may acquire any
rights or benefits; (b) under which Company has or may become subject to any
obligation or Liability; or (c) by which Company or any of the Assets owned
or
used by Company is, are or may become bound.
“Compliance
Date” means three days prior to the Closing Date
"Confidential
Information" has the meaning set forth in Section
12.1.
"Consent"
means any approval, consent, ratification, waiver or other
authorization.
"Contemplated
Transactions" means all of the transactions contemplated by this
Agreement.
"Contract"
means any agreement, contract, Lease, consensual obligation, promise or
undertaking (whether written or oral and whether express or implied), whether
or
not legally binding.
“Copyright”
has the meaning set forth in Section
3.21.
"Damages"
has the meaning set forth in Section
11.2.
"Effective
Time" means the time at which the Closing is consummated.
"Employee
Plans" has the meaning set forth in Section
3.15(d).
"Encumbrance"
means any charge, claim, community or other marital property interest,
condition, equitable interest, lien, option, pledge, security interest,
mortgage, right of way, easement, encroachment, servitude, right of first
option, right of first refusal or similar restriction, including any restriction
on use, voting (in the case of any security or equity interest), transfer,
receipt of income or exercise of any other attribute of ownership.
“End
Date” has the meaning set forth in Section
2.2.
"Environment"
means soil, land surface or subsurface strata, surface waters (including
navigable waters and ocean waters), groundwaters, drinking water supply, stream
sediments, ambient air (including indoor air), plant and animal life and any
other environmental medium or natural resource.
"Environmental,
Health and Safety Liabilities" means any cost, damages, expense, Liability,
obligation or other responsibility arising from or under any Environmental
Law
or Occupational Safety and Health Law, including those consisting of or relating
to:
(a) any
environmental, health or safety matter or condition (including on-site or
off-site contamination, occupational safety and health and regulation of any
chemical substance or product);
(b) any
fine,
penalty, judgment, award, settlement, legal or administrative proceeding,
damages, loss, claim, demand or response, remedial or inspection cost or expense
arising under any Environmental Law or Occupational Safety and Health
Law;
(c) financial
responsibility under any Environmental Law or Occupational Safety and Health
Law
for cleanup costs or corrective action, including any cleanup, removal,
containment or other remediation or response actions ("Cleanup") required by
any
Environmental Law or Occupational Safety and Health Law (whether or not such
Cleanup has been required or requested by any Governmental Body or any other
Person) and for any natural resource damages; or
38
of 45
(d) any
other
compliance, corrective or remedial measure required under any Environmental
Law
or Occupational Safety and Health Law.
The
terms
"removal," "remedial" and "response action" include the types of activities
covered by the United States Comprehensive Environmental Response, Compensation
and Liability Act of 1980 (CERCLA).
"Environmental
Law" means any Legal Requirement that requires or relates to:
(a) advising
appropriate authorities, employees or the public of intended or actual Releases
of pollutants or hazardous substances or materials, violations of discharge
limits or other prohibitions and the commencement of activities, such as
resource extraction or construction, that could have significant impact on
the
Environment;
(b) Preventing
or reducing to acceptable levels the Release of pollutants or hazardous
substances or materials into the Environment;
(c) Reducing
the quantities, preventing the Release or minimizing the hazardous
characteristics of wastes that are generated;
(d) assuring
that products are designed, formulated, packaged and used so that they do not
present unreasonable risks to human health or the Environment when used or
disposed of;
(e) Protecting
resources, species or ecological amenities;
(f) Reducing
to acceptable levels the risks inherent in the transportation of hazardous
substances, pollutants, oil or other potentially harmful
substances;
(g) cleaning
up pollutants that have been Released, preventing the Threat of Release or
paying the costs of such clean up or prevention; or
(h) Making
responsible parties pay private parties, or groups of them, for damages done
to
their health or the Environment or permitting self-appointed representatives
of
the public interest to recover for injuries done to public assets.
"Exchange
Act" means the Securities Exchange Act of 1934.
"Facilities"
means any real property, leasehold or other interest in real property currently
owned or operated by Company, as the case may be, including the Tangible
Personal Property used or operated by Company at the respective locations of
the
Real Property specified herein. Notwithstanding the foregoing, for purposes
of
the definitions of "Hazardous Activity" and "Remedial Action", "Facilities"
shall mean any real property, leasehold or other interest in real property
currently or formerly owned or operated by Company, including the Tangible
Personal Property used or operated by Company at the respective locations of
the
Real Property specified herein.
"GAAP"
means generally accepted accounting principles for financial reporting in the
United States, applied on a basis consistent with the basis on which the
Financial Statements and the other financial statements referred to in
Section
3.4
were or
will be prepared.
39
of 45
"Governing
Documents" means with respect to any particular entity, (a) if a corporation,
the articles or certificate of incorporation and the bylaws; (b) if a general
partnership, the partnership agreement and any statement of partnership; (c)
if
a limited partnership, the limited partnership agreement and the certificate
of
limited partnership; (d) if a limited liability company, the articles of
organization or foundation agreement and operating agreement or charter; (e)
if
another type of Person, any other charter or similar document adopted or filed
in connection with the creation, formation or organization of the Person; (f)
all equityholders' agreements, voting agreements, voting trust agreements,
joint
venture agreements, registration rights agreements or other agreements or
documents relating to the organization, management or operation of any Person
or
relating to the rights, duties and obligations of the equityholders of any
Person; and (g) any amendment or supplement to any of the
foregoing.
"Governmental
Authorization" means any Consent, license, registration or permit issued,
granted, given or otherwise made available by or under the authority of any
Governmental Body or pursuant to any Legal Requirement.
"Governmental
Body" means any: (a) nation, state, county, city, town, borough, village,
district or other jurisdiction; (b) federal, state, local, municipal, foreign
or
other government; (c) governmental or quasi-governmental authority of any nature
(including any agency, branch, department, board, commission, court, tribunal
or
other entity exercising governmental or quasi-governmental powers); (d)
multinational organization or body; (e) body exercising, or entitled or
purporting to exercise, any administrative, executive, judicial, legislative,
police, regulatory or taxing authority or power; or (f) official of any of
the
foregoing.
"Ground
Lease" means any long-term lease of land in which most of the rights and
benefits comprising ownership of the land and the improvements thereon or to
be
constructed thereon, if any, are transferred to the tenant for the term
thereof.
"Ground
Lease Property" means any land, improvements and appurtenances subject to a
Ground Lease in favor of Company.
"Hazardous
Activity" means the distribution, generation, handling, importing, management,
manufacturing, processing, production, refinement, Release, storage, transfer,
transportation, treatment or use (including any withdrawal or other use of
groundwater) of Hazardous Material in, on, under, about or from any of the
Facilities or any part thereof into the Environment and any other act, business,
operation or thing that increases the danger, or risk of danger, or poses an
unreasonable risk of harm, to persons or property on or off the
Facilities.
"Hazardous
Material" means any substance, material or waste which is or will foreseeably
be
regulated by any Governmental Body, including any material, substance or waste
which is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"contaminant," "toxic waste" or "toxic substance" under any provision of
Environmental Law.
"Improvements"
means all buildings, structures, fixtures and improvements located on the Land
or included in the Assets, including those under construction.
"Intellectual
Property Assets" has the meaning set forth in Section
3.21.
40
of 45
"Inventories"
means all inventories of Company , as the case may be, wherever located,
including all finished goods, work in process, raw materials, spare parts and
all other materials and supplies to be used or consumed by Company in the
production of finished goods.
"IRS"
means the United States Internal Revenue Service and, to the extent relevant,
the United States Department of the Treasury.
"Knowledge"
means that an individual will be deemed to have Knowledge of a particular fact
or other matter if: (a) that individual is actually aware of that fact or
matter; or (b) a prudent individual could be expected to discover or otherwise
become aware of that fact or matter in the course of conducting a reasonably
comprehensive investigation regarding the accuracy of any representation or
warranty contained in this Agreement. A Person (other than an individual) will
be deemed to have Knowledge of a particular fact or other matter if any
individual who is serving, or who has at any time served, as a director,
officer, partner, executor or trustee of that Person (or in any similar
capacity) has, or at any time had, Knowledge of that fact or other matter (as
set forth in (a) and (b) above), and any such individual (and any individual
party to this Agreement) will be deemed to have conducted a reasonably
comprehensive investigation regarding the accuracy of the representations and
warranties made herein by that Person or individual.
"Land"
means all parcels and tracts of land in which Company has an ownership
interest.
"Lease"
means any Real Property Lease or any lease or rental agreement, license, right
to use or installment and conditional sale agreement to which Company is a
party
and any other Company Contract, Contract pertaining to the leasing or use of
any
Tangible Personal Property.
"Legal
Requirement"--any federal, state, local, municipal, foreign, international,
multinational or other constitution, law, ordinance, principle of common law,
code, regulation, statute or treaty.
"Liability"
means with respect to any Person, any liability or obligation of such Person
of
any kind, character or description, whether known or unknown, absolute or
contingent, accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise, and
whether or not the same is required to be accrued on the financial statements
of
such Person.
“Xxxx”
has the meaning set forth in Section
3.21.
"Material
Consents" has the meaning set forth in Section
7.4.
“Net
Name” has the meaning set forth in Section
3.21.
"Order"
means any order, injunction, judgment, decree, ruling, assessment or arbitration
award of any Governmental Body or arbitrator.
"Ordinary
Course of Business" means an action taken by a Person will be deemed to have
been taken in the Ordinary Course of Business only if that action:
(a) is
consistent in nature, scope and magnitude with the past practices of such Person
and is taken in the ordinary course of the normal, day-to-day operations of
such
Person;
41
of 45
(b) does
not
require authorization by the board of directors or shareholders of such Person
(or by any Person or group of Persons exercising similar authority) and does
not
require any other separate or special authorization of any nature;
and
(c) is
similar in nature, scope and magnitude to actions customarily taken, without
any
separate or special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business
as
such Person.
“Party
means each individual party to this Agreement.
“Parties
means collectively the parties to this Agreement.
“Patent”
has the meaning set forth in Section
3.21.
“PCAOB”
means the Public Company Accounting Oversight Board.
"Person"
means an individual, partnership, corporation, business trust, limited liability
company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a Governmental
Body.
"Proceeding"
means any action, arbitration, audit, hearing, investigation, litigation or
suit
(whether civil, criminal, administrative, judicial or investigative, whether
formal or informal, whether public or private) commenced, brought, conducted
or
heard by or before, or otherwise involving, any Governmental Body or
arbitrator.
“Purchase
Shares” shall have the meaning set forth in the Recitals.
"Real
Property" means the Land and Improvements and all Appurtenances thereto and
any
Ground Lease Property.
"Real
Property Lease" means any Ground Lease or Space Lease.
"Record"
means information that is inscribed on a tangible medium or that is stored
in an
electronic or other medium and is retrievable in perceivable form.
"Related
Person" means:
(a) with
respect to a particular individual: (i) each other member of such individual's
Family; (ii) any Person that is directly or indirectly controlled by any one
or
more members of such individual's Family; (iii) any Person in which members
of
such individual's Family hold (individually or in the aggregate) a Material
Interest; and (iv) any Person with respect to which one or more members of
such
individual's Family serves as a director, officer, partner, executor or trustee
(or in a similar capacity); and
(b) with
respect to a specified Person other than an individual: (i) any Person that
directly or indirectly controls, is directly or indirectly controlled by or
is
directly or indirectly under common control with such specified Person; (ii)
any
Person that holds a Material Interest in such specified Person; (iii) each
Person that serves as a director, officer, partner, executor or trustee of
such
specified Person (or in a similar capacity); (iv) any Person in which such
specified Person holds a Material Interest; and (v) any Person with respect
to
which such specified Person serves as a general partner or a trustee (or in
a
similar capacity).
42
of 45
For
purposes of this definition, (a) "control" (including "controlling," "controlled
by," and "under common control with") means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies
of
a Person, whether through the ownership of voting securities, by contract or
otherwise, and shall be construed as such term is used in the rules promulgated
under the Securities Act; (b) the "Family" of an individual includes (i) the
individual, (ii) the individual's spouse, (iii) any other natural person who
is
related to the individual or the individual's spouse within the second degree
and (iv) any other natural person who resides with such individual; and (c)
"Material Interest" means direct or indirect beneficial ownership (as defined
in
Rule 13d-3 under the Exchange Act) of voting securities or other voting
interests representing at least ten percent (10%) of the outstanding voting
power of a Person or equity securities or other equity interests representing
at
least ten percent (10%) of the outstanding equity securities or equity interests
in a Person.
"Release"
means any release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal, leaching or
migration on or into the Environment or into or out of any
property.
"Remedial
Action" means all actions, including any capital expenditures, required or
voluntarily undertaken (a) to clean up, remove, treat or in any other way
address any Hazardous Material or other substance; (b) to prevent the Release
or
Threat of Release or to minimize the further Release of any Hazardous Material
or other substance so it does not migrate or endanger or threaten to endanger
public health or welfare or the Environment; (c) to perform pre-remedial studies
and investigations or post-remedial monitoring and care; or (d) to bring all
Facilities and the operations conducted thereon into compliance with
Environmental Laws and environmental Governmental Authorizations.
"Representative"
means with respect to a particular Person, any director, officer, manager,
employee, agent, consultant, advisor, accountant, financial advisor, legal
counsel or other representative of that Person.
"SEC"
means the United States Securities and Exchange Commission.
"SEC
Documents" has the meaning set forth in Section
4.4.
"Securities
Act" means Securities Act of 1933, as amended.
"Seller"
has the meaning set forth in the first paragraph of this Agreement.
"Tangible
Personal Property" means with respect to Company , as the case may be, all
machinery, equipment, tools, furniture, office equipment, computer hardware,
supplies, materials, vehicles and other items of tangible personal property
(other than Inventories) of every kind owned or leased by Company (wherever
located and whether or not carried on Company's ’s books).
"Tax"
means any income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental, windfall profit,
customs, vehicle, airplane, boat, vessel or other title or registration, capital
stock, franchise, employees' income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Body or
payable under any tax-sharing agreement or any other Contract.
"Tax
Return" means any return (including any information return), report, statement,
schedule, notice, form, declaration, claim for refund or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.
43
of 45
"Third
Party" means a Person that is not a party to this Agreement.
"Third-Party
Claim" means any claim against any Indemnified Person by a Third Party, whether
or not involving a Proceeding.
"Threat
of Release" means a reasonable likelihood of a Release that may require action
in order to prevent or mitigate damage to the Environment that may result from
such Release.
“Trade
Secret” has the meaning set forth in Section
3.21.
44
of 45
Exhibit
A
List
of ShareHolders of Protech Biosystems Pvt. Ltd.
|
X.Xx.
|
Name
of the Director
|
Address
|
No
of Shares Held
|
%
of Share Holding
|
|
1.
|
Xx.
Xxxxxx Xxxxx Xxxxx
|
X-0000
Xxxxxxxxxxx Xxxx, Xxx Xxxxx-000000
|
20304
|
33.70%
|
|
2.
|
Xx.
Xxxx Xxxxx Xxxxx
|
X-0000
Xxxxxxxxxxx Xxxx, Xxx Xxxxx-000000
|
20010
|
33.15%
|
|
3.
|
Xx.
Xxxx Xxxxxx Xxxxx
|
X-0000
Xxxxxxxxxxx Xxxx, Xxx Xxxxx-000000
|
20010
|
33.15%
|
| Total Number of shares | : 60324 Shares |
| Paid up Share Capital @ 10 each | : Rs.603240.00 |
45
of 45
