EXECUTION COPY
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is entered into as of February
1, 2003, by and between Integrated Health Technologies, Inc., a Delaware
corporation or a wholly-owned corporation to be formed by it (the "Buyer"), and
Trade Investment Services, L.L.C., a Delaware limited liability company (the
"Seller"). The Buyer and the Seller are collectively, the "Parties".
WHEREAS, the Buyer has agreed to purchase all of the interests of the
Seller, representing fifty percent (50%) of the common stock (the "Securities")
of TisorEx Inc. (to be renamed Paxis Pharmaceuticals, Inc.), a Delaware
corporation (the "Company").
WHEREAS, the Seller has agreed to sell the Securities to the Buyer for the
consideration set forth herein.
Now, therefore, in consideration of the representations, warranties and
covenants herein contained, the Parties hereby agree as follows.
ARTICLE I
THE PURCHASE AND SALE OF THE SECURITIES
1.1 Purchase and Sale of the Securities. The Buyer has agreed to purchase
from and the Seller has agreed to sell to the Buyer the Securities (the "Paxis
Acquisition"), subject to all the terms and conditions hereof and in reliance on
the representations and warranties set forth herein.
1.2 Purchase Price. In consideration for the sale of the Securities from
the Seller, the Buyer will pay the Seller a purchase price structured as
follows: (i) $500,000 ("Cash Payment") to be paid on the Closing Date (as
defined herein); and (ii) payments equal to twenty-five percent (25%) of the
Company's after-tax profits, commencing with the first calendar quarter
following the Closing Date, until the Seller shall have received payments equal
to $49,500,000 in the aggregate (the "Earnout Consideration").
1.3 Payment of Purchase Price. The Cash Payment shall be paid by the Buyer
to the Seller by wire transfer of immediately available funds on the Closing
Date (as defined herein) in accordance with the Seller's written instructions.
The Additional Payments shall be paid or caused by the Buyer to be paid on a
quarterly basis by wire transfer of immediately available funds pursuant to
Section 1.2 above and in accordance with the Seller's written instructions.
1.4 The Closing. The Closing shall take place at the offices of St. ▇▇▇▇ &
▇▇▇▇▇, L.L.C., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, commencing at
10:00 a.m. local time on the Closing Date.
1.5 Actions at the Closing. At the Closing:
(a) the Seller shall deliver to the Buyer the various certificates,
instruments and documents referred to in Section 5.1;
2
(b) the Buyer shall deliver to the Seller the various certificates,
instruments and documents referred to in Section 5.2.
1.6 Payment of Earnout Consideration.
(a) The Earnout Consideration payable to the Seller, as provided in
Section 1.2 above, shall be paid by the Buyer quarterly on or before forty-five
(45) days following the end of each calendar quarter of the Company, commencing
with the first calendar quarter following the Closing Date. Each such quarterly
payment of the Earnout Consideration will be based on the after-tax net profits,
if any, of the Company, computed in accordance with GAAP consistently applied
for the most recently completed calendar quarter. In the event that the Company
reports a loss for such period, the Buyer shall not be required to make a
payment pursuant to this Section 1.6 for such period. A stand-alone profit and
loss statement for the Company shall be maintained by the Buyer which will
include the results of such business unit even if it is transferred or
consolidated with other business units of the Buyer or any affiliates.
(b) On or before forty-five (45) days after the end of each calendar
quarter, the Buyer shall provide the Seller and the Company with a statement
showing the computation of (i) the after-tax net profits of the Company for the
most recently completed calendar quarter, and (ii) the quarterly Earnout
Consideration, if any, payable to the Seller pursuant to Section 1.2. The Seller
shall have the option, which shall not exceed once per calendar year, to engage,
at the Company's expense, an independent certified public accounting firm
reasonably acceptable to the Buyer, to examine, in confidence, such books and
records as may be necessary to determine, with respect to the most recently
completed calendar year, the correctness of any payment of the Earnout
Consideration for the previous calendar year. Any information contained in any
such audit report from the Company's certified public accountant shall be deemed
confidential information. If any audit performed under this Section 1.6(b) shall
indicate that any payment of the Earnout Consideration was underpaid, the Buyer
shall pay to the Seller the amount of such underpayment promptly. If any audit
performed under this Section 1.6(b) shall indicate that any payment of the
Earnout Consideration hereunder was underpaid by more than five percent (5%),
the Buyer shall pay the costs of such audit.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE COMPANY
The Seller represents and warrants to the Buyer that, except as set forth
in the Disclosure Schedule, which Buyer acknowledges will be delivered by the
Seller after the date hereof but prior to the Closing, the statements contained
in this Article II are true and correct as of the date of this Agreement. The
Disclosure Schedule shall be arranged in sections and subsections corresponding
to the numbered and lettered sections and subsections contained in this Article
II. The disclosures in any section or subsection of the Disclosure Schedule
shall qualify only (a) the corresponding section or subsection in this Article
II and (b) other sections or subsections in this Article II to the extent that
it is clear from a reading of the disclosure that such disclosure also qualifies
or applies to such other sections or subsections.
2.1 Organization, Qualification and Corporate Power. The Company is a
corporation duly organized, validly existing and in corporate and tax good
standing under the laws of the state of Delaware. The Company is duly qualified
to conduct business and is in corporate and tax good standing under the laws of
each jurisdiction listed in Section 2.1 of the Disclosure
Schedule, which jurisdictions constitute the only jurisdictions in which the
nature of the Company's businesses or the ownership or leasing of its properties
requires such qualification. The Company has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it. The Company has furnished to the Buyer
complete and accurate copies of its charter and by-laws, each as amended to
date.
2.2 Capitalization.
(a) To the Seller's Knowledge, Section 2.2(a) of the Disclosure
Schedule sets forth a complete and accurate list, as of the date of the
Agreement, of the holders of the Company's capital stock, showing the number of
shares of capital stock, and the class or series of such shares, held by each
stockholder and (for shares other than common stock of the Company), the number
of shares of common stock into which such shares are convertible, if any.
Section 2.2(a) of the Disclosure Schedule also indicates all outstanding shares
of the Company's common stock (the "Common Stock") that are restricted or are
otherwise subject to a repurchase or redemption right, indicating the name of
the applicable stockholder, the vesting schedule (including any acceleration
provisions with respect thereto), and the repurchase price payable by the
Company. To the Seller's Knowledge, all of the issued and outstanding shares of
the capital stock of the Company have been and, subject only to such ministerial
acts by the Company necessary to record the purchase and sale of the Common
Stock contemplated by this Agreement, on the Closing Date will be duly
authorized, validly issued, fully paid, nonassessable and were issued free of
all preemptive rights. To the Seller's Knowledge, all of the issued and
outstanding shares of the capital stock of the Company have been offered, issued
and sold by the Company in compliance with all applicable federal and state and
foreign securities laws.
(b) To the Seller's Knowledge and except as set forth in Section
2.2(b) of the Disclosure Schedule, (i) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase or
acquire any of the Common Stock is authorized or outstanding, (ii) the Company
has no obligation (contingent or otherwise) to issue any subscription, warrant,
option, convertible security or other such right, or to issue or distribute to
its stockholders any further interests or assets of the Company, and (iii) the
Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its Common Stock or to make any other distribution in
respect thereof.
(c) To the Seller's Knowledge and except as set forth in Section
2.2(c) of the Disclosure Schedule, there is no agreement, written or oral,
between the Company and any of its stockholders relating to the sale or transfer
(including agreements relating to rights of first refusal, co-sale rights or
"drag-along" rights), registration under the Securities Act, or voting, of the
Company's Common Stock.
2.3 Authorization. The Seller has all requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery by the Seller of this Agreement and the
agreements provided for herein, and the performance by the Seller of this
Agreement and the consummation by the Seller of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
company action on the part of the Seller. This Agreement and all other
agreements provided for herein have been or will be as of the Closing Date duly
and validly executed and delivered by the Seller and constitutes or will
constitute a valid and binding obligation of the
Seller, enforceable against it in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or similar laws relating to or
affecting the rights of creditors generally and general principles of equity.
2.4 Noncontravention. Neither the execution and delivery by the Seller of
this Agreement or any other agreement provided for herein, nor the consummation
by the Seller of the transactions contemplated hereby or thereby, will (a)
conflict with or violate any provision of its Certificate of Formation or
Operating Agreement or other formation documents of the Seller or the Company,
(b) require on the part of the Seller or Company any notice to or filing with,
or any permit, authorization, consent or approval of, any Governmental Entity,
(c) to the Seller's Knowledge and except as set forth in Section 2.4(c) of the
Disclosure Schedule, conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party the right to accelerate,
terminate, modify or cancel, or require any notice, consent or waiver under, any
contract, lease, sublease, license, sublicense, franchise, permit, indenture,
agreement or mortgage for borrowed money, instrument of indebtedness, Security
Interest or other arrangement to which the Company is a party or by which the
Company is bound or to which any of its assets is subject, (d) result in the
imposition of any Security Interest upon any assets of the Company or (e)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company or any of its properties or assets. Section 2.4 (c) of
the Disclosure Schedule sets forth a true, correct and complete list of all
consents and approvals of third parties and Governmental Entities, and all
filings and notices, that are required to be obtained in connection with the
consummation by the Company of the transactions contemplated hereby.
2.5 Subsidiaries. To the Seller's Knowledge, the Company does not control
directly or indirectly or have any direct or indirect equity participation or
similar interest in any corporation, partnership, limited liability company,
joint venture, trust or other domestic or foreign business association,
organization or entity.
2.6 Financial Statements. The Seller shall cause the Company to provide to
the Buyer the Financial Statements. To the Seller's Knowledge, the Financial
Statements have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby except as expressly set forth in
the notes thereto and except for normal year-end reconciliation adjustments. To
the Seller's Knowledge, each of the Financial Statements fairly presents, in all
material respects, the assets, liabilities, financial position, results of
operations and cash flows of the Company, as of the date thereof and for the
period referred to therein, and is, in all material respects, consistent with
the books and records of the Company.
2.7 Absence of Certain Changes. To the Seller's Knowledge, since the Most
Recent Balance Sheet Date, the Company has conducted its business in the
Ordinary Course of Business and, except as set forth in Section 2.7 of the
Disclosure Schedule, (a) there has occurred no event or development which,
individually or in the aggregate, has had, or would reasonably be expected to
have in the future, a Company Material Adverse Effect, and (b) the Company has
not taken any of the following actions:
(a) issued or sold any Common Stock or any options, warrants or
rights to acquire any such interests, or amended any of the terms of (including
the vesting of) any options or restricted interests agreements, or repurchased
or redeemed any interests of the Company;
(b) split, combined or reclassified any of its shares of Common
Stock; or declared, set aside or paid any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock;
(c) created, incurred or assumed except in the Ordinary Course of
Business any indebtedness (including obligations in respect of capital leases);
assumed, guaranteed, endorsed or otherwise became liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other person or
entity; or made any loans, advances or capital contributions to, or investments
in, any other person or entity;
(d) entered into or adopted or amended any employment or severance
agreement or (except for normal increases in the Ordinary Course of Business for
employees who are not Affiliates), increased in any manner the compensation or
fringe benefits of, or materially modified the employment terms of, its
directors, officers or employees, generally or individually, or paid any bonus
or other benefit to its directors, officers or employees or hired any new
officers or (except in the Ordinary Course of Business) any new employees or
consultants;
(e) acquired, sold, leased, licensed or disposed of any assets or
property, other than purchases and sales of assets in the Ordinary Course of
Business;
(f) mortgaged or pledged any of its material property or assets or
subjected any such property or assets to any Security Interest;
(g) discharged or satisfied any Security Interest or paid any
obligation or liability other than in the Ordinary Course of Business;
(h) amended its charter, by-laws or other organizational documents;
(i) sold, assigned, transferred, licensed or sublicensed any
Intellectual Property, other than pursuant to licenses with customers entered
into in the Ordinary Course of Business;
(j) changed its accounting methods, principles or practices, except
insofar as may be required by a generally applicable change in GAAP, or made any
material new elections, or changes to any material current elections, with
respect to Taxes;
(k) entered into, amended, terminated, took or omitted to take any
action that would constitute a violation of or default under, or waived any
rights under, any contract or agreement of a nature required to be listed in
Section 2.12, Section 2.13 or Section 2.15 of the Disclosure Schedule;
(l) made or committed to make any capital expenditure in excess of
$50,000 per item except as reflected in the Financial Plan attached to Section
2.7 of the Disclosure Schedule;
(m) instituted or settled any material Legal Proceeding;
(n) failed to take any action necessary to preserve the validity of
any material Intellectual Property or Permit; or
(o) agreed in writing or otherwise to take any of the foregoing
actions.
2.8 Undisclosed Liabilities. To the Seller's Knowledge, the Company has no
liability (whether known or unknown, whether absolute or contingent, whether
liquidated or unliquidated and whether due or to become due), except as set
forth in Section 2.8 of the Disclosure Schedule and for liabilities shown on the
Most Recent Balance Sheet, a copy of which is attached to Section 2.8 of the
Disclosure Schedule and except for liabilities incurred in the Ordinary Course
of Business since the date of the Most Recent Balance Sheet.
2.9 Tax Matters.
(a) To the Seller's Knowledge, the Company has filed on a timely
basis (taking into account any extensions of time to file granted or obtained)
all material Tax Returns that it was required to file, and all such Tax Returns
were complete and accurate in all material respects. To the Seller's Knowledge,
the Company is not and has never been a member of a group of corporations with
which it has filed (or been required to file on or prior to the Closing Date)
consolidated, combined, unitary or similar Tax Returns. To the Seller's
Knowledge, the Company has paid on a timely basis all Taxes that were due and
payable whether or not shown on any Tax Return. To the Seller's Knowledge, the
unpaid Taxes of the Company for tax periods through the Most Recent Balance
Sheet Date do not materially exceed the accruals and reserves for Taxes
(excluding accruals and reserves for deferred Taxes established to reflect
timing differences between book and Tax income) set forth on the Most Recent
Balance Sheet. To the Seller's Knowledge, all Taxes that the Company is or was
required by law to withhold or collect have been duly withheld or collected and,
to the extent required, have been paid to the proper Governmental Entity.
(b) To the Seller's Knowledge, the federal income Tax Returns of the
Company have been audited by the Internal Revenue Service or are closed by the
applicable statute of limitations for all taxable years through the taxable year
specified in Section 2.9(b) of the Disclosure Schedule. To the Seller's
Knowledge, no examination or audit of any Tax Return of the Company by any
Governmental Entity is currently in progress or is threatened or contemplated in
writing. To the Seller's Knowledge, the Company has never been informed by any
jurisdiction that the jurisdiction believes that the Company was required to
file any Tax Return that was not filed. To the Seller's Knowledge, the Company
has not waived any statute of limitations with respect to Taxes or agreed to an
extension of time with respect to a Tax assessment or deficiency.
2.10 Assets.
(a) To the Seller's Knowledge and except as set forth in Section
2.10(a) of the Disclosure Schedule, the Company owns or leases all tangible
assets used in or necessary for the conduct of its businesses as presently
conducted, which assets are reflected in the Financial Statements (other than to
the extent acquired or disposed of in the Ordinary Course of Business). To the
Seller's Knowledge, each such tangible asset has been maintained in accordance
with normal industry practice, is in good operating condition and repair
(subject to normal wear and tear) and is suitable for the purposes for which it
presently is used.
(b) To the Seller's Knowledge, each item of equipment, motor vehicle
and other asset that the Company has possession of pursuant to a lease agreement
or other contractual
arrangement is in such condition that, upon its return to its lessor or owner in
its present condition at the end of the relevant lease term or as otherwise
contemplated by the applicable lease or contract, the obligations of the Company
to such lessor or owner will have been discharged in full.
2.11 Owned Real Property. To the Seller's Knowledge, the Company does not
own, and has never owned, any real property.
2.12 Real Property Leases. To the Seller's Knowledge, Section 2.12 of the
Disclosure Schedule lists all Leases and lists the term of such Lease, any
extension and expansion options, and the rent payable thereunder. To the
Seller's Knowledge, the Company has delivered to the Buyer complete and accurate
copies of the Leases.
2.13 Intellectual Property.
(a) To the Seller's Knowledge, the Company owns, or is licensed or
otherwise possesses a legally enforceable right to use, all Intellectual
Property (other than computer software, data and documentation received or
otherwise acquired from third parties) used in the operation of its business or,
with respect to products currently under development, necessary for the
operation of its business. To the Seller's Knowledge, each item of Intellectual
Property owned by or used in the operation of the business of the Company will
be owned or available for use by the Company on identical terms and conditions
immediately following the Closing. To the Seller's Knowledge, the Company has
taken reasonable measures to protect the proprietary nature of each item of
confidential Intellectual Property owned or used by it and to maintain in
confidence all trade secrets and confidential information, that it owns or uses.
To the Knowledge of the Seller, (i) except pursuant to licenses set forth in
Sections 2.13(c) and 2.13(d) of the Disclosure Schedule and so marked, no other
person or business entity has any rights to any of the Intellectual Property
owned or used by the Company, and (ii) no other person or business entity is
infringing, violating or misappropriating any of the Intellectual Property that
the Company owns or uses.
(b) To the Knowledge of the Seller, none of the activities or
business conducted by the Company infringes, violates or constitutes a
misappropriation of any Intellectual Property rights of any other person or
business entity. To the Seller's Knowledge, the Company has not received any
written complaint, claim or notice alleging any such infringement, violation or
misappropriation, and there is no basis for any such complaint, claim or notice.
(c) To the Seller's Knowledge, Section 2.13(c) of the Disclosure
Schedule identifies each (i) patent, trademark registration or copyright
registration that has been issued to the Company with respect to any of its
Intellectual Property, (ii) pending patent application or application for
trademark or copyright registration that the Company has made with respect to
any of its Intellectual Property and (iii) license or other agreement pursuant
to which the Company has licensed, distributed or otherwise granted any rights
to any third party with respect to any of its Intellectual Property. To the
Seller's Knowledge, the Company has delivered to the Buyer correct and complete
copies of all such patent applications, licenses and agreements (each as amended
to date) and has specifically identified and made available to the Buyer correct
and complete copies of all written documentation evidencing ownership of any
such applications, and any claims or disputes relating to, each such item. To
the Seller's Knowledge and except as
set forth in Section 2.13(c) of the Disclosure Schedule, with respect to each
item of Intellectual Property that the Company owns:
(i) subject to such rights as have been granted by the Company
under license agreements entered into with customers in the Ordinary Course of
Business, the Company owns all right, title and interest in and to such item;
and
(ii) such item is not subject to any outstanding judgment,
order, decree, stipulation or injunction restricting the rights of the Company
in such item.
(d) To the Seller's Knowledge, Section 2.13(d) of the
Disclosure Schedule identifies each license or agreement pursuant to which the
Company uses Intellectual Property, or that the Company plans to use in the
future, that is owned by a party other than the Company (excluding off-the-shelf
software programs licensed by the Company pursuant to "shrink wrap" licenses).
To the Seller's Knowledge and except as set forth in Section 2.13(d) of the
Disclosure Schedule, with respect to each such license or agreement:
(i) the license, sublicense or other agreement covering such
item is legal, valid, binding and enforceable (subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws relating to or affecting the
rights of creditors generally and general principles of equity) against the
Company and against each other party thereto, and is in full force and effect;
(ii) such license, sublicense or other agreement will continue
to be legal, valid, binding and enforceable (subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws relating to or affecting the
rights of creditors generally and general principles of equity) against the
Company and against each other party thereto, and will continue to be in full
force and effect immediately following the Closing in accordance with the terms
thereof as in effect prior to the Closing;
(iii) neither the Company nor any other party to such license,
sublicense or other agreement is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or default or
permit termination, modification or acceleration thereunder;
(iv) each item of Intellectual Property underlying each such
license or agreement is not subject to any outstanding judgment, order, decree,
stipulation or injunction restricting the rights of the Company in such
Intellectual Property; and
(v) no license or other fee is payable upon any transfer or
assignment of such license, sublicense or other agreement.
(e) To the Seller's Knowledge, the Company licenses or otherwise
possesses a legally enforceable right to use each item of computer software,
data and documentation the Company has used in the operation of the business of
the Company and received or otherwise acquired by the Company or made available
to the Company from third parties (including, without limitation, third parties
that are customers of the Company).
2.14 Inventory. To the Seller's Knowledge, the Company has no inventory.
2.15 Contracts.
(a) To the Seller's Knowledge, Section 2.15(a) of the Disclosure
Schedule lists the following agreements to which the Company is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property from or to third parties which involves more than the
sum of $50,000;
(ii) any agreement (or group of related agreements) for the
purchase or sale of products or for the furnishing or receipt of services (A)
which calls for performance over a period of more than one year, (B) which
involves more than the sum of $50,000, or (C) in which the Company has granted
manufacturing rights, "most favored nation" pricing provisions or exclusive
marketing or distribution rights relating to any services, products or territory
or has agreed to purchase a minimum quantity of goods or services or has agreed
to purchase goods or services exclusively from a certain party;
(iii) any agreement concerning the establishment or operation
of a partnership, joint venture or limited liability company;
(iv) any agreement (or group of related agreements) under
which it has created, incurred, assumed or guaranteed (or may create, incur,
assume or guarantee) indebtedness (including capitalized lease obligations) or
under which it has imposed (or may impose) a Security Interest on any of its
assets, tangible or intangible;
(v) any agreement for the disposition of any significant
portion of the assets or business of the Company (other than sales of products
in the Ordinary Course of Business) or any agreement for the acquisition of the
assets or business of any other entity (other than purchases of inventory or
components in the Ordinary Course of Business);
(vi) any agreement concerning confidentiality, non-competition
or non-solicitation (other than confidentiality agreements with customers or
potential customers, copies or forms of which have previously been delivered to
the Buyer, or with employees of the Company set forth in the Company's form of
employment agreement, a copy of which has previously been delivered to the
Buyer); (vii) any employment or consulting agreement (other than agreements
disclosed pursuant to clause (ii));
(viii) any agreement with any current or former officer,
director, key employee or stockholder of the Company or an Affiliate thereof
(other than agreements disclosed pursuant to other clauses of this paragraph
(a));
(ix) any agreement under which the consequences of a default
or termination would have a Company Material Adverse Effect;
(x) any agency, distributor, sales representative, franchise
or similar agreements to which the Company is a party or by which the Company is
bound; and
(xi) any other agreement (or group of related agreements) not
entered into in the Ordinary Course of Business.
(b) To the Seller's Knowledge, the Company has delivered to the
Buyer a complete and accurate copy of each arrangement or agreement listed in
Section 2.15(a) of the Disclosure Schedule (the "Contracts") (as amended to
date). To the Seller's Knowledge, with respect to each Contract: (i) the
Contract is legal, valid, binding and enforceable (subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, fraudulent transfer or similar laws relating to or affecting the
rights of creditors generally and general principles of equity) against the
Company and each other party thereto, and is in full force and effect; (ii) the
Contract will continue to be legal, valid, binding and enforceable and in full
force and effect to the same extent immediately following the Closing in
accordance with the terms thereof as in effect immediately prior to the Closing
except as set forth in Section 2.15(b) of the Disclosure Schedule; and (iii)
neither the Company nor, to the knowledge of the Company, any other party, is in
breach or violation of, or default under, any such Contract, and no event has
occurred, is pending or, to the knowledge of the Company, is threatened, which,
after the giving of notice, with lapse of time, or otherwise, would constitute a
breach or default by the Company or any other party under such Contract.
(c) To the Seller's Knowledge and except as set forth in Section
2.15(c) of the Disclosure Schedule, the Company is not a party to any oral
contract, agreement or other arrangement which, if reduced to written form,
would be required to be listed in Section 2.15(a) of the Disclosure Schedule
under the terms of Section 2.15(a). To the Seller's Knowledge, the Company is
not a party to any written or oral arrangement for which the customer has
already been billed or paid that have not been fully accounted for on the Most
Recent Balance Sheet. To the Seller's Knowledge, the Company is not restricted
by any Contract from carrying on business anywhere in the world.
2.16 Insurance. (a) To the Seller's Knowledge, Section 2.16 of the
Disclosure Schedule lists each insurance policy (including, if applicable, fire,
theft, casualty, comprehensive general liability, workers compensation, business
interruption, environmental, product liability and automobile insurance policies
and bond and surety arrangements) to which the Company is a party, a named
insured or otherwise the beneficiary of coverage, all of which are in full force
and effect.
(b) To the Seller's Knowledge, there is no claim pending under any
such policy as to which coverage has been questioned, denied or disputed in
writing by the underwriter of such policy. To the Seller's Knowledge, all
premiums due and payable under all such policies have been paid, the Company has
no reason to believe that it will be liable for retroactive premiums or similar
payments, and the Company is otherwise in compliance with the terms of such
policies. To the Seller's Knowledge, the Company has not received any written
notice of premium increases or a written notice generally disclaiming liability
under such policy or any written notice of the intent to cancel or decline to
renew any such policy. To the Seller's Knowledge, each such policy will continue
to be enforceable against the Company and, to the Company's knowledge, each
other party thereto, and in full force and effect immediately following the
Closing in accordance with the terms thereof as in effect immediately prior to
the Closing. To the Seller's Knowledge, Section 2.16 of the Disclosure Schedule
identifies all claims asserted by the Company pursuant to any insurance policy
since its date of formation
(other than health, dental and workers' compensation policies) and describes the
nature and status of each such claim.
2.17. Litigation. To the Seller's Knowledge, there is no Legal Proceeding
which is pending or has been threatened in writing against the Company which (a)
seeks either damages in excess of $50,000 or equitable relief or (b) in any
manner challenges or seeks to prevent, enjoin, alter or delay the transactions
contemplated by this Agreement. To the Seller's Knowledge, there are no
judgments, orders or decrees outstanding against the Company.
2.18 Legal Compliance. To the Seller's Knowledge, the Company is currently
conducting, and has at all times since March 14, 2002 conducted, its business in
material compliance with each applicable law (including rules and regulations
thereunder) of any federal, state, local or foreign government, or any
Governmental Entity. To the Seller's Knowledge, the Company has not received any
written notice or other communication from any Governmental Entity alleging
noncompliance with any applicable law, rule or regulation.
2.19 Permits. To the Seller's Knowledge, Section 2.19 of the Disclosure
Schedule sets forth a list of all Permits issued to or held by the Company. To
the Seller's Knowledge, such listed Permits are the only Permits that are
required for the Company to conduct its business as presently conducted. To the
Seller's Knowledge, each such Permit is in full force and effect; the Company is
in material compliance with the terms of each such Permit; and, to the knowledge
of the Company, no suspension or cancellation of such Permit is threatened and
the Company has no basis for believing that such Permit will not be renewable
upon expiration. To the Seller's Knowledge, each such Permit will continue in
full force and effect immediately following the Closing.
2.20 Certain Business Relationships With Affiliates. To the Seller's
Knowledge and except as set forth in Section 2.20 of the Disclosure Schedule, no
stockholder or Affiliate of the Company (a) owns any property or right, tangible
or intangible, which is used in the business of the Company, (b) has any claim
or cause of action against the Company, (c) owes any money to, or is owed any
money by, the Company, or (d) is a party to any contract or other arrangement
(written or oral) with the Company, except as disclosed in Section 2.20 of the
Disclosure Schedule. To the Seller's Knowledge, Section 2.20 of the Disclosure
Schedule describes any transactions or relationships between the Company and any
Affiliate thereof which occurred or have existed since the beginning of the time
period covered by the Financial Statements. To the Seller's Knowledge, the
disclosures set forth in Section 2.20 of the Disclosure Schedule include all
material information with respect to the matters so disclosed.
2.21. Bank Accounts. To the Seller's Knowledge, Section 2.21 of the
Disclosure Schedule contains a list of all bank accounts and safe deposit boxes
of the Company and the names of persons having signature authority with respect
thereto or access thereto.
2.22. Disclosure. To the Seller's Knowledge, no statement contained in the
Disclosure Schedule contains or will contain any untrue statement of a material
fact or omits or will omit to state any material fact necessary, in light of the
circumstances under which it was or will be made, in order to make the
statements herein or therein not misleading; provided, however, that nothing in
this Section 2.22 shall require disclosure of any information beyond what is
required to be disclosed pursuant to the relevant representation or warranty.
2.23. Environmental Matters.
(a) To the Seller's Knowledge, the Company has complied with all
applicable Environmental Laws. To the Seller's Knowledge, there is no pending or
threatened civil or criminal litigation, written notice of violation, formal
administrative proceeding, or investigation, inquiry or information request by
any Governmental Entity, relating to any Environmental Law involving the
Company.
(b) To the Seller's Knowledge, the Company has no liabilities or
obligations arising from the release of any Materials of Environmental Concern
into the environment.
(c) To the Seller's Knowledge, the Company is not a party to or
bound by any court order, administrative order, consent order or other agreement
between the Company and any Governmental Entity entered into in connection with
any legal obligation or liability arising under any Environmental Law.
(d) To the Seller's Knowledge, set forth in Section 2.23(d) of the
Disclosure Schedule is a list of all documents (whether in hard copy or
electronic form) that contain any environmental reports, investigations and
audits relating to premises currently or previously owned or operated by the
Company (whether conducted by or on behalf of the Company or a third party, and
whether done at the initiative of the Company or directed by a Governmental
Entity or other third party) which the Company has possession of or access to.
To the Seller's Knowledge, a complete and accurate copy of each such document
has been provided to the Buyer.
(e) To the Seller's Knowledge, the Company is not aware of any
environmental liability of any solid or hazardous waste transporter or
treatment, storage or disposal facility that has been used by the Company.
ARTICLE II-A
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer that the statements
contained in this Article II-A are true and correct as of the date of this
Agreement.
2A.1 Authorization. The Seller has all requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder. The execution and delivery by the Seller of this Agreement and the
agreements provided for herein to which such Seller is a party, and the
consummation by such Seller of the transactions contemplated hereby and thereby
have been duly and validly authorized by all necessary company action on the
part of the Seller. This Agreement and all other agreements provided for herein
(to the extent the Seller is a party thereto) have been or will be as of the
Closing Date duly and validly executed and delivered by the Seller and
constitutes or will constitute a valid and binding obligation of the Seller,
enforceable against such Seller in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or similar laws relating to or
affecting the rights of creditors generally and general principles of equity.
2A.2 Noncontravention. Neither the execution and delivery by the Seller of
this Agreement or any other agreement provided for herein to which such Seller
is a party, nor the consummation by the Seller of the transactions contemplated
hereby or thereby, will (a) conflict with or violate any provision of its
Certificate of Formation or Operating Agreement and other formation documents,
to the extent applicable, (b) require on the part of the Seller any notice to or
filing with, or any permit, authorization, consent or approval of, any
Governmental Entity, or (c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to the Seller or any of his or its
properties or assets. Section 2A.2 of the Disclosure Schedule sets forth a true,
correct and complete list of all consents and approvals of third parties and
Governmental Entities, and all filings and notices, that are required to be
obtained in connection with the consummation by such Seller of the transactions
contemplated hereby.
2A.3 Litigation. There is no Legal Proceeding which is pending or has been
threatened in writing against such Seller which in any manner challenges or
seeks to prevent, enjoin, alter or delay the transactions contemplated by this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that the statements
contained in this Article III are true and correct as of the date of this
Agreement.
3.1 Organization and Corporate Power. The Buyer is a corporation duly
organized, validly existing and in corporate and tax good standing under the
laws of the State of Delaware. The Buyer has all requisite corporate power and
authority to carry on the businesses in which it is engaged and to own and use
the properties owned and used by it.
3.2 Authorization of Transaction. The Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by the Buyer of this Agreement
and the agreements provided for herein and the consummation by the Buyer of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement and all other agreements provided for herein have been or will be duly
and validly executed and delivered by the Buyer and constitutes or will
constitute a valid and binding obligation of the Buyer, enforceable against it
in accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
fraudulent transfer or similar laws relating to or affecting the rights of
creditors generally and general principles of equity.
3.3 Noncontravention. Neither the execution and delivery by the Buyer of
this Agreement or any other agreement provided for herein, nor the consummation
by the Buyer of the transactions contemplated hereby or thereby, will (a)
conflict with or violate any provision of the charter or By-laws of the Buyer,
(b) require on the part of the Buyer any notice to or filing with, or permit,
authorization, consent or approval of, any Governmental Entity, (c) conflict
with, result in breach of, constitute (with or without due notice or lapse of
time or both) a default under, result in the acceleration of obligations under,
create in any party any right to accelerate, terminate, modify or cancel, or
require any notice, consent or waiver under, any contract, lease, sublease,
license, sublicense, franchise, permit, indenture, agreement or mortgage for
borrowed money, instrument of indebtedness, Security Interest or other
arrangement to which the Buyer is
a party or by which it is bound or to which its assets are subject, or (d)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Buyer or any of its properties or assets.
3.4 SEC Filings. The Buyer has filed all registration statements,
schedules and reports and other statements (the "Buyer SEC Documents") required
to be filed by it with the SEC under the Securities Act and the Exchange Act, as
the case may be. As of the respective dates of such Buyer SEC Documents, such
documents complied with or will comply with the requirements of the Securities
Act and the Exchange Act, as the case may be, and applicable rules and
regulations.
3.5 Litigation. There is no Legal Proceeding which is pending or has been
threatened in writing against the Buyer which in any manner seeks to prevent,
enjoin, alter or delay the transactions contemplated by this Agreement or would
reasonably be expected to have a material adverse effect on the ability of the
Buyer to perform its obligations under this Agreement.
3.6 Absence of Certain Changes or Events. Since September 30, 2002 there
has not been any change, event, circumstance or development that would,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of the Buyer to perform its respective obligations
under this Agreement.
ARTICLE IV
COVENANTS
4.1 Closing Efforts. Each of the Parties shall use its Reasonable Best
Efforts to take all actions and to do all things necessary, proper or advisable
to consummate the transactions contemplated by this Agreement, including using
its Reasonable Best Efforts to ensure that (i) its representations and
warranties remain true and correct through the Closing Date and (ii) the
conditions to the obligations of the other Party to consummate the Paxis
Acquisition are satisfied.
4.2 Governmental and Third-Party Notices and Consents. The Seller shall
obtain, at its own expense, all waivers, permits, consents, approvals or other
authorizations from third parties and Governmental Entities, and effect all
registrations, filings and notices with or to third parties and Governmental
Entities, as may be necessary or desirable to consummate the transactions
contemplated by this Agreement in connection with the consummation of the
transactions contemplated by this Agreement. The Buyer shall ensure that any
information furnished by the Buyer to the Seller in writing for inclusion in the
Disclosure Schedule does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements made
therein in light of the circumstances under which they were made, not
misleading.
4.3 Access to Information. The Seller shall furnish to the Buyer such
financial and operating data and other information as to the business of the
Company as the Buyer shall reasonably request and the Seller can reasonably
obtain.
4.4 Notice of Breaches. From the date of this Agreement until the Closing,
the Seller shall promptly deliver to the Buyer supplemental information
concerning events or
circumstances occurring subsequent to the date hereof which would render any
representation, warranty or statement of the Seller in this Agreement or the
Disclosure Schedule inaccurate or incomplete in any material respect at any time
after the date of this Agreement until the Closing.
4.5 Expenses. Except as otherwise expressly provided herein, each of the
Parties hereto shall pay its respective fees and expenses (including, without
limitation, legal and accounting fees and expenses) incurred by it in connection
with the transactions contemplated hereby.
ARTICLE V
CONDITIONS TO CONSUMMATION OF PAXIS ACQUISITION
5.1 Conditions to Obligations of the Buyer. The obligation of the Buyer to
consummate the Paxis Acquisition is subject to the satisfaction of the following
conditions precedent, each of which may be waived in writing in the sole
discretion of the Buyer:
(a) the Seller shall have obtained at its own expense (and shall
have provided copies thereof to the Buyer) all of the waivers, permits,
consents, approvals or other authorizations, and effected all of the
registrations, filings and notices, which are necessary for the consummation of
the transactions contemplated by the Agreement;
(b) the representations and warranties of the Seller set forth in
this Agreement shall be true and correct in all material respects when made as
of the date of this Agreement and as of the Closing as though made as of the
Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties shall be true and correct in all material respects as of such
date);
(c) the Seller shall have performed or complied with its agreements
and covenants required to be performed or complied with under this Agreement as
of or prior to the Closing;
(d) no Legal Proceeding shall be pending or threatened wherein an
unfavorable judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the transactions contemplated by this Agreement, (ii) cause the
transactions contemplated by this Agreement to be rescinded following
consummation or (iii) have, individually or in the aggregate, a Company Material
Adverse Effect, and no such judgment, order, decree, stipulation or injunction
shall be in effect;
(e) the Seller shall have delivered to the Buyer a certificate
evidencing the Securities, free and clear of all encumbrances and liens;
(f) the Seller shall have delivered evidence of the approval of the
Paxis Acquisition by its Board of Managers and/or its members and any approvals
if required by the Company's formation documents;
(g) the Seller shall have delivered evidence of the approval of the
Paxis Acquisition by its Board of Managers and/or its members and any other
approvals required by the Seller's formation documents;
(h) the Seller shall have delivered an opinion of ▇▇▇ & ▇▇▇▇▇ LLP,
counsel to the Seller addressed to the Buyer and dated as of the Closing Date in
a form mutually agreeable to the Buyer and the Seller;
(i) the Paxis Financing (defined below) and a certain Purchase
Agreement ("Natex Purchase Agreement") by and between the Buyer and the Seller
dated February 1, 2003 with respect to the Buyer's purchase of the Seller's
fifty percent (50%) interest in Natex Georgia LLC (the "Natex Acquisition")
shall have been consummated in accordance with the provisions of the Loan
Documents (defined below) in the case of the Paxis Financing, and in accordance
with the provisions of the Natex Purchase Agreement in the case of the Natex
Acquisition;
(j) each member of the Seller shall have signed a representation
letter in a form mutually agreeable to the Buyer and the Seller; and
(k) completion of a due diligence investigation of the Seller and/or
the Company to the Buyer's satisfaction;
(l) completion of a review of the Disclosure Schedule to the Buyer's
satisfaction; and
(m) the Buyer shall have received such other certificates and
instruments (including certificates of good standing or the equivalent document
of the Seller in its jurisdiction of organization and the various foreign
jurisdictions in which it is qualified, certified charter documents,
certificates as to the incumbency of officers and the adoption of authorizing
resolutions) as it shall reasonably request in connection with the Closing.
5.2 Conditions to Obligations of the Seller. The obligation of the Seller
to consummate the Paxis Acquisition is subject to the satisfaction of the
following conditions precedent, each of which may be waived in writing in the
sole discretion of the Seller:
(a) the representations and warranties of the Buyer set forth in
this Agreement shall be true and correct in all material respects when made as
of the date of this Agreement and as of the Closing as though made as of the
Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties shall be true and correct in all material respects as of such
date);
(b) the Buyer shall have performed or complied with its agreements
and covenants required to be performed or complied with under this Agreement as
of or prior to the Closing;
(c) the Buyer shall have delivered to the Seller the Cash Payment;
(d) if requested by the Seller prior to March 31, 2003, then prior
to May 1, 2003, the Buyer shall have made available to the Company a $7,000,000
loan (the "Paxis Financing"), on terms comparable to the Company's existing debt
financing including, but not limited to, the following terms: (i) interest at a
nine percent (9%) rate; (ii) issuance of equity in Paxis equal to one-third of
the shares outstanding after such issuance; (iii) repayment of such loan to be
made from free cash flow of the Company prior to any distributions to the
Company's stockholders; (iv) maturity date to be on the second anniversary of
such loan; and (v) evidenced
by loan documents containing provisions customary for a financing transaction of
this type (the "Loan Documents");
(e) no Legal Proceeding shall be pending or threatened wherein an
unfavorable judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the transactions contemplated by this Agreement or (ii) cause
the transactions contemplated by this Agreement to be rescinded following
consummation, and no such judgment, order, decree, stipulation or injunction
shall be in effect;
(f) the Buyer shall have delivered evidence of the approval of the
Paxis Acquisition by its Board of Directors and any other approvals if required
by the Buyer's formation documents;
(g) the Seller shall have received such other certificates and
instruments (including certificates of good standing of the Buyer in its
jurisdiction of organization, certified charter documents, certificates as to
the incumbency of officers and the adoption of authorizing resolutions) as it
shall reasonably request in connection with the Closing.
ARTICLE VI
INDEMNIFICATION
6.1 Indemnification by the Seller.
(a) The Seller shall indemnify the Buyer in respect of, and hold it
harmless against, any and all Damages incurred or suffered by the Company, the
Buyer or any Affiliate thereof resulting from, relating to or constituting:
(i) any breach, as of the date of this Agreement or as of the
Closing Date, of any representation or warranty of such Seller contained in this
Agreement or any agreement or instrument furnished by such Seller to the Buyer
pursuant to Section 5.1 of this Agreement; or
(ii) any failure to perform any covenant or agreement of the
Seller contained in this Agreement or any agreement or instrument furnished by
the Seller to the Buyer pursuant to this Agreement.
6.2 Indemnification by the Buyer. The Buyer shall indemnify the
Seller in respect of, and hold it harmless against, any and all Damages incurred
or suffered by the Seller resulting from, relating to or constituting:
(a) any breach, as of the date of this Agreement or as of the
Closing Date, of any representation or warranty of the Buyer contained in this
Agreement or any agreement or instrument furnished by the Buyer to the Seller
pursuant to this Agreement; or
(b) any failure to perform any covenant or agreement of the Buyer
contained in this Agreement or any agreement or instrument furnished by the
Buyer to the Seller pursuant to this Agreement.
6.3 Indemnification Claims.
(a) An Indemnified Party shall give written notification to the
Indemnifying Party of the commencement of any Third Party Action. Such
notification shall be given within 20 days after receipt by the Indemnified
Party of notice of such Third Party Action, and shall describe in reasonable
detail (to the extent then known by the Indemnified Party) the facts
constituting the basis for such Third Party Action and the amount or good faith
estimate of the claimed Damages; provided, however, that no delay or failure on
the part of the Indemnified Party in so notifying the Indemnifying Party shall
relieve the Indemnifying Party of any liability or obligation hereunder except
to the extent of any damage or liability caused by or arising out of such
failure. Within 30 days after delivery of such notification, the Indemnifying
Party may, upon written notice thereof to the Indemnified Party, assume control
of the defense of such Third Party Action with counsel reasonably satisfactory
to the Indemnified Party; provided that the Indemnifying Party may not assume
control of the defense of a Third Party Action involving criminal liability or
in which equitable relief is sought against the Indemnified Party. If the
Indemnifying Party does not, or is not permitted under the terms hereof, to
assume control of the defense of a Third Party Action, the Indemnified Party
shall control such defense. The Non-controlling Party may participate in such
defense at its own expense. The Controlling Party shall keep the Non-controlling
Party advised of the status of such Third Party Action and the defense thereof
and shall consider in good faith recommendations made by the Non-controlling
Party with respect thereto. The Non-controlling Party shall furnish the
Controlling Party with such information as it may have with respect to such
Third Party Action (including copies of any summons, complaint or other pleading
which may have been served on such party and any written claim, demand, invoice,
billing or other document evidencing or asserting the same) and shall otherwise
cooperate with and assist the Controlling Party in the defense of such Third
Party Action. The reasonable fees and expenses of counsel to the Indemnified
Party with respect to a Third Party Action shall be considered Damages for
purposes of this Agreement if the Indemnified Party controls the defense of such
Third Party Action pursuant to the terms of this Section 6.3(a). The
Indemnifying Party shall not agree to any settlement of, or the entry of any
judgment arising from, any Third Party Action without the prior written consent
of the Indemnified Party, which shall not be unreasonably withheld, conditioned
or delayed; provided that the consent of the Indemnified Party shall not be
required if the Indemnifying Party agrees in writing to pay any amounts payable
pursuant to such settlement or judgment and such settlement or judgment includes
a complete release of the Indemnified Party from further liability and has no
other material adverse effect on the Indemnified Party. The Indemnified Party
shall not agree to any settlement of, or the entry of any judgment arising from,
any such Third Party Action without the prior written consent of the
Indemnifying Party, which shall not be unreasonably withheld, conditioned or
delayed.
(b) In order to seek indemnification under this Article VI, an
Indemnified Party shall deliver a Claim Notice to the Indemnifying Party.
(c) Within 30 days after delivery of a Claim Notice pursuant to
clause (b) of this section, the Indemnifying Party shall deliver to the
Indemnified Party a Response, in which the Indemnifying Party shall: (i) agree
that the Indemnified Party is entitled to receive all of the Claimed Amount;
(ii) agree that the Indemnified Party is entitled to receive the Agreed Amount;
or (iii) dispute that the Indemnified Party is entitled to receive any of the
Claimed Amount. The Indemnifying Party may contest the payment of all or a
portion of the Claimed Amount only based upon a good faith belief that all or
such portion of the Claimed Amount does not constitute Damages for which the
Indemnified Party is entitled to indemnification under this Article VI,
including, without limitation, as a result of a good faith belief that the
Indemnifying Party has insufficient information to determine whether or not all
or such portion of the Claimed Amount constitutes Damages for which the
Indemnified Party is entitled to indemnification under this Article VI. If no
Response is delivered by the Indemnifying Party within such 30-day period, the
Indemnifying Party shall be deemed to have agreed that all of the Claimed Amount
is owed to the Indemnified Party; provided, however, that the foregoing sentence
shall not apply if (i) the Indemnified Party delivers a Claim Notice pursuant to
Section 9.7 but the Indemnifying Party fails to receive it or (ii) the
Indemnifying Party delivers a Response within such 30-day period pursuant to
this subparagraph (c) and Section 9.7 of this Agreement but the Indemnified
Party fails to receive the Response and in each case such failure is solely due
to events outside the control of the Indemnifying Party. Acceptance by the
Indemnified Party of partial payment of any Claimed Amount shall be without
prejudice to the Indemnified Party's right to claim the balance of any such
Claimed Amount.
(d) During the 30-day period following the delivery of a Response
that reflects a Dispute, the Indemnifying Party and the Indemnified Party shall
use good faith efforts to resolve the Dispute. If the Dispute is not resolved
within such 30-day period, the Indemnifying Party and the Indemnified Party
shall submit the Dispute to binding arbitration and such Dispute shall be
resolved in accordance with Section 6.3(e).
(e) Any arbitration shall be conducted by a single arbitrator (the
"Arbitrator") in accordance with the Commercial Rules in effect from time to
time and the following provisions:
(i) In the event of any conflict between the Commercial Rules
in effect from time to time and the provisions of this Agreement, the provisions
of this Agreement shall prevail and be controlling.
(ii) Either party shall commence the arbitration by filing a
written submission with the New York, New York office of the AAA in accordance
with Commercial Rule 5 (or any successor provision).
(iii) All depositions or other discovery shall be conducted
pursuant to the applicable U.S. federal rules relating to discovery.
(iv) The parties shall use commercially reasonable efforts to
cause the Arbitrator to prepare and distribute to the parties, not later than 30
days after the conclusion of the arbitration hearing, a writing setting forth
the arbitral award and the Arbitrator's reasons therefor. Any award rendered by
the Arbitrator shall be final, conclusive and binding upon the parties, and
judgment thereon may be entered and enforced in any court of competent
jurisdiction (subject to Section 9.11).
(v) The Arbitrator shall have no power or authority, under the
Commercial Rules or otherwise, to (x) modify or disregard any provision of this
Agreement, including the provisions of this Section 6.3(e), or (y) address or
resolve any issue not submitted by the parties.
(vi) In connection with any arbitration proceeding pursuant to
this Agreement, each party shall bear its own costs and expenses, except that
the fees and costs of the
AAA and the Arbitrator, the costs and expenses of obtaining the facility where
the arbitration hearing is held, and such other costs and expenses as the
Arbitrator may determine to be directly related to the conduct of the
arbitration and appropriately borne jointly by the parties (which shall not
include any party's attorneys' fees or costs, witness fees (if any), costs of
investigation and similar expenses) shall be shared equally by the Indemnified
Party and the Indemnifying Party.
6.4 Survival of Representations and Warranties. Unless otherwise specified
in this Section 6.4 or elsewhere in this Agreement, all provisions of this
Agreement shall survive the Closing and the consummation of the transactions
contemplated hereby and shall continue forever in full force and effect in
accordance with their terms. All representations and warranties that are covered
by the indemnification agreements in Sections 6.1(a)(i), 6.1(b)(i) and 6.2(a)
shall expire on the date eighteen months following the Closing Date, except that
(i) the representations and warranties set forth in Sections 2.1, 2.2, 2.3,
2A.1, 3.1 and 3.2 shall survive the Closing without limitation and (ii) the
representations and warranties set forth in Section 2.9 and 2.23 shall survive
until expiration of all statutes of limitation applicable to the matters
referred to therein. If an Indemnified Party delivers to an Indemnifying Party,
before expiration of a representation or warranty, either a Claim Notice based
upon a breach of such representation or warranty, or an Expected Claim Notice
based upon a breach of such representation or warranty, then the applicable
representation or warranty shall survive until, but only for purposes of, the
resolution of the matter covered by such notice. No claim may be asserted nor
any action be commenced against any party for breach of any representation,
warranty, covenant or agreement contained herein, unless an Expected Claim
Notice or Claim Notice is delivered to the Indemnifying Party within the period
set forth in this Section 6.4. If the legal proceeding or claim with respect to
which an Expected Claim Notice has been given is definitively withdrawn or
resolved in favor of the Indemnified Party, the Indemnified Party shall promptly
so notify the Indemnifying Party. The rights to indemnification set forth in
this Article VI shall not be affected by any investigation conducted by or on
behalf of an Indemnified Party or any knowledge acquired (or capable of being
acquired) by an Indemnified Party, whether before or after the date of this
Agreement or the Closing Date, with respect to the inaccuracy or noncompliance
with any representation, warranty, covenant or obligation which is the subject
of indemnification hereunder, provided, however, that the foregoing shall not
apply to any inaccuracy of a representation or warranty if the Indemnifying
Party carries the burden of establishing that the Indemnified Party had actual
knowledge of such inaccuracy which was derived from information provided to the
Indemnified Party by a third party and was not known to the Indemnifying Party
on or prior to the date hereof.
6.5 Limitations.
(a) Notwithstanding anything to the contrary herein, the aggregate
liability of the Seller for Damages under this Article VI shall not exceed the
amount of the Cash Payment (the "Cap").
(b) Notwithstanding anything to the contrary herein, the aggregate
liability of the Buyer for Damages under this Article VI shall not exceed the
Cap.
(c) Notwithstanding anything to the contrary herein, neither Party
shall have any indemnification obligation to an Indemnified Party arising under
this Article VI until the amount of Damages suffered by the Indemnified Party
with respect to a single event exceeds
$20,000 (the "Single Event Threshold") or the aggregate amount of Damages
suffered by the Indemnified Party exceeds $100,000 (the "Aggregate Threshold"),
in which case the Indemnifying Party shall be obligated to pay only the amounts
in excess of the Single Event Threshold or the Aggregate Threshold, as the case
may be.
(d) Except as provided in Article VII hereof, after the Closing, the
rights of the Indemnified Parties under this Article VI shall be the exclusive
remedy of the Indemnified Parties with respect to claims resulting from or
relating to any misrepresentation, breach of warranty or failure to perform any
covenant or agreement contained in this Agreement.
(e) In no event shall any Indemnifying Party be responsible and
liable to any Indemnified Party for any Damages or other amounts under this
Article VI that constitute punitive or consequential damages or other damages
that are not compensatory in nature (other than any such damages that are
payable to any third party which is not an Affiliate of any Indemnified Party).
(f) The liability of any Indemnifying Party for any Damages shall be
reduced by any Tax benefit if attributable to any deduction (for Tax purposes)
realized by the Indemnified Party as a result of the item that gave rise to the
Damages. Such Tax benefit shall be determined by assuming (i) that the
applicable Tax rate was the highest marginal federal, state, local and non-U.S.
Tax rate for the relevant Tax or Taxes (taking into account, where applicable,
the deductibility and credit of any Tax for purposes of computing any other Tax)
applicable to the Indemnified Party for the most recent Tax period for which a
Tax Return relating to such Tax was filed or, if no such Tax Return was filed,
such Tax was determined and paid (other than as an estimated Tax payment) and
(ii) that any deferred Tax benefit was attributable to depreciation or
amortization was immediately realized in an amount equal to the present value of
such deferred Tax benefit using a discount rate equal to the "prime rate" as
published in the Wall Street Journal as in effect on the day that the Tax
benefit was deemed to be realized, compounded monthly.
ARTICLE VII
TERMINATION
7.1 Termination of Agreement. The Parties may terminate this Agreement
prior to the Closing, as provided below:
(a) the Parties may terminate this Agreement by mutual written
consent;
(b) the Buyer may terminate this Agreement by giving written notice
to the Seller in the event the Seller is in breach of any representation,
warranty or covenant contained in this Agreement, and such breach, individually
or in combination with any other such breach, (i) would cause the conditions set
forth in clauses (b) or (c) of Section 5.1 not to be satisfied and (ii) is not
cured within 15 days following delivery by the Buyer to the Seller of written
notice of such breach;
(c) the Seller may terminate this Agreement by giving written notice
to the Buyer in the event the Buyer is in breach of any representation, warranty
or covenant contained in this Agreement, and such breach, individually or in
combination with any other such breach, (i) would cause the conditions set forth
in clauses (a) or (b) of Section 5.2 not to be satisfied and
(ii) is not cured within 15 days following delivery by the Seller to the Buyer
of written notice of such breach;
(d) the Buyer may terminate this Agreement by giving written notice
to the Company if the Closing shall not have occurred on or before July 15, 2003
by reason of the failure of any condition precedent under Section 5.1 (unless
the failure results primarily from a breach by the Buyer of any representation,
warranty or covenant contained in this Agreement); or
(e) the Seller may terminate this Agreement by giving written notice
to the Buyer if the Closing shall not have occurred on or before July 15, 2003
by reason of the failure of any condition precedent under Section 5.2 (unless
the failure results primarily from a breach by the Seller of any representation,
warranty or covenant contained in this Agreement).
ARTICLE VIII
DEFINITIONS
For purposes of this Agreement, each of the following terms shall have the
meaning set forth below.
"AAA" shall mean the American Arbitration Association.
"Affiliate" shall mean any affiliate, as defined in Rule 12b-2 under the
Securities Exchange Act of 1934.
"Agreed Amount" shall mean part, but not all, of the Claimed Amount.
"Agreement" shall have the meaning set forth in the first paragraph
hereto.
"Arbitrator" shall have the meaning set forth in Section 6.3(e).
"Buyer" shall have the meaning set forth in the first paragraph of this
Agreement.
"Cap" shall have the meaning set forth in Section 6.5(a).
"CERCLA" shall mean the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"Claim Notice" shall mean written notification which contains (i) a
description of the Damages incurred or reasonably expected to be incurred by the
Indemnified Party and the Claimed Amount of such Damages, to the extent then
known, (ii) a statement that the Indemnified Party is entitled to
indemnification under Article VI for such Damages and a reasonable explanation
of the basis therefor, and (iii) a demand for payment in the amount of such
Damages.
"Claimed Amount" shall mean the amount of any Damages incurred or
reasonably expected to be incurred by an Indemnified Party.
"Closing" shall mean the closing of the transactions contemplated by this
Agreement.
"Closing Date" shall mean the date two business days after the
satisfaction or waiver of all of the conditions to the obligations of the
Parties to consummate the transactions contemplated hereby (excluding the
delivery at the Closing of any of the documents set forth in Article V), or such
other date as may be mutually agreeable to the Parties.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commercial Rules" shall mean the Commercial Arbitration Rules of the AAA.
"Company" shall have the meaning set forth in the first paragraph of this
Agreement.
"Company Material Adverse Effect" shall mean any material adverse change,
event, circumstance or development with respect to, or material adverse effect
on, (i) the business, assets, liabilities, capitalization, prospects, financial
condition, or results of operations of the Company, or (ii) the ability of the
Buyer to operate the business of the Company immediately after the Closing. For
the avoidance of doubt, the parties agree that the terms "material,"
"materially" and "materiality" as used in this Agreement with an initial lower
case "m" shall have their respective customary and ordinary meanings, without
regard to the meaning ascribed to Company Material Adverse Effect.
"Contract" shall have the meaning set forth in Section 2.15(c).
"Controlling Party" shall mean the party controlling the defense of any
Third Party Action.
"Damages" shall mean any and all claims, debts, obligations and other
liabilities, diminution in value, monetary damages, fines, fees, penalties,
interest obligations, deficiencies, losses and expenses (including amounts paid
in settlement, interest, court costs, reasonable costs of investigators,
reasonable fees and expenses of attorneys, accountants, financial advisors and
other experts, and other expenses of litigation), other than those costs and
expenses of arbitration of a Dispute which are to be shared equally by the
Indemnified Party and the Indemnifying Party as set forth in Section 6.3(e)(vi)
and other than the damages described in Section 6.5(e).
"Disclosure Schedule" shall mean the disclosure schedule provided by the
Company to the Buyer prior to the Closing and accepted in writing by the Buyer.
"Dispute" shall mean the dispute resulting if the Indemnifying Party in a
Response disputes its liability for all or part of a Claimed Amount.
"Environmental Law" shall mean any federal, state or local law, statute,
rule, order, directive, judgment, Permit or regulation or the common law
relating to the environment, occupational health and safety, or exposure of
persons or property to Materials of Environmental Concern, including any
statute, regulation, administrative decision or order pertaining to: (i) the
presence of or the treatment, storage, disposal, generation, transportation,
handling, distribution, manufacture, processing, use, import, export, labeling,
recycling, registration, investigation or
remediation of Materials of Environmental Concern or documentation related to
the foregoing; (ii) air, water and noise pollution; (iii) groundwater and soil
contamination; (iv) the release, threatened release, or accidental release into
the environment, the workplace or other areas of Materials of Environmental
Concern, including emissions, discharges, injections, spills, escapes or dumping
of Materials of Environmental Concern; (v) transfer of interests in or control
of real property which may be contaminated; (vi) community or worker
right-to-know disclosures with respect to Materials of Environmental Concern;
(vii) the protection of wild life, marine life and wetlands, and endangered and
threatened species; (viii) storage tanks, vessels, containers, abandoned or
discarded barrels and other closed receptacles; and (ix) health and safety of
employees and other persons. As used above, the term "release" shall have the
meaning set forth in CERCLA.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended.
"Expected Claim Notice" shall mean a notice that, as a result of a legal
proceeding instituted by or written claim made by a third party, an Indemnified
Party reasonably expects to incur Damages for which it is entitled to
indemnification under Article VI.
"Financial Statements" shall mean the Most Recent Balance Sheet and the
unaudited statements of income of the Company from inception to the date of the
Most Recent Balance Sheet Date.
"GAAP" shall mean United States generally accepted accounting principles.
"Governmental Entity" shall mean any domestic or foreign court,
arbitrational tribunal, administrative agency or commission or other domestic or
foreign governmental or regulatory authority or agency.
"Indemnified Party" shall mean a party entitled, or seeking to assert
rights, to indemnification under Article VI.
"Indemnifying Party" shall mean the party from whom indemnification is
sought by an Indemnified Party.
"Intellectual Property" shall mean all:
(i) patents, patent applications, patent disclosures and all related
continuation, continuation-in-part, divisional, reissue, reexamination, utility
model, certificate of invention and design patents, patent applications,
registrations and applications for registrations;
(ii) trademarks, service marks, trade dress, Internet domain names,
logos, trade names and corporate names and registrations and applications for
registration thereof;
(iii) copyrights and registrations and applications for registration
thereof;
(iv) mask works and registrations and applications for registration
thereof;
(v) computer software, data and related documentation;
(vi) inventions, trade secrets and confidential business
information, whether patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and techniques, research
and development information, copyrightable works, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information;
(vii) other proprietary rights relating to any of the foregoing
(including remedies against infringements thereof and rights of protection of
interest therein under the laws of all jurisdictions); and
(viii) copies and tangible embodiments thereof.
"Knowledge" when used in statements such as "to the Knowledge of" or
"Known to" either Party, or otherwise used to qualify the statement of either
Party hereunder or under any document, certificate or agreement delivered in
connection herewith shall mean that any of the current senior executive officers
or managers of such Party has actual knowledge of the matter to which such
statement relates.
"Lease" shall mean any lease or sublease pursuant to which the Company
leases or subleases from another party any real property.
"Legal Proceeding" shall mean any action, suit, proceeding, claim,
arbitration or investigation before any Governmental Entity or before any
arbitrator.
"Materials of Environmental Concern" shall mean any: pollutants,
contaminants or hazardous substances (as such terms are defined under CERCLA),
pesticides (as such term is defined under the Federal Insecticide, Fungicide and
Rodenticide Act), solid wastes and hazardous wastes (as such terms are defined
under the Resource Conservation and Recovery Act), chemicals, other hazardous,
radioactive or toxic materials, oil, petroleum and petroleum products (and
fractions thereof), or any other material (or article containing such material)
listed or subject to regulation under any law, statute, rule, regulation, order,
Permit, or directive due to its potential, directly or indirectly, to harm the
environment or the health of humans or other living beings.
"Most Recent Balance Sheet" shall mean the unaudited balance sheet of the
Company as of the Most Recent Balance Sheet Date.
"Most Recent Balance Sheet Date" shall mean December 31, 2002.
"Non-controlling Party" shall mean the party not controlling the defense
of any Third Party Action.
"Ordinary Course of Business" shall mean the ordinary course of business
of the Company consistent with past custom and practice (including with respect
to frequency and amount).
"Parties" shall have the meaning set forth in the first paragraph of this
Agreement.
"Permits" shall mean all permits, licenses, registrations, certificates,
orders, approvals, franchises, variances and similar rights issued by or
obtained from any Governmental Entity
(including those issued or required under Environmental Laws and those relating
to the occupancy or use of owned or leased real property).
"Reasonable Best Efforts" shall mean best efforts, to the extent
commercially reasonable.
"Response" shall mean a written response containing the information
provided for in Section 6.3(c).
"Securities Act" shall mean the U.S. Securities Act of 1933, as amended.
"SEC" shall mean the U.S. Securities and Exchange Commission.
"Security Interest" shall mean any mortgage, pledge, security interest,
encumbrance, charge or other lien (whether arising by contract or by operation
of law), other than (i) statutory liens for Taxes not yet due and payable; (ii)
mechanic's, materialmen's, carriers', workmen's and repairmen's liens and other
similar liens imposed by law, (iii) pledges, deposits or liens arising under
worker's compensation, unemployment insurance, social security, retirement and
similar legislation, and (iv) liens on goods in transit incurred pursuant to
documentary letters of credit, in each case, in the case of the Company, arising
in the Ordinary Course of Business of the Company and not material to the
Company.
"Taxes" shall mean all taxes, charges, fees, levies or other similar
assessments or liabilities, including income, gross receipts, ad valorem,
premium, value-added, excise, real property, personal property, sales, use,
transfer, withholding, employment, unemployment, insurance, social security,
business license, business organization, environmental, workers compensation,
payroll, profits, license, lease, service, service use, severance, stamp,
occupation, windfall profits, customs, duties, franchise and other taxes imposed
by the United States of America or any state, local or foreign government, or
any agency thereof, or other political subdivision of the United States or any
such government, and any interest, fines, penalties, assessments or additions to
tax resulting from, attributable to or incurred in connection with any tax or
any contest or dispute thereof.
"Tax Proceedings" shall mean any audit, claim for refund, or contest or
defense against any assessment, notice of deficiency, or other proposed
adjustment relating to any and all Taxes of the Company.
"Tax Returns" shall mean all reports, returns, declarations or statements
required to be supplied to a taxing authority in connection with Taxes.
"Third Party Action" shall mean any suit or proceeding by a person or
entity other than a Party for which indemnification may be sought by a Party
under Article VI.
ARTICLE IX
MISCELLANEOUS
9.1 Press Releases and Announcements. Neither Party shall issue any press
release or public announcement relating to the subject matter of this Agreement
without the prior written approval of the other Party; provided, however, that
either Party may make any public disclosure it believes in good faith is
required by applicable law, regulation or stock market rule (in which
case the disclosing Party shall use reasonable efforts to advise the other Party
and provide them with a copy of the proposed disclosure prior to making the
disclosure).
9.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than (a) the Parties and, to the extent
specified herein, their respective Affiliates, and (b) in each case, their
respective successors and permitted assigns.
9.3 Entire Agreement. This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements or representations by or between the Parties,
written or oral, with respect to the subject matter hereof.
9.4 Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective successors
and permitted assigns. Neither Party may assign either this Agreement or any of
its rights, interests or obligations hereunder without the prior written
approval of the other Party.
9.5 Counterparts and Facsimile Signature. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signature.
9.6 Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.7 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered two business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent for next business day
delivery via a reputable nationwide overnight courier service, in each case to
the intended recipient as set forth below:
To the Buyer: with a copy to:
Integrated Health Technologies, Inc. St. ▇▇▇▇ & ▇▇▇▇▇, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To the Seller: with a copy to:
Trade Investment Services, L.L.C.
▇/▇ ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇ & ▇▇▇▇▇ ▇▇▇
▇▇▇ & ▇▇▇▇▇ LLP One ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Plaza
One ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ Plaza New York, New York 10017-2299
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇▇ ▇. ▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Either Party may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex or ordinary mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Either Party may change the address to which notices,
requests, demands, claims, and other communications hereunder are to be
delivered by giving the other Party notice in the manner herein set forth.
9.8 Governing Law. This Agreement (including the validity and
applicability of the arbitration provisions of this Agreement, the conduct of
any arbitration of a Dispute, the enforcement of any arbitral award made
hereunder and any other questions of arbitration law or procedure arising
hereunder) shall be governed by and construed in accordance with the internal
laws of the State of New York without giving effect to any choice or conflict of
law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of laws of any jurisdictions
other than those of the State of New York.
9.9 Amendments and Waivers. The Parties may mutually amend any provision
of this Agreement at any time prior to the Closing. No amendment of any
provision of this Agreement shall be valid unless the same shall be in writing
and signed by both of the Parties. No waiver of any right or remedy hereunder
shall be valid unless the same shall be in writing and signed by the Party
giving such waiver. No waiver by either Party with respect to any default,
misrepresentation or breach of warranty or covenant hereunder shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
9.10 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.
9.11 Submission to Jurisdiction. Each Party (a) submits to the exclusive
jurisdiction of any state or federal court sitting in New York, New York, in any
action or proceeding arising out of or relating to this Agreement (including any
action or proceeding for the enforcement of any arbitral award made in
connection with any arbitration of a Dispute hereunder), (b) agrees that all
claims in respect of such action or proceeding may be heard and determined in
any such court, (c) waives any claim of inconvenient forum or other challenge to
venue in such court, (d) agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court, and (e) waives any
right it may have to a trial by jury with respect to any action or
proceeding arising out of or relating to this Agreement; provided in each case
that, solely with respect to any arbitration of a Dispute, the Arbitrator shall
resolve all threshold issues relating to the validity and applicability of the
arbitration provisions of this Agreement, contract validity, applicability of
statutes of limitations and issue preclusion, and such threshold issues shall
not be heard or determined by such court. Each Party agrees to accept service of
any summons, complaint or other initial pleading made in the manner provided for
the giving of notices in Section 9.7, provided that nothing in this Section 9.11
shall affect the right of either Party to serve such summons, complaint or other
initial pleading in any other manner permitted by law.
9.12 Construction.
(a) The language used in this Agreement shall be deemed to be the
language chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against either Party.
(b) Any reference to any federal, state, local or foreign statute or
law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
(c) Any reference herein to "including" shall be interpreted as
"including without limitation".
(d) Any reference to any Article, Section or paragraph shall be
deemed to refer to an Article, Section or paragraph of this Agreement, unless
the context clearly indicates otherwise.
9.13 Confidentiality. The Buyer agrees that unless and until the
transactions contemplated hereby have been consummated, the Buyer and its
representatives and Affiliates and their representatives and advisors will hold
in strict confidence all data and information obtained from the Seller or the
Company or any of their Affiliates in connection with the transactions
contemplated hereby, except any of the same which (a) was, is now, or becomes
generally available to the public (but not as a result of a breach of any duty
of confidentiality by which the Buyer and its representatives and Affiliates and
their representatives and advisors is bound); (b) was known to the Buyer prior
to its disclosure to the Buyer; (c) is disclosed to the Buyer by a third party
not subject to any duty of confidentiality to the Seller, the Company or any of
their respective Affiliates prior to its disclosure to the Buyer by the Seller,
the Company or any of their respective Affiliates; (d) is requested or required
by deposition, interrogatories, requests for information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process to
disclose such information; or (e) is required to be disclosed by applicable law.
The Buyer further agrees to hold in strict confidence all data and information
obtained from the Seller relating solely to the Seller (and not the Company or
its business) except any of the same which (a) was, is now, or becomes generally
available to the public (but not as a result of a breach of any duty of
confidentiality by which the Buyer and its representatives and Affiliates and
their representatives and advisors is bound); (b) was known to the Buyer prior
to its disclosure to the Buyer; (c) is disclosed to the Buyer by a third party
not subject to any duty of confidentiality to the Seller, the Company or any of
their respective Affiliates prior to its disclosure to the Buyer by the Seller,
the Company or any of their respective Affiliates; (d) is requested or required
by deposition, interrogatories, requests for information or documents in legal
proceedings, subpoenas, civil investigative demand or similar process to
disclose such
information; or (e) is required to be disclosed by applicable law. The Buyer
will use such data and information solely for the specific purpose of evaluating
the transactions contemplated hereby. If this Agreement is terminated, the Buyer
and its Affiliates and their representatives and advisors will promptly return
to the Seller or the Company all such data, information and other written
material (including all copies thereof) that has been obtained by the Buyer.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
BUYER:
INTEGRATED HEALTH TECHNOLOGIES, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
SELLER:
TRADE INVESTMENT SERVICES, L.L.C.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Member
EXECUTION COPY
PURCHASE AGREEMENT
BY AND BETWEEN
INTEGRATED HEALTH TECHNOLOGIES, INC.,
AND
TRADE INVESTMENT SERVICES, L.L.C.
FOR SECURITIES OF TISOREX INC.
February 1, 2003
TABLE OF CONTENTS
Page
ARTICLE I THE PURCHASE AND SALE of the SECURITIES............................1
1.1 Purchase and Sale of the Securities..........................1
1.1 Purchase Price...............................................1
1.2 Payment of Purchase Price....................................1
1.3 The Closing..................................................1
1.4 Actions at the Closing.......................................1
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE
SELLER AS TO THE COMPANY...........................................2
2.1 Organization, Qualification and Corporate Power..............2
2.2 Capitalization...............................................3
2.3 Authorization................................................3
2.4 Noncontravention.............................................4
2.5 Subsidiaries.................................................4
2.6 Financial Statements.........................................4
2.7 Absence of Certain Changes...................................4
2.8 Undisclosed Liabilities......................................6
2.9 Tax Matters..................................................6
2.10 Assets.......................................................6
2.11 Owned Real Property..........................................7
2.12 Real Property Leases.........................................7
2.13 Intellectual Property........................................7
2.14 Inventory....................................................9
2.15 Contracts....................................................9
2.16 Insurance...................................................10
2.17 Litigation..................................................11
2.18 Legal Compliance............................................11
2.19 Permits.....................................................11
2.20 Certain Business Relationships With Affiliates..............11
2.21 Bank Accounts...............................................11
2.22 Disclosure..................................................11
2.23 Environmental Matters.......................................12
ARTICLE II-A REPRESENTATIONS AND WARRANTIES OF SELLER........................12
2A.1 Authorization...............................................12
2A.2 Noncontravention............................................13
2A.3 Litigation..................................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER......................13
3.1 Organization and Corporate Power............................13
3.2 Authorization of Transaction................................13
3.3 Noncontravention............................................13
3.4 SEC Filings.................................................14
3.5 Litigation..................................................14
3.6 Absence of Certain Changes or Events........................14
ARTICLE IV COVENANTS.........................................................14
4.1 Closing Efforts.............................................14
4.2 Governmental and Third-Party Notices and Consents...........14
4.3 Aaccess to Information......................................14
4.4 Notice of Breaches..........................................14
4.5 Expenses....................................................15
ARTICLE V CONDITIONS TO CONSUMMATION OF PATEX ACQUISITION...................15
5.1 Conditions to Obligations of the Buyer......................15
5.2 Conditions to Obligations of the Seller.....................16
ARTICLE VI INDEMNIFICATION.................................................17
6.1 Indemnification by the Seller...............................17
6.2 Indemnification by the Buyer................................17
6.3 Indemnification Claims......................................17
6.4 Survival of Representations and Warranties..................20
6.5 Limitations.................................................20
ARTICLE VII TERMINATION......................................................21
7.1 Termination of Agreement....................................21
ARTICLE VIII DEFINITIONS.....................................................22
ARTICLE IX MISCELLANEOUS....................................................26
9.1 Press Releases and Announcements............................26
9.2 No Third Party Beneficiaries................................27
9.3 Entire Agreement............................................27
9.4 Succession and Assignment...................................27
9.5 Counterparts and Facsimile Signature........................27
9.6 Headings....................................................27
9.7 Notices.....................................................27
9.8 Governing Law...............................................28
9.9 Amendments and Waivers......................................28
9.10 Severability................................................28
9.11 Submission to Jurisdiction..................................28
9.12 Construction................................................29
Disclosure Schedule