Exhibit 2.2
ASSET PURCHASE AGREEMENT
This Agreement is made as of this 16th day of August, 1999, by and between
ANSAMA Corp., a Nevada corporation, located at ▇▇▇ ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Buyer") and Nutri/System
L.P., a Delaware limited partnership with its principal place of business
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to
as "Seller").
W I T N E S S E T H:
WHEREAS, Seller is the franchisor of Nutri/System(R) Weight Loss Centers
and sells Nutri/System franchises and prepackaged low calorie food and related
products (hereinafter referred to as the "Business"); and
WHEREAS, Buyer is a publicly owned company being advised by ▇▇▇▇▇ ▇▇▇▇▇▇▇,
the President of Seller and the person most familiar with the Business and its
operation;
WHEREAS, Seller desires to sell to Buyer and Buyer wishes to purchase
substantially all of the assets of the business including, without limiting the
foregoing, Seller's inventory of food products, Seller's patents, trademarks and
other intellectual property rights, leasehold interests, franchise agreements,
and all additional assets set forth below, except those assets specifically
excluded below, and assumes all liabilities and obligations of the Business,
except those liabilities specifically excluded below.
NOW THEREFORE, in consideration of the premises set forth hereinabove and
the mutual promises and covenants herein contained, the parties, intending to be
legally bound, agree as follows:
1. Assets to be Conveyed.
On the Closing Date (as hereinafter defined), Seller will assign, convey,
transfer and deliver
to Buyer, by instruments of conveyance in form and substance reasonably
acceptable to both parties, the following assets owned by Seller (hereinafter
sometimes referred to as the "Assets"):
(a) All equipment, fixtures, leasehold improvements, furniture, computers,
and software located at or used in the Business located at Seller's headquarters
or elsewhere, to include, as a minimum, all of the furniture, fixtures and
equipment described in Exhibit "A" attached hereto and incorporated herein;
(b) All of Seller's rights and obligations under the lease agreement for
Seller's headquarters, as amended (the "Lease Agreement"), and attached hereto
as Exhibit "B";
(c) Seller's telephone numbers and telephone equipment for the Business, to
the extent assignable;
(d) All rental and utility deposits under the Lease Agreement, or on
deposit with any supplier or utility company or other company, or deposits
securing letters of credit to food vendors;
(e) All patents, trademarks, logos, copyrights, trade names, trade secrets,
testimonials, agreements of sale, assignments, and leases and licenses thereof
and all other intellectual property related to the Business and all goodwill
related thereto;
(f) All financial and sales records, client and customer lists, including
all files and records relating thereto, and all other proprietary information
used in connection with the operation of the Business;
(g) All franchise agreements;
(h) The saleable and marketable inventory, including food, vitamins and
other perishable goods and inventory pertaining to the Business operations
located at Seller's warehouse at the close of business on the day prior to the
Closing Date; and
(i) All cash and accounts receivable on Seller's books as of the Closing
Date;
provided, however, Seller and Buyer hereby agree that no
statement or warranty is made concerning the value of the accounts receivable or
to what extent they are or are not collectible.
1.1 Assets Excluded from Sale.
Notwithstanding anything herein to the contrary the Assets do not include,
and Buyer shall not receive and Seller retains all right title and interest in,
to and arising directly or indirectly from any and all rights, claims, causes of
action, judgments, awards, settlements and other benefits related to or arising
from the purchase, sale, prescription or other dealings with fenfluramine,
phentermine or Redux or any combination thereof, including without limitation
(i) those against any insurance company (including Chubb Insurance Company, and
its affiliates) and American Home Products and (ii) arising from loss of or
injury to business, bad faith and failure to indemnify.
2. Closing.
The closing shall take place on or before , 1999, (the "Closing
Date") and shall take place at such place and time as the parties may agree.
3. Assumption of Liabilities.
It is expressly agreed and understood that upon closing Buyer will be
assuming all liabilities and obligations of Seller, the Business and its
operations of any type or nature, known or unknown, absolute, contingent or
otherwise, whether arising before or after Closing, including without limitation
any and all liabilities and obligations (i) to employees, franchisees,
customers, suppliers and others having relations with Seller or the Business,
(ii) arising under contracts, leases, agreements, benefit plans and other
obligations, (iii) for sales taxes, franchise taxes, employment taxes, property
taxes, utilities and other amounts, (iv) for personal injury from products of
the Business, except those excluded below, (v) arising from any failure to
comply with any law, rule or regulation, (vi) for any infringement of any third
party's intellectual property, and arising from any
suit, claim or proceeding, except that Seller shall be solely responsible
for, and there shall be no assumption of liability by Buyer of, any debt or
liability of Seller or the Business, arising out of or related to any claims for
personal injury, fraud, breach of contract, false advertising or any related
advertising claim, arising out of or related to the sale or prescription by
Seller or US Medical Weight Loss Company, Inc., their agents or employees of
fenfluramine and/or phentermine and/or Redux, including, without limitation, any
claims raised or which could be raised in the list of lawsuits attached hereto
as Exhibit C (the "Phen-Fen litigation") in which Seller is a party and for
which Seller will continue to be liable, and further there shall be no
assumption of any and all legal fees due to ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ or arising
out of the Chubb Custom Insurance Company v. Nutri/System L.P. or Federal
Insurance Company v. Nutri/System L.P. litigation (the "Excluded Liabilities").
4. Consideration for Sale and Transfer.
4.1 Purchase Price.
The purchase price to be paid by Buyer to Seller shall be Three Million
Dollars ($3,000,000.00).
4.2 Method of Payment.
Buyer shall pay the purchase price to Seller at Closing by wire transfer to
Seller's bank account in the amount of Three Million Dollars ($3,000,000.00).
4.3 Allocation of Purchase Price.
The parties hereto agree that the purchase price for the assets of Seller
sold pursuant to this Agreement shall be allocated pursuant to a separate
written agreement of the parties. Each party agrees to report this transaction
for state and federal income taxes in a manner consistent with this written
allocation.
5. Operation Pending Closing.
Subject to Article 3, operation of the Business, and income and expenses
attributable thereto, prior to the Closing Date shall be maintained in the
ordinary course and be for the account of Seller and, on and after the Closing
Date for the account of Buyer. Expenses which have been paid in advance for any
period extending beyond the Closing Date, including, but not limited to, such
items as electricity, water and other utility charges, rent, real and personal
property taxes, shall be for the benefit of Buyer as of the Closing Date. Seller
shall notify the companies providing the telephone, water, electric and other
utility services of the transfer of such services to Buyer and shall advise such
companies to effect the transfer of the services and billing therefor on the
Closing Date.
6. Seller's Representations and Warranties.
Seller represents and warrants to Buyer as follows:
6.1 Seller is a limited partnership, duly organized and validly existing
and in good standing under the laws of the State of Delaware and has full power
and authority to enter into this transaction, to carry on its business, and to
transfer the Assets and other interests specified in this Agreement free and
clear of all liens and encumbrances.
6.2 Seller has full partnership power and authority to perform its
obligations hereunder. The execution and delivery of this Agreement and
performance by Seller of its obligations hereunder have been duly authorized by
all necessary partnership action in order to constitute this Agreement as a
binding and enforceable obligation of Seller. The execution and delivery of this
Agreement and the performance by Seller of its obligations hereunder do not and
will not violate any provision of Seller's Partnership Agreement or any other
agreement to which it is a party or any judgment, order, decree, law or
regulation. This Agreement is a legal, valid and binding agreement,
enforceable against the Seller in accordance with its terms. There are no
consents required to enable Seller to execute and deliver this Agreement that
have not been obtained.
6.3 The Assets are being purchased in an "as is" condition. SELLER MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE ASSETS OR IN
CONNECTION WITH THE TRANSACTIONS CONTEMPLATED HEREBY OTHER THAN THOSE SET FORTH
IN THIS SECTION 6 AND OTHER DOCUMENTS DELIVERED OR TO BE DELIVERED HEREWITH AND
ALL OTHER WARRANTIES EXPRESS OR IMPLIED ARE HEREBY DISCLAIMED, INCLUDING ALL
WARRANTIES OF MERCHANTIBILITY, SUITABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.4 To the best of Seller's knowledge, after due inquiry, the performance
by Seller of, and its compliance with the terms, provisions and conditions of
this Agreement does not violate any applicable statute, regulation, order or
judgment applicable to it and does not constitute a default under, and is not in
any respect in conflict with, the provisions of any bylaw, indenture, or other
agreement or any judgment to which Seller is a party or by which it may be bound
or affected, including but not limited to any obligation of Seller to its
creditors.
7. Covenants of Seller.
From and after the date of this Agreement and up to the Closing Date,
except as otherwise specifically agreed to in writing by Buyer, Seller agrees
not to sell, assign, lease or otherwise transfer or dispose of any of the Assets
of the Business except in the ordinary course of business.
8. Conditions to Obligations of Buyer.
The obligations of Buyer under this Agreement are additionally subject to
the satisfaction of or written waiver by Buyer of each of the following
conditions on or before the Closing Date, any of which may be waived by Buyer in
writing and each of which shall be considered properly
performed if no notice to the contrary has been provided to Seller in
writing by the close of any contingency time set forth in this section:
(a) that the representations and warranties of Seller contained herein
shall be true on and as of the Closing Date with the same force and effect as
though made on and as of the Closing Date;
(b) that Seller shall have performed all of its obligations and agreements
and complied with all covenants and undertakings required by this Agreement
between the date hereof and the Closing Date;
(c) that Buyer has received funding from Buyer's investors in an amount
sufficient to complete this transaction. If Buyer has not received a firm
commitment from its investors at least ten (10) days prior to the scheduled
Closing Date, then Buyer must give written notice to Seller whether Buyer elects
to cancel this Agreement or proceed to Closing without the financing. However,
if no written notice is received then this Agreement is terminated and neither
party has any continuing obligation to the other; and
(d) Prior to the Closing Date, Buyer shall be entitled, through its
employees and representatives, to satisfactorily complete such investigations of
the property and such examination of the books, records and financial condition
of Seller and the Business as Buyer may reasonably request. In order that Buyer
may have the full opportunity to do so, Seller shall furnish Buyer and its
representatives during such period with all such information concerning the
affairs of Seller and the Business as Buyer or such representatives may
reasonably request and cause Seller's officers, employees, consultants, agents,
accountants and attorneys to cooperate fully with Buyer or such representatives
in connection with such review and examination and to make full disclosure of
all information and documents requested by Buyer and/or such representatives.
Any such
investigations and examinations shall be conducted at reasonable times and
under reasonable circumstances.
9. Conditions to Obligations of Seller.
Obligations of Seller under this Agreement are additionally subject to the
satisfaction of or written waiver by Seller of the following conditions on or
before the Closing Date, any one of which may be waived by Seller in writing and
each of which shall be considered properly performed if no notice to the
contrary has been provided to Buyer in writing by the close of any contingency
time set forth:
(a) that Buyer shall have performed or complied with all of the terms and
conditions of this Agreement on its part to be performed or complied with;
(b) that all actions, proceedings, instruments and documents required to be
delivered by Buyer hereunder or incident to the performance hereof, and all
other related matters shall have been delivered by Buyer to Seller;
(c) that Buyer has made payment of the purchase price as set forth in
Section 4 hereof;
(d) delivery of a secretary's certificate certifying Buyer's corporate
resolution authorizing Buyer to enter into and consummate this transaction.
10. Seller's Performance at Closing.
On the Closing Date, Seller shall execute and deliver or cause to be
delivered to Buyer:
10.1 One or more Bills of Sale in the form attached hereto as Exhibit D
conveying to the Buyer all of the Assets to be acquired by the Buyer hereunder.
10.2 Assignment and consent of landlord of the Lease Agreement in the form
attached hereto as Exhibit E.
10.3 Secretary's Certificate certifying the resolutions of the General
Partner of Seller
approving this transaction.
10.4 Assignment of any and all trademarks, patents and copyrights for the
name "Nutri/System" and all related names and marks all of which are more fully
set forth on Exhibit F attached hereto. Copies of the assignments shall be in
the form attached hereto as Exhibit G.
10.5 As of the Closing Date Seller shall cease to use the name
"Nutri/System" and will change its name to some other name of its choosing that
is in no way similar to "Nutri/System".
11. Covenants of Buyer.
From and after the date of this Agreement and up to the Closing Date,
except as otherwise specifically agreed to in writing by Seller, Buyer agrees
to:
11.1 Take any and all actions necessary for the approval and performance of
this Agreement and the consummation of the transactions contemplated hereby.
11.2 Cooperate fully with Seller and its counsel in preparation and
prosecution of the assignment of the Lease Agreement.
12. Buyer's Representations and Warranties.
12.1 Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Buyer has all requisite
corporate power and authority to execute and deliver this Agreement and to carry
out the transactions contemplated hereby.
12.2 Buyer has full power and authority to assume and perform its
obligations hereunder. The execution and delivery of this Agreement and
performance by Buyer of its obligations hereunder have been duly authorized by
all necessary corporate action in order to constitute this Agreement as a
binding and enforceable obligation of Buyer.
12.3 To the best of Buyer's knowledge, after due inquiry, the performance
by Buyer of, and its compliance with the terms, provisions and conditions of
this Agreement does not violate any
applicable statute, regulation, order or judgment applicable to it and does
not constitute a default under, and is not in any respect in conflict with, the
provisions of any bylaw, indenture, or other agreement or any judgment to which
Buyer is a party or by which it may be bound or affected, including but not
limited to any obligation of Buyer to its creditors.
12.4 There are no actions, suits or proceedings pending or threatened
against Buyer with respect to this Agreement which might prevent the performance
of the transactions contemplated hereby.
13. Buyer's Performance at Closing.
On the Closing Date Buyer shall pay to Seller, by wire transfer of funds,
the monies payable on the Closing Date as set forth in Section 4 hereof and
execute the Assignment of Lease.
14. Leasehold Premises.
Seller will assign to Buyer all of its rights, title and interests,
including any security deposit, in the Lease Agreement for the Business, without
representation or warranty of any kind. Buyer shall, at its sole expense, after
Closing use its best efforts to obtain the consent of landlord to the assignment
of the Lease Agreement. Buyer shall indemnify, defend and hold harmless Seller
against any liability arising from the failure to obtain such consent.
15. Restrictive Covenant.
Seller will not, for a period of three (3) years from the date of execution
of this Agreement, in the United States of America, engage in the Business the
operating assets of which are being purchased by Buyer hereby, or have an
interest, as a proprietor, partner, employee, agent, or consultant in any
enterprise which shall be so engaged.
15.1 The terms and conditions of this Restrictive Covenant have been
established by the mutual agreement of the parties, and in reliance on the
validity of this Agreement, Seller will cease
engaging in the Business as of the Closing Date. Further, if any court
shall determine that the duration, geographical limits or any other provisions
of the restrictions contained in this Agreement are unenforceable, Seller agrees
that this Agreement shall be deemed amended so as to render such Agreement valid
and enforceable, with all other provisions of the Agreement to remain in full
force and effect.
16. Cross Indemnification.
(a) Indemnification by Seller. Seller shall defend, indemnify and hold
harmless Buyer from and against all claims, demands, causes of action, suits,
judgments, debts, liabilities and expenses, including attorneys fees, known or
unknown (i) resulting from any misrepresentations or nonfulfillment of any
condition or obligation on the part of Seller under this Agreement or (ii) which
result from the Excluded Liabilities. Seller hereby agrees to defend, indemnify
and hold harmless the Buyer from the lawsuits identified on Exhibit C hereto.
(b) Indemnification by Buyer. Buyer shall defend, indemnify and hold
harmless Seller from and against all claims, demands, causes of action, suits,
judgments, debts, liabilities and expenses, known or unknown (i) resulting from
any misrepresentations or non-fulfillment of any condition or obligation on the
part of Buyer under this Agreement; or (ii) which result from the operation of
the Business by Buyer on or after the Closing Date; or (iii) which result from
the operation of the Business by Seller prior to Closing, only so long as such
Closing occurs, except claims, demands, causes of action, suits, judgments,
debts, liabilities and expenses related to the Excluded Liabilities.
17. Assignment.
This Agreement and any and all rights or benefits hereunder shall not be
assignable by either party without the prior written consent of all other
parties.
(a) This Agreement shall be binding upon and shall inure to the exclusive
benefit of the respective heirs, administrators, legal representatives,
successors or permitted assigns of the parties. This Agreement is not intended
to, nor shall it create any rights for the benefit of any other party.
(b) Any provision of this Agreement found to be unenforceable or prohibited
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such unenforceability or prohibition without invalidating the remaining
provisions hereof.
18. Counterparts.
This Agreement may be executed in two or more counterparts, which shall
each be considered one and the same Agreement.
19. Further Assurance.
From time to time after the Closing Date and without further consideration,
the parties will execute and deliver, or arrange for the execution and delivery
of, such other instruments of conveyance and transfer and take such action or
arrange for such other actions as may reasonably be requested to more
effectively complete any of the transactions provided for in this Agreement or
any document annexed hereto.
20. Termination or Abandonment.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated and abandoned at any time prior to the Closing Date:
(a) by the mutual written consent of Buyer and Seller;
(b) by Buyer or Seller if any court of competent jurisdiction or
governmental body, authority or agency having jurisdiction shall have issued an
order, decree or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and
nonappealable;
(c) by Buyer if one or more of the conditions to the obligations of
Buyer as set forth in Article 8 hereof has not been fulfilled by the
Closing Date;
(d) by Seller if one or more of the conditions to the obligations of
Seller as set forth in Article 9 hereof has not been fulfilled by the
Closing Date; or
(e) by Seller if Closing hereunder has not taken place within 45
calendar days after the date of execution hereof. Neither Buyer nor Seller
shall be liable to the other for any termination of this Agreement pursuant to
this Article 20.
21. Survival.
Each party shall be entitled to rely on the representations and warranties
of the other set forth herein and on any Exhibit or other document delivered
pursuant to this Agreement to the extent the party does not have or receive
actual notice that the representation or warranty is untrue or has been breached
by the party making the representation or warranty. The representations,
warranties, covenants and obligations of the parties made herein shall survive
the Closing.
22. Governing Law.
This Agreement shall be construed under and in accordance with the laws of
the Commonwealth of Pennsylvania.
23. Notices.
Any notices or other communications required or permitted hereunder shall
be properly delivered if mailed, postage prepaid, by registered or certified
mail, return receipt requested, addressed as follows:
To Seller: Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chairman
C/o Heico Acquisitions, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
To Buyer: ▇▇. ▇▇▇▇▇ Schniedmill, President
ANSAMA Corp.
▇▇▇ ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
or such other address as may be furnished in writing by any party hereto.
24. Merger.
This Agreement represents the entire agreement of the parties and may not
be modified or changed except in a writing signed by both parties. No party
hereto has relied on any representation, oral or written other than those
contained herein in connection with the execution and delivery of this
Agreement.
IN WITNESS WHEREOF, the corporate parties hereto have caused this Asset
Purchase Agreement to be executed by their duly authorized officers and their
respective corporate seals to be affixed hereto and the individual parties
hereto have hereunto set their hands and seal, the day and year first above
written.
BUYER: SELLER:
ANSAMA CORP. NUTRI/SYSTEM L.P.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: President & CEO Title: Assistant Secretary
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