ASSET PURCHASE AND SALE AGREEMENT
By and Among
Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇,
German citizens,
and
Global Life Sciences, Inc.,
A Nevada corporation in formation
and
Too Gourmet, Inc.,
a Nevada corporation.
THIS ASSET PURCHASE AND SALE AGREEMENT ("Agreement") is made and
entered into in duplicate and shall be effective as of the 22nd
day of September, 2003, by and among Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇, German citizens (collectively,
"Seller"), and Too Gourmet, Inc., a Nevada corporation
("Parent"), and Global Life Sciences, Inc., a Nevada corporation
to be formed as its wholly-owned subsidiary ("Subsidiary";
collectively, with Subsidiary, as appropriate, "Purchaser"), and
provides for the Purchaser to acquire certain specified assets of
the Seller, on the terms and subject to the conditions specified
in this Agreement.
RECITALS
A. The Purchaser desires to acquire in the name and for the
account of Subsidiary, on the terms and subject to the conditions
specified in this Agreement, the Acquired Assets (as that term is
defined later in this Agreement).
B. The Seller believes that it is in the best interests of the
Seller, and, therefore, it desires to, sell the Acquired Assets
to the Purchaser, on the terms and subject to the conditions
specified in this Agreement.
NOW, THEREFORE, IN CONSIDERATION OF THE RECITALS SPECIFIED ABOVE
THAT SHALL BE DEEMED TO BE A SUBSTANTIVE PART OF THIS AGREEMENT,
AND THE MUTUAL COVENANTS, PROMISES, UNDERTAKINGS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES SPECIFIED IN THIS AGREEMENT AND
OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, WITH THE INTENT TO
BE OBLIGATED LEGALLY AND EQUITABLY, THE PARTIES DO HEREBY
COVENANT, PROMISE, AGREE, REPRESENT AND WARRANT AS FOLLOWS:
ARTICLE I
DEFINITIONS
As used in this Agreement, the capitalized terms specified in
this Agreement shall have the meanings and definitions specified
and indicated by the provisions of this Article I, unless a
different and common meaning of such a term is clearly indicated
by the context, and variants and derivatives of those terms shall
have correlative meanings. To the extent that certain of the
definitions specified in this Article I suggest, indicate, or
express agreements between or among parties to this Agreement, or
contain representations or warranties or covenants of a party,
the parties agree to the same, by execution of this Agreement.
Agreements, representations, warranties and covenants specified
in any part or provision of this Agreement shall, for all
purposes of this Agreement, be treated in the same manner as
other such agreements, representations, warranties and covenants
specified elsewhere in this Agreement; and the article, section
or paragraph of this Agreement within which such an agreement,
representation, warranty, or covenant appears shall have no
separate meaning or effect regarding the same.
1/38
Initials:_______/_______
1.1 "Accumulated Funding Deficiency". An "accumulated funding
deficiency" as defined in ERISA Section 302(a)(2) or the last two
sentences of Section 412(a)(2) of the Code, or, in either case,
successor provisions to such provisions adopted by amendments to
ERISA or the Code, as the case may be, and including, in each
case, other provisions of ERISA, of the Code or such other law,
modifying, amending, interpreting or otherwise affecting the
application of such provisions, either in general or as applied
to the nature or circumstances of a particular Entity that is a
party to, or is affected by or is involved in the Transaction and
with respect to which Entity the use of the term in this
Agreement, or in the particular location in this Agreement, is
relevant.
1.2 "Acquired Assets". The worldwide right, title, and interests
in and to the assets of the Seller being acquired by the
Purchaser pursuant to the provisions of this Agreement, as
specified on Schedule 1.2 of this Agreement, and all other assets
of the Seller, tangible or intangible, including contractual,
warranty, and other rights, the worldwide use or value of which
will come under the Control (as that term is defined in Section
1.17 of this Agreement) by the Purchaser when the Transaction
contemplated by this Agreement is consummated.
1.3 "Acquired Business". The business conducted by the Seller in
which the Seller utilized, or could have utilized, the Acquired
Assets, as specified in Schedule 1.2 to this Agreement
1.4 "Acquired Business Balance Sheet". The most recent Balance
Sheet or (at Seller's discretion) a current independent third
party appraisal providing an outside valuation of the Acquired
Assets and Acquired Business.
1.5 "Acquired Business Disclosure Document". The document
delivered by the Seller to the Purchaser and included in Schedule
1.5 to this Agreement containing certain disclosures regarding
the Acquired Business.
1.6 "Acquired Facilities". All warehouses, stores, plants,
processing facilities, fixtures, and improvements owned or leased
by the Seller or otherwise used by the Seller in connection with
the operation of its business or leased or subleased by the
Seller to other persons, but only to the extent that the same
consist of Acquired Assets.
1.7 "Affiliate". When used with respect to a person, an
"Affiliate" of that person is a person Controlling, Controlled
by, or subject to common Control with that person.
1.8 "Agreement". This Asset Purchase and Sale Agreement,
including all of its schedules and exhibits and all other
documents specifically referred to in this Agreement that have
been or are to be delivered by a party to this Agreement to the
other party to this Agreement in connection with the Transaction
or this Agreement, and including all duly adopted amendments,
modifications, and supplements to or of this Agreement and such
schedules, exhibits and other documents.
1.9 "Auditors". The Seller and the Acquired Business have MBA
▇▇▇▇▇ ▇▇▇▇▇ as Auditor, a Professional Accountant who is an
independent certified public accountant currently being retained
for the purpose of auditing financial statements and assets of
the Seller, and with respect to the Purchaser, ▇▇▇▇▇▇▇▇▇▇▇, a
Professional Accountancy Corporation which is the independent
certified public accountant currently being retained for the
purpose of auditing financial statements of the Purchaser. With
respect to any report hereafter issued by Auditors, the term
shall mean that firm of independent certified public accountants,
or a successor firm if so engaged by the Purchaser.
1.10 "Business Day". Any day that is not a Saturday, Sunday or
day on which banks in Nevada are authorized to close.
2/38
Initials:_______/_______
1.11 "Closing". The completion of the Transaction, to occur as
contemplated in Article II of this Agreement.
1.12 "Closing Date". September 22, 2003, or the date on which the
Closing actually occurs, which shall be the date that all of the
conditions specified by the provisions of Article VII of this
Agreement have been satisfied or waived.
1.13 "Closing Time". The time at which the Closing actually
occurs. All events that are to occur at the Closing Time shall,
for all purposes, be deemed to occur simultaneously, except to
the extent, if at all, that a specific order of occurrence is
otherwise described.
1.14 "Code". The Internal Revenue Code of 1986, as amended and in
effect on the date the parties sign this Agreement.
1.15 "Complete Withdrawal". A "complete withdrawal" from a
Multiemployer Plan as defined in Section 4203 of ERISA or
successor provisions to such provisions adopted by amendments to
ERISA and including other provisions of ERISA or of other law,
and regulations adopted under ERISA or such other law, modifying,
amending, interpreting or otherwise affecting the application of
such provision, either in general or as applied to the nature or
circumstances of a particular entity that is a party to, or is
affected by or is involved in the Transaction and with respect to
which Entity the use of the term in this Agreement, or in the
particular location in this Agreement, is relevant.
1.16 "Consideration". Twenty-six million five hundred thousand
(26,500,000) shares of $.001 par value common stock of the Parent
to be issued by the Purchaser on behalf of the Subsidiary to the
Seller's designees as specified in Schedule 1.16a and three
million five hundred thousand (3,500,000) stock options for the
purchase of shares of $.001 par value common stock of the
Purchaser at a strike price of $0.10 per option/share (exercise
period 36 months) to be issued by the Purchaser on behalf of the
Subsidiary to the Seller's designees as specified in Schedule
1.16b, at the Closing for the Acquired Assets, which shares and
options may also collectively be referred to in this Agreement as
the "Subject Shares".
1.17 "Control". Generally, the power to direct the management or
affairs of an Entity.
1.18 "Encumbrance". Any lien, pledge, option, adverse claim,
charge, easement security interest, right-of-way or encumbrance.
1.19 "Entity". A corporation, partnership, sole proprietorship,
joint venture, or other form of organization formed for the
conduct of a business, whether active or passive.
1.20 "ERISA". The Employee Retirement Income Security Act of
1974, as amended and in effect at the time of execution of this
Agreement.
1.21 "Exchange Act". The Securities and Exchange Act of 1934, as
amended from time to time.
1.22 "GAAP". Generally Accepted Accounting Principles in the
United States, as in effect on the date of any statement, report
or determination that purports to be, or is required to be,
prepared or made in accordance with GAAP. All references in this
Agreement to financial statements prepared in accordance with
GAAP shall mean in accordance with GAAP consistently applied
during the periods to which reference is made.
1.23 "Governmental Entity". Any governmental or political
subdivision or department thereof, any governmental or regulatory
agency, commission, board, bureau, agency or instrumentality, or
any court or arbitrator or alternative dispute resolution agency,
in each event whether domestic or foreign, federal, state or
local.
1.24 [Reserved.]
1.25 "Inventory". Any stock of raw materials, work-in-process and
finished goods, including, but not limited to, finished goods
purchased for resale, held by a party for manufacturing,
assembly, processing, finishing, sale, or resale to others from
time to time in the ordinary course of the business of that
party, in the form in which such inventories then are held or
after manufacturing, assembling, finishing, processing,
incorporating with other goods or items, refining, or similar
processes.
1.26 "IRS". The Internal Revenue Service.
3/38
Initials:_______/_______
1.27 "Knowledge". A person will be deemed to have "Knowledge" of
a particular fact or other matter if such person is actually
aware of such fact or other matter, but such person shall not and
does not have an obligation to conduct an inquiry or
investigation to become aware of any such fact or matter.
1.28 "Liabilities". At any time ("Determination Time"), the
obligations of a person or Entity, whether known or unknown,
contingent or absolute, recorded on its books or not, resulting
in any way from facts, events, agreements, obligations or
occurrences that existed, occurred or transpired at a prior point
in time, or resulted from the passage of time to the
Determination Time, but not including obligations accruing or
payable after the Determination Time to the extent (but only to
the extent) that such obligations (a) result from previously
existing agreements for services, benefits, or other
considerations, and (b) accrue or become payable with respect to
services, benefits, or other considerations received by the
person or Entity after the Determination Time.
1.29 "Multiemployer Plan". A "multiemployer plan," as defined in
Section 3(37) of ERISA or Section 414(f) of the Code, or, in
either event, successor provisions to such provisions adopted by
amendments to ERISA or the Code, as the case may be, and
including, in each event, other provisions of ERISA, of the Code,
or of other law, and regulations adopted pursuant to ERISA, or
the Code, or such other law, modifying, amending, interpreting,
or otherwise affecting the application of such provisions, either
in general or as applied to the nature or circumstances of a
particular Entity that is a party to, or is affected by, or is
involved in, the Transaction and with respect to which Entity the
use of the term in this Agreement, or in the particular provision
in this Agreement, is relevant.
1.30 "Payables". Any Liabilities of a party resulting from the
borrowing of money or the incurring of obligations for
merchandise or goods purchased.
1.31 "Partial Withdrawal". A "partial withdrawal" from a
Multiemployer Plan, as defined in Section 4205 of ERISA or
successor provisions to such provision adopted by amendments to
ERISA and including other provisions of ERISA or of other law,
and regulations adopted under ERISA or such other law, modifying,
amending, interpreting or otherwise affecting the application of
such provision, either in general or as applied to the nature or
circumstances of a particular entity that is a party to, or is
affected by or is involved in the Transaction and with respect to
which entity the use of the term in this Agreement, or in the
particular location in this Agreement, is relevant.
1.32 "Pension Plan". A "pension plan" or "employee pension
benefit plan," as defined in Section 3(2) of ERISA or successor
provisions to such provision adopted by amendments to ERISA and
including other provisions of ERISA, or of other law, and
regulations adopted pursuant to ERISA or such other law,
modifying, amending, interpreting, or otherwise affecting the
application of such provision, either in general or as applied to
the nature or circumstances of a particular Entity that is a
party to, or is affected by, or is involved in, the Transaction
and with respect to which Entity the use of the term in this
Agreement, or in the particular provision in this Agreement, is
relevant.
1.33 "Person". Any individual, company, sole proprietorship,
corporation, joint venture, association, joint stock company,
fraternal order, cooperative, league, club, society,
organization, trust, estate, governmental agency, political
subdivision or authority, firm, municipality, congregation,
partnership, or other form of entity.
1.34 "Plan Termination". A termination of a Pension Plan, whether
partial or complete, within the meaning of Title IV of ERISA.
1.35 "PBGC". The Pension Benefit Guaranty Corporation.
1.36 "Prohibited Transaction". A "prohibited transaction," as
defined in ERISA Section 4975 (c) of the Code, or, in either
case, successor provisions to such provisions adopted by
amendments to ERISA or the Code, as the case may be, and
including, in each case, other provisions of ERISA, of the Code
or of other law, and regulations adopted under ERISA or the Code
or such other law, modifying, amending, interpreting, or
otherwise affecting the application of such provisions, either in
general or as applied to the nature or circumstances of a
particular entity that is a party to, or is affected by or is
involved in the Transaction and with respect to which Entity the
use of the term in this Agreement, or in the particular location
in this Agreement, is relevant.
4/38
Initials:_______/_______
1.37 "Proprietary Rights". Any trade secrets, copyrights,
patents, trademarks, service marks, customer lists, and all
similar types of intangible property developed, created or owned
by the Seller, or used by the Seller in connection with its
business, whether or not the same are entitled to legal
protection.
1.38 "Purchaser". Too Gourmet, Inc., a Nevada corporation, which,
pursuant to the provisions of this Agreement, is purchasing the
Acquired Assets.
1.39 "Receivables". Any accounts receivable, notes receivable,
and other obligations presented as assets on the books, records
and financial statements of a person or an Entity, in accordance
with GAAP, indicating moneys owed, due and payable to such person
or Entity on whose financial statements such Receivables are
presented.
1.40 "Registration". Registration pursuant to the Securities Act.
1.41 [Reserved.]
1.42 "Reportable Event". A "reportable event", as defined in
Section 4043(b) of ERISA or successor provisions to such
provision adopted by amendments to ERISA and including other
provisions of ERISA or of other law, and regulations adopted
under ERISA or such other law, modifying, amending, interpreting,
or otherwise affecting the application of such provision, either
in general or as applied to the nature or circumstances of a
particular Entity that is a party to, or is affected by or is
involved in the Transaction and with respect to which entity the
use of the term in this Agreement, or in the particular location
in this Agreement, is relevant.
1.43 "SEC". The Securities and Exchange Commission.
1.44 "Securities Act". The Securities Act of 1933, as amended
from time to time.
1.45 "Seller". Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇
▇▇▇▇▇▇▇, German citizens, who, pursuant to the provisions of this
Agreement, are selling the Acquired Assets.
1.46 "Subsidiary". With respect to any Entity, another Entity of
which fifty percent (50%) or more of the effective voting power,
or the effective power to elect a majority of the board of
directors or similar governing body, or fifty percent (50%) or
more of the true equity interest, is owned by such first Entity,
directly or indirectly.
1.47 "Taxes". All taxes, charges, levies or other assessments,
including, without limitation, income, gross receipts, excise,
real and personal property, sales, use, transfer, capital gains,
transfer gains, license, payroll, privilege, and franchise taxes,
imposed by any Governmental Entity and shall include any
interest, penalties or additions to tax attributable to any of
the foregoing.
1.48 "Transaction". The sale of the Acquired Assets, for the
Consideration, and on the terms and subject to the conditions of
this Agreement.
1.49 "Unaudited Financial Statements". The balance sheet, income
statement, statement of stockholders equity and statement of cash
flows, or, in at Seller's discretion, an equivalent statement
(such as an independent third party appraisal) as commonly
provided to shareholders, banks or investors of the Seller, of
the Acquired Business as at July 31, 2003, or later.
1.50 "Welfare Plan". A "welfare plan" or an "employee welfare
benefit plan," as defined in Section 3(1) of ERISA or successor
provisions to such provision adopted by amendments to ERISA and
including other provisions of ERISA, or of other law, and
regulations adopted pursuant to ERISA, or such other law,
modifying, amending, interpreting, or otherwise affecting the
application of such provision, either in general or as applied to
the nature or circumstances of a particular Entity that is a
party to, or is affected by, or is involved in, the Transaction
and with respect to which Entity the use of the term in this
Agreement, or in the particular provision in this Agreement, is
relevant.
5/38
Initials:_______/_______
ARTICLE II
THE TRANSACTION
2.1 The Transaction. On the Closing Date, and at the Closing
Time, on, and in all instances subject to, each of the terms,
conditions, provisions and limitations specified in this
Agreement, the Seller shall sell, transfer, convey, assign,
deliver and set over to the Subsidiary, by instruments
satisfactory in form and substance to the Purchaser and counsel
for the Purchaser, and the Subsidiary shall acquire from the
Seller, all of the Seller's right, title and interest in and to
the Acquired Assets, in exchange for the Consideration, free and
clear of any and all Encumbrances. Neither the Purchaser nor any
of its Affiliates shall assume, become liable for, agree to pay
or discharge or in any manner become in any way responsible for,
any of the Liabilities of the Seller, all of which shall be
discharged by Seller in the ordinary course, but no later than
the Closing Date.
2.2 Delivery of Consideration. The certificates evidencing and
representing the Subject Shares shall be issued and delivered by
the Subsidiary to the Seller on the Closing Date for distribution
to the Seller's shareholders.
2.3 Acquired Assets. The Acquired Assets shall consist of the
assets of Seller at the Closing Date, including, without
limitation, the following, such that, upon the transfer hereof as
of the Closing and in exchange for the Consideration, all of
Seller's rights herein for any purpose in any geographic reason
shall have been transferred to Purchaser with full unencumbered,
worldwide rights of use and ownership thereof:
(a) Fixtures and Equipment. All of Seller's furniture, fixtures,
machinery, equipment, apparatus, supplies and all other tangible
personal property of every kind and description, insofar as any
of the foregoing is used in or relates to the Seller's business.
(b) Licenses and Permits. All right, title and interest of the
Seller in, to and pursuant to, all licenses, permits,
authorizations and other rights of every kind and character
relating to the Seller's business pursuant to any federal, state,
or local statute, ordinance or regulation.
(c) Intangible Assets. All worldwide right, title and interest of
the Seller in, to and pursuant to all trademarks, technology,
patent, know-how, data, copyrights, trade-names, service marks,
licenses, covenants by others not to compete, rights and
privileges, whether used in the Seller's business or usable in
any other geographic area without limitation, and the goodwill
associated with the Seller's business.
(d) Goodwill. The goodwill and going concern value of the
Seller's interest in the Seller's business.
(e) Contracts and Leases. All right, title and interest of Seller
in, to and pursuant to all contracts and leases.
(f) Inventories. Any and all of the Seller's Inventories.
(g) Accounts. All accounts receivable of the Seller in respect of
goods sold or leased or services rendered and all other rights of
the Seller to payment for goods sold or leased or for services
rendered, including, without limitation, those which are not
evidenced by instruments or invoices, whether or not they have
been earned by performance or have been written off or reserved
against as a bad debt or doubtful account; together with all
instruments and all documents of title representing any of the
foregoing, all rights in any merchandise or goods which any of
the same represent, and all rights, title, security and
guaranties in favor of the Seller with respect to any of the
foregoing.
(h) Books and Records. All of the Seller's books and records.
6/38
Initials:_______/_______
(i) Prepaid Expenses, Cash, Insurance. All prepaid expenses and
deposits relating to the Acquired Assets and all cash of the
Seller, and rights and benefits provided pursuant to all
insurance policies.
2.4 Closing. The Closing of the Transaction shall occur at the
offices of ▇▇▇▇▇ ▇▇▇▇ llp, at 10:00 A.M. on the Closing Date or
that date that all of those conditions to Closing specified in
Article VII of this Agreement have been satisfied or waived with
respect to the Transaction, or at such other place as the
Purchaser and the Seller may agree, on the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Parent represents and warrants to the Seller as follows and,
upon its due incorporation, the Subsidiary shall be deemed to
have represented and warranted to the Seller as follows:
3.1 Organization and Qualification. The Purchaser is a
corporation duly organized, validly existing and in good standing
pursuant to the laws of its jurisdiction of incorporation and has
the requisite corporate power and authority to conduct its
business as that business is now being conducted. The Purchaser
is duly qualified as a foreign corporation to do business, and is
in good standing, in each jurisdiction where the character of the
properties owned or leased by it, or the nature of its
activities, is such that qualification as a foreign corporation
in that jurisdiction is required by law.
3.2 Authority Relative to This Agreement. The Purchaser has the
requisite corporate power and authority to perform its
obligations specified by the provisions of this Agreement. The
execution and delivery of this Agreement and the consummation of
the Transaction have been duly authorized and approved by the
requisite corporate authority of the Purchaser, and no other
corporate actions on the part of the Purchaser are necessary to
approve and adopt this Agreement or to approve the consummation
of the Transaction, including the issuance and delivery of the
Consideration. The Purchaser has, and any officer, director or
representative executing this Agreement for and on behalf of the
Purchaser has, the legal capacity and authority to enter into and
deliver this Agreement. This Agreement is a valid and legally
binding obligation of the Purchaser and is enforceable completely
against the Purchaser in accordance with its terms, except as
such enforceability may be limited by general principles of
equity, bankruptcy, insolvency, moratorium and similar laws
relating to creditors' rights generally, and subject to approval
of any and all governmental regulatory agencies and authorities
having jurisdiction of the parties to this Agreement or the
Transaction.
3.3 Absence of Breach; No Consents. The execution, delivery and
performance of this Agreement, and the performance by the
Purchaser of its obligations specified by the provisions of this
Agreement (except for compliance with any regulatory or licensing
laws applicable to the business of the Purchaser, all of which,
and to the extent applicable to and within control of the
Purchaser (and to the extent within its Control), will be
satisfied in all material respects prior to the Closing) do not
(a) conflict with, and will not result in a breach of, any of the
provisions of the Articles of Incorporation or Bylaws of the
Purchaser; (b) contravene any law, rule or regulation of any
state or commonwealth, the United States, (except for compliance
with regulatory or licensing laws, all of which, to the extent
applicable to the Purchaser (and to the extent within the control
of the Purchaser), will be satisfied in all material respects
prior to the Closing), or any applicable foreign jurisdiction, or
contravene any order, writ, judgment, injunction, decree,
determination, or award affecting or obligating the Purchaser, in
such a manner as to provide a basis for enjoining or otherwise
preventing consummation of the Transaction; (c) conflict with or
result in a material breach of or default pursuant to any
material indenture or loan or credit agreement or any other
material agreement or instrument to which the Purchaser is a
party, in such a manner as to provide a basis for enjoining or
otherwise preventing consummation of the Transaction; or (d)
require the authorization, consent, approval or license of any
third party of such a nature that the failure to obtain the same
would provide a basis for enjoining or otherwise preventing
consummation of the Transaction.
3.4 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in
connection with this Agreement or the Transaction or any related
transaction based upon any agreements, written or oral, made by
or on behalf of the Purchaser, other than those specified in
Schedule 3.4 to this Agreement.
7/38
Initials:_______/_______
3.5 No Undisclosed Liabilities. The Purchaser has no Liabilities
which have not been disclosed to the Seller in writing.
3.6 Taxes. The Purchaser has properly filed or caused to be filed
all federal, state, local, and foreign income and other tax
returns, reports, and declarations that are required by
applicable law to be filed by it and has paid, or made full and
adequate provision for the payment of, all federal, state, local,
and foreign income and other taxes properly due for the periods
contemplated by such returns, reports, and declarations.
3.7 Litigation. No investigation or review by any governmental
agency with respect to the Purchaser is pending or threatened
(other than inspections and reviews customarily made of
businesses similar to that the Purchaser), nor has any
governmental agency indicated to the Purchaser an intention to
conduct the same. There is no action, litigation or proceeding
pending or threatened against or affecting the Purchaser at law
or in equity, or before any federal, state, municipal, or other
governmental department, commission, board, bureau, agency, or
instrumentality.
3.8 Employees, Etc. There are no collective bargaining, bonus,
profit sharing, compensation, or other plans, agreements, trusts,
funds, or arrangements maintained by the Purchaser for the
benefit of its directors, officers or employees. There are no
employment, consulting, management service, severance, or
indemnification arrangements, agreements, or understandings
between the Purchaser, on the one hand, and any of its current or
former directors, officers or other employees (or Affiliates
thereof) on the other hand. The Purchaser is not, and following
the Closing will not be, obligated by any express or implied
contract or agreement to employ, directly or as consultant or
otherwise, any person for any specific period of time or until
any specific age.
3.9 Compliance With Laws. The Purchaser is in compliance with
all, and has received no notice of any violation of any, laws or
regulations applicable to its operations, including, without
limitation, the laws and regulations relevant to the use or
utilization of its premises, or with respect to which compliance
is a condition of engaging in any aspect of the business of the
Purchaser, and the Purchaser has all permits, licenses, zoning
rights, and other governmental authorizations necessary to
conduct its business as presently conducted.
3.10 Ownership of Assets. The Purchaser has good, marketable and
insurable title, or valid, effective and continuing leasehold
rights in the case of leased property, to all real property (as
to which, in the case of owned property, such title is fee
simple) and all personal property owned or leased by the
Purchaser in such a manner as to create the appearance or
reasonable expectation that the same is owned or leased by the
Purchaser; such ownership is free and clear of all liens, claims,
encumbrances and charges, except liens for taxes not yet due and
minor imperfections of title and encumbrances, if any, which,
singly and in the aggregate, are not substantial in amount and do
not materially detract from the value of the property subject
thereto or materially impair the use thereof; no other person has
any ownership or similar right in, or contractual or other right
to acquire any such right in, any of such property. The Purchaser
does not know of any potential action by any party, governmental
or other, and no proceedings with respect thereto have been
instituted of which the Purchaser has notice, that would
materially affect the Purchaser's ability to use and to utilize
each of its properties. The Purchaser has received no notices
from any mortgagee regarding any of its leased properties.
3.11 Proprietary Rights. The Purchaser possesses full and
complete ownership of, or adequate and enforceable long-term
licenses or other rights to use (without payment), all of the
Purchaser's Proprietary Rights; the Purchaser has not received
any notice of conflict which asserts the rights of others with
respect thereto; and the Purchaser has in all material respects
performed all of the obligations required to be performed by it,
and is not in default in any material respect, pursuant to any
agreement relating to any such Proprietary Right.
3.12 Subsidiaries. The Purchaser has no Subsidiaries.
3.13 Trade Names. The Purchaser has not utilized any fictitious
business names or similar name in the conduct of the Purchaser's
business or in the utilization of the Purchaser's assets.
3.14 [Reserved.]
8/38
Initials:_______/_______
3.15 Facilities. The Purchaser's facilities are (as to physical
plant and structure) structurally sound, and none of the
Purchaser's facilities, nor any of the vehicles or other
equipment used by the Purchaser in connection with its business,
has any material defects and all of them are in all material
respects in good operating condition and repair and are adequate
for the uses to which they are utilized; none of Purchaser's
facilities, vehicles or other equipment is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs
which are not material in nature or cost. The Purchaser is not in
breach, violation or default of any lease affecting the
Purchaser's assets with respect to, or as a result of, which the
other party (whether lessor, lessee, sublessor, or sublessee)
thereto has the right to terminate the same, and the Purchaser
has not received notice of any claim or assertion that the
Purchaser is or may be in any such breach, violation or default.
3.16 Accounts Receivable. All accounts receivable of the
Purchaser represent transactions in the ordinary course of
business, and are current and collectible.
3.17 Inventories. All Inventories of the Purchaser are of a
quality and quantity usable and saleable in the ordinary course
of business, except for obsolete items and items of below-
standard quality, all of which, in the aggregate, are immaterial
in amount. Items included in such Inventories are specified on
the books and records of the Purchaser at the lower of cost or
market and, in any event, at not more than their net realizable
value, on an item by item basis, after appropriate deduction for
costs of completion, marketing costs, transportation expense and
allocation of all other expenses.
3.18 Contracts. Other than financial obligations referenced on
the Purchaser's balance sheet as filed with its Quarterly Report
on Form 10-QSB for the fiscal quarter ended June 30, 2003, or
further, like-kind advances to the Purchaser from an officer and
director of the Purchaser subsequently thereto, the Purchaser is
not a party to or affected by any contracts, agreements or
understandings, whether express or implied, written or verbal;
provided, however, that the Purchaser, may be a party to or
affected by any such contracts, agreements, or understandings
that (1) are terminable on notice of less than thirty-two (32)
days and do not involve payments or obligations of more than One
Thousand Dollars ($1,000.00) in any period of thirty-one (31)
days or less (on termination or otherwise); or (2) involve
aggregate payment or obligation remaining unpaid as of the date
of the Agreement of less than Five Thousand Dollars ($5,000.00).
The Purchaser is not a party to any executory contract to sell or
transfer any part of any asset or any leasehold interest in any
asset utilized by the Purchaser. True and accurate copies of all
such leases, and of all amendments, supplements, extensions and
modifications thereof, have heretofore been delivered to the
Seller by the Purchaser.
3.19 Accounts Payable. The accounts payable of the Purchaser at
the time of the Closing will be all amounts owed by the Purchaser
regarding trade accounts due and other Payables of the Purchaser.
3.20 [Reserved.]
3.21 [Reserved]
3.22 [Reserved.]
3.23 Full Disclosure. The documents, certificates, and other
writings furnished or to be furnished by or on behalf of the
Purchaser to the Seller pursuant to the provisions of this
Agreement, taken together in the aggregate, do not and will not
contain any untrue statement of a material fact, or omit to state
any material fact necessary to make the statements made, in light
of the circumstances pursuant to which they are made, not
misleading.
3.24 Capitalization; the Subject Stock; Related Matters. The
authorized capital stock of the Purchaser consists of 50,000,000
shares of $.001 par value common stock, and of 5,000,000 shares
of preferred stock. There is no other capital stock authorized
for issuance. As of the date of this Agreement, there are
6,002,500 shares of such common stock issued and outstanding, and
none of such preferred stock. The Subject Shares, when issued in
consideration of the Acquired Assets, will be duly, legally and
validly issued and will be non-assessable.
9/38
Initials:_______/_______
3.25 Options, Warrants and Other Rights and Agreements Affecting
the Purchaser's Capital Stock. Other than the 3,500,000 stock
options to be included in the Subject Shares and the Option
Agreement, the Purchaser has no authorized or outstanding
options, warrants, calls, subscriptions, rights, convertible
securities or other securities, as defined by the provisions of
the Securities Act, or any commitments, agreements, arrangements
or understandings of any manner or nature whatsoever obligating
the Purchaser, in any such event, to issue shares of the
Purchaser's capital stock or other securities or securities
convertible into or evidencing the right to purchase shares of
the Purchaser's capital stock or other securities. Neither the
Purchaser nor any officer, director, or shareholder of the
Purchaser is a party to any agreement, understanding, arrangement
or commitment, or obligated by any provision which creates any
rights in any person with respect to the authorization, issuance,
voting, sale or transfer of any shares of the Purchaser's capital
stock or other securities.
3.26 [Reserved.]
3.27 Litigation and Claims. There is no litigation, arbitration,
claim, governmental or other proceeding (formal or informal), or
investigation pending or threatened (or any basis therefore known
to the Purchaser) against the Purchaser or any of the Purchaser's
businesses, properties, or assets.
3.28 Bulk Transfer Compliance. The Purchaser is aware, in
connection with the sale by the Seller of the Acquired Assets,
the Seller shall not take any action necessary or appropriate to
comply with applicable bulk transfer requirements of the Uniform
Commercial Code.
3.29 SEC Documents. The Purchaser has filed all reports required
to be filed by the Purchaser pursuant to the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, ("SEC
Documents") on a timely basis or received a valid extension of
such time of filing and has filed any such SEC Documents prior to
the expiration of any such extension of time. As of their
respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act and the rules
and regulations of the SEC promulgated pursuant thereto, and none
of the SEC Documents, when filed, contained any untrue statement
of material fact or omitted to specify a material fact required
to be specified therein or necessary in order to make the
information therein not misleading. All material agreements to
which the Purchaser is a party or to which the property or assets
of the Purchaser are subject have been filed as exhibits to the
SEC Documents, as required. The financial statements of the
Purchaser included in the SEC Documents comply in all material
respects with applicable accounting requirements and the rules
and regulations of the SEC with respect thereto as in effect at
the time of filing. Such financial statements have been prepared
in accordance with GAAP during the periods involved, except as
may be otherwise specified in such financial statements or the
notes thereto, and fairly present, in all material respects, the
financial situation of the Purchaser as of and for the dates
thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements,
to normal year-end audit adjustments. Since the date of the
financial statements included in the Purchaser's last filed
Quarterly Report on Form 10-QSB there has been no event,
occurrence or development that has had, or would reasonable be
expected to have, a material adverse effect on the Purchaser or
its business that has not been specifically disclosed to the
Seller by the Purchaser.
3.30 [Reserved.]
3.31 Internal Accounting Controls. The Purchaser maintains a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in
accordance with management's general or specific authorization,
and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
3.32 Private Offering. The Purchaser and all Persons acting on
its behalf have not made, and will not make, offers or sales of
any securities that might be integrated with issuance of the
Subject Shares and which would disqualify the Purchaser from
relying on that exemption from the registration and prospectus
delivery requirements of the Securities Act specified by the
provisions of Section 4(2) of the Securities Act and Rule 506 of
Regulation D. The issuance by the Purchaser to the Seller of the
Subject Shares is exempt from the registration and prospectus
delivery requirements of the Securities Act. Neither the
Purchaser, nor any Person acting on its behalf, has directly or
indirectly made any offers or sales in any security of the
Purchaser or solicited any offers to purchase any securities of
the Purchaser pursuant to circumstances that would cause the
issuance of the Subject Shares, pursuant to this Agreement, to be
integrated with prior offerings by the Purchaser for the purposes
of the Securities Act.
10/38
Initials:_______/_______
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller, jointly and severally, represents and warrants to the
Purchaser as follows:
4.1 Organization and Qualification. The Seller is a sole
proprietorship duly organized, validly existing and in good
standing pursuant to the laws of its jurisdiction of
incorporation and has the requisite corporate power and authority
to conduct its business as that business is now being conducted.
The Seller is duly qualified as a foreign entity to do business,
and is in good standing, in each jurisdiction where the character
of the properties owned or leased by it, or the nature of its
activities, is such that qualification as a foreign entity in
that jurisdiction is required by law.
4.2 Authority Relative to This Agreement. The Seller has the
requisite corporate power and authority to perform its
obligations specified by the provisions of this Agreement. The
execution and delivery of this Agreement and the consummation of
the Transaction have been duly authorized and approved by the
requisite corporate authority of the Seller and no other
corporate action on the part of the Seller is necessary to
approve and adopt this Agreement or to approve the consummation
of the Transaction, except for shareholder approval specified
elsewhere in this Agreement. The Seller has, and any officer,
director or representative executing this Agreement for and on
behalf of the Seller has, the legal capacity and authority to
enter into and deliver this Agreement. This Agreement is a valid
and legally binding obligation of the Seller and is enforceable
completely against the Seller in accordance with its terms,
except as such enforceability may be limited by general
principles of equity, bankruptcy, insolvency, moratorium and
similar laws relating to creditors' rights generally, and subject
to approval of any and all governmental regulatory agencies and
authorities having jurisdiction of the parties to this Agreement
or the Transaction.
4.3 Absence of Breach; No Consents. The execution, delivery and
performance of this Agreement, and the performance by the Seller
of its obligations specified by the provisions of this Agreement
(except for compliance with any regulatory or licensing laws
applicable to the business of the Seller, all of which, and to
the extent applicable to and with the control of the Seller, will
be satisfied in all material respects prior to the Closing) do
not (a) conflict with, and will not result in a breach of, any of
the provisions of the Certificate of Incorporation or Bylaws of
the Seller; (b) contravene any law, rule or regulation of any
state or commonwealth, the United States, (except for compliance
with regulatory or licensing laws, all of which, to the extent
applicable to and within the control of the Seller, will be
satisfied in all material respects prior to the Closing), or any
applicable foreign jurisdiction, or contravene any order, writ,
judgment, injunction, decree, determination, or award affecting
or obligating the Seller, in such a manner as to provide a basis
for enjoining or otherwise preventing consummation of the
Transaction; (c) conflict with or result in a material breach of
or default pursuant to any material indenture or loan or credit
agreement or any other material agreement or instrument to which
the Seller is a party, in such a manner as to provide a basis for
enjoining or otherwise preventing consummation of the
Transaction; or (d) require the authorization, consent, approval
or license of any third party of such a nature that the failure
to obtain the same would provide a basis for enjoining or
otherwise preventing consummation of the Transaction.
4.4 Brokers. No broker, finder, or investment banker is entitled
to any brokerage, finder's, or other fee or commission in
connection with this Agreement or the Transaction or any related
transaction based upon any agreements, written or oral, made by
or on behalf of the Seller.
4.5 No Undisclosed Liabilities. The Seller has no Liabilities
relating to or affecting the Acquired Assets which have not been
disclosed to the Purchaser on that schedule attached to this
Agreement marked Schedule 4.5 and the provisions of which, by
this reference, are made a part of this Agreement.
4.6 Taxes. The Seller has properly filed or caused to be filed
all federal, state, local, and foreign income and other tax
returns, reports, and declarations that are required by
applicable law to be filed by the Seller and that relate to or in
any way affect the Acquired Assets, and has paid, or made full
and adequate provision for the payment of, all federal, state,
local, and foreign income and other taxes properly due for the
periods contemplated by such returns, reports, and declarations.
11/38
Initials:_______/_______
4.7 Litigation. No investigation or review by any governmental
agency with respect to the Acquired Assets or the use thereof is
pending or threatened nor has any governmental agency indicated
to the Seller an intention to conduct the same. There is no
action, litigation or proceeding pending or threatened against or
affecting the Acquired Assets at law or in equity, or before any
federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality.
4.8 Employees, Etc. There are no collective bargaining, bonus,
profit sharing, compensation, or other plans, agreements, trusts,
funds, or arrangements maintained by the Seller for the benefit
of its directors, officers or employees. There are no employment,
consulting, severance, or indemnification arrangements,
agreements, or understandings between the Seller, on the one
hand, and any of its current or former directors, officers or
other employees (or Affiliates thereof) on the other hand. The
Seller is not, and following the Closing will not be, obligated
by any express or implied contract or agreement to employ,
directly or as consultant or otherwise, any person for any
specific period of time or until any specific age.
4.9 Compliance With Laws. The Acquired Business and each of the
Acquired Assets is in substantial compliance with all, and has
received no notice of any violation of any, laws or regulations
applicable to its operations, including, without limitation, the
laws and regulations relevant to the use or utilization of
premises, or with respect to which compliance is a condition of
engaging in any aspect of the business of the Acquired Business,
and the Acquired Business has all permits, licenses, zoning
rights, and other governmental authorizations necessary to
conduct its business as presently conducted. All such permits,
licenses, zoning rights, and other governmental authorizations
will, as a part and consequence of the Transaction, be
transferred to the Purchaser at the Closing.
4.10 Ownership of Assets. The Seller has, except as disclosed in
the Acquired Business Disclosure Document, good, marketable and
insurable title, or valid, effective and continuing leasehold
rights in the case of leased property, to all real property and
all personal property owned or leased by the Seller and
comprising a part of the Acquired Assets or the Acquired
Business, or used by the Seller in the conduct of the Acquired
Business in such a manner as to create the appearance or
reasonable expectation that the same is owned or leased by the
Seller; such ownership is free and clear of all liens, claims,
encumbrances and charges, except liens for taxes not yet due and
minor imperfections of title and encumbrances, if any, which,
singly and in the aggregate, are not substantial in amount and do
not materially detract from the value of the property subject
thereto or materially impair the use thereof; no other person has
any ownership or similar right in, or contractual or other right
to acquire any such right in, any of such assets; and such
ownership will be conveyed to the Purchaser at the Closing
pursuant to the Transaction. The Seller does not know of any
potential action by any party, governmental or other, and no
proceedings with respect thereto have been instituted of which
the Seller has notice, that would materially affect the Seller's
ability to use and to utilize each of such assets in the business
of the Acquired Business. The Seller has received no notices from
any mortgagee regarding any leased properties of the Acquired
Business of the leasehold interest in which comprises any part of
the Acquired Assets. The acquired Business Disclosure Document
specifies a detailed listing of all Acquired Business or the
leasehold interest in which comprises any part of the Acquired
Assets. The Acquired Business Disclosure Document contains a
detailed listing of all Acquired Assets that consist of (a)
accounts receivable (b) miscellaneous current assets in excess
(c) prepaid expenses, (d) real property, and (e) gross aggregate
additions for each of the past four (4) years by location of (i)
buildings and improvements, (ii) furniture and fixtures, (iii)
leasehold improvements, and (iv) automobiles and trucks.
4.11 Condition of Tangible Assets. All tangible assets included
in the Acquired Assets are in good operating condition and repair
(except for ordinary wear and tear) and are in conformity in all
material respects with all applicable laws, ordinances, orders,
regulations and other requirements (including applicable zoning,
environmental, motor vehicle safety standards, occupational
safety and health laws and regulations) relating thereto
currently in effect.
4.12 Trade Names. The Seller has not utilized any trade name,
fictitious business name, or other similar name to utilize any of
the Acquired Assets during the ten (10) years preceding the date
of this Agreement.
12/38
Initials:_______/_______
4.13 Employee Benefit Plans. Except as disclosed in the Acquired
Business Document:
(a) The Seller does not maintain or contribute to any Pension
Plan or any Welfare Plan, nor is the Seller presently, nor has it
been within the last six years, a participating employer in any
Multiemployer Plan, affecting, in any case, employees of the
Acquired Business or employees of the Seller whose principal
activities relate to the Acquired Business.
(b) All Pension Plans and Welfare Plans of the Seller affecting
employees of the Acquired Business or employees of the Seller,
have been administered in substantial compliance with their
terms, ERISA and, where applicable, the Code. The IRS has issued
a favourable determination letter with respect to the
qualification of each such Pension Plan and the exemption of any
corresponding trust. A copy of the Plan has been furnished to
Purchaser, and nothing has occurred since the date of any such
determination letter that could cause the relevant Pension Plan
or trust to lose such qualification or exemption.
(c) With respect to each Pension Plan or Welfare Plan affecting
employees of the Acquired Business or employees of the Seller:
(i) there is no fact, including, without limitation, any
Reportable Event, that exists that would result in a reason for
termination of such Plan by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to
administer such plan, in each case as contemplated by ERISA; (ii)
neither the Seller nor any fiduciary, trustee or administrator of
any such Pension Plan or welfare Plan, has engaged in a
Prohibited Transaction that could subject the Seller to any
material tax or any material penalty imposed by ERISA or the
Code; (iii) the Seller has not incurred any material liability to
the PBGC (other than for payment of premiums); and (iv) there is
no material Accumulated Funding Deficiency with respect to any
Pension Plan, whether or not waived.
(d) There has been no Plan Termination that has occurred during
the five-year period ending on the date of this Agreement
affecting employees of the Acquired Business or employees of the
Seller.
(e) The Seller has no Knowledge of any liability being incurred
pursuant to Title IV of ERISA by the Seller with respect to any
Pension Plan maintained by a trade or business (whether or not
incorporated) which is under common control with, or part of a
controlled group of corporations with, the Seller, within the
meaning of Sections 414(b) or (c) of the Code and affecting
employees of the Acquired Business or employees of the Seller.
(f) No Welfare Plan affecting employees of the Acquired Business
or employees of the Seller is funded with a trust or other
funding method, other than insurance policies.
(g) There has occurred no Complete Withdrawal or Partial
Withdrawal with respect o any Muliemployer Plan affecting
employees of the Acquired Business that could cause the Acquired
Business or any part thereof or any of the Acquired Assets to be
exposed or subjected to any liability, or any lien or similar
charge in relation to any liability, pursuant to or as a result
of ERISA other than to the extent previously paid or fully
provided for in the Acquired Business Balance Sheet, and all
payment required to be made to any such Plan by the Seller
pursuant to any applicable collective bargaining agreements have
been made.
4.14 Facilities. The Acquired Facilities are (as to physical
plant and structure) structurally sound and none of the Acquired
Facilities, nor any of the vehicles or other equipment used by
the Acquired Business in connection with its business, has any
material defects and all of them are in all material respects in
good operating condition and repair and are adequate fro the uses
to which they are being put; none of such Acquired Facilities,
vehicles or other equipment is in need of maintenance or repairs
which are not material in nature or cost. The Seller is not in
breach, violation or default of any lease affecting the Acquired
Business or the Acquired Assets with respect to, or as a result
of, which the other party (whether lessor, lessee, sublessor, or
sublessee) thereto has the right to terminate the same, and the
Seller has not received notice of any claim or assertion that it
is or may be in any such breach, violation or default.
4.15 Accounts Receivable. All accounts receivable of the Seller,
whether or not reflected in the Acquired Business Balance Sheet,
represent transactions in the ordinary course of business, and
are current and collectible net of any reserves shown in such
document (which reserves are adequate and were calculated
consistent with past practice).
13/38
Initials:_______/_______
4.16 Inventories. All Inventories of the Seller, whether or not
specified in the Acquired Business Balance Sheet, are of a
quality and quantity useable and saleable in the ordinary course
of business, except for obsolete items of below standard quality,
all of which, in the aggregate, are immaterial in amount. Items
included in such Inventories are carried on the books of the
Seller, at the lower of cost or market and, in any event, at not
greater than their net realizable value, on an item by item
basis, after appropriate deduction for costs of completion,
marketing costs, transportation expense and allocation of
overhead.
4.17 Contracts. Except as identified in the Acquired Business
Disclosure Document, the Acquired Assets and the Acquired
Business are not parties to or affected by any contracts,
agreements or understandings, whether express or implied, written
or verbal, provided, however, that the Acquired Assets or the
Acquired Business may be parties to or affected by, and the
Acquired Business Disclosure Document need not identify, any such
contracts, agreements, or understandings that (a) are terminable
on notice of less than thirty-two (32) days and do not involve
payments or obligation of more than $1,000.00 in any period of
thirty-one (31) days or less (on termination or otherwise); or
(b) involve aggregate payment or obligation remaining unpaid as
of the date of the Agreement of less that $1,000.00. The Acquired
Business Disclosure Document shall, however, identify the
aggregate amount of payment obligations remaining unpaid as of
the Agreement of all contracts exempt from disclosure by clause
(b) above. The Acquired Business Disclosure Document included a
brief summary of each such contract, agreement or understanding
identified therein. Without in any respect limiting the
foregoing, the Acquired Business Disclosure Document contains a
description of all leases of properties included in the Acquired
Assets or utilized by the Acquired Business, including all
amendments, supplements, extensions and modifications thereof,
identifying, inter alia, the date each such document was executed
and its effective period. The Seller is not a party to any
executory contract to sell or transfer any part of any leasehold
interest included in the Acquired Assets or utilized by the
Acquired Business. True and accurate copies of all such leases,
and of all amendments, supplements, extensions and modifications
thereof, have heretofore been delivered to the Purchaser by the
Seller.
4.18 Accounts Payable. The accounts payable specified on the
Acquired Business Balance Sheet do, and those specified in the
most recent balance sheet included in the Unaudited Financial
Statements of the Acquired Business do, and those specified on
the books of the Seller at the time of the Closing will, specify
all amounts owed by the Seller in respect of trade accounts due
and other Payables of the Acquired Business or relating to the
Acquired Assets, and the actual Liability of the Seller in
respect of such obligations was not, and will not be, on any of
such dates, in excess of the amounts so specified on the balance
sheets or the books of the Acquired Business, as the case may be.
4.19 Insurance. The Seller has insurance policies in full force
and effect insuring the Acquired Assets and the Acquired
Business, and such insurance policies provide for coverages which
are usual and customary in the business of the Acquired Business
as to amount and scope, and are adequate to protect the Acquired
Business against any reasonably foreseeable risk of loss,
including business interruption. The Acquired Business Disclosure
Document identities each of such insurance policies, indicating
the carrier, amount of coverage, annual premium, risks covered,
placing broker or agent, and other relevant information as to
each. The Seller has not within the past three (3) years received
any notice of cancellation of any insurance agreement affecting
the Acquired Assets or the Acquired Business.
4.20 Title to and Utilization of Real Properties. Except as
disclosed in the Acquired Business Disclosure Document, the
Seller owns no real property included in the Acquired Assets.
Each parcel of real property the leasehold interest in which is
included among the Acquired Assets is free of any and all
hazardous wastes, toxic substances, or other types of
contamination or matters of environmental concern, and the Seller
is not subject to any Liability resulting from or related to any
such wastes, substances, contaminants, or matters of
environmental concern in connection with any such property.
4.21 Actions Since Balance Sheet Date. Except as set forth on the
Acquired Business Disclosure Document, since the date of the
Acquired Business Balance Sheet, the Seller has taken no actions
that would be prohibited pursuant to the provisions of this
Agreement (without the prior consent of the Purchaser) after the
date of this Agreement.
4.22 Full Disclosure. The documents, certificates, and other
writings furnished or to be furnished by or on behalf of the
Seller to the Purchaser pursuant to the provisions of this
Agreement, taken together in the aggregate, do not and will not
contain any untrue statement of a material fact, or omit to state
any material fact necessary to make the statements made, in light
of the circumstances pursuant to which they are made, not
misleading.
14/38
Initials:_______/_______
4.23 Evaluation of Risks. The Seller has such Knowledge and
experience in business and financial matters that the Seller is
capable of evaluating the Purchaser and the proposed activities
thereof, the risks and merits of the acquisition of the Subject
Shares and of making an informed decision relating thereto; and
the Seller is not utilizing any other Person regarding the
evaluation of those risks and merits.
4.24 Questionable Payments. Neither the Seller, nor any director,
officer, agent, employee, or other person associated with or
acting on behalf of the Seller has, directly or indirectly, used
any corporate funds for unlawful contributions, gifts,
entertainment, or other unlawful expenses relating to political
activity; made any unlawful payment to foreign and domestic
political parties or campaigns, from corporate funds; violated
any provision of the Foreign Corrupt Practices Act of 1977, as
amended; established or maintained any unlawful or unrecorded
fund of corporate monies or other assets; made any false or
fictitious entry on the books or records of the Seller; made any
bribe, rebate, payoff, influence payment, kickback, or other
unlawful payment; given any favour or gift which is not
deductible for federal income tax purposes; or made any bribe, or
kickback, or other payment of a similar or comparable nature,
whether lawful or not, to any person or Entity, private, or
public, regardless of form, whether in money, property, or
services, to obtain favourable services, to obtain favourable
treatment in securing business or to obtain special concessions,
or to pay for favourable treatment for business secured or for
special concessions already obtained.
4.25 Labour Matters. The Seller is not a party to any labour
agreement with respect to its employees with any labour
organization, group or association. The Seller has not
experienced any attempt by organized labour or its
representatives to make the Seller conform to demands of
organized labour relating to the Seller's employees or to enter
into a binding agreement with organized labour that would relate
to the employees of the Seller. The Seller is in material
compliance with all applicable laws respecting employment
practices, terms and conditions of employment and wages and hours
and is not engaged in any unfair labour practice which would have
a material adverse effect on the Acquired Assets. There is no
unfair labour practice charge or complaint against the Seller
pending before the National Labour Relations Board or any other
Governmental Entity resulting from the Seller's activities, and
the Seller has no Knowledge of any facts or information which
would give rise thereto; there is no labour strike or labour
disturbance pending or, to the Seller's Knowledge, threatened
against the Seller nor is any grievance currently being asserted;
and the Seller has not experienced a work stoppage or other
labour difficulty.
4.26 No Other Agreements Regarding the Acquired Business or the
Acquired Assets. The Seller does not have any legal or equitable
obligation, absolute or contingent, to any other person to sell
the Acquired Business or any of the Acquired Assets, or to enter
into any agreement with respect thereto.
4.27 Compliance With Legislation Regulating Environmental
Quality. To the Seller's Knowledge, there are no toxic wastes or
other toxic or hazardous substances or materials being stored or
otherwise held in or on any of the Seller's facilities, or which
have migrated from the Seller's facilities, whether contained in
ambient air, surface water, groundwater, land surface or
subsurface strata. To the Seller's Knowledge, the Seller's
facilities have been maintained in material compliance with all
federal, state and local environmental protection, occupational,
health and safety or similar laws, ordinances, restrictions,
licenses, and local environmental protection, occupational,
health and safety or similar laws ordinances, restrictions,
licenses and regulations, including, but not limited to, the
Federal Water Pollution Control Act, Resource Conservation &
Recovery Act, Safe Drinking Water Act, Toxic Substances Control
Act, Clean Air Act, Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), and similar state
laws. The Seller has not disposed or arranged (by contract,
agreement or otherwise), within the meaning of Section 107(a)(3)
of CERCLA, for the disposal of any material or substance that was
generated or used by the Seller at any off-site location that has
been or is listed or proposed for inclusion on the National
Priority List promulgated pursuant to CERCLA or any list
promulgated by any Governmental Entity for the purpose of
identifying sites which pose an imminent danger to health and
safety. The Seller has delivered to the Purchaser true and
complete copies of all environmental studies, reports and
analyses made or prepared, in the last five (5) years relating to
Acquired Assets.
4.28 Financial Statements. The Seller has heretofore delivered to
the Purchaser the Unaudited Financial Statements of the Acquired
Business.
15/38
Initials:_______/_______
All of the historical financial statements contained in such
documents were prepared from the books and records of the Seller.
The Unaudited Financial Statements of the Acquired Business were
prepared in accordance with GAAP, and fairly and accurately
present the financial position and condition of the Seller as at
the dates and for the periods indicated, subject to normal
adjustments, none of which will be material. Without limiting the
foregoing, at the date of the Acquired Business Balance Sheet the
Seller owned each of the assets included in preparation of the
Acquired Business Balance Sheet, and the valuation of such assets
in the Acquired Business Balance Sheet is not more than their
fair saleable value (on an item by item basis) at that date; and
the Seller had no Liabilities for which the Acquired Business or
any part of the Acquired Business Balance Sheet, nor any
Liabilities in amounts in excess of the amounts included for them
in the Acquired Business Balance Sheet. From the date of this
Agreement through the Closing Date the Seller will continue to
prepare financial statements for the Acquired Business on the
same basis that it has done so in the past, will promptly deliver
the same to the Purchaser (if requested by Purchaser), and agrees
that from and after such delivery the foregoing representations
will be applicable to each financial statement so prepared and
delivered. The books and records of account of the Seller are
capable of being audited in accordance with GAAP during the 60-
day period immediately following the Closing Date.
4.29 Absence of Material Differences From Disclosure Document.
Except as specifically disclosed in the Acquired Business
Disclosure Document:
4.29.1 No Undisclosed Liabilities. The Seller has no Liabilities
relating to or affecting the Acquired Business or the Acquired
Assets which are not adequately specified or reserved against on
the Acquired Business Balance Sheet, except Liabilities incurred
since the date of the Acquired Business Balance Sheet in the
ordinary course of business of the Acquired Business and
consistent with past practice. Without limiting the foregoing,
(a) there are no unpaid leasehold improvements at any of the
Acquired Facilities for which the Acquired Business is or will be
responsible, and (b) there are no deferred rents due to lessors
at or with respect to any of such Acquired Facilities, and (c)
the Acquired Business Disclosure Document sets forth, as a part
thereof, each Liability of or affecting the Acquired Business or
the Acquired Assets.
4.29.2 No Material Adverse Change, etc. Since the date of the
Acquired Business Balance Sheet, other than as contemplated or
caused by this Agreement, there has not been (a) any material
adverse change in the business, condition (financial or
otherwise), operations, or prospects of the Acquired Business;
(b) any damage, destruction or loss, whether covered by insurance
or not, having a material adverse effect on the business,
condition (financial or otherwise), operations or prospects of
the Acquired Business, or adversely affecting the Acquired
Assets; (c) any entry into or termination of any material
commitment, contract, agreement or transaction affecting the
Acquired Business or the Acquired Assets (including, without
limitation, any material borrowing or capital expenditure or sale
or other disposition of any material asset or assets) other than
this Agreement and agreements executed in the ordinary course of
business; (d) any redemption, repurchase or other acquisition for
value of the capital stock of any corporation included in the
Acquired Assets or of securities convertible into or rights to
acquire any such capital stock or any dividend or distribution
declared, set aside or paid on any such capital stock; (e) any
transfer of or right granted under any material lease, license,
agreement, patent, trademark, trade name or copyright included
among the Acquired Assets; (f) any sale or other disposition of
any asset of the Acquired Business, or any mortgage, pledge or
imposition of any lien or other encumbrance on any asset of the
Acquired Business or of any agreement relating to any of the
foregoing; or (g) any default or breach in any material respect
under any contract, license or permit held by or for or affecting
the Acquired business. Since the date of the Acquired Business
Balance Sheet, the Seller has conducted the Acquired Business
only in the ordinary and usual course, and, without limiting the
foregoing, no changes have been made in (a) executive
compensation amounts, or (b) the manner in which other employees
of the Acquired Business, or employees whose principal duties
related to the Acquired Business or the Acquired Assets, are
compensated, or (c) supplemental benefits provided to any such
executives or other employees, or (d) inventory levels of the
Acquired Business in relation to sales levels, except, in any
such case, in the ordinary course of business and, in any even,
without material adverse effect on the business, condition
(financial or otherwise), operations, or prospects of the
Acquired Business.
4.30 Proprietary Rights. The Seller possesses full and complete
ownership of, or adequate and enforceable long-term licenses or
other rights to use (without payment), all Proprietary Rights
used in the Acquired Business or utilized in conjunction with the
Acquired Assets, and all such ownership, license or other rights
shall be conveyed to the Purchaser at the Closing pursuant to the
Transaction; the Seller has not received any notice of conflict
which asserts the rights of others with respect thereto; and the
Seller has in all material respects performed all of the
obligations required to be performed by it, and is not in default
in any material respect, pursuant to any agreement relating to
any such Property Right.
4.31 Investment Representation. The Seller (i) is aware that the
Subject Shares will be restricted securities subject to the
provisions of Rule 144 and the limits regarding the resale of the
Subject Shares, because of the nature of the Transaction; and
(ii) is acquiring the Subject Shares without Registration
pursuant to the provisions of the Securities Act in reliance from
the exemption from the registration and prospectus delivery
requirements of the Securities Act specified by the provisions of
Section 4(2) of the Securities Act and Rule 506 of Regulation D
for investment and without any intention of sale, resale, or
other distribution of the Subject Shares in any manner that is in
violation of the Securities Act; and (iii) is making the
representations set forth on Exhibit 4.31.
16/38
Initials:_______/_______
ARTICLE V
COVENANTS OF THE PURCHASER
5.1 Affirmative Covenants. From the date of this Agreement
through the Closing Date, the Purchaser will take every action
reasonably required of it in order to satisfy the conditions to
Closing set forth in this Agreement and otherwise to ensure the
prompt and expedient consummation of the Transaction
substantially as contemplated by this Agreement, and will exert
all reasonable efforts to cause the Transaction to be
consummated; provided, however, in all instances that the
representations and warranties of the Seller in this Agreement
are and remain true and accurate and the covenants and agreements
of the Seller in this Agreement are performed and that the
conditions to the obligations of the Purchaser set forth in this
Agreement are capable of being performed.
5.2 Cooperation. The Purchaser shall cooperate with the Seller
and its counsel, accountants and agents in every way in closing
and consummating the Transaction, and in delivering all documents
and instruments deemed reasonably necessary or useful by counsel
to the Seller.
5.3 Expenses. Whether or not the Transaction is consummated, all
costs and expenses incurred by the Purchaser in connection with
this Agreement and the Transaction shall be paid by the
Purchaser. If the Transaction is consummated, Seller shall
contribute $80,000 to all costs and expenses incurred by the
Purchaser as specified in Schedule 5.3 to this Agreement.
5.4 Publicity. Prior to the Closing any written news releases by
the Purchaser pertaining to this Agreement or the Transaction
shall be submitted to the Seller for review and approval prior to
release by the Purchaser, and shall be released only in a form
approved by the Seller; provided, however, that (1) such approval
shall not be unreasonably withheld, and (2) such review and
approval shall not be required of releases by the Purchaser, if
prior review and approval would prevent the timely and accurate
dissemination of such news release as required to comply, in the
judgment of counsel, with any applicable law, rule or policy.
5.5 Access and Information. The Purchaser shall provide to the
Seller and to the Seller's accountants, counsel, and other
representatives reasonable access during normal business hours
throughout the period prior to the Closing to all of the
Purchaser's properties, books, contracts, commitments, records
(including, but not limited to, tax returns), and personnel
relating to the Purchaser and, during such period, the Purchaser
shall furnish promptly to the Seller (1) all written
communications relating to the business of the Purchaser, (2)
internal monthly financial statements of the Purchaser when and
as available, and (3) all other information relating to the
business of the Purchaser as the Seller may reasonably request,
but no investigation pursuant to this Section 5.5 shall affect
any representations or warranties of the Purchaser or the
conditions to the obligations of the Seller to consummate the
Transaction. In the event of the termination of this Agreement,
the Seller will, and will cause its representatives to, deliver
to the Purchaser or destroy all documents, work papers, and other
material, and all copies thereof, obtained by the Seller or on
its behalf from the Purchaser as a result of this Agreement or in
connection herewith, whether so obtained before or after the
execution hereof, and will hold in confidence all information
received from the Purchaser, whether or not such information has
been designated as confidential by the Purchaser in writing or by
appropriate and obvious notation, and the Seller will not use any
such information, except in connection with the Transaction,
until such time as such information is otherwise publicly
available. Seller and its representatives shall assert their
rights pursuant to this Section 5.5 in such a manner as to
minimize interference with the business of the Purchaser.
17/38
Initials:_______/_______
5.6 Conduct of Business Pending Closing of the Transaction. Prior
to the consummation of the Transaction or the termination of this
Agreement pursuant to its terms, unless the Seller shall
otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed, and except as otherwise
contemplated by this Agreement, the Purchaser will comply with
each of the following:
(1) The business of the Purchaser will be conducted only in the
ordinary and usual course, the Purchaser shall keep intact the
business organization and goodwill of the Purchaser and its
business, keep available the services of the employees of the
Purchaser and maintain good relationships with suppliers,
lenders, creditors, distributors, employees, customers and others
having business or financial relationships with the Purchaser,
and the Purchaser shall immediately notify the Seller of any
event or occurrence or emergency material to, and not in the
ordinary and usual course of business of, the Purchaser.
(2) The Purchaser will continue properly and promptly to file
when due all federal, state, local, foreign, and other tax
returns, reports, and declarations required to be filed by it,
and will pay, or make full and adequate provision for the payment
of, all taxes and governmental charges due from or payable by it.
(3) The Purchaser will comply with all laws and regulations
applicable to the operations of the Purchaser.
(4) The Purchaser will maintain in complete force and effect
insurance coverage relating to its business of a type and amount
customary in the business of the Purchaser (but not less than
that presently in effect).
5.7 Updating of Exhibits and Schedules. The Purchaser shall
notify the Seller of any changes, additions or events which may
cause any change in or addition to any schedules or exhibits
delivered by the Purchaser pursuant to this Agreement, promptly
after the occurrence of the same and at the Closing by the
delivery of updates of all such schedules and exhibits. No
notification made pursuant to this section shall be deemed to
cure any breach of any representation or warranty made in this
Agreement, unless the Seller specifically agrees thereto in
writing, nor shall any such notification be considered to
constitute or result in a waiver by the Seller of any condition
set forth in this Agreement.
5.8 Issuance and delivery of the Consideration. On the Closing,
the Purchaser shall issue or cause to be issued to the Seller a
certificate evidencing the Subject Shares.
5.9 Notice of Changes. Until the Closing, the Purchaser will
immediately inform the Seller, in a detailed written notice, of
any fact or occurrence or any pending or threatened occurrence of
which the Purchaser obtains Knowledge and which (if existing and
known at the time of the execution of this Agreement) or at the
time of closing (a) would have been required to be set forth or
disclosed in or pursuant to this Agreement or an exhibit or
schedule hereto,
(b) would make the performance by the Seller of a covenant
specified in this Agreement impossible or make that performance
materially more difficult that in the absence of that fact or
occurrence, or (c) (if existing and known at the time of the
Closing) would cause a condition to the Seller's obligations
pursuant to this Agreement not to be satisfied completely.
5.10 Brokerage Fees. If any person shall assert against the
Seller a claim to a fee, commission, or other compensation
because of alleged performance of services as a broker or finder
of the Purchaser, in connection with or as a result of the
Transaction the Purchaser shall (subject to next sentence)
indemnify and hold the Seller harmless against any and all
losses, liabilities, claims, damages, and expenses whatsoever as
and when incurred resulting from, based upon or in connection
with such claim by such person, and the Purchaser shall, at its
expense, defend, any and all lawsuits, actions, proceedings
(formal or informal), or investigations involving the claim that
may at any time be brought against the Seller and satisfy
promptly any settlement or judgment arising therefrom; but, if
the Purchaser fails to defend any such lawsuit, action,
proceeding, or investigation in a timely manner, the Seller,
shall have the right to defend and settle the same and pay any
judgment or settlement pertaining thereto, as it may reasonably
deem appropriate, at the cost of Purchaser. If, however, it is
ultimately determined in any suit, action, or proceeding (in
which the Seller was provided the opportunity to have its counsel
participate in the defence) the Seller was the sole employer of
the broker or finder, or services were performed solely for
Seller, the Purchaser shall not be responsible pursuant to this
Section 5.10 and amounts therefore paid by the Purchaser pursuant
to this Section 5.10 shall be reimbursed by the Seller.
18/38
Initials:_______/_______
5.11 Changes in Members of Board of Directors. Subject to the
effective time set forth in Section 7.3, below, on the Closing
Date, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and Harrysen ▇▇▇▇▇▇▇, as all of
the members of the Board of Directors of the Purchaser, shall
appoint those persons as members of the Board of Directors of the
Purchaser as designated by the Seller and specified in Schedule
5.11 to this Agreement.
5.12 Resignations of Katz, Byers, and ▇▇▇▇▇▇▇. Subject to the
effective time set forth in Section 7.3, below, on the Closing
Date, after ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, and Harrysen ▇▇▇▇▇▇▇ have
designated to the Board of Directors of the Purchaser those
persons contemplated by the provisions of Section 5.11 of this
Agreement, ▇▇▇▇▇▇▇ ▇▇▇▇ shall resign as a director, ▇▇▇▇▇▇ ▇▇▇▇▇
shall resign as an officer and director, and Harrysen ▇▇▇▇▇▇▇
shall resign as the Chief Executive Officer of the Purchaser.
5.13 [Reserved.]
5.14 [Reserved.]
5.15 [Reserved.]
5.16 Stop Transfer Orders; Suspension of Qualification. The
Purchaser shall not make any notation on its records or give
instructions to any transfer agent of the Purchaser which enlarge
the restrictions of transfer imposed by law. The Purchaser will
advise the Seller, promptly after the Purchaser receives notice
of issuance by the SEC, any state securities commission or any
other regulatory authority of any stop order or of any order
preventing or suspending the use of any offering of any
securities of the Purchaser, or of the suspension of the
qualification of the Subject Securities for offering or sale in
any jurisdiction, or the initiation of any proceeding for any
such purpose.
5.17 Furnishing of Information. The Purchaser shall file timely
(or obtain extensions in respect thereof and file within the
applicable extension period) all reports required to be filed by
the Purchaser after the (i) date of this Agreement and (ii)
Closing Date pursuant to Section 13(a) or 15(d) of the Exchange
act and to furnish the Seller promptly with true and complete
copies of all such reports. Upon the request of any Person, the
Purchaser shall deliver to such Person a written certification of
a duly authorized officer of the Purchaser as to whether the
Purchaser has complied with such requirements.
5.18 Form D; Blue Sky Laws. The Purchaser shall file a Form D
with respect to the Subject Shares as required pursuant to
Regulation D and provide a copy thereof to the Seller promptly
after such filing. The Purchaser shall, on or before the Closing
Date, take such action as the Purchaser shall reasonably
determine is necessary to qualify the Subject Shares for, or
obtain exemption for the Subject Shares for, issuance to the
Seller at the Closing pursuant to this Agreement pursuant to
applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide to the Seller evidence of any
such action so taken on or prior to the Closing Date. The
Purchaser shall make all filings and reports relating to the
offer and sale of the Subject Shares required pursuant to
applicable securities or "Blue Sky" laws of the states of the
United States following the Closing Date.
5.19 Integration. The Purchaser shall not sell, offer for sale or
solicit offers to purchase or otherwise negotiate in respect of
any security (as defined in Section 2 of the Securities Act) that
would be integrated with the issuance of the Subject Shares in a
manner that would require the registration pursuant to the
Securities Act of the issuance of any or all of the Subject
Shares to the Seller.
ARTICLE VI
COVENANTS OF THE SELLER
6.1 Affirmative Covenants. From the date hereof through the
Closing Date, the Seller will take every action reasonably
required of it to satisfy the conditions to Closing set forth in
this Agreement and otherwise to ensure the prompt and expedient
consummation of the Transaction substantially as contemplated
hereby, and will exert all reasonable efforts to cause the
Transaction to be consummated; provided, however, in all
instances that the representations and warranties of the
Purchaser in this Agreement are and remain true and accurate and
that the covenants and agreements of the Purchaser in this
Agreement are correct and that the conditions to the obligations
of the Seller set forth in this Agreement are capable of
satisfaction.
19/38
Initials:_______/_______
6.2 Dissolution and Liquidation of the Seller. After the Closing
and at the Seller's expense, the Seller shall take all action
necessary or appropriate for the prompt dissolution and
liquidation of the Seller and distribution of the Subject Shares
to the Seller's shareholders.
6.3 Access and Information. The Seller shall provide to the
Purchaser and to the Purchaser's accountants, counsel, and other
representatives reasonable access during normal business hours
throughout the period prior to the Closing to all of the Seller's
properties, books, contracts, commitments, records (including,
but not limited to, tax returns), and personnel relating to the
Acquired Assets and, during such period, the Seller shall furnish
promptly to the Purchaser (1) all written communications relating
to the Acquired Assets, and (2) all other information relating to
the Acquired Assets as the Purchaser may reasonably request, but
no investigation pursuant to this Section 6.3 shall affect any
representations or warranties of the Seller, or the conditions to
the obligations of the Purchaser to consummate the Transaction.
In the event of the termination of this Agreement, the Purchaser
will, and will cause its representatives to, deliver to the
Seller or destroy all documents, work papers, and other material,
and all copies thereof, obtained by the Purchaser or on its
behalf from the Seller as a result of this Agreement or in
connection herewith, whether so obtained before or after the
execution hereof, and will hold in confidence all information
received from the Seller, whether or not such information has
been designated as such by the Seller in writing or by
appropriate and obvious notation, and the Purchaser will not use
any such information, except in connection with the Transaction,
until such time as such information, is otherwise publicly
available. Purchaser and its representatives shall assert their
rights pursuant to this Section 6.3 in such manner as to minimize
interference with the business of the Seller.
6.4 No Solicitation. The Seller and those persons and Entities
acting on behalf of the Seller will not, and the Seller will use
its best efforts to cause its employees, agents, and
representatives (including any investment banker) not, directly
or indirectly, to solicit, encourage, or initiate any discussions
with, or negotiate or otherwise deal with, or provide any
information to, any person or Entity other than the Purchaser and
its officers, employees, and agents, relating to the Acquired
Assets. The Seller will notify the Purchaser immediately upon
receipt of any inquiry, offer or proposal relating to any of the
foregoing. None of the foregoing shall prohibit providing
information to others in a manner in keeping with the ordinary
conduct of the Seller's business, or providing information to
government authorities.
6.5 Conduct of Business Pending Closing of the Transaction. Prior
to the consummation of the Transaction or the termination of this
Agreement pursuant to its terms, unless the Purchaser shall
otherwise consent in writing, which consent shall not be
unreasonably withheld or delayed, and except as otherwise
contemplated by this Agreement, the Seller will comply with each
of the following:
(1) The Seller's business will be conducted only in the ordinary
and usual course, the Seller shall keep intact the business
organization and goodwill of the Seller and the Seller's
business, keep available the services of the employees of the
Seller and maintain good relationships with suppliers, lenders,
creditors, distributors, employees, customers and others having
business or financial relationships with the Seller's business,
and the Seller shall immediately notify the Purchaser of any
event or occurrence affecting the Acquired Assets.
(2) The Seller shall not create, incur or assume any long- term
or short-term indebtedness for money borrowed or make any capital
expenditures or commitment affecting any of the Acquired Assets.
(3) The Seller shall not sell, lease, mortgage, encumber, or
otherwise dispose of or grant any interest in any of the Acquired
Assets.
(4) The Seller shall not enter into any contract, agreement,
commitment, or understanding relating to or affecting the
Acquired Assets.
(5) The Seller shall not enter into any agreement, commitment, or
understanding, whether in writing or otherwise, with respect to
any of the matters referred to in subparagraphs (1) through (4)
above.
20/38
Initials:_______/_______
(6) The Seller will continue properly and promptly to file when
due all federal, state, local, foreign, and other tax returns,
reports, and declarations required to be filed by it relating to
the Acquired Assets, and will pay, or make full and adequate
provision for the payment of, all taxes and governmental charges
due from or payable by the Seller relating to the Acquired
Assets.
(7) The Seller will comply with all laws and regulations
applicable to the operations of the Seller's business and the
utilization of the Acquired Assets.
(8) The Seller will maintain in full force and effect insurance
coverage relating to the Acquired Assets (but not less than that
presently in effect).
6.6 Cooperation. The Seller will cooperate with the Purchaser and
its counsel, accountants, and agents in every way in consummating
and closing the Transaction and in delivering all documents and
instruments deemed reasonably necessary or useful by the
Purchaser.
6.7 Expenses. Whether or not the Transaction is consummated, all
costs and expenses incurred by the Seller in connection with this
Agreement and the Transaction shall be paid by the Seller.
6.8 Publicity. Prior to the Closing any written news releases by
the Seller pertaining to this Agreement or the Transaction shall
be submitted to the Purchaser for review and approval prior to
release by the Seller, and shall be released only in a form
approved by the Purchaser; provided, however, that (1) such
approval shall not be unreasonably withheld, and (2) such review
and approval shall not be required of releases by the Seller, if
prior review and approval would prevent the timely and accurate
dissemination of such news release as required to comply, in the
judgment of counsel, with any applicable law, rule or policy.
6.9 Updating of Exhibits and Disclosure Documents. The Seller
shall notify the Purchaser of any changes, additions, or events
which may cause any change in or addition to any schedules or
exhibits delivered by the Seller pursuant to this Agreement
promptly after the occurrence of the same and again at the
Closing by delivery of appropriate updates to all such schedules
and exhibits. No such notification made pursuant to this section
shall be deemed to cure any breach of any representation or
warranty made in this Agreement, unless the Purchaser
specifically agrees thereto in writing, nor shall any such
notification be considered to constitute or result in a waiver by
the Purchaser of any condition set forth in this Agreement.
6.10 Payment of Unassumed Liabilities. The Seller agrees promptly
to pay when due, or otherwise to discharge, without cost or
expense to the Purchaser, each and every Liability of the Seller
in the ordinary course, but no later than the Closing Date.
6.11 Notice of Changes. Until the Closing, the Seller will
immediately inform the Purchaser, in a detailed written notice,
of any fact or occurrence or any pending or threatened occurrence
of which the Seller obtains Knowledge and which (a) (if existing
and known at the time of the execution of this Agreement) would
have been required to be set forth or disclosed in or pursuant to
this Agreement or an exhibit or schedule hereto, (b) (if existing
and known at any time prior to or at the Closing) would make the
performance by the Purchaser of a covenant specified in this
Agreement impossible or make that performance materially more
difficult that in the absence of that fact or occurrence, or (c)
(if existing and known at the time of the Closing) would cause a
condition to the Purchaser's obligations pursuant to this
Agreement not to be fully satisfied.
6.12 Consents Without Any Condition. The Seller shall not make
any agreement or enter into any understanding not approved in
writing by Purchaser as a condition for obtaining any consent,
authorization, approval, order, license, certificate, or permit
required or contemplated by this Agreement.
21/38
Initials:_______/_______
6.13 Brokerage Fees. If any person shall assert against the
Purchaser a claim to a fee, commission, or other compensation on
account of alleged performance of services as a broker of finder,
in connection with or as a result of the Transaction, the Seller
shall (subject to next sentence) indemnify and hold the Purchaser
harmless against any and all losses, liabilities, claims,
damages, and expenses whatsoever as and when incurred resulting
from, based upon or in connection with such claim by such person,
and the Seller shall, at its expense, defend, any and all
lawsuits, actions, proceedings (formal or informal), or
investigations involving the claim that may at any time be
brought against the Seller and satisfy promptly any settlement or
judgment arising therefrom; but, if the Seller fails to defend
any such lawsuit, action, proceeding, or investigation in a
timely manner, the Purchaser shall have the right to defend and
settle the same and pay any judgment or settlement pertaining
thereto, as the Purchaser may reasonably deem appropriate, at the
cost of the Seller. If, however, it is ultimately determined in
any suit, action, or proceeding (in which the Purchaser was
provided the opportunity to have its counsel participate in the
defence) the Purchaser, was the sole employer of the broker or
finder, or services were performed solely for the Purchaser, the
Seller shall not be responsible pursuant to this Section 6.13 and
amounts therefor paid by the Seller because of this Section 6.13
shall be reimbursed by the Purchaser.
6.14 Transfer Restrictions. If the Seller should decide to
dispose of any of the Subject Shares, the Seller understands and
agrees that it may do so only pursuant to an effective
registration statement pursuant to the Securities Act (such as
the SB-2) of the Purchaser or pursuant to an available exemption
from the registration and prospectus delivery requirements of the
Securities Act. In connection with any transfer of any Subject
Shares other than pursuant to an effective registration statement
filed by the Purchaser, the Purchaser may require the transferor
thereof to provide to the Purchaser a written opinion of counsel,
the form and substance of which opinion shall be reasonably
satisfactory to the Purchaser, to the effect that such transfer
does not require registration of such transferred securities
pursuant to the Securities Act, which opinion shall be delivered
by counsel for the Purchaser.
The Seller agrees to the imprinting, so long as is required, of
the following legend on the certificate evidencing the Subject
Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION IN RELIANCE UPON EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT.
ARTICLE VII
CONDITIONS TO CLOSING
7.1 Conditions to Obligation of Purchaser. The obligation of the
Purchaser to close the Transaction shall be subject to the
fulfillment at or prior to the Closing of the following
conditions, unless the Seller shall waive such fulfillment in
writing:
(1) This Agreement and the Transaction shall have received all
approvals, consents, authorizations, and waivers from
governmental and other regulatory agencies and other third
parties (including lenders, holders of debt securities and
lessors) required to consummate the Transaction;
(2) There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state court which
prohibits the consummation of the Transaction;
(3) The Seller shall have performed in all material respects each
of its agreements and obligations specified in this Agreement and
required to be performed on or prior to the Closing and shall
have complied with all material requirements, rules, and
regulations of all regulatory authorities having jurisdiction
relating to the Transaction;
(4) No adverse change shall, in the judgment of the Purchaser,
have occurred regarding the Acquired Assets since the date of
this Agreement;
(5) The representations and warranties of the Seller set forth in
this Agreement shall be true in all material respects as of the
date of this Agreement and, except in such respects as, in the
judgment of the Purchaser, do not materially and adversely affect
the Acquired Assets, as of the Closing, as if made as of the
Closing; and
22/38
Initials:_______/_______
(6) Each Seller shall have delivered to the Purchaser their
respective covenants not to compete, which covenants shall remain
effective for three years after the termination of their
employment with the Purchaser. The covenants not to compete
shall be customary in its terms and shall preclude ▇▇. ▇. ▇▇▇▇▇▇▇
and ▇▇. ▇. ▇▇▇▇▇▇▇ and any of their affiliates or associates,
from directly or indirectly competing with the Purchaser in the
development, formulation, production and distribution of serums
and medical or hormonal treatment for allergies, the operations
of outpatient care units, medical labs and clinics for the
treatment of allergies, the distribution of "Tabox", and related
medical devices, services and in vitro diagnosis of live biopsy
tissue samples for medical customers. The covenants shall be in
the form attached hereto as Schedule 7.1
(7) The Seller shall have delivered to the Purchaser other
documents that the Purchaser may reasonably request in order to
enable the Purchaser to determine whether the conditions to its
obligation pursuant to this Agreement have been satisfied and
otherwise to consummate and close the Transaction.
7.2 Conditions to Obligation of the Seller. The obligation of the
Seller to effect the Transaction shall be subject to the
fulfillment at or prior to the Closing of the following
conditions, unless the Purchaser shall waive such fulfillment in
writing:
(1) This Agreement and the Transaction shall have received all
approvals, consents, authorizations, and waivers from
governmental and other regulatory agencies and other third
parties;
(2) There shall not be in effect a preliminary or permanent
injunction or other order by any federal or state authority which
prohibits the consummation of the Transaction;
(3) The Purchaser shall have performed in all material respects
its agreements and obligations specified in this Agreement
required to be performed on or prior to the Closing;
23/38
Initials:_______/_______
(4) The representations and warranties of the Purchaser set forth
in this Agreement shall be true in all material respects as of
the date of this Agreement and, except in such respects as do not
materially and adversely affect the business of the Purchaser, as
of the Closing Date as if made as of the Closing Date; and
(5) The Purchaser shall have delivered to the Seller other
documents that the Seller may reasonably request in order to
enable the Seller to determine whether the conditions to its
obligation pursuant to this Agreement have been satisfied and
otherwise to consummate and close the Transaction.
7.3 Post-Closing Undertaking of the Parties. The Purchaser, as a
condition subsequent to the Closing, but as a condition precedent
to the effective date of the resignation of Messrs. ▇▇▇▇ and
▇▇▇▇▇ as its directors and the effective date of the commencement
of the terms of the Sellers as its directors, shall have complied
with the preparation, filing, and dissemination of information as
specified in Exchange Act Rule 14f-1.
ARTICLE VIII
DOCUMENTS TO BE DELIVERED AND INSTRUMENTS AT CLOSING
8.1 The Purchaser to the Seller. On the Closing, the Purchaser
shall deliver or cause to be delivered the following instruments
and documents to the Seller:
(1) A certificate evidencing and representing the Subject Shares,
which certificate shall specify an appropriate legend regarding
the restricted nature of those shares and options;
(2) Those documents contemplated by the provisions of Paragraph
(5) of Section 7.2 of this Agreement;
(3) Evidence of action by the members of the Board of Directors
of the Purchaser appointing as members of the Board of Directors
of the Purchaser those persons designated by the Seller;
(4) Written resignation of ▇▇▇▇▇▇▇ ▇▇▇▇ as a member of the Board
of Directors of the Purchaser;
(5) Written resignation of ▇▇▇▇▇▇ ▇▇▇▇▇ as a member of the Board
of Directors and as an officer of the Purchaser;
(6) A copy of the Option Agreement duly signed by the Seller's
designees; and
8.2 The Seller to the Purchaser. On the Closing, the Seller shall
deliver or cause to be delivered the following instruments and
documents to the Purchaser:
(1) A ▇▇▇▇ of Sale, executed by the President Seller, pursuant to
which title to the Acquired Assets are transferred and vested in
the Purchaser a copy of which is attached to this Agreement
marked as Schedule 8.1 ("▇▇▇▇ of Sale"); and
(2) Those documents contemplated by the provisions of Paragraph
(6) of Section 7.1 of this Agreement.
ARTICLE IX
INDEMNIFICATION
9.1 Indemnification by the Seller. The Seller shall indemnify,
save and hold harmless the Purchaser, its affiliates and
subsidiaries, and its and their respective officers, employees,
directors, accountants, auditors, attorneys, partners, agents,
and other representatives ("Purchaser's Representatives") from
and against any and all costs, losses (including, without
limitation, diminution in value), liabilities, damages, lawsuits,
deficiencies, adverse claims, Taxes and expenses (whether or not
resulting from third-party claims) including, without limitation,
interest, penalties, reasonable attorneys' fees and all amounts
paid in investigation, defence or settlement of any of the
foregoing (collectively, "Damages"), incurred in connection with
or resulting from (i) any breach of any covenant or warranty, or
the inaccuracy of any representation made by the Seller in or
pursuant to this Agreement, (ii) any actual or threatened claim,
suit, action or proceeding resulting from the Seller's use of the
Acquired Assets prior to the Closing Date and (iii) any and all
liabilities of the Seller. The term Damages as used in this
Section 9.1 is not limited to matters asserted by third parties
against the Purchaser or the Purchaser's Representatives, but
includes Damages incurred or sustained by the Purchaser or the
Purchaser's Representatives, in the absences of third party
claims.
9.2 Indemnification by Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇. Prof.
Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇ shall indemnify, save and hold
harmless the Purchaser, its affiliates and subsidiaries, and its
and their respective officers, employees, directors, accountants,
auditors, attorneys, partners, agents, and other representatives
("Purchaser's Representatives") from and against any and all
costs, losses (including, without limitation, diminution in
value), liabilities, damages, lawsuits, deficiencies, adverse
claims, Taxes and expenses (whether or not resulting from third-
party claims) including, without limitation, interest, penalties,
reasonable attorneys' fees and all amounts paid in investigation,
defence or settlement of any of the foregoing (collectively,
"Damages"), incurred in connection with or resulting from any
actual or threatened claim, suit, action or proceeding by any
creditor, or purported creditor, of the Acquired Business,
against the indemnified parties herein, whether or not such
actual or threatened claim is specifically in relation to any of
the Acquired Assets. The term Damages as used in this Section
9.2 is not limited to matters asserted by third parties against
the Purchaser or the Purchaser's Representatives, but includes
Damages incurred or sustained by the Purchaser or the Purchaser's
Representatives, in the absences of third party claims.
9.3 Indemnification by the Purchaser. The Purchaser shall
indemnify, save and hold harmless the Seller, and the Seller's
officers, employees, directors, accountants, auditors, attorneys,
partners, agents and other representatives, from and against any
and all Damages incurred in connection with or arising out of or
resulting from any breach of any covenant or warranty, or the
inaccuracy of any representation, made by the Purchaser in or
pursuant to this Agreement.
24/38
Initials:_______/_______
9.4 Defence of Third-Party Claims. If any lawsuit or enforcement
action is filed against any party entitled to the benefit of
indemnification pursuant to this Article IX, written notice
thereof shall be given to the indemnifying party as promptly as
practicable (and in any event no later than fifteen (15) days
after the service of the citation or summons); provided, however,
that the failure of any indemnified party to give timely notice
shall not affect rights to indemnification contemplated by this
Article IX except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such
notice, if the indemnifying party shall acknowledge in writing to
the indemnified party that the indemnifying party shall be
obligated pursuant to the terms of its indemnification pursuant
to this Article IX in connection with such lawsuit or action,
then the indemnifying party shall be entitled, if such party so
elects, to take control of the defence and investigation of such
lawsuit or action and to employ and engage attorneys of its own
choice to handle and defend the same, at the indemnifying party's
cost, risk and expense; provided, however, that the indemnifying
party and its counsel shall proceed with diligence and in good
faith with respect thereto. The indemnified party shall cooperate
in all reasonable respects with the indemnifying party and such
attorneys in the investigation, trial and defence of such lawsuit
or action and any appeal resulting therefrom; provided, however,
that the indemnified party may, at its own cost, participate in
the investigation, trial and defence of such lawsuit or action
and any appeal resulting therefrom. If a tax audit is commenced
or any Tax is claimed in connection with any of the Acquired
Assets prior to the Closing Date, such tax claim shall be treated
as a lawsuit or enforcement action for purposes of this Section
9.3; provided, however, that the Seller shall be solely
responsible for all Taxes, Liabilities and expenses resulting
therefrom.
ARTICLE X
TERMINATION, AMENDMENT, WAIVER
10.1 Termination. This Agreement and the Transaction may be
terminated at any time prior to the Closing:
(1) By mutual consent of the Purchaser and the Seller; or
(2) By either Purchaser or the Seller, upon written notice to the
other, if the conditions to such party's obligations to
consummate the Transaction, in the case of Purchaser, as
specified in Section 7.1 of this Agreement, or, in the case of
the Seller, as specified in Section 7.2 of this Agreement, were
not, or cannot reasonably be, satisfied, unless the failure or
condition is the result of the material breach of this Agreement
by the party seeking to terminate this Agreement.
10.2 Amendment. This Agreement may be amended by the Purchaser
and the Seller by action taken at any time. This Agreement may
not be amended, except by an instrument in writing signed on
behalf of the Purchaser and the Seller.
10.3 Waiver. At any time prior to the Closing, the Purchaser or
the Seller may (i) extend the time for the performance of any of
the obligations or other acts of the other party, (ii) waive any
inaccuracies in the representations and warranties specified in
this Agreement or in any document delivered pursuant to this
Agreement, or (iii) waive compliance with any of the agreements
or conditions specified in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of
such party.
ARTICLE XI
GENERAL PROVISIONS
11.1 Notices. All notices, claims, demands and other
communications hereunder shall be in writing and shall be deemed
given if delivered personally or by telex or telecopy or mailed
by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by
like notice):
If to Purchaser: Too Gourmet, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Seller: Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Starnberger ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
25/38
Initials:_______/_______
And: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
10.3 Descriptive Headings. The headings contained in this
Agreement are for reference Purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.4 Entire Agreement: Assignment. This Agreement (including the
Exhibits, Schedules, and other documents and instruments referred
to herein) (a) constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral,
among the parties or any of them, with respect to the subject
matter hereof; and (b) shall not be assigned by operation of law
or otherwise.
10.5 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada
without giving effect to the provisions thereof relating to
conflicts of law.
10.6 Parties in Interest. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any
rights, benefit, or remedies of any nature whatsoever or by
reason of this Agreement.
10.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.
10.8 Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement, which
shall remain in full force and effect.
10.9 Jurisdiction and Venue. Each Party hereto hereby agrees that
any proceeding relating to this Agreement and the Merger shall be
brought in the United States District Court for the Southern
District of Nevada. Each party hereto hereby consents to
personal jurisdiction in any such action brought in such court,
consents to service of process by registered mail made upon such
party and such party's agent and waives any objection to venue in
any such court or to any claim that such court is an
inconvenient form.
10.10 Investigation. The respective representations and
warranties of each party contained herein or in the schedules or
other documents delivered prior to the Closing Date shall not be
deemed waived or otherwise affected by any investigation made by
any party hereto.
[SIGNATURE PAGE FOLLOWS]
26/38
Initials:_______/_______
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
PURCHASER:
TOO GOURMET, INC.
By: _____________________________
Harrysen ▇▇▇▇▇▇▇, President & CEO
GLOBAL LIFE SCIENCES, INC.
(a corporation in formation)
By: _____________________________
Harrysen ▇▇▇▇▇▇▇, authorized agent
SELLER:
By:_____________________________
Prof. Dr. ▇▇. ▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:_____________________________
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇
27/38
Initials:_______/_______
Schedule 1.2
Acquired Assets:
[see appraised assets list]
28/38
Initials:_______/_______
Schedule 1.4
Acquired Business Balance Sheet:
[see attached appraisal of ▇▇. ▇▇▇▇▇]
29/38
Initials:_______/_______
Schedule 1.16a
List of Seller's designees for 26,500,000 shares:
Pursuant to the terms of the Agreement and, on the Closing Date,
the Seller's designees shall receive 26,500,000 shares of common
stock of Purchaser (current symbol: TGOU). Purchaser (or its
agent) agrees to deliver to each designated shareholder (or his
agent) common stock share certificates representing the number of
shares of Purchaser in the specific amounts set forth below next
to such shareholder's names.
Name and Address of Shareholder No. of Shares to be Issued
-------------------------------------------------------------------
Prof. Dr. Dr. ▇▇▇▇-▇▇▇▇▇▇ 16,680,000
▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,000,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,500,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,500,000
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 1,500,000
▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,500,000
▇▇▇▇▇▇▇ Knotzsch 300,000
Swiss Equities Group Inc. 1,000,000
Seaport Partners, Inc. 1,000,000
Westie International Ltd. 200,000
BF Acquisition Group I, Inc. 300,000
▇▇▇▇▇ ▇▇▇▇▇ 7,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 10,000
▇▇▇▇▇ ▇▇▇▇▇ 3,000
30/38
Initials:_______/_______
Schedule 1.16b
List of Seller's designees for 3,500,000 stock options:
Pursuant to the terms of the Agreement and, on the Closing Date,
the Seller's designees shall receive 3,500,000 options of common
stock (exercise period: 36 months; strike price: $0.10 per
share/option). Purchaser (or its agent) agrees to deliver to each
designated optionee (or his agent) option certificates or option
agreements representing the number of stock options of Purchaser
in the specific amounts set forth next to such optionee's names.
Name and Address of Optionee No. of Options to be Issued
----------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 1,500,000
Sussex Equities, Ltd. 500,000
Platinum Investment Services 1,500,000
Ltd.
31/38
Initials:_______/_______
Schedule 3.4
Purchaser's finder's fee agreements:
Pursuant to the terms of the Agreement Purchaser discloses an
existing and effective finder's fee agreement with United
Investment Management, Inc. ("United") under which Purchaser will
pay a finder's fee of 10.0% to United in connection with any
acquisitions, projects, or any other findings or transactions
involving products, commodities, services, currencies, additions,
renewals, extensions, rollovers, amendments, new contracts, re-
negotiations, parallel contracts or agreements or third party
assignments hereof.
32/38
Initials:_______/_______
Schedule 4.31
Investment Representations:
The Seller hereby makes the following representations and
warranties to the Purchaser, and agrees to indemnify, hold
harmless, and pay all judgments of the claims against the
Purchaser for any liability or injury, including, but not limited
to, that arising under federal or state securities laws, incurred
as a result of any misrepresentation herein or any warranties
made by the Seller.
(a) The Seller, and their designees, are the sole and
true parties in interest and are not acquiring the
Subject Shares for the benefit of any other person;
(b) The Seller confirms receipt and careful review of
the SEC Documents, including all attachments and
exhibits thereto. The Seller understands that all
books, records, and documents of the Purchaser relating
to this Transaction have been and remain available for
inspection by the Seller upon reasonable notice. The
Seller confirms that all documents requested by the
Seller have been made available, and that the Seller
has been supplied with all of the additional
information concerning this investment that has been
requested. The Seller confirms that they have obtained
sufficient information, in their judgment or that of
their independent purchaser representative, if any, to
evaluate the merits and risks of this Transaction. The
Seller confirms that they have had the opportunity to
obtain such independent legal and tax advice and
financial planning services as the Seller has deemed
appropriate prior to making a decision to Close the
Transaction. In making a decision to Close the
Transaction, the Seller has relied exclusively upon
their experience and judgment, or that of their
purchaser representative, if any, upon such independent
investigations as they deemed appropriate, and upon
information provided by the Purchaser in writing or
found in the books, records, or documents of the
Purchaser;
(c) The Seller has such knowledge and experience in
financial and business matters that the Seller is
capable of an evaluation of the merits and risks of
this Transaction;
(d) The Seller is aware that the acquisition of the
Subject Shares is highly speculative and subject to
substantial risks. The Seller is capable of bearing
the high degree of economic risk and burdens of this
venture, including, but not limited to, the possibility
of a complete loss, the lack of a sustained and orderly
public market, and limited transferability of the
Subject Shares, which may make the liquidation of this
investment impossible for the indefinite future;
(e) The offer to sell the Subject Shares was directly
communicated to the Seller by such a manner that the
Seller, or their purchaser representative, if any, was
able to ask questions of and receive answers from the
Purchaser or a person acting on their behalf concerning
the terms and conditions of this transaction. At no
time, except in connection and concurrently with such
communicated offer, was the Seller presented with or
solicited by or through any leaflet, public promotional
meeting, television advertisement, or any other form of
general advertising;
(f) The Securities are being acquired solely for the
Seller's, and their designees', own account, for
investment, and are not being purchased with a view to
resale, distribution, subdivision, or fractionalization
thereof;
(g) The Seller understands that the Subject Shares have not
been registered under the Securities Act or any state
securities laws, in reliance upon exemptions from
regulation for non-public offerings. The Seller
understands that the Subject Shares or any interest
therein may not be, and agrees that the Subject Shares
or any interest therein will not be, resold or
otherwise disposed of by the Seller unless the Subject
Shares are subsequently registered under the Securities
Act and under appropriate state securities laws or
unless the Purchaser receives an opinion of counsel
satisfactory to it that an exemption from registration
is available;
33/38
Initials:_______/_______
(h) The Seller has been informed of and understands the
following:
(1) There are substantial restrictions on the
transferability of the Subject Shares;
(2) No federal or state agency has made any
finding or determination as to the fairness for
public investment, nor any recommendation nor
endorsement, of the Subject Shares;
(3) The Purchaser has no history of material
operations upon which the Seller can make an
evaluation of the acquisition of the Subject
Shares, other than the operations of the Acquired
Business.
(i) None of the following information has ever been
represented, guaranteed, or warranted to the Seller,
expressly or by implication by any broker, the
Purchaser, or agent or employee of the foregoing, or by
any other person:
(1) The approximate or exact length of time that
the Seller will be required to remain as a holder
of the Subject Shares;
(2) The amount of profit or loss to be realized,
if any, as a result of an acquisition of the
Subject Shares;
(3) That the past performance or experience of
the Purchaser, its officers, directors,
associates, agents, affiliates, or employees or
any other person will in any way indicate or
predict economic results in connection with the
plan of operations of the Purchaser or the return
on the investment;
34/38
Initials:_______/_______
Schedule 5.3
Expenses:
Pursuant to the terms of the Agreement, if the Transaction is
consummated, Seller shall contribute $80,000 to all costs and
expenses incurred by the Purchaser by wire transfer to one of
Purchaser's accounts as follows.
- $10,000, which was paid in connection with the execution of
the Letter of Intent for this Transaction
- $10,000 shall be due on the execution of this Agreement
- $20,000 shall be due 31 days after the execution of this
Agreement
- $20,000 shall be due 62 days after the execution of this
Agreement
- $20,000 shall be due 93 days after the execution of this
Agreement
35/38
Initials:_______/_______
Schedule 5.11
Members of Board of Directors as designated by Seller:
Pursuant to the terms of the Agreement, the Seller designates the
following individuals as Members of the Board of Director of
Purchaser:
Name of Individual Specification of Function
---------------------------------------------------------------------
Prof. Dr. Dr. ▇▇▇▇-▇▇▇▇▇▇ Chairman of the Board [and to be
▇▇▇▇▇▇▇ appointed by the newly
constituted Board as the
Purchaser's President and Chief
Executive Officer]
▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Director
Harrysen ▇▇▇▇▇▇▇ Director [and to be appointed by
the newly constituted Board as
the Purchaser's Chief Financial
Officer]
In addition, the newly constituted Board will appoint ▇▇▇▇▇▇▇
Knotzsch as the Purchaser's Vice President/General Counsel and
Secretary and will appoint ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as the Purchaser's Vice
President/Business Development and Controller.
36/38
Initials:_______/_______
Schedule 7.1
Form of Covenants Not To Compete:
37/38
Initials:_______/_______
Schedule 8.1
▇▇▇▇ of Sale:
38/38
Initials:_______/_______