AGREEMENT OF MERGER
BY AND AMONG
RMED INTERNATIONAL, INC.,
RMED ACQUISITION, INC.
AND
JETTAR, LTD.
THIS AGREEMENT OF MERGER (the "Merger Agreement") is made and executed on
October 30, 1998, by and among RMED INTERNATIONAL, INC., a Colorado corporation
("RMED"), RMED ACQUISITION, INC., a Delaware corporation and a wholly-owned
subsidiary of RMED ("Sub"), and JETTAR, LTD., a Wisconsin corporation
("Company").
RECITALS
WHEREAS, the Company manufactures and distributes baby care products and
related items, including the Bumpies(TM) and Rock-A-Bye(TM) line of diapers.
WHEREAS, RMED also manufactures and distributes baby care products
including Tender Care(TM) and Tushies(TM) diapers and products.
WHEREAS, RMED owns all of the issued and outstanding stock of Sub, and
RMED has agreed to be a party to this Merger Agreement only for the purpose of
and to the extent of causing Sub to consummate the Merger.
WHEREAS, RMED has formed Sub for the purpose of the consummation of this
merger transaction.
WHEREAS, RMED, Sub and the Company intend to cause Sub to merge into the
Company (the "Merger") and that as a result of the Merger:
1. The Sub will be the surviving corporation in the Merger (the
"Surviving Corporation") and will continue its existence under the laws of
the State of Delaware and the Company will be the merging corporation in
the Merger and shall cease to exist.
2. All of the Company Shares of common stock issued and outstanding
at the time the Merger becomes effective will be converted into shares of
the common capital stock of RMED (the "Shares") in the manner herein
provided, and all of the Company's issued and outstanding shares of common
stock ("Company Shares") will be cancelled.
WHEREAS, the parties wish to make an agreement setting forth their
respective rights, obligations and understandings with respect to and for the
Merger.
THEREFORE, in consideration of the premises and of the representations and
warranties and the covenants and agreements contained herein, RMED, Sub, and the
Company agree as follows:
ARTICLE I.
PLAN OF MERGER
1.01 Terms and Conditions of the Merger.
(a) The Merger shall become effective upon the filing by the
Secretary of State of the State of Delaware and the Department of
Financial Institution Office of the State of Wisconsin of a Certificate of
Merger, which shall be authorized, executed and delivered by each of Sub
and the Company in the manner provided under Section 2.5 of the General
Corporation Laws of the State of Delaware and Section 180.1101 of the
Wisconsin Business Corporation Law (the "Corporation Laws"). The date when
the Merger shall become effective as aforesaid is herein called the
"Effective Date". On the Effective Date, the Company will be merged into
the Sub and the separate existence of the Company shall cease, and the
Sub, as the Surviving Corporation, will continue its corporate existence
under the name of "JETTAR, LTD."
(b) On the Effective Date, the Sub, as the Surviving Corporation,
shall succeed to all of the rights, obligations, property, assets and
liabilities of the Company in the manner and to the extent set forth in
the Corporation Laws.
(c) The Certificate of Incorporation of the Sub, as in effect
immediately prior to the Effective Date, shall be the Certificate of
Incorporation of the Surviving Corporation, and the by-laws of the Sub, as
in effect immediately prior to the Effective Date, shall be the by-laws of
the Surviving Corporation, without change or amendment until thereafter
amended.
(d) The directors of the Surviving Corporation shall be ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ Reinbacker
(subject to the approval of all parties), each to hold office in
accordance with the Certificate of Incorporation and by-laws of the
Surviving Corporation.
1.02 Manner of Converting Shares. On the Effective Date, each of the
Company Shares issued and outstanding at the time the Merger becomes effective
(other than shares held in the Company's treasury and shares held by
shareholders who properly exercise and do not withdraw appraisal rights
available under the Corporation Laws shall by virtue of the Merger and without
any further action on the part of the holder thereof, be converted into the
right to receive the Shares of RMED (as
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hereinafter defined), which shall be issued upon surrender of the certificate or
certificates representing the shares of the Company. From and after the
Effective Date, each holder of certificates which represented Shares prior to
the Effective Date shall have rights as a common shareholder of RMED.
1.03 Consideration-Issuance of Shares.
(a) The number of Shares in RMED that the Shareholders will be
entitled to receive shall be that number of Shares for each share of the
Company held by each respective shareholder of the Company, all as more
fully set forth in Schedule 1.03(a) hereof.
(b) At the Closing, and as further consideration for the Merger, Sub
shall cause to be issued stock options to purchase 801,924 shares of RMED,
to each respective Shareholder of the Company, all as more fully set forth
on Schedule 1.03(b), pursuant to the terms and conditions of the Stock
Option Agreement attached hereto.
ARTICLE II.
CLOSING PROCEDURE
2.01 Shareholder Vote. Within ten (10) days prior to the execution of this
Merger Agreement of Merger by all of the parties hereto, the Company and Sub
shall each call a special meeting of shareholders for the purpose of voting on
the Merger (the "Special Meetings").
2.02 Closing Procedures. Immediately after the last of the Special
Meetings, in the event that the Merger is approved at each of such meetings, a
meeting (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in the forenoon in order
to determine whether any condition exists or remains unperformed that would
permit any of the parties to this Merger Agreement to decline to enter into the
Merger and to consummate the transactions set forth herein. At the Closing, the
parties will prepare, execute, deliver and exchange the certificates, opinions,
letters and other documents (the "Transaction Documents") not theretofore
provided which constitute conditions precedent to the further actions of the
other parties. If no such condition then exists, or if no party elects to
exercise any right it may have to decline to enter into the Merger and to
consummate the transactions set forth herein, the appropriate representatives of
the parties shall thereupon direct and cause the Certificate of Merger to be
filed by the Secretary of State of Delaware and Department of Financial
Institutions of the State of Wisconsin in accordance with Section 1.01.
2.03 Issuance of Shares and Options. At the Closing, the Surviving
Corporation shall cause the issuance of the Shares in accordance with the
provisions of this Merger Agreement (other than Company Shares owned by
shareholders who have properly exercised and not withdrawn their appraisal
rights in accordance with the
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Corporation Laws). The Company shall cooperate with Sub and use its best efforts
to contact the holders of the Company Shares and obtain the certificates for
such shares for presentment and cancellation at Closing. The Surviving
Corporation shall place a legend pursuant to Schedule 2.03 on the certificates
representing the Shares issued with respect to this Merger Agreement. ARTICLE
III.
COVENANTS, REPRESENTATIONS AND
WARRANTIES OF COMPANY
On the date hereof and the Effective Date, Company makes the following
covenants, representations and warranties to Sub and to RMED:
3.01 Legal Status.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Wisconsin. Except as
set forth on Schedule 3.01, the Company is not qualified as a foreign
corporation to do business in any other jurisdiction, the character of the
Company's properties and the nature of its activities does not make
qualification in any other jurisdiction necessary and where the failure to
be so qualified would have a material adverse effect on its business,
financial condition or results of operations.
(b) The Company has previously delivered to Sub complete and correct
copies of the Certificate of Incorporation (certified by the Secretary of
State of Wisconsin) and by-laws for the Company (certified by its
Secretary). Such Certificate of Incorporation and by-laws are valid and in
effect as of the date hereof.
(c) The Company has the corporate power to own and lease its
property and to carry on its businesses.
(d) The Company currently has no subsidiaries and has had no
subsidiaries during the period of its existence preceding the date of this
Merger Agreement.
3.02 Capitalization.
(a) Common Stock. The Company is authorized to issue 20,000 shares
of common stock, with $1.00 par value per share, of which 520 shares of
Company Shares are held in the treasury, 9,580 shares are validly issued
and outstanding and are fully paid and non-assessable. Except as set forth
on Schedule 3.02(a), no holder of any shares of Company Shares has
asserted any claim or action against the Company, including any claim or
action with respect to the Merger.
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(b) Options and Rights. Except as set forth on Schedule 3.02(b)
there are no outstanding subscriptions, options, warrants, contracts,
calls, commitments, preemptive rights or demands of any nature relating to
the capital stock of the Company or obligating the Company to buy, sell or
issue shares of the Company's capital stock.
3.03 Conflicts of Interest. Except as set forth in Schedule 3.03, to the
best of its knowledge, neither the Company nor any of the shareholders,
directors or officers of the Company nor any of their spouses or children owns
directly or indirectly any interest in (other than a minority interest in a
publicly traded corporation), or is a director, officer or employee of, any
corporation, partnership, firm, association or business organization which
manufactures, distributes or sells, any product or service which is
manufactured, sold or furnished by the Company, or is a competitor, potential
competitor, supplier or customer of the Company.
3.04 Authorization. The Company has full corporate power and authority to
enter into this Merger Agreement and to perform its obligations hereunder. The
Board of Directors of the Company has taken all actions required by law, the
Company's Certificate of Incorporation, its by-laws or otherwise to be taken by
such board to authorize the execution and delivery of this Merger Agreement and,
subject to requisite shareholder approval, the consummation of the Merger and
the other transactions contemplated hereby and, no other corporate proceedings
on the part of the Board of Directors of the Company are necessary to authorize
this Merger Agreement and the Merger and the other transactions contemplated
hereby. This Merger Agreement has been duly and validly executed and delivered
by the Company and constitutes a valid and binding agreement of the Company,
subject to requisite approval of its shareholders.
3.05 Financial Statements.
(a) Financial Statements. The Company has delivered to Sub the
balance sheets for the Company as of December 31, 1996 and 1997 and the
related statements of income, stockholders' equity, and cash flows for the
years then ended (and the accompanying footnotes which are an integral
part thereof) together with the attached Independent Accountants Audit
Reports of Oatley, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Certified Public Accountants, whose
reports thereon are included therein (the "Financial Statements"). Subject
to the qualifications contained in such audit reports, the Financial
Statements present fairly in all material respects the financial position
of the Company as of such dates and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.
(b) Current Financial Statements. Prior to the Closing, the Company
shall use all reasonable efforts to deliver to Sub a balance sheet of the
Company as at the end of such month and the related statements of earnings
for the period then ended (the "Current Financial Statements"). The
Current Financial Statements will be prepared by the Company in the form
customarily used by
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the Company in conformity with generally accepted accounting principles,
and present fairly in all material respects the financial position of the
Company on the applicable date and the results of its operations and its
cash flows for the periods then ended (except that the Current Financial
Statements are subject to normal year-end adjustments).
3.06 Absence of Changes. Except as set forth in Schedule 3.06 or in the
Current Financial Statements, and except for general economic conditions and
other conditions generally affecting the retail sales which are known to the
general public, since September 30,1998 there has not been with respect to the
Company:
(i) any material adverse change in the condition (financial or
other), properties, assets or business of Company;
(ii) any damage, destruction or loss (whether covered by insurance
or not) which materially and adversely affects the business, properties,
assets or business of the Company;
(iii) any declaration, setting aside or payment of any dividend or
any distribution with respect to Schedule 3.06(ii) the Company's capital
stock other than as provided in the Company's Shareholder Agreement, or
any direct or indirect redemption, purchase or other acquisition by the
Company ;
(iv) any increase of more than ten percent (10%) in the compensation
payable or to become payable by the Company to any employee earning Twenty
Five Thousand Dollars ($25,000) per annum or more, or any general increase
in the compensation or rates of compensation payable or to become payable
by the Company to hourly employees, except as required by any collective
bargaining agreement, or to salaried officers or employees earning less
than Twenty Five Thousand Dollars ($25,000) per year;
(v) any change in the accounting principles, methods or practices
followed by the Company;
(vi) any debt, obligation or liability, whether accrued, absolute or
contingent and whether due, incurred or entered into by the Company,
except liabilities and obligations incurred or entered into in the
ordinary course of business;
(vii) any sale, lease, abandonment or other disposition by the
Company of any interest in real property or any machinery, equipment,
inventory or other operating property other than in the ordinary course of
business as reflected in Schedule 3.06;
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(viii) any sale, assignment, transfer, license or other disposition
by the Company of any patent, trademark, trade name, brand name, copyright
(or any application for any patent, trademark or copyright), invention,
process, know-how, formula or trade secret or interest thereunder or other
intangible asset, except as implied for use in connection with the sale of
its products in the ordinary course of business as reflected in Schedule
3.06;
(ix) any agreement, understanding or undertaking by the Company the
performance of which would result in any of the items described in
subparagraphs (i) through (vii) above.
3.07 Undisclosed Liabilities. Except as set forth on Schedule 3.07:
(a) To the best of shareholders' knowledge, after due inquiry on
their part, the Company has no liabilities or obligations, either accrued,
absolute, contingent or otherwise, except:
(i) to the extent reflected or reserved in the Financial
Statements for December 31, 1997 or the Current Financial Statements
for September 30, 1998, and not heretofore paid or discharged;
(ii) to the extent disclosed in this Merger Agreement or in
any of the Schedules to this Merger Agreement;
(iii) those incurred in or as a result of the ordinary course
of business since the date of the Financial Statements for December
31, 1997, including normal warranty claims and executory contracts,
all of which have been consistent with past practice and none of
which, either individually or in the aggregate, would have a
material adverse effect on the Company; or
(iv) those incurred pursuant to or contemplated by this Merger
Agreement, Schedules hereto and the various related or ancillary
documents and agreements contemplated hereby or executed in
connection herewith.
(b) Except as set forth on Schedule 3.07(b) the Company has not
received any notice of any claim against the Company of any liability of
any nature or in any amount required to be set forth or disclosed in the
Financial Statements, the Current Financial Statements, this Merger
Agreement or the Schedules hereto, which is not or will not be set forth
in the Financial Statements, the Current Financial Statements, or
otherwise disclosed in this Merger Agreement or in the Schedules hereto.
3.08 No Violation of Statute or Contract. Except as set forth on Schedule
3.08, and subject to the Merger being approved at the Special Meetings and if
required
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by specific waiver of the other party, neither the execution and delivery of
this Merger Agreement, nor the compliance with the terms and provisions of this
Merger Agreement on the part of the Company will:
(i) conflict with or result in a breach or violation of any of the
terms, conditions or provisions of, or constitute a default (or an event
which, with notice or lapse of time or both would constitute a default)
under the Certificate of Incorporation or by-laws of the Company, or,
assuming that the approvals described in Section 3.07 hereof are duly
obtained or waiting periods expired, any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to the
Company or any of its properties, assets, licenses or permits, which would
have a material adverse effect on the condition (financial or other),
properties, assets or business, of the Company, or
(ii) violate, conflict with, result in a breach of any provisions
of, constitute a default (or any event which, with notice or lapse of time
or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any
lien, security interest, charge or other encumbrance upon any of the
property of the Company under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which the Company is a
party, or by which the Company or its properties or assets may be bound or
affected, which would have a material adverse effect on the condition
(financial or other), results of operations or business of the Company.
3.09 Regulatory Approvals. Except as set forth on Schedule 3.09, no
consent, approval or authorization of, or declaration, filing or registration
with, any government or regulatory authority is required to be obtained or made
by the Company in connection with the Merger or the execution, delivery and
performance by the Company of this Merger Agreement.
3.10 Marketable Securities. Except for the stock of RMED owned by the
Shareholders, as set forth in Schedule 3.10, the Company has directed its
officers and directors, and their spouses and children, not to buy or sell any,
or additional, shares in RMED or any, additional, puts, calls, options, or
warrants which would entitle the holder to sell or buy any shares in RMED prior
to closing.
3.11 Accounts Receivable. Except as set forth in Schedule 3.10, the
accounts receivable of the Company arose from valid sales in the ordinary course
of business, and, subject to applicable reserves, are good and collectible. To
the best of shareholders' knowledge, after due inquiry, the reserves for bad
debts and uncollected accounts is adequate.
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3.12 Notes Receivable. Schedule 3.12 sets forth all notes receivable and
other receivables in excess of Five Thousand Dollars ($5,000), which are not
included in the accounts receivable, which are reflected on the most recent
balance sheet which is included in the Financial Statements or will be reflected
in the Current Financial Statements. The Company has no notice of any defect,
defense, counterclaim, or setoff to payment which the maker of any note
receivable may claim or assert or of any fact or circumstance which would give
rise to denial of payment thereof by the maker of any note receivable. Also
included on Schedule 3.12 is a list of all loans, advances or other payments in
excess of Five Thousand Dollars ($5,000) receivable from directors, officers and
employees of the Company ("Employee Receivables") setting forth the name of the
individual, the amount receivable by the Company from such individual, and the
terms on which such Employee Receivable is to be repaid. The Company has
provided to Sub true and complete copies of all promissory notes or other
documents evidencing the Employee Receivables. The Company agrees to cause all
individuals that are obligated for an Employee Receivable that is not evidenced
by a document, to execute and deliver to the Company promissory notes or other
documents satisfactory to Sub evidencing the obligation to pay such Employee
Receivable prior to Closing.
3.13 Inventories. Except as provided in Schedule 3.13, all of the
Company's inventories reflected on the Financial Statements for December 31,
1997 and that will be reflected in the Current Financial Statements are or will
be good and usable and salable in the ordinary course of the Company's business,
except for minor items not material in amount.
3.14 Real Property Owned or Leased.
(a) The Company does not own any real property.
(b) The Company leases the manufacturing and office facilities
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ (the "Leased
Property") upon terms and conditions contained in the lease agreement
attached hereto and made a part here of as Schedule 3.14 (the "Lease").
(c) The Company represents that:
(i) The Lease is in full force and effect, and that, to the
best of the Company's knowledge, the Company is not aware of any
material default thereunder. To the best of the Company's knowledge,
none of the rights or benefits accorded the Company under the Lease
will be impaired by the Merger and no consent to the Merger is
required from any other party to the Lease, and that after the
Merger, the Lease will be and shall remain in full force and effect.
(ii) The Company has the right of quiet enjoyment to each
parcel of Leased Property.
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(iii) All improvements, fixtures, structures, machinery and
equipment used by the Company in carrying on its business are
located on the Leased Property.
(iv) The Company has the right to use the Leased Property for
all of the operations now conducted therefrom and the Company, by
virtue of the Lease, possesses all easements, licenses, rights of
way and rights in, to, and over the Property which are necessary for
the conduct of the business in the ordinary course. The Leased
Property and Improvements are adequate and sufficient for all
operations now conducted by the Company.
(v) Neither the whole nor any portion of any of the Leased
Property is the subject of a pending condemnation or eminent domain
proceeding, and to the best of the Company's knowledge, the Company
does not know nor has any grounds to believe that any such
condemnation or taking is threatened or contemplated.
(vi) None of the Leased Property is occupied by any entity or
person other than the Company, nor does any other person or entity
have any rights to occupy any portion of the Leased Property, except
that certain space which is not exclusive to the Company, is leased
to other tenants by the Landlord, none of which, however, interferes
with the operations of the Company's business in its ordinary course
as shown on Schedule 3.14(c)(vi).
(vii) Except for the Leased Property, the Company leases no
other real property.
(viii) The Company's occupancy of the Leased Property is not
in material violation of any law or regulation applicable thereto,
nor has the Company, to the best of the Company's knowledge,
received any notice of any such violation.
(ix) The Company has not received any notice of any violation
of any law, ordinance, regulation, building, zoning or fire code or
requiring or calling attention to the need for any work, repairs,
construction, alterations or installations with respect to any of
the Leased Property nor has any such notice been posted on any
portion of the Leased Property.
3.15 Tangible Personal Property. Except as disclosed on Schedule 3.15, all
machinery, equipment and other personal property used by the Company in the
operation of its business either owned or leased by the Company under valid
leases, is, in all material aspects, in good operating condition and repair and
is adequate and sufficient for all operations now conducted by the Company.
Except as disclosed in Schedule 3.15, the Company has good and marketable title
to all personal property
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owned by it, free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of mortgages, liens, pledges, security interests,
charges, encumbrances, equities, claims, easements, rights of way, covenants,
conditions, or restrictions and has valid leases pursuant to which it leases all
personal property used in connection with the operation of its business which is
not owned by the Company. All such leases are valid and binding, in full force
and effect and no defaults (or conditions or events which with the giving of
notice or the passage of time, or both, would constitute a default) exist
thereunder.
3.16 Intellectual Property.
(a) Schedule 3.16 sets forth a description of all trademarks,
trademark registrations and trademark applications, trade names, assumed
names, service marks, service ▇▇▇▇ registrations and applications, service
names, copyrights, patents and patent applications, and patent, and
copyright and trademark licenses, owned or used by the Company in the
conduct of its business (collectively "Intellectual Property"). Except as
set forth on Schedule 3.16, the Company owns, is licensed or otherwise has
the right to use all Intellectual Property and all trade secrets, shop
rights and know-how used in or necessary for the conduct of its business.
(b) Except as set forth in Schedule 3.16, no claim has been asserted
against the Company by any person with respect to the ownership, use,
transfer, license or other disposition by the Company of any Intellectual
Property or any trade secrets, shop rights or know-how or challenging any
license or agreement with respect thereto, and the Company does not know
of any basis for any such claim. To the best of the knowledge of the
Company, the use of Intellectual Property and the trade secrets, shop
rights and know-how by the Company, the practice of any process or the use
of any apparatus, or the making or selling of any product by the Company,
does not, and is not reasonably expected to, infringe on the rights of any
person.
(c) No third party is known by the Company to be infringing on any
Intellectual Property or any trade secrets, shop rights or know how owned
or used by the Company.
3.17 Material Contracts. Schedule 3.17 sets forth a true and correct list
or description of:
(a) Each contract, agreement or binding commitment in respect of the
procurement, purchase, processing, storage or sale of material, products,
supplies, utilities or services to which the Company is a party or by
which it is bound other than contracts, agreements or binding commitments
which
(i) involve payments or receipts by the Company of less than
Twenty Five Thousand Dollars ($25,000),
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(ii) are terminable by the Company without penalty upon not
more than thirty (30) days notice,
(iii) which are substantially performed except for standard
warranty, guaranty, non-compete or indemnification obligations, or
(iv) relate to sales order or purchase order contracts which
individually are for an amount which is less than Twenty Five
Thousand Dollars ($25,000) or a series of related contracts are for
an amount in the aggregate which is less than Fifty Thousand Dollars
($50,000).
(b) Each sales agency or distributorship agreement or franchise to
which the Company is a party or by which it is bound.
(c) Each collective bargaining, union, employment, consulting,
independent contractor, non-competition or secrecy agreement to which the
Company is a party or by which it is bound.
(d) Each pension, profit sharing, retirement, bonus, group life,
health and accident insurance or other employee benefit plan, agreement,
arrangement or binding commitment to which the Company is a party, whether
or not legally binding, including, but not limited to, each union plan or
arrangement to which the Company is a party or makes contributions.
(e) Each material contract, agreement, binding commitment or license
relating to any Intellectual Property, trade secrets, shop rights or
know-how to which the Company is a party except rights which are implied
for use in connection with the sale of the Company's products in the
ordinary course of business.
(f) Each loan or credit agreement, security agreement, guaranty,
indenture, mortgage, pledge, conditional sale or title retention
agreement, equipment obligation, lease or lease purchase agreement or
other documents evidencing secured indebtedness to which the Company is a
party or by which it or any of its properties is bound.
(g) Each partnership, joint venture, joint operating or similar
agreement or agreement for the performance of services as an independent
contractor to which the Company is a party or by which it is bound.
(h) Each contract, agreement or binding commitment other than those
covered above which (A) involves payments or receipts by the Company of
Twenty Five Thousand Dollars ($25,000) or more and not made in the
ordinary course of business, or (B) is not terminable by the Company
without penalty, or (C) which otherwise is reasonably expected to
materially affect the condition (financial or other), properties, assets
or business of the Company.
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Each such contract, agreement or binding commitment is legally valid and binding
on the Company and the Parties thereto, and each constitutes a legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium, and
other similar laws affecting creditors' rights generally, is in full force and
effect, and there are no defaults thereunder known to the Company by any party
thereto. Except as set forth on Schedule 3.17, under the terms of the foregoing,
none of the rights of the Company thereunder will be impaired by the Merger, and
all of the rights of the Company thereunder will be enforceable immediately
after the Effective Date to the extent enforceable immediately prior thereto
without the consent or agreement of any other party, except as indicated on
Schedules. True and complete copies of all documents described in the aforesaid
schedule have or will be made available by the Company to Sub including all
amendments and supplements thereto and modifications thereof.
3.18 Permits and Licenses. To the best of its knowledge, the Company
possesses all governmental permits, licenses and certifications which are
necessary for the conduct of the business by the Company, and all of such
permits, licenses and certifications are in full force and effect. No violations
are known to the Company to exist or, to its knowledge, have been recorded with
respect to any of such permits, licenses or certifications and no proceeding is
pending (other than reapplication pursuant hereto) or known to the Company to be
threatened which, if adversely determined, could result in the revocation,
termination or limitation of any such permits, licenses or certifications.
Except as set forth in Schedule 3.18, the Merger will not cause the revocation,
termination, limitation, non-renewal or expiration of any such permit, license
or certification currently issued to Company.
3.19 Insurance Coverages. Schedule 3.19 refers to all of the Company's
insurance coverages and carriers (specifying the insurer, the amount of the
coverage, the type of insurance, the policy number, the annual premium, the
expiration date and any pending claims thereunder not otherwise disclosed
pursuant to this Merger Agreement). Except as disclosed on Schedule 3.19, the
Company has and maintains insurance coverage with retentions which insurance and
retentions are reasonably believed by the Company to be adequate for the
protection of the Company in the conduct of its business. The Company has not
failed to give any notice or present any claim known to it under any insurance
policy covering the same in proper form and timely fashion. The Company will use
all reasonable efforts to assure that all such coverages will be in full force
and effect at the Effective Date.
3.20 Claims and Litigation. Except as set forth on Schedule 3.20, the
Company is not a party to any litigation, proceeding, arbitration, demand,
action or claim either pending or, to the best knowledge of the Company,
threatened against the Company before any court or governmental or other
regulatory or administrative agency or commission or arbitration panel. Except
as set forth on Schedule 3.20, the Company has no knowledge of any pending items
in dispute or any injury that it believes is likely to give rise to a claim
against the Company. The Company does not believe that any action, proceeding or
investigation set forth on Schedule 3.20 will
-13-
have a material adverse effect on the condition (financial or other),
properties, assets or business of the Company, except for matters for which
reserves have been reflected on the Financial Statements.
3.21 Labor Relations Matters. Except as set forth on Schedule 3.21, the
Company is in compliance in all material respects with all applicable laws
respecting employment and employment practices, terms and conditions of
employment and wages and hours, and is not engaged in any unfair labor practice.
To the best of Company's knowledge, after due inquiry, there is no unfair labor
practice complaint against the Company pending before the National Labor
Relations Board, any state labor relations board or any other court or tribunal.
Except as described in Schedule 3.21, within the last five years there has not
been any, and there is currently no labor strike, or material dispute, slowdown
or stoppage by the Company's employees pending or threatened against or
affecting the Company. To the best of the Company's knowledge, no representation
question exists. Except as set forth in Schedule 3.21, no grievance nor any
arbitration proceeding arising out of or under any labor agreement is pending
and no claim therefor has been made. The Company has no collective bargaining
agreements or other agreements with labor organizations, other than the
agreements listed on Schedule 3.17.
3.22 Tax Matters.
(a) Except as set forth on Schedule 3.22, the Company has
(i) filed when due with the appropriate federal, state, local,
foreign and other governmental agencies, all tax returns, estimates
and reports required to be filed by it,
(ii) paid when due and payable all requisite federal, state,
local or foreign taxes, levies, imposts, duties, licenses and
registration fees and charges of any nature whatsoever, including
interest and penalties thereon and unemployment and social security
taxes ("Taxes") or has established reserves in the Financial
Statements adequate therefor and
(iii) has established, or will have established as of the
Effective Date, reserves that, in the aggregate, are adequate for
the payment of all Taxes not yet due and payable on the results of
operation through the Effective Date as if the taxable year of the
Company ended on the Effective Date, and in each such case, will
immediately notify Sub of such setting aside.
(b) Except as set forth on Schedule 3.22, there are no taxes,
interest, penalties, assessments or deficiencies claimed to be due in
respect of any tax returns filed by the Company, or otherwise that are not
fully reserved for on the Financial Statements. Except as set forth on
Schedule 3.22, the Company has not executed or filed with the Internal
Revenue Service or any other taxing
-14-
authority any agreement or other document extending, or having the effect
of extending, the period of assessment or collection of any Taxes, and no
power-of-attorney of the Company is outstanding or will be outstanding on
the Effective Date. The Company has not reported any item of income,
deduction or credit on any income tax return or reported any other item on
any other return in a manner which is contrary to the specific
recommendation or advice of the Company's accountants and the Company has
not made any disclosures on any tax return pursuant to Section 6662 of the
Internal Revenue Code of 1986, as amended (the "Code").
(c) The Company has not filed a consent pursuant to Section 341(f)
of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as such term is defined in Section
341(f)(4) of the Code) owned by the Company.
(d) No property of the Company is property that the Surviving
Corporation is or will be required to treat as being owned by another
person pursuant to the provisions of Section 168(f)(8) of the Code or is
"tax exempt use property" within the meaning of Section 168(f)(3) of the
Internal Revenue Code, as it existed prior to January 1, 1984.
(e) The Company has not agreed, nor has been requested by the
Internal Revenue Service to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise except as
required by the Tax Reform Act of 1986, which adjustments, if any, have
previously been recognized in the income of the Company in tax returns of
the Company for years ending prior to 1998.
(f) The Company has withheld from employee wages and paid over to
the proper governmental authorities all amounts required to be so withheld
and paid over.
(g) The Company is not a party to, nor is it bound by or has any
obligation under any tax sharing or similar agreement.
(h) The Company is not a foreign person within the meaning of
Section 1445(b)(2) of the Code.
3.23 Benefit Plans.
(a) For the purposes of this Merger Agreement, the term "Employee
Plan" includes all pension, retirement, disability, medical, dental or
other health plans, life insurance or other death benefit plans, profit
sharing, deferred compensation, stock option, bonus or other incentive
plans, vacation benefit plans, severance plans, or other employee benefit
plans or arrangements, including, without limitation, any "pension plan"
as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974 ("ERISA") and any
-15-
"welfare plan" as defined in Section 3(1) of ERISA, whether or not funded,
and whether or not oral, to which the Company is a party or bound or with
respect to which the Company may otherwise have any liability (including
any such plan maintained by the Company within the last three calendar
years) or with respect to which the Company has made any payments or
contributions covering any employee of the Company within the last three
calendar years.
(b) Except as set forth on Schedule 3.23,
(i) the Company has not been since its inception and is not
now the sponsor of any Additional Employee Plan. The Company has no
legally binding commitment to create any additional Employee Plan.
(ii) no separate trust is maintained in conjunction with any
such plan. A separate trust is a trust the assets of which enjoy
protection from the claims of the Company's creditors or any trust
maintained in conjunction with a promise of deferred compensation
(commonly known as a "Rabbi Trust").
3.24 ERISA Matters.
(a) Except as provided in Schedule 3.24 hereof, each Employee Plan
that is an employee pension benefit plan qualifiable under Section 401 or
403(a) of the Code has been determined by the Internal Revenue Service to
be "qualified" within the meaning of the Code.
(b) Each Employee Plan of the Company and the administrators and
fiduciaries of each Employee Plan of the Company have at all times
complied in all material respects with all applicable requirements of
ERISA and of any other applicable law (including regulations and rulings
thereunder) governing each Employee Plan, and each Employee Plan has at
all times been in material respects properly administered in accordance
with all such requirements of law and in accordance with its terms to the
extent consistent with all such requirements of law. Except as set forth
in Schedule 3.20, no lawsuits or complaints material to the Company to, or
by, government agencies have been filed, are pending or are expected with
respect to any Employee Plan.
(c) No "prohibited transaction" (as defined in Section 4975 of the
Code or Section 406 of ERISA) has occurred, or as of the Effective Date,
shall have occurred, with respect to any Employee Plan or trust of the
Company, unless such prohibited transaction shall have been corrected and
any excise tax liability discharged; no notice of termination has been
filed by any Plan Administrator pursuant to Section 4041 of ERISA or been
issued by the PBGC pursuant to Section 4042 of ERISA with respect to any
Plan subject to ERISA and relating to the Company, unless any liability
under Title IV of ERISA occasioned in connection therewith shall have been
discharged; except as disclosed on Schedule 3.20; no Employee Plan has
outstanding, or as of the Effective Date,
-16-
shall have outstanding any "accumulated funding deficiency" (as defined in
Section 412 of the Code), whether or not waived and has not applied for or
received any waivers of minimum funding standards under Section 412; to
the extent required by generally accepted accounting principles, the
Company has made or has accrued or, on or before the Current Financial
Statements date, shall have made or shall have accrued on its books and
records, all contributions required to be made by it under the terms of
all pension, profit sharing and other Employee Plans covering its
employees; and all premiums due to the PBGC have been paid.
(d) Other than with respect to retired or former employees of the
Company, no person is a participant in, or eligible for participation in,
any Employee Plan who is not an employee of the Company.
(e) To the best of the Company's knowledge, the Company does not
currently maintain or contribute to nor has it ever maintained or
contributed to, or been required by any agreement to maintain or
contribute to, any multi-employer plan as defined in Section 3(37) of
ERISA.
3.25 Environmental Matters. Except as set forth in Schedule 3.25, the
Company has obtained all material permits, licenses and other authorizations
which are required under federal, state and local laws ("Environmental Laws")
relating to pollution or protection of the environment, including laws relating
to emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial hazardous or toxic materials or wastes
into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, hazardous or toxic materials
or wastes. Except as set forth in Schedule 3.25, to the best of the Company's
knowledge, it has procured and is in material compliance with all terms and
conditions of the required permits, licenses and authorizations, and all other
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in all
Environmental Laws or contained in any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder. Except as set forth in Schedule 3.25, and excluding the effects of
any future modifications of Environmental Laws, the Company has no knowledge of
and has received no notice of, any past or present events, conditions,
circumstances, activities, practices, incidents, actions or plans which may
reasonably be expected to interfere with or prevent continued compliance in all
material respects, or which may reasonably be expected to give rise to any
liability, or otherwise form the basis of any claim, action, suit, proceeding,
hearing or investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling, or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, or hazardous or toxic material or waste, and no claim,
action, suit, hearing, proceeding or investigation is currently pending or to
its knowledge threatened with respect thereto. The Company will make available
to Sub complete copies of any internal or external
-17-
reports or studies conducted for or by the Company in conjunction with or
relating to environmental matters.
3.26 Compliance with Applicable Law. The Company has complied and is
complying, in all material respects, with all applicable laws, rules,
regulations, orders, ordinances, judgments and decrees of all governmental
authorities (federal, state, or local) (collectively "Laws"), including but not
limited to (i) the Federal Occupational Safety and Health Act and all Laws
relating to the safe conduct of business and environmental protection and
conservation including, but not limited to, noise abatement requirements and
emission control standards; and (ii) all Laws regulating water use. Except as
indicated in Schedule 3.26 hereto, the Company has not received notification
from any governmental authority of any asserted present or past material failure
to comply with Laws which has not been remedied or resolved.
3.27 Bank Accounts. Schedule 3.27 sets forth a true and complete listing
of the following: (i) the name of each bank in which the Company has an account
or safe deposit box and the names of all persons authorized to draw thereon or
to have access thereto; and (ii) the names of all persons, firms or
corporations, if any, holding general or specific powers of attorney from the
Company and a summary statement of the terms thereof.
3.28 Banking Relationships. The Company will use its best efforts and
cooperate with Sub in order to maintain the Company's existing banking
relationships and arrangements and to make them available to the Surviving
Corporation following the Effective Date.
3.29 Full Disclosure. To the best of the knowledge of the Company, after
due inquiry of its officers, no representation, warranty or covenant in this
Merger Agreement, nor any statements, financial statements, certificates or
schedules furnished to Sub pursuant hereto, or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained therein in the light of the circumstances under which they were or are
to be made, not misleading. Except for economic conditions and those generally
affecting the disposable baby diaper industry and information known to RMED, the
Company is not aware of any specific information which leads it to believe that
there is any impending material adverse change in the business of the Company.
3.30 Disclosure on Schedules. Disclosure of information on any Schedule
hereto shall be deemed to satisfy the disclosure requirements of any other
Schedule hereto to which such information may also be applicable.
3.31 Knowledge and Notice. The Company shall be deemed to have knowledge
or best knowledge or awareness of a matter or notice only if such matter or
notice is, at the time in question, actually known to any officer or director of
the Company.
-18-
ARTICLE IV.
COVENANTS, REPRESENTATIONS AND
WARRANTIES OF RMED AND SUB
On the date hereof and the Effective Date, RMED and Sub, jointly and
severally, make the following covenants, representations and warranties to
Company and each of its shareholders:
4.01 Legal Status.
(a) All of the outstanding shares of capital stock of Sub are owned
by RMED. Sub and RMED are corporations duly organized, validly existing
and in good standing under the laws of their states of incorporation and
each has all requisite corporate power and authority to carry out their
respective businesses and the transactions contemplated hereby. Except as
set forth in Schedule 4.01(a), Sub has not conducted any activities,
acquired any assets or incurred any liabilities and will not do so prior
to the Effective Date except as may be required to consummate the
transactions contemplated by this Merger Agreement and any agreements or
documents related hereto.
(b) RMED is a corporation duly organized, validly existing and in
good standing under the laws of the State of Colorado. Except as set forth
on Schedule 4.01(b), RMED is qualified as a foreign corporation to do
business in all other jurisdictions where the character of RMED's
properties and the nature of its activities make qualification necessary
and where the failure to be so qualified would have a material adverse
effect on its business, financial condition or results of operations.
(c) Sub has previously delivered to the Company complete and correct
copies of its Certificate of Incorporation (certified by the Secretary of
State of the State of Delaware) and by-laws (certified by its Secretary).
Such Certificate of Incorporation and by-laws are valid and in effect as
of the date hereof.
(d) RMED and Sub each has the power and authority to own and lease
their respective properties and to carry on their respective businesses.
4.02 Capitalization.
(a) Common Stock. RMED is authorized to issue 52,500,000 shares of
common stock consisting of 2,500,000 shares of Preferred Stock and the
balance of common stock, with $1.00 par value per share, of which no
shares of RMED Shares are held in RMED's treasury and 6,395,958 shares are
validly issued and outstanding and are fully paid and non-assessable.
Except as set forth on Schedule 4.02(a), no holder of any shares of RMED
Shares has asserted
-19-
any claim or action against RMED, including any claim or action with
respect to the Merger.
(b) Options and Rights. Except as set forth on Schedule 4.02(b)
there are no outstanding subscriptions, options, warrants, contracts,
calls, commitments, preemptive rights or demands of any nature relating to
the capital stock of RMED or obligating the Company to buy, sell or issue
shares of RMED's capital stock.
(c) Conflicts of Interest. Except as set forth in Schedule 4.02(c),
to the best of its knowledge, neither RMED nor Sub nor any of the
shareholders, directors or officers of RMED nor any of their spouses or
children owns directly or indirectly any interest in (other than a
minority interest in a publicly traded corporation), or is a director,
officer or employee of, any corporation, partnership, firm, association or
business organization which manufactures, distributes or sells, any
product or service which is manufactured, sold or furnished by the
Company, or is a competitor, potential competitor, supplier or customer of
the Company.
4.03 Authorization. RMED and Sub each has full corporate power and
authority to enter into this Merger Agreement and any agreements related hereto
and to perform its respective obligations hereunder and thereunder. The Boards
of Directors of each of RMED and Sub have taken all actions required by law,
their respective Certificates of Incorporation and By-laws or otherwise to be
taken by them to authorize the execution and delivery of this Merger Agreement
and related agreements and the consummation of the Merger and the other
agreements and transactions contemplated hereby and thereby, and no other
corporate proceedings on the part of the Boards of Directors of RMED or Sub are
necessary to authorize this Merger Agreement and related agreements and the
Merger and the other transactions contemplated thereby and hereby. This Merger
Agreement and the agreements related hereto have been duly and validly executed
and delivered by each of RMED or Sub and constitutes a valid and binding
agreement of each enforceable in accordance with their respective terms subject
only to requisite approval of this Merger Agreement and the transactions
contemplated hereby of the shareholders of RMED.
4.04 Financial Statements.
(a) Financial Statements. RMED has delivered to the Company the
balance sheets for RMED as of December 31, 1996 and 1997 and the related
statements of income, stockholders' equity, and cash flows for the years
then ended (and the accompanying footnotes which are an integral part
thereof) together with the attached Independent Accountants Audit Reports
of Oatley, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., Certified Public Accountants, whose
reports thereon are included therein (the "Financial Statements"). Subject
to the qualifications contained in such audit reports, the Financial
Statements present fairly in all material respects the financial position
of RMED as of such dates and the results
-20-
of its operations and its cash flows for the years then ended in
conformity with generally accepted accounting principles.
(b) Current Financial Statements. Prior to the Closing, RMED will
deliver current Securities and Exchange Commission Reports for the periods
ending after December 31, 1997 (the "Current Financial Statements").
4.05 Absence of Changes. Except as set forth in Schedule 4.05 or in the
Current Financial Statements, and except for general economic conditions and
other conditions generally affecting the retail sales which are known to the
general public, since June, 1998 there has not been with respect to RMED:
(i) any material adverse change in the condition (financial or
other), properties, assets or business of RMED;
(ii) any damage, destruction or loss (whether covered by insurance
or not) which materially and adversely affects the business, properties;
(iii) assets or business of RMED;
(iv) any declaration, setting aside or payment of any dividend or
any distribution with respect to Schedule 4.05 RMED's capital stock other
than as provided in RMED's Shareholder Agreement, if any, or any direct or
indirect redemption, purchase or other acquisition by RMED;
(v) any increase of more than ten percent (10%) in the compensation
payable or to become payable by RMED to any employee earning Twenty Five
Thousand Dollars ($25,000) per annum or more, or any general increase in
the compensation or rates of compensation payable or to become payable by
RMED to hourly employees, except as required by any collective bargaining
agreement, or to salaried officers or employees earning less than Twenty
Five Thousand Dollars ($25,000) per year;
(vi) any change in the accounting principles, methods or practices
followed by RMED;
(vii) any debt, obligation or liability, whether accrued, absolute
or contingent and whether due, incurred or entered into by RMED, except
liabilities and obligations incurred or entered into in the ordinary
course of business;
(viii) any sale, lease, abandonment or other disposition by RMED of
any interest in real property or any machinery, equipment, inventory or
other operating property other than in the ordinary course of business as
reflected in Schedule 4.05;
-21-
(ix) any sale, assignment, transfer, license or other disposition by
RMED of any patent, trademark, trade name, brand name, copyright (or any
application for any patent, trademark or copyright), invention, process,
know-how, formula or trade secret or interest thereunder or other
intangible asset, except as implied for use in connection with the sale of
its products in the ordinary course of business as reflected in Schedule
4.05;
(x) any agreement, understanding or undertaking by RMED, the
performance of which would result in any of the items described in
subparagraphs 4.05(i) through 4.05(vii) above.
4.06 Undisclosed Liabilities. Except as set forth on Schedule 4.06:
(a) To the best of shareholders' knowledge, after due inquiry on
their part, RMED has no liabilities or obligations, either accrued,
absolute, contingent or otherwise, except:
(i) to the extent reflected or reserved in the Financial
Statements for December 31, 1997 or the Current Financial Statements
for June, 1998, and not heretofore paid or discharged;
(ii) to the extent disclosed in this Merger Agreement or in
any of the Schedules to this Merger Agreement;
(iii) those incurred in or as a result of the ordinary course
of business since the date of the Financial Statements for December
31, 1997, including normal warranty claims and executory contracts,
all of which have been consistent with past practice and none of
which, either individually or in the aggregate, would have a
material adverse effect on RMED; or
(iv) those incurred pursuant to or contemplated by this Merger
Agreement, Schedules hereto and the various related or ancillary
documents and agreements contemplated hereby or executed in
connection herewith.
(b) Except as set forth on Schedule 4.06(b), RMED has not received
any notice of any claim against RMED of any liability of any nature or in
any amount required to be set forth or disclosed in the Financial
Statements, the Current Financial Statements, this Merger Agreement or the
Schedules hereto, which is not or will not be set forth in the Financial
Statements, the Current Financial Statements, or otherwise disclosed in
this Merger Agreement or in the Schedules hereto.
4.07 No Violation of Statute or Contract. Except as set forth on Schedule
4.07, neither the execution and delivery of this Merger Agreement, nor the
compliance
-22-
with the terms and provisions of this Merger Agreement on the part of
each of RMED or Sub will:
(i) conflict with or result in a breach or violation of any of the
terms, conditions or provisions of, or constitute a default (or any event
which, with notice or lapse of time or both would constitute a default)
under their respective Certificates of Incorporation or by-laws, or,
assuming that the approvals described in Section 4.12 below are duly
obtained any statute, code, ordinance, rule, regulation, judgment, order,
writ, decree or injunction applicable to any of them, or any of their
respective properties, assets, licenses or permits, which would have a
material adverse effect on the condition (financial or other), results of
operations or business of any of them, or
(ii) violate, conflict with, result in a breach of any provisions
of, constitute a default (or any event which, with notice or lapse of time
or both, would constitute a default) under, result in the termination of,
accelerate the performance required by, or result in the creation of any
lien, security interest, charge or other encumbrance upon any of the
property of any of them under any of the terms, conditions or provisions
of any note, bond, mortgage, indentures, deed of trust, license, lease,
agreement or other instrument or obligation to which any of them is a
party, or by which any of them, their properties or assets may be bound or
affected which would have a material adverse effect on the condition
(financial or other), results of operations or business of any of them.
4.08 Accounts Receivable. Except as set forth in Schedule 4.08, the
accounts receivable of RMED arose from valid sales in the ordinary course of
business, and, subject to applicable reserves, are good and collectible. To the
best of shareholders' knowledge, after due inquiry, the reserves for bad debts
and uncollected accounts is adequate.
4.09 Notes Receivable. Schedule 4.09 sets forth all notes receivable and
other receivables in excess of Five Thousand Dollars ($5,000), which are not
included in the accounts receivable, reflected on the most recent balance sheet
included in the Financial Statements or will be reflected in the Current
Financial Statements. RMED has no notice of any defect, defense, counterclaim,
or setoff to payment which the maker of any note receivable may claim or assert
or of any fact or circumstance which would give rise to denial of payment
thereof by the maker of any note receivable. Also included on Schedule 4.09 is a
list of all loans, advances or other payments in excess of Five Thousand Dollars
($5,000) receivable from directors, officers and employees of RMED ("Employee
Receivables") setting forth the name of the individual, the amount receivable by
RMED from such individual, and the terms on which such Employee Receivable is to
be repaid. RMED has provided to Sub true and complete copies of all promissory
notes or other documents evidencing the Employee Receivables. RMED agrees to
cause all individuals that are obligated for an Employee Receivable that is not
evidenced by a document, to execute and deliver to RMED promissory notes or
other
-23-
documents satisfactory to Sub evidencing the obligation to pay such Employee
Receivable prior to Closing.
4.10 Inventories. Except as provided in Schedule 4.10, all of RMED's
inventories reflected on the Financial Statements for December 31, 1997 and that
will be reflected in the Current Financial Statements are or will be good and
usable and salable in the ordinary course of RMED's business, except for minor
items not material in amount. 4.11 Real Property Owned or Leased.
(a) RMED does not own any real property.
(b) RMED leases real property located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (the "Warehouse Property").
(c) RMED represents that:
(i) RMED has the right of quiet enjoyment to each parcel of
Warehouse Property.
(ii) All improvements, fixtures, structures, machinery and
equipment used by RMED in carrying on its business are located on
the Warehouse Property.
(iii) RMED has the right to use the Warehouse Property for all
of the operations now conducted therefrom and RMED, by virtue of its
ownership, possesses all easements, licenses, rights of way and
rights in, to, and over the Property which are necessary for the
conduct of the business in the ordinary course. The Warehouse
Property and Improvements are adequate and sufficient for all
operations now conducted by RMED.
(iv) Neither the whole nor any portion of any of the Warehouse
Property is the subject of a pending condemnation or eminent domain
proceeding, and to the best of RMED's knowledge, RMED does not know
nor has any grounds to believe that any such condemnation or taking
is threatened or contemplated.
(v) None of the Warehouse Property is occupied by any entity
or person other than the Company, nor does any other person or
entity have any rights to occupy any portion of the Warehouse
Property.
(vi) Except for the Warehouse Property, RMED neither leases or
owns any other real property.
(vii) RMED's occupancy of the Warehouse Property is not in
material violation of any law or regulation applicable thereto, nor
has
-24-
RMED, to the best of RMED's knowledge, received any notice of any
such violation.
(viii) RMED has not received any notice of any violation of
any law, ordinance, regulation, building, zoning or fire code or
requiring or calling attention to the need for any work, repairs,
construction, alterations or installations with respect to any of
the Warehouse Property nor has any such notice been posted on any
portion of the Warehouse Property.
4.12 Regulatory Approvals. Except as contemplated by this Merger Agreement
or as set forth on Schedule 4.12, no consent, approval or authorization of, or
declaration, filing or registration with, any government or regulatory authority
is required to be obtained or made by RMED or Sub in connection with the Merger
or the execution, delivery and performance by them of this Merger Agreement or
any related agreement.
4.13 Tangible Personal Property. Except as disclosed on Schedule 4.13, all
machinery, equipment and other personal property used by RMED in the operation
of its business either owned or leased by RMED under valid leases, is, in all
material aspects, in good operating condition and repair and is adequate and
sufficient for all operations now conducted by RMED. Except as disclosed in
Schedule 4.13, RMED has good and marketable title to all personal property owned
by it, free and clear of restrictions on or conditions to transfer or
assignment, and free and clear of mortgages, liens, pledges, security interests,
charges, encumbrances, equities, claims, easements, rights of way, covenants,
conditions, or restrictions and has valid leases pursuant to which it leases all
personal property used in connection with the operation of its business which is
not owned by RMED. All such leases are valid and binding, in full force and
effect and no defaults (or conditions or events which with the giving of notice
or the passage of time, or both, would constitute a default) exist thereunder.
4.14 Intellectual Property.
(a) Schedule 4.14(a) sets forth a description of all trademarks,
trademark registrations and trademark applications, trade names, assumed
names, service marks, service ▇▇▇▇ registrations and applications, service
names, copyrights, patents and patent applications, and patent, and
copyright and trademark licenses, owned or used by the Company in the
conduct of its business (collectively "Intellectual Property"). Except as
set forth on Schedule 4.14(a), the Company owns, is licensed or otherwise
has the right to use all Intellectual Property and all trade secrets, shop
rights and know-how used in or necessary for the conduct of its business.
(b) Except as set forth in Schedule 4.14(b), no claim has been
asserted against RMED by any person with respect to the ownership, use,
transfer, license or other disposition by RMED of any Intellectual
Property or any trade secrets, shop rights or know-how or challenging any
license or agreement
-25-
with respect thereto, and RMED does not know of any basis for any such
claim. To the best of the knowledge of RMED, the use of Intellectual
Property and the trade secrets, shop rights and know-how by RMED, the
practice of any process or the use of any apparatus, or the making or
selling of any product by RMED, does not, and is not reasonably expected
to, infringe on the rights of any person.
(c) No third party is known by RMED to be infringing on any
Intellectual Property or any trade secrets, shop rights or know how owned
or used by RMED.
4.15 Material Contracts. Schedule 4.15 sets forth a true and correct list
or description of:
(a) Each contract, agreement or binding commitment in respect of the
procurement, purchase, processing, storage or sale of material, products,
supplies, utilities or services to which RMED is a party or by which it is
bound other than contracts, agreements or binding commitments which
(i) involve payments or receipts by RMED of less than Twenty
Five Thousand Dollars ($25,000),
(ii) are terminable by RMED without penalty upon not more than
thirty (30) days notice,
(iii) which are substantially performed except for standard
warranty, guaranty, non-compete or indemnification obligations, or
(iv) relate to sales order or purchase order contracts which
individually are for an amount which is less than Twenty Five
Thousand Dollars ($25,000) or a series of related contracts are for
an amount in the aggregate which is less than Fifty Thousand Dollars
($50,000).
(b) Each sales agency or distributorship agreement or franchise to
which RMED is a party or by which it is bound.
(c) Each collective bargaining, union, employment, consulting,
independent contractor, non-competition or secrecy agreement to which RMED
is a party or by which it is bound.
(d) Each pension, profit sharing, retirement, bonus, group life,
health and accident insurance or other employee benefit plan, agreement,
arrangement or binding commitment to which RMED is a party, whether or not
legally binding, including, but not limited to, each union plan or
arrangement to which RMED is a party or makes contributions.
(e) Each material contract, agreement, binding commitment or license
relating to any Intellectual Property, trade secrets, shop rights or
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know-how to which RMED is a party except rights which are implied for use
in connection with the sale of RMED's products in the ordinary course of
business.
(f) Each loan or credit agreement, security agreement, guaranty,
indenture, mortgage, pledge, conditional sale or title retention
agreement, equipment obligation, lease or lease purchase agreement or
other documents evidencing secured indebtedness to which RMED is a party
or by which it or any of its properties is bound.
(g) Each partnership, joint venture, joint operating or similar
agreement or agreement for the performance of services as an independent
contractor to which RMED is a party or by which it is bound.
(h) Each contract, agreement or binding commitment other than those
covered above which (
(i) involves payments or receipts by RMED of Twenty Five
Thousand Dollars ($25,000) or more and not made in the ordinary
course of business, or
(ii) is not terminable by RMED without penalty, or (
(iii) which otherwise is reasonably expected to materially
affect the condition (financial or other), properties, assets or
business of RMED.
Each such contract, agreement or binding commitment is legally valid and binding
on RMED and the Parties thereto, and each constitutes a legal, valid and binding
obligation of RMED and the Shareholders, enforceable in accordance with its
terms, except as limited by bankruptcy, insolvency, reorganization, moratorium,
and other similar laws affecting creditors' rights generally, is in full force
and effect, and there are no defaults thereunder known to RMED by any party
thereto. Except as set forth on Schedule 4.15, under the terms of the foregoing,
none of the rights of RMED thereunder will be impaired by the Merger, and all of
the rights of RMED thereunder will be enforceable immediately after the
Effective Date to the extent enforceable immediately prior thereto without the
consent or agreement of any other party, except as indicated on Schedules. True
and complete copies of all documents described in the aforesaid schedule have or
will be made available by RMED or Sub to the Company including all amendments
and supplements thereto and modifications thereof.
4.16 Permits and Licenses. To the best of its knowledge, RMED possesses
all governmental permits, licenses and certifications which are necessary for
the conduct of the business by RMED, and all of such permits, licenses and
certifications are in full force and effect. No violations are known to the
Company to exist or, to its knowledge, have been recorded with respect to any of
such permits, licenses or certifications and no proceeding is pending (other
than reapplication pursuant hereto) or known to RMED
-27-
to be threatened which, if adversely determined, could result in the revocation,
termination or limitation of any such permits, licenses or certifications.
Except as set forth in Schedule 4.16, the Merger will not cause the revocation,
termination, limitation, non-renewal or expiration of any such permit, license
or certification currently issued to RMED or Sub.
4.17 Insurance Coverages. Schedule 4.17 refers to all of RMED's and Sub's
insurance coverages and carriers (specifying the insurer, the amount of the
coverage, the type of insurance, the policy number, the annual premium, the
expiration date and any pending claims thereunder not otherwise disclosed
pursuant to this Merger Agreement). Except as disclosed on Schedule 4.17, RMED
has and maintains insurance coverage with retentions which insurance and
retentions are reasonably believed by RMED to be adequate for the protection of
RMED and Sub in the conduct of its business. RMED has not failed to give any
notice or present any claim known to it under any insurance policy covering the
same in proper form and timely fashion. RMED will use all reasonable efforts to
assure that all such coverages will be in full force and effect at the Effective
Date.
4.18 Claims and Litigation. Except as set forth on Schedule 4.18, RMED and
Sub are not a party to any litigation, proceeding, arbitration, demand, action
or claim either pending or, to the best knowledge of RMED or Sub, threatened
against RMED or Sub before any court or governmental or other regulatory or
administrative agency or commission or arbitration panel. Except as set forth on
Schedule 4.18, neither RMED or Sub has any knowledge of any pending items in
dispute or any injury that it believes is likely to give rise to a claim against
RMED or Sub. RMED and Sub do not believe that any action, proceeding or
investigation set forth on Schedule 4.18, will have a material adverse effect on
the condition (financial or other), properties, assets or business of RMED,
except for matters for which reserves have been reflected on the Financial
Statements.
4.19 Labor Relations Matters. Except as set forth on Schedule 4.19, RMED
is in compliance in all material respects with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practice. To the best of
RMED's knowledge, after due inquiry, there is no unfair labor practice complaint
against RMED pending before the National Labor Relations Board, any state labor
relations board or any other court or tribunal. Except as described in Schedule
4.19, within the last five years there has not been any, and there is currently
no labor strike, or material dispute, slowdown or stoppage by RMED's employees
pending or threatened against or affecting RMED. To the best of RMED's
knowledge, no representation question exists. Except as set forth in Schedule
4.19, no grievance nor any arbitration proceeding arising out of or under any
labor agreement is pending and no claim therefor has been made. Neither RMED nor
Sub has any collective bargaining agreements or other agreements with labor
organizations, other than the agreements listed on Schedule 4.19. Since the Sub
existence, the Sub has not employees.
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4.20 Tax Matters.
(a) Except as set forth on Schedule 4.20(a) each of RMED or any
affiliate of RMED, as the case may be, has
(i) filed when due with the appropriate federal, state, local,
foreign and other governmental agencies, all tax returns, estimates
and reports required to be filed by it,
(ii) paid when due and payable all requisite federal, state,
local or foreign taxes, levies, imposts, duties, licenses and
registration fees and charges of any nature whatsoever, including
interest and penalties thereon and unemployment and social security
taxes ("Taxes") or has established reserves in the Financial
Statements adequate therefor and
(iii) has established, or will have established as of the
Effective Date, reserves that, in the aggregate, are adequate for
the payment of all Taxes not yet due and payable on the results of
operation through the Effective Date as if the taxable year of RMED
ended on the Effective Date, and in each such case, will immediately
notify the Company of such setting aside.
(b) Except as set forth on Schedule 4.20(b), there are no taxes,
interest, penalties, assessments or deficiencies claimed to be due in
respect of any tax returns filed by RMED or Sub, or otherwise that are not
fully reserved for on the Financial Statements. Except as set forth on
Schedule 4.20(b), neither RMED or Sub has executed or filed with the
Internal Revenue Service or any other taxing authority any agreement or
other document extending, or having the effect of extending, the period of
assessment or collection of any Taxes, and no power-of-attorney of RMED or
Sub is outstanding or will be outstanding on the Effective Date. RMED or
Sub has not reported any item of income, deduction or credit on any income
tax return or reported any other item on any other return in a manner
which is contrary to the specific recommendation or advice of RMED's or
Sub's accountants and neither RMED or Sub has made any disclosures on any
tax return pursuant to Section 6662 of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) Neither RMED or Sub has filed a consent pursuant to Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply
to any disposition of a subsection (f) asset (as such term is defined in
Section 341(f)(4) of the Code) owned by RMED or Sub.
(d) No property of RMED or Sub is property that the Surviving
Corporation is or will be required to treat as being owned by another
person pursuant to the provisions of Section 168(f)(8) of the Code or is
"tax exempt use
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property" within the meaning of Section 168(f)(3) of the Internal Revenue
Code, as it existed prior to January 1, 1984.
(e) Neither RMED nor SUB has agreed, or has been requested by the
Internal Revenue Service to make any adjustment under Section 481(a) of
the Code by reason of a change in accounting method or otherwise except as
required by the Tax Reform Act of 1986, which adjustments, if any, have
previously been recognized in the income of RMED or Sub in tax returns of
RMED or Sub for years ending prior to 1998.
(f) RMED has withheld from employee wages and paid over to the
proper governmental authorities all amounts required to be so withheld and
paid over.
(g) Neither RMED or Sub is a party to, nor is bound by or has any
obligation under any tax sharing or similar agreement.
(h) Neither RMED or Sub is a foreign person within the meaning of
Section 1445(b)(2) of the Code.
4.21 Benefit Plans.
(a) For the purposes of this Merger Agreement, the term "Employee
Plan" includes all pension, retirement, disability, medical, dental or
other health plans, life insurance or other death benefit plans, profit
sharing, deferred compensation, stock option, bonus or other incentive
plans, vacation benefit plans, severance plans, or other employee benefit
plans or arrangements, including, without limitation, any "pension plan"
as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974 ("ERISA") and any "welfare plan" as defined in Section 3(1) of
ERISA, whether or not funded, and whether or not oral, to which RMED is a
party or bound or with respect to which RMED may otherwise have any
liability (including any such plan maintained by RMED within the last
three calendar years) or with respect to which RMED has made any payments
or contributions covering any employee of RMED within the last three (3)
calendar years.
(b) Except as set forth on Schedule 4.21(b),
(i) RMED has not been since its inception and is not now the
sponsor of any Additional Employee Plan. RMED has no legally binding
commitment to create any additional Employee Plan.
(ii) no separate trust is maintained in conjunction with any
such plan. A separate trust is a trust the assets of which enjoy
protection from the claims of RMED's creditors or any trust
maintained in conjunction with a promise of deferred compensation
(commonly known as a "Rabbi Trust").
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4.22 ERISA Matters.
(a) Except as provided in Schedule 4.22(a) hereof, each Employee
Plan that is an employee pension benefit plan qualifiable under Section
401 or 403(a) of the Code has been determined by the Internal Revenue
Service to be "qualified" within the meaning of the Code.
(b) Each Employee Plan of RMED and the administrators and
fiduciaries of each Employee Plan of RMED have at all times complied in
all material respects with all applicable requirements of ERISA and of any
other applicable law (including regulations and rulings thereunder)
governing each Employee Plan, and each Employee Plan has at all times been
in material respects properly administered in accordance with all such
requirements of law and in accordance with its terms to the extent
consistent with all such requirements of law. Except as set forth in
Schedule4.22(b), no lawsuits or complaints material to the Company to, or
by, government agencies have been filed, are pending or are expected with
respect to any Employee Plan.
(c) No "prohibited transaction" (as defined in Section 4975 of the
Code or Section 406 of ERISA) has occurred, or as of the Effective Date,
shall have occurred, with respect to any Employee Plan or trust of RMED,
unless such prohibited transaction shall have been corrected and any
excise tax liability discharged; no notice of termination has been filed
by any Plan Administrator pursuant to Section 4041 of ERISA or been issued
by the PBGC pursuant to Section 4042 of ERISA with respect to any Plan
subject to ERISA and relating to RMED, unless any liability under Title IV
of ERISA occasioned in connection therewith shall have been discharged;
except as disclosed on Schedule 4.22(c); no Employee Plan has outstanding,
or as of the Effective Date, shall have outstanding any "accumulated
funding deficiency" (as defined in Section 412 of the Code), whether or
not waived and has not applied for or received any waivers of minimum
funding standards under Section 412; to the extent required by generally
accepted accounting principles, RMED has made or has accrued or, on or
before the Current Financial Statements date, shall have made or shall
have accrued on its books and records, all contributions required to be
made by it under the terms of all pension, profit sharing and other
Employee Plans covering its employees; and all premiums due to the PBGC
have been paid.
(d) Other than with respect to retired or former employees of RMED,
no person is a participant in, or eligible for participation in, any
Employee Plan who is not an employee of RMED.
(e) To the best of RMED's knowledge, RMED does not currently
maintain or contribute to nor has it ever maintained or contributed to, or
been required by any agreement to maintain or contribute to, any
multi-employer plan as defined in Section 3(37) of ERISA.
-31-
4.23 Environmental Matters. Except as set forth in Schedule 4.23, RMED has
obtained all material permits, licenses and other authorizations which are
required under federal, state and local laws ("Environmental Laws") relating to
pollution or protection of the environment, including laws relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial hazardous or toxic materials or wastes
into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, hazardous or toxic materials
or wastes. Except as set forth in Schedule 4.23, to the best of RMED's
knowledge, it has procured and is in material compliance with all terms and
conditions of the required permits, licenses and authorizations, and all other
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in all
Environmental Laws or contained in any regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or approved
thereunder. Except as set forth in Schedule 4.23, and excluding the effects of
any future modifications of Environmental Laws, RMED has no knowledge of and has
received no notice of, any past or present events, conditions, circumstances,
activities, practices, incidents, actions or plans which may reasonably be
expected to interfere with or prevent continued compliance in all material
respects, or which may reasonably be expected to give rise to any liability, or
otherwise form the basis of any claim, action, suit, proceeding, hearing or
investigation, based on or related to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling, or the emission,
discharge, release or threatened release into the environment, of any pollutant,
contaminant, or hazardous or toxic material or waste, and no claim, action,
suit, hearing, proceeding or investigation is currently pending or to its
knowledge threatened with respect thereto. RMED will make available to the
Company complete copies of any internal or external reports or studies conducted
for or by RMED in conjunction with or relating to environmental matters.
4.24 Compliance with Applicable Law. RMED has complied and is complying,
in all material respects, with all applicable laws, rules, regulations, orders,
ordinances, judgments and decrees of all governmental authorities (federal,
state, or local) (collectively "Laws"), including but not limited to (i) the
Federal Occupational Safety and Health Act and all Laws relating to the safe
conduct of business and environmental protection and conservation including, but
not limited to, noise abatement requirements and emission control standards; and
(ii) all Laws regulating water use. Except as indicated in Schedule 4.24 hereto,
RMED not received notification from any governmental authority of any asserted
present or past material failure to comply with Laws which has not been remedied
or resolved.
4.25 Bank Accounts. Schedule 4.25 sets forth a true and complete listing
of the following: (i) the name of each bank in which RMED has an account or safe
deposit box and the names of all persons authorized to draw thereon or to have
access thereto; and (ii) the names of all persons, firms or corporations, if
any, holding general or specific powers of attorney from RMED and a summary
statement of the terms thereof.
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4.26 Banking Relationships. RMED will use its best efforts and cooperate
with the Company in order to maintain existing banking relationships and
arrangements and to make them available to the Surviving Corporation following
the Effective Date.
4.27 Full Disclosure. To the best of the knowledge of RMED or Sub, after
due inquiry of its officers, no representation, warranty or covenant in this
Merger Agreement, nor any statements, financial statements, certificates or
schedules furnished to the Company pursuant hereto, or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained therein in the light of the circumstances under which they were or are
to be made, not misleading. Except for economic conditions and those generally
affecting the disposable baby diaper industry and information known to the
Company, neither RMED or Sub is aware of any specific information which lead
either of them to believe that there is any impending material adverse change in
the business of RMED.
4.28 Disclosure on Schedules. Disclosure of information on any Schedule
hereto shall be deemed to satisfy the disclosure requirements of any other
Schedule hereto to which such information may also be applicable.
4.29 Knowledge and Notice. RMED and Sub shall be deemed to have knowledge
or best knowledge or awareness of a matter or notice only if such matter or
notice is, at the time in question, actually known to any officer or director of
RMED or Sub.
ARTICLE V.
CONDITIONS PRECEDENT TO SUB'S
OBLIGATION TO CLOSE
The obligations of Sub to enter into the Merger and to consummate the
transactions set forth in this Merger Agreement are subject to the satisfaction,
or waiver in writing by Sub, on or prior to the Effective Date, of each of the
following conditions:
5.01 Corporate and Shareholder Action. All corporate, shareholder and
other actions necessary to authorize the Merger and to effectuate the
consummation of the transactions contemplated hereby by the Company shall have
been duly taken on or prior to the Effective Date, and the Company shall have
delivered to Sub a certificate of the Company to that effect together with a
certified copy of resolutions of the Board of Directors and Shareholders of the
Company authorizing the execution and delivery of this Merger Agreement and the
consummation of the Merger and the transactions contemplated hereby, all in form
and substance reasonably satisfactory to Sub and its counsel.
5.02 Representations and Warranties. The representations and warranties of
the Company set forth in this Merger Agreement shall be true and correct in all
material respects on and as of the Effective Date with the same effect as though
all such
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representations and warranties had been made as of such date except to the
extent that such representations and warranties are expressly made as of another
specified date and as to such representation, the same shall be true as of such
specified date and except for any changes resulting from activities or
transactions which may have taken place after the date hereof which are
permitted or contemplated by this Merger Agreement or which have been entered
into in the ordinary course of business. The Company shall deliver to Sub a
certificate validly executed by an authorized officer of the Company to that
effect, dated the Effective Date.
5.03 Performance of Obligations. Each and all of the covenants and
agreements of the Company to be performed or complied with pursuant to this
Merger Agreement shall have been duly performed and complied with in all
material respects or duly waived by Sub and there shall have been delivered to
Sub a certificate validly executed by an authorized officer of the Company to
that effect, dated the Effective Date.
5.04 No Adverse Change. There shall have been no material adverse change
in the condition (financial or otherwise), properties, assets, business or
prospects of the Company since September 30, 1998, and there shall have been
delivered to Sub a certificate validly executed by an authorized officer of the
Company to that effect.
5.05 Opinion of Counsel. Sub shall have been furnished an opinion, dated
the Effective Date, of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.C., counsel for the Company in the
form attached hereto as Schedule 5.05.
5.06 Governmental Approvals. Any and all approvals and authorizations of,
filings and registrations with, and notifications to, any governmental or
regulatory authority required for the execution and delivery of this Merger
Agreement by the Company, and the consummation of the Merger and the performance
of its obligations under this Merger Agreement, shall have been duly obtained or
made and shall be in full force and effect. The transaction is not subject to
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Pre-Merger Notification Act ("HSR Act").
5.07 Litigation. At the Effective Date, there shall be no litigation
pending or threatened in which any injunction is or may be sought against or
seeking damages from the Shareholders, or the Company, RMED or Sub in connection
with the transactions contemplated hereby.
5.08 Financing. RMED shall have made satisfactory firm arrangements for
all financing required to consummate the Merger and provide working capital in
the amount of $3,000,000 for the operation of the Surviving Corporation, which
arrangements may include, but shall not be limited to, leases, equity
investments, the sale of options, warrants or other rights, loans (whether
secured or unsecured), issuance of debentures, and/or sale/leaseback
arrangements. In the event that RMED is unable to secure satisfactory financing
arrangements, with acceptable terms and conditions, by December 31, 1998, RMED
may terminate this Merger Agreement by written notice to the Company whereupon
this Merger Agreement shall be null and void and the parties
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shall have no further duties or responsibilities hereunder except for breach of
this Merger Agreement.
5.09 Appraisal Rights. The holders of not more than twenty percent (20%)
of the Company Shares shall have exercised their appraisal rights with respect
to the Merger in accordance with the Corporation Laws.
ARTICLE VI.
OPERATION OF THE COMPANY
TO THE EFFECTIVE DATE
During the period from the date of this Merger Agreement to the Effective
Date, except as otherwise consented to by Sub in writing:
6.01 Ordinary Course of Business. The Company will carry on its business
in the usual, regular and ordinary course, in substantially the same manner as
heretofore conducted and use all reasonable efforts to preserve intact its
present business organization, keep available the services of its present
officers and employees, and preserve its relationships with customers, suppliers
and others having business dealings with it to the end that the goodwill and
ongoing business shall be unimpaired in all material respects at the Effective
Date.
6.02 Charter Documents. The Company will not amend its Articles of
Incorporation or by-laws or change the authorized number of directors nor shall
the Company enter into any agreements or arrangements to do so.
6.03 Merger or Mergers. The Company will not acquire by merging or
consolidating with, or purchasing substantially all the assets of, or otherwise
acquiring any business or any corporation, partnership, association or other
business organization or division thereof nor shall the Company enter into any
agreements or arrangements to do so.
6.04 Sale or Encumbrance. The Company will not, except in the ordinary
course of business, sell, lease or otherwise dispose of, nor voluntarily
encumber, any of its property nor shall the Company enter into any agreements or
arrangements to do so.
6.05 Dividends or Distributions. The Company will not declare, set aside,
make or pay any dividend or other distribution except with respect to Subchapter
S profits for the purpose of the payment of taxes, in respect of its capital
stock or purchase or redeem, directly or indirectly, any shares of its capital
stock nor shall the Company enter into any agreements or arrangements to do so.
6.06 Capitalization. The Company will not issue or sell any shares of its
capital stock of any class or any options, warrants or rights to purchase any
such shares or any securities convertible into or exchangeable for such shares
nor declare any stock
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splits, stock dividends or other recapitalizations or reclassifications nor will
the Company enter into any agreements or arrangements to do so.
6.07 Indebtedness. The Company will not incur any indebtedness for
borrowed money or issue or sell any debt securities nor will the Company enter
into any agreements or arrangements to do so provided that the Company may
borrow for working capital purposes, those items as shown on Schedule 6.07 and
may borrow in excess of such amount with the prior written consent of Sub.
6.08 Compensation. Except as contemplated by or provided in this Merger
Agreement, without Sub's prior written approval, which approval shall not be
unreasonably withheld, the Company will not grant to any employee, officer or
director any increase in compensation in any form other than, in the case of
employees currently compensated at a base salary rate of less than Twenty Five
Thousand Dollars ($25,000) per year, as is consistent with prior practices
unless otherwise required by union contract, or any severance or termination
pay, or enter into any employment agreement with any employee, officer or
director, or amend the terms of any existing option or other employee benefit
plan as reflected in Schedule 6.08 or arrangement or adopt any new option or
other employee benefit plan or arrangement nor will the Company enter into any
agreements or arrangements to do so.
6.09 Disclosure. The Company will promptly advise Sub in writing of any
change known to the Company in the condition (financial or otherwise) in the
properties, assets, liabilities, operations, business or prospects of the
Company which it believes will be materially adverse to the business or
financial condition of the Company and of any material violation or breach known
to the Company in any of the covenants, representations or warranties of the
Company contained herein.
6.10 Government Regulation. The Company will use its best efforts to
comply with all requirements which Federal or state law may impose on the
Company with respect to the Merger and cooperate with and promptly furnish
information to Sub in connection with any such requirements imposed upon Sub in
connection with the Merger, including those imposed under the notice filing
requirements of the HSR Act.
6.11 Obtain Consents. The Company will use its best efforts to obtain any
consent, authorization, approval or exemption required to be obtained or made by
it in connection with the Merger or the taking of any action in connection with
the consummation thereof, not otherwise waived in writing by Sub.
6.12 Litigation. Except in the ordinary course of business, the Company
will not settle or compromise any litigation or administrative or similar
proceeding or claim involving the payment of, or an agreement to pay over time,
an amount, in cash, notes or other property, in excess of Ten Thousand Dollars
($10,000), exclusive of costs and fees.
6.13 Accounting Practices. The Company will not change the accounting
methods or practices followed by the Company.
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ARTICLE VII.
CERTAIN COVENANTS
7.01 Consents of Others. Prior to Closing, RMED and Sub shall use their
best efforts to obtain all authorizations, consents and permits of others and
financing required of them to permit them to consummate the transactions
contemplated by this Merger Agreement and will vote the shares of Sub in favor
of all transactions contemplated by this Merger Agreement.
7.02 Confidentiality. All information furnished by the Company to RMED and
Sub pursuant to or in connection with this Merger Agreement shall be treated as
the sole property of the Company, RMED or the Sub (as the case may be) until
consummation of the Merger contemplated hereby and, if the merger shall not
occur, RMED, Sub and the Company shall return to the Company all documents or
other materials containing information obtained from the Company, RMED or the
Sub or their agents or representatives (and all copies thereof) containing,
reflecting or referring to such information. RMED, Sub and the Company shall
take such action as may be necessary to keep confidential all such information,
and shall not directly or indirectly use such information for any purpose other
than to evaluate the Merger. The obligation to keep such information
confidential shall continue for three years as to all such information except
industrial trade secrets, for which the obligation shall continue for the latter
of ten (10) years from the date the proposed merger is abandoned or the period
protected by U.S. patents, if applicable, , but shall not apply to any
information which:
(i) The parties hereto can establish was in their possession prior
to the disclosure thereof by them, provided that information regarding
industrial trade secrets must be established by written records;
(ii) was then generally known to the public; or
(iii) becomes known to the public other than as a result of actions
by RMED, Sub or their affiliates or representatives.
7.03 Best Efforts. The parties hereto shall use their best efforts to
cause all conditions for the Closing to be met.
7.04 Guaranty. RMED hereby unconditionally guaranties the performance by
the Sub of all its respective obligations under this Merger Agreement and the
agreements related hereto and shall cause the Sub to comply with all of the
provisions of this Merger Agreement and the agreements related hereto.
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ARTICLE VIII.
MUTUAL COVENANTS
8.01 Agreement on Voting. Simultaneously with the execution of this Merger
Agreement, the Company, RMED and Sub will enter into Current Resolutions on
voting (the "Current Resolutions"), a copy of which is attached hereto as
Schedule 8.01:
(a) The Company shall deliver to Sub the Current Resolutions,
executed by each officer and director and shareholder of the Company, to
vote Company Shares owned by such shareholder in favor of the Merger; and
(b) RMED and Sub shall deliver to Company the Current Resolutions
executed by each officer and director and Shareholder of the Sub, to vote
the Sub's shares owned by such shareholder in favor of the Merger.
(c) RMED shall deliver to Company a resolution of RMED's Board of
Directors, authorizing the president of RMED to execute the Merger
Agreement, as well as to provide an enforceable agreement, attached as
Schedule 8.01(c).
ARTICLE IX.
CONDITIONS PRECEDENT TO THE COMPANY'S
OBLIGATION TO CLOSE
The obligations of the Company and the Shareholders to enter into the
Merger and to consummate the transactions set forth in this Merger Agreement as
provided hereunder are subject to the satisfaction, or waiver in writing by the
Company, on or prior to the Effective Date, of each of the following conditions:
9.01 Corporate Action. All corporate and other actions necessary to
authorize the Merger and to effectuate the consummation of the transactions
contemplated hereby by RMED and Sub shall have been duly taken prior to the
Effective Date, and RMED and Sub shall have delivered to the Company a
certificate to that effect together with a certified copy of resolutions of the
Board of Directors of RMED and Sub authorizing the execution and delivery of
this Merger Agreement and the consummation of the Merger and the transactions
contemplated hereby, all in form and substance satisfactory to the Company and
its counsel.
9.02 Representations and Warranties. The representations and warranties of
RMED and Sub set forth in this Merger Agreement shall be true and correct in all
material respects on and as of the Effective Date with the same effect as though
all such representations and warranties had been made as of such date and there
shall have been delivered to the Company certificates validly executed by an
authorized officer of RMED and Sub to that effect, dated the Effective Date.
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9.03 Performance of Obligations. Each and all of the covenants and
agreements of RMED and Sub to be performed or complied with pursuant to this
Merger Agreement shall have been duly performed and complied with in all
material respects or duly waived by the Company and there shall have been
delivered to the Company a certificate validly executed by an authorized officer
of RMED and Sub to that effect, dated the Effective Date.
9.04 Opinion of Counsel. The Company shall have been furnished an opinion,
dated the Effective Date, of Messrs. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇, counsel for RMED and
Sub in the form attached hereto as Schedule 9.04.
9.05 Governmental Approvals. Any and all approvals and authorizations of,
filings and registrations with, and notifications to, any governmental or
regulatory authority required for the execution and delivery of this Merger
Agreement by RMED and Sub, and the consummation of the Merger and the
performance of their obligations under this Merger Agreement shall have been
duly obtained or made and shall be in full force and effect.
9.06 Litigation. At the Effective Date, there shall be no litigation
pending or threatened in which any injunction is or may be sought against or
seeking damages from the shareholders of the Company, Company, RMED or Sub in
connection with the transactions contemplated hereby.
9.07 Material Adverse Change. There shall have been no material adverse
change in the condition (financial or otherwise), properties, assets, business
or prospects of RMED or Sub since the date of this Merger Agreement and there
shall have been delivered to the Company a certificate validly executed by an
authorized officer of RMED and Sub to that effect.
9.08 Shareholder and Director Approval. The directors of RMED and the
directors and shareholder of the Sub shall have authorized the Merger and all
other transactions contemplated hereby at the Special Meetings.
9.09 Personal Guaranties. All personal guaranties of any bank debt by the
Company's shareholders shall have been cancelled and annulled.
ARTICLE X.
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
10.01 Survival. The representations, warranties, covenants, agreements and
certifications made by the parties hereto shall survive the closing of all
transactions pursuant to this Merger Agreement and remain in full force and
effect after the Effective Date for a period (the "Warranty Period") of three
(3) years following such Effective Date.
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10.02 Indemnification by Shareholders. The holders of the Company Shares
(the "Shareholders") will, on a several and limited basis, indemnify RMED and
the Surviving Corporation and their officers, directors, employees and agents,
from and against all Damages, as hereinafter defined, arising out of or
resulting from any misrepresentation or breach of any warranty or covenant or
the failure of any representation or warranty of the Company contained herein,
in any Schedule hereto or in any statement, financial statement, certificate or
other document delivered pursuant hereto. For purposes of this Section 10.02,
Damages shall mean all damages, losses, liabilities, deficiencies, reduction in
value, costs, expenses, assessments, taxes, penalties, fines, claims, demands,
actions, suits and proceedings, including, but not limited to, any losses or
costs related to the violation of any Law, including, but not limited to, any
Environmental Law, and including, in each such instance, the reasonable
attorneys', accountants' and other professionals' fees, costs and expenses and
the expenses of investigation, presentment, proof, collection or defense thereof
and disbursements incurred therewith. The obligation of the Shareholders to
indemnify RMED, Sub and the Surviving Corporation shall be subject to all of the
limitations set forth below:
(a) Indemnity Threshold and Limitation on Amount. RMED, Sub and the
Surviving Corporation shall not submit any claim for indemnification under
this Section 10.02 unless and until the aggregate damages sustained by
RMED, Sub and the Surviving Corporation exceed Twenty Five Thousand
Dollars ($25,000) (the "Indemnity Threshold"), with no right to recoup the
initial Twenty-Five Thousand Dollars ($25,000) incurred. Notwithstanding
any provision to the contrary, the maximum indemnified loss under this
Section 10.02 shall be limited to a maximum of One Hundred Fifty Thousand
Dollars ($150,000) (the "Indemnity Maximum").
(b) Duration. RMED and the Surviving Corporation may recover Damages
for a breach of a representation or warranty contained in this Merger
Agreement, only if RMED, Sub and the Surviving Corporation have given
written notice to the Shareholder Representatives of the breach on or
prior to the expiration of the Warranty Period with respect to such
representation or warranty. Any written notice delivered by RMED, Sub or
the Surviving Corporation to the Shareholder Representatives pursuant to
this Section 10.02 shall set forth the basis for the claim of breach
(including, without limitation, reference to the specific details
regarding the manner in which this Merger Agreement is alleged to have
been breached) and, if then determinable by RMED, Sub or the Surviving
Corporation, a reasonable estimate of the amount of the Damages
anticipated to be incurred in connection therewith.
(c) Tax and Insurance Benefits. All Damages to be paid to RMED or
the Surviving Corporation shall be reduced by the actual amount of any
income or franchise tax benefit resulting therefrom to RMED or the
Surviving Corporation or its affiliates and any insurance proceeds paid to
RMED or the Surviving Corporation.
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(d) No Indemnification for Known Breaches of Representations and
Warranties. Notwithstanding any other provisions to the contrary set forth
in this Merger Agreement or the agreements entered into in connection
therewith, the Company and the Shareholders shall not be deemed to have
misrepresented to RMED or Sub nor breached a warranty or representation
set forth herein or the Schedules hereto, if RMED or Sub has knowledge as
of the Effective Date of such facts or circumstance that constitute the
breach or misrepresentation disclosed in the Merger Agreement, or the
agreements executed in connection therewith, or schedules thereto
delivered, by or on behalf of the Company and the Shareholders to RMED or
Sub, and RMED and Sub nevertheless consummates the transactions
contemplated herein, in which case RMED and Sub shall be deemed to have
waived any claim for Damages they may have under this Article, this Merger
Agreement, or any agreement executed in connection therewith, as it
relates to such breach of representation or warranty.
(e) Shareholders' Indemnification. The shareholder indemnification
as set forth herein is limited on a several basis allocable to each on the
basis of their prorata share ownership in the Company prior to the closing
and further subject to the Indemnity Threshold and Indemnity Maximum, each
of which shall be prorated in a like manner.
10.03 Indemnification by RMED and Sub . RMED and Sub will indemnify the
Shareholders and the Company and its officers, directors, employees and agents
from and against all Damages, as hereinafter defined, arising out of or
resulting from any misrepresentation or breach of any warranty or covenant or
the failure of any representation or warranty of Sub contained herein, in any
Schedule hereto or in any statement, financial statement, certificate or other
document delivered pursuant hereto. For purposes of this Section 10.03, Damages
shall mean all damages, losses, liabilities, deficiencies, reduction in value,
costs, expenses, assessments, taxes, penalties, fines, claims, demands, actions,
suits and proceedings, including, but not limited to, any losses or costs
related to the violation of any Law, and including, in each such instance, the
reasonable attorneys', accountants' and other professionals' fees, costs and
expenses and the expenses of investigation, presentment, proof, collection or
defense thereof and disbursements incurred therewith. The obligation of Sub to
indemnify the Shareholders and the Company shall be subject to all of the
limitations set forth below:
(a) Indemnity Threshold and Limitation on Amount. The Shareholders
and the Company shall not submit any claim for indemnification under this
Section 10.03 unless and until the aggregate Damages sustained by the
Shareholders and the Company equal or exceed Twenty Five Thousand Dollars
($25,000) (the "Indemnity Threshold"), provided, however, that once such
Damages equal or exceed the Indemnity Threshold the indemnification
liabilities of Sub and Sub shall include the entire amount of the
Indemnity Threshold. In no event shall the Sub and Sub's aggregate
obligation to
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indemnify the Shareholders and the Company for Damages hereunder exceed
One Hundred Fifty Thousand Dollars ($150,000).
(b) Duration. The Shareholders and the Company may recover Damages
for a breach of a representation or warranty contained in this Merger
Agreement, only if the Shareholders and the Company have given written
notice to Sub of the breach prior to the expiration of the Warranty Period
with respect to such representation or warranty. Any written notice
delivered by the Shareholders and the Company to Sub pursuant to this
Section 10.03 shall set forth the basis for the claim of breach
(including, without limitation, reference to the specific details
regarding the manner in which this Merger Agreement is alleged to have
been breached) and, if then determinable by the Shareholders and the
Company a reasonable estimate of the amount of the Damages anticipated to
be incurred in connection therewith.
(c) Tax and Insurance Benefits. All Damages to be paid to the
Shareholders and the Company shall be reduced by the actual amount of any
income or franchise tax benefit resulting therefrom to the Shareholders
and the Company or its affiliates and any insurance proceeds paid to the
Shareholders and the Company.
(d) No Indemnification for Known Breaches of Representations and
Warranties. Notwithstanding any other provisions to the contrary set forth
in this Merger Agreement or the agreements entered into in connection
therewith, RMED or Sub shall not be deemed to have misrepresented to the
Company and the Shareholders nor breached a warranty or representation set
forth herein or the Schedules hereto, if the Company and the Shareholders
have has knowledge as of the Effective Date of such facts or circumstance
that constitute the breach or misrepresentation disclosed in the Merger
Agreement, or the agreements executed in connection therewith, or
schedules thereto delivered, by or on behalf of RMED or Sub to the Company
and the Shareholders, and the Company and the Shareholders nevertheless
consummates the transactions contemplated herein, in which case the
Company and the Shareholders shall be deemed to have waived any claim for
Damages they may have under this Article, this Merger Agreement, or any
agreement executed in connection therewith, as it relates to such breach
of representation or warranty.
10.04 Third Party Claim. Promptly after service of notice of any written
claim or process on a party by any third person in any matter in respect of
which indemnity may be sought from the other party, the party so served shall
promptly notify the indemnifying party of the receipt thereof. The indemnifying
party shall have the right to participate in at its own expense, the defense of
any such claim or the settlement thereof. As long as the aggregate amount of
Damages claimed by the indemnified party with respect to all matters is greater
than the Indemnity Threshold, but less than the aggregate amount of Damages
which can be collected from the indemnifying party, the indemnified party shall
not settle, compromise or pay any claim without the
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consent of the indemnifying party, which consent shall not be unreasonably
withheld or delayed.
ARTICLE XI.
TERMINATION; MODIFICATION OR WAIVER
11.01 Termination. This Merger Agreement may be terminated at any time
prior to the Effective Date:
(a) by mutual written agreement of RMED, Sub and the Company; or
(b) by RMED, Sub or the Company, by notice to the other party, if
the Effective Date shall not have taken place prior to December 31, 1998
(or such later date as agreed to by Sub and the Company in writing),
subject to any rights accruing to the date of such notice on account of
any breach of this Merger Agreement by the opposite party hereto;
(c) by RMED, Sub or the Company, if an order is issued by any court,
agency, governmental body or public authority of competent jurisdiction to
restrain, enjoin or prohibit the consummation of the transactions
contemplated by this Merger Agreement;
(d) by RMED, Sub or the Company, in the event that the Merger is not
approved at the Special Meetings; or
(e) by RMED or Sub, in the event that the holders of in excess of
twenty percent (20%) of the Company Shares exercise their appraisal rights
pursuant to the Corporation Laws.
11.02 Waiver. Any failure of RMED or the Company to comply with any
obligation, covenant, agreement or condition contained herein may be expressly
waived in writing by Sub in the case of any such failure by the Company, or by
the Company in the case of any such failure by RMED or Sub, but such waiver or
failure to insist upon strict compliance shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure. Whenever this Merger
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing.
ARTICLE XII.
COSTS INCIDENT TO PREPARATION OF AGREEMENT
The Company shall pay all costs for itself and its shareholders incurred
by them incident to the preparation, execution and delivery of this Merger
Agreement and the
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performance of their respective obligations hereunder, including without
limitation fees and disbursements of legal counsel, accountants, investment
bankers and consultants, brokers, engineers, and surveyors employed by the
respective parties hereto in connection with the transactions contemplated by
this Merger Agreement, provided, however, that:
(i) In the event that the Merger is not approved at the Special
Meetings, the Company shall reimburse RMED and Sub for all out-of-pocket
costs and expenses for attorneys, accountants and consultants of Sub or
RMED incurred in connection with the negotiation and preparation of this
Merger Agreement and related agreements; and
(ii) In the event that the Merger is not approved by the
Shareholders of RMED at the Special Meetings, RMED shall reimburse the
Company for all out-of-pocket costs and expenses for attorneys,
accountants and consultants (including title companies and surveyors) of
the Company incurred in connection with the negotiation and preparation of
this Merger Agreement and related agreements, excluding preparation of the
HSR Act Notification.
(iii) In the event that the merger is completed, the cost of the
attorneys, accountants, and consultants for all parties shall be paid by
Sub at the Closing.
ARTICLE XIII.
PARTIES IN INTEREST AND ASSIGNMENT
This Merger Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors and permitted assigns and the
shareholders of the Company. This Merger Agreement is not made for the benefit
of any person, firm, corporation or other entity not a party hereto (other than
the shareholders of the Company who are and shall be intended beneficiaries of
this Merger Agreement), and nothing in this Merger Agreement will be construed
as giving any person, firm, corporation or other entity, other than the parties
hereto and the shareholders of the Company and their respective successors and
permitted assigns, any right, remedy or claim under or in respect of this Merger
Agreement, or any provision hereof. This Merger Agreement may not be assigned by
any party hereto without the prior written consent of all of the other parties
hereto.
ARTICLE XIV.
MISCELLANEOUS
14.01 Notices. Any notice, request, consent, waiver or other communication
required or permitted to be given hereunder shall be effective only if in
writing and shall be deemed sufficiently given only if delivered in person,
telefaxed with confirmed
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receipt, or sent by certified or express mail, postage prepaid, return receipt
requested, addressed as follows:
If to the Company: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
JETTAR, LTD.
c/o The ▇▇▇▇▇▇ Company
730 Lambeau
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & Ulatowski, S.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to RMED: ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
RMED International, Inc.
▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
or to such other person or address as either such party may have specified in a
notice duly given to the sender as provided herein. Such notice or communication
shall be deemed to have been given as of the date so delivered, telefaxed or
mailed.
14.02 Entire Agreement. This Merger Agreement (including the related
agreements, Exhibits and Schedules attached hereto) and the documents referred
to herein as having been entered into by any of the parties hereto or delivered
by a party hereto to another party hereto constitute the entire agreement and
understanding of the parties relating to the subject matter hereof and supersede
all prior and contemporaneous agreements and understandings, representations and
warranties, whether oral or written, relating to the subject matter hereof. The
terms of this Merger Agreement cannot be changed, modified, released or
discharged orally. Inclusion of or reference to matters in a Schedule does not
constitute an admission or indication of materiality of a matter.
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14.03 Waiver. No delay or failure on the part of any party in exercising
any rights hereunder, and no partial or single exercise thereof, will constitute
a waiver of such rights or of any other rights hereunder.
14.04 Applicable Law. This Merger Agreement shall be construed and
interpreted in accordance with the laws of the State of Wisconsin.
14.05 Savings Clause. The unenforceability or invalidity of any Article or
Section or provision of this Merger Agreement shall not affect the
enforceability or validity of the balance of this Merger Agreement.
14.06 Action by Shareholders of the Company. The shareholders of the
Company hereby irrevocably authorize and appoint ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇.
▇▇▇▇▇ ("Shareholder Representatives") as their agents and attorneys with full
power of substitution to make any amendments or modifications of this Merger
Agreement after the Effective Date and to waive or enforce inaccuracies of
representations and warranties or compliance with any of the provisions herein
contained, that such parties believe, in their sole discretion, to be in the
best interest of the shareholders of the Company. The Shareholders
Representatives shall act by a unanimous consent.
14.07 Headings. The headings of the Articles and Sections contained in
this Merger Agreement are for reference purposes only and shall not in any way
affect the meaning, interpretation, enforceability or validity of this Merger
Agreement.
14.08 Counterparts. This Merger Agreement may be executed in any number of
counterparts, each of which so executed will be deemed to be an original, but
all of which together will constitute one and the same agreement.
14.09 Public Announcements. Neither the Company nor RMED nor Sub, nor the
shareholders or representatives of any of them, shall make any public
announcement or disclosure with respect to any of the Transaction Documents or
any of transactions contemplated thereby (except as required by law or by the
rules of the exchange upon which RMED's shares are traded) which shall be
reviewed by, and comment reserved for, the Company, without the prior written
consent of the party affected thereby, which consent shall not be unreasonably
withheld or delayed.
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IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement
to be executed as of the date first above written.
COMPANY: SUB:
JETTAR, LTD. RMED ACQUISITION, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- ---------------------------------------
Its: President ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its President, Treasurer and Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
SHAREHOLDERS OF JETTAR. LTD. Its Vice President, Secretary
and Director
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: RMED INTERNATIONAL , INC.,
------------------------------- its sole shareholder
▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------- ---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Its President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇ POA RMED:
-------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇ POA
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ POA RMED INTERNATIONAL, INC.
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ POA
_______________________________ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Its President and CEO
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------- ---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Its Chairman and Vice President
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