EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Agreement ("Agreement") is entered into this 14th day of January,
1998, by and between Biomar International, Inc., a Delaware corporation with its
principal offices in Chapel Hill, North Carolina (the "Purchaser") and
Paracelsian, Inc., a Delaware corporation with its principal offices in New York
(the "Corporation").
WHEREAS, the Purchaser desires to purchase from the Corporation 3,571,429 newly
issued shares of the common stock of the Corporation (the "Shares") on the terms
and subject to the conditions set forth herein; and
WHEREAS, the Board of Directors of the Corporation, due to the financial
condition of the Corporation, desires to sell to the Purchaser the Shares on the
terms and subject to the conditions set forth herein.
NOW THEREFORE, IT IS AGREED AS FOLLOWS:
SECTION 1. PURCHASE OF SHARES.
1.1 PURCHASE OF SHARES. Subject to the terms and conditions set forth
herein, on or before January 15, 1998 (the "Purchase Date"), the Purchaser will
purchase 3,571,429 Shares and the Corporation will issue the Shares purchased by
the Purchaser, said Shares constituting approximately thirty percent (30%) of
all of the then issued and outstanding capital stock of the Corporation as of
the Purchase Date. On the Closing Date (as hereinafter defined) the Purchaser
will also receive warrants to purchase up to an additional $520,000 in common
stock, in increments of at least $100,000, at a per share price equal to $0.175
(the "Warrants"). The Warrants are in the form attached as Exhibit 1.1A and will
be exercisable at any time prior to their expiration which will occur 90 days
from the date the Shares and Warrants are registered with the Securities and
Exchange Commission ("SEC") as provided under the Registration Rights Agreement
in the form attached as Exhibit 1.1B. To the extent that the exercise of the
Warrants will require an increase in the number of authorized shares, the
Corporation will use its best efforts to obtain shareholder approval of an
increase in the authorized shares sufficient to accommodate issuance of the
shares under the Warrant.
1.2 PURCHASE PRICE. The Purchaser will pay to the Corporation the sum of
five hundred thousand dollars ($500,000) for the Shares (referred herein to as
the "Purchase Price").
1.3 PAYMENT OF PURCHASE PRICE. The Purchase Price will be paid as follows:
(i) the Purchaser will pay to the Corporation the sum of fifty thousand dollars
($50,000) on the Closing Date; and (ii) the Purchaser will deliver the sum of
four hundred and fifty thousand dollars ($450,000) on the Purchase Date.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF CORPORATION. As a material
inducement to the Purchaser to enter into this Agreement and purchase the
Shares, the Corporation represents and warrants that to the best of the
knowledge of the Corporation:
2.1 ORGANIZATION AND CORPORATE POWER. The Corporation is a corporation duly
incorporated and validly existing under the laws of the State of Delaware and
the Corporation is qualified to do business in every jurisdiction in which its
ownership of property or conduct of business requires it to qualify, except
where any failure does not have a material adverse effect on the Corporation.
The Corporation has all requisite corporate power and authority and all material
licenses, permits, and authorizations necessary to own and operate its
properties and to carry on its business as now conducted, except where any
failure does not have a material adverse effect on the Corporation. The copies
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of the Corporation's articles of incorporation and bylaws have been furnished to
the Purchaser and such copies reflect all amendments made thereto at any time
prior to the date of this Agreement and such copies are correct and complete.
2.2 CAPITAL STOCK AND RELATED MATTERS. (a) The authorized capital stock of
the Corporation consists of twenty million (20,000,000) Shares, twelve million,
four thousand, eight hundred and sixty seven (12,004,867) of which are issued
and outstanding and are owned, of record, as shown on the books of the
Corporation on December 31, 1997 and no other shares, common or otherwise, of
the Corporation are issued and outstanding. Except as listed on Schedule 2.2,
the Corporation does not have outstanding and has not agreed, orally or in
writing, to issue any shares or securities convertible or exchangeable for any
shares, nor does it have outstanding nor has it agreed, orally or in writing, to
issue any options or rights to purchase or otherwise acquire its shares. The
Corporation is not subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any of its shares. Except as listed on
Schedule 2.2, the Corporation has not violated any applicable securities laws or
regulations in connection with the offer or sale of its securities other than
violations that have been, or will before the Closing have been, corrected by
post-issuance filings. All of the outstanding shares of the Corporation's
capital stock are validly issued, fully paid, and nonassessable. Upon purchase
thereof pursuant to the terms of this Agreement, the Purchaser will have, good
and marketable title to the Shares, free and clear of all security interests,
liens, encumbrances, or other restrictions or claims, subject only to
restrictions as to marketability imposed by securities laws. Assuming that the
representations in Section 3.6 are true and correct, the Corporation has not
violated or will not violate any applicable securities laws in connection with
the offer or sale of the Shares to the Purchaser hereunder.
(b) Except as noted on Schedule 2.2 or where the failure to file would
not have had or could not have a material and adverse effect on the Corporation,
the Corporation has filed all reports, registrations and statements, together
with any amendments required to be made with respect thereto, that were required
to be filed with the SEC or any other governmental or regulatory authorities
having jurisdiction over the Corporation. All such reports, registrations and
statements filed by the Corporation with the SEC or other such regulatory
authority are collectively referred to herein as the "Reports." As of their
respective dates, each Report complied in all material respects with all the
statutes, rules and regulations enforced or promulgated by the regulatory
authority with which it was filed and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. The Corporation has not been notified that
any such Report was deficient in any material respect as to form or content.
2.3 SUBSIDIARIES. The Corporation has no operating subsidiaries or
affiliated companies and does not otherwise own or control, directly or
indirectly, any equity interest in any operating corporation or entity.
2.4 CONDUCT OF BUSINESS; LIABILITIES. Except as set forth in Schedule 2.4,
the Corporation is not in default under, and no condition exists that with
notice or lapse of time would constitute a default of the Corporation under (i)
any mortgage, loan agreement, evidence of indebtedness, or other instrument
evidencing borrowed money to which the Corporation is a party or by which the
Corporation or the properties of the Corporation are bound or (ii) any judgment,
order, or injunction of any court, arbitrator, or governmental agency that would
reasonably be expected to affect materially and adversely the business,
financial condition, or results of operations of the Corporation taken as a
whole.
2.5 FINANCIAL STATEMENTS. (a) The audited balance sheet and income
statement of the Corporation as of the 30th day of September, 1997, in the form
attached to this Agreement as Exhibit 2.5(A) and the income statement for the
period ending the 30th day of September, 1997, in the form attached to this
Agreement as Exhibit 2.5(B) (collectively the "Audited Financial Statements"),
fairly presents in all material respects the financial position of the
Corporation as of the 30th day of September, 1997 and has been prepared in
accordance with generally accepted accounting principles, consistently applied,
and in a manner substantially consistent with prior financial statements of the
Corporation. The latest unaudited, balance sheet and income statement of the
Corporation as of the 31st day of
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December, 1997 and for the month then ended, in the form attached hereto as
Exhibit 2.5(C) ("Latest Financial Statements"), fairly presents in all material
respects the financial position of the Corporation as of the 31st day of
December, 1997 and the results of operations for the one month then ended and
have been prepared in accordance with generally accepted accounting principles
consistently applied and in a manner substantially consistent with the Audited
Financial Statements, except for differences resulting from normally occurring
audit adjustments, including, but not limited to, income tax and tax accrual
adjustments, or as noted in the Latest Financial Statements or the notes
thereto. Except as contemplated by or permitted under this Agreement, there are
no adjustments that would be required on review of the Latest Financial
Statements that would, individually or in the aggregate, have a material
negative effect upon the Corporation's reported financial condition.
(b) The audited balance sheet of the Corporation as of the 30th day of
September, 1997, reflects a tangible book value of not less than two million two
hundred thousand dollars ($2,200,000). The unaudited financial statements of the
Corporation as of November 30, 1997, reflect not less than $500,000 in cash and
cash equivalents and no more than $275,000 in payables (excluding any contingent
liabilities arising out of any lawsuits which have been disclosed in the filings
made with the SEC), obligations and other liabilities. Monthly, recurring
operational expenses of the Corporation do not exceed $75,000.
2.6 NO UNDISCLOSED LIABILITIES. Except for (i) liabilities and obligations
incurred in the ordinary course of business since the 31st day of December, 1997
("Statement Date"), and (ii) liabilities or obligations described in Schedule
2.6, neither the Corporation nor any of the property of the Corporation is
subject to any material liability or obligation that was required to be included
or adequately reserved against in the Latest Financial Statements or described
in the notes thereto and was not so included, reserved against, or described.
2.7 ABSENCE OF CERTAIN CHANGES. Except as contemplated or permitted by this
Agreement or as described in Schedule 2.7, since the Statement Date there has
not been:
2.7.1 Any material adverse change in the business, financial condition,
operations, or assets of the Corporation;
2.7.2 Any damage, destruction, or loss, whether covered by insurance or
not materially adversely affecting the properties or business of the
Corporation;
2.7.3 Any sale or transfer by the Corporation of any tangible or
intangible asset other than in the ordinary course of business, any mortgage or
pledge or the creation of any security interest, lien, or encumbrance on any
such asset, or any lease of property, including equipment, other than tax liens
with respect to taxes not yet due and contract rights of customers in inventory;
2.7.4 Any declaration, setting aside, or payment of a distribution in
respect of or the redemption or other repurchase by the Corporation of any stock
of the Corporation;
2.7.5 Any material transaction not in the ordinary course of business
of the Corporation;
2.7.6 The lapse of any material trademark, assumed name, trade name,
service ▇▇▇▇, copyright, or license or any application with respect to the
foregoing;
2.7.7 The grant of any increase in the compensation of officers or
employees (including any such increase pursuant to any bonus, pension,
profit-sharing, or other plan) other than customary increases on a periodic
basis or required by agreement or understanding in the ordinary course of
business and in accordance with past practice;
2.7.8 The discharge or satisfaction of any material lien or encumbrance
or the payment of any material liability other than current liabilities in the
ordinary course of business;
2.7.9 The making of any material loan, advance, or guaranty to or for
the benefit of any person except the creation of accounts receivable in the
ordinary course of business; or
2.7.10 An agreement to do any of the foregoing.
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2.8 TITLE AND RELATED MATTERS. Except as set forth in Schedule 2.8, the
Corporation has good and marketable title to all of its property, real and
personal, and other assets included in the Latest Financial Statements (except
properties and assets sold or otherwise disposed of subsequent to the Statement
Date in the ordinary course of business or as contemplated in this Agreement),
free and clear of all security interests, mortgages, liens, pledges, charges,
claims, or encumbrances of any kind or character, except (i) statutory liens for
property taxes not yet delinquent or payable subsequent to the date of this
Agreement and statutory or common law liens securing the payment or performance
of any obligation of the Corporation, the payment or performance of which is not
delinquent, or that is payable without interest or penalty subsequent to the
date on which this representation is given, or the validity of which is being
contested in good faith by the Corporation; (ii) the rights of customers of the
Corporation with respect to inventory under orders or contracts entered into by
the Corporation in the ordinary course of business; (iii) claims, easements,
liens, and other encumbrances of record pursuant to filings under real property
recording statutes; and (iv) as described in the Unaudited Statements or the
notes thereto.
2.9 LITIGATION. Except as set forth in Schedule 2.9, there are no material
actions, suits, proceedings, orders, investigations, or claims pending or, to
the best of the Corporation's knowledge, overtly threatened against the
Corporation or any of its property, at law or in equity, or before or by any
governmental department, commission, board, bureau, agency, or instrumentality;
the Corporation is not subject to any arbitration proceedings under collective
bargaining agreements or otherwise or, to the best of the Corporation's
knowledge, any governmental investigations or inquiries; and the Corporation has
received in writing no threat of any of the foregoing.
2.10 TAX MATTERS. Except as set forth on Schedule 2.10, (i) the Corporation
has prepared in a substantially correct manner and has filed all federal, state,
local, and foreign tax returns and reports heretofore required to be filed by
them and have paid all taxes shown as due thereon; and (ii) no taxing authority
has asserted any deficiency in the payment of any tax or informed the
Corporation that it intends to assert any such deficiency or to make any audit
or other investigation of the Corporation for the purpose of determining whether
such a deficiency should be asserted against the Corporation.
2.11 COMPLIANCE WITH LAWS. Except as listed on Schedule 2.11, the
Corporation is, in the conduct of its business, in substantial compliance with
all laws, statutes, ordinances, regulations, orders, judgments, or decrees
applicable to them, the enforcement of which, if the Corporation was not in
compliance therewith, would have a materially adverse effect on the business of
the Corporation, taken as a whole. The Corporation has received no notice of any
asserted present or past failure by the Corporation to comply with such laws,
statutes, ordinances, regulations, orders, judgments, or decrees.
2.12 NO BROKERS OR FINDERS. There are no claims for brokerage commissions,
finders' fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement made by or
on behalf of the Corporation.
2.13 INSURANCE. Schedule 2.13 contains a list of each insurance policy
maintained by the Corporation with respect to its properties, assets, and
businesses, and each such policy is in full force and effect. The Corporation is
not in material default with respect to its obligations under any such policy
maintained by it. The Corporation has not been notified of the cancellation of
any of the insurance policies listed on Schedule 2.13 or of any material
increase in the premiums to be charged for such insurance policies.
2.14 EMPLOYEES AND LABOR RELATIONS MATTERS. Except as set forth in Schedule
2.14 or as provided in this Agreement, no employee or former employee of the
Corporation is in violation of any material term of any employment contract,
patent disclosure agreement or any other contract or agreement relating to the
relationship of such employee with the Corporation or any other party because of
the nature of the business conducted or to be conducted by the Corporation. Each
employee or former employee of the Corporation with access to confidential or
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proprietary information has executed, or in the ordinary course will execute, a
proprietary information agreement obligating such employee to hold confidential
the Corporation's proprietary information. The Corporation has in all material
respects complied with all applicable state and federal laws related to
employment.
2.15 DISCLOSURE. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates, or other items
prepared or supplied to the Purchaser by or on behalf of the Corporation with
respect to this purchase contain any untrue statement of a material fact or omit
a material fact necessary to make each statement contained herein or therein not
misleading. The Corporation has not intentionally concealed any fact known to
have a material adverse effect upon the Corporation's existing or expected
financial condition, operating results, assets, customer relations, employee
relations, or business prospects taken as a whole.
2.16 POWER OF ATTORNEY. No material power of attorney or similar
authorization given by the Corporation is presently in effect.
2.17 ACCOUNTS RECEIVABLE. All accounts receivable of the Corporation
reflected in the Latest Financial Statements represent bona fide sales actually
made in the ordinary course of business.
2.18 AGREEMENTS AND COMMITMENTS. Schedule 2.18 contains a complete and
accurate list of each agreement, contract, instrument, and commitment (including
license agreements) to which the Corporation is a party that provides for
payments in excess of $10,000 per year or whose term is in excess of one year
and is not cancelable upon 30 or fewer days' notice without any liability,
penalty, or premium, other than a nominal cancellation fee or charge ("Third
Party Agreements"). Except as otherwise set forth in Schedule 2.18, the
Corporation is not in material default under any Third Party Agreements, nor, to
the Corporation's best knowledge, does there exist any event that, with notice
or the passage of time or both, would constitute a material default or event of
default by the Corporation under any Third Party Agreements.
2.19 PERSONAL PROPERTY. Without material exception, Schedule 2.19 contains
lists of all tangible personal property and assets owned or held by the
Corporation and used or useful in the conduct of the business of the
Corporation. Except as set forth in Schedule 2.19, the Corporation owns and has
good title to such properties and none of such properties is subject to any
security interest, mortgage, pledge, conditional sales agreement, or other lien
or encumbrance (except for liens for current taxes, assessments, charges, or
other governmental levies not yet due and payable). The Corporation has
delivered to the Purchaser copies of all leases and other agreements relating to
property described in Schedule 2.19 (including any and all amendments and other
modifications to such leases and other agreements) all of which are valid and
binding, and the Corporation is not in material default under any such leases or
agreements. Except as set forth in Schedule 2.19 and to the best of the
Corporation's knowledge, all material properties listed therein are generally in
good operating condition and repair (ordinary wear and tear excepted), are
performing satisfactorily, and are available for immediate use in the conduct of
the business and operations of the Corporation. To the best of the Corporation's
knowledge, all such tangible personal property is in compliance in all material
respects with all applicable statutes, ordinances, rules, and regulations. The
properties listed in Schedule 2.19 include substantially all such properties
necessary to conduct the business and operations of the Corporation as now
conducted.
2.20 INTELLECTUAL PROPERTY. The Corporation (i) owns or has the right to
use, free and clear of all liens, charges, claims and restrictions, those
patents, trademarks, service marks, trade names, copyrights, licenses, and other
intellectual property rights necessary for the operation of its businesses now
conducted or presently proposed to be conducted, and (ii) to its knowledge, and
except for the payments required in connection with those patents, trademarks,
service marks, trade names, copyrights, licenses and other intellectual property
rights listed on Schedule 2.20, is not obligated or under any liability
whatsoever to make any payments by way of royalties, fees or otherwise to any
owner or licensee of, or other claimant to, any patent, trademark, service ▇▇▇▇,
trade name, copyright or other intangible asset, with respect to the use thereof
or in connection with the conduct of its business or otherwise. To the knowledge
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of the Corporation, the Corporation has not infringed upon nor is it infringing
upon any patent, trademark, service ▇▇▇▇, trade name, copyright or other
intellectual property of any third party. The Corporation is not aware of any
violation by a third party of any of the Corporation's patents, licenses,
trademarks, service marks, trade names, copyrights, trade secrets or other
proprietary rights.
2.21 ERISA and Related Matters Schedule 2.21 sets forth a description of all
"Employee Welfare Benefit Plans" and "Employee Pension Benefit Plans" (as
defined in ▇▇.▇▇. 3(1) and 3(2), respectively, of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) existing on the date hereof that are
or have been maintained or contributed to by the Corporation. Except as listed
on Schedule 2.21, the Corporation does not maintain any retirement or deferred
compensation plan, savings, incentive, stock option or stock purchase plan,
unemployment compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe benefit
arrangement for any employee, consultant or agent of the Corporation, whether
pursuant to contract, arrangement, custom or informal understanding, which does
not constitute an "Employee Benefit Plan" (as defined in ss. 3(3) of ERISA), for
which the Corporation may have any ongoing material liability after Closing. The
Corporation does not maintain nor has it ever contributed to any Multiemployer
Plan as defined by ss. 3(37) of ERISA. The Corporation does not currently
maintain any Employee Pension Benefit Plan subject to Title IV of ERISA. There
have been no "prohibited transactions" (as described in ss. 406 of ERISA or ss.
4975 of the Code) with respect to any Employee Pension Benefit Plan or Employee
Welfare Benefit Plan maintained by the Corporation as to which the Corporation
has been a party. As to any employee pension benefit plan listed on Schedule
2.21 and subject to Title IV of ERISA, there have been no reportable events (as
such term is defined in ss. 4043 of ERISA).
2.22 OPERATING RIGHTS. The Corporation has all operating authority,
licenses, franchises, permits, certificates, consents, rights and privileges
(collectively "Licenses") as are necessary or appropriate to the operation of
its business as now conducted and which the failure to possess would have a
material adverse effect on the assets, operations or financial condition of the
Corporation. Except where any failure would not have a material adverse effect
on the Corporation, such Licenses are in full force and effect, no violations
have been or are expected to have been recorded in respect of any such licenses,
and no proceeding is pending or, to the knowledge of the Corporation, threatened
that could result in the revocation or limitation of any such licenses. The
Corporation has conducted its business so as to comply in all material respects
with all such Licenses.
2.23 TRANSACTIONS WITH AFFILIATES. Except for regular salary payments and
fringe benefits under an individual's compensation package with the Corporation,
none of the officers, employees, directors, or other affiliates of the
Corporation, or members of their families is a party to any agreements,
understandings, or proposed transactions with the Corporation. The Corporation
has not guaranteed or assumed any obligations of the Corporation's officers,
directors, or employees.
2.24 MINUTE BOOKS. Except as described on Schedule 2.24, the minute books of
the Corporation contain a materially complete summary of all meetings of
directors and shareholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material respects.
2.25 KNOWLEDGE. Notwithstanding anything to the contrary herein, to the
extent that any of the representations and warranties contained in this Section
2 shall have been breached and the fact or facts constituting such breach were
at the date hereof known to T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, then and
in such event, no breach shall be deemed to have occurred.
Section 3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. As a material inducement
to the Corporation to enter into this Agreement and sell the Shares, the
Purchaser hereby represents and warrants to the Corporation that to the best of
the knowledge of the Purchaser:
3.1 ORGANIZATION; POWER. The Purchaser is a corporation duly incorporated
and validly existing under the laws of the State of Delaware and has all
requisite corporate power and authority to enter into this Agreement and perform
its obligations hereunder.
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3.2 AUTHORIZATION. The execution, delivery, and performance by the
Purchaser of this Agreement and all other agreements contemplated hereby to
which the Purchaser is a party have been duly and validly authorized by all
necessary corporate action of the Purchaser, and this Agreement and each such
other agreement, when executed and delivered by the parties thereto, will
constitute the legal, valid, and binding obligation of the Purchaser enforceable
against it in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, and similar statutes affecting creditors'
rights generally and judicial limits on equitable remedies.
3.3 NO CONFLICT WITH OTHER INSTRUMENTS OR AGREEMENTS. The execution,
delivery, and performance by the Purchaser of this Agreement and all other
agreements contemplated hereby to which the Purchaser is a party will not result
in a breach or violation of, or constitute a default under, its Articles of
Incorporation or Bylaws or any material agreement to which the Purchaser is a
party or by which the Purchaser is bound.
3.4 GOVERNMENTAL AUTHORITIES. Except as set forth in Schedule 3.4, (i) the
Purchaser is not required to submit any notice, report, or other filing with any
governmental or regulatory authority in connection with the execution and
delivery by the Purchaser of this Agreement and the consummation of the purchase
and (ii) no consent, approval, or authorization of any governmental or
regulatory authority is required to be obtained by the Purchaser or any
affiliate in connection with the Purchaser's execution, delivery, and
performance of this Agreement and the consummation of this purchase.
3.5 LITIGATION. There are no actions, suits, proceedings, or governmental
investigations or inquiries pending or, to the knowledge of the Purchaser,
threatened against the Purchaser or its properties, assets, operations, or
businesses that might delay, prevent, or hinder the consummation of this
purchase.
3.6 INVESTMENT REPRESENTATIONS
3.6.1 The Purchaser is a corporation in good standing and a
sophisticated investor that has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Corporation so that the Purchaser is capable of evaluating the merits and
risks of the Purchaser's investment in the Corporation and has the capacity to
protect the Purchaser's own interests.
3.6.2 The Purchaser is acquiring the Shares for investment for the
Purchaser's own account, not as a nominee or agent, and not with the view to, or
for resale in connection with, any distribution thereof. The Purchaser
understands that the Shares to be purchased have not been registered under the
Securities Act of 1933 ("Securities Act") or the securities laws of any state by
reason of a specific exemption from the registration provisions of the
Securities Act and the applicable state securities laws, the availability of
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser's representations as expressed herein.
The Purchaser is acquiring the Shares without expectation, desire, or need for
resale and not with the view toward distribution, resale, subdivision, or
fractionalization of the Shares except as provided under the Registration Rights
Agreement.
3.6.3 The Purchaser understands that the Shares to be purchased have
not been registered under Securities Act, or under any state securities law and
will contain a legend to that effect.
3.6.4 The Purchaser understands that the Shares cannot be resold in a
transaction to which the Securities Act and state securities laws apply unless
(i) subsequently registered under the Securities Act and applicable state
securities laws or (ii) exemptions from such registrations are available. The
Purchaser is aware of the provisions of Rule 144 promulgated under the
Securities Act which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
3.7 TAX LIABILITY. To the extent the Purchaser deems necessary, the
Purchaser has reviewed with the Purchaser's own tax advisors the federal, state,
local and foreign tax consequences of this investment and the transactions
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contemplated by this Agreement. The Purchaser relies solely on such advisors and
not on any statements or representations of the Corporation or any of its
agents. The Purchaser understands that the Purchaser (and not the Corporation)
shall be responsible for the Purchaser's own tax liability that may arise as a
result of this investment or the transactions contemplated by this Agreement.
3.8 DISCLOSURE. To the Purchaser's knowledge, this Agreement, with the
Exhibits hereto, when taken as a whole, does not contain any untrue statement of
a material fact concerning the Purchaser or omit to state a material fact
necessary in order to make the statements concerning the Purchaser contained
herein not misleading in light of the circumstances under which they were made.
3.9 LITIGATION. There are no actions, suits, proceedings or investigations
pending against the Purchaser or the Purchaser's properties before any court or
governmental agency (nor, to the Purchaser's knowledge, is there any threat
thereof) which would impair in any way the Purchaser's ability to enter into and
fully perform the Purchaser's commitments and obligations under this Agreement
or the transactions contemplated hereby.
3.10 COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
performance of and compliance with this Agreement, and the issuance of shares
will not result in any material violation of, or conflict with, or constitute a
material default under, any Purchaser's articles of incorporation or bylaws or
any of the Purchaser's material agreements nor result in the creation of any
mortgage, pledge, lien, encumbrance or charge against any of the assets or
properties of the Corporation or the Shares.
Section 4. COVENANTS OF CORPORATION. The Corporation covenants and agrees with
the Purchaser that upon the reasonable request of the Purchaser hereto after the
Closing, the Corporation will take all action and will execute all documents and
instruments necessary or desirable to consummate and give effect to this
purchase. These include, by way of illustration and not by way of limitation,
the following:
4.1 Various conditions relating to filing, payment, and collecting of
refunds relating to taxes;
4.2 Prompt delivery of Corporate books and records;
4.3 Provisions relating to treatment of confidential proprietary
information obtained in the acquisition process; and
4.4 ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ agrees to continue his employment with the
Corporation at not less than his present compensation for at least 30 days after
the Closing Date.
Section 5. AGREEMENTS. 5.1 As a material inducement to the Purchaser to enter
into this Agreement and purchase the Shares, the Corporation agrees to:
5.1.1 provide for the resignation of the current Board of Directors and
the appointment of the Purchaser's nominees to the Board of Directors of the
Corporation;
5.1.2 take such actions as are necessary to qualify and facilitate the
issuance of the Shares without a shareholder vote under any applicable law and
the rules and regulations of the applicable Nasdaq market system; and
5.1.3 provide prompt reimbursement by the Corporation to the Purchaser
for all reasonable legal and other out-of-pocket expenses incurred in connection
with the completion of this transaction.
5.1.4 indemnify the Purchaser from and against all losses, claims,
expenses and liabilities arising out of any breach of any representations,
warranties, covenants and agreements made by the Corporation in this Agreement.
Purchaser understands and agrees that the foregoing indemnification is the
Purchaser's sole and exclusive remedy with respect to any breach of any
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representations, warranties, covenants and agreements made by the Corporation in
this Agreement, except to the extent such breach could be expected to have a
material adverse effect on the future operations or financial condition of the
Corporation.
5.2 As a material inducement to the Corporation to enter into
this Agreement and issue the Shares, the Purchaser agrees to use its best
efforts to cause the Corporation to maintain director and officer liability
coverage in substantially the same amounts and with substantially the same
coverages as that maintained by the Corporation on the Closing Date for at least
three years.
SECTION 6. RELEASE. Dr. T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a principal in the Purchaser,
agrees not to pursue his claims in C.A. No. 15072 BB in the Court of Chancery in
New Castle County, State of Delaware (the "Lawsuit"). ▇▇. ▇▇▇▇▇▇▇▇ understands
that this Agreement is a full and final release of all claims stated in the
Lawsuit, including any claims which he may have or may contend that he may have,
and ▇▇. ▇▇▇▇▇▇▇▇ further understands that he is releasing all claims arising out
of or related to the Lawsuit that are known, unknown, suspected and unsuspected.
SECTION 7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER. Each and
every obligation of the Purchaser under this Agreement is subject to the
condition, at or before the Closing, that the Corporation will have furnished to
the Purchaser a certificate of an officer of the Corporation that its present
legal counsel has been instructed to deliver all files of the Corporation in its
possession to the Purchaser and, to the best of the knowledge of the officer,
all documents of the Corporation have been provided to the Purchaser.
SECTION 8. CLOSING.
8.1 TIME, PLACE, AND MANNER OF CLOSING. The closing ("Closing") will be
held at such time and place as the parties may agree, on January 12, 1998. At
the time of the Closing, the parties to this Agreement will exchange such
instruments and documents in order to determine whether the terms and conditions
of this Agreement have been satisfied. Upon the determination of each party that
its conditions to consummate this purchase have been satisfied or waived, the
Corporation shall deliver to the Purchaser the certificate(s) evidencing the
Shares, and the Purchaser shall deliver to the Corporation the monies referred
to in Section 1.3, in a manner to be agreed upon by the parties. After the
Closing, the Corporation will execute, deliver, and acknowledge all such further
instruments of transfer and conveyance and will perform all such other acts as
the Purchaser may reasonably request to effectively transfer the Shares.
8.2 CONSUMMATION OF CLOSING. All acts, deliveries, and confirmations
comprising the Closing regardless of chronological sequence shall be deemed to
occur contemporaneously and simultaneously upon the occurrence of the last act,
delivery, or confirmation of the Closing and none of such acts, deliveries, or
confirmations shall be effective unless and until the last of the same shall
have occurred. The time of the Closing has been scheduled to correspond with the
close of business at the principal office of the Corporation and, regardless of
when the last act, delivery, or confirmation of the Closing shall take place,
the transfer of the Shares shall be deemed to occur as of the close of business
at the principal office of the Corporation on the date of the Closing.
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SECTION 10. MISCELLANEOUS PROVISIONS.
10.1 AMENDMENT AND MODIFICATION. Subject to applicable law, this Agreement
may be amended, modified, or supplemented only by a written agreement signed by
the parties.
10.2 WAIVER OF COMPLIANCE; CONSENTS
10.2.1 Any failure of any party to comply with any obligation,
covenant, agreement, or condition herein may be waived by the party entitled to
the performance of such obligation, covenant, or agreement or who has the
benefit of such condition, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement, or condition will not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure.
10.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a manner consistent
with the requirements for a waiver of compliance as set forth above.
SECTION 11. WAIVER. Failure of either party at any time to require
performance of any provision of this Agreement shall not limit the party's right
to enforce the provision, nor shall any waiver of any breach of any provision be
a waiver of any succeeding breach of any provision or a waiver of the provision
itself for any other provision.
SECTION 12. LAW GOVERNING. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
SECTION 13. ATTORNEY FEES. In the event any suit or action is brought by
any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the trial court, and/or appellate
court.
SECTION 14. PRESUMPTION. This Agreement or any section thereof shall not
be construed against any party due to the fact that said Agreement or any
section thereof was drafted by said party.
SECTION 15. COMPUTATION OF TIME. In computing any period of time pursuant
to this Agreement, the day of the act, event or default from which the
designated period of time begins to run shall be included, unless it is a
Saturday, Sunday, or a legal holiday, in which event the period shall begin to
run on the next day which is not a Saturday, Sunday or a legal holiday, in which
event the period shall run until the end of the next day thereafter which is not
a Saturday, Sunday or legal holiday.
SECTION 15. TITLES AND CAPTIONS. All article, section and paragraph titles
or captions contained in this Agreement are for convenience only and shall not
be deemed part of the context or affect the interpretation of this Agreement.
SECTION 16. PRONOUNS AND PLURALS. All pronouns and any variations thereof
shall be deemed to refer to the masculine, feminine, neuter, singular or plural
as the identity of the Person or Persons may require.
SECTION 17. ENTIRE AGREEMENT. This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.
SECTION 18. AGREEMENT BINDING. This Agreement shall not be binding upon
the successors and assigns of the parties hereto.
SECTION 19. FURTHER ACTION. The parties hereto shall execute and deliver
all documents, provide all information and take or forbear from all such action
as may be necessary or appropriate to achieve the purposes of this Agreement.
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SECTION 20. GOOD FAITH, COOPERATION, AND DUE DILIGENCE. The parties hereto
covenant, warrant and represent to each other good faith, complete cooperation,
due diligence and honesty in fact in the performance of all obligations of the
parties pursuant to this Agreement. All promises and covenants are mutual and
dependent.
SECTION 21. COUNTERPARTS. This Agreement may be executed in several
counterparts and all so executed shall constitute one Agreement, binding on all
the parties hereto even though all the parties are not signatories to the
original or the same counterpart.
SECTION 22. PARTIES IN INTEREST. Nothing herein shall be construed to be
the benefit of any third party, nor is it intended that any provision shall be
for the benefit of any third party.
SECTION 23. SAVINGS CLAUSE. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
Biomar International, Inc.
By: /s/ T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
T. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman of the Board
Paracelsian, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Agreed and consented to by:
/s/ T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Dr. T. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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