SHARE EXCHANGE AGREEMENT
by and among
AMERICAN UNITED GLOBAL, INC.,
LIFETIME HEALTHCARE SERVICES, INC.,
NEW YORK MEDICAL, INC.
and
THE NEW YORK MEDICAL, INC. EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
DATED AS OF AUGUST 31, 2003
TABLE OF CONTENTS
ARTICLE I - THE SHARE EXCHANGE; CLOSING DATE
Section 1.01.....................................................................................The Share Exchange
Section 1.02................................................................................................Closing
Section 1.03.......................................................................Reservation of Conversion Shares
Section 1.04............................................................................Exemption From Registration
Section 1.05.............................................................................................Deliveries
Section 1.06........................................................................................Further Actions
Section 1.07.........................................................................................Status of ESOP
Section 1.08.....................................................Registration of Securities; Restrictions on Resale
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF AUGI
Section 2.01.......................................................................Organization, Standing and Power
Section 2.02...............................................................................Authority for Agreement.
Section 2.04.....................................................................................Issuance of Shares
Section 2.05.................................................................................Consents and Approvals
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
Section 3.01......................................................................Share Ownership and Authorization
Section 3.02........................................................................................Share Ownership
Section 3.03.................................................................Legal Power; Qualification of the ESOP
Section 3.04................................................................................Authority For Agreement
Section 3.05............................................................................No ESOP Conflict or Default
Section 3.06.....................................................................Ownership and Possession of Shares
Section 3.07.......................................................................................Fiduciary Duties
Section 3.08..........................................................................No Liabilities or Obligations
Section 3.09............................................................................................Legal Power
Section 3.10................................................................................Authority For Agreement
Section 3.11.................................................................................No Conflict or Default
ARTICLE IV - CERTAIN COVENANTS AND AGREEMENTS
Section 4.01..................................................................................Covenants of the ESOP
Section 4.02......................................................................................Covenants of AUGI
Section 4.03...............................................................................Covenants of the Parties
ARTICLE V - CONDITIONS PRECEDENT
Section 5.01.......................................................Conditions Precedent to the Parties' Obligations
Section 5.02........................................................Conditions Precedent to the Obligations of AUGI
Section 5.03....................................................Conditions Precedent to the Obligations of the ESOP
ARTICLE VI - TERMINATION, AMENDMENT AND WAIVER
Section 6.01............................................................................................Termination
Section 6.02..................................................................................Effect of Termination
ARTICLE VII - CONFIDENTIALITY
Section 7.01........................................................................................Confidentiality
ARTICLE VIII - INDEMNIFICATION
Section 8.01 ...............................................................................Indemnification by AUGI
Section 8.02.............................................................Indemnification by the ESOP and NY Medical
Section 8.03........................................................................Indemnification of Escrow Agent
Section 8.04............................................................................Survival of Indemnification
ARTICLE IX - MISCELLANEOUS
Section 9.01.........................................................Non-survival of Representations and Warranties
Section 9.02...............................................................................................Expenses
Section 9.03.........................................................................................Applicable Law
Section 9.04................................................................................................Notices
Section 9.05.......................................................................................Entire Agreement
Section 9.06.............................................................................................Assignment
Section 9.07...................................................................................Headings; References
Section 9.08...........................................................................................Counterparts
Section 9.09...........................................................................No Third Party Beneficiaries
Section 9.10..............................................................................Severability; Enforcement
Section 9.11..................................................................................Rules of Construction
Section 9.12...............................................................................................Exhibits
Section 9.13.........................................................................................Interpretation
List of Schedules
EXHIBITS
Certificate of Designation of Series B-4 Convertible, Redeemable Preferred Stock..................................A
Lock up Agreement.................................................................................................B
Registration Rights Agreement.....................................................................................C
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT dated as of August 31, 2003 (the "Agreement")
by and among American United Global, Inc., a corporation formed under the laws
of the State of Delaware ("AUGI"), Lifetime Healthcare Services, Inc., a
corporation formed under the laws of the State of Delaware and wholly owned
subsidiary of AUGI ("Lifetime"), New York Medical, Inc., a corporation formed
under the laws of the State of Delaware and an majority owned subsidiary of
Lifetime ("NY Medical") and the New York Medical Employee Stock Ownership Plan
and Trust, an employee stock ownership plan (the "ESOP"). AUGI, Lifetime, NY
Medical and the ESOP are referred to herein individually as a "Party" and
collectively as the "Parties.
PREAMBLE
WHEREAS, (a) pursuant to the Merger Agreement, AUGI owns 100% of the
issuance and outstanding shares of capital stock of Lifetime, (b) pursuant to
the Stock Purchase Agreement, Lifetime owns 55% of the issued and outstanding
shares of capital stock of NY Medical, and (c) the ESOP currently owns the
remaining 45% of the outstanding capital stock of NY Medical; and
WHEREAS, Lifetime proposes to acquire and the ESOP proposes to sell to
Lifetime the all and not less than all of the ESOP Shares; and
WHEREAS, pursuant to this Agreement, in sole consideration for the ESOP
Shares, AUGI shall contribute to Lifetime and Lifetime shall issue to the ESOP
shares of Series B-4 redeemable convertible preferred stock of AUGI, which
shares of Series B-4 preferred stock are convertible into shares of AUGI common
stock, par value $.01 per share;
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Trustee"), in its capacity as trustee for
the ESOP, has approved the terms of this Agreement and all transactions and
developments contemplated thereby; and
WHEREAS, the ESOP owns the ESOP Shares and has approved, and deems it
advisable to consummate, the exchange of such ESOP Shares for the B-4 Preferred
Shares of AUGI (the "Share Exchange");
WHEREAS, the obligation of the Parties to effect the Share Exchange is
subject to the conditions set forth in Article V hereof; and
WHEREAS, AUGI, Lifetime, the ESOP and NY Medical are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by the provisions of Section 4(2) of the Securities Act of
1933, as amended (the "Securities Act").
NOW, THEREFORE, in consideration of the premises and the mutual covenants,
representations and warranties contained herein, the Parties hereto, intending
to be legally bound, hereby agree as follows:
CERTAIN DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set
forth below:
"Applicable Law" means any domestic or foreign law, statute, regulation, rule,
policy, guideline or ordinance applicable to the businesses of the Parties, the
Share Exchange and/or the Parties.
"AUGI Conversion Shares" means the shares of common stock, $.01 par value per
share, of AUGI into which the B-4 Preferred Shares are convertible.
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"B-4 Preferred Shares" means the 150,000 shares of Series B-4 redeemable
convertible preferred stock, $.01 par value and $30.00 stated value per share,
of AUGI, and containing the rights, privileges and designations set forth in the
Certificate of Designations.
"Certificate of Designations" means the certificate of designations of the
rights, privileges and designations of the B-4 Preferred Shares, all of which
are set forth in the Certificate of Designations annexed hereto as Exhibit A and
made a part hereof.
"Closing Agreement" means that certain agreement dated as of June 16, 2003,
among ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, AUGI, Lifetime, Redwood Investment
Associates, LP, NY Medical, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, The ▇▇▇▇▇ Family Irrevocable Stock
Trust and certain other persons.
"Dollar" and "$" means lawful money of the United States of America.
"Encumbrances" shall mean any and all liens, charges, security interests,
options, claims, mortgages, pledges, proxies, voting trusts or agreements,
preemptive rights, obligations, understandings or arrangements or other
restrictions on title or transfer of any nature whatsoever.
"ESOP Dividend" means the individual and collective reference to (a) the $4.00
per share annual dividend payable by NY Medical to the ESOP pursuant to the ESOP
Shares, and (b) the $12.00 per share annual dividend to be payable by AUGI to
the ESOP pursuant to the B-4 Preferred Shares.
"ESOP Note" means the 4.75% promissory note of the ESOP payable to NY Medical in
approximate $10,090,000 principal amount at December 31, 2002.
"ESOP Shares" means the 450,000 shares of Series A convertible preferred stock,
$.01 par value per share, of NY Medical that are owned of record and
beneficially by the ESOP.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United States of
America as promulgated by the American Institute of Certified Public Accountants
and the Financial Accounting Standards Board or any successor Institutes
concerning the treatment of any accounting matter.
"GCL" means the General Corporation Law of the State of Delaware.
"Knowledge" means the knowledge after reasonable inquiry.
"Material Adverse Effect" with respect to any entity or group of entities means
any event, change or effect that has or would have a materially adverse effect
on the financial condition, business or results of operations of such entity or
group of entities, taken as a consolidated whole.
"Person" means any individual, corporation, partnership, trust or unincorporated
organization or a government or any agency or political subdivision thereof.
"Merger Agreement" means that certain Amended and Restated Agreement and Plan of
Merger dated as of June 16, 2003, entered into by and among AUGI, Lifetime and
Lifetime Acquisition Corp., formerly a wholly owned subsidiary of AUGI, which
Amended Agreement provided for the merger of Lifetime Acquisition Corp. with and
into Lifetime and was consummated on June 17, 2003.
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"Stock Purchase Agreement" means that certain agreement dated as of March 21,
2003, as amended as of June 16, 2003, by and among Lifetime, Redwood Investment
Associates, LP and NY Medical providing for the acquisition of 55% of the
capital stock of NY Medical by Lifetime, including the exhibits thereto, which
Stock Purchase Agreement was consummated on June 16, 2003.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable") means:
(i) any income, alternative or add-on minimum tax, gross receipts tax,
sales tax, use tax, ad valorem tax, transfer tax, franchise tax, profits tax,
license tax, withholding tax, payroll tax, employment tax, excise tax, severance
tax, stamp tax, occupation tax, property tax, environmental or windfall profit
tax, custom, duty or other tax, impost, levy, governmental fee or other like
assessment or charge of any kind whatsoever together with any interest or any
penalty, addition to tax or additional amount imposed with respect thereto by
any governmental or Tax authority responsible for the imposition of any such tax
(domestic or foreign), and
(ii) any liability for the payment of any amounts of the type described in
clause (i) above as a result of being a member of an affiliated, consolidated,
combined or unitary group for any Taxable period, and
(iii) any liability for the payment of any amounts of the type described in
clauses (i) or (ii) above as a result of any express or implied obligation to
indemnify any other person.
"Tax Return" means any return, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
ARTICLE I
THE SHARE EXCHANGE
SECTION 1.01 SHARE EXCHANGE; CLOSING DATE.
(a) On the Closing Date, the ESOP shall sell, transfer, convey and assign
(collectively, "Transfer") to Lifetime all, and not less than all, of the ESOP
Shares, against receipt by the ESOP of B-4 Preferred Shares described below.
(b) On the Closing Date, AUGI shall contribute to Lifetime and Lifetime
shall issue to the ESOP all and not less than all of the AUGI B-4 Preferred
Shares, against receipt by Lifetime of all of the ESOP Shares.
(c) The Transfer of ESOP shares shall be accomplished by delivery by the
ESOP of all of the ESOP Shares, duly endorsed in blank for Transfer or
accompanied by stock powers with the signature of the record owner guaranteed by
a member of the New York Stock exchange or a bank. The AUGI B-4 Preferred Shares
shall be evidenced by one or more stock certificates registered in the name of
the ESOP as the record owner thereof.
SECTION 1.02 CLOSING.
The closing of the Share Exchange (the "Closing") will take place at the offices
of ▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP, counsel to AUGI ("GSK"), at
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, within one (1) business day
following the satisfaction or waiver of the conditions precedent set forth in
Article V or at such other date as AUGI and the Trustee shall agree (the
"Closing Date"), but in any event no later than March 31, 2004.
SECTION 1.03 RESERVATION OF CONVERSION SHARES. Subject to the terms and
conditions set forth in this Agreement and in the Certificate of Designations,
at and after the Closing, AUGI shall reserve for issuance not less than
1,500,000 shares of its common stock, $.01 par value per share, or such other
number of AUGI Conversion Shares as are required for issuance in connection with
the full conversion of the B-4 Preferred Shares into AUGI Conversion Shares,
including any adjustments by reason of the anti-dilution provisions contained in
the Certificate of Designation therefore.
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SECTION 1.04. EXEMPTION FROM REGISTRATION. The Parties intend that the B-4
Preferred Shares to be conveyed by AUGI to the Trustee shall be exempt from the
registration requirements of the Securities Act pursuant to Section 4(2)
thereof.
SECTION 1.05 . DELIVERIES
(a) Deliveries by AUGI. At the Closing, AUGI shall deliver to the ESOP all
other previously undelivered documents required to be delivered by AUGI to the
ESOP at or prior to the Closing in connection with the Share Exchange.
(b) Deliveries by the ESOP. At the Closing, the ESOP shall deliver to AUGI:
(i) The Fairness Opinion referred to in Section 5.02 (g) hereof; and
(ii) All other previously undelivered documents required to be
delivered by the ESOP to AUGI at or prior to the Closing in connection with
the Share Exchange.
SECTION 1.06 FURTHER ACTIONS.
If, at any time after the Closing Date, AUGI considers or is advised that any
deeds, bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm (of record or otherwise) in
Lifetime, its right, title or interest in and to the ESOP Shares, or otherwise
to carry out the intent and purposes of this Agreement, the officers and
directors of AUGI will be authorized to execute and deliver, in the name and on
behalf of each of Lifetime and the ESOP, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of Lifetime and AUGI, all such other actions and things as the board of
directors of AUGI may determine to be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in and to all, and not less than
all, of the ESOP Shares or otherwise to carry out the intent and purposes of
this Agreement.
SECTION 1.07 STATUS OF ESOP
(a) Status of the ESOP. Subject at all times to the provisions of Section
1.07(b) below, the Parties hereto acknowledge that following consummation of the
Share Exchange:
(i) AUGI, on behalf of its indirect wholly-owned subsidiary NY
Medical, shall declare and pay to the ESOP an annual ESOP Dividend in the
amount of $1.8 million (in addition to the regular 6.5% dividend set forth
in Article 4(a) of the Certificate of Designation); payment of such ESOP
Dividend to be made by reduction and cancellation of a like amount of
principal of and accrued interest on the ESOP Note;
(ii) NY Medical continue to make annual contributions to the ESOP in
an amount equal to 25% of NY Medical's annual payroll; which annual
contributions shall be made by further reductions and cancellations of a
like amount of principal of and accrued interest on the ESOP Note;
(iii) ESOP participants that have been previously allocated ESOP
Shares (approximately 198,000 ESOP Shares) shall be allocated a
corresponding amount of AUGI B-4 Preferred Shares (approximately 66,000
AUGI B-4 Preferred Shares), and ESOP participants that have not been
previously allocated the approximately 252,000 unallocated ESOP Shares
shall be entitled to receive, as and when earned or allocated, the
remaining 84,000 shares of AUGI B-4 Preferred Shares; and
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(iv) the ESOP shall continue to make to NY Medical the $1,800,000
annual payments of principal and accrued interest on the ESOP Note in
accordance with the terms of such ESOP Note and the other agreements and
instruments governing the ESOP; and
(v) the ESOP and the ESOP trust shall continue in accordance with the
provisions of the ESOP.
(b) Termination of the ESOP; Effect. Notwithstanding anything to the
contrary, set forth in Section 1.07(a) above, provided that all "Payment Events"
(as defined in the Closing Agreement) shall have occurred, and AUGI shall have
previously complied with all of its other covenants and agreements set forth in
this Agreement, AUGI, Lifetime, NY Medical or any of the foregoing Persons
(collectively, the "AUGI Group") shall have the right at any time following the
Share Exchange to:
(i) cease declaring and paying the ESOP Dividend;
(ii) cause NY Medical to cease payment of the annual contribution to
the ESOP; and
(iii) allocate to all ESOP participants (whether or not earned) all
AUGI B-4 Preferred Shares not previously allocated; and
(iv) directly or through NY Medical cause the ESOP and the ESOP trust
to be terminated;
provided, that, the AUGI Group shall only engage in the foregoing actions if
(x) all further obligations of the ESOP under the ESOP Note shall
be deemed paid and satisfied in full and the ESOP Note cancelled, and
(y) in the event and to the extent that there shall be any excise
or other Tax payable by reason of any excess contribution being deemed
to have been made to the ESOP as a result of the cancellation of the
remaining outstanding principal of and accrued interest on the ESOP
Note, AUGI or the AUGI Group shall pay the full amount of such Tax and
indemnify, defend and hold harmless NY Medical, the ESOP and the ESOP
participants from any liabilities or obligations in connection
therewith.
SECTION 1.08 REGISTRATION OF SECURITIES; RESTRICTIONS ON RESALE
(a) Registration of Securities. Until such time as either (i) a
registration statement including therein the B-4 Preferred Shares and the AUGI
Conversion Shares for resale by ESOP Participants shall have been declared
effective under the Securities Act, or (i) AUGI shall have received a legal
opinion from counsel to the effect that an exemption from the registration
requirements under the Securities Act is available, all of the B-4 Preferred
Shares and the AUGI Conversion Shares, if any, shall be registered in the name
of the ESOP. AUGI acknowledges that, in connection with the transactions
contemplated by the Merger Agreement and the Stock Purchase Agreement, AUGI has
agreed to prepare and file with the Securities and Exchange Commission, and use
its best efforts to cause to become effective, a registration statement for the
benefit of certain AUGI securityholders covering certain AUGI securities issued
in connection with the acquisition of 100% of the capital stock of Lifetime and
Lifetime's acquisition of 55% of the capital stock of NY Medical (the "Selling
Securityholders Registration Statement"). AUGI hereby covenants and agrees to
include all of the B-4 Preferred Shares and all of the AUGI Conversion Shares in
the Selling Securityholders Registration Statement.
(b) The AUGI B-4 Preferred Shares. The B-4 Preferred Shares will not be
registered under the Securities Act, or the securities laws of any state, and
cannot be transferred, hypothecated, sold or otherwise disposed of until; (i) a
registration statement with respect to such securities is declared effective
under the Securities Act, or (ii) AUGI receives an opinion of counsel for the
stockholder, reasonably satisfactory to counsel for AUGI, that an exemption from
the registration requirements of the Securities Act is available.
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(c) The certificates representing the number of B-4 Preferred Shares for
which the ESOP Shares shall have been issued pursuant to this Agreement shall
contain a legend substantially as follows:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A
REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
SUCH ACT, OR AMERICAN UNITED GLOBAL, INC. RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR AMERICAN UNITED
GLOBAL, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT IS AVAILABLE."
(d) The AUGI Conversion Shares. The AUGI Conversion Shares will not be
registered under the Securities Act, or the securities laws of any state, and
cannot be transferred, hypothecated, sold or otherwise disposed of until; (i) a
registration statement with respect to such securities is declared effective
under the Securities Act, or (ii) AUGI receives an opinion of counsel for the
stockholder, reasonably satisfactory to counsel for AUGI, that an exemption from
the registration requirements of the Securities Act is available.
The certificates representing the number of AUGI Conversion Shares into
which the B-4 Preferred Shares may be converted shall contain a legend
substantially as follows:
"THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A
REGISTRATION STATEMENT WITH RESPECT THERETO IS DECLARED EFFECTIVE UNDER
SUCH ACT, OR AMERICAN UNITED GLOBAL, INC. RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL FOR AMERICAN UNITED
GLOBAL, INC. THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH
ACT IS AVAILABLE."
"PURSUANT TO THE SHARE EXCHANGE AGREEMENT DATED AS OF AUGUST 31, 2003, BY
AND AMONG AMERICAN UNITED GLOBAL, INC., LIFETIME HEALTHCARE SERVICES, INC.,
NY MEDICAL INC. AND THE NEW YORK MEDICAL EMPLOYEE STOCK OWNERSHIP PLAN AND
TRUST, THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE MAY NOT BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF, EXCEPT IN
ACCORDANCE WITH THE TERMS AND CONDITIONS SET FORTH IN A LOCK-UP AGREEMENT
BY AND BETWEEN THE HOLDER HEREOF AND AMERICAN UNITED GLOBAL, INC."
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AUGI
Except as set forth in the schedules to this Agreement, disclosure in any
one of which shall apply to any and all representations and warranties made in
this Agreement, and except as otherwise disclosed in writing to the Trustee,
AUGI hereby represents and warrants to the Trustee, as of the date of this
Agreement and as of the Closing Date, as follows:
SECTION 2.01 ORGANIZATION, STANDING AND POWER.
AUGI is a company duly incorporated, validly existing and in good standing
under the laws of the State of Delaware and has corporate power and authority to
conduct its business as presently conducted by it and to enter into and perform
this Agreement and to carry out the transactions contemplated by this Agreement.
AUGI is duly qualified to do business as a foreign corporation doing business in
each state in which it owns or leases real property and where the failure to be
so qualified and in good standing would have a Material Adverse Effect on AUGI
or its business.
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SECTION 2.02 AUTHORITY FOR AGREEMENT.
The execution, delivery, and performance of this Agreement by AUGI has been
duly authorized by all necessary corporate action, and this Agreement, upon its
execution by the parties thereto, will constitute the valid and binding
obligation of AUGI enforceable against it in accordance with and subject to its
terms, except as enforceability may be affected by bankruptcy, insolvency or
other laws of general application affecting the enforcement of creditors'
rights. Except as set forth above or in Schedule 2.03 attached hereto, the
execution and consummation of the transactions contemplated by this Agreement
and compliance with its provisions by AUGI will not violate any provision of
Applicable Law and will not conflict with or result in any breach of any of the
terms, conditions, or provisions of, or constitute a default under, AUGI's
Certificate of Incorporation or Bylaws, as the case may be and in each case as
amended, or, in any material respect, any indenture, lease, loan agreement or
other agreement or instrument to which AUGI is a party or by which it or any of
its properties are bound, or any decree, judgment, order, statute, rule or
regulation applicable to AUGI except to the extent that any breach or violation
of any of the foregoing would not constitute or result in a Material Adverse
Effect on AUGI taken as a whole.
SECTION 2.03 ISSUANCE OF B-4 PREFERRED SHARES
The B-4 Preferred Shares issuable to the Trustee as the holder of the ESOP
Shares will when issued pursuant to this Agreement be duly and validly
authorized and issued, fully paid and non-assessable. The AUGI Conversion Shares
issuable to upon conversion of the B-4 Preferred Shares will as and when issued
pursuant to the Certificate of Designation be duly and validly authorized and
issued, fully paid and non-assessable.
SECTION 2.04 CONSENTS AND APPROVALS
No consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party to
any agreement with AUGI, is required by or with respect to AUGI in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby, except for such consents, waivers, approvals,
orders, authorizations, registrations, declarations and filings as may be
required under (i) applicable securities laws, or (ii) the GCL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OTHER PARTIES
A. AS TO NY MEDICAL. NY Medical hereby represents and warrants to AUGI,
Lifetime and the ESOP, as of the date of this Agreement and as of the Closing
Date, as follows:
SECTION 3.01. SHARE OWNERSHIP AND AUTHORIZATION. NY Medical has all requisite
power, authority and legal capacity to execute and deliver this Agreement and to
consummate the transactions and developments contemplated hereby. This Agreement
has been duly executed and delivered by NY Medical, and, assuming due and valid
authorization, execution and delivery by the other parties hereto, this
Agreement constitutes a legal, valid and binding obligation of NY Medical,
enforceable against NY Medical in accordance with its terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application affecting
enforcement of creditors' rights generally and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought. Except as set
forth above, NY Medical makes no other representations or warranties hereunder.
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B. AS TO THE ESOP
Except as set forth in the schedules to this Agreement, disclosure in any
one of which shall apply to any and all representations and warranties made in
this Agreement, and except as otherwise disclosed in writing to AUGI and
Lifetime, the Trustee on behalf of the ESOP hereby represent and warrant to AUGI
and Lifetime, as of the date of this Agreement and as of the Closing Date, as
follows:
SECTION 3.02 SHARE OWNERSHIP.
The ESOP is the record and beneficial owner of the ESOP Shares. Except for
the ESOP Shares, the ESOP does not own any securities issued by, or other
obligations of, NY Medical or any subsidiary thereof.
SECTION 3.03 LEGAL POWER; QUALIFICATION OF THE ESOP.
The ESOP has all requisite power, authority and legal capacity to execute
and deliver this Agreement and to consummate the transactions and developments
contemplated hereby.
SECTION 3.04 AUTHORITY FOR AGREEMENT.
This Agreement has been duly executed and delivered by the Trustee on
behalf of the ESOP, and, assuming due and valid authorization, execution and
delivery by the other parties hereto, this Agreement constitutes a legal, valid
and binding obligation of the ESOP, enforceable against the ESOP in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and other similar laws of
general application affecting enforcement of creditors' rights generally and
(ii) the availability of the remedy of specific performance or injunctive or
other forms of equitable relief may be subject to equitable defenses and would
be subject to the discretion of the court before which any proceeding therefor
may be brought.
SECTION 3.05 NO ESOP CONFLICT OR DEFAULT.
Neither the execution and delivery of this Agreement nor the consummation
by the Trustee on behalf of the ESOP, of any of the transactions contemplated
hereby will result in a violation of, or a default under, or conflict with, or
require any consent, approval or notice under, any contract, trust, commitment,
agreement, obligation, understanding, arrangement or restriction of any kind to
which the ESOP is a party or by which ESOP is bound or to which the ESOP Shares
are subject. Consummation by the ESOP of the transactions contemplated hereby
will not violate, or require any consent, approval or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to the ESOP or the ESOP Shares
SECTION 3.06 OWNERSHIP AND POSSESSION OF SHARES.
The ESOP Shares and the certificates representing the ESOP Shares are now,
and at all times during the term hereof shall be, owned by the ESOP and held by
such ESOP, or by a trustee, nominee or custodian for the sole and exclusive
benefit of such ESOP, free and clear of all Encumbrances whatsoever, except for
(a) that portion of the ESOP Shares that remain as pledged collateral (the
"Pledged Shares") pursuant to that certain ESOP Loan and Pledge Agreement by and
between NY Medical and HSBC Bank USA, as trustee, dated as of November 30, 2000
(the "Loan and Pledge Agreement"), (b) any Encumbrances created by this
Agreement and (c) Encumbrances arising under the Securities Act or state
securities laws.
8
SECTION 3.07 FIDUCIARY DUTIES.
The Trustee, on behalf of the ESOP, has consulted with legal counsel and
has obtained a fairness opinion from an independent financial advisor to the
effect that (i) the consideration received by the ESOP pursuant to Section 1.08
hereof is not less than adequate consideration within the contemplation of
Section 3(18) of ERISA and (ii) the Share Exchange, considered as a whole
(including the transactions consummated under the Stock Purchase Agreement and
the Merger Agreement), is fair and reasonable to the ESOP from a financial point
of view.
C. BY LIFETIME AND AUGI
Lifetime and AUGI hereby jointly and severally represent and warrant to the
ESOP and NY Medical, as of the date of this Agreement and as of the Closing
Date, as follows:
SECTION 3.08 NO LIABILITIES OR OBLIGATIONS
Save and except for liabilities and obligations described in or otherwise
incurred in connection with the transactions contemplated by the Merger
Agreement and the Stock Purchase Agreement, Lifetime has not, since its
inception, engaged in any business activities or incurred any liabilities or
obligations of any kind or description, whether contingent liabilities or
liabilities required to be set forth on a balance sheet prepared in accordance
with GAAP.
SECTION 3.09 LEGAL POWER.
Lifetime has all requisite power, authority and legal capacity to execute
and deliver this Agreement and to consummate the transactions and developments
contemplated hereby.
SECTION 3.10 AUTHORITY FOR AGREEMENT.
This Agreement has been duly executed and delivered by Lifetime, and,
assuming due and valid authorization, execution and delivery by the other
Parties hereto, this Agreement constitutes a legal, valid and binding obligation
of Lifetime, enforceable against Lifetime in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application affecting
enforcement of creditors' rights generally and (ii) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.
SECTION 3.11 NO CONFLICT OR DEFAULT.
Neither the execution and delivery of this Agreement nor the consummation
by Lifetime of any of the transactions contemplated hereby will result in a
violation of, or a default under, or conflict with, or require any consent,
approval or notice under, any contract, trust, commitment, agreement,
obligation, understanding, arrangement or restriction of any kind to which
Lifetime is a party or by which Lifetime is bound or to which the its shares are
subject. Consummation by Lifetime of the transactions contemplated hereby will
not violate, or require any consent, approval or notice under, any provision of
any judgment, order, decree, statute, law, rule or regulation applicable to
Lifetime or its securities.
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ARTICLE IV
CERTAIN COVENANTS AND AGREEMENTS
SECTION 4.01 COVENANTS OF THE ESOP
(a) The ESOP, shall use its best efforts to obtain, prior to the Closing,
the unconditional consent of any Person necessary to the consummation of the
Share Exchange, including consents from parties to loans, contracts, leases or
other agreements and consents from governmental agencies, whether federal, state
or local shall have been obtained. All such consents shall be in writing and
executed counterparts thereof shall be delivered to AUGI at or prior to the
Closing.
(b) Lock Up Agreement. The Trustee, on behalf of the ESOP and the ESOP
Participants, shall prior to Closing enter into a Lock-up Agreement with AUGI in
substantially the form of Exhibit B annexed hereto and made a part hereof (the
"Lockup Agreement").
SECTION 4.02 COVENANTS OF AUGI
(a) Registration of AUGI Conversion Shares. AUGI shall register for re-sale
under the Securities Act of 1933, as amended, the AUGI Conversion Shares
issuable upon the conversion of the B-4 Preferred Shares and shall file a
registration statement with respect to such registration with the SEC at the
earlier of: (i) ninety (90) days after the Closing Date, or (ii) sixty (60) days
from the date upon which the financial statements of the Surviving Entity shall
have been audited and determined to be in compliance with Regulation S-X as
promulgated by the SEC; provided, however, that the Trustee on behalf of the
ESOP shall prior thereto have caused the ESOP to enter into a registration
rights agreement with AUGI in the form of Exhibit C annexed hereto and made a
part hereof (the "Registration Rights Agreement").
(b) Lock Up Agreement. AUGI shall prior to Closing enter into the Lockup
Agreement.
SECTION 4.03 COVENANTS OF THE PARTIES
(a) Announcement. Neither the ESOP and NY Medical, on the one hand, nor
AUGI on the other hand, shall issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party (which consent shall not be
unreasonably withheld), except as may be required by applicable law or
securities regulation. Notwithstanding anything in this Section 4.03 to the
contrary, the parties will, to the extent practicable, consult with each other
before issuing, and provide each other the opportunity to review and comment
upon, any such press release or other public statements with respect to this
Agreement and the transactions contemplated hereby whether or not required by
Applicable Law.
(b) Notification of Certain Matters. The ESOP and NY Medical shall give
prompt notice to AUGI, and AUGI shall give prompt notice to the ESOP, of:
(i) The occurrence, or nonoccurrence, of any event the occurrence, or
nonoccurrence, of which would be reasonably likely to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at or prior to the Closing Date; and
(ii) Any material failure of the ESOP and/or NY Medical on the one
hand, or AUGI, on the other hand, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it or them
hereunder.
(c) Reasonable Best Efforts. Before Closing, upon the terms and subject to
the conditions of this Agreement, the Parties agree to use their respective
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper or advisable (subject to
applicable laws) to consummate and make effective the Share Exchange and other
transactions contemplated by this Agreement as promptly as practicable
including, but not limited to:
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(i) The preparation and filing of all forms, registrations and notices
required to be filed to consummate the Share Exchange, including without
limitation, any approvals, consents, orders, exemptions or waivers by any
third party or governmental entity; and
(ii) The satisfaction of the other Party's conditions precedent to
Closing.
(d) Access to Information
(i) Inspection by the ESOP. AUGI will make available for inspection by
the Trustee on behalf of the ESOP, during normal business hours and in a
manner so as not to interfere with normal business operations, all of
AUGI's records (including tax records), books of account, premises,
contracts and all other documents in AUGI's possession or control that are
reasonably requested by the Trustee on behalf of the ESOP to inspect and
examine the business and affairs of AUGI. The Trustee and the ESOP will
treat and hold as confidential any information received from AUGI in the
course of the reviews contemplated by this Section 4.03(v). No examination
by the Trustee or the ESOP will, however, constitute a waiver or
relinquishment by the ESOP of its rights to rely on AUGI's covenants,
representations and warranties made herein or pursuant hereto.
(ii) Inspection by AUGI. The Trustee on behalf of the ESOP will make
available for inspection by AUGI, during normal business hours and in a
manner so as not to interfere with normal business operations, all of
ESOP's records (including tax records), books of account, premises,
contracts and all other documents in the Trustee's or the ESOP's possession
or control that are reasonably requested by AUGI to inspect and examine the
business and affairs of the ESOP. The Trustee on behalf of the ESOP will be
available upon reasonable advance notice to answer questions of AUGI
concerning the affairs of the ESOP. AUGI will treat and hold as
confidential any information received from the ESOP in the course of the
reviews contemplated by this Section 4.03 (v). No examination by AUGI will,
however, constitute a waiver or relinquishment by AUGI of its rights to
rely on the ESOP's covenants, representations and warranties made herein or
pursuant hereto.
ARTICLE V
CONDITIONS PRECEDENT AND COVENANT
SECTION 5.01 CONDITIONS PRECEDENT TO THE PARTIES' OBLIGATIONS.
The obligations of the Parties as provided herein shall be subject to each
of the following conditions precedent, unless waived by both AUGI and the ESOP:
(a) Consents, Approvals. The Parties shall have obtained all necessary
consents and approvals of their respective boards of directors, their
stockholders (including any applicable classes thereof) and all consents,
approvals and authorizations required under their respective charter documents,
and all material consents, including any material consents and waivers by the
Parties' respective lenders and other third-parties, if necessary, to the
consummation of the transactions contemplated by this Agreement.
(b) Absence of Certain Litigation. No action or proceeding shall be
threatened or pending before any governmental entity or authority which, in the
reasonable opinion of counsel for the Parties, is likely to result in a
restraint, prohibition or the obtaining of damages or other relief in connection
with this Agreement or the consummation of the Share Exchange.
11
SECTION 5.02 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AUGI
The obligations of AUGI as provided herein shall be subject to each of the
following conditions precedent, unless waived by AUGI:
(a) Representations and Warranties. The representations and warranties by
NY Medical and the ESOP in Article III herein shall be true and accurate in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made at and as of the
Closing Date, except to the extent that any changes therein are specifically
contemplated by this Agreement or the same shall not have a Material Adverse
Effect.
(b) Performance. NY Medical and the ESOP shall have performed and complied
in all material respects with all agreements to be performed or complied with by
them pursuant to this Agreement prior at or prior to the Closing or the same
shall not have a Material Adverse Effect on either NY Medical or the ESOP.
(c) Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be reasonably satisfactory in substance and
form to AUGI and its counsel, and AUGI and its counsel shall have received all
such counterpart originals (or certified or other copies) of such documents as
they may reasonably request.
(d) Certificate of Good Standing. NY Medical shall have delivered to AUGI a
certificate as to the good standing of NY Medical certified by the Secretary of
State of the State of Delaware on or within two (2) business days prior to the
Closing Date.
(e) Material Changes. Except as contemplated by this Agreement, since the
date hereof, NY Medical shall not have suffered a Material Adverse Effect.
(f) Investigations. Neither any investigation of the ESOP, NY Medical or
subsidiaries of NY Medical by AUGI nor any other document delivered to AUGI as
contemplated by this Agreement, shall have revealed any facts or circumstances
which, in the good faith judgment of AUGI, reflect in a material adverse way on
the financial condition, assets, liabilities (absolute, accrued, contingent or
otherwise), business, operations or prospects of NY Medical or any subsidiary
thereof.
(g) Fairness Opinion. The ESOP shall have received the opinion from an
independent financial advisor, in form and substance satisfactory to AUGI to the
effect that (i) the AUGI B-4 Preferred Shares received by the ESOP pursuant to
this Agreement is adequate consideration within the contemplation of Section
3(18) of ERISA and (ii) the Share Exchange, considered as a whole (including the
transactions consummated pursuant to the Merger Agreement and the Stock Purchase
Agreement), are fair and reasonable to the ESOP from a financial point of view.
(h) Registration Rights Agreement. AUGI shall have received signed
signature pages of the Registration Rights Agreement from the ESOP.
(i) Lock-Up Agreement. AUGI shall have received signed signature pages of
the Lock-Up Agreement from the ESOP.
SECTION 5.03 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE ESOP
The obligation of the ESOP on the Closing Date as provided herein shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions precedent, unless waived by the ESOP:
(a) Consents And Approvals. AUGI shall have obtained all material consents,
including any material consents and waivers of its respective lenders and other
third-parties, if necessary, to the consummation of the transactions
contemplated by this Agreement.
12
(b) Representations And Warranties. The representations and warranties by
AUGI in Article II herein shall be true and accurate in all material respects on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made at and as of the Closing Date,
except to the extent that any changes therein are specifically contemplated by
this Agreement or the same shall not have a Material Adverse Effect.
(c) Performance. AUGI shall have performed and complied in all material
respects with all agreements to be performed or complied with by it pursuant to
this Agreement prior to or at the Closing or the same shall not have a Material
Adverse Effect.
(d) Proceedings And Documents. All corporate, company and other proceedings
in connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the ESOP and its counsel, and the ESOP and
its counsel shall have received all such counterpart originals (or certified or
other copies) of such documents as they may reasonably request.
(e) Material Changes. Except as contemplated by this Agreement, since the
date hereof, AUGI shall not have suffered a Material Adverse Effect.
(f) Certificate of Designation. AUGI shall immediately prior to the filing
of the Certificate of Share Exchange have filed the Certificate of Designation
with the Secretary of State of the State of Delaware.
(g) Registration Rights Agreement. The Registration Rights Agreement shall
have been entered into by AUGI.
(h) Payment Events and Termination of the Closing Agreement. All of the
"Payment Events" (as that term is defined in the Closing Agreement) shall have
occurred, and the Closing Agreement shall have been deemed to have been
satisfied in all respects by the parties thereto and terminated.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
SECTION 6.01 TERMINATION.
This Agreement may be terminated and the Share Exchange may be abandoned at
any time prior to the Closing Date by:
(a) The mutual written consent of the board of directors of AUGI and the
Trustee on behalf of the ESOP;
(b) Either AUGI, on the one hand, or the ESOP, on the other hand, if any
governmental entity or court of competent jurisdiction shall have issued an
order, decree or ruling or taken any other action (which order, decree, ruling
or other action the Parties shall use their commercially reasonable best efforts
to lift), which restrains, enjoins or otherwise prohibits the Share Exchange or
the issuance of the B-4 Preferred Shares pursuant to the Share Exchange and such
order, decree, ruling or other action shall have become final and
non-appealable;
(c) AUGI, if the ESOP or NY Medical shall have breached in any material
respect any of their representations, warranties, covenants or other agreements
contained in this Agreement, and the breach cannot be or has not been cured
within 15 calendar days after the giving of written notice by AUGI to NY Medical
and/or the ESOP, as applicable;
13
(d) The ESOP, if the Payment Events (as defined in the Closing Agreement)
shall have not timely occurred, unless waived or the time for performance
thereof are extended by ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and the respective holders of the
▇▇▇▇▇▇ Note and the Lifetime Note, as applicable;
(e) The ESOP, if AUGI shall have breached in any material respect any of
its representations, warranties, or other covenants or agreements contained in
this Agreement, and the breach cannot be or has not been cured within 15
calendar days after the giving of written notice by the ESOP to AUGI; or
(f) Without any action on the part of the Parties if required by Applicable
Law.
SECTION 6.02 EFFECT OF TERMINATION.
If this Agreement is terminated as provided in Section 6.01, written notice
of such termination shall be given by the terminating Party to the other Party
specifying the provision of this Agreement pursuant to which such termination is
made, this Agreement shall become null and void and there shall be no liability
on the part of AUGI or the ESOP, provided, that nothing in this Agreement shall
relieve any Party from any liability or obligation with respect to any willful
breach of this Agreement and provided, further, that termination shall not
affect accrued rights or liabilities of any party.
ARTICLE VII
CONFIDENTIALITY
SECTION 7.01 CONFIDENTIALITY
AUGI, on the one hand, and NY Medical and the ESOP, on the other hand, will
keep confidential all information and documents obtained from the other,
including but not limited to any information or documents provided pursuant to
Section 4.03 hereof, which are designated by such delivering party as
confidential (except for any information disclosed to the public pursuant to a
press release authorized by the Parties) and in the event the Closing does not
occur or this Agreement is terminated for any reason, will promptly return such
documents and all copies of such documents and all notes and other evidence
thereof, including material stored on a computer, and will not use such
information for its own advantage, except to the extent that (i) the information
must be disclosed by law, (ii) the information becomes publicly available by
reason other than disclosure by the Party subject to the confidentiality
obligation, (iii) the information is independently developed without use of or
reference to the other Party's confidential information, (iv) the information is
obtained from another source not obligated to keep such information
confidential, or (v) the information is already publicly known or known to the
receiving Party when disclosed as demonstrated by written documentation in the
possession of such Party at such time.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 INDEMNIFICATION BY AUGI
AUGI shall indemnify, defend and hold harmless the ESOP, the Trustee, NY Medical
and its or his heirs, legal representatives, successors and assigns (the "Other
Indemnified Parties") against all losses, claims, damages, costs, expenses
(including attorneys' fees), liabilities or judgments or amounts that are paid
in settlement of or in connection with any threatened or actual claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of (i) any breach of this Agreement by AUGI, Lifetime or
any subsidiary or affiliate thereof, including but not limited to failure of any
representation or warranty to be true and correct at or before the Closing, or
(ii) any act, omission or conduct of any officer, director or agent of AUGI,
Lifetime or any subsidiary or affiliated thereof prior to the Closing, whether
asserted or claimed prior to, at or after, the Closing, or (iii) any breach of
this Agreement by AUGI, Lifetime or any subsidiary or affiliate thereof,
including but not limited to failure of any representation or warranty to be
true and correct at or before the Closing (iv) relating to the consummation of
the transactions contemplated herein, and any action taken in connection
therewith, including, without limitation, the provisions of Section 1.07 of this
Agreement (collectively, "Indemnified Liabilities"). Any Other Indemnified Party
wishing to claim indemnification under this Section 8.01, upon learning of any
such claim, action, suit, proceeding or investigation, shall notify AUGI, but
the failure so to notify shall not relieve AUGI from any liability that it may
have under this Section 8.01, except to the extent that such failure would
materially prejudice AUGI.
14
SECTION 8.02 INDEMNIFICATION BY THE ESOP
The ESOP and the Trustee shall severally indemnify, defend and hold harmless
each of AUGI, any subsidiary or affiliate thereof and each person who is now, or
has been at any time prior to the date hereof or who becomes prior to the
Closing, an officer, director or partner of AUGI, any subsidiary or affiliate
thereof or an employee of AUGI, any subsidiary or affiliate thereof and their
respective heirs, legal representatives, successors and assigns (the "AUGI
Indemnified Parties") against all losses, claims, damages, costs, expenses
(including attorneys' fees), liabilities or judgments or amounts that are paid
in settlement of or in connection with any threatened or actual claim, action,
suit, proceeding or investigation based in whole or in part on or arising in
whole or in part out of (i) any breach of this Agreement by the ESOP, including
the Trustee, including but not limited to failure of any representation or
warranty to be true and correct at or before the Closing, or (ii) any act,
omission or conduct of any officer, director or agent of the ESOP or affiliate
thereof including the Trustee, prior to the Closing, whether asserted or claimed
prior to, at or after, the Closing, or (iii) relating to the consummation of the
transactions contemplated herein, and any action taken in connection therewith
("AUGI Indemnified Liabilities"). Any AUGI Indemnified Party wishing to claim
indemnification under this Section 8.02, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify the ESOP, but the
failure so to notify shall not relieve the ESOP from any liability that it or
they may have under this Section 8.02, except to the extent that such failure
would materially prejudice the ESOP.
SECTION 8.03 SURVIVAL OF INDEMNIFICATION
All rights to indemnification under this Article 8 shall survive the
consummation of the Share Exchange and the termination of this Agreement. The
provisions of this Article 8 are intended to be for the benefit of, and shall be
enforceable by, each AUGI Indemnified Party, each ESOP Indemnified Party,
respective heirs and representatives. No Party shall enter into any settlement
regarding the foregoing without prior approval of the ESOP Indemnified Party or
the AUGI Indemnified Party, as the case may be.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Closing Date,
except as set forth in Article VIII. All such representations and warranties
will be extinguished on consummation of the Share Exchange and none of the
Parties nor any of their officers, directors, members, employees or stockholders
shall be under any liability whatsoever with respect to any such representation
or warranty after such time. This Section 9.01 shall not limit any covenant or
agreement of the Parties which by its terms contemplates performance after the
Closing Date.
15
SECTION 9.02 EXPENSES.
Except as contemplated by this Agreement, all costs and expenses incurred
in connection with this Agreement and the consummation of the transactions
contemplated by this Agreement shall be paid by the Party incurring such
expenses.
SECTION 9.03 APPLICABLE LAW.
This Agreement shall be governed by the laws of the State of New York as
applied to agreements entered into and to be performed in such state.
SECTION 9.04 NOTICES.
All notices and other communications under this Agreement shall be in
writing and shall be deemed to have been duly given or made as follows:
(a) If sent by registered or certified mail in the United States, return
receipt requested, upon receipt;
(b) If sent by reputable overnight air courier (such as Federal Express), 2
business days after being sent;
(c) If sent by facsimile transmission, with a copy mailed on the same day
in the manner provided in clauses (a) or (bi) above, when transmitted and
receipt is confirmed by telephone; or
(d) If otherwise actually personally delivered, when delivered against
written receipt thereof.
All notices and other communications under this Agreement shall be sent or
delivered as follows:
If to AUGI, to:
American United Global, Inc.
▇/▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Wolf & Marcus, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
16
If to Lifetime, to:
Lifetime Healthcare Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
▇▇▇▇▇▇▇, Savage, Kaplowitz, Wolf & Marcus, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to NY Medical, to:
New York Medical, Inc.
Two ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to (which shall not constitute notice):
Snow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to the New York Medical Employee Stock Ownership Plan and Trust, to:
New York Medical Employee Stock Ownership Plan and Trust
c/o Lamb & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Trustee
with a copy to (which shall not constitute notice):
Lamb & ▇▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Any Party may change its address by written notice in accordance with this
Section.
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SECTION 9.05 ENTIRE AGREEMENT.
This Agreement (including the documents and instruments referred to in this
Agreement) contains the entire understanding of the Parties with respect to the
subject matter contained in this Agreement, and supersedes and cancels all prior
agreements, negotiations, correspondence, undertakings and communications of the
Parties, oral or written, respecting such subject matter.
SECTION 9.06 ASSIGNMENT.
Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned by any of the Parties (whether by
operation of law or otherwise) without the prior written consent of the other
Parties; provided that in no event may the right to indemnification provided by
Article VIII hereto be assigned by any of the Parties, with or without consent,
except by operation of law. Subject to the immediately foregoing sentence of
this Section 9.06, this Agreement will be binding upon, inure to the benefit of
and be enforceable by, the Parties and their respective successors and assigns.
SECTION 9.07 HEADINGS; REFERENCES.
The article, section and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to "Articles" or
"Sections" shall be deemed to be references to Articles or Sections of this
Agreement unless otherwise indicated.
SECTION 9.08 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which shall be considered one and
the same agreement.
SECTION 9.09 NO THIRD PARTY BENEFICIARIES.
Except as expressly provided by this Agreement, nothing herein is intended
to confer upon any person or entity not a Party to this Agreement any rights or
remedies under or by reason of this Agreement.
SECTION 9.10 SEVERABILITY; ENFORCEMENT.
Any term or provision of this Agreement that is invalid or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only so broad as is
enforceable.
SECTION 9.11 RULES OF CONSTRUCTION.
The Parties agree that they have been represented by counsel during the
negotiation and execution of this Agreement and, therefore, waive the
application of any law, regulation, holding or rule of construction providing
that ambiguities in an agreement or other document will be construed against the
party drafting such agreement or document.
SECTION 9.12 EXHIBITS.
All of the exhibits to this Agreement are hereby incorporated in this
Agreement and shall be deemed and construed to be a part of this Agreement for
all purposes.
SECTION 9.13 INTERPRETATION.
The words "include," "includes" and "including" when used herein shall be
deemed in each case to be followed by the words "without limitation." The table
of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
[SIGNATURES ON THE FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
AMERICAN UNITED GLOBAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman of the Board and CEO
LIFETIME HEALTHCARE SERVICES, INC.
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Financial Officer
NEW YORK MEDICAL, INC.
By: /s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D
--------------------------------
Name: ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
Title: CEO
NEW YORK MEDICAL EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Trustee