Exhibit 99.1
ASSET PURCHASE AGREEMENT
by and among
ADVANCED PLANT PHARMACEUTICALS, INC.
as "SELLER"
and
AMAZIN NUTRITIONALS, INC.
as "BUYER"
28
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement"), dated as of January 2, 2004, is by
and among AMAZING NUTRITIONALS, Inc., a Delaware corporation doing business at
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ("ANI" or "Buyer") and
ADVANCED PLANT PHARMACEUTICALS, INC., a Delaware Corporation, doing business at
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ("Seller").
RECITALS
A. Seller owns certain assets which it uses in its conduct of the Business
(as defined below).
B. Buyer desires to purchase from Seller, and Seller desires to sell to
Buyer, such assets as more specifically identified below and in Schedules
attached hereto, upon the terms and subject to the conditions of this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration, the receipt and adequacy
of which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall have the
following meanings. Any of such terms, unless the context otherwise requires,
may be used in the singular or plural, depending upon the reference.
1.2 "Affiliate" shall have the meaning set forth in the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder.
1.3 "Ancillary Agreements" shall mean the ▇▇▇▇ of Sale, executed as of the
Closing Date.
1.4 "Assets" shall mean all of the right, title and interest of Seller in
and to the business, properties, assets and rights of any kind, whether tangible
or intangible, and constituting, or used or useful in connection with, or
related to, the Business, including without limitation all of Seller's right,
title and interest in the following (but not including, in any case, the
Excluded Assets), as set forth on Schedule 1.4, including:
1.5 "Balance Sheet" shall mean the balance sheet of Seller at the date
indicated thereon, together with the notes thereon.
1.6 "Books and Records" shall mean (a) all records and lists of Seller
pertaining to the Assets, (b) all records and lists which pertain to the
Business, customers of the Business, suppliers of the Business, or personnel of
29
Seller working in connection with the Business, (c) all product, business and
marketing plans of Seller, and (d) all books, ledgers, trial balances, files,
reports, plans, drawings and operating records of every kind maintained by
Seller relating to the Assets, but excluding the originals of Seller's minute
books, stock books, tax returns and accounting ledgers (provided that Buyer will
be provided copies of tax returns and accounting records if it so requests).
1.7 "Business" shall mean Seller's product to be sold pursuant to this
Agreement.
1.8 "Closing" or "Closing Date" shall mean a date occurring as soon as
possible, but not more than forty-five (45) days, after satisfaction of all
conditions to Closing set forth in Article VII of this Agreement, or such other
date as Buyer and Seller shall mutually agree upon.
1.9 "Closing Balance Sheet" shall mean the Balance Sheet dated the as of
the Closing Date.
1.10 "Closing Financial Statements" shall mean the Closing Balance Sheet
and the income statement dated as of the Closing Date.
1.11 "Code" shall mean the Internal Revenue Code of 1986, as amended, and
the rules and regulations thereunder.
1.12 "Consent" shall mean any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, exemption or order of,
registration, certificate, declaration or filing with, or report or notice to,
any person or entity, including but not limited to any governmental authority.
1.13 "Contract" shall mean any agreement, contract, note, loan, evidence
of indebtedness, purchase, order, letter of credit, franchise agreement,
undertaking, covenant not to compete, employment agreement, license, instrument,
obligation or commitment to which Seller is a party or is bound and which
relates to the Business or the Assets, whether oral or written.
1.14 "Damages" shall mean any and all claims, damages, costs, losses
(including without limitation diminution in value), Taxes, liabilities,
judgments, penalties, fines, obligations, lawsuits, deficiencies, demands and
expenses (whether or not arising out of third-party claims), including without
limitation interest, penalties, costs of mitigation, losses in connection with
any environmental law (including without limitation any clean-up or remedial
action), lost profits and other losses resulting from any shutdown or
curtailment of operations, damages to the environment, attorneys' fees, experts'
fees and all amounts paid in investigation, defense or settlement of any of the
foregoing.
1.15 "Encumbrance" shall mean any claim, lien, pledge, option, charge,
easement, security interest, deed of trust, mortgage, right-of-way,
encroachment, building or use restriction, conditional sales agreement,
encumbrance or other right of third parties, whether voluntarily incurred or
arising by operation of law, and includes, without limitation, any agreement to
give any of the foregoing in the future, and any contingent sale or other title
retention agreement or lease in the nature thereof.
30
1.16 "Equipment" shall mean the office equipment of Seller exclusively
used to operate in connection with the Business and all tools, supplies,
equipment, machinery, signs and other tangible personal property owned by Seller
and used in connection with the Business.
1.17 "Financial Statements" shall mean the Year-End Financial Statements,
the Interim Financial Statements and the Closing Financial Statements.
1.18 "Intellectual Property" shall mean any and all United States and
foreign: (a) patents (including reexaminations, design patents, industrial
designs and utility models) and patent applications (including docketed patent
disclosures awaiting filing, provisional applications, reissues, divisions,
continuations, continuations-in-part and extensions), patent disclosures
awaiting filing determination, inventions and improvements thereto; (b)
trademarks, service marks, trade names, trade dress, logos, business and product
names, slogans, and registrations and applications for registration thereof; (c)
copyrights (including software) and registrations thereof; (d) inventions,
processes, designs, formulae, trade secrets, know-how, industrial models,
confidential and technical information, manufacturing, engineering and technical
drawings, product specifications and confidential business information; (e) mask
work and other rights and registrations thereof; (f) intellectual property
rights similar to any of the foregoing; (g) copies and tangible embodiments
thereof (in whatever form or medium, including electronic media).
1.19 "Inventory" shall mean all of Seller's finished goods, accessory
goods and raw materials inventory, and all of Seller's new and/or usable repair
or replacement parts, supplies, and packaging items and similar items with
respect to the Business, in each case, wherever the same may be located.
1.20 "Material Adverse Effect" or "Material Adverse Change" shall mean
with respect to the Business or the Assets any significant and substantial
adverse effect or change in the condition (financial or other), business,
results of operations, prospects, assets, liabilities or operations of the
Business and/or the Assets or on the ability of Seller to consummate the
transactions contemplated hereby, or any event or condition which would, with
the passage of time, constitute a "Material Adverse Effect" or "Material Adverse
Change.
1.21 "Permits" shall mean all licenses, permits, franchises, approvals,
authorizations, consents or orders of, or filings with, any governmental
authority, whether foreign, federal, state or local, or any other person,
necessary or desirable for the past, present or anticipated conduct of, or
relating to the operation of, the Business.
1.22 "Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
1.23 "Tax" shall mean any federal, state, local, foreign or other tax,
levy, impost, fee, assessment, custom duty, or other government charge,
including without limitation income, estimated income, business, occupation,
franchise, property, payroll, personal property, sales, transfer, use,
employment, commercial rent, occupancy, franchise or withholding taxes, and any
premium, including without limitation interest, penalties and additions in
connection therewith.
31
1.24 "Warranties" shall mean standard and customary warranties provided by
Seller in connection with products sold by Seller in connection with the
Business, as set forth on Schedule 4.18.
1.25 "Year-End Financial Statements" shall mean the Balance Sheets and
income statements dated as the Seller's fiscal year ended 2003.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 Transfer of Assets. Upon the terms and subject to the conditions
contained herein, at the Closing, Seller will sell, convey, transfer, assign and
deliver to Buyer free and clear of any Encumbrance (other than Assumed
Liabilities), and Buyer will acquire from Seller, the Assets.
2.2 Purchase Price.
2.2.1 Purchase Price. Upon the terms and subject to the conditions set
forth herein, at the Closing, the Buyer shall pay to Seller, in consideration
for the Assets, the following (the "Purchase Price") and issue to Seller THREE
MILLION THREE HUNDRED THOUSAND SHARES (3,300,000) of ANI's common stock , $0.001
par value, delivered directly to the Seller (the "Closing Shares"); and
2.2.2 Allocation of Purchase Price. The Purchase Price shall be allocated
among the Assets in the manner required by Section 1060 of the Code and
regulations thereunder. Buyer and Seller agree to each prepare and file on a
timely basis with the Internal Revenue Service substantially identical initial
and supplemental Internal Revenue Service Forms 8594 "Asset Acquisition
Statements Under Section 1060."
2.3 Closing Date. The transaction shall close on as of January 1, 2004, at
a place and time to be determined by the parties.
2.4 Closing Costs; Transfer Taxes and Fees. Seller shall be responsible
for paying (i) any documentary and transfer taxes and any sales, use or other
taxes imposed by reason of the transfers of Assets provided hereunder and any
deficiency, interest or penalty asserted with respect thereto and (ii) all costs
of obtaining the transfer of existing Permits which may be lawfully transferred,
(iii) all fees and costs of recording or filing all applicable conveyancing
instruments described in Section 3.1, and (iv) all fees and costs of recording
or filing all UCC termination statements and other releases of Encumbrances.
2.5 Risk of Loss. All risk of loss with respect to the Assets and Business
of Seller on or before the Closing Date shall remain the sole risk of Seller.
32
ARTICLE III
CLOSING
3.1 Conveyances at Closing by Seller. To effect the sale and transfer
referred to in Section 2.1 hereof and subject to satisfaction or waiver by
Seller of the conditions set forth in Section 7.2 hereof, at Closing, Seller
agrees to execute and deliver to Buyer, or file with such governmental
authorities as may be appropriate:
3.1.1 one or more bills of sale, each in the form of Exhibit A
attached hereto, conveying in the aggregate all of Seller's owned personal
property included in the Assets, free and clear of all Encumbrances;
3.1.2 the Closing Financial Statements;
3.1.3 the certificates and other documents described in Article VII
hereof;
3.1.4 all documents necessary to release the Assets from all
Encumbrances;
3.1.5 resolutions adopted by Seller's board of directors and, to the
extent necessary, shareholders approving this Agreement, certified by the
secretary of Seller;
3.1.6 a certificate from the Secretary of State of the State of
Pennsylvania as to Seller's good standing as of the date of the Closing; and
3.1.7 such other instruments as shall be reasonably requested by
Buyer to vest in Buyer title in and to the Assets in accordance with the
provisions hereof, all of which instruments including those specifically listed
above shall be in form and substance acceptable to Seller and its counsel.
3.2 Conveyances at Closing by Buyer. To effect the assumption of
liabilities referred to in Section 2.2 hereof and the payment obligations set
forth in Section 2.4 hereof, subject to satisfaction or waiver by Buyer of the
conditions set forth in Section 7.1 hereof, at Closing, Buyer agrees to execute
which will be retained by Buyer, deliver to Seller, or file with such
governmental authorities as may be appropriate:
3.2.1 the Closing Shares pursuant to Section 2.4.1.1.1 hereof;
3.2.2 the certificates and other documents described in Article VII
hereof;
3.2.3 such other instruments as shall be reasonably requested by
Seller in accordance with the provisions hereof, all of which instruments
including those specifically listed above shall be in the form and substance
reasonably acceptable to Buyer and its counsel.
33
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows, which representations
and warranties as of the dates of delivery of the respective Schedules and as of
the Closing Date shall be true and correct:
4.1 Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Pennsylvania. Copies of the Certificate of Incorporation and Bylaws of Seller,
and all amendments thereto, heretofore delivered to Buyer are accurate and
complete as of the date hereof. Other than as listed on Schedule 4.1, Seller has
no direct or indirect stock or other equity or ownership interest (whether
controlling or not) in any corporation, association, partnership, joint venture
or other entity which engages in a business substantially similar to the
Business.
4.2 Authorization. Seller has all requisite corporate power and authority,
and has taken all corporate action necessary, to own, lease and operate the
Assets, to conduct the Business as it is presently being conducted, to execute
and deliver this Agreement and each Ancillary Agreement to which it will be a
party, to consummate the transactions contemplated hereby and to perform its
obligations hereunder. This Agreement has been duly executed and delivered by
Seller and is a legal, valid and binding obligation of Seller enforceable
against it in accordance with its terms. Following their execution and delivery
by Seller and the other parties thereto each of the Ancillary Agreements and
other documents delivered by Seller at Closing will be a legal, valid and
binding obligation of Seller, enforceable against it in accordance with their
terms.
4.3 No Changes to the Assets. Other than as set forth on Schedule 4.3,
since the Interim Balance Sheet Date:
4.3.1 there has been no actual or threatened adverse change in the
financial condition or results of operation, the Business or the Assets or any
event, condition or state of facts, in either case that is, or would result in a
Material Adverse Change in the Assets or the Business or the prospects for the
Business, including without limitation the loss of any material customers;
4.3.2 there has not been any sale or other disposition, except in
the ordinary course of Seller's Business, of any of the assets of the Business,
or any Encumbrance placed on the Assets;
4.3.3 Seller has operated the Business in the ordinary course
consistent with Seller's past practice so as to preserve the Business intact,
and to preserve the Business and the goodwill of Seller's suppliers, customers,
distributors and others having business relations with it;
4.3.4 Seller has not changed its accounting methods or practices
(including any change in depreciation or amortization policies or rates) or
revalued any of its assets.
4.4 Assets. Seller has good and marketable fee simple title to the Assets
and upon the consummation of the transactions contemplated hereby will transfer
to Buyer good and marketable title to all of the Assets, free and clear of any
Encumbrances, except for any Encumbrance that Buyer, in its sole discretion,
34
specifically accepts in writing. The Assets constitute all assets necessary for
the conduct of the Business as presently conducted.
4.5 Permits and Consents. Seller has all Permits required to conduct the
Business, except where the failure to obtain such Permits would not have a
Material Adverse Effect on the Assets or the Business. All Permits of Seller
related to the Business are valid and in full force and effect and are listed on
Schedule 4.6. Except as disclosed on Schedule 4.6, no notice to, declaration,
filing or registration with, or authorization, or Consent or approval of, or
Permit from, any governmental or regulatory body or authority, or any other
person or entity, is required to be made or obtained by Seller in connection
with the execution, delivery or performance of this Agreement and the
consummation of the transactions contemplated hereby, except where the failure
to comply with such requirement would not have a Material Adverse Effect on the
Assets or the consummation of the transactions contemplated hereby. Schedule 4.6
sets forth all Consents required for the assignment by Seller to Buyer of the
Assumed Contracts. All of the Assumed Contracts will be enforceable by Buyer
after the Closing to the same extent as if the transactions contemplated by this
Agreement had not been consummated.
4.6 No Conflict or Violation. After giving effect to Consents and lien
releases that have been obtained from third parties or will be so obtained prior
to the Closing Date, neither the execution and delivery of this Agreement by
Seller, nor the consummation of the transactions contemplated hereby, nor
compliance by Seller with any of the provisions hereof, will (a) violate or
conflict with any provision of the Certificate of Incorporation or Bylaws of
Seller, (b) violate, conflict with, or result in a breach of any provision of,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in a right of termination or
acceleration under, or result in the creation of any Encumbrance upon any of the
Assets under, any of the terms, conditions or provisions of any Contract,
Permit, agreement, or other instrument or obligation (i) to which Seller is a
party or (ii) by which the Assets are bound, (c) violate, except where such
violation would not, individually or in the aggregate, have a Material Adverse
Effect on the Assets or the Business, any statute, rule, regulation, ordinance,
code, order, judgment, ruling, writ, injunction, decree or award or (d) impose
any Encumbrance, restriction or charge on the Assets or the Business.
4.7 Financial Statements. Attached hereto as Schedule 4.8 are the
Financial Statements of Seller. The Financial Statements (a) are in accordance
with the underlying books and records of Seller, (b) have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods covered thereby (except as otherwise described in
Schedule 4.8) and (c) fairly and accurately present the assets, liabilities
(including all reserves) and financial position of Seller as of the respective
dates thereof and the results of operations and changes in cash flows for the
periods then ended (subject, in the case of the Interim Financial Statements, to
normal year-end adjustments). At the respective dates of the Financial
Statements, there were no liabilities of Seller, which, in accordance with
generally accepted accounting principles, should have been shown or reflected in
the Financial Statements or the notes thereto, which are not shown or reflected
in the Financial Statements or the notes thereto.
4.8 Books and Records. Seller has made and kept (and given Buyer access
to) Books and Records and accounts, which, in reasonable detail, accurately and
fairly reflect the activities of Seller in connection with the Business. A copy
of the minute book of Seller has been previously delivered to Buyer. The copies
35
of the stock book records of Seller previously delivered to Buyer are true,
correct and complete, and accurately reflect all transactions effected in
Seller's stock through and including the date hereof.
4.9 Litigation. Except as set forth on Schedule 4.10, there is no action,
order, writ, injunction, judgment or decree outstanding or any claim, suit,
litigation, proceeding, labor dispute, arbitral action, governmental audit or
investigation (collectively, "Actions") pending, or to the best knowledge of
Seller, threatened or anticipated (a) against, related to or affecting Seller,
the Business or the Assets or (b) seeking to delay, limit or enjoin the
transactions contemplated by this Agreement. Seller is not in default with
respect to or subject to any judgment, order, writ, injunction or decree of any
court or governmental agency, and there are no unsatisfied judgments against
Seller, the Business or the Assets.
4.10 Labor Matters. Seller is not a party to any labor agreement with
respect to its employees with any labor organization, union, group or
association and there are no employee unions (nor any other similar labor or
employee organizations) under local statutes, custom or practice. Seller has not
experienced any attempt by organized labor or its representatives to make Seller
conform to demands of organized labor relating to its employees or to enter into
a binding agreement with organized labor that would cover the employees of
Seller.
4.11 Compliance with Law. Seller, the conduct of the Business and the
operation of the Facilities have not violated and are in compliance with all
laws, statutes, ordinances, regulations, rules and orders of any foreign,
federal, state or local government and any other governmental department or
agency, and any judgment, decision, decree or order of any court or governmental
agency, department or authority, including without limitation environmental
laws, relating to the Assets, Facilities or Business or operations of Seller,
except where the violation or failure to comply, individually or in the
aggregate, would not have a Material Adverse Effect on the Facilities, the
Assets or the Business. Seller and the conduct of the Business and the operation
of the Facilities are in conformity with all energy, public utility, zoning,
building and health codes, regulations and ordinances, OSHA and environmental
laws and all other foreign, federal, state, and local governmental and
regulatory requirements, except where any nonconformity would not have a
Material Adverse Effect on the Facilities, the Assets or the Business. Seller
has not received any notice to the effect that, or otherwise been advised that,
it is not in compliance with any such statutes, regulations, rules, judgments,
decrees, orders, ordinances or other laws, and Seller has no reason to
anticipate that any existing circumstances are likely to result in violations of
any of the foregoing, which non-compliance or violation could, in any one case
or in the aggregate, have a Material Adverse Effect on the Facilities, the
Assets or the Business.
4.12 No Brokers. Neither Seller nor any of its respective officers,
directors, employees, shareholders or Affiliates has employed or made any
agreement with any broker, finder or similar agent or any person or firm which
will result in an obligation to pay any finder's fee, brokerage fees or
commission or similar payment in connection with the transactions contemplated
hereby.
4.13 No Other Agreements to Sell the Assets. Neither Seller nor any of its
respective officers, directors, shareholders or Affiliates have any commitment
or legal obligation, absolute or contingent, to any other person or firm other
than the Buyer to sell, assign, transfer or effect a sale of any of the Assets
(other than inventory in the ordinary course of business), or to effect a
liquidation, dissolution or other reorganization of Seller.
36
4.14 Intellectual Property.
4.14.1 Intellectual Property. Schedule 4.15 contains a complete and
correct list and a brief description, of all Intellectual Property in which
Seller has any interest whatsoever and that is primarily related to, used in,
held for use in connection with, or necessary for the conduct of, or otherwise
material to, the Business (the "Intellectual Property Assets"). The Intellectual
Property Assets listed in Schedule 4.15 are all those used by Seller in
connection with the Business and are identified as "owned" and "licensed"
Intellectual Property Assets.
4.14.2 Royalties and Licenses. Except as set forth on Schedule 4.15,
no person has a right to receive a royalty or similar payment in respect of any
Intellectual Property Assets. Except as set forth on Schedule 4.15, Seller has
no licenses granted, sold or otherwise transferred by or to it or other
agreements to which it is a party, relating in whole or in part to any of the
Intellectual Property Assets.
4.14.3 Ownership and Protection of Intellectual Property. As
applicable, Seller owns or has the right to use pursuant to license, sublicense,
agreement, or permission all Intellectual Property Assets free from any
Encumbrances, and as to the owned Intellectual Property Assets, free from any
requirement of any past, present, or future royalty payments, license fees,
charges or other payments, or conditions or restrictions whatsoever. None of the
owned Intellectual Property Assets are involved in any pending or to the best
knowledge of Seller, threatened litigation, none of the licensed Intellectual
Property Assets are involved in any pending or, to the best knowledge of Seller,
threatened litigation involving Seller and, to the best of Seller's knowledge,
none of the licensed Intellectual Property Assets are involved in any pending or
threatened litigation involving parties other than Seller. Seller has not
received any notice of invalidity or infringement of any rights of others with
respect to such Intellectual Property Assets. To the best of Seller's knowledge
after reasonable investigation, the conduct of the Business does not infringe or
otherwise conflict with any rights of any other firm, corporation, association
or person in respect of any Intellectual Property. To the best knowledge of
Seller after reasonable investigation, none of the owned Intellectual Property
Assets are being infringed or otherwise used or available for use by any other
firm, corporation, association or person. Seller has taken all reasonable and
prudent steps to protect the owned Intellectual Property Assets from
infringement by any other firm, corporation, association or person. Seller's use
of the Intellectual Property Assets is not, to the best of Seller's knowledge
after reasonable investigation, infringing upon or otherwise violating the
rights of any third party in or to such Intellectual Property Assets, nor, to
the best of Seller's knowledge after reasonable investigation, has such
infringement been alleged by any third party. All of the Intellectual Property
Assets are valid and enforceable rights of Seller, and the owned Intellectual
Property Assets, will be quit-claimed to Buyer and will not cease to be valid
and in full force and effect by reason of the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated by this Agreement.
4.15 Tax Matters.
4.15.1 Filing of Tax Returns. Seller has timely filed with the
appropriate taxing authorities all returns (including without limitation
information returns and other material information) in respect of Taxes required
to be filed through the date hereof and will timely file any such returns
required to be filed on or prior to the Closing Date. The returns and other
information filed are complete and accurate in all material respects. Neither
37
Seller, nor any group of which Seller now or was a member, has requested any
extension of time within which to file returns (including without limitation
information returns) in respect of any taxes.
4.15.2 Payment of Taxes. All Taxes, in respect of periods beginning
before the Closing Date, have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as set forth in the Financial
Statements, and Seller does not have any liability for Taxes in excess of the
amounts so paid or reserves so established. There are no liens for Taxes (other
than as could be asserted for current Taxes not yet due and payable) on the
Assets.
4.15.3 Audits, Investigations or Claims. There are no pending or, to
the best of Seller's knowledge, threatened audits, investigations or claims for
or relating to any material additional liability in respect of Taxes, and there
are no matters under discussion with any governmental authorities with respect
to Taxes that in the reasonable judgment of Seller, or its counsel, is likely to
result in a material additional liability for Taxes. Seller has not been
notified that any taxing authority intends to audit a return for any period. No
extension of a statute of limitations relating to Taxes is in effect with
respect to Seller.
4.15.4 No Withholding. The transaction contemplated herein is not
subject to the tax withholding provisions of Section 3406 of the Code, or of
Subchapter A of Chapter 3 of the Code or of any other provision of law.
4.16 Customers. Seller has previously provided to Buyer true and correct
lists of (a) the names and addresses of all domestic customers of the Business
that ordered products, goods, or services from Seller during the twelve (12)
month period ended as of the date of the Interim Balance Sheet, and (b) the
amount for which each such customer was invoiced during such period related to
the Business. Except as set forth in Schedule 4.17, Seller has received no
notice and Seller has no reason to believe that any customer of Seller (i) has
ceased, or will cease, to use the products, goods, or services of Seller which
relate to the Business, (ii) has substantially reduced, or will substantially
reduce, the use of products, goods, or services of Seller which relate to the
Business or (iii) has sought, or is seeking, to reduce the price it will pay for
products, goods or services of Seller, which relate to the Business, including
in each case after the consummation of the transactions contemplated hereby. To
the best of Seller's knowledge, no customer of Seller with respect to the
Business has otherwise threatened to take any action described in the preceding
sentence as a result of the consummation of the transactions contemplated by
this Agreement.
4.17 Warranties. Except as set forth in Schedule 4.18, (a) there are no
warranties, express or implied, written or oral, with respect to the products of
the Business and (b) other than as have occurred in the ordinary course of
Seller's business, there are no pending or threatened claims with respect to any
such warranty, and (c) Seller has not, and to the best knowledge of Seller,
neither Buyer nor any of its affiliates will have, any liability, after the
Closing with respect to any such warranty, whether known or unknown, absolute,
accrued, contingent or otherwise and whether due or to become due, other than
customary returns in the ordinary course of the Business which are reserved
against in accordance with generally accepted accounting principles in the most
recent Financial Statements of Seller. Other than as disclosed in writing to
Buyer, Seller has received no material complaints from customers relating to the
Business.
4.18 Liabilities. Except as set forth on Schedule 4.19, Seller has no
liabilities or obligations with respect to the Business or the Assets to be
transferred (absolute, accrued, contingent or otherwise) except (i) liabilities
38
which are reflected on the Interim Balance Sheet or which are not required under
generally accepted accounting principles to be reflected on the Interim Balance
Sheet, (ii) liabilities incurred in the ordinary course of the business and
consistent with past practice since the Interim Balance Sheet Date, and (iii)
liabilities arising under the Contracts previously furnished to Buyer.
4.19 Securities Law Matters.
4.19.1 Seller confirms that it is acquiring the ANI Shares for its
own account as principal, for investment purposes only, and not with a view to,
or for, resale or distribution thereof, and no other person has or will have a
direct or indirect beneficial interest in the ANI Shares.
4.19.2 Seller understands that the offering and sale of the ANI
Shares is intended to a be a transaction by an issuer not involving any public
offering exempt from registration under the Securities Act of 1933 (the
"Securities Act") by virtue of Section 4(2) of the Securities Act and the rules
and regulations of the Securities and Exchange Commission (the "Commission")
thereunder;
4.19.3 Seller represents that it is an "accredited investor" as such
term is defined in Rule 501 under the Securities Act;
4.19.4 Seller understands and acknowledges that there are
substantial risks of loss of investment involved in an investment in the ANI
Shares, and that the investment in the ANI Shares is an illiquid investment
subject to transfer restrictions, and Seller represents and warrants that it has
the financial ability to bear the economic risk of such investment;
4.19.5 Seller has such knowledge and experience in financial and
business matters, including investments of the type represented by the ANI
Shares, as to be capable of evaluating the merits of investment therein;
4.19.6 Seller has been furnished with a copy of the most recent
periodic reports filed by Buyer with the Commission and any document requested
by Seller, and Seller has carefully read and understands such materials and has
evaluated the risks of an acquisition of the ANI Shares;
4.19.7 Seller has been given the opportunity to ask questions of,
and receive answers from, Representatives of Buyer in order for it to evaluate
the merits and risks of investment in the ANI Shares;
4.19.8 Seller has not been furnished with or relied upon any oral or
written representation, warranty or information in connection with the offering
of the ANI Shares except as set forth in this Agreement.
4.19.9 The instruments evidencing the ANI Shares shall bear a
restrictive legend in substantially the following form: "The securities
represented by this certificate have not been registered under the Securities
Act of 1933, as amended (the "Act"). These securities have been acquired for
investment and not with a view to distribution or resale, and may not be sold,
39
offered for sale, pledged or hypothecated in the absence of an effective
registration statement for such shares under the Act or an opinion of counsel
satisfactory in form and content to the issuer that such registration is not
required under such Act."
4.20 Disclosure. Neither this Agreement nor any of the Schedules or
Exhibits hereto contains or shall contain when delivered at Closing any untrue
statement of a material fact or shall omit to state a material fact necessary to
make the statements contained herein or therein, in light of the circumstances
in which they were made, not misleading; and there is no fact with respect to
the Business which has not been disclosed to Buyer which Materially Adversely
Affects or could reasonably be anticipated to Materially Adversely Affect the
Assets being transferred, financial condition or results of operations,
customer, employee or supplier relations, business condition or prospects of
Seller.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows, which representations
and warranties are, and as of the Closing Date shall be, true and correct:
5.1 Organization of Buyer. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.2 Authorization. Buyer has all requisite corporate power and authority,
and has taken all corporate action necessary, to execute and deliver this
Agreement and each Ancillary Agreement to which it will be a party, to
consummate the transactions contemplated hereby and to perform its obligations
hereunder. This Agreement has been duly executed and delivered by Buyer and is a
legal, valid and binding obligation of Buyer enforceable against it in
accordance with its terms. Following their execution and delivery by Buyer and
the other parties thereto each of the Ancillary Agreements and other documents
delivered by Buyer at Closing will be a legal, valid and binding obligation of
Buyer, enforceable against it in accordance with their terms.
5.3 No Conflict or Violation. Neither the execution, delivery or
performance of this Agreement or the Ancillary Agreements nor the consummation
of the transactions contemplated hereby or thereby, nor compliance by Buyer with
any of the provisions hereof or thereof, will (a) violate or conflict with any
provision of the Certificate of Incorporation or Bylaws of Buyer, or (b) violate
any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award binding upon Buyer.
5.4 Consents and Approvals. No notice to, declaration, filing or
registration with, or authorization, Consent or approval of, or permit from, any
governmental or regulatory body or authority, or any other person or entity, is
required to be made or obtained by Buyer in connection with the execution,
delivery and performance of this Agreement or the Ancillary Agreements and the
consummation of the transactions contemplated hereby or thereby, except (a) as
may be required by Buyer to operate the Business after the Closing, or (b) as
has been obtained on or prior to the date hereof.
40
5.5 No Brokers. Neither Buyer nor any of its respective officers,
directors, employees, shareholders, or Affiliates has employed or made any
agreement with any broker, finder, or similar agent or any person or firm which
will result in an obligation to pay any finder's fee, brokerage fees, or
commission or similar payment in connection with the transactions contemplated
hereby.
5.6 ANI Shares. The ANI Shares to be issued pursuant to this Agreement,
when issued and delivered in accordance with the terms of this Agreement, will
be duly authorized, validly issued, fully paid, and nonassessable and free of
preemptive rights.
5.7 SEC Information Furnished Concerning Buyer. For the period from
January 1, 2003 to the date hereof, Buyer has, or will, file with the
Commission those filings and reports required pursuant to the Securities and
Exchange Act of 1934 (the "SEC Documents"). The audited consolidated financial
statements for the year ended December 31, 2003, contained within the SEC
Documents have been prepared in accordance with generally accepted accounting
principles consistently applied (except as may be otherwise noted therein) and
fairly present the consolidated financial position of Buyer and its subsidiaries
as of such date and the consolidated results of operations of Buyer and its
subsidiaries for the year then ended. To Buyer's knowledge, as of their
respective dates, the SEC Documents, including, but not limited to, the
financial statements contained therein, did not contain any untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
41
ARTICLE VI
COVENANTS OF SELLER AND BUYER
Buyer and Seller each covenant with the other as follows:
6.1 Further Assurances. Upon the terms and subject to the conditions
contained herein, each of the parties hereto agrees, both before and after the
Closing, (i) to use all reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable to consummate and make effective the transactions contemplated by this
Agreement, (ii) to execute any documents, instruments or conveyances of any kind
which may be reasonably necessary or advisable to carry out any of the
transactions contemplated hereunder, and (iii) to cooperate with each other in
connection with the foregoing, including using their respective best efforts (A)
to obtain all necessary waivers, Consents and approvals from other parties to
the Contracts to be assumed by Buyer; provided, however, that Buyer shall not be
required to make any payments, commence litigation or agree to modifications of
the terms thereof in order to obtain any such waivers, Consents or approvals,
(B) to obtain all necessary Permits as are required to be obtained under any
federal, state, local or foreign law or regulations, (C) to effect all necessary
registrations and filings, including without limitation submissions of
information requested by governmental authorities, and (D) to fulfill all
conditions to this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Obligations of Buyer. The obligations of Buyer to
consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by Buyer, in its sole discretion) on or prior to the
Closing Date of the following additional conditions, which Seller agrees to use
reasonable good faith efforts to cause to be fulfilled:
7.1.1 Representations, Performance. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all respects at and as of the date hereof, and shall be repeated and shall be
true and correct in all respects on and as of the Closing Date with the same
effect as though made on and as of the Closing Date.
7.1.2 Performance of Covenants and Conditions. Seller shall have
duly performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
7.1.3 Consents. Seller shall have obtained and shall have delivered
to Buyer copies of (i) all governmental approvals required to be obtained by
Seller in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) all Consents
(including, without limitation, all Consents set forth on Schedule 4.6),
necessary to be obtained in order to consummate the transactions contemplated by
this Agreement.
7.1.4 Closing Financial Statements. Buyer shall have received the
Closing Financial Statements.
42
7.1.5 No Material Adverse Effect. No event, occurrence, fact,
condition, change, development or effect shall have occurred, exist or come to
exist since the date of the Interim Balance Sheet that, individually or in the
aggregate, has constituted or resulted in, or could reasonably be expected to
constitute or result in, a Material Adverse Effect.
7.1.6 No Proceedings or Litigation. No Action by any governmental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby and
which could reasonably be expected to damage Buyer materially if the
transactions contemplated hereby are consummated, including without limitation
any Material Adverse Effect on the right or ability of Buyer to own, operate,
possess or transfer the Assets after the Closing. There shall not be any
statute, rule or regulation that makes the purchase and sale of the Business or
the Assets contemplated hereby illegal or otherwise prohibited.
7.1.7 Conveyancing Documents; Release of Encumbrances. Seller shall
have executed and delivered each of the documents described in Article III
hereof so as to effect the transfer and assignment to Buyer of all right, title
and interest in and to the Assets and Seller shall have filed (where necessary)
and delivered to Buyer all documents necessary to release the Assets from all
Encumbrances, which documents shall be in a form reasonably satisfactory to
Buyer and its counsel.
7.1.8 Permits. Buyer shall have obtained or been granted the right
to use all Permits necessary to its operation of the Business
7.1.9 Due Diligence Review. Buyer and its Representatives shall have
conducted a due diligence review of Seller's Books and Records, Financial
Statements, and other records and accounts of the Business, and in the sole
discretion of Buyer, Buyer shall be satisfied with such review. Such review
shall have no effect whatsoever on the liability of Seller to Buyer under this
Agreement or otherwise for breach of any representations, warranties, or
covenants of Seller or hereunder. Seller shall have also delivered to Buyer all
Schedules to be supplied hereunder at least two (2) business days prior to
Closing, which shall be satisfactory to Buyer.
7.2 Conditions to Obligations of Seller. The obligations of Seller to
consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by Seller, in its sole discretion) on or prior to the
Closing Date of the following additional conditions, which Buyer agrees to use
reasonable good faith efforts to cause to be fulfilled.
7.2.1 Representations, Performance. All representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
respects at and as of the date hereof, and shall be repeated and shall be true
and correct in all respects on and as of the Closing Date with the same effect
as though made on and as of the Closing Date.
7.2.2 Performance of Covenants and Conditions. Buyer shall have duly
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by it prior to or on the Closing
Date.
7.2.3 No Proceedings or Litigation. No Action by any govern1mental
authority or other person shall have been instituted or threatened which
questions the validity or legality of the transactions contemplated hereby.
There shall not be any statute, rule or regulation that makes the purchase and
43
sale of the Business or the Assets contemplated hereby illegal or otherwise
prohibited.
7.2.4 Conveyances. Buyer shall have delivered, or cause to be
delivered, to Seller items or documents identified in Article III hereof.
ARTICLE VIII
CONDUCT OF SELLER AND BUYER PENDING THE CLOSING
8.1 Seller Covenants. Seller hereby covenants and agrees that from the
date hereof to the Closing Date:
8.1.1 Conduct of Business Pending the Closing. Except as
specifically contemplated in this Agreement or as disclosed in any Schedule
hereto, the Business of Seller shall be conducted only in, and Seller shall take
no action except in, the ordinary course, on an arm's length basis, and in
accordance with all applicable laws, rules, and regulations and past custom and
practice, including, without limitation, making any loans or any cash payments,
or transferring any other assets or properties of Seller to any employee,
officer, shareholder, or director of Seller; and Seller will not, directly or
indirectly, do or permit to occur any of the following:
8.1.1.1 Cancel or terminate or permit to be canceled or
terminated its current insurance (or reinsurance) policies or permit any of the
coverage thereunder to lapse, unless simultaneous with such termination,
cancellation, or lapse, replacement policies providing coverage equal to or
greater than the coverage under the canceled, terminated, or lapsed policies are
in full force and effect;
8.1.1.2 Default under any material contract, agreement,
commitment, or undertaking;
8.1.1.3 Knowingly violate or fail to comply with any laws
applicable to it or the Business;
8.1.1.4 Commit any act or permit the occurrence of any event
or the existence of any condition of the type described in Section 4.3 hereof;
8.1.1.5 Except in the ordinary course of business consistent
with historical practices, enter into or modify any employment, severance, or
similar agreements or arrangements with, or grant any bonuses, salary increases,
or severance or termination pay to, any officers, directors, employees, or
consultants, or adopt or amend any bonus, profit sharing, compensation, stock
option, pension, retirement, deferred compensation, employment, or other benefit
plan, trust, fund, or group arrangement for the benefit or welfare of any
officers, directors, or employees;
8.1.1.6 Directly or indirectly enter into or modify any
contract, agreement, or understanding or enter into any transaction not in the
ordinary course of business;
44
8.1.1.7 Cancel, without full payment, any note, loan, or other
obligation owing to Seller relating to the Business except in the ordinary
course of business;
8.1.1.8 Acquire (by merger, exchange, consolidation,
acquisition of stock or assets, or otherwise) any corporation, partnership,
joint venture, or other business organization or division or material assets
thereof;
8.1.1.9 Issue any additional shares of capital stock or permit
the transfer of any outstanding shares of Seller's capital stock or declare any
dividends or distributions;
8.1.1.10 Issue or create any warrants, obligations,
subscriptions, options, convertible securities, or other commitments under which
any additional shares of its capital stock might be directly or indirectly
authorized, issued, or transferred from treasury, or incur any indebtedness for
borrowed money or issue any debt securities except the borrowing of working
capital in the ordinary course of business and consistent with past practice;
8.1.1.11 Pay any obligation or liability, fixed or contingent,
except in the ordinary course of business;
8.1.1.12 Waive or compromise any right or claim, other than as
required to resolve any pending or threatened litigation disclosed in the
Schedules attached hereto;
8.1.1.13 Agree to do any of the actions described in the
preceding clauses 8.1.1.1 through 8.1.1.12
8.1.2 Business Relationships. Seller will exercise its best efforts
to preserve intact its business organization and goodwill, keep available the
services of its officers and employees as a group, and maintain satisfactory
relationships with suppliers, distributors, customers, and others having
business relationships with it.
8.1.3 Notification of Certain Matters. Seller shall (i) confer on a
regular basis with Representatives of Buyer and report operational matters and
the general status of ongoing operations, (ii) notify Buyer of any Material
Adverse Change in the normal course of its business and of any governmental or
third party complaints, investigations, or hearings (or communications
indicating that the same may be contemplated); and (iii) promptly notify Buyer
if Seller shall discover that any representation or warranty made by it in this
Agreement was when made, or has subsequently become, untrue.
8.1.4 Transfer of Permits. Seller will use its best efforts to
assist Buyer to effect the assignment or other transfer of Permits from Seller
to Buyer as of or as soon as practicable after the Closing Date.
8.1.5 Closing. Seller shall use its best efforts to cause the
conditions specified in Article VII hereof to be satisfied at or prior to the
Closing Date.
8.2 No Negotiations. Seller shall not, directly or indirectly, through any
officer, director, agent, or otherwise, solicit, initiate, or encourage
submission of any proposal or offer from any person or entity (including any of
its or their officers or employees) relating to any liquidation, dissolution,
recapitalization, merger, consolidation, or acquisition or purchase of all or a
45
material portion of the assets of, or any equity interest in, Seller or other
similar transaction or business combination involving Seller, or participate in
any negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist, participate in,
facilitate, or encourage, any effort or attempt by any other person or entity to
do or seek any of the foregoing. Seller shall promptly notify Buyer if any such
proposal or offer, or any inquiry from or contact with any person with respect
thereto, is made and shall promptly provide Buyer with such information
regarding such proposal, offer, inquiry, or contact as Buyer may request.
8.3 Public Announcements. The parties hereto shall not issue any press
release or public announcement, including announcements by any party for general
reception by or dissemination to employees, agents, or customers, with respect
to this Agreement and the other transactions contemplated by this Agreement
without the prior written consent of the other parties hereto (which consent
shall not be withheld unreasonably); provided, however, that Buyer may make any
disclosure of announcement of information, it is obligated to make pursuant to
applicable law or regulation, including any applicable law or regulation of the
Nasdaq Over the Counter Bulletin Board or any national securities exchange, as
applicable.
8.4 Confidentiality. Each party hereto, and its officers, directors,
agents, and affiliates, will hold in strict confidence, and will not divulge,
communicate, use to the detriment of any other party hereto or for the benefit
of any other person or persons, or misuse in any way, any financial information
or other data obtained in connection with this Agreement, including, without
limitation, any confidential information or trade secrets of such other party,
personnel information, secret processes, know how, customer lists, formulas, or
other technical data; and if the transactions contemplated by this Agreement are
not consummated, each party hereto, and its officers, directors, agents and
Affiliates, will return to each other party all such data an information,
including without limitation, work sheets, test reports, manuals, lists,
memoranda, and other documents prepared by or made available in connection with
this transaction (and all copies of same). The parties hereto may disclose such
information to their respective attorneys, accountants and other agents so long
as they agree to keep such information confidential. Notwithstanding the
foregoing, confidential information shall not include any information which a
party can demonstrate: (i) was already in such party's possession prior to
negotiations related to this transaction; (ii) is or becomes publicly and openly
known and in the public domain through no fault of such party; or (iii) is
received by such party in a non-confidential manner from a third party having
the right to disclose such information.
46
ARTICLE IX
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
9.1 Books and Records; Payment of Liabilities.
9.1.1 Books and Records. Each party agrees that it will cooperate
with and make available to the other party, during normal business hours, all
Books and Records, information and employees (without substantial disruption of
employment) retained and remaining in existence after the Closing which are
necessary or useful in connection with any tax inquiry, audit, investigation or
dispute, any litigation or investigation or any other matter related to the
Business or the Assets requiring any such Books and Records, information or
employees for any reasonable business purpose.
9.1.2 Cooperation and Records Retention. Seller and Buyer shall (i)
each provide the other with such assistance as may reasonably be requested by
any of them in connection with the preparation of any return, audit, or other
examination by any taxing authority or judicial or administrative proceedings
relating to liability for Taxes, (ii) each retain and provide the other with any
records or other information that may be relevant to such return, audit or
examination, proceeding or determination, and (iii) each provide the other with
any final determination of any such audit or examination, proceeding, or
determination that affects any amount required to be shown on any tax return of
the other for any period. Without limiting the generality of the foregoing,
Buyer and Seller shall each retain, until the applicable statutes of limitations
(including any extensions) have expired, copies of all tax returns, supporting
work schedules, and other records or information, in a timely manner, as and
that may be relevant to such returns for all tax periods or portions thereof
ending on or before the Closing Date and shall not destroy or otherwise dispose
of any such records without first providing the other party with a reasonable
opportunity to review and copy the same.
9.2 Survival of Representations, Etc. All statements contained in any
certificate, schedule, exhibit, instrument or conveyance delivered by or on
behalf of the parties pursuant to this Agreement or in connection with the
transactions contemplated hereby shall be deemed to be representations and
warranties by the parties hereunder. The representations and warranties of
Seller and Buyer contained herein and all claims and causes of action with
respect thereto (other than the provisions of Sections 4.4, 4.16 and this
Section 9.3, and all claims and causes of action with respect thereto) shall
survive for a period of three (3) years from the Closing Date, except that the
representations and warranties in Section 4.4 shall survive forever. The
representations and warranties in Section 4.16 shall survive until the
expiration of the applicable statute of limitations (with extensions) with
respect to the matters addressed in such section. The termination of the
representations and warranties provided herein shall not affect the rights of a
party in respect of any Claim made by such party in a writing received by the
other party prior to the expiration of the applicable survival period provided
herein.
9.3 Indemnifications.
9.3.1 By Seller. Regardless of Seller's knowledge of the existence
of an Indemnifiable Event (as defined below), Seller shall indemnify, defend,
save and hold harmless Buyer, its Affiliates and subsidiaries, and their
respective Representatives, from and against any and all Damages incurred in
47
connection with, arising out of, resulting from or incident to (i) any breach of
any representation or warranty, or the inaccuracy of any representation or
warranty, made by Seller in or pursuant to this Agreement (it being understood
and agreed that, notwithstanding anything to the contrary contained in this
Agreement, to determine if there had been an inaccuracy or breach of a
representation or warranty of the Seller and the losses arising from such
inaccuracy or breach, such representation or warranty shall be read as if it
were not qualified by materiality, including, without limitation, qualifications
indicating accuracy in all material respects, or accuracy except to the extent
the inaccuracy will not have a Material Adverse Effect); (ii) any breach of any
covenant or agreement made by Seller in or pursuant to this Agreement; (iii) any
Excluded Liability; (iv) any liability imposed upon Buyer by reason of Buyer's
status as transferee of the Business or the Assets except to the extent such
liability arises out of or results from Buyer's operation of the Business after
the Closing Date; (v) any liability arising under any environmental law on
account of the conduct of Seller or prior owners or users of the Facilities or
other persons, or on account of the operation of the Business or the Facilities,
or related to any environmental condition (collectively, the "Indemnifiable
Events").
9.3.2 By Buyer. Buyer shall indemnify, defend, save and hold
harmless Seller, its Affiliates and its Representatives from and against any and
all Damages incurred in connection with, arising out of, resulting from or
incident to (i) any breach of any representation or warranty, or the inaccuracy
of any representation or warranty, made by Buyer in or pursuant to this
Agreement (it being understood and agreed that, notwithstanding anything to the
contrary contained in this Agreement, to determine if there had been an
inaccuracy or breach of a representation or warranty of the Buyer and the losses
arising from such inaccuracy or breach, such representation or warranty shall be
read as if it were not qualified by materiality, including, without limitation,
qualifications indicating accuracy in all material respects, or accuracy except
to the extent the inaccuracy will not have a Material Adverse Effect); (ii) any
breach of any covenant or agreement made by Buyer in or pursuant to this
Agreement; or (iii) any Assumed Liability insofar as such Assumed Liability
arises from and after the Closing.
9.3.3 Cooperation. The indemnified party shall cooperate in all
reasonable respects with the indemnifying party and such party's attorneys in
the investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom; provided, however, that the indemnified party may, at its own
cost, participate in the investigation, trial and defense of such lawsuit or
action and any appeal arising therefrom. The parties shall cooperate with each
other in any notifications to insurers.
9.3.4 Defense of Claims. If a claim for Damages (a "Claim") is to be
made by a party entitled to indemnification hereunder against the indemnifying
party, the party claiming such indemnification shall, subject to Section 9.3,
give written notice (a "Claim Notice") to the indemnifying party as soon as
practicable after the party entitled to indemnification becomes aware of any
fact, condition or event which may give rise to Damages for which
indemnification may be sought under this Section 9.4. If any lawsuit or
enforcement action is filed against any party entitled to the benefit of
indemnity hereunder, written notice thereof shall be given to the indemnifying
party as promptly as practicable (and in any event within fifteen (15) calendar
days after the service of the citation or summons). The failure of any
indemnified party to give timely notice hereunder shall not affect rights to
indemnification hereunder, except to the extent that the indemnifying party
demonstrates actual damage caused by such failure. After such notice, if the
48
indemnifying party shall acknowledge in writing to the indemnified party that
the indemnifying party shall be obligated under the terms of its indemnity
hereunder in connection with such lawsuit or action, then the indemnifying party
shall be entitled, if it so elects, (i) to take control of the defense and
investigation of such lawsuit or action, (ii) to employ and engage attorneys of
its own choice (which shall be reasonably acceptable to the indemnified party)
to handle and defend the same, at the indemnifying party's cost, risk and
expense unless the named parties to such action or proceeding include both the
indemnifying party and the indemnified party and the indemnified party has been
advised in writing by counsel that there may be one or more legal defenses
available to such indemnified party that are different from or additional to
those available to the indemnifying party, and (iii) to compromise or settle
such claim, which compromise or settlement shall be made only with the written
consent of the indemnified party, such consent not to be unreasonably withheld;
provided, however, if the remediation or resolution of any such Claim is
reasonably expected to have a Material Adverse Effect on the indemnified party's
business operations, then, notwithstanding the foregoing, the indemnified party
shall be entitled to control such remediation or resolution, including without
limitation to take control of the defense and investigation of such lawsuit or
action, to employ and engage attorneys of its own choice to handle and defend
the same, at the indemnifying party's cost, risk and expense, and to compromise
or settle such Claim. If the indemnifying party fails to assume the defense of
such claim within fifteen (15) calendar days after receipt of the Claim Notice,
the indemnified party against which such claim has been asserted will (upon
delivering notice to such effect to the indemnifying party) have the right to
undertake, at the indemnifying party's cost and expense, the defense, compromise
or settlement of such claim on behalf of and for the account and risk of the
indemnifying party. In the event the indemnified party assumes the defense of
the claim, the indemnified party will keep the indemnifying party reasonably
informed of the progress of any such defense, compromise or settlement. The
indemnifying party shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 9.4 and for any final judgment
(subject to any right of appeal), and the indemnifying party agrees to indemnify
and hold harmless an indemnified party from and against any Damages by reason of
such settlement or judgment.
9.3.5 Liability and Remedies, etc. Nothing herein shall relieve
either party of any liability to make any payment expressly required to be made
by such party pursuant to this Agreement. The term "Damages" as used in this
Section 9.4 is not limited to matters asserted by third parties against Seller
or Buyer, but includes Damages incurred or sustained by Seller or Buyer in the
absence of third party claims. Payments by Buyer of amounts for which Buyer is
indemnified hereunder, and payments by Seller of amounts for which Seller is
indemnified, shall not be a condition precedent to recovery. Seller's obligation
to indemnify Buyer, and Buyer's obligation to indemnify Seller, shall not limit
any other rights, including without limitation rights of contribution which
either party may have under statute or common law.
9.4 Taxes. Subject to Section 2.6, Seller shall pay, or cause to be paid,
when due all Taxes for which Seller is or may be liable or that are or may
become payable with respect to all taxable periods ending on or prior to the
Closing Date. Buyer shall pay, or cause to be paid, when due all Taxes for which
Buyer is or may be liable or that are or may become payable with respect to all
taxable periods ending after the Closing Date.
9.5 Further Action. After the Closing, Seller shall take all actions
reasonably necessary to effect the conveyance of the Assets to Buyer free and
clear of all Encumbrances.
49
ARTICLE X
TERMINATION
10.1 Termination. This Agreement will terminate upon the occurrence of any
of the following events:
10.1.1 Upon the written agreement of Seller and Buyer; or
10.1.2 At such time as Seller or Buyer provides written notice to
the other party if the transactions contemplated hereby shall not have been
consummated pursuant hereto by 5:00 p.m. New York time on November 21, 2003,
unless such date shall be extended by the mutual written consent of Seller and
Buyer; or
10.1.3 At such time as Buyer provides written notice to Seller if
(i) the representations and warranties of Seller shall not have been true and
correct in all material respects as of the date when made, (ii) if any of the
conditions set forth in Section 7.1 shall not have been, or if it becomes
apparent that any of such conditions will not be, fulfilled by 5:00 p.m. New
York time on November 21, 2003, or (iii) if Seller violates the provisions of
Section 8.2 herein; or
10.1.4 At such time as Seller provides written notice to Buyer if
(i) the representations and warranties of Buyer shall not have been true and
correct in all material respects as of the date when made or (ii) if any of the
conditions set forth in Section 7.2 shall not have been, or if it becomes
apparent that any of such conditions will not be fulfilled by 5:00 p.m. New York
time on November 21, 2003.
10.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to the provisions of Section 10.1, this Agreement shall
become void and have no effect, without any liability to any person or entity in
respect hereof or of the transactions contemplated hereby on the part of any
party hereto, or any of its directors, officers, employees, agents, consultants,
representatives, advisers, stockholders or affiliates.
ARTICLE XI
MISCELLANEOUS
11.1 Assignment. Neither this Agreement nor any of the rights or
obligations hereunder may be assigned by any party without the prior written
consent of the other parties; except that Buyer may, without such consent,
assign all such rights to any lender as collateral security and assign all such
rights and obligations to a wholly-owned subsidiary (or a partnership or other
entity controlled by Buyer) or subsidiaries of Buyer or to a successor in
interest to Buyer which shall assume all obligations and liabilities of Buyer
under this Agreement. Subject to the foregoing, this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, and no other person shall have any right,
benefit or obligation under this Agreement as a third party beneficiary or
otherwise.
50
11.2 Notices. All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to:
If to Buyer, addressed to:
If to Seller, addressed to:
Mr. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
Advanced Plant Pharmaceuticals, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
11.3 Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of New
York (without reference to the choice of law provisions thereof), except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.
11.4 Entire Agreement; Amendments and Waivers. This Agreement, together
with all exhibits and schedules hereto, constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto. No
amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby. No waiver of any of
the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
11.5 Multiple Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.6 Expenses. Except as otherwise specified in this Agreement, each party
hereto shall pay its own legal, accounting, out-of-pocket and other expenses
incident to this Agreement and to any action taken by such party in preparation
for carrying this Agreement into effect.
11.7 Invalidity. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
51
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
11.8 Titles. The titles, captions or headings of the Articles, Sections
and subsections herein are inserted for convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this
Agreement.
11.9 Cumulative Remedies. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
IN WITNESS WHEREOF, the parties hereto have executed or caused this Agreement to
be duly executed on their respective behalf, by their respective officers
thereunto duly authorized, all as of the day and year first above written.
AMAZING NUTRITIONALS, INC.,
By:
------------------------------------
Name:
Its: President
ADVANCED PLANT PHARMACEUTICALS, INC.,
By:
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: President
52
Schedule 1.4
Assets Purchased
All rights, title patents, trademarks, processes and related items of LHM123.
Description of Asset Purchased:
LHM 123 is a natural composition for the treatment of senile dementias,
particularly Alzheimer's disease. The composition which is composed of five
natural ingredients can be therapeutically delivered by any appropriate
pharmaceutical method, preferably oral delivery in pill, or most preferably,
capsule form.
Alzheimer's disease is a progressive neurodegenerative disease characterized by
progressive memory loss, poor judgment, language deterioration, and impaired
visuospatial skills. Alzheimer's disease usually begins after the age of 65, but
may occur as early as (early onset type) 40 years old. It usually begins with
minor impairment in short-term memory with such experiences as frequently losing
keys, and eventually progresses to include severe short-term and long-term
memory loss, as well as affecting most other areas of an individual's cognitive
functioning. Alzheimer's disease eventually destroys cognition, personality and
ability to function. In the earliest stages it may be difficult to differentiate
from normal aging, but as it progresses it totally destroys an individual's
ability to function.
53