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HMI INDUSTRIES INC.
EXHIBIT 10.00
MATERIAL CONTRACTS
HEALTH-MOR PERSONAL CARE CORP.
PURCHASE AGREEMENT
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Eidolon Corporation
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TO: Health-Mor Personal Care Corporation
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1. Eidolon Corporation (the "Purchaser") hereby offers to purchase from you
("the Vendor"), on the terms, for the consideration and subject to the
conditions hereinafter set forth, all of the undertaking, property and
assets of the Vendor as at the time of the sale herein provided for (the
"Purchased Assets"), save and except for those assets specifically excluded
hereafter (the "Excluded Assets"), used in connection with the manufacture,
assembly and sale of a needle-free injection system and parts and
replacement parts therefore (the "Business") as a going concern, including
without limiting the generality of the foregoing:
(a) The goodwill of the Business carried on by the Vendor with the
exclusive right to the Purchaser, or the assignee of the Purchaser, to
represent itself as carrying on the same in continuation of and in
succession to the Vendor and the right to Use any words indicating
that the Business is so carried on together with the right to use the
names and words "Activa", "AdvantaJet", "AdvantaJet ES" and
"Gentlejet" or any variation thereof as part of the name of or in
connection with the Business to be carried on by the Purchaser or such
assignee;
(b) All trade marks (together with the goodwill of the Business carried on
in association with the wares for which such marks have been
registered), trade names, copyrights, trade designs, inventions,
patents and licenses (the Intellectual Property") connected with the
Business of and belonging to the Vendor, all of such Intellectual
Property to be listed on and described in Schedule "A" to be delivered
by the Vendor as provided herein;
(c) All dies, molds, machinery and equipment owned by the Vendor and used
in connection with the Business (the "Equipment"), all of which will
be listed on and be described in Schedule "B" (together with the
location of such equipment) to be delivered by the Vendor as provided
herein and the Vendor represents and warrants to the Purchaser that
such Equipment is all that is necessary to carry on the Business;
(d) All computers and computer programs, discs and related data used in
connection with the Business which will be listed on and be described
in Schedule "B" (together with the location of such equipment) to be
delivered by the Vendor as provided herein;
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(e) The benefit of all advertising and public relations developed by the
Vendor or others for the Business, including, without limitation, the
"1-800" number, the WebSite, brochures, manuals, industry contacts and
associations, lead lists, sales information, warranty information and
testimonials, market research and product data, product research and
information concerning the competition;
(f) All manuals or other materials concerning the assembly and packaging
of the products;
(g) All inventories of the Business, provided that such inventories are
current and saleable;
(h) All filing cabinets, Computer desks and stations, and all specialized
equipment which will be listed on and be described in Schedule "B"
(together with the location of such equipment) to be delivered by the
Vendor as provided herein;
(i) The full benefit of all existing warranty claims, if any, assignable
contracts, commitments and engagements to which the Vendor may be
entitled and the full benefit of all forward commitments assignable by
the Vendor for supplies or materials whether or not there are any
contracts with respect to the same, and
(j) All other assets, including books, records and documentation of the
Vendor used in connection with the Business save and except for the
Excluded Assets.
2. The following assets are specifically excluded from the purchase and sale
of the Business and as such are "Excluded Assets":
(a) All real property, wherever situate, including the Vendor's premises
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and all buildings,
leasehold improvements or fixtures at the Vendor's premises;
(b) All cash on hand or in the bank;
(c) All shares, bonds, securities and obligations owned by the Vendor; and
(d) All of the book and other debts due or accruing due to the Vendor,
including receivables of the Vendor and the full benefit of all
securities for such debts.
3. The consideration for the Purchased Assets (the "Purchase Price") shall be
the aggregate of the following:
(a) As to the inventories referred to in sub-paragraph 1(d) above, an
amount equal to the book value of such assets as shown on the books of
the Vendor as at the time of the completion of the sale herein
provided for or such other amount as may be
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mutually agreed upon by the Vendor and the Purchaser at or prior to
the said time of completion; and
(b) As to all of the rest of the Purchased Assets, the sum of $50,000.00.
4. In addition to the Purchase Price referred to above, the Vendor shall be
entitled to receive up to an additional $3,000,000.00 during the five years
following the date of closing, payable as follows:
(a) Within thirty (30) days following each of the five (5) anniversaries
following closing, the Purchaser shall provide the Vendor with a
certificate, duly notarized or otherwise authenticated, confirming the
total sales, for the twelve (12) month period ending on such
anniversary, of the needle-free injection Systems (the "Systems") and
the vial holders, not including those packaged with the Systems, (the
"Vial Holders"), and the Vendor shall be entitled to receive the
following:
Number of Systems Sold Payment per System
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First 2,500 $7.50 per System
Next 1,000 $10.00 per System
Next 1,500 $15.00 per System
The balance $20.00 per System
Plus, $0.05 for each Vial Holder sold.
For the purposes of this sub-paragraph, a sale shall be deemed
to have occurred on the sale, lease or other disposition for
consideration of a System, other than for the purposes of
demonstration.
(b) The Purchaser shall calculate the aggregate owed to the Vendor from
the sale of the Systems for such twelve (12) month period (the "Earn
Out Amount"), and forward to the Vendor a check in an amount equal to
the Earn Out Amount at the same time that the said certificate is sent
to the Vendor.
(c) The Vendor and/or its nominee may request access to the Purchaser's
sales records to conduct a sales audit verification. Such request may
be made once per year and shall provide the Purchaser with thirty (30)
days notice of the date on which access is requested. Representatives
of the Vendor and/or its nominee shall carry out their audit during
normal business hours at the Purchaser's premises.
(d) Provided that the obligation of the Purchaser to make such payments
shall cease on the earlier of:
1) The date upon which the Vendor has received, in the aggregate,
$3,000,000 in Earn Out Amount payments, and
2) The date the Vendor receives the certificate and payment referred
to above for the five year following closing.
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5. The Purchaser shall not assume any liabilities of the Vendor, including
without limitation, any liability to any employees of the Vendor whatsoever
and the Vendor shall hold the Purchaser harmless from and against all
obligations, commitments or liabilities of or claims against the Vendor
whether arising out of or in any way connected to the Business or otherwise
except, where consented to in writing by the Purchaser prior to the Time of
closing, the liability to pay for merchandise, materials and/or supplies
contracted for by the Vendor in the ordinary course of business but neither
delivered nor paid for prior to the time of closing under contracts or
purchase orders to be listed on Schedule "C" hereto and delivered by the
Vendor as provided herein. The Vendor shall also indemnify the Purchaser
and save it harmless from and against any liabilities or claims to which
the Purchaser may become subject as a result of non-compliance with "Bulk
Sales" or similar legislation in Canada or the United States of America.
The Purchaser undertakes, after closing, to use all reasonable efforts to
provide service to persons who purchased a System from the Vendor; in the
event, within two (2) years following closing, such persons who purchased a
System assert a warranty claim in connection with a System or a Vial
Holder, the Purchaser shall service such claim and thereafter be entitled
to set off the cost of servicing claim against monies owing to the Vendor
pursuant to Paragraph 4 above.
6. The Purchase Price payable hereunder shall be satisfied by delivery to the
Vendor at the time of closing of a certified check in an amount equal to
the Purchase Price.
7. Subject to the terms and conditions hereof, the sale and purchase herein
provided for shall be closed at the offices of the Purchaser or the
Purchaser's Counsel on the 15th day of April 15, 1998, or such earlier or
later date as may be mutually agreed upon by the Purchaser and the Vendor,
the actual date and time when the sale and purchase is closed being
herein referred to as the "date of closing" or the "time of closing"
respectively.
8. This offer and the agreement resulting from the acceptance of this offer
are subject to the following conditions, and the Vendor, by its acceptance
of this offer, agrees that it will perform and comply with or will cause to
be performed and complied with such of the said conditions as relate to
matters within its control:
a) The Business shall be carried on in the ordinary course from the date
hereof up to and until the time of closing;
b) At the time of closing such officers and directors of the Vendor as
the Purchaser may specify shall execute releases of all claims or
demands against the Vendor;
c) No substantial damage to the Purchased Assets will have occurred
prior to the time of closing which in the opinion of the Purchaser
would adversely affect the operations or earnings of the Business;
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d) The Purchaser shall have entered into arrangements, satisfactory to it
in its sole discretion, with Tube Fab Limited for the manufacture and
assembly of the System;
e) The sale of the Purchased Assets to the Purchaser on the terms, for
the consideration and subject to the conditions set forth in this
offer (subject to such amendments and/or additions and/or changes, if
any, as may be approved by the Purchaser) shall have been duly and
legally authorized by the Vendor;
f) At the time of closing there shall be no actions, suits or proceedings
(whether or not purportedly on behalf of the Vendor) pending or to the
knowledge of the Vendor threatened against or affecting the Vendor at
law or in equity or before any federal, state, municipal or other
governmental, commission, board, bureau, agency or instrumentality,
domestic or foreign;
g) The Vendor is now and at the time of closing will be in good standing
under all contracts and commitments in connection with the Business to
which it is a party and entitled to all benefits thereunder;
h) The Purchaser shall receive from its Counsel at or prior to the time
of closing a favorable report with respect to all legal matters
pertaining to the Vendor, the Business and the Purchased Assets and
which in the opinion of such Counsel are material in connection with
the sale and purchase herein provided for (including titles and the
form and sufficiency of all documents, which contain the customary
covenants, to be delivered to the Purchaser or its nominee at the time
of closing pursuant to paragraph 12 hereof) and all relevant records
and information shall be supplied to said Counsel for such purposes;
and
i) At the time of closing the Purchaser shall be furnished with such
opinions of its Counsel and with such certificates, affidavits or
declarations of officers of the Vendor as the Purchaser or Purchaser's
Counsel may reasonably think necessary establishing that the above
mentioned conditions have been satisfied and complied with.
The foregoing conditions, (a) to (i) inclusive, are inserted for the sole
and exclusive benefit of the Purchaser and may be waived in whole or in
part by it at any time. In case any of the said conditions shall not be
complied with in whole or in part before the time of closing the Purchaser
may rescind the agreement resulting from the acceptance of this offer by
notice to the Vendor and in such event the Purchaser shall be released from
all obligations hereunder and under such agreement.
9. Up to the time of closing, the Vendor shall maintain fire, boiler, plate
glass, public liability, property damage and any other customary forms of
insurance covering the Purchased Assets which insurance in respect of loss
or damage to property shall be for at least the value of such Purchased
Assets. By its acceptance of this offer, the Vendor agrees that it will
make the requisite arrangements with its insurers so that the
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Purchaser shall be held covered in respect of loss in the same manner and
to the same extent as the Vendor is covered. In the event of any loss,
damage or claim in respect of any risk for which insurance is to be carried
as aforesaid arising before the time of closing, the Purchaser, as a
condition of closing, shall be entitled to be satisfied that the insurers
recognize the claim of the Purchaser for payment in accordance with the
terms of the policies. In addition, the Vendor will continue to maintain
adequate product liability insurance, both until the time of closing, and
thereafter for a period of two (2) years for all products manufactured or
supplied by the Vendor prior to the date of closing.
10. Forthwith upon acceptance of this offer the Vendor shall make available to
the Purchaser all abstracts of title, deeds, leases, certificates of
registration of trade marks, designs, copyrights, patents and other title
documentation its possession or under its control. Within seven (7) days
after acceptance of this offer, the Vendor shall provide the Purchaser with
Schedules "A" "B" and "C" referred to above.
11. At the time of closing, all lists of customers and prospective customers,
all lists of suppliers and all other books, documents and data relating to
the Business shall be delivered to the Purchaser.
12. The Vendor shall take and procure to be taken all proper steps, actions and
corporate proceedings on its part to enable it at the time of closing to
vest a good and marketable in the Purchaser to the Purchased Assets free of
all liens and encumbrances and at the time of closing shall deliver to
the Purchaser or its nominee such deeds of conveyance, assurances,
transfers, bills of sale, assignments and consents and other documents as
Counsel for the Purchaser may reasonably require.
13. Forthwith upon acceptance of this offer, the Vendor shall extend and
furnish the necessary facilities, information and data to enable the
Purchaser, at the expense of the Purchaser, to have the titles to the
property of the Vendor examined. In addition, the Vendor shall permit the
Purchaser and its representatives full and complete access to the Vendor's
premises and all personnel, records and data in connection with the
Business.
14. Within seven (7) days after acceptance of this offer, the Vendor shall
furnish the Purchaser with a list of all contracts, commitments and
engagements and shall thereafter forthwith make such contracts, commitments
and engagements available for inspection by the Purchaser and its
representatives.
15. The Vendor shall forthwith after the closing of the sale and purchase
herein provided cease to carry on the Business.
16. All notices required or permitted to be given by the Purchaser or the
Vendor to the other under the terms of this offer shall he deemed to be
sufficiently given if:
a) Delivered personally, in which case such notice shall be deemed
received on the date of delivery, or
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b) Mailed, registered pre-paid, in which case such notice shall be deemed
received on the date of delivery, or
c) Telefaxed, with the hard copy to follow by regular mail, in which case
such notice shall be deemed delivered on the date of the telefax.
17. Time shall be of the essence of this offer and the agreement resulting from
its acceptance.
18. This offer is open for acceptance by the Vendor in the manner indicated
below only up to 12:00 o'clock noon, Eastern Standard Time, on the 12th day
of March, 1998, and if not accepted at or prior to such time shall be null
and void.
19. The Purchaser is making this offer as agent for a group of investors who
intend to incorporate a company to take an assignment of this offer. On the
incorporation of such a company and on the assignment of the agreement
resulting from the acceptance of this offer, the word "Purchaser" as used
herein shall be deemed to mean and include the said company so incorporated
which shall be entitled to all the benefits of and shall be subject to the
terms of this offer and the said agreement; and provided that such
assignment is conditioned upon the assignee agreeing to comply with the
provisions of sub-paragraph 4(a) hereof, Eidolon Corporation shall have no
liability or obligations under this offer or the resulting agreement.
20. The Agreement resulting from the acceptance of this offer shall be governed
by the laws of the State of Ohio. Any litigation arising from or related
to this Agreement shall he brought and heard in a court of competent
jurisdiction whose clerk of courts is located in Cuyahoga County, Ohio.
If you wish to accept this offer please so indicate by signing and delivering
the accompanying duplicate of this offer to the purchaser at the address noted
above.
Dated this 9th day of March, 1998
Eidolon Corporation,
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Health-Mor Personal Care Corporation hereby accepts the foregoing offer and
covenants, promises and agrees to and with the above named Purchaser to Duly
carry out the same on the terms and conditions therein mentioned.
Dated this day of March, 1998
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Health-Mor Personal Care Corporation
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Secretary
In consideration of the sum of one ($1.00) Dollar now paid to the undersigned by
the Purchaser, the receipt and sufficiency of which is hereby acknowledged; and
in consideration of the Vendor being the wholly-owned subsidiary of the
undersigned, the undersigned hereby guarantees to and unto the Purchaser that
all of the debts and obligations of the Vendor which are outstanding at the time
of closing will he discharged in a timely fashion following closing and the
undersigned hereby indemnifies and saves harmless the Purchaser from and against
its failure so to do.
Dated 11th day of March, 1998
HMI Inc.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Vice President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Asst. Secretary
