EXHIBIT 10.8
-------------------------------
ASSET PURCHASE AGREEMENT
-------------------------------
BY AND BETWEEN
THE AGELESS FOUNDATION, INC.
AND
QUINCY INVESTMENTS CORP.
JULY 27, 2005
TABLE OF CONTENTS
Page
----
ARTICLE I SALE AND TRANSFER OF ASSETS......................................................................... 1
1.01 Purchased Assets............................................................................... 1
1.02 Excluded Assets................................................................................ 3
1.03 Assumption of Liabilities...................................................................... 3
1.04 Purchase Price and Payment for Assets.......................................................... 3
1.05 Purchase Price Allocation...................................................................... 3
ARTICLE II CLOSING............................................................................................ 4
2.01 Closing........................................................................................ 4
2.02 Deliveries by the Company...................................................................... 4
2.03 Buyer's Deliveries at Closing.................................................................. 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................................................... 5
3.01 Corporate Existence and Qualification.......................................................... 5
3.02 Authority, Approval and Enforceability......................................................... 5
3.03 Conflicts...................................................................................... 5
3.04 No Proceedings................................................................................. 6
3.05 Financial Statements........................................................................... 6
3.06 Compliance with Laws........................................................................... 6
3.07 Litigation..................................................................................... 6
3.08 Assets of the Business......................................................................... 6
3.09 Commitments.................................................................................... 7
3.10 Insurance...................................................................................... 8
3.11 Inventories.................................................................................... 8
3.12 Suppliers and Customers........................................................................ 8
-i-
3.13 Products....................................................................................... 8
3.14 Transactions With Affiliates................................................................... 8
3.15 Operations Since May 31, 2005.................................................................. 8
3.16 Taxes.......................................................................................... 9
3.17 Permits........................................................................................ 10
3.18 Intellectual Property.......................................................................... 10
3.19 Environmental; Health; Safety.................................................................. 11
3.20 No Undisclosed Liabilities..................................................................... 11
3.21 Accounts Receivable............................................................................ 11
3.22 Other Information.............................................................................. 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER............................................................ 11
4.01 Corporate Existence and Qualification.......................................................... 11
4.02 Authority, Approval and Enforceability......................................................... 12
4.03 No Proceedings................................................................................. 12
4.04 Conflicts...................................................................................... 12
. The execution and delivery of this Agreement and the carrying out of the transactions
contemplated hereby will not:.................................................................. 12
ARTICLE V CONDITIONS TO THE COMPANY'S AND BUYER'S OBLIGATIONS................................................. 12
5.01 Conditions to Obligations of the Company....................................................... 12
5.02 Conditions to Obligations of Buyer............................................................. 13
5.03 Disclosure Supplement.......................................................................... 14
5.04 Name Change.................................................................................... 14
ARTICLE VI ADDITIONAL AGREEMENTS.............................................................................. 14
6.01 Further Assurances............................................................................. 14
6.02 Publicity...................................................................................... 14
6.03 Conduct of the Business Prior to the Closing Date.............................................. 14
-ii-
6.04 Confidential Information....................................................................... 15
6.05 Transition..................................................................................... 15
6.06 Access and Information......................................................................... 15
6.07 Covenant Not to Compete........................................................................ 15
ARTICLE VII INDEMNITY......................................................................................... 16
7.01 Indemnification................................................................................ 16
7.02 Notice of Asserted Liability................................................................... 17
7.03 Opportunity to Defend.......................................................................... 17
7.04 Limitations.................................................................................... 17
ARTICLE VIII MISCELLANEOUS.................................................................................... 18
8.01 Brokers........................................................................................ 18
8.02 Costs and Expenses............................................................................. 18
8.03 Notices........................................................................................ 18
8.04 Governing Law, Jurisdiction, Venue, Waiver and Jury Trial...................................... 19
8.05 Entire Agreement; Amendments and Waivers....................................................... 19
8.06 Binding Effect and Assignment.................................................................. 20
8.07 Remedies....................................................................................... 20
8.08 Exhibits and Schedules......................................................................... 20
8.09 Multiple Counterparts.......................................................................... 20
8.10 References and Construction.................................................................... 20
8.11 Survival....................................................................................... 21
8.12 Attorneys' Fees................................................................................ 21
8.13 Termination.................................................................................... 21
8.14 Bulk Sales Laws................................................................................ 21
ARTICLE IX DEFINITIONS........................................................................................ 22
-iii-
9.01 Action......................................................................................... 22
9.02 Affiliate...................................................................................... 22
9.03 Assets......................................................................................... 22
9.04 Business Day................................................................................... 22
9.05 Closing Date................................................................................... 22
9.06 Code........................................................................................... 22
9.07 Collateral Agreements.......................................................................... 22
9.08 Contract....................................................................................... 22
9.09 Court Order.................................................................................... 22
9.10 Encumbrances................................................................................... 22
9.11 Financial Statements........................................................................... 22
9.12 Governmental Authorities....................................................................... 23
9.13 Intellectual Property.......................................................................... 23
9.14 Inventory...................................................................................... 23
9.15 Knowledge...................................................................................... 23
9.16 Legal Requirements............................................................................. 23
9.17 Liabilities.................................................................................... 24
9.18 Naturade....................................................................................... 24
9.19 Permits........................................................................................ 24
9.20 Person......................................................................................... 24
9.21 Taxes.......................................................................................... 24
9.22 Tax Returns.................................................................................... 24
-iv-
LIST OF SCHEDULES
Schedule 1.01(a)................... Business Contracts
Schedule 1.01(b)................... Intellectual Property
Schedule 1.01(d)................... Telephone Lines
Schedule 1.01(e)................... Inventory
Schedule 1.01(f)................... Business Documents
Schedule 1.01(g)................... Other Rights
Schedule 1.01(h)................... Accounts Receivable
Schedule 1.01(i)................... Permits
Schedule 1.01(l)................... Personal Property Leases
Schedule 1.02...................... Excluded Assets
Schedule 1.03(a)................... Assumed Liabilities (Accounts Payable)
Schedule 1.04(c)................... Net Working Capital
Schedule 1.05...................... Allocation of Purchase Price
Schedule 3.01...................... Qualifications as Foreign Corporation
Schedule 3.05...................... Financial Statements
Schedule 3.07...................... Litigation
Schedule 3.09(a)................... Contracts
Schedule 3.10...................... Insurance
Schedule 3.11...................... Inventory
Schedule 3.12...................... Suppliers and Customers
Schedule 3.13...................... Products
Schedule 3.14...................... Affiliate Transactions
Schedule 3.18...................... Intellectual Property
Schedule 3.20...................... Indebtedness
Schedule 3.21...................... Accounts Receivable
LIST OF EXHIBITS
Exhibit A - Consulting Agreement with ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Exhibit B - Form of Note
Exhibit C Form of Guaranty
Exhibit D Form of Assignment and Assumption Agreement (Assumed Liabilities)
-v-
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of July __, 2005 ("Agreement Date"), by and between Quincy Investments
Corp., a Bahamas International Business Company (the "Buyer"), and The Ageless
Foundation, Inc., a Florida corporation (the "Company").
RECITALS
A. The Company is engaged in the business of selling its line of
health-related products to retailers (the "Business").
B. Buyer desires to purchase, and Company desires to sell, the
operating assets of the Company, upon the terms and subject to the conditions
set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties agree as follows:
ARTICLE I
SALE AND TRANSFER OF ASSETS
1.01 Purchased Assets. On the terms and subject to the conditions of
this Agreement, on the Closing Date (as defined in Section 2.01 hereof), the
Company shall sell, convey, transfer and deliver to the Buyer, and the Buyer
shall purchase, acquire and accept as of the Closing Date, all of the right,
title and interest of the Company in and to the Business and all of the assets,
properties and rights of the Company of every kind and description wherever
located, tangible and intangible, related to the Business (collectively, the
"Assets"), other than the Excluded Assets, free and clear of all Encumbrances.
The Assets shall include, but not be limited to:
(a) All rights under any purchase orders and Contracts
(collectively, the "Business Contracts") relating to the Business,
including, but not limited to, those that are identified in Schedule
1.01(a), including, without limitation, the right to all of the revenue
therefrom related to any Products sold before the Closing Date;
(b) All goodwill associated with the Business, and all
copyrights, patents, trade names, trademarks, service marks, logos, domain
names, whether registered or unregistered, applications for the foregoing,
including, but not limited to, those as more fully identified in Schedule
1.01(b), and other trade secrets, processes, formulae, inventions,
research and development work, technical information, production data,
blueprints and specifications, licenses, permits, governmental approvals,
authorizations and operation contracts, license agreements, know-how and
similar property, customer lists, lists of suppliers, cost sheets, bills
of material and any other intellectual property and intangible assets that
are owned by the Company or to which the Company possesses rights that are
used in the Business including all Intellectual Property;
-1-
(c) All books, files, operating data and records of the
Company relating to the Business (the "Books and Records"), excluding
accounting and tax books and records, including, but not limited to,
federal, state and local tax filings and records, general ledgers, general
journals, books of original entry, and further excluding corporate
administrative books and records, including minute books and stock
certificate books;
(d) All telephone lines, telephone numbers and telephone
listings used by the Company in the Business, including, but not limited
to, those more fully identified on Schedule 1.01(d) (the "Telephone
Lines");
(e) The Company's Inventory as more fully identified on
Schedule 1.01(e) hereto, which Schedule shall be updated as of the Closing
Date to reflect changes in the ordinary course of business;
(f) The benefit of all confidentiality, non-competition,
non-solicitation, non-disclosure and similar protective agreements or
instruments, all manufacturers' warranties on tangible personal property,
and all other agreements relating to the Business which inure to the
Company's benefit, including, but not limited to, those more fully
identified on Schedule 1.01(f) (the "Business Documents");
(g) All known and unknown, liquidated or unliquidated,
contingent or fixed rights, chooses in action or causes of action of every
nature and kind which the Company has or may have against any third party
relating to the Assets, including, but not limited to, those more fully
identified in Schedule 1.01(g) (the "Other Rights");
(h) All accounts receivable of the Company, including, but not
limited to, those more fully identified on Schedule 1.01(h) hereto, which
Schedule shall be updated as of the Closing Date to reflect changes from
the Agreement Date through the Closing Date (the "Accounts Receivable");
(i) To the extent transferable by the Company to Buyer, all
Permits set forth on Schedule 1.01(i);
(j) All goodwill of the Business and other general intangibles
exclusively or primarily related to the Assets;
(k) All Actions, credits, rights of setoff of any kind, and
all rights under and pursuant to all indemnities, warranties,
representations and guarantees made by suppliers, manufacturers,
contractors or other third parties arising before, on or after the Closing
Date and relating exclusively or primarily to the Assets or any Assumed
Liabilities, and the right to collect damages or proceeds in connection
therewith;
(l) The rights under all leases of personal property to which
Seller is a party and which relate exclusively or primarily to the
Business, including those listed on Schedule 1.01(l); and
-2-
(m) All goods and services and all other economic benefits to
be received subsequent to the Closing Date which arise out of prepayments
and payments by Seller prior to the Closing Date and relating exclusively
or primarily to the Business.
1.02 Excluded Assets. Those assets of Company specifically
identified on Schedule 1.02, including cash and the Purchase Price, are excluded
from the term "Assets" and therefore from the sale contemplated hereby.
1.03 Assumption of Liabilities.
(a) Buyer will assume (a) the current accounts payable of the
Company set forth on Schedule 1.03(a) and (b) the Liability of the Company
to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the amount of $600,000, as set forth on the Interim
Balance Sheet (the "Assumed Liabilities"), which shall be paid on the date
on which the Note is paid in full.
(b) Except with respect to the Assumed Liabilities, Buyer
shall in no event assume or be responsible for any Liabilities of the
Company or relating to the Business, contingent or otherwise, known or
unknown. The Assets shall be sold and conveyed to Buyer free and clear of
all Encumbrances. Without limiting the generality of the foregoing, in no
event shall Buyer assume or be responsible for: (i) any income, property,
franchise, sales, use or other tax of the Company or any filing
requirements or obligations with respect thereto arising out of or
resulting from the sale of the Assets hereunder (all such taxes to be paid
by the Company) or any transaction of the Company prior to or subsequent
to the execution of this Agreement; and (ii) any liabilities, obligations,
or costs resulting from any claim or lawsuit or other proceeding relating
to the Assets or naming the Company or any successor thereof as a party
and arising out of events, transactions, or circumstances occurring or
existing prior to the Closing Date.
1.04 Purchase Price and Payment for Assets. As payment in full for
the Assets:
(a) Buyer will, at Closing:
(i) deliver to the Company a promissory note (the
"Note") payable to the Company, in the principal amount of $700,000,
subject to adjustment pursuant to Section 1.04(b) (the principal
amount of the Note (as adjusted pursuant to Section 1.04(b)) is
referred to herein as the "Purchase Price"); and
(ii) assume the Company's liability for the payment of
certain accounts payable to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, in the amount of
$600,000.
(b) The principal amount of the Note will be adjusted at
Closing based upon changes in the Company's Inventory, accounts payable
and accounts receivable in accordance with Schedule 1.04(c).
1.05 Purchase Price Allocation. The Purchase Price shall be
allocated among the Assets as set forth on Schedule 1.05. The parties
acknowledge that such allocation fairly
-3-
reflects the fair market value of the Assets, and will use such allocation in
reporting for all federal, state and local tax purposes.
ARTICLE II
CLOSING
2.01 Closing. The closing of the transactions contemplated hereby
(the "Closing") shall be held within 14 days of the execution of this Agreement
at the offices of Naturade, Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
provided that the Company has received the requisite approvals from its
shareholders and its board of directors on or before such date. The date upon
which the Closing occurs is hereinafter referred to as the "Closing Date." The
Closing shall be deemed effective as of the close of business of the Business on
the Closing Date.
2.02 Deliveries by the Company. At or prior to the Closing, the
Company shall deliver to Buyer:
(a) certified copies of the resolutions of the Board of
Directors and the stockholders of the Company authorizing the transactions
set forth herein;
(b) all licenses, bills of sale, assignments and other
documents, if any, conveying to Buyer and vesting in Buyer good, clear and
marketable title of record to all of the Assets;
(c) possession of all originals and copies of agreements,
instruments, documents, books, records, files and other data and
information within the possession of the Company that constitute part of
the Assets (collectively, the "Records"); provided, however, that the
Company may retain (1) copies of any Records that the Company is
reasonably likely to need for complying with requirements of law; and (2)
copies of any Records that in the reasonable opinion of the Company will
be required in connection with the performance of its obligations under
Legal Requirements;
(d) executed copy of a Consulting Agreement between the Buyer
and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in the form attached as Exhibit A (the "Consulting
Agreement);
(e) a copy of the certificate of incorporation of the Company
certified as of a recent date by the Secretary of State of Florida;
(f) a certificate of good standing of the Company issued as of
a recent date by the Secretary of State of the State of Florida; and
(g) such other documents and instruments as may be necessary
to effect the transactions contemplated by this Agreement.
2.03 Buyer's Deliveries at Closing. On the Closing Date, the Buyer
shall deliver to the Company the following:
(a) an executed Note in the form attached as Exhibit B;
-4-
(b) executed Guaranty of the obligations under the Note by
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, in the form attached as Exhibit C;
(c) an executed counterpart of the Consulting Agreement;
(d) evidence of the assumption of the Assumed Liabilities
pursuant to an Assignment and Assumption Agreement in the form attached as
Exhibit D;
(e) an executed Assignment and Assumption Agreement, pursuant
to which the Buyer will assign all of its rights and obligations under
this Agreement and the Collateral Agreements to Naturade; and
(f) such other documents and instruments as may be necessary
to effect the transactions contemplated by this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Buyer that:
3.01 Corporate Existence and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida and has the corporate power to own, manage, lease and
hold its properties and to carry on its Business as and where such properties
are presently located and such business is presently conducted. The Company is
duly qualified as a foreign corporation to do business, and is in good standing
in each jurisdiction where the character of the Company's Assets or the nature
of the Company's business requires such qualification, except where the failure
to so qualify or to be in good standing would not have a material adverse effect
on Company's business, operations, properties, prospects, the Assets or
condition (financial or otherwise) (a "Material Adverse Effect"). The Company is
qualified as a foreign corporation and is in good standing in each jurisdiction
set forth in Schedule 3.01 attached hereto.
3.02 Authority, Approval and Enforceability. This Agreement has been
duly executed and delivered by the Company and the Company has all requisite
power and legal capacity to execute and deliver this Agreement and all
Collateral Agreements executed and delivered or to be executed and delivered in
connection with the transactions provided for hereby, to consummate the
transactions contemplated hereby and by the Collateral Agreements, and to
perform its obligations hereunder and under the Collateral Agreements. This
Agreement and each Collateral Agreement to which the Company is a party
constitutes, or upon execution and delivery will constitute, the legal, valid
and binding obligation of such party, enforceable in accordance with its terms,
except as such enforcement may be limited by general equitable principles or by
applicable bankruptcy, insolvency, moratorium, or similar laws and judicial
decisions from time to time in effect which affect creditors' rights generally.
3.03 Conflicts. The execution and delivery by the Company of this
Agreement and each Collateral Agreement, and the performance by it of its
obligations hereunder and thereunder, does not and will not:
-5-
(a) Violate any provision of the certificate of incorporation
or bylaws of the Company;
(b) Violate any provision of any Legal Requirement relating to
the Business, the Assets or the Assumed Liabilities, or require a
registration, filing, application, notice, consent, approval, order,
qualification, authorization, designation, declaration or waiver with, to
or from any Governmental Authority;
(c) Require a consent, approval or waiver from, or notice to,
any party to a Contract, or result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in
the acceleration of material obligations, loss of material benefit or
increase in any material Liabilities or fees under, or create in any party
the right to terminate, cancel or modify, any Contract; or
(d) Result in the creation of any Encumbrance upon any
material Asset.
3.04 No Proceedings. No suit, action or other proceeding is pending
or, to the Knowledge of the Company, threatened before any Governmental
Authority seeking to restrain the Company or any Company or prohibit their entry
into this Agreement or prohibit the Closing, or seeking damages against the
Company or its properties as a result of the consummation of this Agreement.
3.05 Financial Statements. Schedule 3.05 sets forth (a) unaudited
statements of certain assets and certain Liabilities of the Business as of
December 31, 2003, together with related statements of revenues, costs and
expenses of the Business for the twelve-month period ending December 31, 2003
and December 31, 2004 (the "Annual Financial Statements"), (b) unaudited
statements of certain assets and Liabilities of the Business as of May 31, 2005
(the "Interim Balance Sheet"), and (c) unaudited income statements of the
Business for the five-month period ending on May 31, 2005 (collectively, with
the Annual Financial Statements and the Interim Balance Sheets, the "Financial
Statements"). The Financial Statements (i) are in accordance with the books and
records of the Company in all material respects; (ii) present fairly, in all
material respects, the financial position of the Business for the respective
periods there ended; and (iii) have been prepared in accordance with the
Company's normal practices for the Business.
3.06 Compliance with Laws. The Company is and has been in compliance
in all material respects with any and all Legal Requirements applicable to the
Company.
3.07 Litigation. Except as otherwise set forth on Schedule 3.07,
there is no Action against the Company pending or, to the Knowledge of the
Company, threatened in any court or before or by any Governmental Authority, or
before any arbitrator, and to the Knowledge of the Company, there is no basis
for any such Action and there is no Court Order to which the Business is
subject.
3.08 Assets of the Business. The Company has and will have as of the
Closing Date good and marketable title to the Assets, free and clear of any and
all Encumbrances. The Assets and the rights conferred by the Business Contracts
comprise all of the properties, assets
-6-
(including, without limitation, computer software and licenses therefor) and
rights of the Company which relate to the conduct of the Business as presently
conducted and are adequate to conduct the Business as presently conducted by the
Company.
3.09 Commitments.
(a) Except as otherwise set forth on Schedule 3.09(a), the
Company is not a party to or bound by any of the following, whether
written or oral:
(i) any Contract that cannot by its terms be terminated
by the Company with 90 days' or less notice without penalty or whose
term continues beyond one year after the date of this Agreement;
(ii) any contract or commitment for capital expenditures
by the Company in excess of $10,000 per calendar quarter in the
aggregate;
(iii) any lease or license with respect to any Assets,
real or personal, whether as landlord, tenant, licensor or licensee;
(iv) any agreement, contract, indenture or other
instrument relating to the borrowing of money or the guarantee of
any obligation or the deferred payment of the purchase price of any
asset;
(v) any partnership, joint venture or other similar
agreement;
(vi) any contract with any Affiliate of the Company
relating to the provision of goods or services by or to the Company;
(vii) any agreement that purports to limit the Company's
freedom to compete freely in any line of business or in any
geographic area;
(viii) any asset purchase agreements, stock purchase
agreements, and other acquisition or divestiture agreements and
similar Contracts, including any Contracts relating to the sale,
lease or disposal of any Assets relating to the Business (other than
sales of Inventory in the ordinary course of business); and
(ix) any other Contract that is material to the business
of the Company.
(b) All of the Contracts listed or required to be listed in
Schedule 3.09(a) and all of the Business Contracts are valid, binding and
in full force and effect; the Company has not been notified or advised by
any party thereto of such party's intention or desire to terminate or
modify any such Contract in any respect and neither the Company nor, to
the Knowledge of the Company, any other party thereto is in breach of any
of the terms or covenants of any such Contract. Following the Closing,
Buyer will be entitled to all of the benefits of the Company under each
Business Contract that constitutes part of the Assets.
-7-
(c) The Company is not a party to or bound by any Contract or
Contracts, the terms of which were arrived at by or otherwise reflect less
than arm's-length negotiations or bargaining.
3.10 Insurance. Schedule 3.10 sets forth a complete and correct list
of all insurance policies presently in effect that relate to the Company or its
Assets, all of which are in full force and effect.
3.11 Inventories. Except as otherwise set forth in Schedule 3.11,
the Inventory of the Company as of the Closing Date shall consist of items of a
quality, condition and quantity consistent with normal seasonally-adjusted
Inventory levels of the Company and be usable and saleable in the ordinary and
usual course of Business for the purposes for which intended except for obsolete
items and items of below-standard quality, all of which have been written off or
written down to net realizable value in the Interim Balance Sheet. Except as
otherwise set forth in Schedule 3.11, the amount of such Inventory as reflected
on the Company's books of account is at least equal to the fair market value of
such Inventory.
3.12 Suppliers and Customers. Schedule 3.12 sets forth (a ) the ten
(10) largest suppliers of the Company during each of calendar years 2003 and
2004; and (b) the ten (10) largest customers of the Company during each of
calendar years 2003 and 2004. There exists no actual or threatened termination,
cancellation or limitation of, or any modification or change in, the Company's
business relationship with any customer or supplier, which termination,
cancellation, limitation, modification or change could, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect.
3.13 Products. Schedule 3.13 lists each product under development,
developed, manufactured, licensed, distributed or sold by the Company and any
other products in which the Company has any proprietary rights or beneficial
interest (collectively, the "Products").
3.14 Transactions With Affiliates. Except as set forth on Schedule
3.14 and except for customary advances to employees consistent with past
practices and payment of compensation for employment to employees, consistent
with past practices, the Company has not purchased, acquired or leased any
property or services from, or sold, transferred or leased any property or
services to, or loaned or advanced any money to, or borrowed any money from, or
entered into or been subject to any management, consulting or similar agreement
with, or engaged in any other significant transaction with any officer, director
or shareholder of the Company or any of their respective Affiliates. Except as
set forth on Schedule 3.14, no shareholder or other Affiliate of the Company is
indebted to the Company for money borrowed or other loans or advances, and the
Company is not indebted to any shareholder or any such Affiliate.
3.15 Operations Since May 31, 2005.
(a) Since May 31, 2005, there has not been any change,
circumstance or effect in or with respect to the Assets, financial
condition or results of operations of the Business, other than any
changes, circumstances and effects arising in the ordinary course
-8-
of business that have not had and would not have, individually or in the
aggregate, a Material Adverse Effect.
(b) Since May 31, 2005, the Company has conducted the
Business, in all material respects, in the ordinary course, and the
Company has not:
(i) Conveyed, exchanged, sold, assigned, abandoned,
leased (as lessor or lessee), transferred, licensed, or otherwise
disposed of, in whole or in part, in a single transaction or series
of related transactions, any Assets (including Intellectual
Property) except in the ordinary course of business;
(ii) Undertaken or committed to undertake capital
expenditures;
(iii) Suffered any damage, destruction or casualty loss
with respect to any property (whether or not covered by insurance)
material to the Business;
(iv) Except as set forth on Schedule 3.20, incurred or
guaranteed any Indebtedness;
(v) Made any material change in the accounting
principles, methods practices or policies relating to the Business;
(vi) With respect to the Business, acquired or purchased
any properties or assets that are, individually or in the aggregate,
material to the Business (other than in the ordinary course of
business), merged or consolidated with, or acquired all or
substantially all of the assets of, or otherwise acquired, any
Person, or made any material investment in any Person;
(vii) Executed, terminated, cancelled, materially
modified or permitted to materially modify, terminate, cancel or
expire any Business Contract;
(viii) Created or suffered the imposition of any
Encumbrance on any of the Assets;
(ix) Forgiven or cancelled any material debt or material
claim of the Business or voluntarily waived any right of material
value, other than compromises of accounts receivable in the ordinary
course of business;
(x) Entered into any intercompany transactions relating
to the Business with any Affiliate of the Company; or
(xi) Authorized, approved, agreed or committed to do any
of the actions described in clauses (i)-(x) above.
3.16 Taxes. The Company has filed or will have filed on a timely
basis all material Tax Returns relating to the Business in connection with any
Tax required to be filed by
-9-
it, and the Company has or will have timely paid all such Taxes shown thereon to
be due. None of the Assets is subject to any lien in favor of the United States
pursuant to Section 6321 of the Code for nonpayment of federal Taxes, or any
lien in favor of any state or locality pursuant to any comparable provision of
state or local law, under which transferee liability might be imposed upon Buyer
as a buyer of such Assets pursuant to Section 6323 of the Code or any comparable
provision of state or local law. None of the Assets is tax-exempt use property
within the meaning of Section 168(h) of the Code. There is no Action, audit or
claim now pending with respect to any Tax with respect to the Assets. There are
no outstanding agreements extending the statutory period of limitation
applicable to any claim for, or the period for the collection or assessment of,
Taxes with respect to the Assets. With respect to the Business, the Company has
duly and timely withheld from employee salaries, wages and other compensation
and paid over to the appropriate taxing authorities all amounts required to be
so withheld and paid over for all periods under all applicable laws. With
respect to the Business, the Company has collected all material sales and use
Taxes required to be collection and has remitted, or will remit on a timely
basis, such amounts to the appropriate taxing authority, or has been furnished
properly completed exemption certificates and has maintained all such records
and supporting documents in the manner required by all applicable sales and use
Tax statutes and regulations.
3.17 Permits. Each Permit is in full force and effect and the
Company is not in violation of or default thereunder, and, to the Knowledge of
the Company, no suspension or cancellation of any such Permit is threatened.
3.18 Intellectual Property.
(a) Schedule 3.18 contains a list of all Patents, Marks and
Copyrights owned or used by the Company as of the date of this Agreement
which relate to the Business as presently conducted.
(b) The Company either: (i) owns the entire right, title and
interest in and to all Intellectual Property that is used in the Business
as presently conducted (the "Business Intellectual Property"), free and
clear of Encumbrances or adverse claims of ownership from current or
former employees and contractors; or (ii) has the right and license to use
the Business Intellectual Property in the conduct of the Business.
(c) To the Knowledge of the Company, all items set forth on
Schedule 3.18 are valid and in force, or to the extent such items are
applications, are pending without challenge.
(d) (i) During the previous three (3) years, no material
Action has been taken or, to the Knowledge of the Company, threatened, (A)
alleging that the conduct of the Business or any Business Intellectual
Property infringes on or misappropriates the Intellectual Property of
another Person; or (B) challenging the ownership or validity of the
Business Intellectual Property; (ii) no material Action is pending with
respect to any Business Intellectual Property; and (iii) to the Knowledge
of the Company, there is no valid basis for any Action described in this
Section 3.18.
-10-
3.19 Environmental; Health; Safety. To the Knowledge of the Company,
the Company is in compliance in all material respects with all applicable
environmental laws. There is no environmental litigation, administrative or
judicial proceeding or order, consent decree, or investigation pending or
threatened against the Company related to the Business.
3.20 No Undisclosed Liabilities.
(a) The Business does not have any Liabilities of any nature
except for (i) Liabilities disclosed, reflected or reserved against in the
Interim Balance Sheet, (ii) Liabilities incurred since May 31, 2005 in the
ordinary course of business and which have not and will not result in a
Material Adverse Effect and (iii) Liabilities incurred in connection with
this Agreement and the transactions contemplated hereby.
(b) Except as set forth on Schedule 3.20, the Business does
not have any Indebtedness.
3.21 Accounts Receivable. All accounts receivable of the Company
(collectively, the "Accounts Receivable") represent or shall represent valid
obligations arising from sales actually made or services actually performed in
the ordinary course of business. The Accounts Receivable are or will be as of
the Closing Date current and fully collectible, net of the reserves shown on the
Interim Balance Sheets or on the accounting records of the Company as of the
Closing Date (which reserves are adequate and calculated consistent with past
practice). To the Knowledge of the Company, there is no contest, claim, or right
of set off, other than returns in the ordinary course of business, under any
Contract with any obligor of an Accounts Receivable relating to the amount or
validity of such Accounts Receivable. Schedule 3.21 contains a complete and
accurate list of all Accounts Receivable as of the date of the Interim Balance
Sheet, which list sets forth the aging of such Accounts Receivable.
3.22 Other Information. The information furnished by the Company to
Buyer pursuant to this Agreement (including, without limitation, information
contained in the exhibits hereto, the Schedules identified herein, the
instruments referred to in such Schedules and the certificates and other
documents to be executed or delivered pursuant hereto by the Company at or prior
to the Closing) is not, nor at the Closing will be, false or misleading in any
material respect, or contains, or at the Closing will contain, any misstatement
of material fact, or omits, or at the Closing will omit, to state any material
fact required to be stated in order to make the statements therein not
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company that:
4.01 Corporate Existence and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
Bahamas; has the corporate power to own, manage, lease and hold its properties
and to carry on its business as and where such properties are presently located
and such business is presently conducted; and is duly qualified to do business
and is in good standing as a foreign corporation in each of the
-11-
jurisdictions where the character of its properties or the nature of its
business requires it to be so qualified.
4.02 Authority, Approval and Enforceability. This Agreement has been
duly executed and delivered by Buyer and Buyer has all requisite corporate power
and legal capacity to execute and deliver this Agreement and all Collateral
Agreements executed and delivered or to be executed and delivered by Buyer in
connection with the transactions provided for hereby, to consummate the
transactions contemplated hereby and by the Collateral Agreements, and to
perform its obligations hereunder and under the Collateral Agreements. The
execution and delivery of this Agreement and the Collateral Agreements and the
performance of the transactions contemplated hereby and thereby have been duly
and validly authorized and approved by all corporate action necessary on behalf
of Buyer. This Agreement and each Collateral Agreement to which Buyer is a party
constitutes, or upon execution and delivery will constitute, the legal, valid
and binding obligation of Buyer, enforceable in accordance with its terms,
except as such enforcement may be limited by general equitable principles or by
applicable bankruptcy, insolvency, moratorium, or similar laws and judicial
decisions from time to time in effect which affect creditors' rights generally.
4.03 No Proceedings. No suit, action or other proceeding is pending
or, to Buyer's knowledge, threatened before any Governmental Authority seeking
to restrain Buyer or prohibit its entry into this Agreement or prohibit the
Closing.
4.04 Conflicts. The execution and delivery of this Agreement and the
carrying out of the transactions contemplated hereby will not:
(a) Violate or conflict with any of the terms, conditions or
provisions of Buyer's Articles of Incorporation or bylaws;
(b) Violate any Legal Requirements applicable to Buyer;
(c) Violate, conflict with, result in a breach of, constitute
a default under (whether with or without notice or the lapse of time or
both), or accelerate or permit the acceleration of the performance
required by, or give any other party the right to terminate, any contract
or Permit applicable to Buyer; or
(d) Require Buyer to obtain or make any waiver, consent,
approval or authorization of, or registration, declaration, notice or
filing with, any private non-governmental third party or any Governmental
Authority.
ARTICLE V
CONDITIONS TO THE COMPANY'S AND BUYER'S OBLIGATIONS
5.01 Conditions to Obligations of the Company. The obligations of
the Company to carry out the transactions contemplated by this Agreement are
subject, at the option of the Company, to the satisfaction or waiver of the
following conditions:
(a) All representations and warranties of Buyer contained in
this Agreement shall be true and correct in all material respects at and
as of the Closing, and
-12-
Buyer shall have performed and satisfied in all material respects all
covenants and agreements required by this Agreement to be performed and
satisfied by Buyer at or prior to the Closing.
(b) As of the Closing Date, no Action shall be pending or
threatened before any Governmental Authority seeking to restrain the
Company or prohibit the Closing or seeking Damages against the Company as
a result of the consummation of this Agreement.
(c) All of Buyer's deliveries (described in Section 2.03)
shall be tendered to the Company at or prior to Closing.
(d) The Buyer shall have furnished the Company with a
certified copy of all necessary corporate action on its behalf approving
the Buyer's execution, delivery and performance of this Agreement and any
Collateral Agreement.
(e) All proceedings to be taken by the Buyer in connection
with the transactions contemplated hereby and all documents incident
thereto shall be reasonably satisfactory in form and substance to the
Company and its counsel, and Buyer and said counsel shall have received
all such counterpart originals or certified or other copies of such
documents as it or they may reasonably request.
(f) No proceeding in which the Buyer shall be a debtor,
defendant or party seeking an order for its own relief or reorganization
shall have been brought or be pending by or against such person under any
United States or state bankruptcy or insolvency law.
5.02 Conditions to Obligations of Buyer. The obligations of Buyer to
carry out the transactions contemplated by this Agreement are subject, at the
option of Buyer, to the satisfaction, or waiver by Buyer, of the following
conditions:
(a) All representations and warranties of the Company
contained in this Agreement shall be true and correct in all material
respects at and as of the Closing, the Company shall have performed and
satisfied in all material respects all agreements and covenants required
by this Agreement to be performed and satisfied by it at or prior to the
Closing, and Buyer shall have received a certificate of such effect from
an officer of the Company.
(b) As of the Closing Date, no suit, action or other
proceeding shall be pending or threatened before any Governmental
Authority seeking to restrain Buyer or prohibit the Closing or seeking
Damages against Buyer or the Company or the Assets as a result of the
consummation of this Agreement.
(c) The Company shall have furnished Buyer with a certified
copy of all necessary corporate action on its behalf approving the
Company's execution, delivery and performance of this Agreement and each
Collateral Agreement.
-13-
(d) All proceedings to be taken by the Company in connection
with the transactions contemplated hereby and all documents incident
thereto shall be satisfactory in form and substance to Buyer and its
counsel, and Buyer and said counsel shall have received all such
counterpart originals or certified or other copies of such documents as it
or they may reasonably request.
(e) No proceeding in which the Company shall be a debtor,
defendant or party seeking an order for its own relief or reorganization
shall have been brought or be pending by or against the Company under any
United States or state bankruptcy or insolvency law.
(f) All of the Company's deliveries (described in Section
2.02) shall be tendered to Buyer at or prior to the Closing.
5.03 Disclosure Supplement. The Company shall have the right to
supplement its disclosure to Buyer with respect to any matter arising after the
date of this Agreement that, if existing or occurring on or prior to the date of
this Agreement, would have been required to be set forth or described in any
schedule hereto. If such additional information set forth in such supplement
(together with any additional information set forth in the disclosure schedules
and any prior supplement) reveal facts, events or circumstances that Buyer
reasonably believes will have, individually or in the aggregate, a Material
Adverse Effect, then the condition stated in Section 5.02(a) shall be deemed not
to have been satisfied and this Agreement may be terminated by Buyer.
5.04 Name Change. The Company shall change its name at Closing and
discontinue all use of the name "Ageless Foundation."
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Further Assurances. Following the Closing, the Company and the
Buyer shall execute and deliver such documents, and take such other action, as
shall be reasonably requested by any other party hereto to carry out the
transactions contemplated by this Agreement.
6.02 Publicity. None of the parties hereto shall issue or make, or
cause to have issued or made, any public release or announcement concerning this
Agreement or the transactions contemplated hereby, without the advance approval
in writing of the form and substance thereof by each of the other parties,
except as required by law or by the rules of the National Association of
Securities Dealers or the United States Securities and Exchange Commission (in
which case, so far as possible, there shall be consultation among the parties
prior to such announcement), and the parties shall endeavor jointly to agree on
the text of any announcement or circular so approved or required.
6.03 Conduct of the Business Prior to the Closing Date. From the
date hereof until the Closing Date, the Company shall operate the Business only
in the ordinary course of business, and shall not engage in any of the actions
described in Section 3.15 without the written consent of Buyer.
-14-
6.04 Confidential Information. The Company acknowledges that all
customer, supplier and distributor lists, manufacturing techniques, formulas,
sales, marketing and expansion strategies, technology, processes of the Company
and Buyer relating to the business conducted with the Assets, and all related
information concerning the products, services, production, development,
technology and all related technical information, procurement, and sales
activities and procedures, promotion, and pricing techniques, and credit
financial data relating to the business conducted with the Assets concerning
customers of the Company and Buyer are valuable, special, and unique assets
(collectively, "Confidential Information"). The parties agree that all
Confidential Information of the Company shall be transferred to Buyer as part of
the Assets pursuant to the terms of this Agreement. In recognition of this,
Company represents and agrees that during the five (5) year period following the
date of this Agreement, Company will not (i) disclose any Confidential
Information to any Person or entity, or (ii) make use of any Confidential
Information for its own purposes or for the benefit of any Person or entity
other than Buyer, except for disclosures required by any Legal Requirement, in
which event Buyer shall be given prompt notice of any such compelled disclosure,
and, if possible, opportunity to defend its rights hereunder prior to any such
compelled disclosure being made. The Company acknowledges that this covenant to
maintain Confidential Information is necessary to protect the goodwill and
proprietary interest of the Company and that restriction against disclosure of
Confidential Information is reasonable in light of the consideration and other
value the Company has accepted pursuant to this Agreement.
6.05 Transition. Prior to the Closing Date, Buyer and the Company
shall agree in writing upon a process for handling orders and product shipments
during a reasonable transition period following the Closing Date. Buyer and the
Company shall also agree in writing upon a process for introducing Buyer to the
Company's customers and notifying the Company's customers of Buyer's purchase of
the Assets. Any and all of the Company's press releases to the public regarding
the transaction contemplated by this Agreement, and communications to vendors
and customers regarding the transaction reasonably contemplated by this
Agreement shall be approved by Buyer in writing.
6.06 Access and Information. From the date hereof until the first to
occur of the Closing Date and the termination of this Agreement, the Company
shall permit, or cause to be provided, access to Buyer and its representatives
to make such investigation of the Business as Buyer reasonably deems necessary
or desirable in connection with the transactions contemplated hereby. Such
investigation shall include access to the respective directors, officers, agents
and representatives (including legal counsel and independent accountants) of the
Company relating to the Business and the properties, books, records and
commitments of the Company relating to the Business. Buyer and the Company agree
to use reasonable efforts in conducting such investigation to keep confidential
the existence of this Agreement and the proposed transactions. Such access and
investigation shall be made upon reasonable notice and at reasonable places and
times.
6.07 Covenant Not to Compete.
(a) For a period of one (1) year from and after the Closing
Date, the Company shall not, directly or indirectly through any of its
Affiliates or otherwise, engage in the manufacture, sale, provision or
distribution of any Products, or enter into
-15-
any arrangement (contractual or otherwise) pursuant to which any other
Person agrees on behalf of the Company or any of its Affiliates to do any
of the foregoing.
ARTICLE VII
INDEMNITY
7.01 Indemnification.
(a) The Company shall indemnify, defend and hold harmless
Buyer its Affiliates, and its partners, shareholders, directors, officers,
employees, agents and representatives (collectively, the "Buyer
Indemnified Parties") from and against any and all Liabilities, judgments,
claims, settlements, losses, damages, costs, fees (including attorneys'
fees, court fees and expenses), liens, taxes, penalties, obligations and
expenses incurred or suffered (collectively, "Losses") by any such Buyer
Indemnified Party arising from (collectively, the "Buyer Indemnifiable
Claims"):
(i) any misrepresentation or breach of any
representation, warranty or agreement of the Company contained in
this Agreement;
(ii) the non-fulfillment by the Company of any covenant
or agreement made by such party in this Agreement;
(iii) any obligation arising from the conduct of the
Business on or prior to the Closing;
(iv) any Liability that is not an Assumed Liability;
(v) without limiting the foregoing, all Liabilities for
Taxes incurred by the Company related to or arising as a result of
the conduct of the Company or the Business on or prior to the
Closing Date;
(vi) the failure of the Company or Buyer to comply with
any bulk sales law; and
(vii) any and all actions, suits, proceedings, demands,
judgments, costs and legal and other expenses incident to any of the
matters referred to in clauses (i) through (vi) of this Section
7.01(a).
(b) Buyer indemnifies and holds harmless the Company, its
Affiliates and its partners, shareholders, directors, officers, employees
and other agents and representatives (collectively "Company Indemnified
Parties"), from and against any and all Losses incurred or suffered by any
such person arising from:
(i) any misrepresentation or breach of any
representation, warranty or agreement of Buyer contained in this
Agreement;
(ii) the non-fulfillment by Buyer of any covenant or
agreement made by it in this Agreement;
-16-
(iii) any and all Assumed Liabilities;
(iv) any obligation arising from the conduct of the
Business after the Closing by Buyer; and
(v) any and all Losses incident to any of the matters
referred to in clauses (i) through (iv) of this Section 7.01(b).
7.02 Notice of Asserted Liability. Promptly after a Buyer
Indemnified Party or Company Indemnified Party (in this context, an
"Indemnitee") become aware of any fact, condition or event that may give rise to
Losses for which indemnification may be sought under this Article VII, the
Indemnitee shall give notice thereof in the manner provided in Section 8.03 of
this Agreement (the "Claims Notice") to the party (in this context, the
"Indemnitor"). The Claims Notice shall include a description in reasonable
detail of any claim or the commencement (or threatened commencement) of any
action, proceeding or investigation (an "Asserted Liability") against
Indemnitee, and shall indicate the amount (estimated, if necessary) of the
Losses that have been or may be suffered by Indemnitee. Failure of Indemnitee to
promptly give notice hereunder shall not affect rights to indemnification
hereunder, except to the extent that Indemnitor demonstrates actual damage
caused by such failure. Upon Indemnitor's request, Indemnitee shall provide
Indemnitor with such reasonable documentation as Indemnitor shall request
pertaining to any claim(s) made by Indemnitee.
7.03 Opportunity to Defend. Indemnitor may elect to compromise or
defend, at its own expense and by its own counsel reasonably acceptable to
Indemnitee, any Asserted Liability; provided, however, that Indemnitor may not
compromise or settle any Asserted Liability without the consent of Indemnitee,
such consent not to be unreasonably withheld, unless such compromise or
settlement requires no more than a monetary payment for which Indemnitee and any
other indemnifiable parties hereunder are fully indemnified or involves other
matters not binding upon Indemnitee or such other indemnifiable parties. If
Indemnitor elects to compromise or defends such Asserted Liability, it shall
within 15 business days (or sooner, if the nature of the Asserted Liability so
requires) notify Indemnitee of its intent to do so and Indemnitee shall
cooperate in the compromise of, or defense against, such Asserted Liability. If
Indemnitor elects not to compromise or defend any Asserted Liability, fails to
notify Indemnitee of its election as herein provided or contests its obligation
to indemnify, Indemnitee may pay, compromise or defend such Asserted Liability,
at the sole cost and expense of Indemnitor, without prejudice to any rights
Indemnitee may have hereunder. In such event, Indemnitor may participate, at its
own expense, in the defense of any Asserted Liability in respect of which it may
have an indemnification obligation under Section 7.01, provided that Indemnitee
shall control such defense. If either party chooses to defend or participate in
the defense of any Asserted Liability, it shall have the right to receive from
the other party any books, records or other documents within such party's
control that are necessary or appropriate for such defense.
7.04 Limitations. The indemnification and reimbursement obligations
hereunder shall expire on the second anniversary of the Closing Date (the
"Expiration Date"), except (a) as to any claims for, or any claims that may
result in, any liability, judgment, claim, settlement, loss, damage, fee, lien,
Tax, penalty, obligation or expense for which indemnity may be sought hereunder
of which the Indemnitor has received written notice from the Indemnitee on
-17-
or before the Expiration Date and (b) with respect to Taxes, the Expiration Date
shall be 90 days after expiration of the latest statute of limitations
applicable to such Taxes. No Indemnitee shall be entitled to indemnification
pursuant to this Article VII if the Indemnitor shall have delivered in the
aggregate funds equal to $1,300,000 in satisfaction of claims under this Article
VII.
ARTICLE VIII
MISCELLANEOUS
8.01 Brokers. Regardless of whether the Closing shall occur, (i) the
Company shall indemnify and hold harmless Buyer from and against any and all
liability for any brokers or finders' fees arising with respect to brokers or
finders retained or engaged by the Company in respect of the transactions
contemplated by this Agreement, and (ii) Buyer shall indemnify and hold harmless
the Company from and against any and all liability for any brokers' or finders'
fees arising with respect to brokers or finders retained or engaged by Buyer in
respect of the transactions contemplated by this Agreement.
8.02 Costs and Expenses. Each of the parties to this Agreement shall
bear his or its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby.
8.03 Notices. Any notice, request, instruction, correspondence or
other document to be given hereunder by any party hereto to another (herein
collectively called "Notice") shall be in writing and delivered personally or
mailed by registered or certified mail, postage prepaid and return receipt
requested, or sent by national commercial courier service, return receipt
requested for next day delivery to be confirmed in writing by such courier, or
by telecopier, as follows:
BUYER: Quincy Investments Corp.309 Terraces North
▇▇-▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a Copy (which shall not constitute notice) to:
▇▇▇▇▇▇, Saleson & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
-18-
COMPANY: The Ageless Foundation, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, #▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
With a Copy (which shall not constitute notice) to:
Kluger, Peretz, ▇▇▇▇▇▇ & Berlin, P.L.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Each of the above addresses for notice purposes may be changed by providing
appropriate notice hereunder. Notice given by personal delivery or registered
mail shall be effective upon actual receipt. Notice given by telecopier shall be
effective upon actual receipt if received during the recipient's normal business
hours, or at the beginning of the recipient's next normal business day after
receipt if not received during the recipient's normal business hours. All
Notices by telecopier shall be confirmed by the sender thereof promptly after
transmission in writing by registered mail or personal delivery. Anything to the
contrary contained herein notwithstanding, notices to any party hereto shall not
be deemed effective with respect to such party until such Notice would, but for
this sentence, be effective both as to such party and as to all other persons to
whom copies are provided above to be given.
8.04 Governing Law, Jurisdiction, Venue, Waiver and Jury Trial. The
provisions of this agreement and the documents delivered pursuant hereto shall
be governed by and construed in accordance with the laws of the State of Florida
(excluding any conflict of law rule or principle that would refer to the laws of
another jurisdiction). Each party hereto irrevocably submits to the jurisdiction
of the State of California, Orange County, in any action or proceeding arising
out of or relating to this Agreement or any of the Collateral Agreements, and
each party hereby irrevocably agrees that all claims in respect of any such
action or proceeding must be brought and/or defended in such court; provided,
however, that matters which are under the exclusive jurisdiction of the Federal
courts shall be brought in the Federal District Court for the Central District
of California. Each party hereto consents to service of process by any means
authorized by the applicable law of the forum in any action brought under or
arising out of this Agreement or any of the Collateral Agreements, and each
party irrevocably waives, to the fullest extent each may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER.
8.05 Entire Agreement; Amendments and Waivers. This Agreement,
together with all exhibits and schedules attached hereto, constitutes the entire
agreement between and
-19-
among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements, understandings, negotiations and discussions, whether oral
or written, of the parties, and there are no warranties, representations or
other agreements between the parties in connection with the subject matter
hereof except as set forth specifically herein or contemplated hereby. No
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 (regardless of whether similar), nor shall any such
waiver constitute a continuing waiver unless otherwise expressly provided.
8.06 Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns; but neither this Agreement nor any of the
rights, benefits or obligations hereunder shall be assigned, by operation of law
or otherwise, by the Company without the prior written consent of Buyer. The
Company understands and acknowledges that Buyer intends to assign all of its
rights and obligations under this Agreement to Naturade, and that Naturade is an
express third party beneficiary under this Agreement. Except as set forth in the
immediately prior sentence, nothing in this Agreement, express or implied, is
intended to confer upon any person or entity other than the parties hereto and
their respective permitted successors and assigns, any rights, benefits or
obligations hereunder.
8.07 Remedies. The rights and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any party hereto shall
not preclude or constitute a waiver of its right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights and
remedies a party may have by law, statute or otherwise.
8.08 Exhibits and Schedules. The exhibits and Schedules referred to
herein are attached hereto and incorporated herein by this reference. Disclosure
of a specific item in any one Schedule shall be deemed restricted only to the
Section to which such disclosure specifically relates.
8.09 Multiple Counterparts. This Agreement may be executed in one or
more counterparts and via facsimile, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument.
8.10 References and Construction.
(a) Whenever required by the context, and is used in this
Agreement, the singular number shall include the plural and pronouns and
any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identification the person may
require. References to monetary amounts, specific named statutes and
generally accepted accounting principles are intended to be and shall be
construed as references to United States dollars, statutes of the United
States of the stated name and United States generally accepted accounting
principles, respectively, unless the context otherwise requires.
-20-
(b) The provisions of this Agreement shall be construed
according to their fair meaning and neither for nor against any party
hereto irrespective of which party caused such provisions to be drafted.
Each of the parties acknowledge that it has been represented by an
attorney in connection with the preparation and execution of this
Agreement.
8.11 Survival. Any provision of this Agreement which contemplates
performance or the existence of obligations after the Closing Date, and any and
all representations and warranties set forth in this Agreement, shall not be
deemed to be merged into or waived by the execution and delivery of the
instruments executed at the Closing, but shall expressly survive Closing and
shall be binding upon the party or parties obligated thereby in accordance with
the terms of this Agreement, subject to any limitations expressly set forth in
this Agreement.
8.12 Attorneys' Fees. In the event any suit or other legal
proceeding is brought for the enforcement of any of the provisions of this
Agreement, the parties hereto agree that the prevailing party or parties shall
be entitled to recover from the other party or parties upon final judgment on
the merits reasonable attorneys' fees (and sales taxes thereon, if any),
including attorneys' fees for any appeal, and costs incurred in bringing such
suit or proceeding.
8.13 Termination.
(a) This Agreement shall terminate on the earlier to occur of
any of the following events:
(i) the mutual written agreement of Buyer and the
Company;
(ii) by written notice of Buyer or the Company to the
other party hereto, if the Closing shall not have occurred prior to
12:00 midnight, Pacific time, on August 15, 2005;
(iii) by written notice of Buyer to the Company, if the
Company shall have materially breached any of their representations,
warranties or agreements contained herein or pursuant to Section
5.03; or
(iv) by written notice of the Company to Buyer, if Buyer
shall have materially breached any of its representations,
warranties or agreements contained herein.
(b) Nothing in this Section shall relieve any party of any
liability for a breach of this Agreement prior to the termination hereof.
Upon the termination of this Agreement, all other rights and obligations
of the parties under this Agreement shall terminate, except their
obligations under Sections 6.02, 6.04, 7.05, 8.02-8.05, 8.07 and
8.10-8.12.
8.14 Bulk Sales Laws. The parties hereby waive compliance with the
bulk sales laws of any state in which the Assets are located or in which
operations relating to the Business are conducted.
-21-
ARTICLE IX
DEFINITIONS
Capitalized terms used in this Agreement are used as defined in this
Article IX or elsewhere in this Agreement.
9.01 Action. The term "Action" shall mean any lawsuit, claim,
proceeding, litigation, arbitration, action, investigation, inquiry, cause of
action, right of recovery or chose in action.
9.02 Affiliate. The term "Affiliate" shall mean, with respect to any
Person, any other Person controlling, controlled by or under common control with
such Person. The term "Control" as used in the preceding sentence means, with
respect to a corporation, the right to exercise, directly or indirectly, more
than 50% of the voting rights attributable to the shares of the controlled
corporation and, with respect to any Person other than a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person.
9.03 Assets. Shall have the meaning set forth in Section 1.01.
9.04 Business Day. The term "Business Day" shall mean any day that
national banks are open to conduct business in Irvine, California.
9.05 Closing Date. Shall have the meaning set forth in Section 2.01.
9.06 Code. The term "Code" shall mean the Internal Revenue Code of
1986, as amended.
9.07 Collateral Agreements. The term "Collateral Agreements" shall
mean any or all of the exhibits to this Agreement and any and all other
agreements, instruments or documents required or expressly provided under this
Agreement to be executed and delivered in connection with the transactions
contemplated by this Agreement.
9.08 Contract. The term "Contract" shall mean any written contract,
agreement, license, lease, guaranty, indenture, sales or purchase order or other
legally binding commitment in the nature of a contract to which the Company is a
party.
9.09 Court Order. The term "Court Order" means any judgment, order,
writ, decision, injunction, award or decree of any foreign, federal, state,
local or other court or tribunal and any ruling or award in any arbitration
proceeding.
9.10 Encumbrances. The term "Encumbrances" shall mean any lien,
encumbrance, claim, charge, security interest, mortgage, deed of trust, pledge,
easement, conditional sale or other title retention agreement, defect in title
or other restriction of a similar kind.
9.11 Financial Statements. The term "Financial Statements" shall
have the meaning set forth in Section 3.05.
-22-
9.12 Governmental Authorities. The term "Governmental Authorities"
shall mean any nation or country (including but not limited to the United States
and the Bahamas) and any commonwealth, territory or possession thereof and any
political subdivision of any of the foregoing, including but not limited to
courts, departments, commissions, boards, bureaus, agencies, ministries or other
instrumentalities.
9.13 Intellectual Property. The term "Intellectual Property" shall
mean any and all of the following which is owned by, licensed by, licensed to,
used or held for use by a Person (including all copies and embodiments thereof,
in electronic, written or other media): (a) all registered and unregistered U.S.
and foreign trade names, trademarks, trade dress and service marks, together
with any applications related thereto and the goodwill of the Business
symbolized thereby ("Marks"); (b) all inventions (whether patentable or
unpatentable), all improvements thereto, and all patent, patent applications and
disclosures related thereto, together with all reissuances, continuations,
continuations in part, revisions, extensions and re-examinations thereof and all
issued U.S. and foreign patents and pending patent applications, patent
disclosures and improvements thereto (collectively, the "Patents"); (c) all
registered and unregistered U.S. and foreign works of authorship, fixed in any
tangible medium of expressions regardless of the availability of copyright
protection, but including all copyrights and moral rights recognized by law and
all applications to register and renewals of any of the foregoing
("Copyrights"); (d) all computer software and databases owned by the Person or
under development for the Person by third parties ("Software") and all related
documentation; (e) all categories of ideas, trade secrets, know-how, inventions
(whether or not patentable and whether or not reduced to practice),
improvements, processes, procedures, drawings, specifications, designs, plans,
proposals, technical data, copyrightable works, financial, marketing, and
business data, pricing and cost information, business and marketing plans,
customer and supplier lists and information, other confidential and proprietary
information, manufacturing and production processes and techniques, molds, dies,
casts and product configurations ("Proprietary Rights"); (f) all licenses and
other Contracts pursuant to which the Person has acquired rights in or to any of
the Marks, Patents, Copyrights, Software or Proprietary Rights ("In-Licenses");
and (g) all licenses and other Contracts to which the Person has sold, licensed,
leased or otherwise transferred or granted any interest or rights to any Marks,
Patents, Copyrights, Software or Proprietary Rights ("Out-Licenses").
9.14 Inventory. The term "Inventory" shall mean all goods,
merchandise and other personal property owned and held for sale, and all raw
materials, works-in-process, materials and supplies of every nature which
contribute to the finished products of the Company in the ordinary course of its
business, specifically excluding, however, damaged, defective or otherwise
unsaleable items.
9.15 Knowledge. The term "Knowledge" shall mean the actual knowledge
of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, after reasonable due inquiry.
9.16 Legal Requirements. The term "Legal Requirements," when
described as being applicable to any Person, shall mean any and all laws
(statutory, judicial or otherwise), ordinances, regulations, judgments, orders,
directives, injunctions, writs, decrees or awards of, and any Contracts with,
any Governmental Authority, in each case as and to the extent applicable to such
Person or such Person's business, operations or properties.
-23-
9.17 Liabilities. The term "Liabilities" shall mean all
indebtedness, obligations, damages, fines, fees, penalties, and other
liabilities (or contingencies that have not yet become liabilities), whether
absolute, accrued, matured, contingent (or based upon any contingency), known or
unknown, fixed or otherwise, or whether due or to become due, including without
limitation, any fines, penalties, judgments, awards or settlements respecting
any judicial, administrative or arbitration proceedings or any damages, losses,
claims or demands with respect to any Legal Requirement.
9.18 Naturade. The term "Naturade" shall mean Naturade, Inc., a
Delaware corporation.
9.19 Permits. The term "Permits" shall mean any and all permits,
rights, approvals, licenses, authorizations, legal status, orders or Contracts
under any Legal Requirement or otherwise granted by any Governmental Authority.
9.20 Person. The term "Person" shall mean any individual,
partnership, joint venture, firm, corporation, association, limited liability
company, trust or other enterprise or any governmental or political subdivision
or any agency, department or instrumentality thereof.
9.21 Taxes. The term "Taxes" shall mean any federal, state, local or
foreign income, gross receipts, estimated, profits, windfall profits, intangible
property, occupation, production, emergency excess, capital gains, capital
stock, stamp, goods and services, value-added property, sales, use, license,
excise, franchise, employment, payroll, withholding, alternative or add-on
minimum, ad valorem, transfer or excise tax, or any other tax, custom, duty,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest or penalty, imposed by any Governmental Authority.
9.22 Tax Returns. The term "Tax Returns" shall mean any return,
report or similar statement required to be filed with respect to any Tax
(including any attached schedules), including, without limitation, any
information return, claim for refund, amended return or declaration of estimated
Tax and any affiliated, consolidated, combined, unitary or similar return.
[SIGNATURES ON FOLLOWING PAGE]
-24-
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
Executed as of the date first written above.
BUYER:
Quincy Investments, Corp.,
a Bahamas International Business Company
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Chairman
COMPANY:
The Ageless Foundation, Inc.,
a Florida corporation
By:/s/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
S-1
[Schedules and Exhibits have been omitted but are
available to the staff of the Commission upon request]