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