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ASSET ACQUISITION AGREEMENT
This is an Asset Acquisition Agreement (the "Agreement"), dated April 30,
1998, among 562577 B.C. Ltd., a British Columbia, Canada corporation (the
"Seller"), Peritronics Medical Ltd., a British Columbia, Canada corporation (the
"Shareholder"), LifeServ Technologies, Inc., a Florida corporation (the "Buyer")
and Medical Technology Systems, Inc., a Delaware corporation ("Med Tech").
Background
The Seller is engaged in the business of providing healthcare information
systems, including owning and operating a Fetal Monitoring and Point-of-Care
Documentation System (the "Fetal Monitoring System" and collectively with all of
the Seller's operations, the "Business"). The Shareholder constitutes all of the
shareholders of the Seller and is entering into this Agreement to provide
certain assurances in order to induce the Buyer to enter into this Agreement.
The Buyer, a wholly-owned subsidiary of Med Tech, is a healthcare information
systems company that provides clinical information systems, medication
dispensing, and medications management systems for hospitals and other acute
care facilities. The Buyer wishes to purchase from the Seller and the Seller
wishes to sell to the Buyer certain assets of the Seller related to the Business
effective April 30, 1998 ("Effective Date"), subject to the terms and conditions
set forth below. Accordingly, in consideration of the mutual covenants and
agreements set forth below, the parties agree as follows:
Terms
1. Definitions.
"Accredited Investor" has the meaning set forth in Rule 501(a) of
Regulation D promulgated under the Securities Act.
"Assets" has the meaning set forth in Section 2.
"Assumed Liabilities" means all Liabilities of the Business set forth on
Schedule A of this Agreement, but only to the extent that such Liabilities arise
out of or are attributable to items that would properly be accrued under GAAP as
of the Closing Date; provided, however, that the Assumed Liabilities shall not
include any Liabilities not specifically set forth on Schedule A of this
Agreement, including, without limitation: (i) any Liability of the Seller for
income, transfer, sales, franchise use, and other Taxes arising in connection
with the consummation of the transactions contemplated hereby (including any
income Taxes arising because Seller is transferring the Assets), (ii) any
Liability of the Seller for the unpaid Taxes of any Person under United States
Treasury Regulation ss.1.1502-6 (or any similar provision of state, local, or
foreign law), as a transferee or successor, by contract, or otherwise, (iii) any
obligation of the Seller to indemnify any Person (including any Shareholder) by
reason of the fact that such Person was a director, officer, employee, or agent
of the Seller or was serving at the request of any such entity as a partner,
trustee, director, officer, employee, or agent of another
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entity (whether such indemnification is for judgments, damages, penalties,
fines, costs, amounts paid in settlement, losses, expenses, or otherwise and
whether such indemnification is pursuant to any statute, charter document,
bylaw, agreement, or otherwise) (iv) any Liability of the Seller for costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby, (v) any Liability or obligation of the Seller under this
Agreement (or under any related agreement between the Seller on the one hand and
the Buyer on the other hand entered into on or after the date of this
Agreement), (vi) any obligations of any kind relating to any Person whose
approval is or may be required in connection with the transactions contemplated
by this Agreement (provided, however, any fees payable pursuant to compliance
with the HSR Act shall be shared equally by the Buyer and the Seller), (vii) any
obligations related to any severance pay or similar compensation to employees of
the Seller, arising from the termination of any such employee prior to the
Closing Date or related to the transactions contemplated by this Agreement,
(viii) any liability of the Seller, in any real property, owned or leased, and
any obligation or liability of the Seller arising thereunder, and (ix) any
deferred compensation obligations to any of the individuals set forth on
Schedule A to this Agreement.
"Business" has the meaning set forth in the Background Section of this
Agreement.
"Buyer" has the meaning set forth in the preface above.
"Cash Consideration" has the meaning set forth in Section 3(a).
"Closing" has the meaning set forth in Section 3(c).
"Closing Date" has the meaning set forth in Section 3(c).
"Code" means the Internal Revenue Code of 1986, as amended.
"Confidential Information" means any information concerning the business
and affairs of the Seller prior to Closing or the Buyer subsequent to Closing
that is not already generally available to the public, including trade secrets.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excess Cash Flow" means the Net Sales (as defined herein) of Peritronics
Fetal Monitoring Systems (or sales of fetal monitoring systems to Peritronics
customer list as defined in Schedule B) minus the operating expenses associated
with the Net Sales.
"Fetal Monitoring System" has the meaning set forth in the Background
Section above.
"GAAP" means generally accepted accounting principles.
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"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Liability" means any liability (whether known or unknown, whether asserted
or unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due) including
any liability for Taxes.
"Med Tech" means Medical Technology Systems, Inc., a Delaware corporation.
"Med Tech Common Stock" means the common stock, par value $.01 per share,
of Medical Technology Systems, Inc.
"Net Sales" means the proceeds received by the Buyer from the sale of the
Peritronics Fetal Monitoring Systems (or sales to customers on the Peritronics
customer list, attached hereto as Schedule B) less the following: (i) the direct
cost of hardware purchased by the Buyer to install the Fetal Monitoring System,
including any amounts paid for installation of the Fetal Monitoring System; (ii)
the cost of freight to ship the Fetal Monitoring System to the customer; (iii)
any amount paid to customize the software component of the Fetal Monitoring
System as required by the customer; (iv) any amount paid to train customer
personnel in the use of the Fetal Monitoring System; (v) any amount paid to
integrate the customer's database into the Fetal Monitoring System; (vi) any
taxes and licenses pertaining to sales of the Fetal Monitoring System; and (vii)
any commissions paid to employees or agents of agents of the Buyer relating to
sales of the Fetal Monitoring System.
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, firm, association, or other legal
entity.
"Purchase Price" has the meaning set forth in Section 3(a).
"Returns" has the meaning set forth in Section 6(q).
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"Securities Act" means the Securities Act of 1933, as amended.
"Security Interest" means the Universal Commercial Code filing #9717561018,
filed in Sacramento, California on June 20, 1997 in favor of ▇▇▇▇ Mortgage
Corporation on behalf of ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, and ▇▇▇▇▇
▇▇▇▇▇▇▇, attached hereto as Schedule D.
"Seller" has the meaning set forth in the preface above.
"Seller Benefit Plans" has the meaning set forth in Section 6(n).
"Seller ERISA Affiliate" has the meaning set forth in Section 6(n).
"Seller ERISA Plans" has the meaning set forth in Section 6(n).
"Shareholder" has the meaning set forth in the preface above.
"Stock Consideration" has the meaning set forth in Section 3(a).
"Termination for Cause" means termination for: willful disobedience;
insubordination; unwillingness to meet documented and reasonable performance
standards; or gross misconduct.
2. Sale of Business and Assets. The parties hereby agree that, on the Closing
Date, the Seller shall sell and the Buyer shall purchase, for the consideration
set forth below, all of the Seller's assets and the Business as a going concern,
including without limitation, all property, rights, and business of every type
and description, real, personal and mixed, tangible and intangible, constituting
the Business, all of the Seller's goodwill, all contracts and contract rights
with customers of the Business, all contracts and contract rights with temporary
employees or contractors of the Business, any employee or contractor
non-competition agreements in favor of Seller, leases and lease deposits, sales
and supply contracts, leases, all cash on hand in banks, accounts receivable,
all Intellectual Property (including, without limitation, source code for all of
the Seller's products) and Confidential Information, use of the name
"Peritronics", and any variations thereof, patents, trademarks, trade names,
brand names, and copyrights, and all pending applications therefor and interests
thereunder, inventions, processes, know-how, formulae, trade secrets, equipment,
fixtures, rights under contracts and agreements, franchises, all rights in any
funds of whatever nature, books and records (excluding the corporate minute
books and stock transfer records), candidate and employee lists, all telephone
and fax numbers, all telephone listings, and all other property and rights of
every kind and nature owned or held by the Seller on the Closing Date or then
used by the Seller, whether or not specifically referred to in this Agreement.
Such sale shall be made free and clear of all liens, encumbrances, and
restrictions of any kind.
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3. Purchase and Sale of the Assets. (a) Purchase Consideration. Subject to the
terms of this Agreement and in reliance on the representations and warranties of
the Seller and the Shareholder set forth below, the Buyer shall purchase the
Assets on the Closing Date. The purchase price for the Assets (the "Purchase
Price") shall consist of (i) $350,000 in cash (the "Cash Consideration"), and
(ii) 250,000 shares of Med Tech Common Stock (the "Stock Consideration"), all of
which shall be payable to the Seller as set forth below. The Seller is obligated
to pay to the Buyer the Cash Consideration only from Net Sales.
(b) Payment. The Stock Consideration shall be delivered to the Seller no
later than ninety days after the Closing Date. The Cash Consideration shall be
payable as follows: -$10,000 paid on May 8, 1998 -$20,000 paid at Closing -The
remainder paid in monthly installments, commencing on the 15th day of the month
following the Closing Date, equal to 50% of the Excess Cash Flow for the
previous calendar month. The monthly installments shall be payable until such
time as the Cash Consideration has been paid, however, the Cash Consideration
shall be paid in full no later than nine months after the Closing Date.
(c) Closing. The closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of the Seller located at
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, five
business days after Shareholder approval, no later than July 31, 1998, or such
other date as may be agreed upon in writing by the parties (the "Closing Date").
(d) Deliveries at Closing. At the Closing, the Seller shall deliver to the
Buyer a ▇▇▇▇ of sale and such other good and sufficient instruments of transfer
and conveyance as in the reasonable opinion of the Buyer's counsel shall be
effective to vest in the Buyer good and marketable title to the Assets.
4. No Assumption of Liabilities. Except for the obligations of Seller that are
described in Schedule A to this Agreement, the Buyer is not assuming or becoming
liable for any of the Seller's liabilities, obligations, debts, contracts, or
other commitments of the Seller of any kind, known or unknown, whether fixed or
contingent, and whether arising in contract, in tort, or otherwise. The Seller
and the Shareholder have supplied the Buyer with documentation evidencing these
Liabilities as requested by the Buyer.
5. Proration of Expenses. To the extent they relate to the Assets, all sales,
use, and personal property taxes and assessments, accrued and assessed (other
than sales taxes relating to the transfer of the Assets), if any, shall be
prorated as of the Effective Date, with the Seller responsible for the portions
of such items accruing on or before the close of business on the Effective Date
and the Buyer responsible for the portions of such items accruing after the
Effective Date. Personal property taxes and assessments are to be prorated on
the basis of calendar year 1998.
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6. Representations and Warranties of the Seller and the Shareholder. The Seller
and the Shareholder, jointly and severally, represent and warrant to the Buyer
as follows:
(a) Organization and Standing. The Seller is a corporation organized and in
good standing under the laws of the province of its incorporation. The Seller is
qualified to do business as a foreign corporation in each jurisdiction in which
its activities require such qualification. No part of the Business is conducted
by or through any entity other than the Seller. The Shareholder owns all of the
outstanding shares of each class of stock of the Seller. As of the date of this
Agreement, there are no options, warrants, calls, subscriptions, or other
rights, agreements, or commitments relating to the issued or unissued capital
stock of the Seller.
(b) Power and Authority. The Seller has the requisite corporate authority
to enter into this Agreement and to incur and perform its obligations under this
Agreement. The Seller has all necessary corporate power to own, lease, hold, and
operate all of its properties and assets and to carry on the Business as it is
now being conducted. The execution, delivery and performance by the Seller of
this Agreement has been authorized by all necessary corporate action including,
without limitation, approval by the board of directors of the Seller. Upon its
execution and delivery, this Agreement shall constitute a valid and binding
agreement of the Seller and the Shareholder, enforceable against the Seller and
the Shareholder in accordance with its terms, subject only to applicable
bankruptcy, moratorium, and similar laws.
(c) Title to Assets. The Seller has good and marketable title to all of the
Assets, free and clear of all liens, encumbrances, security interests, or claims
of any kind or nature except the Security Interest in the process of being
assigned to the Seller by the form of agreement set out in Schedule E attached
hereto. The Seller has no agreements to mortgage, pledge, or subject to lien,
charge, security interest, or other encumbrance any of the Assets.
(d) Approvals and Consents. The execution, delivery, and performance of
this Agreement (and the transactions contemplated by this Agreement) do not and
will not: (i) contravene any provision of the Articles of Incorporation or
Bylaws of the Seller; (ii) result in a breach of, constitute a default under,
result in the modification or cancellation of, or give rise to any right of
termination, modification, or acceleration in respect of any indenture, loan
agreement, mortgage, lease, or any other contract or agreement to which the
Seller or any of the Assets are bound, except for contracts entered into in the
ordinary course of business during the term of the Operations Management
Agreement between the parties dated September 15, 1997; (iii) result in the
creation of any security interest, pledge, lien, charge, claim, option, right to
acquire, encumbrance, restriction on transfer, or adverse claim of any nature
whatsoever upon any of the Assets; (iv) violate any writ, order, injunction, or
decree of any court or any federal, state, municipal, or other domestic or
foreign governmental department, commission, board, bureau, agency, or
instrumentality, which violation or default in any such case would have a
material adverse effect on the Business.
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(e) Litigation. There are no actions, suits, proceedings, or investigations
at law or in equity, by or before any court, governmental instrumentality,
agency, or arbitral tribunal, now pending or threatened that could have a
material adverse effect on the Business or any of the Assets, or the ability of
the Seller to consummate the transactions contemplated by this Agreement.
(f) Patents and Trademarks. The Seller has the right to use all
Intellectual Property necessary for, or currently used in, its Business. The
Seller's Business does not violate or infringe the Intellectual Property rights
of any third Person. No proceedings have been instituted or threatened that
assert infringement of the Intellectual Property rights of any third party
against the Seller.
(g) Business Names. Within the past five years, the Shareholder has not
used a business name other than "Peritronics" and variations thereof.
(h) Collective Bargaining Agreements and Employment Contracts. There are no
employment contracts or collective bargaining agreements to which the Seller is
a party or by which the Seller is bound, and there is no pending or threatened
labor dispute, labor union organizing attempt, strike, or work stoppage
affecting either the Seller or the Business. The Seller has made no
representation or assurance to any of its employees with respect to future
salary or compensation adjustments.
(i) Insurance Policies. Attached to this Agreement as Schedule C is a
complete and correct list and summary description of all insurance policies held
by the Seller with respect to the Assets, true and complete copies of which have
been delivered to the Buyer. The Seller has complied with all of the provisions
of such policies and the policies are in full force and effect.
(j) Compliance with Laws. To the Seller's knowledge, there is no violation
of any applicable laws, regulations, or orders relating to the conduct of the
Seller's Business, and there is no use of buildings or equipment used by the
Seller in the Business that violates any applicable laws, codes, ordinances, or
regulations, whether federal, state, or local, that, in either case, would have
a material adverse effect on the Assets.
(k) Conveyance Not Fraudulent. The Seller is not making the transactions
contemplated by this Agreement with the intent to hinder, delay, or defraud
either present or future creditors. The Purchase Price constitutes the
reasonably equivalent value for the Assets.
(l) Assets Represent Substantially the Entire Business. The Assets
represent substantially the entire operating assets of the Business.
(m) Real Property. None of the Assets consist of real property owned by the
Seller.
(n) Improper Payments. Neither the Seller nor, to the Seller's knowledge,
any person acting on behalf of the Seller has made any payment or otherwise
transmitted anything of value, directly or indirectly, to (i) any official of
any government or agency or political subdivision thereof for the purpose of
influencing any decision affecting the Business, (ii) any customer, supplier, or
competitor for the purposes of obtaining, retaining, or directing business for
the Seller, or (iii) any political party or any candidate for elective political
office, nor has any fund or other asset of the Seller been maintained that was
not fully and accurately recorded on the Seller's books of account.
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(o) Existing Customers. The Seller has no knowledge or reason to believe
that any existing customers of the Seller will not continue to do business with
the Buyer after the Closing Date.
(p) No Misrepresentations. None of the representations and warranties of
the Seller set forth in this Agreement or in the attached exhibits nor any
information or statements contained in the lists or documents provided or to be
provided by the Seller to the Buyer, notwithstanding any investigation thereof
by the Buyer, contains any untrue statement of a material fact, or omits the
statement of any material fact necessary to render the same not misleading.
(q) Brokers' Fees. The Seller has no Liability or obligation to pay any
fees or commission to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer could become
liable or obligated.
(r) Investment. The Seller and the Shareholder (i) understand that the
Stock Consideration has not been, and will not be, except as described in
Section 9, registered under the Securities Act, or under any state securities
laws, and is being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering, (ii) are
acquiring the Stock Consideration solely for their own account for investment
purposes, and not with a view to the distribution thereof, (iii) are
sophisticated investors with knowledge and experience in business and financial
matters, (iv) have received certain information concerning the Buyer and has had
the opportunity to obtain additional information as requested by the Seller or
the Shareholder in order to evaluate the merits and the risks inherent in
holding the Stock Consideration, (v) are able to bear the economic risk and lack
of liquidity inherent in holding the Stock Consideration, and (vi) are
Accredited Investors.
7. Representations and Warranties of the Buyer. The Buyer represents and
warrants to the Seller as follows:
(a) The Buyer is a corporation organized under the laws of the State of
Florida, and its status is active.
(b) The Buyer has the requisite corporate authority to enter into this
Agreement and to incur and perform its obligations under this Agreement. The
Buyer has all necessary corporate power to own, lease, hold, and operate the
Assets and carry on the Business as it is now being conducted. The Buyer will
use its reasonable best efforts to obtain all necessary corporate action for the
execution, delivery and performance by the Buyer of this Agreement. Upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding agreement of the Buyer, enforceable against the Buyer in
accordance with its terms, subject only to applicable bankruptcy, moratorium,
and similar laws.
(c) The Buyer will utilize their reasonable best efforts to manage the
operations of the Seller in such a manner as to preserve, safeguard and maintain
the Seller's customer base until the Closing Date.
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8. Pre-Closing Covenants. The parties agree as follows with respect to the
period between the execution of this Agreement and the Closing.
(a) General. Each of the parties will use its reasonable best efforts to
take all action and to do all things necessary, appropriate, or convenient to
consummate and make effective the transactions contemplated by this Agreement.
(b) Notices and Consents. The Seller will give any notices to third parties
and will obtain any third-party consents the Buyer may reasonably request in
connection with the transactions contemplated by this Agreement or that may
otherwise be necessary to convey the Seller's full rights in the Assets to the
Buyer.
(c) Full Access. The Seller will permit representatives of the Buyer to
have full access to all premises, properties, books, records, contracts, tax
records, and documents of or pertaining to the Business or the Assets during the
Seller's normal business hours or any other reasonable time for purposes of the
Buyer's due diligence investigation and evaluation of the Assets.
(d) Notice of Developments. The Seller will give prompt written notice to
the Buyer of any material development affecting the Assets. Each party will give
prompt written notice to the other of any material development affecting the
ability of the parties to consummate the transactions contemplated by this
Agreement. No disclosure by any party pursuant to this subsection, however, will
affect the other party's right, if any, to refuse to close under the terms of
this Agreement.
(e) Public Statements. The parties shall cooperate in all respects as to
public statements and announcements with respect to the transactions
contemplated by this Agreement. No party shall issue any press release or
announcement relating to the subject matter of this Agreement without the prior
approval of the other party (which approval shall not be unreasonably withheld);
however, either party may make any public disclosure it believes in good faith
is required by law or regulation (in which case the disclosing party will advise
the other party prior to making the disclosure).
(f) Exclusivity. Neither the Seller nor the Shareholder shall (i) solicit,
initiate, or encourage the submission of any proposal or offer from any person
or entity relating to the acquisition of any capital stock or assets of the
Seller (including any acquisition structured as a merger, consolidation, or
share exchange), or (ii) participate in any discussions or negotiations
regarding, furnish any information with respect to, or assist or participate in,
or facilitate in any other manner any effort or attempt by any person or entity
to do or seek any of the foregoing.
(g) Shareholder Approval. The Seller shall take all action necessary or
advisable to secure the requisite vote or consent of its Shareholder, as
required by Canadian law, to approve or adopt this Agreement.
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(h) Regulatory Approval. The Shareholder will use its best efforts to
obtain all necessary governmental and regulatory approvals necessary to complete
this Agreement no later than July 31, 1998.
(i) Security Interest Assignment. The Seller shall take all action
necessary to assign the Security Interest to itself prior to the Closing Date.
9. Registration Rights. "Piggy Back" Registrations. If Medical Technology
Systems, Inc. shall determine to register any of its securities during the
one-year period commencing on the Closing Date, other than a registration
relating solely to employee benefit plans, or a registration on any registration
form that does not permit secondary sales or does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Med Tech Common Stock, Med Tech will:
(i) Promptly give to the Seller written notice thereof; and
(ii) Use all commercially reasonable efforts to include in such
registration all the Stock Consideration transferred to the Seller under
this Agreement and specified in a written request, made by the Buyer within
20 days after the date of mailing of the written notice by the Seller
described in clause (i) above. If the underwriter advises the Seller that
marketing considerations require a limitation on the number of shares
offered pursuant to any registration statement, then the Seller may offer
all of the securities it proposes to register for its own account or the
maximum amount that the underwriter considers saleable and such limitation
on any remaining securities that may, in the opinion of the underwriter, be
sold will be imposed pro rata among all holders of Stock Consideration who
are entitled to include shares in such registration statement according to
the number of shares of Stock Consideration each such holder requested to
be included in such registration statement.
As long as the Stock Consideration is owned by the Seller or the
Shareholder, such shares shall have the registration rights and obligations
set forth in this Section.
10. Post-Closing Covenants. The parties agree as follows with respect to the
period following the Closing:
(a) General. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the parties will take such further action (including the execution and
delivery of such further instruments and documents) as the other party may
reasonably request, all at the sole cost and expense of the requesting party
(unless the requesting party is entitled to indemnification therefor under
Section 13 of this Agreement).
(b) Transition. The Seller and the Shareholder will not take any action
(other than actions required to be taken by the Seller under this Agreement)
that is designed or intended to have the effect of (i) discouraging any lessor,
licensor, customer, supplier, or other business associate of the Seller from
maintaining the same business relationships with the Buyer after the Closing as
it maintained with the Seller prior to the Closing or (ii) inducing any employee
of the Buyer to terminate his employment with the Buyer. The Seller will refer
all customer inquiries relating to the Business to the Buyer from and after the
Closing.
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(c) Name Change. At the Closing, the Seller shall assign the right to use
the name "Peritronics" and variations thereof to the Buyer, shall cease the use
of such name, and shall cooperate with the Buyer in the assumption of such name
by the Buyer in all jurisdictions where the Seller is currently qualified to do
business. Within six months after the Closing Date, the Shareholder shall either
dissolve or change its name to a new name bearing no resemblance to its present
name.
(d) Non-Compete Agreement. (i) The Seller and the Shareholder hereby agree
that, for a period of two years commencing on the Closing Date, they will not
accept a position as a consultant, agent, or independent contractor, or be or
become the owner of any of the outstanding equity interest in, or otherwise
participate in the business of any entity in the business of providing
obstetrical information systems in any area of the United States, within one
hundred miles of a Buyer-owned, a Buyer-licensed, or Buyer-franchised location
(except that the Shareholder may work with or for the Buyer and its affiliates).
Also for a period of two years commencing on the Closing Date, the Seller and
the Shareholder will not solicit the business of any customer of the Buyer or
the Seller relating to providing obstetrical information systems in the United
States or disclose any confidential information regarding the Business. For
purposes of this Section 10(d), the word "customers" means organizations
(whether corporations, partnerships, or otherwise) or persons who have done
business of any nature with the Buyer, the Seller, or any subsidiary or
affiliate of the Buyer or Seller prior to the Closing Date or during a two year
period commencing on the Closing Date, and with whom the Buyer, the Seller, or
any of the Buyer's or Seller's subsidiaries or affiliates has engaged in
discussions regarding a possible business relationship during the two year
period commencing on the Closing Date.
(ii) If the above covenant not to compete is found by a court of
competent jurisdiction to be unreasonable in either geographical scope or
duration, then such court may determine the scope or duration that is, in
its determination, reasonable and therefore enforceable, and such covenant
shall be enforced with retroactive effect as modified. The Seller and the
Shareholder understand that the Buyer will suffer irreparable harm in the
event of any breach of the provisions of this Section 10(d) and that in the
event of an actual or threatened breach of its provisions, the Buyer shall
be entitled to an injunction to restrain the Seller and the Shareholder
from such action. Nothing in this Section 10(d) shall be construed as
prohibiting the Buyer from pursuing any other available remedy, legal or
equitable, for such breach or threatened breach.
(e) Employment. The Buyer agrees that in the event any employees of the
are terminated after the Closing Date, said employees shall receive not less
than 60 days notice of termination, except for Termination for Cause.
(f) Stock Consideration. The certificates representing the Stock
consideration shall be imprinted with a legend in substantially the following
form:
12
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
OR ANY STATE SECURITIES LAWS AND CANNOT BE TRANSFERRED WITHOUT
AN OPINION OF COUNSEL SATISFACTORY TO MEDICAL TECHNOLOGY
SYSTEMS, INC. THAT SUCH TRANSFER WILL NOT VIOLATE ANY SUCH
SECURITIES LAWS.
Any holder of the Stock Consideration desiring to transfer such shares must
first furnish the Buyer with a written opinion of counsel reasonably
satisfactory to Medical Technology Systems, Inc. that such holder may transfer
the shares as desired without registration under the Securities Act or any
applicable state law. The Seller shall be permitted to assign the Stock
Consideration to the Shareholder. As long as the Stock Consideration is owned by
the Seller or the Shareholder, such shares shall have the registration rights
and obligations set forth in Section 9.
11. Conditions to Obligation of the Buyer. The obligation of the Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Seller and the Shareholder set forth in Section 6 shall be true and correct
in all material respects at and as of the Closing Date;
(b) Assets. The Seller shall not have:
(i) incurred or become subject to, or agreed to incur or become
subject to, any obligation or liability, absolute or contingent, except
current liabilities incurred in the ordinary course of business;
(ii) mortgaged, pledged, or subjected to lien, charge, security
interest, or other encumbrance, or agreed to do so, any of the Assets;
(iii) sold or transferred, or agreed to sell or transfer, any of the
Assets, or cancelled or agreed to cancel, any debts due it or claims
therefor, except, in each case, for full consideration and in the ordinary
course of business;
(iv) engaged in any transactions adversely affecting the Business or
the Assets or suffered any extraordinary losses or waived any rights of
substantial value not in the ordinary course of business;
(c) Performance. The Seller and the Shareholder shall have performed and
complied with all of their respective covenants in all material respects
hereunder through the Closing Date;
13
(d) Consents. The Seller shall have procured all material third party
consents contemplated in Section 8(b);
(d) No Impediments. No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction, or charge would (i) prevent consummation
of any of the transactions contemplated by this Agreement, (ii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation, or (iii) affect adversely the right of the Buyer to own and
operate the Assets (and no such judgment, order, decree, stipulation,
injunction, or charge shall be in effect);
(e) Change of Name. The Seller shall have taken all steps necessary or
appropriate to cease the use of the name "Peritronics" and to assign the right
to use such name to the Buyer. Within six months after the Closing Date, the
Seller and the Shareholder shall either dissolve or change its name to a new
name bearing no resemblance to its present name.
(f) Real Property and Environmental Matters. The Buyer shall be satisfied,
in its sole discretion, that all leases assumed by the Buyer will be valid and
enforceable, and that no environmental or safety hazards exist at any of the
Seller's places of business.
(g) Satisfaction. All actions to be taken by the Seller in connection with
consummation of the transactions contemplated hereby and all documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Buyer and its counsel.
12. Conditions to Obligation of the Seller. The obligation of the Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
(a) Representations and Warranties. The representations and warranties of
the Buyer set forth in Section 7 shall be true and correct in all material
respects at and as of the Closing Date;
(b) Performance. The Buyer shall have performed and complied with all of
its covenants hereunder in all material respects through the Closing Date;
(c) No Impediments. No action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local or foreign jurisdiction wherein an unfavorable judgment,
order, decree, stipulation, injunction, or charge would (i) prevent consummation
of any of the transactions contemplated by this Agreement, or (ii) cause any of
the transactions contemplated by this Agreement to be rescinded following
consummation (and no such judgment, order, decree, stipulation, injunction, or
charge shall be in effect);
(d) Satisfaction. All actions to be taken by the Buyer in connection with
consummation of the transactions contemplated hereby and all documents required
to effect the transactions contemplated hereby will be reasonably satisfactory
in form and substance to the Seller and its counsel.
14
13. Indemnification. (a) The Seller and the Shareholder, jointly and severally,
agree to indemnify and hold the Buyer harmless from, against, and in respect of
the following:
(i) any and all liabilities, obligations, debts, contracts (except
those arising out of LifeServ's management of Peritronics Medical, Inc.
under the Operations Management Agreement, effective as of September 15,
1997, among Med Tech, Medication Management Systems, Inc., Peritronics
Medical, Limited and Peritronics Medical, Inc.), or other commitments of
the Seller of any kind, known or unknown, whether fixed or contingent, and
whether arising in contract, in tort, or otherwise, including any claims by
the Shareholder or any creditors of the Seller;
(ii) any damage or deficiency resulting from any misrepresentation,
breach of warranty, or non-fulfillment of any agreement on the part of the
Seller under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished to
the Buyer by the Seller pursuant to this Agreement;
(iii) any and all liabilities, obligations, damages, fines, and
penalties imposed on the Buyer by any third party or governmental entity
relating to the conduct of the Seller's Business prior to the Effective
Date or the Buyer's relationship with the Seller's former employees and
independent contractors after the Closing Date; and
(iv) all actions, suits, proceedings, claims, demands, assessments,
judgments, legal fees, costs, and expenses incident to any of the foregoing
or arising out of any act or omission of the Seller in the conduct of the
Business prior to the Effective Date except for any costs, liabilities,
legal fees or expenses sustained or incurred as a result of any action,
suit or proceeding that is commenced, threatened or presented as a result
of any action, deed or omission performed or permitted by Buyer or its
employees, officers and directors from September 15, 1997 to the Effective
Date, in its operation of the Business.
(b) The Buyer agrees to give timely notice to the Seller of the assertion
of any claim or demand or the institution of any action, suit, or proceeding in
respect of which indemnification may be claimed hereunder and to provide the
Seller with an opportunity to participate in the defense or settlement of such
action, suit, or proceeding at the Seller's own expense. Any failure by the
Buyer to give such notice shall have no effect on the Buyer's right to
indemnification under Section 13(a).
(c) The indemnification provided for in this Section 13 shall only be
applicable to claims asserted within three years of the date of this Agreement.
Notwithstanding the foregoing, the foregoing time limitation for claims of Buyer
shall not apply to the liabilities of Seller or Shareholder under this Section
13 that are based upon fraud or willful misconduct.
15
14. Termination.
(a) Termination of Agreement. The parties may terminate this Agreement as
provided below:
(i) the parties may terminate this Agreement by mutual written consent
at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving written notice
to the Seller at the Closing if any condition described in Section 12 has
not been satisfied (unless the failure results primarily from the Buyer
breaching any representation, warranty, or covenant contained in this
Agreement); and
(iii) the Seller may terminate this Agreement by giving written notice
to the Buyer at the Closing if any condition described in Section 12 has
not been satisfied (unless the failure results primarily from the Seller
breaching any representation, warranty, or covenant contained in this
Agreement).
(b) Effect of Termination. If any party terminates this Agreement pursuant
to Section 14(a), all obligations of the parties hereunder shall terminate
without any liability of any party to any other party (except for any liability
of any party then in breach).
15. General Provisions.
(a) Benefit and Assignment. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. The rights of the Seller hereunder may not be assigned. The rights of
the Buyer may be assigned to a subsidiary or affiliate of the Buyer, provided
that any such assignment shall in no way relieve the Buyer of its obligations
and responsibilities under this Agreement unless the Seller consents thereto
(such consent not to be unreasonably withheld).
(b) Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Florida.
(c) Notices. All notices, requests, demands and other communications
hereunder shall be in writing, and shall be deemed to have been duly given if
delivered by overnight delivery service or hand delivered, addressed as follows:
If to the Buyer:
LifeServ Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
16
With a copy to:
Holland & Knight
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Seller or the Shareholder:
562577 B.C. Ltd.
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇ ▇. Vice
With a copy to:
Peritronics Medical Ltd.
▇▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. Expenses. Except as otherwise provided in this Agreement, any expenses in
connection with this Agreement or the transactions contemplated herein shall be
paid for by the party incurring such expenses.
17. Sales and Other Taxes. Any sales taxes shall be paid by the Buyer and all
other applicable transfer taxes hereunder shall be paid by the Seller.
18. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
19. Headings. All paragraph headings herein are inserted for convenience only
and shall not modify or affect the construction or interpretation of any
provision of this Agreement.
20. Amendment, Modification and Waiver. This Agreement may be modified, amended,
and supplemented by mutual written agreement of the parties hereto, at any time
prior to the Closing. Each party may waive any condition intended to be for its
benefit. Each amendment, modification, supplement, or waiver shall be in writing
executed by both parties.
17
21. Entire Agreement. This Agreement, including its Exhibits, represents the
entire Agreement of the parties and supersede all prior negotiations and
discussions by and among the parties hereto with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date set forth above.
SELLER:
562577 B.C. LTD.
By: ____________________________________
Its: ____________________________________
SHAREHOLDER:
PERITRONICS MEDICAL LTD.
By: ____________________________________
Its: ____________________________________
BUYER:
LIFESERV TECHNOLOGIES, INC.
By: ___________________________________
Its: ___________________________________
MEDICAL TECHNOLOGY SYSTEMS, INC.
By: ___________________________________
Its: ___________________________________
18
SCHEDULE A - ASSUMED LIABILITIES
The Buyer accepts no assumed liabilities on the part of the Seller, except in
conjunction with the operation of the Business to the Closing Date, as follows:
Vendor Name Amount Owed
ADP Investor Communications 783.85
Alco Metal Fabricators 3,356.00
Arrow Electronics 69,819.37
B&B Enameling Inc. 208.20
Business & Legal Reports Inc. 428.58
Compass Computer Group 114,927.50
Computer Product Plus 3,648.89
Computer Product Plus 1,777.88
Control Master Products Inc. 460.74
Datascope Corp 2,094.13
Esna Biomedical Systems 1,378.10
Expo-3 1,455.40
FTG Data Systems 1,156.25
Future Care 750.00
GCX Corporation 1,064.56
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 697.50
▇▇▇▇▇▇ Stellar 3,869.44
ITT Hartford 778.78
Internet Technology 13,682.25
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 3,173.70
Lyben Computer Systems 41.45
LifeServ Sales Commissions 77,147.55
LifeServ Management Fees 187,500.00
M ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 460.94
MDI Inc. 873.10
Modern Service Office Supply 2,277.68
Mouser Electronics 678.64
▇▇▇ ▇▇▇▇▇, CPA 425.00
On-Line Electronics 1,396.64
Phon-Tronics 100.00
Pyramid Medical 7,861.00
Relsys 36,761.80
▇▇▇▇▇ & ▇▇▇▇▇▇ 16,988.25
Sourcefile 1,500.00
Staples Direct 931.62
Steven's Air Transport 1,926.66
Sun Medical 17,420.50
Terminix 300.00
Uline Inc. 167.85
Unishippers 6,839.48
United Service Network 9,619.81
---------------------
Total: 596,729.09
=====================
19
SCHEDULE B - PERITRONICS CUSTOMER LIST
▇▇▇▇ ▇▇▇▇▇ - Oakland, CA
South Jersey - Cherry Hill, NJ
▇.▇. ▇▇▇▇▇▇▇▇▇▇ - Vancouver, WA
University of Chicago - Chicago, IL
Sacred Heart Group - Spokane,
WA Holy Family - Spokane, WA
Our Lady of ▇▇▇▇▇▇▇ - Pasco, WA
St. Lukes - Boise, ID West Lake
Community - Chicago, IL
Mt. Sinai - Chicago, IL
Genessee - Genessee, NY
▇▇▇▇▇▇▇▇ - Detroit, MI
Charleston Area Medical Center - WV
▇▇▇▇▇▇▇ Medical Center - Bay St. Louis, MS
E. Maine Medical Center - ME
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
Credit Valley Hospital - Ontario, Canada
20
SCHEDULE C - INSURANCE
21
SCHEDULE D - UCC1 FINANCING STATEMENT
22
SCAHEDULE E - ASSIGNMENT AGREEMENT
1
THIS AGREEMENT dated for reference the 1st day of May, 1998.
BETWEEN:
PERITRONICS MEDICAL LTD. a company duly incorporated pursuant to the
laws of British Columbia and having its registered and records office
at Suite 2700, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇
(hereinafter referred to as the "Company")
OF THE FIRST PART
AND:
▇▇▇▇▇ ▇▇▇▇▇▇, Businessman, of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(hereinafter referred to as the "Creditor")
OF THE SECOND PART
AND:
562577 B.C. LTD., a company duly incorporated pursuant to the
laws of British Columbia and having its registered and records
office at Suite 2700, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(hereinafter referred to as the "Assignee")
OF THE THIRD PART
WHEREAS:
The Company is indebted to the Creditor for the reasons and in the amount
set out in Schedule "A" hereto, to this agreement (the "Debt");
▇▇▇▇ Mortgage Corporation (the "Trustee") holds in trust for the Creditor
certain security over the assets of the Company's subsidiary Peritronics Medical
Inc. (the "Security") for the repayment of the debt as described in Schedule "B"
to this agreement (the "Debt");
2
The Company wishes to assign the Debt and obtain an assignment of the
Security from the Creditor to the Assignee in consideration for allotting and
issuing shares in the capital of the Company to the Creditor; and
The Creditor is prepared to accept shares and assign the Debt and its
interest in the Security to the Assignee, which form of assignment is attached
as Schedule "C".
NOW THEREFORE WITNESSETH that in consideration of the premises and of the
covenants and agreements set out herein, the parties hereto covenant and agree
as follows:
ACKNOWLEDGMENT OF DEBT
1. The Company acknowledges and agrees that it is indebted to the Creditor
in the amount of the Debt. The Company further acknowledges the debt is in
default and both Peritronics Medical Inc. ("PMI") and the Company are incapable
of repaying the Debt.
ALLOTMENT AND ISSUANCE OF SHARES
1. The Company agrees to allot and issue to the Creditor those numbers of
shares in the capital of the Company (the "Shares") set out in Schedule "A" to
this agreement as full and final consideration for the assignment by the
Creditor to the Assignee of Debt and Security and the Creditor agrees to release
the Company from payment of the Debt.
2. For the purposes of this agreement, "issue Date" shall mean the fifth
business day after the date that the Company receives notification from the
Vancouver Stock Exchange (the "Exchange") that it has accepted this agreement
for filing and has approved the issuance of the Shares.
3. On the Issue Date, the Company shall deliver to or to the direction of
the Creditor, share certificates representing the Shares.
4. The number of Shares shall be subject to adjustment in the following
events and manner:
(a) In the event of any subdivision or subdivisions of the Shares as
such are constituted on the Issue Date, into a greater number of Shares,
the Company will thereafter deliver at the time of the issuance of Shares
under this agreement, such additional number of Shares as result from said
subdivision or subdivisions without the Creditor giving any other
consideration therefor;
3
(b) In the event of any consolidation or consolidations of the Shares
as such are constituted on the Issue Date, into a lesser number of Shares,
the Company shall thereafter deliver and the Creditor shall accept the
lesser number of Shares as result from such consolidation or consolidations
in lieu of the Shares the Creditor were to receive under this agreement;
(c) In the event of any change of the Shares as such are constituted
on the Issue Date, the Company shall thereafter deliver the number of
Shares of the appropriate class resulting from the said change as the
Creditor would have been entitled to receive in respect of the number of
Shares to be issued pursuant to this agreement;
(d) In the event of any capital reorganization or reclassification of
the Shares (other than a change in the par value thereof) of the Company or
in the event of any merger or amalgamation of the Company with or into any
other company or in the event of any sale of the assets of the Company as
or substantially as an entirety, then the Creditor shall thereafter have
the right to receive the kind and amount of shares and other securities and
property receivable upon such, capital reorganization, reclassification,
merger, amalgamation or sale which a shareholder of a number of Shares
equal to the number of Shares receivable pursuant to this agreement would
have received as a result of such. The subdivision or consolidation of
Shares at any time outstanding into a greater or lesser number of Shares
(whether with or without par value) shall not be deemed to be a capital
reorganization or a reclassification of the capital of the Company for the
purposes of this paragraph (d);
(e) The adjustments provided for in this agreement are cumulative; and
(f) The Company shall not be required to issue fractional Shares or
other securities in satisfaction of its obligations hereunder. If any
fractional interest in a Share or other security would, except for the
provisions of this paragraph (f), be deliverable on the Issue Date, the
Company shall, at its option, in lieu of delivering a fractional Share or
other security therefor, satisfy the right to receive such fractional
interest by payment to the Creditor of an amount in cash equal (computed in
the case of a fraction of a cent to the next lower cent) to the current
market value of the right to subscribe for such fractional interest
(computed on the basis of the most recent closing price On the Vancouver
Stock Exchange for Shares).
(g) Determination of Adjustments: If any questions shall at any time
arise with respect to any adjustments to be made hereunder, such question
shall be conclusively determined by a firm of Chartered Accountants, in
Vancouver, B.C. that the Company and the Creditor shall jointly select, and
who shall have access to all appropriate records and such determination
shall be binding upon the Company and the Creditor;
4
5. The Creditor hereby understands and agrees to a hold restriction to be
placed on the share certificate issued pursuant to this distribution which is 12
months past the date in which the debt was incurred, pursuant to Section
142(2)(d) of the Securities Rules under the Securities Act, R.S.B.C. 1996, c.o
418 (the "Rules").
6. The Creditor agrees to cause the Trustee to assign absolutely the
Security to the Assignee and undertakes to execute all further documents
necessary to carry out the assignment so that the Assignee has full title and
right to the Security.
REGULATORY APPROVALS AND RESTRICTIONS ON DISPOSITION
1. The rights and obligations of the Company and the Creditor is subject to
and conditional upon receipt of the acceptance for filing of this agreement by
the Exchange.
2. The Company shall use its best efforts to obtain the acceptance for
filing of this agreement by the Exchange.
3. The Company is relying on Section 128(e) of the Rules.
4. The Creditor represents and warrants to the Company that:
(i) the Debt constitutes the entire amount due and payable by the
Company and PMI to him;
(ii) upon delivery of the Shares by the Company in accordance with the
provisions of this agreement, the Debt and Security will be fully
assigned to the Assignee to hold the same with power to take all
lawful measures which we might have taken for full recovery of
the Debt through execution under the Security;
(iii)releases the Company from any and all covenants and obligations
relating to the Debt;
(iv) he has not preciously assigned, encumbered, parted with
possession of or otherwise granted any interest in the Debt or
any of his rights relating thereto ;
(v) he will be the beneficial owner of the Shares;
(vi) the Shares are not being acquired as a result of any material
information that has not been generally disclosed to the public;
5
(vii)he will seek his own independent legal advice with regard to
this agreement as well as any restrictions imposed by the Rules
or the British Columbia Securities Act on his respecting
disposition of the Shares.
GENERAL PROVISIONS
1. Time shall be of the essence of this agreement.
2. The Company and the Creditor shall execute any and all such further
deeds, documents and assurances and shall do any and all such further and other
things as may be necessary to implement and carry out the intent of this
agreement.
3. The provisions herein contained constitute the entire agreement between
the parties and supersede all previous understandings, communications,
representations and agreements, whether written or verbal, between the parties
with respect to the subject matter of this agreement.
4. This agreement shall be governed by and construed in accordance with the
laws of the Province of British Columbia.
5. In the event the Creditor is a resident of the United States, the shares
represented by this agreement, once issued, will not have been registered under
the United States Securities Act of 1933 (the "Act") or any State securities
laws, and will be "RESTRICTED SECURITIES" as that term is defined in Rule 144
under the Act. The shares, once issued, may not be offered for sale, sold or
otherwise transferred within the United States except pursuant to an Effective
Registration Statement under the Act and any applicable State securities laws,
or pursuant to an exemption from registration under the Act, the availability of
which will be established to the satisfaction of the Company.
6. All dollar amounts referred to in Schedule "A" to this agreement have
been expressed in Canadian currency, unless otherwise indicated.
7. This agreement shall enure to the benefit of and be binding upon each of
the parties and their respective heirs, executors, administrators, successors
and permitted assigns, as the case may be.
6
IN WITNESS WHEREOF the parties hereto have executed these presents on the day
and year first above written.
THE CORPORATE SEAL of )
PERITRONICS MEDICAL LTD. was )
hereto affixed in the presence of: )
)
) c/s
--------------------------- )
Authorized Signatory )
)
--------------------------- )
Authorized Signatory )
)
)
SIGNED, SEALED AND DELIVERED by )
▇▇▇▇▇ ▇▇▇▇▇▇ in the presence )
of: )
) ---------------------------
) ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------- )
Witness )
)
--------------------------- )
Address )
)
---------------------------
Occupation