Exhibit 2
STOCK PURCHASE AGREEMENT
BY AND AMONG
MEDTOX SCIENTIFIC, INC.,
RAOUL D. RUDELLI, M.D,
KARL VEREBEY, PH.D.,
MICHAEL GREENSTEIN,
AND
LEADTECH CORPORATION
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
1.1) Specific Definitions.......................................1
1.2) Definitional Provisions....................................3
ARTICLE II PURCHASE AND SALE; PURCHASE PRICE; CLOSING........................4
2.1) Purchase and Sale..........................................4
2.2) Purchase Price.............................................4
2.3) Leadtech Options...........................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS........................5
3.1) Listing of Certain Assets and Data.........................5
(a) Real Property........................................5
(b) Equipment............................................5
(c) Patents, Trademarks, Formulas, Etc...................5
(d) Certain Leases, Agreements, Etc......................5
(e) Permits, Licenses, Etc...............................6
(f) Banks and Depositories...............................6
(g) Loans and Credit Agreements, Etc.....................6
(h) Insurance Policies and Claims........................6
(i) Certain Employees.................................7
(j) Employee Plans....................................7
(k) Powers of Attorney...................................7
(l) Taxes.............................................7
3.2) Organization; Directors and Officers.......................7
3.3) Capital Stock..............................................7
3.4) Subsidiaries...............................................8
3.5) Authorization and Binding Obligation.......................8
3.6) Consents Required..........................................8
3.7) Financial Statements.......................................9
3.8) Taxes......................................................9
3.9) Absence of Undisclosed Liabilities.........................9
3.10) Absence of Certain Changes and Events.....................10
3.11) Assets....................................................10
3.12) Trademarks, Patents and Trade Secrets.....................11
3.13) Accounts Receivable.......................................11
3.14) Licenses; Compliance with Laws, Regulations, Etc..........11
3.15) Litigation................................................11
3.16) Warranties, Leases, Contracts.............................12
3.17) Insurance Policies........................................12
3.18) Labor Agreements..........................................12
3.19) Benefit Plans.............................................13
3.20) Employees.................................................14
3.21) No Finders................................................14
3.22) Contracts with Related Parties............................15
3.23) Relations with Suppliers and Customers....................15
3.24) Environmental Matters.....................................15
3.25) Absence of Certain Business Practices.....................15
3.26) Corporate Records.........................................16
3.27) Disclosure................................................16
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER..........................16
4.1) Organization..............................................16
4.2) Authorization and Binding Obligation......................16
4.3) Consents Required.........................................16
4.4) No Finders................................................17
4.5) Investment Purpose in Acquiring the Stock.................17
4.6) Buyer Common Stock........................................17
4.7) Buyer's SEC Filings.......................................17
4.8) Registration of Buyer Common Stock........................17
4.9) Compliance With Law.......................................18
4.10) Disclosure................................................18
ARTICLE V COVENANTS.........................................................18
5.1) Approvals and Consents....................................18
5.2) Preserve Accuracy of Representations and Warranties.......18
5.3) Maintain Leadtech as Going Concern........................18
5.4) Buyer's Access to Information and Records Before Closing..20
5.5) Leadtech's Access to Information and Records Before Closing.20
5.6) Regulatory Approvals.......................................21
5.7) SEC and Blue Sky Filings...................................21
5.8) Disposition of Buyer Common Stock..........................21
5.9) Transition Services........................................21
5.10) Competing Transaction......................................21
ARTICLE VI CONDITIONS TO BUYER'S OBLIGATIONS.................................22
6.1) Truth of Representations and Warranties....................22
6.2) Required Consents..........................................22
6.3) Litigation Affecting Closing...............................22
6.4) Legislation................................................22
6.5) Financing..................................................22
6.6) Noncompetition Agreement...................................22
6.7) Lease Termination..........................................22
6.8) Resignations...............................................23
6.9) Opinion....................................................23
ARTICLE VII CONDITIONS TO SELLERS' OBLIGATIONS...............................23
7.1) Truth of Representations and Warranties....................23
7.2) Consents...................................................23
7.3) Litigation Affecting Closing...............................23
7.4) Legislation................................................23
7.5) Noncompetition Agreement...................................23
7.6) Guarantees.................................................23
7.7) Opinion....................................................24
ARTICLE VIII CLOSING.........................................................24
8.1) Closing Date...............................................24
8.2) Closing Deliveries of Sellers..............................24
8.3) Closing Deliveries of Buyer................................24
8.4) Proceedings................................................25
ARTICLE IX TERMINATION.......................................................25
9.1) Termination................................................25
9.2) Procedure and Effect of Termination........................25
ARTICLE X INDEMNIFICATION; REMEDIES..........................................25
10.1) Indemnification by Sellers.................................25
10.2) Indemnification by Buyer...................................26
10.3) Remedies...................................................27
10.4) Survival...................................................27
ARTICLE XI OTHER PROVISIONS..................................................27
11.1) Further Assurances.........................................27
11.2) Complete Agreement.........................................27
11.3) Survival...................................................28
11.4) Waiver, Discharge, Amendment, Etc..........................28
11.5) Notices....................................................28
11.6) Public Announcement........................................29
11.7) Expenses...................................................29
11.8) Governing Law..............................................29
11.9) Successors and Assigns.....................................29
11.10) Titles and Headings; Construction..........................29
11.11) Benefit....................................................29
11.12) Counterparts...............................................30
List of Exhibits and Schedules
Exhibit 2.2.................................................... Promissory Note
Exhibit 6.6.................................. Separate Noncompetition Agreement
Exhibit 6.9............................................................ Opinion
Schedule 3.1A.................................................... Real Property
Schedule 3.1B........................................................ Equipment
Schedule 3.1C.............................. Patents, Trademarks, Formulas, Etc.
Schedule 3.1D................................. Certain Leases, Agreements, Etc.
Schedule 3.1E.......................................... Permits, Licenses, Etc.
Schedule 3.1F.......................................... Banks and Depositories
Schedule 3.1G................................ Loans and Credit Agreements, Etc.
Schedule 3.1H.................................... Insurance Policies and Claims
Schedule 3.1I................................................ Certain Employees
Schedule 3.1J................................................... Employee Plans
Schedule 3.1K............................................... Powers of Attorney
Schedule 3.1L............................................................ Taxes
Schedule 3.2.................... States where Qualified; Directors and Officers
Schedule 3.3.................... Commitments to Issue Stock or Leadtech Options
Schedule 3.4...................................................... Subsidiaries
Schedule 3.6........................................ Sellers' Consents Required
Schedule 3.7.............................................. Financial Statements
Schedule 3.8........................................................ Taxes Owed
Schedule 3.9........................................... Undisclosed Liabilities
Schedule 3.10....................................... Certain Changes and Events
Schedule 3.11........................... Assets Not in Good Operating Condition
Schedule 3.16................................ Pending or Threatened Litigation
Schedule 3.20................................................... Benefit Plans
Schedule 3.21....................................................... Employees
Schedule 4.3........................................ Buyer's Consents Required
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 1st day of October, 2001, by and among MEDTOX SCIENTIFIC, INC. ("Buyer"), a
Delaware corporation; RAOUL D. RUDELLI, M.D. ("Rudelli") an individual; KARL
VEREBEY, PH.D. ("Verebey") an individual; MICHAEL GREENSTEIN ("Greenstein") an
individual; and LEADTECH CORPORATION ("Leadtech "), a New Jersey corporation.
W I T N E S S E T H:
WHEREAS, Rudelli, Verebey, and Greenstein (collectively, the "Sellers";
individually, a "Seller") own all of the outstanding capital stock of Leadtech
(the "Stock"), which is engaged in the business of analyzing blood samples to
determine whether lead is present; and
WHEREAS, Sellers wish to sell and Buyer wishes to purchase all of the
Stock upon the terms and subject to the conditions set forth in this Agreement;
and
WHEREAS, the parties to this Agreement desire to make certain
representations, warranties and agreements in connection with such sale and also
to prescribe various conditions to such sale;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements contained in this Agreement, the
parties to this Agreement agree as follows:
ARTICLE I
DEFINITIONS
1.1).....Specific Definitions. As used in this Agreement, the following
terms will have the meanings set forth or as referenced below:
"Accounts Receivable" means the accounts receivable reflected on the
Balance Sheet.
"Agreement" means this Agreement and all Exhibits and Schedules to this
Agreement.
"Buyer's Deductible" means as defined in Section 10.3.
"Buyer's Indemnifiable Losses" mean as defined in Section 10.1.
"Closing" and "Closing Date" mean as defined in Section 8.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Employee Plans" means any health care plan or arrangement; life insurance
or other death benefit plan; deferred compensation or other pension or
retirement plan; stock option, bonus or other incentive plan; severance or early
retirement plan; or other fringe or employee benefit plan or arrangement; or any
employment or consulting contract or executive compensation agreement; whether
the same are written or otherwise, formal or informal, voluntary or required by
law or by Leadtech's policies or practices, including, without limitation, any
"pension plan" as defined in Section 3(2) of ERISA that is not a Multiemployer
Plan, and any "welfare plan" as defined in Section 3(1) of ERISA (whether or not
any of the foregoing is funded), (i) to which Leadtech is a party or by which
Leadtech is bound; (ii) that Leadtech has at any time established or maintained
for the benefit of or relating to present or former employees, leased employees,
consultants, agents, and/or their dependents, or directors of Leadtech ; or
(iii) with respect to which Leadtech has made any payments or contributions.
"Environmental Laws or Regulations" means any one or more of the following:
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq.; the Hazardous Materials Transportation Act, 49 U.S.C. 1802 et seq.; the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. 1251 et seq.; the Clean Water Act, 33 U.S.C.
1321 et seq.; the Clean Air Act, 42 U.S.C. 7401 et seq.; the Minnesota
Environmental Response and Liability Act, Minn. Stat. Chap. 115B; the Minnesota
Petroleum Tank Release Cleanup Act, Minn. Stat. Chap. 115C; any other federal,
state, county, municipal, local or other statute, law, ordinance or regulation
that may relate to pesticides, agricultural or industrial chemicals, wastes,
Hazardous Substances (as defined in this Agreement), human health or the
environment; all regulations promulgated by a regulatory body pursuant to any of
the foregoing statutes, laws, regulations, or ordinances and all as may from
time to time be amended or subsequently enacted.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Hazardous Substance" means asbestos, urea formaldehyde,
polychlorinated biphenyls, nuclear fuel or materials, chemical waste,
radioactive materials, explosives, known carcinogens, petroleum products,
pesticides, fertilizers, or any other substance that is toxic or hazardous, or
that is a pollutant, contaminant, chemical, material or substance defined as
hazardous or as a pollutant or contaminant in, or the use, transportation,
storage, release or disposal of which is regulated by, any Environmental Laws or
Regulations.
"Intellectual Property" means letters patent and patent applications;
trade names; trademarks, service marks and registrations thereof and
applications therefor; copyrights and copyright registrations and applications;
and/or discoveries, ideas, technology, know-how, trade secrets, processes,
formulas, drawings and designs, computer programs or software; and all
amendments, modifications, and improvements to any of the foregoing.
"Inventories" means finished goods, raw materials and ingredients, and
work-in-process.
"IRS" means the United States Internal Revenue Service.
-----
"Letter of Intent" means as defined in Section 5.4.
"Liens" means liens, mortgages, charges, security interests, claims,
voting trusts, pledges, encumbrances, options, assessments, restrictions, or
third party or spousal interests of any nature.
"Leadtech Options" means all outstanding options or other rights to
purchase shares of capital stock or other securities convertible into capital
stock of Leadtech held by any person.
"Material Adverse Effect" means any change, event, occurrence, fact,
condition or effect that, individually or in the aggregate, with all other such
changes and effects, will or can reasonably be expected to result in a material
adverse effect on Leadtech's business, results or financial condition of
Leadtech, except for any such changes or effects resulting from changes in
general economic or political conditions.
"Multiemployer Plan" means as defined in Section 3(37) of ERISA.
"Product Liability" means any liability, claim or expense (including
attorneys' fees) arising in whole or in part out of a breach of any product
warranty (whether express or implied), strict liability in tort, negligent
manufacture of product, negligent provision of services, product recall, or any
other liability arising from the manufacturing, packaging, labeling (including
instructions for use), or sale of products.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Sellers' Deductible" means as defined in Section 10.3.
"Stock" has the meaning set forth in the Recitals of this Agreement.
"Taxes" means all taxes, penalties, interest, fines, duties,
withholdings, assessments, and charges assessed or imposed by any federal,
state, local or foreign governmental authority. "Tax" will also include any
liability arising as a result of being (or ceasing to be) a member of any
affiliated, consolidated, combined, or unitary group as well as any liability
under any tax allocation, tax sharing, tax indemnity or similar agreement.
1.2).....Definitional Provisions.
-----------------------
(a) Terms defined in the singular will have a comparable meaning when used
in the plural, and vice-versa.
(b) References to an "Exhibit" or to a "Schedule" are, unless
otherwise specified, to one of the Exhibits or Schedules attached to or
referenced in this Agreement, and references to an "Article" or a
"Section" are, unless otherwise specified, to one of the Articles or
Sections of this Agreement.
(c) The term "person" includes any individual, partnership,
joint venture, corporation, trust, unincorporated organization or
government or any department or agency thereof.
ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE; CLOSING
2.1).....Purchase and Sale. Subject to the terms and conditions of this
Agreement, effective as of the Closing, Sellers will sell, transfer and assign
to Buyer, and Buyer will purchase from Sellers, an aggregate of one hundred
twenty (120) shares of the Stock.
2.2).....Purchase Price. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Sellers including those herein contained, and in full consideration of such
sale, conveyance, transfer, assignment and delivery of one hundred twenty (120)
shares of Stock to Buyer, Buyer agrees to deliver to the Sellers the purchase
price (the "Purchase Price"), payable as follows:
(a) At the Closing, Buyer will pay to Sellers, in proportion
to their respective ownership of the Stock as set forth on Schedule 3.3
(as to each Seller, such Seller's "Ownership Percentage"), the
aggregate sum of Two Million Five Hundred Thousand Dollars ($2,500,000)
by a series of wire transfers to accounts designated by the Sellers,
which designation shall be made at least two (2) business days prior to
the Closing Date.
(b) At the Closing, Buyer will issue to Sellers, in proportion
to their respective Ownership Percentages, a number of unregistered,
restricted shares of Buyer's common stock, par value $.15 per share
("Buyer Common Stock"), equal in value to Two Million Five Hundred
Thousand Dollars ($2,500,000) based on ninety percent (90%) of the
dollar weighted-average of the trading price of the Buyer Common Stock
on the American Stock Exchange during the twenty (20) trading days
immediately preceding the second trading day prior to the Closing Date.
(c) At the Closing, Buyer will issue to Sellers, in proportion
to their respective Ownership Percentages, promissory notes, in an
aggregate principal amount of One Million Two Hundred Thousand Dollars
($1,200,000), executed by Buyer in the form set forth in Exhibit 2.2(c)
(collectively, the "Promissory Notes"; individually a "Promissory
Note").
2.3) Leadtech Options. Each Leadtech Option that is outstanding on the
Closing Date shall be canceled without liability to Buyer.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLERS
Each of the Sellers and Leadtech jointly and severally represent and
warrant to Buyer as of the date of this Agreement as follows, and acknowledge
that the same shall be deemed to have been relied upon by Buyer and shall
survive the Closing of the transactions contemplated by this Agreement as
provided in Section 11.3:
3.1) Listing of Certain Assets and Data. Attached to this Agreement as
Schedules 3.1A through 3.1L are lists, which are true and complete in all
material respects as of the date of this Agreement, of the matters set forth in
the following subsections (a) through (l).
(a) Real Property. Schedule 3.1A sets forth a description of
all real property owned, leased or subject to option, of record or
beneficially, by Leadtech or otherwise used by Leadtech in the conduct
of its businesses, stating the ownership status and a brief description
of all buildings and structures located or planned for construction
thereon. Prior to the date of this Agreement, Sellers have made
available to Buyer true and complete copies of the purchase agreements,
leases, or options relating to such real property.
(b) Equipment. Schedule 3.1B sets forth a list of all material
items of machinery, equipment, furniture, fixtures, vehicles and other
similar property and assets owned, leased or otherwise used by Leadtech
setting forth with respect to all such listed property a summary
description of all Liens relating thereto (other than liens for taxes
due but not yet payable), identifying the parties thereto, the rental
or other payment terms, expiration date and cancellation and renewal
terms thereof. Prior to the date of this Agreement, Sellers have made
available to Buyer true and complete copies of all currently effective
leases, conditional sales agreements or other similar documents
concerning the items listed in Schedule 3.1B.
(c) Patents, Trademarks, Formulas, Etc. Schedule 3.1C sets
forth a list of all of Leadtech's patents, trade names, material
trademarks, material service marks, material copyrights, and
applications or registrations for any of the foregoing, and any
licenses pursuant to which any of the foregoing is used. Prior to the
date of this Agreement, Sellers have made available to Buyer true and
complete copies of all issuances, registrations, applications and
certificates regarding such intellectual property, true and complete
copies of the form of all contracts with employees or others relating
in whole or in part to disclosure, assignment or patenting of
inventions or discoveries, confidential or proprietary information,
product formulas or other know-how, and true and complete copies of all
patent, trademark, trade name, copyright, trade secret or other
intellectual property licenses granted at any time by or to Leadtech.
(d) Certain Leases, Agreements, Etc. Schedule 3.1D sets forth
a list (including, in the case of oral arrangements, a written
description of all material terms thereof) of each lease, contract,
agreement or other commitment, written or otherwise, to which Leadtech
is a party (other than leases, contracts, agreements or commitments
furnished pursuant to other paragraphs of this Section) and which is in
any way not yet performed, involving:
(i) The purchase of any services,raw materials,
supplies or equipment;
(ii) The sale of assets, products or services or any
contract for provision of service warranties, sales credits,
product returns, or discounts, advertising allowances or
promotional services; or
(iii) any distributor or sales representative or
similar broker, dealer or agent of Leadtech's products or
services.
Prior to the date of this Agreement, Sellers have made available to
Buyer true and complete copies of all written agreements identified in
Schedule 3.1D.
(e) Permits, Licenses, Etc. Schedule 3.1E sets forth a list of
all material permits, licenses, approvals or similar permissions, held
by Leadtech or by any distributor, sales representative or similar
broker, dealer or agent of Leadtech's products or services. Prior to
the date of this Agreement, Sellers have made available to Buyer true
and complete copies of all permits, licenses, approvals or other
documents identified in Schedule 3.1E.
(f) Banks and Depositories. Schedule 3.1F sets forth a list of
each bank, broker or other depository with which Leadtech has an
account or safe deposit box, the names and numbers of such accounts or
boxes and the names of all persons authorized to draw or execute
transactions on such accounts.
(g) Loans and Credit Agreements, Etc. Schedule 3.1G sets forth
a list of all outstanding mortgages, promissory notes, evidences of
indebtedness, deeds of trust, indentures, loan or credit agreements or
similar instruments for money borrowed, excluding normal trade credit,
to which Leadtech is a party (as lender or borrower), written or
otherwise, and all amendments or modifications, if any, thereof. Prior
to the date of this Agreement, Sellers have made available to Buyer
true and complete copies of all documents identified in Schedule 3.1G.
(h) Insurance Policies and Claims. Schedule 3.1H sets forth a
list, including the term, coverages, premium rates, limits and
deductibles thereof, of all policies of insurance maintained by
Leadtech and covering any of Leadtech's officers, directors, employees,
agents, properties, buildings, machinery, equipment, furniture,
fixtures or operations and a description of each claim made by Leadtech
under any such policy of insurance during the preceding five (5) year
period describing such claim and the amount of it. Prior to the date of
this Agreement, Sellers have made available to Buyer true and complete
copies of all policies of insurance identified in Schedule 3.1H, and
true and complete copies of all documentation regarding claims made
under them.
(i) Certain Employees. Schedule 3.1I sets forth (i) the name
and current annual salary rate of each director, officer or employee of
Leadtech together with a summary of the bonuses, additional
compensation and other benefits, if any, paid or payable to such
persons as of the date of this Agreement or in the future; (ii) the
name of each employee and each individual to whom employment has been
offered and who has accepted such offer, including scheduled starting
date, and (iii) the names of all former employees whose employment has
terminated either voluntarily or involuntarily during the preceding
12-month period.
(j) Employee Plans. Schedule 3.1J sets forth a list of all
Employee Plans and any related insurance contracts and trust and
custodial agreements. Prior to the date of this Agreement, Sellers have
made available to Buyer true and complete copies of all documents
listed in Schedule 3.1J.
(k) Powers of Attorney. Schedule 3.1K sets forth the names of
all persons, if any, holding powers of attorney from Leadtech or any of
the Sellers and a description of the scope of each such power of
attorney.
(l) Taxes. Schedule 3.1L sets forth a list of (i) all tax,
assessment or information reports and returns filed by or on behalf of
Leadtech or Leadtech's predecessors within any jurisdiction during the
last seven (7) years, and (ii) a list of all tax or assessment
elections of Leadtech in effect. Prior to the date of this Agreement,
Sellers have made available to Buyer true and complete copies of all
documents listed in Schedule 3.1L and all material correspondence to or
from taxing authorities during the preceding seven (7) year period, and
have made available to Buyer for review and copying all working papers
of persons who prepared any of the documents listed in Schedule 3.1L.
3.2) Organization; Directors and Officers. Leadtech is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New Jersey, and has all necessary corporate power and authority to own
its properties and assets and conduct the business presently being conducted by
it. Leadtech is qualified or licensed to transact business as a foreign
corporation in each jurisdiction in which the character of its properties or the
nature of its activities makes any such qualification necessary and where the
failure to be so qualified would have a material adverse effect upon Leadtech's
business. The jurisdictions in which Leadtech are qualified are listed on
Schedule 3.2. Schedule 3.2 also sets forth a list of the directors and officers
(with all titles and positions indicated) of Leadtech. Sellers have previously
made available to Buyer complete and correct copies of the Articles of
Incorporation and Bylaws of Leadtech and all amendments thereto.
3.3) Capital Stock. Leadtech's authorized capital stock consists of
2,500 shares of common stock, without par value , of which one hundred twenty
(120) shares of Stock are issued and outstanding as of the date of this
Agreement and all of which are owned collectively by the Sellers. The number of
shares of Stock owned by each of Sellers is set forth on Schedule 3.3. All Stock
is owned by Sellers, free and clear of any Liens. Except as set forth in
Schedule 3.3, there are no outstanding Leadtech Options, and there are no plans,
contracts or commitments providing for the issuance or granting of Stock,
Leadtech Options or other securities of Leadtech. Leadtech Options were issued
to the persons and in the amounts and have the exercise prices listed on
Schedule 3.3. There is no indebtedness of Leadtech convertible into Stock or
other securities of Leadtech. All issued and outstanding shares of Stock have
been duly authorized and validly issued, and are fully paid and nonassessable.
3.4) Subsidiaries. Leadtech has no ownership or equity interest, direct
or indirect, in any other business, corporation, joint venture, partnership or
proprietorship except as set forth on Schedule 3.4.
3.5) Authorization and Binding Obligation. The execution, delivery and
performance by Sellers and Leadtech of this Agreement and the transactions and
agreements contemplated by this Agreement have been duly and validly authorized
and approved by all requisite corporate action on the part of Leadtech. Each of
Leadtech and Sellers have all requisite power and authority to do and perform
all acts and things required to be done by it or him under this Agreement and
the agreements contemplated by this Agreement. This Agreement constitutes and,
when executed, the agreements contemplated by this Agreement will constitute,
the valid and binding obligations of Leadtech and Sellers, enforceable in
accordance with its and their respective terms except as may be limited by laws
affecting creditors rights generally or by judicial limitations on the right to
specific performance or other equitable remedies.
3.6) Consents Required. Except for any items set forth in Schedule 3.6,
the execution and delivery of this Agreement and the agreements contemplated by
this Agreement, the sale and purchase of the Stock, the cancellation of the
Leadtech Options, if any, and the consummation of the transactions contemplated
by this Agreement in compliance with the terms and provisions of this Agreement
by Leadtech or Sellers will not:
(a) Conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under the Articles
of Incorporation or Bylaws or other governing instruments of Leadtech,
or any material agreement, mortgage, lease, judgment, order, award,
decree or other instrument or restriction to which Leadtech or any
Seller is a party or by which Leadtech or any Seller or any of their
respective assets is bound or affected;
(b) Violate in any material respect any statute, rule,
regulation, order or decree of any federal, state, local or foreign
body or authority by which Leadtech or any Seller or any of their
respective properties or assets may be bound;
(c) Require any material approval, consent, authorization or other order or
action of any court, governmental authority, regulatory body, creditor or any
other person; or
(d) Give any party with rights under any such material
agreement, mortgage, lease, judgment, order, award, decree or other
instrument or restriction the right to terminate, modify or otherwise
materially change the rights or obligations of Leadtech thereunder.
3.7) Financial Statements. Attached as Schedule 3.7 is a true and
complete copy of (i) Leadtech's unaudited financial statements as of and for the
seven (7) month period ended July 31, 2001 (the "Interim Financial Statements";
the balance sheet included in the Interim Financial Statements is the "Interim
Balance Sheet"), and (ii) Leadtech's unaudited financial statements for the year
ended December 31, 2000 (the "Financial Statements"; the balance sheet included
in the Financial Statements is the "Balance Sheet"). The Interim Financial
Statements and the Financial Statements (i) have been prepared in accordance
with Leadtech's books and records; (ii) have been prepared in good faith; (iii)
have been prepared on a cash basis, and (iv) present fairly Leadtech's financial
position as of the dates stated therein and the results of Leadtech's operations
and cash flows for the periods then ended.
3.8) Taxes. Except as set forth in Schedule 3.8: (i) Leadtech has
timely filed all tax or assessment reports and tax returns (including any
applicable information returns) that may be required by any law or regulation of
any jurisdiction to be filed, and all such reports and returns are true, correct
and complete in all material respects; (ii) Leadtech has duly paid or deposited
of account, all material Taxes pursuant to such reports and returns, or assessed
against Leadtech, or that Leadtech is obligated to withhold from amounts owing
to any employee; (iii) Leadtech has no liability for any Taxes materially in
excess of the amounts stated in the Financial Statements with respect to all
time periods or portions thereof ending on or before the dates thereof; (iv)
neither the assessment of any additional material Taxes that by law should have
been reported or paid , nor any investigation or audit, is pending or, to the
knowledge of Sellers, threatened or expected; and (v) no taxing or assessment
authority has indicated to Leadtech or Sellers any intent to conduct an audit or
other investigation or asserted any unresolved deficiencies with respect to Tax
liabilities of Leadtech for any period and there are no facts or circumstances
that would give rise thereto.
3.9) Absence of Undisclosed Liabilities. To the knowledge of Sellers,
there are no material debts, liabilities, or claims against Leadtech, or legal
basis therefor, whether accrued, absolute, contingent, or otherwise, and whether
due or to become due, including, but not limited to, liabilities on account of
taxes, other governmental charges, duties, penalties, interest or fines, except:
(a) Liabilities, to the extent set forth in the Interim Balance Sheet
or Balance Sheet;
(b) Liabilities incurred in the ordinary course of business (and in
compliance with this Agreement) since the date of the Interim Balance
Sheet; or
(c) Liabilities disclosed in Schedule 3.9 or specifically disclosed in
any other schedule to this Agreement.
3.10) Absence of Certain Changes and Events. Except as set forth in
Schedule 3.10, since the date of the Interim Balance Sheet Leadtech has not (i)
sold or otherwise disposed of any of its real property or real property leases,
or entered into any renewals or extensions of such existing leases or entered
into any new leases; (ii) made any material increase in the compensation or
benefits payable or to become payable by Leadtech to any officers, employees or
consultants, or paid or accrued any bonus, percentage of compensation, severance
benefit or other like benefit to, or for the credit of, any officer, employee or
consultant, except in accordance with such plans and arrangements as were in
effect prior to the date of the Interim Balance Sheet or are set forth in
Schedule 3.1I; (iii) entered into, amended, terminated or received notice of
termination of any material contract, license, franchise, commitment or other
arrangement other than in the ordinary course of business; (iv) altered or
revised its accounting principles, procedures, methods or practices except as
required by law; (v) changed its credit policies as to rendition of services,
discounts, warranties or collection of receivables; (vi) transferred or
otherwise disposed of any material assets except in the ordinary course of
business; (vii) incurred, discharged or satisfied any material liability
(absolute or contingent), mortgage, lien, security interest or encumbrance other
than in the ordinary course of business; (viii) except as set forth on the
Interim Balance Sheet, declared or paid any dividend or other distribution in
cash or securities, or redeemed, repurchased or otherwise acquired any capital
stock or other securities of Leadtech; (ix) issued or committed to issue any
securities of, or other ownership interests in, Leadtech; (x) made any purchase
commitment in excess of the normal, ordinary and usual requirements of
Leadtech's business, or made any change in its selling, pricing, advertising or
personnel practices inconsistent with its prior practice; (xi) written off or
down as uncollectible any notes or accounts receivable or portion thereof except
in amounts that in the aggregate are not materially in excess of preexisting
reserves therefor, or taken, set aside or increased any reserves or charges on
their books against earnings or assets; (xii) failed to replenish its assets in
a normal and customary manner consistent with prior practices and prudent
business practices prevailing in Leadtech's industry; (xiii) entered into any
compromise or settlement of or suffered any judgment in any litigation,
proceeding, or governmental investigation relating to its assets, properties,
rights or business; (xiv) suffered any material damage, destruction or loss
whether or not covered by insurance; (xv) made any capital expenditures or
commitment therefor in excess of $20,000; or (xvi) entered into any written or
oral agreement, other than this Agreement, to do any of the things enumerated in
(i) through (xv) of this Section.
3.11) Assets. The fixtures, equipment, facilities and operating assets
of Leadtech are suitable for the uses for which intended and, except as set
forth in Schedule 3.11, free from defects and in good operating condition
(ordinary wear and tear excepted) in all material respects; all such assets are
being and have been properly and regularly serviced and maintained by Leadtech
in a manner that would not void or limit the coverage of any warranty thereon;
and all improvements and modifications of such facilities by Leadtech,
Leadtech's uses of such facilities and all such facilities and their uses
conform in all material respects to all applicable zoning and building laws.
Leadtech has good, marketable and insurable title to, or, in the case of leases,
valid and subsisting leasehold interests in, all assets used in the operations
(as presently conducted) of Leadtech, free and clear of any material Liens
except Liens for current taxes or assessments not yet due and payable.
3.12) Trademarks, Patents and Trade Secrets. All Intellectual Property
that is necessary for Leadtech's operations as presently conducted or in the
production or rendition of any of Leadtech's products or services (the "Leadtech
Intellectual Property") is owned by or licensed to Leadtech. None of Leadtech's
businesses or any of Leadtech's products or services infringe or misappropriate
the Intellectual Property rights of others. No present or former employee or
consultant of Leadtech has violated any noncompetition, confidentiality, or
assignment of inventions covenant or obligation by reason of such employee's or
consultant's employment or consulting with Leadtech. The Leadtech Intellectual
Property has not been challenged in any judicial or administrative proceeding.
All Leadtech Intellectual Property listed in Schedule 3.1C has the status
indicated therein and all applications are still pending in good standing and
have not been abandoned. Leadtech and Sellers have taken all necessary steps and
appropriate actions to record their interests, and protect their rights, in the
Leadtech Intellectual Property. No person or entity nor such person's or
entity's business nor any of its products has infringed or misappropriated the
Leadtech Intellectual Property rights or currently is infringing or
misappropriating such rights. No employee or consultant of Leadtech is subject
to or otherwise restricted by any employment, nondisclosure, assignment of
inventions, nonsolicitation of employees or noncompetition agreement between
such employee or consultant and a third party.
3.13) Accounts Receivable. All accounts and notes receivable shown on
the Balance Sheet and Interim Balance Sheet and all accounts and notes
receivable of Leadtech created up to the Closing Date are or will be, except to
the extent already paid, valid obligations owing to Leadtech, not subject to the
knowledge of the Sellers, to any defenses or set-offs; provided, however that
the parties to this Agreement acknowledge that, in the case of amounts billed by
Leadtech under any State Medicaid program or other federal or state governmental
program, the applicable payor will pay with respect to such claim only the
amount payable under such payor's reimbursement schedule or methodology,
regardless of the face amount of such claim. Leadtech does not have any notes or
accounts receivable owed to Leadtech from any director, officer or Sellers.
3.14) Licenses; Compliance with Laws, Regulations, Etc. Leadtech
possesses all necessary governmental approvals, and all material permits,
licenses and other approvals and authorizations that are necessary for the
conduct of Leadtech's business as presently conducted, and all of such licenses,
permits and other approvals and authorizations are in good standing, full force
and effect. Except as disclosed on Schedule 3.6, all such licenses, permits,
approvals or authorizations will continue to be in full force and effect
immediately after the consummation of the transactions contemplated in this
Agreement and not be affected by the transactions contemplated in this
Agreement.
3.15) Litigation. There is no action, lawsuit, claim, proceeding, or
investigation of any kind pending or, to the knowledge of the Sellers,
threatened against, by or affecting Leadtech that if decided adversely against
Leadtech would have a material adverse effect upon the business of Leadtech.
Leadtech is not in default with respect to any order, writ, injunction, or
decree of any court or of any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, materially affecting or relating to Leadtech's business or assets. No
suit, action or other proceeding is pending or, to the knowledge of Sellers,
threatened by or before any court or governmental agency in which it is sought
to restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated by this
Agreement, and, to the knowledge of Sellers, no investigation that might
eventuate in any such suit, action or other proceeding is pending or overtly
threatened.
3.16) Warranties, Leases, Contracts. To the knowledge of Sellers, all
products manufactured or sold, and all services provided, by Leadtech have
complied, and are in compliance, in all material respects, with all contractual
requirements, warranties or covenants, express or implied, applicable thereto,
and with all applicable governmental, trade association or regulatory
specifications therefor or applicable thereto. The terms of Leadtech's product
and service warranties and product return, discount, and credit policies are set
forth in Schedule 3.16. To the knowledge of Sellers, Leadtech has performed all
material obligations required to be performed by Leadtech and is not in default
under any material lease, contract, mortgage, promissory note, evidence of
indebtedness or other agreement or commitment to which Leadtech is a party or by
which Leadtech is bound, and the same are in full force and effect on the date
of this Agreement and valid and enforceable by Leadtech in accordance with their
respective terms except as may be limited by laws affecting creditors' rights
generally or by judicial limitations on the right to specific performance or
other equitable remedies. There has not been any event of default (or any event
or condition that with notice or the lapse of time, both or otherwise, would
constitute an event of default) on the part of Leadtech or to the knowledge of
Sellers, any party to any thereof that is expected to have a material adverse
effect on Leadtech. Performance of any such lease, contract, mortgage,
promissory note, evidence of indebtedness or other agreement is not expected to
have a Material Adverse Effect on Leadtech.
3.17) Insurance Policies. All policies of insurance listed in Schedule
3.1H are in full force and effect, and have been issued for the benefit of
Leadtech. Leadtech has promptly and properly notified Leadtech's insurance
carriers of any and all claims known to Leadtech with respect to Leadtech's
operations or products for which Leadtech is insured.
3.18) Labor Agreements. Leadtech is not a party to any collective
bargaining agreement with any labor organization. There is not currently pending
or, to the knowledge of Sellers, threatened, a demand for recognition from any
labor union with respect to, and Sellers have no knowledge of any attempt that
has been made or is being made to organize, any of the persons employed by
Leadtech. There has never been and is not now any strike, slow-down, work
stoppage or lockout, or any threat thereof, by or with respect to any of the
employees of Leadtech.
3.19) Benefit Plans.
-------------
(a) Leadtech does not sponsor, maintain, or contribute to any
"employee pension benefit plan" ("Pension Plan"), as such term is
defined in Section 3(2) of ERISA, including, solely for the purpose of
this subsection, a plan excluded from coverage by Section 4(b)(5) of
ERISA.
(b) Leadtech does not sponsor, maintain, contribute to any
Pension Plan that is a "Multiemployer Plan" within the meaning of
Section 4001(a)(3) of ERISA.
(c) Except as set forth in Schedule 3.1J, Leadtech does not
sponsor, maintain, or contribute to any "employee welfare benefit plan"
("Welfare Plan"), as such term is defined in Section 3(1) of ERISA,
whether insured or otherwise, and any such Welfare Plan presently
maintained by Leadtech is, in all material respects, in compliance with
the provisions of ERISA, the Code and all other applicable laws,
including, but not limited to, Section 4980B of the Code, the
regulations under such Section and Part 6 of Title I of ERISA. Except
as set forth in Schedule 3.1J, Leadtech has not established or
contributed to any "voluntary employees' beneficiary association"
within the meaning of Section 501(c)(9) of the Code.
(d) Leadtech does not sponsor, maintain or contribute to a
"self-insured medical reimbursement plan" within the meaning of Section
105(h) of the Code and the regulations under such Section.
(e) Except as set forth in Schedule 3.1J, Leadtech does not
currently maintain or contribute to any oral or written bonus,
profit-sharing, compensation (incentive or otherwise), commission,
stock option or other stock-based compensation, retirement, severance,
vacation, sick or parental leave, dependent care, deferred
compensation, cafeteria, disability, hospitalization, medical, death,
retiree, insurance or other benefit or welfare or other similar plan,
agreement, trust, fund or arrangement providing for the remuneration or
benefit of all or any employees or shareholders, that is neither a
Pension Plan nor a Welfare Plan (collectively, the "Compensation
Plans").
(f) Neither any Pension Plans or Welfare Plans nor any trust
created or insurance contract issued there under nor any trustee,
fiduciary, custodian, or administrator thereof, nor any officer,
director or employee of Leadtech, custodian or any other "disqualified
person" within the meaning of Section 4975(e)(2) of the Code, or "party
in interest" within the meaning of Section 3(14) of ERISA, with respect
to any such plan has engaged in any act or omission that could
reasonably be expected to subject Leadtech, either directly or
indirectly, to a tax or penalty on prohibited transactions imposed by
Sections 4975 of the Code or 406 of ERISA, a liability for breach of
fiduciary duties under ERISA or a civil penalty imposed by Section 502
of ERISA.
(g) Full payment has been made of all amounts that Leadtech is
required, under applicable law, with respect to any Pension Plan,
Welfare Plan or Compensation Plan, or any agreement relating to any
Pension Plan, Welfare Plan or Compensation Plan, to have paid as a
contribution to each Pension Plan, Welfare Plan or Compensation Plan.
To the extent required by generally accepted accounting principles,
Leadtech has made adequate provisions for reserves to meet
contributions that have not been made because they are not yet due
under the terms of any Pension Plan, Welfare Plan or Compensation Plan
or related agreements. There will be no change on or before the Closing
Date in the operation of any Pension Plan, Welfare Plan or Compensation
Plan or documents under which any such plan is maintained that will
result in an increase in the benefit liabilities under such plan,
except as may be required by law. The IRS has issued favorable
determination letters, or applications for favorable determination
letters have been timely submitted and no unfavorable determination
letters have been received, with respect to all Leadtech's Pension
Plans that are intended to be qualified under Section 401(a) of the
Code.
(h) Schedule 3.1J lists all Pension Plans, Welfare Plans and
Compensation Plans, and prior to the date of this Agreement, Sellers
have made available to Buyer complete and accurate copies of all of
such Pension Plans, Welfare Plans, Compensation Plans and related
agreements, annual reports (Form 5500), favorable determination
letters, current summary plan descriptions, and all employee handbooks
or manuals.
3.20) Employees.
---------
(a) Except as set forth in Schedule 3.20 or in the Interim
Balance Sheet, Leadtech has no obligations and the transactions
contemplated by this Agreement will give rise to no obligations to its
directors, officers, employees, consultants, or agents other than
obligations arising in the ordinary course of business since the date
of the Interim Balance Sheet on account of wages, salaries, commissions
and bonuses for prior services performed or business produced.
(b) Except as set forth in Schedule 3.20, there have been no
lawsuits or claims brought by any employee or consultant or former
employee or consultant of Leadtech against Leadtech during the
preceding five (5) years.
(c) Except as set forth in Schedule 3.20, there are no
severance or early retirement payments that are or were due from
Leadtech under the terms of any agreement, oral or written.
3.21) No Finders. Except for the retention of Haverford Healthcare
Advisors in connection with the transactions contemplated hereby, no act of
Leadtech or Sellers has given or will give rise to any valid claim against any
of the parties to this Agreement for a brokerage commission, finder's fee or
other like payment in connection with the transactions contemplated in this
Agreement. The fees and expenses associated with Haverford Healthcare Advisors
are the sole obligation of Sellers.
3.22) Contracts with Related Parties. Except as set forth in Schedules
3.1I, 3.20 or 3.22, there are no contracts between Leadtech and any of its
officers or directors or between Leadtech and Sellers or between Leadtech and
any entity in which any Leadtech officers or directors owns a more than five
percent (5%) equity interest.
3.23) Relations with Suppliers and Customers. No material current
supplier of Leadtech has canceled any contract or order for provision of, and
there has been no information to the effect that any such supplier may not
provide, raw materials, products, supplies, or services to the business of
Leadtech either prior to or following the Closing Date. Except as set forth in
Schedule 3.23, Leadtech has not received any information from any customer to
the effect that such customer intends to materially decrease the amount of
business such customer does with Leadtech either prior to or following the
Closing Date.
3.24) Environmental Matters. To the knowledge of Sellers, Leadtech has
obtained, and is in material compliance with, all permits, licenses or other
approvals necessary under the Environmental Laws or Regulations with respect to
the Leadtech's business or assets, and is in material compliance with all
Environmental Laws or Regulations, except for those permits, licenses or other
approvals the absence of which, and except for Environmental Laws or Regulations
the noncompliance with which, would not have a material adverse effect on
Leadtech. To the knowledge of Sellers, Leadtech's business and assets comply
fully with all Environmental Laws or Regulations except those Environmental Laws
or Regulations the noncompliance with which would not have a material adverse
effect on Leadtech. Neither Leadtech nor Leadtech's business or assets have been
or are subject to any actual or, to the knowledge of Sellers, threatened,
investigations, administrative proceedings, litigation, regulatory hearings, or
other actions threatened, proposed or pending that allege (i) actual or
threatened violation of or noncompliance with any Environmental Law or
Regulation; or (ii) actual or threatened personal injury or property damage or
contamination of any kind resulting from a release or threatened release of a
Hazardous Substance by Leadtech with respect to Leadtech's business or assets.
With respect to the real property used in connection with Leadtech's business
and assets, to the knowledge of Sellers, (i) no above-ground or underground
storage tanks are or were present on such real property or any improvements on
structures thereon; (ii) such real property is not listed on the federal CERCLIS
or on any local, state or federal list of hazardous waste sites; (iii) no Lien
in favor of any governmental authority in response to a release or threatened
release of any Hazardous Substance has been filed or attached to such real
property; and (iv) there has been no past or present use, manufacture,
generation, storage, transportation or disposal by Leadtech of any Hazardous
Substance at or under such real property except in compliance with all
Environmental Laws or Regulations (excluding those Environmental Laws or
Regulations the noncompliance with which would not have a Material Adverse
Effect on Leadtech).
3.25) Absence of Certain Business Practices. Neither the Sellers,
Leadtech, nor to the knowledge of Sellers, any officer, employee or agent of
Leadtech, nor any other person acting on their respective behalves has directly
or indirectly, during the preceding seven (7) years, given or agreed to give any
material gift or similar benefit to any customer, supplier, governmental
employee or other person who is or may be in a position to help or hinder the
business of Leadtech (or assist Leadtech in connection with any actual or
proposed transaction), except Leadtech and/or Leadtech's officers, employees and
agents have engaged in lawful customer entertainment and business promotion
activities.
3.26) Corporate Records. The minute books of Leadtech are complete and
correctly reflect in all material respects, all corporate actions taken by them
at all meetings or through written action and correctly record all resolutions
of the Board of Directors of Leadtech.
3.27) Disclosure. No representation or warranty of Leadtech or Sellers
in this Agreement and no statement in the Schedules omits to state a material
fact necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading. There is no fact (other
than matters of a general economic or political nature which do not affect
Leadtech's business uniquely) known to Sellers or Leadtech that has not been
disclosed by Sellers or Leadtech to Buyer that materially adversely affects
Leadtech's business or financial condition.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Leadtech and Sellers as of the date of
this Agreement as follows, and Buyer acknowledges that the same shall be deemed
to have been relied upon by Leadtech and Sellers and shall survive the closing
of the transactions contemplated by this Agreement as provided in Section 11.3:
4.1) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
4.2) Authorization and Binding Obligation. The execution, delivery and
performance by Buyer of this Agreement and the transactions and agreements
contemplated by this Agreement have been duly and validly authorized and
approved by all requisite corporate action on the part of Buyer. Buyer has all
requisite power and authority to do and perform all acts and things required to
be done by it under this Agreement and the agreements contemplated by this
Agreement. This Agreement constitutes and, when executed, the agreements
contemplated by this Agreement will constitute, the valid and binding obligation
of Buyer, enforceable in accordance with its and their respective terms except
as may be limited by laws affecting creditors' rights generally or by judicial
limitations on the right to specific performance or other equitable remedies.
4.3) Consents Required. Except for any items set forth in Schedule 4.3,
the execution and delivery of this Agreement and the agreements contemplated by
this Agreement, the sale and purchase of the Stock and the consummation of the
transactions contemplated by this Agreement in compliance with the terms and
provisions of this Agreement by Buyer will not:
(a) Conflict with or result in a breach of the terms,
conditions or provisions of or constitute a default under the Articles
of Incorporation or Bylaws or other governing instruments of Buyer, or
any material agreement, mortgage, lease, judgment, order, award, decree
or other instrument or restriction to which Buyer is a party or by
which Buyer or any of its assets is bound or affected;
(b) Violate any material statute, rule, regulation, order or
decree of any federal, state, local or foreign body or authority by
which Buyer or any of its properties or assets may be bound.
(c) Require any material approval, consent, authorization or
other order or action of any court, governmental authority, regulatory
body, creditor or any other person; or
(d) Give any party with rights under any such material
agreement, mortgage, lease, judgment, order, award, decree or other
instrument or restriction the right to terminate, modify or otherwise
materially change the rights or obligations of Buyer there under.
4.4) No Finders. No act of Buyer has given or will give rise to any
valid claim against any of the parties to this Agreement for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated in this Agreement.
4.5) Investment Purpose in Acquiring the Stock. Buyer is acquiring the
Stock for its own account for investment purposes only and not with a view to
their resale or distribution in violation of the Securities Act. Buyer has the
requisite investment intent to satisfy Section 4(2) of the Securities Act. Buyer
is an "accredited investor" as such term is used in Rule 501 under the
Securities Act.
4.6) Buyer Common Stock. When delivered at Closing, all shares of Buyer
Common Stock will have been duly authorized and validly issued, and will be
fully paid and nonassessable and upon such issuance, Sellers will be
shareholders of record of Buyer and entitled to any distributions or dividends
payable to stockholders of record on or after the Closing.
4.7) Buyer's SEC Filings. No document filed by the Company with the
federal Securities and Exchange Commission during the last three years contained
a misstatement of a material fact or failed to state a material fact required to
be stated therein or necessary to make the statements made therein (in light of
the circumstances under which they were made) not misleading as of the date such
filing was made.
4.8) Registration of Buyer Common Stock. Buyer meets all applicable
legal requirements that must be met in order to permit Buyer's registration of
the sale of the Buyer Common Stock on SEC Form S-3 and Buyer's obtaining all
necessary state securities law or "Blue Sky" permits and approvals required in
connection with the sale of such Buyer Common Stock, and there is no fact or
circumstance known to Buyer that could reasonably be expected to delay or
prevent the effectiveness of such S-3 Registration Statement or the issuance or
approval of such permits and approvals.
4.9) Compliance With Law. To the knowledge of Buyer, Buyer is in
compliance in all material respects with, has complied in all material respects
with, and has no material liability under, all applicable laws, including the
common law and all statutes, rules, regulations, ordinances, orders, codes,
permits, licenses and agreements with or of federal, state, or local
governmental or regulatory authorities, and any order, writ, injunction or
decree of a court, arbitral body, governmental agency, or other governmental
entity in connection with a judicial or administrative proceeding, all as the
same may be in effect with respect to or apply to the matter at issue.
4.10) Disclosure. No representation or warranty of Buyer in this
Agreement omits to state a material fact necessary to make the statements herein
or therein, in light of the circumstances in which they were made, not
misleading. There is no fact (other than matters of a general economic or
political nature which do not affect Buyer's business uniquely) known to Buyer
that has not been disclosed by Buyer to Leadtech and Sellers that materially
adversely affects Buyer's business or financial condition.
ARTICLE V
COVENANTS
5.1) Approvals and Consents. Each party hereto will use all reasonable
efforts to obtain all material approvals and consents of all third parties
necessary on the part of such party to consummate the transactions contemplated
in this Agreement. Each party hereto agrees to cooperate with the other parties
hereto in connection with obtaining such approvals and consents.
5.2) Preserve Accuracy of Representations and Warranties. Each of
Sellers and Buyer will refrain from knowingly taking any action, except with the
prior written consent of the other parties, that would render any
representation, warranty or agreement of such party in this Agreement inaccurate
or breached as of the Closing (as though made at and as of the Closing) in any
material respect. At all times prior to the Closing, each party will promptly
inform the others in writing with respect to any matters arising after the date
of this Agreement that, if existing or occurring at the date of this Agreement,
would have been required to be set forth or described in the Schedules pursuant
to Article 3.
5.3) Maintain Leadtech as Going Concern. Except as contemplated by this
Agreement, during the period from the date of this Agreement to the Closing
Date, Sellers will use all reasonable efforts to cause Leadtech to conduct its
operations according to the ordinary and usual course of business and consistent
with past practices, and Sellers will use all reasonable efforts, to the extent
that it is within Sellers' control, to preserve intact Leadtech's business
organizations, to maintain Leadtech's business in the ordinary course, to keep
available the services of Leadtech's officers and employees and to maintain
satisfactory relationships with licensors, licensees, suppliers, contractors,
distributors, customers and others having business relationships with Leadtech.
Sellers will promptly advise Buyer orally and in writing of any materially
adverse change in the business of Leadtech and permit Buyer to consult with
Sellers with respect to any material changes in Leadtech's business. Except as
otherwise expressly provided in or contemplated by this Agreement or to the
extent specifically disclosed on the Schedules to this Agreement, during the
period from the date of this Agreement to the Closing Date, Sellers will not
cause or permit Leadtech to, without the prior written consent of Buyer:
(a) amend its Articles of Incorporation or Bylaws;
(b) authorize for issuance, issue, sell, or deliver (whether
through the issuance or granting of additional options (other than in
the ordinary course of business and consistent with past practice),
warrants, commitments, subscriptions, rights to purchase or otherwise)
any stock of any class or any securities convertible into shares of
Stock or other securities of Leadtech;
(c) split, combine or reclassify any shares of Stock or other
securities of Leadtech, declare, set aside or pay any dividend or other
distribution (whether in cash, stock or property or any combination
thereof) in respect of the Stock or other securities of Leadtech; or
redeem or otherwise acquire any shares of Stock or other securities of
Leadtech; or amend or alter any material term of any of the Stock or
other securities of Leadtech;
(d) create, incur or assume any material indebtedness for
borrowed money (except under current credit facilities), or assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the material obligations of
any other person, other than in the ordinary course of business and
consistent with past practice; or make any material loans, advances or
capital contributions to, or investments in, any other person; or
create, incur or assume any material Lien on any material asset;
(e) (i) materially increase the compensation of any of its
directors, officers, employees, shareholders or consultants, except in
the ordinary course of business and consistent with past practice or
pursuant to contractual obligations existing on the date of this
Agreement, or accelerate the payment of any such compensation (whether
or not any such acceleration is consistent with past practice); (ii)
accelerate or otherwise materially modify the payment, vesting,
exercisability, or other feature or requirement of any pension,
retirement allowance, severance pay, stock option or other employee
benefit not required by any existing plan, agreement or arrangement or
by applicable law to any such director, officer, employee, shareholder
or consultant, whether past or present; or (iii) except in accordance
with their customary past practices, commit themselves to any
additional pension, profit-sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation right,
group insurance, severance pay, retirement or other employee benefit
plan, agreement or arrangement, or to any employment or consulting
agreement with or for the benefit of any person, or amend in any
material manner any of such plans or any of such agreements in
existence on the date of this Agreement;
(f) except in the ordinary course of business and consistent
with past practice or pursuant to contractual obligations existing on
the date of this Agreement, (i) sell, transfer, mortgage, or otherwise
dispose of or encumber any material real or personal property; (ii)
pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, contingent or otherwise), or (iii)
cancel any material debts or waive any material claims or rights that
involve payments or commitments to make payments that individually
exceeds $5,000 or, in the aggregate, exceed $25,000;
(g)change its credit policies as to collection of receivables;
(h) remove or permit to be removed from any building, facility
or real property any material machinery, equipment, fixture, vehicle or
other personal property or parts thereof, except in the ordinary course
of business and except for movement from one facility of Leadtech to
another such facility;
(i) alter or revise its accounting principles, procedures,
methods or practices, except as may be required by generally
accepted accounting principles;
(j) institute, settle or compromise any claim, action, suit or
proceeding pending or threatened by or against it involving amounts in
excess of $20,000, at law or in equity or before any federal, state,
local, foreign or other governmental department, commission, board,
bureau, agency or instrumentality; or
(k) agree, whether in writing or otherwise, to do any of the
foregoing.
5.4) Buyer's Access to Information and Records Before Closing. During
the period from the date of this Agreement through the Closing, Sellers will
afford to Buyer, and to Buyer's accountants, officers, directors, employees,
counsel and other representatives, reasonable access during normal business
hours, to all of Leadtech's properties, books, contracts, commitments and
records, and, during such period, Sellers will furnish promptly to Buyer all
information concerning Leadtech's business, prospects, properties, results of
operations, condition (financial or otherwise) or personnel as Buyer may
reasonably request. Buyer will hold in confidence all nonpublic information
pursuant to the terms of that certain letter of intent dated July 18, 2001 (the
"Letter of Intent"). Notwithstanding the foregoing, Buyer will, and will cause
its employees and representatives to, conduct its due diligence investigation in
a manner that will, to the greatest degree feasible, allow Leadtech to prevent
the transactions contemplated by this Agreement from becoming generally known by
Leadtech's employees.
5.5) Leadtech's Access to Information and Records Before Closing.
During the period from the date of this Agreement through the Closing, Buyer
will afford to Leadtech, and to Leadtech's accountants, officers, directors,
employees, counsel and other representatives, reasonable access during normal
business hours, to all of Buyer's properties, books, contracts, commitments and
records, and, during such period, Buyer will furnish promptly to Leadtech all
information concerning Buyer's business, prospects, properties, results of
operations, condition (financial or otherwise) or personnel as Leadtech may
reasonably request. Leadtech will hold in confidence all nonpublic information
pursuant to the terms of the Letter of Intent.
5.6) Regulatory Approvals. Buyer and Sellers will take all such action
as may be necessary for, and will file and, if appropriate, use all reasonable
efforts to have declared effective or approved all documents and notifications
with governmental or regulatory bodies that they deem necessary or appropriate
for, the consummation of the transactions as contemplated by this Agreement and
each party will give the other information reasonably requested by such other
party pertaining to it and its Affiliates to enable such other party to take
such actions.
5.7) SEC and Blue Sky Filings. Within the three (3) week period
commencing on the Closing Date, Buyer will, at Buyer's expense, prepare a
registration statement on Form S-3 or other applicable form under the Securities
Act (the "Registration Statement") with respect to the Buyer Common Stock issued
to Sellers pursuant to Section 2.2(b) and file such Registration Statement with
the SEC. Buyer also agrees to use all commercially reasonable efforts necessary
to have the SEC declare the Registration Statement effective, and to obtain all
necessary state securities law or "Blue Sky" permits and approvals required to
carry out the transactions contemplated by this Agreement. Following the SEC's
declaration of such S-3 Registration Statement to be effective, Buyer will
promptly exchange the certificates representing the Buyer Common Stock for
certificates not containing any restrictive legend reflecting the absence of
such registration; however, such certificates will be legended to reflect the
restriction set forth in Section 5.8.
5.8) Disposition of Buyer Common Stock. Following the date on which the
SEC declares the Registration Statement effective, no Seller shall sell,
transfer or otherwise dispose of, during any one-month period, any number of
shares of Buyer Common Stock that exceeds the product of (i) the number of
shares of Buyer Common Stock issued to such Seller pursuant to Section 2.2(b)
and (ii) a fraction (x) the numerator of which shall be one (1) and (y) the
denominator of which shall be six (6).
5.9) Transition Services. For the ninety (90) day period commencing on
the Closing Date, Sellers will render reasonable assistance to Buyer upon
Buyer's request to assist Buyer in the transition of Leadtech's business.
5.10) Competing Transaction. Until October 31, 2001, Leadtech will not
sell or negotiate, or distribute or provide any financial or business data
concerning Leadtech or its business or assets to, or have discussions with, any
person or business other than Buyer regarding the sale (whether pursuant to a
merger, stock sale, asset sale or other disposition of all or any of Leadtech's
capital stock or material assets (collectively, a "Competing Transaction").
Leadtech will immediately notify Buyer in writing if, prior to October 31, 2001,
Leadtech or any of the Sellers receive any offer, inquiry or other expression of
interest from any other party concerning a Competing Transaction.
ARTICLE VI
CONDITIONS TO BUYER'S OBLIGATIONS
Buyer's obligations under this Agreement will, at Buyer's option, be
subject to the satisfaction, on or prior to the Closing Date, of all of the
following conditions:
6.1) Truth of Representations and Warranties. The representations and
warranties of Sellers in this Agreement will be true in all material respects on
the Closing Date with the same effect as though made at such time, except for
changes expressly contemplated by this Agreement or changes that do not have a
Material Adverse Effect on the business of Leadtech and except for any
particular representation and warranty that specifically addresses matters only
as of a particular date (which will remain true as of such date). Sellers will
have performed all of Sellers' material obligations and complied with all of
Sellers' material covenants and conditions prior to or as of the Closing Date.
6.2) Required Consents. Sellers will have obtained all material
permits, authorizations, consents and approvals required to be obtained by
Sellers pursuant to this Agreement, in form and substance reasonably
satisfactory to Buyer, and Buyer will have received evidence satisfactory to
Buyer of the receipt of such permits, authorizations, consents and approvals.
6.3) Litigation Affecting Closing. No material suit, action or other
proceeding will be pending or threatened by any third party or by or before any
court or governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated by this Agreement.
6.4) Legislation. No statute, rule, regulation, order, or
interpretation will have been enacted, entered or deemed applicable by any
domestic or foreign government or governmental or administrative agency or court
that would make the transactions contemplated by this Agreement illegal.
6.5) Financing. Buyer shall have raised a minimum of Three Million
Dollars ($3,000,000) net of fees and expenses, on terms satisfactory to Buyer,
through a private placement of Buyer's debt or equity securities, or through
other sources acceptable to Buyer.
6.6) Noncompetition Agreement. At the Closing, Rudelli, Greenstein and
Verebey each will have executed and delivered to Buyer a noncompetition
agreement in the form attached as Exhibit 6.6 (the "Noncompetition Agreement").
6.7) Lease Termination. Leadtech shall have negotiated and executed a
lease termination agreement with the lessor of the facility located in North
Bergen, New Jersey (the "Lease Termination Agreement") containing terms
reasonably acceptable to Buyer. Leadtech and Buyer will confer prior to and
during such negotiations with respect to appropriate terms.
6.8) Resignations. The officers and directors of Leadtech set out on
Schedule 6.8 shall have tendered their resignations effective as of the Closing
Date.
6.9) Opinion. Buyer shall have received an opinion dated the Closing Date
from Stevens & Lee, P.C., counsel to Sellers, in the form of Exhibit 6.9.
ARTICLE VII
CONDITIONS TO SELLERS' OBLIGATIONS
Leadtech's and Sellers' obligations under this Agreement will, at
Leadtech's and Sellers' option, be subject to the satisfaction, on or prior to
the Closing Date, of all of the following conditions:
7.1) Truth of Representations and Warranties. The representations and
warranties of Buyer in this Agreement will be true in all material respects on
the Closing Date with the same effect as though made at such time, except for
changes expressly contemplated by this Agreement and except for any particular
representation and warranty that specifically addresses matters only as of a
particular date (which will remain true as of such date). Buyer will have
performed all of Buyer's material obligations and complied with all of Buyer's
material covenants and conditions prior to or as of the Closing Date.
7.2) Consents. Buyer will have obtained all material permits,
authorizations, consents and approvals required to be obtained by them pursuant
to this Agreement, in form and substance reasonably satisfactory to Sellers, and
Sellers will have received evidence satisfactory to it of the receipt of such
permits, authorizations, consents and approvals.
7.3) Litigation Affecting Closing. No material suit, action or other
proceeding will be pending or threatened by any third party or by or before any
court or governmental agency in which it is sought to restrain or prohibit or to
obtain damages or other relief in connection with this Agreement or the
consummation of the transactions contemplated by this Agreement.
7.4) Legislation. No statute, rule, regulation or order or
interpretation will have been enacted, entered or deemed applicable by any
domestic or foreign government or governmental or administrative agency or court
that would make the transactions contemplated by this Agreement illegal.
7.5) Noncompetition Agreement. At the Closing, Buyer will have executed and
delivered to Rudelli, Greenstein and Verebey the Noncompetition Agreement.
7.6) Guarantees. At the Closing, each of Medtox Laboratories, Inc. and
Medtox Diagnostics, Inc. shall have executed and delivered the guarantees in the
form of Exhibit 7.6 (the "Guarantees").
7.7 Opinion. Sellers shall have received an opinion dated the Closing Date
from Fredrikson & Byron, P.A., counsel to Buyer, in the form of Exhibit 7.7.
ARTICLE VIII
CLOSING
8.1) Closing Date. The consummation of the transactions provided for in
this Agreement (the "Closing") will take place at 10:00 a.m. (local time) on
October 31, 2001, or on such date as soon thereafter as all conditions to
Closing have been satisfied or waived, or on such other date and/or at such
other time as the parties to this Agreement may agree upon (the "Closing Date").
The Closing will take place at Fredrikson & Byron, 1100 International Centre,
Minneapolis, Minnesota, or at such other place or in such other manner (e.g., by
telecopy exchange of signature pages with originals to follow by overnight
delivery) as the parties may agree.
8.2) Closing Deliveries of Sellers. In addition to, and without
limiting any other provisions of this Agreement, Sellers will deliver to Buyer
the following, in form reasonably satisfactory to Buyer and Buyer's counsel:
(a) Stock certificate(s) representing all of the Stock,
together with stock powers duly executed by each of Sellers
transferring such Stock to Buyer.
(b) All of the documents, certificates and instruments required to be
delivered to Buyer under Article 6.
(c) A certificate signed by Sellers certifying that all of the
representations and warranties set forth in Article III are true and
correct as of the Closing Date.
(d) Such other documents or instruments as the Buyer may
reasonably request.
8.3) Closing Deliveries of Buyer. In addition to, and without limiting
any other provisions of this Agreement, Buyer will, at the Closing, deliver to
Sellers the following, in form reasonably satisfactory to Sellers and Sellers'
counsel:
(a) Two Million Five Hundred Thousand Dollars ($2,500,000) in
immediately available funds as required by and set out in Section
2.2(a).
(b) Stock certificate(s) representing all of the shares of
Buyer Common Stock, duly executed by Buyer transferring the Buyer
Common Stock to the Sellers as required by and set out in Section
2.2(b).
(c) The Promissory Notes as required by and set out in Section
2.2(c).
(d) A certificate signed by Buyer certifying that all of the
representations and warranties set forth in Article IV are true and
correct as of the Closing Date.
(e) All of the documents, certificates and instruments required
to be delivered to Sellers under Article 7.
(f) Such other documents or instruments as Sellers may reasonably
request.
8.4) Proceedings. No proceedings will be deemed taken nor any documents
executed or delivered until all proceedings have been taken and all documents
have been executed and delivered. All proceedings taken and all documents
executed and delivered by the parties to this Agreement at the Closing will be
deemed to have been taken and executed simultaneously.
ARTICLE IX
TERMINATION
9.1) Termination. This Agreement may be terminated at any time prior to the
Closing Date, only:
(a) by mutual written consent of Sellers and Buyer; or
(b) by Buyer or Sellers if the Closing shall not have occurred on or prior
to October 31, 2001;
9.2) Procedure and Effect of Termination. In the event of termination
of this Agreement by Buyer and/or by Sellers pursuant to Section 9.1, written
notice thereof will immediately be given to the other parties and this Agreement
will terminate and the transactions contemplated by this Agreement will be
abandoned, without further action by any of the parties. Leadtech agrees that
any termination by all of Sellers will be conclusively binding upon Leadtech,
whether given expressly on its behalf or not, and Buyer will have no further
obligation with respect to Leadtech. If this Agreement is terminated as provided
in this Agreement, no party to this Agreement will have any liability under this
Agreement or further obligation under this Agreement to any other party, and,
provided, however, that nothing in this Article will relieve any party of
liability for breach of any representation, warranty condition precedent or
agreement; and, in such a case, the breaching party will be liable to the
non-breaching party for such breach. In the event of any termination of this
Agreement, the Letter of Intent will govern any confidential information about a
party obtained in connection with this Agreement. This Section any the other
Sections of this Agreement which are said expressly to survive such termination
will survive any termination of this Agreement.
ARTICLE X
INDEMNIFICATION; REMEDIES
10.1) Indemnification by Sellers. Sellers jointly and severally will
indemnify and hold Buyer harmless at all times after the date of this Agreement
against and in respect of any damage, deficiency, claim or expense resulting
from: (i) any misrepresentation, breach of warranty, breach of agreement or
covenant or non-observance of any condition on the part of such Seller under
this Agreement; (ii) any misrepresentation in or omission from any other
instrument to be furnished by such Seller under this Agreement; and (iii) all
actions, suits, proceedings, demands, assessments, judgments, reasonable
attorneys' fees and other related costs incident to any of the foregoing
("Buyer's Indemnifiable Losses").
Buyer's Indemnifiable Losses will not include: (i) any tax liabilities
arising by reason of any reduction or disallowance of deductions from taxable
income in one taxable year, to the extent such reduction or disallowance results
in a corresponding increase in allowable deductions from income in another
taxable year, (ii) the shifting of items of income from one taxable year to
another or (iii) the capitalization of amounts which were expenses, but only if
such capitalized amounts are subject to amortization or depreciation or recovery
in cost of goods sold, inventory or materials, provided, however, that Buyer's
Indemnifiable Losses may include any damage attributable to the lost time value
of money with respect to any of such matters.
The amount of any claim for which indemnification is provided under
this Section 10.1 shall be net of any amounts recovered or recoverable by Buyer
under insurance policies with respect to such claim. If, following the receipt
by Buyer of any indemnity payment hereunder, Buyer shall receive any insurance
recovery or indemnity payment from a third party in respect of the same
underlying claim, Buyer shall reimburse the Seller(s) from whom such indemnity
payment was received to the extent of such insurance recovery or third-party
indemnity payment.
The aggregate liability of Sellers under this Article X shall in no
case exceed the aggregate value of the Purchase Price paid to Sellers hereunder.
Sellers will reimburse Buyer, after reasonable notice and opportunity
to defend against any such claim, for any Buyer's Indemnifiable Losses
experienced or incurred by Buyer at any time after the Closing Date in respect
of any liability to which the foregoing indemnity applies, subject to the
Deductible. If a claim is asserted against Buyer which Buyer knows or has reason
to believe will result in any liability of any Seller under this indemnity,
Buyer will promptly notify the affected Seller in writing and afford such Seller
the opportunity to defend against such claim.
The indemnification provided for in Section 10.1 will not apply unless
and until the aggregate of Buyer's Indemnifiable Losses exceed $25,000 whereupon
the indemnification provided for in Section 10.1 shall apply to all Buyer's
Indemnifiable Losses including such $25,000.
10.2) Indemnification by Buyer. Buyer will indemnify and hold Leadtech
and Sellers, and the officers, directors, employees, agents, heirs and assigns
of each of them, harmless at all times after the date of this Agreement against
and in respect of any damage, deficiency, claim or expense resulting from: (i)
any misrepresentation, breach of warranty, breach of agreement or covenant or
non-observance of any condition on the part of Buyer under this Agreement; (ii)
any misrepresentation in or omission from any other instrument to be furnished
by Buyer under this Agreement; and (iii) all actions, suits, proceedings,
demands, assessments, judgments, reasonable attorneys' fees and other related
costs incident to any of the foregoing ("Sellers' Indemnifiable Losses").
Buyer will reimburse Sellers, after reasonable notice and opportunity
to defend against any such claim, for any Sellers' Indemnifiable Losses
experienced or incurred by Sellers at any time after the Closing Date in respect
of any liability to which the foregoing indemnity applies, subject to the
Deductible. If a claim is asserted against any Seller which such Seller knows or
has reason to believe will result in any liability of Buyer under this
indemnity, such Seller will promptly notify Buyer in writing and afford Buyer
the opportunity to defend against such claim.
10.3) Remedies. Each party will be entitled to specific performance of
their respective obligations to purchase and sell the Stock as set forth in this
Agreement and such relief will be in addition to and not in limitation of any
and all other remedies each party may have in law and at equity for the
enforcement of such party's rights under this Agreement.
10.4) Survival. This Article will survive any termination of this
Agreement.
ARTICLE XI
OTHER PROVISIONS
11.1) Further Assurances. At such time and from time to time on and
after the Closing Date upon request by another party, Sellers and Buyer will
execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances that may be required
for transferring, assigning, and delivering to Buyer, or to Buyer's respective
successors and assigns, all of the Stock or to otherwise carry out the purposes
of this Agreement.
11.2) Complete Agreement. The Schedules and Exhibits to this Agreement
will be construed as an integral part of this Agreement to the same extent as if
they had been set forth verbatim in this Agreement. This Agreement and the
Schedules and Exhibits to this Agreement, together with the Letter of Intent and
all other agreements referenced in this Agreement, constitute the entire
agreement between the parties to this Agreement with respect to the subject
matter of this Agreement and supersede all prior agreements, whether written or
oral, relating to this Agreement. Sellers may, in Sellers' discretion and for
Sellers' convenience, include in the Schedules to this Agreement items that are
not material, and such inclusions will not be deemed to be an agreement or
admission by Sellers, Leadtech , or Buyer that such items are material or
otherwise be used to interpret the meaning of such term for purposes of this
Agreement or otherwise. Information disclosed in any Schedule will be deemed
disclosed and incorporated into any other representation, warranty and Schedule
where such disclosure would be appropriate.
11.3) Survival. The representations, warranties, covenants and
agreements contained in this Agreement will survive the Closing but, other than
those respecting title to the Stock, will expire at the end of eighteen (18)
months after the Closing Date. Expiration of a representation, warranty,
covenant or agreement pursuant to this Section shall not limit or otherwise
affect the right of a party to indemnification under Article 10 if notice was
sent to the party from whom indemnification is sought of the basis for such
claim to indemnification prior to such expiration.
11.4) Waiver, Discharge, Amendment, Etc. The failure of any party to
this Agreement to enforce at any time any of the provisions of this Agreement
(except in the case of the election of such party to proceed with the Closing
despite a failure of any condition to such party's closing obligations to occur)
will in no way be construed to be a waiver of any such provision, nor in any way
to affect the validity of this Agreement or any part thereof or the right of the
party thereafter to enforce each and every such provision. No waiver of any
breach of this Agreement will be held to be a waiver of any other or subsequent
breach. This Agreement may be amended by Buyer and Sellers at any time prior to
the Closing Date. Any amendment to this Agreement must be in writing and signed
by Buyer and Sellers.
11.5) Notices. Any notice required or permitted under this Agreement
will be deemed sufficiently given or served when personally delivered (in
person, by commercial courier service, by facsimile with confirmed transmission,
or otherwise) or forty-eight (48) hours after mailed by registered or certified
mail to the parties at:
If to Sellers, to: Raoul D. Rudelli
Karl Verebey
Michael Greenstein
One Marine Plaza
7700 River Road
North Bergen, NJ 07047
With a copy to: Stevens & Lee, P.C.,
One Glenhardie Corporate
Center
1275 Drummers Lane
Wayne, PA 19087
Attention: John M. Hogan,
Esq.
If to Buyer, to: Medtox Scientific, Inc.
402 West County Road D
Saint Paul, MN 55112
Attention: Richard Braun
With a copy to: Fredrikson & Byron, P.A.
1100 International Centre
900 Second Avenue South
Minneapolis, MN 55402
Attention: Robert R Ribeiro, Esq.
and any party may by like written notice at any time designate a different
address to which notices will subsequently be sent. All notices to Sellers
delivered prior to the Closing Date will be marked "Personal and Confidential."
11.6) Public Announcement. The parties intend all future statements or
communications to the public or press regarding this Agreement or the
transactions contemplated by this Agreement made on or before the Closing Date
will be mutually agreed upon by them. Neither party will on or before the
Closing Date, without such mutual agreement or the prior consent of the other,
issue any statement or communication to the public or to the press regarding
this Agreement, or any of the terms, conditions or other matters with respect to
this Agreement, except as required by law or the rules of the American Stock
Exchange and then only: (a) upon the advice of such party's legal counsel; (b)
to the extent required by law or the rules of the American Stock Exchange; and
(c) following prior notice to, and consultation with, the other party (which
notice will include a copy of the proposed statement or communication to be
issued to the press or public).
11.7) Expenses. Buyer will pay all expenses of Buyer incident to this
Agreement and the preparation for, documentation of and consummation of, the
transactions provided for in this Agreement. Sellers will pay all expenses of
Sellers incident to this Agreement and the preparation for, documentation of and
consummation of, the transactions contemplated by this Agreement; provided,
however, Buyer will pay all costs incurred by Leadtech as a result of
terminating the lease pursuant to the terms of the Lease Termination Agreement.
11.8) Governing Law. This Agreement will be governed by and interpreted in
accordance with the laws of the State of Minnesota, including all matters of
construction, validity, performance and enforcement.
11.9) Successors and Assigns. This Agreement will be binding upon and
inure to the benefit of the parties to this Agreement and the successors or
assigns of the parties to this Agreement.
11.10) Titles and Headings; Construction. The Table of Contents, titles
and headings to the Articles and Sections in this Agreement are inserted for the
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement. This Agreement will be
construed without regard to any presumption or other rule requiring construction
of this Agreement against the party causing this Agreement to be drafted.
11.11) Benefit. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this Agreement or
their respective successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
11.12) Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed as original and all of which together
will constitute one instrument.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in the manner appropriate for each, and to be dated as of the date
written on the first page of this Agreement.
MEDTOX SCIENTIFIC, INC.
By /s/ Richard J. Braun
------------------------------------
Its President and CEO
-------------------------------
/s/ Raoul D. Rudelli
------------------------------------
Raoul D. Rudelli, M.D.
/s/ Karl Verebey
------------------------------------
Karl Verebey, Ph.D.
/s/ Michael Greenstein
------------------------------------
Michael Greenstein
LEADTECH CORPORATION
By /s/ Karl Verebey
---------------------------------
Its President
List of Exhibits and Schedules
EXHIBITS:
Exhibit 2.2 Promissory Note
Exhibit 6.6 Noncompetition Agreement
Exhibit 6.9 Opinion
SCHEDULES:
Schedule 3.1A Real Property
Schedule 3.1B Equipment
Schedule 3.1C Patents, Trademarks, Formulas, Etc.
Schedule 3.1D Certain Leases, Agreements, Etc.
Schedule 3.1E Permits, Licenses, Etc.
Schedule 3.1F Banks and Depositories
Schedule 3.1G Loans and Credit Agreements, Etc.
Schedule 3.1H Insurance Policies and Claims
Schedule 3.1I Certain Employees
Schedule 3.1J Employee Plans
Schedule 3.1K Powers of Attorney
Schedule 3.1L Taxes
Schedule 3.2 States where Qualified; Directors and Officers
Schedule 3.3 Commitments to Issue Stock or Leadtech Options
Schedule 3.4 Subsidiaries
Schedule 3.6 Sellers' Consents Required
Schedule 3.7 Financial Statements
Schedule 3.8 Taxes Owed
Schedule 3.9 Undisclosed Liabilities
Schedule 3.10 Certain Changes and Events
Schedule 3.11 Assets Not in Good Operating Condition
Schedule 3.16 Pending or Threatened Litigation
Schedule 3.20 Benefit Plans
Schedule 3.21 Employees
Schedule 3.22 Contracts with Related Parties
Schedule 3.23 Relations with Suppliers and Customers
Schedule 4.3 Buyer's Consents Required