[Exhibit 99.1]
SETTLEMENT AGREEMENT
--------------------
By and between Global Healthcare
Laboratories, Inc., Dan L. Williams & Co.,
Inc., and Med Gen, Inc. in relation to Global
Healthcare Labs., Inc., et al. v. Med Gen,
Inc., et al., Case No. CASE NO. 03-80373-CIV-
Huck/Turnoff in the U.S. District Court for
the Southern District of Florida
RECITALS
WHEREAS, on May 9, 2003, Global Healthcare Laboratories,
Inc., a Kansas corporation ("GLOBAL"), by and through its
shareholders Howard A. Gordon and Dan L. Williams; Howard A.
Gordon and Dan L. Williams, individually; and Dan L. Williams &
Co., Inc. ("DLW & CO.") (collectively, "Plaintiffs") filed suit
("the Lawsuit") against Med Gen, Inc., a Nevada Corporation ("MED
GEN") and others ("Defendants") in the U.S. District Court for
the Southern District of Florida;
WHEREAS, the Plaintiffs alleged in their complaint, among
other things, claims against MED GEN relating to a July 1, 2000,
Master Distributor Agreement;
WHEREAS, GLOBAL's and DLW & CO.'s claims against MED GEN
proceeded to a jury trial before the Hon. Paul C. Huck on July
30, 2004, through August 6, 2004;
WHEREAS, the jury returned a verdict in favor of GLOBAL and
DLW & CO. against MED GEN and awarded damages to GLOBAL and DLW &
CO.;
WHEREAS, the court entered its Final Judgment (Exhibit "A"
hereto) in favor of GLOBAL and DLW & CO. and against MED GEN on
August 31, 2004, and awarded Two Million, Four Hundred Eighty
Nine Thousand, Four Hundred Eighteen Dollars and Nineteen Cents
($2,489,418.19)[1] to GLOBAL and Eleven Thousand, Seven Hundred
Seventy-Three Dollars and No Cents ($11,773.00) to DLW & CO.,
plus post-judgment interest at the rate of 7% per annum;
WHEREAS, GLOBAL subsequently filed (i) Plaintiffs Bill of
Taxable Costs Against Defendant Med Gen and (ii) Plaintiff Global
Kansas's Verified Motion for Attorneys Fees, and MED GEN filed a
Motion for New Trial;
WHEREAS, the parties stipulate that the value of the Final
Judgment, together with Plaintiffs' motions for attorneys' fees
and costs, is $2.7 million;
WHEREAS, GLOBAL, DLW & CO., and MED GEN, the parties to this
Settlement Agreement, desire to put an end to the expense and
disruption of the Lawsuit; to provide for satisfaction of MED
GEN's obligations pursuant to the Final Judgment; and to settle
MED GEN"s potential liability under Plaintiffs' motions for
attorneys' fees and costs, by entering into this Settlement
Agreement;
TERMS OF SETTLEMENT
-------------------
NOW, THEREFORE, the parties to this agreement, GLOBAL, DLW &
CO., and MED GEN, have stipulated and agreed to enter into this
Settlement Agreement under the following terms:
1. MED GEN agrees to settle this litigation by providing to
GLOBAL and DLW & CO., and GLOBAL and DLW & CO. agree to accept in
payment of the Final Judgment (Exhibit "A" hereto), consideration
in the form of a CASH COMPONENT and STOCK COMPONENT, which are
defined below. MED GEN shall pay, and GLOBAL and DLW & CO. agree
to accept, such consideration by delivering such consideration to
GLOBAL and DLW & CO., in care of their counsel, Sheftall &
Torres, P.A., Miami, FL. GLOBAL and DLW & CO. shall apportion
said consideration among themselves, and MED GEN's payment
obligation to both firms shall be satisfied by timely delivering
said consideration to Sheftall & Torres, P.A., Miami, FL.
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[1] All figures herein are stated in United States currency.
2. Whether or not the CASH COMPONENT and STOCK COMPONENT
together prove to be of sufficient value to GLOBAL and DLW & CO.
to satisfy the face amount of the Final Judgment, plus post-
judgment interest, MED GEN will be required to pay nothing more
of value to GLOBAL and DLW & CO. in order to satisfy its
obligations under this Settlement Agreement and the Final
Judgment if MED GEN fully performs its obligations hereunder.
Accordingly, the parties understand and agree that GLOBAL and DLW
& CO. are assuming a significant risk that the face amount of the
Final Judgment will not be fully satisfied by the consideration
MED GEN is required to provide hereunder. The parties further
understand and agree that MED GEN's promises of the timely
performance of its obligations hereunder are a material
inducement to GLOBAL and DLW & CO. to enter into this Settlement
Agreement and are essential to mitigating GLOBAL's and DLW &
CO.'s risk of non-payment.
CASH COMPONENT
3. The CASH COMPONENT of consideration shall consist of Two
Hundred Thousand Dollars and No Cents ($200,000.00), payable to
the Sheftall & Torres, P.A., Trust Account in installments.
Payments shall be delivered by wire transfer to Sheftall &
Torres, P.A., on or before the dates specified below:
Payment 1: $25,000, due on December 1, 2004;
Payment 2: $25,000, due on December 20, 2004;
Payment 3: $25,000, due on January 1, 2005;
Payment 4: $50,000, due on February 1, 2005; and
Payment 5: $75,000, due on March 1, 2005.
If, however, any one or more of the conditions below occur, the
installment payments listed above shall be accelerated upon the
terms described below:
(a) The unpaid balance of such cash payments would be
accelerated to January 1, 2005, if between the date of any
public announcement of the settlement and December 31, 2004,
Med Gen stock, as quoted on the OTC Bulletin Board, has a
closing bid price at or above Thirty Cents ($0.30) per share
for five consecutive days.
(b) The unpaid balance of such cash payments would be
accelerated to February 1, 2005, if between the date of any
public announcement of the settlement and January 31, 2005,
Med Gen stock, as quoted on the OTC Bulletin Board, has a
closing bid price at or above Twenty Cents ($0.20) per share
for five consecutive days.
(c) Paul B. Kravitz, MED GEN's CEO, currently holds 2
million exercised cashless options for the purchase of MED
GEN common stock as of the date of this Settlement
Agreement. In the event that Mr. Kravitz sells any or all
of these shares and pays MED GEN the Ten Cents ($0.10)
strike price, then Med Gen will utilize these specific
payments to accelerate the installment payments owed the
Plaintiffs under the settlement.
4. Public Announcement of Settlement. MED GEN may make a
public announcement of this settlement once all parties have
fully executed this Settlement Agreement and the subsidiary
agreements attached hereto and incorporated herein. The parties
currently anticipate that this Settlement Agreement will be
executed on or before December 1, 2004, such that MED GEN may
make a public announcement of this settlement on or after
December 1, 2004. Neither GLOBAL nor DLW & CO. shall review,
edit or approve any such announcement by MED GEN prior to
publication, and neither GLOBAL nor DLW & CO. shall bear any
legal liability for the contents of any such announcement.
STOCK COMPONENT
5. The STOCK COMPONENT of consideration shall consist of
the transfer of all the right, title and interest in eight
million (8,000,000) shares of MED GEN's common stock to GLOBAL
and DLW & CO., on the terms, and subject to the limitations,
described below.
6. MED GEN will duly register with the United States
Securities & Exchange Commission (SEC) ten million, two hundred
thousand (10,200,000) shares of its treasury common stock with
full voting rights for resale by GLOBAL, DLW & CO., and others.
The Registration Statement for such shares shall be filed no
later than January 15, 2005. If said registration statement is
not filed by January 15, 2005, then MED GEN shall transfer to
GLOBAL and DLW & CO. an additional five hundred thousand
(500,000) shares of said ten million (10,200,000) shares of stock
to GLOBAL and DLW & CO. for a total of eight million, five
hundred thousand (8,500,000) shares. MED GEN shall bear all
costs and expenses of such registration.
7. MED GEN, its officers, employees, and agents shall use
their best efforts to complete the registration process within 60-
90 days, if possible, from the date the Registration Statement is
filed. Among other things, MED GEN will make prompt and timely
responses to SEC inquiries, if any, concerning the Registration
Statement. MED GEN shall not be liable for delays in the
registration's becoming effective that are solely attributable to
the SEC's actions or failure to act, or that are attributable to
other reasons that are not reasonably within MED GEN's control.
8. Within twenty-four hours of the registration becoming
effective, MED GEN shall transfer the shares in the applicable
number set forth in 6, above, to GLOBAL's and DLW & CO.'s
account at Wachovia Securities, Coral Gables, Florida. Sheftall
& Torres, P.A., will provide to MED GEN on or before January 15,
2005, specific account information necessary to effect the stock
transfer.
9. Registration of the MED GEN stock pursuant hereto
shall be governed by the Registration Rights Agreement attached
hereto at Exhibit "B."
10. The transfer of the right, title and interest in the
MED GEN stock transferred pursuant hereto shall be governed by
the Stock Transfer Agreement attached hereto at Exhibit "C."
11. Subsequent to the registration becoming effective, MED
GEN, at its own expense, shall timely file forms and disclosures
with the SEC, as necessary, in order to keep current the
registration of shares transferred for the benefit of GLOBAL and
DLW & CO., so that such shares remain freely tradable, so long as
any portion of them is held by, or for the benefit of, GLOBAL and
DLW & CO.
12. GLOBAL and DLW & CO. shall execute voting proxies
with respect to all shares received under this Settlement
Agreement in favor of Paul B. Kravitz. As mentioned above, all
shares transferred pursuant to this Settlement Agreement must be
plenary common stock shares so that upon resale in any open
market transaction by or on behalf of GLOBAL and DLW & CO. they
will confer full voting rights upon the transferees of such
shares. In the event that GLOBAL and DLW & CO. sell their shares
in a private transaction other than in an arms-length transaction
to a non-affiliate (as defined in Rule 144 under the Securities
Act of 1933, as amended), then the voting rights will not
transfer and the proxies in favor of Mr. Kravitz will remain in
effect.
13. GLOBAL and DLW & CO. shall deliver to MED GEN a complete
satisfaction of the Final Judgment when the sum of the proceeds
from the CASH COMPONENT and the STOCK COMPONENT equal $2.7
million, or on December 31, 2005, whichever occurs first. The
Satisfaction of Judgment shall be in the form attached hereto at
Exhibit "D."
14. GLOBAL and DLW & CO. agree to provide to MED GEN copies of
all filings made with the SEC in connection with their ownership
of the shares received under this Settlement Agreement.
GENERAL PROVISIONS
15. Upon the execution of this Settlement Agreement by all
parties, GLOBAL and DLW & CO. shall cause to be withdrawn in the
Lawsuit before the U.S. District Court (i) Plaintiffs Bill of
Taxable Costs Against Defendant Med Gen and (ii) Plaintiff Global
Kansas' Verified Motion For Attorneys Fees, to the extent such
motions remain pending. Likewise, MED GEN shall cause to be
withdrawn its Motion for New Trial, to the extent that motion
remains pending. Also upon the execution of this Settlement
Agreement by all parties, the parties to this Settlement
Agreement shall file a joint stipulation for dismissal of the
Lawsuit in which the parties agree that the court shall reserve
jurisdiction to enforce this Settlement Agreement. The foregoing
withdrawal of pending motions and joint stipulation for dismissal
will be accomplished through the filing of the Joint Notice of
Withdrawal of Pending Motions and Joint Stipulation for Dismissal
in the form attached hereto at Exhibit "E."
16. This Settlement Agreement and its attached exhibits sets
forth the entire agreement between the parties with respect to
its subject matter, and this Settlement Agreement and its
attached exhibits may not be altered or modified except by
written instrument executed by all parties hereto. The parties
expressly acknowledge that no other agreements, arrangements or
understandings not expressed in this Settlement Agreement exist
among or between them. This Settlement Agreement shall prevail
over any and all prior communications regarding the matters
addressed herein.
17. Time is of the essence of this agreement.
18. In the event of any ambiguity, the parties acknowledge that
they have jointly participated in the drafting of this Settlement
Agreement, and it shall not be construed against any party.
19. Unless otherwise expressly provided herein, legal
notices and other papers to be delivered by and to the parties in
connection with the implementation of this Settlement Agreement
shall be provided either by (1) facsimile and/or next-day
(excluding Saturday and Sunday) express delivery service, or (2)
certified mail, to the following persons on behalf of the
respective parties:
(a) If to GLOBAL and/or DLW & CO., then to: Scott D.
Sheftall, Esq., Sheftall & Torres, P.A., 100 S.E. Second
Street, Suite 2220, Miami, Florida 33131-2151, Telephone:
(305) 358-5959, Facsimile: (305) 358-5958;
(b) If to MED GEN, then to: Paul B. Kravitz, 7284 W.
Palmetto Park Rd., Suite 207, Boca Raton, Florida 33433,
Telephone: (561) 750-1100, Facsimile: (561) 750-6239.
20. All time periods set forth herein shall be computed in
calendar days unless otherwise expressly provided. In computing
any period of time prescribed or allowed by this Settlement
Agreement, the day of the act, event, or default from which the
designated period of time begins to run shall not be included.
The last day of the period so computed shall be included, unless
it is a Saturday, a Sunday or a legal holiday recognized by the
Federal Rules of Civil Procedure, or, when the act to be done is
the filing of a paper in court, a day on which weather or other
conditions have made the office of the clerk of the court
inaccessible, in which event the period shall run until the end
of the next day that is not one of the aforementioned days.
21. The parties, their successors and assigns, and their
counsel undertake to implement the terms of this Settlement
Agreement in good faith, and to use good faith in resolving any
disputes that may arise in the implementation of the terms of
this Settlement Agreement.
22. This Settlement Agreement may be signed in
counterparts, each of which shall constitute a duplicate
original.
Agreed as of the ____ day of December, 2004.
APPROVED AND AGREED TO BY AND ON BEHALF OF:
Global Healthcare Laboratories, Inc.
By:_______________________________________
HOWARD A. GORDON, PRESIDENT
Dan L. Williams & Co., Inc.
By:_______________________________________
DAN L. WILLIAMS, PRESIDENT
Med Gen, Inc.
By: ________________________________________
PAUL B. KRAVITZ, Chief Executive Officer
Exhibit A to Settlement Agreement
STOCK TRANSFER AGREEMENT
------------------------
THIS STOCK TRANSFER AGREEMENT is made and entered into as of
December 9, 2004 by and among MED GEN, INC., a Nevada corporation
(the "Company"), and GLOBAL HEALTHCARE LABORATORIES, INC., a
Kansas corporation ("Global"), and DAN L. WILLIAMS & COMPANY,
INC., a Kansas corporation ("Williams").
1. Authorization. The Company has authorized the issuance and
acquisition by Global and Williams, subject to the terms and
conditions of this Agreement and of the Settlement Agreement,
dated as of the date hereof (the "Settlement Agreement"), among
the parties hereto, of up to 8,500,000 shares of common stock,
par value $.001 per share (the "Common Stock"), of the Company.
2. Agreement to Issue and Acquire. On the basis of the
representations and warranties contained in this Agreement, and
subject to its terms and conditions, on the Transfer Date (as
hereinafter defined), the Company shall issue and transfer to
Global and Williams and Global and Williams shall acquire from
the Company, the respective number of shares of Common Stock set
forth in the Settlement Agreement (collectively, the "Shares")
for the consideration set forth in the Settlement Agreement.
3. Issuance. The issuance and transfer of the Shares shall
take place at the offices of Sheftall & Torres, P.A., 100
Southeast Second Street, Suite 2220, Miami, Florida 33131, at
10:00 a.m., Miami time, on the date immediately after the
satisfaction or waiver of all conditions specified in Sections 4
and 5 hereof, including, without limitation, the effectiveness of
the Registration Statement (as hereinafter defined). The time
and date of such issuance and transfer are hereinafter defined as
the "Transfer Date." Certificates evidencing the Shares acquired
by Global and Williams hereunder shall be registered as provided
in the Settlement Agreement, or as otherwise instructed by Global
or Williams in writing. The certificates evidencing the Shares
shall be delivered to Global and Williams on the Transfer Date,
with any transfer taxes payable in connection with the transfer
of such Shares duly paid.
4. Conditions to the Company's Obligations. The Company's
obligations to issue the Shares to Global and Williams and
consummate the transactions contemplated by this Agreement on the
Transfer Date are subject to satisfaction of the following
conditions:
(a) All representations and warranties of Global and Williams
contained in this Agreement shall be true and correct in all
material respects (if not qualified by materiality) or in all
respects (if qualified by materiality) at and as of the Transfer
Date with the same effect as though such representations and
warranties were made at and as of the Transfer Date;
(b) Global and Williams shall have performed and complied in all
material respects with all the covenants and agreements required
by this Agreement and the Settlement Agreement to be performed or
complied with by them hereunder or thereunder at or prior to the
Transfer Date;
(c) The Company shall have received from each of Global and
Williams on the Transfer Date a certificate, dated as of the
Transfer Date and signed by an executive officer of Global or
Williams, as the case may be, to the effect that the
representations and warranties of Global or Williams contained in
this Agreement are true and correct in all material respects (if
not qualified by materiality) or in all respects (if qualified by
materiality) at and as of the Transfer Date with the same effect
as though such representations and warranties were made at and as
of the Transfer Date and that Global and Williams has performed
and complied in all material respects with all of the covenants
and agreements required by this Agreement and the Settlement
Agreement to be performed or complied with by it hereunder or
thereunder at or prior to the Transfer Date; and
(d) All material documents, instruments and other items required
by this Agreement to be delivered by Global and Williams to the
Company at or prior to the Transfer Date shall have been
delivered to the Company at or prior to the Transfer Date.
5. Conditions to Global's and Williams' Obligations. The
obligations of Global and Williams to acquire the Shares and
consummate the transactions contemplated by this Agreement on the
Transfer Date are subject to the following conditions:
(a) All representations and warranties of the Company contained
in this Agreement shall be true and correct in all material
respects (if not qualified by materiality) or in all respects (if
qualified by materiality) at and as of the Transfer Date with the
same effect as though such representations and warranties were
made at and as of the Transfer Date;
(b) The Company shall have performed and complied in all
material respects with all the covenants and agreements required
by this Agreement, the Registration Rights Agreement (as
hereinafter defined) and the Settlement Agreement to be performed
or complied with by the Company hereunder or thereunder at or
prior to the Transfer Date;
(c) Global and Williams shall have received from the Company on
the Transfer Date a certificate, dated as of the Transfer Date
and signed by an executive officer of the Company, to the effect
that the representations and warranties of the Company contained
in this Agreement are true and correct in all material respects
(if not qualified by materiality) or in all respects (if
qualified by materiality) at and as of the Transfer Date with the
same effect as though such representations and warranties were
made at and as of the Transfer Date and that the Company has
performed and complied in all material respects with all of the
covenants and agreements required by this Agreement, the
Registration Rights Agreement and the Settlement Agreement to be
performed or complied with by the Company hereunder or thereunder
at or prior to the Transfer Date;
(d) All material governmental and/or regulatory consents,
approvals, orders or authorizations necessary for the
consummation of the transactions contemplated hereby shall have
been obtained, all material governmental and/or regulatory
filings and notices necessary for the consummation of the
transactions contemplated hereby shall have been made or given,
as the case may be, and all material third-party consents
necessary for the consummation of the transactions contemplated
hereby shall have been obtained;
(e) The Company shall have delivered to Global and Williams at
the Transfer Date duly executed certificates representing the
Shares to be delivered at the Transfer Date registered as
provided in the Settlement Agreement or as otherwise instructed
by Global or Williams in writing;
(f) The Company shall have delivered or caused to be delivered
to Global and Williams at the Transfer Date an opinion of counsel
for the Company, dated the Transfer Date, to the effect set forth
in Exhibit A ("Company's Opinion of Counsel");
(g) All actions required to be taken by the Company under
Section 607.0902 of the Florida Business Corporation Act
necessary to cause the acquisition by Global and Williams of the
Shares pursuant to this Agreement to not constitute a "control-
share acquisition" as defined therein shall have been taken;
(h) The Company and its Board of Directors shall have taken all
actions required to be taken in order to render inapplicable to
this Agreement, the issuance of the Shares and the other
transactions contemplated hereunder the provisions of all anti-
takeover and related, affiliated interested party or control-
share transaction laws and regulations of any jurisdiction,
including, without limitation, Sections 78.378 to 78.3793 and
78.411 to 78.444 of the Nevada Revised Statutes;
(i) The Company shall have provided to Global and Williams a
true and correct copy, certified by the Company's secretary, of
the resolutions of the Company's Board of Directors approving
this Agreement, the Registration Rights Agreement, the Settlement
Agreement and the transactions contemplated hereby and thereby;
(j) Between the date hereof and the Transfer Date, (i) there
shall not have occurred any material adverse event affecting the
Company or any of its subsidiaries or any of their respective
businesses, operations, financial conditions, assets or
liabilities (contingent or otherwise) and (ii) the Company shall
not have restated or announced its intention to restate any
portion of its financial statements as included in any filing
with the Securities and Exchange Commission (the "SEC") or in any
press release or other form of media;
(k) All material documents, instruments and other items required
by this Agreement to be delivered by the Company to Global and
Williams at or prior to the Transfer Date shall have been
delivered to Global and Williams at or prior to the Transfer
Date; and
(l) The registration statement (the "Registration Statement")
filed by the Company pursuant to the Registration Rights
Agreement, dated as of the date hereof (the "Registration Rights
Agreement"), among the parties hereto shall have become
effective, no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings
for that purpose shall have been instituted, or to the knowledge
of the Company, shall be contemplated by the SEC.
6. Representations, Warranties and Covenants of the Company.
The Company represents and warrants to, and covenants with,
Global and Williams that:
(a) The Company has on a timely basis filed all forms, reports
and documents required to be filed by it with the SEC since
January 1, 2002. Except to the extent available on the SEC's web
site through the Electronic Data Gathering, Analysis and
Retrieval System ("EDGAR") two (2) days prior to the date of this
Agreement, Schedule 6(a) lists, or the Company has delivered to
Global and Williams copies in the form filed with the SEC of, (i)
the Company's Annual Reports on Form 10-KSB for each fiscal year
of the Company beginning since January 1, 2002, (ii) the
Company's Quarterly Reports on Form 10-QSB for each of the first
three fiscal quarters in each of the fiscal years of the Company
referred to in clause (i) above, (iii) all proxy statements
relating to the Company's meetings of shareholders (whether
annual or special) held, and all information statements relating
to shareholder consents since the beginning of the first fiscal
year referred to in clause (i) above, (iv) all certifications and
statements required by (x) the SEC's Order dated June 27, 2002
pursuant to Section 21(a)(1) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (File No. 4-460), (y) Rule
13a-14 or 15d-14 under the Exchange Act or (z) 18 U.S.C. 1350
(Section 906 of the Sarbanes-Oxley Act of 2002 ("SOX")) with
respect to any report referred to in clause (i), (ii) or (iii)
above, (v) all other forms, reports, registration statements and
other documents (other than preliminary materials if the
corresponding definitive materials have been provided to Global
and Williams pursuant to this Section 6(a)) filed by the Company
with the SEC since the beginning of the first fiscal year
referred to in clause (i) above (the forms, reports, registration
statements and other documents referred to in clauses (i), (ii),
(iii), (iv) and (v) above (including those filed after the date
hereof) are, collectively, referred to as the "Company SEC
Documents"), and (vi) all comment letters received by the Company
from the Staff of the SEC since January 1, 2002 and all responses
to such comment letters by or on behalf of the Company. To the
date of the Transfer Date, the Company SEC Documents (x) were or
will be prepared, in all material respects, in accordance with
the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, as the case may be, and
the rules and regulations thereunder and (y) did not at the time
they were filed with the SEC, or will not at the time they are
filed with the SEC, contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were
made, not misleading. No subsidiary of the Company is or has
been required to file any form, report, registration statement or
other document with the SEC. The Company maintains disclosure
controls and procedures required by Rule 13a-15 or 15d-15 under
the Exchange Act; and such controls and procedures are effective
to provide reasonable assurance that all material information
concerning the Company and its subsidiaries is made known on a
timely basis to the individuals responsible for the preparation
of the Company's filings with the SEC and other public disclosure
documents. To the Company's knowledge, except as otherwise
disclosed in the Company SEC Documents, each director and
executive officer of the Company has filed with the SEC on a
timely basis all statements required by Section 16(a) of the
Exchange Act and the rules and regulations thereunder since
January 1, 2000. As used in this Section 6(a), the term "file"
shall be broadly construed to include any manner in which a
document or information is furnished, supplied or otherwise made
available to the SEC.
(b) Except as otherwise disclosed in the Company SEC Documents,
the financial statements of the Company and its subsidiaries
included in the Company SEC Documents (including the related
notes) complied and will comply as to form, as of their
respective dates of filing with the SEC, in all material respects
with applicable accounting requirements and the published rules
and regulations of the SEC with respect thereto (including,
without limitation, Regulation S-X), have been and will be
prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (except, in the case of
unaudited statements, to the extent permitted by Regulation S-X
for Quarterly Reports on Form 10-QSB) applied on a consistent
basis during the periods and at the dates involved (except as may
be indicated in the notes thereto) and fairly present and will
fairly present, in all material respects, the consolidated
financial condition of the Company and its subsidiaries at the
dates thereof and the consolidated results of operations and cash
flows for the periods then ended (subject, in the case of
unaudited statements, to notes or the absence thereof and normal
year-end audit adjustments that were not, or with respect to any
such financial statements contained in any Company SEC Documents
to be filed subsequent to the date hereof are not reasonably
expected to be, material in amount or effect). Except (A) as
reflected in the Company's audited balance sheet at September 30,
2003 or liabilities described in any notes thereto (or
liabilities for which neither accrual nor footnote disclosure is
required pursuant to GAAP), (B) for liabilities incurred in the
ordinary course of business since September 30, 2003 consistent
with past practice or in connection with this Agreement, the
Registration Rights Agreement or the Settlement Agreement, or the
transactions contemplated hereby and thereby, (C) otherwise
disclosed in the Company SEC Documents, or (D) otherwise set
forth in Schedule 6(b) hereto, to the knowledge of the Company,
neither the Company nor any of its subsidiaries has any material
liabilities or obligations of any nature. The Company has been
in compliance with all rules and regulations promulgated in
response to SOX with respect to non-audit services performed by
its independent auditors since the date of the enactment of such
rules and regulations.
(c) The Company (i) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
Nevada, (ii) has the corporate power and authority to own, lease,
use and operate its properties and to conduct its business as
currently conducted and as described in the Company SEC Documents
and (iii) is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its
business or its ownership, leasing, use or operation of its
property requires such qualification, except in connection with
the representation in clause (iii) where the failure to be so
qualified as a foreign corporation would not have a material
adverse effect on the Shares, the assets, liabilities, business,
properties, operations, financial condition or results of
operations of the Company and/or its subsidiaries, the
transactions contemplated hereby or by the agreements or
instruments to be entered into in connection herewith or the
authority or the ability of the Company to perform its
obligations under this Agreement, or the other agreements or
instruments to be entered into in connection herewith (a
"Material Adverse Effect").
(d) Except as set forth in Schedule 6(d), the Company SEC
Documents set forth the name of each subsidiary of the Company or
other entity in which the Company owns, directly or indirectly,
any equity or debt interest or any form of proprietary interest,
or any obligation, right or option to acquire any such interest,
and the jurisdiction of its formation. Each subsidiary of the
Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to
own, lease, use and operate its properties and to conduct its
business as currently conducted and described in the Company SEC
Documents and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its
business or its ownership, leasing, use or operation of property
requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. Except as
set forth in Schedule 6(d), all of the issued shares of capital
stock of each subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable
and are owned directly by the Company, free and clear of all
liens, encumbrances, equities or claims.
(e) Each of this Agreement, the Registration Rights Agreement,
the Settlement Agreement and the other agreements and documents
executed and/or delivered by the Company in connection herewith
has been duly authorized, executed and delivered by, and is a
valid and binding agreement of, the Company, enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws of general
application affecting creditors' rights generally and general
principles of equity. The Company has all requisite corporate
power and authority to enter into and perform this Agreement, the
Registration Rights Agreement, the Settlement Agreement, and the
other agreements and documents executed and/or delivered by the
Company in connection herewith and to consummate the transactions
contemplated hereby and thereby and to issue the Shares, in
accordance with the terms hereof and thereof.
(f) The authorized capital stock of each of the Company and its
subsidiaries conforms as to legal matters to the description
thereof contained in the Company SEC Documents. As of the date
of this Agreement, the authorized capital stock of the Company
consists only of (i) 50,000,000 shares of Common Stock of which
28,936,447 shares are issued and outstanding, 8,135,852 shares
are reserved for issuance pursuant to the Company's stock option
plans, and no shares are reserved for issuance pursuant to
securities exercisable for, or convertible into or exchangeable
for shares of Common Stock and (ii) 5,000,000 shares of preferred
stock, of which no shares are issued and outstanding or reserved
for issuance pursuant to securities exercisable for or
convertible into or exchangeable for shares of preferred stock.
All outstanding shares of capital stock of the Company are duly
authorized, validly issued, fully paid and nonassessable. No
shares of capital stock of the Company or any of its subsidiaries
are subject to preemptive rights or any other similar rights of
the shareholders of the Company or any of its subsidiaries or any
liens or encumbrances imposed through the actions or failure to
act of the Company or any of its subsidiaries. Except as
disclosed prior to the date hereof in the Company SEC Documents,
(i) there are no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any
character whatsoever that have been granted by the Company
relating to, or securities or rights convertible into or
exchangeable for any shares of capital stock of the Company or
any of its subsidiaries, or arrangements by which the Company or
any of its subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no agreements or arrangements under
which the Company or any of its subsidiaries is obligated to
register the sale of any of its or their securities under the
Securities Act (except as provided in the Registration Rights
Agreement) and (iii) there are no anti-dilution or price
adjustment provisions contained in any security issued by the
Company (or in any agreement providing rights to security
holders) that will be triggered by the issuance of the Shares.
The Company SEC Documents contain true and correct copies of the
Articles of Incorporation of the Company as in effect on the date
hereof, the By-laws of the Company as in effect on the date
hereof and the terms of all securities convertible into or
exercisable for Common Stock of the Company or capital stock of
each of its subsidiaries and the material rights of the holders
thereof in respect thereto.
(g) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement and the
Settlement Agreement, will be validly issued, fully paid and non-
assessable, and free from all taxes, liens, claims and
encumbrances with respect to the issue thereof and will not be
subject to any preemptive or similar rights and Global and
Williams shall have received good title with respect to the
Shares.
(h) Except as set forth in Schedule 6(h) hereto, the execution,
delivery and performance of this Agreement, the Registration
Rights Agreement and the Settlement Agreement by the Company and
the consummation by the Company of the transactions contemplated
hereby and thereby (including, without limitation, the issuance
of the Shares) will not (i) conflict with or result in a
violation of any provision of the Articles of Incorporation or
By-laws of the Company or (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could
become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, contract, indenture, patent, patent license or
instrument to which the Company or any of its subsidiaries is a
party, or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulations of any
self-regulatory organizations to which the Company or any of its
subsidiaries or their securities are subject) applicable to the
Company or any of its subsidiaries or by which any property or
asset of the Company or any of its subsidiaries is bound or
affected. Neither the Company nor any of its subsidiaries is in
violation of its respective Articles of Incorporation, By-laws or
other organizational documents and neither the Company nor any of
its subsidiaries is in default (and no event has occurred which
with notice or lapse of time or both could put the Company or any
of its subsidiaries in default) under, and neither the Company
nor any of its subsidiaries has taken any action or failed to
take any action that would give to others any rights of
termination, amendment, acceleration or cancellation of, any
agreement, contract, indenture or instrument to which the Company
or any of its subsidiaries is a party or by which any property or
assets of the Company or any of its subsidiaries is bound or
affected. The businesses of the Company and its subsidiaries are
not being conducted in violation of any law, ordinance or
regulation of any governmental entity, except to the extent that
the failure to so conduct such businesses does not and will not
have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and the Settlement Agreement and
as required under the Securities Act and any applicable state
securities laws and by the rules and regulations of the OTC
Bulletin Board, the Company is not required to obtain any
consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory
agency, or self regulatory organization or stock market or third
party in order for it to execute, deliver or perform any of its
obligations under this Agreement, the Registration Rights
Agreement or the Settlement Agreement or any other agreements
executed and delivered by it in accordance with the terms hereof
or thereof or to issue the Shares in accordance with the terms
hereof. All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to
the preceding sentence have been obtained or effected or will be
obtained or effected on or prior to the Transfer Date.
(i) Except as set forth on Schedule 6(i) hereto or as disclosed
prior to the date hereof in the Company SEC documents, there has
not occurred any material adverse change, or any development
involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business
or operations of the Company and/or any of its subsidiaries,
taken as a whole, since September 30, 2003.
(j) There are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened, to which the Company
or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject
other than proceedings accurately disclosed prior to the date
hereof in the Company SEC Documents or set forth on Schedule 6(j)
hereto.
(k) Except as set forth in Schedule 6(k) hereto or the Company
SEC Documents prior to the date hereof, and except where such has
not had and could not reasonably be expected to have a Material
Adverse Effect, on the Company or, any of its subsidiaries, the
Company and each of its subsidiaries (i) have obtained all
applicable permits, licenses and other authorizations, including
the Company Permits (as hereinafter defined), which are required
to be obtained under all applicable federal, state or local laws
or any applicable regulation, code, plan, order, decree,
judgment, notice or demand letter issued, entered, promulgated or
approved thereunder relating to pollution or protection of the
environment ("Environmental Laws"), including laws relating to
emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic material or
wastes, including petroleum, into ambient air, surface water,
ground water or land or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or hazardous or
toxic materials or wastes, including petroleum, by the Company or
any of its subsidiaries (or their respective agents); (ii) are in
compliance with all Environmental Laws and all terms and
conditions of such required permits, licenses and authorizations,
and also are in compliance with all other applicable limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in applicable
Environmental Laws; (iii) as of the date hereof, are not aware of
nor have received notice of any uncured past or present
violations of Environmental Laws or any event, condition,
circumstance, activity, practice, incident, action or plan which
is reasonably likely to interfere with or prevent continued
compliance with Environmental Laws or which could give rise to
any material capital expenditure or common law or statutory
liability, or otherwise form the basis of any claim, action, suit
or proceeding against the Company or any of its subsidiaries
under any Environmental Law or otherwise based on or resulting
from the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, handling, emission, discharge or
release into the environment of any pollutant, contaminant, or
hazardous or toxic material or waste, including petroleum; (iv)
have taken all actions necessary under applicable Environmental
Laws to register any products or materials required to be
registered by the Company or any of its subsidiaries (or any of
their respective agents) thereunder and (v) none of the Company
nor any of its subsidiaries has entered into any agreement to
undertake or pay for any response action of any kind or nature or
to pay any damages (including punitive damages), costs, fines or
penalties associated with any release or threatened release of
any pollutant, contaminant or hazardous or toxic material or
waste, including petroleum, at any location.
(l) The Company and its subsidiaries own or possess all patents,
patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names currently employed by
them in connection with the business now operated by them, and
neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing.
(m) The Company is not, and after giving effect to the issue of
the Shares will not be, required to register as an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
(n) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Company has, directly, or through any agent, (i) sold,
offered for sale, solicited offers to buy or otherwise negotiated
in respect of, any security (as defined in the Securities Act)
which is or will be integrated with the offer or issue of the
Shares in a manner that would require the registration under the
Securities Act of the Shares; or (ii) offered, solicited offers
to buy or issued the Shares by any form of general solicitation
or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities
Act; and neither the Company nor any Affiliate of the Company
will engage in any of the actions described in clauses (i) and
(ii) of this paragraph.
(o) Subject to the accuracy of Global's and Williams'
representations herein, it is not necessary in connection with
the offer, issuance and delivery of the Shares to Global and
Williams in the manner contemplated by this Agreement to register
the Shares under the Securities Act.
(p) The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to
the issuance of the Shares and the listing or quotation of the
Shares.
(q) The Company has not taken and will not, in violation of
applicable law, take any action designed to or that might
reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the
sale or resale of the Shares.
(r) The Company is eligible to file with the SEC a registration
statement on Form SB-2 for purposes of registering the resale of
the Shares.
(s) No shareholder of the Company or any other person has any
right (which has not been waived) to require the Company to
register the sale of any shares owned by such shareholder or
person under the Securities Act in the Registration Statement to
be filed by the Company on behalf of Global and Williams;
provided, however, that the Settlement Agreement contemplates
that up to 2,200,000 additional shares of Common Stock may be
included in the Registration Statement.
(t) Except as otherwise disclosed in the Company SEC Documents
prior to the date hereof, the Company and each of its
subsidiaries has made or filed, or properly filed for an
extension with respect to, all federal, state and foreign income
and all other tax returns, reports and declarations required by
any jurisdiction to which it is subject (unless and only to the
extent that the Company and each of its subsidiaries has set
aside on its books provisions reasonably adequate for the payment
of all unpaid and unreported taxes) and has paid all taxes and
other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and
has set aside on its books provisions reasonably adequate for the
payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. Except as
otherwise disclosed in the Company SEC Documents or on Schedule
6(t), there are no unpaid taxes in any material amount claimed to
be due to the taxing authority of any jurisdiction, and the
officers of the Company know of no basis for any such claim.
Except as otherwise disclosed in the Company SEC Documents prior
to the date hereof, neither the Company nor any of its
subsidiaries has executed a waiver with respect to the statute of
limitations relating to the assessment or collection of any
foreign, federal, state or local tax.
(u) Except as otherwise disclosed in the Company SEC Documents
prior to the date hereof, except for arm's length transactions
pursuant to which the Company or any of its subsidiaries makes
payments in the ordinary course of business upon terms no less
favorable than the Company or any of its subsidiaries could
obtain from third parties, each of which is set forth in the
Company SEC Documents prior to the date hereof, none of the
officers, directors, or employees of the Company or any of its
subsidiaries is presently a party to any transaction with the
Company or any of its subsidiaries (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from
any officer, director or such employee or, to the knowledge of
the Company, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or
partner.
(v) All information relating to or concerning the Company or any
of its subsidiaries set forth in this Agreement is true and
correct in all material respects as of the date hereof and the
Company has not omitted to state any material fact necessary in
order to make the statements made herein, in light of the
circumstances under which they were made, not misleading.
(w) The Company and each of its subsidiaries are in possession
of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates,
approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being
conducted (collectively, the "Company Permits"), except where the
failure to so possess such Company Permits would not have a
Material Adverse Effect, and there is no action pending or, to
the knowledge of the Company, threatened regarding suspension or
cancellation of any of the Company Permits. Neither the Company
nor any of its subsidiaries is in conflict with, or in default or
violation of, any of the Company Permits, except for such
conflicts, defaults or violations which would not have a Material
Adverse Effect.
(x) To the knowledge of the Company, each of the Company and its
subsidiaries has good and marketable title in fee simple to all
real property owned by it, free and clear of all liens,
encumbrances and defects except (x) liens for real estate taxes
not yet due and payable and (y) recorded easements, covenants,
and other restrictions of record which do not impair the current
use, occupancy or value of the property subject thereto. Any
real property and facilities held under lease by the Company
and/or its subsidiaries are held by them under valid, subsisting
and enforceable leases.
(y) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be
prudent and customary in the businesses in which the Company and
its subsidiaries are engaged. Neither the Company nor any such
subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a comparable cost.
(z) Except as set forth in Schedule 6(z) hereto, neither the
Company nor any of its subsidiaries, nor, to the knowledge of the
Company, any director, officer, agent, employee or other person
acting on behalf of the Company or any of its subsidiaries has,
in the course of his actions for, or on behalf of, the Company or
any of its subsidiaries, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or
indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or
domestic government official or employee.
(aa) The Company (both before and after giving effect to the
transactions contemplated by this Agreement) and, each of its
subsidiaries is solvent (i.e., its assets have a fair market
value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and
matured) and currently the Company has no information that would
lead it to reasonably conclude that the Company or any of its
subsidiaries would not have the ability to, nor does it intend to
take any action that would impair its ability to, pay its debts
from time to time incurred in connection therewith as such debts
mature.
(bb) The Company has not, since the enactment of SOX, extended
credit, arranged for the extension of credit, or renewed an
extension of credit, in the form of a personal loan to or for any
director or executive officer (or equivalent thereof) of the
Company. The Company SEC Documents identify any loan or
extension of credit maintained by the Company to which the second
sentence of Section 13(k)(1) of the Exchange Act applies. Each
of the Company, its directors and its senior financial officers
has consulted with the Company's independent auditors and with
the Company's outside counsel with respect to, and (to the extent
applicable to the Company) is familiar in all material respects
with all of the requirements of, SOX. The Company is in
compliance with the provisions of SOX applicable to it as of the
date hereof and has implemented such programs and has taken
reasonable steps, upon the advice of the Company's independent
auditors and outside counsel, respectively, to ensure the
Company's future compliance (not later than the relevant
statutory and regulatory deadlines therefor) with all provisions
of SOX which shall become applicable to the Company after the
date hereof.
(cc) No duties, liabilities or obligations of the Company vest,
accelerate or become due and owing as a result of the Company's
concluding the transactions contemplated by this Agreement
including, without limitation, loan payments to affiliates,
salary continuation payments, employment benefits, or any other
Company duties, liabilities or obligations whether owed to
shareholders, employees, affiliates or unrelated third parties.
7. Representations, Warranties and Covenants of Global and
Williams.
Global and Williams each represents and warrants to, and
covenants with, the Company in each case severally but not
jointly, as follows:
(a) It and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of
the Company and materials relating to the offer and issuance of
the Shares which have been requested by them. It is acquiring
the Shares for its own account for investment only and with no
present intention of distributing any of the Shares or any
arrangement or understanding with any other persons regarding the
distribution of the Shares, other than as contemplated in the
Registration Rights Agreement or pursuant to sales registered or
exempted from registration under the Securities Act; provided,
however, that by making the representations herein, it does not
agree to hold any of the Shares for any minimum or other specific
term and reserves the right to dispose of the Shares at any time
in accordance with applicable law and the provisions of this
Agreement.
(b) It will not, directly or indirectly, offer, sell, pledge,
transfer or otherwise dispose of (or solicit offers to buy,
purchase or otherwise acquire or take a pledge of) any of the
Shares, except in compliance with the Securities Act and the
applicable rules and regulations of the SEC thereunder.
Notwithstanding the foregoing or anything else contained herein
to the contrary, nothing herein shall restrict the Shares from
being pledged as collateral in connection with a bona fide margin
account or other lending arrangement provided such pledge is
effected in compliance with applicable law.
(c) It will not make any sale of the Shares without complying
with the provisions of this Agreement and without causing the
prospectus delivery requirement, if any, under the Securities Act
to be satisfied, and it acknowledges that, until such time as the
Shares have been registered under the Securities Act as
contemplated by the Registration Rights Agreement or otherwise
may be sold pursuant to Rule 144 under the Securities Act ("Rule
144") without any restriction as to the number of securities as
of a particular date that can then be immediately sold, the
Shares may bear a restrictive legend in substantially the
following form:
The securities represented by this
certificate have been acquired directly or
indirectly from the Company without being
registered under the Securities Act of 1933,
as amended (the "Act"), or any other
applicable securities laws, and are
restricted securities as that term is defined
under Rule 144 promulgated under the Act.
These securities may not be sold, pledged,
transferred, distributed or otherwise
disposed of in any manner ("Transfer") unless
they are registered under the Act and any
other applicable securities laws, or unless
the request for Transfer is accompanied by a
favorable opinion of counsel, reasonably
satisfactory to the Company, stating that the
Transfer will not result in a violation of
the Act or any other applicable securities
laws.
The Company shall cause the legend set forth above to be removed
and the Company shall issue a certificate without such legend to
the holder of any Shares upon which it is stamped if (a) such
Shares are sold under an effective registration statement filed
under the Securities Act or (b) such holder provides the Company
with reasonable assurances that such Shares can be sold pursuant
to Rule 144(k) without any restriction as to the number of
securities as of a particular date that can then be immediately
sold.
(d) It acknowledges that it has had the opportunity to ask
questions of and receive answers from qualified representatives
of the Company concerning the terms and conditions of this
Agreement and of the Shares to be issued hereunder, as well as
the information contained in the Company SEC Documents.
(e) It acknowledges that it is a sophisticated investor familiar
with the type of risks inherent in the acquisition of securities
such as the Shares and that, by reason of its knowledge and
experience in financial and business matters in general, and
investments of this type in particular, and the knowledge and
experience in financial and business matters of its
representatives and agents, it is capable of evaluating the
merits and risks of an investment by it in the Shares.
(f) It is able to bear the economic risk of an investment in the
Shares, including, without limiting the generality of the
foregoing, the risk of losing part or all of its investment in
the Shares.
(g) It recognizes that investment in the Shares involves
substantial risks. It further recognizes that no Federal or
State agencies have passed upon this offering of the Shares or
made any findings or determination as to the fairness of this
investment.
(h) It is not acquiring the Shares as a result of or subsequent
to any general advertisement, article, notice or other
communication published in any newspaper, magazine, or similar
media or broadcast over television or radio or presented at any
seminar.
(i) Each of this Agreement, the Registration Rights Agreement,
the Settlement Agreement and the other agreements and documents
executed and/or delivered by it in connection herewith has been
duly authorized, executed and delivered by, and is a valid and
binding agreement of, it, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general application
affecting creditors' rights generally and general principles of
equity. It has all requisite power and authority to enter into
and perform this Agreement, the Registration Rights Agreement,
the Settlement Agreement and the other agreements and documents
executed and/or delivered by it in connection herewith and to
consummate the transactions contemplated hereby and thereby.
(j) The execution, delivery and performance of this Agreement,
the Registration Rights Agreement, the Settlement Agreement and
any other agreements executed and delivered by it, and the
consummation by it of the transactions contemplated hereby and
thereby will not (i) conflict with or result in a violation of
any provision of its charter or organizational documents, or (ii)
violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which with notice or
lapse of time or both could become a default) under, or give to
others any rights of termination, amendment, acceleration or
cancellation of, any agreement, contract, indenture, patent,
patent license or instrument to which it is a party, or (iii) to
result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws
and regulations) applicable to it or by which any of its property
or assets is bound or affected. Except as specifically
contemplated by this Agreement and the Settlement Agreement and
as required under the Securities Act and any applicable state
securities laws and by the rules and regulations of the OTC
Bulletin Board, it is not required to obtain any consent,
authorization or order of, or make any filing or registration
with, any court, governmental agency, regulatory agency, or self
regulatory organization or stock market or third party in order
for it to execute, deliver or perform any of its obligations
under this Agreement, the Registration Rights Agreement or the
Settlement Agreement, or any other agreements executed and
delivered by it in accordance with the terms hereof or thereof.
All consents, authorizations, orders, filings and registrations
which it is required to obtain pursuant to the preceding sentence
have been obtained or effected or will be obtained or effected on
or prior to the Transfer Date.
(k) It acknowledges that the Company has relied on the
representations contained herein in making its determination that
a statutory basis for exemption from the requirements of Section
5 of the Securities Act currently exists.
8. Additional Covenants of the Company and/or Global and
Williams.
(a) During the period from the date of this Agreement to the
Transfer Date, the Company shall permit Global and Williams and
their representatives to have reasonable access to the directors,
officers, employees, agents, assets and properties of the Company
and each of its subsidiaries and all relevant books, records and
documents of or relating to the Company and each of its
subsidiaries and each of their respective businesses and assets
during normal business hours and will furnish to Global and
Williams such information, financial records and other documents
relating to the Company and each of its subsidiaries and their
respective business and assets as Global and Williams may
reasonably request. Access to such information by Global and
Williams shall be effected through the granting of access by the
Company to Global and Williams and shall be governed by a
confidentiality agreement to be agreed to among the Company,
Global and Williams.
(b) The Company agrees at its expense to file a Form D with
respect to the Shares as required under Regulation D and to
provide a copy thereof to Global and Williams promptly after such
filing. The Company shall at its expense, on or before the
Transfer Date, take such action as the Company shall reasonably
determine is necessary to qualify the Shares for sale to Global
and Williams at the Transfer Date under applicable securities or
"blue sky" laws of the states of the United States (or to obtain
an exemption from such qualification), and shall provide evidence
of any such action so taken to Global and Williams on or prior to
the Transfer Date.
(c) Prior to the Transfer Date, the Company shall at all times
have authorized, and reserved for the purpose of issuance, a
sufficient number of shares of Common Stock to provide for the
maximum number of Shares issuable pursuant to the Settlement
Agreement.
(d) The Company shall promptly secure the listing of the Shares
upon each national securities exchange, the OTC Bulletin Board or
automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance)
and, as long as Global and Williams owns any of the Shares, shall
maintain, so long as any other shares of Common Stock shall be so
listed, such listing of all Shares. The Company will comply in
all respects with the Company's reporting, filing and other
obligations under the bylaws or rules of the National Association
of Securities Dealers ("NASD") to the extent, and on such other
exchanges upon which, shares of the Company's Common Stock are
then listed.
(e) The Company covenants and agrees that, unless Global and
Williams shall have consented in writing (which consent, in the
case of (vii) below, shall not be unreasonably withheld), neither
the Company nor any of its subsidiaries shall, between the date
of this Agreement and the Transfer Date, directly or indirectly
do or propose or agree to do any of the following:
(i) amend or otherwise change its Articles of Incorporation or
Bylaws or equivalent organizational documents;
(ii) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(iii) reclassify, combine, recapitalize, split, subdivide,
exchange or redeem, purchase or otherwise acquire, directly or
indirectly, any of its capital stock;
(iv) take any action other than in the ordinary course of
business and in a manner consistent with past practice with
respect to accounting policies or procedures;
(v) operate its business other than in the ordinary course;
(vi) merge or consolidate with any other entity or sell all or
substantially all of its assets;
(vii) issue any securities other than pursuant to obligations
in existence on the date hereof;
(viii) dissolve, liquidate or wind up or spin-off any assets;
(ix) enter into any agreement, contract, arrangement or
understanding with any Affiliate of the Company; or
(x) agree, in writing or otherwise, to take any of the
foregoing actions or any action that would make any representation
or warranty in this Agreement made by the Company untrue or
incorrect.
9. Reliance on Representations. Notwithstanding any knowledge
of facts determined or determinable by any of Global and Williams
or the Company by investigation, each party shall have the right
to fully rely on the representations, warranties, covenants and
agreements of the other party hereto contained in this Agreement,
the Registration Rights Agreement, the Settlement Agreement or in
any other documents or papers delivered in connection herewith.
Each representation, warranty, covenant and agreement of the
parties set forth in this Agreement, the Registration Rights
Agreement or the Settlement Agreement is independent of each
other representation, warranty, covenant and agreement. Each
representation and warranty made by any party in this Agreement,
the Registration Rights Agreement and the Settlement Agreement
shall survive the Transfer Date.
10. Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery,
by telecopier, by courier guaranteeing overnight delivery or by
first-class mail and shall be deemed given (i) when made, if made
by hand delivery, (ii) upon confirmation, if made by telecopier,
(iii) one (1) business day after being deposited with such
courier, if made by overnight courier or (iv) on the third day
after deposit in the mail, if made by first-class mail, to the
parties as follows:
(a) if to Global and Williams, to: Sheftall & Torres, P.A.
100 Southeast Second Street
Suite 2220
Miami, Florida 33131
With a copy to: J. Thomas Cookson
Akerman Senterfitt
One Southeast Third Avenue
28th Floor
Miami, Florida 33131
if to the Company, to: Med Gen, Inc.
7284 W. Palmetto Park Road
Suite 207
Boca Raton, Florida 33433
Attn: Paul Kravitz
With a copy to: Stewart Merkin
444 Brickell Avenue
Suite 300
Miami, Florida 33131
or to such other address as such person or entity may have
furnished to the other persons or entities identified in this
Section 10 in writing in accordance herewith.
11. Severability. If any term, provision, covenant or
restriction of this Agreement is held to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated thereby, and the parties hereto shall use their best
efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by
such term, provision, covenant or restriction, it being intended
that all of the rights and privileges of the parties shall be
enforceable to the fullest extent permitted by law.
12. Modification; Amendment. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented unless pursuant to an instrument in
writing signed by the Company and Global and Williams.
13. Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and
understanding of the parties hereto with respect to the subject
matter contained herein. Except as provided in this Agreement,
there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to
such matters. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such matters.
14. Counterparts. This Agreement may be signed in any number of
original or facsimile counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
15. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of
Florida.
16. Headings. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall
not be deemed a part of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
GLOBAL HEALTHCARE LABORATORIES,
INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
DAN L. WILLIAMS & COMPANY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
MED GEN, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A to Settlement Agreement
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is made as of
the 9th day of December, 2004, by and among MED GEN, INC., a
Nevada corporation (the "Company"), and GLOBAL HEALTHCARE
LABORATORIES, INC., a Kansas corporation ("Global"), and DAN L.
WILLIAMS & COMPANY, INC., a Kansas corporation ("Williams").
WHEREAS, the Company has agreed to issue shares of its common
stock, par value $.001 per share, pursuant to the terms of the
Settlement Agreement, dated as of the date hereof (the
"Settlement Agreement"), to Global and Williams; and
WHEREAS, entering into this Agreement is a condition to Global
and Williams entering into the Settlement Agreement and this
Agreement is a material inducement to Global and Williams to
enter into the Settlement Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties
hereby agree as follows:
17.
DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
AFFILIATE: An affiliate of any specified person shall mean any
other person directly or indirectly controlling or controlled by
or under direct or indirect common control with such specified
person. For the purposes of this definition, "control," when used
with respect to any person, means the power to direct the
management and policies of such person, directly or indirectly,
whether through the ownership of voting securities, by contract
or otherwise and the terms "affiliated," "controlling" and
"controlled" have meanings correlative to the foregoing.
AGREEMENT: This Agreement, as this it may be amended,
supplemented or modified from time to time in accordance with the
terms hereof.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in Miami,
Florida are authorized or obligated by law or executive order to
close.
COMMENCEMENT DATE: The date hereof.
COMMON STOCK: The common stock, par value $.001 per share, of the
Company or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such
classes resulting from all such reclassifications.
COMPANY: Med Gen, Inc., a Nevada corporation, and any successor
entity thereto.
EFFECTIVENESS PERIOD: The earlier of (i) the date when the
Holders of Registrable Securities are able to sell all such
securities immediately without restriction pursuant to the volume
limitation provisions of Rule 144 under the Securities Act or any
successor rule thereto or otherwise, or (ii) the sale pursuant to
the Registration Statement of all securities registered
thereunder.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the SEC thereunder.
FILING DATE: January 15, 2005.
HOLDER: Each owner of any Registrable Securities (provided that,
for the period prior to the Transfer Date (as defined in the
Stock Transfer Agreement of even date herewith among the parties
hereto) Global and Williams shall be deemed to be Holders
hereunder).
PROSPECTUS: The prospectus included in the Registration Statement
(including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed in
reliance upon Rule 430A), as amended or supplemented by any
prospectus supplement, with respect to the resale of any of the
Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to any such prospectus,
including post-effective amendments, and all materials
incorporated by reference or deemed to be incorporated by
reference, if any, in such prospectus.
REGISTRABLE SECURITIES: The shares of Common Stock to be issued
or issuable under the Settlement Agreement (including any shares
of Common Stock issued or issuable thereon upon any stock split,
stock combination, stock dividend or the like), upon original
issuance thereof and at all times subsequent thereto, and
associated related rights, until the earliest of (i) the date on
which the resale thereof has been effectively registered under
the Securities Act and such securities have been disposed of in
accordance with the Registration Statement relating thereto, (ii)
the date on which such securities have been distributed to the
public pursuant to Rule 144 or are saleable pursuant to paragraph
(k) of Rule 144 or (iii) the date on which such securities cease
to be outstanding.
REGISTRATION STATEMENT: Any registration statement of the Company
filed with the SEC pursuant to the Securities Act that covers the
resale of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and
supplements to such registration statement or Prospectus
(including pre- and post-effective amendments), all exhibits
thereto, and all material incorporated by reference or deemed to
be incorporated by reference, if any, in such registration
statement.
REQUISITE INFORMATION: As defined in Section 2(c) hereof.
RULE 144: Rule 144 promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or
any successor rule or regulation.
RULE 144A: Rule 144A promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or
any successor rule or regulation.
RULE 415: Rule 415 promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or
any successor rule or regulation.
RULE 424: Rule 424 promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or
any successor rule or regulation.
RULE 430A: Rule 430A promulgated by the SEC pursuant to the
Securities Act, as such rule may be amended from time to time, or
any successor rule or regulation.
SEC: The Securities and Exchange Commission, or any successor
governmental agency or authority thereto.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
TRANSFER AGENT: The registrar and transfer agent for the
Company's Common Stock.
18.
REGISTRATION STATEMENT.
(a) REGISTRATION RIGHTS. Subject to the conditions set forth in
Section 2(c), the Company, at its own expense, agrees to file
with the SEC a Registration Statement for an offering to be made
on a continuous basis pursuant to Rule 415 covering all of the
Common Stock constituting Registrable Securities. The Company
shall use best efforts to cause the Registration Statement to be
filed as soon as practicable but in no event later than the
Filing Date. The Registration Statement shall be on Form SB-2
under the Securities Act or another appropriate form selected by
the Company permitting registration of such Registrable
Securities for resale by the Holders in the manner or manners
reasonably designated by the Holders. The Company shall use best
efforts to cause the Registration Statement to be declared
effective pursuant to the Securities Act as soon as reasonably
practicable following the filing thereof (which the parties
anticipate will ordinarily occur 60 to 90 days after the filing
thereof), and to keep such Registration Statement continuously
effective under the Securities Act during the Effectiveness
Period. In the event securities are registered on the
Registration Statement on behalf of the Company or other holders
in addition to the Holders, in no event shall the number of
Registrable Securities covered by the Registration Statement be
cut back, limited or reduced.
(b) SUPPLEMENTS AND AMENDMENTS. The Company shall keep any
Registration Statement continuously effective by supplementing
and amending such Registration Statement if so required by the
rules, regulations or instructions applicable to the registration
form used for such Registration Statement, if required by the
Securities Act or if reasonably requested by the Holders or by
any underwriter of such Registrable Securities. If the
Registration Statement under Section 2(a) ceases to be available
for use by the Holders because the Company no longer qualifies to
use such form of registration statement, the Company shall be
required to file as promptly as reasonably practicable a new
Registration Statement on an appropriate form and its obligations
hereunder shall continue to apply in all respects.
(c) SELLING SECURITYHOLDER INFORMATION. Each Holder wishing to
register to sell Registrable Securities pursuant to the
Registration Statement and related Prospectus agrees to notify
the Company, in a timely manner, and confirm such Holder's
agreement to be bound by the terms of this Agreement and include
such information regarding it and the distribution of its
Registrable Securities as is required by law to be disclosed by
the Holder in the Registration Statement (the "Requisite
Information") to the Company prior to any intended distribution
of Registrable Securities under the Registration Statement.
The Company shall use best efforts to file, as soon as
practicable after the receipt of the Requisite Information from
any Holder or any changes in the Requisite Information with
respect to such Holder (including, without limitation, any
changes in the plan of distribution), a Prospectus supplement
pursuant to Rule 424 or otherwise amend or supplement such
Registration Statement to include in the Prospectus the Requisite
Information as to such Holder (and the Registrable Securities
held by such Holder), and the Company shall provide such Holder a
copy of such Prospectus as so amended or supplemented containing
the Requisite Information in order to permit such Holder to
comply with the Prospectus delivery requirements of the
Securities Act in a timely manner with respect to any proposed
disposition of such Holder's Registrable Securities and to file
the same with the SEC. Each Holder shall promptly notify the
Company of any material changes to the Requisite Information
provided to the Company by such Holder.
(d) ADDITIONAL AGREEMENTS OF HOLDERS. Each Holder agrees not to
dispose of Registrable Securities pursuant to the Registration
Statement without complying with the prospectus delivery
requirements under the Securities Act. Each Holder further
agrees that it will comply fully with applicable federal and
state securities laws in connection with the distribution of any
Registrable Securities pursuant to the Registration Statement.
Each Holder further acknowledges having been advised by the
Company that applicable federal securities laws prohibit Holders
from trading in securities of the Company at any time while in
possession of material non-public information about the Company.
19.
REGISTRATION PROCEDURES.
In connection with the Company's registration obligations
hereunder, the Company shall effect such registrations on the
appropriate form selected by the Company to permit the resale of
Registrable Securities in accordance with each Holder's intended
method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as reasonably possible:
(a) Furnish to the Holders and the managing underwriters, if
any, copies of all such documents proposed to be filed (including
those documents incorporated or deemed to be incorporated by
reference) and use its commercially reasonable efforts to reflect
in each such document, when so filed with the SEC, such comments
as the Holders may reasonably propose. The Company shall not file
any such Registration Statement or related Prospectus or any
amendments or supplements thereto (including any document that
would be incorporated or deemed incorporated by reference) to
which the Holder or the managing underwriters, if any, shall
reasonably object in writing (by hand-delivery, courier
guaranteeing overnight delivery or telecopy) within five Business
Days after the receipt of such documents. Notwithstanding the
foregoing, the Company shall not be required to furnish to the
Holders or the managing underwriters, if any, any amendments or
supplements to the Registration Statement or Prospectus filed
solely to reflect changes to the amount of Common Stock
constituting Registrable Securities held by any particular Holder
or immaterial revisions to the information contained therein.
(b) Prepare and file with the SEC such amendments, including
post-effective amendments, to the Registration Statement as may
be necessary to keep such Registration Statement continuously
effective for the applicable time period set forth in Section
2(a) hereof; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and comply with the provisions
of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement and Prospectus
during such period in accordance with the intended method or
methods of disposition by the Holder set forth in such
Registration Statement as so amended or in such Prospectus as so
supplemented including, without limitation, the filing of any
Prospectus supplement pursuant to Rule 424 in order to add or
change any selling security holder information (including any
such supplements or amendments pursuant to Section 2(c) hereof,
provided such Holder to which such change applies complies with
the Requisite Information requirements of Section 2(c) hereof).
(c) Notify the Holders and the managing underwriters, if any,
promptly and, if requested by any such person, confirm such
notice in writing:
(i) (A) when a Prospectus or any Prospectus supplement or post-
effective amendment is proposed to be filed and (B) with respect
to a Registration Statement or any post-effective amendment, when
the same has become effective;
(ii) of any written comments from the SEC with respect to any
filing and of any request by the SEC or any other Federal or
state governmental authority for amendments or supplements to
such Registration Statement or related Prospectus or for
additional information related thereto;
(iii) of the issuance by the SEC, any state securities
commission, any other governmental agency or any court of any
stop order, order or injunction suspending or enjoining the use
or effectiveness of the Registration Statement or the initiation
of any proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of qualification or exemption from
qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any
proceeding for such purpose;
(v) of the existence of any fact or the happening of any event
during the Effectiveness Period that makes any statement of
material fact made in such Registration Statement or related
Prospectus untrue in any material respect, or that requires the
making of any changes in such Registration Statement or
Prospectus so that, in the case of the Registration Statement, it
will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and that,
in the case of the Prospectus, such Prospectus will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading; and
(vi) of the determination by the Company that a post effective
amendment to the Registration Statement will be filed with the
SEC.
(d) Use commercially reasonable efforts to obtain the withdrawal
of any stop order or order enjoining or suspending the use or
effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification)
of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) If reasonably requested by a Holder, or managing
underwriters, if any, to:
(i) promptly include in a Prospectus supplement or post-
effective amendment such information as the Holder or managing
underwriters, if any, may reasonably request to be included
therein; and
(ii) make all required filings of such Prospectus supplement or
such post-effective amendment as soon as reasonably practicable
after the Company has received notification of the matters to be
included in such Prospectus supplement or post-effective
amendment.
(f) Furnish to each Holder who so requests, and each managing
underwriter, if any, without charge, at least one copy of the
Registration Statement and each amendment thereto (but excluding
schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits, unless
requested in writing by such Holder or any managing underwriter
and then only to the person who so requested).
(g) Deliver to each Holder and the underwriters, if any, without
charge, as many copies of the Prospectus or Prospectuses
(including each form of Prospectus) and each amendment or
supplement thereto as such persons may reasonably request; and
the Company hereby consents to the use of such Prospectus, and
each amendment or supplement thereto, by each of the selling
Holders of Registrable Securities and the underwriters, if any,
in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities, use
all reasonable efforts to register or qualify, or cooperate with
the Holders of Registrable Securities to be sold or the
underwriters, if any, and their respective counsel in connection
with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for
offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder or
underwriter reasonably requests in writing, keep each such
registration or qualification (or exemption therefrom) effective
during the period the Registration Statement is required to be
kept effective and do any and all other acts or things legally
necessary to enable the disposition in such jurisdictions of the
Registrable Securities covered by the Registration Statement;
provided, however, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is
not then so qualified.
(i) In connection with any sale or transfer of Registrable
Securities that will result in such securities no longer being
Registrable Securities, cooperate with the Holders and the
managing underwriters, if any, to (i) facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold (unless the same shall be in book-entry
form), which certificates shall not bear any restrictive legends,
unless required by applicable securities laws and shall be in a
form eligible for deposit with the Depositary Trust Company, and
(ii) enable such Registrable Securities to be in such
denominations and registered in such names as the managing
underwriters, if any, or Holders may reasonably request at least
two Business Days prior to any sale of Registrable Securities.
(j) Use best efforts to cause the offering of the Registrable
Securities covered by the Registration Statement to be registered
with or approved by such other governmental agencies or
authorities within the United States as may be necessary to
enable the Holders or managing underwriter, if any, to consummate
the disposition of such Registrable Securities; provided,
however, that the Company shall not be required to register the
Registrable Securities in any jurisdiction that would require the
Company to qualify to do business in any jurisdiction where it is
not then so qualified.
(k) Upon the occurrence of any event contemplated by Section
3(c)(iv) hereof, as promptly as reasonably practicable, prepare a
supplement or amendment, including, if appropriate, a post-
effective amendment, to the Registration Statement or a
supplement to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, such
Prospectus will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(l) Enter into such agreements (including any underwriting
agreements in form, scope and substance as may be reasonably
req \uested and as are customary in underwritten offerings) and
take all such other appropriate actions in connection therewith
(including those reasonably requested by the managing
underwriters, if any, or a Holder of the Registrable Securities
being sold) in order to expedite or facilitate the sale of such
Registrable Securities. In connection with any underwritten
offering, the Company will:
(i) make such representations and warranties to the Holders of
such Registrable Securities and the underwriters, if any, with
respect to the business of the Company and its subsidiaries
(including with respect to businesses or assets acquired or to be
acquired by any of them), and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be
incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if
and when requested;
(ii) obtain, as may reasonably be required, opinions of counsel
to the Company (which may include in-house counsel) and updates
thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing
underwriters, if any), addressed to each selling Holder of
Registrable Securities and each of the underwriters, if any,
covering the matters customarily covered in opinions requested in
underwritten offerings (including any such matters as may be
reasonably requested by such underwriters);
(iii) obtain, as may reasonably be required, customary "cold
comfort" letters and updates thereof from the independent
certified public accountants of the Company (and, if necessary,
any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the
Company for which financial statements and financial data are, or
are required to be, included in the Registration Statement),
addressed (where reasonably possible) to each selling Holder of
Registrable Securities and each of the underwriters, if any, such
letters to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
underwritten offerings; and
(iv) deliver such documents and certificates as may be reasonably
requested by a Holder of the Registrable Securities being sold or
the managing underwriters, if any, to evidence the continued
validity of the representations and warranties made pursuant to
clause (i) of this Section 4(m) and to evidence compliance with
any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
(m) Make available for inspection by a representative of the
Holders of Registrable Securities being sold, any underwriter
participating in any such disposition of Registrable Securities,
if any, and any attorney, consultant or accountant retained by
such selling Holders or underwriter, at the offices where
normally kept, during reasonable business hours, all financial
and other records, pertinent corporate documents and properties
of the Company and its subsidiaries (other than records and
documents that the Company and its subsidiaries agreed
contractually not to disclose and the disclosure of which would
violate any such contractual agreement) as they may reasonably
request, and cause the officers, directors, agents and employees
of the Company and its subsidiaries to supply all information
(other than information that the Company and its subsidiaries
agreed contractually not to disclose and the disclosure of which
would violate any such contractual agreement) in each case
reasonably requested by any such representative, underwriter,
attorney, consultant or accountant in connection with such
Registration Statement and as shall be reasonably necessary to
enable such persons to conduct a reasonable investigation within
the meaning of Section 11 of the Securities Act; provided,
however, that the foregoing inspection and information gathering
shall be coordinated on behalf of the Holders and the other
parties thereto by one counsel designated by and on behalf of
such Holders and other parties and provided further, that such
persons shall first agree in writing with the Company that any
information that is reasonably and in good faith designated by
the Company as confidential at the time of delivery or inspection
(as the case may be) of such information shall be kept
confidential by such persons, unless (i) disclosure of such
information is required by court or administrative order or is
necessary to respond to inquiries of regulatory authorities; (ii)
disclosure of such information is required by law (including any
disclosure requirements pursuant to Federal securities laws in
connection with the filing of any Registration Statement or the
use of any Prospectus); (iii) such information becomes generally
available to the public other than as a result of a disclosure or
failure to safeguard by any such person; or (iv) such information
becomes available to any such person from a source other than the
Company and such source is not known to be bound by a
confidentiality agreement.
(n) (i) list all shares of Common Stock covered by any
Registration Statement on any securities exchange on which the
Common Stock is then listed; or (ii) authorize for quotation on
the National Market of the National Association of Securities
Dealers Automated Quotation System, Small-Cap Market or OTC
Bulletin Board all Common Stock covered by any such Registration
Statement if the Common Stock is then so authorized for
quotation.
(o) Make all reasonable efforts to provide such information as
is required for any filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD").
20.
REGISTRATION EXPENSES.
All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by
it whether or not any Registration Statement is filed or becomes
effective. The fees and expenses referred to in the foregoing
sentence shall include:
(a) all registration, filing, securities exchange listing, NASD
and rating agency fees and expenses;
(b) printing expenses (including, without limitation, printing
Prospectuses if the printing of Prospectuses is required by the
managing underwriters, if any, or by a Holder of the Registrable
Securities);
(c) messenger, copying, telephone and delivery expenses;
(d) fees and disbursements of counsel for the Company;
(e) fees and disbursements of all independent certified public
accountants referred to in Section 3(m)(iii) including, without
limitation, the expenses of any special audits or "cold comfort"
letters required by Section 3(m)(iii);
(f) fees and expenses of all other persons retained by the
Company; and
(g) all registration, filing, qualification and other fees and
expenses of complying with securities or blue sky laws of all
jurisdictions in which the Registrable Securities are to be
registered and any legal fees and expenses incurred in connection
with the blue sky qualifications of the Registrable Securities
and the determination of their eligibility for investment under
the laws of all such jurisdictions.
Notwithstanding anything in this Agreement to the contrary, the
Holders shall be responsible for all expenses customarily borne
by selling securityholders (including underwriting discounts,
commissions and fees and expenses of counsel to the selling
Holders).
21.
INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Holder of Registrable Securities, such Holder's affiliates, and
their respective officers, directors, employees, representatives
and agents and each person, if any, who controls any Holder of
Registrable Securities within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act, against any
and all loss, liability, claim or damage arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus (or any
amendment or supplement thereto), or the omission or alleged
omission to state therein any material fact required to be stated
therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that this indemnity agreement shall not apply
to any loss, liability, claim or damage arising out of any untrue
statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder of
Registrable Securities (which also acknowledges the indemnity
provisions herein) or any person, if any, who controls any such
Holder of Registrable Securities expressly for use in the
Registration Statement (or any amendment thereto), or any
preliminary prospectus or the Prospectus (or any amendment or
supplement thereto); provided, further, that this indemnity
agreement shall not apply to any loss, liability, claim or damage
if the Holder fails to deliver at or prior to the written
confirmation of sale, the most recent Prospectus, as amended or
supplemented, and such Prospectus, as amended or supplemented,
would have corrected such untrue statement or omission or alleged
untrue statement or omission of a material fact (provided that
the Company has delivered to such Holder, or otherwise given
notice to such Holder of the existence of, such most recent
Prospectus, as supplemented or amended).
(b) In connection with the preparation of the Registration
Statement in which a Holder of Registrable Securities is
participating in furnishing information relating to such Holder
of Registrable Securities to the Company for use in such
Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto, each such
Holder agrees, severally and not jointly, to indemnify and hold
harmless any other Holders of Registrable Securities, and the
Company, their affiliates, their respective officers, directors,
employees, representatives and agents and each person, if any,
who controls such other Holders or the Company within the meaning
of either such Section, against any and all loss, liability,
claim or damage described in the indemnity contained in
subsection (a) of this Section, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or
any amendment thereto), or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the
Company by or on behalf of such Holder of Registrable Securities
(which also acknowledges the indemnity provisions herein) or any
person, if any, who controls any such Holder of Registrable
Securities expressly for use in the Registration Statement (or
any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action
commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall
not relieve such indemnifying party from any liability hereunder
to the extent it is not materially prejudiced as a result thereof
and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement.
The indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified
party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay
the reasonable fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party
shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying
party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual
or potential differing interests between them. It is understood
that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any
proceeding or related proceedings in the same jurisdiction, be
liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel), for the Holders of
Registrable Securities, and all persons, if any, who control the
Holders of Registrable Securities within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange
Act, collectively (unless representation of all Holders and such
parties by the same counsel would be inappropriate due to actual
or potential differing interests between or among them), and (b)
the fees and expenses of more than one separate firm (in addition
to any local counsel), for the Company and each person, if any,
who controls the Company within the meaning of either such
Section, and that all fees and expenses payable under (a) and (b)
above shall be reimbursed as they are incurred. In the case of
any such separate firm for the Holders of Registrable Securities,
and control persons of the Holders of Registrable Securities,
such firm shall be reasonably acceptable to the Company. In the
case of any such separate firm for the Company and control
persons of the Company, such firm shall be reasonably acceptable
to the Holders of a majority in interest of the Registrable
Securities. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent
(which consent shall not be unreasonably withheld or delayed),
but if settled with such consent or if there be a final non-
appealable judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of
the indemnified parties (which consent shall not be unreasonably
withheld or delayed), settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 5 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified
party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. No
indemnified party shall, without the prior written consent of the
indemnifying party, settle or compromise or consent to the entry
of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of
which indemnification or contribution could be sought under this
Section 5 (whether or not the indemnified parties are actual or
potential parties thereto).
(d) If the indemnification to which an indemnified party is
entitled under this Section 5 is for any reason unavailable to or
insufficient although applicable in accordance with its terms to
hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, in such
proportion as is appropriate to reflect the relative fault of the
indemnifying party or parties on the one hand and of the
indemnified party on the other hand in connection with the
statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative fault of the Company on the one hand and the Holders
of the Registrable Securities on the other hand shall be
determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to
information supplied by the Company, or by the Holder of the
Registrable Securities and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by
pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to
above in this Section 5(d). The aggregate amount of losses,
liabilities, claims, damages, and expenses incurred by an
indemnified party and referred to above in this Section 5(d)
shall be deemed to include any out-of-pocket legal or other
expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or
any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon
any such untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 5, no Holder shall
be required to indemnify or contribute any amount in excess of
the amount by which the total price at which Registrable
Securities were sold by such Holder exceeds the amount of any
damages that such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission to
alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The remedies provided in this Section 5 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
For purposes of this Section 5(d), each person, if any, who
controls any Holder of Registrable Securities within the meaning
of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as such Holder,
and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the
Company. No party shall be liable for contribution with respect
to any action, suit, proceeding or claim settled, compromised, or
with respect to which the party requesting contribution consented
to the entry of a judgment, without such party's written consent,
which consent shall not be unreasonably withheld or delayed.
(e) The Company may require as a condition to including the
Registrable Securities in the Registration Statement, and to
entering into any underwriting agreement with respect thereto,
that the Company shall have received an undertaking from the
Holder and such underwriter to comply with the provisions of this
Section 5.
(f) The agreements contained in this Section 5 shall survive the
transfer or sale of the Registrable Securities and shall remain
in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on
behalf of any indemnified party.
22.
INFORMATION REQUIREMENTS.
(a) The Company agrees that, if at any time before the end of
the Effectiveness Period the Company is not subject to the
reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and use reasonable
efforts to take such further reasonable action as any Holder of
Registrable Securities may reasonably request in writing to
enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of
the exemptions provided by Rule 144 and Rule 144A under the
Securities Act (or any similar rule or regulation hereafter
adopted by the SEC) and customarily taken in connection with
sales pursuant to such exemptions, including, without limitation,
making available adequate current public information within the
meaning of paragraph (c)(2) of Rule 144 and delivering the
information required by paragraph (d) of Rule 144A. Upon the
written request of a Holder, the Company shall deliver to such
Holder a written statement as to whether it has complied with
such reporting requirements.
(b) The Company shall file reports required to be filed by it
under the Exchange Act and any other securities exchanges or
markets on which the Common Stock is listed or quoted.
23.
UNDERWRITTEN REGISTRATION.
If any of the Registrable Securities covered by the Registration
Statement are to be sold in an underwritten offering, the
investment banker or investment bankers and manager or managers
that will administer the offering will be investment bankers of
recognized national standing selected by the Holders of a
majority in interest of the Registrable Securities subject to the
consent of the Company (which will not be unreasonably withheld
or delayed). No person may participate in any underwritten
registration hereunder unless such person (i) agrees to sell such
person's Registrable Securities on the basis reasonably provided
in any underwriting arrangements approved by the Holders of a
majority in interest of the Registrable Securities and (ii)
completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up agreements and
other documents reasonably required under the terms of such
underwriting arrangements. Notwithstanding any other provision of
this Agreement, if the underwriter determines in good faith that
marketing factors require a limitation of the number of shares to
be underwritten, the number of shares that may be included in the
underwriting shall be allocated on a pro rata basis among the
Holders.
24.
MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. The Company may in the future
grant registration rights that would permit any person that is a
third party the right to piggy-back on the Registration
Statement; provided, however, that if the managing underwriter,
if any, of such offering notifies the Holders that the total
amount of Registrable Securities which they and the holders of
such piggy-back rights intend to include in the Registration
Statement is so large as to materially adversely affect the
success of such offering (including the price at which such
securities can be sold), then only the amount, the number or kind
of securities offered for the account of holders of such piggy-
back rights will be reduced to the extent necessary to reduce the
total amount of securities to be included in such offering to the
amount, number or kind recommended by the managing underwriter
and the amount of Registrable Securities to be included shall not
be reduced.
(b) NO INCONSISTENT AGREEMENTS. The Company has not entered or
shall not enter into any agreement that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the
Company's other issued and outstanding securities under any such
agreements.
(c) NO ADVERSE ACTION AFFECTING THE REGISTRABLE SECURITIES. The
Company will not take any action with respect to the Registrable
Securities which would adversely affect the ability of any of the
Holders to include such Registrable Securities in a registration
undertaken pursuant to this Agreement.
(d) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures
from the provisions hereof, may not be given, without the written
consent of the Company and Holders of a majority in interest of
Registrable Securities, provided, however, that, for the purposes
of this Agreement, Registrable Securities that are owned,
directly or indirectly, by either the Company, or an Affiliate of
the Company are not deemed outstanding. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the
rights of Holders whose Registrable Securities are being sold
pursuant to the Registration Statement and that does not directly
or indirectly affect the rights of other Holders may be given by
Holders of a majority in interest of the Registrable Securities
being sold by such Holders pursuant to such Registration
Statement, provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding
sentence. Each Holder of Registrable Securities outstanding at
the time of any such amendment, modification, supplement, waiver
or consent or thereafter shall be bound by any such amendment,
modification, supplement, waiver or consent effected pursuant to
this Section 8(d), whether or not any notice, writing or marking
indicating such amendment, modification, supplement, waiver or
consent appears on the Registrable Securities or is delivered to
such Holder.
(e) NOTICES. All notices and other communications provided for
herein or permitted hereunder shall be made in writing by hand-
delivery, courier guaranteeing overnight delivery, certified
first-class mail, return receipt requested, or telecopy and shall
be deemed given (i) when made, if made by hand delivery, (ii)
upon confirmation, if made by telecopier, (iii) one Business Day
after being deposited with such courier, if made by overnight
courier or (iv) on the date indicated on the notice of receipt,
if made by first-class mail, to the parties as follows:
(i) if to a Holder, to the address of such Holder as it
appears in the Common Stock register of the Company (or for Global
and Williams, the addresses set forth in the Stock Transfer
Agreement). Failure to mail a notice or communication to a
Holder or any defect in such notice or communication shall not
affect its sufficiency with respect to other Holders.
(ii) if to the Company to: Med Gen, Inc.
7284 W. Palmetto Road
Suite 106
Boca Raton, Florida 33433
Telephone No.: (561) 750-1100
Facsimile No.: (561) 750-6239
Attention: Paul Kravitz
With a copy to: Stewart Merkin
Suite 300
444 Brickell Avenue
Miami, Florida 33131
Telephone No: (305) 357-5556
Facsimile No.: (305) 358-2490
(f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of each existing and future Holder. The Company may not
assign or delegate its rights or obligations hereunder without
the prior written consent of the Holders of a majority in
interest of the Registrable Securities, other than by operation
of law pursuant to a merger or consolidation to which the Company
is a party.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF FLORIDA,
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF
FLORIDA WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
(h) SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions
set forth herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest
extent permitted by law.
(i) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the
meaning hereof. All references made in this Agreement to
"Section" and "paragraph" refer to such Section or paragraph of
this Agreement, unless expressly stated otherwise.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties
as a final expression of their agreement and is intended to be a
complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject
matter contained herein and the registration rights granted by
the Company with respect to the Registrable Securities. There are
no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior
agreements and undertakings among the parties solely with respect
to such registration rights.
(k) TERMINATION. This Agreement and the obligations of the
parties hereunder shall terminate upon the end of the
Effectiveness Period, except for any liabilities or obligations
under Section 3, 4, or 5 hereof.
(l) SPECIFIC PERFORMANCE. The Company agrees that, to the extent
permitted by law, (i) the obligations imposed on it in this
Agreement are special, unique and of an extraordinary character,
and that in the event of a breach by the Company there would not
be an adequate remedy at law; and (ii) the Holders shall be
entitled to specific performance and injunctive and other
equitable relief in addition to any other remedy to which they
may be entitled at law or in equity.
(m) CONFIDENTIALITY. Global and Williams agree to keep this
Agreement and the Stock Transfer Agreement confidential until the
Company issues a press release with regard thereto or otherwise
discloses their existence; provided, however, that Global and
Williams may make all filings or other disclosures with the Court
in connection with the Settlement Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
MED GEN, INC.
By:
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GLOBAL HEALTHCARE LABORATORIES,
INC.
By:
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DAN L. WILLIAMS & COMPANY, INC.
By:
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