EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is made as of May 11,
2004 by and among Power3 Medical Products, Inc., a New York corporation
("Buyer"), Advanced Bio/Chem, Inc. d/b/a ProtcEx, a Nevada corporation (the
"Company") and Steven B. Rash and Ira Goldknopf (collectively, the
"Shareholders"). Capitalized terms that are not defined elsewhere in this
Agreement are defined in Section 12. The Disclosure Letter, together with any
supplements to the Disclosure Letter, is hereby incorporated in this Agreement,
and made a part hereof, by this reference.
The Company desires to sell to Buyer, and Buyer desires to purchase from
the Company, all of the Company's assets for the consideration and on the terms
set forth in this Agreement. In consideration of the benefits that they will
receive by virtue of the Contemplated Transactions, each of the Shareholders is
agreeing to make the representations, warranties, and indemnifications in this
Agreement jointly and severally with the Company and each of the Shareholders is
agreeing to enter into and be bound by a Non-competition Agreement
("Non-competition Agreement") and an Employment Agreement ("Employment
Agreement") containing, among other things, covenants respecting
confidentiality, non-competition and non-solicitation, with Buyer.
NOW THEREFORE, in consideration of the mutual covenants of the parties set
forth in this Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. SALE AND TRANSFER OF ASSETS; CLOSING
1.1 ASSETS AND ASSUMED LIABILITIES
(a) Subject to the terms and conditions of this Agreement, at the
Closing the Company will sell, transfer, and convey to Buyer, free and
clear of any Encumbrances, and Buyer will purchase from the Company, all
assets of the Company (collectively, the "Assets"), including all of the
Company's right, title, and interest in and to the following assets:
(i) all rights under Applicable Contracts;
(ii) all tangible personal property owned, used or leased by
the Company, wherever located;
(iii) all phone systems, fixtures and furniture and phone
numbers;
(iv) all trademarks, trademark applications, trade names,
Trade Secrets and any and all other intellectual property rights,
including those derived, if any, from services previously rendered
to customers and the right to sue for past infringements thereof;
(v) all software in which the Company has an interest
including source and object codes; all causes of action,
judgments, claims, and demands of any nature related to such
software;
(vi) all customer lists, supplier lists, sales and marketing
records and materials, problem lists, license and maintenance fee
records, and other business records;
(vii) all current assets, including all cash, prepaid
expenses, and trade and other accounts and notes receivable;
(viii)all intangible property, including goodwill and
covenants not to compete; and
(ix) all right title and interest into the assumed name
ProtcEx.
(b) Subject to the terms and conditions of this Agreement, at the
Closing the Buyer will assume all of the Company's obligations arising on
or after the date of the Closing under the Applicable Contracts listed in
Part 2.5 of the Disclosure Letter, except to the extent such liabilities
and obligations are specifically excluded by this or the next paragraph of
this Section 1.1(b), and the liabilities listed on Schedule 1.1(b)
(collectively, the "Assumed Obligations"). Notwithstanding anything to the
contrary above, Buyer will not assume any liabilities or obligations of
the Company if the existence of such liabilities or obligations either
are, or give rise to or result from, facts or circumstances that
constitute a misrepresentation or breach of the representations and
warranties in Section 2 (irrespective of their period of survival in
Section 10.1), either as of the date of this Agreement or as of the
Closing Date as if made on the Closing Date. The Assumed Obligations are
the only liabilities and obligations of the Company that Buyer will assume
in connection with the Contemplated Transactions.
1.2 PURCHASE PRICE
The purchase price (the "Purchase Price") for the Assets will be paid
partly by delivering 15,000,000 shares (the "Purchase Shares") of Common Stock
of Buyer, $.001 par value per share (the "Buyer Shares").
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS
The Company and the Shareholders, jointly and severally, represent and
warrant to Buyer as follows:
2.1 ORGANIZATION AND GOOD STANDING
The Company is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Nevada, with full power and authority to
conduct its business as it is now being conducted, to own, hold under lease, or
otherwise possess or use the properties and assets that it purports to own, hold
under lease, or otherwise possess or use, and to perform all its obligations
under the Contracts.
2.2 AUTHORITY; NO CONFLICT
(a) This Agreement constitutes the legal, valid, and binding
obligation of the Company and each of the Shareholders, enforceable
against the Company and each of the Shareholders in accordance with its
terms. The Company has the absolute and unrestricted right, power,
authority, and capacity to execute and deliver this Agreement and to
perform its obligations under this Agreement. Each of the Shareholders has
all requisite legal capacity to execute and deliver this Agreement and his
Employment Agreement, if applicable, and to perform his obligations
thereunder. This Agreement and the Employment Agreement of each
Shareholder, if applicable, when executed, will constitute the legal,
valid, and binding obligations of such Shareholder enforceable against him
in accordance with their respective terms.
(b) Neither the execution and delivery of this Agreement or the
Employment Agreements, nor the consummation or performance of any of the
Contemplated Transactions will, directly or indirectly:
(i) contravene, conflict with, or result in (with or without
notice or lapse of time) a violation or breach of (A) any
provision of the organizational documents of the Company, (B) any
resolution adopted by the board of directors (or any Person or
group of Persons exercising similar authority) or the
Shareholders, (C) any Legal Requirement or any Order to which the
Company, any Shareholder or any of the Assets may be subject, or
give any Governmental Body or other Person the right (with or
without notice or lapse of time) to challenge any of the
Contemplated Transactions or to exercise any remedy or obtain any
relief under any such Legal Requirement or Order; (D) any of the
terms or requirements of, or give any Governmental Body the right
(with or without notice or lapse of time) to revoke, withdraw,
suspend, cancel, terminate, or modify, any Governmental
Authorization that is held by the Company or that otherwise
relates to the Company's business or any of the Assets, or (E) any
provision of, or give any Person the right (with or without notice
or lapse of time) to declare a default or exercise any remedy
under, including the release of any asset or property of the
Company held in escrow, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any Contract;
(ii) cause Buyer or the Company to become subject to, or to
become liable for the payment of, any tax or cause any of the
Assets to be reassessed or revalued by any taxing authority or
other Governmental body;
(iii) result in (with or without notice or lapse of time) the
imposition or creation of any Encumbrance upon or with respect to
any of the Assets; or
(iv) require any notice to or Consent from any Person.
2.3 TITLE TO PROPERTIES; ENCUMBRANCES
The Company has good, sole and marketable right, title and interest to the
Assets, free and clear of any Encumbrances. The Company has the right to convey,
and upon the consummation of the transactions contemplated by this Agreement,
the Company will have conveyed and Buyer will be vested with, good and
marketable title and interest in and to the Assets, free and clear of all
Encumbrances. The Company has not infringed, and is not infringing, on any
copyright or Trade Secret of another person. Part 2.3 of the Disclosure Letter
contains a complete list of all third party materials which are a component of
or incorporated in or specifically required to develop or support any of the
Company's products ("Materials"), and a list of any restrictions on the
Company's unrestricted right to use, incorporate or distribute the Materials.
The Company is not in violation of any license, sublicense or agreement with
respect to an Embedded Product. Neither the Company nor any Shareholder has
received any notice from any Person that is contrary to any of the foregoing
representations.
2.4 LEGAL PROCEEDINGS; ORDERS
Except as set forth in Part 2.4 of the Disclosure Letter, there is no
claim, counter-claim, action, suit, order, proceeding or investigation pending
or, to the knowledge of the Company or the Shareholders, threatened against or
involving the Company (or pending or threatened against any of the officers,
directors or key employees of the Company), its business or the Assets, or
relating to the transactions contemplated hereby, before any court, agency or
other governmental body; nor is there any reasonable basis for any such claim,
action, suit, proceeding or governmental investigation. Neither the Company nor
any Shareholder is directly subject to or affected by any Order. Neither the
Company nor any Shareholder has received any opinion or memorandum or legal
advice from legal counsel retained by them to the effect that any of them is
exposed, from a legal standpoint, to any liability which may be material to the
Company's business or the Assets. The Company is not engaged in any legal action
to recover monies due it or for damages sustained by it.
2.5 CONTRACTS; NO DEFAULTS
Part 2.5 of the Disclosure Letter contains a correct and complete list of
every Applicable Contract, correct and complete copies of which previously have
been furnished to the Buyer (or forms thereof, where form agreements are used;
provided that any and all deviations or changes to the forms in any individual
case are described in Part 2.5 or the Disclosure Letter). Except as set forth in
Part 2.5 of the Disclosure Letter, all of the Applicable Contracts may be
assigned to Buyer without the consent, approval, novation or waiver of any third
party. The Company is not in default, and no event has occurred which with the
giving of notice or the passage of time or both would constitute a default,
under any Applicable Contract or any other obligation owed by the Company, and
no event has occurred which with the giving of notice or the passage of time or
both would constitute a default by any other party to any such Applicable
Contract or obligation. Each of the Applicable Contracts is in full force and
effect, is valid and enforceable in accordance with its terms and is not subject
to any claims, charges, setoffs or defenses. Without limiting the foregoing,
Part 2.5 of the Disclosure Letter includes a list of each licensing,
distribution, maintenance or support, trial, beta test, consulting, development,
escrow, sales, non-competition, reseller, and sales representative agreement,
any other Applicable Contract containing covenants that in any way purport to
restrict the Company's business activity or limit the freedom of the Company to
engage in any line of business or to compete with any Person which relates to or
affects the Assets or Buyer's right to use, sell, develop, modify, license or
distribute the Assets.
2.6 INTELLECTUAL PROPERTY
(a) Part 2.6(a) of the Disclosure Letter contains a true and
complete list of all copyrights, trademarks, service marks, trade names,
patents, business names, domain names and other similar intangible
property rights and interests (hereinafter sometimes individually and
collectively referred to as the "Intellectual Property Rights") applied
for, issued to or owned by the Company, under which the Company is
licensed or franchised, or used in the conduct of the Company's business,
all of which are valid and in good standing and uncontested, except as
disclosed on Part 2.6(a) of the Disclosure Letter. The Company has
delivered to Buyer copies of all documents establishing the Intellectual
Property Rights. Except as disclosed on Part 2.6(a) of the Disclosure
Letter, the Company is not infringing upon or otherwise acting adversely
to any Intellectual Property Right owned by any person or persons, and
there is no such claim or action pending, or to the best knowledge of the
Company and the Shareholders threatened with respect thereto. The Company
and the Shareholders have no knowledge that any Person is infringing on
any Intellectual Property Right of the Company.
(b) The Company has taken all reasonable security measures to
protect the secrecy, confidentiality, and value of the Trade Secrets, and
any other persons who have knowledge of or access to information relating
to the Trade Secrets have been put on notice and, if appropriate, have
entered into agreements that the Trade Secrets are proprietary to the
Company and are not to be divulged or misused. All of the Trade Secrets
are presently valid and protectable, are not part of the public domain,
and have not been used, divulged, or appropriated for the benefit of any
persons other than the Company or to the detriment of the Company. The
Company and the Shareholders have no knowledge that any Person is
infringing on any Trade Secret of the Company.
(c) Part 2.6(c) of the Disclosure Letter contains a complete and
accurate list of all software developed by the Company (the "Software").
The Company is in actual and sole possession of the complete source code
of the Software and all Design Documentation. Except as set forth in Part
2.6(c) of the Disclosure Letter there are no defects in any Software, and
there are no errors in any Design Documentation, which defects or errors
would in any material respect affect the use of any Software or the
functioning of any Software in accordance with the specifications for the
Software published by the Company or its customers, the Software has all
the features described in the Design Documentation for that Software and
materials made available to the Company's customers, and the Software does
not contain any "back door," "time bomb," "Trojan horse," "worm," "drop
dead device," "virus" (as these terms are commonly used in the computer
software industry), or other software routines or hardware components
designed to permit unauthorized access, to disable or erase software,
hardware, or data, or to perform any other similar type of functions. The
Company has delivered to Buyer complete and accurate records of the
Company with respect to Software fixes (including fixes currently in
progress), problem lists, maintenance of the Software, and customer
complaints, and all warranty claims (including any pending claims) related
to the Software are described in Part 2.6(c) of the Disclosure Letter.
Except as set forth in Part 2.6(c) of the Disclosure Letter, the Company
has made no representations and warranties with respect to the Software.
2.7 DISCLOSURE
(a) No representation or warranty of the Company or the
Shareholders in this Agreement and no statement in the Disclosure Letter
omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not
misleading.
(b) No notice given pursuant to Section 4.2 will contain any
untrue statement or omit to state a material fact necessary to make the
statements therein or in this Agreement, in light of the circumstances in
which they were made, not misleading.
(c) In the event of any inconsistency between the statements in
the body of this Agreement and those in the Disclosure Letter (other than
an exception expressly set forth as such in the Disclosure Letter with
respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
2.8 BROKERS OR FINDERS
Except as set forth in Part 2.8 of the Disclosure Letter, the Company, the
Shareholders and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
2.9 OWNERS; OWNERSHIP DOCUMENTS.
Part 2.9 of the Disclosure Letter sets forth the names and address of all
persons who have any equity interest in the Company. There are no outstanding
warrants, options, commitments or rights of any kind to acquire from the Company
any equity or other security interest in the Company of any kind. The Company
has delivered to Buyer true and complete copies of all agreements governing the
operation of the Company and the rights and obligations of Shareholders of the
Company, including true and complete copies of the Company's Articles of
Incorporation, By Laws and all amendments thereto.
2.10 FINANCIAL STATEMENTS
(a) The Company has heretofore provided to Buyer true, complete
and correct copies of (i) audited balance sheets, statements of
operations, Shareholder's capital and cash flows for the Company (together
with all notes and opinions thereto of independent auditors) for the
fiscal years ended December 31, 2001 through December 31, 2003 and (ii)
unaudited balance sheets, statements of income, shareholder's equity
capital and cash flows for the Company for the first quarter ending March
31, 2004 (collectively, the "Financial Statements"). The Financial
Statements have been prepared on the accrual basis and otherwise in
conformity with GAAP and present fairly in all material respects the
assets, liabilities, financial position and results of operations of the
Company.
(b) The Company shall provide to Buyer true and correct copies of
unaudited interim balance sheets, statements, of income, operations,
Shareholder's capital and cash flow for the Company for each month and
three month period (together with year-to-date statements) beginning with
the statements for the month ending April 30, 2004 and through the month
preceding the Closing (collectively, the "Interim Statements"). The
Interim Statements shall be prepared on the accrual basis and otherwise in
conformity with GAAP (except for required and normal year-end adjustments)
and present fairly in all material respects the assets, liabilities,
financial position and results of operations of the Company as of the
respective dates and for the respective periods covered thereby.
2.11 OPERATIONS SINCE March 31, 2004
(a) Since March 31, 2004, there has been (i) no material adverse
change in the Assets (individually or in aggregate), or the operations of
the Company, no fact or condition exists or is contemplated or threatened
which might reasonably be expected to cause such a change in the future
other than Buyer's purchase and use of the Assets and conditions
attributable to the overall economy and e-commerce business in general and
(ii) no damage, destruction, loss or claim, whether or not covered by
insurance, or condemnation or other taking, adversely affecting, in any
material respect, the Assets or the operations of the Company.
(b) Since June 14, 1990, the Company has conducted its business in
the ordinary course consistent with existing operating procedures and
practices. Without limiting the generality of the foregoing, since June
14, 1999, except as set forth on Part 2.11(b),the Company has not:
(i) sold, leased, transferred or otherwise disposed of
(except in the ordinary course of business), or mortgaged or
pledged, or imposed or suffered to be imposed by lien, charge or
encumbrance on, any of the Assets;
(ii) canceled any debts owed to, or claims held by the
Company (including the settlement of any claims or litigation)
other than in the ordinary course of business consistent with past
practice;
(iii) canceled or terminated any material contact,
relationship, lease or agreement or entered into and become bound
by any material contract, relationship, lease or agreement;
(iv) delayed payment of any account payable or other
liability beyond its due date or the date when such liability
would have been paid in the ordinary course of business consistent
with the past practice;
(v) entered into, amended, waived or declared (or received a
declaration of) default under any Contract;
(vi) made any distribution or other payment to any equity
owner; or
(vii) made any agreements, written or oral, to perform any of
the above, other than this Agreement.
2.12 NO UNDISCLOSED LIABILITIES
The Company is not subject to any liability, commitment or obligation
(including unasserted claims whether known or unknown), whether absolute,
contingent, accrued or otherwise, except as set forth on Schedule 1.1(b).
2.13 TAXES
Except as set forth in Part 2.13 of the Disclosure Letter, the Company has
and will timely file all required federal, state, county and local income,
excise, withholding, property, sales, use, franchise and other tax returns,
declarations and reports which are required to be filed on or before the date
hereof and the Closing, and has paid or reserved for all taxes which have become
due pursuant to such returns or pursuant to any assessment which has become
payable. All monies required to be withheld by the Company from employees for
income taxes, social security, workmen's' compensation, unemployment insurance
and other payroll taxes have been collected or withheld, and either paid to the
respective governmental agencies, set aside in accounts for such purposes, or
accrued, reserved against and entered upon the books of the Company. The
returns, declarations and reports referred to in the previous sentences of this
Section 2.13 are or will be true and correct and reflect or will reflect
accurately all taxable income or tax liabilities for the periods covered
thereby. The Company has not received a notice that any examination of or
proceeding with respect to any tax return or report has been scheduled or
conducted. There are no outstanding agreements or waivers extending the
statutory period of limitations applicable to any tax return of the Company.
2.14 ACCOUNTS RECEIVABLE
All accounts and notes receivable of the Company have arisen from bona
fide transactions in the ordinary course of business, none of such accounts or
notes receivable is subject to defense, counterclaim or set off, and none of the
account debtors of such accounts or notes receivable is an affiliate of the
Company or any Shareholder.
2.15 EMPLOYEE RELATIONS
The Company does not have any employees.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to the Company as follows:
3.1 ORGANIZATION AND GOOD STANDING
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, its state of incorporation.
3.2 AUTHORITY; NO CONFLICT
(a) This Agreement and Buyer's Closing Documents constitute the
legal, valid, and binding obligation of Buyer, enforceable against Buyer
in accordance with their terms. Buyer has the absolute and unrestricted
right, power, and authority to execute and deliver this Agreement and
Buyer's Closing Documents and to perform its obligations under this
Agreement and Buyer's Closing Documents.
(b) Neither the execution and delivery of this Agreement and
Buyer's Closing Documents by Buyer nor the consummation or performance of
any of the Contemplated Transactions by Buyer will give any Person the
right to prevent, delay, or otherwise interfere with any of the
Contemplated Transactions pursuant to: (i) any provision of Buyer's
charter documents or bylaws; (ii) any resolution adopted by the board of
directors or the stockholders of Buyer; (iii) any Legal Requirement or
Order to which Buyer may be subject; or (iv) any Contract to which Buyer
is a party or by which Buyer may be bound. Buyer is not required to give
any notice to or obtain any Consent from any Person in connection with the
execution and delivery of this Agreement by Buyer or the consummation or
performance of any of the Contemplated Transactions by Buyer.
3.3 CERTAIN PROCEEDINGS
There is no pending Proceeding that has been commenced against Buyer and
that challenges, or may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the Contemplated Transactions. To Buyer's
knowledge, no such Proceeding has been threatened (orally or in writing).
3.4 CAPITALIZATION
[Standard representations and warranties to follow]
3.5 BROKERS OR FINDERS
Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement, except
to Chapman, Spira & Carson, LLP.
4. COVENANTS OF THE COMPANY
4.1 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES
The Company and each Shareholder shall refrain from taking any action
which would render any representation, warranty or covenant contained in Section
2 of this Agreement inaccurate as of the Closing Date. Not in limitation of the
foregoing, between the date of execution of this Agreement and the Closing Date,
neither the Company nor any Shareholder shall, without the prior written
approval of Buyer: (a) enter into any Contract, (b) materially change billing
practices or rates, (c) change salaries, bonuses or compensation structure of
any employee, (d) issue any additional equity interest or any warrant, option,
commitment or right of any kind to acquire from the Company any equity or other
security interest in the Company of any kind, (e) merge, liquidate, consolidate,
reorganize or change the organic structure of the Company, (f) make any
distribution or other payment to any equity owner, or (g) make any commitment or
agreement with respect to the any of foregoing.
4.2 NOTIFICATION
Between the date of this Agreement and the Closing Date, the Company and
the Shareholders will promptly notify Buyer in writing if the Company or the
Shareholders become aware of any fact or condition that causes or constitutes a
misrepresentation or breach of any of the Company's and the Shareholders'
representations and warranties as of the date of this Agreement, or if the
Company or any Shareholder becomes aware of the occurrence after the date of
this Agreement of any fact or condition that would cause or constitute a
misrepresentation or breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any change
in the Disclosure Letter if the Disclosure Letter were dated the date of the
occurrence or discovery of any such fact or condition, the Company will promptly
deliver to Buyer a supplement to the Disclosure Letter specifying such change.
During the same period, the Company will promptly notify Buyer of the occurrence
of any breach of any covenant of the Company in this Section 4 or of the
occurrence of any event that may make the satisfaction of the conditions in
Section 6 impossible or unlikely.
4.3 BEST EFFORTS
Between the date of this Agreement and the Closing Date, the Company will
use its best efforts to cause the conditions in Section 6 to be satisfied.
4.4 ACCESS AND INVESTIGATION
During the period from the date of this Agreement to the Closing Date, the
Company will (i) afford Buyer and its Representatives full and free access to
the Company's personnel, properties, contracts, books and records, and other
documents and data, (ii) furnish Buyer and its Representatives with copies of
all such contracts, books and records, and other existing documents and data as
Buyer may reasonably request, and (iii) furnish Buyer and its Representatives
with such additional financial, operating, and other data and information as
Buyer may reasonably request.
4.5 REPAYMENT OF INDEBTEDNESS
Within five business days of the Closing Date, the Shareholders shall
repay all outstanding indebtedness of the Company as of the Closing Date.
5. COVENANTS OF BUYER
5.1 PRESERVE ACCURACY OF REPRESENTATIONS AND WARRANTIES
The Buyer shall refrain from taking any action which would render any
representation, warranty or covenant contained in Section 3 of this Agreement
inaccurate as of the Closing Date
5.2 NOTIFICATION
Between the date of this Agreement and the Closing Date, the Buyer will
promptly notify the Company in writing if the Buyer becomes aware of any fact or
condition that causes or constitutes a misrepresentation or breach of any of the
Buyer's representations and warranties as of the date of this Agreement, or if
the Buyer becomes aware of the occurrence after the date of this Agreement of
any fact or condition that would cause or constitute a misrepresentation or
breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition.
5.3 BEST EFFORTS
Between the date of this Agreement and the Closing Date, Buyer will use
its best efforts to cause the conditions in Section 7 to be satisfied.
6. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
Buyer's obligation to purchase the Assets and to take the other actions
required to be taken by Buyer at the Closing is subject to the satisfaction, at
or prior to the Closing, of each of the following conditions (any of which may
be waived by Buyer, in whole or in part):
6.1 ACCURACY OF REPRESENTATIONS
Each of the Company's and the Shareholders' representations and warranties
in this Agreement must have been accurate in all respects as of the date of this
Agreement, and must be accurate in all respects as of the Closing Date as if
made on the Closing Date, without giving effect to any supplement to the
Disclosure Letter.
6.2 THE COMPANY'S PERFORMANCE
(a) Each of the covenants and obligations that the Company is
required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been duly performed and complied with in
all material respects.
(b) The Company must have delivered to Buyer each of the documents
and items required to be delivered by the Company pursuant to Section 9.2,
and each of the other covenants and obligations in Section 4.1 and Section
4.3 must have been performed and complied with in all respects.
6.3 CONSENTS
Each of the Consents identified in Part 2.2 of the Disclosure Letter must
have been obtained and must be in full force and effect.
6.4 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced or
threatened (orally or in writing) against Buyer, or against any Related Person
of Buyer, any material Proceeding (a) involving any challenge to, or seeking
damages or other relief in connection with, any of the Contemplated
Transactions, or (b) that may have the effect of preventing, delaying, making
illegal, or otherwise interfering with any of the Contemplated Transactions.
6.5 NO CLAIM REGARDING ASSETS OR SALE PROCEEDS
There must not have been made or threatened (orally or in writing) by any
Person any claim asserting that such Person (a) has the right to acquire or
obtain any interest in the Assets, or (b) is entitled to all or any portion of
the Purchase Price payable for the Assets.
6.6 NO PROHIBITION
Neither the consummation nor the performance of any of the Contemplated
Transactions by the Company will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause Buyer or any Person affiliated with Buyer to
suffer any material adverse consequence under, (i) any applicable Legal
Requirement or Order, or (ii) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
Governmental Body.
6.7 DISCLOSURE LETTER
Buyer's receipt and review and acceptance of the Disclosure Letter and the
materials disclosed therein to Buyer's satisfaction within 10 business days of
the date hereof.
6.8 DUE DILIGENCE
Buyer's satisfactory completion of its "due diligence" investigation
relating to the Company's business and the Assets.
6.9 CEO'S VERIFICATION
Verification by the CEO of the Company's First Quarter Revenues, as
more fully set forth in Schedule 1.2.
7. CONDITIONS PRECEDENT TO COMPANY'S OBLIGATION TO CLOSE
The Company's obligation to sell the Assets and to take the other actions
required to be taken by the Company at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by the Company, in whole or in part):
7.1 ACCURACY OF REPRESENTATIONS
Each of Buyer's representations and warranties in this Agreement must have
been accurate in all respects as of the date of this Agreement and must be
accurate in all respects as of the Closing Date as if made on the Closing Date.
7.2 BUYER'S PERFORMANCE
(a) Each of the covenants and obligations that Buyer is required
to perform or to comply with pursuant to this Agreement at or prior to the
Closing must have been performed and complied with in all material
respects.
(b) Buyer must have delivered to the Company each of the documents
and payments required to be delivered by Buyer pursuant to Section 9.2.
7.3 CONSENTS
Each of the Consents identified in Part 2.2 of the Disclosure Letter must
have been obtained and must be in full force and effect.
7.4 NO PROCEEDINGS
Since the date of this Agreement, there must not have been commenced or
threatened (orally or in writing) against the Company and the Shareholders, or
against any Person affiliated with the Company and the Shareholders, any
material Proceeding (a) involving any challenge to, or seeking damages or other
relief in connection with, any of the Contemplated Transactions, or (b) that may
have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions.
7.5 NO PROHIBITION
Neither the consummation nor the performance of any of the Contemplated
Transactions by the Company will, directly or indirectly (with or without notice
or lapse of time), materially contravene, or conflict with, or result in a
material violation of, or cause the Company and the Shareholders or any Person
affiliated with the Company and the Shareholders to suffer any material adverse
consequence under, (i) any applicable Legal Requirement or Order, or (ii) any
Legal Requirement or Order that has been published, introduced, or otherwise
formally proposed by or before any Govern mental Body.
8. TERMINATION
8.1 TERMINATION EVENTS
This Agreement may, by written notice given prior to or at the Closing, be
terminated:
(a) by either Buyer or the Company if a material breach of any
provision of this Agreement has been committed by the other party and such
breach has not been waived;
(b)
(i) by Buyer if any of the conditions in Section 6 has not
been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure
of Buyer to comply with its obligations under this Agreement) and
Buyer has not waived such condition on or before the Closing Date;
or
(ii) by the Company, if any of the conditions in Section 7
has not been satisfied as of the Closing Date or if satisfaction
of such a condition is or becomes impossible (other than through
the failure of the Company to comply with its obligations under
this Agreement) and the Company has not waived such condition on
or before the Closing Date; or
(c) by mutual consent of Buyer and the Company.
8.2 EFFECT OF TERMINATION
Each party's right of termination under Section 8.1 is in addition to any
other rights it may have under this Agreement or otherwise, and the exercise of
a right of termination will not be an election of remedies. If this Agreement is
terminated pursuant to Section 8.1, all further obligations of the parties under
this Agreement will terminate, except that the obligations in Sections 13.1,
13.5 and 13.9 and the obligations under that certain Amended Mutual
Non-Disclosure Agreement between Buyer and the Company, which by its terms
survive, will survive; provided, however, that if this Agreement is terminated
by a party because of the breach of the Agreement by the other party or because
one or more of the conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's failure to comply
with its obligations under this Agreement, the terminating party's right to
pursue all legal remedies will survive such termination unimpaired.
9. CLOSING
9.1 CLOSING DATE
The purchase and sale (the "Closing") provided for in this Agreement will
take place at the offices of Sonfield & Sonfield, counsel to Buyer, at 770 South
Post Oak Lane, Houston, Texas 77056 at 10:00 a.m. (local time) on May 15, 2004,
or at such other time and place as the parties may agree. Subject to the
provisions of Section 8, failure to consummate the purchase and sale provided
for in this Agreement on the Closing Date will not result in the termination of
this Agreement and will not relieve any party of any obligation under this
Agreement.
9.2 CLOSING DELIVERIES
At the Closing:
(a) The Company and the Shareholders will deliver to Buyer:
(i) such bills of sale, assignments, and other good and
sufficient instruments of conveyance as are necessary to vest
Buyer with good title to the Assets;
(ii) all Design Documentation, any lists of prospective
customers, and any problem lists;
(iii) all copies of the source code for the Software and all
copies of the Software in machine-readable form that are in the
possession of the Company;
(iv) all of the Company's business records (to the extent not
previously delivered to Buyer) as described in Section 1.1(a)(v);
(v) a Non-competition Agreement, executed by each of the
Shareholders in the form of Exhibit 9.2(a)(v)
(vi) an Employment Agreement, executed by each of the
Shareholders in the form of Exhibit 9.2(a)(vi);
(vii) a Stockholders Agreement, executed by the Company, and
each of the Shareholders, in the form of Exhibit 9.2(a)(vii);
(viii)a certificate executed by the Chief Executive Officer
of the Company and the Shareholders to the effect that (A) each of
the Company's and the Shareholders' representations and warranties
in this Agreement was accurate in all respects as of the date of
this Agreement and is accurate in all respects as of the Closing
Date as if made on the Closing Date (giving full effect to any
supplements to the Disclosure Letter that were delivered by the
Company and the Shareholders to Buyer prior to the Closing Date in
accordance with Section 4.2), and (B) the Company and the
Shareholders have performed and complied with all covenants and
conditions required to be performed or complied with by them prior
to or at the Closing;
(ix) a Good Standing Certificate for the Company from all
states in which the Company is authorized to do business;
(x) a copy of resolutions of the Company's Shareholders,
executed after review by them of the information described in
Section 11, as authorizing and approving the Company's execution
and delivery of this Agreement and consummation of the
Contemplated Transactions;
(xi) a Subscription Agreement in the form of Exhibit
9.2(a)(xi) hereto executed by Company, and if required by Buyer's
counsel, by each Shareholder;
(xii) an opinion of Roger L. Schoss, Esq., dated the date of
the Closing, in the form attached hereto as Exhibit 9.2(a)(xii),
(xiii)such other documents, instruments, certificates and
opinions as Buyer may reasonably request for the purpose of
consummating the Contemplated Transactions.
(b) Buyer will deliver to the Company:
(i) a stock certificate, duly executed and registered in the
Company's name, representing the Buyer Shares, as defined on
Schedule 1.2;
(ii) a certificate executed by Buyer to the effect that (A)
each of Buyer's representations and warranties in this Agreement
was accurate in all respects as of the date of this Agreement and
is accurate in all respects as of the Closing Date as if made on
the Closing Date and (B) Buyer has performed and complied with all
covenants and conditions required to be performed or complied with
by it prior to or at the Closing;
(iii) the Employment Agreements, executed by Buyer;
(iv) a Stockholders Agreement, executed by the Buyer, in the
form of Exhibit 9.2(a)(vii);
(v) a copy of resolutions adopted by Buyer's board of
directors, certified by an officer of Buyer as having been duly
adopted and being in full force and effect as of the Closing Date,
authorizing Buyer's execution and delivery of this Agreement and
consummation of the Contemplated Transactions;
(vi) a Good Standing Certificate for Buyer from the State of
New York;
(vii) an opinion of Sonfield & Sonfield, dated the date of
the Closing, in the form attached hereto as Exhibit 9.2(b)(vii);
and
(viii)such other documents, instruments, certificates and
opinions as the Company may reasonably request for the purpose of
consummating the Contemplated Transactions.
10. INDEMNIFICATION; REMEDIES
10.1 SURVIVAL
All representations and warranties in this Agreement, the Disclosure
Letter, the supplements to the Disclosure Letter, and any other certificate or
document delivered pursuant to this Agreement will survive the Closing. The
right to indemnification, reimbursement or other remedy based on such
representations and warranties will not be affected by any investigation
conducted by Buyer or its agents. Notwithstanding the foregoing, (a) all
representations and warranties shall continue in effect if a claim for breach
thereof has been made prior to the expiration of the applicable survival period
and shall survive until such claim is resolved and (b) any representation or
warranty of which either the Company or any Shareholder had knowledge of a
misrepresentation or breach at any time prior to the date on which such
representation or warranty is made shall survive indefinitely.
10.2 INDEMNIFICATION AND REIMBURSEMENT BY THE COMPANY AND THE SHAREHOLDERS
The Company and the Shareholders jointly and severally, will indemnify and
hold harmless Buyer and its employees, officers, directors, stockholders,
controlling persons, and affiliates (collectively, the "Indemnified Persons"),
and will reimburse the Indemnified Persons, for any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, but excluding consequential or punitive
damages, whether or not involving a third-party claim (collectively, "Damages"),
arising from or in connection with:
(a) any material misrepresentation or breach of any representation
or warranty made by the Company in or pursuant to this Agreement, the
Disclosure Letter, the supplements to the Disclosure Letter, or any other
certificate or document delivered by the Company or the Shareholders
pursuant to this Agreement;
(b) any non-compliance with or breach by the Company or the
Shareholders of any covenant or obligation of the Company or the
Shareholders in this Agreement;
(c) (i) the operation of the Company's business (including the
development, manufacture, sale, shipment, license or use of the Software
or other product of, or services provided by, the Company) prior to the
Closing Date, or (ii) any liabilities or obligations of the Company other
than the Assumed Obligations; or
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with the Company or the
Shareholders (or any Person acting on its or his behalf) in connection
with any of the Contemplated Transactions.
10.3 INDEMNIFICATION AND REIMBURSEMENT BY BUYER
Buyer shall indemnify and hold harmless the Company and the Shareholders,
and will reimburse the Company and the Shareholders, for any Damages arising
from or in connection with:
(a) any misrepresentation or breach of any representation or
warranty made by Buyer in this Agreement or in any certificate delivered
by Buyer pursuant to this Agreement;
(b) any non-compliance with or breach by Buyer of any covenant or
obligation of Buyer in this Agreement;
(c) any claim by any Person arising from the Buyer's ownership or
utilization of the Assets after the Closing Date (except to the extent
such claim relates to a matter for which Buyer is entitled to
indemnification pursuant to Section 10.2); or
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Buyer (or any Person acting
on its behalf) in connection with any of the Contemplated Transactions.
10.4 RIGHT OF SETOFF
Upon notice to the Company specifying in reasonable detail the damages
which are the basis for any such set-off, Buyer may set off an amount equal to
the known or reasonably anticipated Damages to which it may be entitled under
this Section 10 against amounts otherwise payable under Section 1.2. Neither the
exercise of nor the failure to exercise such right of set-off will constitute an
election of remedies or limit Buyer in any manner in the enforcement of any
other remedies that may be available to it.
10.5 PROCEDURE FOR INDEMNIFICATION-THIRD PARTY CLAIMS
(a) Promptly after receipt by an indemnified party under Section
10.2 or 10.3 of notice of a claim against it (a "Claim"), the indemnified
party will, if a claim is to be made against an indemnifying party under
such Section, give notice to the indemnifying party of the Claim, but the
failure to notify the indemnifying party will not relieve the indemnifying
party of any liability that it may have to any indemnified party, except
to the extent that the indemnifying party demonstrates that the defense of
such action is prejudiced by the indemnified party's failure to give such
notice.
(b) If any Claim referred to in Section 10.5(a) is made against an
indemnified party and it gives notice to the indemnifying party of the
Claim, the indemnifying party will, unless the Claim involves tax
liabilities, be entitled to participate in the defense of the Claim and,
to the extent that it wishes (unless (i) the indemnifying party is also a
party to the Claim and the indemnified party determines in good faith that
joint representation would result in a conflict of interest, or (ii) the
indemnifying party fails to provide reasonable assurance to the
indemnified party of its financial capacity to defend the Claim and
provide indemnification with respect to the Claim), to assume the defense
of the Claim with counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of its
election to assume the defense of the Claim, the indemnifying party will
not, as long as it diligently conducts such defense, be liable to the
indemnified party under such Section for any fees of other counsel or any
other expenses with respect to the defense of the Claim in each case
subsequently incurred by the indemnified party in connection with the
defense of the Claim, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Claim, (a) no compromise or
settlement of such claims may be effected by the indemnifying party
without the indemnified party's consent unless (i) there is no finding or
admission of any violation of Legal Requirements or any violation of the
rights of any Person and no effect on any other Claims that may be made
against the indemnified party, and (ii) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and (b)
the indemnifying party will have no liability with respect to any
compromise or settlement of such claims effected without its consent. If
notice is given to an indemnifying party of a Claim and the indemnifying
party does not, within ten days after the indemnified party's notice is
given, give notice to the indemnified party of its election to assume the
defense of the Claim, the indemnifying party will be bound by any
determination with respect to the Claim or any compromise or settlement
effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Claim may adversely affect it or its Related Persons other than as a
result of monetary damages for which it would be entitled to
indemnification under this Agreement, the indemnified party may, by notice
to the indemnifying party, assume the exclusive right to defend,
compromise, or settle the Claim, but the indemnifying party will not be
bound by any determination of a Claim so defended or any compromise or
settlement effected without its consent (which may not be unreasonably
withheld).
(d) The Company, the Shareholders and Buyer hereby consent to the
non-exclusive jurisdiction of any court in which a Claim is brought
against any indemnified person for purposes of any claim that an
indemnified party may have under this Agreement with respect to such Claim
or the matters alleged therein, and agree that process may be served on
the Company, the Shareholders and Buyer with respect to such a claim
anywhere in the world.
10.6 PROCEDURE FOR INDEMNIFICATION-OTHER CLAIMS
A claim for indemnification for any matter not involving a third-party
claim may be asserted by notice to the party from whom indemnification is
sought.
11. SECURITIES LAW MATTERS
The Company, the Shareholders and Buyer agree as follows with respect to
the purchase and the sale or other disposition of the Purchase Shares by the
Company and the Shareholders after the Closing:
11.1 ACQUISITION AND DISPOSITION OF PURCHASE SHARES
The Company and each of the Shareholders represents and warrants that the
Company and each Shareholder:
(a) has received and reviewed Buyer's audited balance sheets,
statements of operations, and cash flow (together with all notes and
opinions thereto of Kingery, Crouse & Hohl, P.A.) for the fiscal year
ended December 31, 2003 and a general description of Buyer's business
plan.
(b) (i) was provided the opportunity to ask questions of and
receive answers from Buyer, or its representative, concerning the
operations, business and financial condition of Buyer, and all such
questions have been answered to his full satisfaction and any information
necessary to verify such responses has been made available to him; (ii)
has received such documents, materials and information as he deems
necessary or appropriate for evaluation of Buyer Shares, and further
confirms that he has carefully read and understands these materials and
has made such further investigation as was deemed appropriate to obtain
additional information to verify the accuracy of such materials; (iii)
confirms that Buyer Shares were not offered to him by any means of general
solicitation or general advertising; (iv) he has such knowledge and
experience in financial and business matters that he is capable of
evaluating the merits and risks of an investment in the Purchase Shares;
(v) the Company is acquiring the Purchase Shares for its own account, for
investment purposes only, and not with a view towards the sale or other
distribution thereof, in whole or in part, except for a distribution to
the Shareholders to the extent such distribution (A) will not violate any
state or federal security laws, (B) will not cause the issuance of such
Purchased Shares to the Company to violate any state or federal security
laws, and (C) will not require any registration of such Purchased Shares
or other information to be filed by the Company or Buyer with respect to
the Purchased Shares or any other Buyer Shares.
12. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified:
"Applicable Contract"-any Contract which relates directly or indirectly to
the Assets or to services rendered to or by or to be rendered to or by the
Company.
"Buyer's Closing Documents"-the documents to be delivered by Buyer to the
Company pursuant to Section 9.2(b).
"Closing Date"-the date and time as of which the Closing actually takes
place.
"Company's Closing Documents"-the documents to be delivered by the Company
and the Shareholders to Buyer pursuant to Section 9.2(a).
"Consent"-any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
"Contemplated Transactions"-all of the transactions contemplated by this
Agreement, including:
(i) the sale of the Assets by the Company to Buyer;
(ii) the execution, delivery, and performance of the
Company's Closing Documents and Buyer's Closing Documents; and
(iii) the performance by Buyer and the Company and the
Shareholders of their respective covenants and obligations under
this Agreement and the Employment Agreement as applicable.
"Contract"-any agreement, contract, obligation, promise, or undertaking
(whether written or oral and whether express or implied) that is legally binding
and (a) under which the Company has or may acquire any rights, (b) under which
the Company has or may become subject to any obligation or liability, or (c) by
which the Company or any of the Assets is or may become bound.
"Design Documentation"-all documentation, specifications, manuals, user
guides, promotional material, internal notes and memos, technical documentation,
drawings, flow-charts, diagrams, source language statements, demo disks,
benchmark test results, and other written materials related to, associated with
or used or produced in the development of the Software.
"Disclosure Letter"-the disclosure letter delivered by the Company to
Buyer concurrently with the execution and delivery of this Agreement.
"Encumbrance"-any claim, lien, pledge, charge, security interest,
equitable interest, option, right of first refusal, condition, or other
restriction or adverse claim of rights of any kind, including any restriction on
use, transfer, voting (in the case of a security), receipt of income, or
exercise of any other attribute of ownership.
"Governmental Authorization" any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"Governmental Body"-any:
(i) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign, or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department,
official, or other entity and any court or other tribunal);
(iv) multi-national organization or body; or
(v) body exercising, or entitled or purporting to exercise,
any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
"Legal Requirement"-any federal, state, local, municipal, foreign, or
other constitution, ordinance, regulation, statute, treaty, or other law
adopted, enacted, implemented, or promulgated by or under the authority of any
Governmental Body or by the eligible voters of any jurisdiction, and any
agreement, approval, consent, injunction, judgment, license, order, or permit by
or with any Governmental Body to which the Company is a party or by which the
Company is bound.
"Order"-any award, injunction, judgment, order, ruling, subpoena, or
verdict or other decision entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"Ordinary Course of Business"-an action taken by a Person will be deemed
to have been taken in the "Ordinary Course of Business" only if:
(i) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal
day-to-day operations of such Person;
(ii) such action is not required to be authorized by the
board of directors of such Person (or by any Person or group of
Persons exercising similar authority); and
(iii) such action is similar in nature and magnitude to
actions customarily taken, without any authorization by the board
of directors (or any Person or group of Persons exercising similar
authority), in the ordinary course of the normal day-to-day
operations of other Persons that are in the same line of business
as such Person.
"Person" any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, or other entity or
Governmental Body.
"Proceeding"-any suit, litigation, arbitration, hearing, audit,
investigation, or other action (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
"Related Person"-with respect to a particular individual:
(i) each other member of such individual's Family; and
(ii) any Person that is directly or indirectly controlled by
any one or more members of such individual's Family.
With respect to a specified Person other than an individual:
(i) any Person that, directly or indirectly, controls, is
controlled by, or is under common control with such specified
Person; and
(ii) each Person that serves as a director, executive
officer, general partner, executor, agent, employee or trustee of
such specified Person (or in a similar capacity);
For purposes of this definition, the "Family" of an individual includes
(i) such individual, (ii) the individual's spouse and former spouses, (iii) any
lineal ancestor descendant of the individual, or (iv) a trust for the benefit of
the foregoing. A Person will be deemed to control another Person, for purposes
of this definition, if the first Person possesses, directly or indirectly, the
power to direct, or cause the direction of, the management policies of the
second Person, (x) through the ownership of voting securities, (y) through
common directors, trustees or officers, or (z) by contract or otherwise.
"Representative"-with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of such
Person, including legal counsel, accountants, and financial advisors.
"Trade Secrets"-all licenses, processes, algorithms, formulae, designs,
methods, trade secrets, inventions, proprietary or technical information, Design
Documentation and data covering or embodied in any software or other assets
owned by the Company or used in the conduct of its business.
13. GENERAL PROVISIONS
13.1 EXPENSES
The Company and the Shareholders, on the one hand, and Buyer, on the other
hand, will each bear their own expenses incurred in connection with the
Contemplated Transactions. The Company will pay any legal, accounting, or other
expenses incurred by the Company in connection with the Contemplated
Transactions.
13.2 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given (a) when
delivered by hand; (b) when sent by telecopier, provided that a copy is mailed
by U.S. certified mail, return receipt requested; or (c) one day after deposit
with a nationally recognized overnight delivery service, in each case to the
appropriate addresses and telecopier numbers set forth below (or to such other
addresses and telecopier numbers as a party may designate by notice to the other
parties):
if to Power3:
Power3 Medical Products, Inc.
8374 Market Street, Suite 439
Bradenton, Florida 34202
Attn: Tim Novak, President
Facsimile: (270) 423-6811
with a copy to (which shall not constitute notice to such party):
Robert L. Sonfield, Jr., Esq.
Sonfield & Sonfield
770 South Post Oak Lane, Suite 435
Houston, Texas 77056-1937
Facsimile: (713) 877-1547
if to the Company:
Advanced Bio/Chem, Inc. d/b/a ProtcEx
4800 Research Forest Drive
The Woodlands, Texas 77381
Attn: Stephen B. Rash, President
Facsimile: (281) 363-7935
with a copy to (which shall not constitute notice to the Company):
13.3 FURTHER ASSURANCES
The parties agree (a) to furnish upon request to each other such further
information, (b) to execute and deliver to each other such other documents, and
(c) to do such other acts and things, all as the other party may reasonably
request for the purpose of carrying out the intent of the Contemplated
Transactions.
13.4 WAIVER
The rights and remedies of the parties to this Agreement are cumulative
and not alternative. Neither the failure nor any delay by any party in
exercising any right, power, or privilege under this Agreement or the documents
referred to in this Agreement will operate as a waiver of such right, power, or
privilege, and no single or partial exercise of any such right, power, or
privilege will preclude any other or further exercise of such right, power, or
privilege or the exercise of any other right, power, or privilege.
13.5 ENTIRE AGREEMENT AND MODIFICATION
This Agreement supersedes all prior oral or written agreements between the
parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the party to be charged with the amendment.
13.6 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
Neither party may assign any of its rights under this Agreement without
the prior consent of the other parties except that Buyer may assign any of its
rights under this Agreement to any subsidiary of Buyer; provided, no such
assignment shall relieve Buyer of its obligations under this Agreement. Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted assigns
of the parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy, or claim under or with respect to this Agreement or
any provision of this Agreement.
13.7 SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable by any
court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
13.8 SECTION HEADINGS, CONSTRUCTION
The headings of Sections in this Agreement are provided for convenience
only and will not affect their construction or interpretation. All references to
"Sections" refer to the corresponding Sections of this Agreement. All words used
in this Agreement will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the word "include"
or "including" does not limit the preceding words or terms. The language used in
this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rule of strict construction will be applied
against any party.
13.9 CONFIDENTIALITY OF AGREEMENT
The Company and the Shareholders will keep the terms of this Agreement and
the other agreements contemplated by this Agreement confidential and will not,
without the prior consent of Buyer, disclose such terms to any person or entity
other than their accountant ` s and attorneys who agree to be bound by this
confidentiality provision, provided that this confidentiality obligation will
terminate with respect to any information that becomes generally available to
the public through no fault of the Company or the Shareholders or their
accountants or attorneys or where required by law.
13.10 GOVERNING LAW
This Agreement will be governed by and construed under the laws of the
State of New York without regard to conflicts of laws principles.
13.11 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Purchase Agreement as
of the date first written above.
Buyer: Company:
Power3 Medical Products, Inc. ADVANCED BIO/CHEM, INC. D/B/A PROTEEX
By: /s/ Tim Novak By: /s/ Steven B. Rash
------------------------- ------------------------
Tim Novak, President Steven B. Rash, CEO
Shareholders:
/s/ Steven B. Rash
----------------------------
Steven B. Rash
/s/ Ira L. Goldknopf
----------------------------
Ira Goldknopf