Exhibit 2.1
ACQUISITION AGREEMENT
AMONG
AGE RESEARCH, INC.,
THE VARSITY GROUP, INC.,
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement"), dated as of May 22,
2003, is by and among AGE RESEARCH, INC., a Delaware corporation ("Buyer"), THE
VARSITY GROUP, INC., a Missouri corporation (the "Company"), and the persons
and/or entities listed on Exhibit A hereto who are the holders in the aggregate
of all the issued and outstanding capital stock of the Company (referred to
collectively as the "Seller') (Buyer, Company, and Seller may be referred to
collectively as the "Parties").
RECITALS
A. The capital stock of the Company consists of 30,000
authorized shares of Common Stock, $1.00 par value (the "the Company Shares"),
of which two hundred (200) are currently issued and outstanding and held by
Seller ("Shares").
B The capital stock of the Buyer consists of 100,000,000
authorized shares of Common Stock, $.001 par value, of which 68,759,301 are
currently issued and outstanding and held by Seller ("Shares").
C. The Buyer represents that it's Board of Directors and
Shareholders will authorize a reverse split of 1 for 35 shares of stock prior to
the closing date of this transaction and increase to 750,000,000 the number of
authorized shares of common stock.
D. Upon the terms and conditions set forth below, Seller
desires to sell all of the Company Shares to Buyer, such that, following such
transaction, the Company will be a 100% owned subsidiary of Buyer.
E. The parties intend that this transaction qualify as a
tax-free stock for stock Reorganization within the meaning of section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained in this Agreement, the
Parties hereto agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE SHARES
1.1 ISSUANCE OF THE SHARES. Subject to the terms and
conditions herein set forth, and on the basis of the representations, warranties
and agreements herein contained, Seller shall sell and transfer to Buyer two
hundred (200) Shares of the Company's common stock that constitute 100% of the
issued and outstanding shares of capital stock of the Company.
1.2 CONSIDERATION. At the Closing, Buyer shall issue to Seller
that number of shares of common stock of the Buyer (the "Consideration Shares")
such that after issuance the Consideration Shares shall equal 80% of the issued
and outstanding shares of common stock, or 9,343,920 post split shares of the
common stock of the Buyer. The Consideration Shares shall be restricted common
shares issued pursuant to Rule 506 of Regulation D as promulgated and amended by
the Securities and Exchange Commission, Section 4(2) of the Securities Act of
1933, as amended, or Section 4(6) of the Securities Act of 1933, as amended.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.0 REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY.
Except as disclosed in Exhibit B referring specifically to the representations
and warranties in this Agreement that identifies by section number the section
and subsection to which such disclosure relates and is delivered by the Seller
and the Company to the Buyer prior to the execution of this Agreement (the
"Disclosure Schedules"), the Seller and the Company represent and warrant to the
Buyer, as of the date hereof and as of the Closing, as follows:
2.1 ORGANIZATION, STANDING, POWER. Company is a corporation
duly organized, validly existing, and in good standing under the laws of the
state of Missouri. It has all requisite corporate power, franchises, licenses,
permits, and authority to own its properties and assets and to carry on its
business as it has been and is being conducted. Company is duly qualified and in
good standing to do business in each jurisdiction in which a failure to so
qualify would have a Material Adverse Effect (as defined below) on the Company.
For purposes of this Agreement, the term "Material Adverse Effect" means any
change or effect that, individually or when taken together with all other such
changes or effects which have occurred prior to the date of determination of the
occurrence of the Material Adverse Effect, is or is reasonably likely to be
materially adverse to the business, assets (including intangible assets),
financial condition, or results of operations of the entity.
2.2 AUTHORITY. The Company and Seller have all requisite power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery by the Company and Seller of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary action on the parts of the Company and
Seller, including the approval of the Board of Directors of each Party. This
Agreement has been duly executed and delivered by the Company and Seller to the
Buyer and constitutes a valid and binding obligation of the Seller and the
Company enforceable in accordance with its terms, except that such
enforceability may be subject to: (a) bankruptcy, insolvency, reorganization, or
other similar laws relating to enforcement of creditors' rights generally; and
(b) general equitable principles. Subject to the satisfaction of the conditions
set forth in Article 3 below, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated hereby will not,
conflict with or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation, or acceleration of any obligation, or to loss of a material
benefit under, or the creation of a lien, pledge, security interest, charge, or
other encumbrance on any assets of the Company (any such conflict, violation,
default, right, loss, or creation being referred to herein as a "Violation")
pursuant to: (i) any provision of the organization documents of the Company and
Seller; or (ii) any loan or credit agreement, note, bond, mortgage, indenture,
contract, lease, or other agreement, or instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule, or
regulation applicable to each of the Company's and Seller's respective
properties or assets, other than in the case of any such Violation which
individually or in the aggregate would not have a Material Adverse Effect on the
Company.
2.3 CAPITALIZATION OF THE COMPANY.
(a) THE COMPANY. The capital stock of the Company consists of
30,000 authorized shares of Common Stock, $1.00 par value (the "Company
Shares"), of which two hundred (200) are currently validly issued and
outstanding and held by Seller free of all liens and encumbrances.
(b) NO RIGHTS TO ACQUIRE SHARES. Except as set forth on the
Disclosure Schedules, there are no options, warrants, rights, calls,
commitments, plans, contracts, or other agreements of any character granted or
issued by any of the Company and Seller which provide for the purchase,
issuance, or transfer of any additional shares of the capital stock of the
Company nor are there any outstanding securities granted or issued by any of the
Company and Seller that are convertible into any shares of the equity securities
of the Company, and none is authorized. None of the Company and Seller have
outstanding any bonds, debentures, notes, or other indebtedness the holders of
which have the right to vote (or convertible or exercisable into securities
having the right to vote) with holders of the Company s capital stock on any
matter.
(e) NO VOTING AGREEMENTS. Except as set forth on the
Disclosure Schedules, none of the Company and Seller are a party or subject to
any agreement or understanding, and, to the best of the Company and Seller'
knowledge, there is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of written consents
with respect to any security or by a shareholder or director of any of the
Company.
(f) NO REGISTRATION RIGHTS. Except as set forth on the
Disclosure Schedules the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
2.4 SUBSIDIARIES. "Subsidiary" or "Subsidiaries" means all
corporations, trusts, partnerships, associations, joint ventures, or other
Persons, as defined below, of which the Company or any Subsidiary of the Company
owns not less than twenty percent (20%) of the voting securities or other equity
or of which the Company or any Subsidiary of the Company possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies, whether through ownership of voting shares, management contracts, or
otherwise.
"Person" means any individual, corporation, trust, association, partnership,
proprietorship, joint venture, or other entity. Prior to the Closing of this
Agreement, there are no Subsidiaries of the Company other than as disclosed
herein or disclosed on the Disclosure Schedules.
2.5 NO DEFAULTS. None of the Company and Seller has received
notice that they would be, with the passage of time, in default or violation of
any term, condition, or provision of: (i) their Articles of Incorporation or
Bylaws; (ii) any judgment, decree, or order applicable to any of the Company and
Seller; or (iii) any loan or credit agreement, note, bond, mortgage, indenture,
contract, agreement, lease, license, or other instrument to which any of the
Company and Seller is now a party or by which they or any of their properties or
assets may be bound, except for defaults and violations which, individually or
in the aggregate, would not have a Material Adverse Effect on any of the Company
and Seller.
2.6 GOVERNMENTAL CONSENTS. Any consents, approvals, orders, or
authorizations of or registrations, qualifications, designations, declarations,
or filings with or exemptions by (collectively "Consents"), any court,
administrative agency, or commission, or other federal, state, or local
governmental authority or instrumentality, whether domestic or foreign (each a
"Governmental Entity"), which may be required by or with respect to any of the
Company and Seller in connection with the execution and delivery of this
Agreement or the consummation by the Company and Seller of the transactions
contemplated hereby, except for such Consents which if not obtained or made
would not have a Material Adverse Effect on any of the Company and Seller for
the transactions contemplated by this Agreement, are the responsibility of the
Seller and the Company. Each of the Company and Seller hereby represents and
warrants that such Consents have been obtained by them.
2.7 FINANCIAL STATEMENTS. The Company and Seller have
furnished Buyer with a true and complete copy of its financial statements for
the period ending December 31, 2002, (the "Financial Statements"), which comply
as to form in all material respects with all applicable accounting requirements
with respect thereto and have been prepared internally and fairly present the
financial positions of the Company as at the dates thereof and the results of
its operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal, recurring audit adjustments not material in
scope or amount). There has been no change in the Company's accounting policies
or the methods of making accounting estimates or changes in estimates that are
material to the Financial Statements, except as described in the notes thereto.
A list of the Company's assets, both tangible and intangible, is attached to
this Agreement as Schedule 2.7-1 and a list of the Company's liabilities is
attached as Schedule 2.7-2. All of the Company's assets are set forth in
Schedule 2.7-1 and all of the Company's liabilities are set forth in Schedule
2.7-2.
2.8 ABSENCE OF UNDISCLOSED LIABILITIES. None of the Company
and Seller have any liabilities or obligations (whether absolute, accrued, or
contingent) except: (i) Liabilities that are accrued or reserved against in
their respective Balance Sheets; or (ii) additional Liabilities reserved against
since December 31, 2002, that (x) have arisen in the ordinary course of
business; (y) are accrued or reserved against on their books and records; and
(z) amount in the aggregate to less than $25,000.
2.9 ABSENCE OF CHANGES. Since December 31, 2002, the Company
has conducted its businesses in the ordinary course and there has not been: (i)
any Material Adverse Effect on the business, financial condition, liabilities,
or assets of the Company or any development or combination of developments of
which management of the Company and Seller has knowledge which is reasonably
likely to result in such an effect; (ii) any damage, destruction, or loss,
whether or not covered by insurance, having a Material Adverse Effect on the
Company; (iii) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock, or property) with respect to the
capital stock of the Company; (iv) any increase or change in the compensation or
benefits payable or to become payable by the Company to any of their employees,
except in the ordinary course of business consistent with past practice; (v) any
sale, lease, assignment, disposition, or abandonment of a material amount of
property of the Company, except in the ordinary course of business; (vi) any
increase or modification in any bonus, pension, insurance, or other employee
benefit plan, payment, or arrangement made to, for, or with any of their
employees; (vii) the granting of stock options, restricted stock awards, stock
bonuses, stock appreciation rights, and similar equity based awards; (viii) any
resignation or termination of employment of any office of the Company; and the
Company, to the best of their knowledge, do not know of the impending
resignation or termination of employment of any such office; (ix) any merger or
consolidation with another entity, or acquisition of assets from another entity
except in the ordinary course of business; (x) any loan or advance by the
Company to any person or entity, or guaranty by the Company of any loan or
advance; (xi) any amendment or termination of any contract, agreement, or
license to which any of the Company is a party, except in the ordinary course of
business; (xii) any mortgage, pledge, or other encumbrance of any asset of any
of the Company; (xiii) any waiver or release of any
right or claim of the Company, except in the ordinary course of business; (xiv)
any write off as uncollectible any note or account receivable or portion
thereof; or (xv) any agreement by any of the Company to do any of the things
described in this Section 2.9.
2.10 PATENTS AND TRADEMARKS. The Company has sufficient title
and ownership of all patents, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights, and processes
(collectively, "Intellectual Property") necessary for their businesses as now
conducted without any conflict with or infringement of the rights of others. The
Intellectual Property owned by the Company is listed in the Disclosure
Schedules. There are no outstanding options, licenses, or agreements of any kind
relating to the Intellectual Property, nor is the Company bound by or a party to
any options, licenses, or agreements of any kind with respect to the
Intellectual Property of any other person or entity. The Company has not
received any communications alleging that they have violated or, by conducting
their businesses as proposed, would violate any of the Intellectual Property of
any other person or entity. The Company is not aware that any of their employees
is obligated under any contract (including licenses, covenants, or commitments
of any nature) or other agreement, or subject to any judgment, decree, or order
of any court or administrative agency, that would interfere with the use of his
or her best efforts to promote the interests of the Company or that would
conflict with the Company's business as proposed to be conducted. Neither the
execution or delivery of this Agreement, nor the carrying on of the Company's
business by its employees, nor the conduct of the Company's business as
proposed, will, to the best of the Company and Seller' knowledge, conflict with
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any contract, covenant, or instrument under which any of such
employees is now obligated. None of the Company and Seller believes that it is
or will be necessary to utilize any inventions of any of its employees (or
people it currently intends to hire) made prior to their employment by the
Company.
2.11 CERTAIN AGREEMENTS. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will: (i) result in any payment (including, without limitation, severance,
unemployment compensation, parachute payment, bonus, or otherwise), becoming due
to any director, employee, or independent contractor of the Company, from any
other party under any agreement or otherwise; (ii) materially increase any
benefits otherwise payable under any agreement; or (iii) result in the
acceleration of the time of payment or vesting of any such benefits.
2.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any provision of its articles of incorporation or
bylaws, or of any instrument, judgment, order, writ, decree, or contract to
which it is a party or by which it is bound, or, to the best of their knowledge,
of any provision of any federal or state statute, rule, or regulation which may
be applicable to them. The execution, delivery, and performance of this
Agreement and the consummation of the transactions contemplated hereby will not
result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree, or contract, or an
event that results in the creation of any lien, charge, or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
nonrenewal of any material permit, license, authorization, or approval
applicable to the Company, its businesses, or operations, or any of its assets
or properties.
2.13 EMPLOYEE BENEFIT PLANS. All employee benefit plans
(including without limitation all plans which authorize the granting of stock
options, restricted stock, stock bonuses, or other equity based awards) covering
active, former, or returned employees of the Company are listed in the
Disclosure Schedules.
2.14 OTHER PERSONAL PROPERTY. The books and records of the
Company contain a complete and accurate description, and specify the location,
of all trucks, automobiles, machinery, equipment, furniture, supplies, and other
tangible personal property owned by, in the possession of, or used by the
Company in connection with their businesses. Except as set forth in the
Disclosure Schedules, no personal property used by the Company in connection
with their businesses is held under any lease, security agreement, conditional
sales contract, or other title retention or security arrangement.
2.15 PROPERTIES AND LIENS. Except as reflected in the
Financial Statements or as set forth in the Disclosure Schedules, and except for
statutory mechanics' and materialmen's liens, liens for current taxes not yet
delinquent, the Company owns, free and clear of any liens, claims, charges,
options, or other encumbrances, all of their tangible and intangible property,
real and personal, whether or not reflected in the Financial Statements (except
that sold or disposed of in the ordinary course of business since the date of
such statements) and all such property acquired since the date of such
statements. All real property and tangible personal property of the Company is
in good operating condition and repair, ordinary wear and tear excepted.
2.16 INVENTORY. The Company carries no inventory.
2.17 MAJOR CONTRACTS. Except as otherwise disclosed in
the Disclosure Schedules, the Company is not a party or subject to:
(a) Any union contract, or any employment contract or
arrangement providing for future compensation, written or oral, with any
officer, consultant, director, or employee which is not terminable by the
Company on 30 days' notice or less without penalty or obligations to make
payments related to such termination;
(b) Any joint venture contract, partnership agreement or
arrangement or any other agreement that has involved or is expected to involve a
sharing of revenues with other persons or a joint development of products with
other persons;
(c) Any manufacture, production, distribution, sales,
franchise, marketing, or license agreement, or arrangement by which products or
services of the Company are developed, sold, or distributed;
(d) Any material agreement, license, franchise, permit,
indenture, or authorization which has not been terminated or performed in its
entirety and not renewed which may be, by its terms, accelerated, terminated,
impaired, or adversely affected by reason of the execution of this Agreement, or
the consummation of the transactions contemplated hereby or thereby;
(e) Any material agreement, contract, or commitment that
requires the consent of another person for the Company to enter into or
consummate the transactions contemplated by this Agreement;
(f) Except for object code license agreements of the Company
executed in the ordinary course of business, any indemnification by the Company
with respect to infringements of proprietary rights; or
(g) Any contract containing covenants purporting to materially
limit the Company's freedom to compete in any line of business in any geographic
area.
All contracts, plans, arrangements, agreements, licenses,
franchises, permits, indentures, authorizations, instruments, and other
commitments listed in the Disclosure Schedules are valid and in full force and
effect and to the best of their knowledge, neither the Company itself nor any
other party thereto, breached any material provisions of, or is in default in
any material respect under the terms thereof.
2.18 QUESTIONABLE PAYMENTS. The Company, nor to its knowledge
any director, officer, employee, or agent of the Company, has: (i) made any
payment or provided services or other favors in the United States or any foreign
country in order to obtain preferential treatment or consideration by any
Governmental Entity with respect to any aspect of the business of the Company
and Seller; or (ii) made any political contributions that would not be lawful
under the laws of the United States, any foreign country or any jurisdiction
within the United States or any foreign country. None of the Company and Seller,
nor to their knowledge any director, officer, employee, or agent of the Company,
has been or is the subject of any investigation by any Governmental Entity in
connection with any such payment, provision of services, or contribution.
2.19 RECENT TRANSACTIONS. None of the Company and Seller, nor
to their knowledge any director, officer, employee, or agent of the Company, is
participating in any discussions and do not intend to engage in any discussion:
(i) with any representative of any corporation or corporations regarding the
consolidation or merger of the Company with or into any such corporation or
corporations; (ii) with any corporation, partnership, association, or other
business entity or any individual regarding the sale, conveyance, or disposition
of all or substantially all of the assets of the Company and Seller or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of; or (iii) regarding any
other form of acquisition, liquidation, dissolution, or winding up of the
Company and Seller.
2.20 LEASES IN EFFECT. All real property leases and subleases
as to which the Company is a party and any amendments or modifications thereof
(each a "Lease" and, collectively, the "Leases") are listed in the Disclosure
Schedules and are valid, in full force and effect and enforceable, and there are
no existing defaults on the part of any party and no party has received nor
given notice of default or claimed default with respect to any Lease, nor is
there any event that with notice or lapse of time, or both, would constitute a
default thereunder. Except as set
forth on the Disclosure Schedules, no consent is required from any party under
any Lease in connection with the completion of the transactions contemplated by
this Agreement, and none of the Company and Seller have received notice that any
party to any Lease intends to cancel, terminate, or refuse to renew the same or
to exercise any option or other right thereunder, except where the failure to
receive such consent, or where such cancellation, termination, or refusal would
not have a Material Adverse Effect on the Company and Seller.
2.21 ENVIRONMENTAL.
(a) To the best knowledge of the Company and Seller: (i) the
business as presently or formerly engaged in by them is and has been conducted
in compliance with all applicable Environmental Laws (as defined in subparagraph
(b) below), including without limitation, having all permits, licenses, and
other approvals and authorizations, during the time they engaged in such
businesses; (ii) there are no civil, criminal, or administrative actions, suits,
demands, claims, hearings, investigations, or proceedings pending or threatened
against them relating to any violation, or alleged violation, of any
Environmental Law; and (iii) they have not incurred, and none of their
properties presently or formerly owned or operated by them are presently subject
to, any material liabilities (fixed or contingent) relating to any suit,
settlement, court order, administrative order, judgment, or claim asserted or
arising under any Environmental Law.
(b) "Environmental Law" means any federal, state, foreign, and
local law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, legal doctrine, order, judgment, decree,
injunction, requirement, or agreement with any governmental entity relating to:
(i) the protection, preservation, or restoration of the environment (including,
without limitation, air, water, vapor, surface water, groundwater, drinking
water supply, surface land, subsurface land, plant and animal life, or any other
natural resource), to human health or safety; or (ii) the exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release, or disposal of hazardous substances, in
each case as amended and as now or hereafter in effect.
2.22 TAXES. Except as set forth elsewhere in this
Agreement or in the Disclosure Schedules:
(a) All taxes, assessments, fees, penalties, interest, and
other governmental charges with respect to the Company and Seller which have
become due and payable by December 31, 2002, have been paid in full or
adequately reserved against by the Company and Seller, and all taxes,
assessments, fees, penalties, interest, and other governmental charges which
have become due and payable subsequent to December 31, 2002, have been paid in
full or adequately reserved against on their books of account and such books are
sufficient for the payment of all unpaid federal, state, local, foreign, and
other taxes, fees, and assessments (including without limitation, income,
property, use, franchise, capital stock, added value, employees' income
withholding, social security, and unemployment taxes), and all interest and
penalties thereon with respect to the periods then ended and for all periods
prior thereto; the Company has not incurred sales tax or excise tax liability;
(b) There are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the assessment of any tax or
deficiency against the Company and Seller, nor are there any actions, suits,
proceedings, investigations, or claims now pending against the Company and
Seller in respect of any tax or assessment, or any matters under discussion with
any federal, state, local, or foreign authority relating to any taxes or
assessments, or any claims for additional taxes or assessments asserted by any
such authority; and
(c) There are no liens for taxes upon the assets of the
Company and Seller except for taxes that are not yet payable. The Company has
withheld all taxes required to be withheld in respect of wages, salaries, and
other payments to all employees, officers, and directors and timely paid all
such amounts withheld to the proper taxing authority.
2.23 DISPUTES AND LITIGATION. Except as disclosed in the
Disclosure Schedules, there is no suit, claim, action, litigation, or proceeding
pending or, to the knowledge of the Company and Seller, threatened against or
affecting the Company, respectively, or any of their properties, assets, or
business or to which the Company is a party, in any court or before any
arbitrator of any kind or before or by any Governmental Entity, which would, if
adversely determined, individually or in the aggregate, have a Material Adverse
Effect on the Company and Seller, nor is there any judgment, decree, injunction,
rule, or order of any Governmental Entity or arbitrator outstanding against the
Company, respectively, and having, or which, insofar as reasonably can be
foreseen, in the future could have, any such effect. To the knowledge of the
Company and Seller, there is no investigation pending or threatened
against any of the respective Company and Seller before any foreign, federal,
state, municipal, or other governmental department, commission, board, bureau,
agency, instrumentality, or other Governmental Entity.
2.24 COMPLIANCE WITH LAWS. Except as set forth in the
Disclosure Schedules, none of the Company and Seller' businesses is being
conducted in violation of, or in a manner which could cause liability under any
applicable law, rule, or regulation, judgment, decree, or order of any
Governmental Entity, except for any violations or practices, which, individually
or in the aggregate, have not had and will not have a Material Adverse Effect on
the Company and Seller. The Company and Seller each have all franchises,
permits, licenses, and any similar authority necessary for the conduct of their
business as now being conducted by them, the lack of which could materially and
adversely affect the business, properties, prospects, or financial condition of
the Company and Seller and believes they can obtain, without undue burden or
expense, any similar authority for the conduct of their business as it is
planned to be conducted. None of the Company and Seller is in default in any
material respect under any of such franchises, permits, licenses, or other
similar authority. A true and complete list of all such franchises, permits, and
licenses held by the Company and Seller is set forth in the Disclosure
Schedules.
2.25 RELATED PARTY TRANSACTIONS. No employee, officer, or
director of the Company nor member of his or her immediate family is indebted to
the Company, nor is the Company indebted (or committed to make loans or extend
or guarantee credit) to any of them. To the best of each of the Company and
Seller' knowledge, none of such persons has any direct or indirect ownership
interest in any firm or corporation with which the Company is affiliated or with
which the Company has a business relationship, or any firm or corporation that
competes with the Company and Seller, except that employees, officers, or
directors of the Company and Seller and members of their immediate families may
own stock in publicly traded companies that may compete with the Company and
Seller. To the best knowledge of each of the Company and Seller, respectively,
no member of the immediate family of any officer or director of the Company is
directly or indirectly interested in any material contract with the Company.
2.26 INSURANCE. The Company and Seller have or shall obtain
fire and casualty insurance policies, with extended coverage, sufficient in
amount (subject to reasonable deductibles) to allow them to replace any of their
properties that might be damaged or destroyed within 45 days of the execution of
this Agreement. The Seller shall have in effect and in good standing the current
Worker's Compensation with its current carrier at the time of closing.
2.27 MINUTE BOOKS. The minute books of the Company provided to
Buyer contain a complete summary of all meetings of directors and shareholders
since the time of incorporation and reflect all transactions referred to in such
minutes accurately in all material respects.
2.28 DISCLOSURE. No representation or warranty made by the
Company in this Agreement, nor any document, written information, statement,
financial statement, certificate, or exhibit prepared and furnished or to be
prepared and furnished by the Company and Seller or their representatives
pursuant hereto or in connection with the transactions contemplated hereby, when
taken together, contains any untrue statement of a material fact, or omits to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading in light of the circumstances under which they were
furnished.
2.29 RELIANCE. The foregoing representations and warranties
are made by each of the Seller and the Company with the knowledge and
expectation that the Buyer is placing reliance thereon.
2.30 STATUS OF SELLERS.
(a) The Seller has access to the complete SEC filings of the
Buyer filed on or after March 1, 2003, and has carefully read such filings in
their entirety, and understands the contents thereof. Each Seller has relied
only on the information contained therein, information otherwise provided by the
Company in response to the request of each Seller or each Seller's financial
advisor or representative, or information from books and records made available
to each Seller by the Buyer.
(b) Each Seller confirms that, in making the decision to
purchase the Consideration Shares, each Seller has relied solely upon
independent investigations made by each Seller and/or each Seller's financial
advisors or representatives, including each Seller's own professional tax,
accounting, financial, legal and other advisors, and
that each Seller and such financial representatives and advisors have been given
the opportunity to ask questions of, and receive answers from, the Company
concerning the terms and conditions of the Offering and to obtain any additional
information, to the extent such persons possess such information or can acquire
it without unreasonable effort or expense.
(c) Each Seller understands that the certificate representing
the Consideration Shares will bear a restrictive legend regarding the restricted
transferability thereof and, therefore, the Consideration Shares are and will be
"restricted securities," as that term is defined in the 1933 Act. The Seller is
not acquiring the Consideration Shares with any view towards the resale or
distribution thereof.
(d) Except as allowed by applicable securities laws, rules and
regulations, the Consideration Shares are being purchased solely for the
Seller's own account and not for the account of any other person or entity, and
not for distribution, assignment or resale to others and no other person or
entity has a direct or indirect beneficial interest in such Consideration
Shares.
(e) Each Seller agrees that the Seller will neither directly
nor indirectly seek to assign, transfer or sell the Consideration Shares in any
way inconsistent with the legend that will be placed on the certificate
evidencing the Consideration Shares.
2.40 REPRESENTATIONS AND WARRANTIES OF BUYER
REPRESENTATIONS AND WARRANTIES OF BUYER. BUYER represents, warrants and
covenants, except to the extent set forth on the BUYER Schedule of Exceptions or
except as set forth in the reports required to be filed by BUYER under the
Securities Act and the Exchange Act of 1934, as amended, including pursuant to
Section 13(a) or 15(d) thereof ("SEC REPORTS"), as follows:
(a) BUYER is a duly organized and validly existing corporation in good
standing under the laws of the State of Delaware, authorized to issue an
aggregate of 750,000,000 shares (at time of closing) of BUYER Common Stock. As
of the Closing Date, other than BUYER Common Stock, there are no other
securities authorized and/or issuable under the BUYER Articles of Incorporation.
On the Closing Date, there will be issued and outstanding no more than 2,335,980
(post split) shares of BUYER Common Stock, all of which such issued and
outstanding shares will be validly issued, fully paid and nonassessable. Except
as contemplated by this Agreement, on the Effective Date there will be no issued
or outstanding options, warrants or other rights, or commitments or agreements
of any kind, contingent or otherwise, to purchase or otherwise acquire shares of
BUYER Common Stock or any issued or outstanding securities of any nature
convertible into shares of BUYER Common Stock. There is no proxy or any other
agreement, arrangement or understanding of any kind authorized or outstanding
which restricts, limits or otherwise affects the right to vote any shares of
BUYER Common Stock.
(b) BUYER is, and on the Closing Date will be, duly authorized, qualified
and licensed under any and all applicable laws, regulations, ordinances or
orders of public authorities to carry on its business in the places and in the
manner as presently conducted. The business of BUYER does not require it to be
registered as an investment company or investment advisor, as such terms are
defined under the Investment Company Act and the Investment Advisors Act of
1940.
(c) The financial statements of BUYER, consisting of its Balance Sheets as
at December 31, 2002 and 2001, and its Statement of Operations for the fiscal
years ended December 31, 2002 and 2001, its Statement of Stockholders' Equity as
of December 31, 2002 and 2001 and its Statement of Cash Flows for the fiscal
years ended December 31, 2002 and 2001 all together with accompanying notes,
have been audited by independent public accountants, are complete and correct in
all material respects, present fairly the financial position of BUYER and the
results of operations and changes in financial position for the respective
periods ended on such dates, and were prepared in accordance with generally
accepted accounting principles consistently applied during the periods. The
interim financial statements of BUYER, consisting of its Balance Sheet as of
March 31, 2003 and its Statement of Operations, Statement of Stockholders'
Equity and Statement of Cash Flows for the three-month period ending March 31,
2003 have been
prepared in accordance with generally accepted accounting principles and have
been adjusted for all normal and recurring accruals and present fairly the
financial position of BUYER and the results of operations and changes in
financial position for the respective periods ended on such dates, and were
prepared in accordance with generally accepted accounting principles
consistently applied during the periods. All the financial statements referenced
herein regarding BUYER are collectively referred to as the "BUYER FINANCIAL
STATEMENTS", all of which are set forth in the SEC Reports publicly filed with
the Commission.
(d) There has not been, and on the Closing Date there will not have been,
any material change in the financial condition of BUYER from that set forth in
the BUYER Financial Statements except for (i) transactions in the ordinary
course of business, (ii) transactions relating to this Agreement, and (iii) the
incurring of expenses and liabilities relating to this Agreement.
(e) There are, and on the Closing there will be, no liabilities (including,
but not limited to, tax liabilities) or claims against BUYER (whether such
liabilities or claims are contingent or absolute, direct or indirect, accrued or
unaccrued and matured or unmatured) not appearing on the BUYER Financial
Statements.
(f) All federal, state, county and local income, excise, property or other
tax returns required to be filed by BUYER have been filed and all required
taxes, fees or assessments have been paid or an adequate reserve therefore has
been set up in the BUYER Financial Statements.
(g) Reserved
(h) BUYER has, and on the Closing Date will have, no material non-disclosed
contracts to which it is, or on the Closing Date will be, a party.
(i) There are, and on the Closing Date there will be, no legal,
administrative, arbitral or other proceedings, claims, actions or governmental
investigations of any nature pending or to BUYER's knowledge threatened in
writing, against BUYER, including, but not limited to any shareholder claims or
derivative actions, or challenging the validity or propriety of the transactions
contemplated by this Agreement, and, to BUYER's best knowledge, there is no
reasonable basis for any proceeding, claim, action or governmental investigation
against BUYER. BUYER is not a party to any order, judgment or decree which will,
or might reasonably be expected to, materially adversely affect the business,
operations, properties, assets or financial condition of BUYER.
(j) Since December 31, 2002 and to the Closing Date there will be (i) no
salaried or otherwise compensated employees and no bonuses paid to any officer
or director of BUYER; (ii) no loans made to or transactions with any officer or
director of BUYER; (iii) no dividends or other distributions declared or paid by
BUYER; and (iv) no purchase by BUYER of any of the BUYER common stock except
those disclosed.
(k) BUYER has not issued or committed itself to issue, and to the Closing
Date will not issue or commit itself to issue, any additional common shares or
any options, rights, warrants, or other securities convertible into common
shares, except as contemplated by this Agreement.
(l) BUYER has no issued patents, trademarks, trademark registrations, trade
names, copyrights, copyright registrations or applications therefor. BUYER has
no knowledge of any infringements by it of any third party's intellectual
property.
(m) BUYER has, and on the Closing Date will have, in all material respects
operated its business and conducted its affairs in compliance with all
applicable laws, rules and regulations.
(n) On the Closing Date there will be no loans, leases, commitments,
arrangements or other contracts of any kind or nature outstanding between (i)
BUYER and (ii) any officer or director of BUYER or any person related to or
affiliated with any officer or director of BUYER.
(o) During the past five year period, no officer or director of BUYER has
been the subject of any Bad Event.
(p) BUYER has no pension plan, profit sharing or similar employee benefit
plan.
(q) Except for the consent and approval of the Boards of Directors of
BUYER, the filing of a Form 8-K within 15 days of the Closing Date and the
filing of a Form D with the Commission and the State of
1
Delaware, no consents or approvals of, or filings or registrations with, any
third party or any public body or authority are necessary in connection with (i)
the execution and delivery by BUYER of this Agreement and (ii) the consummation
of the Acquisition and the other transactions contemplated hereby. BUYER has,
and on the Closing Date will have, full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
and the transactions contemplated hereby have been, or will be prior to the
Effective Date, duly approved by the Board of Directors of BUYER. This Agreement
has been duly executed and delivered by BUYER and constitutes the legal, valid
and binding obligation of BUYER enforceable against it in accordance with the
terms hereof except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws of general application relating to or affecting the
enforcement of rights hereunder or general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(r) None of the information supplied or to be supplied by or about BUYER to
the Company concerning the Acqusition contains any untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading.
(s) The execution and delivery by BUYER of this Agreement, the consummation
and performance of the transactions herein contemplated, and compliance with the
terms of this Agreement by BUYER will not conflict with, result in a breach of
or constitute a default under (i) any indenture, mortgage, deed of trust or
other agreement, instrument or contract to which BUYER is now a party or by
which it or any of its assets or properties is bound; (ii) the Certificate of
Incorporation, as amended, or the bylaws of BUYER, in each case as amended; or
(iii) any law, order, rule or regulation, writ, injunction, judgment or decree
of any government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over BUYER or any of its business or properties.
(t) To the best of its knowledge, BUYER is not in violation of any federal,
state or local environmental law or regulation.
ARTICLE 3
CONDITIONS PRECEDENT
3.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The
respective obligations of each Party hereunder shall be subject to the
satisfaction prior to or at the Closing of the following conditions:
(a) NO RESTRAINTS. No statute, rule, regulation, order,
decree, or injunction shall have been enacted, entered, promulgated, or enforced
by any court or Governmental Entity of competent jurisdiction that enjoins or
prohibits the consummation of this Agreement and shall be in effect.
(b) LEGAL ACTION. There shall not be pending or threatened in
writing any action, proceeding, or other application before any court or
Governmental Entity challenging or seeking to restrain or prohibit the
consummation of the transactions contemplated by this Agreement, or seeking to
obtain any material damages.
3.2 CONDITIONS TO SELLER'S OBLIGATIONS. The obligations of
Seller shall be subject to the satisfaction prior to or at the Closing of the
following conditions unless waived by Seller.
(a) PERFORMANCE OF OBLIGATIONS OF BUYER. Buyer shall have
performed all agreements and covenants required to be performed by it under this
Agreement prior to the Closing, except for breaches that do not have a Material
Adverse Effect on the Parties or on the benefits of the transactions provided
for in this Agreement. Seller shall have received a certificate signed on behalf
of Buyer by the Chief Executive Officer of Buyer to such effect on the Closing.
(b) BOARD AND SHAREHOLDER AUTHORIZATIONS. The buyer shall have
secured the necessary board and shareholder authorizations necessary to secure
an increase in the Buyer's authorized shares from the current 100,000,000
authorized shares to 750,000,000 authorized shares. The Buyer shall also have
secured the necessary board and shareholder authorization in to secure a 1 for
35 reverse split enact such reverse of the Buyer's capital stock prior to close.
3.3 CONDITIONS TO BUYER'S OBLIGATIONS. The obligations of
Buyer shall be subject to the satisfaction prior to or at the Closing of the
following conditions unless waived by Buyer:
(a) REPRESENTATIONS AND WARRANTIES OF SELLER AND THE COMPANY.
The representations and warranties of Seller and the Company set forth in this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing as though made on and as of the Closing, except: (i) as otherwise
contemplated by this Agreement; or (ii) in respects that do not have a Material
Adverse Effect on the Parties or on the benefits of the transactions provided
for in this Agreement. Buyer shall have received certificates signed on behalf
of Seller and the Company by the Chief Executive Officer or President of each
Seller and the Company to such effect on the Closing.
(b) PERFORMANCE OF OBLIGATIONS OF SELLER AND THE COMPANY.
Seller and the Company shall have performed all agreements and covenants
required to be performed by them under this Agreement prior to the Closing,
except for breaches that do not have a Material Adverse Effect on the Parties or
on the benefits of the transactions provided for in this Agreement. Buyer shall
have received certificates signed on behalf of Seller and the Company by the
Chief Executive Officer or President of each Seller and the Company to such
effect on the Closing.
(c) GOVERNMENTAL APPROVALS. All Consents of Governmental
Entities legally required by Seller and the Company for the transactions
contemplated by this Agreement shall have been filed, occurred, or been
obtained, other than such Consents, the failure of which to obtain would not
have a Material Adverse Effect on the consummation of the transactions
contemplated by this Agreement.
(d) CONSENTS OF OTHER THIRD PARTIES. Seller and the Company
shall have received and delivered to Buyer all requisite consents and approvals
of all lenders, lessors, and other third parties whose consent or approval is
required in order for Seller and the Company to consummate the transactions
contemplated by this Agreement, or in order to permit the continuation after the
Closing of the business activities of the Company in the manner such business is
presently carried on by it. Buyer shall have received copies of any necessary
written consent(s) to this Agreement and the transactions contemplated herein.
(e) MATERIAL ADVERSE CHANGE. Since the date hereof and through
Closing, there shall not have occurred any change, occurrence, or circumstance
in Seller or the Company having or reasonably likely to have, individually or in
the aggregate, in the reasonable judgment of Buyer, a Material Adverse Effect on
the Parties or on the transactions contemplated by this Agreement.
(F) DUE DILIGENCE INVESTIGATION. The Buyer shall have completed its due
diligence investigation and analysis of information and evaluation of the
Company to its satisfaction in its sole judgment.
ARTICLE 4
CLOSING AND DELIVERY OF DOCUMENTS
4.1 TIME AND PLACE. The closing of the transactions
contemplated by this Agreement shall take place at the offices of NeoTactix,
located in Irvine, California, no later than July 30, 2003, or at such other
time and place as the Parties mutually agree upon in writing (which time and
place are hereinafter referred to as the "Closing").
4.2 DELIVERIES BY SELLER. At Closing, Seller shall make
the following deliveries to Buyer:
(a) A stock certificate(s) representing the Company Shares
previously owned by Seller as set forth in Section 1.1 above, together with an
assignment in blank executed by each Seller;
(b) A certificate of good standing for each Seller if Seller
is an entity;
(c) A certificate executed by Seller certifying that: (i) all
Seller's representations and warranties under this Agreement are true as of the
Closing, as though each of those representations and warranties had been made on
that date; and (ii) Seller has performed all agreements and covenants required
to be performed by it under this Agreement prior to the Closing, except for
breaches that do not have a Material Adverse Effect on the Parties or on the
benefits of the transactions provided for in this Agreement; and
(d) Certified resolutions of the Board of Directors of Seller,
if Seller is an entity, in form satisfactory to counsel for Buyer, authorizing
the execution and performance of this Agreement.
4.3 DELIVERIES BY THE COMPANY. At Closing, the Company shall
make the following deliveries to Buyer:
(a) A certificate representing the Company Shares that Buyer
is acquiring as set forth in Section 1.1 above;
(b) A certificate of good standing for the Company;
(c) A certificate executed by the Company certifying that: (i)
all of the Company's representations and warranties under this Agreement are
true as of the Closing, as though each of those representations and warranties
had been made on that date; and (ii) the Company has performed all agreements
and covenants required to be performed by it under this Agreement prior to the
Closing, except for breaches that do not have a Material Adverse Effect on the
Parties or on the benefits of the transactions provided for in this Agreement;
and
(d) Certified resolutions of the Board of Directors of the
Company, in form satisfactory to counsel for Buyer, authorizing the execution
and performance of this Agreement; and
(e) The minute book and corporate records of the Company.
4.4 DELIVERIES BY BUYER. At Closing, Buyer shall make the
following deliveries to Seller:
(a) A certificate executed by Buyer certifying that: (i)
Buyer's representations and warranties under this Agreement are true as of the
Closing, as though each of those representations and warranties had been made on
that date; and (ii) Buyer has performed all agreements and covenants required to
be performed by it under this Agreement prior to the Closing, except for
breaches that do not have a Material Adverse Effect on the Parties or on the
benefits of the transactions provided for in this Agreement;
(b) A certificate of good standing for Buyer; and
(c) Certified resolutions of the Board of Directors of Buyer
in form satisfactory to counsel for Seller, authorizing the execution and
performance of this Agreement.
(d) Stock Certificates for the Consideration Shares duly
issued by the Buyer in the names and for the number of Consideration Shares set
forth in Schedule 4.4(e).
ARTICLE 5
INDEMNIFICATION
5.1 SELLER AND THE COMPANY'S INDEMNITY OBLIGATIONS. (a) Upon
receipt of notice thereof, Seller and the Company shall, jointly and severally,
indemnify, defend, and hold harmless Buyer from any and all claims, demands,
liabilities, damages, deficiencies, losses, obligations, costs and expenses,
including attorney fees and any costs of investigation that Buyer shall incur or
suffer, that arise, result from or relate to: (i) any breach of, or failure by
Seller or the Company to perform, any of their representations, warranties,
covenants, or agreements in this Agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Seller and/or the
Company under this Agreement; and (ii) the employment of any of the Company's
employees which is in violation of any law, regulation, or ordinance of any
Governmental Entity either under the conduct of its business.
(b) If additional liabilities or claims become known and
claims are made upon the Company for occurrences prior to December 31, 2002,
Buyer shall have the right to offset the liabilities and claims against the
Consideration Shares as well as pursue all other remedies.
(c) Buyer shall notify promptly Seller and the Company of the
existence of any claim, demand, or other matter to which Seller and the
Company's indemnification obligations would apply, and shall give them a
reasonable opportunity to defend the same at their own expense and with counsel
of their own selection, provided that Seller shall at all times also have the
right to fully participate in the defense. If Seller and the
Company, within a reasonable time after this notice, fails to defend, Buyer
shall have the right, but not the obligation, to undertake the defense of, and,
with the written consent of Seller and the Company, to compromise or settle the
claim or other matter on behalf, for the account, and at the risk, of Seller and
the Company.
(d) The Company's obligations under this section 5.2 shall
terminate upon the Closing.
5.2 BUYER'S INDEMNITY OBLIGATIONS.
(a) Upon receipt of notice thereof, Buyer shall indemnify,
defend, and hold harmless Seller and/or the Company from any and all claims,
demands, liabilities, damages, deficiencies, losses, obligations, costs, and
expenses, including attorney fees and any costs of investigation that Seller
and/or the Company shall incur or suffer, that arise, result from or relate to
any breach of, or failure by Buyer to perform any of its representations,
warranties, covenants, or agreements in this Agreement or in any schedule,
certificate, exhibit, or other instrument furnished or to be furnished by Buyer
under this Agreement.
(b) Upon receipt of notice thereof, Buyer shall indemnify,
defend, and hold harmless Seller and/or the Company from any and all claims,
demands, liabilities, damages, deficiencies, losses, obligations, costs, and
expenses, including attorney fees and any costs of investigation that Seller
shall incur or suffer, that arise, result from or relate to the conduct of the
business of the Company subsequent to the Closing.
(c) Seller shall notify promptly Buyer of the existence of any
claim, demand or other matter to which Buyer's indemnification obligations would
apply, and shall give it a reasonable opportunity to defend the same at its own
expense and with counsel of its own selection, provided that Seller shall at all
times also have the right to fully participate in the defense. If Buyer, within
a reasonable time after this notice, fails to defend, Seller shall have the
right, but not the obligation, to undertake the defense of, and, with the
written consent of Buyer, to compromise or settle the claim or other matter on
behalf, for the account, and at the risk, of Buyer.
ARTICLE 6
COVENANTS OF THE PARTIES
6.1 COVENANTS. The Parties agree as follows with respect
to the period between the execution of this Agreement and the Closing.
(a) GENERAL. Each of the Parties will reasonable best efforts
to take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth
herein).
(b) NOTICES AND CONSENTS. The Seller and Company shall give
any notices to third parties and obtain any third party consents that the Buyer
reasonably may request in connection with this Agreement, including giving any
notices to, make any filings with, obtaining any authorizations, consents, and
approvals of governments and governmental agencies in connection with this
Agreement.
(c) OPERATION OF BUSINESS. The Seller shall not cause or
permit the Company to engage in any practice, take any action, or enter into any
transaction outside the ordinary course of business.
(d) FULL ACCESS. Each of the Seller and the Company shall
permit representatives of the Buyer to have full access at all reasonable times,
and in a manner so as not to interfere with the normal business operations of
the Company, to all premises, properties, personnel, books, records (including
tax records), contracts, and documents of or pertaining to the Company. The
Buyer shall treat and hold as such any confidential information it receives
from the Company in the course of the reviews contemplated by this Agreement,
and shall not use any of the confidential information except in connection with
this Agreement, and, if this Agreement is terminated for any reason whatsoever,
shall return to the Company all tangible embodiments (and all copies) of the
confidential information which are in its possession.
(e) NOTICE OF DEVELOPMENTS.
(i) Any of the Seller and the Company shall notify the Buyer
immediately of any development causing a breach of any of the representations
and warranties in this Agreement.
(ii) Seller and the Company shall give prompt written notice
to the Buyer of any material adverse development causing a breach of any of its
representations and warranties in this Agreement. No disclosure by the Company
pursuant to this (e)(ii), however, shall be deemed to amend or supplement the
Disclosure Schedule or to prevent or cure any misrepresentation or breach of
warranty.
(f) EXCLUSIVITY. None of the Sellers or the Company shall
solicit, initiate, or encourage the submission of any proposal or offer from any
other person relating to the acquisition of all or substantially all of the
capital stock or assets of any of the Company (including any acquisition
structured as a merger, consolidation, or share exchange); PROVIDED, HOWEVER,
that the Sellers and their directors and officers will remain free to
participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing to the extent their fiduciary duties may require
6.2 POST-CLOSING COVENANTS. The Parties agree as follows
with respect to the period following the Closing.
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor as set forth below).
(b) LITIGATION SUPPORT. If and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Company, each of the Seller and the Company
shall cooperate with Buyer and its counsel in the defense or contest, make
available their personnel, and provide such testimony and access to their books
and records as shall be necessary in connection with the defense or contest, all
at the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under this
Agreement).
(c) TRANSITION. Neither of the Company nor the Seller will
take any action that is designed or intended to have the effect of discouraging
any lessor, licensor, customer, supplier, or other business associate of any of
the Company from maintaining the same business relationships with the Company
after the Closing as it maintained with the Company prior to the Closing.
(d) COVENANT NOT TO COMPETE. For a period of one year from and
after the Closing Date, none of the Sellers will engage directly or indirectly
in any business that Company conducts as of the Closing Date in any geographic
area in which the Company conducts that business as of the Closing Date;
PROVIDED, however, that no owner of less than 5% of the outstanding stock of any
publicly-traded corporation shall be deemed to engage solely by reason thereof
in any of its businesses. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Agreement is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
ARTICLE 7
DEFAULT, WAIVER AND AMENDMENT
7.1 DEFAULT. Upon a breach or default under this Agreement by
any of the Parties (following the cure period provided herein), the
non-defaulting party shall have all rights and remedies given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise.
Notwithstanding the foregoing, in the event of a breach or default by any Party
hereto in the observance or in the timely performance of any of its obligations
hereunder which is not waived by the non-defaulting Party, such defaulting Party
shall have the right to cure such default within 15 days after receipt of notice
in writing of such breach or default.
7.2 WAIVER AND AMENDMENT. Any term, provision, covenant,
representation, warranty, or condition of this Agreement may be waived, but only
by a written instrument signed by the party entitled to the benefits thereof.
The failure or delay of any party at any time or times to require performance of
any provision hereof or to exercise its rights with respect to any provision
hereof shall in no manner operate as a waiver of or affect such party's right at
a later time to enforce the same. No waiver by any party of any condition, or of
the breach of any term, provision, covenant, representation, or warranty
contained in this Agreement, in any one or more instances, shall be deemed to be
or construed as a further or continuing waiver of any such condition or breach
or waiver of any other condition or of the breach of any other term, provision,
covenant, representation, or warranty. No modification or amendment of this
Agreement shall be valid and binding unless it be in writing and signed by all
Parties hereto.
ARTICLE 8
MISCELLANEOUS
8.1 EXPENSES. Whether or not the transactions contemplated
hereby are consummated, each of the Parties hereto shall bear all taxes of any
nature (including, without limitation, income, franchise, transfer, and sales
taxes) and all fees and expenses relating to or arising from its compliance with
the various provisions of this Agreement and such party's covenants to be
performed hereunder, and except as otherwise specifically provided for herein,
each of the Parties hereto agrees to pay all of its own expenses (including,
without limitation, attorneys and accountants' fees, and printing expenses)
incurred in connection with this Agreement, the transactions contemplated
hereby, the negotiations leading to the same and the preparations made for
carrying the same into effect, and all such taxes, fees, and expenses of the
Parties hereto shall be paid prior to Closing.
8.2 NOTICES. Any notice, request, instruction, or other
document required by the terms of this Agreement, or deemed by any of the
Parties hereto to be desirable, to be given to any other party hereto shall be
in writing and shall be given by facsimile, personal delivery, overnight
delivery, or mailed by registered or certified mail, postage prepaid, with
return receipt requested, to the following addresses:
To Buyer: AGE RESEARCH, INC.
Attn: Richard F. Holt
31103 Rancho Viejo Road
Suite 2102
San Juan Capistrano, CA 92675
Fax: 800-597-1970
With a copy to: Scott W. Absher
NeoTactix
18101 Von Karman Avenue
Suite 330
Irvine, CA 96212
Telephone: 949-888-8060
Fax: 949-888-0863
With a copy to: Owen Naccarato, Esq.
Naccarato & Associates
19600 Fairchild
Suite 260
Irvine, CA 92612
Fax: 949-851-9262
To the Company: THE VARSITY GROUP, INC.
12755 Olive Boulevard
Suite 120
Creve Coeur, MO 63141
Attention: Mr. David A.Brinker
Attention: Mr. David V.Avakian
To the Seller: Mr. David A. Brinker
Mr. David A.Avakian
c/o THE VARSITY GROUP, INC.
12755 Olive Boulevard
Suite 120
St. Louis, MO 63141
The persons and addresses set forth above may be changed from
time to time by a notice sent as aforesaid. If notice is given by facsimile,
personal delivery, or overnight delivery in accordance with the provisions of
this Section, said notice shall be conclusively deemed given at the time of such
delivery. If notice is given by mail in accordance with the provisions of this
Section, such notice shall be conclusively deemed given seven days after deposit
thereof in the United States mail.
8.3 ENTIRE AGREEMENT. This Agreement, together with the
Schedule and Exhibits hereto, sets forth the entire agreement and understanding
of the Parties hereto with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and understandings related to the
subject matter hereof. No understanding, promise, inducement, statement of
intention, representation, warranty, covenant, or condition, written or oral,
express or implied, whether by statute or otherwise, has been made by any party
hereto which is not embodied in this Agreement, or in the schedules or exhibits
hereto or the written statements, certificates, or other documents delivered
pursuant hereto or in connection with the transactions contemplated hereby, and
no party hereto shall be bound by or liable for any alleged understanding,
promise, inducement, statement, representation, warranty, covenant, or condition
not so set forth.
8.4 SURVIVAL OF REPRESENTATIONS. All statements of fact
(including financial statements) contained in the Schedules, the exhibits, the
certificates, or any other instrument delivered by or on behalf of the Parties
hereto, or in connection with the transactions contemplated hereby, shall be
deemed representations and warranties by the respective party hereunder. All
representations, warranties, agreements, and covenants hereunder shall survive
the Closing and remain effective regardless of any investigation or audit at any
time made by or on behalf of the Parties or of any information a party may have
in respect hereto. Consummation of the transactions contemplated hereby shall
not be deemed or construed to be a waiver of any right or remedy possessed by
any party hereto, notwithstanding that such party knew or should have known at
the time of closing that such right or remedy existed.
8.5 INCORPORATED BY REFERENCE. The schedules, exhibits, and
all documents (including, without limitation, all financial statements)
delivered as part hereof or incident hereto are incorporated as a part of this
Agreement by reference.
8.6 REMEDIES CUMULATIVE. No remedy herein conferred upon the
Parties is intended to be exclusive of any other remedy and each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
8.7 EXECUTION OF ADDITIONAL DOCUMENTS. Each Party hereto shall
make, execute, acknowledge, and deliver such other instruments and documents,
and take all such other actions as may be reasonably required in order to
effectuate the purposes of this Agreement and to consummate the transactions
contemplated hereby.
8.8 FINDERS' AND RELATED FEES. Each of the Parties hereto is
responsible for, and shall indemnify the other against, any claim by any third
party to a fee, commission, bonus, or other remuneration arising by reason of
any services alleged to have been rendered to or at the instance of said party
to this Agreement with respect to this Agreement or to any of the transactions
contemplated hereby.
8.9 GOVERNING LAW. This Agreement has been negotiated and
executed in the State of Delaware and shall be construed and enforced in
accordance with the laws of such state.
8.10 FORUM. Each of the Parties hereto agrees that any action
or suit which may be brought by any party hereto against any other party hereto
in connection with this Agreement or the transactions contemplated hereby may be
brought only in a federal or state court in Pennsylvania, Delaware, or in St.
Louis, Missouri.
8.11 PROFESSIONAL FEES. In the event any Party hereto shall
commence legal proceedings against the other to enforce the terms hereof, or to
declare rights hereunder, as the result of a breach of any covenant or condition
of this Agreement, the prevailing party in any such proceeding shall be entitled
to recover from the losing party its costs of suit, including reasonable
attorneys' fees, accountants' fees, and experts' fees.
8.12 BINDING EFFECT AND ASSIGNMENT. This Agreement shall inure
to the benefit of and be binding upon the Parties hereto and their respective
heirs, executors, administrators, legal representatives, and assigns.
8.13 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed simultaneously in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The Parties agree that facsimile signatures of this Agreement shall
be deemed a valid and binding execution of this Agreement.
8.14 REPRESENTATION. All Parties to this Agreement have been
given the opportunity to consult with counsel of their choice regarding their
rights under this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement, as of the date first written hereinabove.
BUYER:
AGE RESEARCH, INC.,
a Delaware corporation
----------------------
By: Richard Holt
Its: President
THE COMPANY:
THE VARSITY GROUP, INC.,
a Missouri Corporation
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By: David V. Avakian
Its: President
-----------------------------
By: David A. Brinker
Its: Executive Vice President