Exhibit 10.1
ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT is made this 18th day of
August, 2004, by and between XXXX, INC., a Pennsylvania corporation (hereinafter
called "Seller"), and THE XXXXXXX CORPORATION, a Nevada corporation, or a
wholly-owned subsidiary thereof as its nominee (hereinafter "Buyer").
Seller operates two businesses known as Xxxxx Xxxxx Company, located
in Elizabethtown, PA, and Pharmaloz, located in Lebanon, PA (collectively, the
"Business"). The Business involves the manufacturing, packaging, distribution
and sale of OTC lozenges and related products under FDA licensing, and the
manufacturing, packaging, distribution and sale of hard candy products. Buyer
desires to purchase, and Seller desire to sell, all of the assets of the
Business described in this Agreement. In addition, Buyer has agreed to purchase
the parcels of real estate on which the Business is located, in accordance with
the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and the covenants
and conditions hereinafter contained, the parties, with the intention of being
legally bound, covenant and agree as follows:
1. INCORPORATION OF RECITALS AND EXHIBITS. The above recitals and
each Schedule and Exhibit identified in this Agreement are made a part of this
Agreement by such reference.
2. SALE AND PURCHASE OF ASSETS.
2.1. ASSETS OF SELLER'S BUSINESS. Subject to the terms and
conditions of this Agreement, Buyer agrees to purchase from Seller, and Seller
agrees to sell, transfer, and assign to Buyer, the following assets owned by
Seller (and none other) (together with the Real Estate (as hereinafter defined),
the "Acquired Assets"):
2.1.1 All fixtures, furnishings, office equipment, office
supplies, machinery, manufacturing equipment, tools and replacement parts
located at the Pharmaloz facility, 000 X. 00xx Xxxxxx, Xxxxxxx, XX 00000, and
the Xxxxx Xxxxx facility, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx, XX 00000, as
set forth on Schedule 2.1.1 hereto, and all warranties and agreements pertaining
thereto (to the extent transferable), it being understood that tools and
replacement parts will not be listed on Schedule 2.1.1 and that all tools and
replacement parts on the premises will be included in the assets sold hereunder;
2.1.2 All computer equipment, computer systems and software of
the Business, as set forth on Schedule 2.1.2 hereto, and all warranties and
agreements pertaining thereto;
2.1.3 All material, inventory (including work-in-process), and
supplies of the Business on hand as of the Closing (as defined in paragraph 4),
it being agreed that such inventory shall be as described in paragraph 5.1.5 and
shall have a value, based upon Seller's cost, of at least $900,000 (Xxxxx Xxxxx
inventory shall have a value of at least $530,000 and Pharmaloz inventory shall
have a value of at least $370,000) as of the Closing Date. Seller shall be
permitted to sell, at any time up to Closing, any of the inventory in the
ordinary course of its business, and shall be entitled to retain all of the sale
proceeds; provided, however, that in the event the inventory value at Closing is
$25,000 more or less than $900,000, the purchase price shall be adjusted as
provided in paragraph 3.1.3. A physical inspection of the inventory shall be
made the day prior to the Closing Date by representatives of Seller and Buyer,
and the parties shall prepare a list of the inventory, with a calculation of the
value of the inventory;
2.1.4 All records, files, and information pertaining to the
manufacturing of Cold-Eeze lozenges or any other products manufactured at the
Pharmaloz or Xxxxx Xxxxx locations;
2.1.5 All intangible property, know-how and confidential
information pertaining to the manufacturing of Cold-Eeze lozenges or any other
products manufactured at the Pharmaloz or Xxxxx Xxxxx locations;
2.1.6 All licenses, permits and approvals for the manufacturing
of OTC products (to the extent transferable), including FDA and MCA licensing,
as set forth on Schedule 2.1.6;
2.1.7 All lists or information pertaining to customers,
suppliers, vendors, clients, prospective clients or customers, manufacturers,
distributors, and dealers (as used herein the term "list" shall include the
name, address, phone number and contact person for each person or entity
listed), as set forth on Schedule 2.1.7 hereto;
2.1.8 Telephone and fax numbers and listings, web sites, and
internet addresses for the Business;
2.1.9 The name "XXXX", and the trademarks and trade names
"Simon's", "It's a Boy", "It's a Girl", and "College Farm", "Wedjeez", and
"Pharmaloz";
2.1.10 Goodwill of the Business; and
2.1.11 Seller's leasehold interest in the licenses and equipment
(to the extent assignable) listed upon Schedule 2.1.11 hereto.
2.2 REAL ESTATE. Buyer further agrees to purchase from Seller, and
Seller agrees to sell to Buyer, the parcels of real estate on which Seller's
business is conducted, namely 000 X. 00xx Xxxxxx, Xxxxxxx, XX 00000 and 00 Xxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxxxxx, XX 00000 (collectively, the "Real Estate"), upon
the following terms:
2.2.1 Buyer's obligation to proceed to Closing is contingent upon
Buyer obtaining, on or before the conclusion of the due diligence period
referenced in paragraph 3.3, a satisfactory Phase I environmental assessment
report (the "Report") for the Real Estate, satisfactory to Buyer in its sole
reasonable discretion, providing that no toxic wastes, hazardous wastes,
hazardous substances, petroleum, asbestos, asbestos-containing materials, PCB's,
PCB-containing materials, urea, formaldehyde and/or radon have been released
from or onto or are present on or in the subject premises or any improvement
thereon or any part thereof; that the subject premises are in compliance with
all applicable federal, state and local environmental statutes, ordinances,
regulations and rules; that there are no conditions on the subject premises
which may require removal, remediation or corrective action under any applicable
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federal, state or local environmental statutes, ordinances, regulations or
rules; that no operations or conditions on properties surrounding the subject
premises pose a risk that toxic or hazardous substances or waste may be released
onto the subject premises. In the event that the Report is not satisfactory to
Buyer, Buyer may terminate this Agreement as provided in paragraph 3.3.1, and in
such event, the Deposit (as defined in paragraph 3.1.1 below) shall be returned
to Buyer, this Agreement shall be null and void and thereafter the parties
hereto shall have no further liabilities or obligations each to the other.
2.2.2 The Real Estate is to be conveyed free and clear of all
liens, encumbrances, and easements, EXCEPTING HOWEVER, existing building
restrictions, ordinances, easements of roads, privileges or rights of public
service companies, and any other restrictions or conditions of record, that do
not, in Buyer's sole reasonable opinion, affect the use or marketability of the
Real Estate; otherwise the title to the herein described lot or piece of ground
shall be good and marketable and such as will be insured by any reputable Title
Insurance Company at the regular rates. Buyer shall notify Seller, in writing,
of any objectionable title restrictions within the Due Diligence Period (as
defined in paragraph 3.3 below), and if such objections are not resolved to
Buyer's satisfaction by the conclusion of the Due Diligence Period, Buyer may
terminate this Agreement as provide in paragraph 3.3.1, and in such event, the
Deposit shall be returned to Buyer, this Agreement shall be null and void and
thereafter the parties hereto shall have no further liabilities or obligations
each to the other.
If Buyer fails to timely notify Seller in writing of any objections
to title, then Buyer agrees that any title objections are waived and title shall
be deemed acceptable to Buyer.
2.2.3 Taxes, rents, interest on mortgage encumbrances, water and
sewer rental, if any, shall be apportioned pro rata as of the date of
settlement. All Real Estate Transfer Taxes imposed by any government body shall
be borne equally by Seller and Buyer.
2.2.4 Tender of an executed deed and purchase money is hereby
waived.
2.2.5 All plumbing, heating and lighting fixtures, and systems
appurtenant thereto, and forming a part thereof, as well as all ranges, and
other permanent fixtures, together with screens, shades and awnings, if any, and
all trees, shrubbery and plants now in or on the Real Estate herein intended to
be conveyed, unless specifically excepted in this Agreement, are included in the
sale and purchase price, and shall become the property of Buyer at the time of
settlement of this transaction.
2.2.6 Any loss or damage to the Real Estate caused by fire or
other casualty between the date of this Agreement and the time of settlement
which results in Seller's manufacturing and laboratory facilities being
inoperable for more than 24 hours shall be immediately repaired by Seller, at
Seller's expense, such that the Real Estate and Improvements are in operating
condition at the time of Closing. In the event Seller is unwilling or unable to
effectuate such repairs, Buyer may void this Agreement. Buyer shall void this
Agreement by giving written notice of same to Seller, and in such event, all
deposit monies together with interest shall be returned to Buyer, and
thereafter, the parties hereto shall have no further liabilities or obligations
each to the other.
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2.2.7 [Intentionally omitted]
2.2.8 Except as otherwise expressly set forth herein, Buyer
agrees to accept the Real Estate at Closing in its condition at that time
provided it is in substantially the same condition as at the time of this
Agreement, subject to ordinary wear and tear, and further agrees and confirms
that, (i) Seller, nor any agent, employee or representative of Seller, has not
made and does not make herein any representation or warranty as to the condition
of all or any portion of the Real Estate (including, without limitation, the
condition of the Real Estate's roof and mechanical, electrical, heating,
plumbing, air conditioning and structural units, systems and components), and
(ii) the Real Estate is being sold "as is-where is" and without any express or
implied warranty whatsoever as to the condition thereof, fitness for a
particular purpose, or otherwise.
2.3 EXCLUDED ASSETS. The following assets are specifically excluded
from the Acquired Assets:
2.3.1 Seller's accounts receivable. Attached hereto as Schedule
2.3.1 is a list of Seller's receivables as of the date of this Agreement. At
Closing, Seller agrees to provide an updated Schedule 2.3 list of receivables as
of the Closing Date in the format shown on Schedule 2.3. Any payments received
after Closing from any customer on account of a receivable shown on such updated
Schedule 2.3 shall be applied by Seller in payment of such receivable as is
specifically referenced on the customer's remittance. If the payment does not
reference an invoice to which payment is to be applied, the payment shall be
credited to the oldest outstanding receivable first. Seller shall not be
entitled to retain any payments in excess of those shown on the updated Schedule
2.3, unless Seller can demonstrate in good faith its entitlement to same as an
account receivable for goods or services provided prior to the Closing Date. The
parties agree to reasonably cooperate in their treatment of accounts receivable;
for example, Buyer agrees to forward promptly to Seller any monies, checks or
instruments received by Buyer after the Closing Date with respect to goods or
services provided prior to the Closing Date.
2.3.2 Any and all life insurance policies owned by the Seller.
2.3.3 Any stock of Buyer owned by the Seller.
2.3.4 The titled motor vehicles described on Schedule 2.3.4.
2.3.5 All assets whatsoever of Seller not included within the
Acquired Assets, subject to the provisions of paragraph 5.1.29.
2.3.6 All assets in Seller's possession that are already owned by
Buyer, as listed on Schedule 2.3.6.
3. PURCHASE PRICE AND TERMS OF PAYMENT; DUE DILIGENCE PERIOD
3.1 PURCHASE PRICE FOR JOEL'S ASSETS. The total purchase price for
the Acquired Asset is FIVE MILLION ONE HUNDRED THOUSAND DOLLARS (U.S.$5,100,000)
(except as provided in paragraph 3.1.3), payable as follows:
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3.1.1 Buyer shall deposit the sum of $100,000 in an
interest-bearing escrow account with Xxxxxxxx and Xxxx, P.C. and XxXxxx Xxxxxxx
& Nurick LLC, as joint escrow agents, pursuant to an Escrow Agreement in the
form attached hereto as Exhibit "A" and made a part hereof, said deposit (the
"Deposit") to be credited against the purchase price at Closing, unless this
Agreement is rightfully terminated by Buyer prior to Closing as provided herein.
Interest on the Deposit shall accrue to Buyer unless Buyer defaults hereunder.
3.1.2 Buyer shall pay to Seller at Closing (i) FOUR MILLION
DOLLARS (U.S. $4,000,000), in cash, or by wire transfer if requested by Seller,
(except as provided in paragraph 3.1.3) and (ii) shares of stock of Buyer issued
in the name of the shareholders of Seller (the "Shareholders") (in proportions
provided by Seller not less than 5 business days prior to the Closing Date),
having a value of $1,000,000 based upon the average closing price per share of
such stock for the period commencing on September 23, 2003 and terminating on
September 23, 2004 (or, if the Closing Date is earlier than October 1, 2004,
terminating on the date which is 5 business days immediately prior to the
Closing Date) (the "Shares"). The treatment of the Shares shall otherwise be in
accordance with the terms and conditions of the Registration Rights Agreement in
the form attached hereto as Exhibit "B" and made a part hereof. The Shareholders
join in this Agreement for the sole and limited purpose of acknowledging that
until the Shares are registered, (i) the Shares must be held until an exemption
from such registration is available, and (ii) the shareholders are acquiring the
Shares for their own account for investment, and not with a view to distribution
or resale.
3.1.2.1 If the Shares are registered more than 120 days but less
than 180 days after Closing, and at the time of registration the Shares have a
value (based upon their price per share at the time of registration) of less
than $1,000,000, Buyer shall make cash payments to the Shareholders (in
proportions provided by Seller not less than 5 business days prior to the
Closing Date) equal to the difference between such value of the Shares and
$1,000,000, said payment to be made within ten (10) business days after the date
of registration; provided that, in lieu of making such payment, Buyer shall have
a "call" right, exercisable no later than ten (10) business days after the date
of registration, to purchase the Shares from the registered owners for a cash
payment of $1,000,000, with such payment to be made in exchange for the Shares
within five (5) business days of exercise of such call right.
3.1.2.2. If the Shares are not registered by the 179th day after
Closing, then (subject to Section 3.1.2.3 below) the Shareholders shall each
have a "put" right, for a period of thirty (30) days thereafter (i.e., from the
180th day through and including the 210th day after Closing), to elect to sell
to Buyer, and Buyer shall purchase, all of such Shareholder's Shares for a cash
amount equal to the Shareholder's pro-rata percentage of the Shares multiplied
times $1,000,000, such payment to be made within five (5) business days after
notice of the election to sell the Shares. By way of example, if a Shareholder
exercising the put right holds 20% of the Shares, the Shareholder shall be
entitled to a cash payment of $200,000.
3.1.2.3 In computing the time periods described in paragraphs
3.1.2.1 and 3.1.2.2, the parties shall not take into account any time period of
delay that is solely the result of Seller's need to address any regulatory
agency concerns about the adequacy of Seller's financial statements.
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3.1.3 If the value of the Xxxxx Xxxxx and Pharmaloz inventory
referenced in paragraph 2.1.3 is $25,000 more or less than $900,000 as of the
Closing Date, the cash portion of the purchase price shall be adjusted at
Closing as follows: the price shall be reduced by the amount, if any, by which
the value of the Xxxxx Xxxxx and Pharmaloz inventory is less than $875,000 as of
the Closing Date, and the price shall be increased by the amount, if any, by
which the value of the Xxxxx Xxxxx and Pharmaloz inventory is greater than
$925,000 as of the Closing Date.
3.2 ALLOCATION OF PURCHASE PRICE. The purchase price for the
Acquired Assets shall be allocated as follows:
Land and improvements: $ 200,000
Buildings: $ 2,000,000
Machinery and equipment: $ 1,500,000
Inventory: $ 900,000
Goodwill: $ 500,000
===========
$ 5,100,000;
PROVIDED, however, that the parties agree to reasonably adjust such allocation
to take into account the results of the appraisals of the land, buildings, and
machinery and equipment being obtained by Buyer, to the extent required by
applicable law or regulation.
3.3 DUE DILIGENCE PERIOD. Buyer acknowledges that it has been
engaged in extensive due diligence prior to the date of this Agreement. Buyer
shall have the right, until 5 p.m., local time, on August 31, 2004 (the "Due
Diligence Period") to continue to conduct such inspections, studies, and
evaluations of the Acquired Assets, as Buyer in Buyer's sole discretion deems
necessary, to determine the suitability and fitness of such assets and property
for its intended uses by Buyer. During the Due Diligence Period, Buyer shall
have reasonable access to (i) the Acquired Assets, (ii) any records,
information, or documents relating to the Acquired Assets, and (iii) any
governmental agencies having jurisdiction over any matters affecting the
Acquired Assets. Seller shall reasonably furnish Buyer with any such records,
information, or documents in Seller's possession at the commencement of the Due
Diligence Period.
3.3.1 Buyer shall notify Seller in writing, on or before the
expiration of the Due Diligence Period, of Buyer's intention to (1) waive this
contingency or (2) terminate this Agreement. If Buyer elects to waive this
contingency, Buyer shall be deemed to have accepted the Acquired Assets subject
to any matters discovered during the Due Diligence Period and "as is where is",
and the Deposit shall immediately become completely non-refundable except in the
event of (i) Seller's default, or (ii) the non-occurrence of a condition
precedent to Buyer's obligation to close contained in paragraph 8 below. If
Buyer elects to terminate this agreement (which Buyer may do for any reason
during the Due Diligence Period), the Deposit, together with interest earned
thereon, shall be returned to Buyer, and thereafter the parties hereto shall
have no further liabilities or obligations each to the other.
3.3.2 Nothing contained herein shall prevent the parties from
modifying the provisions of this Agreement as a result of matters discovered by
Buyer during the Due Diligence Period, provided that any such modification shall
be in writing and signed by all parties.
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4. CLOSING
4.1 TIME AND PLACE. Closing shall take place at the offices of
Xxxxxxxx and Xxxx, P.C., Doylestown, PA, on or before October 1, 2004 (the
"Closing Date"); provided that all conditions precedent to each party's
obligations hereunder have been satisfied or waived by such date in accordance
with the terms and conditions of this Agreement. Time shall be of the essence of
this Agreement.
4.2 TRANSACTIONS AT CLOSING. At Closing, the following transactions
shall take place:
4.2.1 Seller shall execute and deliver to Buyer a Xxxx of Sale
for all equipment, machinery and fixtures shown on Exhibits 2.1.1 and 2.1.2;
4.2.2 Seller shall execute any documentation necessary to
transfer the licenses (to the extent transferable) described in paragraph 2.1.6
to Buyer, and shall execute such further documentation as may be reasonably
required after Closing to complete the transfer of such licenses to Buyer;
4.2.3 Seller and Buyer shall execute any documentation necessary
to transfer the remaining assets described in paragraph 2 to Buyer;
4.2.4 Buyer shall pay the balance of the purchase price to
Seller, and deliver the Shares to the shareholders of Seller, each in the manner
provided in paragraph 3.1; and
4.2.5 Buyer and Seller shall complete the sale and purchase of
the Real Estate, and execute and deliver all necessary documents in connection
with such purchase, and Buyer shall pay any consideration required in connection
with such purchase of the Real Estate.
5. REPRESENTATIONS AND WARRANTIES BY SELLER.
5.1 Seller warrants and represents to Buyer as follows:
5.1.1 Seller is a duly organized, existing corporation in good
standing under Pennsylvania law, with full power, right and authority to enter
into and perform this Agreement and to grant all of the rights, powers and
authorities herein granted;
5.1.2 Except as disclosed on Schedule 5.1.2, the execution,
delivery and performance of this Agreement do not conflict with, violate, or
breach any agreement to which Seller is a party, or Seller's Articles of
Incorporation or By-Laws;
5.1.3 All actions taken, or required to be taken, by Seller under
this agreement have been duly authorized by the shareholders, directors and
officers of Seller;
5.1.4 Except as disclosed on Schedule 5.1.4 or the title
commitment and materials, Seller holds good and marketable title to all of the
assets and property described in section 2.1 above, and has the ability to sell,
transfer, license and convey such property, free and clear of rights,
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agreements, claims, or interests of any other persons or entities, and free and
clear of any liens, restrictions, or encumbrances of any kind;
5.1.5 Except as disclosed on Schedule 5.1.5, all inventory
described in paragraph 2.1.3 is undamaged, has been manufactured within six
months prior to the Closing Date, and has not been removed from its original
packaging;
5.1.6 All equipment and machinery described in paragraph 2.1.1 is
in good working order and in compliance with FDA standards for good
manufacturing practices, and Seller has no knowledge of any uncorrected material
defects in or damage to such machinery and equipment;
5.1.7 All computer systems and software used in the Business are
in good working order;
5.1.8 All records and documents pertaining to the manufacturing
and packing of OTC lozenges and other products of the Business are properly
maintained and in compliance with applicable federal, state, and local laws and
regulations;
5.1.9 Except as disclosed on Schedule 5.1.9, there are no claims,
complaints, lawsuits of any kind pending or threatened against Seller or any of
Seller's officers, directors or shareholders in any jurisdiction;
5.1.10 There are no investigations, judicial, administrative, or
regulatory proceedings of any kind pending or threatened against Seller or any
of Seller's officers, directors or shareholders involving any federal, state or
local government agency, including but not limited to claims based upon
applicable environmental, labor, manufacturing, safety, zoning, or municipal
laws;
5.1.11 Except as disclosed on Schedule 5.1.11, all local, state,
and federal taxes, including but not limited to income, withholding, sales, and
franchise taxes, owed by Xxxx have been paid, and all tax returns required to be
filed by Xxxx have been timely filed;
5.1.12 There are no unpaid or delinquent accounts of the Business
that would give rise to a lien or claim against the assets being sold hereunder;
5.1.13 Seller is not in default under any contract, agreement or
lease to which it is a party, and Seller has timely paid or performed all
obligations under any such agreements;
5.1.14 Seller is not in default in any payments due to any
suppliers, vendors, or manufacturers, and has timely paid or performed any
obligations to such entities;
5.1.15 Seller has not entered into any agreements or otherwise
dealt with any other party with respect to any matters contained in this
Agreement; provided, however, that Buyer acknowledges that in November, 2003,
Seller engaged Xxxxxxx Associates in order to pursue a possible sale of the
Business; and
5.1.16 All licenses, approvals and permits necessary to the
conduct of the Business (including but no limited to FDA licensing, MCA
licensing, Pennsylvania labor and industry and department of health, county and
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local department of health, and municipal zoning, use and occupancy) are valid
and in full force and effect, and Seller is not aware of any impediments to the
transfer and/or issuance of new licenses, permits and approvals to Buyer for the
conduct of the Business.
5.1.17 Except as disclosed on Schedule 5.1.17, there are no
leases, tenancies, licenses or other rights of occupancy or use for any portion
of the Real Estate in effect as of the date of this Agreement. Seller agrees not
to enter into any lease, license or agreement for the occupancy or use of any
portion of the Real Estate after the date of this Agreement without Buyer's
written consent.
5.1.18 No assessments for public improvements have been made
against the Real Estate which remain unpaid and Seller has no knowledge and has
received no notice of any proposed assessment for public improvements or of any
proposed public improvements for which an assessment may be levied against the
Real Estate.
5.1.19 Except as disclosed on Schedule 5.1.19, the current use of
the Real Estate is in compliance with such zoning classification.
5.1.20 There is no suit, action, or proceeding pending or
threatened against or affecting Seller or the Real Estate before or by any
court, administrative agency or other governmental or quasi-governmental
authority, or which brings into question the validity of this Agreement or this
transaction or which could adversely affect title to, or the use and enjoyment
of, or value of the Real Estate.
5.1.21 Except as otherwise disclosed in this Agreement or the
Schedules, Seller has as of the date of this Agreement, and will have as of the
date of the Closing, good, marketable and indefeasible title to the Pharmaloz
and Xxxxx Xxxxx Real Estate subject only to the matters set forth in this
Agreement (including, without limitation intended, the terms and conditions of
paragraph 2.2.2 above).
5.1.22 To the best of Seller's knowledge, and except as disclosed
on Schedule 5.1.22: (1) there are no Hazardous Substances (as defined below)
stored, used or present in, or at the Real Estate; (2) the Real Estate has never
been used by the Seller to refine, produce, store, handle, transfer, process or
transport Hazardous Substances; (3) there has been no Release (as defined
below), actual or threatened, of any Hazardous Substances by Seller on, over,
into, through or from the Real Estate; (4) there has been no Release of any
Hazardous Substances for which Seller is or may be liable. To the best of
Seller's knowledge, and except as disclosed on Schedule 5.1.22, there have been
no air emissions, or discharges to surface waters or groundwaters, of Hazardous
Substances which have occurred prior to the date hereof. In addition, except as
identified in this Agreement or disclosed on Schedule 5.1.22, there are no above
ground or underground storage tanks, vessels or related equipment or containers
located on the Real Estate that are subject to federal, state or local laws,
statutes, rules, regulations or ordinances. For purposes of this Agreement, each
of the terms "Release", "Environmental Law" and "Hazardous Substance" shall be
defined as follows:
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(i) "Hazardous Substance" means any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any
material containing any such substance as a component. Hazardous
Substance includes without limitation petroleum or any derivative
or by-product thereof, asbestos, radioactive material, and
polychlorinated biphenyls;
(ii) "Environmental Law" means any federal, state or local
law, statute, ordinance, rule, regulation, code license, permit,
authorization, approval, consent order, judgment, decree,
injunction or agreement by or with any governmental entity
relating to (1) the protection, preservation or restoration of
the environment (including, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural
resource), and/or (2) the use, storage, recycling, treatment,
generation transportation, processing, handling, labeling,
production, release or disposal of Hazardous Substances. The term
Environmental Law includes without limitation: (1) the
Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. ss.9601, ET SEQ.; the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. ss.6901, ET
SEQ.; the Clean Air Act, as amended, 42 U.S.C. ss.7401, ET SEQ.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C.
ss.1251, ET SEQ.; the Toxic Substances Control Act, as amended 15
U.S.C. ss.9601, ET SEQ.; the Emergency Planning and Community
Right to Know Act, 42 U.S.C. ss.11001, ET SEQ.; the Safe Drinking
Water Act, 42 U.S.C ss.300(f), ET SEQ.; and all comparable state
and local laws, and (2) any common law (including without
limitation common law that may impose strict liability) that may
impose liability or obligations for injuries or damages due to,
or threatened as a result of, the presence of or exposure to any
Hazardous Substance;
(iii) "Release" means the releasing, spilling, leaking,
discharging, disposing, discarding or dumping of any Hazardous
Substance from, on, into or about the Pharmaloz and Xxxxx Xxxxx
Real Estate.
5.1.23 Subject to the terms and conditions of this Agreement
(including, without limitation intended, the terms and conditions of paragraph
2.2.2 above), any buildings or improvements on the Real Estate ("Improvements")
are located within the boundaries of the Property and do not encroach on the
property of others. The Improvements (including all roads, parking areas, curbs,
sidewalks, sewers and utilities) have been completed and installed in accordance
with plans, specifications, and/or requirements approved by all governmental or
quasi-governmental authorities having jurisdiction.
5.1.24 To the best of Seller's knowledge, and except as disclosed
in the title commitment and materials, no default or breach exists under any of
the covenants, conditions, restrictions, rights of way or easements, if any,
affecting all or any portion of the Real Estate which are to be performed or
complied with by the Seller.
5.1.25 Subject to the terms and conditions of this Agreement
(including, without limitation intended, the terms and conditions of paragraph
2.2.2 above), all public utilities required for the operation of the Real Estate
either enter the Real Estate through adjoining public streets or, if they
10
enter through adjoining private land, do so in accordance with valid, permanent,
public or private easements which will inure to the benefit of Buyer at Closing.
5.1.26 Seller has no knowledge of any uncorrected material
defects in or damage to the Improvements.
5.1.27 Subject to the terms and conditions of this Agreement
(including, without limitation intended, the terms and conditions of paragraph
2.2.2 above), to the extent the existing legal description of the Real Estate is
not adequate to convey good, marketable and insurable title, any survey which
may be required for the preparation of an adequate legal description of the
Property (or correction thereof) shall be secured and paid for by the Seller.
However, survey or surveys desired by the Buyer or required by any mortgagee
shall be secured and paid for by the Buyer.
5.1.28 Except as disclosed on Schedule 5.1.28, no work has been
performed at, or is in progress at, and no materials have been furnished to, the
Real Estate which though not presently the subject of might give rise to
mechanics or materialmens or other liens against the Property or any portion
thereof.
5.1.29 All assets necessary to operate the Business are included
in the assets being sold hereunder.
5.2 To Seller's knowledge, Seller's representations and warranties
set forth in this Agreement do not contain any untrue statement of material fact
or omit to state a material fact necessary in order to make such representations
and warranties and information, in light of the circumstances under which they
have been made, not misleading, and to Seller's knowledge Seller has not
withheld from Buyer its knowledge of any material fact or event that has
occurred or is about to occur regarding the Business which has had or, so far as
it can reasonably foresee, will have an adverse affect on the Business.
5.3 All of the foregoing representations and warranties shall be
true and correct at the time of Closing, and shall survive Closing for a period
of twenty-four (24) months from the date of Closing. It is further agreed that
if Seller dissolves after Closing, the shareholders of Seller shall agree to be
bound as successors-in-interest to Seller's obligations hereunder.
6. REPRESENTATIONS AND WARRANTIES BY BUYER.
6.1 Buyer hereby represents, warrants, and covenants to Seller the
following:
6.1.1 Buyer is a corporation duly organized, existing and in good
standing under the laws of the State of Nevada, and qualified to do business in
the State of Pennsylvania, with full right, power, and authority to enter into
and perform this Agreement and to grant all of the rights, powers, and
authorities herein granted.
6.1.2 The execution, delivery, and performance of this Agreement
do not conflict with, violate, or breach any agreement to which Buyer is a
party, or Buyer's articles of incorporation or bylaws.
11
6.1.3 All actions taken, or required to be taken, by Buyer under
this agreement have been duly authorized by the shareholders, directors and
officers of Buyer.
6.1.4 This Agreement has been duly executed and delivered by
Buyer and is a legal, valid, and binding obligation enforceable against Buyer in
accordance with its terms.
6.2 All of the foregoing representations and warranties shall be
true and correct at the time of Closing, and shall survive Closing for a period
of twenty-four (24) months from the date of Closing.
6.3 Buyer acknowledges and agrees that the disclosure of
confidential information of Seller is subject to the terms of the Supply
Agreement between them, as amended, and that Buyer shall not, except as and to
the extent required by law or to pursue the financing and approvals necessary to
consummate this transaction, without the prior written consent of Buyer,
directly or indirectly, make any public comment, statement or communication with
respect to, or otherwise disclose or permit the disclosure of, the existence of
the proposed transaction or the terms and conditions of this Agreement. Further,
Buyer agrees that, in the event the transaction contemplated by this Agreement
is not consummated, Buyer will promptly deliver to Seller any and all
confidential information as Buyer might then have in its possession or control.
6A. Contracts and Commitments
6A.1 Buyer agrees to be responsible for those obligations of
Seller relating to existing contractual commitments as of the Closing Date,
pursuant to an Assignment and Assumption Agreement in customary form and content
and to be executed and delivered by the parties at the Closing. Seller's current
commitments are as set forth on Schedule 6A.1 hereof. An updated Schedule 6A.1
shall be prepared by Seller and attached to this agreement at Closing. Except as
set forth on such updated Schedule 6A.1, Buyer shall have no responsibility for
any debts, liabilities, or obligations of Seller.
6A.2. The parties shall use reasonable best efforts to obtain all
consents to assignments which are required under the assigned contracts, with
Seller being primarily responsible therefor. If any such consent is not
obtained, then Seller and Buyer shall cooperate in any reasonable arrangement
designed to provide for Buyer the benefit of the particular assigned contract;
provided, however, that unless some other reasonable arrangement is selected by
the parties hereto, Buyer shall be appointed the attorney-in-fact for Seller to
enforce, perform and enjoy such the particular Assigned Contract in the name of
Seller. It is expressly understood and agreed that the lack of any such consent
shall not be a condition precedent for the benefit of either Buyer or Seller.
7. OPERATION OF THE BUSINESS BY SELLER
7.1 From and after the date hereof, until Closing, Seller shall
operate the Business in the ordinary course in a manner consistent with prior
practices. Seller shall timely pay all taxes, fees, debts and liabilities of the
Business, shall not breach or be in default under any existing agreements, and
shall not allow any material adverse change to take place with respect to any
aspect of the Business. Seller shall not incur any contractual obligations in
12
excess of $25,000 without Buyer's consent, which shall not be unreasonably
withheld or delayed. Seller shall not sell or encumber any of the Acquired
Assets outside of the ordinary course of business without Buyer's consent.
7.2 Seller shall promptly notify Buyer of any claim that is
threatened or commenced against Seller after the date hereof and prior to
Closing.
7.3 Seller shall notify Buyer of any claim that is threatened or
commenced against Seller for a period of two (2) years after Closing, to the
extent that such claim could be a lien against the Acquired Assets being sold to
Buyer hereunder.
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER TO CLOSE
The obligation of Buyer to complete the transactions contemplated
herein shall be subject to the satisfaction of all of the conditions set forth
in this Section 8, on or before the Closing Date:
8.1 All representations and warranties of Seller shall be materially
true and correct as of the Closing date as though originally made on such date;
8.2 Seller shall not be in default hereunder and all obligations of
Seller to have been performed on or before the Closing Date shall have been duly
performed by Seller;
8.3 No suit or proceeding shall have been threatened or commenced
against Seller which affects the Acquired Assets and which claims an amount in
excess of $100,000.
9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to complete the transactions contemplated
herein shall be subject to the satisfaction of all of the conditions set forth
in this Section 9, on or before the Closing Date:
9.1 All representations and warranties of Buyer shall be materially
true and correct as of the Closing date as though originally made on such date;
9.2 Buyer shall not be in default hereunder and all obligations of
Buyer to have been performed on or before the Closing Date shall have been duly
performed by Buyer;
9.3 No claim, suit or proceeding shall have been threatened or
commenced against Buyer;
9.4 Buyer shall enter into an employment agreement with Xxxxx Deck
in the form attached as Exhibit C";
9.5 Buyer shall enter into an employment agreement with Xxxxx Xxxx
in the form attached as Exhibit "D"; and
9.6 Buyer shall have agreed to hire any employees of Seller
13
who are employed by Seller at the time of Closing, on an "at-will" basis for a
90-day trial period, and to have available to its employees benefits not less
favorable to those currently offered by Seller to its employees.
10. TERMINATION; DEFAULT; REMEDIES
10.1 Either party may terminate this Agreement in the event that the
conditions precedent contained in paragraph 8 (with respect to Buyer) and 9
(with respect to Seller) have not been satisfied or waived prior to Closing.
10.2 Either party may terminate this Agreement prior to Closing in
the event of breach or default by the other party and failure to cure such
default after ten days' written notice of such default.
10.3 If Buyer terminates this Agreement when permitted to do so in
accordance with the terms and conditions of this Agreement, the Deposit,
together with all interest thereon, shall be returned to Buyer.
10.4 In the event of a breach by Buyer under this Agreement, Seller
shall be entitled to retain the Deposit, together with all interest thereon, as
liquidated damages for such breach, which shall be Seller's sole remedy.
10.5 In the event of a breach by Seller, Buyer shall have such
rights and remedies as are available under this Agreement and applicable law.
11. MISCELLANEOUS PROVISIONS
11.1 In the event that any provision of this Agreement is declared
invalid or contrary to any law, rule, regulation or public policy of the United
States or any state, all of the remaining provisions hereof shall continue in
full force and effect.
11.2 Each of the parties hereto and their respective officers and
directors shall, prior to and after Closing, cooperate with each other and use
their reasonable best efforts to take or cause to be taken all actions, and do
or cause to be done all things, necessary, proper or advisable on their part
under this Agreement and applicable laws to consummate and make effective the
transactions contemplated by this Agreement as soon as practicable.
11.3 This Agreement has been made and executed in the Commonwealth
of Pennsylvania and shall in all respects be governed by the laws of the
Commonwealth of Pennsylvania. In the event of any dispute hereunder, the parties
consent to the exclusive jurisdiction and venue of the Court of Common Pleas of
Bucks County, Pennsylvania.
11.4 Any notice or other communication required or permitted to be
given pursuant to this Agreement shall be deemed to have been sufficiently given
if in writing and delivered by hand or by telefax transmission (with a mandatory
written confirmation, via a recognized overnight courier, as provided below) or
sent by registered or certified mail (postage prepaid) or by express courier or
express mail, fees prepaid, addressed as indicated below:
14
(a) If to Seller: Xxxx, Inc.
Attention: Xxxxx X. Deck, President
X.X. Xxx 000
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxxxx, XX 00000-0000
With a copy to: Xxxxx X. Xxxxxx, Esq.
XxXxxx Xxxxxxx & Nurick LLC
000 Xxxx Xxxxxx
P. O. Xxx 0000
Xxxxxxxxxx, XX 00000-0000
(a) If to Buyer: The Xxxxxxx Corporation
Attention: Xxx Xxxxxxx, President
P.O. Box 1349
000 X. Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxx X. X. XxxXxxxx, Esq.
Xxxxxxxx and Xxxx, P.C.
X.X. Xxx 0000
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Either party may, by notice as aforesaid, designate a different
address for notices or other communications intended for it.
Any notice which is delivered in the manner provided herein
(provided mandatory confirmation copies are sent) shall be deemed to have been
duly given to the party to whom it is directed upon actual receipt by such
party.
11.5 Buyer and Seller represent to each other that no brokerage
commissions are due to any party as a result of this transaction; PROVIDED,
however, that Seller will owe a commission to Xxxxxxx Associates, for which
Seller shall be solely responsible. Any party violating this representation
shall indemnify, defend and hold the other party harmless from and against all
commissions due and any other costs, losses, liabilities and expenses, including
attorneys' fees, incurred as a result of such violation.
11.6 Neither party shall assign or transfer this Agreement or their
rights or obligations hereunder without the prior written consent of the other
party, except that Buyer may assign this Agreement to a wholly-owned subsidiary
of Buyer; provided that Buyer shall at all times be responsible for and
guarantee the payment or performance of all obligations of such subsidiary. This
Agreement shall bind the successors and assigns of the parties hereto.
11.7 This Agreement constitutes the entire understanding between the
parties relating to the subject matter of this Agreement and supersedes and
cancels any and all previous agreements or understandings between the parties.
15
This Agreement may not be altered or amended except by a written instrument
executed by duly authorized representatives of the parties.
11.8 The headings contained herein are inserted for convenience only
and shall not be deemed to have any substantive meaning.
11.9 Any failure to either party to notify the other of a violation,
default or breach of this Agreement or to terminate this Agreement on account
thereof shall not constitute a waiver of such violation, default or breach, or a
consent, acquiescence or waiver of any later violation, default or breach,
whether of the same or a different character.
11.10 Each party hereto warrants and represents to the other that
all necessary corporate and individual actions and approvals have been taken and
given, and that upon execution by its duly authorized representative, this
Agreement shall be a binding obligation of such party.
11.11 This Agreement shall legally bind the parties and their
respective successors (including the shareholders receiving distribution of the
assets of a dissolved corporation) and assigns.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
16
IN WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase and Sale Agreement to be executed on the day and year first above
written.
XXXX, INC.
By: /s/ Xxxxx X. Deck
-------------------------------------------------------
Xxxxx X. Deck, President
Shareholders of XXXX, INC.:
Joinder for the sole and limited purpose of the matters
described in paragraphs 3.1.2, 3.1.2.1, 3.1.2.2,
3.1.2.3, and 5.3 above
/s/ Xxxxx X. Deck
-------------------------------------------------------
Xxxxx X. Deck
/s/ Xxxxxx X. Deck
-------------------------------------------------------
Xxxxxx X. Deck
/s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------------------------
Xxxxxx X. Xxxxxxxxx
/s/ Xxxxxxx X. Deck
-------------------------------------------------------
Xxxxxxx X. Deck
/s/ Xxxxxx X. Deck
-------------------------------------------------------
Xxxxxx X. Deck
THE XXXXXXX CORPORATION
By: /s/ Xxx X. Xxxxxxx
-------------------------------------------------------
17
LIST OF SCHEDULES
-----------------
SCHEDULE REFERENCE SCHEDULE DESCRIPTION
------------------ --------------------
2.1.1 Machinery, equipment, etc.
2.1.2 Computer equipment, software
2.1.6 Licenses and permits
2.1.7 Customer lists
2.1.11 Equipment and licenses
2.3.1 Accounts receivable
2.3.4 Excluded motor vehicles
2.3.6 Assets of Buyer in Seller's possession
5.1.2 Breaches
5.1.4 Current liens
5.1.5 Inventory
5.1.9 Threatened litigation
5.1.11 Tax matters
5.1.17 Third-party rights
5.1.19 Zoning
5.1.22 Environmental matters
5.1.28 Work
6A.1 Contractual commitments
18
LIST OF EXHIBITS
----------------
EXHIBIT REFERENCE EXHIBIT DESCRIPTION
----------------- -------------------
"A" Escrow Agreement
"B" Registration Rights Agreement
"C" Xxxxx Deck Employment Agreement
"D" Xxxxx Xxxx Employment Agreement
EXHIBIT "A"
ESCROW AGREEMENT
This ESCROW AGREEMENT (this "Agreement") is made this 18th day of August,
2004, by and among XXXX, INC., a Pennsylvania corporation ("Seller") and THE
XXXXXXX CORPORATION, a Nevada corporation ("Buyer"); and XXXXXXXX AND XXXX, P.C.
("Xxxxxxxx") and XXXXXX XXXXXXX & XXXXXX LLC ("MWN") as escrow agents (Xxxxxxxx
and MWN are sometimes collectively referred to as the "Escrow Agent").
RECITALS
WHEREAS, Buyer and Seller have entered into a certain Asset Purchase and
Sale Agreement dated August 18, 2004 (the "Asset Purchase Agreement"), pursuant
to which Buyer agreed to purchase substantially all of the assets of Seller; and
WHEREAS, pursuant to paragraph 3.1.1 of the Asset Purchase Agreement, the
sum of One Hundred Thousand Dollars ($100,000.00) is to be deposited into escrow
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
AGREEMENT
1. DEPOSIT. Buyer on the date hereof shall deposit the sum of One Hundred
Thousand Dollars ($100,000.00) (the "Deposit") into an escrow account designated
by the Escrow Agent. The Escrow Agent shall hold the Deposit in escrow pursuant
to the terms of the Asset Purchase Agreement.
2. ACCOUNT. The Deposit shall be deposited into an interest-bearing account
in an FDIC-insured bank designated by the Escrow Agent. In order to open and
administer such interest bearing account, Escrow Agent is hereby authorized to
utilize Seller's Taxpayer Identification Number, as follows: 00-0000000.
3. UNANIMOUS ACTION. Except as otherwise provided in this Agreement, all
actions taken by Xxxxxxxx and MWN in their joint capacity as Escrow Agent shall
be unanimous.
4. RELEASE AND PAYMENT. The Escrow Agent shall release, pay, deliver,
transfer and assign the Deposit (together with any interest) by check, bank
check, or wire transfer in accordance with the terms and conditions of the Asset
Purchase Agreement and the procedures described in Section 5 below.
5. PROCEDURES TO OBTAIN RELEASE AND PAYMENT.
(a) Upon the occurrence of any event that entitles a party to the
Deposit, the party entitled to the Deposit shall deliver written
instructions to Xxxxxxxx and MWN in their joint capacity as the Escrow
Agent, including a description of the applicable release and payment event.
(b) If the written instructions are signed by both Buyer and Seller
and are delivered pursuant to Section 5(a), the Escrow Agent shall promptly
release and deliver the Deposit as directed in such instructions.
(c) If the written instructions have been delivered to the Escrow
Agent by other than joint instructions, the Escrow Agent shall promptly
send a copy thereof to the other party. Such other party shall have ten
(10) business days following the date of its receipt of a copy of such
written instructions in which to object to the requested disbursement of
the Deposit by sending a written objection thereto to the Escrow Agent. If
the Escrow Agent has not timely received such written objection, the Escrow
Agent shall promptly release and deliver the Deposit as directed in the
written instructions. If the Escrow Agent has received the written
objection on or before such tenth (10th) business day, the Escrow Agent
shall forthwith give notice of such objection to the party which originally
delivered the written instructions, and shall continue to hold the Deposit
until Buyer and Seller jointly direct the release and delivery thereof
pursuant to written instructions signed by each of them. If Buyer and
Seller have not delivered any such joint written instructions within ten
(10) business days after the date on which the Escrow Agent delivered the
notice of objection to the party originally delivering the written
instructions, Buyer and/or Seller may petition a court of competent
jurisdiction ("Court") for determination of how the Deposit should be
disbursed, and each of Buyer and Seller hereby agrees promptly to deliver
to the other and to the Escrow Agent notice of such petition and a copy
thereof. In connection with such petition, each of Buyer and Seller agrees
in good faith to take such actions as may be necessary or advisable to
enable the Court to render a decision with respect to the disposition of
the Deposit as promptly as practicable. In the event that neither party
petitions the Court for such determination within ten (10) business days
after the Escrow Agent has delivered a notice of objection, either of
Xxxxxxxx or MWN, may, in its sole discretion, petition the Court for such
determination. In connection with any judicial determination, the Escrow
Agent shall promptly release and deliver the Deposit only as directed by
the Court pursuant to a judgment which is final and non-appealable, or else
it may take action only upon receipt of instructions which are signed by
both Buyer and Seller.
6. NOTICES. All notices, requests, demands and other communications that
are required by or may be given under this Agreement shall be in writing. All
notices directed to the Escrow Agent shall be provided contemporaneously to
Xxxxxxxx and MWN acting in their joint capacity as Escrow Agent. All notices
hereunder shall be deemed to have been duly given (i) when received if
personally delivered, (ii) when transmitted if transmitted by telecopy,
electronic or digital transmission method, (iii) the day after such notices are
sent, if send for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express), and (iv) upon receipt, if
sent by certified or registered mail, return receipt requested. Such notices
shall be delivered to the parties at their respective addresses as set forth in
the Asset Purchase Agreement.
7. WAIVER OF POTENTIAL CONFLICT OF INTEREST. Buyer and Seller each hereby
2
acknowledges that Xxxxxxxx has fully disclosed all potential conflicts of
interest that may arise out of Xxxxxxxx'x representation of Buyer in the
negotiation, preparation and execution of the Asset Purchase Agreement, as well
as acting as the Escrow Agent hereunder. Buyer and Seller each hereby
acknowledges that MWN has fully disclosed all potential conflicts of interest
that may arise out of MWN's representation of Seller in the negotiation,
preparation and execution of the Asset Purchase Agreement, as well as acting as
the Escrow Agent hereunder. After reviewing and evaluating these disclosures,
each of Buyer and Seller hereby consents to (i) the continuing representation of
Seller by MWN, even if a dispute over the disposition of the Deposit arises and
(ii) the continuing representation of Buyer by Xxxxxxxx, even if a dispute over
the disposition of the Deposit arises.
8. LIABILITY OF THE ESCROW AGENT. The acceptance by the Escrow Agent of its
duties as such under this Agreement is subject to the following terms and
conditions, which all parties to this Agreement hereby agree shall govern and
control with respect to the rights, duties, liabilities and obligations of the
Escrow Agent:
(a) The Escrow Agent is not a party to, and is not bound by, any
agreement which may be evidenced by, or arise out of, the foregoing written
instructions, other than as expressly set forth herein or in the Asset
Purchase Agreement.
(b) The duties of the Escrow Agent set forth herein are purely
ministerial in nature, and the parties hereby release the Escrow Agent from
any acts done or admitted to be done by it in good faith and in the
performance of its duties hereunder. In addition, the Escrow Agent shall
have no responsibility for determining or ascertaining the accuracy,
sufficiency or completeness of the facts alleged in any written
instructions.
(c) The Escrow Agent shall not incur any liability to Buyer and Seller
by acting in accordance with the terms of the provisions of this Agreement
upon any written notice, request, waiver, consent, receipt or other paper
or document that the Escrow Agent, in good faith, believes to be genuine.
Moreover, the Escrow Agent shall not be liable for the sufficiency or
correctness as to the accuracy, completeness, form, manner, execution or
validity of any instrument deposited to the escrow created hereby, or the
identity, authority, or right of any person executing the same.
(d) The Escrow Agent may consult with, and obtain advice from,
independent legal counsel in the event of any dispute or question as to the
interpretation of any of the provisions hereof or its duties hereunder, and
it shall not incur any liability to Buyer and Seller and shall be fully
protected by acting in good faith in accordance with any such opinion and
instructions of such counsel.
(e) In the event that the Escrow Agent becomes involved with any
litigation arising out of this Agreement, including the initiation or
prosecution of an action pursuant to Section 5(c) hereof, each of Xxxxxxxx
and/or MWN is hereby authorized to deposit with the clerk of a court of
competent jurisdiction any and all funds, securities or other property held
by it pursuant hereto and, thereupon, shall stand fully relieved and
discharged of any further duties, liabilities or obligations hereunder, and
3
this Agreement shall terminate. Further, in the event the Escrow Agent is
threatened with litigation arising out of this Agreement, each of Xxxxxxxx
and/or MWN is hereby authorized to interplead all interested parties in any
court of competent jurisdiction and to deposit with the clerk of such court
any and all funds, securities or other property held by it pursuant hereto
and, thereupon, shall stand fully relieved and discharged of any further
duties, liabilities or obligations hereunder, and this Agreement shall
terminate. Notwithstanding the foregoing, the Escrow Agent shall not be
required by any provision hereof to institute legal proceedings of the kind
referred to in this Section 8(e).
(f) Buyer and Seller hereby agree, jointly and severally, to indemnify
each of Xxxxxxxx and MWN and hold each harmless from and against any and
all loss, liability, expense (including reasonable attorneys' fees and
expenses), claim or demand arising out of, or in connection with, their
acting as Escrow Agent hereunder, except for such loss, liability, expense,
claim or demand which is judicially determined in a final order to have
arisen out of the gross negligence or willful misconduct of Xxxxxxxx and/or
MWN. Such indemnification shall survive the resignation of the Escrow Agent
or the termination of this Agreement.
9. RESIGNATION OF THE ESCROW AGENT.
(a) Xxxxxxxx and/or MWN may resign from their joint role as Escrow
Agent hereunder by giving written notice of such resignation to Buyer and
Seller at their respective addresses set forth in the Asset Purchase
Agreement, at least ten (10) business days prior to the date specified for
such resignation to take effect. In such event and upon the effective date
of such resignation, the remaining party (if any) shall serve as the Escrow
Agent and shall fulfill all of the Escrow Agent's responsibilities and
obligations hereunder, subject to the right to resign in accordance with
this Section 9.
(b) In the event of the resignation of both Xxxxxxxx and MWN (or upon
Xxxxxxxx'x and MWN's becoming incapable of acting hereunder) Seller and
Buyer shall forthwith appoint a new Escrow Agent; failing such appointment
within twenty (20) days, the parties shall apply to a Judge of Bucks
County, Pennsylvania to act in his or her individual and not judicial
capacity, on such notice as such Judge may direct, for the appointment of a
new Escrow Agent.
10. TERMINATION OF THE ESCROW AGENT. This Agreement shall terminate upon
the complete disbursement of the Deposit or as otherwise set forth herein. Upon
such termination, the Escrow Agent shall be released from, and shall not have
any further liabilities or obligations hereunder.
11. MISCELLANEOUS.
(a) The Escrow Agent shall not receive any fee for its services as
Escrow Agent.
(b) The laws and courts of the Commonwealth of Pennsylvania shall be
controlling regarding the interpretation of this Agreement.
4
(c) In the event that any one or more of the provisions of this
Agreement or in any other document referred to herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect,
then, to the maximum extent permitted by law, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement
or any other such document or instrument.
(d) This Agreement may be executed 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.
(e) The captions to the various sections, subsections and clauses
herein are solely for the convenience of the parties hereto and shall not
control or affect the meaning or construction of this Agreement.
(f) This Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersedes all prior oral and
written agreements among the parties with respect to the subject matter
hereof.
[SIGNATURE PAGE FOLLOWS]
5
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties
hereto have executed this Escrow Agreement the date first above written.
WITNESS/ATTEST: SELLER:
XXXX, INC.
By:
---------------------------------
Xxxxx X. Deck, President
BUYER:
THE XXXXXXX CORPORATION
By:
---------------------------------
, its
ESCROW AGENT:
XXXXXX XXXXXXX &
NURICK LLC
By:
---------------------------------
, Member
XXXXXXXX & XXXX, P.C.
By:
---------------------------------
, its
6
Exhibit "B"
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and entered
into as of October ___, 2004, by and among The Xxxxxxx Corporation, a Nevada
corporation (the "COMPANY"), and the undersigned shareholders (each, a
"SHAREHOLDER" and collectively, the "SHAREHOLDERS").
WHEREAS:
A. In connection with that certain Asset Purchase and Sale Agreement by and
between Xxxx, Inc. ("XXXX") and the Company (the "PURCHASE AGREEMENT"), the
Company has agreed, upon the terms and subject to the conditions of the Purchase
Agreement, to issue _____________ shares of the Company's common stock, $.0005
par value per share (the "COMMON STOCK") to the Shareholders as part of the
consideration for the Acquired Assets (as such term is defined in the Purchase
Agreement);
B. To induce the Shareholders to execute and deliver the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the "SECURITIES
ACT"), and applicable state securities laws.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Shareholders
hereby agree as follows.
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
"BUYBACK DATE" means the 180th day following the Closing Date, PROVIDED,
HOWEVER, that the Buyback Date shall be extended beyond the 180th day following
the Closing Date for any time period of delay that is the result solely of
Joel's need to address any regulatory agency concerns regarding the adequacy of
Joel's financial statements.
"CALL RIGHT" shall have the meaning set forth in Section 2(b).
"CASH PAYMENT" shall have the meaning set forth in Section 2(b).
"CLOSING DATE" means the date on which the closing of the transactions
contemplated by the Purchase Agreement occurs.
"COMMISSION" means the Securities and Exchange Commission.
"EFFECTIVE REGISTRATION DATE" means the date on which the Commission
declares the Registration Statement to be effective.
"EFFECTIVENESS DATE" means the 120th day following the Closing Date,
PROVIDED, however, that the Effectiveness Date shall be extended beyond the
120th day following the Closing Date for any time period of delay that is the
result solely of Joel's need to address any regulatory agency concerns regarding
the adequacy of Joel's financial statements.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(a).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, or any similar successor statute.
"INDEMNIFIED PARTY" shall have the meaning set forth in Section 5(c).
"INDEMNIFYING PARTY" shall have the meaning set forth in Section 5(c).
"PROCEEDING" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
"PROSPECTUS" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
"PUT RIGHT" shall have the meaning set forth in Section 2(c).
"REGISTRABLE SECURITIES" means the shares of Common Stock issued upon the
closing of the transactions contemplated by the Purchase Agreement, including
any securities which may thereafter be issued in respect of any such share of
Common Stock in the event of any stock split, stock dividend, recapitalization
or reclassification; share exchange, consolidation, merger or reorganization;
distribution of warrants or other rights; or other like issuances or
distributions of securities.
"REGISTRATION STATEMENT" means each registration statement required to be
filed hereunder, including the Prospectus, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"RULE 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.
"TRADING MARKET" means any of the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, the Nasdaq National Market, the American Stock Exchange or the New York
Stock Exchange.
2. Registration.
(a) Within 20 days following the Closing Date, the Company shall prepare
and use its best efforts to file with the Commission a Registration Statement
covering the Registrable Securities for an offering to be made on a continuous
basis pursuant to Rule 415. The Registration Statement shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith). The Company shall cause the
Registration Statement to become effective and remain effective as provided
herein. The Company shall use its reasonable commercial efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date. The Company shall use its reasonable commercial efforts
to keep the Registration Statement continuously effective under the Securities
Act until the date which is the earlier date of when (i) all Registrable
Securities have been effectively registered under the Securities Act and
disposed of in accordance with the Registration Statement covering them, (ii)
all Registrable Securities are distributed to the public pursuant to Rule 144
(or any similar provision then in force) under the Securities Act, or (iii) all
Registrable Securities are otherwise freely transferable without restriction
under the Securities Act (the "EFFECTIVENESS PERIOD").
(b) Following the Effective Registration Date and upon notice of a sale by
a Shareholder and confirmation by such Shareholder that he has complied with the
prospectus delivery requirements, the Company shall cause its counsel to issue a
opinion to the transfer agent stating that the shares are subject to an
effective registration statement and can be reissued free of restrictive legend.
3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission the Registration Statement with
respect to such Registrable Securities, respond as promptly as possible to any
comments received from the Commission, and use its best efforts to cause the
Registration Statement to become and remain effective for the Effectiveness
Period with respect thereto;
(b) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary to comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities covered by the
Registration Statement and to keep such Registration Statement effective until
the expiration of the Effectiveness Period;
(c) furnish to the Shareholders such reasonable number of copies of the
Registration Statement and the Prospectus included therein as such Shareholders
may request in order to facilitate the public sale or disposition of the
Registrable Securities covered by the Registration Statement;
(d) list the Registrable Securities covered by the Registration Statement
with any Trading Market on which the Common Stock of the Company is then listed;
(e) use its commercially reasonable efforts to register or qualify the
Registrable Securities covered by the Registration Statement under such state
securities or blue sky laws of such jurisdictions as such Shareholders may
reasonably request; PROVIDED, HOWEVER, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to subject
itself to taxation in connection with any such registration or qualification of
such Registrable Securities;
(f) immediately notify the Shareholders at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the Prospectus contained in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing; and
(g) prepare and promptly file with the Commission and promptly notify the
Shareholders of the filing of such amendments or supplements to such
Registration Statement or Prospectus as may be necessary to correct any
statements or omissions if, at the time when a Prospectus relating to such
Registrable Securities is required to be delivered under the Securities Act, any
event has occurred as the result of which any such Prospectus or any other
Prospectus then in effect may include an untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
4. Registration Expenses. All expenses relating to the Company's compliance
with Sections 2 and 3 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the NASD, transfer
taxes, fees of transfer agents and registrars, fees of, and disbursements
incurred by, one counsel for the Shareholders (to the extent such counsel is
required due to Company's failure to meet any of its obligations hereunder), are
called "REGISTRATION EXPENSES." All selling commissions applicable to the sale
of Registrable Securities, including any fees and disbursements of any special
counsel to the Shareholders beyond those included in Registration Expenses, are
called "SELLING EXPENSES" and shall be the responsibility of the Shareholders.
The Company shall only be responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify and hold
harmless the Shareholders against any losses, claims, damages or liabilities,
joint or several, to which the Shareholders may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any final
Prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Shareholders for any reasonable
legal or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case if and to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission so
made in conformity with information furnished by or on behalf of the
Shareholders in writing specifically for use in any such document.
(b) In the event of a registration of the Registrable Securities under the
Securities Act pursuant to this Agreement, each of the Shareholders will
indemnify and hold harmless the Company, and its officers, directors and each
other person, if any, who controls the Company within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact which was
furnished in writing by such Shareholder to the Company expressly for use in
(and such information is contained in) the Registration Statement under which
such Registrable Securities were registered under the Securities Act pursuant to
this Agreement, any preliminary Prospectus or final Prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission in information furnished in writing to the
Company by such Shareholder to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse the Company and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action, provided, however, that such
Shareholder will be liable in any such case if and only to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so made in
conformity with information furnished in writing to the Company by or on behalf
of such Shareholder specifically for use in any such document.
(c) Promptly after receipt by a party entitled to claim indemnification
hereunder (an "Indemnified Party") of notice of the commencement of any action,
such Indemnified Party shall, if a claim for indemnification in respect thereof
is to be made against a party hereto obligated to indemnify such Indemnified
Party (an "Indemnifying Party"), notify the Indemnifying Party in writing
thereof, but the omission so to notify the Indemnifying Party shall not relieve
it from any liability which it may have to such Indemnified Party other than
under this Section 5(c) and shall only relieve it from any liability which it
may have to such Indemnified Party under this Section 5(c) if and to the extent
the Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the Indemnifying
Party shall not be liable to such Indemnified Party under this Section 5(c) for
any legal expenses subsequently incurred by such Indemnified Party in connection
with the defense thereof; if the Indemnified Party retains its own counsel, then
the Indemnified Party shall pay all fees, costs and expenses of such counsel,
provided, however, that, if the defendants in any such action include both the
indemnified party and the Indemnifying Party and the Indemnified Party shall
have reasonably concluded that there may be reasonable defenses available to it
which are different from or additional to those available to the Indemnifying
Party or if the interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified Party
shall have the right to select one separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
reasonable expenses and fees of such separate counsel and other expenses related
to such participation to be reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the event of
joint liability under the Securities Act in any case in which either (i) a
Shareholder makes a claim for indemnification pursuant to this Section 5 but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be enforced in such
case notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of such Shareholder in circumstances for which indemnification is
provided under this Section 5; then, and in each such case, the Company and such
Shareholder will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution from others) in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party and the Indemnified Party in connection with the actions
which resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such Indemnifying
Party or Indemnified Party, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such action; provided,
however, that, in any such case, no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 10(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation. The amount paid or payable by a party as a result
of the losses, claims, damages or liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with any investigation or proceeding.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Shareholder,
of any of their respective obligations under this Agreement, each Shareholder or
the Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement.
(b) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Shareholders in such capacity pursuant hereto)
may include securities of the Company in any Registration Statement other than
the Registrable Securities, and the Company shall not after the date hereof
enter into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. The Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any person that have not been fully
satisfied.
(c) Compliance. Each Shareholder covenants and agrees that he will comply
with the prospectus delivery requirements of the Securities Act as applicable to
him in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(d) Discontinued Disposition. Each Shareholder agrees by his acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of a Discontinuation Event (as defined below), such Shareholder
will forthwith discontinue disposition of such Registrable Securities under the
applicable Registration Statement until such Shareholder's receipt of the copies
of the supplemented Prospectus and/or amended Registration Statement or until it
is advised in writing (the "ADVICE") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has received copies
of any additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph. For purposes of this Section 6(d), a "DISCONTINUATION EVENT" shall
mean (i) when the Commission notifies the Company whether there will be a
"review" of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement; (ii) any request by the Commission or
any other Federal or state governmental authority for amendments or supplements
to such Registration Statement or Prospectus or for additional information;
(iii) the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iv) the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and/or (v) the occurrence of any
event or passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made in
such Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The Company shall promptly take any and all commercially
reasonable actions necessary to rectify any Discontinuation Event such that the
use of the applicable Prospectus may be resumed.
(e) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Shareholder written notice of
such determination and, if within fifteen days after receipt of such notice, any
such Shareholder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Shareholder requests to be registered to the extent the Company may do so
without violating registration rights of others which exist as of the date of
this Agreement, subject to customary underwriter cutbacks applicable to all
holders of registration rights and subject to obtaining any required consent of
any selling stockholder(s) to such inclusion under such registration statement.
(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the
Shareholders of the then outstanding Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of certain Shareholders and
that does not directly or indirectly affect the rights of other Shareholders may
be given by Shareholders of at least a majority of the Registrable Securities to
which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance
with the provisions of the immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to the Company or
the Shareholder at the respective addresses set forth below or as may hereafter
be specified in a notice designated as a change of address under this Section
6(g). Any notice or request hereunder shall be given by registered or certified
mail, return receipt requested, hand delivery, overnight mail, Federal Express
or other national overnight next day carrier (collectively, "COURIER") or
telecopy (confirmed by mail). Notices and requests shall be, in the case of
those by hand delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail, deemed to
have been given three (3) business days after the date when deposited in the
mail or with the overnight mail carrier, in the case of a Courier, the next
business day following timely delivery of the package with the Courier, and, in
the case of a telecopy, when confirmed. The address for such notices and
communications shall be as follows:
(i) If to the Company: The Xxxxxxx Corporation
Attention: Xxx Xxxxxxx, President
P.O. Box 1349
000 X. Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
With a copy to: Xxxxxx X. X. XxxXxxxx, Esq.
Xxxxxxxx and Xxxx, P.C.
X.X. Xxx 0000
00 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
(ii) If to a Shareholder: To the name and address set forth under such
Shareholder's signature on the signature pages
hereto.
or such other address as may be designated in writing hereafter in
accordance with this Section 6(g) by such person.
(h) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of the parties
and shall inure to the benefit of each Shareholder. The Company may not assign
its rights or obligations hereunder without the prior written consent of each
Shareholder. Each Shareholder may not assign their respective rights hereunder
without the prior written consent of the Company; PROVIDED, HOWEVER, that in the
event of a transfer of Registrable Securities in which the transferor receives
no tangible consideration (such as, but not limited to, a transfer to the estate
or heirs in the case of a deceased Shareholder), the transferee shall have all
rights theretofore held by the transferor under this Agreement.
(i) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the Commonwealth
of Pennsylvania, without regard to the principles of conflicts of law thereof.
Each party agrees that all Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement shall
be commenced exclusively in the Court of Common Pleas of Bucks County,
Pennsylvania. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Court of Common Pleas of Bucks County, Pennsylvania for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Proceeding
is improper. Each party hereto hereby irrevocably waives personal service of
process and consents to process being served in any such Proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with
evidence of delivery) to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its reasonable attorneys fees and other
costs and expenses incurred with the investigation, preparation and prosecution
of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(n) Pronouns and Plurals. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, singular or plural as the context
may require. All references herein to "he," "him" or "his" or "she," "her" or
"hers" shall be for purposes of simplicity and are not intended to be a
reference to a particular gender.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
The Xxxxxxx Corporation
By:
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Name: Xxx Xxxxxxx
Title: President
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Xxxxx X. Deck
Address:
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Xxxxxx X. Deck
Address:
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Xxxxxx X. Xxxxxxxxx
Address:
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Xxxxxxx X. Deck
Address:
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Xxxxxx X. Deck
Address:
EXHIBIT "C"
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this ________day of
__________, 2004, between __________________________, a ___________________, as
employer (hereinafter "Employer"), and XXXXX X. DECK (hereinafter "Employee")
W I T N E S S E T H:
WHEREAS, the Employer agrees to hire and employ Employee according to the
terms and conditions stated herein; and,
WHEREAS, the Employee agrees to render Employer services according to the
terms and conditions stated herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. EMPLOYEE'S DUTIES AND TITLE. Employer hereby employs Employee to render
services to Employer in the title and capacity of President, with assigned
duties and tasks as specified by Employer's Board of Directors, including, by
way of example only and without limitation: responsibility for Employer's
day-to-day manufacturing operations and affairs at the Pharmaloz facility in
Lebanon, PA and the Xxxxx Xxxxx facility in Elizabethtown, PA. Employee's job
description shall be as described on Exhibit "A" attached hereto and made a part
hereof. In no event shall Employee's job description or responsibilities be
materially changed without his consent, nor shall Employee be obligated to
relocate without his consent. The Employee hereby accepts such employment for
the period stated in Paragraph 2, and agrees to devote his full time and
attention and his best talents and expertise to the duties of employment hereby
accepted by him.
2. TERM OF EMPLOYMENT. The term of Employee's employment under this
Agreement shall commence on the date hereof ("Commencement Date") and continue
until the close of business on December 31, 2006 (the "Termination Date"),
unless sooner terminated pursuant to paragraph 5 of this Agreement; PROVIDED,
however that the term will automatically renew on the Termination Date, and on
each subsequent anniversary of the Termination Date (each, an "ANNIVERSARY
DATE") for an additional one-year period unless either party shall give written
notice of non-renewal to the other not less than sixty (60) days prior to the
Termination Date or the then-applicable Anniversary Date, in which event this
Agreement shall terminate on the Termination Date or at the end of the one-year
period then in effect.
3. COMPENSATION. As compensation to the Employee pursuant to services
rendered under this contract, the Employer shall pay to Employee and Employee
shall accept the following salary, other compensation, and benefits:
(a) Employer shall pay the Employee a base salary at an annual rate,
of One Hundred Twenty Five Thousand Dollars ($125,000.00) per year, or such
greater amount as the Board of Directors may from time to time determine.
(b) The Employee shall be entitled to such bonuses and incentive
compensation as may be awarded in the discretion of the Board of Directors.
(c) The Employee shall receive, at the Employer's expense, family
healthcare coverage through such health insurance plan as is established by
Employer, and shall be entitled to participate in any employee benefit
plans established by Employer, including, without limitation, pension and
profit sharing plans, and savings plans, which are generally applicable to
the Employer's employees; provided, however, that (1) the Employee's
receipt of such benefits is pursuant to and determined by the provisions of
such plans, and (2) the Employer reserves the right to modify or eliminate
and or all such plans, so long as Employer maintains and/or makes available
employee benefits comparable to those available to Employee through XXXX,
Inc. as of July 1, 2004.
(d) Employee shall be entitled to participate in the stock option plan
sponsored by The Xxxxxxx Corporation ("TQC") for officers and executives of
TQC and Employer, and TQC's Board (through its Compensation Committee)
shall make periodic determinations whether to award options to Employee in
accordance with determinations made by such Committee regarding similarly
situated officers.
4. VACATION BENEFITS; EXPENSE REIMBURSEMENT.
(a) The Employee shall be entitled to six (6) weeks paid vacation in
each calendar year (pro rated for 2004) during the term of his employment
hereunder.
(b) The Employer shall reimburse the Employee for necessary and
appropriate travel and business expenses incurred by Employee on behalf of
the Employer
5. TERMINATION. Employee's employment under this Agreement shall terminate
upon occurrence of any of the events described in the following subparagraphs
(a) through (c):
(a) In the event of Employee's violation of any of the covenants of
this Agreement, his employment shall automatically and immediately
terminate; PROVIDED, however, that Employer provides Employee with ten (10)
days' written notice of any such violation, and Employee has failed to cure
the violation within such 10-day period. No further payments or benefits
whatsoever shall be due to the Employee or any beneficiary under this
Agreement as of the date of said violation.
(b) The Employer may terminate the employment of the Employee for
"cause" at any time, in which event neither the Employee nor his
beneficiaries or estate shall be entitled to any further payments
hereunder. For purposes of this Agreement, "cause" shall mean:
(i) The misappropriation of funds or property of the Employer;
2
(ii) Any attempt to obtain personal profit from the Employer by
actions that are adverse to the interests of the Employer;
(iii) Unreasonable neglect or refusal to perform duties assigned
to him; or
(iv) Conviction of a felony.
(c) If the Employee dies during the term of his employment under this
Agreement, his employment shall automatically terminate, and Employee and
his estate and beneficiaries shall only be entitled to such benefits, if
any, as are provided under the Employer's benefit plans in the event of an
employee's death, as well as any compensation due but not paid through the
date of death.
6. COVENANT NOT TO COMPETE. Except as provided in paragraph (b) below:
(a) Employee agrees, that during the term of his employment under this
Agreement and for a period of two (2) years thereafter, that:
(i) He shall not associate with, enter into the employ of, or
render any services to any business that competes with Employer or a
business that conducts similar business (as defined below) to the
business of Employer, within a twenty-five (25) mile radius of the
Employer's facilities in Lebanon and Elizabethtown, Pennsylvania.
(ii) He shall not solicit, divert, or induce customers or clients
of Employer to obtain similar products or services from others,
including any competitor of the Employer.
(iii) He shall not acquire any financial interest, other than for
full consideration, in any competitor in a similar business to the
business of Employer (including any interest in any publicly-traded
entity) that competes with Employer anywhere in the United States.
"Similar business" as used in the foregoing subparagraphs shall
include, but not be limited to, the business of manufacture,
distribution and sale of (a) cold-relief products, (b) allergy-relief
products, and (c) health and nutritional supplements.
(b) The provisions of paragraphs (a)(i) - (iii) shall not apply if
Employee's employment terminates because of a sale, merger, consolidation,
or similar transaction involving the Employer.
7. CONFIDENTIALITY/SECRECY COVENANTS.
(a) During the period of his employment hereunder, and for a period of
five (5) years thereafter, Employee agrees that he shall not:
3
(i) Use, divulge, or communicate to anyone, either orally, in
writing, or by electronic means, the names and/or addresses of
Employer's customers or clients, or the details of any transactions or
financial matters of Employer, whether or not such information was
available to Employee during his employment.
(ii) Use, divulge or communicate to anyone, either orally, in
writing, or by electronic means, any Employer trade secrets, patents,
formulas, processes, manufacturing methods, or data supplied or
available to him in connection with his employment.
(b) Employee agrees that all trade secrets, formulas, patents,
processes, manufacturing methods, data, documents, equipment, property,
customer and supplier information, financial information, sales and
marketing data, and other information provided to the Employee by the
Employer, or obtained by the Employee, in the course of, or in connection
with, his employment, are and shall remain the property of the Employer and
shall be returned to the Employer by the Employee immediately upon
termination of Employee's employment, and no copies or reproductions
thereof in any form shall be retained by Employee.
8. INJUNCTIVE RELIEF. In the event of a breach by Employee of any of the
covenants contained in paragraphs 6 and 7 of this Agreement, Employee agrees
that money damages shall not be an adequate remedy for such breach, and Employer
shall, in addition to all other remedies for such breach provided for under this
Agreement or applicable law, have the right to request immediate and permanent
injunctive relief to enjoin and restrain such breach and any consequences
thereof.
9. EMPLOYER'S PROPRIETARY RIGHTS. Employee agrees that all inventions and
products developed by the Employee during the term of his employment under this
Agreement shall be owned by and be the exclusive property of the Employer.
10. MISCELLANEOUS.
(a) This Agreement supersedes any and all prior agreements or
understandings, oral or written, with respect to the employment of the
Employee with the Employer. This Agreement may not be altered or terminated
orally, and shall be modified only by a subsequent written Agreement
executed by both the Employee and the Employer.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the Employer and its successors and assigns; PROVIDED, however,
that Employer shall not assign or transfer (by operation of law or
otherwise) this Agreement without the express prior written consent of
Employee. This Agreement shall be binding upon and shall inure to the
benefit of the Employee, his heirs, executors and personal representatives,
and shall not be assigned by the Employee and any attempted assignment
shall be in violation of this Agreement and shall be null
4
and void.
(d) Whenever possible, each provisions of this Agreement shall be
interpreted in such a manner as to make all provisions effective and valid;
but, if any provision in this Agreement is held to be invalid, illegal or
unenforceable, such provision will be ineffective without invalidating the
remainder of this Agreement.
(e) All notices, demands or other communications, shall be delivered
to the Employer or Employee at the following addresses which may be changed
from time to time by either party within thirty (30) days' written notice:
To the Employer:
Xxx X. Xxxxxxx, President/CEO
The Xxxxxxx Corporation 000
Xxxxx Xxxxxxx Xxxx X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
To the Employee:
Xxxxx X. Deck
00 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxxx, XX 00000
(f) All rights and remedies granted to the Employer hereunder shall
not be exclusive, but shall be in addition to all rights and remedies
available to the Employer at law or in equity.
(g) Unless otherwise specifically defined within this Agreement, words
and phrases shall be construed and interpreted according to their common
usage and meaning. Headings and titles are for reference purposes only and
are not to be construed as part of this Agreement.
5
IN WITNESS WHEREOF, the Employer, by its authorized representative, and
Employee have caused this Agreement to be executed and made, all as of the day
and year first written above.
By:
---------------------------------
, its
------------------------------------
Xxxxx X. Deck ("Employee")
THE XXXXXXX CORPORATION hereby unconditionally and irrevocably guarantees to
Employee the full and punctual payment and performance of all obligations when
due of Employer under this Employment Agreement.
THE XXXXXXX CORPORATION
By:
---------------------------------
Xxx X. Xxxxxxx, President
6
Exhibit "A"
SUMMARY JOB DESCRIPTION FOR PRESIDENT
Essential duties and responsibilities of the President's job is to:
1. Establish current and long term objectives, plans and policies subject
to approval by the Board of Directors;
2. Supervise those employees who report directly to the President and, at
minimum, performs annual performance evaluations of those employees;
3. Final decision-maker regarding hiring and firing of employees;
4. Dispense advice, guidance, direction, and authorization to carry out
major plans and procedures consistent with established policies and
Board approval;
5. Oversee organization's financial structure;
6. Review operating results of the organization, comparing them to
established objectives, and takes steps to help correct unsatisfactory
results;
7. Establishes and maintains an effective system of communications
throughout the organization;
8. Represent the organization with major customers, the financial
community, major suppliers, and the public;
9. Plus such other duties as directed by the Board of Directors.
EXHIBIT "D"
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this ________day of
__________, 2004, between __________________________, a ___________________, as
employer (hereinafter "Employer"), and XXXXX XXXX (hereinafter "Employee")
W I T N E S S E T H:
WHEREAS, the Employer agrees to hire and employ Employee according to the
terms and conditions stated herein; and,
WHEREAS, the Employee agrees to render Employer services according to the
terms and conditions stated herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. EMPLOYEE'S DUTIES AND TITLE. Employer hereby employs Employee to render
services to Employer in the title and capacity of Chief Operating Officer, with
assigned duties and tasks as specified by Employer's Board of Directors,
including, by way of example only and without limitation: responsibility for
production and manufacturing, technical guidance, employee supervision and other
matters related to Employer's day-to-day manufacturing operations and affairs at
the Pharmaloz facility in Lebanon, PA and the Xxxxx Xxxxx facility in
Elizabethtown, PA. Employee's job description shall be as described on Exhibit
"A" attached hereto and made a part hereof. In no event shall Employee's job
description or responsibilities be materially changed without his consent, nor
shall Employee be obligated to relocate without his consent. The Employee hereby
accepts such employment for the period stated in Paragraph 2, and agrees to
devote his full time and attention and his best talents and expertise to the
duties of employment hereby accepted by him.
2. TERM OF EMPLOYMENT. The term of Employee's employment under this
Agreement shall commence on the date hereof ("Commencement Date") and continue
until the close of business on December 31, 2006 (the "Termination Date"),
unless sooner terminated pursuant to paragraph 5 of this Agreement; PROVIDED,
however that the term will automatically renew on the Termination Date, and on
each subsequent anniversary of the Termination Date (each, an "ANNIVERSARY
DATE") for an additional one-year period unless either party shall give written
notice of non-renewal to the other not less than sixty (60) days prior to the
Termination Date or the then-applicable Anniversary Date, in which event this
Agreement shall terminate on the Termination Date or at the end of the one-year
period then in effect.
3. COMPENSATION. As compensation to the Employee pursuant to services
rendered under this contract, the Employer shall pay to Employee and Employee
shall accept the following salary, other compensation, and benefits:
(a) Employer shall pay the Employee a base salary at an annual rate,
of One Hundred Four Thousand Dollars ($104,000.00) per year, or such
greater amount as the Board of Directors may from time to time determine.
(b) Employer shall, during the term of this Agreement, pay the premium
for a $500,000 term life insurance policy obtained by Employer in
Employee's name. Employer's payment of the premium shall be subject to all
applicable federal, state or local employment or withholding taxes.
(c) The Employee shall be entitled to such bonuses and incentive
compensation as may be awarded in the discretion of the Board of Directors.
(d) The Employee shall receive, at the Employer's expense, family
healthcare coverage through such health insurance plan as is established by
Employer, and shall be entitled to participate in any employee benefit
plans established by Employer, including, without limitation, pension and
profit sharing plans, and savings plans, which are generally applicable to
the Employer's employees; provided, however, that (1) the Employee's
receipt of such benefits is pursuant to and determined by the provisions of
such plans, and (2) the Employer reserves the right to modify or eliminate
and or all such plans, so long as Employer maintains and/or makes available
employee benefits comparable to those available to Employee through XXXX,
Inc. as of July 1, 2004.
(e) Employee shall be entitled to participate in the stock option plan
sponsored by The Xxxxxxx Corporation ("TQC") for officers and executives of
TQC and Employer, and TQC's Board (through its Compensation Committee)
shall make periodic determinations whether to award options to Employee in
accordance with determinations made by such Committee regarding similarly
situated officers.
4. VACATION BENEFITS; EXPENSE REIMBURSEMENT.
(a) The Employee shall be entitled to five (5) weeks paid vacation in
each calendar year (pro rated for 2004) during the term of his employment
hereunder.
(b) The Employer shall reimburse the Employee for necessary and
appropriate travel and business expenses incurred by Employee on behalf of
the Employer
5. TERMINATION. Employee's employment under this Agreement shall terminate
upon occurrence of any of the events described in the following subparagraphs
(a) through (c):
(a) In the event of Employee's violation of any of the covenants of
this Agreement, his employment shall automatically and immediately
terminate; PROVIDED, however, that Employer provides Employee with ten (10)
days' written notice of any such violation, and Employee has failed to cure
the violation within such 10-day period. No further payments or benefits
whatsoever shall be due to the Employee or any beneficiary under this
Agreement as of the date of said violation.
(b) The Employer may terminate the employment of the Employee for
"cause" at any time, in which event neither the Employee nor his
2
beneficiaries or estate shall be entitled to any further payments
hereunder. For purposes of this Agreement, "cause" shall mean:
(i) The misappropriation of funds or property of the Employer;
(ii) Any attempt to obtain personal profit from the Employer by
actions that are adverse to the interests of the Employer;
(iii) Unreasonable neglect or refusal to perform duties assigned
to him; or
(iv) Conviction of a felony.
(c) If the Employee dies during the term of his employment under this
Agreement, his employment shall automatically terminate, and Employee and
his estate and beneficiaries shall only be entitled to such benefits, if
any, as are provided under the Employer's benefit plans in the event of an
employee's death, as well as any compensation due but not paid through the
date of death.
(d) In the event of Employee's termination for any reason other than
set forth in paragraphs (a) through (c), Employee shall be entitled to a
lump-sum severance payment equal to nine (9) months' salary. No further
payments shall be due to Employee hereunder.
6. COVENANT NOT TO COMPETE. Except as provided in paragraph (b) below:
(a) Employee agrees, that during the term of his employment under this
Agreement and for a period of two (2) years thereafter, that:
(i) He shall not associate with, enter into the employ of, or
render any services to any business that competes with Employer or a
business that conducts similar business (as defined below) to the
business of Employer, within a twenty-five (25) mile radius of the
Employer's facilities in Lebanon and Elizabethtown, Pennsylvania.
(ii) He shall not solicit, divert, or induce customers or clients
of Employer to obtain similar products or services from others,
including any competitor of the Employer.
(iii) He shall not acquire any financial interest, other than for
full consideration, in any competitor in a similar business to the
business of Employer (including any interest in any publicly-traded
entity) that competes with Employer anywhere in the United States.
"Similar business" as used in the foregoing subparagraphs shall
include, but not be limited to, the business of manufacture,
distribution and sale of (a) cold-relief products, (b) allergy-relief
products, and (c) health and nutritional supplements.
(b) The provisions of paragraphs (a)(i) - (iii) shall not apply if
Employee's employment terminates because of a sale, merger, consolidation,
or similar transaction involving the Employer.
3
7. CONFIDENTIALITY/SECRECY COVENANTS.
(a) During the period of his employment hereunder, and for a period of
five (5) years thereafter, Employee agrees that he shall not:
(i) Use, divulge, or communicate to anyone, either orally, in
writing, or by electronic means, the names and/or addresses of
Employer's customers or clients, or the details of any transactions or
financial matters of Employer, whether or not such information was
available to Employee during his employment.
(ii) Use, divulge or communicate to anyone, either orally, in
writing, or by electronic means, any Employer trade secrets, patents,
formulas, processes, manufacturing methods, or data supplied or
available to him in connection with his employment.
(b) Employee agrees that all trade secrets, formulas, patents,
processes, manufacturing methods, data, documents, equipment, property,
customer and supplier information, financial information, sales and
marketing data, and other information provided to the Employee by the
Employer, or obtained by the Employee, in the course of, or in connection
with, his employment, are and shall remain the property of the Employer and
shall be returned to the Employer by the Employee immediately upon
termination of Employee's employment, and no copies or reproductions
thereof in any form shall be retained by Employee.
8. INJUNCTIVE RELIEF. In the event of a breach by Employee of any of the
covenants contained in paragraphs 6 and 7 of this Agreement, Employee agrees
that money damages shall not be an adequate remedy for such breach, and Employer
shall, in addition to all other remedies for such breach provided for under this
Agreement or applicable law, have the right to request immediate and permanent
injunctive relief to enjoin and restrain such breach and any consequences
thereof.
9. EMPLOYER'S PROPRIETARY RIGHTS. Employee agrees that all inventions and
products developed by the Employee during the term of his employment under this
Agreement shall be owned by and be the exclusive property of the Employer.
10. MISCELLANEOUS.
(a) This Agreement supersedes any and all prior agreements or
understandings, oral or written, with respect to the employment of the
Employee with the Employer. This Agreement may not be altered or terminated
orally, and shall be modified only by a subsequent written Agreement
executed by both the Employee and the Employer.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the Employer and its successors and assigns; PROVIDED, however,
4
that Employer shall not assign or transfer (by operation of law or
otherwise) this Agreement without the express prior written consent of
Employee. This Agreement shall be binding upon and shall inure to the
benefit of the Employee, his heirs, executors and personal representatives,
and shall not be assigned by the Employee and any attempted assignment
shall be in violation of this Agreement and shall be null and void.
(d) Whenever possible, each provisions of this Agreement shall be
interpreted in such a manner as to make all provisions effective and valid;
but, if any provision in this Agreement is held to be invalid, illegal or
unenforceable, such provision will be ineffective without invalidating the
remainder of this Agreement.
(e) All notices, demands or other communications, shall be delivered
to the Employer or Employee at the following addresses which may be changed
from time to time by either party within thirty (30) days' written notice:
To the Employer:
Xxx X. Xxxxxxx, President/CEO
The Xxxxxxx Corporation
000 Xxxxx Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
To the Employee:
Xxxxx Xxxx
00 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxxx, XX 00000
(f) All rights and remedies granted to the Employer hereunder shall
not be exclusive, but shall be in addition to all rights and remedies
available to the Employer at law or in equity.
(g) Unless otherwise specifically defined within this Agreement, words
and phrases shall be construed and interpreted according to their common
usage and meaning. Headings and titles are for reference purposes only and
are not to be construed as part of this Agreement.
5
IN WITNESS WHEREOF, the Employer, by its authorized representative, and
Employee have caused this Agreement to be executed and made, all as of the day
and year first written above.
By:
---------------------------------
, its
------------------------------------
Xxxxx Xxxx("Employee")
THE XXXXXXX CORPORATION hereby unconditionally and irrevocably guarantees to
Employee the full and punctual payment and performance of all obligations when
due of Employer under this Employment Agreement.
THE XXXXXXX CORPORATION
By:
---------------------------------
Xxx X. Xxxxxxx, President
6
Exhibit "A"
SUMMARY JOB DESCRIPTION FOR CHIEF OPERATING OFFICER
Essential duties and responsibilities of the Chief Operating Officer is to:
1. Oversee all of the production functions of both operating plants to
assure compliance with established operating procedures, including
quality assurance functions, maintenance procedures, material
acquistion, storage and handling;
2. Establish production goals and objectives in line with capabilities of
plant personnel and equipment parameters, and reviews those results
taking steps to help correct unsatisfactory results;
3. Supervise those employees who report directly to the position and, at
minimum, perform an annual performance evaluation of those employees;
4. Dispense advice, guidance, direction, and authorization to carry out
plans and procedures consistent with established policies;
5. Review all capital projects ascertaining the functionality of the
project and selecting the vendor in consideration of quality,
functionality, cost, service, and reputation;
6. Serves as a technical point person relating to new products,
ingredients, or processes;
7. Represents the organization to key contract customers, major
suppliers, and trade organizations;
8. Plus such other duties as directed by the President.
