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EXHIBIT 2.1
PLAN OF MERGER AND ACQUISITION AGREEMENT
among
LIFEQUEST MEDICAL, INC.
a Delaware corporation
XXXXX MEDICAL, INC.,
a Nevada corporation
and
TRIMEDICA, INC.
a Colorado corporation
Xxxx Xxxxxxx,
an individual
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THIS PLAN OF MERGER AND ACQUISITION AGREEMENT ("Agreement") executed
this ___ day of August, 1997, to be effective on June 30, 1997, by and among
TRIMEDICA, INC., a Colorado corporation ("Trimedica"), Xxxx Xxxxxxx, an
individual, as sole shareholder of Trimedica (referred to as the
"Shareholder"), LIFEQUEST MEDICAL, INC., a Delaware corporation ("LifeQuest"),
and XXXXX MEDICAL, INC., a Nevada corporation ("Purchaser," and together with
LifeQuest, the "LifeQuest Parties").
W I T N E S S E T H:
WHEREAS, LifeQuest is primarily in the business of developing and
commercializing minimally invasive surgery devices; and
WHEREAS, LifeQuest owns all of the issued and outstanding stock of
Purchaser; and
WHEREAS, Trimedica is in the business of selling minimally invasive
orthopaedic surgical products in Colorado, Wyoming, and Montana.
WHEREAS, the Shareholder is an individual constituting the sole
shareholder of Trimedica; holding 100% of the issued and outstanding stock of
Trimedica; and
WHEREAS, the respective boards of directors of Purchaser and Trimedica
have approved the merger of Trimedica with and into Purchaser (the "Merger")
pursuant to the terms and subject to the conditions of this Agreement; and
WHEREAS, this Agreement is intended to qualify under Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, the parties hereto agree that Trimedica shall be merged with and
into Purchaser and that the terms and conditions of the Merger, the method of
carrying the Merger into effect and certain other provisions relating thereto
shall be as hereinafter set forth and as set forth:
ARTICLE 1
DEFINITIONS
Defined Terms. As used herein, the terms below shall have the following
meanings herein specified applicable to both the singular and plural forms of
any of the terms.
1.1 "Affiliate" shall mean, with respect to a Person, any Person
that, directly or indirectly, controls or is controlled by or is under common
control with the Person.
1.2 "Assets" shall mean the assets, properties and rights of
Trimedica of every nature, kind and description, wherever located, tangible and
intangible, real, personal and mixed, whether or not reflected in the books and
records of Trimedica necessary
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or desirable to permit the business of Trimedica to be carried on in the manner
as is presently conducted.
1.3 "Benefit Plans" shall mean bonus, deferred compensation,
severance, pension, profit sharing, retirement, stock purchase, stock option,
medical, hospitalization, accident insurance or any other employee benefit
plan, arrangement or practice, whether written or unwritten, which covers
employees of Trimedica.
1.4 "Certificate" shall mean each stock certificate representing
shares of Trimedica Stock.
1.5 "Closing" shall mean the meeting held on the Closing Date.
1.6 "Closing Date" shall have the meaning assigned to it in Article
7.
1.7 "Effective Time" shall mean the time at which a properly executed
certificate of merger in substantially the form attached to this agreement as
Exhibit A (together with other documents required by law to effect the Merger)
shall have been filed with the Secretary of State of Nevada, and in any other
jurisdiction where such a certificate of merger is required.
1.8 "Environmental Conditions" shall mean material conditions with
respect to soil, surface waters, ground waters, stream sediments, underground
tanks, asbestos and similar conditions on-site and off-site of properties
owned, occupied or used by Trimedica, as the case may be, related to the
presence or Release of Hazardous Substances, which conditions could require
remedial action or may result in claims, demands and liabilities against, upon
or, respectively, by third parties, including, without limitation, governmental
entities, adjacent property owners and any individuals suffering property
damage or personal injury.
1.9 "Environmental Laws" shall mean all federal, state and local
laws, rules, regulations, codes, judgments and decrees concerning pollution or
protection of the environment.
1.10 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
1.11 "Financial Statements" shall mean the balance sheets, statements
of income and retained earnings and changes in cash flows for the years or
periods ended June 30, 1997, December 31, 1996 and December 31, 1995.
1.12 "Former Trimedica Shareholder" shall mean each Person who was,
immediately before the Effective Time, a holder of issued and outstanding
shares of Trimedica Stock.
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1.13 "Hazardous Substances" shall include any dangerous substances,
toxic substances, hazardous materials or hazardous substances as defined in or
pursuant to the Resource Conservation and Recovery Act (42 U.S.C. Section 6901,
et seq.), as amended, the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601, et seq.) ("CERCLA"), as amended, or
any other Environmental Law.
1.14 "Intellectual Property" shall have the meaning assigned to it in
Section 3.8.
1.15 "IRS" shall mean the Internal Revenue Service.
1.16 "LifeQuest SEC Documents" shall mean each report, schedule,
registration statement and definitive proxy statement filed by LifeQuest with
the SEC since January 1, 1995.
1.17 "LifeQuest Stock" shall mean the common stock, $.001 par value of
LifeQuest.
1.18 "Losses" shall mean all damages, losses, obligations,
liabilities, claims, encumbrances, deficiencies, costs and expenses including,
without limitation, reasonable attorneys' fees and other costs and expenses
incident to any suit, action, investigation, claim or proceeding.
1.19 "Market Price" shall mean the average of the closing bid and
asked prices of a share of LifeQuest Stock for the 10 consecutive trading days
immediately prior to the third trading day prior to the Effective Time, as
reported in the over-the-counter market as reported by the National Association
of Securities Dealers Automated Quotation System.
1.20 "Merger Consideration" shall have the meaning assigned to it in
Section 2.6.
1.21 "Notice" shall mean any summons, citation, directive, order,
claim, litigation, proceeding, judgment, letter or other communication, written
or oral, actual or threatened, from the United States Environmental Protection
Agency or other federal, state or local agency or authority or any other entity
or any individual concerning any intentional or unintentional act or omission
which has resulted or may result in the Release of Hazardous Substances into
waters, or into the "environment" as such term is defined in CERCLA, from or on
property owned, occupied or used by Trimedica, and shall include the imposition
of any lien on property occupied or used by Trimedica, pursuant to any
violation of any Environmental Law, or any knowledge, after due inquiry and
investigation, of any acts that could give rise to any of the above.
1.22 "Person" shall mean an individual, corporation, partnership,
joint venture, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
1.23 "Purchaser Stock" shall mean the common stock, $.01 par value of
Purchaser.
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1.24 "Release" shall mean releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping.
1.25 "SEC" shall mean the United States Securities and Exchange
Commission.
1.26 "Securities Act" shall mean the Securities Act of 1933, as
amended.
1.27 "Trimedica Stock" shall mean the common stock, no par value, of
Trimedica.
1.28 "Trimedica's Contracts" shall mean (a) the contracts described on
Schedule 3.12, (b) purchase orders from customers accepted in the ordinary
course of business, and (c) employment contracts terminable on not more than 30
days' notice.
1.29 "Subsidiary" shall mean, with respect to any Person (the
"parent"), (i) any corporation, association, joint venture, partnership or
other business entity of which securities or other ownership interests
representing more than 50% of the ordinary voting power or beneficial interest
are, at the time as of which any determination is being made, owned or
controlled by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent and (ii) any joint venture or
partnership of which the parent or any Subsidiary of the parent is a general
partner or has responsibility for its management (provided, however, that the
term "Subsidiary" shall not include joint operating agreements).
1.30 "Surviving Corporation" shall mean the corporation existing at
and after the Effective Time as a result of the Merger.
ARTICLE 2
MERGER
2.1 The Merger. Subject to the terms and conditions of this
agreement, Trimedica shall be merged with and into Purchaser in accordance with
all applicable laws, with Purchaser being the Surviving Corporation. Purchaser
and Trimedica shall cause a certificate of merger to be filed with the
Secretary of State of Nevada, and in any other jurisdiction where such a
certificate of merger is required, on the Closing Date, unless legally
prohibited from doing so. The Merger shall be effective at the Effective Time.
2.2 Surviving Corporation. From and after the Effective Time, the
Surviving Corporation shall have the name "Xxxxx Medical, Inc." and shall
possess all assets and property of every description, and every interest in the
assets and property, wherever located, and the rights, privileges, immunities,
powers, franchises and authority, of a public as well as of a private nature,
of each of Trimedica and Purchaser, and all debts and all other things in
action or belonging or due to each of Trimedica and Purchaser, all of which
shall be vested in the Surviving Corporation without further act or deed, and
title to any real estate or any interest in the real estate vested in either
Trimedica or Purchaser shall not revert or in any way be impaired.
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2.3 Liabilities. The Surviving Corporation shall be liable for all
the debts, liabilities and duties of each of Trimedica and Purchaser; any
action or proceeding pending, by or against either Trimedica or Purchaser, may
be prosecuted to judgment, with right of appeal, as if the Merger had not taken
place, or the Surviving Corporation may be substituted in its place, and all
the rights of creditors of each of Trimedica and Purchaser shall be preserved
unimpaired, and all liens upon the property of each of Trimedica and Purchaser
shall be preserved unimpaired, on only the property affected by the liens
immediately prior to the Effective Time.
2.4 Certificate of Incorporation and Bylaws. The certificate of
incorporation and bylaws of Purchaser in effect immediately prior to the
Effective Time shall be the certificate of incorporation and bylaws of the
Surviving Corporation following the Merger until otherwise amended or repealed.
2.5 Directors and Officers. The directors and officers of Purchaser
immediately prior to the Effective Time shall be the directors and officers of
the Surviving Corporation until their successors are duly elected or appointed
and qualified in the manner provided in the bylaws of the Surviving
Corporation, or as otherwise provided by law.
2.6 Conversion or Cancellation of Stock Upon Merger. In consideration
for the Merger and the non-competition agreement in Section 12 hereof, as of
the Effective Time, by virtue of the Merger and without any action on the part
of the holders of any shares of Trimedica Stock, or the holder of the shares of
Purchaser Stock, (a) the Trimedica Stock outstanding immediately before the
Effective Time shall be converted into the right to receive, subject to Section
2.7 below, an aggregate number of shares of LifeQuest Stock, equal to the
quotient of 250,000 divided by the Market Price of a share of LifeQuest Stock
(the "Merger Consideration") and (b) each share of Purchaser Stock outstanding
immediately before the Effective Time shall be converted into one share of
common stock of the Surviving Corporation.
2.7 Fractional Shares. Notwithstanding Section 2.6, no certificates
or scrip representing fractional shares of LifeQuest Stock shall be issued upon
the surrender for exchange of certificates that prior to the Effective Time
represented shares of Trimedica Stock, no dividend or distribution of LifeQuest
shall relate to any fractional share interest and no fractional share interest
shall entitle the owner thereof to vote or to exercise any rights of a
shareholder of LifeQuest. In the event that any Former Trimedica Shareholder
shall be entitled to any fractional share interest then any fractional amount
shall be rounded up to the nearest whole share.
2.8 Exchange Requirements. After the Effective Time, (a) each
outstanding Certificate shall, until duly surrendered to Purchaser, be deemed
to represent only the right to receive the Merger Consideration, (b) there
shall be no further transfer on the records of Trimedica of Certificates, and
(c) each share of Trimedica Stock presented or surrendered to Purchaser shall
be canceled in exchange for the Merger Consideration as contemplated by Section
2.6. In no event shall Purchaser be obligated to deliver Merger Consideration
to any holder of a Certificate until such holder surrenders such Certificate as
provided herein.
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2.9 Interim Dividends. No dividends or other distributions declared
after the Effective Time on LifeQuest Stock issuable pursuant to the Merger and
payable to any Former Trimedica Shareholder after the Effective Time shall be
paid to the holder of any unsurrendered certificates formerly representing
shares of Trimedica Stock until the certificates shall be surrendered as
provided herein, provided, however, that (a) upon surrender there shall be paid
to the shareholder in whose name the certificates representing the shares of
LifeQuest Stock shall be issued the amount of unpaid dividends with respect to
the holder's shares of LifeQuest Stock and (b) at the appropriate payment date,
or as soon as practicable thereafter, there shall be paid to the shareholder
the amount of dividends declared with respect to whole shares of LifeQuest
Stock with a record date on or after the Effective Time but before surrender
and a payment date subsequent to surrender, subject in any case to any
applicable escheat laws. No interest shall be payable with respect to the
payment of dividends or other distributions on surrender of outstanding
certificates.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER
The Shareholder represents and warrants to the LifeQuest Parties as
follows:
3.1 Corporate Organization. Trimedica is a corporation duly
organized, validly existing and in good standing under the laws of Colorado,
and has full power and authority to own its properties and to carry on its
business as and in the places where such properties are now owned or such
business is now being conducted. Complete and correct copies of the Articles of
Incorporation of Trimedica and all amendments thereto, certified in each case
by the Secretary of State of the State of Colorado, and of the Bylaws of
Trimedica and all amendments thereto, certified by the Secretary of Trimedica,
heretofore have been delivered to LifeQuest. Trimedica is duly qualified to do
business and is in good standing in all jurisdictions (each such jurisdiction
is set forth on Schedule 3.1 attached hereto and made a part hereof) in which
such qualification is necessary because of the character of the properties
owned, leased or operated by it or the nature of its activities. Trimedica has
not knowingly taken any action, or failed to take any action which action or
failure will preclude or prevent Trimedica's business from being conducted in
substantially the same manner in which Trimedica has heretofore conducted the
same.
3.2 Subsidiaries. Trimedica has no subsidiaries.
3.3 Capitalization. Trimedica's authorized capital stock consists of
100 shares of Trimedica Stock, of which 100 shares are issued and outstanding
and are owned of record and beneficially by the Shareholder free and clear of
all liens, encumbrances or other obligations and issued without violation of
the preemptive, subscriptive or other similar rights of any person or entity.
There are no outstanding subscriptions, options, warrants, rights or other
agreements obligating Trimedica to issue any additional shares of Trimedica
Stock, except as set forth on Schedule 3.3 attached hereto and made a part
hereof.
3.4 Authorization. Trimedica has full power and authority, corporate
and otherwise, to enter into this Agreement and to assume and perform its
obligations
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hereunder. The execution and delivery of this Agreement and the performance by
Trimedica of its obligations hereunder have been duly authorized by the Board
of Directors and the shareholders of Trimedica and no further action or
approval, corporate or otherwise, by Trimedica is required in order to
constitute this Agreement as a binding and enforceable obligation of Trimedica.
The execution and delivery of this Agreement and the performance by Trimedica
of its obligations hereunder do not and will not violate any provisions of the
Articles of Incorporation or Bylaws of Trimedica and do not and will not
conflict with or result in any breach of any condition or provisions of, or
constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any of the Assets by reason of the terms of
any contract, mortgage, lien, lease, agreement, indenture, instrument or
judgment to which Trimedica is a party, or which is or purports to be binding
upon Trimedica or which affects or purports to affect any of the Assets.
3.5 Approvals and Consents. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary as to Trimedica or the
Shareholder in order to constitute this Agreement as a valid, binding and
enforceable obligation of Trimedica and the Shareholder in accordance with its
terms.
3.6 Permits, Licenses, Etc. Trimedica has all permits, licenses,
orders and approvals, exclusive of those required under Environmental Laws, of
all federal, state, or local governmental or regulatory bodies required for it
to conduct its business as presently conducted. All such permits, licenses,
orders and approvals are in full force and effect and no suspension or
cancellation of any of them is threatened. Trimedica is operating in compliance
with all such permits, licenses, orders and approvals, and none of such
permits, licenses, orders or approvals will be adversely affected by the
consummation of the transactions contemplated by this Agreement. Trimedica is
in compliance in all material respects with each law, rule and regulation other
than Environmental Laws applicable to its business including, without
limitation, laws, rules and regulations respecting occupational safety and
employment practices. The conduct of the business of Trimedica and all assets
and properties utilized by Trimedica therein are in conformance with the
requirements and regulations of the Occupational Safety and Health
Administration ("OSHA").
3.7 Environmental Laws. Trimedica has all permits, licenses, orders
and approvals of, and has made all required filings with, all federal, state or
local governmental or regulatory bodies relating to, arising under or required
by the Environmental Laws. All such permits, licenses, orders and approvals are
in full force and effect and no suspension or cancellation of any of them is
pending or threatened. None of such permits, licenses, orders or approvals will
be adversely affected by the consummation of the transactions contemplated by
this Agreement. Trimedica is in compliance with all such permits, licenses,
orders and approvals and with all limitations, conditions, standards and
requirements contained in Environmental Laws applicable to it and the business
conducted by it. Schedule 3.7 attached hereto and made a part hereof contains a
description of each summons, citation, order, letter or other written
communication received by Trimedica from any federal, state or local
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governmental or regulatory body under any of the Environmental Laws during the
five-year period ending on the date hereof.
There are no currently existing Environmental Conditions with respect to
properties owned, occupied or used by Trimedica. Trimedica has received no
Notice with respect to any Environmental Condition at any time prior to the
date hereof.
3.8 Intellectual Property and Other Intangible Assets. Schedule 3.8
sets forth a description of all intellectual property owned, licensed or
claimed by Trimedica. Trimedica (a) owns or has the right to use all
inventions, discoveries, patents, copyrights, trademarks, trade names, service
marks, corporate names, licenses, trade secrets and know how and all other
intellectual property rights with respect to the foregoing, used in or
necessary for the conduct of its business as now conducted or as proposed to be
conducted without infringing upon or otherwise acting adversely to the right or
claimed right of any Person under or with respect to any of the foregoing (such
inventions, discoveries, patents, copyrights, trademarks, trade names, service
marks, corporate names, licenses, trade secrets and know how and all other
intellectual property rights with respect thereto being herein referred to as
the "Intellectual Property") and (b) is not obligated or under any liability or
claim whatsoever to make any payments by way of royalties, fees or otherwise to
any owner or licensee of, or other claimant to, any inventions, discoveries,
patents, copyrights, trademarks, trade names, service marks, corporate names,
licenses, trade secrets and know how and all other intellectual property
rights, with respect to the use thereof or in connection with the conduct of
its business or otherwise. A list of all such Intellectual Property and a
statement whether such Intellectual Property is owned or licensed is set forth
in Schedule 3.8 hereto. Except as specifically set forth in Schedule 3.8
hereto, the Intellectual Property has been duly registered or patented or
sought to be registered or patented with appropriate state, federal and foreign
jurisdictions and Trimedica is the sole and exclusive owner or has the sole and
exclusive right to use the Intellectual Property.
3.9 Financial Statements. Attached hereto as Schedule 3.9 and made a
part hereof are the Financial Statements, prepared in accordance with U.S.
generally accepted accounting principles consistently applied throughout the
periods indicated. The Financial Statements (a) are true, correct and complete,
(b) fairly, completely and accurately present the financial position of
Trimedica at the dates specified and the results of its operations for the
period covered, and (c) reflect expenses and liabilities of Trimedica in a
consistent manner throughout the periods to which the Financial Statements
relate. At the date of the Financial Statements, Trimedica had no liabilities
or obligations of any kind or nature, fixed or contingent, matured or unmatured
or otherwise, which are not fully reflected or reserved against on the
Financial Statements; nor does Trimedica have any liability or obligation of
any kind or nature arising since that date other than those incurred in the
ordinary course of business consistent with past practices, none of which are
material. Trimedica owns outright and has good and indefeasible title to all of
the Assets, including, without limitation, all of the assets and properties
reflected on the Financial Statements or acquired thereafter, free and clear of
any mortgage, lien, pledge, charge, claim, conditional sales or other
agreement, lease, right or encumbrance of any sort except: (x) to the extent
stated or reserved against on the Financial Statements and for changes
occurring in the
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ordinary course of business after the date thereof, none of which changes is
adverse, and (y) as set forth on Schedule 3.9A attached hereto and made a part
hereof. Each such asset and item has been fully operational in the ordinary
course of business for at least the six months immediately preceding the date
hereof. The Assets include all assets and properties (real, personal and mixed,
tangible and intangible) and all rights necessary or desirable to permit
Seller's business to be carried on as presently conducted by Seller, and
Trimedica has complete and unrestricted power and the unqualified right to
transfer, convey and assign the Assets.
3.10 Material Adverse Changes Since the Date of the Financial
Statements. Since June 30, 1997, except as set forth on Schedule 3.10, there
has been no material adverse change in the financial condition, assets,
liabilities, properties or business of Trimedica. Since June 30, 1997,
Trimedica has not:
(a) issued or sold any stock, notes, bonds or other securities,
or any option to purchase the same, or entered into any agreement with respect
thereto;
(b) declared, set aside or made any dividend or other
distribution on its capital stock or redeemed, purchased or acquired any shares
thereof or entered into any agreement in respect of the foregoing;
(c) incurred any damage, destruction or similar loss, whether or
not covered by insurance, materially affecting its business or properties;
(d) other than in the ordinary course of business, sold,
assigned or transferred any of its tangible assets or any trade name,
franchise, design, or other intangible assets or property;
(e) other than in the ordinary course of business, mortgaged,
pledged or granted or suffered to exist any lien or other encumbrance or charge
on any of its assets or properties, tangible or intangible;
(f) other than in the ordinary course of business, waived any
rights of material value or canceled or modified any material debts or claims;
(g) incurred any liability or obligation for borrowed money to
any shareholder of Trimedica or any Affiliate of Trimedica;
(h) incurred any obligation or liability (absolute or
contingent) except current liabilities and obligations incurred in the ordinary
course of its business or paid any liability or obligation (absolute or
contingent) other than current liabilities and obligations incurred in the
ordinary course of business, none of which were material;
(i) entered into any transaction other than in the ordinary
course of business;
(j) became obligated to make any payment to any shareholder or
any Affiliate of Trimedica in any capacity, or entered into any transaction of
any nature with any shareholder or any Affiliate of Trimedica in any capacity,
except in respect of
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the foregoing for compensation to shareholders or Affiliates who are employees
of Trimedica in their capacity as such;
(k) except for increases in the ordinary course and customary in
the business of Trimedica, which increases did not inure to officers, directors
or shareholders of Trimedica or to consultants to Trimedica, increased the
compensation payable to any employee of Trimedica or became obligated to
increase any such compensation, or their capacities as such; or
(l) entered into any transaction with any Affiliate of
Trimedica, except in respect of the foregoing for compensation to Affiliates
who are employees of Trimedica in their capacity as such.
3.11 Tax Returns. Trimedica has duly filed all federal, state, county
and local income, excise, sales and other tax returns and reports required to
have been filed by it to the date hereof, after giving effect to any extensions
of time to file duly obtained by Trimedica. Each such return and report is true
and correct and Trimedica has paid all taxes, interest and penalties shown on
such returns or reports to be due or claimed to be due prior to the date hereof
to any federal, state, county, local or other taxing authority. Trimedica has
no liability for any taxes, assessments, amounts, interest or penalties of any
nature whatsoever other than as shown on the Financial Statements and there is
no basis for any additional claim or assessment. The IRS has not examined the
federal income tax returns of Trimedica. No waiver of the statute of
limitations has been given with respect to any taxable year of Trimedica. No
government or governmental authority is now asserting or threatening to assert
any deficiency or assessment for additional taxes or any interest, penalties or
fines with respect to Trimedica. Complete and correct copies of the federal
income tax return of Trimedica for the fiscal year ended December 31, 1996, as
well as any other tax returns requested by LifeQuest, have been heretofore
delivered to LifeQuest.
3.12 Contracts. Trimedica is not a party to nor has any contract or
commitment of any kind or nature whatsoever, written or oral, including,
without limitation, any lease, license, franchise, employment, consultant or
commission agreement, pension, profit sharing, bonus, stock purchase,
retirement, hospitalization, insurance or other plan or arrangement involving
employee benefits, contract with any labor union or contract for services,
materials, supplies or equipment or for the sale or purchase of any of its
products or assets. Except as set forth therein, each of the Trimedica's
Contracts referred to on Schedule 3.12 is valid and existing, in full force and
effect and enforceable in accordance with its terms and no party thereto is in
default and no claim of default by any party has been made or is now pending
and there does not exist any event that with notice or the passing of time or
both would constitute a default or would excuse performance by any party
thereto. None of Trimedica's Contracts, except as expressly set forth therein,
requires any consents or approvals by any party to such contract to prevent a
breach or to protect and preserve the rights of the Surviving Corporation
thereunder subsequent to the consummation of the Merger. Trimedica has
heretofore delivered to LifeQuest complete and correct copies of each of
Trimedica's Contracts.
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3.13 Tangible Personal Property. Schedule 3.13 attached hereto and
made a part hereof is a true and complete list of all tangible personal
property owned by Trimedica having a book value at the date of the Financial
Statements. Trimedica owns and has good and indefeasible title in fee to all of
its assets and properties including, without limitation, all of the assets and
properties reflected in the Financial Statements and those identified on
Schedule 3.13, free and clear of any mortgage, lien, pledge, charge, claim,
conditional sales or other agreement, lease, right or encumbrance except (a) to
the extent stated or reserved against in the Financial Statements, (b) vendors'
or other statutory liens which may have resulted in the ordinary course of
business, (c) minor imperfections of title, liens and encumbrances which do not
materially detract from the value or the utility of the property subject
thereto or materially impair the operations of the owner thereof, and (d) as
set forth in Schedule 3.13 attached hereto and made a part hereof.
3.14 Real Property. Trimedica owns no real property. Except as set
forth on Schedule 3.14, Trimedica leases no real property. All leases of
property under which Trimedica purports to be a lessee are valid, binding and
in full force and effect, and Trimedica is not in default thereunder and there
is no event or fact which upon the passage of time or the giving of notice, or
both, could constitute a default by Trimedica under such lease.
3.15 Insurance. Schedule 3.15 attached hereto and made a part hereof,
is a true and complete list and brief description of all policies of fire,
liability and other forms of insurance owned or held by Trimedica. All of such
policies are valid and binding and in full force and effect as of the date
hereof and are in such amounts and cover such risks as are customarily carried
by other businesses similar to those conducted by Trimedica.
3.16 Banking. Schedule 3.16 attached hereto and made a part hereof is
a true and complete list setting forth the names and locations of all banks at
which Trimedica has an account or safe deposit box, the numbers of the accounts
and the names of all persons authorized to draw thereon.
3.17 Litigation. There are no actions, suits, proceedings or
investigations pending or threatened against or affecting the assets or the
business, operations or financial condition of Trimedica, at law or in equity,
in any court or before any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, nor is there
any basis for any such action, suit, proceeding or investigation. There are no
judgments outstanding against Trimedica and Trimedica is not in default in
respect of any judgment, order, writ, injunction, or decree of any court or any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality.
3.18 Labor. There are no threats of strikes, work stoppages or demands
for collective bargaining by any union or labor organization against or
including Trimedica, no grievances, disputes or controversies with any union or
any other organization of the employees of Trimedica, and no pending or
threatened arbitration proceedings involving an employment grievance, dispute
or controversy.
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3.19 Employee Benefit Plans. Except as set forth on Schedule 3.19
attached hereto and made a part hereof, Trimedica has no Benefit Plans,
including, without limitation, any "employee pension benefit plan" or "employee
welfare benefit plan" within the meaning of the Employee Retirement Income
Security Act of 1974, as amended (29 U.S.C. Section 1001, et seq.) ("ERISA"),
and the final regulations thereunder. True and complete copies of each written
Benefit Plan sponsored by Trimedica have heretofore been delivered to
LifeQuest. Trimedica has no commitment, written or oral, and whether legally
binding or not, to create any Benefit Plans in addition to those shown on
Schedule 3.19. Trimedica has no benefit plan that is a defined benefit plan
within the meaning of ERISA Section 3(35) maintained or contributed to by
Trimedica and that covers employees of Trimedica. Trimedica has no liability on
account of any Benefit Plans, including but not limited to liability for (a)
additional contributions accruing under such Benefit Plans with respect to
periods commencing on or prior to the Closing Date; (b) fiduciary breaches by
Trimedica, the trustees under the trust created under any of such plans, or any
other persons under ERISA, or any other applicable statute, regulation or rule;
or (c) income taxes by reason of non-qualification of such Benefit Plans. There
are no pending claims against any Benefit Plan (other than for benefits in
accordance with its terms), nor has any claim been threatened in writing by any
participant thereof or beneficiary thereunder. Without limiting the generality
of the foregoing, all Benefit Plans are in full compliance with all applicable
reporting, disclosure, filing and other administrative requirements pertaining
to employee benefit plans set forth in the Code and ERISA and rules and
regulations promulgated under either.
3.20 Inventory. Inventory reflected on the Financial Statements as of
the date thereof was determined in accordance with generally accepted
accounting principles consistently applied, stated, on an aggregate basis, at
the lower of cost (based on the first-in, first-out method) or market value and
consists solely of merchandise usable or saleable in the ordinary course of
business at not less than gross cost. The inventory conforms to customary trade
standards for marketable goods. Since the date of the Financial Statements,
there have been no changes in the inventory reflected on the Financial
Statements except in the ordinary course of business, none of which have been
material.
3.21 Accounts Receivable. Each account receivable reflected on the
Financial Statements constitutes a bona fide receivable resulting from a bona
fide sale to a customer in the ordinary course of business, the amount of which
was actually due on the date thereof and has been or will be collected in the
ordinary course of business, net of the allowance for doubtful accounts
reflected on the Financial Statements. There are no defenses, claims of
disabilities, counterclaims, offsets, refusals to pay or other rights of set-
off against any accounts receivable and there is no threatened, intended or
proposed defense, claim of disability, counterclaim, offset, refusal to pay or
other right of set-off with respect thereto. Each account receivable, each
document and instrument and each transaction underlying or relating thereto
conforms, including, without limitation, in respect of interest rates charged,
notices given and disclosures made, to the requirements and provisions of each
applicable law, rule, regulation or other relating to credit, consumer credit,
credit practices, credit advertising, credit reporting, retail installment
sales, credit cards, collections, usury, interest rates and truth-in-lending,
including, without limitation, the Federal Truth in Lending Act, as amended,
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and Regulation Z issued by the Board of Governors of the Federal Reserve System
thereunder. Each account receivable existing on the Closing Date will be paid
in full by not later than the 120th day after the closing. Such reserves and
allowances have been established on the basis of historical experience in
accordance with U.S. generally accepted accounting principles consistently
applied.
3.22 Employee and Other Compensation. Schedule 3.22 attached hereto
and made a part hereof is a complete and correct list of the names and current
annual salary, bonus, commission and perquisite arrangements, written or
unwritten, for each director, officer and employee of Trimedica, including
those whose compensation was paid in whole or in part by persons or entities
other than Trimedica. No current or former shareholder, director, officer,
employee or Affiliate of Trimedica, nor any relative, associate or agent of
such shareholder, director, officer, employee or Affiliate, has any interest in
any property of Trimedica except as a shareholder, or is a party, directly or
indirectly, to any contract for employment or otherwise or any lease or has
entered into any transaction with Trimedica including, without limitation, any
contract for the furnishing of services by, or rental of real or personal
property from or to, or requiring payments to, any such stockholder, director,
officer, employee, Affiliate, relative, associate or agent. To the best
knowledge of Trimedica and the Shareholder, no employee listed thereon intends
to terminate his employment relationship with Trimedica and Trimedica has no
contract for the future employment of any officer or employee not listed on
Schedule 3.22.
3.23 Customers and Suppliers. Schedule 3.23 attached hereto and made a
part hereof is a complete and correct list of the names and addresses of the 10
largest customers and suppliers, respectively, of Trimedica during the last
fiscal year, and the total sales to or purchases from such customers and
suppliers made by Trimedica during the last fiscal year. No supplier or
customer of Trimedica representing in excess of 5% of Trimedica's purchases or
sales during the last fiscal year has advised Trimedica, formally or
informally, that it intends to terminate, discontinue or substantially reduce
its business with Trimedica by reason of the transactions contemplated by this
Agreement or otherwise.
3.24 No Omission of Material Fact. No representation or warranty by
the Shareholder in this Agreement or under any documents, instruments,
certificates or schedules furnished pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading.
3.25 Closing Date Effect. All of the representations and warranties of
the Shareholder are true and correct as of the date hereof and shall be true
and correct on and as of the Closing Date, with the same force and effect as if
such representations and warranties were made by the Shareholder to the
LifeQuest Parties on the Closing Date.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE LIFEQUEST PARTIES
The LifeQuest Parties represent and warrant to the Shareholder as
follows:
4.1 LifeQuest Corporate Organization. LifeQuest is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full power and authority to own its properties and to carry on
its business as and in the places where such properties are now owned or such
businesses are now being conducted.
4.2 Purchaser Corporate Organization. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has full power and authority to own its properties and to carry on
its business as and in the places where such properties are now owned or such
businesses are now being conducted.
4.3 Authorization. The LifeQuest Parties have full power and
authority, corporate and otherwise, to enter into this Agreement and to assume
and perform their respective obligations hereunder. The execution and delivery
of this Agreement and the performance by the LifeQuest Parties of their
respective obligations hereunder have been or will be duly authorized by the
Boards of Directors of the LifeQuest Parties and no further action or approval,
corporate or otherwise, by the LifeQuest Parties is or will be required in
order to constitute this Agreement as a binding and enforceable obligation of
the LifeQuest Parties.
ARTICLE 5
LIFEQUEST STOCK AND LIFEQUEST SEC DOCUMENTS
5.1 LifeQuest SEC Documents. LifeQuest has furnished the Shareholder
with a true and complete copy of the LifeQuest SEC Documents. As of its filing
date (and, with respect to any registration statement, the date on which it was
declared effective), each LifeQuest SEC Document was in compliance, in all
material respects, with the requirements of its form, contained no untrue
statement of a material fact and did not omit any statement of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
financial statements of LifeQuest included in the LifeQuest SEC Documents
complied, at the time of filing with the SEC (and, with respect to any
registration statement, the date on which it was declared effective), as to
form, in all material respects, with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were prepared
in accordance with generally accepted accounting principles applied on a
consistent basis during the periods involved (subject, in the case of unaudited
statements, to the omission of certain footnotes) and fairly present, in all
material respects (subject, in the case of the unaudited statements, to normal,
recurring year-end audit adjustments) the consolidated financial position of
LifeQuest as at the dates thereof and the consolidated results of their
operations and changes in financial position for the periods then ended. The
consolidated financial statements of LifeQuest as of March 31, 1997, included
in
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the LifeQuest SEC Documents disclose all liabilities of LifeQuest required to
be disclosed therein and contained adequate reserves for taxes and all other
material accrued liabilities. Since March 31, 1997, there has not been any
change in the business, assets, properties, condition (financial or otherwise),
results of operations or prospects of LifeQuest, and no condition exists, which
in any case would have or be a material adverse effect on, or with respect to,
LifeQuest.
5.2 No Omission of Material Fact. No representation or warranty by
the LifeQuest Parties in this Agreement or under any documents, instruments,
certificates or schedules furnished pursuant hereto or in connection with the
transactions contemplated hereby, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading.
5.3 Closing Date Effect. All of the representations and warranties of
the LifeQuest Parties are true and correct as of the date hereof and shall be
true and correct on and as of the Closing Date with the same force and effect
as if such representations and warranties were made by the LifeQuest Parties to
Trimedica on the Closing Date.
ARTICLE 6
AGREEMENT AND PLAN OF REORGANIZATION
6.1 Tax Treatment. Trimedica and the Shareholder, LifeQuest and
Purchaser intend that the transactions contemplated hereunder constitute a tax-
free reorganization (a "Reorganization") under Section 368 of the Code, and
agree to treat and report the transactions hereunder as a Reorganization. This
Agreement shall be construed in a manner to result in treatment of the
transactions hereunder as a Reorganization.
ARTICLE 7
CLOSING
7.1 The closing of the transactions contemplated hereby shall take
place on the Closing Date, August __, 1997, at the offices of LifeQuest
Medical, Inc., 00000 Xxxx Xxxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxx 00000, or at
such other place and on such other date as the parties shall agree. The date of
closing so determined is herein sometimes called the "closing" or the "Closing
Date."
ARTICLE 8
CONDITIONS OF CLOSING
8.1 LifeQuest Parties. The obligation of the LifeQuest Parties to
close hereunder shall be subject to the satisfaction of the following
conditions or the written waiver thereof by the LifeQuest Parties:
(a) Each of the agreements and covenants of Trimedica and the
Shareholder to be performed under this Agreement at or prior to the Closing
shall have been duly performed in all material respects.
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(b) The representations and warranties of Trimedica and the
Shareholder in this Agreement shall be true and correct in all material
respects on and as of the Closing Date.
(c) No injunction or restraining order shall be in effect to
forbid or enjoin the consummation of the transactions contemplated by this
Agreement and no Federal, state, local or foreign statute, rule or regulation
shall have been enacted which prohibits, restricts or delays the consummation
hereof.
(d) All consents, authorizations, orders or approvals of, and
filings or negotiations with, any Federal, state, local or foreign governmental
agency, commission, board or other regulatory body which are required for or in
connection with the execution, delivery and performance of this Agreement by
Trimedica and the Shareholder and the consummation of the transactions
contemplated hereby, and in order to permit or enable the Surviving
Corporation, after the closing to operate a business substantially similar to
Trimedica's business as conducted by Trimedica as of the date hereof, shall
have been duly obtained or made, including, but not limited to, any approvals
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act.
(e) LifeQuest shall have received a certified copy of
resolutions duly adopted by the Board of Directors and shareholders of
Trimedica authorizing and approving the execution and delivery of this
Agreement and performance by Trimedica of its obligations hereunder.
(f) Xxxx Xxxxxxx shall have executed and delivered to the
Company an Employment Agreement and a Non-Qualified Stock Option Agreement in
the forms attached hereto as Exhibit B and Exhibit C, respectively.
(g) LifeQuest shall have received such further certificates and
documents as shall have been reasonably requested by the LifeQuest Parties,
including consents of all requisite third parties.
(h) The LifeQuest Parties shall have completed their diligence
activities to their satisfaction.
8.2 The Shareholder and Trimedica. The obligation of the Shareholder
and Trimedica to close hereunder shall be subject to the satisfaction of the
following conditions or the written waiver thereof by the Shareholder and
Trimedica:
(a) Each of the agreements and covenants of the LifeQuest
Parties to be performed under this Agreement at or prior to the Closing shall
have been duly performed in all material respects.
(b) The representations and warranties of the LifeQuest Parties
in this Agreement shall be true and correct in all material respects on and as
of the Closing Date.
(c) No injunction or restraining order shall be in effect to
forbid or enjoin the consummation of the transactions contemplated by this
Agreement and no Federal,
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state, local or foreign statute, rule or regulation shall have been enacted
which prohibits, restricts or delays the consummation hereof.
(d) The Shareholder shall have received the Merger
Consideration.
(e) The Shareholder shall have received such further
certificates and documents as he shall have reasonably requested.
ARTICLE 9
REMEDIES FOR BREACH
9.1 Arbitration. The Company and Shareholder agree that any dispute
or controversy arising out of or in connection with this Agreement or any
alleged breach hereof shall be settled by arbitration in San Antonio, Texas
pursuant to the rules of the American Arbitration Association. If the two
parties cannot jointly select a single arbitrator to determine the matter, one
arbitrator shall be chosen by each party (or, if a party fails to make a
choice, by the American Arbitration Association on behalf of such party) and
the two arbitrators so chosen will select a third. The decisions of the single
arbitrator jointly selected by the parties, or, if three arbitrators are
selected, the decision of any two of them, will be final and binding upon the
parties and the judgment of a court of competent jurisdiction may be entered
thereon. Fees of the arbitrators and costs of arbitration shall be borne by the
parties in such manner as shall be determined by the arbitrator or arbitrators.
9.2 Survival of Representations, Warranties and Agreements. All of
the representations, warranties, covenants and agreements made by the parties
to this Agreement shall survive the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereunder.
ARTICLE 10
INDEMNIFICATION
10.1 Indemnification. The Shareholder shall defend and indemnify the
LifeQuest Parties and save and hold them harmless from, against, for and in
respect of, and pay any and all Losses suffered, sustained, incurred or
required to be paid by the LifeQuest Parties by reason of any breach or failure
of observance or performance of any representation, warranty, covenant,
agreement or commitment made by Trimedica or the Shareholder hereunder or
relating to or as a result of any such representation, warranty, covenant,
agreement or commitment being untrue or incorrect, or, as to products currently
[manufactured] or sold by Trimedica, any action for infringement upon or use
adverse to the right or claimed right of any Person to use all inventions,
discoveries, patents, copyrights, trademarks, trade names, service marks,
corporate names, licenses, trade secrets and know how and all other
intellectual property rights with respect to the foregoing.
10.2 Procedure for Indemnification. In the event that the Shareholder
shall be obligated to the LifeQuest Parties pursuant to this Article, or in the
event that a suit, action, investigation, claim or proceeding is begun, made or
instituted as a result of which the Shareholder may become obligated to the
LifeQuest Parties hereunder, the
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LifeQuest Parties shall give prompt written notice to the Shareholder of the
occurrence of such event. The Shareholder agrees to defend, contest or
otherwise protect against any such suit, action, investigation, claim or
proceeding at the Shareholder's own cost and expense. The LifeQuest Parties
shall have the right, but not the obligation, to participate, at its own
expense, in the defense thereof by counsel of its own choice. In the event that
the Shareholder fails timely to defend, contest or otherwise protect against
any such suit, action, investigation, claim or proceeding, the LifeQuest
Parties shall have the right to defend, contest or otherwise protect against
the same, and, upon 10 days' written notice to the Shareholder, make any
compromise or settlement thereof and recover the entire cost thereof from the
Shareholder, including, without limitation, reasonable attorneys' fees,
disbursements and all amounts paid as a result of such suit, action,
investigation, claim or proceeding or compromise or settlement thereof.
ARTICLE 11
REQUIREMENTS OF SECURITIES LAWS
11.1 Shareholders Representations and Warranties. The Shareholder
recognizes that the Merger Consideration is not being registered under the
Securities Act in reliance upon an exemption from the Securities Act which is
predicated, in part, on the representations and agreements of the Shareholder
set forth in this Agreement. The Shareholder represents and warrants to the
LifeQuest Parties that he, along with his purchaser representative, as that
term is defined in Rule 501(h) of the Securities Act (the "Purchaser
Representative"), has such knowledge and experience in financial and business
matters that he is capable of evaluating the merits and risks of the
transactions contemplated and contained herein, and that the Merger
Consideration is being acquired solely for his own account for investment and
not with a view to, or for offer or resale in connection with, a distribution
thereof within the meaning of the Securities Act. The Shareholder understands
that the effect of such representation and warranty is that the Merger
Consideration must be held indefinitely unless subsequently registered under
the Securities Act or an exemption from such registration is available at the
time for any proposed sale or other transfer thereof. The Shareholder also
understands that LifeQuest is under no obligation to file a registration
statement under the Securities Act covering the Merger Consideration or to take
any other action to enable the Shareholder to transfer or otherwise dispose of
the Merger Consideration. The Shareholder represents that he has consulted with
his counsel in regard to the Securities Act and that he is fully familiar with
the circumstances under which he is required to hold the Merger Consideration
and the limitations upon the transfer or other disposition thereof. The
Shareholder acknowledges that the LifeQuest Parties are relying upon the truth
and accuracy of the foregoing representations and warranties in issuing the
Merger Consideration under the Securities Act. The Shareholder agrees to
indemnify and hold the LifeQuest Parties harmless against all liabilities,
costs and expenses, including reasonable attorneys' fees, incurred by the
LifeQuest Parties as a result of any sale, transfer or other disposition by the
Shareholder of all or any part of the Merger Consideration in violation of the
Securities Act.
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11.2 Legend. The Merger Consideration shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM UNDER SAID ACT."
11.3 SEC Documents. The Shareholder acknowledges that he has been
furnished by the LifeQuest Parties with (a) a copy of the Annual Report to
Stockholders of Lifequest for the year ended December 31, 1996, (b) a copy of
the Annual Report on Form 10-KSB of LifeQuest for the fiscal year ended
December 31, 1996, in the form filed with the SEC, and (c) copies of all
filings since December 31, 1996, by LifeQuest with the SEC in compliance with
Section 13 or 14 of the Exchange Act. The Shareholder represents that he, or
his Purchaser Representative, has reviewed the foregoing documents and
acknowledges that they have been afforded the opportunity to obtain any
additional information necessary to verify the accuracy of the information
contained in the foregoing documents, including the opportunity to ask
questions of, and receive answers from, officers and representatives of
LifeQuest concerning the LifeQuest Parties and the terms and conditions of the
transactions contemplated by this Agreement. The Shareholder acknowledges that
The Law Firm of Xxxxxxx X. & Xxxx X. Xxxxxxxxx, LLC, attorneys at law, have
advised him during the course of the negotiation of this Agreement, and that he
has consulted The Law Firm of Xxxxxxx X. & Xxxx X. Xxxxxxxxx, LLC, attorneys at
law, with respect to the transactions contemplated by this Agreement.
11.4 Incidental Registration. If, at any time between the Effective
Time and the one-year anniversary of the Effective Time, LifeQuest proposes to
register any of the LifeQuest Stock (whether unissued, yet to be authorized or
held by any person) under the Securities Act, LifeQuest shall, at least 30 days
prior to the filing under the Securities Act of the registration statement
relating thereto, give written notice to the Shareholder of its intention to do
so, and, upon the written request of the Shareholder given within 10 days after
the giving of any such notice (which request shall state the proposed method of
distribution), LifeQuest shall include or cause to be included in any such
registration statement, up to 25% of the Merger Consideration; provided,
however, that LifeQuest may at any time withdraw or cease proceeding with any
such registration if it shall at the time withdraw or cease proceeding with the
registration of such LifeQuest Stock originally proposed to be registered; and
provided further, that if the registration proposed by LifeQuest relates to an
underwritten offering, the Shareholder shall not have any right to sell the
Merger Consideration in any manner or through any underwriter other than in the
manner and through the managing underwriter or underwriters being used by
LifeQuest.
(a) Notwithstanding any other provision of this Section 11.4,
if a registration pursuant to this Section 11.4 involves a firm commitment,
underwritten offering of the securities so being registered and if the managing
underwriter of such
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offering informs LifeQuest and the Shareholder by letter of its belief that
marketing factors require a limitation of the number of shares to be
underwritten, LifeQuest may limit the amount of Merger Consideration to be
included in the registration and underwriting; provided that no such reduction
shall reduce the securities being offered by LifeQuest for its own account; and
provided that those shares which are excluded from the underwritten offering
shall be withheld from the market by the holders thereof for a period, not to
exceed 180 days, which the managing underwriter reasonably determines as
necessary in order to effect the underwritten offering.
(b) Registration Procedures and Expenses. If and whenever
LifeQuest is required to include a portion of the Merger Consideration in a
registration statement under the Securities Act, as provided in Section 11.4
hereof, LifeQuest shall, as expeditiously as is reasonably practicable, do each
of the following:
(i) prepare and file with the SEC a registration statement
with respect to the Merger Consideration and, subject to the limitations
under Section 11.4 hereof, use its best efforts to cause such
registration statement to become effective;
(ii) cooperate with the Shareholder and any underwriter who
shall sell the Merger Consideration in connection with their review of
LifeQuest made in connection with such registration;
(iii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for 120 days from the date of its effectiveness, and
to comply with the provisions of the Securities Act and the Exchange Act
with respect to the disposition of all the Merger Consideration covered
by such registration statement for such period;
(iv) furnish to the Shareholder such number of copies of the
prospectus forming a part of such registration statement (including each
preliminary prospectus), in conformity with the requirements of the
Securities Act, and such other documents as the Shareholder may
reasonably request in order to facilitate the disposition of the Merger
Consideration; and
(v) LifeQuest shall (a) notify the Shareholder at any time
when a prospectus relating to the Merger Consideration is required to be
delivered under the Securities Act, of the happening of any event as a
result of which the prospectus forming a part of such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in the light
of the circumstances then existing, and (b) at the request of the
Shareholder, prepare and furnish to the Shareholder a reasonable number
of copies of any supplement to or any amendment of such prospectus that
may be necessary so that, as thereafter delivered to the purchasers of
the Merger Consideration, such prospectus shall not include any untrue
statement of a material fact or omit to state a material fact required
to be stated therein
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or necessary to make the statements therein not misleading in the light
of the circumstances then existing.
(c) Agreement by the Shareholder. In the event that the
Shareholder participates, pursuant to this Section 11.4, in the offering of the
Merger Consideration, the Shareholder shall;
(i) furnish LifeQuest all material information reasonably
requested by LifeQuest concerning the Shareholder and the proposed
method of sale or other disposition of the Merger Consideration and such
other information and undertakings as shall be reasonably required in
connection with the preparation and filing of the registration statement
covering the Merger Consideration in order to ensure full compliance
with the Securities Act and the rules and regulations of the SEC
thereunder;
(ii) cooperate in good faith with LifeQuest and its
underwriters, if any, in connection with such registration, including
placing the Merger Consideration in escrow or custody to facilitate the
sale and distribution thereof provided that such escrow or custody
arrangement shall be no more restrictive upon the Shareholder than upon
any other holder of LifeQuest Stock for the benefit of whom such
registration is undertaken; and
(iii) make no further sales or other dispositions, or offers
therefor, of the Merger Consideration under such registration statement
if, during the effectiveness of such registration statement, an
intervening event should occur which, in the opinion of counsel to
LifeQuest, makes the prospectus included in such registration statement
no longer comply with the Securities Act, so long as written notice
containing the facts and legal conclusions relied upon by LifeQuest in
this regard has been received by the Shareholder from LifeQuest, until
such time as the Shareholder has received from LifeQuest copies of a
new, amended or supplemented prospectus complying with the Securities
Act, which prospectus shall be delivered to the Shareholder by LifeQuest
as soon as practicable after such notice.
(d) Allocation of Expenses. If and whenever LifeQuest is
required by the provisions of this Section 11.4 to use its best efforts to
effect the registration of the Merger Consideration under the Securities Act,
LifeQuest shall pay the costs and expenses in connection therewith; provided,
however, that the Shareholder shall pay, in all events, all underwriting
discounts, selling commissions and stock transfer taxes attributable to the
Merger Consideration under such registration statement.
(e) Indemnification. In the event of any registration of any
of the Merger Consideration under the Securities Act pursuant to this Section
11.4, the Shareholder shall indemnify and hold harmless, LifeQuest, each
director of LifeQuest, each officer of LifeQuest who shall sign such
registration statement, each underwriter and any person who controls LifeQuest
or such underwriter within the meaning of the Securities Act, with respect to
any statement in or omission from such registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereto, if such statement or omission was made in reliance
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upon and in conformity with written information furnished to LifeQuest or its
underwriter through an instrument duly executed by the Shareholder specifically
for use in the preparation of such registration statement, preliminary
prospectus, final prospectus or amendment or supplement.
11.5 Rule 144 Stock. Notwithstanding the foregoing provisions of this
Article 11, LifeQuest shall not be obligated to effect a registration pursuant
to Section 11.4(a) with respect to the Merger Consideration which could then be
sold pursuant to Rule 144 under the Securities Act.
ARTICLE 12
NON-COMPETITION AGREEMENT
12.1 Customer Lists; Non-Solicitation. The Shareholder hereby further
covenants and agrees that the Shareholder shall not, commencing on the Closing
Date and ending on the first anniversary date of the Closing Date, directly or
indirectly, (a) use or make known to any person or entity the names or
addresses of any clients or customers of Trimedica or the LifeQuest Parties or
any other information pertaining to them, (b) call on, solicit, take away or
attempt to call on, solicit or take away any clients or customers of Trimedica
or the LifeQuest Parties, nor (c) solicit for employment, recruit, hire or
attempt to recruit or hire any employees of Trimedica or the LifeQuest Parties;
provided that the Shareholder shall not be prohibited from engaging in the
activities described in (a) and (b) above in connection with the manufacture,
marketing, sale or distribution of the product known as a surgical clip
applier.
12.2 Covenants Independent. The covenants of the Shareholder contained
in Section 12.1 of this Agreement will be construed as independent of any other
provision in this Agreement; and the existence of any claim or cause of action
by the Shareholder against the LifeQuest Parties will not constitute a defense
to the enforcement by the LifeQuest Parties of said provisions. The Shareholder
understands that the provisions contained in Section 12.1 are essential
elements of the transactions contemplated by this Agreement and, but for the
agreement of the Shareholder to Section 12.1, the LifeQuest Parties would not
have agreed to enter into this Agreement and the transactions contemplated
herein. The Shareholder has been advised to consult with counsel in order to be
informed in all respects concerning the reasonableness and propriety of Section
12.1 with specific regard to the nature of the business conducted by Trimedica
and the LifeQuest Parties and the Shareholder acknowledges that Section 12.1 is
reasonable in all respects.
12.3 Remedies. In the event of a breach or a threatened breach by the
Shareholder of any of the provisions contained in Sections 12.1, 12.2 or 12.3
of this Agreement, the Shareholder acknowledges that the LifeQuest Parties will
suffer irreparable injury not fully compensable by money damages and,
therefore, will not have an adequate remedy available at law. Accordingly, the
LifeQuest Parties shall be entitled to obtain such injunctive relief or other
equitable remedy from any court of competent jurisdiction as may be necessary
or appropriate to prevent or curtail any such breach, threatened or actual. The
foregoing shall be in addition to and without prejudice to any other rights
that the LifeQuest Parties may have under this
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Agreement, at law or in equity, including, without limitation, the right to xxx
for damages.
ARTICLE 13
CONFIDENTIALITY
13.1 Nondisclosure. The Shareholder shall not, without the prior
written consent of the Board of Directors of LifeQuest, disclose or use for any
purpose confidential information or proprietary data of Trimedica, Purchaser or
LifeQuest (or any of their respective subsidiaries), except as required by
applicable law or legal process; provided, however, that confidential
information shall not include any information known generally to the public or
ascertainable from public or published information (other than as a result of
unauthorized disclosure by such Shareholder) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by Trimedica or LifeQuest (or any of their
respective subsidiaries).
ARTICLE 14
GENERAL PROVISIONS
14.1 Expenses. Each of the parties hereto shall pay all expenses
incurred by it incident to preparing for, entering into and carrying into
effect this Agreement.
14.2 Notices. Any notice, report, demand or payment required,
permitted or desired to be given pursuant to any of the provisions of this
Agreement shall be deemed to have been sufficiently given or served for all
purposes if hand delivered or delivered by responsible overnight courier or
sent by certified or registered air mail, return receipt requested, and postage
prepaid as follows:
If to the LifeQuest Parties:
LifeQuest Medical, Inc.
0000 XxXxxxxxxx Xxxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxx
with a copy to: Fulbright & Xxxxxxxx L.L.P.
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No. (000) 000-0000
If to the Shareholder: Xxxx Xxxxxxx
000 Xxxx Xxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
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with a copy to: Xxxxxxx X. Xxxxxxxxx
The Law Firm of Xxxxxxx X. & Xxxx X. Xxxxxxxxx, LLC
0000 Xxxxxxxxx Xx., Xxxxx X
Xxxxxxxx Xxxxxxx, XX 00000
Any of the foregoing parties may at any time and from time to time
change the address to which notice shall be sent hereunder, by notice to the
other parties given under this subsection. The date of the giving of such
notice delivered by hand or by responsible overnight courier shall be the date
of its delivery, and the date of the giving of such notice by certified or
registered mail shall be the date three days after the posting of the mail.
14.3 Finders. Each of the parties covenants and represents to the
other that there are no claims for brokerage commissions or finder's fees in
connection with the negotiation of this Agreement and the performance of the
transactions contemplated hereunder resulting from any action taken by it. Each
of the parties agrees to indemnify and hold harmless the other in respect of
any and all Losses sustained by the other as a result of any liability to any
broker or finder on the basis of any arrangement, agreement or acts made by or
on behalf of such party with any other person or persons whatsoever.
14.4 Complete Agreement. The representations, warranties, covenants
and agreements set forth in this Agreement and in any financial statement,
schedule or exhibit delivered pursuant hereto, constitute all of the
representations, warranties, covenants and agreements among the parties hereto
and upon which the parties have relied, and, except as may be specifically
provided herein, no change, modification, addition or termination of the
Agreement or any part thereof shall be valid unless in writing and signed by or
on behalf of the party to be charged therewith.
14.5 Prior Agreements. This Agreement constitutes the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes
prior agreements relating thereto.
14.6 No Waiver. No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver. No
waiver shall be deemed a continuing waiver or waiver in respect of any
subsequent breach or default, either of similar or different nature unless
expressly so stated in writing.
14.7 Headings. The headings or captions under Sections of this
Agreement are for convenience and reference only, and do not form a part
hereof, and do not in any way modify, interpret or construe the intent of the
parties or affect any of the provisions of this Agreement.
14.8 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS. NON-
EXCLUSIVE VENUE FOR ANY ACTION PERMITTED HEREUNDER SHALL BE PROPER IN SAN
ANTONIO, BEXAR COUNTY, TEXAS, AND EMPLOYEE CONSENTS TO SUCH VENUE.
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14.9 Assignment. Neither this Agreement nor the rights of the parties
hereto shall not be assignable, unless otherwise specifically provided.
14.10 Severability. If any term or provision of this Agreement shall be
held to be invalid or unenforceable for any reason, such term or provision
shall be ineffective to the extent of such invalidity or unenforceability
without invalidating the remaining terms and provisions hereof, and this
Agreement shall be construed as if such invalid or unenforceable term or
provision had not been contained herein. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be held to
be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
14.11 Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement
shall be binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of the parties reflected hereon as
signatories.
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IN WITNESS WHEREOF, the parties hereto have caused this Plan of Merger
and Acquisition Agreement to be signed on the date and year first above
written.
LIFEQUEST MEDICAL, INC.
By:
------------------------------------------
Xxxxxxx X. Xxxxx,
President and Chief Executive Officer
XXXXX MEDICAL, INC.
By:
------------------------------------------
Xxxxxxx X. Xxxxx,
President and Chief Executive Officer
TRIMEDICA, INC.
By:
------------------------------------------
Xxxx Xxxxxxx
President
SHAREHOLDER
---------------------------------------------
Xxxx Xxxxxxx
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