10.1 Acquisition Agreement, dated as of February 6, 2003, among Enhance
Biotech, Inc. (f/k/a Becor Communications, Inc.) and Enhance Lifesciences Inc.
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ENHANCE LIFESCIENCES INC.,
A DELAWARE CORPORATION
AS OF FEBRUARY 6, 2003
ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT ("Agreement"), is made and entered into this
6th day of February, 2003, by and between Becor Communications, Inc., a Delaware
corporation ("BCI") and Enhance Lifesciences Inc., a Delaware corporation
("XXXX"), each herein sometimes being referred to individually as a "party" and
collectively as the "parties," is made with reference to the following facts:
R E C I T A L S
A. BCI is a publicly held corporation who's wholly owned subsidiary is
engaged in the development, production and distribution of management and
general workforce training videos.
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B. XXXX is a privately held pharmaceutical company that is developing
products that aim to improve quality of life (the "Business").
C. The parties propose, as of the Effective Time (as hereinafter defined),
that BCI shall acquire ownership of 100% of the outstanding common shares of
XXXX (the "Acquisition"), as a result of which (a) XXXX will become a
wholly-owned subsidiary of BCI and (b) the current holders of the outstanding
common shares of XXXX (the "XXXX Shareholders") will receive as consideration
for the Acquisition shares of BCI common stock as hereinafter set forth.
D. The Acquisition is to be effectuated as a non-taxable reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the
"Code").
E. "BCI/XXXX" refers to the corporate entity as of the Effective Time.
NOW, THEREFORE, in consideration of the promises and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereby agree as follows:
ARTICLE000001ARTICLE0000001ARTICLE ONE
1.01 0000021.01 00000021.01 THE ACQUISITION. On the terms and subject to
the conditions set forth in this Agreement, BCI shall acquire 100% of the
outstanding common shares of XXXX (the "XXXX Shares") in exchange for a total of
14,516,000 newly issued shares of BCI common stock (the "BCI Shares") to be
issued to the XXXX Shareholders in amounts calculated in accordance with Article
Two.
ARTICLE TWO
2.01 CALCULATION OF EXCHANGE RATIO. The number of BCI Shares to be issued
to each of the XXXX Shareholders for their respective XXXX Shares shall be
calculated in accordance with the formula in Section 2.02, using an exchange
ratio of 0.7258 (the "Exchange Ratio"). The Exchange Ratio was derived by
dividing the total number of BCI Shares to be issued (14,516,000) by the total
number of XXXX Shares (20,000,000).
2.02 CALCULATION OF BCI SHARES TO BE ISSUED. The number of BCI Shares to
be issued to each of the XXXX Shareholders for their respective shares shall be
calculated by (i) multiplying (a) the total number of XXXX Shares held by each
XXXX Shareholder by (b) the Exchange Ratio and (ii) rounding the product to the
nearest whole number (subject to other reasonable adjustments needed to maintain
the total number of BCI Shares to be issued at 14,516,000). No fractional shares
of BCI common stock shall be issued in connection with the Acquisition.
ARTICLE THREE
3.01 THE CLOSING. The consummation of the transactions contemplated by
this Agreement (the "Closing") shall take place as soon as practicable after or
upon the satisfaction or waiver in writing of all of the conditions precedent to
the obligations of the parties hereto, on such date as may be designated by
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mutual consent of the parties (the "Closing Date"). The parties will conduct the
Closing at the offices of BCI, at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx,
XX, 00000, or such other place as the parties may mutually agree. At the
Closing, the parties will determine that each condition to the obligations of
the parties hereunder has been satisfied or waived or will, at such Closing, be
satisfied or waived.
(a) Definitions. For purposes of this Agreement, the terms listed
below shall be defined as follows:
(i) "Private Placement" shall mean a private placement of
newly issued shares of BCI common stock at not less than $1.50 per share which
raises gross proceeds for BCI of at least US$2,000,000. For purposes of this
Agreement, the term "Private Placement" shall also mean a merger or business
combination, as a result of which the combined entity (including BCI) has assets
consisting of cash, money market instruments and readily marketable securities
of at least US$2,000,000 in excess of the cash assets of BCI prior to the
transaction, and net assets (inclusive of such assets consisting of cash, money
market instruments and readily marketable securities) in excess of net
liabilities which net amount is at least US$2,000,000 greater than the amount of
net assets of BCI in excess of BCI's net liabilities prior to such transaction.
(ii) "Private Placement Deadline" shall mean 5:00 p.m. Pacific
Time on the [INSERT DATE 6 MONTHS AFTER CLOSING.]
(iii) "Promissory Note" shall mean terms and conditions of
Promissory Note as attached.
3.02 THE EFFECTIVE TIME. The Acquisition shall become effective when all
of the items required by this Agreement to be delivered at the Closing have been
delivered (the "Effective Time").
3.03 DIRECTORS OF BCI AT THE EFFECTIVE TIME. XXXX shall have the right to
nominate up to three new persons to serve as directors of BCI at and after the
Effective Time of the Acquisition. XXXX shall identify any such nominees in
Schedule 3.03. As provided in Section 7.05 hereof, the BCI board of directors
shall adopt resolutions appointing such persons (the "New BCI Directors") as
directors (the "New Director Resolutions"), which by their terms shall become
operative only at the Effective Time of the Acquisition.
3.04 OFFICERS OF BCI AT THE EFFECTIVE TIME. XXXX shall identify in
Schedule 3.04 those persons it desires to nominate for appointment as the new
officers of BCI at and after the Effective Time of the Acquisition. As provided
in Section 7.05 hereof, the BCI board of directors shall adopt resolutions
appointing such persons as the new officers of BCI (the "New BCI Officers") (the
"New Officer Resolutions"), which by their terms shall become operative only at
the Effective Time of the Acquisition.
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ARTICLE FOUR
XXXX represents and warrants to BCI with respect to XXXX as follows:
4.01 ORGANIZATION AND GOOD STANDING. XXXX is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and has all requisite corporate power and authority to own or lease its assets
as now owned or leased by it and to otherwise conduct its business. XXXX has one
subsidiary. All corporate proceedings required by law or by the provisions of
this Agreement to be taken by XXXX on or before the Closing Date in connection
with the execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been or will be duly and
validly taken.
4.02 DUE AUTHORIZATION. XXXX has all requisite power, authority and legal
capacity and is competent to execute and deliver this Agreement and XXXX has all
requisite power, authority and legal capacity and is competent to execute and
deliver each of the other transaction documents to which it is or is specified
to be a party, perform its obligations hereunder and thereunder and consummate
the transactions contemplated hereby and thereby. This Agreement constitutes,
together with all other transaction documents to which XXXX is a party, when
executed and delivered by XXXX, will constitute legal, valid and binding
obligations of XXXX, enforceable against XXXX in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent conveyance and moratorium laws and other laws of general application
affecting the enforcement of creditors' rights generally. The execution and
delivery by XXXX of this Agreement and each of the other transaction documents
to which it is, or is specified to be, a party, and the consummation of the
stock exchange and other transactions contemplated hereby and thereby have been
duly authorized by all necessary action (corporate and other) of XXXX.
4.03 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. Except as noted on
Schedule 4.03, the execution and delivery of this Agreement by XXXX and the
consummation of the transactions contemplated hereby will not result in a breach
of any of the terms and provisions of, or constitute a default under, or
conflict with, any material agreement, indenture or other instrument to which
ELS is a party or by which they or their assets are bound.
4.04 ABSENCE OF CERTAIN CHANGES. Since the date of the most recent
financial statements given to BCI, there has not been any material adverse
change in the working capital, financial condition, assets, liabilities,
reserves, contractual allowances, business operations or prospects of XXXX, and
neither XXXX nor any subsidiary of XXXX has:
(a) Engaged in any material transaction outside the ordinary course
of business;
(b) Made any capital expenditures other than in the ordinary course
of business;
(c) Paid, loaned or advanced (other than the payment of salaries or
reimbursement of expenses in the ordinary course of business) any amounts to, or
sold, transferred or leased any properties or assets to or entered into any
other transactions with any of its officers or directors, any of its affiliates,
or any officer or director of its affiliates;
(d) Made any material change in any method of accounting or
accounting practice;
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(e) Incurred any material indebtedness or leasehold expense in
excess of $5,000;
(f) Entered into any material guaranties or otherwise incurred or
suffered to exist any material contingent liabilities;
(g) Paid or declared any dividend or other distribution in respect
of its capital stock, or set aside any sums for the payment of any such dividend
or other distribution;
(h) Issued or sold any common shares or other equity security,
granted any stock option or warrant, or otherwise issued any security
convertible into capital stock;
(i) Canceled any indebtedness due it except upon full payment
thereof;
(j) Increased the compensation payable or to become payable by XXXX
to any of its respective directors, officers, employees or agents, or any bonus
payments or arrangement made to or with any thereof;
(k) Agreed, whether in writing or otherwise, to do any of the
foregoing;
(l) Suffered any labor trouble or any controversies with any of its
employees;
(m) Suffered any damage, destruction or loss, whether or not covered
by insurance, materially adversely affecting the business or properties of XXXX;
or
(n) Received notice that any person or entity with which XXXX has a
significant business relationship intends to cancel or terminate such business
relationship.
4.05 CONTRACTS AND COMMITMENTS. All references to XXXX in this Section
4.05 shall be deemed to refer to both XXXX and its subsidiaries. Attached as
Schedule 4.05 is a list of all agreements which materially affect XXXX, to which
XXXX is a party or by which XXXX or any of its property is bound which exist as
of the date of execution of this Agreement (including, without limitation, joint
venture or partnership agreements, personal property leases, conditional sales
contracts, notes or other evidence of indebtedness, or other contracts,
agreements, or commitments) (collectively, the "Contracts"). XXXX now has, and
at the Closing will have, valid and enforceable interests in and to the
Contracts. XXXX is not in default with respect to any material term or condition
of any such Contract, nor has any event occurred which through the passage of
time or the giving of notice, or both, would constitute a default thereunder.
XXXX has received no notice that any party to a Contract intends to cancel or
terminate such Contract or to exercise or not to exercise any option thereunder.
4.06 LICENSES AND PERMITS. Schedule 4.06 lists all licenses ("Licenses")
and permits ("Permits") held by XXXX and its subsidiaries in connection with the
operation of their business as currently conducted or to the occupancy and use
of the premises upon which their business is conducted. No breach of any such
License or Permit currently exists, nor has any event occurred which through the
passage of time or the giving of notice, or both, would constitute a breach
thereunder.
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4.07 PROPRIETARY RIGHTS. Schedule 4.07 lists all patents, patent
applications, trademarks, trade names, service marks, copyrights, patent rights,
trademark registrations, trademark applications, business names, brand names,
copyright registrations, designs, design registrations, rights to computer
software or any rights to any of the foregoing ("Intellectual Property") of
which XXXX is the owner, licensee or licensor (other than commercially-available
computer software and similar property), and indicates whether XXXX is the
owner, the licensee or the licensor of such Intellectual Property and, if it is
the licensee or licensor, the identity of the other party to the agreement, the
scope of the rights licensed, and the term of the agreement. Neither the stock
exchange or the other transactions to be consummated at closing will conflict
with, alter or impair such rights. To ELSI's knowledge, it conducts its business
without conflict or infringement of any Intellectual Property claimed or held by
others. To ELSI's knowledge, no third party conflicts with or infringes upon any
Intellectual Property owned or licensed by XXXX.
4.08 LITIGATION. All references to XXXX in this Section 4.08 shall be
deemed to refer to both XXXX and its subsidiaries. Except as listed in Schedule
4.08:
(a) there is no action, suit or proceeding to which XXXX or any of
ELSI's officers or directors, is a party (either as a plaintiff or defendant)
pending before any court or governmental agency, authority or body, or any
arbitrator or arbitral body, which, if decided or concluded adversely, would
have a materially adverse impact upon the operation by XXXX of the Business or
on ELSI's ability to consummate the transactions contemplated herein, and XXXX
has no knowledge that any such action, suit or proceeding has been threatened
against XXXX;
(b) None of XXXX, its officers or its directors has not been
permanently or temporarily enjoined by any order, judgment or decree of any
court or tribunal or any other agency from engaging in or continuing any conduct
or practice in connection with the Business; and
(c) There is not in existence on the date hereof any order, judgment
or decree of any court or other tribunal or other agency or any arbitrator or
arbitral body, enjoining or requiring XXXX or any of its officers or directors
to take any action of any kind with respect to the business, properties or
assets of the Business.
4.09 COMPLIANCE WITH LAW.
(a) XXXX and its subsidiaries currently have no outstanding notice
or notification from any court or governmental agency, authority or body that,
with respect to the operations of the Business, it is in violation in any
material respect of or not in substantial compliance with any federal,
provincial or local laws, statutes, ordinances, rules, regulations, decrees,
orders, permits or other similar items (including, but not limited to, those
related to employee safety, employment discrimination and environmental
protection or conservation) or that upon the passage of time it will be in
violation in any material respect of any of the foregoing;
(b) The conduct of the Business within the five-year period prior to
the date hereof has not been in violation of any federal, provincial or local
laws, statutes, ordinances, rules, regulations, decrees, orders, permits or
42
other similar items (including, but not limited to, those related to employee
safety, employment discrimination and environmental protection or conversation)
in force on the date hereof, the enforcement of which would materially and
adversely affect the condition (financial or otherwise), business or properties
of XXXX or its subsidiaries;
(c) Neither XXXX, its subsidiaries, nor any shareholder, officer,
employee or agent of XXXX or its subsidiaries has, directly or indirectly,
within the five year period prior to the date hereof given or agreed to give any
gift or similar benefit to any customer, supplier, competitor or governmental
employee or official or has engaged in any other practice, which in any such
case would subject XXXX to any damage or penalty in any civil, criminal or
governmental litigation or proceeding or which would be grounds for termination
or modification of any material contract, license or other instrument to which
XXXX or any subsidiary of XXXX is a party; and
(d) All outstanding securities issued by XXXX (including all common
stock and securities convertible into or exercisable for common stock) were
issued in compliance with all applicable securities laws. All of the outstanding
common shares of XXXX are, and any common shares of XXXX issuable upon
conversion or exercise of any other security, when issued pursuant to such
conversion or exercise will be, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute, the
charter documents of XXXX or any agreement to which XXXX is a party or is bound.
4.10 CAPITALIZATION. The authorized capital stock of XXXX consists of
25,000,000 common shares, of which 20,000,000 shares are outstanding on the date
hereof. Such issued and outstanding shares have been duly and validly authorized
and are fully paid and non-assessable. There are no other shares of capital
stock of XXXX outstanding, authorized or reserved for issuance; there are no
outstanding options, warrants, or rights to purchase or acquire, or securities
convertible into or exchangeable for, any shares of capital stock of XXXX, and
there are no contracts, commitments, agreements, understandings, arrangements or
restrictions which require XXXX to issue, sell or deliver any shares of capital
stock of XXXX. Attached as Schedule 4.14 is a list of the shareholders of XXXX
as of the date hereof, indicating the number of XXXX common shares owned by them
beneficially and of record.
4.11 LABOR AND EMPLOYMENT MATTERS. All references to XXXX in this Section
4.11 shall be deemed to refer to both XXXX and its subsidiaries. XXXX xxxx no
collective bargaining agreement, service or employment contract or other labor
or employment agreement or scheme to which XXXX is a party or by which XXXX is
bound; no profit sharing, deferred compensation, bonus, stock option, stock
purchase, pension, retainer, consulting, retirement, welfare or incentive plan,
contract, arrangement or scheme to which XXXX is a party or by which XXXX is
bound; and no plan, contract, arrangement or scheme under which fringe benefits
(including, but not limited to, vacation plans or programs, sick leave plans or
programs and related benefits) are afforded to employees of XXXX.
4.12 TAXES. All references to XXXX in this Section 4.12 shall be deemed to
refer to both XXXX and its subsidiaries.
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(a) As used in this Agreement, (i) "Code" shall mean the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations promulgated thereunder;
(ii) "Taxes" shall mean all Federal, state and local, domestic and foreign,
income, franchise, property, sales, excise, employment, payroll, withholding and
other taxes of any nature, including any interest, penalties or additions with
respect thereto and any obligations under any agreements or arrangements with
any other Person with respect to such amounts; (iii) "Taxing Authority" shall
mean any Governmental Entity (including any subdivision, agency or commission
thereof) exercising regulatory authority in respect of Taxes or liability for
Taxes of any other Person as required by Applicable Law; (iv) "Tax Return" shall
mean all returns, reports, forms, including information returns, with respect to
Taxes; (v) "Person" shall mean an individual, partnership, corporation, business
trust, joint stock company, estate, trust, unincorporated association, joint
venture, Governmental Authority or other entity, of whatever nature; and (vi)
"Governmental Authority shall mean any governmental, regulatory or
administrative body, agency, commission, board, arbitrator or authority, any
court or judicial authority, any public, private or industry regulatory
authority, whether international, foreign, national, federal, state or local,
and any entity or official exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any laws or
regulations.
(b) XXXX has filed, when due, all Tax Returns except as discussed in
Schedule 4.12(b). All such Tax Returns are true and complete in all respects.
All Taxes due from XXXX with respect to the taxable periods covered by such Tax
Returns and all other Taxes have been or will be timely paid. XXXX has not
requested any extension of time to file any Tax Return that has not yet been
filed.
(c) No Tax Return of XXXX is currently under audit, examination, or
dispute by any Taxing Authority, and no written or unwritten notice of such an
audit, examination or dispute has been received by XXXX. No issues relating to
Taxes have been raised in the last five years by any Taxing Authority that can
reasonably be expected to recur in a later taxable period. No deficiency for any
material amount of Taxes has been asserted or assessed or threatened by any
Taxing Authority against XXXX. No Liens for Taxes exist with respect to any
assets or properties of XXXX.
4.13 ENVIRONMENTAL COMPLIANCE. All references to XXXX in this Section 4.13
shall be deemed to refer to both XXXX and its subsidiaries. There have been no
uses, disposals, burials or releases of Hazardous Materials (as defined) on any
premises used in the Business, either before or after ELSI's occupancy of such
premises, except in substantial compliance with applicable laws. For purposes of
this Section 4.13, the term "Hazardous Materials" shall mean any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "toxic substances" and similar terms under any
applicable federal, provincial or local laws or regulations. The operations of
XXXX at ELSI's premises have been in material compliance with all applicable
federal, provincial or local environmental laws or regulations. XXXX shall
indemnify and hold harmless BCI and its successors and assigns from and against
any and all claims, demands, damages, actions, penalties, liabilities, causes of
action and government proceedings of any kind or nature whatsoever, arising out
of or in any manner directly or indirectly connected with the presence prior to
Closing of Hazardous Materials at such premises or the violation prior to
Closing of any applicable federal, provincial or local environmental laws or
regulations at such premises, including, but not limited to, any claims of
indemnification or contribution under any federal, provincial or local laws or
regulations.
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4.14 SUBSIDIARIES AND AFFILIATES. Except for the subsidiaries of XXXX
named in Section 4.01, XXXX does not have, directly or indirectly, an equity
investment in any corporation, partnership, joint venture or other business
entity which investment represents or upon conversion would represent more than
ten percent (10%) of the voting power or interest in the profits of such entity.
4.15 NO ASSETS OWNED BY AFFILIATES. There are no properties, tangible or
intangible, owned by the shareholders of XXXX, or owned by any affiliate or
relative of such shareholders, which have been used in the normal day-to-day
operations of the Business any time since January 1, 2000.
4.16 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND SHAREHOLDERS. Except
as set forth in the financial statements dated 31st October 2002, XXXX is not
indebted to any officer, director, or shareholder of XXXX in any amount
whatsoever other than for salaries or services rendered since the start of
ELSI's current pay period and for reimbursable business expenses, nor is any
such officer, director or shareholder indebted to XXXX except for advances made
in the ordinary course of business to meet anticipated reimbursable business
expenses to be incurred by such obligor.
4.17 RELATED PARTY TRANSACTIONS. All references to XXXX in this Section
4.17 shall be deemed to refer to both XXXX and its subsidiaries. Except as
identified on Schedule 4.17, no officer or director, in such person's capacity
as such, or, to ELST's knowledge, any shareholder of XXXX, nor any affiliate or
relative of any such person, now has or within the last three (3) years has had,
either directly or indirectly, a material interest in any contract, agreement or
commitment to which XXXX is or was a party, or under which XXXX is or was
obligated or bound, or to which any of ELSI's properties may be or may have been
subject, other than any contract, agreement or commitment between XXXX and such
persons in their capacities as employees, officers or directors of XXXX.
4.18 NO LEGAL BAR. XXXX is not prohibited by any order, writ, injunction
or decree of any body of competent jurisdiction from consummating the
transactions contemplated by this Agreement, and no such action or proceeding is
pending against XXXX which questions the validity of this Agreement or any of
the transactions contemplated hereby.
4.19 FINDER'S FEES AND BROKERAGE FEES. XXXX has not had any dealings with
any person which would entitle such person to any finder's fee or brokerage fees
in connection with this Agreement or any transaction contemplated hereby
(provided that the parties acknowledge that in the event that the Private
Placement is consummated XXXX will have entered into arrangements for the
payment of investment banking fees or finder's fees in connection with the
Private Placement).
4.20 REQUIRED CONSENTS. No consent, waiver or other authorization of any
third party (including, without limitation, any third party to a Real Property
Lease, Equipment Lease, Contract, License, Permit or other instrument to which
XXXX or any subsidiary of XXXX is a party or by which XXXX or any subsidiary of
XXXX is bound) is required to the consummation of the transactions contemplated
by this Agreement.
4.21 OTHER INFORMATION. XXXX has disclosed or will, prior to the Closing,
disclose to BCI all information requested by BCI and known to XXXX (after
reasonable investigation and inquiry) to be material to the condition (financial
45
or otherwise), business or properties of XXXX and its subsidiaries. The
information concerning XXXX and its subsidiaries set forth in this Agreement, in
the schedules hereto furnished by ELSI, and in any other document, statement or
certificate furnished or to be furnished to BCI pursuant hereto, does not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or therein or necessary to make the
statements and facts contained herein or therein, in light of the circumstances
in which they are made, not false or misleading. All information contained or
referred to in the schedules hereto furnished by XXXX is accurate in all
material respects and XXXX (after having made reasonable inquiry) is not aware
of any other fact or matter which renders any such information materially
misleading. Copies of all documents heretofore or hereafter delivered or made
available to BCI were or will be complete and accurate copies of such documents
on the date such copies are delivered.
4.22 XXXX UNAUDITED FINANCIAL STATEMENTS. XXXX has delivered to BCI its
unaudited consolidated financial statements for the year ended January 31, 2002
and the three months ended October 31, 2002, and such financial statements are
true and correct and fully represent the financial condition of XXXX at such
dates and comply with United States generally accepted accounting principles
consistently applied throughout the periods covered.
4.23 REGULATORY INVESTIGATIONS. To ELSI's knowledge, there are no
investigations or inquiries pending against XXXX or its directors or officers by
any stock exchange, securities regulatory authority, taxing authority or any
other governmental department or agency.
4.24 CORPORATE RECORDS. All of the minute books and corporate and
financial records of XXXX are, or prior to the Closing will be, in all material
respects, complete, up to date and accurate.
4.25 PRIVATE OFFERING. None of XXXX or its subsidiaries or the officers,
directors, agents or representatives thereof or their Affiliates has issued,
sold or offered any security of XXXX to any Person under circumstances that
would cause the sale of the stock, as contemplated by this Agreement, to be
subject to the registration requirements of the Securities Act of 1933 (the
"Securities Act"). None of XXXX parties described above will offer the stock or
any part thereof or any similar securities for issuance or sale to, or solicit
any offer to acquire any of the same from, anyone so as to make the issuance and
sale of the Shares subject to the registration requirements of Section 5 of the
Securities Act. The exchange, sale and delivery of the stock hereunder are
exempt from the registration and prospectus delivery requirements of the
Securities Act.
4.26 FOREIGN CORRUPT PRACTICES ACT. None of XXXX or its subsidiaries, or
any officer, director or employee of XXXX or its subsidiaries, or any agent or
other Person associated with or acting on behalf of XXXX has with respect to
XXXX (i) used any corporate funds for any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity; (ii)
made any unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any
unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
4.27 CORPORATE NAME. XXXX has not received any written or unwritten notice
of conflict during the past five (5) years with respect to the rights of others
regarding the corporate names of XXXX, and has the exclusive right to use its
name as the name of a corporation in the jurisdictions in which XXXX has
operations. No Person is presently authorized by XXXX to use the name of XXXX.
4.28 REPRESENTATIONS. All representations and warranties of XXXX are true,
accurate and complete in all material respects as of the date hereof and will be
true, accurate and complete as of the Closing as if made at such time, except
with respect to the effect of transactions in the ordinary course of business
and transactions contemplated or permitted by this Agreement. Any exception to a
representation or warranty of XXXX which is disclosed in any of the schedules
hereto furnished by XXXX shall be deemed to apply only to the representation or
warranty referenced by such schedule, and shall not, unless scheduled
separately, be considered an exception to any other representation or warranty
of XXXX in this Agreement.
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ARTICLE FIVE
BCI represents and warrants to XXXX as follows:
5.01 ORGANIZATION, STANDING AND POWER. BCI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite corporate power and authority to own or lease its
assets as now owned or leased by it and to otherwise conduct its business. All
corporate proceedings required by law or by the provisions of this Agreement to
be taken by BCI on or before the Closing Date in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement have been or will be duly and validly taken.
5.02 DUE AUTHORIZATION. This Agreement and each other agreement
contemplated hereby to be executed in connection herewith by BCI or have been
(or upon execution will have been) duly executed and delivered by BCI and
constitute (or upon execution will constitute) legal, valid and binding
obligations of BCI enforceable in accordance with their respective terms, except
as limited by bankruptcy, insolvency, reorganization or other laws affecting
generally the enforcement of creditors' rights.
5.03 AGREEMENT NOT IN BREACH OF OTHER INSTRUMENTS. The execution and
delivery of this Agreement by BCI and the consummation of the transactions
contemplated hereby will not result in a breach of any of the terms and
provisions of, or constitute a default under, or conflict with, any material
agreement, indenture or other instrument to which BCI is a party or by which it
or its properties are bound.
5.04 STATUS OF COMMON STOCK. Upon consummation of the transactions
contemplated by this Agreement, the BCI Shares to be issued to the XXXX
Shareholders, when issued and delivered, will be duly authorized, validly
issued, fully paid and non-assessable and free of any and all liens, claims or
encumbrances.
5.05 NO BANKRUPTCY. Neither BCI nor its assets are the subject of any
proceeding involving either a voluntary or an involuntary bankruptcy, insolvency
or receivership.
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5.06 ABSENCE OF CERTAIN CHANGES. Since November 19, 2002, there has not
been any material adverse change in the financial condition, assets or
liabilities of BCI, and BCI has not:
(a) Engaged in any material transaction outside the ordinary
course of business;
(b) Made any capital expenditures other than in the ordinary
course of business;
(c) Paid, loaned or advanced (other than the payment of
salaries or reimbursement of expenses in the ordinary course of business) any
amounts to, or sold, transferred or leased any properties or assets to or
entered into any other transactions with any of its officers or directors, any
of its affiliates, or any officer or director of its affiliates;
(d) Made any material change in any method of accounting or
accounting practice;
(e) Incurred any material indebtedness or leasehold expense in
excess of $5,000;
(f) Entered into any material guaranties or otherwise incurred
or suffered to exist any material contingent liabilities;
(g) Paid or declared any dividend or other distribution in
respect of its capital stock, or set aside any sums for the payment of any such
dividend or other distribution;
(h) Issued or sold any shares of common stock or any other
equity security, granted any stock option or warrant, or otherwise issued any
security convertible into capital stock.
(i) Agreed, whether in writing or otherwise, to do any of the
foregoing;
(j) Suffered any labor trouble or any controversies with any
of its employees; or
(k) Suffered any damage, destruction or loss, whether or not
covered by insurance, materially adversely affecting the business or properties
of BCI.
5.07 CONTRACTS AND COMMITMENTS. All agreements which materially affect
BCI, to which BCI is a party or by which BCI or any of its property is bound
which exist as of the date of execution of this Agreement have been filed as
exhibits to documents filed by BCI with the Commission under the Securities
Exchange Act of 1934 (collectively, the "Contracts"). BCI is not in default with
respect to any material term or condition of any such Contract, nor has any
event occurred which through the passage of time or the giving of notice, or
both, would constitute a default thereunder.
5.08 LITIGATION.
(a) There is no action, suit or proceeding to which BCI or any of
BCI's officers or directors is a party (either as a plaintiff or defendant)
pending before any court or governmental agency, authority or body, or any
arbitrator or arbitral body, which, if decided or concluded adversely, would
48
have a materially adverse impact upon the operation by BCI of its business or on
BCI's ability to consummate the transactions contemplated herein, and BCI has no
knowledge that any such action, suit or proceeding has been threatened against
BCI;
(b) None of BCI, its officers or its directors has been permanently
or temporarily enjoined by any order, judgment or decree of any court or
tribunal or any other agency from engaging in or continuing any conduct or
practice in connection with its business; and
(c) There is not in existence on the date hereof any order, judgment
or decree of any court or other tribunal or other agency or any arbitrator or
arbitral body, enjoining or requiring BCI or any of its officers or directors to
take any action of any kind with respect to its business, properties or assets.
5.09 COMPLIANCE WITH LAW.
(a) BCI currently has no outstanding notice or notification from any court
or governmental agency, authority or body that, with respect to the operations
of BCI's business, it is in violation in any material respect of or not in
substantial compliance with any federal, state or local laws, statutes,
ordinances, rules, regulations, decrees, orders, permits or other similar items
(including, but not limited to, those related to employee safety, employment
discrimination and environmental protection or conservation) or that upon the
passage of time it will be in violation in any material respect of any of the
foregoing;
(b) The conduct of BCI's business within the five-year period prior to the
date hereof has not been in violation of any federal, state or local laws,
statutes, ordinances, rules, regulations, decrees, orders, permits or other
similar items (including, but not limited to, those related to employee safety,
employment discrimination and environmental protection or conversation) in force
on the date hereof, the enforcement of which would materially and adversely
affect the condition (financial or otherwise), business or properties of BCI;
(c) Neither BCI nor any shareholder, officer, employee or agent of BCI
has, directly or indirectly, within the five year period prior to the date
hereof given or agreed to give any gift or similar benefit to any customer,
supplier, competitor or governmental employee or official or has engaged in any
other practice, which in any such case would subject BCI to any damage or
penalty in any civil, criminal or governmental litigation or proceeding or which
would be grounds for termination or modification of any material contract,
license or other instrument to which BCI is a party; and
(d) All outstanding securities issued by BCI (including all common stock
and securities convertible into or exercisable for common stock) were issued in
compliance with all applicable securities laws. All of the outstanding shares of
BCI common stock are, and any shares of BCI common stock issuable upon
conversion or exercise of any other security, when issued pursuant to such
conversion or exercise will be, duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights created by statute, the
charter documents of BCI or any agreement to which BCI is a party or is bound.
49
5.10 CAPITALIZATION. The authorized capital stock of BCI consists of
25,000,000 shares of common stock, of which 1,612,900 shares are outstanding on
the date hereof. Such issued and outstanding shares have been duly and validly
authorized and are fully paid and nonassessable. There are no other shares of
capital stock of BCI outstanding, authorized or reserved for issuance, there are
no outstanding options, warrants, or rights to purchase or acquire, or
securities convertible into or exchangeable for, any shares of capital stock of
BCI, and there are no contracts, commitments, agreements, understandings,
arrangements or restrictions which require BCI to issue, sell or deliver any
shares of capital stock of BCI. Attached as Schedule 5.10 is a list of the
stockholders of BCI indicating the number of BCI common shares owned of record
by them as of a recent date.
5.11 TAXES. All tax returns required to be filed with respect to BCI have
been duly filed and all taxes and other governmental charges as reflected on
such tax returns as being due and owing in respect of the properties, income,
sales and payrolls of BCI have been duly paid. There are no pending questions
with governmental agencies relating to, or claims or assessments for, taxes
payable by BCI, and BCI has not given, and has not been requested to give, any
waivers extending the statutory period of limitation applicable to any income
tax return for any period; and proper and accurate amounts have been withheld by
BCI from its employees for all periods in full and complete compliance with the
tax withholding provisions of all applicable laws.
5.12 ENVIRONMENTAL COMPLIANCE. There have been no uses, disposals, burials
or releases of Hazardous Materials (as defined) on any premises used in BCI's
business, either before or after BCI's occupancy of such premises, except in
substantial compliance with applicable laws. For purposes of this Section 5.12,
the term "Hazardous Materials" shall mean any substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "toxic substances" and similar terms under any applicable federal,
state or local laws or regulations. The operations of BCI at BCI's premises have
been in material compliance with all applicable federal, state or local
environmental laws or regulations. BCI shall indemnify and hold harmless XXXX
and its successors and assigns from and against any and all claims, demands,
damages, actions, penalties, liabilities, causes of action and government
proceedings of any kind or nature whatsoever, arising out of or in any manner
directly or indirectly connected with the presence prior to Closing of Hazardous
Materials at such premises or the violation prior to Closing of any applicable
federal, state or local environmental laws or regulations at such premises,
including, but not limited to, any claims of indemnification or contribution
under any federal, state or local laws or regulations.
5.13 SUBSIDIARIES AND AFFILIATES. Except for its wholly owned subsidiary
Advanced Knowledge, BCI has no direct or indirect equity investment in any
corporation, partnership, joint venture or other business entity.
5.14 INDEBTEDNESS TO AND FROM OFFICERS, DIRECTORS AND STOCKHOLDERS. Except
as set forth in the financial statements dated November 30, 2002 BCI is not
indebted to any officer, director, or stockholder of BCI in any amount
whatsoever.
5.15 NO LEGAL BAR. BCI is not prohibited by any order, writ, injunction or
decree of any body of competent jurisdiction from consummating the transactions
contemplated by this Agreement, and no such action or proceeding is pending
against BCI which questions the validity of this Agreement or any of the
transactions contemplated hereby.
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5.16 FINDER'S FEES AND BROKERAGE FEES. BCI has not had any dealings with
any person which would entitle such person to any finder's fee or brokerage fees
in connection with this Agreement or any transaction contemplated hereby.
5.17 OTHER INFORMATION. BCI has disclosed or will, prior to the Closing,
disclose to XXXX all information requested by XXXX and known to BCI (after
reasonable investigation and inquiry) to be material to the condition (financial
or otherwise), business or properties of BCI. The information concerning BCI set
forth in this Agreement, in the BCI Annual Report (including the audited
financial statements contained therein (the "BCI Financial Statements")), in any
schedules hereto furnished by BCI, and in any other document, statement or
certificate furnished or to be furnished to BCI pursuant hereto, does not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or therein or necessary to make the
statements and facts contained herein or therein, in light of the circumstances
in which they are made, not false or misleading. All information contained or
referred to in the schedules hereto furnished by BCI is accurate in all material
respects and BCI (after having made reasonable inquiry) is not aware of any
other fact or matter which renders any such information materially misleading.
Copies of all documents heretofore or hereafter delivered or made available to
AMI were or will be complete and accurate copies of such documents on the date
such copies are delivered.
5.18 BCI FINANCIAL STATEMENTS. The BCI Financial Statements fully
represent the financial condition of BCI at August 31, 2002 and the results of
operations, shareholders equity and cash flows of BCI for the periods covered.
The BCI Financial Statements comply with generally accepted accounting
principles consistently applied throughout the periods covered.
5.20 REPORTING COMPANY. BCI is a reporting company registered under
Section 12(g) of the Securities Exchange Act of 1934 and is in compliance with
all laws, rules and regulations applicable to reporting companies generally.
5.21 SECURITIES FILINGS. BCI is current with respect to all required
filings with state and federal securities regulatory authorities and the
contents of all such filings are complete and accurate in all material respects.
5.22 OTC BULLETIN BOARD. BCI's common stock is posted for trading on the
OTC Bulletin Board under the symbol "BCOI."
5.23 STOP TRADE ORDERS. There are no pending, and there have never been
any, stop trade orders issued against BCI or any of its directors or officers or
those of any affiliates of BCI by any securities regulatory authority whether in
the United States or in any other jurisdiction.
5.24 REGULATORY INVESTIGATIONS. To BCI's knowledge, there are no
investigations or inquiries pending against BCI or its directors or officers by
any stock exchange, securities regulatory authority, taxing authority or any
other governmental department or agency.
5.25 CORPORATE RECORDS. All of the minute books and corporate and
financial records of BCI are, or prior to the Closing will be, in all material
respects, complete, up to date and accurate.
5.26 REPRESENTATIONS. All representations and warranties of BCI are true,
accurate and complete in all material respects as of the date hereof and will be
true, accurate and complete as of the Closing as if made at such time, except
with respect to the effect of transactions in the ordinary course of business
and transactions contemplated or permitted by this Agreement. Any exception to a
representation or warranty of BCI which is disclosed in any of the schedules
hereto furnished by BCI shall be deemed to apply only to the representation or
warranty referenced by such schedule, and shall not, unless scheduled
separately, be considered an exception to any other representation or warranty
of BCI in this Agreement.
5.27 GOVERNMENT APPROVALS. Other than (i) the pre-Closing filing and
delivery to stockholders of the Stockholder Notice described in Section 8.17 and
(ii) the post-Closing filing of securities exemption notice filings required in
the State of California and the Province of Ontario, no governmental notices,
filings, approvals or consents are required in order for BCI to complete the
transactions contemplated by this Agreement.
5.28 REQUIRED CONSENTS. No consent, waiver or other authorization of any
third party (including, without limitation, any third party to a real property
lease, equipment lease, contract, license, permit or other instrument to which
BCI is a party or by which BCI is bound) is required to the consummation of the
transactions contemplated by this Agreement.
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ARTICLE SIX
All references to XXXX in this Article shall be deemed to refer to both
XXXX and its subsidiaries, except where the context requires otherwise. XXXX
hereby covenants and agrees, between the date hereof and the Closing (and, with
respect to Sections 6.06, 6.09, 6.10, 6.18, 6.19 and 6.20 also after the
Closing), as follows:
6.01 CONDUCT OF BUSINESS. XXXX shall conduct the operations of its
Business only in the ordinary course and in a manner consistent with a
maximization of the value of the Business. XXXX shall use reasonable efforts to
preserve the goodwill of its customers and others with whom it has business
relations. Except as otherwise contemplated by this Agreement or consented to by
BCI in writing, between the date of this Agreement and the Closing, XXXX shall
not:
(a) Engage in any material transaction outside the ordinary course
of business;
(b) Make any capital expenditures other than in the ordinary course
of business;
(c) Enter into any material guaranties or otherwise incur or suffer
to exist any material contingent liabilities;
(d) Enter into any material new indebtedness, or cancel any
indebtedness due it except upon full payment thereof;
(e) Make any payment of dividends or other unusual distribution of
cash or assets to shareholders or employees, including repayment of outstanding
indebtedness;
(f) Make any material change in any method of accounting or
accounting practice;
(g) Enter into or engage in any transaction with any officer,
director, shareholder or affiliate, except for the payment of salaries and other
activities in the ordinary course of business;
(h) Fail to pay when due, or fail to maintain a reserve adequate for
the payment when due of, any applicable local, provincial or federal taxes;
(i) Issue or sell any common shares or other equity security, grant
any stock option or warrant, or otherwise issue any security convertible into
capital stock;
(j) Take any other action which would render any representation or
warranty of XXXX herein inaccurate as of the date such action is taken; or
(k) Agree, whether in writing or otherwise, to do any of the
foregoing.
6.02 FULFILLMENT OF CONDITIONS AND COVENANTS. XXXX shall not voluntarily
undertake any course of action inconsistent with the satisfaction of the
requirements or conditions applicable to it as set forth in this Agreement and
shall promptly do all acts and take all such steps as it deems necessary or
appropriate to enable it to perform as early as possible the obligations herein
provided.
6.03 STATUS OF ASSETS. ELSI's title to its assets shall be maintained and
preserved at all times from the date hereof until completion of the Closing in
material accordance with the representations and warranties of XXXX set forth in
Article Four hereof.
6.04 ACCESS TO INFORMATION. Upon reasonable notice from BCI, XXXX shall
deliver to the representatives of BCI, or grant such representatives access
during normal business hours to, the books, records and financial statements of
XXXX to make such reviews, examinations and investigations thereof as BCI deems
necessary.
6.05 FINANCIAL RECORDS AND UNAUDITED FINANCIAL STATEMENTS. XXXX shall
accurately maintain its books and records and promptly advise BCI in writing of
any material adverse change in the condition (financial or otherwise), assets,
liabilities, earnings or Business of XXXX.
6.06 AUDITED FINANCIAL STATEMENTS. XXXX shall complete an audit of the
financial statements of XXXX in conformance with the requirements of Form 8-K
(items 2 and 7) and other applicable rules and regulations of the Commission.
Such audit shall be completed in time for BCI to timely file the audited
financial statements of XXXX, together with all required pro forma financial
statements, with the Commission on Form 8-K, i.e., within 75 days after the
Effective Time.
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6.08 TRANSFER OF LICENSES, PERMITS AND AUTHORIZATIONS. Between the date
hereof and the Closing, XXXX shall, if required by applicable law or
regulations, at its cost, obtain new Licenses and Permits or transfers of
existing Licenses and Permits and any governmental or other consents or
authorizations required for the consummation of the Acquisition and the conduct
of ELSI's Business following the Closing; provided, however, that the terms and
conditions of such new or transferred Licenses and Permits shall not be less
favorable than those terms and conditions to which XXXX is currently subject.
6.09 EMPLOYEES. Between the date hereof and the Closing, XXXX shall use
its best efforts to ensure that all of the key employees of XXXX shall remain as
employees of XXXX (subject to Section 14.05 below).
6.10 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. XXXX agrees that
it shall cooperate with BCI in the preparation of any document or other material
which may be required by any governmental agency as a predicate to or result of
the transactions herein contemplated.
6.11 SOLICITATION OF INQUIRIES. From the date hereof to the earlier to
occur of (i) the Closing or (ii) the termination of this Agreement pursuant to
Article Ten hereof (which period shall be referred to herein as the "No-Shop
Period"), neither XXXX nor its directors, employees, agents or representatives
shall, without the prior written consent of BCI, solicit from any other person,
firm or corporation any inquiry or proposal relating to a merger, consolidation,
amalgamation, purchase or sale of assets, exchange of securities or similar
transaction involving XXXX, other than in the ordinary course of business, nor
shall they deliver to any other person any information concerning XXXX or its
business, financial affairs or prospects for the purpose or with the intent of
permitting such person or entity to evaluate the possibility of such a
transaction involving XXXX.
6.12 PURCHASE AND SALE AGREEMENTS. XXXX shall distribute to each of the
XXXX Shareholders a Purchase and Sale Agreement in substantially the form
attached as Exhibit B (the "Purchase and Sale Agreement") to be signed by them
and returned to XXXX for delivery to BCI at the Closing. XXXX shall also
distribute to each of the XXXX Shareholders for informational purposes (i) a
copy of the BCI Annual Report, and (ii) a copy of this Agreement.
6.13 PUBLIC ANNOUNCEMENTS. Except as required by any applicable law, rule
or regulation, prior to the Closing XXXX shall not issue nor permit to be issued
any press release or otherwise make or permit to be made any public statement
with respect to the transactions contemplated by this Agreement without the
prior written consent of BCI.
6.14 APPOINTMENT OF SUCCESSOR DIRECTORS. The persons to be appointed as
the New BCI Directors at the Effective Time shall adopt the Successor Director
Resolutions and shall deliver an original signed copy of such resolutions to Xxx
X. Xxxx in connection with the Closing.
6.15 INSTRUCTION LETTER TO TRANSFER AGENT. [Intentionally omitted.]
6.16 CONDUCT OF BUSINESS PRIOR TO PRIVATE PLACEMENT. XXXX covenants and
agrees, at all times after the Effective Date until the Private Placement shall
have been consummated, to the following:
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(a) XXXX and its subsidiaries will operate their businesses separate
and apart from BCI
(b) XXXX and its subsidiaries will not transfer or assign to BCI,
directly or indirectly, by any means whatsoever, any of ELSI's liabilities,
debts, expenses, losses, judgments, claims, damages or other obligations and
will not cause BCI to incur any liabilities, debts, expenses, losses, judgments,
claims, damages or other obligations on behalf or for the benefit of XXXX or its
subsidiaries; and
(c) XXXX and its subsidiaries will pay in a timely manner all legal,
accounting and other costs and expenses of BCI incurred in connection with the
Private Placement and incurred for any other purpose, including, but not limited
to, costs and expenses of effecting a change of BCI's corporate name, preparing
and filing reports and statements under the Securities Exchange Act of 1934, and
satisfying all other applicable laws and regulations.
6.17 ASSUMPTION OF LIABILITIES AND OBLIGATIONS. Upon the occurrence of any
[rescission of the Acquisition under the terms of this Agreement], each of XXXX
and its subsidiaries, hereby assume the obligation to pay and satisfy, in a
timely manner, any and all liabilities, debts, expenses, losses, judgments,
claims, damages and other obligations of BCI which may have been incurred by BCI
during the period commencing immediately after the Closing and ending on [the
date on which Xxxxx Xxxxx takes control back], including, without limitation,
all legal, accounting and other costs and expenses of BCI incurred in connection
with the Private Placement (unless the same shall have been consummated) and all
legal, accounting and other costs and expenses of BCI incurred for any other
purpose, including, but not limited to, costs and expenses of effecting a change
of BCI's corporate name, preparing and filing reports and statements under the
Securities Exchange Act of 1934, and satisfying all other applicable laws and
regulations.
6.18 NO CHANGE IN STOCK TRANSFER AGENT. BCI/XXXX shall retain U.S. Stock
Transfer of Glendale, CA, as its stock transfer agent for at least two years
following the date of the Closing.
6.19 NO REVERSE STOCK SPLITS, LIMITED ISSUANCES. For a period of at least
two years following the date of the Closing, BCI/XXXX shall not cause or permit
any reverse stock split of ELSI's stock, without the expressed prior written
consent of Xxxxx Xxxxx, in his sole discretion. Furthermore, until the closing
of the Private Placement, BCI/XXXX shall not issue any other stock, convertible
debentures, warrants, options and the like or other rights to equity in, except
to raise capital and may do so only when the shares of stock are sold at a
purchase price of not less than One Dollar and fifty cents ($1.50) per share.
6.20 COMPLIANCE WITH PRIVATE PLACEMENT DEADLINE. Notwithstanding any
language contained herein to the contrary, in the event that XXXX fails, for any
reason, to complete a Private Placement on or before the Private Placement
Deadline, then the default provisions set forth in the Promissory Note executed
by BCI in favor or Xx. Xxxxx Xxxxx as compensation for amounts due in respect of
Xx. Xxxxx'x Consulting Agreement shall be triggered, at the option of Xx. Xxxxx,
in his sole discretion, and Xx. Xxxxx may, subject to the terms and conditions
of said Promissory Note, exercise the rights and remedies provided therein. By
this reference, the Promissory Note (a copy of which is attached as an exhibit
to Xx. Xxxxx'x Consulting Agreement) is incorporated herein by this reference as
if set forth in full at this point, excepting therefrom the payment provisions
which remain as obligations only pursuant to the Promissory Note.
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ARTICLE SEVEN
BCI hereby covenants and agrees, between the date hereof and the date of
Closing (and, with respect to Section 7.08, also after the Closing), as follows:
7.01 FULFILLMENT OF CONDITIONS AND COVENANTS. BCI shall not voluntarily
undertake any course of action inconsistent with the satisfaction of the
requirements and conditions applicable to it as set forth in this Agreement, and
BCI shall promptly do all acts and take all such measures as may be necessary or
appropriate to enable it to perform as early as possible the obligations herein
provided.
7.02 ACCESS TO INFORMATION. Upon reasonable notice from XXXX, BCI shall
deliver to the representatives of XXXX, or grant such representatives access
during normal business hours to, the books, records and financial statements of
BCI to make such reviews, examinations and investigations thereof as XXXX xxxxx
necessary.
7.03 COMPLIANCE WITH APPLICABLE SECURITIES LAWS. BCI agrees to use its
best efforts to comply with all applicable securities laws in connection with
the offer and sale of the BCI Shares to the XXXX Shareholders and will pay all
expenses incident thereto.
7.04 RESIGNATIONS OF EXISTING DIRECTORS AND OFFICERS. The board of
directors of BCI shall obtain written resignations of each of the existing
directors and officers of BCI, to become effective at the Effective Time, and
shall deliver them to XXXX at the Closing.
7.05 APPOINTMENT OF NEW DIRECTORS AND OFFICERS. The board of directors of
BCI shall adopt the New Director Resolutions (as defined in Section 3.03) and
the New Officer Resolutions (as defined in Section 3.045) and shall deliver
certified copies of such resolutions to XXXX at the Closing.
7.06 CONDUCT OF BUSINESS. Except for spinning off Advanced Knowledge, Inc.
as a separate entity, BCI shall conduct the operations of its business only in
the ordinary course. Except as otherwise contemplated by this Agreement or
consented to by XXXX in writing, between the date of this Agreement and the
Closing, BCI shall not:
(a) Engage in any material transaction outside the ordinary course
of business;
(b) Make any capital expenditures other than in the ordinary course
of business;
(c) Enter into any material guaranties or otherwise incur or suffer
to exist any material contingent liabilities;
(d) Enter into any material new indebtedness, or cancel any
indebtedness due it except upon full payment thereof;
55
(e) Make any payment of dividends or other unusual distribution of
cash or assets to stockholders or employees, including repayment of outstanding
indebtedness;
(f) Make any material change in any method of accounting or
accounting practice;
(g) Enter into or engage in any transaction with any officer,
director, shareholder or affiliate, except for the payment of salaries and other
activities in the ordinary course of business;
(h) Fail to pay when due, or fail to maintain a reserve adequate for
the payment when due of, any applicable local, state or federal taxes;
(i) Issue or sell any shares of common stock or other equity
security, grant any stock option or warrant, or otherwise issue any security
convertible into capital stock;
(j) Take any other action which would render any representation or
warranty of BCI herein inaccurate as of the date such action is taken; or
(k) Agree, whether in writing or otherwise, to do any of the
foregoing.
7.07 FINANCIAL RECORDS. BCI shall accurately maintain its books and
records and promptly advise XXXX in writing of any material adverse change in
the condition (financial or otherwise), assets, liabilities or business of BCI.
7.08 AGREEMENT WITH RESPECT TO OTHER REGULATORY FILINGS. BCI agrees that
it shall cooperate with XXXX in the preparation of any document or other
material which may be required by any governmental agency as a predicate to or
result of the transactions herein contemplated.
7.09 SOLICITATION OF INQUIRIES. Unless otherwise permitted by this
Agreement, during the No-Shop Period (as defined in Section 6.11) neither BCI
nor its directors, employees, agents or representatives shall, without the prior
written consent of XXXX, solicit from any other person, firm or corporation any
inquiry or proposal relating to a merger, consolidation, amalgamation,
arrangement, purchase or sale of assets, exchange of securities or similar
transaction involving BCI, other than in the ordinary course of business, nor
shall they deliver to any other person any information concerning BCI or its
business, financial affairs or prospects for the purpose or with the intent of
permitting such person or entity to evaluate the possibility of such a
transaction involving BCI.
7.10 PUBLIC ANNOUNCEMENTS. Except as required by any applicable law, rule
or regulation, prior to the Closing BCI shall not issue nor permit to be issued
any press release or otherwise make or permit to be made any public statement
with respect to the transactions contemplated by this Agreement without the
prior written consent of XXXX.
7.11 SPIN OFF OF ADVANCED KNOWLEDGE, INC. Currently, BCI owns, controls
and operates a wholly owned subsidiary known as Advanced Knowledge, Inc. ("AKI")
and prior to the Closing, BCI shall spin off AKI to BCI's current shareholders,
as constituted prior to the Closing (i.e. no shares shall be issued to the XXXX
shareholders), with AKI assuming all of the assets and liabilities associated
with its business. As of the Closing, BCI shall have no liabilities, contingent
or otherwise, except as set forth on Schedule 7.11, and BCI represents and
warrants the same.
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ARTICLE EIGHT
The obligations of XXXX contemplated herein are subject to the
satisfaction, at or before the Closing, of all of the conditions set out
hereinbelow. If any such condition is not satisfied, XXXX shall have the right,
at its sole election, either to waive the condition in question and proceed with
the Closing or, in the alternative, to terminate this Agreement without
liability. In the event that XXXX elects to waive the condition in question and
proceed with the Closing, the condition in question shall be deemed to have been
satisfied and shall have no further force or effect hereunder in the absence of
any misrepresentation of BCI to XXXX with respect to such condition.
8.01 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND WARRANTIES. The
representations and warranties of BCI contained herein and in all documents to
be delivered pursuant hereto shall be true and correct in all material respects
as of the Closing, as if made at such time, and XXXX shall have received from
BCI a certificate, dated as of the Closing and signed by an executive officer of
BCI, certifying that all such representations and warranties of BCI remain true
and correct as of the Closing.
8.02 COMPLIANCE WITH COVENANTS. BCI shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or satisfied by BCI.
8.03 ACTION/PROCEEDING. No court shall have issued an order effective
against a party to restrain or prohibit the transactions herein contemplated.
8.04 CONSENTS. XXXX shall have obtained all Required Consents from the
parties from whom consent is required, as listed on Schedule 4.25 hereto, and
from any other third party (including any federal, provincial or local
governmental agency or instrumentality) as may be necessary or appropriate in
connection with the execution and delivery of this Agreement, or to the
consummation of the transactions contemplated hereby, and XXXX shall have
obtained documentation or other evidence confirming same.
8.05 COMPLIANCE WITH LAW. There shall have been obtained any and all
permits, approvals and consents of all governmental bodies or agencies which
counsel for XXXX may reasonably deem necessary or appropriate so that
consummation of the transactions contemplated by this Agreement will be in
compliance in all material respects with applicable laws.
8.06 OPINION OF COUNSEL FOR BCI. XXXX shall have received an opinion of L.
Xxxxxxx Xxxxxxxx, counsel to BCI, dated as of the Closing, which is addressed to
XXXX and the XXXX Shareholders and is satisfactory in form and substance to XXXX
and its counsel, to the effect that:
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(a) BCI is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) BCI is qualified to do business in the State of California;
(c) BCI has corporate power and authority to enter into this
Agreement, the Purchase and Sale Agreements and the transactions and documents
contemplated thereby and to perform its obligations thereunder, and BCI has
corporate power and authority to own its properties and assets and to conduct
its present business;
(d) The execution, delivery and performance of the agreements to be
delivered pursuant hereto by BCI have been duly authorized and approved by BCI
and constitute the valid and binding obligations of BCI duly enforceable in
accordance with their terms except as such enforcement may be limited by
bankruptcy, insolvency and other similar laws affecting the rights of creditors
generally, and will not contravene outstanding documents, by-laws, contracts or
instruments by which BCI or its assets are bound or to which they are subject;
(e) The BCI Shares to be issued and delivered at the Closing are
duly authorized, validly issued, fully paid and non-assessable, and free of
pre-emptive rights;
(f) To counsel's knowledge, after due inquiry of BCI's officers and
directors but without investigation of public records, BCI is not a party to any
litigation or the subject of any judgment or actual or threatened claim;
(g) To counsel's knowledge, after due inquiry of BCI's officers and
directors but without investigation of public records, BCI has not been the
subject of any investigation, stop order or legal action by the Commission or
any state securities authorities having jurisdiction;
(h) To counsel's knowledge, after due inquiry of BCI's officers and
directors but without investigation of public records, the transactions
contemplated by this Agreement will not contravene any applicable law, rule or
regulation to which BCI is subject; and
In rendering its opinion, counsel for BCI may rely upon certificates of
officers of BCI and certificates of governmental authorities as to factual
matters.
8.07 DELIVERY OF RESOLUTIONS. The board of directors of BCI shall have
adopted the New Director Resolutions (as defined in Section 3.04) and the New
Officer Resolutions (as defined in Section 3.05) and shall have delivered
certified copies of such resolutions to XXXX at the Closing.
8.08 DELIVERY OF BCI SHARES. At the Closing the certificates representing
the BCI Shares shall have been delivered to the XXXX Shareholders in accordance
with Articles 1 and 2 of this Agreement.
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8.10 PURCHASE AND SALE AGREEMENTS. XXXX shall have received properly
executed Purchase and Sale Agreements from all of the XXXX Shareholders for
delivery to BCI at the Closing.
8.11 OTHER INFORMATION. XXXX shall have received such other certificates,
opinions and other documents as it or its counsel may reasonably require in
order to consummate the transactions contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.
8.12 ADVERSE CHANGE. BCI shall not have suffered any material change, loss
or damage, whether or not covered by insurance, since the date of execution of
this Agreement.
8.13 CORPORATE AUTHORIZATION. BCI shall have delivered to XXXX certified
copies of all appropriate resolutions of BCI's board of directors authorizing
the transactions contemplated by this Agreement.
8.14 CERTIFICATE OF STATUS. BCI shall have delivered to XXXX a certificate
of good standing and a tax clearance certificate from the Delaware Secretary of
State with respect to BCI dated not more than ten (10) days prior to the
Closing.
8.15 INCUMBENCY CERTIFICATE. BCI shall have delivered to XXXX a
certificate of incumbency with respect to those persons who are the directors
and officers of BCI at the time of the Closing.
8.17 STOCKHOLDER NOTICE. At least ten days prior to the Closing, BCI shall
have filed with the Commission and sent to BCI's stockholders the notice which
is required by Section 14(f) of the Securities Exchange Act of 1934 and Rule
14f-1 promulgated thereunder (the "Stockholder Notice") with respect to the
anticipated change in control of BCI's board of directors at the Effective Time.
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ARTICLE NINE
The obligations of BCI contemplated herein are subject to the
satisfaction, at or before the Closing, of all of the conditions set out herein
below. If any such condition is not satisfied, BCI shall have the right, at its
sole election, either to waive the condition in question and proceed with the
Closing or, in the alternative, to terminate this Agreement without liability.
In the event that BCI elects to waive the condition in question and proceed with
the Closing, the condition in question shall be deemed to have been satisfied
and shall have no further force or effect hereunder in the absence of any
misrepresentation of XXXX to BCI with respect to such condition.
9.01 LINE OF CREDIT. XXXX shall have secured an irrevocable commitment for
a credit facility (whether a loan, revolving credit, etc.) for advances of not
less than One Million Dollars ($1,000,000), in the aggregate, subject to
satisfaction of facility and drawdown conditions, which terms shall be
considered reasonably satisfactory by BCI, from Jano Holdings and/or SCO Capital
LLC. The credit facility will terminate upon sonsummation of the Private
Placement.
9.02 PRIVATE PLACEMENT. XXXX shall have entered into a placement agreement
with Axcel Capital Partners and/or SCO Financial Group to raise US$2,000,000,
(two million dollars) through a private placement offering of BCI/XXXX common
stock (post Closing), at a purchase price of not less than One Dollar and fifty
cents ($1.50) per share.
9.03 ACCURACY OF AND CERTIFICATE AS TO REPRESENTATIONS AND WARRANTIES. The
representations and warranties of XXXX contained herein and in all documents to
be delivered pursuant hereto shall be true and correct in all material respects
as of the Closing, as if made at such time, and BCI shall have received from
XXXX a certificate, dated as of the Closing and signed by an authorized officer
of XXXX, certifying that all such representations and warranties of XXXX remain
true and correct as of the Closing.
9.04 COMPLIANCE WITH COVENANTS. XXXX shall have performed and complied in
all material respects with all covenants, agreements and conditions required by
this Agreement to be performed or satisfied by XXXX.
9.05 ACTION/PROCEEDING. No court shall have issued an order effective
against a party to restrain or prohibit the transactions herein contemplated.
9.06 CONSENTS. XXXX shall have obtained all Required Consents from the
parties from whom consent is required, and from any other third party (including
any federal, provincial or local governmental agency or instrumentality) as may
be necessary or appropriate in connection with the execution and delivery of
this Agreement, or to the consummation of the transactions contemplated hereby,
and BCI shall have obtained from XXXX documentation or other evidence confirming
same.
9.07 COMPLIANCE WITH LAW. There shall have been obtained any and all
permits, approvals and consents of all governmental bodies or agencies which
counsel for BCI may reasonably deem necessary or appropriate so that
consummation of the transactions contemplated by this Agreement will be in
compliance in all material respects with applicable laws.
9.08 PURCHASE AND SALE AGREEMENTS. XXXX shall have delivered to BCI a
properly executed Purchase and Sale Agreement from each of the XXXX
Shareholders.
9.09 CONSULTING AGREEMENT WITH XXXXX XXXXX. XXXX shall have entered into a
consulting agreement with Xxxxx Xxxxx, substantially in the form attached hereto
as Exhibit A.
9.10 OPINION OF COUNSEL FOR XXXX. BCI shall have received an opinion from
Xxxxx Xxxxxxx LLP, counsel to XXXX, which is dated as of the Closing and is
satisfactory in form and substance to BCI and its counsel, to the effect that:
(a) XXXX is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware;
(b) XXXX is qualified to do business in the State of Delaware;
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(c) XXXX has corporate power and authority to enter into this
Agreement and the Promissory Note and to perform its obligations thereunder, and
XXXX and its subsidiaries have corporate power and authority to own their
respective properties and assets and to conduct their businesses as presently
conducted;
(d) The execution, delivery and performance of the agreements to be
delivered pursuant hereto by XXXX have been duly authorized and approved by XXXX
and constitute the valid and binding obligations of XXXX duly enforceable in
accordance with their terms except as such enforcement may be limited by
bankruptcy, insolvency and other similar laws affecting the rights of creditors
generally,;
(e) The XXXX Shares to be delivered at the Closing are duly
authorized, validly issued, fully paid and non-assessable, and free of
pre-emptive rights;
(f) The sale to BCI of the XXXX Shares at the Closing is exempt from
all applicable takeover statutes, rules and regulations;
(g) No governmental notices, filings, approvals or consents are
required in order for XXXX to complete the transactions contemplated by this
Agreement;
(h) To counsel's knowledge, upon due inquiry of ELSI's officers and
directors without investigation of public records, XXXX is not a party to any
litigation or the subject of any judgment or actual or threatened claim except
as disclosed in the Agreement or the schedules thereto;
(i) To counsel's knowledge, upon due inquiry of ELSI's officers and
directors and without investigation of public records, XXXX has not been the
subject of any investigation, stop order or legal action by any securities
authorities having jurisdiction; and
(j) To counsel's knowledge, upon due inquiry of ELSI's officers and
directors and without investigation of public records, the transactions
contemplated by this Agreement will not contravene any applicable law, rule or
regulation to which XXXX is subject; and;
In rendering its opinion, counsel for XXXX may rely upon certificates of
officers of XXXX and certificates of governmental authorities as to factual
matters.
9.11 SECURITIES LAW COMPLIANCE. All applicable securities laws have been
satisfied in connection with the offer and sale of the BCI Shares.
9.12 OTHER INFORMATION. BCI shall have received such other certificates,
opinions and other documents as it or its counsel may reasonably require in
order to consummate the transactions contemplated hereby, all of which shall be
in form and substance satisfactory to it and its counsel.
9.13 ADVERSE CHANGE. XXXX shall provide an officer's certificate to BCI
which states that: (i ) no material adverse change in the results of operations
or the financial condition of XXXX which materially impairs ELSI's ability to
conduct its Business shall have occurred other than for changes which occur from
the fact that XXXX has entered into this Agreement with BCI; (ii) XXXX shall not
62
have suffered any material change, loss or damage, whether or not covered by
insurance, since the date of execution of this Agreement, which change, loss or
damage materially affects or impairs the ability of XXXX to conduct its
Business; and, (iii) without limitation of the foregoing, there shall not have
occurred any destruction of or damage or loss to all or any part of the assets
of XXXX from any cause whatsoever, including, but not limited to, fire, flood,
accident, acts of God, earthquake, insurrection, riot or any other cause
commonly referred to as force majeure, which destruction, damage or loss shall
not have been fully repaired to BCI's satisfaction.
9.14 CORPORATE AUTHORIZATION. XXXX shall have delivered to BCI certified
copies of all appropriate resolutions of ELSI's board of directors authorizing
the transactions contemplated by this Agreement.
9.15 CERTIFICATE OF GOOD STANDING. XXXX shall have delivered to BCI a
certificate of good standing from the state of Delaware with respect to XXXX and
each of its subsidiaries dated not more than ten (10) days prior to the Closing,
together with confirmation of good standing on the date of Closing.
9.16 TRANSFER AND DELIVERY OF XXXX SHARES. [Intentionally omitted.]
9.17 INCUMBENCY CERTIFICATE. XXXX shall have delivered to BCI a
certificate of incumbency with respect to those persons who are the directors
and officers of BCI at the time of the Closing.
9.18 STOCKHOLDER NOTICE. At least ten days prior to the Closing, BCI shall
have filed with the Commission and sent to BCI's stockholders the Stockholder
Notice described in Section 8.17.
9.19 DELIVERY OF ALL ESCROW ITEMS. [Intentionally omitted.]
9.20 DELIVERY OF AUDITOR'S LETTER. XXXX shall have delivered to BCI a
letter from its auditor confirming that they will be able to complete ELSI's
audited financial statements in accordance with the Securities and Exchange
Commissions requirements of Form 8-K (items 2 and 7) and other applicable rules
and regulations of the Commission.
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ARTICLE TEN
10.01 TERMINATION. This Agreement may be terminated and the Acquisition
abandoned (notwithstanding any shareholder approval of the Acquisition) prior to
the Effective Time:
(a) by mutual written consent of BCI and XXXX at any time;
(b) by XXXX at any time after March 19, 2003, provided that XXXX is
not in material breach of any covenant, agreement, representation or warranty
made by it in this Agreement;
(c) by BCI at any time after March 19, 2003, provided that BCI is
not in material breach of any covenant, agreement, representation or warranty
made by it in this Agreement;
(d) by BCI or XXXX at any time if an order is entered by any court
or governmental agency having jurisdiction enjoining BCI or XXXX, respectively,
from consummating any of the transactions contemplated by this Agreement and
such order shall not have been vacated, reversed or withdrawn on or before the
thirtieth (30th) day after the date on which such order was first issued; or
(e) by BCI or XXXX if (i) any representation or warranty of the
other hereunder shall not have been materially true and correct as of the time
at which made, or (ii) any conditions precedent to the obligations of such party
as set forth in Article Eight or Nine are not satisfied in a timely fashion, or
(iii) default shall be made by the other hereunder in the due and timely
observance or performance of any of its covenants and agreements herein
contained, in either event only if such representation or warranty cannot be
made true and correct or such default cannot be cured on or prior to the
fifteenth (15th) day after the non-defaulting or breaching party notifies the
other in writing of such default or breach, specifying the nature thereof.
10.02 NOTICE OF TERMINATION. The power of termination provided for by
Section 10.01 hereof may be exercised only by a notice given in writing and
signed on behalf of BCI by Xxxxx Xxxxx and on behalf of XXXX by Xxx X. Xxxx.
10.03 EFFECT OF TERMINATION. In the event of termination and abandonment
pursuant to this Article Ten, this Agreement shall become void and have no
effect, without any liability on the part of any of the parties, except as
otherwise provided in Articles Eleven and Twelve hereof. Any announcement of the
termination of this Agreement and the abandonment of the Acquisition shall be
made by means of a press release issued jointly by BCI and XXXX unless otherwise
required to be made by BCI pursuant to the federal or state securities laws.
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ARTICLE ELEVEN
11.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each party hereto shall survive the Closing for a period of twelve
(12) months, and shall not be affected by any investigation made by or on behalf
of BCI or XXXX, as the case may be. After the applicable expiration with respect
to any particular representation or warranty, neither BCI nor XXXX shall be
under any liability whatsoever with respect to any such representation or
warranty. All covenants and agreements of the parties contained herein shall
survive the Closing Date and shall continue for the period required to fulfill
the applicable covenant or agreement.
11.02 INDEMNIFICATION. The parties shall indemnify each other as follows:
(a) ELSI's Indemnity of BCI. XXXX shall indemnify, defend and hold
harmless BCI and its stockholders, directors, officers and agents from and
against all losses, judgments, liabilities, claims, damages, or expenses
(including reasonable attorneys' fees) of every kind, nature and description,
whether known or unknown, absolute or contingent, joint or several ("Loss"),
arising out of or relating to (i) any misrepresentation, breach of any
representation or warranty, or non-fulfillment, non-performance, failure to
timely or fully perform, or breach of any covenant, agreement or other
obligation to be performed by XXXX contained in this Agreement or any exhibit or
schedule hereto, (ii) the conduct of ELSI's Business prior to the Effective
Time, or (iii) the conduct of ELSI's business after the Effective Time and prior
to any rescission of the Acquisition.
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(b) BCI's Indemnity of XXXX. BCI shall indemnify, defend and hold
harmless XXXX, the XXXX Shareholders and ELSI's directors, officers and agents
from and against any Loss arising out of or relating to (i) any
misrepresentation, breach of any representation or warranty, or non-fulfillment,
non-performance, failure to timely or fully perform, or breach of any covenant,
agreement or other obligation to be performed by BCI contained in this Agreement
or any exhibit or schedule hereto, or (ii) the conduct of BCI's business prior
to the Effective Time.
11.03 INDEMNIFICATION NOTICE.
(a) Third Party Claim. In the event that XXXX, BCI or any other
party entitled to indemnification under Section 11.02 hereof shall choose to
assert a claim for Loss or potential Loss based upon a claim by a third party
("Third Party Claim"), the party seeking indemnification ("Indemnified Party")
shall notify the party against which indemnification is sought ("Indemnifying
Party") in writing of such claim, promptly following the occurrence of the event
giving rise thereto, certifying that such a claim has been asserted and the
basis therefor which shall be set forth in reasonable detail ("Notification").
(i) The Indemnifying Party shall acknowledge receipt of the
Notification and advise the Indemnified Party in writing twenty (20) days after
receipt thereof as to whether the Indemnifying Party agrees to such Third Party
Claim and whether the defense of the Third Party Claim shall be undertaken by
counsel of the choice of and at the expense of the Indemnifying Party. If the
Indemnifying Party so agrees, the Indemnifying Party shall be deemed to have
accepted any indemnifiable Loss suffered arising from such Third Party Claim,
the defense of which has been assumed by the Indemnifying Party. If the
Indemnifying Party advises the Indemnified Party that it shall undertake the
defense of the Third Party Claim, the Indemnified Party shall deliver all the
documents related to the Third Party Claim to the Indemnifying Party or to its
counsel, after which the responsibility of the Indemnified Party for the defense
of the Third Party Claim shall cease, except that the Indemnified Party shall
make available all documents, books and records in its possession related to the
Third Party Claim, at no expense to the Indemnifying Party, and shall fully
cooperate with counsel for the Indemnifying Party, including providing its
personnel who are acquainted with the facts or the documents or books and
records related to the Third Party Claim.
(ii) If the Indemnifying Party advises the Indemnified Party
that the defense of the Third Party Claim will not be undertaken, either the
Indemnified Party shall settle such Third Party Claim (in which case, the amount
of such settlement and all attorneys' fees attendant to the achievement of such
settlement shall be deemed included in any computation to determine Loss), or
the Indemnified Party shall notify the Indemnifying Party of the identity of the
counsel for the Indemnified Party who has been selected to defend the Third
Party Claim. The Indemnifying Party shall fully cooperate with the Indemnified
Party and its counsel to the extent that the Indemnifying Party has knowledge of
the facts or circumstances relating to the Third Party Claim and the Indemnified
Party shall cause its counsel to be available to the Indemnifying Party or its
counsel to respond to any inquiries of the Indemnifying Party concerning the
progress of such defense. In the event that the Indemnified Party shall assert a
claim for Loss as a result of any loss suffered by the Indemnified Party in
66
settling or defending such Third Party Claim, the Indemnified Party shall notify
the Indemnifying Party in writing of such claim. The Indemnifying Party shall
pay all costs related to the settlement or the defense within thirty (30) days
after a demand for the Loss or any component part is made.
(b) Non-Third Party Claim. In the event the Indemnified Party shall
choose to assert a claim for Loss or potential Loss by reason of other than a
Third Party Claim, the Indemnified Party shall notify the Indemnifying Party in
writing of such claim and the reasons therefor, which reasons shall be set forth
in reasonable detail. The Indemnifying Party shall pay to the Indemnified Party
the amount of the Loss within thirty (30) days of demand pursuant to this
Section 11.03.
11.04 DISPUTE.
(a) If the Indemnifying Party disputes any claim for indemnification
or its obligation to indemnify any claim pursuant to this Article Eleven, the
Indemnifying Party shall notify the Indemnified Party of such dispute within
twenty (20) days of receipt of the Notification. If the matter cannot be
reconciled by mutual agreement, the matter shall be submitted to binding
arbitration as provided in Section 14.05 hereof.
(b) If the Indemnifying Party fails to fulfill its obligations under
this Article, the Indemnified Party may submit the matter to binding arbitration
as provided in Section 14.05 hereof.
ARTICLE TWELVE
12.01 LITIGATION COSTS. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees, court costs and other costs
incurred in such action or proceeding, in addition to any other relief to which
it or they may be entitled.
ARTICLE THIRTEEN
13.02 CONFIDENTIALITY. Except as may be required by law or as otherwise
permitted herein, the parties hereto shall cause all information obtained by
them in connection with the negotiation and performance of this Agreement to be
treated as confidential and will not use, and will not knowingly permit others
to use, any such information in any manner detrimental to the other.
Notwithstanding the foregoing, such information may be disclosed (i) in
connection with any filings or permit applications with governmental authorities
as may be necessary in order to complete the transactions contemplated by this
Agreement; (ii) as necessary in order to obtain any Required Consents of third
parties to the transactions contemplated by this Agreement; or (iii) as
otherwise necessary in order for BCI to close the transactions contemplated by
this Agreement. The provisions of this Section shall survive any termination of
this Agreement.
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ARTICLE FOURTEEN
14.01 NOTICES. All notices, waivers or other communications required or
contemplated hereby shall be deemed given if delivered personally, or sent by
registered or certified mail or air courier, postage prepaid, return receipt
requested, or by telex or telecopier addressed to the parties so to be served as
follows:
If to XXXX:
Enhance Lifesciences, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxx, President
Fax No.: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxxxxx, Esq.
Xxxxx Xxxxxxx, LLPC
1251 Avenue of the Americas
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax No.: (000) 000-0000
If to BCI:
Xx. Xxxxx Xxxxx
BECOR COMMUNICATIONS, INC.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
With a copy to:
L. Xxxxxxx Xxxxxxxx, Esq.
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
Service of any such notice or demand so made by mail shall be deemed
complete on the date of actual delivery thereof as shown by the addressee's
registry or certification receipt, or upon the expiration of seven days
following the date of mailing. Any party hereto from time to time by notice in
writing served upon the other as aforesaid may designate a different mailing
address to which, or a different or additional person to whom, all such notices
or demands thereafter shall be addressed.
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14.02 ASSIGNMENT. Neither the Agreement nor any of the rights hereunder
may be assigned by either party without the prior written consent of the other.
14.03 EXPENSES. Except as otherwise provided in this Agreement, each party
hereto shall bear all expenses and costs incurred by it with respect to this
Agreement and the transactions contemplated hereby.
14.04 GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the internal law of the State of California without reference to
its rules as to conflicts of law.
14.05 DISPUTE. Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, including without limitation claims against any
party or its affiliates, employees, professionals, officers or directors shall
be settled by binding arbitration in Los Angeles, California, in accordance with
the Commercial Rules of the American Arbitration Association. The arbitrator
shall be an active member of the California bar. In the proceeding, the
arbitrator shall apply California substantive law and the California Evidence
Code. The arbitrator shall prepare an award in writing, which shall include
factual findings and any legal conclusions on which the decision is based.
Judgment upon any award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. In any such proceeding, the prevailing party shall
be entitled, in addition to any other relief awarded or adjudged, such sum as
the arbitrator may fix as and for reasonable attorneys' fees and costs, and the
same shall be included in the award and any judgment.
14.06 ENTIRE UNDERSTANDING. All prior agreements, representations,
discussions, negotiations, commitments and understandings between the parties
are incorporated in this Agreement and the exhibits and schedules attached
hereto which constitute the entire contract between the parties. The terms of
this Agreement are intended by the parties as a final expression of their
agreement with respect to such terms as are included herein and may not be
contradicted by evidence of any prior or contemporaneous written or oral
representations, agreements or understandings, whether express or implied. The
parties further intend that this Agreement constitutes the complete and
exclusive statement of its terms and that no extrinsic evidence whatsoever may
be introduced in any judicial proceeding, if any, involving this Agreement. No
amendment or variation of the terms of this Agreement shall be valid unless made
in writing and signed by each of the parties.
14.07 FURTHER ASSURANCES. Each party, both prior to and after the Closing,
shall reasonably cooperate with the other, at the other's request, in furnishing
information, documents, testimony and other assistance in connection with the
transactions contemplated hereby.
14.08 WAIVER. Each party may at any time waive compliance by the other
with any covenants or conditions contained in this Agreement, but only by a
written instrument executed by the party waiving such compliance. If either
party waives a condition of Closing, the other party shall have no liability
hereunder with respect to the matters so waived.
14.09 HEADINGS. All Section and Article headings are included for
convenience only and are not intended to be full or accurate descriptions of the
contents thereof.
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14.10 COUNTERPARTS. This Agreement may be executed simultaneously in one
or more counterparts, each of which may be deemed an original but all of which
together shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
counterpart.
14.11 SEVERABILITY. If any provision of this Agreement, as applied to any
party or to any circumstance, shall be adjudged by a court to be void, invalid
or unenforceable, the same shall in no way affect any other provision of this
Agreement, the application of such provision in any other circumstance or the
validity or enforceability of this Agreement.
14.12 BINDING ON SUCCESSORS. All of the terms, provisions and conditions
of this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, successors, assigns and legal
representatives.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in multiple originals as of the day and year first above written.
"BCI"
BECOR COMMUNICATIONS, INC.
By:
---------------------------------------------
Name: Xxxxx Xxxxx
Title: President and Chief Executive Officer
By:
---------------------------------------------
Name: L. Xxxxxxx Xxxxxxxx
Title: Secretary
"XXXX"
ENHANCE LIFESCIENCES INC.
By:
---------------------------------------------
Name: Xxx X. Xxxx
Title: President
By:
---------------------------------------------
Name: Xxxxxxxxxxx X. Every
Title: CEO
