PUT AGREEMENT
PUT AGREEMENT, dated of August 9, 2000, by and between Empyrean Bioscience,
Inc., a Wyoming corporation (the "Empyrean"), and International Bioscience
Corporation, a Florida corporation ("IBC").
WITNESSETH:
WHEREAS, Empyrean and IBC are parties to the Limited Liability Company
Operating Agreement (the "LLC Agreement") of IBC-Empyrean, L.L.C. (the "LLC"),
such LLC formed for the purpose of commercializing the Licensed Products (as
such term is defined in the LLC Agreement) in certain countries; and
WHEREAS, Empyrean and IBC desire to enter into certain agreements as more
fully set forth herein in connection with a Change of Control (as herein
defined) of Empyrean or IBC.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained in this Agreement, the parties hereto agree as follows.
1. Definitions. As used in this Agreement the following terms have the
meaning set forth below:
"Act" shall mean the Delaware Limited Liability Company Act, as amended
from time to time.
"Change of Control" shall mean the happening of any of the following with
respect to either IBC or Empyrean (for the purposes of this definition, each a
"company"):
(i) any "person", as such term is used in Section 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act") becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the company representing fifty percent (50%) or
more of the combined voting power of the company's outstanding securities;
(ii) with respect to IBC, if Sara Gomez de Ferro ceases for any
reason, except by reason of her death or incapacity, to be a director on the
board of directors of IBC, or, with respect to Empyrean, if Lawrence D. Bain
ceases for any reason, except by reason of his death or incapcity, to be a
director on the board of directors of Empyrean;
(iii) the shareholders of the company approve a merger or
consolidation of the company with any other corporation, other than (x) a merger
or consolidation which would result in the voting securities of the company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than eighty percent (80%) of the combined voting power of
the voting securities of the company or such surviving entity outstanding
immediately after such merger or consolidation or (y) a merger or consolidation
effected to implement a recapitalization of the company (or similar transaction)
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in which no "person" (as defined above in clause (i)) acquires more than fifty
percent (50%) of the combined voting power of the company's then outstanding
securities;
(iv) the shareholders of the company approve a plan of complete
liquidation of the company or an agreement for the sale or disposition by the
company of all or substantially all of its assets or any transaction having a
similar effect; or
(v) the company enters into an agreement with an unrelated party for
the sale of all or substantially all of the assets or outstanding stock of the
company or any transaction having a similar effect.
"Fair Market Value" shall mean the fair market value of the Target's
Interest in the LLC as determined by a nationally-recognized independent
investment banking firm mutually agreed upon by Empyrean and IBC to determine
such value.
"Interest" shall mean all membership interests, units or any other
additional rights the Target possesses in the LLC.
"Non-Target" shall have the meaning contained in Section 2.
"Target" shall have the meaning contained in Section 2.
2. Put Option.
(a) Upon a Change of Control of either Empyrean or IBC, as the case may be
(the party subject to such change of control referred to as the "Target"), the
other party (the "Non-Target") shall have the right, at its sole option and upon
written notice delivered within 30 calendar days of each Change in Control, to:
(i) in the event of a Change of Control as described in paragraph (i)
of the definition of "Change of Control" above, exercise the right to sell to
such person who has acquired 50% or more of the combined voting power of the
Target's outstanding securities, such Non-Target's Interest at the Fair Market
Value thereof;
(ii) in the event of a Change of Control as described in paragraph
(ii) of the definition of "Change of Control" above, exercise the right to sell
to the Target such Non-Target's Interest at the Fair Market Value thereof;
(iii) in the event of a Change of Control as described in paragraph
(iii) of the definition of "Change of Control" above, exercise the right to sell
to the surviving entity resulting from the merger of the Target with any other
corporation such Non-Target's Interest at the Fair Market Value thereof;
(iv) in the event of a Change of Control as described in paragraph
(iv) of the definition of "Change of Control" above, exercise the right to sell
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to such company or "person" (as such term is defined in Section 13(d) or 14(d)
of the Exchange Act) that acquires the Target or all or substantially all of the
Target's assets, whether in a liquidation of the Target or in any sale or
disposition of assets by the Target or otherwise, such Non-Target's Interest at
the Fair Market Value thereof; or
(v) in the event of a Change of Control as described in paragraph (v)
of the definition of "Change of Control" above, exercise the right to sell to
such unrelated party that acquires all or substantially all of the Target's
assets or outstanding stock or to any such unrelated party involved in any
transaction having a similar effect such Non-Target's Interest at the Fair
Market Value thereof.
In the event that the Non-Target does not elect to exercise its put right as
provided for in Section 2(a) within such 30 calendar day period, the put right
shall be extinguished.
(b) Promptly after receipt of the put notice, the parties shall select a
nationally-recognized independent investment banking firm which shall promptly
establish the Fair Market Value of the Interest being sold. In the event the
parties cannot promptly agree on the selection of an investment banking firm,
the issue shall be submitted for resolution pursuant to the arbitration
provisions set forth in Section 14.2 of the LLC Agreement.
(c) Within 10 business days of the establishment of the Fair Market Value
of the Interest being sold, the party acquiring such Interest shall pay the
selling party such Fair Market Value.
3. Notices. All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given and delivered if personally delivered or if sent by nationally
recognized overnight courier by telecopy or by registered or certified mail,
return receipt requested and postage prepaid, addressed as follows:
(a) if to Empyrean, at:
Empyrean Bioscience, Inc.
23800 Commerce Park Road, Suite A
Cleveland, Ohio 44122
Attention: Mr. Richard C. Adamany
Facsimile No.: (216) 360-7909
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Richard H. Kronthal, Esq.
Facsimile No.: 212-836-8689
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(b) if to IBC, at:
International Bioscience Corporation
777 South Flagler Drive
Phillips Point Building
East Tower, Suite 909
West Palm Beach, Florida 33401
Attn: Ms. Sara Gomez de Ferro
Facsimile No.: (561) 366-8905
with a copy to:
Holtzman, Krinzman, Equels & Furia
2601 South Bayshore Drive, Suite 600
Miami, Florida 33133
Attn: Mr. Arthur J. Furia, Esq.
Facsimile No.: (305) 859-9996
Any such notice or communication shall be deemed to have been received (i)
in the case of personal delivery, on the date of such delivery (or if such date
is not a business day, on the next business day after the date sent), (ii) in
the case of nationally-recognized overnight courier, on the next business day
after the date sent, (iii) in the case of telecopy transmission, when received
(or if not sent on a business day, on the next business day after the date
sent), and (iv) in the case of mailing, on the third business day following the
date on which the piece of mail containing such communication is posted.
4. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement must be in writing and shall not operate or be
construed as a waiver of any other or subsequent breach. Any of the provisions
of this Agreement may be waived only by an instrument in writing executed by the
party or parties whose rights are being waived.
5. Amendment. This Agreement may not be amended, terminated, suspended or
otherwise modified except in a written instrument, duly executed by both
parties.
6. Governing Law. (i) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Florida regardless of the laws that
might otherwise govern under applicable principles of conflicts of law thereof.
(ii) Except for actions brought for wrongful termination or to seek
termination of this Agreement, if any disagreement arises regarding the
interpretation of any points of the Agreement or any other point not covered
herein or any claims for damages or specific performance, the disagreement, upon
request of either party hereto delivered in writing to the other party, shall be
resolved by arbitration before a single arbitrator in accordance with the
commercial rules and procedures set forth by the American Arbitration
Association. The prevailing party in such action or arbitration shall be
entitled to receive from the other party a reasonable sum for it's attorneys'
fees and all other reasonable costs and expenses incurred in such action or
arbitration.
(iii) The venue of any arbitration between the parties arising from or
related to this Agreement shall be in either Miami-Dade County or Palm Beach
County, Florida. Any litigation arising from or related to this Agreement shall
be brought exclusively in an appropriate state or federal court in Miami-Dade
County or Palm Beach County, Florida, and the parties waive any right to
challenge such venue.
7. Counterparts. This Agreement may be executed in one or more
counterparts, and each such counterpart shall be deemed to be an original, but
all such counterparts together shall constitute but one agreement.
8. Entire Agreement. This Agreement is the sole and complete statement of
the parties of their rights and obligations with respect to the subject matter
hereof. This Agreement is an integrated agreement and replaces and supersedes
any and all previous obligations and agreements between the parties. The parties
hereto recognize and agree that no representations or warranties have been made
except as set forth in this Agreement. Except as may otherwise be expressly
provided herein, by signing this Agreement the parties expressly release each
other from any and all existing obligations that pre-date this Agreement as if
such obligations have been fully performed and satisfied. Any amendments to this
Agreement shall be in writing and executed by both parties hereto.
9. Severability. In the event any provision of this Agreement shall be held
to be invalid, illegal or unenforceable, the remaining terms shall remain in
full force and effect, to effectuate this Agreement in accordance with its
intent. Headings, title and subtitles of this Agreement are for convenience of
reference only and are not to be considered in construing the terms of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto do hereby sign, enter into and
acknowledge this Put Agreement on the date first written above.
INTERNATIONAL BIOSCIENCE CORPORATION
By:_____________________________________
Title:__________________________________
EMPYREAN BIOSCIENCE, INC.
By:_____________________________________
Title:__________________________________
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