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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated this 3rd day of November,
2000 by and among:
HEALTH-PAK, INC., a Delaware corporation, with offices at 2005, Beech Grove
Place, Utica, New York hereafter referred to as the "Company " or "Health-Pak.";
LIFE ENERGY TECHNOLOGY HOLDINGS, LTD., a corporation organized under the
laws of the Republic of Ireland with its office address at Finnabair Science
Park, Technology City, Dundalk, Co. Louth, Ireland.; and hereinafter referred to
as "Life."
THE STOCKHOLDERS OF LIFE who are named in Schedule A annexed hereto and
made a part hereof, hereinafter referred to as the "Stockholders" or the
"Shareholders" and who are the holders of all of the outstanding shares of
common stock (ordinary shares) of Life.
All of the foregoing entities and persons are collectively referred to as
the "Parties."
W I T N E S S E T H:
WHEREAS, Health-Pak and Life, with the consent of the Stockholders, have
entered into a plan of reorganization, as contemplated under the United States
Internal Revenue Code (the "Code") adopted by their respective Boards of
Directors which provides as follows:
PLAN OF REORGANIZATION
Both corporations shall be reorganized under and pursuant to Section
368(a)(1)(B) of the Code by the Company acquiring all of the outstanding voting
shares of common stock (or ordinary shares) of Life in a proposed exchange of
such shares solely for the voting shares of common stock of the Company and by
exchanging such shares, Life will become a wholly owned subsidiary of the
Company, and the Company will change its name to "Life Energy Technology
Holdings, Ltd.," or such other name as may be agreed upon, and the Board of
Directors of the Company will be reorganized to include new directors nominated
by Life, the purpose of which is to seek additional restructuring for Health-Pak
and to give Life access to the public market in the United States for its
shares; and
WHEREAS, the Company and Life confirm that they each have no other class of
securities, either issued and outstanding or authorized, except as specifically
set forth herein; and that no other person or entity has any right or
entitlement to receive any further shares of common stock, or of any other class
or type of security of either corporation except as herein described;
NOW, THEREFORE, in consideration of the promises and mutual
representations, warranties and covenants herein contained, the parties hereto
adopt this Agreement and Plan of Reorganization , hereinafter referred to as the
"Agreement," and they hereby agree as follows:
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ARTICLE 1
EXCHANGE OF SHARES
1.01 EXCHANGE OF SHARES. All of the outstanding shares of common stock (the
ordinary shares hereinafter called the "Life Shares") owned by the Stockholders
of Life constituting an approximate total of fifteen (15) million shares shall
be exchanged solely for an approximate total of fifteen (15) million shares of
the common stock of Health-Pak (the "Shares") and Life shall thereafter operate
as a wholly owned subsidiary of the Company. All of the shares thereby exchanged
shall be duly authorized and non-assessable shares of common stock of each
corporation, free and clear of all liens and encumbrances. The exchange
transaction is intended to be a tax free exchange pursuant to Section
368(a)(1)(B) of the Internal Revenue Code. All of the outstanding shares of the
class A preferred class stock owned by the Stockholders of Life constituting an
approximate total of sixteen (16) million shares shall be exchanged solely for
an approximate total of sixteen (16) million shares of the class A preferred
class stock of Health-Pak.
The shares intended to be issued to the Stockholders by Health-Pak are to
be deemed "restricted securities" as defined by Rule 144 promulgated under the
Securities Act of 1933, as amended, (the "Act"). Furthermore, the Parties
confirm and acknowledge that as restricted shares the Health-Pak shares of
common stock to be exchanged hereunder will be subject to restrictions against
the further sale or transfer thereof unless subsequently registered under the
Act or an exemption from such registration becomes available, such as is
provided by Rule 144. There is no present intent to register the shares to be
issued. However, in the event the Company elects to file a registration
statement with the Securities and Exchange Commission and/or any state
securities commission in connection with a public offering of its securities and
further seeks to register any then issued and outstanding shares, Life
Shareholders shall have the right to request registration of their shares and
the Company shall prepare and file with the appropriate regulatory agency all
documents necessary to facilitate registration of such shares. The Company shall
notify the Life Shareholders of its intent to file a registration statement
regarding issued and outstanding shares at least sixty days prior to the
anticipated date of filing. Life Shareholders shall have twenty days from their
respective receipt of such notice from the Company to provide written notice to
the Company of their respective request(s) to have their shares registered.
1.02 DELIVERY OF SHARES. On the Closing Date as set forth herein, the
Stockholders shall deliver to the Company all stock certificates and/or stock
powers representing the Life shares, duly endorsed, so as to make the Company
the sole holder thereof, free and clear of all claims and encumbrances; and the
Company shall deliver to the Shareholder Representative certificates in such
denominations as the Shareholder or their representative shall determine
representing the Health-Pak shares so as to make the Shareholders the sole
holder thereof, free and clear of all claims and encumbrances, subject to the
restrictions on transfer described herein. The terms, conditions, preferences,
and other rights and privileges of the Health-Pak shares shall be the same as
for all other issued and outstanding shares of the Company's capital stock of
the same class.
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1.03 EXEMPT TRANSACTION. The transaction contemplated by the exchange of
shares recited above shall be made subject to an exemption from the registration
requirements of the Act provided by Sections 4(1) and 4(2) thereof as a private
transaction not involving any public offering.
ARTICLE 2
WARRANTIES AND REPRESENTATIONS OF LIFE AND THE STOCKHOLDERS
2.01 WARRANTIES AND REPRESENTATIONS OF LIFE AND THE STOCKHOLDERS. Life
hereby represents and warrants, for itself and for each of its subsidiaries,
with respect to its financial condition, liabilities, operations and to the Life
shares of common stock, and to other matters affecting the transfer contemplated
hereby and the Stockholders hereby represent and warrant with respect to the
matters specified below as being applicable to them, that the representations
listed below are true and correct as of the date hereof and will be true and
correct as of the Closing Date (as hereinafter defined).
2.02 ORGANIZATION. Life is duly organized, validly existing and in good
standing under the laws of the Republic of Ireland and the County where it is
organized and it has all of the requisite power and authority to own, hold,
lease or operate its properties and assets and to carry on its business as now
being conducted. Life has an authorized capitalization of fifteen (15) million
shares of common stock (or ordinary shares), .001 par value, of which fifteen
(15) million shares are duly issued and outstanding and owned by the
Shareholders, which shares constitute the Life shares of common stock (ordinary
shares) to be transferred to the Company hereunder and represent all of the
issued and outstanding shares of capital stock of Life. Life also has an
authorized capitalization of sixteen (16) million shares of Class A stock
preferred of which sixteen (16) million shares are duly issued and outstanding
and owned by the Shareholders, which shares constitute the Life shares of class
A preferred to be transferred to the Company hereunder and represent all of the
issued and outstanding shares of preferred stock of Life.
2.03 LIFE COMMON STOCK. The Life Shares presently owned by the Stockholders
are duly and validly issued, fully paid and non-assessable, and are free and
clear of all voting trusts, agreements, arrangements, liens and all other
encumbrances, claims, equities and liabilities of every nature, and Life, having
duly taken all corporate action required therefore, had the unqualified right to
issue the Life Shares and to deliver clear and unencumbered title thereto to the
Stockholders. There are no outstanding options, contracts, calls, commitments or
demands of any character relating to the authorized, but previously unissued,
shares of common stock (or ordinary shares) of Life. Life's common stock (or
ordinary shares) and the class A preferred stock are the sole classes of stock
authorized by Life's Articles of Incorporation and Life is under no obligation,
legal or otherwise, to establish any other class of common stock, or any other
type of security. The Stockholders have good and marketable title to their
shares of common stock in Life and have the unqualified right to transfer and
dispose of the Life stock as contemplated herein, and upon the closing
hereunder, clear and unencumbered title thereto shall be conveyed
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to the Company.
2.04 QUALIFICATION IN THE UNITED STATES. Life is, or will promptly become,
duly qualified as a foreign corporation in good standing in the United States in
each state in which such qualification is necessary except where the failure to
be so qualified would not materially adversely affect Life. Life will acquire an
office address in the United States as soon as possible.
2.05 AUTHORIZATION OF THIS AGREEMENT. The execution of this Agreement by
Life and the performance by Life of its covenants and undertakings hereunder
have been duly authorized by all requisite corporate action, and approved by the
Board of Directors and, prior to the Closing, shall be approved by the
Stockholders of Life. Life has the corporate power and authority to enter into
this Agreement and perform the covenants and undertakings to be performed by it
hereunder, and is under no impediment which would adversely affect its ability
to consummate or prohibit it from consummating this transaction. Upon execution,
this Agreement shall constitute a legal, binding and valid obligation of Life
and its Stockholders, enforceable against each of them in accordance with its
terms.
2.06 AUTHORITY OF THE STOCKHOLDERS, The Stockholders have full power,
competency and authority to enter into this Agreement and to make a valid
transfer of their common stock as herein contemplated. No authorization or
approval or exemption from or filing or registration with any court, person,
personal representative, executor, governmental agency, commission or board or
any instrumentality of any government or private regulatory body is necessary to
authorize this Agreement by Life or the Stockholders.
2.07 CONFLICT WITH OTHER OBLIGATIONS AND INTERESTS. The execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the compliance by Life and the Stockholders with the provisions
hereof will not (i) conflict with or result in a breach of any provisions of ,
or constitute a material default (or an event which, with notice or lapse of
time or both, would constitute a material default) under, or result in the
creation of any material lien, security interest, charge or encumbrance upon
Life or the shares of stock of Life being transferred or any material assets of
Life under any of the terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of Life or any material note, bond, mortgage,
indenture, license, lease, agreement or other instrument or obligation to which
either Life or the Stockholders are a party, or by which they are bound; or (ii)
violate any order, writ, injunction, decree, statute, rule or regulation
applicable to Life or the Stockholders or any of their respective properties or
assets.
2.08 FINANCIAL STATEMENTS. Life and the Stockholders have delivered to the
Company, or on or before the Closing Date will deliver to the Company, an
unaudited balance sheet prepared for review and use by Life management. The
books of account of Life fully and fairly reflect all of the material
transactions of Life as of the date then ended for each financial statement
submitted. Life will have no material liabilities, either fixed or contingent,
not reflected in such financial statements, other than for contracts or
obligations incurred in the ordinary and usual course of business or as set
forth in SCHEDULE B annexed hereto, and no such contracts or obligations
constitute liens or other liabilities which, if disclosed, would alter
substantially the financial condition of Life as reflected in such financial
statements. All
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liabilities for the current and for all prior years, including any income
and sales taxes or other taxes for which Life has any liability, have been paid
in full or have been adequately provided for in said audited financial
statements in accordance with generally accepted accounting principles within 60
days from the date of closing.
2.09 CHANGES IN FINANCIAL CONDITION. Since the date of the most recent
financial statements of Life as submitted to the Company, there have not been
(i) any adverse changes in the financial condition or in the operations of Life
or any of its subsidiaries (if any); (ii) any damage, destruction or loss,
whether covered by insurance or not, adversely affecting the properties and
business of Life; (iii) any declaration, setting aside of payment of any
dividend in respect of the capital stock of Life; (iv) any issuance of capital
stock by Life or securities exercisable, convertible into or exchangeable for
capital stock, any distribution (whether by way of reclassification,
recapitalization, stock split or otherwise) in respect of the capital stock of
Life, or any redemption or other acquisition of any such stock, (v) any contract
or transaction entered into by Life except contracts and transactions entered
into in the ordinary course of business, this Agreement or as otherwise approved
by Health-Pak in writing; (vi) any material default in any contract, obligation
or debt of Life; or (vii) any other event or condition of any character
pertaining to and materially adversely affecting the assets or business of Life
taken as a whole.
2.10 TAX MATTERS. (a) FILING OBLIGATIONS. Life has duly and timely filed
(or there have been duly and timely filed on its behalf), or a valid extension
of time to file has been obtained, with the appropriate governmental
authorities, all Tax Returns ("Tax Returns" as hereinafter defined) required to
be filed by it and all such Tax Returns are true, correct and complete in all
material respects. All taxes for which Life is or may be liable (whether or not
shown on any Tax Return) in respect of periods (or portions thereof) ending on
or before the Closing Date have been timely paid, or will be timely paid, or
have been provided for on the Financial Statements. Regarding any period (or
portion thereof) through the Closing Date for which taxes are not yet due or
owing, Life has established due and sufficient reserves for the payment of such
taxes and such current reserves through the Closing Date are duly and fully
provided for in the Financial Statements.
(b) DEFICIENCIES. No deficiencies for taxes have been claimed, proposed or
assessed by any taxing or other governmental authority against Life and Life has
not received any notice, or otherwise has any knowledge, of any potential claim,
proposal or assessment against the Life for any such deficiency for taxes. There
are no pending, or to the best of Life or the Stockholder's knowledge,
threatened audits, investigations or claims for or relating to any liability in
respect of taxes, and there are no matters under discussion between Life on the
one hand and any governmental authority on the other hand with respect to taxes
that, in the reasonable judgment of Life or the Stockholders, is likely to
result in a material additional liability of Life for taxes.
(c) TAX LIENS. There are no liens for taxes upon any property or assets of
Life except for liens for taxes not yet due and payable, and for which adequate
reserves have been provided for on the Financial Statements.
(d) WITHHOLDING TAXES. Life has duly and timely withheld, collected and
paid to the proper governmental authority all taxes required to have been
withheld, collected or paid.
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(e) TAXES IN FOREIGN JURISDICTIONS. No claim has ever been made to Life by
an authority in any jurisdiction where Life has not filed tax returns that Life
is or may be subject to taxation by that jurisdiction.
(f) WAIVER OF STATUTE OF LIMITATIONS. Life has not waived any statute of
limitations in respect of taxes or agreed to any extension of time with respect
to a tax assessment or deficiency.
(g) SECTION 280G OF THE CODE. There is no contract, plan or arrangement
(written or otherwise) covering any current or former employee or independent
contractor of Life that, individually or in the aggregate, could give rise to
the payment of any amount that will not be deductible by Life under Section 280G
of the Code.
(h) POWER OF ATTORNEY. No power of attorney that is currently in force has
been granted by Life with respect to any matters relating to Taxes.
(i) TAX SHARING AGREEMENTS. There are no tax sharing agreements or other
similar arrangements with respect to or involving Life.
(j) REAL PROPERTY HOLDING COMPANY. Life is not, and during the five-year
period ending on the Closing Date has not been, a "United States Real Property
Holding Corporation," as such term is defined in Section 897(c) of the Code or
the Treasury Regulations promulgated thereunder.
(k) COPIES OF TAX RETURNS TO BE DELIVERED. On or prior to the Closing Date
Life will deliver to the Company copies of its tax returns filed with any taxing
authority or the Internal Revenue Service of the United States and any state
taxing authority, or in the alternative, Life will provide a statement that the
due date for such tax returns has been extended, by Life for its last fiscal
period or that such tax returns are not yet required.
(l) DEFINITION OF "TAXES" AND "TAX RETURNS." For purposes of this
Agreement, and without limiting the generality of the foregoing, "Tax" or
"Taxes" shall mean any and all taxes, charges, fees, levies or other
assessments, including all net income, gross income, gross receipts, excise,
stamp, real or personal property, ad valorem, sales, withholding, estimated,
social security, employment, unemployment, occupation, use, service, service
use, license, net worth, payroll, franchise, environmental, severance, transfer,
recording, escheat, or other taxes, duties, assessments, or charges, imposed by
any governmental authority and any interest, penalties, or additions to tax
attributable thereto. "Tax Return" shall mean any report, return, document,
declaration, information, return or filing (including any related or supporting
information) filed or required to be filed with respect to taxes.
2.11 LITIGATION. Except as set forth in SCHEDULE C, Life is not involved in
any pending litigation or governmental investigation or proceeding, and to the
best of Life and the Stockholders' knowledge, no material litigation, claim,
assessment or governmental investigation or proceeding is threatened which might
reasonably be expected to result in any material change in the business or
condition, financial or otherwise, of Life or in any of its properties or
assets, or which might reasonably be expected to result in any material
liability on the part of Life or which questions the validity of this Agreement,
or which would, in the case of officers, directors or employees of Life, impair
their ability to carry out their duties as such officers, directors or
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employees now or in the future, or which might reasonably be expected to
otherwise adversely affect the Company or Life, or of any action taken or to be
taken pursuant to or in connection with the provisions of this Agreement. The
Stockholders represent that they are not involved in any pending material
litigation or governmental investigation or proceeding which would, to the best
of their knowledge and information, affect their ownership of the Life Shares or
their ability to enter into this Agreement or to carry out its terms and
conditions. Stockholders further covenant that to the best of their knowledge
and information, no such material litigation, claim, assessment or governmental
investigation or proceeding of any kind exists or is threatened.
2.12 BREACH OF CONTRACTS AND COMMITMENTS. Life has not materially breached,
and there are no pending or threatened claims or any legal basis for a claim
that Life has materially breached, any of the terms or conditions of any
material agreement, contract or commitment to which it is a party or is bound,
and the execution and performance hereof will not violate any law or any
provisions of any agreement to which Life is subject.
2.13 COMPLIANCE WITH LAW. Life has complied with all applicable laws of the
Republic of Ireland and its provinces in connection with its formation, issuance
of securities, organization, capitalization and operation, and no contingent
liabilities have been threatened, or claims made or threatened with respect
thereto, including claims for violation of any securities laws and there is no
basis for any such claim or liability except, in all such cases, for violations
and claims which individually or in the aggregate would not materially adversely
affect Life. No consent, approval, authorization or order of, or registration,
qualification, designation, declaration or filing with, any governmental
authority is required on the part of either Life or the Stockholders in
connection with the execution and delivery of this Agreement, or the carrying
out of any of the transactions contemplated hereby.
2.14 CERTIFICATE OF INCORPORATION, BY-LAWS, MINUTES, ETC. Copies of Life's
Certificate of Incorporation, By-laws and Minutes of Life and all Amendments
thereto that have been furnished, or immediately upon execution of this
Agreement, will be furnished to the Company by or on behalf of Life and are or
will be, as applicable, true and complete. Attached hereto as EXHIBITS A AND B
are true and complete copies of the certificate of incorporation and by-laws of
Life, as amended to date.
2.15 CONTRACTS AND COMMITMENTS. Life does not have any material agreement,
contract, lease, commitment or obligation (including employment agreements or
labor contracts) other than as provided on SCHEDULE D; the respective books of
account and other records of Life are true, complete and correct, and accurately
present or reflect all of the transactions entered into by Life or to which Life
has been a party, or to which its properties and assets may be subject.
2.16 MINUTES. The records of directors' and stockholders' meeting of Life
contain a true and complete record of all corporate proceedings of Life since
its date of incorporation, and comply in all respects with all statutes, laws,
rules, and regulations applicable to them and to their respective businesses and
properties.
2.17 OFFICERS, DIRECTORS AND EMPLOYEES. The only officers, directors of the
Life are
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listed IN SCHEDULE E, annexed hereto. The curriculum vitae of the officers,
directors and key management of the Company are set forth in SCHEDULE F hereto
and are true and complete and do not contain any material misstatement of fact
or omit any fact required to make the facts stated therein not misleading.
2.18 PATENTS, LICENSES, SOFTWARE ETC. Annexed hereto as SCHEDULE G is a
list of all of the domestic and foreign patents, patent applications, patent,
software and other licenses, trade names, trademarks, service marks, trademark
registrations and applications, service mark registrations and applications,
copyrights, copyright registrations and applications owned or controlled by
Life, used in the operations of the business of Life, or governing the products
or processes of Life (collectively, the "Intellectual Property"). Life owns or
has a valid license to use the Intellectual Property. Life has not received any
notice of infringement of or conflict with, and to their knowledge, there are no
infringements of or conflicts with, the rights of any person with respect to the
use of any Intellectual Property.
2.19 INVESTMENT COMPANY REPRESENTATION. Life is not an "Investment Company"
as that term is defined under the Investment Company Act of 1940, as amended.
2.20 ACCOUNTS RECEIVABLE. All accounts receivable of Life, whether
reflected in the Balance Sheet or otherwise, represent sales actually made or
services actually performed in the ordinary course of business, and are current
and collectible consistent with past practices net of any reserves shown on the
Balance Sheet (which reserves are adequate and were calculated in accordance
with generally accepted accounting principles consistent with past practice).
2.21 INVENTORY. To the best knowledge of Life after due inquiry, all
inventory of Life is merchantable and reflected on Life's books at the lower of
cost or market, and of a quality and quantity usable and salable in the ordinary
course of Life's business.
2.22 CONDITION OF MACHINERY AND EQUIPMENT. The equipment owned by Life is
structurally sound with no known defects and is in satisfactory operating
condition and repair and is adequate for the uses to which it is being put; and
none of such equipment is in need of maintenance or repairs except for ordinary,
routine maintenance and repairs which are not material in nature or cost.
2.23 BANK ACCOUNTS. SCHEDULE H annexed hereto sets forth the names and
locations of all banks, trust companies, savings and loan associations and other
financial institutions at which Life maintain safe deposit boxes or accounts of
any nature and the names of all persons authorized to draw thereon, make
withdrawals therefrom or have access thereto.
2.24 INSURANCE POLICIES. SCHEDULE I annexed hereto contains an accurate and
complete summary description of all material policies of fire, liability,
workmen's compensation and other forms of insurance owned or held by Life. All
such policies are in full force and effect, all premiums with respect thereto
covering all periods up to and including the Effective Time have or will be
paid, and no notice of cancellation or termination has been received with
respect to any such policy. Such policies are sufficient for compliance with all
requirements of law and of all agreements to which Life is party; are valid,
outstanding and enforceable policies; provide
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adequate insurance coverage for the assets and operations of Life; will
remain in full force and effect through the respective dates set forth in
SCHEDULE I without the payment of additional premiums; and will not in any way
be affected by, or terminate or lapse by reason of, the transactions
contemplated by this Agreement.
2.25 EMPLOYMENT LAWS AND REGULATIONS. To the best knowledge of Life after
due inquiry, Life is in compliance with all applicable laws respecting
employment and employment practices, terms and conditions of employment and
wages and hours, and is not engaged in any unfair labor practices; there is no
unfair labor practice complaint against Life pending before the National Labor
Relations Board; there is no labor strike, dispute, slowdown or stoppage
actually pending or, to the best of Life's knowledge after due inquiry,
threatened against or affecting Life; to the best knowledge of Life, after due
inquiry, no representation question exists respecting the employees of Life; to
the best knowledge of Life, after due inquiry, no grievance which might have a
material adverse effect on Life or the conduct of its businesses nor any
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claim therefor exists; no collective bargaining agreement
which is binding on Life restricts it from relocating or closing its operations;
Life has not experienced any work stoppage or other labor difficulty in the
past; and Life is not a party to any collective bargaining labor representative
agreement.
2.26 COMPENSATION PLANS. Except as disclosed in SCHEDULE J, Life does not
have any bonus, deferred compensation, pension, profit-sharing, retirement,
stock purchase, stock option or any other fringe benefit plan, arrangement or
practice, whether formal or informal.
2.27 ASSETS NOT SUBJECT TO DECREE. Neither the whole nor any portion of the
leaseholds or any other assets of Life is subject to any governmental decree or
order to be sold or is being condemned, expropriated or otherwise taken by any
public authority with or without payment of compensation therefor, nor to the
best knowledge of Life has any such condemnation, expropriation or taking been
proposed.
2.28 ENVIRONMENTAL MATTERS. To the best knowledge of Life and its
Stockholders, Life is in compliance in all material respects with all applicable
federal, state and local laws and regulations relating to pollution control and
environmental contamination, including, without limitation, all discharge or
disposal of Hazardous Materials (as defined below). Except as set forth in
SCHEDULE K annexed hereto, to the best knowledge of Life, Life has not been
alleged to be in violation of, or been subject to any administrative or judicial
proceeding pursuant to, such laws or regulations either now or at any time
during the past. Except as set forth in SCHEDULE K, there are no facts or
circumstances that Life reasonably expects could form the basis for the
assertion of any Claim (as defined below) against Life relating to environmental
matters including, but not limited to, any Claim arising from past or present
environmental practices asserted under the laws of the Republic of Ireland or
CERCLA or RCRA (each as defined below), or any other federal, state or local
environmental statute or regulation.
2.29 DEFINITIONS OF ENVIRONMENTAL TERMS. For purposes of this Agreement,
the following terms shall have the following meanings: (i) "Hazardous Materials"
shall mean materials defined as "hazardous substances," "hazardous wastes" or
"solid wastes" in (A) the Comprehensive
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Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601-9657, and any amendment thereto ("CERCLA"), (B) the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901-6987, and any amendments
thereto ("RCRA"), and (C) any similar state or local environmental statute or
regulation; and (ii) "Claim" shall mean any and all claims, demands, causes of
action, suits, proceedings, and decrees.
2.30 EMPLOYEE BENEFIT PLANS. Life does not have and has never maintained
any employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
2.31 AGENTS AND BROKERS. Except as set forth in SCHEDULE J, no agent,
advisor, broker, person or firm acting on behalf of Life is, or will be,
entitled to any commission or broker's, advisor's or finder's fees from any of
the parties hereto, or from a person controlling, controlled by or under common
control with any of the parties hereto, in connection with any of the
transactions contemplated herein.
2.32 INSOLVENCY. Neither Life nor any of the Stockholders is insolvent or
bankrupt and there is no pending or threatened insolvency or bankruptcy
proceeding of any kind, either state or federal, affecting either Life or any of
the Stockholders.
2.33 STOCKHOLDERS INVESTMENT REPRESENTATION. The Stockholders represent
that they are acquiring the common stock of Health-Pak in exchange for their
shares of common stock in Life for the purposes of investment only, for each of
their own respective accounts and not with a view to, or for the purpose of
resale, distribution or subdivision. The Stockholders each acknowledge that they
have been informed that the shares of common stock to be issued to them as
herein set forth have not been registered under the Securities Act of 1933, as
amended, or the laws of any state or other jurisdiction and that, therefore,
such shares may not be resold, offered, or pledged except pursuant to a
registration statement or under an exemption from the registration and
prospectus delivery requirements of the Act.
2.34 SUBSIDIARIES. Life is the owner or is the control shareholder of the
following subsidiaries, each of which shall be owned by Life as of the Closing
Date:
ARTICLE 3
WARRANTIES AND REPRESENTATIONS OF THE COMPANY
3.01 WARRANTIES AND REPRESENTATIONS OF THE COMPANY. The Company hereby
makes the following representations and warranties to Life and the Stockholders
, each of which is true as of the date hereof and will be true as of the Closing
Date and each of which shall be deemed to be independently material and to have
been relied upon by Life and the Stockholders in connection with this Agreement.
3.02 ORGANIZATION. The Company is a corporation duly organized, validly
existing by
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virtue of the laws of Delaware in the United States, and will be in good
standing under the laws thereof on the Closing Date; and neither the nature of
its business nor the character and location of its properties requires it to be
qualified or licensed to do business in any other jurisdiction. Since its
incorporation, no claim has been asserted by any governmental authority that the
nature of its business, or the character and location of the properties owned or
operated by the Company makes qualification or licensing to do business
necessary in any jurisdiction in which it is not so qualified or licensed.
3.03 HEALTH-PAK COMMON STOCK. The authorized capital stock of the Company
consists solely of 20 million shares of Common Stock, $.001 par value per share.
As of the date of this Agreement, there are approximately 6,544,473 shares
issued and outstanding. All of the issued and outstanding shares of the
Company's capital stock, including the Life Shares to be issued hereunder, are
or will be when issued fully paid and non-assessable shares of the Company's
common stock.
3.04 SUBSIDIARIES. The Company has one subsidiary, Health-Pak, Inc., a New
York corporation, which is presently in Bankruptcy under Chapter 11 of the
United States Bankruptcy Code. The Company does not own any other subsidiaries
nor does it own any interest in any corporation, partnership or proprietorship
except as set forth on SCHEDULE L annexed hereto.
3.04a TAXES AND TAX RETURNS. FILING OBLIGATIONS. (a) The Company has duly
and timely filed (or there have been duly and timely filed on its behalf), or a
valid extension of time to file has been obtained, with the appropriate
governmental authorities all tax returns ("Tax Returns" as hereinafter defined)
required to be filed by it and all such tax returns are true, correct and
complete in all material respects. All taxes for which the Company is or may be
liable (whether or not shown on any tax return) in respect of periods (or
portions thereof) ending on or before the Closing Date have been timely paid, or
will be timely paid, or have been provided for on the Financial Statements. With
respect to any period (or portion thereof) through the Closing Date for which
taxes are not yet due or owing, the Company has established due and sufficient
reserves for the payments of such taxes in accordance with generally accepted
accounting principles, and such current reserves through the Closing Date are
duly and fully provided for in the Financial Statements.
(b) TAX DEFICIENCIES. No deficiencies for taxes have been claimed, proposed
or assessed by any taxing or other governmental authority against the Company
and the Company has not received any notice, or otherwise has any knowledge, of
any potential claim, proposal or assessment against the Company for any such
deficiency for taxes. There are no pending, or to the best of the Company's
knowledge, threatened audits, investigations or claims for or relating to any
liability in respect of taxes, and there are no matters under discussion between
the Company on the one hand and any governmental authority on the other hand
with respect to taxes that, in the reasonable judgment of the Company, is likely
to result in a material additional liability of the Company for taxes.
(c) TAX LIENS. There are no liens for taxes upon any property or assets of
the Company except for liens for taxes not yet due and payable, and for which
adequate reserves have been provided for on the Financial Statements.
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(d) WITHHOLDING TAXES. The Company has duly and timely withheld, collected
and paid to the proper governmental authority all taxes required to have been
withheld, collected or paid.
(e) TAXES IN FOREIGN JURISDICTIONS. No claim has ever been made to the
Company by an authority in a jurisdiction where the Company has not filed tax
returns that the Company is or may be subject to taxation by that jurisdiction.
(f) WAIVER OF STATUTE OF LIMITATIONS. The Company has not waived any
statute of limitations in respect of taxes or agreed to any extension of time
with respect to a tax assessment or deficiency.
(g) SECTION 280G OF THE CODE. There is no contract, plan or arrangement
(written or otherwise) covering any current or former employee or independent
contractor of the Company that, individually or in the aggregate, could give
rise to the payment of any amount that will not be deductible by the Company
under Section 280G of the Code.
(h) POWER OF ATTORNEY No power of attorney that is currently in force has
been granted by the Company with respect to any matters relating to taxes.
(i) TAX SHARING AGREEMENTS. There are no tax sharing agreements or other
similar arrangements with respect to or involving Acquire.
(j) REAL PROPERTY HOLDING COMPANY. The Company is not, and during the
five-year period ending on the Closing Date has not been, a "United States Real
Property Holding Corporation," as such term is defined in Section 897(c) of the
Code or the Treasury Regulations promulgated thereunder.
(i) COPIES OF TAX RETURNS TO BE DELIVERED. Copies of the tax returns filed,
or a statement that the due date for such tax returns has been extended, by the
Company for its last fiscal period have been or prior to closing will be
provided to Life.
(j) DEFINITION OF "TAX" AND "TAX RETURN." For purposes of this Agreement,
and without limiting the generality of the foregoing, "Tax" or "Taxes" shall
mean any and all taxes, charges, fees, levies or other assessments, including
all net income, gross income, gross receipts, excise, stamp, real or personal
property, ad valorem, sales, withholding, estimated, social security,
employment, unemployment, occupation, use, service, service use, license, net
worth, payroll, franchise, environmental, severance, transfer, recording,
escheat, or other taxes, duties, assessments, or charges, imposed by any
governmental authority and any interest, penalties, or additions to tax
attributable thereto. "tax return" shall mean any report, return, document,
declaration, information, return or filing (including any related or supporting
information) filed or required to be filed with respect to taxes.
3.05 COMPLIANCE WITH LAW. The Company has complied with all state, federal
and local laws in connection with its formation, issuance of securities,
organization, capitalization and operation, and no contingent liabilities have
been threatened, or claims made or threatened with respect to said operations,
formation or capitalization, including claims for violation of any state or
federal securities laws and, to the best of its knowledge, no basis for any such
claim or liability exists. All filings required to be made by the Company
pursuant to federal or state securities laws have been made and are current,
comply as to form with all requirements of the
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securities laws have been made and are current, comply as to form with all
requirements of the securities laws and contain no material misstatement or omit
any facts required so as not to be misleading. No consent, approval,
authorization or order of, or registration, qualification, designation,
declaration or filing with, any governmental authority is required on the part
of the Company in connection with the execution and delivery of this Agreement,
or the carrying out of any of the transactions contemplated hereby.
3.06 DISPUTES AND LITIGATION. The Company is not involved in any
pending litigation, disputes or governmental investigation or proceeding, and to
the best knowledge of the Company, no litigation, claim, assessment or
governmental investigation or proceeding is pending or threatened, except as may
be disclosed on SCHEDULE M annexed hereto.
3.07 BREACH OF AGREEMENTS IN EFFECT. The Company has not breached, nor
are there any pending or threatened claims or any legal basis for a claim that
the Company has breached, any of the terms or conditions of any agreement,
contract or commitment to which it is a party or is bound and the execution and
performance hereof will not result in a violation of any agreement, law or
governmental regulation to which the Company is subject.
3.08 THE SHARES TO BE ISSUED. The Health-Pak Shares to be issued to the
Stockholders have been duly authorized, and when issued in exchange for the Life
Shares as provided herein, will be validly issued, non-assessable and fully paid
under the laws of the state of Delaware and will be issued in a non-public
offering pursuant to exemptions from registration under federal and state
securities laws. The Health-Pak Shares to be issued will have the same dividend,
voting and other rights, powers, preferences, limitations and restrictions as
all of the shares of common stock of the Company issued and outstanding as of
the date hereof, except that the Health-Pak Shares shall be deemed "restricted
shares" as defined in Rule 144 promulgated under the Act and shall bear a
restricted legend and stop transfer instructions will be filed with the
Company's Transfer Agent. All of the Health-Pak Shares will, when delivered, be
free and clear of all voting trusts, agreements, arrangements, liens and all
other encumbrances, claims, equities and liabilities of every nature, and the
Company, having duly taken all corporate action required therefor, has the
unqualified right to issue the Health-Pak Shares and to deliver clear and
unencumbered title thereto.
3.09 APPROVAL BY THE BOARD OF DIRECTORS. The execution of this
Agreement by the Company, and the performance by the Company of its covenants
and undertakings hereunder have been duly authorized by all requisite corporate
action, and approved by the Board of Directors, and the Company has the
corporate power and authority to enter into this Agreement and to perform the
covenants and undertakings to be performed by it hereunder, and is under no
other impediment which would adversely affect its ability to consummate or
prohibit it from consummating the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable in
accordance with its terms.
3.10 POWER AND AUTHORITY. The Company has full power, authority and
legal right to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the compliance by the
Company with the provisions hereof will not: (i) conflict with
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or result in a breach of any provisions of, or constitute a default (or an event
which, with notice or lapse of time or both, would constitute a default) under,
or result in the creation of any lien, security interest, charge or encumbrance
upon the shares to be issued or any of the property or assets of the Company
under any of the terms, conditions or provisions of the Articles of
Incorporation or By-Laws of the Company or any note, bond, mortgage, indenture,
license, agreement or other instrument or obligation to which the Company is a
party, or by which it is bound; or (ii) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to the Company or any of its
properties or assets.
ARTICLE 4
INTERIM OPERATIONS
4.01 INTERIM OPERATIONS. Between the date hereof and the Closing Date
the Company and Life (including their respective subsidiaries) will conduct
their respective operations as follows:
4.02 PRESENT BUSINESS OPERATIONS. Except as herein provided, the
Company and Life will carry on their respective businesses in substantially the
same manner as heretofore and the assets, properties and rights now owned by
them will be maintained, as far as practicable, in the usual and ordinary course
of business, to the same extent, under the same insurance coverage and in the
same condition as on the date of this Agreement. Prior to the closing date, the
Company and Life shall engage in no activity or business other than as is
presently conducted or shall be necessary to effect the transactions
contemplated by this Agreement.
4.03 NON-DISPOSAL OF PROPERTY. Except in the ordinary course of
business and as herein provided, or as may hereafter be mutually agreed to in
writing by the parties, neither the Company nor Life will sell or dispose of any
property or assets, nor will they encumber any property or assets except as may
be required by law or the provisions of the United States Bankruptcy Court.
4.04 ISSUANCE OF STOCK. Neither of the Parties to this Agreement
without the written consent of the other Parties hereto, will issue or sell, or
issue the right to subscribe to, any shares of capital stock or securities
exchangeable or exercisable for capital stock, or acquire for a consideration
any shares of capital stock or warrants, or declare or pay any dividend on any
capital stock.
4.05 AMENDMENT OF CORPORATE DOCUMENTS. Except as contemplated herein,
neither the Company nor Life will, absent a written consent of the other party,
amend their respective Certificates of Incorporation or By-Laws.
4.06 ACCESS TO BOOKS AND RECORDS. Life and the Company shall each, at
all reasonable times, permit access to their respective properties, books and
records for the purpose of examination by the other party hereto and its
officers, directors, attorneys, accountants and
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representatives, and Life and Company shall furnish to the other party hereto
upon request any information reasonably required in respect of such property,
assets and business;
4.07 DEBT. Neither the Company nor Life will incur any indebtedness or
contingent liability, or enter into any contract or agreement except in the
ordinary course of business without the consent of the other party.
4.08 ACQUISITIONS. Neither the Company nor Life will acquire any
business or assets of any going business, nor will they merge or consolidate
with or into any other corporation, or entity, nor will they change the
character of their business except with the prior consent of the other party.
4.09 NOTICE OF ANY CHANGES. The Company and Life will promptly advise
each other in writing of any material adverse change in their financial
condition, business or affairs, whether arising from matters occurring not in
the ordinary course of business or not.
ARTICLE 5
CONDITIONS PRECEDENT TO CLOSING
5.01. CONDITIONS PRECEDENT TO THE ACQUISITION BY THE COMPANY. The
obligations of the Company to consummate and effect the acquisition contemplated
hereunder shall be subject to the satisfaction, on or prior to the Closing Date,
of the following conditions:
5.02 WARRANTIES AND REPRESENTATIONS OF LIFE SHALL BE TRUE AND CORRECT.
Except as otherwise contemplated by this Agreement, the representations and
warranties of Life and the Stockholders herein contained shall be true and
correct as of the Closing Date with the same effect as though made on the
Closing Date and Life shall have performed all obligations and complied with all
covenants required by this Agreement to be performed or complied with by it
prior to such Closing Date; and Life shall have delivered to the Company a
certificate dated at such Closing Date and signed by the Chairman of the Board
of Directors, the President, Treasurer, or any Vice President of Life to the
foregoing effect, to the best knowledge of the person giving such certificate;
5.03 STOCKHOLDER'S APPROVAL. The Stockholders shall each have approved
this Agreement and the acquisition contemplated hereunder;
5.04 APPROVAL OF COUNSEL. All transactions contemplated hereby and the
form and substance of all legal proceedings and of all papers used or delivered
hereunder, shall be acceptable to counsel for the Company;
5.05 RESTRAINING LITIGATION OR PROCEEDING. There shall not be any
litigation to restrain or invalidate the transactions contemplated in this
Agreement, the defence of which would, in the judgement of the Board of
Directors of Life, made in good faith and based upon the advice of
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counsel, involve expense or lapse of time that would be adverse to the interest
of Life or the Stockholders or the Company. There shall not be any governmental
proceeding, claim or other litigation pending or threatened to restrain or
invalidate the exchange, or which, if adversely decided, could adversely affect
the Company
5.06 OPINION OF COUNSEL. The Company shall have received the opinion of
counsel for Life, dated the Closing Date, with respect to the following matters:
(A) ORGANIZATION. Life is a corporation duly organized, validly
existing and in good standing under the laws of the Republic of Ireland and the
County under which it was formed and it has all requisite corporate power and
authority to carry on the business now conducted and to own and operate its
respective properties.
(B) COMMON STOCK. The capital stock of Life and the number of
shares issued and outstanding immediately prior to the acquisition, all of which
are duly authorized, issued and outstanding, and are non-assessable shares of
Life, are as indicated in Paragraph 4 hereof.
(C) CORPORATE ACTION. All necessary corporate proceedings,
including appropriate action by the Stockholders and the officers and directors
of Life, to approve this Agreement and the execution, delivery and performance
thereof and all other proceedings required by law or by the provisions of this
Agreement have been taken, and Life has the full right, power and authority to
enter into this Agreement and to carry out the terms thereof without further
action;
(D) SUITS, ACTIONS OR PROCEEDINGS. To the best knowledge of such
counsel, except as herein indicated, there are no suits, action, claims or
proceedings pending or threatened against Life, nor to the knowledge of such
counsel is Life a party to or subject to any order, judgement, decree,
agreement, stipulation or consent of or with any court or administrative agency,
nor, to the best knowledge of such counsel, is any investigation pending or
threatened against Life.
5.07 TAX RETURNS FILED. Life has filed all federal, state, county and
local income, franchise, property and other tax returns, forms or reports which
are due or required to be filed by it prior to the date hereof, and has paid or
made adequate provisions for the payment of all taxes, fees or assessments which
have or may become due pursuant to such returns or pursuant to any assessments
received.
5.08 RECEIPT OF TAX RETURNS AND CORPORATE DOCUMENTS. Health-Pak shall
have been given the opportunity to review and copy the tax returns, corporate
minute book and all other corporate, business and financial records of Life.
5.09 RECEIPT OF ALL INFORMATION, SCHEDULES AND EXHIBITS. Life and
Health-Pak shall have exchanged all of the information, Schedules and Exhibits
referred to in this Agreement, which shall be completed by each party within
thirty (30) days following the date hereof (unless extended by the mutual
agreement of the parties hereto) after which date either party may elect to
terminate this Agreement according to the provisions of Article 8 below.
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5.10 ASSUMPTION, PAYMENT ON SETTLEMENT OF CERTAIN OBLIGATIONS. Life
shall have assumed, paid or settled the current obligations of Health-Pak to
Zeller, Weiss & Kahn, B. Bruce Freitag and the Company's transfer agent as
reflected in Schedule L and M. Health-Pak represents that Schedules L and M
reflects a true and accurate representation of those amounts currently due and
owing to the aforementioned person and entities. Life shall also have paid the
necessary costs and expenses to complete Health-Pak's filing requirements with
the Securities and Exchange Commission. Said payments, assumptions and
settlements shall not exceed the sum of $125,000. Health-Pak and Anthony J.
Liberatore shall be jointly and severally responsible for payment of all amounts
in excess of $125,000.00 and for any and all franchise, state, local, or other
taxes in excess of $10,000.00 that are necessary to satisfy the obligations
identified in this paragraph.
5.11 CONDITIONS PRECEDENT TO ACQUISITION BY LIFE. The obligations of
Life to consummate and effect the acquisition contemplated hereunder shall be
subject to the satisfaction, on or prior to the Closing Date, of the following
conditions:
5.12 WARRANTIES AND REPRESENTATIONS OF THE COMPANY ARE TRUE AND
CORRECT. The representations and warranties of the Company herein contained
shall be true and correct as of and at the date of this Agreement and as of the
Closing Date of the acquisition; and the Company shall have performed all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by it prior to the Closing Date; and the Company
shall have delivered to Life a certificate at such date, signed by the President
and Treasurer to the foregoing effect, to the best knowledge of the person
giving such certificate;
5.13 APPROVAL OF COUNSEL. All transactions contemplated hereby, and the
form and substance of all legal proceedings and of all papers used or delivered
hereunder, shall be acceptable to counsel for Life;
5.14 RESTRAINING LITIGATION. There shall not be any litigation to
restrain or invalidate the transactions contemplated in this Agreement, the
defence of which would, in the judgement of the Board of Directors of Life, made
in good faith and based upon the advice of counsel, involve expense or lapse of
time that would be adverse to the interests of Life or the Stockholders or the
Company. There shall not be any governmental proceeding, claim or other
litigation pending or threatened to restrain or invalidate the exchange, or
which, if adversely decided, could adversely affect Life.
5.15 OPINION OF COUNSEL. Life and the Stockholders shall have received
the opinion of counsel for the Company, dated the Closing Date, with respect to
the following matters:
(A) ORGANIZATION. Health-Pak is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and it has all requisite corporate power and authority to carry on the business
now conducted and to own and operate its respective properties;
(B) COMMON STOCK. The capital stock of Health-Pak and the number of
shares issued and outstanding immediately prior to the acquisition, all of which
are duly authorized,
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issued and outstanding, and are non-assessable shares of Health-Pak, are as
indicated herein;
(C) CORPORATE ACTION. All necessary corporate proceedings,
including appropriate action by the directors of Health-Pak, to approve this
Agreement and the execution, delivery and performance thereof and all other
proceedings required by law or by the provisions of this Agreement have been
taken, and Health-Pak has the full right, power and authority to enter into this
Agreement and to carry out the terms thereof without further action;
(D) SUITS, ACTIONS OR PROCEEDINGS. To the best knowledge of such
counsel, except as herein indicated, there are no suits, action, claims or
proceedings pending or threatened against Health-Pak or its officers and/or
directors that would subject the Company to any claim of indemnity by its
officers and/or directors, nor to the knowledge of such counsel is Health-Pak a
party to or subject to any order, judgement, decree, agreement, stipulation or
consent of or with any court or administrative agency, nor, to the best
knowledge of such counsel, is any investigation pending or threatened against
Health-Pak.
5.16 OTHER CONDITIONS. (a) Health-Pak shall have entered into an
agreement in the form set forth in EXHIBIT C attached hereto which shall provide
for the acquisition by Anthony J. Liberatore of all of the outstanding common
stock of the Health-Pak New York subsidiary and the plant facility in Utica, New
York in exchange for approximately 4,119,382 shares of common stock of
Health-Pak owned by Mr. Liberatore and his family and (b) Carter A. Beavers, a
shareholder of Health-Pak shall have returned for cancellation a total of 1
million shares of the common stock of Health-Pak.
ARTICLE 6
CLOSING
6.01 CLOSING The date for the closing of the transactions described in
this Agreement (the "Closing Date"), shall take place not later than ninety (90)
days from the date of this Agreement unless otherwise mutually agreed between
the parties in writing. The Closing Date shall take place sooner and within five
(5) days of compliance with all conditions precedent to the requirements set
forth in Article 5 of this Agreement and shall take place at the offices of the
Company or such other place as the parties may agree.
6.02 DELIVERY OF DOCUMENTS. Each party will comply with their
respective requirements and obligations at the closing as set forth herein and
will deliver appropriate documents as called for by this Agreement including
certificates for the shares of stock of Life and the Company.
6.03 BOARD OF DIRECTORS. On the Closing Date the Company's Board of
Directors shall be expanded by increasing the total number of authorized
directors to six and the presently existing directors shall appoint the
following persons to serve as directors of the Company until the next annual
meeting of shareholders:
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(a) Anthony Liberatore
(b) Michael Liberatore
(c) William Meola
(d) Albert Reynolds TD
(e) Dr. Christopher McCormack, B.Sc., Ph.D., N.I.H.C., M.PS.,
M.ARVO.,F.F.,Ful.S.
(f) Todd F. Walker, Esq.
The following directors of Health-Pak shall remain as directors to
serve until the next annual meeting of shareholders:
(a) Anthony Liberatore
(b) Michael Liberatore
(c) William Meola
Of the foregoing directors, the existing directors of Health-Pak
remaining as directors after the Closing shall immediately sign resignations to
be delivered to the newly appointed directors to be acted upon by said directors
at their will.
6.04 OFFICERS OF THE COMPANY. At the Closing, the Company shall deliver
the resignation, effective as of the Closing Date, of its officers and the
following shall be appointed in their place and stead:
President:: Dr. Christopher McCormack, B.Sc., Ph.D., N.I.H.C.,
M.PS., M.ARVO.,F.F.,Ful.S.
Treasurer: Todd F. Walker
Secretary: Todd F. Walker
6.05 REPRESENTATIONS
The holders of the required number of shares of common stock of the
Company, in accordance with the Certificate of Incorporation, By-Laws and
statutes affecting the Company, shall have voted in favor of this Agreement and
the acquisition contemplated hereunder and the Company shall have delivered at
the Closing Date a Certificate of the President and the Secretary of the Company
attesting thereto.
ARTICLE 7
INDEMNIFICATION
7.01 INDEMNIFICATION BY LIFE AND THE STOCKHOLDERS. In order to induce
the Company to enter into this Agreement, and for other good and valuable
consideration, receipt whereof is
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acknowledged, Life and the Stockholders agree to indemnify the Company and its
successors and assigns, and to hold them harmless in respect of (i) all
liabilities of Life of any nature, whether accrued, contingent, absolute or
otherwise, as of the Closing Date, which are not disclosed or provided for in
the financial statements delivered to the Company as herein provided; (ii) any
damage or deficiency arising from any misrepresentation or breach of warranty
made by Life herein; and (iii) all actions, suits, proceedings, demands,
assessments, fines, judgements, costs, expenses, or reasonable attorney's fees
incident to the foregoing;
7.02 INDEMNIFICATION BY THE COMPANY. In order to induce Life and the
Stockholders to enter into this Agreement, and for other good and valuable
consideration, receipt whereof is acknowledged, the Company agrees to indemnify
Life and Shareholders Representative and their successors and assigns, and their
respective officers, directors, employees, controlling persons and agents, and
to hold each of them harmless in respect of (i) all liabilities of the Company
of any nature, whether accrued, contingent, absolute or otherwise, as of the
Closing Date, which are not disclosed or provided for in the financial
statements delivered to Life and the Shareholders as herein provided; (ii)any
damage or deficiency arising from any misrepresentation or breach of warranty or
agreement made by the Company herein; and (iii) all actions, suits, proceedings,
demands, assessments, fines, judgements, costs, expenses, or reasonable
attorney's fees (whether related to claims between the parties, involving third
parties or otherwise), as they are incurred, incident to the foregoing.
ARTICLE 8
TERMINATION
8.01 TERMINATION. This Agreement may be terminated or abandoned at any
time prior to the Closing Date upon the following conditions:
(a) By the mutual consent of the Boards of Directors of the Company
and Life; or
(b) By the Board of Directors of either the Company or Life if, in
the bona fide judgement of such Board there shall have been a material violation
of any covenant or agreement set forth herein; or if any warranty or
representation shall be untrue; or such Board of Directors should, in its bona
fide judgement deem the acquisition inadvisable or impractical by reason of any
defect which, in the opinion of counsel for the company whose Board of Directors
has made such a determination, constitutes a material part of its assets or
there exists or there is a threat of a material liability or obligation of such
other company not previously known at the time of this Agreement; or
(c) By the election of either party in the event that all of the
conditions precedent to closing, as set forth in paragraph 7 above, have not
been complied with within ninety (90) days following the date hereof, unless
extended by the mutual consent of the parties hereto.
8.02 EFFECT OF TERMINATION PRIOR TO CLOSING. In the event of the
termination and
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abandonment of the acquisition and this Agreement as herein provided, written
notice shall be given to the company or person to be notified of the termination
or abandonment as herein provided, and thereupon this Agreement shall become
wholly void and of no effect, and there shall be no liability on the part of any
person who is a party hereto, or any liability for the Board of Directors,
stockholders, officers or directors of either the Company or Life or any other
party to this Agreement.
ARTICLE 9
NATURE AND SURVIVAL OF WARRANTIES AND REPRESENTATIONS
9.01. NATURE AND SURVIVAL OF REPRESENTATIONS. All representations,
warranties and covenants made by a party to this Agreement shall survive the
execution of this Agreement and the consummation of the transactions
contemplated hereby. All of the parties hereto are executing and carrying out
the provisions of this Agreement, and relying solely upon the representations,
warranties and covenants contained in this Agreement and not upon any
investigation upon which he she or it might have made, or any representation,
warranties, agreements, promises or information, written or oral, made by the
other party, or by persons other than as specifically set forth herein.
ARTICLE 10
INVESTMENT REPRESENTATIONS OF THE STOCKHOLDERS AND
RESTRICTION ON SALE OF STOCK
10.01. INVESTMENT REPRESENTATIONS OF SHAREHOLDERS. The Stockholders,
warrant, represent and agree with respect to the Health-Pak Shares to be
received in exchange for the Life Shares pursuant to this Agreement that the
Shares are being acquired for the purpose of investment, for the separate
accounts of the Stockholders, and not with a view to distribution or resale or
any present intention to divide their participation with others. Shareholder
Representative further represents and warrants that he has been informed that
the Health-Pak Shares to be received by the Stockholders are not being
registered under the Act in reliance upon the exemption provided by Section 4(2)
of the Act as a transaction not involving any public offering and that reliance
upon such exemptions is predicated in part on the representations made in this
paragraph 10.01.
10.02 LIMITATIONS ON SALE OF SHARES OF THE COMPANY. The Stockholders
consent to the imposition of a legend on the certificate or certificates of
stock to be acquired by them to the effect that such securities have not been
registered under the Act and such securities may not be sold, pledged or
hypothecated, except in compliance with said Act, or upon an appropriate opinion
of counsel acceptable to the Company to the effect that an exemption from the
registration provisions of said Act is available to the selling shareholder. The
Stockholders
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further consent to the imposition of "stop transfer" instructions with respect
to each of their respective accounts as recorded by the transfer agent of the
Company, to the effect that such shares may not be sold or disposed of without
evidence of compliance with the requirements of said Act, or upon an acceptable
opinion of counsel.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1. MISCELLANEOUS. PROVISIONS. The following miscellaneous provisions
shall be observed in this Agreement.
11.2 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.3 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
among the parties pertaining to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings of the parties in
connection herewith. There are no oral promises, conditions, representations,
understandings, interpretations or terms of any kind as conditions or
inducements to the execution of this Agreement.
11.4 SUCCESSORS. This Agreement shall be binding upon the parties
hereto, and inure to the benefit of the parties, and their respective heirs,
administrators, executors, personal representatives, successors in interest and
assigns.
11.5 FURTHER ASSURANCES. At any time and from time to time after the
date hereof, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to any property transferred hereunder or otherwise to carry out the intent
and purposes of this Agreement.
11.6 WAIVER. Any failure on the part of any party hereto to comply with
any of the obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
11.7 NOTICES. All notices and communications required or permitted
hereunder shall be sufficient if made in writing and shall be deemed to have
been given if delivered in person or sent by postage prepaid, first class,
registered or certified mail, return receipt requested to the addresses first
set forth above or to such other or additional addresses as any party hereto
shall reasonably designate with respect to itself from time to time.
11.8 SEVERABILITY. The parties to this Agreement hereby agree and
affirm that none of the above provisions is dependent upon the validity or of
any other provisions, and if any part of this Agreement is deemed to be
unenforceable, the balance of the Agreement shall remain in full force and
effect; provided that the essential purposes of this Agreement are capable of
being
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fulfilled in the absence of such invalid provisions.
11.9 HEADINGS. The section and subsection headings in this Agreement
are inserted for convenience only, and shall not affect in any way the meaning
or interpretation of this Agreement.
11.10 GOVERNING LAW. This Agreement shall be governed by the laws of
the State of Florida in the United States applicable to contracts entered into
and to be fully performed therein notwithstanding any laws of conflicts.
11.11 AMENDMENT. This Agreement or any provision hereof, may not be
changed, waived, terminated or discharged except by means of a written
supplemental instrument signed by the party against whom enforcement of the
change, waiver, termination or discharge is sought.
11.12 ASSIGNMENT. This Agreement is personal to the Parties hereto and
may not be assigned, transferred to any other party or person.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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11.13 RIGHT OF RESCISSION. In accordance with the requirement that the
parties receive and be given an opportunity to review Schedules to this
Agreement and other information identified herein, Life reserves the right to
rescind this Agreement due to any misrepresentation or omission of material fact
related to the transaction if, in its sole and exclusive determination its
ongoing due diligence investigation reveals any material information that causes
its Board of Directors to conclude that consummation of the merger transaction
is not in the best interests of Life. Said right of rescission shall expire in
180 days from the date of closing but shall not limit any matter relating to
fraud.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
above written date by authority of their respective Boards of Directors or have
otherwise set their hand and seal hereto on the date above written.
<TABLE>
<S> <C>
ATTEST: HEALTH-PAK, INC.
/s/ Michael Liberatore By: /s/ Anthony J. Liberatore
------------------------ ----------------------------------
ANTHONY J. LIBERATORE, PRESIDENT
ATTEST: LIFE ENERGY TECHNOLOGY
HOLDINGS, LTD.
/s/ M. O'Rourke BY: /s/ Dr. Christopher McCormack
--------------------------- ---------------------------------
DR. CHRISTOPHER MCCORMACK, CHIEF
EXECUTIVE OFFICER
</TABLE>
The Shareholder's representative hereby executes and ratifies this Agreement for
and on behalf of himself, individually, and all behalf of all other existing
shareholders as named in Schedule A.
<TABLE>
<S> <C>
ATTEST: /s/ M. O'Rouke BY: /s/ Dr. Christopher McCormack
------------------------ -----------------------------------------
DR. CHRISTOPHER MCCORMACK, INDIVIDUALLY, AND
ON BEHALF OF ALL SHAREHOLDERS LISTED ON
SCHEDULE A.
</TABLE>
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SCHEDULE A
(To Be Supplied)
<PAGE>
SCHEDULE B
(To Be Supplied)
<PAGE>
SCHEDULE C
(To Be Supplied)
<PAGE>
SCHEDULE D
(To Be Supplied)
<PAGE>
SCHEDULE E
(To Be Supplied)
<PAGE>
SCHEDULE F
(To Be Supplied)
<PAGE>
SCHEDULE G
(To Be Supplied)
<PAGE>
SCHEDULE H
(To Be Supplied)
<PAGE>
SCHEDULE I
(To Be Supplied)
<PAGE>
SCHEDULE J
(To Be Supplied)
<PAGE>
SCHEDULE K
(To Be Supplied)
<PAGE>
SCHEDULE L
(To Be Supplied)
<PAGE>
SCHEDULE M
(To Be Supplied)
<PAGE>
EXHIBIT 2(1)
ACQUISITION AGREEMENT
AGREEMENT, made this 3rd day of November, 2000 by and between:
ANTHONY LIBERATORE, having an address at 2005 Beechgrove, Utica, New York,
hereinafter referred to as "Liberatore"; and
HEALTH-PAK, INC., a Delaware corporation with its offices at 2005 Beechgrove,
Utica, New York, hereinafter referred to as "HPI";
LIFE ENERGY TECHNOLOGY HOLDING COMPANY, LTD., a corporation organized under the
laws of the Republic of Ireland with its office address at Finnabair Science
Park, Technology City, Dundalk, Co. Louth, Ireland.; hereinafter referred to as
"Life.";
who are collectively referred to herein as the "parties."
W I T N E S S E T H
WHEREAS, Life has entered into an Agreement and Plan or Reorganization with HPI
dated November 3rd, 2000, pursuant to which Life shall become a wholly owned
subsidiary of HPI (the HPI Agreement"); and
WHEREAS, Health-Pak, Inc., a New York corporation ("Health"), is presently a
wholly owned subsidiary of HPI; and
WHEREAS, Liberatore desires to acquire the parties desire to acquire all of the
capital stock of Health (the "Health Shares") from HPI upon the terms and
conditions set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. ACQUISITION OF THE HEALTH SHARES. The parties agree that simultaneously
with the Closing of the HPI Agreement Liberatore shall acquire all of
Health Shares from HPI in consideration for that number of the shares of
Common Stock of HPI currently owned by Liberatore which, after giving
consideration to the planned reverse split of such common shares as
contemplated by the HPI Agreement, will leave Liberatore as the owner of
100,000, post-reverse split shares of HPI common stock (the "Residual
Shares"). For purposes of this provision, the number of HPI shares owned by
Liberatore shall also include any and all such shares owned by Elizabeth
Liberatore, his wife, and Michael Liberatore, his son, it being understood
and agreed that the ownership of the Residual Shares shall be as determined
by Liberatore. The parties further understand and agree that
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should any of the provisions of the HPI Agreement be changed or modified,
or if the parties shall agree otherwise, the number of Residual Shares may
be changed provided that in no event shall the Residual Shares be less than
100,000.
2. COMMITMENT TO PAY DEBTS. Anything contained herein or in the HPI Agreement
to the contrary notwithstanding, the parties agree that Liberatore shall
use his best efforts following his acquisition of the Health Shares to
either pay or refinance all existing obligations of Health which are either
guaranteed by HPI or which may otherwise result in any material, unsecured
liability to HPI. As of the date hereof, the parties understand and agree
that such existing obligations include the existing mortgage on the
building owned by Health in Utica, New York and Health's existing
obligation to Foothills Capital Corp., its factor (collectively, the "HPI
Guaranteed Obligations"). In addition, Liberatore shall as soon as
practicable following the Closing of the HPI Agreement effect the sale of
up to 50,000 of the Residual Shares and apply all of the proceeds
therefrom, net of any capital gains taxes that may be due in connection
with the sale of such Residual Shares, to the reduction of the HPI
Guaranteed Obligations. In the event that such proceeds are not adequate to
fully pay the HPI Guaranteed Obligations, Liberatore shall use his best
efforts to refinance such obligations or otherwise remove HPI from any
obligation in connection therewith. However, the parties agree that in no
event shall Liberatore be obligated to commit any more than the net
proceeds from the sale of 50,000 Residual Shares to the repayment of the
HPI Guaranteed Obligations, it being the intention of the parties that
Liberatore shall have available for his personal benefit not less than
50,000 Residual Shares.
3. CONTINUING LIEN. Liberatore agrees that to the extent that any HPI
Guaranteed Obligations remain unpaid that he shall use his best efforts as
the sole shareholder of Health to permit a continuing lien on the building
owned by Health in Utica, New York, which lien shall be superior to that of
any other party except for the present Mortgagee, until such time as all
HPI Guaranteed Obligations have been fully satisfied and duly released of
record.
4. MISCELLANEOUS. PROVISIONS. The following miscellaneous provisions shall be
observed in this Agreement.
a. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
b. ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
among the parties pertaining to the subject matter hereof, and
supersedes all prior and contemporaneous agreements and understandings
of the parties in connection herewith. There are no oral promises,
conditions, representations, understandings, interpretations or terms
of any kind as conditions or inducements to the execution of this
Agreement.
c. FURTHER ASSURANCES. At any time and from time to time after the date
hereof, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to carry
out the purposes of this Agreement.
d. NOTICES. All notices and communications required or permitted
hereunder shall be sufficient if made in writing and shall be deemed
to have been given if delivered in person or sent by postage prepaid,
first class, registered or certified mail, return receipt requested to
the addresses first set forth above or to such other or additional
addresses
2
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as any party hereto shall reasonably designate with respect to itself
from time to time.
e. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York in the United States applicable to contracts entered
into and to be fully performed therein without regard to the laws of
conflicts of the State of New York.
f. AMENDMENT. This Agreement or any provision hereof, may not be changed,
waived, terminated or discharged except by means of a written
supplemental instrument signed by the party against whom enforcement
of the change, waiver, termination or discharge is sought.
g. ASSIGNMENT. This Agreement is personal to the Parties hereto and may
not be assigned, transferred to any other party or person.
HEALTH-PAK, INC.
By: /s/ Anthony J. Liberatore
-------------------------------------------------
ANTHONY J. LIBERATORE, PRESIDENT
LIFE ENERGY TECHNOLOGY HOLDING COMPANY, LTD.
By: /s/ Dr. Christopher McCormack
--------------------------------------------------
DR. CHRISTOPHER MCCORMACK, CHIEF EXECUTIVE OFFICER
/s/ Anthony Liberatore
-----------------------------------------------------
ANTHONY LIBERATORE
3
