<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)*
RESPONSE USA, INC.
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
761235 40 7
(CUSIP Number)
BERT BEDROSIAN, PRESIDENT
BKR, INC.
7944 E. BECK LANE, #210
SCOTTSDALE, ARIZONA 85260
(602) 483-9337
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
MARCH 4, 1997
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed on Schedule 13G to report the
acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with this statement [X]. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter the
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
<PAGE> 2
SCHEDULE 13D
CUSIP NO. 761235 40 7 Page 2 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
BKR, INC., a Nevada corporation (88-0371100)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,094,164
REPORTING ---------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,094,164
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,094,164
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
26.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 761235 40 7 Page 3 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Bert Bedrosian
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Arizona
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,094,164
REPORTING ---------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,094,164
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,094,164
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
26.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 761235 40 7 Page 4 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robin Bedrosian
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Arizona
- --------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY ---------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH 1,094,164
REPORTING ---------------------------------------------------
PERSON 9 SOLE DISPOSITIVE POWER
WITH -0-
---------------------------------------------------
10 SHARED DISPOSITIVE POWER
1,094,164
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,094,164
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
26.5%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
- --------------------------------------------------------------------------------
<PAGE> 5
ITEM 1. Security and Issuer.
This statement relates to the Common Stock, par value $.008
per share ("Common Stock") issued by Response USA, Inc., a Delaware corporation
(the "Company"), whose principal executive offices are located at 11-K Princess
Road, Lawrenceville, New Jersey 08648.
ITEM 2. Identity and Background.
This statement is filed by BKR, Inc., a Nevada corporation
("BKR"), Bert Bedrosian, the Chairman and President of BKR, and Robin Bedrosian,
the Secretary and Treasurer and a Director of BKR. Bert Bedrosian owns one
hundred percent (100%) of the outstanding capital stock of BKR. Bert Bedrosian
as an Officer and Shareholder of BKR and Robin Bedrosian as an Officer may be
deemed to beneficially own the shares of Common Stock of the Company owned of
record by BKR. BKR's principal business is the manufacture and distribution of
personal emergency response systems and the monitoring of said systems at its
principal place of business located at 7944 East Beck Lane, Suite 210,
Scottsdale, Arizona 85260. BKR, Bert Bedrosian and Robin Bedrosian are sometimes
referred to collectively as the Reporting Persons.
None of the Reporting Persons have, during the last five (5)
years (i) been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors), or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violations with respect to such laws.
ITEM 3. Source and Amount of Funds or Other Consideration.
The 1,094,164 shares of Common Stock were issued to BKR
pursuant to a Purchase Agreement dated March 4, 1997 (the "Purchase Agreement")
whereby the Company acquired certain assets of BKR in exchange for the stock
which was issued at a price of $3.016 per share.
ITEM 4. Purpose of Transaction.
The purpose of the acquisition of the stock is for investment.
The Reporting Persons may make purchases of Common Stock from time to time and
may acquire or dispose of any or all of the shares of Common Stock held by them
at any time. BKR holds a warrant pursuant to which it may acquire up to 450,000
additional shares of the Company's Common Stock. In addition, pursuant to the
Purchase Agreement, under certain circumstances BKR may be issued additional
shares of the Company's Common Stock (See Item 6). The Reporting Persons have no
plans or proposals which relate to, or could result in any of the matters
referred to in Paragraphs (b) through (j), of Item 4 of Schedule 13D.
<PAGE> 6
ITEM 5. Interest in Securities of the Issuer.
As of the date hereof, the Reporting Persons beneficially own
1,094,164 shares of the Company's Common Stock, comprising approximately 26.50%
of the shares outstanding. The percentage used herein is calculated based upon
the 4,130,908 shares of Common Stock of the Company stated by the Company as
issued and outstanding as of March 4, 1997. The Reporting Persons have shared
voting and dispositive power with respect to all the shares of Common Stock to
which this statement relates. None of the Reporting Persons have effected any
transactions in the shares of the Common Stock in the past sixty (60) days
except for the acquisition of the Common Shares.
No person other than the Reporting Persons has the right to
receive or the power to direct receipt of dividend or the proceeds of sale of
the shares of Common Stock.
ITEM 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
BKR and the issuer are equal owners of HealthLink, Ltd., a
Nevada limited liability company and BKR has been granted through HealthLink,
Ltd. the right to acquire up to 450,000 shares of the Common Stock of the
Company based on certain performance criteria. The Company has, pursuant to the
Purchase Agreement, guaranteed a value of $3,300,000.00 payable in shares of the
Common Stock of the Company. An arrangement has been reached whereby upon the
sale of a certain amount of the shares and assuming a value less than the
$3,300,000.00 value the Company has agreed to issue additional Common Shares to
BKR in order to allow BKR to receive the value of $3,300,000.00. Other than the
foregoing, there are no contracts, arrangements, understandings or relationships
with the Reporting Persons or any other person with respect to the securities of
the issuer, including but not limited to, transfer or voting of any other
securities, finders' fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, divisions of profits or loss or the giving or
withholding of proxies.
ITEM 7. Materials to be Filed as Exhibits.
99.1 Warrant.
99.2 Purchase Agreement.
99.3 Joint Filing Agreement.
<PAGE> 7
SIGNATURE
After reasonable inquiry and to the best of such person's
knowledge and belief, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.
Dated: May 12, 1997 BKR, INC.,
a Nevada corporation
By: /s/ Bert Bedrosian
---------------------------------
BERT BEDROSIAN, President
/s/ Bert Bedrosian
-------------------------------------
BERT BEDROSIAN
/s/ Robin Bedrosian
--------------------------------------
ROBIN BEDROSIAN
<PAGE> 1
EXHIBIT 99.1
THE WARRANTS AND COMMON STOCK ISSUABLE UPON EXERCISE OF
WARRANTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AS AMENDED (THE "ACT"), AND THE WARRANTS AND COMMON
STOCK ISSUABLE ON EXERCISE OF WARRANTS MAY NOT BE SOLD
UNLESS THERE IS A REGISTRATION STATEMENT IN EFFECT COVERING
THE WARRANTS AND COMMON STOCK OR THERE IS AVAILABLE AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE ACT
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
RESPONSE USA, INC.
This is to certify that, for value received, BKR, Inc., having an
address at 7944 East Beck Lane, Suite 210, Scottsdale, Arizona 85260, or assigns
(the "Holder" or "Holders") is entitled to purchase, subject to the provisions
of this warrant, from Response USA, Inc., a Delaware corporation (the
"Company"), having a principal place of business located at 11-H Princess Road,
Lawrenceville, New Jersey 08642, the number of shares as set forth below (the
"Warrant Shares") of the common stock, $.008 par value, of the Company (the
"Common Stock"), at any time during the period commencing when and if
HealthLink, Ltd. shall place 10,000 personal emergency response systems ("PERS")
online (the "Exercise Commencement Date"), until 5:00 P.M., New York City time,
on the date five (5) years thereafter (which shall be referred to herein as the
"Exercise Term"), subject to adjustment as set forth hereinafter. This warrant
and any warrant resulting from a transfer or subdivision of this warrant shall
sometimes hereinafter be referred to as a "Warrant."
1. EXERCISE OF WARRANT. The number of shares of Common Stock which may
be purchased upon the exercise of this Warrant shall be 30,000 shares for each
10,000 PERS placed online by HealthLink, Ltd., at an initial exercise price of
$1.00 per share ("Purchase Price"); provided, however, that in no event shall
this Warrant be exercisable to purchase more than 450,000 shares of Common
Stock. This Warrant may be exercised in whole or in part at any time or from
time to time during the period commencing on the Exercise Commencement Date
through the last day of the Exercise Term, or if such day is a day on which
banking institutions in the State of New York are authorized by law to close,
then on the next succeeding day which shall not be such a day, by presentation
and surrender hereof to the Company at its principal office, or at the office of
its stock transfer agent, if any, with the Purchase Form annexed hereto duly
executed and accompanied by payment of the Purchase Price in cash or certified
or official bank check for the number of shares specified in such form. If this
Warrant should be exercised in part only, the Company shall, upon surrender of
this Warrant for cancellation, execute and deliver a new
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Warrant evidencing the rights of the Holder thereof to purchase the balance of
the shares purchasable hereunder. Upon receipt by the Company of this Warrant at
its office, or by the stock transfer agent of the Company at its office, in
proper form for exercise and accompanied by the appropriate payment for the
Warrant Shares issuable upon such exercise, the Holder shall be deemed to be the
holder of record of such Warrant Shares, notwithstanding that the stock transfer
books of the Company shall then be closed or that certificates representing such
Warrant Shares shall not then be actually delivered to the Holder. Certificates
for the Warrant Shares shall be delivered to the Holder within a reasonable
time, not to exceed five (5) business days following the exercise of this
Warrant.
2. RESERVATION AND LISTING OF SHARES. The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant, such number of shares of its Common Stock as shall be required for
issuance and delivery upon exercise of this Warrant. Commencing with an initial
public offering of the Company's Common Stock, as long as the Warrants shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of the Warrants to be listed on any
exchange on which the Common Stock then trades.
3. FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. Subject to
Section (6)(h) hereof, any fraction of a share called for upon any exercise
hereof shall be canceled.
4. EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This warrant is
exchangeable, without expense, at the option of the Holder, upon presentation
and surrender hereof to the Company at its office or at the office of its stock
transfer agent, if any, for other Warrants of different denominations entitling
the Holder thereof to purchase in the aggregate the same number of shares of
Common Stock as are purchasable hereunder. Subject to Section 10 hereof, upon
surrender of this Warrant to the Company at its principal office or at the
office of its stock transfer agent, if any, with the Assignment Form annexed
hereto duly executed and funds sufficient to pay the applicable transfer tax,
if any, the Company shall, without charge, execute and deliver a new Warrant in
the name of the assignee named in such instrument of assignment and this
Warrant shall promptly be canceled. This Warrant may be divided or combined
with other Warrants which carry the same rights upon presentation thereof at
the office of the Company or at the office of its stock transfer agent, if any,
together with a written notice signed by the Holder hereof specifying the names
and denominations in which new Warrants are to be issued. Upon receipt by the
Company of evidence satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and, in the case of loss, theft or destruction, of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date. Any such new Warrant, when executed and delivered, shall
constitute an additional contractual obligation on the part of the Company,
whether or not this Warrant so lost, stolen, destroyed, or mutilated shall be
at any time enforceable by anyone.
2
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5. RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder of the Company until exercise hereof.
6. ADJUSTMENTS OF PURCHASE PRICE AND NUMBER OF SHARES.
(a) RECLASSIFICATION, CONSOLIDATION, MERGER, ETC.
In case of any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination),
or in the case of any consolidation of the Company with, or merger of the
Company into, another corporation (other than a consolidation or merger in which
the Company is the surviving corporation and which does not result in any
reclassification or change of the outstanding shares of Common Stock, except a
change as a result of a subdivision or combination of such shares or a change in
par value, as aforesaid), or in the case of a sale or conveyance to another
corporation of all or a substantial part of the property of the Company, the
Holder shall thereafter have the right to purchase the kind and number of shares
of stock and other securities and property receivable upon such
reclassification, change, consolidation, merger, sale or conveyance as if the
Holder were the owner of the shares of Common Stock underlying the Warrants
immediately prior to any such event.
(b) DIVIDENDS AND OTHER DISTRIBUTIONS WITH RESPECT TO
OUTSTANDING SECURITIES. In the event that the Company shall at any time prior to
the exercise of all Warrants declare a dividend (other than a dividend
consisting solely of shares of Common Stock or a cash dividend or distribution
payable out of current or retained earnings) or otherwise distribute to its
shareholders any monies, assets, property, rights, evidences of indebtedness,
securities (other than shares of Common Stock), whether issued by the Company or
by another person or entity, or any other thing of value, the Holder or Holders
of the unexercised Warrants shall thereafter be entitled, in addition to the
shares of Common Stock or other securities receivable upon the exercise thereof,
to receive, upon the exercise of such Warrants, the same monies, property,
assets, rights, evidences of indebtedness, securities or any other thing of
value that they would have been entitled to receive at the time of such dividend
or distribution as if the Holder were the owner of the shares of Common Stock
underlying the Warrants immediately prior to any such event. At the time of any
such dividend or distribution, the Company shall make appropriate reserves to
ensure the timely performance of the provisions of this Subsection.
(c) FRACTIONAL SHARES. As to any fraction of a share which
the holder of this Warrant would be entitled to purchase upon exercise of this
warrant, the Company shall pay, in lieu of such fractional interest, an amount
in cash equal to the current market value of such fractional interest, to the
nearest one-hundredth of a share. The Holder, by his acceptance hereof,
expressly waives any right to receive any fractional share of stock or
fractional Warrant upon exercise of this Warrant.
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7. DEFINITION OF "COMMON STOCK". For the purpose of this Warrant, the
term "Common Stock" shall mean, in addition to the class of stock designated as
the Common Stock, par value $.008 per share, of the Company on the date
hereof, any class of stock resulting from successive changes or
reclassifications of the Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value. If
at any time, as a result of an adjustment made pursuant to one or more of the
provisions of Section (6) hereof, the shares of stock or other securities or
property obtainable upon exercise of this Warrant shall include securities of
the Company other than shares of Common Stock or securities of another
corporation, then thereafter the amount of such other securities so obtainable
shall be subject to adjustment from time to time in a manner and upon terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in Section (6) hereof and all other provisions of this Warrant with
respect to Common Stock shall apply on like terms to any such other shares or
other securities.
8. REGISTRATION UNDER THE SECURITIES ACT OF 1933. The Warrant Shares
issuable upon exercise of this Warrant are subject to a Registration Rights
Agreement of even date, the terms of which are incorporated by reference into
this Warrant as if such terms are set forth at length herein.
9. TRANSFER TO COMPLY WITH THE ACT. This Warrant or the Warrant Shares
or any other security issued or issuable upon exercise of this Warrant may not
be sold or otherwise disposed of except as follows:
(a) upon an opinion of counsel to the Holder, acceptable to the
counsel to the Company to a person who, in the opinion of counsel for the
Company, is a person to whom this Warrant or Warrant Shares may legally be
transferred without registration and without the delivery of a current
prospectus under the Act with respect thereto and then only against receipt of a
letter from such person in which such person represents that he is acquiring the
Warrants or Warrant Shares for his own account for investment purposes and not
with a view to distribution, and in which such person agrees to comply with the
provisions of this Section (9) with respect to any resale or other disposition
of such securities; or
(b) to any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering thereof for
such sale or disposition.
10. NOTICES TO WARRANT HOLDERS. Nothing contained in this Agreement
shall be construed as conferring upon the Holder or Holders the right to vote or
to consent or to receive notice as a shareholder in respect of any meetings of
shareholders for the election of directors or any other matter, or as having any
rights whatsoever as a shareholder of the Company. If, however, at any time
prior to the expiration of the Warrants and their exercise, any of the following
events shall occur:
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(a) The Company shall take a record of the holders of its shares of
Common Stock for the purpose of entitling them to receive a dividend or
distribution payable otherwise than in cash, or a cash dividend or distribution
payable otherwise than out of current or retained earnings, as indicated by the
accounting treatment of such dividend or distribution on the books of the
Company; or
(b) The Company shall offer to all the holders of its Common Stock
any additional shares of capital stock of the Company or securities convertible
into or exchangeable for shares of capital stock of the Company, or any warrant,
right or option to subscribe therefor; or
(c) A dissolution, liquidation or winding up of the Company (other
than in connection with a consolidation or merger) or a sale of all or
substantially all of its property, assets and business shall be proposed; or
(d) There shall be any capital reorganization or reclassification
of the capital stock of the Company, or consolidation or merger of the Company
with another entity;
then, in any one or more of said events, the Company shall give written notice
of such event to the Holder at least fifteen (15) days prior to the date fixed
as a record date or the date of closing the transfer books for the determination
of the shareholders entitled to such dividend, distribution, convertible or
exchangeable securities or subscription rights, warrants or options, or entitled
to vote on such proposed dissolution, liquidation, winding up or sale. Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be. Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection with the declaration or
payment of any such dividend or distribution, or the issuance of any convertible
or exchangeable securities or subscription rights, warrants or options, or any
proposed dissolution, liquidation, winding up or sale.
11. NOTICES. All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to the Holder, to him at the address set forth in the
preamble of this Warrant; or
(b) If to the Company, to the address set forth in the preamble of
this Agreement; or
(c) In each case to such other address as either party may
designate by notice to the other party.
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12. SUCCESSORS. All the covenants and provisions of this Warrant by or
for the benefit of the Holder shall inure to the benefit of his successors and
assigns hereunder.
13. TERMINATION. This Warrant will terminate on the earlier of (i) the
date the Warrant has been entirely exercised; or (ii) the last day of the
Exercise Term.
14. GOVERNING LAW. This Warrant shall be deemed to be made under the
laws of the State of New Jersey without giving effect to conflicts of laws and
principles and for all purposes shall be construed in accordance with the laws
of said State.
15. ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Warrant and all
attachments hereto and all incorporation by references set forth herein, set
forth the entire agreement and understanding between the parties as to the
subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them. This Warrant
may be amended, the Company may take any action herein prohibited or omit to
take any action herein required to be performed by it, and any breach of any
covenant, agreement, warranty or representation may be waived, only if the
Company has obtained the written consent or waiver of the Holder. No course of
dealing between or among any persons having any interest in this Warrant will be
deemed effective to modify, amend or discharge any part of this Warrant or any
rights or obligations of any person under or by reason of this Warrant.
RESPONSE USA, INC.,
By:
-----------------------------
Name: Richard Brooks
Title: President
Dated: March 4, 1997
Attest:
- -----------------------
6
<PAGE> 7
RESPONSE USA, INC.
ASSIGNMENT FORM
(To be signed only upon assignment of Warrant)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto _________________________________________________________________________
________________(Name and address of assignee must be printed or typewritten)
the rights of the undersigned represented by this Warrant, to the extent of
_______________________________________________________________________________
(_______________) shares of Common Stock, $.008 par value, of Response USA,
Inc. (the "Company") hereby irrevocably constituting and appointing_____________
_______________ Attorney to make such transfer on the books of the Company,
with full power of substitution in the premises.
Dated:______________, 199___ _____________________________
Signature of Registered Holder
Signature Guaranteed:
___________________________
Note: The above signature must correspond
with the name as it appears upon
the front page of this Warrant in
every particular, without
alteration or enlargement or any
change whatever.
6
<PAGE> 8
RESPONSE USA, INC.
PURCHASE FORM
RESPONSE USA, INC.:
The undersigned hereby irrevocably elects to exercise the
right of purchase represented by this Warrant for, and to purchase hereunder,
shares of Common Stock, $.008 par value per share, of Response USA, Inc. (the
"Shares") provided for herein, and requests that certificates for the Shares be
issued in the name of: ____________________________________________________
(Please print name, address and social security number) and, if said number of
Shares shall not be all the Share purchasable hereunder, that a new Warrant for
the balance of the Shares purchasable under this Warrant be registered in the
name of the undersigned Warrant holder or his Assignee as below indicated and
delivered to the address stated below.
Dated:________________, 199__
Name of Warrant or Assignee:___________________________________
(Please print)
Address:_______________________________________________________
_______________________________________________________________
Signature:_____________________________________________________
Signature Guaranteed:
____________________________
Note: The above signature must correspond
with the name as it appears upon
the front page of this Warrant in
every particular, without
alteration or enlargement or any
change whatever, unless this
Warrant has been assigned.
7
<PAGE> 1
EXHIBIT 99.2
PURCHASE AGREEMENT
DATED AS OF
MARCH 4, 1997
AMONG
BKR, INC.,
A NEVADA CORPORATION
RESPONSE USA, INC.,
A DELAWARE CORPORATION
AND
HEALTHLINK, LTD.,
A NEVADA LIMITED LIABILITY COMPANY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE 1
<S> <C> <C>
DEFINITIONS.....................................................................................2
1.1 Definitions............................................................................2
ARTICLE 2
SALE OF FIFTY PERCENT (50%) UNDIVIDED
INTEREST IN ASSETS AND TRANSFER OF SELLER
AND BUYER'S INTEREST IN SUCH ASSETS.............................................................6
2.1 Purchase and Sale of Purchased Interest
by Buyer...............................................................................6
2.2 Purchase Price.........................................................................6
2.3 Transfer of Purchased Interest by Buyer
to the Company.........................................................................7
2.4 Transfer of Seller's Remaining Interest to
the Company............................................................................7
2.5 Liabilities Not Being Assumed..........................................................7
2.6 Post-Closing Adjustment to Response
Shares.................................................................................7
ARTICLE 3
CLOSING.........................................................................................8
3.1 Closing Date...........................................................................8
3.2 Documents to be Delivered at the Closing
by Seller..............................................................................8
3.3 Documents to be Delivered at the Closing
by Buyer...............................................................................8
3.4 Contributions of Purchased and
Remaining Interest.....................................................................8
3.5 Delivery of HealthLink Memberships.....................................................8
3.6 Delivery of Response Warrant...........................................................8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
...............................................................................................9
4.1 Organization and Related Matters.......................................................9
4.2 Authorization..........................................................................9
4.3 No Conflicts...........................................................................9
4.4 No Brokers or Finders..................................................................9
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C> <C>
4.5 Capital Structure......................................................................9
4.6 Disclosure Package....................................................................10
4.7 Validity of Shares....................................................................10
4.8 Absence of Litigation.................................................................11
4.9 Eligibility for Use of Form S-3.......................................................11
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER.......................................................11
5.1 Seller Organization and Related Matters...............................................11
5.2 Authorization of Seller...............................................................11
5.3 No Other Liabilities or Contingencies.................................................11
5.4 Absence of Certain Developments.......................................................12
5.5 Material Contracts....................................................................12
5.6 Title to Properties...................................................................12
5.7 Intangible Property...................................................................13
5.8 Tax Matters...........................................................................13
5.9 Accounting Records....................................................................13
5.10 No Defaults or Conflicts..............................................................14
5.11 Legal Proceedings.....................................................................14
5.12 Permits; No Violation of Law..........................................................14
5.13 Compliance with Law...................................................................15
5.14 No Brokers or Finders.................................................................15
5.15 Environmental Compliance..............................................................15
5.16 Acquisition for Investment............................................................15
5.17 Material Facts........................................................................16
5.18 Accuracy..............................................................................16
ARTICLE 6
COVENANTS WITH RESPECT TO CONDUCT OF SELLER
AND BUYER BEFORE AND AFTER CLOSING.............................................................16
6.1 Conduct of Business...................................................................16
6.2 Access; Books and Records.............................................................17
6.3 Notification of Certain Matter........................................................17
6.4 Permits and Approvals.................................................................17
6.5 Cooperation...........................................................................18
6.6 Administration of Accounts............................................................18
6.7 Registration of Response Shares.......................................................18
</TABLE>
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<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE 7
CONDITIONS OF PURCHASE.........................................................................22
7.1 Conditions Precedent to the Obligation of
the Buyer to Close....................................................................22
7.2 Conditions Precedent to the Obligation of
the Seller to Close...................................................................23
ARTICLE 8
TERMINATION OF OBLIGATIONS; SURVIVAL OF COVENANTS..............................................24
8.1 Termination of Agreement..............................................................24
8.2 Effect of Termination.................................................................25
ARTICLE 9
INDEMNIFICATION................................................................................25
9.1 Obligations of the Seller.............................................................25
9.2 Obligations of Buyer..................................................................26
9.3 Procedure.............................................................................26
9.4 Exclusive Remedy; Survival............................................................28
ARTICLE 10
GENERAL........................................................................................28
10.1 Amendments; Waivers...................................................................28
10.2 Exhibits; Integration.................................................................29
10.3 Best Efforts; Further Assurances......................................................29
10.4 Choice of Law.........................................................................29
10.5 Arbitration...........................................................................29
10.6 No Assignment.........................................................................29
10.7 Headings..............................................................................29
10.8 Counterparts..........................................................................30
10.9 Publicity and Reports.................................................................30
10.10 Confidentiality.......................................................................30
10.11 Notices...............................................................................30
10.12 Expenses..............................................................................31
10.13 Waiver................................................................................31
10.14 Representation By Counsel;
Interpretation........................................................................31
10.15 Specific Performance..................................................................31
10.16 Severability..........................................................................31
Signatures........................................................................32, 33
</TABLE>
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<PAGE> 5
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (the "Agreement") is entered into as of
March , 1997, among BKR, Inc., a Nevada corporation ("Seller"), Response USA,
Inc., a Delaware corporation ("Buyer"), and HealthLink, Ltd., a Nevada limited
liability company ("the "Company"), with respect to the following facts:
A. Seller is engaged in the manufacture, sale and monitoring of
Personal Emergency Response Systems ("PERS") to the general
public; and
B. The parties have agreed to: (i) the purchase by Buyer of a
fifty percent (50%) undivided interest in Seller's Assets;
(ii) the contribution of Seller's remaining fifty percent
(50%) undivided interest in the Assets to HealthLink; and
(iii) the contribution of Buyer's fifty percent (50%)
undivided interest in the Assets to HealthLink (the
"Company");
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement and the Exhibits and Schedules
delivered pursuant to this Agreement, the following definitions shall apply:
(a) "Action" means any action, complaint, investigation, suit or other
proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator or Governmental Entity.
(b) "Affiliate" means a legal or natural Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with a specified Person; or a legal or natural Person that
directly, or indirectly through one or more intermediaries, owns or holds any
financial interest in a specified legal Person or a specified legal Person's
constituent members or shareholders.
(c) "Agreement" means this Agreement by and among Buyer, Seller and
HealthLink as amended or supplemented as provided in this Agreement.
(d) "Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of the foregoing, required to be
obtained from, or any notice, statement or other communication required to be
filed with or delivered to, any Governmental Entity or any other Person.
2
<PAGE> 6
(e) "Business" means the ownership and operation of the manufacture,
sale and monitoring of Personal Emergency Response Systems ("PERS") and all
activities incidental or related thereto, including the ownership of
intellectual property and all other such activities so related, and shall be
deemed to include any of the following incidents of such business: income, cash
flow, operations, condition (financial or other), and assets of Seller.
(f) "Business Day" means any day except Saturday, Sunday or any day on
which banks in the State of Nevada are permitted to be closed.
(g) "Closing" means the consummation of the transaction contemplated by
this Agreement.
(h) "Closing Date" means the date of the Closing.
(i) "Code" means the Internal Revenue Code of 1986, as amended from
time to time.
(j) "Contract" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
(k) "Contribution Date" means the date upon which Seller transfers the
Assets to Buyer, which shall be the same date upon which Buyer contributes the
Assets to the Company.
(l) "Employment Contracts" means all oral, written and executed
employment Contracts relating to the Business, including written and executed
Contracts with executives and employees, if any, and all rights of Seller
thereunder.
(m) "Encumbrance" means any claim, charge, easement, encumbrance,
security interest, lien, option, pledge, right of others or restriction (whether
on voting, sale, transfer, disposition or otherwise), whether imposed by
agreement, understanding, law, equity or otherwise, except for any restrictions
on transfer generally arising under any applicable federal or state securities
law.
(n) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and the related regulations and published interpretations.
(o) "ERISA Affiliate" means Seller and all trades or businesses
(whether or not incorporated) that are members of a group of which Seller is a
member and which are (i) a "controlled group" within the meaning of Section
414(b) of the Code, (ii) a group "under common control" within the meaning of
Section 414(c) of the Code, or (iii) an "affiliated service group" within the
meaning of Section 414(m) or of the Code.
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<PAGE> 7
(p) "GAAP" means generally accepted accounting principles in the United
States, as in effect from time to time. Where more than one alternative
treatment is permitted by GAAP as of any date, GAAP shall be deemed to refer, as
of such date, to the treatment actually utilized by Seller so long as such
treatment is permitted by GAAP.
(q) "Governmental Entity" means any government or any agency, bureau,
commission, court, department, official, political subdivision, tribunal or
other instrumentality of any government, whether federal, state or local,
domestic or foreign.
(r) "Hazardous Substance" includes (but shall not be limited to)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity or reproductive toxicity, and petroleum
and drilling fluids, produced waters and other wastes associated with the
exploration, development, or production of crude oil, natural gas or geothermal
energy.
(s) "Indemnifiable Claim" means any Loss for or against which any party
is entitled to indemnification under this Agreement; "Claim" includes any claim
of right to indemnification.
(t) "Intangible Property" means any trade secret or other confidential
information or know-how and any and all Marks and goodwill.
(u) "IRS" means the Internal Revenue Service or any successor entity.
(v) "Knowledge" means matters that are to the best knowledge of a party
after diligent inquiry, including matters that would have been disclosed by an
accountant's audit.
(w) "Law" means any constitutional provision, statute or other law,
rule, regulation, or interpretation of any thereof and any Order.
(x) "Loss" means any cost, damage, disbursement, expense, liability,
loss, deficiency, diminution in value, obligation, penalty (except to the extent
incurred solely by reason of the act or omission of the specified Person) or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including interest or other carrying costs, penalties (except to the extent
incurred solely by reason of the act or omission of the specified Person),
reasonable legal, accounting and other professional fees and expenses incurred
in the investigation, collection, prosecution and defense of claims and amounts
paid in settlement that may be imposed on or otherwise incurred or suffered by
the specified Person.
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<PAGE> 8
(y) "Material Contract" means any Contract to which Seller is a party
or by which any of its assets is in a material manner bound or affected that
(a) after the Balance Sheet Date could obligate Seller to pay an amount of Five
Hundred Dollars ($500.00) or more, (b) has a term beyond three (3) months after
the Closing Date, (c) otherwise could restrict Business activities, (d) provides
for the extension of credit, (e) limits the ability of the Buyer to conduct the
Business, including as to manner or place, (f) provides for a guaranty or
indemnity, (g) grants a power of attorney, agency or similar authority to
another person or entity, (h) contains a right of first refusal or right of
consent, or (i) requires Seller or the Company, upon transfer of the Assets, to
buy or sell goods.
(z) "Order" means any decree, injunction, judgment, order, ruling or
writ.
(aa) "Permit" means any license, permit, franchise, certificate of
authority or order, or any waiver of the foregoing, required to be issued by any
Governmental Entity.
(bb) "Person" means an association, a corporation, an individual, a
partnership, a limited liability company, a trust or any other entity or
organization, including a Governmental Entity.
(cc) "Purchased Interest" shall have the meaning set forth in Section
2.1 of this Agreement.
(dd) "Purchase Price" shall have the meaning set forth in Section 2.2
of this Agreement.
(ee) "Remaining Interest" shall have the meaning set forth in Section
2.1 of this Agreement.
(ff) "Tax" means any foreign, federal, state, county or local income,
sales and use, excise, franchise, real and personal property, transfer, gross
receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity, any interest and penalties (civil or criminal) related
thereto or to the nonpayment thereof, and any Loss in connection with the
determination, settlement or litigation of any Tax liability.
(gg) "Tax Return" means a report, return or other information required
to be supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes any Affiliate.
(hh) "Assets" are assets of the Seller described in Exhibit A.
(ii) "The Response Closing Price Per Share" means the average bid price
for the Response Shares on the NASDAQ stock exchange during the fifteen (15)
trading days immediately preceding March 4, 1997.
5
<PAGE> 9
For all purposes of this Agreement, except as otherwise expressly provided:
(i) the terms defined in this Article I have the meanings assigned to
them in this Article I and include the plural as well as the singular,
(ii) all accounting terms not otherwise defined herein have the
meanings assigned under GAAP,
(iii) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement,
(iv) pronouns of either gender or neuter shall include, as appropriate,
the other pronoun forms,
(v) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision, and
(vi) the words "include," "including" and other words of similar import
mean "include, without limitation," or "including, without limitation,"
regardless of whether any reference to "without limitation" or words of similar
import is made.
ARTICLE 2
SALE OF FIFTY PERCENT (50%) UNDIVIDED INTEREST IN ASSETS
AND TRANSFER OF SELLER AND BUYER'S INTEREST IN SUCH ASSETS
2.1 PURCHASE AND SALE OF PURCHASED INTEREST BY BUYER. In reliance upon the
representations, warranties and covenants contained herein, and subject to the
terms and conditions of this Agreement, on the Closing Date Seller shall sell,
convey, assign, transfer and deliver to the Buyer a fifty percent (50%)
undivided interest in the Assets set forth in Exhibit A. Such interest is
referred to as the "Purchased Interest." The remaining fifty percent (50%)
undivided interest in the Assets owned by Seller as set forth in Exhibit A,
shall be referred to as the "Remaining Interest."
2.2 PURCHASE PRICE. In reliance upon the representations, warranties and
covenants contained herein, and subject to the terms and conditions of this
Agreement, Buyer shall pay to Seller the Purchase Price of Three Million Three
Hundred Thousand Dollars ($3,300,000.00). The purchase price shall be payable by
the delivery of a number of shares of common stock of Buyer ("Response Shares")
having a value equal to the Purchase Price. The number of shares required to
attain the Three Million Three Hundred Thousand Dollars ($3,300,000.00) shall be
computed by averaging the closing bid price for the Response Shares on the
NASDAQ stock exchange during the fifteen (15) trading days immediately preceding
the Closing Date (the "Response Closing Price Per Share").
6
<PAGE> 10
The Response Shares shall contain a restriction such that Seller may only sell
Five Thousand (5,000) shares per day for no more than one hundred thousand
(100,000) shares per month.
Buyer shall undertake to immediately register such shares for
the benefit of Seller by the filing of a registration statement pursuant to the
provisions of Section 6.7 hereof.
2.3 TRANSFER OF PURCHASED INTEREST BY BUYER TO THE COMPANY. In reliance upon the
representations, warranties and covenants contained herein, and subject to the
terms and conditions of this Agreement, on the Closing Date Buyer shall
contribute, convey, assign, transfer and deliver to HealthLink, Ltd. the
Purchased Interest.
2.4 TRANSFER OF SELLER'S REMAINING INTEREST TO THE COMPANY. In reliance upon the
representations, warranties and covenants contained herein, and subject to the
terms and conditions of this Agreement, on the Closing Date Seller shall
contribute, convey, assign, transfer and deliver to the Company the Remaining
Interest. Seller shall receive a fifty percent (50%) membership interest in
exchange for the contribution of the Remaining Interest to the business of
HealthLink, Ltd. which shall be governed by the terms and conditions of an
Operating Agreement in substantially the form attached hereto as Exhibit O.
2.5 LIABILITIES NOT BEING ASSUMED. Buyer and HealthLink, Ltd. are not assuming
any liabilities of the Seller other than obligations arising from and after the
Closing Date under the contracts.
2.6 POST-CLOSING ADJUSTMENT TO RESPONSE SHARES. If Seller sells at least
1,000,000 Response Shares in open market transactions, and the average gross
sale price per share obtained by Seller is less than the Response Closing Price
per share (as evidenced by copies of appropriate brokerage account statements,
or any other manner reasonably acceptable to Buyer) (the "Shortfall Amount"),
then Buyer shall, at its option either:
(a) Pay to Seller within sixty (60) days after notice of such
sale an amount equal to the difference between the Response Closing Price per
share and Seller's gross sale price per share; or
(b) Deliver to such Seller additional shares of Common Stock
with an aggregate market value (based on the average closing bid price of the
Common Stock during the fifteen (15) trading days immediately preceding the date
of delivery) equal to such difference, which shares shall be registered and
freely transferable without restriction under the Securities Act, other than any
restriction arising from the holders status as an "affiliate," as defined in
Rule 144 under the Securities Act.
7
<PAGE> 11
Upon the sale of the balance of Seller's Response Shares, the
foregoing procedure shall be followed such that Seller shall in no event receive
aggregate gross proceeds from the sale of the Response Shares of less than
$3,300,000. To the extent that Seller receives a Shortfall Amount form Purchaser
and receives gross proceeds from the sale of the Response Shares in excess of
$3,300,000 (the "Excess"), Seller shall pay to Purchaser within sixty (60) days
of the last sale of the Response Shares, an amount equal to the Excess, but not
to exceed the Shortfall Amount.
ARTICLE 3
CLOSING
3.1 CLOSING DATE. The Closing of the transaction shall take place at the office
of BKR at 7944 E. Beck Lane, Suite 210, Scottsdale, Arizona, 85260, on or before
the close of business March 4, 1997.
3.2 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY SELLER. At the Closing, Seller
shall deliver or cause to be delivered to Buyer certificates and such other
instruments of transfer necessary or appropriate to transfer to and vest in the
Buyer and thereafter in HealthLink, Ltd. all of Seller's right, title and
interest in and to fifty percent (50%) of the Assets.
3.3 DOCUMENTS TO BE DELIVERED AT THE CLOSING BY BUYER. Within forty-eight (48)
hours after the Closing, Buyer shall deliver or cause to be delivered to Seller,
the shares representing the Purchase Price.
3.4 CONTRIBUTIONS OF PURCHASED AND REMAINING INTEREST. At the Closing Seller and
Buyer shall deliver or cause to be delivered to HealthLink certificates or such
other instruments of transfer necessary or appropriate to transfer and vest in
HealthLink, Ltd. all of Buyer's and Seller's interests in the Purchased and
Remaining Interests. Seller shall deliver an Optional Advance Note substantially
in the form attached hereto marked Exhibit N for the benefit of the Company.
3.5 DELIVERY OF HEALTHLINK MEMBERSHIPS. Subject to the successful and completed
contributions and transfers set forth in Section 3.4 above HealthLink, Ltd.
shall cause membership certificates to be issued and delivered to Seller and
Buyer representing the membership interest of each in HealthLink, Ltd.
3.6 DELIVERY OF RESPONSE WARRANT. Within forty-eight (48) hours after the
Closing, Buyer shall deliver or cause to be delivered to Seller a Warrant, in
the form attached hereto as Exhibit W, whereby Buyer grants to Seller the right
to purchase 30,000 Response Shares for each 10,000 personal emergency response
systems placed on line by HealthLink, Ltd. following the Closing Date, up to an
aggregate maximum of 450,000 Response Shares. The purchase price for such shares
shall be $3.00 per share. The shares covered by such warrant shall be registered
by Buyer pursuant to Section 6.7 below.
8
<PAGE> 12
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents, warrants and agrees as follows:
4.1 ORGANIZATION AND RELATED MATTERS. Buyer is a corporation duly organized and
validly existing under the laws of the State of Delaware and has all necessary
power and authority to operate, own and lease its properties and assets, to
carry on its business as now conducted, and to perform its obligations under
this Agreement.
4.2 AUTHORIZATION. Buyer has all required power and authority and has taken all
actions necessary to enter into this Agreement, to consummate all other
transactions contemplated hereby, and to perform its obligations hereunder. This
Agreement and any other agreements, instruments or documents entered into by
Buyer pursuant to this Agreement have been duly executed and delivered by Buyer
and constitute the legal, valid and, assuming due execution and delivery by the
other parties hereto and thereto, binding obligations of Buyer, enforceable in
accordance with their terms, except as to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally
and (b) rules of law and equity governing specific performance, injunctive
relief and other equitable remedies. The execution, delivery and performance of
this Agreement and any other agreement, instrument or document entered into by
Buyer pursuant to this Agreement and the Operating Agreement, have been duly
authorized by all necessary action of Buyer.
4.3 NO CONFLICTS. The execution, delivery and performance of this Agreement by
Buyer will not (a) materially violate the provisions of, or constitute a
material breach or default (whether upon lapse of time and/or the occurrence of
any act or event, or otherwise) under, its charter documents or bylaws or any
Contract to which it is a party that is material to its financial condition,
results of operations or conduct of its business, or (b) violate any Law to
which Buyer is subject.
4.4 NO BROKERS OR FINDERS. No agent, broker, finder or investment or commercial
banker, or other Person or firm engaged by or acting on behalf of Buyer or its
Affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to any broker's or finder's or similar fees or other commissions as a
result of this Agreement or such transactions. The Buyer agrees to pay any such
brokerage commissions, finders fees or similar compensation and to indemnify and
hold Seller harmless against any damages incurred as a result of any such claim.
4.5 CAPITAL STRUCTURE.
(a) Stock and Options. The authorized capital stock of Buyer
consists of 4,130,908 shares of common stock, .008 par value, and 6,890 shares
of Preferred Stock, 1996 Series A, 1,000 par value. At the close of business on
March 4, 1997, 4,130,908
9
<PAGE> 13
shares of Buyer's common stock were issued and outstanding, zero shares of
Buyer's common stock were held by Buyer in its Treasury and1,233,381 Class A
Warrants; 1,481,950 Class B Warrants; 49,700 Class C Warrants; 175,000 Options
at $4.50; 1,032,000 Options at $3.25 to Mellon Bank; and 2,868,400 Insider
Options at $2.50 for shares of Buyer's common stock were reserved for issuance
upon the exercise of the warrants or options to purchase Buyer's common stock.
6,890shares of Buyer's Preferred Stock, 1996 Series A are issued and
outstanding.
(b) No Other Commitments. Except for the Buyer options
disclosed in Section 4.5(a) above, and listed on Schedule 4.5 hereto, as of the
date hereof, there are no options, warrants, convertible, or other securities,
calls, commitments, conversion privileges or preemptive or other rights or
agreements of any character to which Buyer is a party or by which Buyer is bound
obligating Buyer or any of Buyer's subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold, any shares of capital stock of Buyer to
grant, extend or enter into any such option, warrant, call, right, commitment,
conversion right or agreement.
4.6 DISCLOSURE PACKAGE. Buyer has delivered to Seller the following documents:
(a) Buyer's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1996; (b) Buyer's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1996; (c) Buyer's Quarterly Report on Form 10-QSB for the quarter
ended December 31, 1996; (d) all Current Reports on Form 8-K filed by Buyer
since July 1, 1996; and (e) all other documents filed by Buyer with the
Securities and Exchange Commission since July 1, 1996. The documents listed or
required to be listed in items (a) through (e) above are collectively referred
to as the "Buyer Disclosure Package." The financial statements of Buyer included
in the Buyer Disclosure Package complied as to form in all material respects
with the then applicable accounting requirements and published rules and
regulations of the Securities and Exchange Commission with respect thereto, were
prepared in accordance with generally accepted accounting principals applied on
a consistent basis during the periods involved (except as may have been
indicated in the notes thereto or, in the case of any unaudited statements, as
permitted by Form 10-Q as promulgated by the SEC) and fairly present (subject,
in the case of the unaudited statements, to normal, year-end, audit adjustments)
be consolidated financial position of Buyer and its consolidated subsidiaries as
at the respective dates thereof and the consolidated results of their operations
and cash flows. All of the documents contained in the Buyer Disclosure Package
are true, correct and complete in all material respects and do not contain any
untrue statements of material fact or omit to state any material fact necessary
in order to make such representations, warranties, or statements, in light of
the circumstances under which they were made, not misleading.
4.7 VALIDITY OF SHARES. The Response Shares to be issued pursuant to this
Agreement will, when issued, (a) be duly authorized, validly issued, fully paid
and non-assessable, (b) be free and clear of any liens and encumbrances except
for applicable restrictions on transfer under applicable securities law, and (c)
not be subject to any preemptive rights created by statute, the certificate of
incorporation or the bylaws of Buyer.
10
<PAGE> 14
4.8 ABSENCE OF LITIGATION. Except as set forth in Schedule 4.8, there is no
claim, action, proceeding or investigation pending or, to the best of knowledge
of Buyer, threatened against Buyer or any property or asset of Buyer, before any
court, arbitrator or administrative, governmental or regulatory or body,
domestic or foreign, which individually or in the aggregate would be a material
adverse affect on Buyer. Neither Buyer nor any property or asset of Buyer is
subject to any order, writ, judgment, injunction, decree, determination or award
which would have, individually or in the aggregate, a material adverse affect on
Buyer.
4.9 ELIGIBILITY FOR USE OF FORM S-3. Buyer is eligible to use Form S-3 under the
Securities Act of 1933, as amended, to register the Response Shares as
contemplated by Section 6.7 hereof. Buyer shall use its best efforts to maintain
such eligibility until the sale of all of the Response Shares by Seller.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents, warrants and agrees, except as set forth in the schedules
attached to this Agreement, as follows:
5.1 SELLER ORGANIZATION AND RELATED MATTERS. Seller is a corporation duly
organized and validly existing under the laws of the State of Nevada and has all
necessary power and authority to operate, own and lease its properties and
assets, to carry on its Business as now conducted, and to perform its
obligations under this Agreement.
5.2 AUTHORIZATION OF SELLER. Seller has all required power and authority and has
taken all actions necessary to enter into this Agreement, to sell, assign,
contribute and deliver the Assets to Buyer and consummate all other transactions
contemplated hereby, and to perform its obligations hereunder. This Agreement
and any other agreements, instruments or documents entered into by Seller
pursuant to this Agreement have been duly executed and delivered by Seller and
constitute the legal, valid and, assuming due execution and delivery by the
other parties hereto and thereto, binding obligations of Seller, enforceable in
accordance with their terms, except as to the effect, if any, of (a) applicable
bankruptcy and other similar laws affecting the rights of creditors generally
and (b) rules of law and equity governing specific performance, injunctive
relief and other equitable remedies. The execution, delivery and performance of
this Agreement and any other agreement, instrument or document entered into by
Seller pursuant to this Agreement have been duly authorized by all necessary
action of Seller.
5.3 NO OTHER LIABILITIES OR CONTINGENCIES. To Seller's Knowledge, Seller does
not have any liabilities of any nature that relate to the Business except the
Liabilities set forth in Exhibit B. The financial statements disclosed by Seller
to Buyer as set forth in Exhibit B fairly represent the financial condition of
Seller as of the dates set forth therein. Upon Seller's transfer of the Assets
to Buyer, Buyer shall not assume and will not have any liabilities or
obligations material to the Business or its condition (financial or otherwise),
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whether accrued, absolute, contingent or otherwise, and whether due or to become
due, except for obligations arising from and after the Closing Date under the
Material Contracts. Upon Seller's transfer of the Assets to Buyer, Buyer shall
own the Assets free and clear of any Encumbrances.
(a) Except as set forth in this Agreement, upon Seller's
transfer of the Remaining Interest in the Assets to HealthLink, Ltd.,
HealthLink, Ltd. shall not have any liabilities or obligations to the Business
or its condition (financial or otherwise), whether accrued, absolute, contingent
or otherwise, and whether due or to become due, except for obligations arising
after the Closing Date under the Material Contracts. Since the Balance Sheet
Date, Seller has not incurred any accrued or contingent liability other than in
the ordinary course of business.
5.4 ABSENCE OF CERTAIN DEVELOPMENTS. Since the Balance Sheet Date, there has
been no (a) adverse change in the condition, financial or otherwise, of Seller
or in the assets, liabilities, properties or business of Seller, or, in the
reasonable judgment of Seller, the prospects of any of them, (b) declaration,
setting aside or payment of any distribution with respect to Seller, (c) loss,
destruction or damage to any property of Seller, whether or not insured, which
loss would have an adverse effect on the Business taken as a whole, (d) labor
trouble involving Seller or the Assets or any change in any of its personnel or
the terms and conditions of employment, (e) waiver of any material right, (f)
loan or extension of credit to any officer or employee of Seller, or (g)
acquisition or disposition of any assets (or any contract or arrangement
therefor) or any other transaction by Seller other than for fair value in the
ordinary course of business.
5.5 MATERIAL CONTRACTS. All Material Contracts being assigned to Buyer and the
Company that relate to the Business to which Seller or any Affiliate of Seller
is a party or assignee or to which Seller or any of its properties are subject
or by which any thereof are bound are listed in Exhibit B, and true copies of
the agreements appearing in such Exhibit, including all amendments and
supplements (and accurate descriptions of all oral agreements), have been made
available to Buyer. Each Material Contract is valid and in full force and effect
and enforceable in accordance with its terms; Seller has duly performed all its
obligations thereunder to the extent that such obligations to perform have
accrued; and no breach or default by Seller, or any other party or obligor with
respect thereto, has occurred or as a result of this Agreement or performance
will occur. Consummation of the transactions contemplated by this Agreement will
not (and will not give any person a right to) terminate or modify any rights of,
or accelerate or otherwise affect any obligation of Seller, Buyer or the Company
under any Material Contract.
5.6 TITLE TO PROPERTIES. Seller has good and marketable title to all properties
and assets necessary to the Business as currently conducted and as presently
proposed to be conducted, and to all of its properties and assets, free and
clear of all Encumbrances except as disclosed in this Agreement. All tangible
property included in such properties that is reasonably necessary to the
Business is in good condition and repair, except for reasonable wear and tear;
and all leases of real or personal property, to which Seller is
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a party, are fully effective and upon the transfer of Buyer's interest in the
Assets to the Company, will afford Buyer and the Company peaceful and
undisturbed possession of the subject matter of such leases. Seller is not in
violation of any zoning, building or safety ordinance, regulation or requirement
or other law or regulation applicable to the operation of owned or leased
properties likely to impede the normal operation of the Business, and Seller has
not received any written notice of violation with which Seller has not complied.
5.7 INTANGIBLE PROPERTY. Exhibit C lists any and all Marks, Patents and other
material items of Intangible Property in which Seller has an interest and the
nature of such interest. Such assets include all Permits or other rights with
respect to any of the foregoing. Seller has complete rights to and ownership of
all Intangible Property required for use in connection with the Business,
including the right to use, free and clear of claims or rights of others, all
trade secrets, customer lists, processes, computer software, patents, copyrights
and trademarks required for, incident to or included in the Business. Seller
does not use any such Intangible Property by consent of any other person and is
not required to and does not make any payments to others with respect thereto.
Such Intangible Property of Seller is fully assignable free and clear of any
Encumbrances. Seller has performed all obligations required to be performed by
it, and is not in default under any Contract relating to any of the foregoing.
In the operation of the Business, Seller (i) does not, to its knowledge,
infringe any patent, copyright or trademark rights of others; (ii) represents
and warrants that all trade secrets, know-how, technical processes and
procedures developed and belonging to Seller that are material to the Business
of Seller and will be material to the Business upon transfer of the Assets to
Buyer and thereafter to the Company, and that have not been patented, have been
kept confidential; and (iii) is not using and has not used any confidential
information, trade secrets or computer software required for the Business of any
former employer of any of Seller's past or present employees.
5.8 TAX MATTERS. There are no Taxes due and payable by Seller related to the
Business that have not been paid or adequately reserved for. There have been no
examinations or audits of any Tax Returns or reports by any applicable
Governmental Entity. There have been no actions or failures to act that would
inappropriately (a) defer taxable income or gains that would otherwise properly
accrue or (b) accelerate taxable deductions or losses that would otherwise
properly accrue. Seller has duly filed all Tax Returns required to have been
filed by it, and such Tax Returns are accurate and complete in all material
respects. There are no waivers of applicable statutes of limitations with
respect to Taxes for any year.
5.9 ACCOUNTING RECORDS. Seller has records that accurately and validly reflect
its transactions relating to the Business and accounting controls sufficient to
ensure that such transactions are (a) executed in accordance with management's
general or specific authorization and (b) recorded so as to maintain
accountability for such assets and transactions.
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5.10 NO DEFAULTS OR CONFLICTS. Seller is not in default (which default would
have a material adverse effect on Seller's, Buyer's or Company's properties or
assets or the business of Seller, Buyer or Company as currently conducted or
proposed to be conducted): (a) under its charter documents or its bylaws or any
note, indenture, mortgage, lease, agreement, contract, purchase order or other
instrument, document or agreement to which it is a party or by which it or any
of its property is bound or affected or (b) under any Order of any Governmental
Entity. There exists no condition, event or act which after notice, lapse of
time, or both, could constitute a default by Seller, Buyer or Company under any
of the foregoing. To Seller's Knowledge, no third party is in default under any
Contract to which Seller, Buyer or Company is a party or by which any of them or
any of their property is affected (which default would have an adverse effect on
Seller's, Buyer's or Company's properties or assets or the business of Seller,
Buyer or Company as currently conducted or proposed to be conducted). The
execution, delivery and performance of this Agreement by Seller and the
execution, delivery and performance of any related agreement or contemplated
transactions by Seller will not: (x) violate, or constitute a breach or default
(whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under any Material Contract binding on Buyer or Company or its assets
following transfer of the Assets to Buyer and Company by Seller as described
herein, (y) result in the imposition of any Encumbrance against any of Seller's
or, following transfer of the Assets to Buyer or Company, Buyer's assets or
Company's assets or (z) violate any Law to which Seller, Buyer, Company or their
respective assets are subject.
5.11 LEGAL PROCEEDINGS. There is no Order or Action pending or threatened,
against or affecting the Business, the Assets, conditions (financial or
otherwise) or prospects of the Seller (a) that questions the validity of this
Agreement, or any other agreements, instruments or documents entered into by
Seller pursuant to this Agreement or the right of Seller to enter into them or
to consummate the transactions contemplated hereby or thereby, or (b) that
individually or, when aggregated with one or more other Orders or Actions, has
resulted or might reasonably be expected to result in an adverse circumstance or
has impaired or might reasonably be expected to impair Seller's ability to
perform this Agreement or the consummation of the transactions contemplated by
this Agreement. Neither Seller nor any of its officers or directors (as
applicable) are a party to, or subject to the provisions of, any Order or Action
of any Governmental Entity. There is no Action by the Seller currently pending
or that Seller currently intends to initiate. There is no matter relating to the
Business or the assets of Seller as to which Seller has received any notice,
claim or assertion against or affecting any employee, agent or representative of
the Seller or any other Person, in connection with which any such Person has or
may be expected to have any right to be indemnified by any of the Seller.
5.12 PERMITS; NO VIOLATION OF LAW. Seller holds all Permits that are required by
any Governmental Entity to permit Seller (upon transfer of the Assets to Buyer
and Company), Buyer and Company to conduct the Business and all such Permits are
valid and in full force and effect. Seller is not in violation of any Law of any
Governmental Entity relevant to the ownership of its properties or the carrying
on of the Business.
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5.13 COMPLIANCE WITH LAW. Seller has organized and has conducted the Business in
accordance with applicable Laws, and the forms, procedures and practices of
Seller are in compliance with any applicable law governing bulk transfers.
5.14 NO BROKERS OR FINDERS. No agent, broker, finder or investment or commercial
banker, or other Person or firm engaged by or acting on behalf of the Seller in
connection with the negotiation, execution or performance of this Agreement, or
the transactions contemplated by this Agreement, will be entitled to any
brokerage or finder's or similar fee or other commission as a result of this
Agreement or such transactions. The Seller agrees to pay any such brokerage
commissions, finder's fees or similar compensation and to indemnify and hold
Buyer harmless against any damages incurred as a result of any such claim.
5.15 ENVIRONMENTAL COMPLIANCE. To Seller's Knowledge: (a) Seller has not
generated, used, transported, treated, stored, released or disposed of, and has
not expressly permitted anyone else to generate, use, transport, treat, store,
release or dispose of, any Hazardous Substance in violation of any Law; (b) any
Hazardous Substance handled or dealt with in any way in connection with the
Business of Seller during Seller's ownership has been and is being handled or
dealt with in all respects in compliance with applicable Laws; and (c) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance in connection with the conduct of the
Business of Seller that, to the best of Seller's knowledge, information or
belief, has created any liability under any Laws or which would require
reporting to or notification of any Governmental Entity.
5.16 ACQUISITION FOR INVESTMENT. Seller has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the investment in the Response Shares, and is able to bear the economic
risks of such investment. Seller is acquiring the Response Shares for its own
account, for investment and not with a view to distribution. Seller acknowledges
that:
(a) Seller has been given the opportunity to ask questions of
Buyer's management.
(b) Buyer has heretofore furnished Seller with copies of its
June 30, 1996 Form 10-KSB, and subsequent Form 10-QSB.
(c) The offering of the Response Shares has not been
registered under the Securities Act of 1933 (the "Securities Act"); Buyer is
relying on the exemption from such registration provided by Section 4(2) of the
Securities Act as a transaction by an issuer not involving a public offering.
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5.17 MATERIAL FACTS. This Agreement, the Exhibits and the Schedules hereto and
furnished contemporaneously herewith, and each other agreement, document,
certificate or written statement furnished or to be furnished to Buyer through
the Closing Date by or on behalf of Seller in connection with the transactions
contemplated hereby do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained herein
or therein in light of the circumstances in which they were made not misleading.
There is no fact known to Company that has not been disclosed herein or
otherwise by Seller to Buyer that may materially adversely affect the Business,
properties, assets or condition (financial or otherwise) of Buyer or the
Company.
5.18 ACCURACY. The accuracy of the Exhibits and/or Schedules provided by Seller
in connection with this Agreement shall be the sole responsibility of Seller on
the one hand, and not Buyer, on the other hand, notwithstanding any involvement
by any employees or representatives of Buyer in the preparation and compilation
of such Exhibits and/or Schedules.
ARTICLE 6
COVENANTS WITH RESPECT TO CONDUCT OF SELLER
AND BUYER BEFORE AND AFTER CLOSING
From the date hereof each of Buyer and Seller will comply with the terms and
provisions of this Article 6 applicable to such Person.
6.1 CONDUCT OF BUSINESS. With respect to the Business, Seller will not, without
the prior consent in writing of Buyer:
(a) conduct the Business except in the ordinary course
consistent with prudent industry practice; or
(b) except in accordance with their terms, terminate, allow to
expire, renew or renegotiate any Material Contract or default in any of its
obligations under any Material Contract or enter into any new Material Contract
that is not reflected in the Balance Sheet (it being understood that Seller
shall promptly notify Buyer of any such termination, expiration, renewal,
renegotiation or default and of any such new Material Contract); or
(c) terminate or fail to renew or preserve any Permits, or
take any action that would jeopardize the continuance of its material supplier
or customer relationships unless adequate replacement therefor is arranged; or
(d) incur or agree to incur any obligation or liability
(absolute or contingent) that individually calls for payment of any amount
outside the normal course of business; or
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(e) sell, transfer, mortgage, encumber or otherwise dispose of
any of the assets of the Business except as contemplated by this Agreement; or
(f) dispose of or permit to lapse any rights to the use of any
Intangible Property relating to the Business or dispose of or disclose any such
Intangible Property not a matter of public knowledge; or
(g) introduce any material new method of management or
operation in respect of the Business; or
(h) take any action or inaction that would cause any of the
representations or warranties contained in this Agreement to be inaccurate; or
(i) extend any statutes of limitation.
6.2 ACCESS; BOOKS AND RECORDS. Seller will authorize and permit Buyer and a
reasonable number of its representatives to have reasonable access during normal
business hours, and in such manner as will not unreasonably interfere with the
conduct of the Business, to all of its properties, books, records, operating
instructions and procedures, Tax Returns and all other information with respect
to the Business as Buyer may from time to time request, and at Buyer's expense
to make copies of such books, records and other documents and to discuss its
business with such third Persons, including its or their (as applicable)
directors, officers, employees, accountants, counsel, suppliers,
concessionaires, customers and creditors as Buyer considers necessary or
appropriate for the purposes of familiarizing itself with the Business of
Seller.
6.3 NOTIFICATION OF CERTAIN MATTERS. Seller shall give prompt notice to Buyer,
and Buyer shall give prompt notice to Seller, of (i) the occurrence, or failure
to occur, of any event that would be likely to cause any representation or
warranty by such Person contained in this Agreement to be untrue or inaccurate
in any material respect and (ii) any failure of Buyer, Seller or the Company to
comply with or satisfy, in any material respect, any covenant, condition or
agreement to be complied with or satisfied by it under this Agreement.
6.4 PERMITS AND APPROVALS.
(a) Seller and Buyer each agree to cooperate and use their
reasonable efforts to obtain (and will promptly prepare all registrations,
filings and applications, requests and notices preliminary to) all Approvals and
Permits that may be necessary or that may be reasonably requested by Buyer, in
each case, necessary to consummate the transactions contemplated by this
Agreement and to conduct the Business thereafter.
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(b) To the extent that the Approval of a third party with
respect to any Material Contract is required in connection with the transactions
contemplated by this Agreement, Seller and Buyer shall use their best efforts to
obtain such Approval prior to the Closing Date and, in the event that any such
Approval is not obtained, Seller shall cooperate with Buyer and use its best
efforts to provide Buyer with the benefits of each such Material Contract.
(c) From the date of this Agreement, Seller agrees to use its
best efforts to include in any material agreements entered into subsequent to
the date of this Agreement and relating in any way to the Business ("Subsequent
Contracts") a provision permitting the assignment of any such Subsequent
Contract to Buyer or the Company and providing that upon such assignment Buyer
or the Company shall succeed to all of Seller's rights, title and interests
thereunder subject to Buyer's or the Company's assumption of all Seller's
duties, powers and obligations under such Subsequent Contract.
6.5 COOPERATION. After the Closing, Buyer and Seller each will afford to each
other, and to each other's accountants, counsel and other representatives,
reasonable access during normal business hours to the books and records of
Seller. Each party or its representatives may, at such party's own expense, make
copies of such books and records. Seller agrees to preserve the books and
records that are retained by Seller following transfer of the Assets to Buyer
and Seller and Buyer agree to preserve the books and records transferred by
Seller to Buyer, for at least three (3) full calendar years after the date such
records were prepared, and each party agrees to give at least thirty (30) days'
advance written notice to the other if at any time thereafter it intends to
dispose of such books and records in order to give the other party the right to
collect and keep them.
6.6 ADMINISTRATION OF ACCOUNTS. After the Closing, Buyer and Seller agree to use
their best efforts to orderly transition the business to HealthLink, Ltd. and to
account for the day to day operation of the assets and the business.
6.7 REGISTRATION OF RESPONSE SHARES.
(a) Buyer shall use its best efforts to register for resale
the Response Shares issued to the Sellers, as well as any shares of Buyer's
Common Stock issuable to Seller pursuant to the Warrant, under the Securities
Act of 1933, as amended (the "Securities Act"). With respect to the Response
Shares to be registered, Buyer shall take the following actions:
(i) Prepare, file by April 15, 1997, cause to become
effective as soon as possible and keep effective for a period of three (3) years
following the Closing, with the Commission, a registration statement or
statements or similar documents (the "Registration Statement"), and reasonable
and necessary amendments, to include such Response Shares;
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(ii) Furnish to Seller or its permitted assignees
such numbers of copies of a prospectus, including a preliminary prospectus, and
all amendments and supplements thereto, in conformity with the requirements of
the Securities Act;
(iii) Register and qualify the securities covered by
the Registration Statement under such other securities or Blue Sky laws of such
jurisdictions deemed necessary by Seller, and prepare and file in those
jurisdictions such amendments (including post-effective amendments) and
supplements and to take such other actions as may be necessary to maintain such
registration and qualification as necessary;
(iv) Furnish to Seller an option of counsel to Buyer,
dated as of the effective date of the Registration Statement.
(v) Notify Seller at any time when a prospectus
relating to securities covered by the Registration Statement is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing. Buyer will promptly
amend or supplement the Registration Statement to correct any such untrue
statement or omission;
(vii) Notify Seller of the issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for the purpose; and
(viii) Do such other actions or make available to
Seller such documents as reasonably required under the Securities Act and as
reasonably requested in relation to the registration of securities covered by
the Registration Statement.
(b) Notwithstanding the foregoing, Buyer shall not be
obligated to take any action pursuant to this Section 6.7:
(i) In any particular jurisdiction in which Buyer
would be required to execute a general consent to service of process in
affecting such registration, qualification or compliance, unless Buyer is
already subject to service in such jurisdiction and except as may be required by
the Securities Act; or
(ii) If, at such time, the Response Shares held by
the Seller are freely tradeable without regard to any volume restrictions under
Rule 144 promulgated under the Securities Act.
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(c) All expenses incurred in connection with registrations
pursuant to this Section 6.7, including, without limitation, all registration,
qualification and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for Buyer, blue sky fees and expenses, the expense of
any special audits incident to or required by any such registration shall be
borne by Buyer. All underwriting discounts, selling commissions and stock
transfer taxes applicable to the Response Shares being registered by Seller
shall be borne by Seller.
(d) The obligations of Buyer to register the Response Shares,
shall not be transferable by the Sellers except in connection with (i) a
distribution of the Response Shares to the shareholders of Seller, or (ii) if
the Registration Statement is not effective by September 30, 1997, in connection
with a transfer of the Response Shares, prior to the effectiveness of the
Registration Statement, by a Seller to a Qualified Institutional Buyer as
defined in Rule 144A under the Securities Act. Sellers shall give prompt notice
of any such transfer.
(e) Buyer shall, without limitation as to time, indemnify and
hold harmless, to the fullest extent permitted by law, Seller and Seller's
officers, directors, shareholders, attorneys, accountants and other agents from
and against all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys' fees) and expenses (collectively, "Losses"),
as incurred, arising out of or based upon any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, Prospectus or form
of Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are based
solely upon information furnished in writing to Buyer by Seller or their counsel
expressly for use therein; provided, that Buyer shall not be liable to Seller to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if either (A)(i) Seller failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale by Seller of a Response Share to the person asserting the claim from
which such Losses arise and (ii) the Prospectus would have corrected such untrue
statement or alleged untrue statement or such omission or alleged omission; or
(B)(x) such untrue statement or alleged untrue statement, omission or alleged
omission is corrected in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of Buyer with copies of the
Prospectus as so amended or supplemented, Seller thereafter fails to deliver
such Prospectus as so amended or supplemented, prior to or concurrently with the
sale of a Response Share to the person asserting the claim from which such
Losses arise.
(f) In connection with the Registration Statement, Seller
shall furnish to Buyer in writing such information as Buyer reasonably requests
for use in connection with the Registration Statement or Prospectus and hereby
agree to indemnify, to the fullest extent permitted by law, and without
limitation as to time, Buyer, its directors and officers,
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agents and employees, each person who controls Buyer (within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling persons, from and
against all Losses arising out of or based upon any untrue statement of a
material fact contained in the Registration Statement, Prospectus or preliminary
prospectus or arising out of or based upon any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement or
omission is contained in any information so furnished in writing by any of
Seller or their counsel to Buyer expressly for use in such Registration
Statement or Prospectus and that such information was relied upon by Buyer in
preparation of such Registration Statement, Prospectus or preliminary
prospectus. In no event shall the liability of Seller hereunder be greater in
amount than the dollar amount of the proceeds received by Seller upon the sale
of the Response Shares giving rise to such indemnification obligation.
(g) If any Person shall be entitled to indemnity hereunder (an
"indemnified party"), such indemnified party shall give prompt notice to the
party from which such indemnity is sought (the "indemnifying party") of any
claim or of the commencement of any proceeding ("Proceeding") with respect to
which such indemnified party seeks indemnification or contribution pursuant
hereto; provided, that the failure to so notify the indemnifying party shall not
relieve the indemnifying party from any obligation or liability except to the
extent that the indemnifying party shall demonstrate damage caused by such
failure. After any such notice with respect to a matter instituted by a third
party, the indemnifying party may, or if so requested by the indemnified party,
the indemnifying party shall, participate in any such action, suit or other
proceeding or assume the defense thereof, with counsel reasonably satisfactory
to the indemnified party; provided however, that the indemnified party shall
have the right to participate at its own expense in the defense of any such
action, suit or other proceeding. Furthermore, should the indemnifying party not
assume the defense in a prompt manner or should there be a conflict of interest
in connection with the representation of both the indemnifying party and the
indemnified party, the indemnified party shall have the right to appoint its own
counsel, the reasonable fee and expenses of which shall be borne by the
indemnifying party. All such fees and expenses (including any fees and expenses
incurred in connection with investigation or preparing to defend such action or
proceeding) shall be paid to the indemnified party, as incurred, within five (5)
days of written notice thereof to the indemnifying party (regardless of whether
it is ultimately determined that an indemnified party is not entitled to
indemnification hereunder). The indemnifying party shall not consent to entry of
any judgment or enter into any settlement or otherwise seek to terminate any
proceeding in which any indemnified party is or could be a party under this
Section 2, unless such judgment, settlement or other termination includes as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance satisfactory to the
indemnified party, from all liability in respect of such claim or litigation for
which such indemnified party would be entitled to indemnification hereunder.
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(h) If the indemnification provided for in this Section 6.7 is
unavailable to any indemnified party under paragraphs (e) or (f) hereof in
respect to any Losses or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall, jointly and severally, contribute to the amount paid
or payable by such indemnified party as a result of such Losses, in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party or indemnifying parties, on the one hand, and such indemnified party, on
the other hand, in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such indemnifying party or indemnifying parties, on the
one hand, and such indemnified party, on the other hand, shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include any
legal or other fees or expenses incurred by such party in connection with any
Proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this paragraph (g) were determined by pro
rata allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provision of this paragraph (g), none of Seller
shall be required to contribute any amount in excess of the amount by which the
total price at which the Responses Shares sold by Seller and distributed to the
public were offered to the public exceeds the amount of any damages which Seller
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE 7
CONDITIONS OF PURCHASE
7.1 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE BUYER TO CLOSE. The
obligations of Buyer to effect the Closing shall be subject to the following
conditions except to the extent waived in writing by Buyer:
(a) Representations and Warranties and Covenants of Seller.
The representations and warranties of Seller herein contained shall be true in
all material respects at the Closing Date Seller shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement to be performed or complied with by it at or prior to the Closing
Date, and Seller shall have delivered to Buyer a certificate
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of Seller in form and substance reasonably satisfactory to Buyer, dated the
Closing Date and signed by its Chairman of the Board, President or its
Vice-President to such effect.
(b) No Adverse Fact. No fact, event, circumstance or condition
that would be expected to have a material adverse effect on the Business shall
have occurred following the date hereof and be continuing.
(c) No Orders: Legal Proceedings. No Law or Order shall have
been enacted, entered, issued, promulgated or enforced by any Governmental
Entity that prohibits or restricts or would (if successful) prohibit or restrict
the transactions contemplated by this Agreement. No Governmental Entity shall
have notified any party to this Agreement that consummation of the transactions
contemplated by this Agreement would constitute a violation of any Law of any
jurisdiction and/or that it intends to commence proceedings to restrain or
prohibit such transactions or force divestiture or rescission, unless such
Governmental Entity shall have withdrawn such notice and abandoned any such
proceedings prior to the time that otherwise would have been the Closing Date,
unless nationally recognized counsel known to have expertise as to such matters
on behalf of the party against whom such action or proceeding was or would be
instituted renders to the parties a favorable opinion that such action or
proceeding is or would be without merit.
(d) Legal Opinion. Buyer shall have received a legal opinion
from counsel for Seller in form and substance satisfactory to Buyer.
(e) Due Diligence. Buyer shall not have discovered any
information during the course of its due diligence investigation that could have
a material adverse effect on the Business or which is at material variance with
the information previously provided to Buyer by Seller.
(f) Employment Agreement. HealthLink, Ltd. shall have entered
into an employment agreement with an individual to manage the operations of
HealthLink, Ltd., which agreement is reasonably satisfactory to Buyer.
(g) Financial Statements. Seller will provide, at Seller's
sole cost and expense, certified financial statements of Seller, if and as
required by the rules and regulations of the Securities Exchange Act of 1934
applicable to Buyer. Buyer and Seller agree to share the cost and expense of
such financial statements which may be required for Guard-Tech, Inc., a Michigan
corporation.
7.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE SELLER TO CLOSE. The
obligations of Seller to effect the Closing shall be subject to the following
conditions, except to the extent waived in writing by Seller:
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<PAGE> 27
(a) Representations and Warranties and Covenants of Buyer. The
representations and warranties of Buyer herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time. Buyer shall have performed all obligations and complied with all
Covenants and conditions required by this Agreement to be performed or complied
with by it at or prior to the Closing Date.
(b) No Orders: Legal Proceedings. No Law or Order shall have
been enacted, entered, issued, promulgated or enforced by any Governmental
Entity that prohibits or restricts or would (if successful) prohibit or restrict
the transactions contemplated by this Agreement. No Governmental Entity shall
have notified any party to this Agreement that consummation of the transactions
contemplated by this Agreement would constitute a violation of any Law of any
jurisdiction and/or that it intends to commence proceedings to restrain or
prohibit such transactions or force divestiture or rescission, unless such
Governmental Entity shall have withdrawn such notice and abandoned any such
proceedings prior to the time that otherwise would have been the Closing Date,
unless nationally recognized counsel known to have expertise as to such matters
on behalf of the party against whom such action or proceeding was or would be
instituted renders to the parties a favorable opinion that such action or
proceeding is or would be without merit.
(c) Legal Opinion. Seller shall have received a legal opinion
from counsel to Buyer in form and substance satisfactory to Seller.
(d) No Adverse Fact. No fact, event, circumstance or condition
that would be expected to have a material adverse effect on Buyer shall have
occurred following the date hereof and be continuing.
(e) Employment Agreement. HealthLink, Ltd. shall have entered
into an Employment Agreement with an individual to manage the operations of
HealthLink, which Agreement is reasonably satisfactory to Seller.
(f) Warrant Agreement. Buyer shall have executed and delivered
to Seller, within forty-eight (48) hours after the Closing, the Warrant
Agreement.
ARTICLE 8
TERMINATION OF OBLIGATIONS;
SURVIVAL OF COVENANTS
8.1 TERMINATION OF AGREEMENT. If all of the conditions to Closing have not been
satisfied, waived or otherwise extended, this Agreement and the transactions
contemplated by this Agreement shall terminate at the close of business on the
date (the "Termination Date") which is the later of: (i) following March 31,
1997, or (ii) such later date as shall be mutually agreed to in writing by Buyer
and Seller. Termination prior to the Closing may occur only by:
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<PAGE> 28
(a) Mutual Consent. By mutual consent in writing of Buyer and
Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer by
written notice to Seller if any event occurs that would render impossible the
satisfaction, on or before the day then reasonably estimated by Buyer and Seller
to be the Termination Date, of one or more conditions to the obligations of
Buyer to consummate the transactions contemplated by this Agreement.
(c) Conditions to Seller's Performance Not Met. By Seller by
written notice to Buyer if any event occurs that would render impossible the
satisfaction, on or before the day then reasonably estimated by Buyer and Seller
to be the Termination Date, of one or more conditions to the obligation of
Seller to consummate the transactions contemplated by this Agreement.
(d) Material Breach. By Buyer or Seller if there has been a
material misrepresentation or material breach on the part of the other party in
its representations, warranties and covenants set forth herein, which, if
curable, has not been cured within ten (10) business days after receipt of
notice from Buyer or Seller of its intention to terminate if such
misrepresentation or breach continues.
8.2 EFFECT OF TERMINATION. If this Agreement shall be terminated pursuant to
Article 8, all further obligations of the parties under this Agreement shall
terminate without further liability of any party to the other; provided however,
that the obligations of the parties contained in Section 10.10 shall survive any
such termination. Except as provided in this Section 8.2, a termination under
Section 8.1 shall not relieve any party of any liability for any intentional
breach of, or for any intentional misrepresentation under, this Agreement or be
deemed to constitute a waiver of any available remedy (including specific
performance if available) for any such intentional breach or misrepresentation.
ARTICLE 9
INDEMNIFICATION
9.1 OBLIGATIONS OF THE SELLER. The Seller and Guard-Tech Industries, Inc., a
Michigan corporation, predecessor in interest to Seller, jointly and severally
agree to indemnify and hold harmless Buyer and its Affiliates and the respective
directors, managers, officers, employees, agents and assigns of each from and
against any and all Losses incurred directly or indirectly by them as a result
of, or directly or indirectly based upon or arising from:
(a) any inaccuracy in or breach or nonperformance of any of
the representations, warranties, covenants or agreements made by the Seller in
or pursuant to this Agreement, as qualified by the matters set forth in the
Schedules of this Agreement; or
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<PAGE> 29
(b) any Tax liabilities attributable to the transfer and
contribution of the Assets to Buyer or the Company.
(c) any claims, judgments, losses, liabilities, damages and
expenses (including attorney's fees) arising from or otherwise relating to
employment or other labor matters, including any unfair labor practice charges
and/or union grievances, whether currently pending or asserted in the future,
arising out of or otherwise relating to any action or breach of duty in
connection with the operation of the Business on or before the Contribution Date
or with the consummation of the transactions contemplated by this Agreement
(collectively, "Labor Matters");
(d) any liabilities, losses, payments, sureties, guaranties,
bonds or escrows arising with respect to any of Seller's benefit plans,
agreements, arrangements or practices (collectively, "ERISA Matters"); or
(e) any loss arising from the operation of the Assets or the
Business for the period up to and including the Closing Date.
9.2 OBLIGATIONS OF BUYER. Buyer agrees to indemnify and hold harmless the
Seller, their Affiliates and their respective partners, directors, officers,
employees, agents and assigns from and against any and all Losses incurred
directly or indirectly by them as a result of, or directly or indirectly based
upon or arising from, any inaccuracy in or breach or nonperformance of any of
the representations, warranties, covenants or agreements made by Buyer in or
pursuant to this Agreement.
9.3 PROCEDURE.
(a) Notice. If any party becomes aware of any fact,
circumstance or event (including without limitation any Action asserted or
threatened by a third party or any request to waive any applicable statute of
limitations) that might reasonably be expected to result in an Indemnifiable
Claim with respect to that party (an "Indemnified Party"), such Indemnified
Party shall give prompt written notice to the party that would be required to
provide indemnification (the "Indemnifying Party") of the nature of the fact,
circumstance or event and the amount believed to be involved. Notwithstanding
the foregoing, the rights of any Indemnified Party to be indemnified in respect
of any Indemnifiable Claim resulting from the assertion of liability by any
third party shall not be adversely affected by the Indemnified Party's failure
to give or delay in giving notice unless such failure or delay was intentional
or unless (and then only to the extent that) the Indemnifying Party is
materially prejudiced thereby.
(b) Defense. If any Action that might reasonably be expected
to result in an Indemnifiable Claim is asserted or threatened by a third party
against any Indemnified Party, the Indemnifying Party may elect to control the
defense thereof with experienced counsel reasonably satisfactory to the
Indemnified Party. Notwithstanding the foregoing, if the Indemnifying Party,
within fifteen (15) days after receipt of a notice of such Action
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<PAGE> 30
fails to give written notice to the Indemnified Party that the Indemnifying
Party shall undertake the defense thereof or thereafter fails to timely assume
such defense, then the Indemnified Party shall have the right to defend,
compromise or settle the Action for the account of the Indemnifying Party. An
assertion by the Indemnifying Party of a reservation of rights with respect to
such Action shall not constitute a failure to give written notice that it shall
undertake such defense. If, after the Indemnifying Party has undertaken the
defense of the Action, the Indemnified Party reasonably believes (and gives
notice thereof to the Indemnifying Party) that an Indemnifiable Claim may
materially adversely affect the business or operations of the Indemnified Party,
then the Indemnified Party shall have the right to participate in the defense of
the Action at its own expense, subject to the reasonable direction of the other
party. Each of the Indemnifying Party and the Indemnified Party shall give all
reasonable assistance to the other party in connection therewith. In any case,
the Indemnified Party shall, subject to Section 10.10, make available to the
Indemnifying Party and its attorneys, accountants, employees, agents, advisors
and consultants, at reasonable times during normal business hours, all books,
records, documents, employees, agents, advisors and consultants under its
control and relating to such Action or such other matter as to which the
Indemnified Party is or was required to give notice. The party having control of
the defense of an Action shall notify the other party of every proposal, oral or
written, for settlement, which it receives or makes.
(c) Settlement Limitations. Notwithstanding anything in this
Article 9 to the contrary, the Indemnifying Party shall not, without the written
consent of the Indemnified Party, settle or compromise any threatened or pending
Action on behalf of the Indemnified Party or permit a default or consent to
entry of any judgment in respect thereof unless such settlement, compromise or
consent includes, as an unconditional term thereof, the giving by the claimant
to the Indemnified Party of a release from all liability in respect of such
Action. Except in the circumstances described in the preceding sentence, if a
settlement offer is made by the applicable third-party claimant, the
Indemnifying Party notifies the Indemnified Party in writing of the Indemnifying
Party's willingness to unconditionally accept the settlement offer and pay the
amount called for by such offer, and the Indemnified Party declines to accept
such offer, the Indemnified Party may continue to contest such Action, free of
any participation by the Indemnifying Party, and the amount of any ultimate
liability with respect to any Indemnifiable Claim arising therefrom that the
Indemnifying Party has an obligation to pay hereunder shall be limited to the
amount of the settlement offer that the Indemnified Party declined to accept
plus the fees and expenses, including legal, accounting and other professional
fees and expenses, of the Indemnified Party relating to such Indemnifiable Claim
incurred through the date of its rejection of the settlement offer and to which
the Indemnified Party would otherwise be entitled hereunder. If a settlement
offer solely for money damages is made by the applicable third-party claimant,
the Indemnified Party notifies the Indemnifying Party in writing of its
willingness to unconditionally accept the settlement offer, the Indemnifying
Party has not reserved its rights to assert that any Loss of the Indemnified
Party resulting from such Action is not an Indemnifiable Claim, and the
Indemnifying Party declines to accept and pay the amount called for by such
offer, the Indemnifying Party may continue to contest such Action at its own
expense. The provisions of this Article 9 are subject to
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<PAGE> 31
the rights of any Indemnified Party's insurer that may be defending any such
claim. If the Indemnifying Party makes any payment hereunder, the Indemnifying
Party shall be subrogated, to the extent of such payment, to all rights and
remedies of the Indemnified Party to any insurance benefits or other claims of
the Indemnified Party with respect to such Claim. Nothing in this Article 9
shall be deemed to obligate any person to maintain any insurance or to pursue
any claim against any insurer or third party.
(d) Fees and Expenses. Provided that the Indemnifying Party
has timely and properly undertaken its duties of defense and indemnity, the fees
and expenses of the Indemnified Party relating to such Indemnifiable Claim,
including legal, accounting, consultant, expert, witness, employee, officer and
director fees and expenses shall be borne by the Indemnified Party.
(e) Limitations on Indemnification. Notwithstanding anything
herein to the contrary, no claim for indemnification hereunder may be asserted
by any indemnified third party unless such claim is first asserted on or before
the first (1st) anniversary of the Closing Date. The indemnification provided
for in this Section 9 shall not apply unless and until the aggregate
Indemnifiable Claims for which one or more of the Indemnified Parties seeks
indemnification hereunder exceeds an aggregate of $50,000.00 (the "Basket"), in
which event the indemnification shall include all Indemnifiable Claims in excess
of the Basket. In addition, the maximum liability of Seller to Indemnified
Parties under this Section 9 for all claims of indemnification shall not exceed
$3,300,000.00.
9.4 EXCLUSIVE REMEDY; SURVIVAL. The indemnification provided in this Article 9
shall constitute the exclusive remedy (except for equitable remedies) of the
parties hereto and their respective directors, officers, employees, Affiliates,
agents and assigns from and against any and all Losses asserted against,
resulting to, imposed upon or incurred or suffered by, any of them, directly or
indirectly, as a result of, or based upon or arising from, the breach of any
representation or warranty or the nonfulfillment of any agreement or covenant in
or pursuant to this Agreement or any other agreement, document or instrument
required hereunder or pursuant to any applicable statute, rule or regulation.
The provisions of this Article 9 shall survive indefinitely.
ARTICLE 10
GENERAL
10.1 AMENDMENTS; WAIVERS. This Agreement and any Exhibits attached hereto may be
amended only by agreement in writing of all parties. No waiver of any provision
or consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.
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10.2 EXHIBITS; INTEGRATION. Each Exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of the Agreement,
although Exhibits may be delivered separately to each party (after being
initialed by the delivering party) in addition to being attached to this
Agreement. This Agreement, together with such Exhibits, constitutes the entire
agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith.
10.3 BEST EFFORTS; FURTHER ASSURANCES. Each party will use its best efforts to
cause all conditions to its obligations hereunder to be timely satisfied and to
perform and fulfill all obligations on its part to be performed and fulfilled
under this Agreement, to the end that the transactions contemplated by this
Agreement shall be effectuated substantially in accordance with its terms as
reasonably practicable. Each party shall execute and deliver both before and
after the Closing such further certificates, agreements and other documents and
take such other actions as the other party may reasonably request to consummate
or implement the transactions contemplated hereby or to evidence such events or
matters. As used in this Agreement, the term "best efforts" shall not include
efforts that require the performing party (a) to do any act that is unreasonable
under the circumstances, (b) to amend or waive any rights under this Agreement,
or (c) to incur or expend any funds other than reasonable out-of-pocket expenses
incurred in satisfying its obligations hereunder, including the fees, expenses
and disbursements of its accountants, actuaries, counsel and other
professionals.
10.4 CHOICE OF LAW. This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
Nevada without regard to conflicts of law doctrines, except to the extent that
certain matters are preempted by federal law or are governed by the law of the
jurisdiction of organization of the respective parties.
10.5 ARBITRATION. Any dispute arising out of or relating to this Agreement that
cannot be settled by good faith negotiation between the parties will be
submitted to final and binding arbitration before a retired judge pursuant to
the commercial rules of the American Arbitration Association.
10.6 NO ASSIGNMENT. Neither this Agreement nor any rights or obligations under
it are assignable without the prior written consent of Buyer and Seller.
10.7 HEADINGS. The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
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10.8 COUNTERPARTS. This Agreement and any other agreement (or document)
delivered pursuant hereto may be executed in one or more counterparts and by
different parties in separate counterparts. All of such counterparts shall
constitute one and the same agreement (or other document) and shall become
effective when one or more counterparts of this Agreement have been signed by
each party and delivered to the other party.
10.9 PUBLICITY AND REPORTS. Seller and Buyer shall coordinate all publicity
relating to the transactions contemplated by this Agreement, and no party shall
issue any press release, publicity statement or other public notice relating to
this Agreement, or the transactions contemplated by this Agreement, without
obtaining the prior consent of the other party.
10.10 CONFIDENTIALITY. All information disclosed by any party (or its
representatives) whether before or after the date hereof, in connection with the
transactions contemplated by, or the discussions and negotiations preceding,
this Agreement to any other party (or its representatives) shall be kept in
confidence by such other party and its representatives and shall not be
disclosed to or used by any Person. If this Agreement is terminated, each party
shall use all reasonable efforts to return upon written request from the other
party all documents received by it or its representatives from such other party
and not retain any copies.
10.11 NOTICES. Any notice or other communication hereunder must be given in
writing and either (a) delivered in person, (b) transmitted by telex, telefax or
telecopy mechanism, provided that any notice so given is also mailed as provided
in clause (c), or (c) mailed, postage prepaid, receipt requested, as follows:
If to Seller, addressed to:
BKR, Inc.
7944 East Beck Lane, Suite 210
Scottsdale, Arizona 85260
With copies to:
Loyd E. Wright, Esq.
19200 Von Karman Avenue, Suite 870
Irvine, CA 92715
If to Buyer, addressed to:
Richard M. Brooks
Response USA, Inc.
11-H Princess Road
Lawrenceville, New Jersey 08648
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and to:
Tom Rose, Esq.
Schneck, Weltman, Hashmall & Mischel, LLP
1285 Avenue of Americas, 3rd Floor
New York, NY 10019
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number and an appropriate answer back is received,
(ii) if given by mail, three days after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid, or (iii) if
given by any other means, when actually received at such address.
10.12 EXPENSES. Seller and Buyer shall each pay their own expenses incident to
the negotiation, preparation and performance of this Agreement and the
transactions contemplated hereby, including the fees, expenses and disbursements
of their respective accountants and attorneys.
10.13 WAIVER. No failure to exercise or delay in exercising any right hereunder
on the part of any party shall be deemed a waiver thereof, nor shall any single
or partial exercise preclude any further or other exercise of such or any other
right.
10.14 REPRESENTATION BY COUNSEL; INTERPRETATION. Seller and Buyer each
acknowledge that each party to this Agreement has been represented by counsel in
connection with this Agreement and the transactions contemplated by this
Agreement. Accordingly, any rule of Law, or any legal decision that would
require interpretation of any claimed ambiguities in this Agreement against the
party that drafted it has no application and is expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intent of Buyer and Seller.
10.15 SPECIFIC PERFORMANCE. Seller acknowledges that, in view of the uniqueness
of the Business and the transactions contemplated by this Agreement, Buyer would
not have an adequate remedy at law for money damages in the event that this
Agreement has not been performed in accordance with its terms and therefore
agrees that Buyer shall be entitled to specific performance of the terms hereof
in addition to any other remedy to which it may be entitled, at law or in
equity.
10.16 SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by any court of final jurisdiction, it is the intent of the
parties that all remaining provisions of this Agreement be construed to remain
fully valid, enforceable and binding on the parties.
[SIGNATURES CONTAINED ON PAGE 32]
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized officers, if any, all as of the day and year
first written above.
"SELLER" "BUYER"
BKR, INC., RESPONSE USA, INC.,
a Nevada corporation a Delaware corporation
By: /s/ Richard M. Brooks
--------------------------------
By: /s/ Bert Bebrosian RICHARD M. BROOKS,
------------------------------- President
BERT BEDROSIAN,
President
By: /s/ Ronald Feldman
-------------------------------
By: /s/ Robin Bedrosian RONALD FELDMAN,
------------------------------- Chief Operating Officer
ROBIN BEDROSIAN,
Secretary
HEALTHLINK, LTD.,
a Nevada limited liability company
By: /s/ Bert Bedrosian
-------------------------------
BERT BEDROSIAN,
President
By: /s/ Kenneth W. Stickney
-------------------------------
KENNETH W. STICKNEY,
Chairman
By: /s/ Richard M. Brooks
-------------------------------
RICHARD M. BROOKS,
Chief Executive Officer
By: /s/ Ronald Feldman
-------------------------------
RONALD FELDMAN,
Vice Chairman
[SIGNATURES CONTINUED ON PAGE 33]
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GUARD-TECH INDUSTRIES, INC.,
a Michigan Corporation
By: /s/ BERT BEDROSIAN
-------------------------------------
BERT BEDROSIAN
President
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EXHIBIT 99.3
JOINT FILING AGREEMENT
This Agreement is made as of April 7, 1997, by and among BKR, Inc., a
Nevada corporation ("BKR"), Bert Bedrosian and Robin Bedrosian, with reference
to the following facts:
WHEREAS: BKR, Bert Bedrosian and Robin Bedrosian may
be required to file a statement and
amendments thereto, containing the
information required by Schedule 13D
pursuant to Section 13(d) of the Securities
Exchange Act of 1934, as amended, and Rule
13(d)-1 promulgated thereunder, in
connection with the investment activities of
BKR, Bert Bedrosian and Robin Bedrosian; and
WHEREAS: Pursuant to Rule 13(d)-1(f), the undersigned
parties desire to satisfy any Schedule 13D
filing obligation by a single joint filing.
NOW, THEREFORE, the parties hereto agree that any statement on Schedule
13D to which this Agreement is attached, and any amendment to such statement,
are filed on behalf of each one of them.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
BKR, INC.,
a Nevada corporation
By: /s/ Bert Bedrosian
----------------------------------
BERT BEDROSIAN, President
/s/ Bert Bedrosian
-----------------------------------
BERT BEDROSIAN
/s/ Robin Bedrosian
-----------------------------------
ROBIN BEDROSIAN
