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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): February 18, 1998
Selfcare, Inc.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-20871 04-3164127
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(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
200 Prospect St., Waltham, Massachusetts 02154
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code (781) 647-3900
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Not Applicable
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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There are 4 pages in this Report.
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
Acquisition of Can-Am Care Corporation
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On February 18, 1998, Selfcare Consumer Products, Inc. ("SCP"), a wholly
owned subsidiary of Selfcare, Inc. (the "Company"), acquired all of the issued
and outstanding capital stock of Can-Am Care Corporation ("Can-Am") (this
transaction being referred to herein as the "Acquisition"). As consideration for
the Acquisition, SCP paid the four stockholders of Can-Am (the "Stockholders")
$13.6 million in cash, approximately 1.1 million shares of the Company's common
stock, and promissory notes of the Company in the aggregate principal amount of
$2.0 million (the "Notes"). The Notes are due on the third anniversary of the
closing of the Acquisition and bear interest at a rate of 6.0% per annum. The
Notes are also subject to potential premiums of up to $2.0 million in the
aggregate based upon increases in the price of the Company's common stock
during the term of the Notes. The Company funded the cash portion of the
purchase price and refinanced its existing loans with a credit facility
consisting of a $37.0 million term loan and a $5.0 million revolving credit
line made to SCP by The Chase Manhattan Bank. In connection with the
Acquisition, Robert Oringer and Herbert Cover, two principals of Can-Am,
entered into employment agreements with the Company and SCP. Mr. Oringer will
remain President of Can-Am, and Mr. Cover will serve as Can-Am's Vice President
of Sales and Trade Relations. In addition, the Board of Directors appointed Mr.
Oringer a member of the Board and agreed to nominate him for re-election on the
expiration of the initial term and each year thereafter until he shall have
sold half of the shares of the Company's common stock received by him in the
Acquisition. The Company and SCP also entered into non-competition and
confidentiality agreements with each of the Stockholders, and with A.M.G.
Medical Inc. ("AMG"), a sister company of Can-Am. Also in connection with the
Acquisition, Can-Am entered into an agreement with AMG whereby AMG will supply
monolet-compatible lancets to Can-Am and a Management Services agreement with
AMG whereby AMG will provide, among other things, labor, office space and
insurance to Can-Am. The Company also entered into an agreement with AMG and
its stockholders granting the Company a right of first refusal to purchase the
assets or securities of AMG for a certain period of time.
Can-Am Care Corporation sells insulin syringes, blood lancets, glucose
tablets and specialty skin creams to pharmacies across the U.S. Can-Am had
revenues of approximately $25.0 million in fiscal 1997.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
CAN-AM CARE CORPORATION
All required financial statements will be filed by amendment
within 60 days of the date on which this report is filed.
(b) Pro Forma Financial Information.
SELFCARE, INC.
All required pro forma financial information will be filed by
amendment within 60 days of the date on which this report is filed.
Page 2 of 4
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(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
2.1* Stock Purchase Agreement, dated as of February 18, 1998, by and
among Selfcare, Inc., Selfcare Consumer Products, Inc., Can-Am
Care Corporation and the Stockholders party thereto.
2.2 List of Schedules omitted from the Stock Purchase Agreement.
* In accordance with Item 601(b)(2) of Regulation S-B, Selfcare,
Inc. has omitted certain exhibits and schedules to the Stock
Purchase Agreement from this filing. Selfcare, Inc. agrees to
provide any omitted schedules and exhibits supplementally to the
Securities and Exchange Commission upon request.
</TABLE>
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
SELFCARE, INC.
Date: March 4, 1998 By: /s/ Ron Zwanziger
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Ron Zwanziger,
President
page 4 of 4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
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<S> <C>
2.1 Stock Purchase Agreement, dated as of February 18, 1998, by and
among Selfcare, Inc., Selfcare Consumer Products, Inc., Can-Am
Care Corporation and the Stockholders party thereto.
2.2 List of Schedules omitted from the Stock Purchase Agreement.
</TABLE>
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[EXHIBIT 2.1]
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STOCK PURCHASE AGREEMENT
by and among
CAN-AM CARE CORPORATION,
SELFCARE, INC.
SELFCARE CONSUMER PRODUCTS, INC.
and
THE STOCKHOLDERS PARTY HERETO
February 18, 1998
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TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C> <C>
SECTION 1. Purchase and Sale .................................................... 1
(a) Purchase and Sale of Securities ...................................... 1
(b) Purchase Price ....................................................... 1
(c) Transaction Share Adjustment ......................................... 3
(d) Closing .............................................................. 4
SECTION 2. Representations and Warranties of the Company and the Stockholders ... 4
(a) Organization, Power and Authority; Effect of Transaction ............. 4
(b) Financial Information ................................................ 6
(c) Condition and Title to Properties .................................... 7
(d) Compliance with Applicable Laws; Litigation .......................... 7
(e) Regulatory Approvals and Consents .................................... 8
(f) Intellectual Property ................................................ 8
(g) Related Transactions ................................................. 8
(h) Insurance ............................................................ 9
(i) Tax Matters .......................................................... 9
(j) Employee Retirement Income Security Act of 1974 ...................... 9
(k) Employment Arrangements .............................................. 10
(l) Material Agreements .................................................. 10
(m) Ordinary Course of Business .......................................... 11
(n) Broker or Finder ..................................................... 12
(o) Environmental Protection ............................................. 12
(p) Accounts Receivable .................................................. 13
(q) Products in Warranty ................................................. 13
(r) Inventory ............................................................ 13
(s) Agreement with P.J. Noyes ............................................ 13
(t) Agreement with Cimetra ............................................... 13
SECTION 3. Representations and Warranties of the Stockholders ................... 13
(a) Capacity; Due Execution .............................................. 14
(b) Validity and Enforceability .......................................... 14
(c) Title to Securities .................................................. 14
(d) Effect of Transaction ................................................ 14
(e) Investment ........................................................... 14
(f) Exclusive Representations; Due Diligence ............................. 15
SECTION 4. Representations and Warranties of the Purchasers ..................... 15
(a) Organization and Business; Power and Authority;
Effect of Transaction; Ordinary Course of Business ................... 16
(b) Capitalization ....................................................... 17
(c) The Shares ........................................................... 17
(d) Note Issuance ........................................................ 18
(e) Investment ........................................................... 18
(f) Broker or Finder ..................................................... 19
(g) Exclusive Representations; Due Diligence ............................. 19
</TABLE>
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<TABLE>
<S> <C> <C>
(h) LifeScan ............................................................. 19
(i) Litigation ........................................................... 19
(j) Regulatory Approvals and Consents .................................... 19
(k) SEC Documents; Financial Statements .................................. 20
(l) Intellectual Property ................................................ 20
(m) Selfcare Material Agreements ......................................... 21
(n) Financing 21
(o) No Material Adverse Change ........................................... 21
SECTION 5. Covenants and Agreements of the Parties .............................. 21
(a) Access to Information; Confidentiality ............................... 21
(b) Agreement to Cooperate ............................................... 22
(c) Public Announcements ................................................. 22
(d) Directors' and Officers' Indemnification ............................. 22
SECTION 6. Additional Covenants ................................................. 22
(a) Covenants of the Company ............................................. 22
(i) Interim Conduct of Company Business .................................. 23
(b) Covenants of Selfcare ................................................ 24
(i) Selfcare Material Agreements ......................................... 24
(ii) AMG Payables ......................................................... 24
(iii) Below-Market Issuances ............................................... 24
SECTION 7. Closing Conditions ................................................... 24
(a) Obligations of the Purchasers ........................................ 24
(b) Obligations of the Company and the Stockholders ...................... 26
SECTION 8. Indemnification ...................................................... 28
(a) Survival of Representations and Warranties ........................... 28
(b) Indemnification by Stockholders ...................................... 28
(c) Indemnification by the Purchasers .................................... 29
(d) Minimum Indemnification .............................................. 29
(e) Notice and Opportunity to Defend ..................................... 29
(f) Exclusive Remedy ..................................................... 29
(g) Escrow Agreement ..................................................... 30
SECTION 9. Tax Matters .......................................................... 30
SECTION 10. Definitions .......................................................... 31
SECTION 11. Miscellaneous ........................................................ 38
(a) Nature of Representations and Warranties ............................. 38
(b) Entire Agreement ..................................................... 39
(c) Rights and Remedies .................................................. 39
(d) Expenses ............................................................. 39
(e) Termination .......................................................... 39
(f) Waivers; Amendments .................................................. 40
(g) Assignment; Successors and Assigns ................................... 40
</TABLE>
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<TABLE>
<S> <C> <C>
(h) Notices .............................................................. 41
(i) Severability ......................................................... 42
(j) Counterparts ......................................................... 42
(k) Section Headings ..................................................... 42
(l) Further Acts ......................................................... 42
(m) Conflict Among Attachments ........................................... 42
(n) Governing Law ........................................................ 43
EXHIBITS
Exhibit A Form of Note
Exhibit B Allocation of Purchase Price
Exhibit C Form of Noncompetition and Confidentiality Agreement
Exhibit D Right of First Refusal Agreement (AMG)
Exhibit E Right of First Refusal Agreement (Acquisitions offered to AMG or the Stockholders)
Exhibit F Management Services Agreement
Exhibit G Form of Employment Agreement
Exhibit H Supply Agreement
Exhibit I Agreement between Selfcare and Robert Oringer
Exhibit J Opinion of Counsel to the Company and the Stockholders
Exhibit K Opinion of Counsel to AMG, the AMG Stockholders and certain Stockholders
Exhibit L Registration Rights Agreement
Exhibit M Lock-up Agreement
Exhibit N Opinion of Counsel to the Purchasers
Exhibit O Escrow Agreement
</TABLE>
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT") made as of February 18,
1998 by and among Can-Am Care Corporation, a New York corporation (the
"COMPANY"), each of the undersigned stockholders of the Company (individually, a
"STOCKHOLDER" and collectively, the "STOCKHOLDERS"), Selfcare, Inc., a Delaware
corporation ("SELFCARE"), and Selfcare Consumer Products, Inc., a Delaware
corporation and wholly-owned subsidiary of Selfcare (the "PURCHASER" and
collectively with Selfcare, the "PURCHASERS"),
W I T N E S S E T H T H A T:
WHEREAS, the Company is engaged in the business of distributing home health
care products for the care of diabetes and owning and operating the properties
and assets associated therewith (the "BUSINESS");
WHEREAS, the Stockholders own all of the issued and outstanding capital
stock, convertible securities and option securities (the "SECURITIES") of the
Company;
WHEREAS, the Purchasers desire to acquire, and each Stockholder desires to
sell, the Securities upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company has agreed to repay certain of its obligations for
money borrowed prior to the Closing provided for herein;
NOW, THEREFORE, in consideration of the premises, of the mutual covenants
and agreements herein set forth, and other valuable consideration, the receipt,
adequacy and sufficiency whereof are hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby covenant and agree as follows:
SECTION 1. PURCHASE AND SALE.
(a) PURCHASE AND SALE OF SECURITIES. Subject to the provisions of this
Agreement, the Stockholders shall sell the Securities to the Purchasers, and the
Purchasers agree to purchase and accept the delivery of the Securities.
(b) PURCHASE PRICE. In reliance upon the representations and warranties
of Stockholders and on the terms and subject to the conditions herein set forth,
the Purchasers agree to pay (1) an aggregate amount of cash equal to $13,600,000
less all outstanding interest bearing debt of Can-Am (the "CASH"); and (2)
1,108,333 shares (as adjusted as described in the following paragraph and
SECTION 1(c)) (the "SHARES") of the common stock, $.001 par value per share
("COMMON STOCK"), of Selfcare; and (3) a $2,000,000 three year 6% Non-negotiable
Subordinated Promissory Note of Selfcare in the form of EXHIBIT A hereto (the
"NOTE" and collectively with the Shares and the Cash, the "PURCHASE PRICE")
providing among other things that if the average closing prices on the American
Stock Exchange (the "AMEX") for the Common Stock during the 90 trading days
immediately preceding the maturity date of the Note is between 50% and 100%
greater than $9.00 (subject to adjustment as provided in the Note) (the "BASE
PRICE"), the principal amount of the Note shall be increased by up to $2,000,000
(prorated between the 50%-100% so that if the increase in the closing price of
the Common Stock is 50% or less there shall be no increase in principal amount
of the Note and if the increase in the closing price of the Common Stock
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is 100% or more the principal amount of the Note shall be increased by
$2,000,000 (the "POTENTIAL PREMIUM")). In the event of a change of control (as
defined in the Note) of Selfcare, the outstanding principal amount of the Note
shall become due and payable immediately, but the Potential Premium shall not be
due until the maturity date of the Note. At the Closing, as hereinafter defined,
Purchasers shall deliver to Stockholders (1) one or more certificates registered
in the name of each Stockholder representing the number of Shares to be
delivered to such Stockholder in accordance with the schedule set forth on
EXHIBIT B hereto, (2) one or more Notes payable to each Stockholder representing
the principal amount of Notes to be received by such Stockholder in accordance
with the schedule set forth on EXHIBIT B hereto, and (3) the Cash by wire
transfer of immediately available funds in such amounts and to the accounts of
the Stockholders in accordance with the schedule set forth on EXHIBIT B hereto.
At the Closing, the Stockholders shall deliver to the Purchaser all certificates
representing the Securities together with duly executed stock powers and such
other instruments of transfer as the Purchasers shall request.
If between the date of this Agreement and the Closing Date the outstanding
shares of Selfcare Common Stock shall have been changed into a different number
of shares or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the 1,108,333 Shares shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split, combination or
exchange of shares.
The Purchase Price shall be adjusted downward or upward to account for the
amount, if any, by which Net Assets, as hereinafter defined, of the Company as
of the Closing Date are less than or greater than $1,000,000, as determined
based on the "NET ASSETS AUDIT," as hereinafter defined. Any adjustment to the
Purchase Price pursuant hereto shall be made by payments in cash. For purposes
of this Agreement, "NET ASSETS" shall mean assets less liabilities determined in
accordance with GAAP consistent with the Company's past practices.
A post-closing audit of the Net Assets of the Company (the "NET ASSETS
AUDIT") shall be completed by the accounting firm Arthur Andersen LLP and
communicated in writing to Stockholders no later than six months after the
Closing Date, as hereinafter defined; PROVIDED, that if Arthur Andersen LLP is
not able to complete the Net Assets Audit for any reason, the Net Assets Audit
shall be conducted by another "big six" accounting firm mutually acceptable to
the Purchasers and the Stockholders. If one or more of the Stockholders
disagrees with the result of the Net Assets Audit, such Stockholders shall
inform Purchasers of such disagreement in writing within ten business days after
results of the Net Assets Audit are communicated to Stockholders. Purchasers and
such Stockholders shall attempt to resolve their differences through good faith
negotiation. If Purchasers and such Stockholders are unable to resolve such
disagreement within twenty days after such Stockholders inform Purchasers of
their disagreement with the results of the Net Assets Audit, the disagreement
will be submitted to a binding third-party audit, with costs to be shared
equally by Purchasers and such Stockholders. Such audit shall be conducted by an
auditor (the "THIRD PARTY AUDITOR") who (1) shall be selected by the then
current managing partner of the Boston office of a nationally recognized
accounting firm agreed upon by Purchasers and such Stockholders and (2) shall
possess a minimum of 10 years' experience in accounting and auditing.
The Third Party Auditor shall resolve all disputed matters specified in any
notice of disagreement within 30 business days of the date that such matters are
referred to such Third Party Auditor, and its decision shall be final and
binding upon the Purchasers, the Company and the Stockholders.
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Any upward or downward adjustment made to the Purchase Price pursuant to
this SECTION 1(b) shall be made on the tenth business day following the date
upon which the determination of Net Assets becomes final and binding upon the
parties, or at such other time as the parties may agree in writing.
(c) TRANSACTION SHARE ADJUSTMENT. The 1,108,333 shares of Selfcare Common
Stock delivered to the Stockholders (for purposes of the following paragraphs of
this SECTION 1(c), the "SELFCARE SHARES") shall be adjusted as follows:
(i) If by June 30, 1998 (and provided the closing of such
"Transaction" (as defined below) occurs no later than August 31, 1998) Selfcare
enters into a definitive purchase and sale agreement to sell all or a
substantial portion of its assets representing more than fifty-one percent (51%)
of the value of all assets of Selfcare as of the date of the Transaction, or to
sell the stock of Selfcare or a subsidiary or spin-off of Selfcare where the
sale of such subsidiary or spin-off represents the sale of more than fifty-one
percent (51%) of the value of all assets of Selfcare as of the date of the
Transaction, in a transaction or series of related transactions (a
"TRANSACTION") in which the Stockholders would retain or receive (i) cash, (ii)
securities of Selfcare or a subsidiary or spin-off of Selfcare and/or (iii)
securities of the acquirer ("OTHER SECURITIES"), and the value of such
consideration exceeds $14,820,000 (as determined below) upon the closing of such
Transaction, the Selfcare Shares will be subject to the following adjustment,
which adjustment will be made, at Selfcare's election, simultaneously with or
immediately prior to the consummation of the Transaction:
(A) For purposes of this SUBSECTION 1(c)(i), the
"CONSIDERATION PREMIUM" of the Selfcare Shares shall be the total value of
the Selfcare Shares (based on the average of the Selfcare closing share
price for the five (5) trading days immediately preceding the closing date
of a Transaction (the "SELFCARE SHARE PRICE")) less $14,820,000.
(B) Each of the Stockholders shall deliver back to the
Company on the closing date of the Transaction the portion of the
Consideration Premium received by him by delivery of that number of
Selfcare Shares having a value equal to his PRO RATA share of the
Consideration Premium divided by the Selfcare Share Price.
(ii) If no Transaction occurred as provided in SUBSECTION 1(c)(i)
above, and if by October 31, 1998 (and provided the closing of such Transaction
occurs no later than December 31, 1998) Selfcare enters into a definitive
purchase and sale agreement relating to a Transaction in which the Stockholders
would retain or receive (i) cash, (ii) securities of Selfcare or a subsidiary or
spin-off of Selfcare and/or (iii) Other Securities, and the value of such
consideration exceeds $17,100,000 (as determined below) upon the closing of such
Transaction, the Selfcare Shares will be subject to the following adjustment,
which adjustment will be made, at Selfcare's election, simultaneously with or
immediately prior to the closing date of the Transaction:
(A) For purposes of this SUBSECTION 1(c)(ii), the
"CONSIDERATION PREMIUM" of the Selfcare Shares shall be the total value of
the Selfcare Shares (based on the Selfcare Share Price) less $17,100,000.
(B) Each of the Stockholders shall deliver back to the
Company on the closing date of the Transaction the portion of the
Consideration Premium received by him by delivery of that number of
Selfcare Shares having a value equal to his PRO RATA share of the
Consideration Premium divided by the Selfcare Share Price.
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If any Stockholder should sell any of his Selfcare Shares prior to the
closing date of a Transaction, the number of Selfcare Shares and the dollar
amounts of $14,820,000 and $17,100,000 shall be appropriately reduced to account
for such sale. After the earlier of a public announcement by Selfcare of a
Transaction or the date on which a Stockholder receives knowledge of a
Transaction, the Stockholders shall not sell or otherwise transfer any Selfcare
Shares until the closing or abandonment of such Transaction.
The intent of this SECTION 1(c) is to limit the gain realized by the
Stockholders in the Selfcare Shares to 30% if a Transaction described in
SUBSECTION 1(c)(i) occurs and to 50% if a Transaction described in SUBSECTION
1(c)(ii) occurs, so that in either such case each Stockholder would return his
PRO RATA share of the Consideration Premium (in the form of Selfcare Shares) to
Selfcare as provided above.
(d) CLOSING. Subject to the satisfaction or waiver of the conditions set
forth in SECTION 6 below, the purchase of the Securities shall be made at a
closing (the "CLOSING") to be held at the offices of Foley, Hoag & Eliot LLP,
One Post Office Square, Boston, MA 02109, on February 17, 1998, or at such other
time and on such other date as the Purchasers, the Company and the Stockholders
may mutually agree (the "CLOSING DATE").
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
STOCKHOLDERS. The Company and the Stockholders, jointly and severally, hereby
represent and warrant to the Purchasers as follows:
(a) ORGANIZATION, POWER AND AUTHORITY; EFFECT OF TRANSACTION.
(i) The Company (A) is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, (B) has
all requisite power and authority (corporate and other) to own or hold under
lease its properties and to conduct its business as now conducted, and (C) has
been duly qualified and is authorized to do business and is in good standing as
a foreign corporation in each jurisdiction (a true and correct list of which is
set forth on SCHEDULE 2(A)) in which the character of its property or the nature
of its business or operations requires such qualification or authorization,
except where the failure to so qualify does not, in the aggregate, have a
Material Adverse Effect on the Company.
(ii) The Company has all requisite power and authority (corporate
and other) in order to enable it to execute and deliver, and to perform its
obligations under, this Agreement and each agreement, instrument or other
document executed or required to be executed pursuant hereto including, but not
limited to the Note, the Registration Rights Agreement among Selfcare and the
Stockholders, Employment Agreements between each of Robert Oringer and Herb
Cover and Selfcare, the Escrow Agreement among State Street Bank and Trust
Company (the "ESCROW AGENT"), the Purchasers, the Company and the Stockholders,
the Supply Agreement between the Company and A.M.G. Medical Inc. ("AMG"), and
the Management Services Agreement between the Company and AMG, each dated as of
the Closing Date, (collectively, the "OTHER AGREEMENTS"), and the execution,
delivery and performance of this Agreement and each agreement, instrument or
other document executed or required to be executed pursuant hereto have been
duly and validly authorized by all requisite corporate or other action. This
Agreement has been, and as of the Closing Date each Other Agreement to which the
Company is a party will be, duly executed and delivered by the Company and
constitutes, and each agreement, instrument or other document executed or
required to be executed pursuant hereto when executed and delivered by the
Company will constitute, legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms, except as: (A) the
enforceability thereof may be limited by bankruptcy, reorganization, insolvency,
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moratorium, fraudulent conveyance or other laws of general applicability
affecting the enforcement of creditors' or secured parties' rights or debtors'
obligations generally, (B) the availability of specific performance or other
equitable remedies may be limited by equitable principles of general
applicability (whether such matter is considered in a proceeding at law or in
equity), and (C) the indemnification provisions with respect to securities law
matters may be limited by applicable securities laws or principles of public
policy.
(iii) Except as set forth on SCHEDULE 2(A), neither the execution
and delivery of this Agreement, the Other Agreements to which the Company is a
party or any other agreement, instrument or other document executed or required
to be executed pursuant hereto, nor the consummation of the transactions herein
contemplated nor compliance with the terms, conditions and provisions hereof by
the Company:
(A) will conflict with, or result in a breach or violation of,
or constitute a default under, the Certificate of Incorporation or By-Laws
of the Company or any Applicable Law on the part of the Company or will
conflict with, or result in a breach or violation of, or constitute a
default under, or permit any other party to terminate, or permit the
acceleration of any obligation or liability in, or, but for any requirement
of giving of notice or passage of time or both, would constitute such a
conflict with, breach orviolation of, or default under, or permit any such
termination or acceleration in, any agreement to which the Company is a
party or by which it or its property is bound, except where such conflicts,
breaches, violations or defaults described in this paragraph do not, in the
aggregate, have a Material Adverse Effect on the consummation of the
transactions contemplated hereby or the Company;
(B) will result in or permit the creation or imposition of any
Lien upon any property now owned or leased by the Company; or
(C) will require any Governmental Authorization or
Governmental Filing.
(iv) The Company does not have any Subsidiaries nor does the
Company have any investment in any Person.
(v) The authorized and outstanding capital stock of the Company
and the ownership thereof will as of the Closing Date be as set forth on
SCHEDULE 2(a). All issued and outstanding Securities are duly authorized,
validly issued, fully paid, non-assessable and free from any restrictions on
transfer, and are not subject to any preemptive or similar rights, except (A) as
set forth on SCHEDULE 2(a) and (B) for restrictions imposed by federal or state
securities or "blue-sky" laws. Except as set forth on SCHEDULE 2(a), (X) there
is neither outstanding nor has the Company agreed to grant or issue any shares
of its capital stock or any Option Security or Convertible Security and (Y) the
Company is not a party to and is not bound by any agreement, put or commitment
pursuant to which it is obligated to purchase, redeem or otherwise acquire any
shares of capital stock or any Option Security or Convertible Security. All
issued and outstanding shares of capital stock of the Company were issued (A) in
transactions exempt from the registration provisions of the Securities Act of
1933, as amended (the "SECURITIES ACT"), and (B) in compliance with or in
transactions exempt from the registration provisions of applicable state
securities or "blue-sky" laws.
(b) FINANCIAL INFORMATION. The Company has heretofore furnished to the
Purchasers true, correct and complete copies of the financial statements of the
Company for each of the fiscal years ended
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May 31, 1996 and May 31, 1997 and the interim period thereafter ended December
31, 1997 (the "FINANCIAL STATEMENTS"). Except as set forth on SCHEDULE 2(b), the
Financial Statements, including in each case the notes thereto, have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby, except as otherwise noted therein, and fairly present
the financial condition and results of operations of the Company, on the bases
therein stated, as of the respective dates thereof, and for the respective
periods covered thereby subject, in the case of unaudited financial statements,
to normal year-end audit adjustments and accruals. Between the date of the most
recent financial statements forming part of the Financial Statements and the
date of this Agreement, except to the extent described on SCHEDULE 2(b), there
has been no Material Adverse Change in the Company. Except as set forth in the
December 31, 1997 balance sheet forming part of the Financial Statements (the
"MOST RECENT BALANCE SHEET"), there are no material liabilities of the Company,
whether accrued, absolute, contingent or otherwise (including, without
limitation, claims relating to product liability, liabilities as guarantor or
otherwise with respect to obligations of any other Person, or liabilities for
Taxes due or then accrued or to become due), of a nature required by GAAP to be
set forth in the Financial Statements, or the notes thereto, except for
liabilities which have arisen in the ordinary course of business of the Company
since the date of the Most Recent Balance Sheet and except as contemplated by
this Agreement and the Related Agreements. SCHEDULE 2(b) sets forth certain
adjustments made to the Financial Statements for the most recent fiscal year of
the Company (the "ADJUSTMENTS"). The Adjustments refer to actual payments made
by the Company during the fiscal year ended May 31, 1997, and, giving effect to
the Adjustments, the Company had adjusted earnings before interest, taxes,
depreciation and amortization of $3,138,952 in its most recent fiscal year.
(c) CONDITION AND TITLE TO PROPERTIES. The Company owns no real property
and has good indefeasible and merchantable title to all assets, tangible and
intangible, reflected on the Most Recent Balance Sheet or used by the Company,
if not so reflected, or acquired by the Company since such date, except
inventory sold and other tangible personal property used up or retired since
such date, in each case in the ordinary course of business, free and clear of
all Liens, except such as are reflected in such balance sheet, or the notes
thereto, or set forth on SCHEDULE 2(c), or which do not, in the aggregate, have
a Material Adverse Effect on the Company. SCHEDULE 2(c) contains a list of all
real property leased by the Company and all leases of real property as of the
date hereof, true, correct and complete copies of which have been provided to
Purchasers. The Company is not in material default in the performance,
observance or fulfillment of any obligation, covenant or condition contained in
any such lease. SCHEDULE 2(c) contains a list setting forth all Material items
of tangible assets owned or leased by the Company as of the date hereof. All
tangible properties and assets valued at over $5,000 owned or leased by the
Company are in satisfactory operating condition and repair, ordinary wear and
tear excepted, have been maintained in accordance with reasonable business
practice and are adequate for the operation of the Business as currently
conducted.
(d) COMPLIANCE WITH APPLICABLE LAWS; LITIGATION.
(i) Except as set forth on SCHEDULE 2(d), the Company is presently,
and has been for the past five (5) years, in compliance in all material
respects, with all Applicable Laws, except where the failure to comply could not
be reasonably expected to have a Material Adverse Effect. The Company has not:
(A) offered, made or agreed to make any contribution, payment, or
gift of funds or property to any governmental official, employee or agent
where either the contribution, payment or gift or purpose thereof was
illegal under any Applicable Law;
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(B) established or maintained or agreed to establish or maintain
any unrecorded fund or material asset for any purpose, or made any false
entries on any books or records for any reason; or
(C) offered, made or agreed to make any contribution, or
reimbursed any political gift or contribution made by any other person, to
any candidate for federal, state, local or foreign public office where such
contribution or reimbursement or the purpose thereof was illegal under any
Applicable Law.
(ii) The Company has filed in a timely manner all reports, documents,
and other materials that are or were required to be filed (and the information
contained therein was correct and complete in all respects) under all Applicable
Laws, including Section 1877 of the Social Security Act, except to the extent
that non-compliance with any such Applicable Law could not, individually or in
the aggregate, have a Material Adverse Effect on the Company.
SCHEDULE 2(d) contains a brief description of all litigation or legal or
other actions, suits, proceedings or investigations, at law or in equity or
admiralty, or before any federal, state, municipal or other governmental
department (including, without limitation, the National Labor Relations Board),
commission, board, agency or instrumentality, domestic or foreign, in which the
Company or any of its officers or directors, in such capacity, is engaged as of
the date hereof, or, to the knowledge of the Company and Stockholders as of the
date hereof, with which the Company or any of its officers or directors is
threatened in connection with the business or affairs or properties or assets of
the Company.
(e) REGULATORY APPROVALS AND CONSENTS. Set forth on SCHEDULE 2(e) is a
true and complete list of all Regulatory Approvals and Consents possessed by the
Company, the failure of which to have would, singly or in the aggregate, have a
Material Adverse Effect. The Company has, and is in material compliance with,
all of the Regulatory Approvals and Consents which are required to carry on the
Business as currently conducted. None of the Regulatory Approvals or Consents
set forth on SCHEDULE 2(e) requires the consent or filing of any third party in
order for such Regulatory Approval or Consent to continue to be in effect after
the Closing Date.
(f) INTELLECTUAL PROPERTY. The present and planned future conduct of
business by the Company is not materially dependent upon any one or more trade
secrets, patents, trademarks, trade names, service marks or copyrights (the
"INTELLECTUAL PROPERTY"). The Company owns or has rights to use its Intellectual
Property adequate to operate its business as currently operated and as
contemplated to be operated. There are no Claims of any Person pertaining to any
of the Intellectual Property, no proceedings have been instituted, are pending
or, to the Company's knowledge, threatened which challenge the Company's rights
in respect to any of the Intellectual Property, and to the Company's knowledge,
the Intellectual Property does not infringe upon or otherwise violate the rights
of any other Person or to the Company's knowledge is not being infringed or
violated by any other Person. SCHEDULE 2(f) sets forth a true, correct and
complete list of all the Intellectual Property of the Company, and no licenses,
sublicenses or agreements pertaining to any of the Intellectual Property are in
effect, except as set forth on SCHEDULE 2(f).
(g) RELATED TRANSACTIONS. SCHEDULE 2(g) sets forth a list of all
agreements or transactions between the Company and any of its officers,
directors or Stockholders, or to the knowledge of the Company any Affiliate of
any thereof (including descriptions of each agreement or transaction in the
ordinary course of business between the Company and AMG), now existing or which,
at any time since
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June 1, 1995, existed or occurred, including, without limitation, any informal
or oral agreements or understandings and any agreement or transaction providing
for the furnishing of services to or by, providing for rental of property, real,
personal or mixed, to or from, or providing for the lending or borrowing of
money to or from or otherwise requiring payments to or from, any officer,
director or stockholder, or any Affiliate of any thereof, and, except as set
forth on SCHEDULE 2(g), each such agreement or transaction is terminable by the
Company without further liability to it.
(h) INSURANCE. The Company maintains such policies of fire and casualty,
liability and other forms of insurance in such amounts, with such deductibles
and against such risks and losses as are set forth on SCHEDULE 2(h) (the
"INSURANCE POLICIES") and will continue such insurance in effect through the
Closing (or if such policies are canceled or lapse prior to the Closing,
renewals or replacements thereof will be entered into in the ordinary course of
business to the extent available on commercially reasonable terms). The Company
is not in default with respect to any material provision contained in any such
insurance policy now in effect.
(i) TAX MATTERS. The Company has filed all Tax Returns required to be
filed prior to the Closing Date. All Taxes owed by the Company (whether or not
shown on any Tax Return) have been paid. The Company (1) has not received any
notice of any claims from any Taxing Authority concerning any Tax liability of
the Company, (2) has not received any notice of any claim by any Taxing
Authority in a jurisdiction where the Company does not file Tax Returns that it
is or may be subject to taxation by that jurisdiction, (3) has not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to any Tax assessment or deficiency, (4) is not a party to any tax
allocation or sharing agreement, (5) is not a party to any "safe harbor lease"
that is subject to the provisions of Section 168(f)(8) of the Internal Revenue
Code as in effect prior to the enactment of the Tax Reform Act of 1986, (6) has
not filed a consent under Section 341(f) of the Code concerning collapsible
corporations, (7) is not obligated to make any payments, and is not a party to
any agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Section 280G of the Code, (8) is not
and has not been a United States real property holding corporation within the
meaning of Section 897(c)(2) of the Code during the applicable period specified
in Section 897(c)(1)(A)(ii) of the Code, has disclosed on its federal income Tax
Returns all positions taken therein that could give rise to a substantial
understatement of federal income tax within the meaning of Section 6662 of the
Code, and (10) has withheld and paid all taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder, or other third party. The provision for taxes
on the Most Recent Balance Sheet is sufficient to satisfy all the taxes of any
kind of the Company. The Company has not signed any extension agreement with any
Taxing Authority. The Company does not expect any Taxing Authority to assess any
additional Taxes for any period for which Tax Returns have been filed. Schedule
2(j) lists all federal, state, local and foreign income Tax Returns filed with
respect to the Company for taxable periods ended on or after December 31, 1990,
and indicates those Tax Returns that have been audited and those Tax Returns
that currently are the subject of audit. The Company has delivered to the
Purchasers correct and complete copies of all U.S. and foreign income Tax
Returns filed by, and all Tax examination reports and statements of deficiencies
assessed against or agreed to by, the Company since December 31, 1990. The
Company does not have any liability for Taxes of any other person under Section
1.1502-6 of the Treasury Regulations (or any similar provision of U.S. or
foreign law) or as a transferee or successor.
(j) EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974. The Company has no
current obligation to make any contribution to any Plans and has had no such
obligation for the past 5 years. SCHEDULE 2(j) contains a true, correct and
complete list of all Plans.
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(k) EMPLOYMENT ARRANGEMENTS. The Company has no employees, and as such
has no obligation or liability, contingent or other, under any Employment
Arrangement.
(l) MATERIAL AGREEMENTS. Except as described on SCHEDULE 2(l), the
Company is not, as of the date of this Agreement, a party to or bound by any:
(i) (A) lease or similar agreement under which the Company is lessee
of, or holds or uses, any machinery, equipment, vehicle or other tangible
personal property owned by a third party; (B) continuing contract for the future
purchase of materials, supplies or equipment; (C) management, service,
consulting or other similar type of contract; (D) distribution or sales agency
agreement or arrangement; or (E) advertising agreement or arrangement, in any
such case which has an aggregate future liability in excess of $25,000 or which
is not terminable by the Company on not more than 90 days' notice without
penalty or premium;
(ii) agreement or contract under which the Company has borrowed or
loaned any money or issued any note, bond, indenture or other evidence of
indebtedness or guaranteed indebtedness of others (other than (A) endorsements
for the purpose of collection in the ordinary course of business, (B) advances
to employees of the Company in the ordinary course of business, and (C) credit
terms for customers in the ordinary course of business);
(iii) mortgage, pledge, security agreement, deed of trust or other
document, in each case granting a lien (including, without limitation, liens
upon properties acquired under conditional sales, capital leases or other title
retention or security devices) securing obligations in excess of $25,000
individually or $100,000 in the aggregate;
(iv) outstanding commitment by the Company to make a capital
expenditure, capital addition or capital improvement involving an amount in
excess of $25,000 for any individual commitment or $100,000 in the aggregate;
(v) continuing contract which requires the Company to sell a minimum
amount of materials, supplies and/or equipment in the future;
(vi) other contract (including, without limitation, partnerships and
joint ventures) which purports to limit the freedom of the Company to engage in
any line of business in any geographic area; and
(vii) other Material Agreement.
True, complete and correct copies if in writing, and if oral, accurate
written summaries, of each of the foregoing have been delivered to or made
available for review by the Purchasers. To the knowledge of the Company, each
Material Agreement of the Company described on SCHEDULE 2(l) is in full force
and effect and enforceable in accordance with its terms, except as disclosed on
SCHEDULE 2(l). The Company has not received notice that any party with it to a
Material Agreement intends to terminate such agreement. The Company is not (with
or without the lapse of time or the giving of notice, or both) in breach or
default thereunder and, to the knowledge of the Company, no other party to any
of the Material Agreements is (with or without the lapse of time or the giving
of notice, or both) in breach or default thereunder.
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(m) ORDINARY COURSE OF BUSINESS. The Company, from the date of the Most
Recent Balance Sheet to the date hereof, except as may be described on SCHEDULE
2(m) or as may be required by the terms of this Agreement:
(i) has operated the Business in the ordinary course;
(ii) has not sold or otherwise disposed of, or contracted to sell or
otherwise dispose of, any of its properties or assets, other than inventory in
the ordinary course of its business and non-material amounts of machinery and
equipment no longer needed in the operation or business or replaced with assets
of like kind or better kind and quality;
(iii) except in each case in the ordinary course of business, has not
incurred any obligations or liabilities;
(iv) has not discharged or satisfied any Lien or paid any obligation
or liability (absolute or contingent), other than current liabilities or
obligations under contracts then existing or thereafter entered into in the
ordinary course of business and commitments under leases of real property
existing on that date or incurred since that date in the ordinary course of
business;
(v) has not materially increased the compensation payable, or to
become payable, to any of its officers, employees, advisors, consultants,
salesmen or agents, has not otherwise altered, modified or changed in any
material respect the terms of the employment or engagement of such persons, and
has not entered into Employment Arrangements, other than in the ordinary course
of business and on terms and conditions substantially consistent with prior
practices;
(vi) has not suffered any material damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of property
by any Authority;
(vii) has not issued, sold or purchased, or agreed to issue, sell or
purchase, any shares of capital stock or any Convertible Securities or Option
Securities;
(viii) has not declared, made or paid, or agreed to declare, make or
pay, any Distribution that would cause the Net Assets to be less than $1,000,000
(including $100,000 in cash) as of the Closing Date;
(ix) has not mortgaged, pledged or subject to lien or any other
encumbrance any of its assets, tangible or intangible; and
(x) has made no changes in its accounting practices or tax elections.
(n) BROKER OR FINDER. No Person other than Bear, Stearns & Co., Inc.
("BEAR STEARNS"), assisted in or brought about the negotiation of this Agreement
or the subject matter of the transactions contemplated hereby in the capacity of
broker, agent or finder or in any similar capacity on behalf of the Company or
any of the Stockholders, and, except for the fees and expenses of Bear Stearns,
neither any Stockholder nor the Company has incurred any broker's, finder's or
similar fees or commissions payable with respect to the transactions
contemplated by this Agreement.
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(o) ENVIRONMENTAL PROTECTION. Except as set forth in Schedule(o), and to
the knowledge of the Company:
(i) The Company is in compliance with all applicable Environmental
Laws (as such term is defined in ADDENDUM A hereto) except where the failure to
comply would have a Material Adverse Effect;
(ii) The Company has obtained all material permits and approvals
required under Environmental Laws, including, without limitation, all material
environmental, health and safety permits, licenses, approvals, authorizations,
variances, agreements and waivers of federal, state and local governmental
authorities ("PERMITS") necessary for the conduct of its business and the
operation of its facilities, and all such Permits are in good standing and the
Company is in material compliance with all terms and conditions of such Permits
except where the failure to comply would have a Material Adverse Effect;
(iii) Neither the Company nor any of its currently or, to the
Company's knowledge, previously owned or leased properties or operations has
been named as a potentially responsible party or is subject to any outstanding
written order from or agreement with any federal, state or local governmental
authority or other person or is subject to any judicial or docketed
administrative proceeding respecting (x) Environmental Laws, (y) Remedial Action
(as such term is defined in ADDENDUM A hereto) or (z) any material Environmental
Liabilities and Costs (as such term is defined in ADDENDUM A hereto) that are
reasonably likely to have a Material Adverse Effect;
(iv) There are no conditions or circumstances associated with the
currently or previously owned or leased properties or operations of the Company
which may give rise to Environmental Liabilities and Costs that are reasonably
likely to have a Material Adverse Effect;
(v) The Company has not received (x) any notice or claim to the
effect that it is or is reasonably expected to be liable to any person as a
result of a Release (as such term is defined in ADDENDUM A hereto) or threatened
Release or (y) any notice letter or request for information under CERCLA (as
such term is defined in ADDENDUM A hereto) that are reasonably likely to have a
Material Adverse Effect; and
(vi) No Environmental Lien (as such term is defined in ADDENDUM A
hereto) and no unrecorded Environmental Lien of which the Company has notice has
attached to any property of the Company.
(p) ACCOUNTS RECEIVABLE. All customer and trade notes and accounts
receivable owned by the Company are fully collectible in the aggregate, to the
extent of the aggregate face value thereof as indicated on the Most Recent
Balance Sheet, within 180 days of the invoice date.
(q) PRODUCTS IN WARRANTY. Attached as SCHEDULE 2(q) are true, complete
and correct copies of the Company's standard warranty agreements used in
connection with its business operations. The Company's standard warranty
agreements apply to each product in warranty except as otherwise indicated on
SCHEDULE 2(q). The Company is not in violation in any material respect of any
such warranty agreement.
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(r) INVENTORY. All inventory of the Company, whether or not reflected in
the Most Recent Balance Sheet, consists of a quality and quantity usable and
salable in the ordinary course of business, except for obsolete items and items
of below-standard quality, all of which have been written off or written down to
net realizable value in the Most Recent Balance Sheet in accordance with GAAP.
All inventories not written off have been priced at the lower of cost or market.
The quantities of each type of inventory (whether raw materials,
work-in-process, or finished goods) are not excessive, but are reasonable and
warranted in the present circumstances of the Company. The amount of defective
or deficient work in process and finished goods inventory, in the aggregate, is
not material to the inventory taken as a whole.
(s) AGREEMENT WITH P.J. NOYES. The Company is party to a manufacturing
and marketing agreement with P.J. Noyes, Inc. ("NOYES") relating to, among other
things, the distribution of glucose tablets (the "NOYES AGREEMENT"). The Noyes
Agreement is in full force and effect. The Company has not received notice that
Noyes intends to terminate the Noyes Agreement. The Company is not in breach or
violation of the Noyes Agreement and, to the Company's knowledge, (i) Noyes is
not in breach of the Noyes Agreement, and (ii) no event, occurrence or condition
exists which, with the lapse of time, the giving of notice, or both, would
become a default by Noyes or the Company under the Noyes Agreement. The Company
has no reason to believe that Noyes will terminate the Noyes Agreement as a
result of the consummation of the transactions contemplated by this Agreement.
(t) AGREEMENT WITH CIMETRA. The Company is party to an agreement with
Cimetra ("CIMETRA") relating to, among other things, warehousing, shipping and
related services (the "CIMETRA AGREEMENT"). The Cimetra Agreement is in full
force and effect. The Company has not received notice that Cimetra intends to
terminate the Cimetra Agreement. The Company is not in breach or violation of
the Cimetra Agreement and, to the Company's knowledge, (i) Cimetra is not in
breach of the Cimetra Agreement, and (ii) no event, occurrence or condition
exists which, with the lapse of time, the giving of notice, or both, would
become a default by Cimetra or the Company under the Cimetra Agreement. The
Company has no reason to believe that Cimetra will terminate the Cimetra
Agreement as a result of the consummation of the transactions contemplated by
this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder, severally and not jointly, represents and warrants to the
Purchasers that:
(a) CAPACITY; DUE EXECUTION. He has capacity to enable him to execute and
deliver, and to perform his obligations under, this Agreement and each other
agreement, instrument and document executed or required to be executed pursuant
hereto, and the execution, delivery and performance of this Agreement and each
other agreements, instrument and document executed or required to be executed
pursuant hereto have, or on or prior to the Closing Date will have, been duly
executed and delivered;
(b) VALIDITY AND ENFORCEABILITY. This Agreement constitutes, and each
other agreement, instrument and document executed or required to be executed
pursuant hereto when executed and delivered by him will constitute, his valid
and binding obligations, enforceable in accordance with its respective terms,
except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, fraudulent conveyance or similar laws affecting the
enforcement of creditors' or secured parties' rights or debtors' obligations
generally, (ii) the availability of specific performance or other equitable
remedies may be limited by equitable principles of general applicability
(whether in a court of law or in equity), and (iii) the indemnification
provisions with respect to securities law matters may be limited by applicable
securities laws or principles of public policy.
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(c) TITLE TO SECURITIES. He owns and has good, valid and marketable title
to the Securities set forth opposite his name on EXHIBIT B, free and clear of
all Liens, puts, calls, options, preemptive rights, stockholder agreements and
voting rights; and
(d) EFFECT OF TRANSACTION. Neither the execution and delivery of this
Agreement or any other agreement or instrument executed or required to be
executed pursuant hereto, nor the consummation of the transactions herein
contemplated, nor compliance with the terms, conditions and provisions hereof by
him:
(i) will conflict with, or result in a breach or violation of, or
constitute a default under, any Applicable Law on his part or will conflict
with, or result in a breach or violation of, or constitute a default in the
performance, observance or fulfillment of, or a default under, or permit the
acceleration of any obligation or liability in, or, but for any requirement of
giving of notice or passage of time or both, would constitute such a conflict
with, breach or violation of, or default under, or permit any such acceleration
in, any material agreement to which he is a party or by which he or his property
is bound;
(ii) will result in or permit the creation or imposition of any Lien
upon any of his property or assets; or
(iii) will require any Governmental Authorization or Governmental
Filing.
(e) INVESTMENT.
(i) Each Stockholder is acquiring the Shares for his own account for
investment and not with a view to, or for sale in connection with, any
transaction which would constitute a distribution within the meaning of the
Securities Act.
(ii) Each Stockholder understands that none of the Shares have been
registered under the Securities Act or the securities laws of any state, and in
the absence of such registration (or an exemption therefrom), he may be required
to hold the Shares for an indefinite period of time; that the exemptions from
any registration under the Securities Act provided by Rule 144 promulgated
thereunder are not presently available and may not necessarily become available
to him; and that even if available, such rule may permit resales of the Shares
only in limited amounts and upon compliance with the terms and conditions of
such rule.
(iii) Each Stockholder (A) has such knowledge and experience in
financial and business matters that he is capable of evaluating the merits and
risks of this investment in the Shares; (B) is able to bear the complete loss of
its investment in the Securities; and (C) has reviewed the Selfcare SEC
Documents and has had the opportunity to ask questions of, and receive answers
from, the Purchasers concerning the terms and conditions of the offering of the
Shares and to obtain additional information.
(iv) Each Stockholder acknowledges and agrees that until such time as
he is no longer required under the Securities Act and the rules and regulations
thereunder, the certificates representing the Shares shall bear a legend
referencing the Securities Act.
(v) Each Stockholder is an "accredited investor" as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act.
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(f) EXCLUSIVE REPRESENTATIONS; DUE DILIGENCE. Neither of the Purchasers
nor any other party has made any representations to the Stockholders or any of
their authorized representatives concerning the Purchasers or any other matter
affecting or relating to the business of the Purchasers or the transactions
contemplated herein other than those representations set forth in SECTION 4
hereof which, the Stockholders acknowledge and agree, are the sole and exclusive
representations upon which they may rely and have relied in consummating the
transactions contemplated herein. The Stockholders have had an opportunity to
ask questions and receive answers concerning the business of the Purchasers and
the terms and conditions of the offering of the Shares contemplated herein and
have had full access to such other information concerning the Purchasers as they
have requested. The Stockholders have also had an opportunity to ask questions
of the officers of the Purchasers concerning the Purchasers and the business of
the Purchasers which questions were answered to the Stockholders' satisfaction.
(g) TAX MATTERS. None of the Stockholders expect any Taxing Authority to
assess any additional Taxes for any period for which Tax Returns have been
filed. None of the Stockholders has knowledge based upon personal contact with
any agent of a Taxing Authority of any claim concerning any Tax liability of the
Company.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. The
Purchasers, acting jointly and severally, hereby represent and warrant to the
Company and the Stockholders as follows:
(a) ORGANIZATION AND BUSINESS; POWER AND AUTHORITY; EFFECT OF
TRANSACTION; ORDINARY COURSE OF BUSINESS.
(i) Each of the Purchasers (A) is a corporation duly organized,
validly existing and in good standing under the laws of Delaware; (B) has all
requisite power and authority (corporate and other) to own or hold under lease
its properties and to conduct its business as now conducted; and (C) has been
duly qualified and is authorized to do business and is in good standing as a
foreign corporation in each jurisdiction in which the character of its property
or the nature of its business or operations requires such qualification or
authorization, except where the failure to so qualify does not, in the
aggregate, have a Material Adverse Effect on the Purchasers.
(ii) Each of the Purchasers has all requisite power and authority
(corporate and other) in order to enable it to execute and deliver, and to
perform its obligations under, this Agreement and each Other Agreement, and the
execution, delivery and performance of this Agreement and each agreement,
instrument or other document executed or required to be executed pursuant hereto
have been duly and validly authorized by all requisite corporate or other
action. This Agreement has been, and on the Closing Date the Other Agreements
will be, duly executed and delivered by the Purchasers and constitutes, and each
agreement, instrument or other document executed or required to be executed
pursuant hereto when executed and delivered by the Purchasers will constitute
legal, valid and binding obligations of the Purchasers, enforceable in
accordance with their respective terms, except as: (A) the enforceability
thereof may be limited by bankruptcy, reorganization, insolvency, moratorium,
fraudulent conveyance or other laws of general applicability affecting the
enforcement of creditors' or secured parties' rights or debtors' obligations
generally; (B) the availability of specific performance or other equitable
remedies may be limited by equitable principles of general applicability
(whether such matter is considered in a proceeding at law or in equity); and (C)
the indemnification provisions with respect to securities law matters may be
limited by applicable securities laws or principles of public policy.
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<PAGE> 20
(iii) Neither the execution and delivery of this Agreement, the Other
Agreements or any other agreement, instrument or other document executed or
required to be executed pursuant hereto, nor the consummation of the transaction
herein contemplated, nor compliance with the terms, conditions and provisions
hereof by the Purchasers:
(A) will conflict with, or result in a breach or violation of,
or constitute a default under, any Applicable Law on the part of either
Purchaser or will conflict with, or result in a breach or violation of, or
constitute a default under, or permit the acceleration of any obligation or
liability in, or, but for any requirement of giving of notice or passage of
time or both, would constitute such a conflict with, breach or violation
of, or default under, or permit any such acceleration in, any Material
Agreement to which either of the Purchasers or any of their respective
subsidiaries is a party or by which either of the Purchasers or any of
their respective subsidiaries or their respective property is bound, except
where such conflicts, breaches, violations or defaults described in this
paragraph do not, in the aggregate, have a Material Adverse Effect on
consummation of the transactions contemplated hereby or on the Purchasers;
(B) will result in or permit the creation or imposition of any
Lien upon any property now owned or leased by either of the Purchasers; or
(C) will, based on the representations and warranties of the
Company set forth in SECTION 2(e) and the Stockholders in SECTION 3(d)
require any Governmental Authorization or Governmental Filing, except for
filings contemplated by the Registration Rights Agreement referred to in
SECTION 7(b)(vi) hereof and any other agreements entered into pursuant
hereto.
(b) CAPITALIZATION. The capitalization of Selfcare as of February 10,
1998, including the authorized capital stock, the number of shares issued and
outstanding, the number of shares reserved for issuance pursuant to the
Selfcare's stock option plans, the number of shares reserved for issuance
pursuant to Option Securities or Convertible Securities is set forth on SCHEDULE
4(b). All of such outstanding shares of capital stock of Selfcare have been
validly issued, fully paid and nonassessable. No shares of capital stock of
Selfcare are subject to preemptive rights or any other similar rights granted,
created, suffered or caused by Selfcare or any liens or encumbrances granted,
created, suffered or caused by Selfcare or any of its Subsidiaries. Except as
disclosed in SCHEDULE 4(b), as of the date of this Agreement, (i) there are no
outstanding options, warrants, scrip, rights to subscribe for, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital stock
of Selfcare or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which Selfcare or any of its Subsidiaries is
or may become bound to issue additional shares of capital stock of Selfcare or
any of its Subsidiaries, (ii) issuance of the Shares will not trigger
antidilution or similar rights for any outstanding securities of Selfcare, and
(iii) there are no agreements or arrangements under which Selfcare or any of its
Subsidiaries is obligated to register the sale of any of its or their securities
under the Securities Act. Selfcare has furnished to the Company true and correct
copies of the Selfcare's Certificate of Incorporation as in effect on the date
hereof (the "SELFCARE CERTIFICATE OF INCORPORATION"), and Selfcare's Bylaws as
in effect on the date hereof (the "SELFCARE BY-LAWS"). Selfcare has set forth on
SCHEDULE 4(b) a list of all instruments and agreements (other than the Selfcare
Certificate of Incorporation and Selfcare By-laws) governing or concerning
Option Securities or Convertible Securities (and Selfcare shall provide to the
Stockholders copies thereof upon the request of the Stockholders). At the
Closing, Selfcare shall provide the Stockholders with a written confirmation of
this representation signed by Selfcare's Chief Executive Office or Chief
Financial Officer on behalf of Selfcare as of the date of the Closing. Except as
set forth on SCHEDULE 4(b), all issued and outstanding shares of capital stock
of the Purchasers were issued (A) in compliance with
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or in transactions exempt from the registration provisions of the Securities
Act, and (B) in compliance with or in transactions exempt from the registration
provisions of applicable state securities or "blue-sky" laws.
(c) THE SHARES. The Shares have been duly authorized and, when issued on
the Closing Date, will be validly issued, fully paid, non-assessable and free
from all taxes, liens, claims and encumbrances directly or indirectly imposed or
suffered by Selfcare or any of its Subsidiaries or affiliates, will be entitled
to all rights and preferences accorded to a holder of Common Stock, shall upon
listing with the AmEx be entitled to be traded on the same markets and exchanges
as the other shares of Common Stock are traded, and will not be subject to
preemptive rights or other similar rights of stockholders of Selfcare or of any
other person or entity granted, created, suffered or caused by Selfcare or any
of its Subsidiaries.
(d) NOTE ISSUANCE. When issued and delivered in accordance with the terms
hereof, the Note will be duly and validly issued free from all liens, claims,
and encumbrances directly or indirectly imposed or suffered by Selfcare or any
of its Subsidiaries or affiliates, will not be subject to preemptive rights or
other similar rights of stockholders of Selfcare or of any other person or
entity granted, created, suffered or caused by Selfcare or any of its
Subsidiaries, and will constitute a valid and legally binding obligation of
Selfcare, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, usury, marshaling or other laws affecting the
enforcement generally of contractual parties' rights and remedies (including
such as may deny giving effect to waivers of contractual parties' rights) or by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding at law or in equity.
(e) INVESTMENT.
(i) Each of the Purchasers is acquiring the Securities for its own
account for investment and not with a view to, or for sale in connection with,
any transaction which would constitute a distribution within the meaning of the
Securities Act.
(ii) Each of the Purchasers understands that none of the Securities
have been registered under the Securities Act or the securities laws of any
state, and in the absence of such registration (or an exemption therefrom), it
may be required to hold the Securities for an indefinite period of time; that
the exemptions from registration under the Securities Act provided by Rule 144
promulgated thereunder are not presently available and may not necessarily
become available to it; and that even if available, such rule may permit resales
of the Securities only in limited amounts and upon compliance with the terms and
conditions of such rule.
(iii) Each of the Purchasers (A) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of this investment in the Securities; (B) is able to bear the complete
loss of its investment in the Securities; and (C) has had the opportunity to ask
questions of, and receive answers from, the Company concerning the terms and
conditions of the offering of the Securities and to obtain additional
information.
(iv) Each of the Purchasers acknowledges and agrees that until such
time as it is no longer required under the Securities Act and the rules and
regulations thereunder, the certificates representing the Securities shall bear
a legend referencing the Securities Act.
(v) Each of the Purchasers is an "accredited investor" as such term
is defined in Rule 501 of Regulation D promulgated under the Securities Act.
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(f) BROKER OR FINDER. No Person other than Covington Associates
("COVINGTON") assisted in or brought about the negotiation of this Agreement or
the subject matter of the transactions contemplated hereby in the capacity of
broker, agent or finder or in any similar capacity on behalf of the Purchasers
and, except for the fees and expenses of Covington, the Purchasers have not
incurred any broker's, finder's or similar fees or commissions payable with
respect to the transactions contemplated by this Agreement.
(g) EXCLUSIVE REPRESENTATIONS; DUE DILIGENCE. Neither the Company nor any
other party has made any representations to the Purchasers or any of their
authorized representatives concerning the Company or any other matter affecting
or relating to the Business or the transactions contemplated herein other than
those representations set forth in SECTIONS 2 AND 3 hereof and in SECTION 7 of
the ROFR Agreement - AMG which, the Purchasers acknowledge and agree, are the
sole and exclusive representations upon which they may rely and have relied in
consummating the transactions contemplated herein. The Purchasers have had an
opportunity to ask questions and receive answers concerning the Company and the
Business and the terms and conditions of the offering of the Securities
contemplated herein and have had full access to such other information
concerning the Company as they have requested. The Purchasers have also had an
opportunity to ask questions of the officers of the Company and the Stockholders
concerning the Company and the Business which questions were answered to the
Purchasers' satisfaction.
(h) LIFESCAN. Selfcare has not received any notice from Lifescan, Inc.
that Lifescan intends to terminate Selfcare's exclusive worldwide alliance with
LifeScan. Selfcare is not, and to the knowledge of Selfcare, Lifescan is not in
breach or violation of any material term or provision of such alliance. The
distribution of the product, as described in the Sales Distribution Agreement
for Testing System for Blood Glucose (the "NEW SYSTEM") between LifeScan, Inc.
and Selfcare (the "LIFESCAN DISTRIBUTION AGREEMENT") is not, to the knowledge of
Selfcare, subject to any material threat of delay or interruption.
(i) LITIGATION. SCHEDULE 4(i) contains a brief description of all
litigation or legal or other actions, suits, proceedings or investigations, at
law or in equity or admiralty, or before any federal, state, municipal or other
governmental department (including, without limitation, the National Labor
Relations Board), commission, board, agency or instrumentality, domestic or
foreign, in which the Purchasers or any of their officers or directors, in such
capacity, is engaged, as of the date hereof or, to the knowledge of the
Purchasers as of the date hereof, with which the Purchasers or any of their
officers or directors, in such capacity, is threatened in connection with the
business or affairs or properties or assets of the Purchasers.
(j) REGULATORY APPROVALS AND CONSENTS. The Purchasers have, and are in
material compliance with, all of the Regulatory Approvals and Consents which are
required to carry on the business of the Purchasers as currently conducted.
There are no Regulatory Approvals or Consents required to consummate the
transactions contemplated by this Agreement. Except for renewals expected to be
obtained in the ordinary course of business, none of the Regulatory Approvals or
Consents held by Selfcare and any of its Subsidiaries requires the consent or
filing of any third party in order for such Regulatory Approval or Consent to
continue to be in effect after the Closing Date.
(k) SEC DOCUMENTS; FINANCIAL STATEMENTS. Except as disclosed in SCHEDULE
4(k), since December 31, 1996, Selfcare has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
Securities and Exchange Commission (the "COMMISSION") pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT") (all of the foregoing filed after December 31, 1996 and all exhibits
included therein and financial statements and schedules thereto and documents
incorporated by reference therein, being referred to herein as the "SELFCARE SEC
DOCUMENTS"). The Company has delivered to each Purchaser true and complete
copies of the Selfcare SEC Documents,
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except for exhibits, schedules and incorporated documents. As of their
respective dates, the Selfcare SEC Documents complied in all material respects
with the requirements of the Exchange Act and the rules and regulations of the
Commission promulgated thereunder applicable to the Selfcare SEC Documents, at
the time they were filed with the Commission, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the statements
made in any such Selfcare SEC Documents which is required to be updated or
amended under applicable law has not been so updated or amended. None of the
statements made in any such Selfcare SEC Documents which was or has become
inaccurate or misleading, and which would have a Material Adverse Effect and is
required to be disclosed, has not been so updated or amended. The financial
statements of Selfcare included in the Selfcare SEC Documents have been prepared
in accordance with GAAP, consistently applied, and the rules and regulations of
the Commission during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the case
of unaudited interim statements, to the extent they do not include footnotes or
are condensed or summary statements) and, fairly present in all material
respects the consolidated financial position of Selfcare and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal, immaterial year-end audit adjustments).
(l) INTELLECTUAL PROPERTY. Except as specifically disclosed in the
Selfcare SEC Documents, each of Selfcare and its Subsidiaries owns, is licensed
to use, or possesses adequate and enforceable rights to use all material
patents, patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, copyright applications, licenses, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) and other similar rights and
proprietary knowledge (collectively, "INTANGIBLES") used or necessary for the
conduct of its business as now being conducted and as described in Selfcare's
Annual Report on Form 10-KSB/A for its most recently ended fiscal year. To
Selfcare's best knowledge, except as specifically disclosed in the Selfcare SEC
Documents or set forth in SCHEDULE 4(l), neither Selfcare nor any of its
Subsidiaries infringes on or is in conflict with any right of any other person
with respect to any Intangibles nor is there any claim of infringement made by a
third party against or involving Selfcare or any of its Subsidiaries, which
infringement, conflict or claim, individually or in the aggregate, could
reasonably be expected to result in an unfavorable decision, ruling or finding
which would have a Material Adverse Effect.
(m) SELFCARE MATERIAL AGREEMENTS. Except as described on SCHEDULE 4(m),
neither Selfcare nor any of its Subsidiaries has entered into any Selfcare
Material Agreements during the period between the filing of its most recent Form
10-Q under the Exchange Act and the date hereof. A true and correct copy, if in
writing, and if oral, an accurate written summary, of each Selfcare Material
Agreement listed on SCHEDULE 4(m) has been delivered to the Stockholders. Each
Selfcare Material Agreement is in full force and effect and enforceable in
accordance with its terms. Selfcare has not received notice that any party with
it to a Selfcare Material Agreement intends to terminate such agreement. Except
as set forth in SCHEDULE 4(m) or as specifically disclosed in the Selfcare SEC
Documents, none of Selfcare, its Subsidiaries or, to the knowledge of Selfcare,
any of the other parties thereto, is in breach or violation of any Selfcare
Material Agreement, which breach or violation would have a Material Adverse
Effect, or of any other existing agreement or document which Selfcare will be
required to list or describe in any subsequent Commission filing. No event,
occurrence or condition exists which, with the lapse of time, the giving of
notice, or both, would become a default by Selfcare or its Subsidiaries under
any Selfcare Material Agreement which would have a Material Adverse Effect.
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(n) FINANCING. The Purchasers have obtained a commitment for senior bank
debt financing, a true and correct copy of which has been furnished to the
Company. The Purchasers know of no reason why the conditions to the obligation
to fund the commitment will not be timely satisfied.
(o) NO MATERIAL ADVERSE CHANGE. Since September 30, 1997, there has been
no change which has had a Material Adverse Effect on the business of Selfcare
and its Subsidiaries, taken as a whole except as disclosed in SCHEDULE 4(o).
SECTION 5. COVENANTS AND AGREEMENTS OF THE PARTIES. The parties do hereby,
jointly and severally, covenant and agree as follows:
(a) ACCESS TO INFORMATION; CONFIDENTIALITY.
(i) Each of the Company and the Purchasers shall afford to the other
party and each of its respective officers, directors, employees, attorneys,
accountants, financial advisors, in the case of the Purchasers, and other
representatives or agents, as the case may be, reasonable access during mutually
agreeable business hours throughout the period from the date hereof to the
Closing Date to all of its properties, books and records (and shall permit
copies to be made thereof) and, during such period, each of the Company and the
Purchasers shall provide each of the other parties and its financing sources, in
the case of the Purchasers, and each of their respective representatives such
financial and operating data and such other information with respect to their
business and properties as they shall from time to time reasonably request.
(ii) Each of the Purchasers acknowledges that all information being
provided to it or, in the case of the Purchasers, its financing source, by the
Company is subject to the terms of a confidentiality agreement dated October,
1997 by and among the Company and Bear Stearns (the "CONFIDENTIALITY
AGREEMENT"), the terms of which are incorporated herein by reference. Effective
upon, and only upon, the Closing, the Confidentiality Agreement shall terminate.
(b) AGREEMENT TO COOPERATE. Subject to the terms and conditions herein
provided, each of the parties hereto shall cooperate and use all reasonable
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under Applicable Laws to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, using all commercially reasonable efforts to:
(i) prepare and file with the applicable Authorities, as promptly as
practicable after the execution of this Agreement, all requisite applications,
notifications, registrations, filings and submissions, amendments thereto and
publications and requests for extensions and waivers in connection therewith,
together with all related information, data and exhibits, as may be necessary to
obtain all Governmental Authorizations legally required for, or otherwise
required by Applicable Law in connection with, the consummation of the
transactions contemplated by this Agreement.
(ii) defend vigorously against any Legal Actions in which such party
is named as a defendant which seeks to enjoin, restrain or prohibit the
consummation of the transactions contemplated hereby or seeks damages with
respect to such transactions, including, without limitation, to lift any
injunction or other legal bar to such consummation (and, in such case, to
proceed with such consummation as expeditiously as possible); and
(iii) obtain the satisfaction of the conditions specified in
SECTION 7.
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(c) PUBLIC ANNOUNCEMENTS. Until such time, including following any
termination of this Agreement as may be mutually agreed upon by the parties to
this Agreement, none of the parties shall, without the approval of the
Purchasers and the Company, which approval shall not unreasonably be withheld,
delayed or conditioned, make or cause to be made any press release or other
public announcement that directly or indirectly discloses the transactions
contemplated by this Agreement, except as and to the extent that it is required
to make by Law or, in the case of Selfcare, by its listing agreement with the
AmEx. Prior to making any press release or other public announcement that may be
required by Law or the AmEx, the party proposing to make the same shall advise
the others and afford them the opportunity to review and comment upon its
content.
(d) DIRECTORS' AND OFFICERS' INDEMNIFICATION. The Company shall not take,
and the Purchasers shall not permit the Company to take, for a period of six (6)
years after the Closing, any action that would diminish the rights to
indemnification of each present and former director, officer, employee and agent
of the Company contained in the Articles of Incorporation or By-Laws,
respectively, of the Company as in effect on the Closing Date.
SECTION 6. ADDITIONAL COVENANTS.
(a) COVENANTS OF THE COMPANY. The Company hereby agrees to keep, perform
and fully discharge the following covenants and agreements:
(i) INTERIM CONDUCT OF COMPANY BUSINESS. From the date hereof until
the Closing, the Company shall operate its business consistent with prior
practice and in the ordinary course of business, except that the Company shall
repay all its indebtedness for money borrowed on or before the Closing Date.
Without limiting the generality of the foregoing, from the date hereof until the
Closing Date, except for transactions contemplated by this Agreement or
expressly approved in writing by the Purchasers, the Company shall not:
(A) enter into or amend any employment, bonus, severance or
retirement contract or arrangement, or increase any salary or other form of
compensation payable, or to become payable, to any executive or employee
other than (i) salary increases for employees of the Company who are not
Stockholders and whose current salary is less than $75,000 per annum and
(ii) normal year-end bonuses and gifts to employees who are not
Stockholders in the aggregate of approximately $10,000;
(B) make any payments to any Stockholder, AMG or any Affiliate
that would cause the Net Assets to be less than $1,000,000 (including
$100,000 in cash) as of the Closing Date;
(C) purchase, lease or otherwise acquire any real estate or any
interest therein;
(D) declare, set aside or pay any dividend or make any other
Distribution with respect to any equity security of the Company that would
cause the Net Assets to be less than $1,000,000 (including $100,000 in
cash) as of the Closing Date;
(E) merge or consolidate with, or agree to merge or consolidate
with, or purchase or agree to purchase all or substantially all of the
assets of, acquire securities of or otherwise acquire, any Person;
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(F) sell, lease or otherwise dispose of, or agree to sell, lease
or otherwise dispose of, any of its material assets, properties, rights or
claims, whether tangible or intangible, except in the ordinary course of
business;
(G) authorize for issuance, issue, sell or deliver any of its
equity securities, Option Securities or Convertible Securities;
(H) split, combine or reclassify any class of equity security or
redeem or otherwise acquire, directly or indirectly, any of its equity
securities;
(I) incur any indebtedness not pre-payable without penalty or
premium;
(J) place or permit to be placed any Lien on any of its assets or
properties, other than statutory Liens arising in the ordinary course of
business;
(K) make or authorize any amendments or changes to its corporate
charter or By-Laws not approved in writing by the Purchasers except as
expressly contemplated by this Agreement;
(L) make any investment in excess of $25,000, whether singly or
in the aggregate, in property, plant and equipment and other items of
capital expenditure;
(M) accelerate receivables or delay or postpone payment of any
accounts payable or other liability, except in the ordinary course of
business;
(N) amend, modify or terminate any Material Agreement; or
(O) make any changes in its accounting practices or tax
elections.
(b) COVENANTS OF SELFCARE. Selfcare hereby agrees to keep, perform and
fully discharge the following covenants and agreements:
(i) SELFCARE MATERIAL AGREEMENTS. Selfcare agrees to promptly provide
true and correct copies, if in writing, and if oral, accurate written summaries,
of each Selfcare Material Agreement that Selfcare or any of its Subsidiaries
enters into after the date hereof and before the Closing Date, and, where
feasible, to inform the Stockholders of any such Selfcare Material Agreement
prior to the execution thereof by Selfcare or any of its Subsidiaries.
(ii) AMG PAYABLES. Selfcare shall, by the date 90 days after the
Closing Date, cause the Company to bring all payables owed by it to AMG current
to within 60 days of the date 90 days after the Closing Date.
(iii) BELOW-MARKET ISSUANCES. During the period between the date of
this Agreement and the Closing Date, Selfcare shall not issue, and shall not
agree to issue, any shares of its Common Stock at a price below the closing
price of its Common Stock on the AmEx for the trading day immediately preceding
such issuance ("below-market prices"); PROVIDED, that Selfcare may issue shares
of its Common Stock at below-market prices (i) in exchange for convertible notes
originally issued to stockholders of Cambridge Biotech Limited (Cambridge
Diagnostics), and (ii) in connection with the exercise of any Option Securities,
Convertible Securities, Warrants or similar obligations of Selfcare outstanding
on the date of this Agreement in accordance
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with their existing terms or, in the case of Option Securities, hereafter
awarded to employees in accordance with Selfcare's existing option plans.
SECTION 7. CLOSING CONDITIONS. The obligations of the parties hereto are
subject to the conditions specified below.
(a) OBLIGATIONS OF THE PURCHASERS. The obligations of the Purchasers to
consummate the transactions contemplated by this Agreement are subject to the
satisfaction as of the Closing of the following conditions, each of which may be
waived by the Purchasers in their sole discretion:
(i) The representations and warranties of the Company and the
Stockholders made in this Agreement that are qualified as to materiality shall
be true and correct, and the representations and warranties of the Company and
the Stockholders made in this Agreement that are not so qualified, shall be true
and correct in all material respects, in each case on and as of the Closing, as
though made on and as of the Closing Date.
(ii) The Company and the Stockholders shall have performed their
covenants contained in this Agreement required to be performed by the time of
the Closing.
(iii) During the period from the date hereof until the Closing Date,
nothing shall have occurred that could, individually or in the aggregate, result
in a Material Adverse Change to the business of the Company.
(iv) The Company and the Stockholders shall have delivered to the
Purchasers a certificate dated the Closing Date and signed by duly authorized
signatories of the Company and the Stockholders confirming the satisfaction of
the foregoing CLAUSES (i), (ii) AND (iii).
(v) No injunction or order of any court or administrative agency or
other government body or public authority of competent jurisdiction shall be in
effect as of the Closing which restrains or prohibits the consummation of the
transactions contemplated hereby; nor shall there be any lawsuit, claim,
arbitration, proceeding or investigation pending against the Company or any
Stockholder which questions the legality of or seeks to enjoin, restrain or
prohibit the transactions contemplated hereby or which is reasonably expected to
have a Material Adverse Effect on the Business.
(vi) The Company shall have obtained consents to the transactions
contemplated by this Agreement under the Material Agreements, if any, listed on
SCHEDULE 4(m) as requiring such consents.
(vii) Each of the Stockholders and AMG shall have executed and
delivered Non-competition and Confidentiality Agreements substantially in the
form of EXHIBIT C hereto.
(viii) On or before the Closing Date the Purchasers shall have
obtained senior debt financing on terms reasonably satisfactory to Purchasers.
(ix) On or before the Closing Date, the Company shall have repaid all
its indebtedness for money borrowed, excluding certain amounts owed to AMG
described in SECTION 6(b)(ii).
(x) The Stockholders and AMG shall have delivered to the Purchasers a
duly executed Right of First Refusal Agreement (AMG) (the "ROFR AGREEMENT -
AMG") in substantially the form of EXHIBIT D hereto.
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(xi) Each Stockholder and AMG shall have executed and delivered to
the Purchasers a Right of First Refusal Agreement (Acquisitions offered to AMG
or the Stockholders) in substantially the form of EXHIBIT E hereto.
(xii) AMG and the Company shall have executed and delivered to the
Purchasers a Management Services Agreement in substantially the form of EXHIBIT
F hereto.
(xiii) Each of Herb Cover and Robert Oringer and Selfcare shall have
entered into an employment contract in substantially the form of EXHIBIT G
hereto.
(xiv) AMG and the Company shall have executed and delivered to the
Purchasers a Supply Agreement substantially in the form of EXHIBIT H hereto.
(xv) Each of the Stockholders and the Escrow Agent shall have
executed and delivered the Escrow Agreement referred to in SECTION 8(g) of this
Agreement, and concurrently with the Closing, each of the Stockholders shall
have made all deposits due under the Escrow Agreement.
(xvi) Selfcare and Robert Oringer shall have executed and delivered
an agreement substantially in the form of EXHIBIT I hereto providing for the
appointment of Robert Oringer to the Board of Directors and his resignation from
the Board of Directors under certain circumstances.
(xvii) The Company shall have terminated all Liens against its assets
which are perfected by financing statements.
(xviii) The Purchasers shall have received a favorable opinion, dated
the Closing Date, from Schulte Roth & Zabel LLP, counsel for the Company and the
Stockholders in the form of EXHIBIT J hereto.
(xix) The Purchasers shall have received a favorable opinion, dated
the Closing Date, from Kaufman & Laramee, Canadian counsel for the Company and
the Stockholders in the form of EXHIBIT K hereto.
(b) OBLIGATIONS OF THE COMPANY AND THE STOCKHOLDERS. The obligations of
the Company and the Stockholders to consummate the transactions contemplated by
this Agreement are subject to the satisfaction as of the Closing of the
following conditions, each of which may be waived by the Company and the
Stockholders in their sole discretion:
(i) The representations and warranties of the Purchasers made in this
Agreement that are qualified as to materiality shall be true and correct, and
the representations and warranties of the Purchasers made in this Agreement that
are not so qualified, shall be true and correct in all material respects, in
each case on and as of the Closing, as though made on and as of the Closing
Date.
(ii) The Purchasers shall have performed their covenants contained in
this Agreement required to be performed by the time of the Closing.
(iii) During the period from the date hereof until the Closing Date,
nothing shall have occurred that could, individually or in the aggregate, result
in a Material Adverse Change to the business of Selfcare or its Subsidiaries,
taken as a whole.
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(iv) The Purchasers shall have delivered to the Company and the
Stockholders a certificate dated the Closing Date and signed by duly authorized
signatories of the Purchasers confirming the satisfaction of the foregoing
CLAUSES (i), (ii) AND (iii).
(v) No injunction or order of any court or administrative agency or
other governmental body or public authority of competent jurisdiction shall be
in effect as of the Closing which restrains or prohibits the consummation of the
transactions contemplated hereby; nor shall there be any lawsuit, claim,
arbitration, proceeding or investigation pending against the Purchasers which
questions the legality or seeks to enjoin, restrain or prohibit the transactions
contemplated hereby or which is reasonably expected to have a Material Adverse
Effect on Selfcare and its Subsidiaries, taken as a whole.
(vi) The Purchasers shall have obtained consents to the transactions
contemplated by this Agreement under the Selfcare Material Agreements, if any,
as requiring such consents.
(vii) Selfcare and each of the Stockholders shall have executed and
delivered a Registration Rights Agreement substantially in the form of EXHIBIT L
hereto.
(viii) Ron Zwanziger shall have executed and delivered to the
Stockholders a Lock-up Agreement substantially in the form of EXHIBIT M hereto.
(ix) Selfcare shall have executed and delivered to Robert Oringer an
agreement substantially in the form of EXHIBIT I hereto providing for the
appointment of Robert Oringer to the Board of Directors of Selfcare and his
resignation from the Board of Directors under certain circumstances.
(x) The Company and each Stockholder shall have received favorable
opinions, dated the Closing Date, from Foley, Hoag & Eliot LLP, counsel for the
Purchasers, in the form of EXHIBIT N hereto.
(xi) AMG and the Company shall have executed and delivered to the
Stockholders a Management Services Agreement substantially the form of EXHIBIT F
hereto.
(xii) The Purchasers shall have entered into an employment contract
with each of Herb Cover and Robert Oringer in substantially the form of EXHIBIT
G hereto.
(xiii) AMG and the Company shall have executed and delivered to the
Stockholders a Supply Agreement substantially in the form of EXHIBIT H hereto.
(xiv) The Purchasers and the Escrow Agent shall have executed and
delivered to each Stockholder the Escrow Agreement referred to in SECTION 8(g)
of this Agreement.
SECTION 8. INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The parties hereto agree
to shorten the applicable period of limitation of claims made under
representations and warranties, and for that purpose each and every such
representation and warranty of the Company, the Stockholders and the Purchasers
set forth in this Agreement (including, without limitation, any certificates
furnished in connection therewith) shall survive until thirty (30) days after
the receipt by the Purchasers of the audited financial statements of the Company
for the calendar year ending December 31, 1998 (the "SURVIVAL PERIOD"), except
with respect to (i) the representations
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and warranties set forth in SECTIONS 2(n), 3(c), 3(e) AND 4(e), which shall
survive the Closing until the expiration of the applicable statute of
limitations; and (ii) the representations and warranties set forth in SECTION
2(i), which shall survive the Closing until the first to occur of (x) the
expiration of the statute of limitations (and any extensions thereof) applicable
to the Tax in respect of which indemnification is being sought without the
assertion of a deficiency in respect thereof by the applicable governmental
entity, or (y) the completion of the final audit and determination by the
applicable governmental entity with respect to such Tax and final disposition of
any deficiency resulting therefrom. From and after the applicable period of
survival with respect to such respective representations and warranties of the
Company, Stockholders and the Purchaser, none of the Stockholders, Company or
the Purchasers or any Affiliate of the Stockholders or the Purchasers shall have
any liability whatsoever with respect to any such representation or warranty,
except for breaches as to which any party shall have notified the other party
prior to such date. This SECTION 8(a) shall have no effect upon any other
obligation of the parties hereto to be performed after the Closing Date.
(b) INDEMNIFICATION BY STOCKHOLDERS. Each Stockholder hereby agrees,
jointly and severally, to indemnify, defend and hold each of the Purchasers, its
officers, directors, employees, and agents harmless from and in respect of any
and all losses, damages, costs and expenses of any kind and nature whatsoever
(including, without limitation, reasonable attorneys' fees and disbursements)
which may be sustained or suffered by any of them (collectively, "LOSSES"),
arising out of or resulting from any breach or inaccuracy of any representation
or warranty or the breach of or failure to perform any warranty, covenant,
undertaking or other agreement of the Company or such Stockholder contained in
this Agreement or any other document or instrument executed in connection
therewith; PROVIDED, HOWEVER, that in the event the transactions contemplated by
this Agreement are consummated, the maximum liability of the Stockholders
hereunder or otherwise with respect to such representations, warranties,
covenants, undertakings, or other agreements contained in this Agreement shall
not exceed an amount equal to the amount placed in escrow in accordance with
SECTION 8(g) hereof; PROVIDED, FURTHER, that liability of the Stockholders for
representations and warranties contained in SECTIONS 2(i), 2(n), 3(c) and 3(e)
shall be without limitation. For all purposes of this SECTION 8, "Losses" for
breach of any representation, warranty or covenant contained in this Agreement
shall be determined without giving effect to any qualification or limitation in
such representation, warranty or covenant as to materiality or Material Adverse
Effect.
(c) INDEMNIFICATION BY THE PURCHASERS. The Purchasers hereby agree,
jointly and severally, to indemnify, defend and hold each Stockholder, the
Company, its officers, directors, employees, consultants and agents harmless
from and in respect of any and all Losses which may be sustained or suffered by
any of them arising out of or resulting from any breach or inaccuracy of any
representation or warranty of the Purchasers or the breach of or failure to
perform any warranty, covenant, undertaking or other agreement of the Purchasers
contained in this Agreement or any other document or instrument executed in
connection herewith.
(d) MINIMUM INDEMNIFICATION. Notwithstanding anything to the contrary
contained herein, none of the Purchasers, its officers, directors, employees,
consultants and agents shall be entitled to recover from the Company or the
Stockholders and the Stockholders and/or the Company, its officers, directors,
employees, consultants and agents shall not be entitled to recover from the
Purchasers unless and until the total of all claims for indemnity or damages
with respect to any inaccuracy or breach of any such representations or
warranties other than those contained in SECTION 2(n), 3(c) and 3(e) above or
breach of or default in the performance of any covenants, undertakings or other
agreements, whether such claims are brought under this SECTION 8 or otherwise,
exceeds $125,000, and then only to the extent of such excess.
(e) NOTICE AND OPPORTUNITY TO DEFEND. If there occurs an event which a
party asserts is an indemnification event pursuant to SECTION 8(b) OR 8(c), the
parties seeking indemnification shall promptly
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notify the other parties obligated to provide indemnification (collectively, the
"INDEMNIFYING PARTY"). If such event involves (i) any Claim or (ii) the
commencement of any action, suit or proceeding by a third person, the party
seeking indemnification will give such Indemnifying Party prompt written notice
of such Claim or the commencement of such action, suit or proceeding; PROVIDED,
HOWEVER, that the failure to provide prompt notice as provided herein will
relieve the Indemnifying Party of its obligations hereunder only to the extent
that such failure prejudices the Indemnifying Party. Such notice shall summarize
the basis for the claim and any claim of liability being asserted by a third
party. In case any such action, suit or proceeding shall be brought against any
party seeking indemnification and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to participate
therein and, to the extent that it desires to do so, to assume the defense
thereof, with counsel reasonably satisfactory to such party seeking
indemnification (it being agreed that Schulte Roth & Zabel LLP and Foley, Hoag &
Eliot LLP shall be reasonably satisfactory) and, after notice from the
Indemnifying Party to such party seeking indemnification of such election so to
assume the defense thereof, the Indemnifying Party shall not be liable to the
party seeking indemnification hereunder for any attorneys' fees or any other
expenses, in each case subsequently incurred by such party, in connection with
the defense of such action, suit or proceeding. The party seeking
indemnification agrees to cooperate fully with the Indemnifying Party and its
counsel in the defense against any such action, suit or proceeding. In any
event, the party seeking indemnification shall have the right to participate at
its own expense in the defense of such action, suit or proceeding. In no event
shall an Indemnifying Party be liable for any settlement or compromise effected
without its prior consent, which consent shall not unreasonably be withheld,
delayed or conditioned.
(f) EXCLUSIVE REMEDY. The indemnification provisions of this SECTION 8
shall constitute the exclusive remedy after the Closing of each party hereto
with respect to the breach or inaccuracy of any representation or warranty made
by any other party hereto in this Agreement; PROVIDED, HOWEVER, that the
indemnification provided for in this SECTION 8 shall not be the sole and
exclusive remedy of the parties with respect to any matter that is (i) based
upon fraud or willful or deliberate wrongdoing or (ii) based on any inaccuracy
or breach of a representation or warranty contained in SECTIONS 2(i), 2(n), 3(c)
or 3(e).
(g) ESCROW AGREEMENT. In order to provide Purchasers with assurances that
there will be sufficient funds available to meet the Stockholders' indemnity
obligations hereunder, the Stockholders shall escrow Shares with a value on the
Closing Date equal to ten percent (10%) of the Purchase Price (without regard to
any premium on the Note) for a period equal to the Survival Period, in
accordance with the provisions of the Escrow Agreement attached as EXHIBIT O
hereto (the "ESCROW AGREEMENT"). Such escrowed Shares shall be used for the
purpose of, and (except for breaches for which there is unlimited liability as
provided in SECTION 8(b)) shall be the exclusive source for, making payments to
Indemnified Persons pursuant to this SECTION 8.
SECTION 9. TAX MATTERS. The following provisions shall govern the
allocation of responsibility as between the Purchasers and the Stockholders for
certain tax matters following the Closing Date:
(a) TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. The Purchasers
shall prepare or cause to be prepared and file or cause to be filed all Tax
Returns for the Company for all periods ending on or prior to the Closing Date
which are filed after the Closing Date. The Purchasers shall permit the
Stockholders to review and comment on each such Tax Return described in the
preceding sentence prior to filing. The Stockholders shall reimburse the
Purchasers for Taxes of the Company with respect to such periods within fifteen
(15) days after payment by the Purchasers or the Company of such Taxes to the
extent such Taxes are not reflected in the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing Balance Sheet.
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(b) TAX PERIODS BEGINNING BEFORE AND ENDING AFTER THE CLOSING DATE. The
Purchasers shall prepare or cause to be prepared and file or cause to be filed
any Tax Returns of the Company for Tax periods which begin before the Closing
Date and end after the Closing Date. The Stockholders shall pay to the
Purchasers within fifteen (15) days after the date on which Taxes are paid with
respect to such periods an amount equal to the portion of such Taxes which
relates to the portion of such taxable period ending on the Closing Date to the
extent such Taxes are not reflected in the reserve for Tax liability (rather
than any reserve for deferred Taxes established to reflect timing differences
between book and Tax income) shown on the face of the Closing Balance Sheet. For
purposes of this Section, in the case of any Taxes that are imposed on a
periodic basis and are payable for a Taxable period that includes (but does not
end on) the Closing Date, the portion of such Tax which relates to the portion
of such taxable period ending on the Closing Date shall (x) in the case of any
Taxes other than Taxes based upon or related to income or receipts, be deemed to
be the amount of such Tax for the entire taxable period multiplied by a fraction
the numerator of which is the number of days in the taxable period ending on the
Closing Date and the denominator of which is the number of days in the entire
taxable period, and (y) in the case of any Tax based upon or related to income
or receipts be deemed equal to the amount which would be payable if the relevant
taxable period ended on the Closing Date. Any credits relating to a taxable
period that begins before and ends after the Closing Date shall be taken into
account as though the relevant taxable period ended on the Closing Date. All
determinations necessary to give effect to the foregoing allocations shall be
made in a manner consistent with prior practice of the Company.
(c) COOPERATION ON TAX MATTERS.
(i) The Purchasers, the Company and the Stockholders shall cooperate
fully, as and to the extent reasonably requested by the other party, in
connection with the filing of tax Returns pursuant to this Section and any
audit, litigation or other proceeding with respect to Taxes. Such cooperation
shall include the retention and (upon the other party's request) the provision
of records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. The Company and the Stockholders agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Company relating to any taxable period beginning before the Closing Date until
the expiration of the statute of limitations (and, to the extent notified by the
Purchasers or the Stockholders, any extensions thereof) of the respective
taxable periods, and to abide by all record retention agreements entered into
with any taxing authority, and (B) to give the other party reasonable written
notice prior to transferring, destroying or discarding any such books and
records and, if the other party so requests, the Company or the Stockholders, as
the case may be, shall allow the other party to take possession of such books
and records.
(ii) The Purchasers and the Stockholders further agree, upon request,
to use their best efforts to obtain any certificate or other document from any
governmental authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including, but not limited
to, with respect to the transactions contemplated hereby).
(iii) The Purchasers and the Stockholders further agree, upon
request, to provide the other party with all information that either party may
be required to report pursuant to Section 6043 of the Code and all Treasury
Department Regulations promulgated thereunder.
(d) CERTAIN TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with this Agreement (including any New York
State Gains Tax, New York City Transfer Tax and any similar tax imposed in other
states or
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subdivisions), shall be paid by the Stockholders when due, and the Stockholders
will, at their own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, sales, use, stamp,
registration and other Taxes and fees, and, if required by applicable law, the
Purchasers will, and will cause their affiliates to, join in the execution of
any such Tax Returns and other documentation.
SECTION 10. DEFINITIONS. As used herein, except as otherwise specifically
set forth below in this Section or unless the context otherwise requires, the
terms (or any variant in the form thereof) set forth in this Agreement have the
respective meanings set forth in this Section. Terms defined in the singular
shall have a comparable meaning when used in the plural, and vice versa, and the
reference to any gender shall be deemed to include all genders. Unless otherwise
defined or the context otherwise clearly requires, terms for which meanings are
provided herein shall have such meanings when used in the Schedules hereto and
each agreement, notice, certificate, communication, opinion or other document
executed or required to be executed pursuant hereto or thereto or otherwise
delivered, from time to time, pursuant hereto or thereto.
"ADJUSTMENTS" is defined in SECTION 2(b) of the Agreement.
"AFFILIATE" shall mean, with respect to any Person, (a) any other Person at
the time directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person, (b) any other Person of which such
Person at the time owns, directly or indirectly, twenty percent (20%) or more of
any class of the capital stock or beneficial interest, (c) any other Person
which at the time owns, directly or indirectly, twenty percent (20%) or more of
any class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a trust for the benefit of any thereof. A
Person shall be deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power to direct or cause the direction
of the management or policies of such Person or the disposition of its assets or
properties, whether by stock, equity or other ownership, by contract,
arrangement or understanding, or otherwise.
"AGREEMENT" shall mean this Stock Purchase Agreement including, unless the
context otherwise specifically requires, all schedules and exhibits hereto, and
as the same may from time to time be supplemented, amended, modified or restated
in the manner herein provided.
"AMEX" is defined in SECTION 1(b) of the Agreement.
"AMG" is defined in SECTION 2(a) of the Agreement.
"APPLICABLE LAW" shall mean any Law of any Authority, including, without
limitation, all federal, state, local and foreign Laws, to which the Person in
question is subject or by which it or any of its business or operations is
subject or any of its property is bound.
"AUTHORITY" shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including, without limitation, any U.S., Canadian or other
federal, state, territorial, county, municipal or other government or
governmental or quasi-governmental agency, arbitrator, authority, board, body,
branch, bureau, central bank or comparable agency or Entity, commission,
corporation, court, department, instrumentality, master, mediator, panel,
referee, system or other political unit or subdivision or other Entity of any of
the foregoing.
"BEAR STEARNS" is defined in SECTION 2(n) of the Agreement.
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"BASE PRICE" is defined in SECTION 1(b) of the Agreement.
"BUSINESS" is defined in the first whereas clause of the Agreement.
"CASH" is defined in SECTION 1(b) of the Agreement.
"CLAIMS" shall mean, with respect to any Person, any and all debts,
liabilities, obligations, losses, damages, deficiencies, assessments and
penalties of or against such Person, together with all Legal Actions pending or
threatened, claims and judgments of whatever kind and nature relating thereto,
and all fees, costs, expenses and disbursements (including, without limitation,
reasonable attorneys' and other legal fees, costs and expenses) reaching to any
of the foregoing.
"CLOSING" is defined in SECTION 1(c) of the Agreement.
"CLOSING BALANCE SHEET" shall mean the balance sheet containing the
Financial Statements as of the Closing Date.
"CLOSING DATE" is defined in SECTION 1(c) of the Agreement.
"CLOSING SHARE PRICE" means the average of the closing prices of the Common
Stock on the AmEx on the Closing Date and on the four trading days immediately
preceding the Closing Date.
"CODE" shall mean the United States Internal Revenue Code of 1986, as
amended.
"COMMISSION" is defined in SECTION 4(k) of the Agreement.
"COMPANY" is defined in the first paragraph of the Agreement.
"COMMON STOCK" is defined in SECTION 1(b) of the Agreement.
"CONFIDENTIALITY AGREEMENT" is defined in SECTION 5(a) of the Agreement.
"CONSENTS" shall mean consents, licenses, permits, certifications and
approvals granted by any non-governmental third party.
"CONSIDERATION PREMIUM" is defined in SECTION 1(c)(i)(A) and
SECTION 1(c)(ii)A.
"CONVERTIBLE SECURITIES" shall mean, with respect to any Person, any
evidences of indebtedness, shares of capital stock (other than common stock) or
other securities directly or indirectly convertible into or exchangeable for
shares of common stock, whether or not the right to convert or exchange
thereunder is immediately exercisable or is conditioned upon the passage of
time, the occurrence or non-occurrence or existence or non-existence of some
other event, or both.
"DISTRIBUTION" shall mean, with respect to any Person: (a) the declaration
or payment of any dividend (except dividends payable in common stock of such
Person) on or in respect of any shares of any class of capital stock or equity
security of such Person, (b) the purchase, redemption or other retirement of any
shares of any class of capital stock or equity security of such Person or any
shares of capital stock of any Subsidiary owned by a Person other than such
Person or a Subsidiary (otherwise than out of the substantially concurrent
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sale to Persons other than such Person or its Subsidiaries of shares of stock of
the same class, provided that in case of any such capital stock of a Subsidiary,
the proportion of such Subsidiary's stock of that class held by Persons other
than such Person and its Subsidiaries does not increase), and (c) any other
distribution on or in respect of any shares of any class of capital stock of
such Person or any shares of capital stock of any Subsidiary owned by a Person
other than such Person or a Subsidiary.
"DOLLARS" and "$" shall mean the lawful money of the United States of
America.
"EMPLOYMENT ARRANGEMENT" shall mean, with respect to any Person, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, policy (exclusive of any which is terminable within ninety (90) days
without liability, penalty or payment of any kind of such Person or any of its
Affiliates), or providing for severance, termination payments, insurance
coverage (including any self-insured arrangements), workers compensation,
disability benefits, life, health, medical, dental or hospitalization benefits,
supplemental unemployment benefits, vacation or sick leave benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock appreciation rights or other forms of incentive compensation or
post-retirement insurance, compensation or post-retirement insurance
compensation or benefits, or any collective bargaining or other labor agreement,
whether or not any of the foregoing is subject to the provisions of ERISA.
"ENTITY" shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
from time to time in effect, and any successor law, and any reference to any
statutory provision shall be deemed to be a reference to any successor
provision.
"ESCROW AGREEMENT" is defined in SECTION 8(g) of the Agreement.
"EXCHANGE ACT" is defined in SECTION 4(k) of the Agreement.
"FINANCIAL STATEMENTS" is defined in SECTION 2(b) of the Agreement.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"GOVERNMENTAL AUTHORIZATIONS" shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities.
"GOVERNMENTAL FILINGS" shall mean all filings, including franchise and
similar tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
"GOVERNMENTAL ORDER" shall mean all decisions, decrees, findings,
judgments, and orders, whether or not final, of any Authority in any Legal
Action.
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
the Agreement or any other instrument executed or required to be executed
pursuant hereto or thereto refer, except where the context clearly
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indicates the contrary, to the Agreement or such other instrument, as the case
may be, as a whole and not to any particular Section, paragraph or provision of
the Agreement or such other instrument.
"HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvement Act of
1976, and the rules and regulations thereunder, all as from time to time in
effect, or any successor law, rules or regulations, and any reference to any
statutory or regulatory provision shall be deemed to be a reference to any
successor statutory or regulatory provision.
"INCLUDING" and "INCLUDES" shall mean including without limiting the
generality of any description preceding such term.
"INDEMNIFYING PARTY" is defined in SECTION 8(E) of the Agreement.
"IRS" shall mean the United States Internal Revenue Service or any
successor Authority.
"LAW" shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation judgment, order, ordinance,
regulation, requirement, rule, rule of law, rule of public policy, settlement
agreement, statute, or writ of any Authority; (b) the common law, or other legal
or quasi-legal precedent; or (c) arbitrator's, mediator's or referee's award,
decision or finding.
"LEGAL ACTION" shall mean, with respect to any Person, any litigation or
legal or other actions, arbitrations, investigations, proceedings or suits, at
law or in arbitration, equity or admiralty (whether or not purported to be
brought on behalf of such Person) affecting such Person or any of its business
or property or assets.
"LIEN" shall mean any of the following: mortgage; lien (statutory or
other); preference, priority or other security agreement, arrangement or
interest; hypothecation, pledge or other deposit arrangement; assignment;
charge; levy; executory seizure; attachment, garnishment; encumbrance (including
any easement, exception, variance, reservation or limitation, right of way,
zoning restriction, building or use restriction, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; preemptive or similar right; any financing lease involving
substantially the same economic effect as any of the foregoing; the Filing of
any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
"LOSSES" is defined in SECTION 8(b) of the Agreement.
"MATERIAL" or "MATERIALITY" for the purposes of the Agreement, shall,
unless specifically stated to the contrary, be determined with reference to the
Company without regard to the fact that various provisions of the Agreement set
forth specific dollar amounts.
"MATERIAL ADVERSE" when used alone or in conjunction with other terms
(including without limitation "Change" and "Effect") shall mean, (i) with
respect to Selfcare, any event or set of events which has a material adverse
effect upon the business, properties, financial condition or results of
operation of Selfcare and its Subsidiaries taken as a whole and, (ii) with
respect to the Company, any event or set of events which has a material adverse
effect upon the business, properties, financial condition or results of
operation of the Company.
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"MATERIAL AGREEMENT" shall mean, with respect to any Person, any agreement,
contract, arrangement, undertaking, commitment, license or obligation required
to be listed in Section 2(l) or which to the extent it relates to (a) any
supplier of such Person, accounted for more than ten percent (10%) of the
purchases of such Person in any of the three most recent fiscal years of such
Person, (b) any customer of such Person, accounted for more than ten percent
(10%) of the sales of such Person in any of the three most recent fiscal years
of such Person, (c) any other matter, involves in excess of $50,000, or (d) in
the case of the Company, its Distribution Agreements and other contracts with
P.J. Noyes Company, Inc., Sherwood Medical Company and Chronimed.
"MOST RECENT BALANCE SHEET" is defined in Section 2(b) of the Agreement.
"NET ASSETS" is defined in SECTION 1(b) of the Agreement.
"NET ASSETS AUDIT" is defined in SECTION 1(b) of the Agreement.
"NOTE" is defined in SECTION 1(b) of the Agreement.
"OPTION SECURITIES" shall mean all rights, options and warrants, and calls
or commitments evidencing the right to subscribe for, purchase or otherwise
acquire shares of capital stock or Convertible Securities, whether or not the
right to subscribe for, purchase or otherwise acquire is immediately exercisable
or is conditioned upon the passage of time, the occurrence or non-occurrence or
the existence or nonexistence of some other event.
"OTHER AGREEMENTS" is defined in SECTION 2(a) of the Agreement.
"OTHER SECURITIES" is defined in SECTION 1(c)(i).
"PERMIT" is defined in SECTION 2(o) of the Agreement.
"PERSON" shall mean any natural individual or any Entity.
"PLAN" shall mean, with respect to any Person and at a particular time, any
employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate (as defined in ERISA) is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an
employer as defined in Section 3(5) of ERISA.
"POTENTIAL PREMIUM" is defined in SECTION 1(b) of the Agreement.
"PURCHASE PRICE" is defined in SECTION 1(b) of the Agreement.
"PURCHASER" and "PURCHASERS" are defined in the first paragraph of the
Agreement.
"REGULATORY APPROVALS" shall mean the consents, licenses, certifications
and approvals to do business granted by, or authorizations of, declarations or
filings with, courts, administrative agencies or commissions and other
governmental Authorities or instrumentalities, domestic or foreign, and of any
other accrediting agency.
"RELATED AGREEMENT" or "RELATED AGREEMENTS" means the agreements referred
to in SECTION 8(a)(viii).
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"ROFR AGREEMENT - AMG" is defined in SECTION 7(a)(x) of the Agreement.
"SECURITIES" is defined in the second whereas clause of the Agreement.
"SECURITIES ACT" is defined in SECTION 2(a)(v) of the Agreement.
"SELFCARE" is defined in the first paragraph of the Agreement.
"SELFCARE MATERIAL AGREEMENTS" means, as of any date of determination, any
contract or other agreement or arrangement to which Selfcare or any of its
Subsidiaries is bound and which would have to be publicly filed or disclosed by
Selfcare if Selfcare were required to file a Form 10-K under the Exchange Act on
such date.
"SELFCARE SEC DOCUMENTS" is defined in SECTION 4(k) of the Agreement.
"SELFCARE SHARES" is defined in SECTION 1(c)(i).
"SELFCARE SHARE PRICE" is defined in SECTION 1(c)(i)(A).
"SHARES" is defined in SECTION 1(b) of the Agreement.
"STOCKHOLDERS" is defined in the first paragraph of the Agreement.
"SUBSIDIARY" shall mean, with respect to any Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
or, if no such voting stock is outstanding a majority of the equity interests,
of which is owned directly or indirectly by such Person, or any subsidiary of
such Person.
"SURVIVAL PERIOD" is defined in SECTION 8(a) of the Agreement.
"TAX" (and with correlative meanings, "Taxes" and "Taxable"), shall mean
all U.S. and foreign (including Canadian) federal, state, provincial or local
net or gross income, gross receipts, net proceeds, estimates, sales, use, ad
valorem, value added, franchise, withholding, payroll, employment, excise,
property, alternative or add-on minimum, environmental or other taxes,
assessments, duties, fees, levies or other governmental charges of any nature
whatever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
"TAXING AUTHORITY" means any governmental agency, board, bureau, body,
department or authority of any U.S., Canadian or foreign jurisdiction having
jurisdiction with respect to any Tax.
"TAX RETURNS" shall mean any returns, reports or statements (including any
information returns and estimated tax returns) required to be filed for purposes
of a particular Tax.
"THIRD PARTY AUDITOR" is defined in SECTION 1(b).
"TRANSACTION" is defined in SECTION 1(c)(i).
"WRITTEN" or "IN WRITING" shall mean any form of written communication or a
communication by means of telex, telecopier device, telegraph or cable.
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SECTION 11. MISCELLANEOUS.
(a) NATURE OF REPRESENTATIONS AND WARRANTIES. The parties shall not be
liable or bound in any manner by expressed or implied representations,
warranties, covenants, conditions, agreements or indemnifications pertaining to
the subject matter of this Agreement, or any other matter whatsoever, made or
furnished by any officer, director, employee, stockholder, attorney, principal,
controlling person, agent or other person representing or purporting to
represent one of the parties unless such representations, warranties, covenants,
conditions, agreements or indemnifications are expressly and specifically set
forth herein or in any schedule, exhibit or other document expressly made a part
hereof. The representations, warranties, covenants, agreements and
indemnifications of the parties shall not be deemed waived or otherwise affected
by any investigation made by or on behalf of any party hereto.
Certain of the representations and warranties are made "to the knowledge"
of a particular party. The parties hereto agree that the meaning of such
expression shall in all cases be understood as comprising actual knowledge of
the party making such representations and warranties or any executive officer of
such party after a reasonable investigation thereof under the circumstances,
provided that the "knowledge of the Company" shall be deemed to include the
actual knowledge of the Stockholders.
(b) ENTIRE AGREEMENT. This Agreement (which term, unless the context
otherwise specifically requires, includes any exhibits or schedules hereto and
all agreements, instruments, financial statements, opinions, or other documents
and certificates delivered pursuant hereto) constitutes the entire agreement
among the parties with respect to the subject matter hereof and supersedes all
prior agreements, arrangements, commitments, covenants, promises, conditions,
understandings, inducements, representations and negotiations, expressed or
implied, written or oral, between or among them as to such subject matter,
including, without limitation, any so-called "letters of intent" but excluding
any confidentiality agreements with respect thereto. The express terms hereof
control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
(c) RIGHTS AND REMEDIES. Anything in this Agreement to the contrary
notwithstanding, upon any termination of this Agreement, each party shall be
entitled to actual damages only and in no event to incidental, consequential or
punitive damages, measured by loss of anticipated profits or otherwise.
(d) EXPENSES. The Stockholders shall pay all their own costs and expenses
and all costs and expenses of the Company (including, without limitation, the
costs and expenses of legal counsel and of Bear Stearns) relating to the
execution, delivery and performance of this Agreement, except that upon the
Closing the Purchasers shall assume fees and expenses of Stockholders incurred
in connection with the negotiation and documentation of this transaction not to
exceed $600,000. The Purchasers shall pay all their own costs and expenses
(including, without limitation, the costs and expenses of legal counsel)
relating to the execution, delivery and performance of this Agreement.
(e) TERMINATION. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated:
(i) By mutual agreement of the Purchasers and the Stockholders; or
(ii) By the Purchasers or Stockholders holding a majority of the
Securities, if, other than as a result of a breach or violation of or default
under this Agreement by the terminating party, the Closing shall not have
occurred on or before February 28, 1998; or
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<PAGE> 40
(iii) By the Stockholders holding a majority of the Securities upon
notice to Purchasers if (A) a condition to the performance of the Stockholders
set forth in SECTION 7(b) hereof shall not be fulfilled at the time specified
for the fulfillment thereof; (B) a material default under, or a material breach
of, this Agreement shall be made by the Purchasers; or (C) any representation or
warranty set forth in this Agreement or in any instrument delivered by the
Purchasers pursuant hereto shall be materially false or misleading; or
(iv) By the Purchasers by notice to the Company if (X) a condition to
the performance of the Purchasers set forth in SECTION 7(a) hereof shall not be
fulfilled at the time specified for the fulfillment thereof; (Y) a material
default under or a material breach of this Agreement shall be made by the
Company or the Stockholders; or (Z) any representation set forth in this
Agreement or in any instrument delivered by the Company or the Stockholders
pursuant hereto shall be materially false or misleading; or
(v) By any party, if, other than as a result of a breach or violation
of or default under this Agreement by the terminating party which resulted
therein, an Authority of competent jurisdiction shall have issued a Governmental
Order (which Order the parties hereto shall use all commercially reasonable
business efforts to lift or reverse), in each case permanently restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, and such Order shall have become a final order.
Written notice setting forth the reasons for any termination (other than
pursuant to PARAGRAPH (i)) shall be given by the terminating party to each other
party, and the party receiving the same shall have thirty (30) days within which
to cure the default specified in such notice.
The provisions of SECTIONS 5(a) (to the extent therein provided) AND 5(c)
shall survive the termination of this Agreement. Except as set forth in this
paragraph, upon the termination of this Agreement, it shall become void and have
no further force and effect, and there shall be no liability hereunder on the
part of any party hereto; PROVIDED that no such termination shall relieve the
breaching party of liability for its breach hereunder.
(f) WAIVERS; AMENDMENTS. Anything in this Agreement to the contrary
notwithstanding, amendments to and modifications of this Agreement may be made,
required consents and approvals may be granted, compliance with any term,
covenant, agreement, condition or other provision set forth herein may be
omitted or waived, and misrepresentations and breaches of warranties may be
waived, either generally or in a particular instance and either retroactively or
prospectively with, but only with, the written consent of the party or parties
entitled to the benefit thereof.
Whenever any provision of this Agreement provides for the consent or
approval of one party as a condition to some action or omission to act of the
other party, such consent or approval shall not be unreasonably withheld,
delayed or conditioned.
(g) ASSIGNMENT; SUCCESSORS AND ASSIGNS. This Agreement shall not be
assignable by any party without the prior written consent of the others;
PROVIDED that the Purchasers may assign their rights under SECTION 8 to any
senior lender to the Company. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective heirs,
executors, legal representatives, successors and permitted assigns, including,
without limitation, successors by operation of law pursuant to any merger,
consolidation or sale of assets involving any of the parties. Nothing in this
Agreement expressed or implied is intended to and nothing herein shall be
construed to confer upon or create in any person (other than parties hereto and
their
35
<PAGE> 41
permitted successors and assigns and the Persons named in SECTION 5(d) OR 8(b)
any rights or remedies under or by reason of this Agreement, including, without
limitation, any rights to enforce this Agreement.
(h) NOTICES. All notices and other communications which by any provision
of this Agreement are required or permitted to be given shall be given in
writing and shall be (i) mailed by first-class mail or by a reputable
nationally-recognized overnight courier service ("EXPRESS MAIL"), postage
prepaid, (ii) sent by telecopy, confirmed by mailing (by first class or express
mail, postage prepaid) written confirmation at substantially the same time as
such rapid transmission, or (iii) personally delivered to the receiving party
(which if other than an individual shall be an officer or other responsible
party of the receiving party). All such notices and communications shall be
mailed, sent or delivered to it at the address set forth below or to such
facsimile number(s) or address(es) as the party entitled to receive any such
communication or notice may have designated by written notice to the other
parties as follows:
If to the Company or any Stockholder:
Can-Am Care Corporation
Cimetra Industrial Park
Box 98
Chazy, New York 12921-0098
Attention:
Facsimile: (800) 461-4414
with a copy to each other party and to:
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
Attention: Stuart D. Freedman, Esq.
Facsimile: (212) 593-5955
If to Purchasers:
Selfcare, Inc.
200 Prospect Street
Waltham, MA 02154
Attention: Ron Zwanziger, Chairman of the Board
Facsimile: (617) 647-3939
with a copy to:
Foley, Hoag & Eliot LLP
One Post Office Square
Boston, MA 02109
Attention: John D. Patterson, Jr., Esq.
Facsimile: (617) 832-7000
A notice delivered in person shall be effective when given; a notice sent
by mail shall be deemed effective on the earlier of the date of receipt or
refusal to accept or the third business day after it has been
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<PAGE> 42
mailed; a notice sent by telecopy shall be deemed to be given when receipt of
such transmission is acknowledged or other evidence of receipt is evident.
(i) SEVERABILITY. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any Applicable Law or for any other reason,
such circumstance shall not have the effect of rendering the provision or
provisions in question invalid, inoperative, illegal or unenforceable in any
other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative, illegal or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such Applicable Law, but this Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative, illegal or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case, except
when such reformation and construction could operate as an undue hardship on any
party, or constitute a substantial deviation from the general intent and purpose
of such party as reflected in this Agreement.
The parties shall endeavor in good faith negotiations to replace the
invalid, inoperative, illegal or unenforceable provisions with valid, operative,
legal and enforceable provisions the economic effect of which comes as close as
possible to that of the invalid, inoperative, illegal or unenforceable
provisions.
(j) COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, binding upon all the parties hereto,
notwithstanding that all the parties are not signatories to the original or the
same counterpart. In pleading or proving any provision of this Agreement it
shall not be necessary to produce more than one of such counterparts.
(k) SECTION HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
(l) FURTHER ACTS. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
agreements, assignments, instruments, other documents and assurances, as any
other party or its counsel deems reasonably necessary or desirable in order to
carry out the terms and conditions of this Agreement and the transactions
contemplated hereby or to facilitate the enjoyment of any of the rights created
hereby or to be created hereunder.
(m) CONFLICT AMONG ATTACHMENTS. In the event of any conflict between the
provisions of this Agreement and any schedule or exhibit hereto, or any
agreement, instrument, other document or undertaking executed pursuant hereto,
unless otherwise specifically provided therein, the provisions of this Agreement
shall control.
(n) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA
AND THE LAW (OTHER THAN THE LAW GOVERNING CONFLICT OF LAW QUESTIONS) OF THE
STATE OF NEW YORK EXCEPT TO THE EXTENT THE LAWS OF ANY OTHER JURISDICTION ARE
MANDATORILY APPLICABLE.
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<PAGE> 43
STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase
Agreement all pursuant to authority heretofore granted, to the extent
applicable, by their respective Boards of Directors, as of the date first
written above.
CAN-AM CARE CORPORATION
_______________________________ By: ___________________________
Allan M. Goldenberg Name:
Title:
_______________________________ SELFCARE, INC.
Benjamin Topor
_______________________________ By: __________________________
Robert Oringer Name: Anthony Hall
Title: Chief Financial Officer
COVER FAMILY TRUST
By: _______________________________ SELFCARE CONSUMER PRODUCTS, INC.
Herbert Cover, Trustee
By: ______________________________
Name: Anthony Hall
Title: Treasurer
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<PAGE> 44
ADDENDUM A
CERTAIN DEFINED TERMS
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 ET SEQ.), as of the Closing Date.
"HAZARDOUS MATERIALS" means any waste, pollutant, hazardous material,
hazardous substance, toxic substance, hazardous waste, special waste, petroleum
or petroleum-derived substance or waste, or any constituent of any such
pollutant material, substance or waste regulated under any Environmental Law.
"ENVIRONMENTAL LAWS" means all federal, state, local and foreign laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder imposing liability or establishing
standards of conduct for the protection of human health. Environmental Laws
shall include, without limitation, CERCLA, the Hazardous Material Transportation
Act (49 U.S.C. Section 1801 ET SEQ.), the Solid Waste Disposal Act (42 U.S.C.
Section 6901 ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the
Toxic Substances Control Act (15 U.S.C. Section 2601 ET SEQ.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 ET SEQ.), the Federal Insecticide
Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), the Medical Waste
Tracking Act of 1988, Pub. L. No. 100-582, 102 Stat. 2950 (1988), as such laws
have been amended as of the Closing Date, and any analogous federal, state,
local or foreign, statutes, ordinances or bylaws as of the Closing Date.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities, obligations,
responsibilities, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, expert and consulting
fees and costs of investigation and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any claim or demand, by any
corporation, partnership, trust, individual or other entity ("PERSON") which
relate to any requirements of Environmental Laws, Remedial Actions, Releases or
threatened Releases of Hazardous Materials, including any Environmental Law,
permit, order, approval, authorization, license, variance or agreement with a
federal, state or local governmental authority or other person, arising from
environmental, health or safety conditions or a Release or threatened Release
resulting from the past operations of the Company (or any of its predecessors in
interest), or any release for which the Company is otherwise responsible under
any Environmental Law.
"ENVIRONMENTAL LIEN" means any lien or similar interest in favor of any
federal, state or local governmental authority for Environmental Liabilities and
Costs.
"RELEASE" means any actual or threatened release, spill, emission, leaking,
pumping, injection, disposal, discharge, dispersal, pouring, emptying, escaping,
dumping, discarding, leaching or migration of Hazardous Materials into the
indoor or outdoor environment including the movement of Hazardous Materials
through or in the air, soil, surface water, groundwater or property, including
the abandonment or discarding of barrels, containers and other closed
receptacles containing any Hazardous Materials triggering either liability or
any obligation to perform a Remedial Action.
"REMEDIAL ACTION" means all actions necessary to clean up, remove, treat,
remediate, investigate or otherwise mitigate an actual or threatened release of
Hazardous Matersials pursuant to Environmental Laws and post-remedial monitoring
and care.
<PAGE> 1
[EXHIBIT 2.2]
<PAGE> 2
SCHEDULES AND EXHIBITS OMITTED FROM THE
STOCK PURCHASE AGREEMENT
AS FILED HEREWITH
<TABLE>
<S> <C>
1 Disclosure Schedule of Can-Am detailing exceptions, qualifications and
other matters with respect to the representations and warranties of
Can-Am under the Stock Purchase Agreement.
2 Disclosure Schedule of the Company detailing exceptions,
qualifications and other matters with respect to the representations
and warranties of the Company under the Stock Purchase Agreement.
3 Form of Promissory Note.
4 Allocation of Purchase Price.
5 Form of Non-Competition and Confidentiality Agreement.
6 Right of First Refusal Agreement (AMG).
7 Right of First Refusal Agreement (Acquisitions offered to AMG or the
Stockholders).
8 Management Services Agreement.
9 Form of Employment Agreement.
10 Supply Agreement.
11 Agreement by and between Robert Oringer and the Company.
12 Opinion of Counsel to the Company and the Stockholders.
13 Opinion of Counsel to AMG, the AMG Stockholders and certain
Stockholders.
14 Registration Rights Agreement.
15 Lock-Up Agreement.
16 Opinion of Counsel to the Purchasers.
17 Escrow Agreement.
</TABLE>
