SETTLEMENT AGREEMENT AND JOINT
VENTURE LITIGATION.
(A)
AT THE CLOSING, SELLERS AND BUYER SHALL
EXECUTE AND DELIVER, AND SPARHAWK SHALL CAUSE HUGHES AND BASCOM TO EXECUTE AND
DELIVER, A SETTLEMENT AGREEMENT SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS
EXHIBIT C (THE "SETTLEMENT AGREEMENT").
(B)
ON THE CLOSING DATE, THE PARTIES HERETO
SHALL DISMISS, AND SPARHAWK SHALL CAUSE HUGHES AND BASCOM TO DISMISS, ALL CLAIMS
THEY ASSERTED IN THE JOINT VENTURE LITIGATION WITH PREJUDICE PURSUANT TO A
MOTION OF APPROVAL OF SETTLEMENT AND STIPULATION OF DISMISSAL WITH PREJUDICE
SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT D (THE "MOTION TO
DISMISS"), AND EACH PARTY TO BEAR ITS OWN COSTS RELATED THERETO.
(C)
ON THE CLOSING DATE, SELLERS AND BUYER
SHALL OBTAIN ANY REQUIRED APPROVAL OF THE SETTLEMENT AGREEMENT BY THE COURT
APPOINTED RECEIVER, EACH PARTY TO BEAR ITS OWN FEES AND COSTS RELATED THERETO;
PROVIDED, HOWEVER, ALL FEES INCURRED FOR THE RECEIVER'S SERVICES IN THE JOINT
VENTURE LITIGATION SHALL BE BORNE BY THE JOINT VENTURE.
SECTION 1.7.
ADDITIONAL AFFIRMATIVE
UNDERTAKINGS AND COVENANTS.
(A)
POLYDEX, CHEMDEX AND VET LABS SHALL USE ALL
REASONABLE COMMERCIAL EFFORTS TO OBTAIN ALL THIRD PARTY CONSENTS, APPROVALS AND
AGREEMENTS NECESSARY TO EFFECTUATE THE ASSIGNMENT, TRANSFER OR SALE OF ANY OF
THE ASSETS, AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT,
AND SPARHAWK AND ITS EMPLOYEES SHALL COOPERATE WITH AND ASSIST SELLER IN
OBTAINING SUCH CONSENTS.
EACH OF THE SELLERS AND BUYER SHALL PAY THEIR OWN
LEGAL FEES AND EXPENSES INCURRED IN OBTAINING SUCH CONSENTS.
(B)
CONTEMPORANEOUS WITH THE CLOSING DATE, VET
LABS SHALL CHANGE ITS CORPORATE NAME AND MAKE ALL NECESSARY AND PROPER FILINGS
EVIDENCING SUCH CHANGE.
SECTION 1.8.
ACKNOWLEDGEMENT REGARDING
TRANSFER OF JOINT VENTURE INTEREST.
SELLERS ACKNOWLEDGE AND AGREE THAT THE SALE
OF VET LABS' PARTNERSHIP INTEREST IN THE JOINT VENTURE TO SPARHAWK TRANSFERS ALL
OF VET LABS' RIGHT, TITLE AND INTEREST IN THE JOINT VENTURE AND ALL CLAIMS
RELATED THERETO.
SECTION 1.9.
PERSONAL PROPERTY TAXES.
ALL
PERSONAL PROPERTY TAXES ASSESSED AGAINST OR IN RESPECT OF THE ASSETS PURCHASED
BY THE BUYER FOR CALENDAR YEAR 2004 (THE "TAXABLE PERIOD") SHALL BE PRORATED
BETWEEN VET LABS AND BUYER AS OF THE CLOSING DATE.
THE BUYER SHALL PAY ALL OF
THE PROPERTY TAXES ON THE ASSETS FOR THE TAXABLE PERIOD WHEN
5
due.
Following the Buyer's payment of such property taxes, the Buyer shall then
forward copies of the property tax assessments for the Taxable Period to Vet
Labs, which amount Vet Labs shall promptly reimburse Buyer for the pro rata
amounts due thereunder.
SECTION 1.10.
REAL ESTATE PROPERTY TAXES;
PRORATIONS.
THE JOINT VENTURE SHALL PAY ON BEHALF OF VET LABS ALL GENERAL REAL
ESTATE TAXES LEVIED AND ASSESSED AGAINST THE REAL ESTATE, AND ALL INSTALLMENTS
OF SPECIAL ASSESSMENTS FOR THE YEARS PRIOR TO THE CALENDAR YEAR OF CLOSING.
BUYER SHALL ASSUME AND PAY ALL SUCH TAXES AND INSTALLMENTS OF SPECIAL ASSESSMENT
ACCRUING OR PAYABLE AFTER THE CLOSING.
NOTWITHSTANDING THE FOREGOING, BUYER
SHALL BE LIABLE FOR ANY EXPENSES OR INTEREST WITH RESPECT TO THE REAL ESTATE