CONTRIBUTION AGREEMENT
Exhibit
10.3
This Agreement is made and entered into
effective as of December 30, 2009 (the "Effective Date"), by and
between WS Technologies LLC dba Windswept Technologies, an Oregon limited
liability company ("Company"), and microHelix,
Inc., an Oregon corporation ("Contributing
Party").
Background
A. Contributing
Party and certain other parties have entered into an Operating Agreement (the
"Operating Agreement")
pursuant to which Company will service and collect consumer receivables
generated by hospitals on a recourse basis with respect to the hospital as a
result of the contribution by Contributing Party of 1,000,000 shares of Series D
Preferred Stock (the "Series D
Preferred Stock") of Contributing Party and warrants to purchase up to
65,100,917 shares of Class B Common Stock of Contributing Party at an
exercise price of $0.001 per share (the "Warrants") and certain assets
contributed by the other parties to the Operating Agreement, who collectively
will own all of the ownership interests in Company.
C. Contributing
Party wishes to make the contribution of the Series D Preferred Stock and the
Warrants in return for the receipt of ownership interests of
Company.
Agreement
In consideration of the mutual promises
and covenants set forth in this Agreement, the parties agree as
follows:
1. Contribution. Subject
to the terms and conditions set forth in this Agreement, Contributing Party
agrees to transfer to Company at Closing (defined below) the Series D Preferred
Stock and the Warrants.
2. Ownership
Interests. Concurrently with Contributing Party's contribution
of the Series D Preferred Stock and the Warrants to Company at Closing, and in
exchange for the Series D Preferred Stock and the Warrants, Company will issue
to Contributing Party a 50% ownership interest in Company, which will be held by
Contributing Party pursuant to the terms of and will have all of the rights set
forth in the Operating Agreement.
3. Closing. The
closing of the transactions contemplated by this Agreement (the "Closing") will take place at
the offices of Xxxxxx Xxxx LLP at 1600 Pioneer Tower, 000 XX Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxx 00000, at 10:00 a.m. Pacific Time on December 31,
2009, or at such other place or time as Company and Contributing Party mutually
agree (the "Closing
Date").
3.1 Company's Conditions to
Closing. The obligations of Company to consummate the Closing
and otherwise effect the transactions contemplated by this Agreement are subject
to the satisfaction at or prior to the Closing of each of the following
conditions, any of which may be waived, in writing, exclusively by
Company:
3.1.1 Representations and
Warranties. The representations and warranties of Contributing
Party in this Agreement will be true and correct as of the Closing as if made as
of the Closing, except (i) for changes contemplated by this Agreement, and (ii)
for those representations and warranties which address matters only as of a
particular date (which will be true and correct as of such particular
date).
3.1.2 Agreements and
Covenants. Contributing Party will have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing.
3.1.3 Certificate. Company
will have been provided with a certificate executed by Contributing Party to the
effect that, as of the Closing the conditions set forth in Sections 3.2.1 and
3.2.2 have been
duly satisfied.
3.1.4 Transfer Documents; Other
Agreements. At Closing, Company will have
received:
(a) A
Subscription Agreement for the Series D Preferred Stock in the form of attached
Exhibit A
executed by Contributing Party;
(b) A
Warrant Agreement in the form of attached Exhibit B executed by
Contributing Party;
(c) A
fully executed Contribution Agreement between Company and Aequitas Capital
Management, Inc. in the form attached as Exhibit C;
(d) A
fully executed Contribution Agreement between Company and CarePayment, LLC in
the form attached as Exhibit D;
and
(e) A
fully executed Operating Agreement.
3.1.5 Suits, Actions or
Proceedings. No suit, action, arbitration or other proceeding
will be pending before any court, arbitrator or Governmental Body which may
result in the restraint or prohibition of the consummation of the transactions
contemplated by this Agreement.
3.1.6 No Material Adverse
Change. There will not have occurred since the date of this
Agreement any event, change, effect, occurrence or state of facts individually
or in the aggregate which has had or could have a material adverse effect on the
ability of the parties to effect the transactions under this
Agreement.
3.2 Contributing
Party's Conditions to Closing. The obligations of
Contributing Party to consummate the Closing and otherwise effect the
transactions contemplated by this Agreement are subject to the satisfaction at
or prior to the Closing of each of the following conditions, any of which may be
waived, in writing, exclusively by Contributing Party:
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3.2.1 Representations and
Warranties. The representations and warranties of Company in
this Agreement will be true and correct as of the Closing as if made as of the
Closing, except (i) for changes contemplated by this Agreement, and
(ii) for those representations and warranties which address matters only as
of a particular date (which will be true and correct as of such particular
date).
3.2.2 Agreements and
Covenants. Company will have performed or complied in all
material respects with all agreements and covenants required by this Agreement
to be performed or complied with by it on or prior to the Closing.
3.2.3 Certificate. Contributing
Party will have been provided with a certificate executed by Company to the
effect that, as of the Closing, the conditions set forth in Sections 3.2.1 and 3.2.2 have been duly
satisfied.
3.2.4 Operating
Agreement. At Closing, Contributing Party will have received a
fully executed Operating Agreement.
4. Other Agreements.
4.1 Further
Assurances. At any time or from time to time after the
Closing, at Company's request and without further consideration, Contributing
Party will execute and deliver to Company such other instruments of transfer,
conveyance, assignment, and confirmation, provide such materials and
information, and take such other actions as Company may reasonably deem
necessary in order more effectively to transfer, convey, and assign to Company,
and to confirm Company's title to, the Series D Preferred Stock and the
Warrants, and to assist Company in exercising all rights with respect thereto,
and otherwise to cause Contributing Party to fulfill its obligations under this
Agreement.
5. Representations and Warranties of
Contributing Party. Except as is otherwise disclosed on Schedule 5 to this Agreement
(the "Disclosure
Schedule") Contributing Party represents and warrants to Company
that:
5.1 Authorization. Contributing
Party is a limited liability company duly organized and validly existing under
the laws of the state of Oregon. Contributing Party has all requisite
organizational power and authority to enter into this Agreement and to
consummate the transactions contemplated by this
Agreement. Contributing Party's execution and delivery of this
Agreement and consummation of the transactions contemplated by this Agreement
have been duly authorized by all requisite organizational action and
Contributing Party has duly executed and delivered this Agreement, which
constitutes the valid and binding obligation of Contributing Party, enforceable
in accordance with its terms. Contributing Party has made available
to Company true, correct and complete copies of Contributing Party's authorizing
board and shareholder resolutions relating to the transactions contemplated by
this Agreement.
5.2 Investment. Contributing
Party is not acquiring the ownership interest issued to it under the Operating
Agreement with a view to or for sale in connection with any further distribution
thereof within the meaning of the Securities Act of 1933, as amended (the "Securities
Act").
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5.3 Valid Issuance of
Securities. The shares of Series D Preferred Stock and the
Warrants, upon issuance to Company in accordance with the terms of this
Agreement, will be duly authorized, fully paid and nonassessable.
5.4 No Conflicts. The
execution and delivery by Contributing Party of this Agreement do not, and the
performance by Contributing Party of its obligations under this Agreement and
the consummation of the transactions contemplated hereby and thereby will
not:
5.4.1 conflict
with or result in a violation or breach of any of the terms, conditions, or
provisions of the Amended and Restated Articles of Incorporation, as amended, or
Bylaws of Contributing Party; provided, however, that Company expressly
acknowledges that Contributing Party does not currently have sufficient
authorized shares of common stock to allow for the exercise of all of the
Warrants;
5.4.2 conflict
with or result in a violation or breach of any term or provision of any federal,
state, or local law, rule, regulation or order applicable to Contributing Party,
or conflict with or result in a violation or breach of any term or provision of
any judgment, injunction, decree, ruling or other charge applicable to
Contributing Party; or
5.4.3 with
respect to any contract to which Contributing Party is a
party: conflict with or result in a violation or breach of such
contract, constitute (with or without notice or lapse of time or both) a default
under such contract, require Contributing Party to obtain any consent, or
approval, or give any notice to or make any filing with any person or
entity.
5.5 Litigation. There
are no pending or threatened, claims, litigation, investigation, tax audit or
proceedings of any nature against Contributing Party or to which Contributing
Party is a party which could in any way impair Contributing Party's ability to
fully perform its obligations under this Agreement.
5.6 Disclosures. No
representation or warranty or other statement made by Contributing Party in this
Agreement, the Disclosure Schedule and any other documents or certificates
delivered in connection with this Agreement contains any untrue statement or
omits to state a material fact necessary to make any of them, in light of the
circumstances in which it was made, not misleading.
6. Representations and Warranties of
Company. Company represents and warrants to Contributing Party
as follows:
6.1 Authorization. Company
is a limited liability company duly organized and validly existing under the
laws of the State of Oregon. Company has all requisite limited
liability company power and authority to enter into this Agreement and to
consummate the transactions contemplated in this Agreement. Company's
execution and delivery of this Agreement and consummation of the transactions
contemplated by this Agreement have been duly authorized by all requisite
organizational action. This Agreement has been duly executed and
delivered by Company and constitutes the valid and binding obligation of Company
enforceable in accordance with its terms.
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6.2 No Conflicts. The
execution and delivery by Company of this Agreement do not, and the performance
by Company of its obligations hereunder and thereunder and the consummation of
the transactions contemplated hereby and thereby will not:
6.2.1 conflict
with or result in a violation or breach of any of the terms, conditions, or
provisions of the Articles of Organization; or
6.2.2 conflict
with or result in a violation or breach of any term or provision of any federal,
state, or local law, rule, regulation, order, or judgment applicable to
Company.
6.3 Litigation. There
are no pending claims, litigation, investigation, tax audit or proceedings of
any nature against Company or to which Company is a party which could in any way
impair Company's ability to fully perform its obligations under this
Agreement.
7. Indemnification.
7.1 Contributing Party
Indemnification. Contributing Party will defend, indemnify and
hold Company and its directors, shareholders, employees, agents, successors and
assigns harmless from and against any and all claims, losses or liabilities
(including reasonable attorney fees, court costs and expenses of investigation
as determined by a court of competent jurisdiction) incurred by any such
indemnified party as a result of any breach of any of Contributing Party's
representations, warranties or covenants contained in this
Agreement.
7.2 Company
Indemnification. Company will defend, indemnify and hold
Contributing Party and its respective directors, shareholders, employees,
agents, successors and assigns harmless from and against any and all claims,
losses or liabilities (including reasonable attorney fees, court costs and
expenses of investigation as determined by a court of competent jurisdiction)
incurred by any indemnified party as a result of any breach of any of Company's
representations, warranties or covenants contained in this
Agreement.
7.3 Notice and Defense of
Claims. If either party to this Agreement ("Indemnitee") receives notice
or otherwise obtains knowledge of any matter with respect to which the other
party to this Agreement ("Indemnitor") may become
obligated to hold harmless or indemnify Indemnitee under this Section 7, then Indemnitee
will promptly deliver to Indemnitor a written notice describing such matter,
provided that the failure to promptly deliver such notice will not affect the
indemnification obligation except to the extent the Indemnitor is prejudiced or
injured thereby. If such matter involves a third party, Indemnitor
will have the right, at its option, to assume the defense of such matter at its
own expense and with its own counsel, provided that such counsel does not have
an actual or potential conflict of interest. If Indemnitor elects to
and does assume the defense of such matter, (a) Indemnitee will fully
cooperate as reasonably requested by Indemnitor in the defense or settlement of
such matter, (b) Indemnitor will keep Indemnitee reasonably informed of
developments and events relating to such matter, and (c) Indemnitee will
have the right to participate without interfering with Indemnitor or its
counsel, at its own expense, in the defense of such matter. So long
as Indemnitor is in good faith defending Indemnitee in such matter, Indemnitee
will not settle or compromise or attempt to contact any other parties to the
dispute in such matter. Unless and until the Indemnitor assumes the
defense with respect to such matter, Indemnitee will have the right (but not the
obligation) to defend itself, or to enter into any reasonable settlement of such
matter, without prejudice to any right of recovery against
Indemnitor.
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7.4 Payments to Indemnified
Parties. An Indemnitor with an indemnification obligation
under this Section
7 will
promptly reimburse each Indemnitee for all amounts owed under this Section 7 from time to time
at the Indemnitee's request.
7.5 Survival of
Representations. The representations and warranties set forth
in this Agreement will survive from and after the Closing Date through the
applicable statute of limitations (and thereafter, to the extent a claim or
action is made prior to such period, until such claim or action is finally
resolved). No claim for indemnification pursuant to this Section will
be made by any party based upon a breach or alleged breach of any representation
or warranty unless written notice of such claim or action is received by the
party against whom indemnification is sought prior to expiration of the survival
period.
8. Termination.
8.1 Termination Events. Except as
provided in Section
8.2,
this Agreement may be terminated at any time prior to the Closing:
8.1.1 by
mutual written consent of Contributing Party and of Company;
8.1.2 by
Contributing Party or Company if the Closing has not occurred by
January 31, 2010;
8.1.3 by
Contributing Party or Company if: (a) there is a final nonappealable order
of a Governmental Body in effect permanently restraining, enjoining or otherwise
prohibiting consummation of the transactions contemplated by this Agreement; or
(ii) there is any statute, rule, regulation or order enacted, promulgated
or issued or deemed applicable to the Agreement after the date of this Agreement
by any Governmental Body that would make consummation of the transactions
contemplated by this Agreement illegal;
8.1.4 by
Company if it is not in material breach of any of its representations,
warranties, covenants or agreements contained in this Agreement and there has
been a breach of any representation, warranty, covenant or agreement contained
in this Agreement on the part of Contributing Party, or if any representation or
warranty of Contributing Party has become untrue, or in any case if any of the
conditions set forth in Section 3.1 or Section 3.2 would not be
satisfied; provided, that, if such inaccuracy in such representations and
warranties or breach by Contributing Party is curable through the exercise of
commercially reasonable efforts, then Company may terminate this Agreement under
this Section 8.1.4 only if the
breach is not cured within 30 days after the date of written notice from Company
of such breach (but no cure period will be required for a breach which by its
nature cannot be cured); or
8.1.5 by
Contributing Party if it is not in material breach of any of its
representations, warranties, covenants or agreements contained in this Agreement
and there has been a material breach of any representation, warranty, covenant
or agreement contained in this Agreement on the part of Company such that the
conditions set forth in Section 3.2.1 or Section 3.2.2 would not be
satisfied; provided, that, if such inaccuracy in Company's representations and
warranties or breach by Company is curable by Company through the exercise of
its commercially reasonable efforts, then Contributing Party may terminate this
Agreement under this Section 8.1.5 only if the
breach is not cured within 30 days after the date of written notice from
Contributing Party of such breach (but no cure period will be required for a
breach which by its nature cannot be cured).
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8.2 Notice of Termination; Effect of
Termination. Except as set forth in Section 8.1.1 any termination
of this Agreement under Section 8.1 will be effective
immediately upon the delivery of a valid written notice of the terminating party
to the other party. Where action is taken to terminate this Agreement
pursuant to Section 8.1, the terminating
party must promptly deliver to the other party a notice setting forth the reason
for the termination and the specific Section and subsection (as applicable) of
this Agreement upon which the right of termination is based. In the
event of termination of this Agreement as provided in Section 8.1, this Agreement
will become void and there will be no liability on the part of any party to this
Agreement, or their respective officers, directors, managers, members or
shareholders; provided that each party will remain liable for any breaches of
this Agreement prior to its termination.
9. Miscellaneous
Provisions.
9.1 Successors and
Assigns. This Agreement will be binding upon and will inure to
the benefit of the parties and their respective successors and permitted
assigns. The foregoing notwithstanding, neither party will be
permitted to assign its rights or delegate its obligations under this Agreement
to another party without the prior written consent of the other party to this
Agreement.
9.2 Notices. Each
notice, consent, request, or other communication required or permitted under
this Agreement will be in writing, will be delivered personally or sent by
certified mail (postage prepaid, return receipt requested) or by a recognized US
overnight courier, and will be addressed as follows:
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If to Company:
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WS
Technologies LLC
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Attn: President
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0000
XX Xxxxxxx Xxxx, Xxxxx 000
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Xxxx
Xxxxxx, XX 00000
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If to Contributing Party:
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microHelix,
Inc.
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Attn: President
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0000
XX Xxxxxxx Xxxx, Xxxxx 000
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Xxxx
Xxxxxx, XX 00000
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Each
notice, consent, request, or other communication will be deemed to have been
received by the party to whom it was addressed (a) when delivered if delivered
personally; (b) on the second business day after the date of mailing if mailed;
or (c) on the date officially recorded as delivered according to the record of
delivery if delivered by overnight courier. Each party may change its
address for purposes of this Agreement by giving written notice to the other
party in the manner set forth above.
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9.3 Alterations and
Waivers. The waiver, amendment or modification of any
provision of this Agreement or any right, power or remedy under this Agreement,
whether by agreement of the parties or by custom, course of dealing or trade
practice, will not be effective unless in writing and signed by the party
against whom enforcement of such waiver, amendment or modification is
sought. No failure or delay by either party in exercising any right,
power or remedy with respect to any of the provisions of this Agreement will
operate as a waiver of such provisions with respect to such
occurrences.
9.4 Governing Law. This
Agreement will be construed, governed and enforced in accordance with the laws
of the State of Oregon, without regard to its choice of law
provisions.
9.5 Exhibits and
Schedules. The exhibits and schedules attached to this
Agreement are incorporated into and are a part of this Agreement.
9.6 Integration and Entire
Agreement. This Agreement and the exhibits and schedules and
other documents referred to in this Agreement set forth the entire understanding
between the parties and supersede all previous and contemporaneous written or
oral negotiations, commitments, understandings, and agreements relating to the
subject matter of this Agreement and merge all prior and contemporaneous
discussions between the parties.
9.7 Counterparts and
Delivery. This Agreement may be executed in
counterparts. Each counterpart will be considered an original, and
all of them, taken together, will constitute a single Agreement. This
Agreement may be delivered by facsimile or electronically, and any such delivery
will have the same effect as physical delivery of a signed
original. At the request of any party, the other party will confirm
facsimile or electronic transmission signatures by signing an original
document.
9.8 Definitions. Whenever
used in this Agreement, (a) the term "including" will be deemed to mean
"including without limitation", (b) the term "person" will be deemed to mean any
natural person, corporation, limited liability company, partnership or other
entity, and (c) the terms "will" and "shall" have the same meaning.
9.9 Attorney Fees. In
the event suit or action is instituted to interpret or enforce this Agreement,
the prevailing party will be entitled to recover its attorney's fees, including
those incurred on appeal, as determined by the court or arbitrator.
9.10 Specific
Performance. The parties acknowledge they would be irreparably
damaged if any of the provisions of this Agreement are not performed in
accordance with their specific terms and that monetary damages would provide an
inadequate remedy. Accordingly, in addition to any other remedy at
law or in equity, the nonbreaching party will be entitled to injunctive relief
to prevent breaches of this Agreement and specifically to enforce this Agreement
without the need for posting any bond or other security.
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9.11 Rules of
Construction. The parties have been represented by separate
counsel during the negotiation and execution of this Agreement and, therefore,
waive the application of any law regulation, holding or rule of construction
providing that ambiguities in an agreement or other document will be construed
against the parties drafting such agreement or document.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the parties have
executed this Agreement on the date first above written.
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COMPANY:
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WS
TECHNOLOGIES LLC
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By
microHelix, Inc., its Manager
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By
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/s/ Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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Secretary
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CONTRIBUTING
PARTY:
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MICROHELIX,
INC.
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By
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s/ Xxxxx X. Xxxxxx
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Xxxxx
X. Xxxxxx
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Secretary
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Signature
page to WS Technologies, LLC Contribution Agreement
(microHelix)
