ASSET PURCHASE AGREEMENT
Exhibit
2.1
THIS ASSET PURCHASE AGREEMENT
(the “Agreement”)
is made and entered into as of this 27th day of June, 2008, by and between
IMPLANT SCIENCES CORPORATION, a Massachusetts corporation, with its principal
place of business at 000 Xxxxxxx Xxxx, Xxxxxxxxx, XX 00000 (“Seller”) and INTERNATIONAL
BRACHYTHERAPY S.A., a Belgian company with its principal place of business at
Xxxx Xxxxxxxxxxxx X, 0000 Seneffe, Belgium (“Purchaser”).
R
E C I T A L S:
WHEREAS, Seller has been in
the business of using Xenation machines to implant Xenon-124 atoms and other
ions into cores (the “Products”) used to produce low
dose rate brachytherapy seeds and other radioactive sources for the treatment of
diseases (collectively referred to as “Seller’s Xenation
Business”);
WHEREAS, Seller has determined
that it is no longer commercially desirable for it to operate Seller’s Xenation
Business, Seller has offered Seller’s Xenation Business for sale, and Seller has
received no other offers to purchase Seller’s Xenation Business or the assets
used in Seller’s Xenation business;
WHEREAS, Purchaser is in the
business of designing, developing and distributing interstitial implants
used for the treatment of certain types of cancers; and
WHEREAS, Seller desires to
sell and Purchaser desires to acquire the assets used in Seller’s Xenation
Business, including without limitation, certain Xenation machines and all
related assets, raw materials, supplies, and repair parts, together with United
States Patent Number 6,060,036 (the “6,060 Patent”) and all related
intellectual property, technology and know-how (“Intellectual Property Rights”)
associated therewith (collectively referred to sometimes as the “Acquired Assets”) upon and in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in
consideration of the mutual promises contained herein, the recitals set forth
above, which are hereby incorporated by reference, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
Article
I.
Purchase of
Assets
1.1 Purchase of
Assets. On and subject to the terms and conditions contained
in this Agreement, at Closing, Seller shall sell, assign, convey, transfer and
deliver to Purchaser the Acquired Assets including but not limited to those
shown of Schedule
1.1, including any Intellectual Property Rights, free and clear of any
and all liens, encumbrances, claims, mortgages, pledges, charges or other
security interests of any nature (collectively, “Security Interests”) or
unassumed liabilities and obligations, and all right, title, interest and
goodwill therein of every kind and nature currently owned by Seller, subject
only to the Ytterbium License (as such term is defined in Section 9.5 of this
Agreement).
1.2 Patent
License.
(a) Notwithstanding
the foregoing, the Acquired Assets shall not include United States Patent Number
6,183,409 or any of the inventions disclosed and claimed therein (the “6,183 Patent”). Purchaser
acknowledges that Seller currently intends to transfer the 6,183 patent to Best
Medical International, Inc. (“Best Medical”), in connection
with the sale to Best Medical of Seller’s business of manufacturing, marketing
and selling Ytterbium and Dura Plaque products, materials, inventory, and/or
machinery for the treatment of cancer and other diseases (“Seller’s Ytterbium Business”).
In lieu of an assignment of the 6,183 Patent, effective on the Closing Date,
Seller shall grant to Purchaser a license, in the form attached as Exhibit A (the “Xenation License”), granting
Purchaser, its successors and assigns a worldwide, perpetual, exclusive, fully
transferable, fully paid-up and royalty-free license under the Patent Rights (as
such term is defined below), to develop, reduce to practice, make, have made,
use, sell, have sold and otherwise freely distribute Products for the purpose of
low dose brachytherapy or other radioactive sources. For purposes of
the Xenation License, the 6,183 Patent shall include all divisions,
continuations, continuations-in-part, reissues, certificates of reexamination,
extensions thereof and all foreign rights relating thereto, and the “Patent Rights" shall mean any
and all rights arising under the 6,183 Patent and all improvements and
modifications being related or derived from the inventions and claims set forth
in the 6,183 Patent reciting xenon, together with the right to sublicense the
Patent Rights and all rights of action and recovery for infringement thereof, to
be held and enjoyed by Purchaser, its successors and assigns, for the full term
or terms for which any and all such patents may be granted, all as more fully
described in the Xenation License.
(b) In
the event that Seller does not complete the sale of Seller’s Ytterbium Business
to Best Medical by the close of business on December 31, 2008, then Seller shall
promptly assign the 6,183 Patent to Purchaser, without additional consideration;
provided, however,
that, effective upon such assignment, Purchaser shall grant to Seller a
perpetual, exclusive worldwide, royalty-free license, in the form attached as
Exhibit A (with
only such changes as may be reasonably required to make proper references to the
6,183 Patent) to use and practice, solely in Seller’s Ytterbium Business, (i)
the 6,183 Patent, (ii) any foreign counterparts of the foregoing, and (iii) any
reissue, continuation, divisional or continuation-in-part applications and such
patent and patent application as may issues thereon, and including the right to
claim priority under any applicable statute, treaty or convention based on said
applications. Such license shall be fully transferable to any subsequent
purchaser of Seller’s Ytterbium Business and shall include the right to grant
sublicenses.
1.3 Assumed
Liabilities. At Closing, Purchaser shall assume those
contracts, leases, agreements identified in Schedule 1.3 (the
“Assumed Contracts”) and
other obligations and liabilities of Seller with respect to Seller’s Xenation
Business which are specifically identified in Schedule 1.3
(together with the Assumed Contracts, the “Assumed
Liabilities”). The Assumed Liabilities, however, shall not
include any liabilities or obligations which shall have accrued under the
Assumed Contracts prior to the Closing; provided, however, that
Seller shall be entitled to receive payment (either directly from the other
parties to such Assumed Contracts or from Purchaser, if and to the extent that
any of such other parties pays Purchaser) for the portion of those Assumed
Contracts identified in Schedule 1.3 that are
performed by Seller prior to Closing. Purchaser will assume no other liabilities
of Seller (or its affiliates), or relating to the Acquired Assets, of any nature
whatsoever, including, but not limited to, (i) severance amounts, if any, due to
any of Seller's employees or independent contractors, (ii) liabilities under the
Assumed Contracts that accrue prior to the Closing, (iii) all liabilities,
obligations, Security Interests whatsoever, and (iv) any other pre-closing
liabilities.
1.4 Excluded
Assets. The Acquired Assets shall not include Seller’s product
line related to the Products, Seller’s Products, Seller's customer list for
Seller’s Xenation Business, any trade names or goodwill associated with Seller’s
product line related to Seller’s Xenation Business or any other assets of Seller
not used in Sellers’ Xenation Business.
1.5 Purchase
Price. In consideration of the conveyance to Purchaser of the
Acquired Assets, Purchaser shall pay to Seller, at the Closing, in cash, by bank
or certified check or by wire transfer of immediately available funds to an
account designated by Seller, the amount of Seven Hundred Fifty Thousand United
States Dollars ($750,000.00) (“Purchase
Price”). Seller and Purchaser mutually agree that the Purchase
Price shall be allocated as indicated in Schedule 1.4 and that
neither party shall take, for tax purposes, any position inconsistent with that
allocation.
ARTICLE
II.
Representations and
Warranties of Seller
As used in this Article II, the term
“Knowledge” (or words of
such import) means, respect to Seller, the knowledge of any of its corporate
officers; and with respect to Seller's corporate officers, the actual knowledge
of such persons the respect to any matter or the knowledge that such persons
should have obtained after reasonable inquiry of the employee or employees of
Seller responsible for such matter; provided, however, that no such person shall
be required to consult any docket or public records or make any inquiry of any
unrelated third parties. Seller represents and warrants to Purchaser
as follows:
2.1 Corporate
Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. Seller the requisite corporate power and authority to
own, operate and lease the Acquired Assets and to conduct the operations of
Seller’s Xenation Business as presently conducted.
2.2 Authorization of
Transaction. The consummation of the transactions contemplated by this
Agreement by Seller does not constitute a sale of substantially all of its
assets or any other transaction that would require approval of Seller’s
shareholders or the Securities and Exchange Commission in order to consummate
the transactions contemplated in this Agreement. Without limiting the
generality of the foregoing:
(a) Seller’s
board of directors has duly authorized the execution and delivery of this
Agreement and has approved the consummation of the transactions contemplated by
this Agreement;
(b) No vote,
consent or other approval of the Company’s shareholders is required by Seller’s
Articles of Organization or Bylaws, or by the laws of the Commonwealth of
Massachusetts; and
(c) Assuming
the due authorization and execution of this Agreement by Purchaser, this
Agreement constitutes a valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, subject to the qualifications that
enforcement of the rights and remedies created hereby is subject to (i)
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and
other laws of general obligation affecting the rights and remedies of creditors,
(ii) general principles of equity (regardless of whether enforcement is
considered in equity or at law), and (iii) the availability of specific
performance or other equitable or legal remedies specified therein.
2.3 Noncontravention. Neither
the execution, the delivery of this Agreement nor the consummation of the
transactions contemplated hereby will:
(a) violate
any constitution, statute, regulation, rule, injunction, order, decree, ruling,
charge or other restriction of any government, governmental agency, arbitrator
or court to which Seller is subject; or
(b) conflict
with, result in breach of, or constitute default under, or result in any right
to accelerate or result in the creation of any Security Interest pursuant to, or
right of termination under, any provision of any agreement of Seller, or require
the consent of any other party to any contract, note, loan agreement, indenture,
mortgage, deed of trust or other contract, license, assignment, agreement or
instrument to which Seller is a party or by which it is bound, which consent was
not received, except as set forth on Schedule 2.3(b);
or
(c) conflict
with the Articles of Organization or Bylaws of Seller; or
(d) require
the approval, authorization, consent of or notice to any government or
governmental agency in order for the parties hereto to consummate the
transactions contemplated by this Agreement.
2.4 Broker Fees. Seller
has no obligation to pay any fees or commissions to any broker, finder or agent
with respect to the transactions contemplated by this
Agreement. Seller has entered into no agreement and has taken no
action that could cause Purchaser to become liable or obligated to pay any fees
or commissions due and owing to any individual, corporation, partnership,
limited liability company, business trust, business association, governmental
entity, governmental authority or other legal entity (collectively, “Person”).
2.5 Title and Sufficiency of the
Acquired Assets. To the Knowledge of Seller, the Acquired
Assets constitute all of the assets, tangible and intangible, of any nature
whatsoever, reasonably required to operate Seller’s Xenation Business in the
manner historically operated by Seller. Seller has good and
marketable title to all of the Acquired Assets, including tangible and
intangible property rights and intellectual property rights relating thereto,
and none of the Acquired Assets or use thereof is subject to any Security
Interest, restrictions, claims, licenses of any nature, (except for (i) liens
for unpaid taxes which are not yet due and payable and (ii) the Ytterbium
License (as such term is defined in Section 9.5 of this Agreement)) or rights of
others of any kind or nature whatsoever. None of the Acquired Assets
is leased.
2.6 Business and Intellectual
Property Rights. With respect to Seller’s Xenation Business
and the Intellectual Property Rights to be acquired by Purchaser hereunder,
Seller represents that:
(a) To the
Knowledge of Seller, the conduct of Seller’s Xenation Business and the use of
the Acquired Assets by Seller do not infringe the intellectual property rights
of any Person. To the Knowledge of Seller, no Person has asserted or threatened
to assert any claim that the conduct of Seller’s Xenation Business or the use of
the Acquired Assets by Seller infringes the intellectual property rights of such
Person;
(b) The
Intellectual Property Rights, together with the Xenation License, include all of
the intellectual property Seller owns or uses in connection with the Acquired
Assets (including that intellectual property which is required for the
manufacture of the Product currently manufactured by Seller utilizing the
Assets);
(c) Seller
has disclosed to Purchaser (or the parties have agreed to a date by which Seller
will disclose to Purchaser as part of the Initial Services (as such term is
defined in Section 9.4)) any and all intellectual property, trade secrets and
confidential information that Seller owns or uses in connection with the
Acquired Assets (including the trade secrets and confidential information
required for the manufacture of the Products currently manufactured or the
reproduction of the equipment to manufacture the Products by Seller utilizing
the Acquired Assets) that, to the Knowledge of Seller, are necessary or useful
in the operation of the Acquired Assets, the manufacture of the Products or
brachytherapy devices produced and sold using the Product; Seller has identified
to Purchaser the individuals involved in the development of any such material
intellectual property, trade secrets and confidential information; and Seller
has obtained from such individuals or entities who have knowledge of such
material trade secrets and confidential information, or to whom such material
trade secrets and confidential information have been disclosed, valid and
enforceable non-disclosure and trade secret agreements; and
(d) To the
Knowledge of Seller, any and all material improvements relating to any of the
Acquired Assets have been disclosed by Seller to Purchaser (or the parties have
agreed to a date by which Seller will disclose such material improvements to
Purchaser as part of the Initial Services).
(e) Seller
uses the Acquired Assets (including Seller's Xenation machines, intellectual
property, technology and know-how which constitute any part of the Acquired
Assets)strictly to make devices for the treatment of diseases and, Seller has
never used the Acquired Assets in any manner which would threaten or impair
national security of the United States.
2.7 Compliance with
Environmental Laws. To the Knowledge of Seller, Seller’s
operation of its leased premises at 000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
(the “Premises”) has
been in compliance with all material state, federal and local environmental
laws, regulations and permits.
2.8 No Third Party Consents
Required. All consents, approvals or other authorizations for the
transfer of the Acquired Assets and the assignment of the Assumed Contracts
(including but not limited to any governmental approval) to Purchaser have been,
or will be, obtained prior to the Closing.
2.9 Claims and
Proceedings. There is no legal action, suit, arbitration or governmental
proceeding or investigation pending or, to the Knowledge of Seller, threatened
against or affecting Seller that could reasonably be expected to adversely
affect the Acquired Assets or prevent the consummation of the transactions
contemplated hereby.
2.10 Operating
Costs. Seller has previously provided Purchaser with
information to assist Purchaser in developing cost estimates for the production
of the Products (“Cost
Information”). To the Knowledge of Seller, the Cost
Information provided by Seller is based on reasonable assumptions and
estimates.
2.11 Condition. To
the Knowledge of Seller, and except as has been previously disclosed to
Purchaser, each material item of tangible personal property which constitutes
any part of the Acquired Assets is suitable for immediate use in the ordinary
course of business of Seller’s Xenation Business in the manner in which Seller
conducts Seller’s Xenation Business on the date of this Agreement; provided, however, that one
of the Xenation machines is inoperable and is used by Seller solely as a source
of spare parts for other functioning Xenation machines. Except as has been
previously disclosed to Purchaser, no material item of tangible personal
property which constitutes any part of the Acquired Assets is in need of repair
or replacement, other than as part of routine maintenance in the ordinary course
of business.
2.12 Books and
Records. Seller has provided to Purchaser, or Seller shall
provide to Purchaser within six months after the Closing, as part of the Initial
Services, all owners manuals, drawings and maintenance records relating to the
Acquired Assets which are in the possession of Seller.
2.13 Leased Real
Property. Provided that Purchaser complies with its
obligations under this Agreement, there is no fact, condition of circumstance of
which Seller has Knowledge that is reasonably likely to prevent Purchaser from
enjoying all of the rights and benefits granted to Purchaser by Seller in
Section 9.3 of this Agreement.
2.14 Permits. To
the Knowledge of Seller, (a) Seller has obtained all governmental permits,
authorizations, certificates, approvals, licenses, exemptions, clearances, and
classifications required for the conduct of Seller’s Xenation Business and the
ownership and operation of the Acquired Assets (the “Permits”), (b) Seller is not
in violation of any of the Permits, and no proceedings are pending or threatened
to revoke or limit any of the Permits, and the Permits are sufficient to enable
Seller to fulfill its obligations under Section 9.4 to operate the Acquired
Assets to produce Products for Purchaser.
2.15 Taxes. Seller
has filed all required tax returns and met all reporting obligations relating to
the Acquired Assets and Seller’s Xenation Business that have been, or are
due. Seller has paid (or has made adequate provision for) all taxes
(including penalties and interest), withholdings and other governmental charges
relating to the Acquired Assets and Seller’s Xenation Business, and there are no
unpaid taxes, withholdings or other governmental charges which if not paid,
would cause Purchaser to have any liability or affect the ability of Purchaser
to operate Seller’s Xenation Business.
2.16 Insurance. Seller
has delivered copies of all insurance policies (including, without limitation,
policies providing property, casualty, liability, and workers’ compensation
coverage, and bond and surety arrangements) maintained by Seller with respect to
Seller’s Xenation Business and the Acquired Assets. Such policies are
valid, binding and enforceable in accordance with their terms, and are in full
force and effect.
2.17 Names. Seller
has not been known by or conducted business under any name other than Implant
Sciences Corporation in the ten-year period preceding the date of this
Agreement. All assets and rights relating to Seller’s Xenation
Business are held by, and all agreements, obligations, expenses and transactions
relating to Seller’s Xenation Business have been entered into, incurred and
conducted by Seller as Implant Sciences Corporation.
2.18 No
Bankruptcy. Seller has not filed any petition under any
federal or state bankruptcy, reorganization, arrangement, liquidation,
receivership, moratorium or similar laws, and Seller has no current intention to
make any such filing. To the Knowledge of Seller, no such petition has been
filed by any third party with respect to Seller or its assets.
2.19 Disclosure. No
representation, warranty, or statement made by Seller in this Agreement, or any
document furnished or to be furnished to Purchaser pursuant to this Agreement,
when taken together as a whole, contains or will contain any untrue statement of
a material fact, or omits or will omit to state any material fact necessary to
make the statements contained herein or therein not misleading.
Article
III.
Representations and
Warranties of Purchaser
Purchaser represents and warrants to
Seller as follows:
3.1 Corporate
Organization. Purchaser is a company duly organized, validly
existing and in good standing under the laws of Belgium and is duly qualified to
do business in the Commonwealth of Massachusetts to execute this Agreement and
to consummate the transactions contemplated herein.
3.2 Corporate
Authority. The execution and delivery of this Agreement to
Seller and the carrying out of the provisions hereof have been duly authorized
by Purchaser’s board of directors, supervisory board and/or other governing
authority, the authorization of which is required by applicable
law.
3.3 Brokers. Purchaser
has not become obligated to pay or has taken any action that might result in any
Person claiming to be entitled to receive, any brokerage commission, finder’s
fee or similar commission, or fee in connection with any of the transactions
contemplated by this Agreement.
3.4 Noncontravention. Neither
the execution and/or delivery of this Agreement, nor the consummation of the
transactions contemplated hereby (including the assignment to be executed
hereunder) will:
(a) violate
any constitution, statute, regulation, rule, injunction, order, decree, ruling,
charge or other restriction of any government, governmental agency, arbitrator
or court to which Purchaser is subject; or
(b) conflict
with, result in breach of, or constitute default under, or result in any right
to accelerate or result in the creation of any Security Interest pursuant to, or
right of termination under, any provision of any agreement of Purchaser, or
require the consent of any other party to any contract, note, loan agreement,
indenture, mortgage, deed of trust or other contract, license, assignment,
agreement or instrument to which Purchaser is a party or by which it is bound,
which consent was not received; or
(c) conflict
with the charter or other constituent documents of Purchaser; or
(d) require
the approval, authorization, consent of or notice to any government or
governmental agency in order for the parties hereto to consummate the
transactions contemplated by this Agreement.
3.5 Available
Funds. At the Closing, Purchaser will have on hand all of the
funds needed to pay the Purchase Price in full and to consummate the
transactions contemplated by this Agreement.
3.6 Acquired
Assets. Purchaser represents, warrants, acknowledges, and
agrees that, except as expressly set forth in Article II, (a) Seller is selling,
and Purchaser is acquiring, the Acquired Assets and the Intellectual Property
Rights on an “as is, where is” basis; and (b) Seller hereby disclaims all other
representations and warranties, whether express or implied, with respect to the
Acquired Assets, the Intellectual Property Rights and/or Seller’s Xenation
Business, including without limitation all express or implied warranties of
merchantability and fitness for a particular purpose. Without limiting the
generality of the foregoing, except as expressly set forth in Article II, no
representation or warranty is made with respect to the enforceability or
validity of any patent or patent application included within the Intellectual
Property Rights or the enforceability or validity of the 6,183 Patent, or
whether any patent will issue based on any patent application within the
Intellectual Property Rights.
Article IV.
Pre-Closing
Covenants
4.1 General. Each
of the parties will use its respective best efforts to take all action and to do
all things necessary, proper or advisable in order to consummate and make
effective the transactions contemplated by this Agreement (including
satisfaction, but not waiver, of the conditions precedent to Closing set forth
in Article V below).
4.2 Exclusive
Dealing. Unless and until this Agreement has been terminated
pursuant to Article VI, Seller shall not solicit in any way an offer from any
other Person to purchase any of the Acquired Assets, whether directly or
indirectly through the sale of stock, a merger, a business combination or
otherwise, or furnish any information to any other Person in that regard; and
Seller shall promptly (within 24 hours) notify Purchaser upon the receipt of any
unsolicited competing offer or communication in respect of such alternate
transaction and of the proposed terms thereof. Seller shall refrain from any
further communications with any other Persons concerning any such alternate
transaction so long as this Agreement remains effective, unless Seller’s board
of directors determines that the proper exercise of its fiduciary duties
requires Seller to do so.
4.3 Conduct of Seller’s Xenation
Business. Until the earlier of the Closing or the termination
of this Agreement, Seller shall, (a) use its reasonable efforts to conduct
Seller’s Xenation Business in the ordinary course in accordance with its past
practice and policies, including, without limitation, using its reasonable
efforts to continue the employment or engagement, as the case may be, of Xx.
Xxxxxxx X. Xxxxxxx and Xx. Xxxxxx Xxxxx, and (b) preserve the Acquired Assets in
their present condition, ordinary wear and tear excepted.
4.4 Current Employees of
Seller’s Xenation Business. Purchaser shall be free, prior to
the Closing, to enter into employment-at-will or independent contractor-at-will
agreements (which agreements shall be effective as of the Closing and not prior
thereto) with certain of the current employees or independent contractors who
work in Seller’s Xenation Business, including Xx. Xxxxxxx X. Xxxxxxx, Xx. Xxxxxx
Xxxxx, and one additional technician, on terms and conditions mutually agreeable
to Purchaser and such individuals. Seller shall not impede Purchaser’s efforts
to induce such individuals to enter into such employment-at-will or independent
contractor-at-will agreements.
4.5 Governmental Licenses,
Permits, and Clearances. Prior to the Closing, Seller shall
use its commercially reasonable efforts to cooperate with Purchaser, to the
extent reasonably requested by Purchaser, in obtaining the transfer and
assignment of any Permits necessary to the operation and use of the Acquired
Assets, including the sale of products manufactured utilizing such Acquired
Assets.
4.6 Non-applicability of State
Sales Taxes. Prior to the Closing, the parties agree to take all
reasonable actions necessary or appropriate to cause the transactions
contemplated by this Agreement to qualify as an isolated sale transaction or
comparable exemption from the applicability of state sales taxes.
4.7 Material Adverse
Change. Seller shall promptly advise Purchaser of any material
adverse change in the condition (financial or otherwise) of Seller’s Xenation
Business or the Acquired Assets.
4.8 Disclosures. Seller
shall promptly advise Purchaser of the occurrence of any event or circumstance
which affects the consummation of the transactions contemplated by this
Agreement or which, if in existence on the date of this Agreement, would have
been required to have been disclosed in a Schedule to this
Agreement.
4.9 Liens. Seller
shall not create or permit to exist any security interest, mortgage, pledge,
lien, charge, encumbrance or adverse claim of any kind or nature with respect to
any of the Acquired Assets.
4.10 Disposal of
Assets. Seller shall not sell or dispose of any Acquired
Assets, except in the ordinary course of business of Seller’s Xenation
Business.
Article V.
Conditions Precedent
Conditions Precedent
5.1 Conditions Precedent to
Obligations of Purchaser. Purchaser’s obligation to consummate
the transactions to be performed by it in connection with the Closing is subject
to the satisfaction of the following conditions:
(a) Seller
shall have taken all actions (whether corporate or otherwise) which, in
Purchaser’s reasonable judgment, are necessary or appropriate to authorize the
execution and delivery of this Agreement, the transactions contemplated by this
Agreement, and all documents and instruments incident to such
transactions;
(b) The
representations and warranties of Seller set forth in Article II above shall be
true and correct in all material respects at and as of the Closing
Date;
(c) There
have been no material or adverse changes to the existence, nature or quality of
the Acquired Assets;
(d) No
temporary restraining order, preliminary or permanent injunction or other legal
restraint or prohibition preventing transfer of title of the Acquired Assets
shall be in effect. There shall be no suit, action, investigation, inquiry or
other proceeding by any governmental authority or any other Person or any other
legal or administrative proceeding pending or threatened which questions the
validity or legality of the transactions contemplated by this Agreement, or
seeks damages in connection therewith;
(e) Seller
shall have satisfied, performed and complied with all agreements, conditions and
contingencies contained in this Agreement required to be performed or complied
with by it prior to or contemporaneously with Closing;
(f) Seller
shall have delivered to Purchaser a certificate dated as of the Closing Date in
a form acceptable to Purchaser certifying compliance with the conditions
specified in Sections 5.1(a) through 5.1(e) hereof;
(g) Seller
shall have delivered to Purchaser all deliveries contemplated by Section 7.3(a)
hereof; and
(h) Purchaser
may, in a writing signed at or prior to the Closing, (i) waive any condition
specified in this Section 5.1, if it executes a writing so stating at or prior
to the Closing; (ii) extend Seller an opportunity to cure any of the foregoing
conditions; and/or (iii) terminate Seller’s obligations hereunder.
5.2 Conditions Precedent to
Obligations of Seller. Seller’s obligation to consummate the
transactions to be performed by it in connection with the Closing is subject to
the satisfaction of the following conditions:
(a) Purchaser
shall have taken all actions (whether corporate or otherwise) which, in Seller’s
reasonable judgment, are necessary or appropriate to authorize the execution and
delivery of this Agreement, the transactions contemplated by this Agreement, and
all documents and instruments incident to such transactions;
(b) The
representations and warranties of Purchaser set forth in Article III above shall
be true and correct in all material respects at and as of the Closing
Date;
(c) No
temporary restraining order, preliminary or permanent injunction or other legal
restraint or prohibition preventing transfer of title of the Acquired Assets
shall be in effect. There shall be no suit, action, investigation, inquiry or
other proceeding by any governmental authority or any other Person or any other
legal or administrative proceeding pending or threatened which questions the
validity or legality of the transactions contemplated by this Agreement, or
seeks damages in connection therewith;
(d) Purchaser
shall have performed and complied with all agreements and conditions contained
in this Agreement and required to be performed or complied with by it prior to
or contemporaneously with Closing;
(e) Purchaser
shall have delivered to Seller a certificate dated as of the Closing Date in a
form acceptable to Seller certifying compliance with the conditions specified in
Sections 5.2(a) through 5.2(d) hereof;
(f) Purchaser
shall have delivered to Seller all deliveries contemplated by Section 7.3(b)
hereof; and
(g) Seller
may, in a writing signed at or prior to the Closing, (i) waive any condition
specified in this Section 5.2, if it executes a writing so stating at or prior
to the Closing; (ii) extend Purchaser an opportunity to cure any of the
foregoing conditions; and/or (iii) terminate Purchaser’s obligations
hereunder.
Article VI.
Termination
6.1 Termination of
Agreement.
(a) The
parties may terminate this Agreement by mutual written agreement at any time
prior to Closing.
(b) In
addition, either Purchaser or Seller may terminate this Agreement as provided
below:
(i) Purchaser
may terminate this Agreement by giving written notice to Seller at any time
prior to the Closing: (1) in the event Seller has breached any
material representation, warranty or covenant contained in this Agreement in any
material respect, Purchaser has notified Seller of the breach in writing, and
the breach has continued without cure for a period of ten days after the notice
of breach; or (2) if the Closing shall not have occurred on or before the
30th
day after the date of this Agreement, by reason of the failure of any condition
precedent under Section 5.1 hereof (unless the failure results primarily from
Purchaser breaching any representation, warranty or covenant contained in this
Agreement);
(ii) Seller
may terminate this Agreement by giving written notice to Purchaser at any time
prior to the Closing: (1) in the event that Purchaser has breached
any material representation, warranty or covenant contained in this Agreement in
any material respect, Seller has notified Purchaser of the breach in writing,
and the breach has continued without cure for a period of ten days after the
notice of breach; or (2) if the Closing shall not have occurred on or before the
30th
day after the date of this Agreement by reason of the failure of any condition
precedent under Section 5.2 hereof (unless the failure results primarily from
Seller breaching any representation, warranty, or covenant contained in this
Agreement); and
(iii) Seller
may terminate this Agreement by giving written notice to Purchaser at any time
prior to the Closing if Seller’s board of directors determines that the proper
exercise of its fiduciary duties requires Seller to sell all or substantially
all of the Acquired Assets to a Person other than Purchaser.
6.2 Effect of
Termination. In the event that this Agreement is terminated
pursuant to Section 6.1, such termination shall be without liability or
obligation to any party or parties and all further obligations of the parties
shall terminate, except the obligations set forth in Article X, General
Provisions, which shall survive; provided, however, that, if
this Agreement is terminated by Purchaser pursuant to Section 6.1(b)(i) or by
Seller pursuant to clause 6.1(b)(ii), it is expressly understood that the
terminating party’s right to pursue all legal and equitable remedies therefor,
including damages related thereto, shall also survive termination unimpaired. In
addition to, and not in lieu of, the foregoing, in the event that this Agreement
is terminated by Seller pursuant to clause 6.1(b)(iii), then Seller shall be
required to pay to Purchaser a one-time fee of One Hundred Thousand Dollars
($100,000.00).
Article VII
The Closing
The Closing
7.1 Closing. The
Closing of the transactions provided for herein shall take place at the offices
of Seller, or such other location as the parties determine.
7.2 Closing
Date. The Closing shall take place upon the execution of this
Agreement by the parties or on such other date as the parties may determine.
Until this Agreement is either terminated or the parties have agreed upon an
extended Closing Date, the parties shall diligently continue to work to satisfy
all conditions to Closing.
7.3 Documents and Instruments to
be Tendered at Closing.
(a) Seller’s Deliveries to
Purchaser. On the Closing Date, subject to the terms and
conditions set forth in this Agreement, Seller shall make the following
deliveries to Purchaser:
(1) The duly
executed Xenation License, substantially in the form attached hereto as Exhibit
A;
(2) Duly
executed assignments of the Intellectual Property Rights, substantially in the
form attached hereto as Exhibit
B;
(3) A duly
executed Xxxx of Sale with respect to the Acquired Assets, substantially in the
form attached hereto as Exhibit
C;
(4) The
executed certificate required in Section 5.1(f) hereof;
(5) A good
standing certificate from the Secretary of the Commonwealth of
Massachusetts;
(6) A duly
executed resolution of Seller’s board of directors authorizing the execution,
delivery and performance of this Agreement, certified as having been duly
adopted and as being in full force and effect on the Closing Date;
(7) Copies of
valid and enforceable non-disclosure and trade secret agreements as provided in
Section 2.6(c);
(8) A copy of
the employment agreement between Seller and Xx. Xxxxxxx X. Xxxxxxx, which shall
have a term at least through June 30, 2009 and include terms and conditions
acceptable to Purchaser (the “Hollows Employment
Agreement”); and
(9) All other
items or documents reasonably requested by Purchaser or Purchaser’s
counsel.
(b) Purchaser’s Deliveries to
Seller at Closing. On the Closing Date, subject to the terms
and conditions set forth in this Agreement, Purchaser shall make the following
deliveries to Seller:
(1) Payment
by cash, bank or certified check or wire transfer of immediately available funds
to an account designated by Seller of (x) the full Purchase Price, and (y) the
first month’s (or partial month’s) rent due to Seller under Section
9.3;
(2) The
executed certificate required in Section 5.2(e) hereof;
(3) Evidence
reasonably satisfactory to Seller of the authority of Purchaser to execute and
deliver this Agreement;
(4) The duly
executed Ytterbium License, substantially in the form attached hereto as Exhibit D;
and
(5) All other
items or documents reasonably requested by Seller or Seller’s
counsel.
7.4 Passage of Title and Risk of
Loss. Legal and equitable title to, and risk of loss with
respect to, the Acquired Assets shall pass to Purchaser upon the Closing. As of
the Closing, Seller shall have no further obligation to insure the Acquired
Assets.
7.5 Further
Assurances. Seller shall, at any time on or after the Closing
Date, take any and all steps reasonably requested by Purchaser to place
Purchaser in possession and operating control of the Acquired Assets and
Seller’s Xenation Business, and will do, execute, acknowledge, and deliver all
such further acts, deeds, assignments, transfers, conveyances, powers of
attorney, and assurances as may be reasonably required for the more effective
transfer to and reduction to possession of Purchaser, or its successors or
assigns, of any of the Acquired Assets.
Article VIII.
Indemnification
and Hold Harmless
8.1 Survival of Representations;
Limitations. All representations, warranties, covenants, and
obligations in this Agreement shall survive the Closing and the consummation of
the transactions contemplated by this Agreement, subject to the terms of this
Article VIII and other applicable provisions of this Agreement. In no
event shall the aggregate indemnity liability of Seller pursuant to Sections
8.2(a) or 8.2(b) or of Purchaser pursuant to Section 8.3(a) or 8.3(b)
exceed $750,000.00 (inclusive of attorney’s fees and costs). In no
event shall indemnification be payable by Seller pursuant to Sections 8.2(a) or
8.2(b) or by Purchaser pursuant to Sections 8.3(a) or 8.3(b) unless the
aggregate Damages (as defined in Section 8.2) incurred by all of the
Purchaser Indemnitees (as defined in Section 8.2) or the Seller Indemnitees
(as defined in Section 8.3), as applicable, exceed $75,000.00 and then only
for the excess over such amount. In no event shall Seller have any
liability to the Purchaser Indemnitees pursuant to Section 8.2(c) or 8.2(d) or
Purchaser have any liability to the Seller Indemnitees pursuant to Sections
8.3(c) or 8.3(d) unless the aggregate Damages incurred exceed $75,000.00, at
which point Seller or Purchaser, as applicable, shall be liable for all such
Damages, and not just those in excess of such amount. The indemnity liability of
Seller under Section 8.2(e) and the indemnity liability of Purchaser under
Section 8.3(e), respectively, shall not be subject to any of the limitations of
this Section 8.1.
8.2 Indemnification of Purchaser
Indemnified Parties. Seller shall indemnify, defend and hold
harmless Purchaser, its directors, officers, employees, and agents
(collectively, the “Purchaser
Indemnitees”) from and against any and all damages, costs, expenses,
losses, claims, demands, liabilities and/or obligations, including, but not
limited to, reasonable fees and disbursements of counsel (collectively, “Damages”), that are paid,
suffered or incurred by any of them in investigating, preparing, defending,
acknowledging, satisfying or settling any claims or other assertion of liability
asserted against, imposed upon, or incurred or suffered by any of the Purchaser
Indemnitees, directly or indirectly, to the extent the Damages result from,
arise out of, or are caused by any of the following:
(a) Any
breach of any of the representations and warranties of Seller made in this
Agreement;
(b) Any
breach of any covenant, obligation or agreement made by Seller in this
Agreement;
(c) Fraud;
(d) Other
than claims with respect to the Assumed Liabilities, third-party claims,
including any claims made by third parties with respect to Products manufactured
and sold by Seller prior to the Closing; or
(e) All
costs and expenses relating to the non-commissioning, decommissioning, or
closure of the Licensed Premises (as such term is defined in Section 9.3) or the
Premises, except to the extent that such costs and expenses arise out of
Purchaser’s use or occupancy thereof or the breach by Purchaser of any provision
of Section 9.3.
8.3 Indemnification of Seller
Indemnified Parties. Purchaser shall indemnify, defend and
hold harmless Seller and its directors, officers, employees, and agents
(collectively, “Seller
Indemnitees”) from and against any and all Damages that are paid,
suffered or incurred by any of them in investigating, preparing, defending,
acknowledging, satisfying or settling any claim or other assertion of liability
asserted against, imposed upon, or incurred or suffered by any of the Seller
Indemnitees, directly or indirectly, to the extent the Damages result from,
arise out of, or are caused by any of the following:
(a) Any
breach of any of the representations and warranties of Purchaser made in this
Agreement;
(b) Any
breach of any covenant, obligation or agreement made by Purchaser in this
Agreement;
(c) Fraud;
(d) Third-party
claims, including claims with respect to the Assumed Liabilities, and including
any claims made by third parties with respect to Products manufactured and sold
by Purchaser after the Closing; or
(e) The use
or occupancy of the Licensed Premises, and any costs and expense incurred by
Seller relating to the non-commissioning, decommissioning, or closure of the
Premises which arise solely out of Purchaser’s use or occupancy of the Licensed
Premises or out of any breach by Purchaser of any provision of Section
9.3.
8.4 Notice of Indemnification
Claims. Any claim for indemnification must be asserted in a
written notice delivered to the other party. Notwithstanding any
other provision of this Agreement, no claim for indemnification by either party
based on a breach of a representation or warranty made in this Agreement, unless
such breach rises to the level of fraud, in which case these provisions shall
not apply, pursuant to Sections 8.2(a) or 8.3(a), as applicable, or a breach of
any covenant or agreement made in this Agreement pursuant to Sections 8.2(b) or
8.3(b), as applicable, against the other party may be made after the first
anniversary of the Closing Date. Claims for indemnification may be brought
pursuant to Sections 8.2(c), 8.2(d), 8.2(e), 8.3(c), 8.3(d) or 8.3(e), as
applicable, against the other party at any time during the applicable statute of
limitations.
8.5 Matters Involving Third
Parties, including Third Party Claims. If any third party
notifies either party (“Indemnified Party”) with
respect to any matter which may give rise to a claim for indemnification against
the other party (the “Indemnifying Party”) under
this Article VIII, the Indemnified Party shall notify the Indemnifying Party
promptly in writing; provided,
however, that no delay on the part of the Indemnified Party in notifying
the Indemnifying Party shall relieve the Indemnifying Party from any liability
or obligation unless (and then solely to the extent) the Indemnifying Party is
damaged by the delay. In the event the Indemnifying Party notifies
the Indemnified Party within fifteen (15) days after the Indemnified Party has
given notice of the matter that the Indemnifying Party is assuming its defense,
(a) the Indemnifying Party shall defend the Indemnified Party against the
matter with counsel of the Indemnifying Party’s choice reasonably satisfactory
to the Indemnified Party, (b) the Indemnified Party shall cooperate in the
defense of such claim and may retain separate co-counsel at its sole cost and
expense, (c) the Indemnified Party shall not consent to the entry of any
judgment or enter into any settlement with respect to the matter without the
prior written consent of the Indemnifying Party (not to be unreasonably withheld
or delayed), and (d) the Indemnifying Party shall not consent to the entry
of any judgment with respect to the matter, or enter into any settlement which
does not include a provision whereby the plaintiff or claimant in the matter
releases the Indemnified Party from all liability with respect to the claim,
without the prior written consent of the Indemnified Party (not to be
unreasonably withheld or delayed). In the event the Indemnifying
Party fails to notify the Indemnified Party within 15 days after the Indemnified
Party has given notice of the matter that the Indemnifying Party is assuming its
defense, the Indemnified Party may defend against, or enter into any settlement
with respect to, the matter in any manner it may deem appropriate.
8.6 Matters Involving the
Parties. In the event that the Indemnified Party asserts a
claim under this Article VIII (excluding claims covered by Section 8.5)
against the Indemnifying Party, the Indemnified Party shall give written notice
to the Indemnifying Party specifying, in reasonable detail, the basis for the
assertion of the claim and the amount of the claim asserted. Such
assertion of liability shall be deemed accepted by such Indemnifying Party and
the amount of such claim shall be deemed a valid claim, conclusive and binding
on the Indemnifying Party, unless, within twenty (20) days after the Indemnified
Party gives written notice to the Indemnifying Party of such claim, the
Indemnifying Party gives written notice to the Indemnified Party contesting the
basis for, or the amount of, such claim. If such notice is given by
the Indemnifying Party, then the parties shall use commercially reasonable
efforts to reach agreement with respect to such claim. If no such
agreement is reached, the parties may pursue their respective rights and
remedies to the full extent of the law, subject to the terms of this
Agreement.
8.7 Mitigation. The
Indemnified Party shall take all commercially reasonable steps to mitigate all
Damages, including availing itself as reasonably directed by the Indemnifying
Party of any defenses, limitations, rights of contribution, claims against third
parties and other rights at law, and shall provide such evidence and
documentation of the nature and extent of any Damages as may be reasonably
requested by the Indemnifying Party. Each party shall use
commercially reasonable efforts in addressing any Damages that may provide the
basis for an indemnifiable claim (that is, each party shall respond to such
liability in the same manner that it would respond to such liability in the
absence of the indemnification provided for in this Agreement). Any
request for indemnification of specific costs shall include invoices and
supporting documents containing reasonably detailed information about the costs
and/or damages for which indemnification is being sought.
8.8 Exclusive
Remedy. The parties acknowledge that the indemnification
provided in this Article VIII shall be the sole and exclusive remedy after the
Closing Date for monetary damages available to the parties to this Agreement for
breach of any of the terms, conditions, representations or warranties contained
herein; provided,
however, this exclusive remedy for damages does not preclude a party from
(a) bringing an action for specific performance or other available equitable
remedy for a breach of a covenant or agreement contained in this Agreement, or
(b) pursuing remedies under applicable law for fraud.
Article IX.
Other Obligations of the
Parties/Post Closing Obligations
9.1 Tax
Liabilities. Each party hereto shall bear its own tax
liabilities incurred and arising in connection with the consummation of the
transactions contemplated hereunder.
9.2 Restrictive
Covenants.
(a) Covenants Not to Compete or
Solicit Customers. Seller agrees that for a period of seven
(7) years after the Closing Date Seller, its affiliates and
successors-in-interest (the “Seller Parties”), shall not,
(i) directly or indirectly, engage in any business encompassing the selling of
low dose rate brachytherapy sources of any type in competition with the
Products; provided,
however, that nothing in this Agreement or in any of the documents and
agreements executed in connection with this Agreement shall prevent Seller or
any successor-in-interest to Seller, including Best Medical, from engaging in
the Seller’s Ytterbium Business; or (ii) solicit or accept business which is
competitive with Seller’s Xenation Business from any Person that was a customer
of Seller’s Xenation Business or any Person to which Seller’s Xenation Business
actively marketed its Products or services prior to the Closing
Date.
(b) Covenants Not to Solicit
Employees and Contractors. Seller agrees that for a period of
three (3) years after the Closing Date the Seller Parties shall not recruit or
solicit, offer employment to, or employ any person who was an employee or
independent contractor of Seller’s Xenation Business as of the Closing Date. The
foregoing restriction shall not prevent Seller from receiving professional
services from any legal, accounting, banking or similar firm which may be
providing services to Seller’s Xenation Business as of the Closing
Date.
(c) Covenant of
Confidentiality. Seller agrees that for a period of three (3) years after
the Closing Date it shall keep confidential and shall not make use of any
confidential information which constitutes part of the Acquired Assets or the
Intellectual Property Rights. Seller further agrees that it shall keep
confidential and shall not make use of any information which qualifies as a
trade secret and which constitutes part of the Acquired Assets or the
Intellectual Property Rights for so long as such information qualifies as a
trade secret. Notwithstanding the foregoing, the restrictions set forth in this
Section 9.2(c) shall not apply to any information which (a) becomes
generally available to the public through no fault of Seller or its employees,
agents or representatives; (b) is independently developed by Seller after
the Closing Date without benefit of the above-described information (and such
independent development is substantiated in writing), or rightfully received
from another source on a non-confidential basis; or (c) when such
disclosure is required by a court or governmental authority or is otherwise
required by law (including, without limitation, any governmental or regulatory
agency or under the rules of any stock exchange or automatic quotation system on
which Seller’s securities are traded) or is necessary to establish rights under
this Agreement or any agreement contemplated hereby (and the disclosing party
has taken all reasonable efforts to limit the scope of such disclosure and to
protect the confidential nature of the information disclosed).
(d) Remedies and
Enforcement. Notwithstanding Section 10.7 hereof, in the event
of a breach or threatened breach of this Section 9.2 and its subsections,
Purchaser shall be entitled, in addition to all other remedies otherwise
available to Purchaser, to an injunction enjoining and restraining such breach
or threatened or intended breach. Seller consents to the issuance of
an injunction against them in any court of competent jurisdiction without proof
of specific damages. In the event that Purchaser is required to
enforce any part of this Section 9.2 through legal proceedings, Purchaser shall
be entitled to an award of its reasonable costs, expenses, and attorney’s fees
incurred.
9.3 Use of
Premises.
(a) Grant of License.
Effective as of the Closing, Seller hereby grants to Purchaser, upon the terms
and conditions set forth in this Section 9.3, the right to use approximately
1,818 square feet of the Premises, being that area outlined in yellow on the
drawing attached hereto as Exhibit E, or such
other location at the Premises as may be mutually agreed upon by the parties (as
the case may be, the “Licensed
Premises”), for the purpose of conducting Seller’s Xenation Business
after the Closing (the “Purpose”).
(b) Rent. In
consideration of the right to use the Licensed Premises for the Purpose,
Purchaser shall pay to Seller, in advance, rent at the rate of $3,419 per month.
Payment of the first month’s rent shall be due at Closing, and subsequent
payments shall be made prior to the first date of each calendar month thereafter
during the term of this license. Rent for any partial calendar month shall be
prorated. The monthly rental rate of $3,419 per month is inclusive of
full reimbursement to Seller of the cost of all utilities used by Purchaser on
the Licensed Premises, including without limitation electricity.
(c) Termination. The
license granted this Section 9.3 shall terminate upon the earliest to occur of
(i) thirty (30) days following notice from Purchaser to Seller of Purchaser’s
intent to terminate such license, (ii) the date that Purchaser enters into a new
mutually acceptable lease renting the Licensed Premises directly from the lessor
of the Premises, (iii) immediately upon notice from Seller to Purchaser upon
Purchaser’s breach of any provision of this Section 9.3 (including any failure
of Purchaser to pay any installment of rent when on or before the date such
installment is due), or (iv) upon the expiration of Seller’s lease for the
Premises (the “Master
Lease”) on December 31, 2008 or the earlier termination of the Master
Lease.
(d) Purchaser’s
Obligations. Purchaser shall not use the Licensed Premises for
any purpose or conduct other than the Purpose. Purchaser shall have no right to
use or occupy any portion of the Premises other than the License Premises; provided, however, that
Purchaser shall have reasonable access to hallways and other common areas
reasonably necessary to access the Licensed Premises. Purchaser shall not do or
permit to be done any act or thing upon the Licensed Premises or in the Premises
which would violate the Master Lease, which would invalidate or be in conflict
with any fire insurance policies or increase the rate for fire insurance
covering the Premises, or which could subject Seller to any liability or
responsibility for injury to any person or persons or to property. Purchaser
shall at all times abide by and adhere to the restrictions imposed upon Seller
under the Master Lease and all policies and procedures of Seller generally
applicable to the Premises and to employees and visitors to the
Premises
(e) Insurance. Purchaser
shall at all times during the term of this license carry, at its own expense,
one or more policies of general public liability and property damage insurance,
issued by one or more insurance companies acceptable to Seller, with minimum
coverages not less than the coverages which Seller is required to carry under
the Master Lease. The insurance policy or policies shall protect Seller, naming
Seller as an additional insured, and shall provide that they may not be
cancelled on less than thirty (30) days prior written notice to Seller.
Purchaser shall furnish Seller with Certificates of Insurance evidencing all
required coverage. Should Purchaser fail to carry such insurance and
furnish Seller with such Certificates of Insurance after a request to do so,
Seller may, at its sole election, either (i) terminate the license granted by
this Section 9.3 upon notice to Purchaser or (ii) have the right to obtain such
insurance and collect the cost thereof from Purchaser as additional
rent.
(f) Loss or Damage to
Property. All personal property belonging to Purchaser or to any other
Person located in or about the Licensed Premises (including without limitation
the Acquired Assets), shall be there at the sole risk of Purchaser or such other
Person, and neither Seller nor Seller’s agents or employees shall be liable for
the theft or misappropriation thereof, nor for any damage or injury thereto, nor
for the death or injury of any other persons or damage to property caused by
water, snow, frost, steam, heat, cold, dampness, falling plaster, explosions,
sewers or sewerage, gas, odors, noise, the bursting or leaking of pipes,
plumbing, electrical wiring, and equipment and fixtures of all kinds, or by any
act or neglect of Seller or its agents or employees, or of any other person or
caused in any other manner whatsoever.
(g) No Assignment or
Re-License. Notwithstanding any provision of this Agreement to
the contrary, Purchaser shall not have any right to assign the license or any of
the rights granted by this Section 9.3, or to re-license any portion of the
Licensed Premises, to any Person without the prior written approval of Seller.
Any such assignment or re-license shall be void and shall have the effect of
terminating the license granted hereby.
(h) Quiet
Enjoyment. Purchaser shall peaceably and quietly occupy and
enjoy the Licensed Premises for the term herein stated without hindrance or
interruption by Seller or any other Person or Persons lawfully or equitably
claiming by, through or under Seller.
(i) Rights Reserved by
Seller. Seller shall have the right during the term of the
license granted by this Section 9.3 to enter the Licensed Premises upon
reasonable notice.
(j) Condition of Licensed
Premises. Neither Purchaser nor Purchaser’s agents have made
any representations or promises with respect to the physical condition of the
Licensed Premises or any matter or thing affecting or relating to the Licensed
Premises. Purchaser agrees to take the Licensed Premises “as is” and
acknowledges that the taking of possession of the Licensed Premises by Purchaser
shall be conclusive evidence that the Licensed Premises were in a condition
satisfactory to Purchaser at the time such possession was so taken.
Notwithstanding the foregoing, Seller agrees to install a wire door/wall at the
entry to portion of the Licensed Premises in which the Xenation machines are
currently located, and Purchaser shall have the right, at its sole expense, to
install locks on such door and on any other door(s) opening directly onto the
Licensed Premises. Purchaser shall not affix any signs or advertising
to the Premises but may affix signs to the Licensed Premises and the Acquired
Assets. Purchaser shall make no other changes in or to the Licensed
Premises without the prior written consent of Seller. Purchaser shall
not install in or attach to the Licensed Premises any trade fixtures, equipment,
leasehold improvements or other property (other than the Acquired Assets)
without Seller’s prior written consent. Purchaser agrees to repair at
Purchaser’s sole expense any damage to the Licensed Premises or Premises caused
by its use or occupancy of the Licensed Premises. Any leasehold improvements to
which Seller may, in its sole discretion, agree shall be made at the sole
expense of Purchaser.
(k) Restoration of the Licensed
Premises; Removal of Property. Upon the expiration or earlier termination
of the license granted by this Section 9.3, Purchaser shall, at its sole cost
and expense, and in compliance with all applicable laws, (i) cease operations in
the Licensed Premises and remove all of its property and assets from the
Premises, and (ii) return the Licensed Premises to the condition existing
immediately prior to the Closing Date, normal wear and tear excepted. Purchaser
shall not be responsible for any cost or expense relating to the
non-commissioning, decommissioning, or closure of the Premises except as set
forth in the preceding sentence and except for costs and expenses arising out of
Purchaser’s use or occupancy of the Licensed Premises or out of the breach by
Purchaser of any provision of this Section 9.3.
9.4
|
Provision of
Services.
|
(a) Initial Services.
Effective as of the Closing, Seller shall provide to Purchaser the services (the
“Initial Services”) of
up to three employees to work full-time in the Licensed Premises, under the
direction of Purchaser, on the supervision, documentation of equipment and
processes, and operation of the Acquired Assets for the purpose of producing
Products and / or transferring the Acquired Assets to a new location off of the
Premises specified by Purchaser. Seller shall provide the services of Xx.
Xxxxxxx X. Xxxxxxx and Xx. Xxxxxx Xxxxx if they are employed by Seller. Subject
to the payment of the compensation required by Section 9.4(b), Seller shall
provide the Initial Services through the earlier of (i) December 31, 2008 or
(ii) the termination of the Initial Services pursuant to Section 9.4(c). The
parties agree that the goal of the Initial Services will be to assist Purchaser
in maximizing core production while the Xenation machines remain operational in
the Licensed Premises, to document, disassemble and package the Acquired Assets
for transfer to a new location, as specified Purchaser, and to assist Purchaser
in the assembly, commissioning, validation and production of cores at the new
location.
(b) Compensation. In
consideration of the Initial Services, Purchaser shall pay to Seller
compensation equal to the sum of (i) Seller’s cost for direct labor; (ii) a
fringe benefit assessment equal to 35% of such direct labor costs; (iii)
Seller’s direct costs of materials; (iv) the cost of travel incurred by Seller
or its employees in performing the Initial Services (other than travel between
the Licensed Premises and the homes of Seller's employees); (v) a general and
administrative assessment equal to 32% of the total of the amounts specified in
clauses (i) through (iv) of this Section 9.4(b); and (vi) a further fee equal to
10% of the total of the amounts specified in clauses (i) through (v) of this
Section 9.4(b) (clauses (i) through (vi of this Section 9.4(b), collectively,
the “Compensation
Factors”). For purposes of illustration only, the following is an example
of the application of the Compensation Factors and the calculation of
compensation due to Seller pursuant to this Section 9.4:
Direct
labor costs in a given month:
Fringe
benefits for such month (35%):
Direct
material costs in such month:
Travel
costs in such month:
Subtotal:
General
and administrative assessment (32%):
Subtotal:
Fee
(10%):
Total compensation for such
month:
|
$10,000
3,500
500
1,500
$15,500
4,960
$20,460
2,046
$22,506
|
Seller shall invoice Purchaser for
such compensation monthly in arrears. Seller's invoice shall be
accompanied by time records documenting the labor for the month and receipts or
invoices for material costs and travel incurred during the
month. Payment shall be due within fifteen (15) days of receipt of an
electronic invoice, payable by wire transfer of immediately available funds to
an account designated by Seller.
(c) Termination. Purchaser
may terminate Seller’s obligation to provide the Initial Services at any time
upon thirty (30) days prior notice. Upon notice of termination, Seller shall
invoice Purchaser for all accrued expenses, and Seller shall provide a final
invoice for all other compensation that may be due to Seller pursuant to Section
9.4(b) subsequent to the effective date of such termination. In addition, upon
notice of termination, Seller shall invoice Purchaser for any and all
compensation, accrued vacation, bonuses and other amounts which may be due to
Xxxxxxx Xxxxxxx under the Hollows Employment Agreement, including all severance
payments, termination payments and other compensation which may be due to Mr.
Hollows upon the termination of the Hollows Employment Agreement, with the
Compensation Factors applied to such amounts. Seller shall pay all
such invoices within fifteen (15) days of receipt, by wire transfer of
immediately available funds to an account designated by Seller.
(d) Extension of
Services. If requested by Purchaser upon the termination of
the Initial Services, Seller and Purchaser shall enter into a consulting
agreement, upon terms and conditions mutually agreeable to the parties, pursuant
to which Seller will provide the necessary expertise to continue the transfer of
data and documentation relating to the equipment, processes and the operation of
the Xenation machines, as applicable, for a period of up to one year after the
Closing.
9.5 Ytterbium
License. Effective on the Closing Date, Purchaser shall grant
to Seller a perpetual, exclusive worldwide, royalty-free license, in the form
attached as Exhibit
D (the “Ytterbium
License”) to use and practice, solely in Seller’s Ytterbium Business of
(i) Patent Number 6,060, (ii) any foreign counterparts of the foregoing, and
(iii) any reissue, continuation, divisional or continuation-in-part applications
and such patent and patent application as may issues thereon, and including the
right to claim priority under any applicable statute, treaty or convention based
on said applications. The Ytterbium License shall be fully transferable to any
purchaser of Seller’s Ytterbium Business (including without limitation, Best
Medical) and shall include the right to grant sublicenses.
9.6 Release. Effective
as of the Closing, and upon payment of the Purchase Price, Seller, for itself
and for each of its affiliates, shareholders, directors, officers and employees,
hereby releases any and all claims and causes of actions of any kind or nature
whatsoever, known or unknown, at law, in equity, or otherwise, Seller may have
against or with respect to the Acquired Assets, and Seller hereby agrees not to
assert such claims or causes of action. Seller represents and warrants that it
has not assigned any of such claims or causes of action to any Person.
Notwithstanding the foregoing, however, Seller does not release any claims it
may have against Purchaser arising after the Closing under this Agreement or
under any license, agreement, certificate or other instrument executed by
Purchaser in connection with the Closing.
9.7 No Challenges of
Patents. Seller covenants and agrees that it will not challenge the
validity or enforceability of any patent or patent application included within
the Acquired Assets (or the 6,183 Patent licensed under the Xenation License) in
any future litigation between the parties involving this Agreement, the Acquired
Assets, the Product, the Xenation License or the Ytterbium License. Seller
specifically acknowledges that its agreement not to challenge the validity or
enforceability is absolute and in all respects and precludes litigation of the
validity or enforceability issue in any litigation between the
parties.
Article X.
General Provisions
General Provisions
10.1 Incorporation of
Recitations. The recitations set forth on page 1 of this
Agreement are incorporated as part of this Agreement and made a part hereof, as
if fully set forth herein.
10.2 Survival of Representations
and Warranties/Post-Closing Obligations/ Confidentiality
Obligations. All of the representations and warranties of the
parties contained in this Agreement, indemnification obligations set forth in
Article VIII, the post-closing obligations set forth in Article IX, and the
General Provisions set forth in this Article X shall survive the Closing, unless
otherwise prescribed differently in the applicable section, for a period of one
year after Closing and shall not be affected by any investigation, verification
or approval by any party hereto or by anyone on behalf of any such
parties.
10.3 Notice. Any
notice required or permitted to be given under this Agreement shall be given in
writing and sent by international courier to the address of the party set forth
herein, unless that party shall give notice of a different
address. The date of notice shall be the date such notice is
delivered to such courier, properly addressed and delivery charges
prepaid. Any party may change its notice address by notice to the
other party. Any notices under this Agreement shall be delivered
to:
If to
Purchaser:
Xxxxxx
Xxxx, Chief Operating Officer
INTERNATIONAL
BRACHYTHERAPY S.A.
Zone
Industrielle C
7180
Seneffe
Belgium
With copies (which shall not
constitute notice) to: Xxxxx
Xxxxx
X.X. Xxx
000
Xxxxxxxxxx,
XX 00000-0000
X.X.X.
-and-
Xxxxxx X.
XxXxxx
Xxxxxx,
Xxxxxx & Xxxx, P.C.
0000
Xxxxxxxxx Xxxx, X.X.
Xxxxx
0000, The Xxxxx Xxxxxxxx
Xxxxxxx,
Xxxxxxx 00000
X.X.X.
If to Seller:
Xxxxx
Xxxx, CFO
IMPLANT
SCIENCES CORPORATION
000
Xxxxxxx Xxxx
Xxxxxxxxx,
XX 00000
X.X.X.
With
copies (which shall not
constitute notice) to:
Xxxx
Xxxxxx
Xxxxx
Xxxxxx-Xxxxx Xxxxxxxxx, P.C.
0000
Xxxxxxx Xxxx, Xxxxx #000
Xxxxxxx,
XX 00000
U.S.A.
Notwithstanding
the foregoing, no notice shall be deemed ineffective for failure to comply with
the foregoing if either (i) the party for whom the notice was intended admits to
its receipt, or (ii) actual receipt is otherwise proven by competent
evidence.
10.4 Publicity. All
public disclosures relating to the transactions contemplated by this Agreement
and the method of its release shall be reviewed and approved by both parties
prior to such disclosure, such review not to be unreasonably delayed and such
approval not to be unreasonably withheld; provided, however, that
Seller and Purchaser shall each be free to make such public disclosures of the
existence and/or terms of this Agreement and the transactions contemplated
hereby as may be required by law or the rules of any securities
exchange..
10.5 Time of the
Essence. With regard to all dates and time periods set forth
or referred to in this Agreement, time is of the essence.
10.6 Waiver of
Breach. Any waiver by any party hereto of a breach of any of
the provisions of this Agreement by any other party shall not operate or be
construed as a waiver by the other parties of any of the rights and privileges
of said parties hereunder or of any subsequent breach.
10.7 Controlling
Law/Construction. This Agreement shall be interpreted,
administered and enforced in accordance with the laws of the Commonwealth of
Massachusetts (exclusive of its conflict of laws rules). The parties, having
been represented by counsel during the negotiation and execution of this
Agreement, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities are to be construed against the drafting
party.
10.8 Arbitration. Except
for the right of Purchaser to pursue injunctive relief for violations of the
Restrictive Covenants set forth in Article IX, the parties agree that any claim
or cause of action arising out of this Agreement shall be decided by binding
arbitration conducted in Boston, Massachusetts under the expedited procedures of
the Judicial Arbitration and Mediation Service. The prevailing party shall be
entitled to an award of reasonable attorney’s fees, administrative costs and
expenses incurred in any such arbitration proceeding; provided, however, that the
arbitrators shall not have the authority to award exemplary, punitive,
incidental, indirect or consequential damages.
10.9 Assignability. This
Agreement shall be binding upon and inure to the benefit of the Parties named
herein and their respective successors and assigns. Purchaser shall have the
right to assign its rights and obligations under this Agreement to a subsidiary,
affiliate or related Person, provided, however, that no
such assignment shall relieve Purchaser of its obligations hereunder. Seller
shall have the right to assign its rights and obligations under the Ytterbium
License as provided in Section 9.5, and Purchaser hereby consents to such
assignment.
10.10 Severability. In
the event that any provision of this Agreement or the application thereof
becomes or is declared by any tribunal of competent jurisdiction to be illegal,
void or unenforceable, the remainder of this Agreement will continue in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party.
10.11 Further
Acts. Seller, at its sole cost and expense, shall, at any time
and from time to time after the Closing Date, upon request of Purchaser, do,
execute, acknowledge and deliver all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney and assurances as may reasonably be
required to convey, transfer to, and vest in Purchaser, and protect
the right, title, interest in, and enjoyment of, the assets of Seller intended
to be assigned, transferred, and conveyed pursuant to this
Agreement.
10.12 Counterparts and Facsimile
Signatures. This Agreement may be executed in one or
more separate counterparts, each of which, when so executed, shall be deemed to
be an original. Such counterparts shall, together, constitute and
shall be one and the same instrument. If executed by counterpart, no
party shall become bound by this Agreement until all parties hereto have affixed
their respective signatures hereto. Any signed copy of this
Agreement, or copy or counterpart thereof, delivered by facsimile transmission,
shall for all purposes be treated as if it were delivered containing an original
manual signature of the party whose signature appears in the facsimile, and
shall be binding upon such party in the same manner as though an originally
signed copy had been delivered.
10.13 No Third-Party
Beneficiaries. Except with respect to the parties identified
in Article VIII, and except for any assignee(s) or sublicense(s) of the
Ytterbium (including Best Medical), this Agreement shall not confer any rights
or remedies upon any Person other than the parties and their respective
successors and permitted assigns.
10.14 Entire
Agreement. This Agreement (including the documents referred to
herein and attached hereto) constitutes the entire agreement between the parties
and supersedes any prior understandings, agreements or representations between
the parties, oral or written, to the extent they relate in any way to the
subject matter hereof.
10.15 Headings. The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.
10.16 Exhibits and
Schedules. Each exhibit and schedule referred to in this
Agreement, each attachment to any exhibit or schedule, and each other attachment
to this Agreement is hereby incorporated by reference into this Agreement and is
made a part of this Agreement as if set out in full in the first place that
reference is made to it..
10.17 Amendments;
Waivers. No amendment or waiver of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Seller and Purchaser.
10.18 Payment of Fees and
Expenses. Each party to this Agreement shall be responsible
for, and shall pay, all of its own fees and expenses, including those of its
legal counsel, accountants, advisors, investment bankers and brokers, incurred
in the negotiation, preparation and consummation of the Agreement and the
transactions contemplated herein.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF, the parties have
set their hands and seals upon this Agreement as of the date indicated
below.
IMPLANT SCIENCES
CORPORATION
By: /s/ Xxxxxxx X.
Xxxxxx (Seal)
Date June
27, 2008
Xxxxxxx
X. Xxxxxx, Chief Executive Officer
INTERNATIONAL BRACHYTHERAPY
S.A
By: /s/ Xxxxxxxx
Xxxxxxx (Seal)
Date June
27,
2008 Xxxxxxxx
Xxxxxxx, Chief Executive Officer
By: /s/ Xxxx X. Xxxxxx (Seal)
Xxxx
X. Xxxxxx, Ph.D., Director