Exhibit 10.40 ASSET PURCHASE OPTION AGREEMENT BY AND BETWEEN PROTEIN POLYMER TECHNOLOGIES, INC.
Exhibit 10.40
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ASSET PURCHASE OPTION AGREEMENT
BY AND BETWEEN
PROTEIN POLYMER TECHNOLOGIES, INC.
and
SURGICA CORPORATION
November 23, 2005
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EXECUTION COPY
ASSET PURCHASE OPTION AGREEMENT
THIS ASSET PURCHASE OPTION AGREEMENT (this "Agreement") is made and
entered into as of November 23, 2005 by and between Surgica Corporation, a
Delaware corporation (the "Company") and Protein Polymer Technologies, Inc., a
Delaware corporation (the "Optionee"). Unless otherwise defined herein, all
capitalized terms used herein shall have the respective meanings ascribed
thereto in the Purchase Agreement (defined below).
R E C I T A L S
WHEREAS, the Company and the Optionee propose to enter into that
certain License Agreement and that certain Supply and Services Agreement,
attached hereto as Exhibit A and Exhibit B, respectively (collectively, the
"License Agreement"), pursuant to which the Company, among other things, would
license to Optionee certain intellectual property (including patent and patent
applications), as well as marketing and distribution rights;
WHEREAS, in order to induce the Optionee to enter into the License
Agreement and to advance funds to the Company, pursuant to this Agreement and
subject to the terms herein, the Optionee shall have the right to purchase from
the Company substantially all of the assets of the Company now existing or
hereafter acquired through the date of the exercise of the Option (defined
below) (the "Assets") for the purchase price described in Section 1.4 of this
Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements herein set forth and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, each of the parties
hereto (individually, a "Party", collectively, the "Parties") hereby agree as
follows:
ARTICLE I
OPTION TO PURCHASE
Section 1.1. Option to Purchase Assets.
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Subject to the satisfaction or waiver of the conditions set forth in
Article V hereof, the Company hereby grants to Optionee the option to purchase
substantially all of the Assets (the "Option") during the Option Period (as
defined in Section 1.2 of this Agreement), as the same may be extended pursuant
to the terms hereof, or such later date as the Parties shall mutually agree
upon. The date on which the Option becomes effective is referred to herein as
the "Option Effective Date."
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Section 1.2. The Option Period.
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The "Option Period" shall commence on the date hereof and extend until
One (1) year from the Effective Date, provided that, upon written notice from
Optionee to the Company not more than 60 days and not less than 30 days prior to
such date, the Option Period may be extended until Two (2) years from the
Effective Date, in the sole and absolute discretion of Optionee.
Section 1.3. Exercise of Option.
--------------------------------
(a) During the Option Period, Optionee may exercise the Option only
upon written notice (the "Option Notice") to the Company, in accordance with
Section 7.7 herein.
(b) Within 10 days after the Optionee delivers the Option Notice, the
Optionee, Optionee's wholly-owned subsidiary and the Company, must enter into a
definitive asset purchase agreement in substantially the form attached hereto as
Exhibit C (the "Purchase Agreement").
Section 1.4. Option Payment.
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The consideration which shall be paid by Optionee to the Company for
the Assets shall be equal to that set forth in Section 2.6 of the Purchase
Agreement.
Section 1.5. Option Closing.
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The Option shall become effective (the "Option Closing") on the Option
Effective Date, which shall be one Business Day after satisfaction or waiver of
all the conditions set forth in Article V hereof, but in no event later than
December 17, 2005. At the Option Closing, the parties shall enter into the
License Agreement and Supply and Services Agreement and shall execute and
deliver such other instruments and documents contemplated by Article V hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Optionee for its benefit
that the statements contained in this Article II are true and correct, subject
to such exceptions as are specifically disclosed in writing in the Disclosure
Schedule provided by the Company to the Optionee (the "Disclosure Schedule").
Section 2.1. Organization, Qualification and Corporate Power.
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The Company is a corporation duly organized, validly existing and in
corporate good standing under the laws of the State of Delaware. The Company is
duly qualified to conduct business and is in corporate good standing under the
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laws of each jurisdiction in which the nature of its businesses or the ownership
or leasing of its properties requires such qualification, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect on the Company. The Company has the corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it. The Company has furnished or made available to the
Optionee true and complete copies of its Certificate of Incorporation and
Bylaws, each as amended and/or restated and as in effect on the date hereof
(hereinafter the "Charter" and "Bylaws," respectively). The Company is not in
default under or in violation of any provision of its Charter or Bylaws, each as
amended to date.
Section 2.2. Representations and Warranties in Purchase Agreement.
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The representations and warranties regarding the Company set forth in
Article III of the Purchase Agreement are true and correct as of the date
hereof.
Section 2.3. Authorization of Transaction.
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Subject to the Requisite Stockholder Approval (as defined below) of
this Agreement, the Company has the corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder. The execution
and delivery of this Agreement and, subject to the adoption of this Agreement,
the proper notice or waiver thereof to the Company's preferred stockholders as
provided in the Charter and Bylaws of the Company and the approval of the
transaction by a majority of the votes represented by the outstanding shares of
stock entitled to vote on this Agreement, which is a majority of the Company's
common stock and preferred stock voting as a single class, with the preferred
voting on an "as converted" basis, voting in accordance with the corporate laws
of the State of Delaware and the Charter and Bylaws of the Company (the
"Requisite Stockholder Approval"), the performance by the Company of this
Agreement and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action
on the part of the Company. This Agreement has been duly and validly executed
and delivered by the Company and, assuming the due authorization, execution and
delivery by the Optionee, constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws affecting the enforcement of
creditors' rights generally, and except that the availability of equitable
remedies, including specific performance, is subject to the discretion of the
court before which any proceeding therefor may be brought.
Section 2.4. Noncontravention.
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Subject to receipt of the Requisite Stockholder Approval and the
consent of AngioDynamics, Inc., substantially in the form as set forth on
Exhibit D, attached hereto, except as set forth on Schedule 2.4, attached
hereto, neither the execution and delivery of this Agreement by the Company, nor
the consummation by the Company of the transactions contemplated hereby, will:
(a) conflict with or violate any provision of the Charter or Bylaws of the
Company; (b) require on the part of the Company any filing with, or any permit,
authorization, consent or approval of, any Governmental Body; (c) conflict with,
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result in a breach of, constitute (with or without due notice or lapse of time
or both) a default under, result in the acceleration of, create in any party the
right to accelerate, terminate, modify or cancel, or require any notice, consent
or waiver under, any contract, lease, sublease, license, sublicense, franchise,
permit, indenture, agreement or mortgage for borrowed money, instrument of
indebtedness, Lien or other arrangement to which the Company is a party or by
which the Company is bound or to which any of its Assets is subject; (d) result
in the imposition of any Lien upon any Assets of the Company; or (e) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company, any of its properties or Assets.
Section 2.5. Subsidiaries.
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The Company does not have any direct or indirect subsidiaries or any
other equity interest in any other firm, corporation, partnership, joint
venture, association or other business organization.
Section 2.6. Absence of Certain Changes.
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Since June 30, 2005, the Company has conducted its business in the
Ordinary Course of Business and there has not occurred any change, event or
condition (whether or not covered by insurance) that has resulted in, or might
reasonably be expected to result in any material adverse change in the Assets,
business, financial condition or results of operations of the Company.
Section 2.7. Powers of Attorney.
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There are no outstanding powers of attorney executed on behalf of the
Company.
Section 2.8. Fees.
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Except as disclosed in Schedule 2.8, the Company has no liability or
obligation to pay any fees or commissions to any broker, investment banking
firm, finder or agent with respect to the transactions contemplated by this
Agreement.
Section 2.9. Books and Records.
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The minute books and other similar records of the Company contain true
and complete records of all material actions taken at any meetings of the
stockholders of the Company, Board of Directors or any committee thereof and of
all written consents executed in lieu of the holding of any such meeting.
Section 2.10. Company Action.
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The Board of Directors of the Company, at a meeting duly called and
held, has by the unanimous vote of all directors (i) determined that the
transaction contemplated herein is fair and in the best interests of the Company
and its stockholders, (ii) adopted this Agreement in accordance with the
provisions of the corporate laws of the State of Delaware, and (iii) directed
that this Agreement be submitted to the stockholders of the Company for their
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adoption and approval and resolved to recommend that the stockholders of the
Company vote in favor of the adoption of this Agreement.
Section 2.11. Disclosure.
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No representation or warranty by the Company contained in this
Agreement, and no statement contained in the Disclosure Schedule or any other
document, certificate or other instrument delivered to or to be delivered by or
on behalf of the Company pursuant to this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary, in
light of the circumstances under which it was made, in order to make the
statements herein not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE OPTIONEE
The Optionee represents and warrants to the Company as follows:
Section 3.1. Organization.
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The Optionee is a corporation duly organized, validly existing and in
good standing under the laws of the state of Delaware. The Optionee is duly
qualified to conduct business and is in corporate good standing under the laws
of each jurisdiction in which the nature of its businesses or the ownership or
leasing of its properties requires such qualification, except where the failure
to be so qualified or in good standing would not have a Material Adverse Effect
on it.
Section 3.2. Authorization of Transaction.
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The Optionee has all corporate requisite power and authority to execute
and deliver this Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement and the performance of
this Agreement and the consummation of the transactions contemplated hereby and
thereby by the Optionee have been duly and validly authorized by all necessary
corporate action on the part of the Optionee. This Agreement has been duly and
validly executed and delivered by the Optionee and, assuming the due
authorization, execution and delivery by the Company, constitutes a valid and
binding obligation of the Optionee, enforceable against it in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally, and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
Section 3.3. Noncontravention.
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Neither the execution and delivery of this Agreement, nor the
consummation by the Optionee of the transactions contemplated hereby, will (a)
conflict or violate any provision of the Certificate of Incorporation or Bylaws
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of the Optionee, (b) conflict with, result in breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of, create in any party any right to accelerate, terminate, modify
or cancel, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness, security interest or
other arrangement to which the Optionee is a party or by which either is bound
or to which any of their assets are subject, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Optionee or
any of its properties or assets.
Section 3.4. Company Action.
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The Board of Directors of the Optionee, at a meeting duly called and
held, have (i) determined that the transaction contemplated herein is fair and
in the best interests of the Optionee and each of its stockholders, and (ii)
adopted this Agreement in accordance with the provisions of the Delaware General
Corporation Law.
Section 3.5. Brokers' Fees.
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The Optionee has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.
Section 3.6. Financial Reports and SEC Documents.
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The Optionee's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 2004, as amended by Form 10-KSB/A filed on May 18, 2005, and all
other reports, definitive proxy statements or information statements filed or to
be filed by it subsequent to December 31, 2004 under Section 13(a), 13(c), 14 or
15(d) of the Exchange Act in the form filed or to be filed (collectively, "SEC
Documents") with the SEC, as of the date filed or to be filed, (A) complied or
will comply in all material respects as to form with the applicable requirements
under the Exchange Act and (B) as of the time filed, or to be filed, did not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; and each of the balance sheets contained in or incorporated by
reference into any such SEC Document (including the related notes and schedules
thereto) fairly presents, or will fairly present, the financial position of
Optionee and its subsidiaries, if any, as of its date, and each of the
statements of income and changes in shareholders' equity and cash flows or
equivalent statements in such SEC Documents (including any related notes and
schedules thereto) fairly presents, or will fairly present, the results of
operations, changes in shareholders' equity and changes in cash flows, as the
case may be, of Optionee and its subsidiaries, if any, for the periods to which
they relate, in each case in accordance with U.S. GAAP consistently applied
during the periods involved, except in each case as may be noted therein,
subject to the absence of footnotes and to normal year-end adjustments in the
case of unaudited statements.
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ARTICLE IV
COVENANTS BY THE OPTIONEE AND THE COMPANY
The Optionee and the Company covenant as follows:
Section 4.1. Satisfaction of Conditions.
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Each of the Parties shall use its commercially reasonable efforts to
take all actions and to do all things necessary, proper or advisable to satisfy
the conditions set forth in Article V of this Agreement.
Section 4.2. Notices and Consents.
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Each of the Optionee and the Company shall use their commercially
reasonable efforts to obtain, at its expense, all such waivers, permits,
consents, approvals or other authorizations from third parties and Governmental
Bodies, and to effect all such registrations, filings and notices with or to
third parties and Governmental Bodies, as may be required by or with respect to
the Optionee or the Company, respectively, in connection with the transactions
contemplated by this Agreement.
Section 4.3. Operation of Business.
-----------------------------------
Except as contemplated by this Agreement, during the period from the
date of this Agreement up until the Closing Date (as defined in the Purchase
Agreement), the Company shall conduct its operations in the Ordinary Course of
Business and in compliance with all applicable laws and regulations and, to the
extent consistent therewith, use all reasonable efforts to preserve intact its
current business organization, keep its physical Assets in good working
condition, keep available the services of its current officers and employees and
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing business shall not be
impaired in any material respect. Without limiting the generality of the
foregoing, prior to the Closing Date, the Company shall not, without the written
consent of the Optionee:
(a) issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) or authorize the issuance, sale
or delivery of, or redeem or repurchase, any stock of any class or any other
securities or any rights, warrants or options to acquire any such stock or other
securities (except pursuant to the conversion or exercise of convertible
securities, options or warrants outstanding on the date hereof), or amend any of
the terms of any such convertible securities, options or warrants;
(b) split, combine or reclassify any shares of its capital stock;
declare, set aside or pay any dividend, special bonus or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock;
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(c) create, incur or assume any debt not currently outstanding
(including obligations in respect of capital leases); assume, guarantee, endorse
or otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other person or entity; or make any loans,
advances or capital contributions to, or investments in, or increase the amount
of any existing loan to any other person or entity;
(d) enter into, adopt or amend any Plans or any employment or severance
agreement or arrangement or increase in any manner the compensation or fringe
benefits of, or modify the employment terms of, its directors, officers or
employees, generally or individually, or pay any benefit not required by the
terms in effect on the date hereof of any existing Plan;
(e) acquire, sell, transfer, lease, sublease, license, abandon,
encumber, transfer or otherwise dispose of any properties or assets, real,
personal or mixed (including leasehold interests and intangible property)
related to the Operations, except in the Ordinary Course of Business
(f) amend and/or restate its Charter or Bylaws;
(g) change in any material respect its accounting methods, principles
or practices, or make any change in depreciation or amortization policies or
lives adopted by it except insofar as may be required by a generally applicable
change in GAAP or as required by Optionee;
(h) discharge or satisfy any Lien or pay any obligation or liability
other than in the Ordinary Course of Business;
(i) settle, compromise, materially modify or amend, waive, terminate,
cancel, release or assign any rights or Claims concerning, affecting or relating
to any Contract relating to the Operations (including, without limitation, any
Assigned Agreement), or otherwise relating to the Operations;
(j) mortgage or pledge any of its property or Assets or subject any
such Assets to any Lien;
(k) sell, assign, license, grant or transfer any rights under, or enter
into any settlement regarding the breach or infringement of, any Intellectual
Property, or modify any existing rights with respect thereto;
(l) enter into, amend, terminate, take or omit to take any action that
would constitute a violation of or default under, or waive, release or assign
any rights under, any contract or agreement;
(m) enter into, amend, modify or consent to the termination of any
Assigned Agreement;
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(n) make or commit to make any capital expenditure in excess of Five
Thousand Dollars ($5,000) per item;
(o) take any action or fail to take any action permitted by this
Agreement with the knowledge that such action or failure to take action would
result in (i) any of the representations and warranties of the Company set forth
in this Agreement or the Purchase Agreement becoming untrue or (ii) any of the
conditions to the transaction set forth in Article V, not being satisfied;
(p) make any material charitable contribution;
(q) engage or terminate any consultant;
(r) enter into, materially amend or (except in conjunction with the
completion of the term thereof) terminate any Contract or transaction with any
director or officer, stockholder or Affiliate of Seller (or with any relative,
beneficiary, spouse or Affiliate of such Person) relating to the Operations;
(s) terminate, discontinue, close or dispose of any facility or other
business operation, or lay off any employees or implement any early retirement,
separation or program providing early retirement window benefits or announce or
plan any such action or program for the future;
(t) allow any Permit that was issued or relates to the Operations to
lapse or terminate or fail to renew any insurance policy or Permit that is
scheduled to terminate or expire within forty five (45) calendar days of the
Effective Date, except to the extent that such failure would not be reasonably
expected to cause a Material Adverse Effect on the ability of the Company to own
and operate the Operations as now conducted;
(u) enter into any contract, other than in the Ordinary Course of
Business and as provided to the Optionee, or any amendment or termination of, or
default under, any contract that is or was material to the Operations or
Seller's rights thereunder;
(v) commence any litigation other than (i) for the routine collection
of bills or (ii) in such cases where the Company in good faith determines that
failure to commence suit would result in the material impairment of a valuable
aspect of the Company's business, provided that Company consults with the
Optionee prior to the filing of such a suit;
(w) make or change any material election in respect of Taxes, adopt or
change any accounting method in respect of Taxes, file any material return or
any amendment to a material return, enter into any closing agreement, settle any
claim or assessment in respect of Taxes (except settlements effected solely
through payment of immaterial sums of money), or consent to any extension or
waiver of the limitation period applicable to any claim or assessment in respect
of Taxes;
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(x) write down or write up (or fail to write down or write up in
accordance with U.S. GAAP consistent with past practice) the value of any
receivables or revalue any of the Company's assets other than in the Ordinary
Course of Business and in accordance with U.S. GAAP;
(y) issue any purchase orders or otherwise agreed to make any purchases
involving exchanges in value in excess of Two Thousand Five Hundred Dollars and
Zero Cents ($2,500.00) individually or Five Thousand Dollars and Zero Cents
($5,000.00) in the aggregate, except in the Ordinary Course of Business;
(z) merge with, enter into a consolidation with or acquire an interest
of 5% or more in any Person or acquire a substantial portion of the assets or
business of any Person or any division or line of business thereof engaged in a
business relating to the Operations, or otherwise acquire any material assets
relating to the Operations except in the Ordinary Course of Business;
(aa) (i) grant, announce, or make any change in the rate of
compensation, wages, salaries, commission, bonuses, incentives, pensions or
other direct or indirect remuneration or benefits payable, or pay or agree or
orally promised to pay, conditionally or otherwise, any bonus, incentive,
retention or other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any director, officer, employee,
distributor, contractor, or agent of the Company relating to or involved in the
Operations, including any increase or change pursuant to any Plan or (ii) enter
into, establish, increase or promise to increase, amend or terminate any
benefits under any Plan or any employment or severance agreement or commitment
or collective bargaining agreement with any employee or contractor of the
Company relating to or involved in the Operations, in either case except as
required by Law or any collective bargaining agreement, such exceptions being
disclosed in the Disclosure Schedules;
(bb) fail to pay any creditor any material amount owed to such creditor
when due;
(cc) change in any manner the character or scope of the Operations;
or
(dd) agree, whether in writing or otherwise, to take any action
described in this Section 4.3 or grant any options to purchase, rights of first
refusal, rights of first offer or any other similar rights or commitments with
respect to any of the actions specified in this Section 4.3, except as expressly
contemplated by this Agreement.
Section 4.4. Full Access.
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The Company shall permit representatives of the Optionee to have full
access (upon reasonable notice and at all reasonable times, and in a manner so
as not to interfere with the normal business operations of the Company) to all
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premises, properties, financial and accounting records, contracts, other records
and documents, and personnel, of or pertaining to the Company, subject to
compliance with applicable confidentiality obligations of the Company.
Section 4.5. Notice of Breaches.
--------------------------------
The Company shall promptly deliver to the Optionee written notice of
any event or development of which the Company is aware and that would (a) render
any statement, representation or warranty of the Company in this Agreement
(including the Disclosure Schedule) inaccurate or incomplete in any material
respect, or (b) constitute or result in a breach by the Company of, or a failure
by the Company to comply with, any agreement or covenant in this Agreement
applicable to such Party. The Optionee shall promptly deliver to the Company
written notice of any event or development of which the Optionee is aware that
would (i) render any statement, representation or warranty of the Optionee in
this Agreement inaccurate or incomplete in any material respect, or (ii)
constitute or result in a breach by the Optionee of, or a failure by the
Optionee to comply with, any agreement or covenant in this Agreement applicable
to such Party. No such disclosure shall be deemed to avoid or cure any such
misrepresentation or breach.
Section 4.6. Exclusivity.
-------------------------
The Company agrees that from the date of execution of this Agreement
until the earlier of (a) the Closing Date or (b) termination of this Agreement
in accordance with Article VI hereof, the Company shall not, and the Company
shall use its best efforts to cause each of its officers, directors, employees,
representatives and agents not to, directly or indirectly, (a) solicit,
initiate, engage or participate in or knowingly encourage discussions or
negotiations with any person or entity (other than the Optionee) concerning any
merger, consolidation, sale of assets, tender offer, recapitalization,
accumulation of stock, proxy solicitation or other business combination
involving the Company or any division of the Company, (b) solicit, initiate,
entertain or encourage any proposal or offer related to such an acquisition, (c)
provide any non-public information concerning the business, properties or Assets
of the Company to any person or entity (other than the Optionee) or (d) enter
into any understanding, letter of intent or agreement, whether binding or
non-binding, in connection with the foregoing. The Company shall immediately
notify the Optionee of, and shall disclose to the Optionee all details of, any
inquiries, discussions or negotiations of the nature described in the first
sentence of this Section 4.6. The term "indirectly" shall include, but not be
limited to, through Company representatives.
Section 4.7. Reasonable Commercial Efforts and Further Assurances.
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Each of the Parties shall use reasonable commercial efforts to
effectuate the transactions contemplated hereby and to fill and cause to be
fulfilled the conditions to closing under this Agreement. Each Party, at the
reasonable request of another Party, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
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Section 4.8. Funding of Business Plan.
--------------------------------------
If the Closing occurs prior to June 30, 2007, absent a Material Adverse
Effect, as determined by and in the sole discretion of Optionee, Optionee shall
provide support, as more fully described in Schedule 4.8, to the Operations to
be transferred from Seller to Optionee as provided herein in order to, in the
reasonable judgment of Optionee, enable the Minimum Revenue Trigger to be met.
It is currently anticipated that such support, if any, will be reflected in the
approval budgets for the Operations to be transferred from Seller to Optionee as
further described in the Supply and Services Agreement.
ARTICLE V
CONDITIONS TO CONSUMMATION OF TRANSACTION
Section 5.1. Conditions to Each Party's Obligations.
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The respective obligations of each Party to the Option Closing
hereunder are subject to the following conditions:
(a) The Company shall have received the Requisite Stockholder Approval
from the stockholders of the Company.
(b) Any required notice to the Company's preferred stockholders shall
have been given or waived; and
(c) Subject to the Requisite Stockholder Approval, Company and the
Optionee shall have entered into the License Agreement.
Section 5.2. Conditions to Obligations of the Optionee.
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The obligation of the Optionee to the Option Closing hereunder is
subject to the satisfaction of the following additional conditions:
(a) the Company shall have performed or complied with in all material
respects its agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Option Closing;
(b) the representations and warranties of the Company set forth in
Article II shall be true and correct as of the date hereof, and shall be true
and correct as of the Option Closing, except for representations and warranties
made as of a specific date, which shall be true and correct as of such date;
(c) the Company shall have delivered to the Optionee a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clauses (a) and (b) of this
Section 5.2 is satisfied in all respects;
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(d) The Company shall have received the consent of AngioDynamics, Inc.,
substantially in the form of Exhibit D, attached hereto, to assign the Company's
rights and obligations under that certain Distributor Agreement, dated as of
June 28, 2002, between the Company and AngioDynamics, Inc.
(e) Xxxxx X. Xxxxxx shall have entered into a Voting Agreement,
substantially in the form attached hereto as Exhibit E; and
(f) Xxxxx X. Xxxxxx and the Company shall have entered into an
Employment Agreement substantially in the form set forth on Exhibit F hereto;
and
(g) Xxxxx X. Xxxxxx and the Optionee shall have entered into a Side
Letter Agreement substantially in the form set forth on Exhibit G hereto.
Section 5.3. Conditions to Obligations of the Company.
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The obligation of the Company to consummate the Option Closing
hereunder is subject to the satisfaction of the following additional conditions:
(a) The Optionee shall have performed or complied with in all material
respects its agreements and covenants required to be performed or complied with
under this Agreement as of or prior to the Option Closing;
(b) the representations and warranties of the Optionee set forth in
Article III shall be true and correct as of the date hereof, and shall be true
and correct as of the Option Closing, except for representations and warranties
made as of a specific date, which shall be true and correct as of such date; and
(c) the Optionee shall have delivered to the Company a certificate
(without qualification as to knowledge or materiality or otherwise) to the
effect that each of the conditions specified in clause (a) and (b) of this
Section 5.3 is satisfied in all respects.
ARTICLE VI
TERMINATION
Section 6.1. Termination of Agreement.
--------------------------------------
The Parties may terminate this Agreement prior to the Closing Date as
provided below:
(a) the Parties may terminate this Agreement by mutual written consent;
(b) any Party may terminate this Agreement by giving written notice to
the other Parties upon the entry of any permanent injunction or other order of a
court or other competent authority preventing the consummation of the
transaction that has become final and nonappealable;
-13-
(c) The Optionee may terminate this Agreement if any of the conditions
set forth in Section 5.1 or 5.2 is not satisfied on or prior to December 17,
2005 and the Optionee is not then in breach of this Agreement;
(d) the Company may terminate this Agreement if any of the conditions
set forth in Section 5.1 or 5.3 are not satisfied on or prior to December 17,
2005 and the Company is not then in breach of this Agreement; and
(e) the Optionee may terminate this Agreement for any reason prior to
the Closing Date.
Section 6.2. Effect of Termination.
-----------------------------------
If any Party terminates this Agreement pursuant to Section 6.1, all
obligations of the Parties shall terminate without any liability of any Party to
any other Party. Notwithstanding the foregoing, the following obligations shall
survive termination of this Agreement: (i) liability of any Party for breaches
of this Agreement; (ii) confidentiality, as provided in Section 7.1; and (iii)
each Party's obligation to bear its own fees and expenses incurred in connection
with the preparation and negotiation of this Agreement and the transactions
contemplated herein as provided in Section 7.11.
Section 6.3. Amendment.
-----------------------
The Parties may cause this Agreement to be amended at any time by
execution of an instrument in writing signed on behalf of each of the Parties.
Section 6.4. Extension; Waiver.
-------------------------------
At any time prior to the Closing Date, any Party may, to the extent
legally allowed (i) extend the time for the performance of any of the
obligations or other acts of the other Parties; (ii) waive any inaccuracies in
the representations and warranties made to such Party contained herein or in any
document delivered pursuant hereto and (iii) waive compliance with any of the
agreements or conditions for the benefit of such Party contained herein. Any
agreement on the part of a Party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such Party.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Press Releases and Announcements.
----------------------------------------------
No Party shall issue any press release or make any public disclosure
relating to the subject matter of this Agreement without the prior approval of
the other Parties; provided, however, that any Party may make any public
disclosure it believes in good faith is required by law or regulation (in which
case the disclosing Party shall advise the other Parties and provide them with
-14-
a copy of the proposed disclosure prior to making the disclosure).
Notwithstanding the foregoing, the Parties acknowledge that Optionee is a
reporting company under the Securities Exchange Act of 1934, as amended, and
will be required to publicly disclose this Agreement and the transactions
contemplated hereby in the form of press releases, Current Reports on Form 8-K
and such other means as Optionee determines.
Section 7.2. No Third Party Beneficiaries.
------------------------------------------
This Agreement shall not confer any rights or remedies upon any person
other than the Parties and their respective successors and permitted assigns.
Section 7.3. Entire Agreement.
------------------------------
This Agreement, the Disclosure Schedule, the Schedules, the documents
and instruments and other agreements among the Parties referred to herein
constitute the entire agreement among the Parties and supersedes any prior
understandings, agreements or representations by or among the Parties, written
or oral, with respect to the subject matter hereof.
Section 7.4. Succession and Assignment.
---------------------------------------
This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors and permitted assigns. No Party may
assign either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other Parties, provided
however, that Optionee may assign some or all of its rights hereunder to a
wholly owned subsidiary.
Section 7.5. Counterparts.
--------------------------
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
Section 7.6. 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.
Section 7.7. Notices.
---------------------
All notices, requests, demands, claims, and other communications
hereunder shall be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly delivered two business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent via a reputable nationwide
overnight courier service or sent via facsimile (with acknowledgment of complete
transmission) with a confirmation copy by registered or certified mail, in each
case to the intended recipient as set forth in the Purchase Agreement.
-15-
Any Party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the Party for whom it is intended. Any Party may change
the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other Parties notice
in the manner herein set forth.
Section 7.8. Governing Law.
---------------------------
This Agreement shall be governed by and construed in accordance with
the internal laws (and not the law of conflicts) of the State of California.
Section 7.9. Amendments and Waivers.
------------------------------------
The Parties may mutually amend any provision of this Agreement at any
time prior to Closing Date. No amendment of any provision of this Agreement
shall be valid unless the same shall be in writing and signed by all of the
Parties. No waiver by any Party of any default, misrepresentation or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent default, misrepresentation, breach of such warranty
or covenant.
Section 7.10. Severability.
---------------------------
Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction. If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed, provided that this Agreement shall not then
substantially deprive either Party of the bargained-for performance of the other
Party.
Section 7.11. Expenses.
-----------------------
All fees and expenses (including all legal and accounting fees and
expenses and all other expenses) incurred by Optionee in connection with this
Agreement and the transactions contemplated hereby shall be paid by Optionee
whether or not the transaction is consummated. All transaction costs incurred by
the Company in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Company whether or not the transaction is
consummated.
-16-
Section 7.12. Other Remedies.
-----------------------------
Except as otherwise provided herein, any and all remedies herein
expressly conferred upon a Party will be deemed cumulative with, and not
exclusive of, any other remedy conferred hereby or by law or equity upon such
Party, and the exercise by a Party of any one remedy will not preclude the
exercise of any other remedy.
Section 7.13. Construction.
---------------------------
The Parties agree that they have been represented by counsel during the
negotiation, preparation 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 Party drafting such agreement or document. Any reference to any
federal, state, local, or foreign statute or law shall be deemed also to refer
to all rules and regulations promulgated thereunder, unless the context requires
otherwise.
Section 7.14. Incorporation of Schedules and Disclosure Schedule.
-----------------------------------------------------------------
The Exhibits, Schedules and Disclosure Schedule identified in this
Agreement are incorporated herein by reference and made a part hereof.
[Signature page to follow]
-17-
EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SURGICA CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Name: Xxxxx X. Xxxxxx
Title: President and Chief Executive
Officer
PROTEIN POLYMER TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx, III
---------------------------------
Name: Xxxxxxx X. Xxxxxxxxx, III
Title: Chief Executive Officer
[Signature Page to the Asset Purchase Option Agreement]
Β
Β
Β
Exhibit A
FORM OF LICENSE AGREEMENT
Β
Β
Β
Β
Β
Β
Exhibit B
FORM OF SUPPLY AND SERVICES AGREEMENT
Β
Β
Β
Β
Β
Β
Exhibit C
FORM OF ASSET PURCHASE AGREEMENT
Β
Β
Β
--------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
by and between
[_____________ ACQUISITION, LLC],
PROTEIN POLYMER TECHNOLOGIES, INC.,
and
SURGICA CORPORATION,
Dated as of [______], 200[_]
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Article I DEFINITIONS....................................................................................1
Section 1.1 Definitions.......................................................................1
Article II TRANSFER OF ASSETS AND LIABILITIES............................................................10
Section 2.1 Acquired Assets..................................................................10
Section 2.2 Excluded Assets..................................................................12
Section 2.3 Assumed Liabilities..............................................................12
Section 2.4 Excluded Liabilities.............................................................13
Section 2.5 Transfer of Acquired Assets and Assumed Liabilities..............................13
Section 2.6 Consideration....................................................................14
Section 2.7 Earnout..........................................................................15
Section 2.8 Closing..........................................................................16
Section 2.9 Deliveries by Seller.............................................................16
Section 2.10 Deliveries by Purchaser..........................................................17
Section 2.11 Non-Assignable Acquired Assets...................................................17
Article III REPRESENTATIONS AND WARRANTIES OF SELLER......................................................18
Section 3.1 Organization and Qualification of Seller.........................................18
Section 3.2 Authority of Seller to Execute and Perform Agreement.............................19
Section 3.3 Subsidiaries.....................................................................19
Section 3.4 Financial Statements.............................................................19
Section 3.5 Absence of Certain Changes or Events.............................................20
Section 3.6 Litigation and Liabilities.......................................................23
Section 3.7 Title and Condition to Properties; Absence of Liens; etc.........................23
Section 3.8 Licenses and Registrations; Compliance with Laws; etc............................24
Section 3.9 Intellectual Property............................................................24
Section 3.10 Non-Contravention................................................................27
Section 3.11 Consents and Approvals...........................................................27
Section 3.12 Acquired Assets..................................................................27
Section 3.13 Employee Benefit Plans; ERISA....................................................27
Section 3.14 Insurance Policies...............................................................28
Section 3.15 Contracts........................................................................28
Section 3.16 Environmental Matters............................................................29
Section 3.17 Taxes............................................................................30
Section 3.18 Liabilities......................................................................30
Section 3.19 Real Estate......................................................................31
Section 3.20 Tangible Personal Property.......................................................31
Section 3.21 Labor Matters....................................................................32
Section 3.22 Certain Interests................................................................33
Section 3.23 Brokers..........................................................................33
Section 3.24 Sufficiency of Assets............................................................33
Section 3.25 No Untrue Statements.............................................................33
-i-
TABLE OF CONTENTS
(continued)
Page
Article IV REPRESENTATIONS AND WARRANTIES OF PURCHASER...................................................33
Section 4.1 Organization.....................................................................33
Section 4.2 Authority to Execute and Perform Agreement; Ability to Perform...................34
Section 4.3 Consents and Approvals...........................................................34
Section 4.4 Non-Contravention................................................................34
Section 4.5 Financial Reports and SEC Documents..............................................34
Section 4.6 Purchaser Litigation.............................................................35
Section 4.7 Brokers..........................................................................35
Section 4.8 Validity of Shares...............................................................35
Article V ADDITIONAL AGREEMENTS OF THE PARTIES..........................................................35
Section 5.1 Conduct of Operations............................................................35
Section 5.2 Further Assurances...............................................................36
Section 5.3 Certain Notifications............................................................36
Section 5.4 Access to Records and Facilities; Confidentiality................................36
Section 5.5 Preservation of Records..........................................................36
Section 5.6 Non-Competition and Non-Solicitation Covenant of Seller..........................37
Section 5.7 Employees........................................................................38
Section 5.8 Satisfaction of Conditions Precedent.............................................38
Section 5.9 Expenses and Apportioned Obligations.............................................38
Section 5.10 Bulk Sales Compliance............................................................38
Section 5.11 Public Announcements.............................................................38
Section 5.12 Use of Name and Logo.............................................................39
Section 5.13 Excluded Liabilities.............................................................39
Section 5.14 Competing Offers; Merger or Liquidation..........................................39
Section 5.15 Exemption from Registration or Securities Act Registration; Preparation
of Notice of Meeting and Proxy Statement or Information Statement................39
Section 5.16 Support of Operations............................................................41
Article VI CONDITIONS TO CLOSING.........................................................................42
Section 6.1 Conditions to Obligations of Seller..............................................42
Section 6.2 Conditions to Obligations of Purchaser...........................................42
Article VII TERMINATION...................................................................................44
Section 7.1 Termination......................................................................44
Section 7.2 Effect of Termination............................................................45
Article VIII INDEMNIFICATION...............................................................................45
Section 8.1 Indemnification by Seller........................................................45
Section 8.2 Indemnification by Purchaser.....................................................46
Section 8.3 Defense of Claims................................................................46
-ii-
TABLE OF CONTENTS
(continued)
Page
Section 8.4 Survival of Representations and Warranties.......................................48
Section 8.5 Offset...........................................................................48
Article IX MISCELLANEOUS.................................................................................49
Section 9.1 Amendments; Non-Contractual Remedies; Preservation of Remedies...................49
Section 9.2 Waiver...........................................................................49
Section 9.3 Governing Law....................................................................49
Section 9.4 Submission of Jurisdiction; Waiver of Jury Trial.................................49
Section 9.5 Specific Performance.............................................................50
Section 9.6 Notices..........................................................................50
Section 9.7 Section Headings.................................................................51
Section 9.8 Construction.....................................................................51
Section 9.9 Counterparts.....................................................................51
Section 9.10 Assignments......................................................................52
Section 9.11 Entire Agreement, Enforceability and Miscellaneous...............................52
Section 9.12 Interpretation...................................................................52
-iii-
TABLE OF CONTENTS
(continued)
Page
EXHIBITS
Exhibit A Xxxx of Sale and Assignment
Exhibit B Patent Assignment
Exhibit C Copyright Assignment
Exhibit D Trademark Assignment
Exhibit E Lease Assignment
Exhibit F Allocation Method
Exhibit G Certificate of Secretary of Seller
Exhibit H Employment Agreement
Exhibit I Non-Competition Agreement
Exhibit J Side Letter Agreement
SCHEDULES
Schedule 1.1 Persons with Knowledge
Schedule 2.1(b) Equipment
Schedule 2.1(c) Inventory
Schedule 2.1(d) Assigned IP Assets
Schedule 2.1(f) Assigned Agreements
Schedule 2.1(g)(i) Material Permits
Schedule 2.1(g)(ii) Other Permits
Schedule 2.1(h) Insurance Policies
Schedule 2.1(o) Transferred Bank Accounts
Schedule 2.2(f) Excluded Assets
Schedule 3.1 Organization and Qualification of Seller
Schedule 3.3 Subsidiaries
Schedule 3.4 Reference Statement
Schedule 3.4(c) Accounts Receivable
Schedule 3.5 Absence of Certain Changes or Events
Schedule 3.6 Litigation and Liabilities
Schedule 3.7 Liens
Schedule 3.8 Licenses and Registrations; Compliance with Laws
Schedule 3.9(a)(i) Owned Intellectual Property
Schedule 3.9(a)(ii) IP Licenses and Licensed IP
Schedule 3.9(b) Exceptions to Title to Intellectual Property
Schedule 3.9(e)(i) Intellectual Property Claims
Schedule 3.9(e)(ii) Third Party Indemnification Obligations
Schedule 3.9(f) Persons Waiving Rights to Intellectual Property
Schedule 3.10 Non-Contravention
Schedule 3.11 Consents and Approvals
Schedule 3.13 Employee Benefits; ERISA
Schedule 3.14 Insurance
Schedule 3.15(a) Contracts
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TABLE OF CONTENTS
(continued)
Page
Schedule 3.15(c) Defaults Under Contracts
Schedule 3.15(d) Open Bids
Schedule 3.16 Environmental Contracts
Schedule 3.17 Taxes
Schedule 3.18 Liabilities
Schedule 3.19(a) Leased Real Property and Ancillary Leased Real Property Documents
Schedule 3.20(a) Tangible Personal Property
Schedule 3.20(b) Tangible Personal Property Leases
Schedule 3.22 Certain Interests
Schedule 3.23 Brokers
Schedule 4.2 Authorizations and Consents
Schedule 4.6 Brokers
Schedule 5.1 Conduct of Operations
Schedule 6.2(a) Consents
-v-
ASSET PURCHASE AGREEMENT
------------------------
ASSET PURCHASE AGREEMENT, dated as of [__________], 200[_] (the
"Agreement"), by and between SURGICA CORPORATION, a Delaware corporation
("Seller"), PROTEIN POLYMER TECHNOLOGIES, INC., a Delaware corporation ("PPT")
and [_____________ ACQUISITION, LLC], a [________] limited liability company
("Acquisition Co.") and wholly-owned subsidiary of PPT (collectively, PPT and
Acquisition Co. are referred to herein as "Purchaser").
R E C I T A L S
- - - - - - - -
WHEREAS, Seller wishes to sell to Purchaser, and Purchaser wishes to
purchase from Seller, substantially all of the property, assets and rights owned
or leased by Seller relating to the Operations (as defined herein), and in
connection therewith Purchaser is willing to assume certain obligations and
liabilities of the Seller relating thereto, all upon the terms and subject to
the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the premises,
representations, mutual agreements, covenants and conditions hereinafter set
forth, and intending to be legally bound hereby, the parties hereto hereby agree
as follows:
Article I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the
following terms have the meanings indicated:
"Accountant" shall mean [________]
"Acquired Assets" shall have the meaning set forth in Section
2.1.
"Affiliate" shall have the meaning set forth in Rule 12b-2 of
the General Rules and Regulations under the Securities Exchange Act of 1934, as
amended.
"Agreement" shall have the meaning set forth in the preamble
to this Agreement.
"Allocation Method" shall have the meaning set forth in
Section 2.6(c).
"Ancillary Leased Real Property Documents" shall have the
meaning set forth in Section 3.19(a).
"Annualized First Quarter Revenue" shall mean the product of
(i) four (4) multiplied by (ii) the revenue for the first (1st) quarter of 2007
derived from the Operations to be transferred from Seller to Purchaser as
provided herein and as evidenced in regularly prepared financial statements in a
manner consistent with those historically provided by Seller.
"Assigned Agreements" shall have the meaning set forth in
Section 2.1(f).
"Assigned IP Assets" shall have the meaning set forth in
Section 2.1(d).
"Assumed Liabilities" shall have the meaning set forth in
Section 2.3.
"Balance Sheet" shall have the meaning set forth in Section
3.4(a).
"Balance Sheet Date" shall have the meaning set forth in
Section 3.4(a).
"Xxxx of Sale and Assignment" shall have the meaning set forth
in Section 2.5(a)(i).
"Books and Records" shall have the meaning set forth in
Section 2.1(i).
"Business Day" shall mean any day that is not a Saturday, a
Sunday or other day on which banks are required or authorized by Law to be
closed in the State of California.
"Claim" shall have the meaning set forth in Section 8.3.
"Closing" shall have the meaning set forth in Section 2.8.
"Closing Date" shall have the meaning set forth in Section
2.8.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Common Stock" shall mean the common stock, $0.01 par value,
of PPT.
"Common Stock Equivalent A" shall mean the number of shares of
Common Stock equal to the quotient of (i) Fifty Cents ($0.50) divided by (ii)
the price per share of Common Stock based on the ninety- (90) day prior average
price of the Common Stock as of April 1, 2007.
"Common Stock Equivalent B" shall mean the number of shares of
Common Stock equal to the quotient of (i) One Dollar and Zero Cents ($1.00)
divided by (ii) the price per share of Common Stock based on the ninety- (90)
day prior average price of the Common Stock as of April 1, 2007.
"Consent" shall have the meaning set forth in Section 3.11.
"Contracts" shall have the meaning set forth in Section
2.1(f).
"Copyright Assignment" shall have the meaning set forth in
Section 2.5(a)(iii).
"Copyrights" shall have the meaning set forth in the
definition of Intellectual Property in this Section 1.1.
"Debt" shall mean, with respect to any Person, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money, (b)
all obligations of such Person for the deferred purchase price of property or
services, (c) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
-2-
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (d) all obligations of such Person as lessee under leases that have
been or should be, in accordance with U.S. GAAP, recorded as capital leases, (e)
all obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (f) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any capital
stock of such Person or any warrants, rights or options to acquire such capital
stock, valued, in the case of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (g) all indebtedness of others referred to in clauses (a) through (f)
above guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an agreement (i)
to pay or purchase such indebtedness or to advance or supply funds for the
payment or purchase of such indebtedness, (ii) to purchase, sell or lease (as
lessee or lessor) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such indebtedness or to assure
the holder of such indebtedness against loss, (iii) to supply funds to or in any
other manner invest in the debtor (including any agreement to pay for property
or services irrespective of whether such property is received or such services
are rendered) or (iv) otherwise to assure a creditor against loss, and (h) all
indebtedness referred to in clauses (a) through (f) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness.
"Disclosure Schedule" shall have the meaning specified in the
preamble to Article III.
"Earnout Amount" shall mean the aggregate amount of (i) the
Common Stock Equivalent A for every One Dollar and Zero Cents ($1.00) in
Annualized First Quarter Revenue up to, and including, Two Million Dollars and
Zero Cents ($2,000,000.00) plus (ii) the Common Stock Equivalent B for every One
Dollar and Zero Cents ($1.00) in Annualized First Quarter Revenue in excess of
Two Million Dollars and Zero Cents ($2,000,000.00).
"Earnout Payment Date" shall mean shall have the meaning set
forth in Section 2.7(a).
"Environment" shall mean surface waters, groundwaters,
sediment, soil, subsurface strata and outdoor or indoor ambient air.
"Environmental Action" shall mean any investigation,
monitoring, notification, clean-up, containment, response, removal, remedial
compliance or other action relating to any Environmental Laws for which Seller
is, or as a result of Seller's being, obligated to defend, indemnify and hold
Purchaser harmless pursuant to Section 8.1.
"Environmental Laws" shall mean all applicable Laws, now or
hereafter in effect and as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent
decree or judgment, or other agency requirement having the force and effect of
law and relating to the Environment, pollution, Hazardous Substances, protection
of the environment, protection of natural resources, or health and safety,
including the
-3-
Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; the Hazardous Materials Transportation
Act; the Clean Water Act, the Toxic Substances Control Act; the Clean Air Act;
the Safe Drinking Water Act; the Atomic Energy Act; the Federal Insecticide,
Fungicide and Rodenticide Act; the Occupational Safety and Health Act; and the
Federal Food, Drug and Cosmetic Act.
"Equipment" shall have the meaning set forth in Section
2.1(b).
"ERISA" shall have the meaning set forth in Section 3.13(a).
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Excluded Assets" shall have the meaning set forth in Section
2.2.
"Excluded Liabilities" shall have the meaning set forth in
Section 2.4.
"Financial Statements" shall have the meaning set forth in
Section 3.4(a).
"U.S. GAAP" shall mean United States generally accepted
accounting principles consistently applied.
"Governmental Bodies" shall have the meaning set forth in
Section 3.8.
"Governmental Body" shall have the meaning set forth in
Section 3.8.
"Hazardous Substance" shall mean any toxic, hazardous,
chemical, material, explosive, dangerous, flammable or radioactive substance
that is regulated by or under authority of any Environmental Laws, including,
without limitation, (i) petroleum and petroleum products and compounds
containing them, including gasoline, diesel fuel and oil; urea formaldehyde foam
insulation; polychlorinated biphenyls and transformers, other equipment, or
compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials in any form that is or could become friable; radon
gas; underground or above-ground storage tanks, whether empty or containing any
substance; any substance the presence of which is prohibited or regulated by any
federal, state or local authority; any substance that requires special handling;
(ii) in the United States, all substances defined as Hazardous Substances, Oils,
Pollutants or Contaminants in the Natural Oil and Hazardous Substances Pollution
Contingency Plan; and (iii) any other material or substance now or in the future
defined as a "hazardous substance", "hazardous material", "hazardous waste",
"extremely hazardous waste", "restricted hazardous wastes", "toxic substance",
"toxic pollutant", "contaminant", or pollutant", or words of similar import,
under any applicable Environmental Law.
"Indemnified Party" shall mean a Purchaser Indemnified Party
pursuant to Section 8.1 or a Seller Indemnified Party pursuant to Section 8.2,
as the case may be.
"Indemnifying Party" shall mean Seller pursuant to Section 8.1
or Purchaser pursuant to Section 8.2, as the case may be.
-4-
"Instruments of Assignment" shall have the meaning set forth
in Section 2.5(a)(vi).
"Intellectual Property" shall mean all of the following as
they exist in any jurisdictions throughout the world, in each case, to the
extent owned by or licensed to Seller:
(i) patents, patent applications, industrial rights and the
inventions, designs and improvements described and claimed therein, patentable
inventions, and other patent rights (including any divisionals, continuations,
continuations-in-part, renewals, substitutions, reexaminations or reissues
thereof, whether or not patents are issued on any such applications and whether
or not any such applications are amended modified, withdrawn or refiled)
(collectively, "Patents");
(ii) trademarks, service marks, trade dress, trade names,
brand names, designs, logos, slogans, corporate names and other identifiers of
source or goodwill (including, in each case, the goodwill associated therewith),
whether registered or unregistered, and all registrations and applications for
registration thereof, including, without limitation, the name "Surgica
Corporation" and all variants of Surgica Corporation the registrations of which
are owned by Seller (collectively, "Trademarks");
(iii) copyrights, including any renewals and extensions
thereof, copyright registrations and applications for registration thereof, and
non-registered copyrights (collectively, "Copyrights");
(iv) trade secrets, confidential business information and
other proprietary information including, without limitation, designs, research
and development information, technical information, specifications, operating
and maintenance manuals, methods, engineering drawings, know-how, data, data
rights, mask works, discoveries, inventions, industrial designs and other
proprietary rights (whether or not patentable or subject to copyright, mask work
or trade secret protection)
(v) advertising and promotional rights and rights to privacy
and publicity;
(vi) all domain names, web sites and web pages and related
rights and items;
(vii) computer software programs and software systems,
including, without limitation, all databases, compilations, tool sets,
compilers, higher level or "proprietary" languages, and all related material
documentation and information, whether in source code, object code or human
readable form, other than software used by Seller that is commercially available
pursuant to "shrink-wrap," "click-through" or other standard form license
agreements and software that is embedded as part of commercially available
products or services (collectively, "Software"); and
(viii) all common rights thereto.
"intellectual property", if used in lower case, shall mean all
of the foregoing, without restriction as to identity of ownership, licensor or
licensee.
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"Inventory" shall have the meaning set forth in Section
2.1(c).
"IP Licenses" shall mean all permits, licenses, sublicenses
and other agreements or permissions including, without limitation, agreements
between Seller and third parties relating to the development or use of
Intellectual Property, the development or transmission of data, or the use,
modification, framing, linking advertisement, or other practices with respect to
Internet web sites under which Seller is a licensee or otherwise authorized to
use or practice, or under which Seller is a licensor of any Intellectual
Property.
"Knowledge" shall mean the actual knowledge of the Persons
listed on Schedule 1.1, after reasonable investigation sufficient to express an
informed view and such knowledge that would be imputed to such Persons in the
normal exercise of their duties.
"Laws" shall have the meaning set forth in Section 2.11(a).
"Lease Assignment" shall have the meaning set forth in Section
2.5(a)(v).
"Leased Real Property" shall have the meaning set forth in
Section 3.19(a).
"Liabilities" shall have the meaning set forth in Section
3.18.
"Liens" shall mean any pledges, liens (including environmental
and Tax liens), charges, encumbrances, transfer restrictions, options, rights of
first refusal, mortgages, deeds of trust, easements, leases, servitudes,
security interests, hypothecations, violations, licenses, reversions, reverters,
preferential arrangements, restrictive covenants, conditions or restrictions and
Claims of any kind or other encumbrances of any nature whatsoever, including any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership.
"Losses" shall have the meaning set forth in Section 8.1.
"Material Adverse Effect" shall mean any circumstance, change
in or effect on the Operations or Seller that, individually or in the aggregate
with all other circumstances, changes in or effects on the Operations or Seller:
(a) is or is reasonably likely to be materially adverse to the business,
operations, assets or liabilities (including contingent liabilities), employee
relationships, customer or supplier relationships, results of operations, the
condition (financial or otherwise) or prospects of the Operations, in each case
taken as a whole (other than changes, effects or circumstances that are the
result of economic factors affecting the economy as a whole or that are the
result of factors generally affecting the industry or specific markets in which
the Operations operate), or (b) is reasonably likely to materially adversely
affect the ability of the Purchaser to operate or conduct the Operations in the
manner in which it is currently or currently contemplated to be operated or
conducted by Seller, or (c) could prevent, or materially impair or materially
delay, Purchaser from consummating the transactions contemplated by the
Transaction Documents; provided, that a "Material Adverse Effect" shall not
include any adverse change, effect or event (a) arising out of or resulting
primarily from actions contemplated by the parties hereto in connection with
this Agreement or the other Transaction Documents or (b) that is attributable to
the announcement or performance of this
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Agreement or the other Transaction Documents or the transactions contemplated by
this Agreement or the other Transaction Documents.
"Material Permits" shall have the meaning set forth in Section
2.1(g).
"Minimum Revenue Trigger" shall mean average sales per quarter
from the Operations to be transferred from Seller to Purchaser as provided
herein for the first (1st) quarter of 2007 and second (2nd) quarter of 2007
which are equal to or greater than Four Hundred Fifty Thousand Dollars and Zero
Cents ($450,000.00).
"Operations" shall mean all business and operations of Seller
as currently conducted, and as conducted on the Closing Date, including, without
limitation, all research, development, manufacturing, marketing, sales, service
and other activities of Seller (including its predecessors, if any) relating
thereto or in connection therewith.
"Options" shall have the meaning set forth in Section 3.19(a).
"Order" shall have the meaning set forth in Section 6.1(a).
"Ordinary Course of Business" shall have the meaning set forth
in Section 3.5.
"Other Instruments" shall have the meaning set forth in
Section 2.5(a)(vi).
"Patent Assignment" shall have the meaning set forth in
Section 2.5(a)(ii).
"Patents" shall have the meaning set forth in the definition
of Intellectual Property in this Section 1.1.
"Permits" shall have the meaning set forth in Section 3.8.
"Permitted Liens" shall have the meaning set forth in Section
3.7.
"Person" shall mean and include an individual, a partnership,
a joint venture, a limited liability company, a corporation, a trust, a firm, an
association, an unincorporated organization and a government or any department
or agency thereof or any other entity, as well as any syndicate or group that
would be deemed to be a person under Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended.
"Plans" shall have the meaning set forth in Section 3.13.
"Pre-Closing Tax Period" shall mean (i) any Tax period ending
on or before the Closing Date and (ii) with respect to a Tax period that
commences before but ends after the Closing Date, the portion of such period up
to and including the Closing Date.
"Private Placement Alternative" shall have the meaning set
forth in Section 5.15(a).
"Private Placement Documents" shall have the meaning set forth
in Section 5.15(a).
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"Proceedings" shall have the meaning set forth in Section 3.6.
"Purchase Price" shall have the meaning set forth in Section
2.6(a).
"Purchaser" shall have the meaning set forth in the preamble
to this Agreement.
"Purchaser Indemnified Party" shall have the meaning set forth
in Section 8.1.
"Remedial Action" shall mean all action to (a) clean up,
remove, treat or handle in any other way Hazardous Substances in the
Environment; (b) prevent the Release of Hazardous Substances so that they do not
migrate, endanger or threaten to endanger public health or the Environment; or
(c) perform remedial investigations, feasibility studies, corrective actions,
closures and post-remedial or post-closure studies, investigations, operations,
maintenance and monitoring.
"Release" shall mean disposing, discharging, injecting,
spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing and the like into or upon any land or water or air or otherwise entering
into the Environment.
"Restricted Period" shall have the meaning set forth in
Section 5.6(a).
"Revenue Trigger Report" shall have the meaning set forth in
Section 2.7(b).
"S-4 Alternative" shall have the meaning set forth in Section
5.15(b).
"SEC" shall mean the Securities and Exchange Commission.
"SEC Documents" shall have the meaning set forth in Section
4.5.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Seller" shall have the meaning set forth in the preamble to
this Agreement.
"Seller Indemnified Party" shall have the meaning set forth in
Section 8.2.
"Seller Special Meeting" shall have the meaning set forth in
Section 5.15(d).
"Shares" shall have the meaning set forth in Section 2.6(a).
"Software" shall have the meaning set forth in the definition
of Intellectual Property in this Section 1.1.
"Statement" shall have the meaning set forth in Section
5.15(c).
"Tangible Personal Property" shall have the meaning set forth
in Section 3.20(a).
"Tax" shall mean all taxes (whether federal, state, local or
foreign) based upon or measured by income and any other tax whatsoever,
including but not limited to any income,
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alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, value added, transfer, franchise, profits, license, registration,
recording, documentary, conveyance, gains, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental or
windfall profit tax, custom duty or other tax, governmental fee or other like
assessment or charge of any kind whatsoever, whether or not measured in whole or
in part by net income, together with any interest, deficiency penalty, addition
to tax or additional amount imposed by any Governmental Body responsible for the
imposition of any such tax (domestic or foreign) and obligations under any tax
sharing, tax allocation or similar agreement to which Seller is a party.
"Tax Returns" shall mean all returns, declarations, reports,
estimates, information returns and statements required to be filed in respect to
any Taxes.
"Third Party Claims" shall have the meaning set forth in
Section 8.3.
"Trademark Assignment" shall have the meaning set forth in
Section 2.5(a)(iv).
"Trademarks" shall have the meaning set forth in the
definition of Intellectual Property in this Section 1.1.
"Transaction Documents" shall mean this Agreement and the
Instruments of Assignment all Schedules and Exhibits hereto and thereto,
together with any other agreements, instruments, certificates and documents
executed by the parties hereto in connection herewith or therewith.
"Transfer Taxes" shall have the meaning set forth in Section
5.9.
"Transferred Bank Accounts" shall have the meaning set forth
in Section 2.1(o).
"Treasury Regulations" shall mean the Treasury Regulations
(including Temporary Treasury Regulations) promulgated by the United States
Department of Treasury with respect to the Code or other federal tax statutes.
"WARN Act" means the Worker Adjustment and Retraining
Notification Act (Pub. L. 100-379, 102 Stat. 890 (1988)), as amended.
Article II
TRANSFER OF ASSETS AND LIABILITIES
Section 2.1 Acquired Assets. Upon the terms and subject to the
conditions of this Agreement, at the Closing provided for in Section 2.8, in
each case subject to Section 2.11, Seller, shall sell, convey, assign, transfer
and deliver to Purchaser, and Purchaser shall purchase and acquire from Seller,
free and clear of all Liens, all of Seller's right, title and interest in and to
all of the property, assets and rights owned, goodwill and business of every
kind, character and description, leased or licensed, whether tangible,
intangible, real, personal or mixed and wheresoever located, whether carried on
the books of Seller or not carried on the books of Seller due to expense, full
depreciation or otherwise, relating to or used in the Operations (other than
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the Excluded Assets) as the same may exist on the Closing Date (collectively,
the "Acquired Assets"), expressly subject to the Assumed Liabilities and
Permitted Liens. Such Acquired Assets shall include, without limitation, the
following (except to the extent that they are Excluded Assets):
(a) the Operations as a going concern;
(b) All of Seller's right, title and interest in and to all tangible
personal property owned or leased by Seller relating to or used in the
Operations, including, without limitation, all furniture, fixtures, computer
equipment, furnishings, tools, machinery, spare parts, motor vehicles, leasehold
improvements and equipment, and any prepaid deposits for any of the same
(collectively, the "Equipment"), and all manufacturers' warranties associated
with such items, including, without limitation, the list of Equipment set forth
on Schedule 2.1(b).
(c) All of Seller's right, title and interest in and to all inventory,
work-in-process, components, finished goods, parts, supplies, raw materials and
other items owned or leased by Seller relating to or used in the Operations and
any prepaid deposits for any of the same (collectively, the "Inventory"), as
well as all manufacturers' warranties associated with such items, including,
without limitation, the list of Inventory set forth on Schedule 2.1(c);
(d) All of Seller's right, title and interest in and to all
Intellectual Property and all IP Licenses, in both cases relating to or used in
the Operations (collectively, the "Assigned IP Assets"), including, without
limitation, the list of Assigned IP Assets set forth on Schedule 2.1(d);
(e) All of Seller's right, title and interest in and to all claims,
deposits, prepayments, warranty and guarantee rights, refunds and rebates and
similar items relating to the Operations;
(f) All of Seller's rights under, and interest in, all agreements,
arrangements, contracts (including contracts governing relationships with
exhibitors), notes, bonds, loans, instruments, mortgages, indentures, leases
(including any and all leases, subleases, sale/leaseback agreements, operating
leases or similar arrangements), conditional sales contracts, licenses
(including, without limitation, all IP Licenses), franchises, understandings,
commitments, sales and purchase orders, and under all bids, offers and contracts
under negotiation as of the Closing Date (to the extent such offers are
transferable) and other binding arrangements (collectively, "Contracts")
relating to the Operations to which Seller is a party or by or to which the
Acquired Assets are bound or subject (collectively, the "Assigned Agreements"),
including, without limitation, the list of Assigned Agreements set forth on
Schedule 2.1(f);
(g) To the extent transferable under applicable Law, all of Seller's
right, title and interest in and to all Permits, municipal, state and federal
franchises, licenses, agreements, waivers and authorizations relating to or used
in the Operations, including, without limitation, (i) the list of Material
Permits set forth on Schedule 2.1(g)(i) (the "Material Permits") and (ii) any
other Permits set forth on Schedule 2.1(g)(ii);
(h) All of Seller's right, title and interest in and to all insurance
policies for the benefit of Seller in respect of the Operations or Acquired
Assets and all rights of every nature
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and description under or arising out of such policies, including, without
limitation, the list of such policies set forth on Schedule 2.1(h);
(i) All of Seller's right, title and interest in and to all original or
copies (in accordance with Section 2.2(a)) of all books, records, and other
documents (whether on paper, computer diskette, tape or other storage media)
used in the Operations (collectively, the "Books and Records"), including, but
not limited to, tax records, property records, purchase and sales records,
credit data, marketing, advertising and promotional materials, personnel files
and payroll records, accounting records, financial reports, fixed asset lists,
customer lists, customer records and information, supplier lists, parts lists,
manuals, technical and repair data, invoices, correspondence, files and any
similar items;
(j) All of Seller's right, title and interest in and to all rights,
Claims, causes of action, choses in action, rights of recovery and rights of
setoff of any kind against third parties relating to the Operations, including,
but not limited to, all rights to insurance proceeds and rights under and
pursuant to all warranties, representations and guarantees made by suppliers of
products, materials, or equipment, or components thereof covering any of the
Acquired Assets;
(k) All of Seller's right, title and interest in and to all stationery,
forms, labels, shipping materials, brochures, art work, photographs, advertising
materials and any similar items relating to or used in the Operations
(l) All of Seller's right, title and interest in and to all Leased Real
Property, including, without limitation, such real properties set forth in
Schedule 3.20(a), together with any and all rights to easements for ingress,
egress and utilities which are attendant to such property and all other
appurtenances thereto;
(m) All of Seller's right, title and interest in and to all accounts
receivable, notes and other amounts receivable from third parties, including,
without limitation, customers and employees, and any amounts designated on the
Balance Sheet as prepayments, advances and deposits of Seller relating to the
Operations as of the Closing Date (including rights to payment for services that
have been performed but have not been billed prior to the Closing Date), whether
or not in the ordinary course of business, together with any unpaid financing
charges accrued thereon;
(n) All of Seller's right, title and interest in and to all goodwill
associated with the Operations;
(o) All of Seller's right, title and interest in the bank accounts set
forth on Schedule 2.1(o) (the "Transferred Bank Accounts");
(p) All of Seller's right, title and interest in all cash on hand, cash
equivalents, bank accounts and short-term instruments (including restricted cash
in respect of the items set forth in Section 2.1(e)) and all similar types of
investments, such as certificates of deposit, treasury bills and other
marketable securities, relating to the Operations as of the Closing Date
(whether or not such cash is held in a Transferred Bank Account); and
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(q) All of Seller's and its Affiliates' right, title and interest to
and under all other assets, rights and claims of every kind and nature relating
to the Operations as of the Closing Date.
Section 2.2 Excluded Assets. Notwithstanding any other
provision of this Agreement, the Acquired Assets shall not include any of the
following assets and properties of Seller (collectively, the "Excluded Assets"),
which assets shall not be transferred, conveyed, set over, delivered or assigned
to Purchaser:
(a) All original Books and Records (i) that would otherwise constitute
Acquired Assets but for the fact that Seller is required to retain such original
Books and Records pursuant to applicable Laws (in which case copies of such
Books and Records shall be included in the Acquired Assets to the extent
permitted by applicable Laws) or (ii) that constitute documents relating to the
corporate organization, qualification to do business or corporate existence of
Seller;
(b) All claims, rights, interests and proceeds with respect to any Tax
refunds and other refunds of charges or assessments by a Governmental Body
arising from or pertaining to the conduct of the Operations for any Pre-Closing
Tax Period;
(c) All rights, Claims, causes of action and documents relating to an
Excluded Asset or an Excluded Liability;
(d) All of Seller's rights, title and interest under this Agreement and
the Transaction Documents to which Seller is a party; and
(e) All of Seller's right, title and interest in and to all Contracts
to which Seller is a party exclusively relating to Seller's internal governance,
including, without limitation, the Seller's Certificate of Incorporation,
Bylaws, in each case as amended and/or restated, or any other Contract among
Seller and its stockholders relating to Seller's internal governance.
Section 2.3 Assumed Liabilities. Upon the terms and subject to
the conditions of this Agreement, at the Closing, Purchaser shall assume and
thereafter pay, perform and discharge only the following Liabilities of Seller
relating to the Operations (collectively, the "Assumed Liabilities"):
(a) All liabilities or obligations arising out of or relating to the
Operations and Acquired Assets for all periods commencing on and after the
Closing Date; and
(b) All liabilities or obligations of Seller relating to or arising
under the Assigned Agreements set forth in Schedule 2.1(f) (other than
liabilities or obligations attributable to any failure by Seller to comply with
the terms thereof).
Section 2.4 Excluded Liabilities. Notwithstanding Section 2.3
above, Seller shall retain, and shall be responsible for paying, performing and
discharging when due, and Purchaser shall not assume or have any responsibility
for, any Liabilities of Seller whatsoever, whether Known or unknown, fixed or
contingent, obsolete or otherwise, other than the Assumed Liabilities (the
"Excluded Liabilities"), including without limitation, those set forth below:
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(a) Debt;
(b) All obligations or Liabilities arising from or relating to any
Excluded Asset;
(c) All obligations or Liabilities of Seller pursuant to Environmental
Laws arising from or relating to any action, event, circumstance or condition
related to the Operations or the Leased Real Property;
(d) Except with respect to the Assigned Agreements described in Section
2.3(b), all obligations or liabilities arising from or relating to the Seller's
officers, directors, employees, independent contractors and consultants, and the
Plans; and
(e) Any liability or obligation for Taxes of Seller or attributable to
the Acquired Assets or the Operations for any Pre-Closing Tax Period (including
all liabilities of Seller for Taxes related to the transactions contemplated by
this Agreement).
Section 2.5 Transfer of Acquired Assets and Assumed
Liabilities.
(a) At the Closing, Seller shall effectuate the sale, conveyance,
assignment, transfer and delivery of the Acquired Assets to Purchaser by
delivering to Purchaser (or its designees with respect to any or all such
assets) each of the following:
(i) A duly executed xxxx of sale and assignment relating to
the Assigned Agreements, Permits and other Acquired Assets, in the form of
Exhibit A hereto (the "Xxxx of Sale and Assignment");
(ii) A duly executed assignment of Patents, in the form of
Exhibit B hereto (the "Patent Assignment");
(iii) A duly executed assignment of Copyrights, in the form of
Exhibit C hereto (the "Copyright Assignment");
(iv) A duly executed assignment of Trademarks, in the form of
Exhibit D hereto (the "Trademark Assignment");
(v) A duly executed assignment and estoppel of real property
leases, in the form of Exhibit E hereto (the "Lease Assignment"); and
(vi) Such other documents of title and good and sufficient
instruments of conveyance and transfer (collectively, the "Other Instruments"
and, together with the Xxxx of Sale and Assignment, the Patent Assignment, the
Copyright Assignment, the Trademark Assignment, and the Lease Assignment, the
"Instruments of Assignment") as are reasonably necessary to transfer to
Purchaser (or its designees) Seller's right and title to and interests in the
Acquired Assets free and clear of all Liens, other than the Assumed Liabilities
and Permitted Liens.
Section 2.6 Consideration.
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(a) Upon the terms and subject to the conditions of this Agreement, the
aggregate purchase price (the "Purchase Price") payable by Purchaser to Seller
in full and complete payment for the sale, conveyance, assignment, transfer and
delivery of the Acquired Assets by Seller shall consist of (i) the assumption of
the Assumed Liabilities by Purchaser at the Closing; (ii) Two Million
(2,000,000) shares of Common Stock (the "Shares"); and (iii) the Earnout Amount,
if any. The Shares, and the shares comprising the Earnout Amount, if any, shall
constitute "restricted securities" as that term is defined in Section 144(a)(3)
of the Securities Act and shall be restricted as to their resale, as more fully
described below.
(b) Seller hereby agrees that it shall not, without the prior written
consent of Purchaser, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, pledge, lend or otherwise transfer or dispose of, any
Shares, shares comprising the Earnout Amount or any securities convertible into
or exercisable or exchangeable for the Shares or shares comprising the Earnout
Amount held by Seller, or enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of such securities, for a period of one hundred eighty (180) days from
the Closing Date with respect to the Shares and one hundred eighty (180) days
from the Earnout Payment Date with respect to the shares comprising the Earnout
Amount; provided, however, that if Purchaser exercises the option granted to it
by Seller pursuant to that certain Asset Purchase Option Agreement, dated as of
November [_], 2005 by and between PPT and Seller (the "Option Agreement"), more
than one hundred eighty (180) days prior to July 30, 2007, the aforementioned
restrictions shall apply for a period of thirty (30) days from the Earnout
Payment Date with respect to the shares comprising the Earnout Amount. In order
to enforce the foregoing covenant, Purchaser may impose stop transfer
instructions with respect to the Shares and shares comprising the Earnout Amount
held by Seller until the end of such period(s).
(c) The Purchase Price shall be allocated among the Acquired Assets and
the covenants contained in Section 5.6 of this Agreement as of the Closing Date
in accordance with Exhibit F (the "Allocation Method"). Any subsequent
adjustments to the sum of the Purchase Price shall be allocated in a manner
consistent with the Allocation Method and Section 1060 of the Code and the
Treasury Regulation issued thereunder. For all Tax purposes, Purchaser and
Seller agree that the transactions contemplated in this Agreement shall be
reported in a manner consistent with the terms of this Agreement and that
neither Seller nor Purchaser will take any position inconsistent therewith in
any Tax Return, in any refund claim, in any litigation or otherwise. Seller and
Purchaser agree to cooperate in good faith with each other in filing IRS Form
8594 in the form prepared by Purchaser.
Section 2.7 Earnout. As additional consideration for the
transactions set forth herein:
(a) If, on the later of (i) July 30, 2007 or (ii) the date on which
Purchaser exercises the option granted to it by Seller pursuant to the Option
Agreement, the Minimum Revenue Trigger has been achieved, Purchaser shall issue
shares of Common Stock to Seller no later than ten (10) Business Days after
Purchaser's receipt of confirmation that Seller accepts the Revenue Trigger
Report, subject to the resolution of any dispute pursuant to Section 2.7(c) (the
"Earnout Payment Date"), the Earnout Amount. Notwithstanding the foregoing, no
fractional shares of
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Common Stock shall be issued in conjunction with any payment by Purchaser to
Seller of the Earnout Amount. In lieu of any fractional share to which Seller
would otherwise be entitled, Purchaser shall pay cash equal to the product of
such fraction multiplied by the price per share of Common Stock based on the
ninety- (90) day prior average price of the Common Stock as of April 1, 2007.
(b) Whether the Minimum Revenue Trigger has been achieved, and the
Annualized First Quarter Revenue, shall be determined by Purchaser within (i)
thirty (30) days after the close of the second quarter of 2007 or (ii) the date
on which Purchaser exercises the option granted to it by Seller pursuant to the
Option Agreement, whichever is later. Copies of Purchaser's report (the "Revenue
Trigger Report") setting forth Purchaser's determination of whether the Minimum
Revenue Trigger has been achieved, and the Annualized First Quarter Revenue,
shall be submitted by Purchaser in writing to Seller and, unless Seller notifies
Purchaser within thirty (30) Business Days after receipt of such Revenue Trigger
Report that it objects to the computations set forth therein, such Revenue
Trigger Report shall be binding and conclusive for the purposes of this
Agreement. Following delivery to Seller of the Revenue Trigger Report, Purchaser
shall give Seller and its accountants reasonable access to Purchaser's personnel
as well as any books, records, work-papers, documents, and reports created or
prepared by Purchaser in connection with the determination of the Minimum
Revenue Trigger and the Annualized First Quarter Revenue and the preparation of
the corresponding Revenue Trigger Report on reasonable prior notice during
regular business hours in order to verify the computations set forth therein.
(c) If Seller disagrees with the computations set forth in the Revenue
Trigger Report, Seller may, within thirty (30) days after delivery of the
Revenue Trigger Report, deliver a notice to Purchaser disagreeing with such
computation and the basis for its disagreement, and thereafter the parties shall
in good faith attempt to resolve any dispute, in which event the Revenue Trigger
Report and the computations set forth therein, as amended to the extent
necessary to reflect the resolution of the dispute, shall be conclusive and
binding on the parties. If the parties do not reach agreement resolving the
dispute within ten (10) days after notice is given by Seller, the parties shall
submit the dispute to the Accountant to review this Agreement and the disputed
items or amounts for the purpose of making the appropriate calculations (it
being understood that the Accountant shall be functioning as an expert and not
as an arbitrator). Promptly, but no later than thirty (30) days, the Accountant
shall determine, based solely on written submissions by Purchaser and Seller,
and not by independent review, only those issues in dispute and shall render a
written report as to the resolution of the dispute and the resulting
computations which shall be conclusive and binding on the parties. The
Accountant shall have access to such books, records, work-papers and personnel
as it shall request. In resolving any disputed item, the Accountant shall be
bound by the provisions of this Section 2.7(c). The fees, costs and expenses of
the Accountant (i) shall be borne by Purchaser if the Accountant determines that
the Revenue Trigger has been understated by ten percent (10%) percent or more,
but only if the Minimum Revenue Trigger has been met or exceeded and (ii) shall
be borne by Seller if the Accountant determines that the Revenue Trigger has not
been understated or has been understated by less than ten percent (10 %)
percent, regardless of whether or not the Minimum Revenue Trigger has been met
or exceeded.
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(d) Any issuance pursuant to Section 2.7(c) shall be made within ten
(10) Business Days after the determination thereof to the applicable party.
Section 2.8 Closing. Subject to the terms and conditions of
this Agreement, the closing of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP, 000 Xxxxx Xxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 at 10:00 a.m.
California time, on the date that is no later than the third (3rd) Business Day
following satisfaction or waiver of all of the conditions to Closing set forth
in Article VI hereof, or at such other time, place or date as Purchaser and
Seller mutually agree upon in writing. The date upon which the Closing actually
occurs is referred to herein as the "Closing Date".
Section 2.9 Deliveries by Seller. At the Closing, Seller shall
deliver, or cause to be delivered, to Purchaser each of the following, duly
executed, to the extent execution by Seller is necessary, by or on behalf of
Seller:
(a) the Xxxx of Sale and Assignment;
(b) the Patent Assignment;
(c) the Copyright Assignment;
(d) the Trademark Assignment;
(e) the Lease Assignment;
(f) a receipt for the Purchase Price;
(g) the officer's certificate of Seller dated the Closing Date referred
to in Section 6.2(d);
(h) a certificate of the Secretary of Seller dated the Closing Date in
substantially the form attached as Exhibit G hereto;
(i) duly executed releases of all Liens in respect of the Acquired
Assets (other than Permitted Liens);
(j) the Other Instruments, in form and substance satisfactory to
Purchaser, as may be requested by Purchaser, if any;
(k) copies of all Consents of Governmental Bodies (if applicable) to
the transfer or assignment of the Material Permits;
(l) copies of all Consents from third parties necessary for the
transfer or assignment of any Acquired Asset; and
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(m) a recent certificate of good standing for Seller (or other
equivalent certificate) from the appropriate Governmental Body dated within a
reasonable time period before the Closing.
Section 2.10 Deliveries by Purchaser. At the Closing,
Purchaser shall deliver or cause to be delivered to Seller, each of the
following, duly executed, to the extent execution by Purchaser is necessary, by
or on behalf of Purchaser:
(a) the Purchase Price;
(b) counterparts of the Instruments of Assignment;
(c) the officer's certificate of Purchaser referred to in Section
6.1(c);
(d) a certificate of good standing (or other equivalent certificate)
for Purchaser from the appropriate Government Body dated within a reasonable
time before the Closing; and
(e) copies of all Consents of Governmental Bodies (if applicable) to
the transfer or assignment of the Material Permits.
Section 2.11 Non-Assignable Acquired Assets.
(a) To the extent that any of the Acquired Assets (including, without
limitation, any Assigned Agreements or Permits) are not capable of being
assigned to Purchaser (or its designees) at the Closing without the Consent of
the issuer thereof or any other party thereto or any other Person, or if such
assignment or attempted assignment would constitute a breach thereof, or a
violation of any applicable United States or non-United States federal,
national, supranational, state, provincial, local or similar statute, law,
ordinance, regulation, rule, code, order, judgment or decree, injunction, award,
administrative order or decree, administrative or judicial decision, and any
other executive or legislative proclamation, requirement or rule of law
(including common law) (collectively, "Laws"), this Agreement shall not
constitute an assignment thereof, or an attempted assignment, unless such
Consent has been obtained.
(b) In the event that any Consent referred to in Section 2.11(a) has
not been obtained prior to the Closing, Seller and Purchaser shall cooperate to
obtain each and every such Consent and to resolve the impracticalities of
assignment referred to in Section 2.11(a) after the Closing.
(c) To the extent any Consents referred to in Section 2.11(a) have not
been obtained by Seller prior to the Closing, until the impracticalities of
assignment referred to in this Section 2.11 are resolved, Seller shall use its
reasonable efforts to (i) provide Purchaser, to the extent permitted by
applicable Law, the benefits of any Acquired Assets referred to in Section
2.11(a), (ii) cooperate in any reasonable and lawful arrangement (including
subleasing or subcontracting, or performance thereunder by Seller as Purchaser's
agent) designed to provide such benefits to Purchaser, and (iii) enforce for the
account and benefit of Purchaser any and all rights of Seller arising from the
Acquired Assets referred to in Section 2.11(a) against such issuer thereof and
all other parties thereto and/or any other Person (including, without
limitation, the right to elect to terminate in accordance with the terms thereof
upon the sole determination of Purchaser).
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(d) At such time and on each occasion after the Closing Date as all
Consents referred to in this Section 2.11 with respect to an Acquired Asset have
been obtained, such Acquired Asset shall automatically be transferred and
assigned by Seller to Purchaser for no additional consideration.
Article III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller
represents and warrants to Purchaser for its benefit that the statements
contained in this Article III are true and correct as of the date hereof and the
Closing Date (or in the case of representations and warranties made as of a
specific date, as of such date), subject to such exceptions as are specifically
disclosed in writing in the Disclosure Schedule provided by Seller to Purchaser
(the "Disclosure Schedule").
Section 3.1 Organization and Qualification of Seller. Seller
is a corporation duly organized, validly existing and in corporate good standing
under the laws of the State of Delaware and has all requisite corporate power
and authority to own, lease and operate the Acquired Assets and to conduct the
Operations. Except as set forth on Schedule 3.1, Seller is duly licensed or
qualified to do business and is in good standing in each jurisdiction in which
the properties owned or leased by it or the conduct of the Operations requires
such qualification, except to the extent that the failure to be so licensed or
qualified and in good standing would not (a) adversely affect the ability of
Seller to carry out its obligations under, and to consummate the transactions
contemplated by, this Agreement and the Transaction Documents to which Seller is
a party or (b) otherwise have a Material Adverse Effect. The copies of the
Certificate of Incorporation and Bylaws previously delivered to Purchaser or its
counsel, in each case as amended and/or restated, are true, complete and
correct.
Section 3.2 Authority of Seller to Execute and Perform
Agreement. Seller has full right and all necessary corporate power and authority
required to enter into, execute and deliver this Agreement and the other
Transaction Documents to which it is or will be a party and to perform fully its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Seller of this
Agreement and the Transaction Documents to which Seller is a party, the
performance by Seller of its obligations hereunder and thereunder and the
consummation by Seller of the transactions contemplated hereby and thereby have
been duly authorized by all requisite corporate action on the part of Seller and
its stockholders. This Agreement has been duly executed and delivered by Seller
and, on the Closing Date, the other Transaction Documents to which Seller is a
party will be duly executed and delivered by Seller. Assuming due authorization,
execution and delivery hereof and thereof by Purchaser, this Agreement is, and
upon their execution the other Transaction Documents will be, legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with
their respective terms, except that such enforceability may be subject to (i)
bankruptcy, insolvency, reorganization or other similar laws affecting or
relating to enforcement of creditors' rights generally, and (ii) general
equitable principles.
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Section 3.3 Subsidiaries. Except as set forth on Schedule 3.3,
There are no corporations, partnerships, joint ventures, associations or other
entities that own, hold, or lease any of the Acquired Assets or that are in any
respect involved in the Operations in which Seller or its Affiliates own, of
record or beneficially, any direct or indirect equity, debt or other interest or
any right (contingent or otherwise) to acquire the same.
Section 3.4 Financial Statements. [TO BE UPDATED BASED UPON
DATE OF OPTION EXERCISE]
(a) Seller has delivered to Purchaser (i) the financial statements of
Seller (balance sheet and statements of operations and cash flow, together with
the notes thereto) for the fiscal years ended December 31, 2002, December 31,
2003 and December 31, 2004 and (ii) the unaudited balance sheet of Seller (the
"Balance Sheet") as of [June 30, 2005] (the "Balance Sheet Date"), and the
related consolidated statements of operations and cash flows for the [six- (6)]
month period ended [June 30, 2005] (together with the financial statements
referred to in clause (i) above, the "Financial Statements"), copies of which
are set forth in Schedule 3.4. The Financial Statements were prepared in
accordance with the books of account and other financial records of the Seller
and are complete and correct in all material respects and have been prepared in
accordance with U.S. GAAP applied consistent with past practice. The Financial
Statements are true and correct, include all adjustments that are necessary, and
fairly present in all material respects the financial condition, operating
results and cash flows of Seller as of the dates thereof and for the periods
indicated in accordance with U.S. GAAP, except that the Financial Statements
referred to in clause (ii) above do not contain the information and disclosures
to be found in notes to financial statements prepared in accordance with U.S.
GAAP and are subject to normal year-end adjustments, which will not be material.
(b) The books of account and other financial records of the Seller: (i)
reflect all items of income and expense and all assets and Liabilities required
to be reflected therein in accordance with past practice and, to the extent
applicable, on an income Tax basis, (ii) are in all material respects complete
and correct, and do not contain or reflect any material inaccuracies or
discrepancies and (iii) have been maintained in accordance with good business
and accounting practices.
(c) All accounts receivable of the Seller reflected in the Balance
Sheet and all accounts receivable of Seller that have arisen since the Balance
Sheet Date (except such accounts receivable as have been collected since such
dates) are valid and enforceable claims against the account debtors, and the
goods and services sold and delivered that gave rise to such accounts were sold
and delivered in conformity with all applicable express and implied warranties,
purchase orders, agreements and specifications. Such accounts receivable of
Seller are subject to no valid defense, offset or counterclaim, other than
normal cash discounts accrued in the Ordinary Course of Business, and are fully
collectible, without resort to litigation or extraordinary collection activity,
within ninety (90) days after the Closing Date, except to the extent of the
allowance for doubtful accounts reflected on the Balance Sheet. Except as set
forth in Schedule 3.4(c), as of the Closing Date, all of Seller's accounts
receivable and payable will have arisen from the sale or purchase of inventory
or services to Persons not affiliated with Seller and in the Ordinary Course of
Business.
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(d) All inventories of raw materials, work-in-process and finished
goods set forth or reflected in the Balance Sheet, or acquired by Seller since
the Balance Sheet Date, consists of a quality and quantity usable and saleable
by Seller in the Ordinary Course of Business. The value at which inventories are
carried on the Balance Sheet reflects the normal inventory valuation policy of
Seller, on a basis consistent with that of the preceding period, of stating
inventory at its lower of cost or market value, and, consistent therewith, all
non-current or obsolete inventory held by Seller on the Balance Sheet Date has
been valued at its current market value on the Balance Sheet. There is no reason
to believe that Seller will experience in the foreseeable future any difficulty
in obtaining, in the desired quantity and quality, the raw materials, supplies
or component products required for the manufacture, assembly, production or sale
of its products including, without limitation, inventory which historically has
been imported.
Section 3.5 Absence of Certain Changes or Events. Except as
set forth on Schedule 3.5, since [June 30, 2005], Seller has conducted the
Operations only in the ordinary course of business consistent with past practice
(the "Ordinary Course of Business"). As amplification and not limitation of the
foregoing, since such date, Seller has not:
(a) suffered a Material Adverse Effect or an event that could
reasonably be expected to cause a Material Adverse Effect;
(b) made any capital expenditures or similar commitments for any
capital expenditures.
(c) issued any purchase orders or otherwise agreed to make any
purchases involving exchanges in value in excess of Two Thousand Five Hundred
Dollars and Zero Cents ($2,500.00) individually or Five Thousand Dollars and
Zero Cents ($5,000.00) in the aggregate, except in the Ordinary Course of
Business;
(d) incurred, assumed, guaranteed, paid or discharged any Lien or
Liability related to the Operations, absolute, accrued, contingent or otherwise,
whether due or to become due, including without limitation any Debt, other than
current liabilities incurred in the Ordinary Course of Business;
(e) incurred any Debt in excess of Two Thousand Five Hundred Dollars
and Zero Cents ($2,500.00) individually or Five Thousand Dollars and Zero Cents
($5,000.00) in the aggregate, except in the Ordinary Course of Business;
(f) made any loan or advance or increased the amount of any existing
loans to any Person or Affiliate of Seller;
(g) sold, transferred, leased, subleased, licensed, abandoned or
otherwise disposed of any properties or assets, real, personal or mixed
(including leasehold interests and intangible property) related to the
Operations included in the Acquired Assets, except in the Ordinary Course of
Business;
(h) issued, sold, delivered or agreed or committed to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, rights to purchase or otherwise) or authorized the
issuance, sale or delivery of, or redeemed or
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repurchased, any stock of any class or any other securities or any rights,
warrants or options to acquire any such stock or other securities (except
pursuant to the conversion or exercise of convertible securities, options or
warrants outstanding on the date hereof), or amended any of the terms of any
such convertible securities, options or warrants;
(i) split, combined or reclassified any shares of its capital stock;
declared, set aside or paid any dividend, special bonuses other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock;
(j) merged with, entered into a consolidation with or acquired an
interest of 5% or more in any Person or acquired a substantial portion of the
assets or business of any Person or any division or line of business thereof
engaged in a business relating to the Operations, or otherwise acquired any
material assets relating to the Operations except in the Ordinary Course of
Business;
(k) permitted or allowed any of the Acquired Assets to be subjected to
any Lien other than Permitted Liens and Liens that will be released at or prior
to the Closing;
(l) transferred or granted any rights under, or entered into any
settlement regarding the breach or infringement of, any Intellectual Property
included in the Assigned IP Assets, or modified any existing rights with respect
thereto except for the granting of non-exclusive licenses or rights to customers
for the use of products sold by Seller in the Ordinary Course of Business;
(m) changed in any manner the character or scope of the Operations;
(n) written down or written up (or failed to write down or write up in
accordance with U.S. GAAP consistent with past practice) the value of any
receivables or revalued any of the Acquired Assets other than in the Ordinary
Course of Business and in accordance with U.S. GAAP;
(o) made any change in the accounting methods or practices or made any
change in depreciation or amortization policies or lives adopted by it, except
as required by U.S. GAAP;
(p) made, changed revoked or otherwise modified any express or deemed
Tax election or settled or compromised any Tax Liability;
(q) settled, compromised, materially modified or amended, waived,
terminated, cancelled, released or assigned any rights or Claims concerning,
affecting or relating to any Contract relating to the Operations (including,
without limitation, any Assigned Agreements), or otherwise relating to the
Operations or the Acquired Assets;
(r) suffered or incurred any material damage, destruction or casualty
loss (whether or not covered by insurance) affecting the Operations or the
Acquired Assets;
(s) amended, modified or consented to the termination of or failed to
renew, or received any written notice or threat (that was not subsequently
withdrawn) to terminate or fail to renew, any Contract that is or was material
to the Operations or Seller's rights thereunder;
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(t) made any material charitable contribution;
(u) entered into, materially amended or (except in conjunction with the
completion of the term thereof) terminated any Contract or transaction with any
director, officer, employee, stockholder or Affiliate of Seller (or with any
relative, beneficiary, spouse or Affiliate of such Person) relating to the
Operations or the Acquired Assets;
(v) entered into, amended, modified or consented to the termination of
any Assigned Agreement;
(w) terminated, discontinued, closed or disposed of any facility or
other business operation, or laid off any employees or implemented any early
retirement, separation or program providing early retirement window benefits or
announced or planned any such action or program for the future;
(x) allowed any Permit that was issued or relates to the Operations to
lapse or terminate or failed to renew any insurance policy or Permit that is
scheduled to terminate or expire within forty five (45) calendar days of the
Closing Date, except to the extent that such failure would not be reasonably
expected to cause a Material Adverse Effect on the ability of Purchaser to own
and operate the Acquired Assets and conduct the Operations as now conducted;
(y) failed to maintain Seller's plant, property and equipment in good
repair and operating condition, ordinary wear and tear excepted;
(z) (i) granted, announced, or made any change in the rate of
compensation, wages, salaries, commission, bonuses, incentives, pensions or
other direct or indirect remuneration or benefits payable, or paid or agreed or
orally promised to pay, conditionally or otherwise, any bonus, incentive,
retention or other compensation, retirement, welfare, fringe or severance
benefit or vacation pay, to or in respect of any director, officer, employee,
distributor, contractor, or agent of Seller relating to or involved in the
Operations, including any increase or change pursuant to any Plan or (ii)
entered into, established, increased or promised to increase, amended or
terminated any benefits under any Plan or any employment or severance agreement
or commitment or collective bargaining agreement with any employee or contractor
of Seller relating to or involved in the Operations, in either case except as
required by Law or any collective bargaining agreement, such exceptions being
disclosed on Schedule 3.5;
(aa) (i) established, entered into, or adopted any Plan, (ii) caused or
permitted any Plan to be materially amended (other than as required to comply
with applicable Law), or (iii) waived any of its rights under, or permitted or
provided for the acceleration of vesting or payment under, any provision of any
Plan;
(bb) failed to pay any creditor any material amount owed to such
creditor when due; or
(cc) agreed, whether in writing or otherwise, to take any action
described in this Section 3.5 or granted any options to purchase, rights of
first refusal, rights of first offer or any other similar rights or commitments
with respect to any of the actions specified in this
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Section 3.5, except as expressly contemplated by this Agreement and the
Transaction Documents to which Seller is a party.
Section 3.6 Litigation and Liabilities. Except as listed on
Schedule 3.6, there are no Claims or legal, administrative or arbitral
proceedings, hearings, inquiries or investigations by or before any Governmental
Body ("Proceedings") pending by or against Seller or any Affiliate thereof or
affecting Seller in connection with or relating to the transactions contemplated
by this Agreement or the Transaction Documents or of any action taken or to be
taken in connection therewith or the consummation of the transactions
contemplated thereby, or, to Seller's Knowledge, threatened against, or
involving the Operations or the Acquired Assets. Except as set forth on Schedule
3.6, none of Seller, its Affiliates or any of its assets or properties relating
to the Operations, including the Acquired Assets, is subject to any Order (nor,
to the Knowledge of Seller, are there any such Orders threatened to be imposed
by any Governmental Body) that has or has had a Material Adverse Effect or could
affect the legality, validity or enforceability of this Agreement, any
Transactional Documents or the consummation of the transactions contemplated
hereby or thereby.
Section 3.7 Title and Condition to Properties; Absence of
Liens; etc. Seller has good, valid and marketable title to, or, in the case of
leased or subleased Acquired Assets, valid and subsisting leasehold interests
in, all of its properties and assets, real, personal and fixed, tangible and
intangible, comprising part of the Acquired Assets, free and clear of any Liens,
except (i) for Liens for Taxes, assessments and governmental charges or levies
not yet due and payable, (ii) Liens for Taxes that are being contested in good
faith and by appropriate proceedings, provided, that adequate reserves with
respect thereto are maintained on Seller's books, (iii) pledges or deposits to
secure obligations under workers' compensation laws or similar legislation or to
secure public or statutory obligations (iv) in the case of leased assets, those
set forth in the lease agreements pertaining thereto and disclosed in the
Disclosure Schedules (v) statutory Liens imposed by Law, such as landlords',
carriers', warehousemen's, mechanics', suppliers', materialmen's, workmen's,
repairmen's liens or other similar Liens arising in the Ordinary Course of
Business with respect to amounts not yet overdue or amounts being contested in
good faith by appropriate proceedings or (vi) Liens that, individually and in
the aggregate, do not and could not reasonably be expected to materially detract
from the value of the Acquired Assets, or materially interfere with the use,
occupancy or operation thereof as currently used, occupied or operated and as
set forth on Schedule 3.7 (such of the foregoing Liens described in clauses (i)
through (vi), collectively, the "Permitted Liens").
Section 3.8 Licenses and Registrations; Compliance with Laws;
etc. Except as set forth on Schedule 3.8, Seller has all permits,
authorizations, identification numbers, licenses, orders, waivers, and
registrations, including, but not limited to those required under or issued
pursuant to any applicable Environmental Laws, and shall have the approvals of,
and have made all required registrations with, any United States or non-United
States federal, national, supranational, state, provincial, local, or similar
government or political subdivision thereof, or any agency or instrumentality of
any such government or political subdivision, governmental, regulatory or
administrative authority, agency or commission or any court, tribunal, or
judicial or arbitral body (each a "Governmental Body," and collectively,
"Governmental Bodies") the absence of which could reasonably be expected to
cause a Material Adverse Effect on the ability of Purchaser to own and operate
the Acquired Assets and conduct the Operations as now
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conducted (collectively, "Permits"). Except as set forth on Schedule 3.8, such
Permits are in effect in accordance with their terms; no notices of violations
have been issued by any Governmental Body in respect of any Permit; and no
proceeding is pending or, to the Knowledge of Seller, threatened to revoke or
limit any Permit. Seller is in compliance with the terms of such Permits in all
respects material to the Operations. Except as set forth on Schedule 3.8, the
Operations have not been conducted and are not being conducted in conflict with,
violation of or default under any Law or Order and Seller has filed with the
proper authorities all material statements and reports required by, and have
complied in all material respects with, all Laws and Orders applicable to Seller
or any of its properties or assets, including the Acquired Assets, or the
Operations, and Seller is not in violation of any such Law or Order. Seller has
not, in the last three (3) years, received any notice of any Claim that Seller
has not complied in any material respect with any Law or Order. Seller has not
made any illegal payment to officers or employees of any governmental or
regulatory body, or made any payment to customers for the sharing of fees or to
customers or suppliers for rebating of charges, or engaged in any other
reciprocal practices, or made any illegal payment or given any other illegal
consideration to purchasing agents or other representatives of customers in
respect of the sales made or to be made by Seller.
Section 3.9 Intellectual Property.
(a) Disclosure.
(i) Schedule 3.9(a)(i) sets forth a true and complete list of
all issued or applied for Patents and all issued or applied for Copyright or
Trademark registrations included in the Assigned IP Assets. Schedule 3.9(a)(i)
also lists all unregistered Intellectual Property (excluding unregistered and
immaterial copyrightable works) included in the Assigned IP Assets. The Assigned
IP Assets constitutes all intellectual property used in and/or necessary to the
conduct of the Operations as it is currently conducted.
(ii) Schedule 3.9(a)(ii) sets forth all (A) material IP
Licenses granted to third parties by Seller (excluding non-material,
non-exclusive licenses granted by Seller to customers for the use of products
sold by Seller in the Ordinary Course of Business) and (B) material IP Licenses
granted to Seller by third parties, in each case, included in the Assigned IP
Assets. Except as set forth in Schedule 3.9(a)(ii), no Person other than Seller
has ownership rights to improvements or modifications made by Seller in the
Assigned IP, including, without limitation, in Assigned IP that has been
licensed to Seller.
(b) Rights. Except for Intellectual Property licensed to Seller and, in
any case, subject to licenses granted by Seller, Seller owns, free and clear of
all Liens (other than Permitted Liens) and except as set forth in Schedule 3.9
(b), all right, title and interest in all Intellectual Property included in the
Assigned IP Assets and is entitled to use such Intellectual Property on an
unrestricted basis in the Operations. Except as set forth in Section 3.15(b) and
Section 3.15(c), all IP Licenses granted by any third party to Seller listed on
Schedule 3.9(a)(ii) are valid and enforceable except as enforcement may be
limited by (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors' rights generally and
(ii) general principles of equity; provided, however, that no representation or
warranty is made here or in Section 3.15 as to the ability of any such third
party to grant the license in question. All currently existing Copyright and
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Xxxxxxxxx xxxxxxxxxxxxx xxx Xxxxxx Xxxxxx Patents listed on Schedule 3.9(a)(i)
are, with respect to issued and registered items, validly-issued, and all
necessary registration, maintenance, renewal fees, annuity fees and Taxes in
connection with such registrations have been timely paid and all necessary
documents and certificates in connection with such registrations have been
timely filed with the relevant patent, copyright, trademark or other authorities
in the United States (or other applicable jurisdictions) for the purposes of
maintaining such registered Intellectual Property.
(c) The Assigned IP Assets (but in the case of IP Licenses, qualified
by the Knowledge of Seller), are valid and enforceable, and have not been
adjudged invalid or unenforceable in whole or part.
(d) To the Knowledge of Seller, no Person is engaging in any activity
that infringes the Assigned IP Assets. Each Seller IP License is valid and
enforceable, is binding on all parties to such license, and is in full force and
effect, and, to the Knowledge of Seller, no party to any Seller IP License is in
breach thereof or default thereunder.
(e) Claims; Third Party Obligations.
(i) Except as disclosed in Schedule 3.9(e)(i), no Claim has
been served on Seller and is currently pending or, to Seller's Knowledge,
threatened and Seller has no Knowledge of any basis for any Claim that
challenges the validity, enforceability, ownership, or right to use, sell,
license or sublicense (except for limitations in the IP Licenses included in the
Assigned IP Assets or as otherwise provided by Laws) any Intellectual Property
included in the Assigned IP Assets, and no item of Intellectual Property
included in the Assigned IP Assets is subject to any outstanding order, ruling,
decree, stipulation, charge or agreement restricting in any manner the use, the
licensing, or the sublicensing thereof (except for limitations in the IP
Licenses included in the Assigned IP Assets or as otherwise provided by Laws).
Except as disclosed in Schedule 3.9(e)(i), to Seller's Knowledge, Seller has not
infringed upon, misappropriated or otherwise violated the intellectual property
rights of any third party and Seller has not received any Claim, charge,
complaint, demand or notice alleging any such infringement, misappropriation or
violation, by Seller or by the Operations as currently conducted, and has no
Knowledge of any basis for any such Claim. The Operations as currently conducted
do not (A) infringe or misappropriate the intellectual property of any Person,
(B) violate any term or provision of any Assigned Agreement, (C) violate the
rights of any Person (including rights to privacy or publicity), or (D)
constitute unfair competition or an unfair trade practice under the Laws.
(ii) Schedule 3.9(e)(ii) lists all Assigned Agreements between
Seller and any other Person wherein or whereby Seller has agreed to, or assumed,
any obligation or duty to warrant, indemnify, reimburse, hold harmless, guaranty
or otherwise assume or incur any obligation or Liability or provide a right of
rescission with respect to the infringement or misappropriation by Seller or
such other Person of the intellectual property of any Person other than Seller.
(f) Employees, Consultants and Other Persons. Seller has taken all
commercially reasonable steps to protect Seller's rights in confidential
information and trade secrets of Seller
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related to or used in the Operations. Except as disclosed in Schedule 3.9(f), as
of the date hereof, each present or past employee, director, officer, contractor
or consultant of Seller who developed any part of any Intellectual Property
(excluding unregistered and immaterial copyrightable works) included in the
Assigned IP Assets (except for Intellectual Property licensed by a third party
to Seller) either: (i) is a party to an agreement that, to the extent permitted
by Laws, conveys or obligates such Person to convey to Seller any and all right,
title and interest in and to all such Assigned IP Assets developed by such
Person in connection with such Person's employment with or engagement on behalf
of Seller or a party contracting with Seller; (ii) as to copyrighted or
copyrightable material which are included in the Assigned IP Assets and were
created in the course of such Person's employment with or engagement on behalf
of Seller is a party to a "work made for hire" agreement pursuant to which, to
the extent permitted by Laws, Seller is deemed to be the original owner/author
of all proprietary rights in such material; or (iii) otherwise has by operation
of Law, to the extent permitted by Law, vested in Seller any and all right,
title and interest in and to all such Assigned IP Assets developed by such
Person in connection with such Person's employment with, or engagement on behalf
of, Seller.
(g) Transfer. (i) Except as set forth in Schedule 3.11 and (ii)
provided Purchaser is in compliance with all material requirements of this
Agreement and the Laws, the execution and delivery by Seller of, and the
assignment and transfer of the Assigned IP Assets to Purchaser contemplated by
this Agreement, in and of themselves, will not result in the loss or impairment
of the rights of Purchaser to own or use (in the manner and for the purposes
used by Seller prior to the Closing Date) any of the Assigned IP Assets.
(h) Third Party Rights. Neither this Agreement nor any of the
Transaction Documents nor any transactions contemplated hereby or thereby will
result in Purchaser's granting any rights or licenses with respect to the
intellectual property of Purchaser to any Person pursuant to any Assigned
Agreement to which Seller is a party or by which any of its Acquired Assets are
bound.
Section 3.10 Non-Contravention. Except as set forth on
Schedule 3.10, the execution and delivery of this Agreement and the other
Transaction Documents by Seller, the consummation by Seller of the transactions
contemplated hereby and thereby and the performance by Seller of this Agreement
and the other Transaction Documents in accordance with their respective terms
will not (a) violate, conflict with or result in the breach of any provision of
its Certificate of Incorporation or Bylaws, in each case as amended and/or
restated (b) violate, conflict with or result in the breach of any material
provision of, or result in a material modification of or otherwise entitle any
party to terminate, or constitute (whether after the filing of notice or lapse
of time or both) a default under, any Assigned Agreement to which Seller is a
party or by or to which the Acquired Assets may be bound or subject, (c) violate
or result in the revocation or suspension of any Permit, (d) conflict with or
violate (or cause an event that could have a Material Adverse Effect as a result
of) any Law or Order applicable to, against, or binding upon Seller or by which
any of Seller's securities, business or property are bound or any of the
Acquired Assets, or (e) conflict with, result in any breach of, constitute a
default (or event which that the giving of notice or lapse of time, or both,
would become a default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or
cancellation of, or result in the creation or imposition of any Lien (other than
Permitted Liens) on any of the Acquired Assets pursuant to
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any provision of any Assigned Agreement, Lien, note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument or arrangement to which Seller is a party or by which any of
the Acquired Assets are bound or affected, except, in the case of clause (d) and
this clause (e), to the extent that such conflicts, breaches, defaults or other
matters result from facts or circumstances relating solely to Purchaser and
would not (A) adversely affect the ability of Seller to carry out its
obligations under, and to consummate the transactions contemplated by, this
Agreement and the Transaction Documents to which Seller is a party or (B)
otherwise have a Material Adverse Effect.
Section 3.11 Consents and Approvals. Except as set forth on
Schedule 3.11, the execution, delivery and performance of this Agreement and
each of the other Transaction Documents by Seller, the consummation by Seller of
the transactions contemplated hereby and thereby, and compliance by Seller with
any of the provisions hereof or thereof shall not require any consent, approval,
order, authorization or action of, any filing, expiration of waiting periods,
registration or declaration with, or notice to ("Consent"), any Governmental
Body or any other Person.
Section 3.12 Acquired Assets. Since the Balance Sheet Date, to
Seller's Knowledge, all of the Acquired Assets have been acquired for
consideration not less or greater than the fair market value of such Acquired
Assets at the date of such acquisition.
Section 3.13 Employee Benefit Plans; ERISA.
(a) Schedule 3.13 lists each material, written employment, bonus,
deferred compensation, incentive compensation, stock purchase, stock option,
stock appreciation right or other stock-based incentive, severance,
change-in-control, or termination pay, hospitalization or other medical,
disability, life or other insurance, supplemental unemployment benefits,
profit-sharing, pension, or retirement plan, program, agreement or arrangement,
and each other employee benefit plan, program, agreement or arrangement,
sponsored, maintained or contributed to or required to be contributed to for the
employees of the Seller by Seller (the "Plans"). Each of the Plans has been
operated and administered in all material respects in accordance with applicable
laws, rules and regulations, including but not limited to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") and the Code. No
benefit under any Plan is or will be an Assumed Liability.
(b) Except as set forth on Schedule 3.13, as of the date hereof, the
consummation of the transactions contemplated by this Agreement or any other
Transaction Documents will not (i) entitle any individual to severance pay,
unemployment compensation or other benefits or compensation, (ii) accelerate the
time of payment or vesting, or increase the amount of any compensation due, or
in respect of, any individual, (iii) result in or satisfy a condition to the
payment of compensation that would, in combination with any other payment,
result in an "excess parachute payment" within the meaning of Code Section
280G(b)(1), or (iv) constitute or involve a prohibited transaction (as defined
in ERISA Section 406 or Code Section 4975), constitute or involve a breach of
fiduciary responsibility within the meaning of ERISA Section 502(1) or otherwise
violate any provision of ERISA.
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Section 3.14 Insurance Policies. Schedule 3.14 sets forth a
list (or a copy) of all insurance policies maintained by Seller relating to the
Operations or the Acquired Assets, products, employees, and operations of Seller
as of the date hereof. All such policies contain such types and amounts and
cover such risks as are consistent with customary practices and standards of
companies engaged in business and operations similar to those of Seller, are in
full force and effect, all premiums due and payable thereon have been paid, and
Seller has complied in all material respects with the provisions of such
policies and have not received notice from any of its insurance brokers or
carriers that such broker or carrier will not be willing or able to renew its
existing coverage. Seller has delivered or made available to Purchaser or its
counsel true, complete and correct copies of all such policies together with all
riders and amendments thereto.
Section 3.15 Contracts.
(a) Schedule 3.15(a) hereto lists, as of the date hereof, all of the
Assigned Agreements to which Seller is a party or by or to which Seller or any
of its assets or properties are bound or subject. True and complete copies of
all of the foregoing Assigned Agreements, in each case as amended to date, have
been delivered to, or, to the extent not requested to be delivered, have been
made available for inspection by, Purchaser or its counsel.
(b) All Contracts described or listed in Schedule 3.15(a) (i)
constitute the legal, valid and binding obligations of Seller, are in full force
and effect, (ii) are freely and fully assignable to Purchaser without penalty or
other adverse consequences and (iii) upon the consummation of the transactions
contemplated by this Agreement and the Transaction Documents shall continue in
full force and effect without penalty or other adverse consequence, and are
enforceable in accordance with their respective terms except as enforcement may
be limited by (A) bankruptcy, insolvency, reorganization, fraudulent conveyance
or transfer, moratorium or similar laws affecting creditors' rights generally
and (B) general principles of equity.
(c) Except as set forth in Schedule 3.15(c), Seller is not in breach or
default under any Assigned Agreement, nor, to Seller's Knowledge, does any
condition exist that, with notice or lapse of time or both, would constitute a
breach or default on the part of Seller thereunder, except to the extent that
such breach, default or condition would not be reasonably expected to cause a
Material Adverse Effect on the ability of Purchaser to own and operate the
Acquired Assets and conduct the Operations as now conducted. Except as set forth
on Schedule 3.15(c), to the Knowledge of Seller, no other party to any Assigned
Agreement is in breach or default thereunder, nor, to the Knowledge of Seller,
does any condition exist that with notice or lapse of time or both would
constitute a breach or default on the part of such other party thereunder.
Except as set forth on Schedule 3.15(c), Seller has no Knowledge that any Person
intends to terminate (whether for cause or convenience) any Assigned Agreement
before its stated term, if any. Seller has no Knowledge of any Claim, threatened
in writing or pending, by any Governmental Body or any other Person, under any
Assigned Agreement.
(d) Except as set forth in Schedule 3.15(d), to Seller's Knowledge, no
outstanding bid or proposal was bid at an anticipated loss at the time such bid
or proposal was prepared and tendered.
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(e) There is no contract, agreement or other arrangement granting any
Person any preferential right to purchase any of the Acquired Assets.
Section 3.16 Environmental Matters.
(a) Except as listed in Schedule 3.16
(i) Seller and its Affiliates (as it relates to the
Operations) are, and for the past five (5) years have been, in compliance with
all applicable Environmental Laws and all Permits;
(ii) there has been no Release of any Hazardous Substances on
any of the Leased Real Property during the period of Seller's or any of its
Affiliates' ownership, lease, use or occupancy thereof, on any property formerly
owned, leased, used or occupied by Seller or any of its Affiliates related to
the Operations;
(iii) there are no Claims pending or, to the Knowledge of
Seller, threatened against Seller or any of its Affiliates (relating to the
Operations), the Leased Real Property and there are no circumstances that can
reasonably be expected to form the basis of any such Claim;
(iv) there are no underground storage tanks, surface
impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Substances
are being or have been treated, stored or disposed on any of the Leased Real
Property and there is no asbestos or asbestos-containing material that requires
abatement or encapsulation under any Environmental Law at any of the Leased Real
Property; and
(v) neither Seller nor any of its Affiliates has any actual or
alleged Liability relating to the Operations under any Environmental Law.
(b) Seller has provided Purchaser with copies of any environmental
assessment or audit reports or other similar studies or analyses relating to the
Operations and the Leased Real Property.
(c) Neither the execution of this Agreement or the Transaction
Documents nor the consummation of the transactions contemplated hereby or
thereby will require any Remedial Action or notice to or Consent of any
Governmental Body or Person pursuant to any applicable Environmental Law or
Permit.
Section 3.17 Taxes. Seller has duly and timely filed all Tax
Returns with respect to material Taxes required to be filed on or before the
Closing Date. All such Tax Returns are true, correct and complete in all
material respects. No adjustment relating to such Tax Returns has been proposed
formally or informally by any Tax authority and no basis exists for any such
adjustment. All Taxes that are shown to be due on such Tax Returns have been
duly and timely paid (except for any extension or for any Taxes which are being
disputed by Seller in good faith as set forth on Schedule 3.17 Except as set
forth on Schedule 3.17, Seller has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts owing with respect to the
Operations to any employees, agents, contractors, creditor, stockholder or other
third party and nonresidents and, to the extent required, has remitted such
amounts to the proper agencies. Seller is not a "foreign person" within the
meaning of Section 1445(b)(2) of the
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Code. Except as set forth on Schedule 3.17, Seller, (a) has not been a member of
an affiliated group filing a consolidated income Tax Return; and (b) has no
liability for the Taxes of any person under Treasury Regulations Section
1.1502-6(a) (or any analogous or similar provision of any state, local or
foreign law or regulation), as a transferee or successor, by contract, or
otherwise. There are no pending or threatened Proceedings for the assessment or
collection of Taxes against Seller (insofar as either relates to the activities
or income of Seller or the Operations or could result in liability of Seller on
the basis of joint and/or several liability) or any corporation that was
included in the filing of a Tax Return with Seller on a consolidated or combined
basis. There are no Tax liens on any properties or assets of Seller, including
the Acquired Assets and the Operations.
Section 3.18 Liabilities. Except as set forth on Schedule 3.18
Seller has no direct or indirect Debt, liability, Claim, loss, damage,
deficiency or obligation or responsibility, fixed or unfixed, xxxxxx or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, asserted or
unasserted, matured or unmatured, determined or determinable, absolute,
contingent or otherwise, including those arising under any Law (including any
Environmental Law), Proceeding or Order and those arising under any contract,
agreement, arrangement, commitment or undertaking, whether or not of a kind
required by U.S. GAAP to be set forth on a financial statement or in the notes
thereto ("Liabilities") relating to the Operations or Acquired Assets, except
for: (i) Liabilities that are fully and adequately reflected or reserved against
on the Financial Statements and (ii) Liabilities that have arisen in the
Ordinary Course of Business since the date of the Balance Sheet until the
Closing Date and (iii) Liabilities that, individually, or in the aggregate, are
not material to the Operations, as determined by Purchaser, acting reasonably.
Reserves are reflected on the Reference Balance Sheet against all Liabilities of
Seller in amounts that have been established on a basis consistent with past
practice and in accordance with U.S. GAAP.
Section 3.19 Real Estate.
(a) Schedule 3.19(a) sets forth a true and complete list of all of the
real property which Seller leases, subleases, licenses or through any Contract,
has the right or obligation to use or occupy, now or in the future, relating to
or used in the Operations and any and all ancillary documents (the "Ancillary
Leased Real Property Documents") pertaining thereto (including all amendments,
modifications, supplements, exhibits, schedules, addenda and restatements
thereto and thereof and all consents, including consents for alterations,
assignments and sublets, documents recording variations, memoranda of lease,
options, rights of expansion, extension, first refusal and first offer and
evidence of commencement dates and expiration dates) (collectively, together
with all buildings, structures, facilities, plants, improvements currently or
hereafter located thereon, all fixtures, systems, equipment, machinery and items
of personal property of Seller relating to or used in the Operations attached or
appurtenant thereto, and all easements, licenses, rights of way, privileges,
appurtenances, strips, gores and other rights pertaining to the foregoing, the
"Leased Real Property"). Seller holds the leasehold estate under and interest in
each parcel of the Leased Real Property free and clear of all Liens, other than
Permitted Liens. With respect to each of such leases and subleases, Seller has
not exercised or given any notice of exercise, nor has any lessor or landlord
exercised or received any notice of exercise by a lessor or landlord of, any
option, right of first offer or right of first refusal
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contained in any such lease or sublease, including any such option or right
pertaining to purchase, expansion, renewal, extension or relocation
(collectively, "Options").
(b) The transactions contemplated by this Agreement and the Transaction
Documents will not require the issuance of any new or amended certificate of
occupancy, and, to the Knowledge of Seller, there are no facts that would
prevent the Leased Real Property from being occupied by Purchaser after the
Closing in the same manner as occupied by Seller immediately prior to the
Closing.
(c) The rental set forth in each lease or sublease of the Leased Real
Property is the actual rental being paid, and there are no separate agreements
or understandings with respect to the same.
(d) Seller has the full right to exercise any Options contained in the
leases and subleases pertaining to the Leased Real Property on the terms and
conditions contained therein and upon due exercise would be entitled to enjoy
the full benefit of such Options with respect thereto.
(e) All leases relating to Leased Real Property constitute the legal,
valid and binding obligations of Seller, are in full force and effect and have
not been modified or amended and are enforceable in accordance with their
respective terms. Seller is not in material default under any leases of such
Leased Real Property and, to Seller's Knowledge, the landlord of the Leased Real
Property is not in default under its obligations under the lease of such Leased
Real Property and, to Seller's Knowledge, no condition has occurred which with
notice or lapse of time or both would constitute a default thereunder.
Section 3.20 Tangible Personal Property.
(a) Schedule 3.20(a) lists each item or distinct group of machinery,
Equipment, Inventory, tools, supplies, furniture, fixtures, personalty,
vehicles, books, computer equipment and other tangible personal property (the
"Tangible Personal Property") used in the Operations.
(b) Schedule 3.20(b) sets forth a true and complete list of all leases
and subleases for Tangible Personal Property and any and all material ancillary
documents pertaining thereto (including all amendments, consents and evidence of
commencement dates and expiration dates).
(c) Seller has the full right to exercise any renewal options contained
in the leases and subleases pertaining to the Tangible Personal Property on the
terms and conditions contained therein and upon due exercise would be entitled
to enjoy the use of each item of leased Tangible Personal Property for the full
term of such renewal options.
Section 3.21 Labor Matters.
(a) Seller is not a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by Seller, and
currently there are no organizational campaigns, petitions or other unionization
activities seeking recognition of a collective bargaining unit that could affect
Seller.
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(b) There are no unfair labor practice complaints pending against
Seller before the National Labor Relations Board or any other Governmental Body.
(c) Seller is currently in compliance with all applicable Laws relating
to the employment of labor, including those related to wages, hours, collective
bargaining and the payment and withholding of taxes and other sums as required
by the appropriate Governmental Body and has withheld and paid to the
appropriate Governmental Body or is holding for payment not yet due to such
Governmental Body all amounts required to be withheld from employees of the
Seller and is not liable for any arrears of wages, Taxes, penalties or other
sums for failure to comply with any of the foregoing.
(d) Seller has paid in full to all its respective employees or
adequately accrued for in accordance with U.S. GAAP all wages, salaries,
commissions, bonuses, benefits and other compensation due to or on behalf of
such employees.
(e) There is no Claim with respect to payment of wages, salary or
overtime pay that has been asserted or is now pending or threatened before any
Governmental Body with respect to any Persons currently or formerly employed by
Seller.
(f) Seller is not a party to, or otherwise bound by, any consent decree
with, or citation by, any Governmental Body relating to employees or employment
practices.
(g) There is no charge or proceeding with respect to a violation of any
occupational safety or health standard that has been asserted or is now pending
or threatened with respect to Seller.
(h) There is no charge of discrimination in employment or employment
practices, for any reason, including age, gender, race, religion or other
legally protected category, which has been asserted or is now pending or
threatened before the United States Equal Employment Opportunity Commission, or
any other Governmental Body in any jurisdiction in which Seller has employed or
currently employs any Person.
Section 3.22 Certain Interests. Except as disclosed in
Schedule 3.22, no Affiliate of Seller has (a) any interest in any Person that
engages in the same or similar business as the Operations, (b) any interest in
any Person that purchases from or sells or furnishes to Seller any goods or
services used in the Operations, (c) a beneficial interest in any contract,
commitment, agreement or understanding to which Seller is a party or by which it
may be bound or affected related to the Operations and/or the Acquired Assets;
or (d) any claim against any of the Acquired Assets. Except as disclosed on
Schedule 3.22, none of the assets of Seller include any receivables from any
executive or employee of Seller.
Section 3.23 Brokers. Except as disclosed in Schedule 3.23, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement or the Transaction Documents based upon arrangements made by or on
behalf of Seller.
Section 3.24 Sufficiency of Assets. The Acquired Assets
constitute all the properties, assets and rights used, held or intended to be
used in, and all such properties, assets
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and rights as are necessary to conduct, the Operations. At all times since
[December 31, 2004], Seller has caused the Acquired Assets to be maintained in
accordance with good business practice, and all the Acquired Assets are in good
operating condition and repair, have been properly operated, serviced, and
maintained, and are suitable for the purposes for which they are used and
intended, ordinary wear and tear excepted.
Section 3.25 No Untrue Statements. No representation or
warranty of Seller in this Agreement or Transaction Documents or at the Closing
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to make the statements herein or
therein not misleading. There is no fact that Seller has not disclosed to
Purchaser in writing that has had or, insofar as Seller can now foresee, may
have a Material Adverse Effect on the ability of Seller to perform fully this
Agreement and the Transaction Documents
Article IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser
hereby represents and warrants to Seller as follows:
Section 4.1 Organization. PPT is a Delaware corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Acquisition Co. is a [limited liability company] duly organized,
validly existing and in good standing under the laws of the State of [Delaware].
PPT and Acquisition Co. have all requisite power and authority to own, lease and
operate its properties and assets and to carry on its business as now being or
heretofore conducted.
Section 4.2 Authority to Execute and Perform Agreement;
Ability to Perform. Except for Consents or authorizations set forth on Schedule
4.2, PPT and Acquisition Co. have the entity power and authority required to
enter into, execute and deliver this Agreement and the other Transaction
Documents to which each is or will be a party and to perform fully their
obligations hereunder and thereunder. PPT and Acquisition Co. have not taken any
action that in any respect conflicts with, constitutes a default under or
results in a violation of any provision of its, respectively, Certificate of
Incorporation and Certificate of Formation. The execution, delivery and
performance of this Agreement and the other Transaction Documents to which each
is a party have been duly authorized by all necessary corporate actions. This
Agreement has been duly executed and delivered by PPT and Acquisition Co. and,
on the Closing Date, the other Transaction Documents to which PPT and
Acquisition Co. are parties on the Closing Date will be duly executed and
delivered by PPT and Acquisition Co. Assuming due execution and delivery hereof
and thereof by Seller, this Agreement and the other Transaction Documents will
be valid and binding obligations of PPT and Acquisition Co. enforceable in
accordance with their respective terms, except that such enforceability may be
subject to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting or relating to enforcement of creditors' rights generally, and (ii)
general equitable principles.
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Section 4.3 Consents and Approvals. Other than as set forth in
Schedule 4.2, the execution and delivery of this Agreement and the other
Transaction Documents to which Purchaser is or will be a party, the consummation
by Purchaser of the transactions contemplated hereby and thereby and compliance
by Purchaser with any of the provisions hereof and thereof will not require any
Consent of any Governmental Body or any other Person, except as may be necessary
as a result of any specific facts or circumstance relating solely to Seller
Section 4.4 Non-Contravention. Assuming the making and
obtaining of all Consents referred to in Schedule 4.2, except as may result from
any facts or circumstances relating solely to Seller, the execution, delivery of
this Agreement by Purchaser and the execution of the other Transaction Documents
to which Purchaser is or will be a party, the consummation of the transactions
contemplated hereby and thereby and the performance by Purchaser of this
Agreement and the other Transaction Documents in accordance with their
respective terms will not (a) violate any provision of the organizational
documents of Purchaser, (b) violate any Law or Order applicable to, against, or
binding upon, Purchaser or by which any of Purchaser's securities, business or
property are bound or (c) conflict with or result in the breach of any material
provision of any Contract to which Purchaser may be bound, constitute a default
(or event that with the giving of notice or lapse of time, or both, would become
a default) under, require any Consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of,
any note, bond, mortgage or indenture, contract, agreement, lease, sublease,
license, permit, franchise or other instrument or arrangement to which Purchaser
is a party, which would adversely affect the ability of Purchaser to carry out
its obligations under, and to consummate the transactions contemplated by, this
Agreement or the Transaction Documents.
Section 4.5 Financial Reports and SEC Documents. PPT's Annual
Report on Form 10-KSB for the fiscal year ended December 31, 2004, as amended by
Form 10-KSB/A filed on May 18, 2005, and all other reports, definitive proxy
statements or information statements filed or to be filed by it subsequent to
December 31, 2004 under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act in
the form filed or to be filed (collectively, PPT's "SEC Documents") with the
SEC, as of the date filed or to be filed, (A) complied or will comply in all
material respects as to form with the applicable requirements under the Exchange
Act and (B) as of the time filed, or to be filed, did not and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
each of the balance sheets contained in or incorporated by reference into any
such SEC Document (including the related notes and schedules thereto) fairly
presents, or will fairly present, the financial position of PPT and its
subsidiaries as of its date, and each of the statements of income and changes in
shareholders' equity and cash flows or equivalent statements in such SEC
Documents (including any related notes and schedules thereto) fairly presents,
or will fairly present, the results of operations, changes in shareholders'
equity and changes in cash flows, as the case may be, of PPT and its
subsidiaries for the periods to which they relate, in each case in accordance
with U.S. GAAP consistently applied during the periods involved, except in each
case as may be noted therein, subject to the absence of footnotes and to normal
year-end adjustments in the case of unaudited statements.
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Section 4.6 Purchaser Litigation. There are no Claims or
legal, administrative or arbitral Proceedings, hearings or investigations
pending or, to the Knowledge of Purchaser, threatened against or involving
Purchaser, or any outstanding Orders, judgments, injunctions, awards or decrees
of any court, governmental or regulatory body or arbitration tribunal against or
involving Purchaser, which, if adversely determined, would affect the legality,
validity or enforceability of this Agreement or any Transaction Documents or
would materially impair Purchaser's ability to consummate the transactions
contemplated hereby or thereby.
Section 4.7 Brokers. Except as set forth on Schedule 4.6, no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement or the Transaction Documents based upon arrangements made by or on
behalf of Purchaser.
Section 4.8 Validity of Shares. The Shares, and the shares
comprising the Earnout Amount, if any, upon issuance, will be legally and
validly issued, fully paid and nonassessable.
Article V
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 5.1 Conduct of Operations. Except as specifically
contemplated by this Agreement or as set forth in Schedule 5.1, during the
period from the date hereof to the Closing Date, Seller shall conduct the
Operations in the Ordinary Course of Business, maintain the Acquired Assets in
good condition (specifically excluding wear and tear), preserve intact its
business organizations and the business organization of the Operations, preserve
intact relationships with third parties and maintain the goodwill associated
with the Operations, including, but not limited to, with customers, suppliers,
and employees, keep available to Purchaser the services of its employees,
continue in full force and effect without material modification all existing
policies or binders of insurance currently maintained in respect of Seller and
the Operations, exercise, but only after notice to Purchaser and receipt of
Purchaser's prior written approval, any rights of renewal pursuant to the terms
of any of the leases or subleases set forth in Schedule 3.20(a) which by their
terms would otherwise expire, and continue its advertising and promotional
activities, and pricing and purchasing policies.
Section 5.2 Further Assurances. At any time and from time to
time after the Closing, each of the parties agree to cooperate with the other
and to execute and deliver such other documents, instruments of transfer or
assignment, files, Books and Records and do all such further acts and things as
may be reasonably required to carry out the transactions contemplated by this
Agreement and the other Transaction Documents. Without limiting the generality
of the foregoing, Purchaser and Seller shall cooperate with each other in the
conduct of any audit or other proceeding relating to Taxes involving the
Acquired Assets. If either party becomes aware of any pending or threatened
assessment, official inquiry, examination or proceeding that could result in an
official determination with respect to Taxes due or payable the responsibility
for which rests with the other party hereto, such party shall promptly so notify
the other party in writing.
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Section 5.3 Certain Notifications. At all times from the date
hereof until the Closing Date, Seller shall promptly notify Purchaser in writing
of the occurrence of any event or circumstance that will or could (a) render any
statement, representation or warranty of Seller in this Agreement (including the
Schedules hereto) untrue, inaccurate or incomplete in any material respect, (b)
constitute or result in the breach by Seller of, or a failure to comply with,
any agreement or covenant in this Agreement applicable to Seller or (c) be
reasonably expected to cause a Material Adverse Effect.
Section 5.4 Access to Records and Facilities; Confidentiality.
Prior to the Closing Date, and upon reasonable prior notice, Seller shall (i)
afford Purchaser and its officers, employees, agents, accountants, counsel,
financing sources and representatives, through Seller's employees, directors,
officers and representatives, to make such investigation of the premises,
assets, properties, plants, business and operations of Seller, and to those
officers, directors, employees, agents, accountants, managers, personnel and
counsel of Seller who have any knowledge relating to the Operations and (ii)
furnish to the officers, employees, agents, accountants, counsel, financing
sources and representatives of Purchaser such additional financial and operating
data and other information regarding the assets, properties, liabilities and
goodwill of Seller and the Operations (or legible copies thereof) as Purchaser
may from time to time reasonably request and such examination of the facilities
and Books and Records at reasonable times and during Seller's normal business
hours.
Section 5.5 Preservation of Records. Until five (5) years
after the date hereof or until the expiration of the record retention period
under relevant federal or state requirements, if longer, none of Seller or
Purchaser will destroy or otherwise dispose of any of the books, records, files
or documents that relate to the Operations without giving the other party hereto
at least ninety (90) days' prior written notice and an opportunity, at such
other party's cost and expense, to take possession or make extracts or copies
thereof. "Books, records, files or documents" shall include copies of any
insurance policies, testing logs, application records, personnel files,
financial statements, operational reports, policies and procedures,
correspondence, all reports prepared for or provided to any Governmental Body,
all records retained pursuant to relevant Governmental Body requirements and any
other books, records, files or documents. After the Closing Date, each party
hereto shall permit the other party, its officers, counsel, accountants and
other authorized representatives during normal business hours and on prior
written notice, to have access to and examine and make copies of any books,
records, files or documents, in its possession that relate to or concern the
Operations or its operations, provided that such access does not unreasonably
interfere with the operations of the party providing such access and provided
further that the party requesting access to such books, records, files or
documents will bear any costs, other than wages and salaries and employee
benefits of relevant personnel, of obtaining such access
Section 5.6 Non-Competition and Non-Solicitation Covenant of
Seller.
(a) For a period of five (5) years after the Closing (the "Restricted
Period"), Seller shall not and shall cause Xxxxx X. Xxxxxx to not engage,
directly or indirectly, in any business anywhere in the world, including the 58
counties in the State of California that produces or supplies products or
services of the kind produced or supplied by the Operations as of the Closing.
In addition, Seller shall not and shall cause Xxxxx X. Xxxxxx to not, without
the prior
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written consent of Purchaser, directly or indirectly, own an interest in,
manage, operate, join, control, lend money or render financial or other
assistance to or participate in or be connected with, as an officer, employee,
partner, stockholder, consultant or otherwise, any Person that competes with
Purchaser or the Operations in manufacturing, producing or supplying products or
services of the kind manufactured, produced or supplied by the Operations as of
the Closing.
(b) As a separate and independent covenant, Seller agrees with
Purchaser that, for a period of five (5) years following the Closing, Seller
will not and shall cause Xxxxx X. Xxxxxx to not, in any way, directly or
indirectly, call upon, solicit, advise or otherwise do, or attempt to do,
business with any customers of the Operations with whom the Operations or Seller
had any dealings during the period of time in which the Operations were owned by
Seller or take away or interfere or attempt to interfere with any custom, trade,
business or patronage of the Operations or interfere with or attempt to
interfere with any officers, employees, representatives or agents of the
Operations or induce or attempt to induce any of them to leave the employ of
Purchaser or violate the terms of their contracts, or any employment
arrangements, with Purchaser.
(c) The Restricted Period shall be extended by the length of any period
during which Seller or Xxxxx X. Xxxxxx is in breach of the terms of this Section
5.6. Seller acknowledges that the covenants set forth in this Section 5.6 are an
essential element of this Agreement and that, but for the agreement of Seller to
comply with these covenants, Purchaser would not have entered into this
Agreement. Seller acknowledges that (i) this Section 5.6 constitutes an
independent covenant that shall not be affected by performance or nonperformance
of any other provision of this Agreement by Purchaser, and (ii) a portion of the
Purchase Price shall be consideration allocable to such independent covenant.
Seller acknowledges that they have independently consulted with counsel and
after such consultation agree that the covenants set forth in this Section 5.6
are reasonable and proper.
Section 5.7 Employees. Purchaser shall assume the employment
agreement, effective immediately after the Closing, between Seller and Xxxxx X.
Xxxxxx, dated as of [_____ __,] 2005, the form of which is attached as Exhibit
H, and shall retain the services of Xxxxxx X. XxXxxxxx. Seller shall be
responsible for any Liability arising under the WARN Act and other similar
statutes or regulations of any jurisdiction with respect to any termination by
Seller of employment of any employee of Seller, including, any termination of
employment that occurs in connection with the transactions described in this
Agreement, on or prior to the Closing Date, and Seller shall be responsible for
the issuance of any notices required by the WARN Act with respect to any such
termination.
Section 5.8 Satisfaction of Conditions Precedent. The parties
hereto will use reasonable efforts to satisfy (or cause to be satisfied) all the
conditions precedent to their respective obligations to consummate the
transactions contemplated hereby as set forth in Article VI.
Section 5.9 Expenses and Apportioned Obligations. Except as
otherwise provided in this Agreement, each party shall bear its own expenses in
connection with the preparation, execution and performance of this Agreement and
transactions contemplated hereby, including costs of their respective attorneys,
accountants, investment bankers, brokers and other representatives, whether or
not the Closing shall have occurred; provided, however, that all
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excise, sales, use, registration, stamp, recording, documentary, conveyance,
franchise, property, transfer, gains and similar Taxes and fees (including,
without limitation, penalties and interest), levies and charges incurred in
connection with this Agreement and the other Transaction Documents (but
excluding Taxes assessed solely on or by reference to income, which shall be
borne by Seller) and the transactions contemplated hereby and thereby
(collectively, "Transfer Taxes") shall be borne equally by Purchaser and Seller.
Purchaser and Seller shall use reasonable efforts to minimize the amount of all
Transfer Taxes and shall cooperate in providing each other with any appropriate
resale exemption certificates and other similar documentation. The party that is
required by applicable Law to make the filings, reports, or returns and to
handle any audits or controversies with respect to any applicable Transfer Taxes
shall do so, and the other party shall cooperate with respect thereto as
necessary.
Section 5.10 Bulk Sales Compliance. Each of Purchaser and
Seller shall waive compliance with the provisions of the applicable statutes
relating to bulk transfers or bulk sales.
Section 5.11 Public Announcements. Neither Purchaser nor
Seller shall issue any report, statement or press release or otherwise make any
public statement with respect to this Agreement or the other Transaction
Documents and the transactions contemplated hereby and thereby without the
written consent of the other party (not to be unreasonably withheld) hereto
prior to taking any such action, except as may be required by Law or may be
necessary in order to comply with disclosure requirements imposed by any
Governmental Bodies, in which case such party nevertheless shall advise the
other party and discuss the contents of the disclosure before issuing any such
report, statement or press release.
Section 5.12 Use of Name and Logo. Seller acknowledges that
from and after the Closing, the name "Surgica Corporation," and all similar or
related names, marks and logos shall be owned by Purchaser, that neither Seller
nor any of its Affiliates shall have any rights in the name "Surgica
Corporation," and all similar or related names, marks and logos and that neither
Seller nor any of its Affiliates will contest the ownership or validity of any
rights of Purchaser in or to the name "Surgica Corporation," and all similar or
related names, marks and logos. Within three (3) Business Days after the Closing
Date, Seller shall amend its organizational documents and make any necessary
filings with the Delaware Secretary of State (and within Thirty (30) Business
Days after the Closing Date, Seller shall make all necessary filings with all
other relevant Governmental Bodies) to change any corporate name from any name
incorporating "Surgica Corporation" or any confusingly similar designations to a
name that does not incorporate "Surgica Corporation" or any confusingly similar
designation.
Section 5.13 Excluded Liabilities. Seller shall pay and
discharge the Excluded Liabilities as and when the same become due and payable.
Section 5.14 Competing Offers; Merger or Liquidation. Seller
agrees that between the date of this Agreement and the earlier of (a) the
Closing and (b) the termination of this Agreement, neither Seller nor any of its
Affiliates, officers, directors, representatives or agents will, without the
prior written consent of Purchaser, (i) solicit, initiate, consider, encourage
or accept any other proposals or submissions of bids or offers from any Person
(A) relating to any acquisition or purchase of all or any portion of the capital
stock of Seller or assets of Seller, (B) to enter into any merger, consolidation
or other business combination or
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similar transaction with Seller or the Operations or (C) to enter into a
recapitalization, reorganization or any other extraordinary business transaction
involving or otherwise relating to Seller or the Operations, (ii) participate in
any discussions, conversations, negotiations or other communications regarding,
or furnish to any other Person any information with respect to, or otherwise
cooperate in any way, assist or participate in, facilitate or encourage any
effort or attempt by any other Person to seek to do any of the foregoing or
(iii) commence any proceeding to merge, consolidate or liquidate or dissolve or
obligate itself to do so. Seller immediately shall cease and cause to be
terminated all existing discussions, conversations, negotiations and other
communications with any Persons conducted heretofore with respect to any of the
foregoing. Seller shall notify Purchaser promptly if any such proposal or offer,
or any inquiry or other contact with any Person with respect thereto, is made
and shall, in any such notice to Purchaser, indicate in reasonable detail the
identity of Person making such proposal, offer, inquiry or contact and the terms
and conditions of such proposal, offer, inquiry or other contact. Seller agrees
not to release, without the prior written consent of Purchaser, any Person from,
or waive any provision of, any confidentiality or standstill agreement to which
Seller is a party.
Section 5.15 Exemption from Registration or Securities Act
Registration; Preparation of Notice of Meeting and Proxy Statement or
Information Statement.
(a) Seller and PPT shall use their commercial reasonable efforts to
prepare, execute and file all necessary documents in order to qualify the
conveyance of the Shares and the shares comprising the Earnout Amount as a
private placement of securities (the "Private Placement Documents") such that
neither this Agreement nor any of the Transaction Documents nor any transactions
contemplated hereunder and thereunder, involve any public offering of securities
within the meaning of Section 4(2) of the Securities Act, and accordingly, under
Rule 506 of Regulation D, render the registration provisions of Section 5 of the
Securities Act inapplicable to such transactions (the "Private Placement
Alternative").
(b) However, notwithstanding the foregoing, if Seller and PPT determine
that the Private Placement Alternative is unavailable or undesirable for any
reason, then, as promptly as practicable after such determination, Seller and
PPT shall prepare, and PPT shall file with the SEC, a Form S-4 which may, or
shall if required by applicable law, include Seller's preliminary proxy
materials or consent of solicitation relating to the approval of this Agreement,
the Transaction Documents and the transactions contemplated hereunder and
thereunder by the stockholders of Seller and a prospectus relating to the offer
and sale of the Shares and the shares comprising the Earnout Amount (the "S-4
Alternative") which complies in form with applicable SEC requirements and Seller
shall use all reasonable efforts to cause the Form S-4 to become effective as
soon after the receipt of final comments from the SEC thereon as practicable.
Such proxy statement/prospectus shall include the recommendation of the Board of
Directors of Seller in favor of this Agreement, the Transaction Documents and
the transactions contemplated hereunder and thereunder. Seller shall furnish to
PPT all information concerning Seller and the stockholders of Seller as may be
reasonably requested in connection with any action contemplated by this Section
5.15(c).
(c) As soon as practicable after the execution of this Agreement,
Seller, in consultation with PPT, shall prepare (a) a Notice of Meeting and
Proxy Statement or (b) Information Statement (as applicable, the "Statement")
for the stockholders of Seller to approve
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this Agreement, the Transaction Documents and the transactions contemplated
hereunder and thereunder. The Statement and Private Placement Documents shall
constitute a disclosure document for the offer and sale of Common Stock to be
received by the stockholders of Seller under this Agreement. Seller shall use
commercially reasonable efforts, with the cooperation of PPT, to cause such
statement to be distributed to the stockholders of Seller promptly following the
actions contemplated by the Private Placement Alternative. PPT and Seller shall
each use commercially reasonable efforts to cause the Statement to comply with
applicable federal and state securities laws requirements. PPT and Seller agree
to provide promptly to the other such information concerning its business and
financial statements and affairs as in the reasonable judgment of the providing
party or its counsel, may be required or appropriate for inclusion in the
Statement, or in any amendments or supplements thereto, and to cause its counsel
and auditors to cooperate with the other's counsel and auditors in the
preparation of the Statement. PPT and Seller agree to provide promptly advise
the other, in writing if at any time prior to the Closing Date either Seller or
PPT shall obtain knowledge of any facts that might make it necessary or
appropriate to amend or supplement the Statement in order to make the statements
contained or incorporated by reference therein not misleading or to comply with
applicable law. The Statement shall contain the recommendation of the Board of
Directors of Seller that the stockholders of Seller approve this Agreement, the
Transaction Documents and the transactions contemplated hereunder and thereunder
and the conclusion of the Board of Directors of Seller that the terms and
conditions of this Agreement, the Transaction Documents and the transactions
contemplated hereunder and thereunder are fair and reasonable to Sellers and the
stockholders of Seller. Seller shall otherwise use its best efforts to obtain
the requisite stockholder approval from the stockholders of Seller. Anything to
the contrary contained herein notwithstanding, Seller shall not include in the
Statement any information with respect to PPT, Acquisition Co. or any of their
affiliates or associates the form and content of which information shall not
have been approved by PPT or Acquisition Co., as applicable, prior to such
inclusion.
(d) Unless an Information Statement and an Action By Written Consent of
the Stockholders in lieu of a meeting is used, Seller shall promptly after the
date hereof take all action necessary in accordance with Delaware General
Corporation Law and its Certificate of Incorporation and Bylaws, in each case as
amended and/or restated, to convene a stockholders' meeting (the "Seller Special
Meeting"). If the Private Placement Alternative is accomplished, such Seller
Special Meeting will follow as promptly as practicable thereafter or after
effectiveness of the Form S-4, if applicable. Seller shall consult with PPT as
to the date of the Seller Special Meeting and/or the Action by Written Consent
of the Stockholders in lieu of a meeting and shall not postpone or adjourn
(other than for the absence of a quorum) the Seller Special Meeting without the
consent of PPT. Following the Private Placement Alternative, Seller shall use
its best efforts to solicit from the stockholders of Seller, proxies or actions
by written consent in favor of this Agreement, the Transaction Documents and the
transactions contemplated hereunder and thereunder and shall take all other
action necessary or advisable to secure the vote or consent of the stockholders
of Seller required by Delaware law to effect this Agreement, the Transaction
Documents and the transactions contemplated hereunder and thereunder.
(e) Seller, acting through its Board of Directors, shall include in the
proxy statement/ prospectus the recommendation of its Board of Directors that
the stockholders of Seller vote in favor of the adoption of this Agreement, the
Transaction Documents and the transactions
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contemplated hereunder and thereunder, and shall otherwise use its best efforts
to obtain the requisite stockholder approval from the stockholders of Seller.
(f) If the Private Placement Alternative is not chosen and Seller and
PPT proceed with the S-4 Alternative, none of the information supplied or to be
supplied by or on behalf of Seller for inclusion in the Form S-4 to be filed
with the SEC by PPT in connection with the issuance of Common Stock in or as a
result of this Agreement, the Transaction Documents and the transactions
contemplated hereunder and thereunder, including the proxy statement, will, at
the date such information is supplied and, as thereafter amended or
supplemented, at the time of the Company Special Meeting, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading or, as thereafter amended or supplemented, will,
in the case of the Form S-4, at the time the Form S-4 becomes effective under
the Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein, or necessary to make the
statements therein not misleading.
Section 5.16 Support of Operations. If the Closing occurs
prior to June 30, 2007, absent a Material Adverse Effect, as determined by and
in the sole discretion of Purchaser, Purchaser shall provide support, as more
fully described in Schedule 5.16, to the Operations to be transferred from
Seller to Purchaser as provided herein in order to, in the reasonable judgment
of Purchaser, enable the Minimum Revenue Trigger to be met.
Article VI
CONDITIONS TO CLOSING
Section 6.1 Conditions to Obligations of Seller. The
obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment or waiver, prior to or on the Closing
Date, of each of the following conditions:
(a) Regulatory Authorizations. All Consents of Governmental Bodies to
the transfer or assignment of the Material Permits shall have been obtained and
all such Consents shall be in full force and there shall be in effect no
preliminary or permanent injunction, writ, judgment, decree, stipulation,
determination, award or other order entered by or with any Governmental Body of
competent jurisdiction (collectively, an "Order") directing that the
transactions contemplated herein or therein, or any of them, not be consummated.
(b) Representations and Warranties; Agreements and Covenants. The
representations and warranties of Purchaser contained in this Agreement and in
any certificate delivered by any officer of Purchaser pursuant hereto (i) that
are not qualified by "materiality" or "Material Adverse Effect" (or a similar
concept) shall have been true and correct in all material respects when made and
as of the Closing Date, with the same force and effect as if made at and as of
the Closing Date, and (ii) that are qualified by "materiality" or "Material
Adverse Effect" (or a similar concept) shall have been true and correct in all
material respects when made and at and as of the Closing Date, with the same
force and effect as if made at and as of the Closing Date (except, in each case,
for those representations and warranties that relate to a particular date, which
shall be true and correct as of such date). Purchaser shall have performed or
complied
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with all material covenants and agreements, and satisfied all conditions,
required by this Agreement to be performed or complied with or satisfied by it
on or prior to the Closing Date in all material respects.
(c) Certificates. Purchaser shall have delivered to Seller a
certificate, dated the Closing Date, of an officer of Purchaser to the effect
that the conditions specified in Section 6.1(b) have been satisfied.
(d) Execution and Delivery. Purchaser shall have executed and delivered
the documents set forth in Section 2.10 hereof to which it is a party.
(e) Stockholder Approval. This Agreement and the Transaction Documents
to which Seller is a party and the consummation of the transactions contemplated
hereby and thereby shall have been approved by Seller's stockholders in
accordance with Seller's Certificate of Incorporation and Bylaws, in each case
as amended and/or restated, and as required by applicable Law.
Section 6.2 Conditions to Obligations of Purchaser. The
obligations of Purchaser to consummate the transactions contemplated by this
Agreement are subject to the fulfillment or waiver, prior to or on the Closing
Date, of each of the following conditions:
(a) Authorizations and Consents. Purchaser and Seller shall have
received, each in form and substance reasonably satisfactory to Purchaser, all
authorizations, Consents, orders and approvals of all third parties and Persons
and estoppel certificates that Purchaser reasonably deems necessary or desirable
for the consummation of the transactions contemplated by this Agreement and the
Transaction Documents, including all third party consents required under any
Contracts, and all Consents of Governmental Bodies to the transfer or assignment
of the Material Permits and all Consents listed on Schedule 6.2(a) shall have
been obtained and all such Consents shall be in full force and there shall be no
Order in effect.
(b) Representations and Warranties; Agreements and Covenants. The
representations and warranties of Seller contained in this Agreement and in any
certificate delivered by any officer of Seller pursuant hereto (i) that are not
qualified by "materiality" or "Material Adverse Effect" (or a similar concept)
shall have been true and correct in all material respects when made and as of
the Closing Date, with the same force and effect as if made at and as of the
Closing Date, and (ii) that are qualified by "materiality" or "Material Adverse
Effect" (or a similar concept) shall have been true and correct in all material
respects when made and at and as of the Closing Date, with the same force and
effect as if made at and as of the Closing Date (except, in each case, for those
representations and warranties that relate to a particular date, which shall be
true and correct as of such date). Seller shall have performed or complied with
all material covenants and agreements, and satisfied all conditions, required by
this Agreement to be performed or complied with or satisfied by it on or prior
to the Closing Date in all material respects, and Purchaser shall have received
a certificate of Seller to such effect signed by Xxxxx X. Xxxxxx or another duly
authorized officer thereof.
(c) Permits. Except as set forth in Section 3.8, all Material Permits
required for the conduct of the Operations and the ownership and operation of
the Acquired Assets shall have
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been transferred to Purchaser and shall be in full force and effect without any
material limitation or restrictions, and Purchaser shall have been furnished
with evidence thereof reasonably satisfactory to it.
(d) Certificates. Seller shall have delivered to Purchaser
certificates, dated the Closing Date, of officers of Seller to the effect that
the conditions specified in paragraphs (a) through (c) of this Section 6.2 have
been satisfied.
(e) Execution and Delivery. Seller shall have executed and delivered
the documents set forth in Section 2.9 hereof to which it is a party;
(f) Employees. The employment agreement between Purchaser and Xxxxx X.
Xxxxxx, the form of which is set forth on Exhibit H, shall have been executed by
each party thereto and Purchaser shall have reached mutually satisfactory
employment arrangements with Xxxxxx X. XxXxxxxx and such of Seller's employees
as Purchaser elects to hire.
(g) Release and Repayment of Debt. Purchaser shall have received
evidence reasonably satisfactory to Purchaser that all Debt (except to the
extent that it constitutes an Assumed Liability) has been paid in full and all
Liens on the Acquired Assets have been released.
(h) No Proceeding. No Proceeding shall have been commenced or
threatened by or before any Governmental Body or by any other Person against
Seller or Purchaser, seeking to prevent, delay, restrain or materially and
adversely alter the transactions contemplated by this Agreement that, in the
reasonable judgment of Purchaser, is likely to render it impossible or unlawful
to consummate such transactions or that could have a Material Adverse Effect or
otherwise render inadvisable, in the sole discretion of Purchaser, the
consummation of the transactions contemplated by this Agreement.
(i) Resolutions of the Seller. Purchaser shall have received a true and
complete copy, certified by the Secretary or an Assistant Secretary of Seller,
of the resolutions duly and validly adopted by the stockholders and the board of
directors of Seller evidencing its authorization of the execution and delivery
of this Agreement and the Transaction Documents to which Seller is a party and
the consummation of the transactions contemplated hereby and thereby.
(j) No Material Adverse Effect. No event or events shall have occurred,
or be reasonably likely to occur, which, individually or in the aggregate, have,
or could have, a Material Adverse Effect.
(k) Conversion of Seller's Preferred Stock. All outstanding shares of
the Seller's preferred stock shall have been converted into the Seller's common
stock.
(l) Exemption from Registration or Securities Act Registration. The
Private Placement Alternative shall have been completed if chosen in accordance
with Section 5.15(a), or, if not chosen, then the SEC shall have declared the
Form S-4 effective in accordance with the provisions of the Securities Act, and
no stop order suspending the effectiveness of the Form S-4 shall have been
issued by the SEC and remain in effect.
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(m) Non-Competition of Xxxxx X. Xxxxxx. The non-competition agreement
between Purchaser and Xxxxx X. Xxxxxx, the form of which is set forth on Exhibit
I, shall have been executed by each party thereto.
(n) Side Letter. The side letter agreement between Purchaser and Xxxxx
X. Xxxxxx, the form of which is set forth on Exhibit J, shall have been executed
by each party thereto.
Article VII
TERMINATION
Section 7.1 Termination. Notwithstanding anything in this
Agreement to the contrary, this Agreement may be terminated prior to the Closing
as follows:
(a) by the mutual written consent of Seller and Purchaser;
(b) by Purchaser, by delivery of written notice to Seller, if the
Closing shall not have occurred prior to the close of business on the date which
is ninety (90) days subsequent to the date hereof, other than by reason of the
failure by Purchaser to perform in all material respects any of the covenants or
agreements contained in this Agreement;
(c) at the election of Seller, (i) if Purchaser has breached any
representation or warranty contained in this Agreement, which breach would cause
the condition set forth in Section 6.1(b) to not be satisfied, or (ii) if
Purchaser has breached any covenant or agreement contained in this Agreement,
which breach would cause the condition set forth in Section 6.1(b) to not be
satisfied, in each case, which breach has not been cured on or prior to thirty
(30) days following delivery of written notice of such breach by Seller to
Purchaser;
(d) at the election of Purchaser, (i) if Seller has breached any
representation or warranty contained in this Agreement, which breach would cause
the condition set forth in Section 6.2(b) to not be satisfied, or (ii) if Seller
has breached any covenant or agreement contained in this Agreement, which breach
would cause the condition set forth in Section 6.2(b) to not be satisfied, in
each case which breach has not been cured on or prior to thirty (30) days
following delivery of written notice of such breach by Purchaser to Seller; or
(e) at the election of Seller on the one hand or Purchaser on the
other, if any legal proceeding is commenced or threatened by any Governmental
Body directed against the consummation of the Closing or any other transaction
contemplated under this Agreement and Purchaser or Seller (as the case may be)
reasonably and in good xxxxx xxxxx it impractical or inadvisable to proceed in
view of such legal proceeding or threat thereof or by either the Purchaser or
Seller in the event that any Governmental Body shall have issued an Order or
taken any other action restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such Order or other action shall
have become final and nonappealable.
If this Agreement so terminates, it shall become null and void and have
no further force or effect except as provided in Section 7.2.
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Section 7.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
thereafter become void and have no further force or effect, except that the
obligations provided for in this Section 7.2, Section 5.9, the confidentiality
provisions contained in Section 5.4 and Article IX and any confidentiality
agreements between Purchaser and Seller shall survive any such termination of
this Agreement. Neither party hereto shall have any liability in respect of the
termination of this Agreement except (a) as set forth in this Section 7.2 and
under those provisions of this Agreement that survive such termination, and (b)
such termination shall not relieve either party from liability for any breach of
any provision of this Agreement.
Article VIII
INDEMNIFICATION
Section 8.1 Indemnification by Seller. Seller agrees to
indemnify Purchaser against and hold Purchaser and its Affiliates, officers,
directors, employees, agents, successors and assigns (each a "Purchaser
Indemnified Party") harmless from and against, in the manner and subject to the
limitations and qualifications set forth in this Section 8.1, any and all
Liabilities, losses, diminution in value, damages, Claims, costs and expenses,
interest, awards, judgments and penalties (including reasonable attorneys',
experts' and consultants' fees and expenses) actually suffered or incurred by
them (including any Action brought or otherwise initiated by any Indemnified
Party) (hereinafter "Losses"), arising out of or resulting from:
(a) the breach of any representation or warranty made by Seller
contained in this Agreement or any of the Transaction Documents to which Seller
is a party; or
(b) the breach of any covenant or agreement by Seller contained in this
Agreement or in any of the Transaction Documents to which Seller is a party; or
(c) any and all Losses suffered or incurred by a Purchaser Indemnified
Party by reason of or in connection with any Claim or cause of action of any
third party (including claims for compensation, commissions or expenses for
services as a broker or finder) to the extent arising out of any action,
inaction, event, condition, Liability or obligation of Seller occurring or
existing prior to the Closing; or
(d) Excluded Assets;
(e) Liabilities, whether arising before or after the Closing Date, that
are not expressly assumed by the Purchaser pursuant to this Agreement, including
the Excluded Liabilities (including any Liabilities arising under Section 5.9 of
this Agreement and any Liabilities for Taxes now or hereafter owed by Seller or
any Affiliate of Seller, or attributable to the Acquired Assets or the
Operations, relating to any period, or any portion of any period, ending on or
prior to the Closing Date); or
(f) any failure to comply with Laws relating to bulk transfers or bulk
sales with respect to the transactions contemplated by this Agreement
(notwithstanding the waiver contained in Section 5.10).
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Section 8.2 Indemnification by Purchaser. Purchaser agrees to
indemnify Seller against and hold Seller and its Affiliates, officers,
directors, employees, agents, successors and assigns (each a "Seller Indemnified
Party") harmless from and against, in the manner and subject to the limitations
and qualifications set forth in this Article VIII, any and all Losses, arising
out of or resulting from:
(a) the breach of any representation or warranty made by Purchaser
contained in this Agreement or any of the Transaction Documents to which
Purchaser is a party; or
(b) the breach of any covenant or agreement by Purchaser contained in
this Agreement or any of the Transaction Documents to which Purchaser is a
party; or
(c) the Assumed Liabilities; or
(d) any and all Losses suffered or incurred by a Seller Indemnified
Party by reason of or in connection with any Claim or cause of action of any
third party (including claims for compensation, commissions or expenses for
services as a broker or finder) to the extent arising out of any action,
inaction, event, condition, Liability or obligation of the Purchaser occurring
or existing after to the Closing.
Section 8.3 Defense of Claims. An Indemnified Party shall give
the Indemnifying Party written notice of any action, claim, suit or demand (a
"Claim") of which such Indemnified Party has knowledge and as to which it may
request indemnification hereunder, within sixty (60) days of such determination,
stating the amount of the Loss, if known, method of computation thereof, and in
reasonable detail the factual basis of such Claim with a reference to the
provisions of this Agreement in respect of which such right of indemnification
is claimed or arises. The obligations and Liabilities of the Indemnifying Party
under this Article VIII with respect to Losses arising from claims of any third
party that are subject to the indemnification provided for in this Article VIII
("Third Party Claims") shall be governed by and be contingent upon the following
additional terms and conditions: if an Indemnified Party shall receive notice of
any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
written notice of such Third Party Claim within thirty (30) days of the receipt
by the Indemnified Party of notice of such Third Party Claim; provided, however,
that the failure to provide such notice to the Indemnifying Party shall not
release the Indemnifying Party from any of its obligations under this Article
VIII except to the extent that the Indemnifying Party is materially prejudiced
by such failure and shall not relieve the Indemnifying Party from any other
obligation or Liability that it may have to any Indemnified Party otherwise than
under this Article VIII. If the Indemnifying Party acknowledges in writing its
obligation to indemnify the Indemnified Party hereunder against any Losses that
may result from such Third Party Claim, then the Indemnifying Party shall be
entitled to assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its intention to
do so to the Indemnified Party within ten (10) days of the receipt of such
notice from the Indemnified Party; provided, however, if such Claim seeks an
injunction or other equitable relief against the Indemnified Party, subject to
the last sentence of this Section 8.3, the Indemnified Party shall have the
right to participate in and jointly control the defense of any portion of such
Claim and to retain its own counsel in each jurisdiction for which the
Indemnified Party determines counsel is required, which counsel shall be
reasonably acceptable to the
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Indemnifying Party, at the expense of the Indemnifying Party. In the event that
the Indemnifying Party exercises the right to undertake any such defense against
any such Third Party Claim as provided above, the Indemnified Party shall
cooperate with the Indemnifying Party in such defense and make available to the
Indemnifying Party, at the Indemnifying Party's expense, all witnesses,
pertinent records, materials and information in the Indemnified Party's
possession or under the Indemnified Party's control relating thereto as is
reasonably required by the Indemnifying Party. Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against any
such Third Party Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
at the Indemnifying Party's expense, all such witnesses, records, materials and
information in the Indemnifying Party's possession or under the Indemnifying
Party's control relating thereto as is reasonably required by the Indemnified
Party. If the Indemnifying Party elects and is entitled to compromise or defend
such Claim, it shall within thirty (30) days (or sooner, if the nature of the
Claim so requires) notify the Indemnified Party of its intent to do so. The
Indemnified Party shall have the right to employ separate counsel in any such
Claim and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Party unless (i) the
Indemnifying Party shall fail to assume the defense of such Claim as provided
herein or (ii) the Indemnified Party shall have been advised by such counsel
that there is or is likely to develop a conflict of interest for counsel in
representing both the indemnifying party and the indemnified party with respect
to such Claim in which case the fees and expenses of counsel shall be borne by
the Indemnifying Party. If the Indemnifying Party elects not to compromise or
defend such Claim or fails to notify the Indemnified Party of its election as
herein provided, the Indemnified Party may pay, compromise or defend such Claim
at the Indemnifying Party's expense, subject to the limitations set forth in
this Article VIII. Except as set forth in the immediately preceding sentence,
the Indemnifying Party shall have no indemnification obligations with respect to
any such Claim which shall be settled by the Indemnified Party without the prior
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed). The Indemnifying Party's right to direct the
defense, if applicable, shall include the right to compromise or enter into an
agreement settling any Claim by a third party; provided, that no such compromise
or settlement shall be entered into without the prior written consent of the
Indemnified Party (which may be withheld in its sole discretion /unreasonably
withheld) (i) if such compromise or settlement provides for injunctive or other
nonmonetary or equitable relief affecting the Indemnified Party or (ii) if such
compromise or settlement does not include as an unconditional term thereof the
giving by each claimant or plaintiff to such Indemnified Party of a general
release from any and all liability with respect to such Claim. Notwithstanding
the foregoing, in the event that the Indemnified Party withholds its consent to
a settlement proposal that involves nothing other than the payment of monetary
damages for which the Indemnifying Party will be responsible, the Indemnified
Party shall indemnify and hold harmless the Indemnifying Party against any
Losses suffered by the Indemnifying Party as a result of the Indemnified Party's
withholding of its consent to such settlement proposal. The Indemnifying Party
will make promptly any payment required to be made by it to the Indemnified
Party under this Article VIII.
Section 8.4 Survival of Representations and Warranties.
(a) The representations and warranties of Seller contained in this
Agreement and the Transaction Documents to which Seller is a party shall survive
the Closing for a period of twelve
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(12) months from the Closing Date; provided, however, that (i) the
representations and warranties made pursuant to Section 3.1, Section 3.2,
Section 3.7 and Section 3.22 shall survive indefinitely and (ii) the
representations and warranties made pursuant to Section 3.16 and 3.17 shall
survive the Closing until thirty (30) calendar days following the expiration of
the applicable statute of limitations governing such claims (giving effect to
any waiver or extension thereof). Neither the period of survival nor the
liability of Seller with respect to the Seller's representations and warranties
shall be reduced by any investigation made at any time by or on behalf of
Purchaser. Notwithstanding the foregoing, if written notice of any Claim under
this Article VIII has been given prior to the expiration of the period covering
the applicable representations and warranties by Purchaser to Seller, then the
relevant representations and warranties shall survive as to such Claim until
such Claim has been finally resolved.
(b) The representations and warranties of Purchaser contained in this
Agreement and the Transaction Documents to which Purchaser is a party shall
survive the Closing until twelve (12) months from the Closing Date; provided,
however, that the representations and warranties made pursuant to Section 4.1,
Section 4.2, Section 4.5 and Section 4.7 shall survive indefinitely. Neither the
period of survival nor the liability of Purchaser with respect to Purchaser's
representations and warranties shall be reduced by any investigation made at any
time by or on behalf of Seller. Notwithstanding the foregoing, if written notice
of any Claim under this Article VIII has been given prior to the expiration of
the period covering the applicable representations and warranties by Purchaser
to Seller, then the relevant representations and warranties shall survive as to
such Claim until such Claim has been finally resolved.
Section 8.5 Offset. The parties agree that the amount of any
Losses payable or reimbursable to Purchaser under this Article VIII may be
satisfied, in the sole and absolute discretion of Purchaser, out of Shares and
the shares comprising the Earnout Amount, if any, issued by Purchaser to Seller
under this Agreement.
Article IX
MISCELLANEOUS
Section 9.1 Amendments; Non-Contractual Remedies; Preservation
of Remedies. This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by Purchaser and Seller or, in the case of a waiver, in accordance with
Section 9.2, by or on behalf of the party waiving compliance. The rights and
remedies of any party based upon, arising out of or otherwise in respect of any
inaccuracy in or breach of any representation, warranty, covenant or agreement
contained in this Agreement or any document delivered pursuant to this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject matter of any other representation, warranty,
covenant or agreement contained in this Agreement or any document delivered
pursuant to this Agreement as to which there is no inaccuracy or breach.
Section 9.2 Waiver. Any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of another party,
(b) waive any inaccuracies in the representations and warranties of another
party contained herein or in any document
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delivered by another party pursuant hereto or (c) waive compliance with any of
the agreements of another party or conditions to such party's obligations
contained herein. Any such extension or waiver shall be valid only if set forth
in an instrument in writing signed by the party to be bound thereby. The failure
of any party to assert any of its rights hereunder shall not constitute a waiver
of any of such rights. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any party of any such right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or the exercise of any other such right, power or
privilege. Any waiver of any term or condition shall not be construed as a
waiver of any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition of this Agreement. All
rights and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
Section 9.3 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO
BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY
AND IN ACCORDANCE WITH THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS OF THE
STATE OF CALIFORNIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
Section 9.4 Submission of Jurisdiction; Waiver of Jury Trial.
The parties hereto irrevocably submit to the exclusive jurisdiction of any state
or federal court sitting in the County of San Diego, in the State of California
over any suit, action or Proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby. To the fullest extent they may
effectively do so under applicable Law, the parties hereto irrevocably waive and
agree not to assert, by way of motion, as a defense or otherwise, any claim that
they are not subject to the jurisdiction of any such court, any objection that
they may now or hereafter have to the laying of the venue of any such suit,
action or proceeding brought in any such court and any claim that any such suit,
action or Proceeding brought in any such court has been brought in an
inconvenient forum. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS
WAIVER, (iii) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS, AGREEMENTS AND CERTIFICATIONS IN THIS Section 9.4.
Section 9.5 Specific Performance. Each party hereto agrees and
acknowledges that remedies at law for any breach of its obligations under this
Agreement are inadequate and will cause irreparable harm and that in addition
thereto, the non-breaching parties
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shall be entitled to seek equitable relief, including injunction and specific
performance, in the event of any such breach.
Section 9.6 Notices. Any notices, requests, claims, demands or
other communications required under this Agreement shall be in writing and shall
be given or made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by nationally recognized overnight courier
service, by telecopy, by electronic mail, facsimile or registered or certified
mail (postage prepaid, return receipt requested) to the respective parties at
the following addresses, facsimile numbers, or electronic mail addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 9.6):
(a) if to Seller on or before the Closing Date:
Surgica Corporation
5090 Xxxxxx X. Xxxxxxx Xxxxxxx #0
Xx Xxxxxx Xxxxx, Xx 00000
Facsimile: 916.933.5260
Attention: Xxxxx X. Xxxxxx
with a copy to:
Bullivant Xxxxxx Xxxxxx PC
0000 Xxxxxx Xxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: 916.442.3442
Email xxxx.xxxxx@xxxxxxxxx.xxx
Attention: Xxxx X. Xxxxx, Esq.
if to Seller after the Closing Date:
[___________________]
[___________________]
[___________________]
Facsimile: [___________________]
Email: [___________________]
Attention: [___________________]
(b) if to the Purchaser:
Protein Polymer Technologies, Inc.
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, XX 00000
Facsimile: 858.558.6477
Email: xxx@xxxx.xxx; xxx@xxxx.xxx
Attention: Xxxxxxx X. Xxxxxxxxx, Chief Executive
Officer and J. Xxxxxx Xxxxxxxx, Chairman
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with a copy to:
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Facsimile: 213.996.3254
Attention: Xxxxxx X. Xxxxxx Xx., Esq.
Section 9.7 Section Headings. The section and paragraph
headings contained in this Agreement are for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement. A
reference to a Section or an Exhibit or Schedule will mean a Section in, or
Exhibits or Schedule to, this Agreement unless otherwise explicitly set forth.
Section 9.8 Construction. As used herein, unless the context
otherwise requires: references to "Article" or "Section" are to an article or
section hereof; "include," "includes" and "including" are deemed to be followed
by "without limitation" whether or not they are in fact followed by such words
or words of like import; "hereof," "herein," "hereunder" and comparable terms
refer to the entirety of this Agreement and not to any particular article,
section or other subdivision hereof or attachment hereto; references to an
agreement or other instrument or law, statute or regulation are referred to as
amended and supplemented from time to time (and, in the case of a statute or
regulation, to any successor provision) and all regulations, rulings and
interpretations promulgated pursuant thereto; and the headings of the various
articles, sections and other subdivisions hereof are for convenience of
reference only and shall not modify, define or limit any of the terms or
provisions hereof.
Section 9.9 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one (1) or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
Section 9.10 Assignments. This Agreement may not be assigned,
by operation of law, or otherwise without the express written consent of the
parties hereto (which consent may be granted or withheld in the sole discretion
of such non-assigning party), except that Purchaser may assign, in whole or in
part, any of its rights and obligations under this Agreement to an Affiliate;
provided, that Purchaser shall remain obligated for payment of the Purchase
Price and the performance of its obligations under this Agreement. This
Agreement shall be binding upon and inure to the benefit of successors and
permitted assigns of the parties hereto.
Section 9.11 Entire Agreement, Enforceability and
Miscellaneous. This Agreement, including the Exhibits and Schedules attached
hereto, together with the other Transaction Documents: (a) constitutes the
entire agreement among the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements and understandings, both written and
oral, among the parties, with respect to the subject matter hereof; (b) shall be
binding upon, and is solely for the benefit of, each of the parties herein and
nothing in this Agreement, express or implied, is intended to confer or shall
confer upon any other Persons, including any union or any employee or former
employee of Seller, any legal or equitable right, benefit or remedy of any
nature whatsoever, including any rights of employment for any
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specified period, hereunder or by reason of this Agreement; and (c) in case any
provision in this Agreement shall be or shall be held invalid, illegal or
unenforceable (other than Purchaser's obligation to pay the Purchase Price or
Seller's obligation to deliver the Acquired Assets), the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby so long as the economic or legal substance of the transactions
contemplated by this Agreement is not affected in any manner materially adverse
to any party. There are no third party beneficiaries to this Agreement or the
transactions contemplated hereunder, and, except for certain indemnified Persons
as set forth in Article VIII of this Agreement, in no event shall Seller,
Purchaser or their respective Affiliates have any liability to, or be under any
obligation to, any other Person.
Section 9.12 Interpretation. The parties hereto acknowledge
and agree that: (i) each party hereto and its counsel reviewed and negotiated
the terms and provisions of this the Transaction Documents and have contributed
to their revision and (ii) the rule of construction to the effect that any
ambiguities are resolved against the drafting party shall not be employed in the
interpretation of the Transaction Documents. Whenever a party's consent or
acceptance hereunder is qualified by a standard of reasonableness (including a
requirement to not unreasonably withhold such consent or acceptance), such party
may not unreasonably withhold or delay such consent or acceptance.
[Signature page to follow]
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IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first written above.
[___________ ACQUISITION, LLC]
By : Its Manager
Protein Polymer Technologies, Inc.
By: _______________________________
Name:
Title:
PROTEIN POLYMER TECHNOLOGIES, INC.
By: ____________________________________
Name:
Title:
SURGICA CORPORATION
By: ____________________________________
Name:
Title:
[Signature Page to Asset Purchase Agreement]
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Exhibit D
FORM OF CONSENT TO ASSIGNMENTS AND OBLIGATIONS
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[Surgica Corporation Letterhead]
[Date]
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_______________
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Re: |
Assignment of Distributor Agreement dated June 28, 2002, by and |
between Surgica Corporation and Angiodynamics, Inc. (the βAssignmentβ)
Ladies and Gentlemen:
Surgica Corporation, a Delaware corporation (the βCompanyβ), intends to enter into an option agreement (βOption Agreementβ) that shall include (i) an immediate license of certain Company technologies and intellectual property to Protein Polymer Technologies, Inc. (βPPTIβ) and (ii) an option to PPTI to acquire all or substantially all of the assets of the Company. In connection with the execution of the Option Agreement, the Company intends to assign all of its rights and obligations under the Distributor Agreement, dated June 28, 2002, by and between the Company and Angiodynamics, Inc. (the βAgreementβ) to PPTI.
Pursuant to Section 17.5 of the above-referenced Agreement, the Company needs to secure your approval of the Assignment. By your signature below, you acknowledge that (i) the Agreement is valid and in full force and effect, (ii) you have waived any right to terminate, or claim a default or breach of, the Agreement in connection with the consummation of the Assignment, and (iii) you have consented to the assignment of the Agreement by the Company to PPTI. Please return your signed copy of this letter to us in the enclosed self addressed envelope at your earliest convenience.
Thank you for your cooperation and assistance in this matter.
Very truly yours,
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SURGICA CORPORATION,
a Delaware corporation
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By: |
Name:
Title:
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Letter to
Date
Page 2
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Acknowledged and Agreed this
____ day of November, 2005
ANGIODYNAMICS, INC.,
a Delaware corporation
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By: |
Name:
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Title: |
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Exhibit E
FORM OF VOTING AGREEMENT
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Exhibit F
FORM OF EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of December 19, 2005 between SURGICA CORPORATION, a Delaware corporation (the "Company"), and XXXXX X. XXXXXX (the "Employee").
RECITAL
The Company desires to employ the Employee, and the Employee desires to be so employed by the Company, on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual promises set forth in this Agreement, the Company and the Employee hereby agree as follows:
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1. |
Employment. |
(a)Β Β Β Subject to the terms and conditions contained herein, the Company hereby agrees to employ the Employee, and the Employee accepts such employment, from the date hereof until the earlier of (i) December 31, 2007 or (ii) the date such employment is terminated pursuant to Section 4 of this Agreement (the βTermβ). During the Employee's employment under this Agreement, the Employee shall perform such duties for the Company as may from time to time be assigned to the Employee by the Board of Directors of the Company (the "Board"). The Employee shall have the title of President, or such other title or titles, if any, as from time to time may be assigned to the Employee by the Board.
(b)Β Β Β The Employee will devote his or her entire business time, energy, attention and skill to the services of the Company and its affiliates and to the promotion of their interests. So long as the Employee is employed by the Company, the Employee shall not, without the written consent of the Company:
(i)Β Β Β Β Β Β Β Β Β Β Β engage in any other activity for compensation, profit or other pecuniary advantage, whether received during or after the term of this Agreement;
(ii)Β Β Β Β Β Β Β Β Β Β render or perform services of a business, professional, or commercial nature other than to or for the Company, either alone or as an employee, consultant, director, officer, or partner of another business entity, whether or not for compensation, and whether or not such activity, occupation or endeavor is similar to, competitive with, or adverse to the business or welfare of the Company; or
(iii)Β Β Β Β Β Β Β Β invest in or become a shareholder of another corporation or other entity; provided, that the Employee's investment solely as a shareholder in another
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corporation shall not be prohibited hereby so long as such investment is not in excess of one percent (1%) of any class of shares that are traded on a national securities exchange.
(c)Β Β Β Prior to or concurrently with the execution of this Agreement, the Employee has executed an Employee Proprietary Information, Trade Secret and Confidentiality Agreement (the "Confidentiality Agreement").
2.Β Β Β Β Β Location of Employment. The Employee's principal place of employment shall be at the executive offices of the Company located in El Dorado Hills, California; provided, that at the direction of the Board, the Employee may from time to time be required to travel to various domestic and foreign locations.
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3. |
Compensation. |
(a)Β Β Β In exchange for full performance of the Employee's obligations and duties under this Agreement, the Company shall pay the Employee an annual base salary (the "Base Salary") equal to ________, payable in monthly installments in accordance with the Company's standard payroll practices. In any month in which the Employee shall be employed for less than the entire number of days in such month, the compensation payable under this Section 3(a) shall be prorated on the basis of the number of days during which the Employee was actually employed divided by the number of days in such month.
(b)Β Β Β The Base Salary is a gross amount, and the Company shall be required to withhold from such amount deductions with respect to Federal, state and local taxes, FICA, unemployment compensation taxes and similar taxes, assessments or withholding requirements.
(c)Β Β Β During the Employee's employment under this Agreement, the Employee shall also be reimbursed by the Company for reasonable business expenses actually incurred or paid by the Employee, consistent with the policies established by the Board, in rendering to the Company the services provided for in this Agreement, upon presentation of expense statements or such other supporting information as is consistent with the policies of the Company.
(d)Β Β Β The Employee shall be entitled to 20 business days vacation for each full year of employment under this Agreement, which vacation time will accrue in accordance with the vacation policy of the Company.
(e)Β Β Β The Employee shall be entitled to participate in all benefit plans (including deferred compensation plans and any medical, dental or life insurance plans) which shall be available from time to time to the domestic management employees of the Company generally, except to the extent such participation in any plan would, in the opinion of the Board, alter the intended tax treatment of such plan; provided, however, that the Employee shall have no right under this Agreement to participate in any stock purchase
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or other plan relating to shares of capital stock of the Company or its affiliates. The Employee acknowledges and agrees that the Board may in its discretion terminate at any time or modify from time to time any such benefit plans.
(f)Β Β Β Β Other than as expressly set forth in this Section 3 or Sections 4(f) and 4(g) below, the Employee shall not receive any other compensation or benefits except to the extent provided by the Board.
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Termination. |
(a)Β Β Β Disability. The employment of the Employee under this Agreement may be terminated by the Company immediately upon giving the Employee notice if (i) the Board determines that the Employee is unable to discharge his or her essential job duties by reason of illness or injury or (ii) the Employee has been unable to discharge his or her essential job duties by reason of illness or injury for either (A) a period of two consecutive months or (B) twelve weeks in any twelve-month period. In the event of such termination, the Company shall have no further obligation to pay any unaccrued compensation or unaccrued benefits to the Employee for periods after the date of such termination, except for those payments that would be required under Section 4(c) hereof on a termination for cause.
(b)Β Β Β Death. The employment of the Employee under this Agreement shall terminate on the date of the Employee's death. In the event of such termination, the Company shall have no further obligation to pay any unaccrued compensation or unaccrued benefits to the Employee for periods after the date of such termination, except for those payments that would be required under Section 4(c) hereof on a termination for cause.
(c)Β Β Β Termination for Cause. The employment of the Employee under this Agreement may be terminated by the Company upon written notice from the Board that, in the opinion of the Board, the Employee has:
(i)Β Β Β Β Β Β Β Β Β Β Β refused or failed (after reasonable notice that such refusal or failure would result in termination of the Employee's employment) to perform, to the satisfaction of the Board, any duties assigned to the Employee by the Board;
(ii)Β Β Β Β Β Β Β Β Β Β committed a breach of the terms of this Agreement or any other legal obligation to the Company;
(iii)Β Β Β Β Β Β Β Β failed to perform any of the Employee's obligations under the Confidentiality Agreement;
(iv)Β Β Β Β Β Β Β Β Β demonstrated negligence or willful misconduct in the execution of the Employee's assigned duties;
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(v)Β Β Β Β Β Β Β Β Β Β been convicted of or pleaded nolo contendere to a felony or other serious crime;
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(vi) |
repeatedly and intemperately used alcohol or drugs; |
(vii)Β Β Β Β Β Β Β engaged in business practices which, in the opinion of the Board, are unethical or reflect adversely on the Company;
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(viii) |
misappropriated assets of the Company; or |
(ix)Β Β Β Β Β Β Β Β Β been repeatedly absent from work during normal business hours for reasons other than disability.
Subject to the Employeeβs rights under Section 4(e) of this Agreement, upon termination of the Employeeβs employment for cause, the Company shall have no further obligation to pay any compensation to the Employee for periods after the effective date of the termination for cause, except for (1) compensation and benefits earned or accrued by the Employee pursuant to Section 3 of this Agreement as of the termination date, and (2) such benefits, if any, as may be required to be provided by the Company under the Employee Retirement Income Security Act of 1974 (βERISAβ) including but not limited to the Comprehensive Omnibus Budget Reconciliation Act (COBRA).
(d)Β Β Β Termination by Employee Without Good Reason. In the event the Employee terminates his or her employment with the Company other than for Good Reason (as defined below), the Company shall have no further obligation to pay any unaccrued compensation or unaccrued benefits to the Employee for periods after receipt by the Board of a written notice of resignation signed by the Employee or, if no such notice is given, on the date on which the Employee voluntarily terminates his or her employment relationship with the Company for other than Good Reason, except for those payments that would be required under Section 4(c) hereof on a termination for cause.
(e)Β Β Β Termination by Company without Cause or Termination by Employee For Good Reason. In the event either (i) the Company terminates the employment of the Employee, other than pursuant to subsections (a), (b) or (c) above, or (ii) the Employee terminates his or her employment, other than pursuant to subsections (d) or (e) above, for Good Reason, the Company shall provide to the Employee or any other assignee as provided in Section 10 below, continued payment to the Employee of the Base Salary then in effect at intervals in accordance with the Companyβs standard payroll practice until the later of (i)Β threeΒ (3) months from the date of such termination, or (ii)Β the expiration of the Term of this Agreement. Good Reason defined. For purposes of this Agreement, the term βGood Reasonβ shall mean a termination by the Employee after the occurrence of any of the following events:
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any reduction in Base Salary; |
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(ii)Β Β Β Β Β Β Β Β Β Β a reduction in the Employee's job function, duties or responsibilities, or a similar change in the Employee's reporting relationships; or
(iii)Β Β Β Β Β Β Β Β Β any material breach of the terms of this Agreement by the Company;
provided, however, that a termination shall not be treated as a termination for Good Reason (i) if Employee shall have specifically consented in writing to the occurrence of the event giving rise to the claim of termination for Good Reason or (ii) unless Employee, within thirty (30) days after receiving written notice from the Company specifying in reasonable detail the occurrence of one of such events, shall have delivered a written notice to the Company stating that he or she intends to terminate his or her employment for Good Reason and specifying the factual basis for such termination and such event, if capable of being cured, shall not have been cured within thirty (30) days of the receipt by the Company of such notice.
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5. |
Employee's Representations. |
(a)Β Β Β The Employee represents that he or she has full authority to enter into this Agreement and that he or she is free to enter into this Agreement and not under any contractual restraint which would prohibit the Employee from satisfactorily performing his or her duties to the Company under this Agreement.
(b)Β Β Β The Employee hereby agrees to indemnify and hold harmless the Company, its officers, directors and stockholders from and against any losses, liabilities, damages or costs (including reasonable attorney's fees) arising out of a breach, or claimed breach, of any of the representations, warranties and covenants of the Employee set forth in this Agreement.
(c)Β Β Β The Employee acknowledges that he or she is free to seek advice from independent counsel with respect to this Agreement. The Employee has either obtained such advice or, after carefully reviewing this Agreement, has decided to forego such advice. The Employee is not relying on any representation or advice from the Company or any of its officers, directors, attorneys or other representatives regarding this Agreement, its content or effect.
6.Β Β Β Β Β Arbitration. Any controversy or claim arising out of or relating to this Agreement or any breach hereof or the Employee's employment by the Company or termination thereof, shall be settled by arbitration by one arbitrator in accordance with the rules of the American Arbitration Association, and judgment upon such award rendered by the arbitrator may be entered in any court having jurisdiction thereof. The arbitration shall be held in the City of San Diego or such other place as may be agreed upon at the time by the parties to the arbitration.
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7.Β Β Β Β Β Equitable Relief. The Employee acknowledges that the Company is relying for its protection upon the existence and validity of the provisions of this Agreement, that the services to be rendered by the Employee are of a special, unique and extraordinary character, and that irreparable injury will result to the Company from any violation or continuing violation of the provisions of this Agreement for which damages may not be an adequate remedy. Accordingly, the Employee hereby agrees that in addition to the remedies available to the Company by law or under this Agreement, the Company shall be entitled to obtain such equitable relief as may be permitted by law in a court of competent jurisdiction including, without limitation, injunctive relief from any violation or continuing violation by the Employee of any term or provision of this Agreement.
8.Β Β Β Β Β Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal substantive laws (and not the laws of conflicts) of the State of California.
9.Β Β Β Β Β Entire Agreement. This Agreement constitutes the whole agreement of the parties hereto in reference to any employment of the Employee by the Company and in reference to any of the matters or things herein provided for or hereinabove discussed or mentioned in reference to such employment; all prior agreements, promises, representations and understandings relative thereto being herein merged.
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10. |
Assignability. |
(a)Β Β Β In the event the Company shall merge or consolidate with any other corporation, partnership or business entity, or all or substantially all of the Company's business or assets shall be transferred in any manner to any other corporation, partnership or business entity, then such successor to the Company shall thereupon succeed to, and be subject to, all rights, interests, duties and obligations of, and shall thereafter be deemed for all purposes hereof to be, the "Company" under this Agreement. This Agreement shall inure to the benefit of and be enforceable by Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Employee should die, any amounts payable to him or her hereunder shall be paid in accordance with the terms of this Agreement to Employee's devisee, legatee, or other designee or, if there be no such designee, to his or her estate.
(b)Β Β Β This Agreement is personal in nature and the Employee shall not, except as set forth in subsection (a) hereof, without the written consent of the Company, assign or transfer this Agreement or any rights or obligations hereunder.
(c)Β Β Β Except as set forth in subsection (a) above, nothing expressed or implied in this Agreement is intended or shall be construed to confer upon or give to any person, other than the parties to this Agreement, any right, remedy or claim under or by reason of this Agreement or of any term, covenant or condition of this Agreement.
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11.Β Β Amendments; Waivers. This Agreement may be amended, modified, superseded, canceled, renewed or extended and the terms or covenants of this Agreement may be waived only by a written instrument executed by the parties to this Agreement or, in the case of a waiver, by the party waiving compliance. Any such written instrument must be approved bay the Board to be effective as against the Company. The failure of any party at any time or times to require performance of any provision of this Agreement shall in no manner affect the right at a later time to enforce the same. No waiver by any party of the breach of any term or provision contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such breach, or a waiver of the breach of any other term or covenant contained in this Agreement.
12.Β Β Notice. All notices, requests or consents required or permitted under this Agreement shall be made in writing and shall be given to the other parties by personal delivery, overnight air courier (with receipt signature) or facsimile transmission (with "answerback" confirmation of transmission), sent to such parties' addresses or telecopy numbers as are set forth below such parties' signatures to this Agreement, or such other addresses or telecopy numbers of which the parties have given notice pursuant to this Section 12. Each such notice, request or consent shall be deemed effective upon the date of actual receipt, receipt signature or confirmation of transmission, as applicable.
13.Β Β Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
14.Β Β Survival. The representations and agreements of the Employee set forth in Sections 5, 6 and 7 of this Agreement shall survive the expiration or termination of this Agreement (irrespective of the reason for such expiration of termination).
15.Β Β Attorney's Fees. If any party to this Agreement seeks to enforce his or her or its rights under this Agreement, the prevailing party or parties shall be entitled to recover reasonable fees, costs and expenses incurred in connection therewith including, without limitation, the fees, costs and expenses of attorneys, accountants and experts, whether or not litigation is instituted, and including such fees, costs and expenses of appeals.
[Signature page to follow]
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IN WITNESS WHEREOF, the parties to this Agreement have executed this Employment Agreement as of the date first above written.
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SURGICA CORPORATION
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By _________________________
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Xxxxx X. Xxxxxx |
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President and Chief Executive Officer | ||
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Address for Notices:
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_______________________________
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_______________________________
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XXXXX X. XXXXXX
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Address for Notices:
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_______________________________
_______________________________
_______________________________
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[Signature Page to Employment Agreement]
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Exhibit G
FORM OF SIDE LETTER
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[Date]
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Protein Polymer Technologies, Inc.
00000 Xxxxxxxx Xxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx
Facsimile: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, III
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Re: Representations and Warranties
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Gentlemen:
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Reference is made to that certain Asset Purchase Option Agreement (the βAgreementβ), dated as of November 23, 2005, by and between Protein Polymer Technologies, Inc., a Delaware corporation (βBuyerβ), and Surgica Corporation, a Delaware corporation (βSellerβ). This letter (the βSide Letterβ) is to confirm my understanding with respect to the matters set forth below. Capitalized terms used in this Side Letter, unless otherwise defined herein, shall have the meanings ascribed to such terms in the Agreement. The provisions of this Side Letter shall apply solely to the undersigned, Xxxxx X. Xxxxxx (βXxxxxxβ), and Buyer notwithstanding any provisions to the contrary in the Agreement.
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1.Β Β Β Β Β Β Β Β Β Β Β Β Β Representations and Warranties. Xxxxxx represents and warrants to Buyer that, to his actual knowledge, each of the representations and warranties of Seller set forth in the Agreement is true and correct at and as of the date the Agreement was executed.
2.Β Β Β Β Β Β Β Β Β Β Β Β Β Liability. Buyer and Xxxxxx acknowledge and certify that in no event shall Xxxxxxβx liability for any claims by Buyer with respect to Xxxxxxβx representations and warranties pursuant to Section 1 of this Side Letter exceed the aggregate amount of consideration paid by Buyer to Xxxxxx or by Buyer to Seller for purposes of paying Xxxxxx as specifically provided for and pursuant to Schedules B and C of that certain License Agreement attached to the Agreement as ExhibitΒ A.
3.Β Β Β Β Β Β Β Β Β Β Β Β Β Amendment. This Side Letter may be amended only by a written instrument executed by Buyer and Xxxxxx. Any amendment effected pursuant to this SectionΒ 3 shall be binding upon all parties hereto.
4.Β Β Β Β Β Β Β Β Β Β Β Β Β Entire Agreement. Except as specifically set forth herein, this Side Letter and other documents referred to herein contain the entire understanding of the parties hereto in respect of their subject matter and supersede all prior and contemporaneous agreements and understandings, oral and written, among the parties with respect to such subject matter.
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5.Β Β Β Β Β Β Β Β Β Β Β Β Β Successors and Assigns. This Side Letter shall be binding upon and inure to the benefit of the Buyer and Xxxxxx, and their respective successors, heirs and assigns; provided, however, that Xxxxxx shall not directly or indirectly delegate, transfer or assign any of his obligations or duties hereunder in whole or in part without the prior written consent of Buyer, and any such transfer or assignment without said consent shall be void ab initio.
6.Β Β Β Β Β Β Β Β Β Β Β Β Β Counterparts. This Side Letter may be executed in one or more counterparts, including by facsimile, each of which shall be deemed an original, but all such counterparts together shall constitute but one and the same Side Letter.
7.Β Β Β Β Β Β Β Β Β Β Β Β Β Governing Law. This Side Letter shall be governed by and construed in accordance with the internal laws (and not the law of conflicts) of the State of California.
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Please indicate your acceptance of the terms of this letter by signing below. |
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Very Truly Yours,
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_________________________________
Xxxxx X. Xxxxxx
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Agreed & Acknowledged:
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PROTEIN POLYMER TECHNOLOGIES, INC.
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By:____________________________
Name: Xxxxxxx X. Xxxxxxxxx, III
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Chief Executive Officer |
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[Signature page to Side Letter]
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Schedule 2.4
[*****]
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[*****] Material is confidential and has been omitted and filed separately with the Securities and Exchange Commission.
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Schedule 2.8
FEES
[*****]
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[*****] Material is confidential and has been omitted and filed separately with the Securities and Exchange Commission.
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Schedule 4.8
CONTEMPLATED FUNDING OF OPERATIONS BY OPTIONEE
[*****]
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[*****] Material is confidential and has been omitted and filed separately with the Securities and Exchange Commission.
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