Exhibit 10 BT
LICENSE AGREEMENT
THIS AGREEMENT, made the 25th day of February, 1999, by and between
X.X. XXXX, INC., a New Jersey corporation, having its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 (hereinafter
referred to as "BARD") and HYDROMER, INC. having its principal place of
business at 00 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000-0000 (hereinafter
referred to as "LICENSOR").
WITNESSETH
WHEREAS, LICENSOR is the sole owner of all "PROPRIETARY RIGHTS"
(hereinafter defined) existing on the "EFFECTIVE DATE" (hereinafter defined);
and
WHEREAS, BARD desires to obtain from LICENSOR, and LICENSOR desires
to grant to BARD, a license under all PROPRIETARY RIGHTS, with right to
sublicense, to manufacture or have manufactured "SUPERSLIP COATING"
(hereinafter defined) "BIOSTATIC COATING" (hereinafter defined) and "STAY WET
COATING" (hereinafter defined); and
WHEREAS, BARD desires to obtain from LICENSOR, and LICENSOR desires to
xxxxx XXXX, an exclusive license throughout the "TERRITORY" (hereinafter
defined), under all PROPRIETARY RIGHTS, with right to sublicense, to apply
SUPERSLIP COATING, BIOSTATIC COATING and STAY WET COATING to all products
within the "LICENSEE APPLICATION" (hereinafter defined); and
WHEREAS, BARD desires to obtain from LICENSOR and LICENSOR desires to
grant to BARD, an exclusive license through the TERRITORY, with right to
sublicense, under all PROPRIETARY RIGHTS to use, sell, offer for sale, import
and export "PRODUCT" (hereinafter defined).
NOW, THEREFORE, in consideration of the above premises, all of which
are incorporated into the body of this Agreement as if set forth fully
therein, and of the mutual agreements and undertakings hereinafter set forth,
LICENSOR and BARD agree as follows:
I. DEFINITIONS
1.1 AFFILIATE--means any person or entity which controls, is controlled
by, or is under common control with BARD. For purposes of this
definition, the term "control," including the correlative meanings of
the terms "controlled by" and "under common control with" shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such person or
entity.
1.2 BIOSTATIC COATING--means: (i) the coating described on SCHEDULE A,
which is attached hereto and incorporated herein, and (ii) all
improvements to and enhancements or the coating described on SCHEDULE
A which, prior to the EFFECTIVE DATE or during the term of this
Agreement, was or is: (a) invented by LICENSOR, alone or jointly with
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any third party, or (b) acquired by LICENSOR by purchase, license or
otherwise.
1.3 EFFECTIVE DATE--means the date and year first above written.
1.4 LICENSED APPLICATION--means intermittent and indwelling urological
catheters.
1.5 NEW COATING--means any coating which may have utility for any product
within the LICENSED APPLICATION: (i) which, prior to the EFFECTIVE
DATE or during the term of this Agreement, was or is invented by
LICENSOR, alone or jointly with any third party, or (ii) any rights
to which were acquired by LICENSOR prior to the EFFECTIVE DATE or
are acquired by LICENSOR during the term of this Agreement, in
each case whether by purchase, license, the grant of distribution
rights or otherwise, exclusive, in all instances, of: (a) SUPERSLIP
COATING, BIOSTATIC COATING and STAY WET COATING, and (b) any coating
(other than SUPERSLIP COATING, BIOSTATIC COATING or STAY WET COATING)
which is covered, in the country of manufacture or sale, by an
unexpired claim of United States Letters Patent No. 4,769,013 or any
foreign counterpart but only for so long as Xxxxxxx Healthcare
Corporation is a licensee under said patent for the LICENSED
APPLICATION, and (c) any coating (other than SUPERSLIP COATING,
BIOSTATIC COATING or STAY WET COATING which, within the six (6) month
period prior to the EFFECTIVE DATE, was
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manufactured or sold by LICENSOR and which, on the EFFECTIVE DATE, is
not covered by any issued Letters Patent.
1.6 NET SALES--means NET SELLING PRICE, as in effect from time to time
during the time of this Agreement, times units sold while that
particular NET SELLING PRICE is in effect.
1.7 NET SELLING PRICE--means, with respect to any PRODUCT, the gross
invoiced selling price of such PRODUCT by BARD or any AFFILIATE to any
non-AFFILIATE, less the following offsets and deductions: (i) import
duty, sales, use and value added tax, if included in the gross
invoiced selling price, and (ii) freight and handling charges, if
included in the gross invoiced selling price, and (iii) relevant
customary cash, trade and quantity discounts and rebates actually
granted and given by BARD or an AFFILIATE to customers, and (iv) fees
paid by BARD or an AFFILIATE to group purchasing organizations on the
sale of PRODUCT; provided however: (a) if any PRODUCT is sold in a kit
or in a combination with any article which is not coated with
SUPERSLIP COATING, BIOSTATIC COATING or STAY WET COATING, and such
PRODUCT is also sold separately, the NET SELLING PRICE of such PRODUCT
shall be determined as if it was sold alone, (b) if any PRODUCT is
sold in a kit or in a combination with any article which is not coated
with SUPERSLIP COATING, BIOSTATIC COATING or STAY WET COATING,
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and such PRODUCT is not sold separately, the NET SELLING PRICE of such
PRODUCT included in such kit or combination shall be determined by
multiplying the gross invoiced selling price of such kit or
combination, less applicable deductions and off-sets referred to
above, by a fraction, the numerator of which shall be BARD'S or its
AFFILIATE'S published list price for such PRODUCT included in such kit
or combination and the denominator of which shall be BARD's or its
AFFILIATE'S published list price for all items contained in such kit
or combination.
1.8 PRODUCT--means any product within the LICENSED APPLICATION which is
coated with SUPERSLIP COATING, BIOSTATIC COATING or STAY WET COATING.
1.9 PROPRIETARY RIGHTS--means all applications for Letters Patent, issued
Letters Patent (including but not limited to United States Letters
Patent No. 4,642,267), trade secrets, know-how, technology,
manufacturing processes and procedures, formulae, quality control
procedures, test procedures, specifications, protocols, drawings and
other intellectual property rights applicable to SUPERSLIP COATING,
BIOSTATIC COATING and/or STAY WET COATING.
1.10 RESTRICTED INFORMATION--means any information of a confidential
and/or proprietary nature as to which BARD or LICENSOR, as the
disclosing party, prior to or during the term of this Agreement,
develops or acquires any interest, including but not limited to, all
discoveries, inventions,
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improvements, and ideas relating to any process, formula, manufacture,
composition of matter, plan or design, whether patentable or not, or
relating to the conduct of business by the disclosing party, which,
prior to or during the term of this Agreement, was or is disclosed to
the other party, as the receiving party, exclusive of data or
information: (1) which, at the time of disclosure, was in the public
domain or which, subsequent to disclosure, becomes part of the public
domain by any means other than the breach by the receiving party of its
obligations hereunder, or (ii) which was known to the receiving party,
at the time of disclosure, as evidenced by the receiving party's
business records maintained in the ordinary course of business, or
(iii) which is, at any time, legally disclosed to the receiving party
by any person or entity not a party hereto, or (iv) which is developed
by an employee of the receiving party who is shown, by competent proof
and by clear and convincing evidence, not to have been privy to
information disclosed by the disclosing party, or (v) which is
disclosed verbally, except where the disclosing party reduces the
verbal disclosure to writing, marks the same as confidential or
proprietary and furnishes the receiving party with the reduction to
writing within sixty (60) days of the verbal disclosure.
1.11 ROYALTY PERIOD - means each twelve (12) month period commencing with
the EFFECTIVE DATE.
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1.12 STAY WET COATING - means: (i) the coating described on SCHEDULE B,
which is attached hereto and incorporated herein, and (ii) all
improvements to and enhancements of the coating described on SCHEDULE B
which, prior to the EFFECTIVE DATE or during the term of this
Agreement, was or is: (a) invented by LICENSOR, alone or jointly with
any third party, or (b) acquired by LICENSOR by purchase, license or
otherwise.
1.13 SUPERSLIP COATING - means: (i) the coating described on SCHEDULE C,
which is attached hereto and incorporated herein, and (ii) all
improvements to and enhancements of the coating described on SCHEDULE C
which, prior to the EFFECTIVE DATE or during the term of this Agreement
was or is: (a) invented by LICENSOR, alone or jointly with any third
party, or (b) acquired by LICENSOR by purchase, license or otherwise.
1.14 SUPPLY AGREEMENT - means the License and Supply Agreement executed by
HYDROMER and BARD on the EFFECTIVE DATE, a copy of which is attached
hereto and incorporated herein as EXHIBIT A.
1.15 TERRITORY - means all countries of the world.
11. GRANT OF LICENSE
2.1 LICENSOR hereby grants to BARD: (ii) an exclusive license, under all
PROPRIETARY RIGHTS existing on the EFFECTIVE DATE, with right to
sublicense, to manufacture or have manufactured, throughout the
TERRITORY, SUPERSLIP COATING,
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BIOSTATIC COATING and STAY WET COATING solely for the LICENSED
APPLICATION, (ii) an exclusive license, throughout the TERRITORY, under
all PROPRIETARY RIGHTS existing on the EFFECTIVE DATE, with right to
sublicense, to apply (or have applied) SUPERSLIP COATING, BIOSTATIC
COATING and STAY WET COATING to all products within the LICENSED
APPLICATION, (iii) an exclusive license, throughout the TERRITORY,
under all PROPRIETARY RIGHTS existing on the EFFECTIVE DATE, with right
to sublicense, to use, sell, offer for sale, import and export all
PRODUCT. In the event any PROPRIETARY RIGHTS not in existence on the
EFFECTIVE DATE come into existence after the EFFECTIVE DATE, the
licenses granted by LICENSOR to BARD pursuant to this Section 2.1 shall
be deemed amended to include the same without any further action of the
parties. Nothing contained in this Section 2.1 is intended to restrict
or prohibit the manufacture by LICENSOR under PROPRIETARY RIGHTS for
use outside the LICENSED APPLICATION.
2.2 LICENSOR and BARD hereby acknowledge and agree that the licenses
granted to BARD under Section 2.1 specifically include the right to
have any PRODUCT distributed by BARD, by any AFFILIATE and/or by their
respective distributors.
2.3 In consideration of the payment by BARD no LICENSOR on the EFFECTIVE
DATE of the sum of $100.00, the receipt and legal sufficiency of which
is hereby acknowledged by
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LICENSOR, LICENSOR hereby grants BARD a right of first refusal to
obtain: (i) an exclusive license, under all applicable proprietary
rights, with right to sublicense, to manufacture or have manufactured,
throughout the TERRITORY, solely for use for the LICENSED APPLICATION
each NEW COATING, subject to rights, if any, retained by any
co-inventor, (ii) an exclusive license, throughout the TERRITORY, under
all applicable proprietary rights, with right to sublicense, to apply
(or have applied) each NEW COATING to all products within the LICENSED
APPLICATION, subject to rights, if any, retained by any co-inventor,
(iii) an exclusive license, throughout the TERRITORY, under all
applicable proprietary rights, with right to sublicense, to use, sell,
offer for sale, import and export all products within the LICENSED
APPLICATION coated with each NEW COATING, subject to rights, if any,
retained by any co-inventor, (iv) the exclusive right to distribute,
through the TERRITORY, each NEW COATING solely for use for the LICENSED
APPLICATION, subject to rights, if any, retained by any third party
from whom LICENSOR procures such rights. LICENSOR shall notify BARD of
the existence of each NEW COATING within thirty (30) days of the date
on which the same is reduced to practice or any rights thereto are
acquired by LICENSOR. LICENSOR shall include in each notice issued by
LICENSOR pursuant to this Section 2.3 the following: (i) all technical
information
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in its possession relating to the NEW COATING which is the subject of its
notice, (ii) a statement advising whether LICENSOR owns or licenses the
proprietary rights relating to the NEW COATING which is the subject of
its notice, (iii) the terms of LICENSOR's offer to BARD with respect to
such NEW COATING which shall consist of the following: (a) a royalty on
sales by BARD and its AFFILIATES of products within the LICENSED
APPLICATION coated with such NEW COATING, at a rate of two percent (2%)
of net sales calculated in a manner consistent with NET SALES, (b)
minimum annual royalties of $20,000.00 on sales by BARD and its
AFFILIATES of products within the LICENSED APPLICATION coated with the
NEW COATING which is the subject of LICENSOR's offer, (iii) the
proposed selling price by HYDROMER to BARD and its AFFILIATES of such
NEW COATING under the SUPPLY AGREEMENT. No such offer shall include any
other financial terms. BARD shall have one hundred-eighty (180) days to
accept or reject any such offer by notice to LICENSOR but may extend
any such one hundred eighty (180) day period, for up to two (2)
additional ninety (90) day periods, by payment to LICENSOR of the sum
of $25,000.00 per extension. In the event BARD rejects or fails to
timely accept any offer made by LICENSOR pursuant to this Section 2.3,
LICENSOR thereafter shall be free to offer the rights which BARD
rejected or failed to timely accept to any third party on terms no
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more favorable than those offered to BARD. If, however, LICENSOR
intends to offer any third party such rights on terms more favorable
than those which BARD rejected or failed to timely accept, prior to
offering such terms to the third party, LICENSOR shall notify BARD of
the more favorable terms. Any such notice from LICENSOR shall be
deemed an amended offer which may be accepted by BARD by notice to
LICENSOR given within thirty (30) days of the date of the amended offer.
III. CONSIDERATION; ROYALTIES
3.1 In connection of the licenses granted by LICENSOR to BARD pursuant to
Section 2.1 hereof and the rights of first refusal granted by LICENSOR
to BARD pursuant to Section 2.3 hereof, BARD has paid LICENSOR
concurrently herewith the sum of $120,000 in immediately available
funds. Such consideration shall be allocated as set forth on
SCHEDULE D, which is attached hereto and incorporated herein.
3.2 In further consideration of the licenses granted by LICENSOR to BARD
pursuant to Section 2.1 hereof, BARD hereby agrees to pay LICENSOR a
royalty of two percent (2%) of NET SALES. In the event royalties
earned by LICENSOR on NET SALES during any year, commencing with the
EFFECTIVE DATE, are less than U.S. $20,000, BARD, within forty five
(45) days of the end of such year, shall pay the shortfall to LICENSOR.
Notwithstanding the foregoing,
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the provisions of this Section 3.2 shall not apply for so long as
BARD purchases SUPERSLIP COATING, BIOSTATIC COATING or STAY WET COATING
from LICENSOR pursuant to the SUPPLY AGREEMENT.
3.3 Earned royalties, if any, payable hereunder shall be paid by BARD to
LICENSOR within forty five (45) days of the close of each ROYALTY
PERIOD. With respect to sales of PRODUCT outside the United States on
which any earned royalties are payable hereunder, conversions to U.S.
dollars, if applicable, shall be made on the last business day of each
month during the ROYALTY PERIOD, based upon the applicable average
exchange rates quoted by the WALL STREET JOURNAL during each such
month. At the time of BARD's remittance of each earned royalty
payment, BARD shall furnish to LICENSOR a report showing the number of
units of PRODUCT sold by BARD or any AFFILIATE to any non-AFFILIATE
during each month during the ROYALTY PERIOD, the gross invoiced selling
price of such PRODUCT and offsets and deductions taken in arriving at
NET SALES. Notwithstanding anything to the contrary contained in this
Agreement, BARD shall be entitled to withhold, from earned royalties
payable hereunder, all taxes thereon required, by competent
governmental authorities, to be withheld. BARD hereby covenants to
promptly remit or to cause its applicable AFFILIATE to remit all such
taxes to the proper authorities as required by law and further agrees
to
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furnish LICENSOR with evidence of remittance within forty five (45)
business days of each such remittance.
3.4 BARD hereby agrees to maintain and agrees to cause its AFFILIATES to
maintain, for a period of five (5) years following sale, records
concerning the number of each PRODUCT sold by BARD and its AFFILIATES
to non-AFFILIATES, the gross invoiced selling price of such PRODUCT and
offsets and deductions taken in arriving of NET SALES. BART hereby
grants to LICENSOR the right, during normal business hours and upon
reasonable advance notice to BARD, to have an independent certified
public accounting firm, reasonably acceptable to BARD, inspect such
records, no more often than annually, for purposes of ascertaining the
truth and accuracy of reports furnished by BARD to LICENSOR hereunder
and the calculations of earned royalties paid and payable by BARD
hereunder. The cost of any such audit shall be borne by LICENSOR;
provided however, in the event any such audit indicates a discrepancy
of five percent (5%) or more, to the detriment of LICENSOR, between
royalties actually paid hereunder and royalties actually owing, BARD,
within thirty (30) days of receipt from LICENSOR of a copy of the
auditor's certified report evidencing such discrepancy and a copy of
the auditor's invoice for such audit, shall reimburse LICENSOR for its
actual incurred cost in having such audit conducted and shall pay
LICENSOR the royalty shortfall as
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determined by the auditor, subject to BARD's rights under the provisions
of Section 7.4 hereof.
IV. NO EFFORTS OBLIGATIONS
4.1 LICENSOR hereby acknowledges and agrees that: (i) BARD shall have no
obligation to manufacture or have manufactured any quantity of
SUPERSLIP BOATING, BIOSTATIC COATING or STAY WET COATING, except to the
extent otherwise provided in the SUPPLY AGREEMENT, (ii) neither BARD
nor any AFFILIATE shall be obligated to use any efforts whatsoever to
promote, market or sell any PRODUCT, (iii) the consideration set forth
in Section 3.2 hereof (or in lieu thereof BARD's minimum purchase
obligations under the SUPPLY AGREEMENT) have been bargained for in lieu
of any obligation by BARD or any AFFILIATE to use any efforts to
promote, market or sell any PRODUCT, (iv) subject to the provisions of
Section 24.1 of the SUPPLY AGREEMENT, nothing contained herein is
intended to prohibit or restrict the right of BARD and its AFFILIATES
to manufacture, have manufactured, use, promote, market or sell any
product which is or may be deemed to be competitive with any PRODUCT.
V. PATENT MATTERS
5.1 LICENSOR hereby covenants to BARD that, during the term of this
Agreement, LICENSOR, at its expense: (i) shall maintain all issued
Letters Patent listed on SCHEDULE E, SCHEDULE F, and SCHEDULE G, which
are attached hereto and
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incorporated herein, and (ii) shall diligently prosecute all
applications for Letters Patent listed on SCHEDULE E, SCHEDULE F and
SCHEDULE G and shall maintain all Letters patent issuing thereon, and
(iii) shall prepare such other applications for Letters Patent directed
toward SUPERSLIP COATING, BIOSTATIC COATING, STAY WET COATING and each
NET COATING which LICENSOR deems advisable, shall file such applications
in such countries as LICENSOR deems advisable, shall diligently prosecute
the same and shall maintain all Letters Patent issuing thereon.
5.2 In the event any party hereto knows or has reason to believe that any
issued patent included in the PROPRIETARY RIGHTS is being infringed,
either directly or indirectly by any third party which is not an
AFFILIATE, with respect to the LICENSED APPLICATION, the party
possessing such knowledge or belief shall promptly notify the other.
In said event, BARD, at its sole cost and expense, shall have the first
right, but not the obligation, to attempt to stop any such infringement
by taking such action as BARD, in its sole judgment, deems appropriate,
including prosecution of a lawsuit. In the event BARD institutes a
lawsuit against any such infringer, LICENSOR hereby agrees to be named
as a nominal party herein, if required by applicable law. In the last
mentioned event, (ii) LICENSOR is named as a nominal party, BARD hereby
agrees to reimburse LICENSOR for reasonable attorneys' fees incurred
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by LICENSOR incident to its being named a nominal party within
thirty (30) days of BARD's receipt of documentation supporting such
fees. The parties hereby agree that all recoveries and awards that
may be obtained as a result of any action taken by BARD with
respect to any such infringement, including any settlement thereof,
shall be the sole and exclusive property of BARD. In the event BARD
fails to take any action against the alleged infringer within sixty
(60) business days of issuance of any notice referred in the first
sentence of this Section 5.2, LICENSOR, thereafter, shall have the
right, but not the obligation, at its sole cost and expense, to
attempt to stop such alleged infringement by taking such action as
LICENSOR, in its sole judgment, deems appropriate, including
prosecution of a lawsuit. The parties hereby agree that all
recoveries and awards that may be obtained as a result of any
action taken by LICENSOR with respect to such alleged infringement,
including any settlement thereof, shall be the sole and exclusive
property of LICENSOR, it being expressly agreed that LICENSOR shall
have the right to settle any such action on such terms as it deems
appropriate, provided such settlement is not inconsistent with the
rights herein granted to BARD.
VI. REPRESENTATIONS AND WARRANTIES
6.1 LICENSOR represents and warrants to BARD that:
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(i) LICENSOR has the power and authority to execute and deliver
this Agreement and perform the transactions contemplated
hereby. The execution, delivery and performance of this
Agreement has been duly authorized by the Board of Directors
of LICENSOR and no other corporate proceedings or other actions
are necessary on the part of LICENSOR to execute, deliver, and
perform this Agreement, and
(ii) this Agreement has been duly executed and delivered by LICENSOR
and constitutes the legal, valid and binding obligation of
LICENSOR, enforceable against LICENSOR in accordance with the
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors rights generally or by
the application of general principles of equity, and
(iii) LICENSOR is a corporation duly organized, validly existing and
in good standing under the laws of the State of New Jersey.
LICENSOR has the corporate power and authority to own all of
its properties and assets and to carry on its business as it is
now conducted, and is duly licensed and qualified to do business
and is in good standing in each jurisdiction in which the
nature of the business conducted by in or the character or
location of the properties and assets owned or
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leased by it makes such licensing or qualifications necessary,
and
(iv) neither the execution by LICENSOR of this Agreement, the
consummation of the transactions contemplated hereby nor the
performance by LICENSOR of any of the obligations imposed on it
hereunder will:
(a) conflict with or result in a breach of any provision in
the certificate of incorporation, by-laws or any
resolutions of LICENSOR, or
(b) give rise to a default, or any right of termination,
cancellation or acceleration, or otherwise be in conflict
with any of the terms, conditions or provisions of any
obligation to which LICENSOR is a party or by which it or
any of its ssets, including the PROPRIETARY RIGHTS, may
be bound or require any consent, approval or notice under
the terms of any such instrument evidencing any such
obligation, or
(c) result in the creation or imposition of any lien, claim,
restriction, charge or encumbrance upon any of the
PROPRIETARY RIGHTS, and
(v) LICENSOR is the sole and exclusive owner of the PROPRIETARY
RIGHTS existing on the EFFECTIVE DATE and owns the same free
and clear of all liens and encumbrances of any nature
whatsoever, and
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(vi) no improvement to or enhancement of the SUPERSLIP COATING
described on SCHEDULE C has been reduced to practice by
LICENSOR or acquired by LICENSOR, by purchase, license or
otherwise, and
(vii) all applications for Letters Patent existing on the EFFECTIVE
DATE directed toward the SUPERSLIP COATING described on
SCHEDULE C and all issued Letters Patent existing on the
EFFECTIVE DATE covering the SUPERSLIP COATING as so described
are listed on SCHEDULE E, and
(viii) no improvement to or enhancement of the BIOSTATIC COATING
described on SCHEDULE A has been reduced to practice by
LICENSOR or acquired by LICENSOR, by purchase, license or
otherwise, and
(ix) all applications for Letters Patent existing on the EFFECTIVE
DATE directed toward the BIOSTATIC COATING described on
SCHEDULE A and all issued Letters Patent existing on the
EFFECTIVE DATE covering the BIOSTATIC COATING as so described
are listed on SCHEDULE F, and
(x) no improvements to or enhancement of the STAY WET COATING
described on SCHEDULE B has been reduced to practice by
LICENSOR or acquired by LICENSOR, by purchase, license or
otherwise, and
(xi) all applications for Letters Patent existing on the EFFECTIVE
DATE directed toward the STAY WET COATING described on
SCHEDULE B and all issued Sellers Patent
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existing on the EFFECTIVE DATE covering the STAY WET COATING as
so described are listed on SCHEDULE G, and
(xii) prior to entering into any agreement with any third party which
reasonably may result in an improvement to or enhancement of
the SUPERSLIP COATING described on SCHEDULE C or the BIOSTATIC
COATING described on SCHEDULE A or the STAY WET COATING
described on SCHEDULE B, LICENSOR shall procure from the third
party an assignment of the third party's entire right title
and interest in and to any such improvement or enhancement or,
alternatively, shall procure from such third party an exclusive
license, with right to sublicense, under all rights of the third
party in and to any such improvement or enhancement for the
LICENSED APPLICATION.
(xiii) no NEW COATING has been reduced to practice on or prior to the
EFFECTIVE DATE, and
(xiv) prior to entering into any agreement with any third party which
reasonably may result in the reduction to practice of any NEW
COATING, LICENSOR shall use its reasonable efforts to negotiate
and have included in such agreement: (a) an assignment of the
third party's entire right title and interest in and to any
NEW COATING resultant from work performed under such agreement,
or (b) an exclusive license, with right to sublicense, under
all rights of the third party in and
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to any NEW COATING resultant from work performed under such
agreement to manufacture, have manufactured, use, sell, offer
for sale, import and export any such NEW COATING throughout the
TERRITORY, and
(xv) to the best of LICENSOR'S knowledge:
(a) no issued patent included in PROPRIETARY RIGHTS on the
EFFECTIVE DATE is being infringed by any third party in
any country in the TERRITORY, and
(b) no third party action or proceeding is pending, nor has
any claim been made or threatened, challenging the
validity or enforceability of any issued patent included
in PROPRIETARY RIGHTS on the EFFECTIVE DATE or LICENSOR'S
rights in and to any other PROPRIETARY RIGHTS existing on
the EFFECTIVE DATE; and
(xvi) LICENSOR has made no public disclosure of any non-patented
PROPRIETARY RIGHTS existing on the EFFECTIVE DATE and shall
make no public disclosure of any such PROPRIETARY RIGHTS or any
PROPRIETARY RIGHTS which come into existence during the term of
this Agreement, except to the extent required by law or to
obtain patent protection therefor, unless LICENSOR obtains
BARD's prior written consent, which shall not be unreasonably
delayed or withheld.
6.2 BARD represents and warrants to LICENSOR that:
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(i) BARD has the power and authority to execute and deliver this
Agreement and perform the transactions contemplated hereby. The
execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action of BARD and
no other corporate proceedings or other actions are necessary on
the part of BARD to execute, deliver, and perform this
Agreement, and
(ii) this Agreement has been duly executed and delivered by BARD and
constitutes the legal, valid and binding obligation of BARD,
enforceable against BARD in accordance with the terms, except
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting creditors rights generally or by the application of
general principles of equity, and
(iii) BARD is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey. BARD
has the corporate power and authority to own all of its
properties and assets and to carry on its business as it is now
conducted, and duly licensed and qualified to do business and
is in good standing in each jurisdiction in which the nature of
the business conducted by it or the character or location of
the properties and assets owned or leased
22
by it makes such licensing or qualifications necessary, and
(iv) neither the execution by BARD of this Agreement, the
consummation of the transactions contemplated hereby nor the
performance by BARD of any of the obligations imposed on it
hereunder will:
(a) conflict with or result in a breach of any provision in
the certificate of incorporation, by-laws or any
resolution of BARD, or
(b) give rise to a default, or any right of termination,
cancellation or acceleration, or otherwise be in conflict
with any of the terms, conditions or provisions of any
obligation to which BARD is a party or by which it or any
of its assets may be bound or require any consent,
approval or notice under the terms of any such instrument
evidencing any such obligation, or
(c) result in the creation or imposition of any lien, claim,
restriction, charge or encumbrance upon any of its assets.
VII. INDEMNIFICATION
7.1 LICENSOR agrees to indemnify, defend (using counsel selected by
LICENSOR which is reasonably acceptable to BARD) and hold harmless
BARD, its AFFILIATES and their respective officers, directors,
employees and customers, from and against any and all liabilities,
losses, damages,
23
costs and expenses (including, without limitation, reasonable attorneys'
fees, court costs and out-of-pocket expenses) suffered or incurred
arising out of or in condition with: (i) the breach of any warranty or
inaccuracy of any representation of LICENSOR contained in this
Agreement, (ii) any failure by LICENSOR to perform any of the
covenants, agreements or obligations of LICENSOR contained in this
Agreement, (iii) any third party claim alleging that the manufacture,
use, sale, offer for sale or import of any PRODUCT infringes the
proprietary rights of the third party where the basis of the alleged
infringement is SUPERSLIP COATING, BIOSTATIC COATING or STAY WET
COATING alone and not the combination of any such coating with any other
item, (iv) any third party claim alleging that the manufacture, use,
sale, offer for sale or import of any product within the LICENSED
APPLICATION coated with any NEW COATING on which BARD exercised its
right of first refusal hereunder infringes the proprietary rights of
the third party where the basis of the alleged infringement is such NEW
COATING alone and not the combination of such NEW COATING with any other
item.
7.2 Subject to LICENSOR's obligations under Section 7.1 hereof and subject
further to LICENSOR's defense and indemnification obligations under the
SUPPLY AGREEMENT, BARD agrees to indemnify, defend (using counsel
selected
24
by BARD which is reasonably acceptable to LICENSOR) and hold harmless
LICENSOR and its officers, directors and employees, from and against
any and all liabilities, losses, damages, costs and expenses
(including, without limitation, reasonable attorneys' fees, court costs
and out-of-pocket expenses) suffered or incurred arising out of or in
connection with: (i) the breach of any warranty or inaccuracy of any
representation of BARD contained in this Agreement, (ii) any failure by
BARD to perform any of the covenants, agreements or obligations of BARD
contained in this Agreement, (iii) the sale of any PRODUCT or any
product coated with a NEW COATING on which BARD exercises its right of
first refusal hereunder.
7.3 Within thirty (30) days after BARD or LICENSOR, as the case may be
(hereinafter the "Indemnified Party"), has received notice of or has
acquired knowledge of any claim by any person or entity not a party to
this Agreement of the commencement or threatened commencement of any
action or proceeding by any person or entity not a party to this
Agreement ("third party claim") or has acquired knowledge of any other
claim hereunder against the other party hereto ("first party claim")
the Indemnified Party shall, if such claim is indemnifiable by the
other party pursuant thereto (hereinafter the "Indemnifying Party",
give the Indemnifying Party written notice of such claim and the
commencement or threatened commencement of such action or
25
proceeding, if any. Such notice shall state the nature and basis of
such claim and, if ascertainable, the amount thereof. Notwithstanding
the foregoing, the failure of the Indemnified Party to give such
notice shall not excuse the Indemnifying Party's obligation to
indemnify and, in the case of a third party claim, defend the
Indemnified Party, except to the extent the Indemnifying Party has
suffered damage or prejudice by reason of the Indemnified Party's
failure to give or delay in giving such notice. Within ten (10)
business days of receipt of any notice issued by the Indemnified
Party pursuant to this Section 7.3, the Indemnifying Party shall
notify the Indemnified Party whether the Indemnifying Party
acknowledges its indemnification obligation and, in the case of a
third party claim, its defense obligation with respect to the claim
which was the subject of the Indemnified Party's notice or whether it
disclaims such obligations. In the event the Indemnifying Party
disclaims or fails to timely acknowledge its obligations with respect
to any claim by the Indemnified party relating to any third party
claim, the Indemnified Party shall have the right to defend such
claim, with counsel of its own selection, and compromise such claim
without prejudice to its right to indemnification hereunder. In the
event the indemnifying Party timely acknowledges its obligations
hereunder with respect to any third party claim, the indemnifying
Party shall defend the same with counsel in
26
accordance with the foregoing provisions of this Article VII. Where the
Indemnifying Party shall have acknowledged in writing its obligations
hereunder with respect to any third party claim, the Indemnified
Party may, at its expense, participate in the defense of such third
party claim and no such third party claim shall be settled by the
Indemnified Party without the prior written consent of the
Indemnifying Party. At any time after the Indemnifying Party
acknowledges its obligations hereunder with respect to any third
party claim, the Indemnifying Party may request the Indemnified Party
to agree in writing to the payment or compromise of such third party
claim (provided such payment or compromise has been previously
approved in writing by the third party claimant), whereupon such
action shall be deemed agreed to by the Indemnified Party and shall be
agreed to in writing by the Indemnified Party unless such settlement
would involve a remedy or remedies other than the payment of money
damages by the Indemnifying Party.
7.4 In the event either party makes a claim against the other party under
Article VII hereof and further in the event the party receiving notice
of such claim fails to timely acknowledge its obligations hereunder
with respect in such claim or disclaims such obligations, the parties,
within sixty (60) days of the date of issuance of notice by the party
making such claim, shall meet and attempt to resolve
27
in good faith the dispute between the parties with respect to such
claim. If the parties fail to resolve such dispute within seventy-five
(75) days of the date of issuance of notice by the party making such
claim, the party making such claim may thereafter commence litigation
against the other party in a court of competent jurisdiction for
determination of its claim. Upon resolution of any claim pursuant to
this Section 7.4, whether by agreement between the parties or the
rendering of a final judgment from which no appeal lies in any
litigation, the appropriate party under an agreement or the party
against which judgment is rendered in litigation shall, within ten
(10) days of such resolution, pay over and deliver to the other party
funds in the amount of any claim as resolved, and any fees, including
attorneys' fees, incurred by such other party with respect to any such
litigation.
VIII. TERM/TERMINATION
8.1 This Agreement shall commence on the EFFECTIVE DATE and shall continue
thereafter for term(s) coextensive with the SUPPLY AGREEMENT, unless
sooner terminated in accordance with Section 8.2 or 8.3 hereof,
provided however, in the event the SUPPLY AGREEMENT is terminated
pursuant to Section 11.2(i), 11.2(ii) or 11.2(iii), this Agreement
shall continue through May 5, 2025, unless sooner terminated by BARD,
with or without cause, upon not less than ninety (90) days' notice
given by BARD to HYDROMER.
28
8.2 In the event of a material breach or default by BARD of any term or
provision of this Agreement on its part to be observed or performed
hereunder, LICENSOR shall have the right to give BARD notice thereof,
whereupon BARD shall have thirty (30) days from the date of such notice
to cure or cause the cure of such breach or default. If such breach or
default is timely cured, this Agreement shall remain in full force and
effect. If such breach is not timely cured, LICENSOR shall have the
right to immediately terminate this Agreement upon notice to BARD.
8.3 In the event of a material breach or default by LICENSOR of any term
or provision of this Agreement on its part to be observed or performed
hereunder, BARD shall have the right to give LICENSOR notice thereof,
whereupon LICENSOR shall have thirty (30) days from the date of such
notice to cure or cause the cure of such breach or default. If such
breach or default is timely cured, this Agreement shall remain in full
force and effect. If such breach is not timely cured, BARD shall have
the right to immediately terminate this Agreement upon notice to
LICENSOR.
8.4 During the nine (9) month period following termination of this
Agreement for any reason, BARD and its AFFILIATES shall have the right
to sell their remaining inventory of PRODUCT and any product coated
with any NEW COATING. All sales pursuant to this Section 8.4 shall be
subject to the
29
provisions of Section 2.3 and Article III relating to royalties,
exclusive of minimum annual royalties.
8.5 Termination of this Agreement by either party in accordance with the
provisions of this Article VIII shall not constitute an election of
remedies.
IX. SURVIVAL
9.1 The provisions of Section 2.3 (with respect to product coated with any
NEW COATING sold prior to termination of this Agreement), Article III
(with respect to PRODUCT sold prior to termination of this Agreement)
Section 5.2 (with respect to actions instituted prior to termination),
Sections 8.4 and 9.1 and Articles VI, VII and XI shall survive the
termination of this Agreement for a period of six (6) years.
X. NO CIRCUMVENTION
10.1 As a material inducement to the execution by BARD of this Agreement,
LICENSOR hereby represents and warrants to BARD that, during the term
of this Agreement, LICENSOR shall not sell any SUPERSLIP COATING,
BIOSTATIC COATING, STAY WET COATING or any NEW COATING on which BARD
exercises its right of first refusal hereunder to any person or entity
which LICENSOR knows or has reasonable grounds to believe intends to
use or sell the same for use for the LICENSED APPLICATION. LICENSOR
agrees that any remedy at law for any breach by it of the provisions
of this Section 10.1 will be inadequate by reason of the fact the
irreparable
30
harm will be sustained by BARD and its affiliates in the event of such
breach and that BARD shall be entitled to injunctive relief and/or
specific performance in respect of each such breach. The remedies provided
in Section 10.1 shall be in addition to any other remedy which BARD may
have at law or in equity.
XI. MISCELLANEOUS
11.1 All notices required or permitted to be given under this Agreement shall
be in writing and shall be deemed effective and given when delivered in
person or sent by certified or registered mail, posted and certification
prepaid, addressed to the party to be notified at its address first above
written or to such other address as a party shall designate by notice
given in the aforementioned manner. Notices to BARD shall be directed to
the attention of its General Counsel. Notices to LICENSOR shall be
directed of its President.
11.2 This Agreement may not be assigned by BARD or LICENSOR without the
prior written consent of the non-assigning party, which consent shall not
be unreasonably delayed or withheld, except that BARD or LICENSOR may
assign this Agreement upon notice of but without the consent of the
non-assigning party: (a) to any AFFILIATE of the assigning party; or (b)
to any purchaser of substantially all the stock of the assigning party; or
(c) to a purchaser of substantially all of the assets of the assigning
party
31
relating to lubricious coatings, provided the assignee assumes all of the
assignor's obligations hereunder.
11.3 BARD or LICENSOR'S failure to observe and perform any term or
provision of this Agreement on their respective parts to be so observed
and performed shall be excused in the event, to the extent and only during
the period that same arises beyond the excused party's control not
resulting from its fault or negligence, including, but not limited to,
fire, acts of a public enemy, government or God, strikes and lockouts,
priorities, allocations, and unavailability of materials at a reasonable
cost.
11.4 This Agreement shall be binding upon and enure to the benefit of BARD, its
successors and permitted assigns, and LICENSOR, its successors and
permitted assigns.
11.5. This Agreement shall be governed by and construed in accordance with the
laws of the State of New Jersey; provided, however, that all questions
concerning the construction or effect of patent applications and patents
shall be decided in accordance with the laws of the country in which the
particular patent application or patent concerned has been filed or
granted, as the case may be.
11.6 The invalidity or unenforceability of any term or provision of this
Agreement shall not effect the other terms and provisions, and the same
shall be construed in
32
all respects as if such invalid or unenforceable term or provision was
omitted herefrom.
11.7 This Agreement, the Schedules and Exhibit thereto and any agreement
between the parties incorporated herein by reference constitutes the
entire agreement between BARD and LICENSOR respecting the subject matter
hereof and incorporates and supersedes all prior negotiations, agreements
and undertakings, all of which are merged herein. This Agreement may not
be changed or modified except by written instrument executed by the
parties.
11.8 The Article and Paragraph headings of this Agreement are intended for
convenience of reference only and shall not define or limit the provisions
of this Agreement.
11.9 The failure of a party to exercise its rights under this Agreement
regarding any misrepresentation, breach or default by another party shall
not prevent such party from exercising such right unless such waiver is in
writing nor shall any such waiver constitute a waiver of any other right
hereunder.
11.10 The singular of any term used herein shall be deemed to include the plural
of any term used herein shall be deemed to include the singular, as the
context requires. The masculine, feminine or neuter gender of any word
used herein shall include the others, as context requires.
33
11.11 During the term of this Agreement and during the six (6) year period
following the expiration or termination thereof, each party which received
RESTRICTED INFORMATION from the other shall hold the same in strict
confidence and shall not use the same for its benefit (except as
contemplated herein) or for the benefit of any third party. Any party
receiving RESTRICTED INFORMATION from the other shall return the same to
the disclosing party within thirty (30) days of the expiration or
termination of this Agreement; provided however, each party shall have the
right to retain one (1) copy of all RESTRICTED INFORMATION received from
the other in its Law Department files, under lock and key, for archival
purposes only.
34
IN WITNESS WHEREOF, BARD and LICENSOR have caused this Agreement to
be executed by their duly authorized officers on the dates indicated
below.
X.X. XXXX, INC.
By: [Illegible]
-----------------------------
Title: GROUP PRESIDENT
------------------------
Dated: FEBRUARY 25, 1999
-------------------------
HYDROMER, INC.
By: [Illegible]
-----------------------------
Title: VICE PRESIDENT
------------------------
Dated: FEBRUARY 25, 1999
-------------------------
35
LICENSE AND SUPPLY AGREEMENT
THIS AGREEMENT made this 25th day of February, 1999 by and between
HYDROMER, INC., a New Jersey corporation, having its principal place of
business at 00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("HYDROMER")
and X. X. XXXX, INC., a New Jersey corporation having its principal place of
business at 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000 ("BARD").
WHEREAS, simultaneously with the execution of this Agreement BARD and
HYDROMER executed the "LICENSE AGREEMENT" (hereinafter defined), and
WHEREAS, BARD is desirous of licensing back to HYDROMER certain rights
licensed to BARD by HYDROMER under the LICENSE AGREEMENT; and
WHEREAS, HYDROMER is desirous of accepting such license back from BARD,
on the subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the terms and provisions of this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the execution and delivery thereof,
HYDROMER and BARD agree as follows:
I. DEFINITIONS.
1.1 AFFILIATE -- means any person or entity which controls, is
controlled by, or is under common control with
BARD; For purposes of this definition, the term "control", including the
correlative meanings of the terms "controlled by" and "under common control
with" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of management or policies of such person or
entity.
1.2 BIOSEARCH -- means Biosearch Medical Products, Inc., a New
Jersey corporation, having its principal place of business at 00X Xxxxxxxxxx
Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
1.3 BIOSTATIC COATING -- shall have the meaning set forth in
Section 1.2 of the LICENSE AGREEMENT.
1.4 BIOSTATIC RIGHTS -- mean those PROPRIETARY RIGHTS relating
to BIOSTATIC COATING licensed by HYDROMER to BARD under the LICENSE AGREEMENT.
1.5 COATINGS -- mean SUPERSLIP COATING, BIOSTATIC COATING and
STAY WET COATING.
1.6 CPI -- means the Consumer Price Index for Urban Consumers,
Northern New Jersey, all items (1982-1984 Standard Reference Base Period), as
published by the United States Department of Labor Bureau of Labor Statistics.
1.7 EFFECTIVE DATE -- means the date and year first above
written.
1.8 GAAP -- means generally accepted accounting principles.
2
1.9 LICENSE AGREEMENT -- means the license agreement which is
attached hereto and incorporated herein as EXHIBIT 1.
1.10 LICENSED APPLICATION -- shall have the meaning set forth in
Section 1.4 of the LICENSE AGREEMENT.
1.11 NEW COATING -- shall have the meaning set forth in Section
1.5 of the LICENSE AGREEMENT.
1.12 PROPRIETARY RIGHTS -- shall have the meaning set forth in
Section 1.9 of the LICENSE AGREEMENT.
1.13 SPECIFICATIONS -- mean the raw material, manufacturing,
quality assurance and finished product specifications and protocols relating
to SUPERSLIP COATING, STAY WET COATING, BIOSTATIC COATING and each NEW
COATING, on which BARD exercises its option pursuant to Section 2.3 of the
LICENSE AGREEMENT, as may be amended or supplemented by mutual written
agreement of the parties. The SPECIFICATIONS applicable to SUPERSLIP COATING
are attached hereto and incorporated herein as EXHIBIT 2.
1.14 STAY WET COATING -- shall have the meaning set forth in
Section 1.12 of the LICENSE AGREEMENT.
1.15 STAY WET RIGHTS -- mean those PROPRIETARY RIGHTS relating
to STAY WET COATING licensed by HYDROMER to BARD under the LICENSE AGREEMENT.
1.16 SUPERSLIP COATING -- shall have the meaning set forth in
Section 1.13 of the LICENSE AGREEMENT.
3
1.17 SUPERSLIP RIGHTS -- mean those PROPRIETARY RIGHTS relating
to SUPERSLIP COATING licensed by HYDROMER to BARD under the LICENSE AGREEMENT.
II. LIMITED LICENSE
2.1 BARD hereby grants to HYDROMER a limited, exclusive, royalty
free license, under those SUPERSLIP RIGHTS licensed to BARD under the LICENSE
AGREEMENT which exist on the EFFECTIVE DATE for the sole and limited purpose
of manufacturing SUPERSLIP COATING and supplying the same to BARD and any
AFFILIATE in accordance with the terms of this Agreement. In the event any
SUPERSLIP RIGHTS not in existence on the EFFECTIVE DATE come into existence
after the EFFECTIVE DATE, the license granted by BARD TO HYDROMER pursuant to
the immediately preceding sentence shall be deemed amended to include the
same without any further action of the parties.
2.2 BARD hereby grants to HYDROMER a limited, exclusive, royalty
free license, under those STAY WET RIGHTS licensed to BARD under the LICENSE
AGREEMENT which exist on the EFFECTIVE DATE, for the sole and limited
purpose of manufacturing STAY WET COATING and supplying the same to BARD and
any AFFILIATE in accordance with the terms of this Agreement. In the event any
STAY WET RIGHTS not in existence on the EFFECTIVE DATE come into existence
after the EFFECTIVE DATE, the license granted by BARD to HYDROMER pursuant to
the immediately preceding sentence shall
4
be deemed amended to include the same without any further action of the
parties.
2.3 BARD hereby grants to HYDROMER a limited, exclusive, royalty
free license, under those BIOSTATIC RIGHTS licensed to BARD under the LICENSE
AGREEMENT which exist on the EFFECTIVE DATE, for the sole and limited purpose
of manufacturing BIOSTATIC COATING and supplying the same to BARD and any
AFFILIATE in accordance with the terms of this Agreement. In the event any
BIOSTATIC RIGHTS not in existence on the EFFECTIVE DATE come into existence
after the EFFECTIVE DATE, the license granted by BARD to HYDROMER pursuant to
the immediately preceding sentence shall be deemed amended to include the
same without any further action of the parties.
2.4 Nothing contained in this Agreement is intended to grant to
HYDROMER: (i) the right to apply SUPERSLIP COATING, STAY WET COATING or
BIOSTATIC COATING to any product within the LICENSED APPLICATION, or (ii) the
right to use, sell, offer to sale, import or export any product within the
LICENSED APPLICATION coated with SUPERSLIP COATING, STAY WET COATING or
BIOSTATIC COATING.
2.5 HYDROMER shall have no right to further sublicense any of
the licenses granted to it pursuant to this Agreement or to assign any of its
rights hereunder without the prior written consent of BARD which will not be
unreasonably delayed or withheld. Any sublicense or assignment of any of the
5
rights licensed to HYDROMER pursuant to this Agreement shall be null, void and
without force or effect.
III. NEW COATINGS
3.1 In the event BARD, pursuant to Section 2.3 of the LICENSE
AGREEMENT, exercises its right of first refusal on a particular NEW COATING,
HYDROMER shall manufacture and sell such NEW COATING (except where HYDROMER
merely possesses distribution rights in which case it shall sell such NEW
COATING) to BARD and its AFFILIATES, as ordered, and BARD and its AFFILIATES
shall purchase such NEW COATING from HYDROMER on the financial terms relating
to such NEW COATING accepted by BARD pursuant to Section 2.3 of the LICENSE
AGREEMENT. In the event BARD exercises its right of first refusal under
Section 2.3 of the LICENSE AGREEMENT with respect to a particular NEW
COATING, the parties shall promptly cooperate to agree upon mutually
acceptable specifications for such NEW COATING and promptly following
agreement thereon shall promptly amend and supplement the SPECIFICATIONS to
include mutually acceptable specifications for such NEW COATING. Further, in
the event BARD exercises its right of first refusal under Section 2.3 of the
LICENSE AGREEMENT with respect to any NEW COATING, BARD shall be deemed to
have granted to HYDROMER, at the time of its exercise of such option, without
requiring any further action by BARD, a royalty free license, under all
proprietary rights relating to such NEW COATING licensed to BARD pursuant to
the LICENSE AGREEMENT, if
6
any, for the sole and limited purpose of manufacturing such NEW COATING and
supplying the same to BARD and its AFFILIATES in accordance with the terms of
this Agreement. No license granted by BARD to HYDROMER pursuant to this
Section 3.1 shall be construed as granting to HYDROMER: (i) the right to
apply any NEW COATING to any product within the LICENSE APPLICATION, or (ii)
the right to use, sell, offer for sale, import or export any product within
the LICENSED APPLICATION coated with any NEW COATING.
IV. MANUFACTURE.
4.1 The parties hereby acknowledge that the commercial embodiment
of BIOSTATIC COATING has not been finalized by HYDROMER as of the EFFECTIVE
DATE. HYDROMER agrees to use its reasonable efforts to finalize the commercial
embodiment of BIOSTATIC COATING, at its expense, and agrees to notify BARD
within thirty (30) days of finalization of such commercial embodiment.
Promptly after receipt by BARD of the notice issued by HYDROMER pursuant to
the immediately preceding sentence, if BARD notifies HYDROMER that BARD or
any AFFILIATE is interested in purchasing BIOSTATIC COATING hereunder, the
parties shall promptly amend and supplement the SPECIFICATIONS to include
mutually acceptable specifications for BIOSTATIC COATING.
4.2 The parties hereby acknowledge that, while there is a
commercial embodiment of STAY WET COATING existing on the EFFECTIVE DATE, the
parties have not included the
7
specifications relating thereto on EXHIBIT 2 as neither BARD nor any
AFFILIATE has a current intention to purchase the same from HYDROMER. In the
event BARD notifies HYDROMER that BARD or any AFFILIATE is interested in
purchasing STAY WET COATING hereunder, the parties shall promptly amend and
supplement the SPECIFICATIONS to include mutually acceptable specifications
for STAY WET COATING.
4.3 If HYDROMER, at any time deems, it necessary to change any
of the SPECIFICATIONS applicable to any of the COATING or applicable to any
NEW COATING on which BARD exercises its right of first refusal pursuant to
Section 2.3 of the LICENSE AGREEMENT, HYDROMER shall notify BARD in writing
of such proposed change prior to implementation of the same. Any change to
any of the SPECIFICATIONS may only be implemented upon BARD's prior written
consent thereto.
4.4 At the time of shipment of any COATING or NEW COATING
ordered by BARD or any AFFILIATE hereunder, HYDROMER shall furnish BIOSEARCH
and BARD or its ordering AFFILIATE with a Certificate of Analysis, signed by
an authorized representative of HYDROMER, certifying that each COATING and
NEW COATING, if any, included in such shipment: (i) has been manufactured in
conformity with applicable SPECIFICATIONS and, (ii) conformed with applicable
SPECIFICATIONS at the time of tender by HYDROMER to the selected carrier.
8
4.5 During the term of this Agreement: (i) HYDROMER shall
manufacture, sell and deliver all SUPERSLIP COATING, STAY WET COATING (if
any) and BIOSTATIC COATING (if any ) ordered by BARD or any AFFILIATE, all in
accordance with the terms of this Agreement, (ii) HYDROMER shall manufacture,
sell and deliver (except where HYDROMER merely possesses distribution rights
in which case it shall sell and deliver) all quantities of NEW COATING on
which BARD exercised its right of first refusal under Section 2.3 of the
LICENSE AGREEMENT, as ordered by BARD or any of its AFFILIATES, all in
accordance with the terms of this Agreement.
V. PURCHASE AND SALE OF SUPERSLIP COATING.
5.1 All purchases and sales of COATINGS, if any, and NEW
COATING, if any, under this Agreement will be initiated by issuance and
delivery to HYDROMER by BARD or an AFFILIATE of a purchase order. The only
terms and conditions of any purchase order issued by BARD or any AFFILIATE
pursuant to this Agreement that will be binding on HYDROMER shall be those
establishing the quantity of any COATING or NEW COATING to be purchased, the
required delivery date(s) therefor and the designated shipping destination.
VI. WARRANTIES; INSPECTION; PROCEDURE; ACCEPTANCE; REMEDIES.
6.1 HYDROMER warrants to BARD that all COATINGS and NEW COATING
sold and delivered hereunder: (a) will
9
be free from defects in material, design and workmanship, and (b) will be
manufactured in accordance with the SPECIFICATIONS applicable thereto and in
substantial compliance with Good Manufacturing Practices under the Federal
Food, Drug and Cosmetics Act of 1938, as amended and regulations promulgated
thereunder.
VII. PRICES AND PAYMENT TERMS.
7.1 HYDROMER agrees to sell to BARD and its AFFILIATES, during
the initial term of this Agreement and during any renewal term, all
quantities of SUPERSLIP COATING, STAY WET COATING (if any), BIOSTATIC COATING
(if any) and NEW COATING (if any), as ordered in accordance with this
Agreement, at the applicable selling price established in accordance with
Section 7.1 and 7.2 hereof. The parties agree that the initial selling price
of SUPERSLIP COATING and STAY WET COATING shall be U.S. $140.00 per U.S.
gallon and further agree that, subject to any adjustment in accordance with
Section 7.2 hereof, said selling prices shall be firm for orders placed
through December 31, 1999. Further, the parties agree that the initial
selling price of BIOSTATIC COATING shall be established based upon the sum of
U.S. $140.00 per U.S. gallon for the base coating plus HYDROMER's actual
material costs for the anti-microbial contained therein, established in
accordance with the GAAP, plus HYDROMER's direct manufacturing expenses,
established in accordance with GAAP, for application, on a per U.S. gallon
basis, of such anti-microbial
10
to such base coating. Additionally, the parties agree that the initial
selling price of BIOSTATIC COATING, as so established shall be firm through
December 31, 1999, subject to any adjustment in accordance with Section 7.2
hereof. Further, the parties agree that in the event BARD exercises its right
of first refusal under Section 2.3 of the LICENSE AGREEMENT with respect to a
particular NEW COATING the initial selling price thereof shall be as set
forth in HYDROMER's offer accepted by BARD pursuant to Section 2.3 of the
LICENSE AGREEMENT, which price shall be firm through December 31st of the
year in which such offer is accepted. Further, the parties agree that the
initial selling prices of SUPERSLIP COATING, STAY WET COATING, BIOSTATIC
COATING and any such NEW COATING shall be subject to increase on January 1,
2000 and annually thereafter during the remainder of the initial term of this
Agreement and during any renewal thereof (each an "Adjustment Date") by an
amount equal to fifty percent (50%) of the increase, if any, in HYDROMER's
actual incurred cost, established and consistently applied in accordance with
GAAP, for purchased raw materials utilized in the COATING or NEW COATING on
which the selling price is being increased, calculated as of the relevant
Adjustment Date, versus the corresponding actual incurred cost, established
in accordance with GAAP, for such materials on the anniversary prior to the
relevant Adjustment Date. Notwithstanding the foregoing, in the event fifty
percent (50%) of the increase in any such purchased raw
11
material, calculated in accordance with the above provisions of this
Section 7.1, exceeds the percentage increase in the CPI during the
one (1) year period beginning fifteen (15) months prior to the applicable
Adjustment Date, such excess shall not be used in the calculation of increase
in the selling price of the COATING(s) or NEW COATING which utilizes such raw
material. Further, it is expressly understood that any adjustment in the
selling prices made in accordance with the provisions of Section 7.2 hereof
shall not be taken into account in any calculation made pursuant to this
Section 7.1.
7.2 The parties hereby expressly agree that in the event
HYDROMER's actual incurred cost, established and consistently applied in
accordance with GAAP, for any purchased raw material utilized in any of the
COATINGS or any NEW COATING being purchased by BARD or any of its AFFILIATES
hereunder increases by more than fifteen percent (15%), HYDROMER shall notify
BARD of the name of such raw material and the COATING(s) and/or NEW COATING
in which such raw material is used and shall include with its notice a
certification signed by the Chief Financial Officer or other officer of
HYDROMER certifying the percentage and dollar amount of such increase. In the
event HYDROMER issues a notice pursuant to the immediately preceding
sentence, the selling price by HYDROMER to BARD and its AFFILIATES of the
COATING(s) and/or NEW COATING set forth in such notice shall immediately be
increased to reflect fifty percent
12
(50%) of the increase in the raw material, as certified by HYDROMER. In the
event HYDROMER issues any notice in accordance with the first sentence of
this Section 7.2, HYDROMER shall have its Chief Financial Officer or another
officer certify to BARD, on a quarterly basis, any fluctuation in HYDROMER's
actual incurred cost, established and consistently applied in accordance with
GAAP, of the raw material which was the subject of such notice. If any
certification issued by HYDROMER indicates a further increase of fifteen
percent (15%) or more in HYDROMER's cost of such raw material, the selling
price hereunder of the COATING(s) and/or NEW COATING in which such raw
material is used shall immediately be further increased in a manner
consistent with the foregoing provisions of this Section 7.2. If any
certification issued by HYDROMER indicates a decrease in HYDROMER's cost of
such raw material, the selling price hereunder of the COATING(s) and/or NEW
COATING in which such raw material is used shall immediately be decreased to
reflect fifty percent (50%) of the decrease in the cost of such raw material,
as certified by HYDROMER; provided, however, in no event shall any such
decrease result in a selling price hereunder lower than the initial selling
price hereunder, as may have been adjusted in accordance with Section 7.1. In
the event HYDROMER issues a notice pursuant to the first sentence of this
Section 7.2, the quarterly certification and any required adjustment process
shall continue until HYDROMER's actual incurred cost for the relevant
13
raw material equals HYDROMER's actual incurred cost for the same used in
calculating the last increase, taken in accordance with Section 7.1, of the
selling price of the COATING(s) and/or NEW COATING in which such raw material
is used.
7.3 HYDROMER shall invoice BARD or its ordering AFFILIATE at the
applicable selling price at the time of shipment. Payment terms are net
thirty (30) days from date of receipt of shipment at the shipping destination
designated in the purchase order to which the shipment corresponds.
VIII. PURCHASE ORDERS.
8.1 All purchase orders hereunder shall be issued not less than
ninety (90) days prior to the required delivery date and shall specify the
quantity ordered, required delivery date(s) and designated shipping
destination.
8.2 All purchase orders hereunder shall be in fifty-five (55)
gallon drum multiples and shall be for at least one (1)-fifty-five (55)
gallon drum.
8.3 During each year during the term of this Agreement, BARD
and/or its AFFILIATES shall order from HYDROMER a minimum of one thousand
(1000) gallons of any combination of COATINGS.
8.4 Within thirty (30) days of the EFFECTIVE DATE, BARD shall
furnish to HYDROMER with a non-binding forecast of its orders of COATINGS
during the next twelve (12) month period, broken down by quarter. BARD shall
update such forecast
14
on a monthly basis. In the event BARD exercises its right of first refusal
pursuant to Section 2.3 of the LICENSE AGREEMENT with respect to any NEW
COATING, the parties agree that the provisions of this Section 8.4 shall
apply mutatis mutandis to such NEW COATING.
IX. SHIPPING TERMS.
9.1 All COATINGS ordered hereunder will be delivered to BARD or
its ordering AFFILIATE, as applicable, by tender to its selected carrier,
F.O.B. HYDROMER's facility located at 00 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx, xx the delivery date set forth in the corresponding purchase order.
Title and risk of loss shall pass upon acceptance of tender by such carrier.
X. TERM
10.1 This Agreement shall commence on the EFFECTIVE DATE and
shall have an initial term continuing through May 6, 2005, unless sooner
terminated in accordance with the provisions of Article XI hereof. BARD shall
have the right to renew this Agreement, at its option, for up to four (4)
additional successive five (5) year renewal terms by notice given to HYDROMER
not less than ninety (90) days prior to the expiration of the then current
term.
XI. TERMINATION
11.1 HYDROMER shall have the right to terminate this Agreement
immediately upon notice to BARD in the event BARD
15
becomes insolvent, makes a general assignment for the benefit of its
creditors, files or has filed against it a petition in bankruptcy which is
not dismissed or stayed without renewal within the applicable statutory
period or files a petition in any State or Federal proceeding seeking relief
from its creditors. Further, in the event of a material breach or default by
BARD of any term or provision of this Agreement on its part to be observed or
performed hereunder, HYDROMER shall have the right to give BARD notice
thereof, whereupon BARD shall have thirty (30) days from the date of such
notice to cure or cause the cure of such breach or default. If such breach or
default is timely cured, this Agreement shall remain in full force and
effect. If such breach is not timely cured, HYDROMER shall have the right to
immediately terminate this Agreement upon notice to BARD.
11.2 BARD shall have the right to terminate this Agreement:
(i) immediately upon notice to HYDROMER in the event HYDROMER becomes insolvent,
makes a general assignment for the benefit of its creditors, files or has
filed against it a petition in bankruptcy which is not dismissed or stayed
without renewal within the applicable statutory period or files a petition in
any State or Federal proceeding seeking relief from its creditors,
(ii) immediately upon notice to HYDROMER in the event HYDROMER fails to timely
perform any of its material obligations hereunder for a period of ninety (90)
days, either consecutively or in the aggregate, during any twelve (12) month
period, regardless of
16
whether such failure is due to Force Majeure, as defined in Section 12.1(a)
hereof, (iii) immediately upon notice to HYDROMER in the event of a material
breach or default by HYDROMER of any term or provision of this Agreement on
its part to be observed or performed which is not cured by HYDROMER within
thirty (30) days of the date of notice by BARD to HYDROMER of such breach or
default, (iv) with or without cause, at any time after May 6, 2005, upon not
less than one hundred twenty (120) days' prior written notice to HYDROMER.
11.3 In the event BARD terminates this Agreement pursuant to
Section 11.2(iv), the parties hereby agree that the following rights and
obligations of the respective parties shall apply: (i) BARD and its
AFFILIATES shall have the right to purchase from HYDROMER and HYDROMER shall
have the obligation to supply BARD and its AFFILIATES, on a purchase order
basis and on the terms and conditions set forth in this Agreement (exclusive
of Section 8.3) COATINGS and NEW COATING purchased by BARD or any AFFILIATE
prior to termination of this Agreement, (ii) all obligations of HYDROMER
under this Agreement shall apply with respect to any COATINGS or NEW COATING
ordered by BARD or any AFFILIATE pursuant to Section 11.3(i) of this
Agreement, (iv) all obligations of BARD under this Agreement shall apply
with respect to any COATINGS or NEW COUNTING ordered by BARD or any AFFILIATE
pursuant to Section 11.3(i) of this agreement, exclusive of those set forth
in Section 8.3., (v) notwithstanding the last sentence of Section 3.2 of the
LICENSE AGREEMENT, BARD shall be obligated to
17
pay HYDROMER earned royalties in accordance with the terms of the LICENSE
AGREEMENT: (a) on all PRODUCTS, as defined in the LICENSE AGREEMENT, coated
with any of the COATINGS purchased pursuant to this Section 11.3, (b) all
products coated with any NEW COATING purchased pursuant to this Section 11.3.
11.4 Except as expressly set forth in this Agreement, termination
of this Agreement:
(i) will not affect or impair the rights, liabilities and
obligations of any party under any purchase order issued prior to the
effective date of termination or pursuant to Section 11.3 hereof; and
(ii) will not relieve any party of any obligation or liability
incurred under this Agreement prior to the effective date of
termination or pursuant to Section 11.3 hereof;
(iii) shall not constitute an election of remedies.
XII. FORCE MAJEURE.
12.1 (a) Subject to the provisions of Section 11.2(ii) which
shall supercede this Section 12.1(a), the failure by HYDROMER to make or by
BARD to take or require any delivery hereunder (or any portion thereof) when
due shall not subject the non-performing party to any liability to the other
party if the non-performing party declares in writing to the other party that
performance cannot be made due to: (i) an act of God or the public enemy,
fire, explosion, perils of the sea, flood, drought, war, riot, sabotage,
accident or embargo; (ii) without limiting the foregoing circumstances, any
circumstances of like or different character beyond the reasonable control of
the party so failing
18
exclusive of inability to pay money unless caused by national bank closure or
failure; (iii) interruption of or delay in transportation beyond the
reasonable control of the party so failing; (iv) inadequacy or shortage or
failure of normal sources of supply of materials, energy or equipment beyond
the reasonable control of the party so failing; (v) equipment breakdowns
beyond the reasonable control of the party so failing; (vi) labor trouble from
whatever cause arising and whether or not the demands of the employees
involved are reasonable and within said party's power to concede; or
(vii) compliance by HYDROMER or BARD with any order, action, direction or
request of any governmental officer, department, agency, authority or committee
thereof (any occurrence or condition set forth in subsections (i) through
(vii) above are herein referred to as "Force Majeure").
(b) The party claiming an excuse hereunder shall promptly notify
the other party in writing, specifying the reasons therefor and expected
duration thereof. Such party shall take reasonable steps to ensure resumption
of full performance hereunder as soon as reasonably possible.
(c) In the event of a Force Majeure event effecting HYDROMER,
HYDROMER shall have the right to obtain COATINGS and any NEW COATING on which
BARD exercised its right of first refusal pursuant to Section 2.3 of the
LICENSE AGREEMENT from a third party only in the event it has obtained BARD's
prior written consent which will not be unreasonably delayed or withheld.
19
BARD may impose reasonable conditions to granting such consent which may
include, but are not necessarily limited to, qualifying the third party as an
approved vendor and/or requiring the third party to agree in writing to all
relevant terms and conditions of this Agreement.
(d) During the pendency of any Force Majeure situation, should
HYDROMER retain any manufacturing capacity relating to any of the COATINGS or
any NEW COATING on which BARD exercised its right of first refusal pursuant
to Section 2.3 of the LICENSE AGREEMENT, HYDROMER shall allocate a proportion
of such manufacturing capacity to BARD which is no less favorable than that
granted to any other customer of HYDROMER.
XIII. PRODUCTS LIABILITY INSURANCE; INDEMNIFICATION.
13.1 During the term of this Agreement and for so long as
HYDROMER supplies any of the COATINGS or NEW COATING pursuant to Section 11.3
of this Agreement, HYDROMER shall maintain, at its expense, a policy of
comprehensive general liability insurance, with products liability
endorsement, in the minimum amount of $3,000,000.00 per occurrence and in the
annual aggregate. Said policy shall name BARD and its AFFILIATES as
additional insureds only with respect to COATINGS and NEW COATING sold by
HYDROMER hereunder. HYDROMER shall furnish BARD with a certificate of
insurance evidencing such coverage within thirty (30) days of the execution
of this Agreement, which certificate
20
shall provide for not less than thirty (30) days notice to BARD prior to
material change in coverage or policy cancellation.
13.2 HYDROMER agrees to indemnify, defend (using counsel
selected by HYDROMER which is reasonably acceptable to BARD) and hold
harmless BARD, its AFFILIATES and their respective officers, directors,
employees and customers, from and against any and all liabilities, losses,
damages, costs and expenses (including, without limitation, reasonable
attorneys' fees, court costs and out-of-pocket expenses) suffered or incurred
arising out of or in condition with: (i) the falsity of any Certificate of
Analysis delivered pursuant to Section 4.4 hereof or the breach of any
warranty contained in Section 6.1 hereof, provided however, in no event shall
HYDROMER be liable for any lost profits resultant from any breach or falsity
referred to in this Section 13.2(i), (ii) any failure by HYDROMER to perform
any of the covenants, agreements or obligations of HYDROMER contained in this
Agreement, (iii) any third party claim alleging that the manufacture, use,
sale, offer for sale or import of any product within the LICENSED APPLICATION
coated with any COATING or NEW COATING purchased hereunder infringes the
proprietary rights of the third party where the basis of the alleged
infringement is such COATING or NEW COATING alone and not its combination
with any other item.
13.3 BARD agrees to indemnify, defend (using counsel selected by
BARD which is reasonably acceptable to
21
HYDROMER) and hold harmless HYDROMER and its officers, directors and
employees, from and against any and all liabilities, losses, damages, costs
and expenses (including, without limitation, reasonable attorneys' fees,
court costs and out-of-pocket expenses) suffered or incurred arising out of
or in connection with: (i) any failure by BARD or any AFFILIATE to perform
any of the covenants, agreements or obligations of BARD contained in this
Agreement, (ii) the sale of any product within the LICENSED APPLICATION
coated with any COATING or NEW COATING purchased hereunder, subject to
HYDROMER's obligations under Section 13.2 hereof and subject further to
HYDROMER's defense and indemnification obligations under the LICENSE
AGREEMENT.
13.4 Within thirty (30) days after BARD or HYDROMER, as the case
may be (hereinafter the "Indemnified Party"), has received notice of or has
acquired knowledge of any claim by any person or entity not a party to this
Agreement of the commencement or threatened commencement of any action or
proceeding by any person or entity not a party to this Agreement ("third
party claim") or has acquired knowledge of any other claim hereunder against
the other party hereto ("first party claim") the Indemnified Party shall, if
such claim is indemnifiable by the other party pursuant hereto (hereinafter
the "Indemnifying Party"), give the Indemnifying Party written notice of such
claim and the commencement or threatened commencement of such action or
proceeding, if any. Such notice shall state the
22
nature and basis of such claim and, if ascertainable, the amount thereof.
Notwithstanding the foregoing, the failure of the Indemnified Party to give
such notice shall not excuse the Indemnifying Party's obligation to indemnify
and, in the case of a third party claim, defend the Indemnified Party, except
to the extent the Indemnifying Party has suffered damage or prejudice by
reason of the Indemnified Party's failure to give or delay in giving such
notice. Within ten (10) business days of receipt of any notice issued by the
Indemnified Party pursuant to this Section 13.4, the Indemnifying Party shall
notify the Indemnified Party whether the Indemnifying Party acknowledges its
indemnification obligation and, in the case of a third party claim, its
defense obligation with respect to the claim which was the subject of the
Indemnified Party's notice or whether it disclaims such obligations. In the
event the Indemnifying Party disclaims or fails to timely acknowledge its
obligations with respect to any claim by the Indemnified Party relating to
any third party claim, the Indemnified Party shall have the right to defend
such claim, with counsel of its own selection, and compromise such claim
without prejudice to its right to indemnification hereunder. In the event the
Indemnifying Party timely acknowledges its obligations hereunder with respect
to any third party claim, the Indemnifying Party shall defend the same with
counsel in accordance with the foregoing provisions of this Section 13. Where
the Indemnifying Party shall have acknowledged
23
in writing its obligations hereunder with respect to any third party claim,
the Indemnified Party may, at its expense, participate in the defense of such
third party claim and no such third party claim shall be settled by the
Indemnified Party without the prior written consent of the Indemnifying
Party. At any time after the Indemnifying Party acknowledges its obligations
hereunder with respect to any third party claim, the Indemnifying Party may
request the Indemnified Party to agree in writing to the payment or
compromise of such third party claim (provided such payment or compromise has
been previously approved in writing by the third party claimant), whereupon
such action shall be deemed agreed to by the Indemnified Party and shall be
agreed to in writing by the Indemnified Party unless such settlement would
involve a remedy or remedies other than the payment of money damages by the
Indemnifying Party.
13.5 In the event either party makes a claim against the other
party under Section 13 hereof and further in the event the party receiving
notice of such claim fails to timely acknowledge its obligations hereunder
with respect to such claim or disclaims such obligations, the parties, within
sixty (60) days of the date of issuance of notice by the party making such
claim, shall meet and attempt to resolve in good faith the dispute between
the parties with respect to such claim. If the parties fail to resolve such
dispute within seventy-five (75) days of the date of issuance of notice by
the party making such
24
claim, the party making such claim may thereafter commence litigation against
the other party in a court of competent jurisdiction for determination of its
claim. Upon resolution of any claim pursuant to this Section 13.5, whether by
agreement between the parties or the rendering of a final judgment from which
no appeal lies in any litigation, the appropriate party under an agreement
or the party against which judgment is rendered in litigation shall, within
ten (10) days of such resolution, pay over and deliver to the other party
funds in the amount of any claim as resolved, and any fees, including
attorneys' fees, incurred by such other party with respect to any such
litigation.
XIV. NOTICES.
14.1 All notices required or permitted to be given under this
Agreement shall be in writing and shall be deemed effective and given when
delivered in person or sent by certified or registered mail, postage and
certification prepaid, addressed to the party to be notified at its address
first above written or to such other address as a party shall designate by
notice given in the aforementioned manner. Notices to BARD shall be directed
to the attention of its General Counsel. Notices to HYDROMER shall be
directed of its President.
XV. ASSIGNMENT.
15.1 This Agreement may not be assigned by BARD or HYDROMER
without the prior written consent of the non-
25
assigning party, which consent shall not be unreasonably delayed or withheld,
except that BARD or HYDROMER may assign this Agreement upon notice to but
without the consent of the non-assigning party: (a) to any purchaser of
substantially all the stock of the assigning party; or (b) to a purchaser of
substantially all of the assets of the assigning party relating to lubricious
coatings, provided the assignee assumes all of the assignor's obligations
hereunder.
XVI. BINDING EFFECT.
16.1 This Agreement shall be binding upon and inure to the
benefit of BARD, its successors and permitted assigns, and HYDROMER, its
successors and permitted assigns.
XVII. GOVERNING LAW.
17.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
XVIII. INVALIDITY.
18.1 The invalidity or unenforceability of any term or provision
of this Agreement shall not effect the other terms and provisions, and the
same shall be construed in all respects as if such invalid or unenforceable
term or provision was omitted herefrom.
XIX. ENTIRE AGREEMENT.
19.1 This Agreement, the Exhibits thereto and any agreement
between the parties incorporated herein by reference constitutes the entire
agreement between BARD and
26
HYDROMER respecting the subject matter hereof and incorporates and supersedes
all prior negotiations, agreements and undertakings, all of which are merged
herein. This Agreement may not be changed or modified except by written
instrument executed by the parties.
XX. CAPTIONS.
20.1 The Article and Section headings of this Agreement are
intended for convenience of reference only and shall not define or limit the
provisions of this Agreement.
XXI. WAIVERS.
21.1 The failure of a party to exercise its rights under this
Agreement regarding any breach or default by the other party shall not
prevent such party from exercising such right unless such waiver is in
writing nor shall any such waiver constitute a waiver of any other right
hereunder.
XXII. CONSTRUCTION.
22.1 The singular of any term used herein shall be deemed to
include the plural and the plural of any term used herein shall be deemed to
include the singular, as the context requires. The masculine, feminine or
neuter gender of any word used herein shall include the others, as context
requires.
XXIII. SURVIVAL.
23.1 The provisions of Sections 11.3, 11.4 and the provisions of
Article XIII, XVI, XVII, XVIII, XIX, XX, XXI, XXII and XXIII, as well as all
other rights and obligations of
27
the respective parties which accrued prior to the expiration or termination
of this Agreement or are intended to be observed or performed after the
expiration or termination of this Agreement, shall survive and continue
thereafter in full force and effect.
XXIV. LUBRICIOUS COATING REQUIREMENTS.
24.1 BARD hereby covenants that, from the EFFECTIVE DATE through
May 6, 2205, BARD and its AFFILIATES shall purchase from HYDROMER their
entire requirements of lubricious coatings intended for use on intermittent
urological catheters. Nothing contained in this Section 24.1 shall be deemed
or construed to require BARD or any of its AFFILIATES to purchase from
HYDROMER any lubricious coatings intended for use on xxxxx catheters.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Agreement in duplicate on the dates
indicated below.
HYDROMER, INC.
Date: 2/25/99 By: [Illegible]
------------------ -----------------------------------
Title: Vice President
--------------------------------
X.X. XXXX, INC.
Date: February 25, 1999 By: [Illegible]
------------------ -----------------------------------
Title: Group President
--------------------------------
28
EXHIBIT 2
---------
TO LICENSE AND SUPPLY AGREEMENT
BY AND BETWEEN X.X. XXXX, INC.
AND HYDROMER, INC.
SPECIFICATIONS applicable to SUPERSLIP COATING are set forth in Hydromer's
technology transfer files which were delivered to X.X. Xxxx, Inc. at closing
by Xxxxxx Xxxxxxx, Vice President of Hydromer, Inc. and are incorporated
herein by reference.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement is made as of the 25th day of February,
1999, by and between Hydromer, Inc., a New Jersey corporation, having its
principal place of business at 00 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (the "Seller") and X.X. Xxxx, Inc., a New Jersey corporation,
having its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000 (the "Purchaser").
W I T N E S S E T H
WHEREAS, Seller desires to issue and sell to Purchaser, and Purchaser
desires to purchase from Seller, an aggregate of 220,000 shares (the
"Shares") of common stock, without par value (the "Common Stock") of Seller,
all on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
representations, warranties and covenants contained herein, the parties agree
as follows:
1. SALE OF SHARES. At the Closing (as defined in Paragraph 3 herein)
and subject to all other terms and conditions of this Agreement, Seller shall
issue, sell and transfer the Shares to Purchaser, free and clear of all
liabilities, liens, encumbrances, arrangements and other restrictions, except
for any restrictions on resale which may be imposed on Purchaser under the
Securities Act of 1933, as amended (the "Securities Act").
2. PAYMENT OF PURCHASE PRICE. In consideration of the Seller's
performance of this Agreement, Purchaser shall pay to Seller the aggregate
purchase price of $880,000, payable at Closing by certified or bank cashier's
check or by wire transfer to an account specified by Seller.
3. CLOSING. The sale and purchase of the Shares referred to in
Section 1 herein shall be consummated at a closing (the "Closing") to be held
on or about February 25, 1999 (the "Closing Date"). The Closing shall take
place at 12:00 p.m. on the Closing Date at the offices of Xxxxxxx & Xxxxxx,
P.C., 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000.
4. SELLER'S CLOSING DOCUMENTATION. At the Closing, Seller shall
deliver to Purchaser the following:
(a) a stock certificate of Seller, in proper form, duly
issued in the name of Purchaser, evidencing the Shares;
(b) resolutions of the Board of Directors of Seller
approving the execution, delivery and the performance by
Seller of this Agreement and all other documents
required to be executed and delivered by Seller
hereunder (the "Related Documents");
(c) a secretary's certificate, in form satisfactory to
Purchaser, certifying as to the Certificate of
Incorporation and By-laws
2
of Seller and as to the resolutions referred to in
Section 4.(b).
5. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller hereby
represents and warrants as follows:
(a) Seller has the power and authority to execute and deliver
this Agreement and perform the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the Related
Documents have been duly authorized by the Board of Directors of Seller and
no other corporate proceedings or other actions are necessary on the part of
Seller to execute, deliver and perform this Agreement or any of the Related
Documents.
(b) This Agreement has been duly executed and delivered by
Seller and constitutes the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally or by the application of general principles of
equity. The Related Documents, when executed and delivered by Seller, will
constitute legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally or by the application of general principles of
equity.
3
(c) The execution, delivery and performance of this Agreement
and each any of the Related Documents by Seller, and the consummation of the
transactions contemplated by this Agreement and by the Related Documents, do
not require any consent or waiver of any governmental authority or any other
person or entity not otherwise already obtained and delivered to Purchaser.
(d) The execution, delivery and performance of this Agreement
and any of the Related Documents will not violate any provision of Seller's
organizational documents or any law, rule, regulation or order applicable to
or binding upon Seller or any of its properties, or any contract, agreement
or instrument to which Seller is a party.
(e) The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey.
Seller has the corporate power and authority to own or lease all of its
properties and assets and to carry on its business as it is now being
conducted, and is duly licensed and qualified to do business and is in good
standing in each jurisdiction in which the nature of the business conducted
by it or the character or location of the properties and assets owned or
leased by it makes such licensing or qualification necessary.
(f) The sale of the Shares by Seller hereby is exempt from
registration under the Securities Act.
(g) The Shares being issued and sold by Seller have been
duly authorized, validly issued and, upon payment by Purchaser hereunder,
will be fully paid and nonassessable.
4
(h) Seller is not a party to or bound by any stockholder's
agreement, standstill agreement, buy-sell agreement or similar agreement or
arrangement.
(i) The authorized capital stock of Seller consists of
6,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock. As
of the date hereof, there are 4,367,987 shares of Common Stock issued and
outstanding. As of the date hereof, there are 45,000 shares of Common Stock
issuable upon exercise of stock options and 1,367,013 shares of Common Stock
available for granting of stock options. As of the date hereof, there are no
shares of Preferred Stock issued and outstanding. All material terms relating
to stock options on Common Stock exercisable as of the date hereof and all
material terms relating to issuance of stock options on Common Stock
available for such purpose as of the date hereof are described on
SCHEDULE 5.(i), which is attached hereto and incorporated herein. Except for
the stock options, Seller has not granted and is not bound by any outstanding
subscriptions, options, warrants, calls, commitments or agreements of any
character calling for the transfer, purchase, subscription or issuance of any
shares of capital stock of Seller or any securities representing the right to
purchase, subscribe or otherwise receive shares of such capital stock or any
securities convertible or exchangeable into any such shares.
(j) All annual, quarterly, current and special reports,
proxy statements, annual reports to stockholders and any other reports and
materials required to be filed by Seller pursuant
5
to Sections 13 or 15(d) of the Securities and Exchange Act of 1934 and/or
delivered to stockholders and all registration statements and other filings
required to be filed under the Securities Act (collectively, the "Reports")
have been timely filed. All of the Reports comply in all material respects,
as to form and substance, with securities laws and applicable Securities and
Exchange Commission ("SEC") rules and regulations. Such Reports do not
contain any untrue statement of a material fact or fail to state a material
fact necessary in order to make the statement therein not misleading.
(k) There has not been any material adverse change or
development or event which could be reasonably expected to have a material
adverse impact on the business, operations, assets or financial condition of
Seller from that set forth in Seller's Annual Report on Form 10-KSB for the
fiscal year ended June 30, 1998 and Quarterly Reports on Form 10-Q for the
fiscal quarters thereafter. There has been no amendment to any said reports,
and no Current Reports on SEC 8-K or press releases have been filed or issued
by Seller subsequent to December 31, 1998.
(l) Except as disclosed in the Reports or in SCHEDULE 5.(l),
which is attached hereto and incorporated herein, there are no pending or, to
the best of the Seller's knowledge, threatened, legal, administrative,
arbital or other proceedings, claims, actions or governmental investigations
of any nature against Seller nor is Seller a party to any order, judgment or
decree entered in any lawsuit or proceeding.
6
(m) Seller has duly completed and filed (and until the
Closing will so file) all returns, declarations, reports, information returns
and statements (collectively, the "Returns") required to be filed by it in
respect of any Federal, State and local taxes (including withholding taxes,
penalties or other payments required) and has duly paid (and until the
Closing will so pay) all such taxes as the same become due and payable, other
than taxes or other charges which are being contested in good faith (and have
been disclosed to the Purchaser in writing). Seller has established (and
until the Closing will establish) on its books and records reserves that are
adequate for the payment of all Federal, State and local taxes not yet due
and payable, but are incurred in respect of Seller through such date. No
deficiencies were asserted as a result of examinations of Federal and State
income tax returns which have not been resolved and paid in full. There are
no audits or other administrative or court proceedings presently pending nor
any other disputes pending with respect to, or claims asserted for, taxes or
assessments upon Seller, nor has Seller given any currently outstanding
waivers or comparable consents regarding the application of the statute of
limitations with respect to any taxes or Returns. Seller has provided
Purchaser with true and correct copies of its Returns for the last three (3)
fiscal years.
(n) Seller holds all material licenses, franchises, permits
and authorizations necessary for the lawful conduct of its business and has
complied with and is not in default in any respect under any applicable law,
statute, order, rule,
7
regulation, policy and/or guideline of any Federal, State or local
governmental authority relating to Seller (other than where such default or
noncompliance will not result in a material adverse effect on the business,
operations, assets or financial condition of Seller) and Seller has not
received notice of violation of, and Seller does not know of any violation
of, any of the above.
(o) Except as disclosed in the Reports, Seller is not a
party to or bound by any contract or understanding (whether written or oral)
with respect to the employment of any officers, employees, directors or
consultants, and, other than as set forth in this Agreement, the consummation
of the transactions contemplated by this Agreement will not (either alone or
upon the occurrence of any additional acts or events) result in any payment
(whether of severance pay or otherwise) becoming due from Seller to any
officer, employee, director or consultant thereof. Seller is not a party to
any collective bargaining agreement or any agreement with any labor union
covering any employee of Seller. The business of Seller is not affected by
any labor disturbance involving the employees of Seller nor, to the best
knowledge of Seller, is any union attempting to represent any person employed
by Seller. Seller has complied with all applicable laws relating to the
hiring and employment of employees and independent contractors. There are no
unfair labor practice claims or any complaints or charges relating to
employment or dismissal pending, or, to the best knowledge of Seller,
threatened against Seller. Seller does not sponsor or maintain and is not
otherwise a party to or liable under
8
any plan, program, fund or arrangement (whether or not qualified for Federal
income tax purposes) that is an "employee pension benefit plan" or an
"employee welfare benefit plan", as such terms are defined in the Employee
Retirement Income Security Act of 1974, as amended, or any other benefit
arrangement for its employees, their dependents and beneficiaries (except for
the Stock Options and standard health and disability plans).
(p) Seller has good title to all material assets and
properties, real and personal, subject to no encumbrances, liens, mortgages,
security interests or pledges except to the extent disclosed in
SCHEDULE 5.(p), which is attached hereto and incorporated herein. Seller, as
lessee, has the right under valid and subsisting leases to occupy, use,
possess and control all real property leased by Seller as presently occupied,
used, possessed and controlled by Seller. The business operations and all
insurable properties and assets of Seller are insured for its benefit against
all risks which, in the reasonable judgment of Seller, should be insured
against, in each case under policies or bonds issued by insurers of
recognized responsibility, in such amounts with such deductibles and against
such risks and losses as are in the opinion of Seller adequate for the
business engaged in by Seller. As of the date hereof, Seller has not received
any notice of cancellation or notice of a material amendment of any such
insurance policy or bond and is not in default under any such policy or bond,
no coverage thereunder is being disputed and all material claims thereunder
have been filed in a timely fashion.
9
(q) The minute books of Seller contain accurate records of
all meetings and other corporate action held or taken by the stockholders and
Board of Directors of Seller (including committees of the Board of Directors).
(r) Except as disclosed in the Reports, Seller has not
received any written notice, citation, claim, assessment, proposed assessment
or demand for abatement alleging that Seller is responsible for the
correction or cleanup of any condition resulting from the violation of any
law, ordinance or other governmental regulation regarding environmental
matters. Seller has no actual knowledge that any toxic or hazardous
substances or materials have been emitted, generated, disposed of or stored
on any property currently owned or leased by Seller, or owned or leased by
Seller prior to the date of this Agreement, in any manner that violated any
applicable Federal, State or local law or regulation governing or pertaining
to such substances and materials, the violation of which could reasonably be
expected to have a material adverse effect on the business, operations,
assets or financial condition of Seller.
(s) The accounts receivable of Seller reflected in the
financial statements set forth in the Reports are true, bona fide accounts
receivable of Seller, have been fully collected or are fully collectible in
amounts not less than the aggregate amount thereof, net of reserves, and are
not subject to any offsets, credits or counterclaims.
10
(t) Except as disclosed in the Reports, Seller is not a
party to or bound by: (i) any mortgage, security agreement, promissory note
or other commitment relating to the borrowing of money, extension of credit
or imposition of an encumbrance on any assets of Seller, or (ii) any
guarantee or obligation to provide funds or assume the debt of any person or
entity, or (iii) any other material contracts or agreements. Seller is not in
default, or with the passage of time or the giving of notice would be in
default, under the terms of any of the foregoing.
(u) Seller's financial statements (including the notes
thereto) have been prepared in accordance with generally acceptable
accounting principles consistently applied during the periods involved and
fairly present the financial condition of Seller as of the respective dates
set forth therein and the results of operations, changes in shareholders'
equity and cash flows of Seller for the respective periods set forth therein.
The books and records of Seller are maintained in accordance with applicable
legal and accounting requirements and fairly and accurately reflect all of
the transactions of Seller and are complete and correct in all material
respects.
(v) Except as disclosed in the financial statements in the
Reports or incurred in the ordinary course of business since June 30, 1998,
there exist no liabilities or obligations of any nature whatsoever (whether
absolute, contingent or otherwise) in respect of the business or assets of
Seller of the type customarily reflected in financial statements prepared in
11
accordance with generally accepted accounting principles. Seller knows of no
claim or liability of Seller, or the basis of any claim or liability, not
fully described pursuant to this Agreement.
(w) Seller's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1998 describes all material patents, copyrights, copyright
registrations, trademarks, trademark registrations, service marks, logos or
other identifying symbols, names or marks therefore used or held for use in
the business of Seller. All of such items and all of the technology, trade
secrets, know-how, manufacturing processes and procedures, formulae, quality
control procedures, test procedures, specifications, protocols, drawings,
designs and other intellectual property used or held for use in the business
of Seller (collectively, the "Proprietary Rights") are complete and include
all the rights necessary for the conduct of the business of Seller as
conducted on the date hereof and as currently contemplated by Seller to be
conducted in the future. All of such Proprietary Rights are owned exclusively
by Seller, free and clear of all liens, charges, claims and encumbrances of
any kind whatsoever, and Seller has good and marketable title to such
Proprietary Rights. Seller has made no public disclosure of any know-how or
trade secret included in the Proprietary Rights. All such Proprietary Rights
are in good standing, are valid and enforceable and are free from default on
the part of Seller. No proceeding is pending and no claim has been made or,
to the best knowledge of Seller, threatened which challenges the rights of
Seller in respect of any
12
of the Proprietary Rights or alleges that any of the Proprietary Rights
infringes upon or otherwise violates the rights of others, is being infringed
by others, or is subject to any outstanding order, decree, judgment or
stipulation.
(x) Seller has not incurred any liability to any broker, finder
or agent for any broker's fees, finder's fees, commissions or similar
obligation with respect to the transactions contemplated by this Agreement or
by any of the Related Documents.
6. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants as follows:
(a) Purchaser has the power and authority to execute and deliver
this Agreement and to perform the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the Related
Documents have been duly authorized by all necessary corporate action of
Purchaser and no other corporate proceedings or other actions are necessary
on the part of Purchaser to execute, deliver and perform this Agreement or
any of the Related Documents.
(b) This Agreement has been duly executed and delivered by
Purchaser and constitutes the legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors rights generally or by the application of general principles of
equity. The Related Documents, when executed and
13
delivered by Purchaser, will constitute a legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors rights generally or by the application
of general principles of equity.
(c) No consent of any governmental authority or any other person
or entity is required for the execution, delivery and performance of this
Agreement or any of the Related Documents by Purchaser.
(d) Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of New Jersey.
(e) Purchaser is acquiring the Shares solely for its own account
for investment and not with a view to resale or distribution thereof, in
whole or part.
(f) Purchaser understands that the Shares have not been
registered under the Securities Act and that the offering and sale of the
Shares by Seller to Purchaser is intended to be exempt from registration
under the Securities Act.
(g) Purchaser understands that the Shares may not be sold,
hypothecated or otherwise disposed of unless subsequently registered under
the Securities Act and applicable state securities laws or pursuant to an
exemption from such registration.
14
(h) Purchaser did not become aware of the offer of the Shares
through or as a result of any form of general solicitation or general
advertising, including, without limitation, any article, notice,
advertisement or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio.
(i) Purchaser has such knowledge and experience in business and
financial matters that it is capable of evaluating the merits and risks of
the purchase of the Shares and making an informed investment decision with
respect thereto. Purchaser is an accredited investor as such term is defined
in Rule 501 under the Securities Act.
(j) Purchaser understands that the Shares will bear a legend
restricting their transfer and further understands and agrees that transfer
of the Shares must comply with the restrictions set forth therein.
(k) Purchaser has not incurred any liability to any broker,
finder or agent for any broker's fees, finder's fees, commissions or similar
obligation with respect to the transactions contemplated by this Agreement or
by any of the Related Documents.
7. REGISTRATION RIGHTS. At Closing, Seller and Purchaser shall execute
and deliver a Registration Rights Agreement in form attached hereto and
incorporated herein as EXHIBIT A.
8. PURCHASER'S PREEMPTIVE RIGHTS. In the event Seller proposes to
issue, for any reason whatsoever, shares of equity of any class, including,
but not limited to Common Stock,
15
or proposes to grant any option, warrant or right to purchase equity shares
of any class or other securities convertible into or carrying rights or
options to purchase equity shares of any class (all of the foregoing
hereinafter referred to as the "Securities") at a per equity share price
lower than the per equity share price paid by Purchaser pursuant to Section 2
above (subject to appropriate adjustment in the case of stock splits, reverse
stock splits or changes in the equity of Seller through reclassification or
reorganization), then prior to Seller entering into any binding commitment
for the sale of said Securities, Seller shall provide Purchaser with notice
specifying in detail the terms and conditions of the proposed issuance of
Securities, and Purchaser shall have the right to purchase some or all of
said Securities on the terms and conditions hereafter provided. Purchaser
shall have thirty (30) days from receipt of a given notice issued by Seller
pursuant to this Section 8 (the "Exercise Period") to notify Seller whether
it intends to exercise its right to purchase all or some portion, in
Purchaser's sole discretion, of the Securities, upon the terms and conditions
set forth therein. For purposes of this Section 8, the "per equity share
price", with respect to options, warrants, rights or convertible securities
shall be deemed to be the total consideration payable for the issuance of a
share of equity (i.e. the consideration paid for the option, warrant, right
or convertible security at the time of issuance plus the
16
consideration payable upon exercise or conversion). Securities which have
been offered to Purchaser and which have not been purchased by Purchaser may
be sold by Seller for such consideration not less than, and upon conditions
no less restrictive than, those which were offered to Purchaser, for a period
of six (6) months following the expiration of the applicable Exercise Period.
Notwithstanding the foregoing, Securities shall not be subject to this
Section 8 if they are issued upon exercise of options, warrants, rights or
convertible securities outstanding as of the date of this Agreement or upon
exercise of any stock options granted to employees or directors under any
stock option plan of Seller in effect as of the date of this Agreement (but
not including material amendments thereto subsequent to the date of this
Agreement unless approved by the stockholders of Seller).
9. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY UNDER THIS
AGREEMENT. The respective obligations of each party under this Agreement
shall be subject to the satisfaction, at or prior to the Closing, that no
order, decree or ruling issued by any court of competent jurisdiction, nor
any rule, regulation or order entered, promulgated or enacted by any
governmental, regulatory or administrative agency nor any suit, action or
other proceeding would prevent the consummation of the transactions as
contemplated hereby.
17
10. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS. The
obligations of Purchaser to consummate the transactions contemplated hereby
are subject to and conditioned upon the performance, prior to or on the
Closing Date, of each of the following (unless waived in writing by
Purchaser):
(a) All the terms and conditions of this Agreement to be
complied with and performed by Seller on or before the Closing Date shall
have been complied with and performed.
(b) All representations and warranties by Seller which are
contained in this Agreement or in any of the Related Documents shall be true
and correct in all material respects when made and as of the Closing Date as
though such representations and warranties were made as of the Closing Date.
(c) Purchaser shall have received a certificate of the
President or a Vice President of Seller, in form and substance satisfactory to
Purchaser, dated the Closing Date, certifying, in such detail as Purchaser
may request, to the fulfillment of the conditions specified in paragraphs (a)
and (b) of this Section 10.
(d) Purchaser shall have received from Seller all documents
referred to in Paragraph 4(a) through 4(c) of this Agreement.
(e) Seller shall have executed on the Closing Date and
delivered to Purchaser the following Related Documents: (i) a Registration
Rights Agreement in form and substance as set forth on EXHIBIT A, (ii) a
License Agreement in form and substance as set
18
forth on EXHIBIT B, which is attached hereto and incorporated herein, (iii) a
License and Supply Agreement in form and substance as set forth on EXHIBIT C
which is attached hereto and incorporated herein.
(f) Purchaser shall have received from its outside patent counsel
a written legal opinion satisfactory to Purchaser opining that the
manufacture, use or sale of intermittent and indwelling urinary catheters
coated with "SUPERSLIP COATING", as defined in SCHEDULE C to the License
Agreement which is attached hereto as EXHIBIT B, will not, based on such
SUPERSLIP COATING alone and not the combination thereof with any other item,
infringe any valid patent owned by a third party.
(g) Biosearch Medical Products, Inc., a New Jersey corporation,
having its principal place of business at 00X Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000, and Purchaser shall have executed and delivered: (i) an
Asset Purchase Agreement, in form and substance as set forth on EXHIBIT D,
which is attached hereto and incorporated herein, (ii) an Equipment Lease
Agreement, in form and substance as set forth on EXHIBIT E, which is attached
hereto and incorporated herein, (iii) a License and Supply Agreement, in
form and substance as set forth on EXHIBIT F, which is attached hereto and
incorporated herein.
(h) Purchaser shall have received from Seller an Incumbency
Certificate, dated the Closing Date, executed by the Secretary of Seller or
by an Assistant Secretary of Seller which shall identify the name and title
and bear the signature of each
19
officer of Seller individually authorized to execute and deliver this
Agreement and all other documents required to be delivered by Seller pursuant
thereto, including the Related Documents.
(i) Purchaser shall have received an opinion of Xxxxxx X.
Xxxxxxx, counsel for Seller, dated the Closing Date, in form and substance as
set forth on EXHIBIT G, which is attached hereto and incorporated herein.
11. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. The obligations of
Seller to consummate the transactions contemplated hereby are subject to and
conditioned upon the performance prior to or on the Closing Date of each of
the following (unless waived in writing by Seller):
(a) All the terms and conditions of this Agreement to be
complied with and performed by Purchaser on or before the Closing Date shall
have been complied with and performed.
(b) All representations and warranties by Purchaser which are
contained in this Agreement or in any of the Related Documents shall be true
and correct in all material respects when made and as of the Closing Date as
though such representations and warranties were made as of the Closing Date.
(c) Seller shall have received a certificate of an officer of
Purchaser, in form and substance satisfactory to Seller, dated the Closing
Date, certifying, in such detail as Seller may request, to the fulfillment of
the conditions specified in paragraphs (a) and (b) of this Section 12.
20
(d) Purchaser shall have executed on the Closing Date and
delivered to Seller the following Related Documents: (i) a Registration
Rights Agreement in form and substance as set forth on EXHIBIT A, (ii) a
License Agreement in form and substance as set forth on EXHIBIT B, (iii) a
License and Supply Agreement in form and substance as set forth on EXHIBIT C.
(e) Seller shall have received from Purchaser an Incumbency
Certificate, dated the Closing Date, executed by the Secretary of Purchaser
or by an Assistant Secretary of Purchaser which shall identify the name and
title and bear the signature of each officer of Purchaser individually
authorized to execute and deliver this Agreement and all other documents
required to be delivered by Purchaser pursuant thereto, including the Related
Documents.
(f) Seller shall have received an opinion of Xxxxx X. Xxxxx,
General Counsel of Purchaser or Xxxx X. Xxxxx, Assistant General Counsel of
Purchaser, in form and substance as set forth on EXHIBIT H, which is attached
hereto and incorporated herein.
12. INDEMNIFICATION
(a) Seller hereby agrees to defend (utilizing counsel selected by
Seller that is reasonably acceptable to Purchaser), indemnify and hold
Purchaser, its officers, directors, and employees harmless from and against
any and all liabilities, losses, damages, costs or expenses (including,
without limitation, reasonable attorneys' and accountants' fees and expenses,
court costs and all other out-of-pocket expenses) directly or indirectly
21
incurred by such persons or entities arising out of or in connection with:
(i) the breach of any warranty or the inaccuracy of any representation by
Seller contained in this Agreement or in any Exhibit or Schedule hereto or in
any agreement, instrument, certificate or other document executed by or on
behalf of Seller in connection herewith, and (ii) any failure by Seller to
perform any of the covenants, agreements or obligations under this Agreement
or any other agreement or instrument executed and delivered by or on behalf
of Seller pursuant hereto or in connection herewith, and (iii) the assertion
against Purchaser or any of its officers, directors, or employees of any
claim, liability or obligation relating to or arising out of the business,
operations or assets of Seller, whether incurred before or after the Closing
Date. The indemnification obligations of Seller herein shall survive the
Closing.
(b) Purchaser hereby agrees to defend (utilizing counsel selected
by Purchaser that is reasonably acceptable to Seller), indemnify and hold
Seller and its officers, directors, and employees harmless, from and against
any and all liabilities, losses, damages, costs or expenses (including,
without limitation, reasonable attorneys' fees and expenses, court costs and
all other out-of-pocket expenses) directly or indirectly incurred by such
persons or entities arising out of or in connection with: (i) the breach of
any warranty or the inaccuracy of any representation by Purchaser contained
in this Agreement or in any Exhibit or Schedule
22
hereto or in any agreement, instrument, certificate or other document
executed by or on behalf of Purchaser in connection herewith, and (ii) any
failure by Purchaser to perform any of the covenants, agreements or
obligations under this Agreement or any other agreement or instrument
executed and delivered by or on behalf of Purchaser pursuant hereto or in
connection herewith. The indemnification obligations of Purchaser herein
shall survive the Closing.
(c) Within thirty (30) days after Purchaser or Seller, as the case may
be (hereinafter the "Indemnified Party"), has received notice of or has
acquired knowledge of any claim by any person or entity not a party to this
Agreement of the commencement or threatened commencement of any action or
proceeding by any person or entity not a party to this Agreement ("third
party claim") or has acquired knowledge of any other claim hereunder against
the other party hereto ("first party claim") the Indemnified Party shall, if
such claim is indemnifiable by the other party pursuant hereto (hereinafter
the "Indemnifying Party"), give the Indemnifying Party written notice of such
claim and the commencement or threatened commencement of such action or
proceeding, if any. Such notice shall state the nature and basis of such
claim and, if ascertainable, the amount thereof. Notwithstanding the
foregoing, the failure of the Indemnified Party to give such notice shall not
excuse the Indemnifying Party's obligation to indemnify and, in the case of a
third party claim,
23
defend the Indemnified Party, except to the extent the Indemnifying Party has
suffered damage or prejudice by reason of the Indemnified Party's failure to
give or delay in giving such notice. Within ten (10) business days' of receipt
of any notice issued by the Indemnified Party pursuant to this Section 12(c),
the Indemnifying Party shall notify the Indemnified Party whether the
Indemnifying Party acknowledges its indemnification obligation and, in the
case of a third party claim, its defense obligation with respect to the claim
which was the subject of the Indemnified Party's notice or whether it
disclaims such obligation(s). In the event the Indemnifying Party disclaims
or fails to timely acknowledge its obligations with respect to any claim by
the Indemnified Party relating to any third party claim, the Indemnified
Party shall have the right to defend such claim, with counsel of its own
selection, and compromise such claim without prejudice to its right to
indemnification hereunder. In the event the Indemnifying Party timely
acknowledges its obligations hereunder with respect to any third party claim,
the Indemnifying Party shall defend the same with counsel in accordance with
the foregoing provisions of this Section 12. Where the Indemnifying Party
shall have acknowledged in writing its obligations hereunder with respect to
any third party claim, the Indemnified Party may, at its expense, participate
in the defense of such third party claim and no such third party claim shall
be settled by the Indemnified Party without the prior written consent of the
Indemnifying Party. At any time after the
24
Indemnifying Party acknowledges its obligations hereunder with respect to any
third party claim, the Indemnifying Party may request the Indemnified Party
to agree in writing to the payment or compromise of such third party claim
(provided such payment or compromise has been previously approved in writing
by the third party claimant), whereupon such action shall be deemed agreed to
by the Indemnified Party and shall be agreed to in writing by the Indemnified
Party unless such settlement would involve a remedy or remedies other than the
payment of money damages by the Indemnifying Party.
(d) In the event either party makes a claim against the other
party under Section 12 hereof and further in the event the party receiving
notice of such claim fails to timely acknowledge its obligations hereunder
with respect to such claim or disclaims such obligations, the parties,
within sixty (60) days of the date of issuance of notice by the party making
such claim, shall meet and attempt to resolve in good faith the dispute
between the parties with respect to such claim. If the parties fail to resolve
such dispute within seventy-five (75) days of the date of issuance of notice
by the party making such claim, the party making such claim may thereafter
commence litigation against the other party in a court of competent
jurisdiction for determination of its claim. Upon resolution of any claim
pursuant to this Section 12, whether by agreement between the parties or the
rendering of a final judgment from which no appeal lies in any litigation,
the
25
appropriate party under an agreement or the party against which judgment is
rendered in litigation shall, within ten (10) days of such resolution, pay
over and deliver to the other party funds in the amount of any claim as
resolved, and any fees, including attorneys' fees, incurred by such other
party with respect to any such litigation.
(e) Notwithstanding the foregoing, any limitation on the
respective obligations of Seller or Purchaser under this Section 12 which are
set forth in the agreement attached hereto as EXHIBIT B or in the agreement
attached hereto as EXHIBIT C shall modify the respective obligations of the
parties under this Section 12. Further, notwithstanding anything to the
contrary contained herein, in no event shall the obligations of Seller or
Purchaser under this Section 12 exceed the aggregate Purchase Price set forth
in Section 2 of this Agreement.
13. TERMINATION. This Agreement may be terminated prior to the
Closing:
(a) by mutual written consent of the parties hereto;
(b) by Purchaser, if there shall have occurred a material
adverse change in the business, operations, assets or financial condition of
the Company from that disclosed by Seller in Seller's Form 10-KSB for the
fiscal year ended June 30, 1998;
26
(c) by Purchaser, if any of the conditions set forth in Section
10 herein are not satisfied or are not capable of being satisfied by the
Closing Date;
(d) by Seller, if any of the conditions set forth in Section 11
herein are not satisfied or are not capable of being satisfied by Closing
Date;
(e) by Seller or Purchaser if the Closing does not take place by
February 26, 1999.
14. EFFECT OF TERMINATION. In the event of termination of this
Agreement pursuant to Section 13, this Agreement shall thereafter become void
and have no effect, and neither party shall have any liability to the other
party, except that nothing herein shall relieve any party from liability for
any willful breach hereof.
15. NO PUBLIC ANNOUNCEMENTS. Neither Seller nor Purchaser shall issue
any press release or make any public statement with respect to this
Agreement, or the transactions contemplated hereby, without the consent of
the other party, except as may be required by applicable securities or other
laws. In the event any such disclosure is required by applicable law, the
disclosing party shall provide the non-disclosing party with a copy of the
proposed release not less than two (2) business days prior to its proposed
release and shall provide the non-disclosing party with an opportunity to
comment on the substance thereof.
27
16. FEES AND EXPENSES. Each of the parties hereto shall be responsible
for their own expenses incurred in connection with the transactions
contemplated hereby.
17. SURVIVAL OF CERTAIN REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations, warranties and covenants of the parties in this Agreement
and in any instrument delivered pursuant hereto shall survive the Closing.
18. COVENANT ON OPERATIONS -- Seller covenants, for so long as
Purchaser or any affiliate of Purchaser owns any of the Shares, it will
maintain its books and records in accordance with generally accepted
accounting principles consistently applied with prior periods and will,
within forty-five (45) days of the end of each fiscal quarter of Seller,
furnish Purchaser with a copy of its audited (or unaudited, if it does not
have audited quarterly financial statements at such time) financial
statements for such quarter and within ninety (90) days of the end of each
fiscal year furnish Purchaser with a copy of its audited financial statements
for such year.
19. NOTICES. All notices that are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in
all respects if given in writing and delivered by hand or national overnight
courier service, transmitted by telecopy or mailed by registered or certified
mail, postage prepaid, as follows:
28
If to Seller:
X.X. Xxxx
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
If to Purchaser:
Hydromer, Inc.
00 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
or such other address or addresses as any party hereto shall have designated
by notice in writing to the other party hereto.
20. WAIVERS. Each party may, by written notice to the other: (i)
extend the time for the performance of any of the obligations or other
actions of the other under this Agreement; (ii) waive any inaccuracies in the
representations or warranties of the other contained in this Agreement or in
any document delivered pursuant to this Agreement; (iii) waive compliance
with any of the conditions of the other contained in this Agreement; or (iv)
waive performance of any of the obligations of the other under this
Agreement. Except as provided in the preceding sentence, no action taken
pursuant to this Agreement, including, without limitation, any investigation
by or on behalf of any party, shall be deemed to constitute a waiver by the
party taking such action of compliance with any representation, warranty,
covenant or agreement contained in this Agreement. The waiver by any party
hereto of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.
29
21. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of New Jersey.
22. BINDING EFFECT, BENEFITS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
permitted successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, express or implied, is
intended to confer on any person other than the parties hereto or their
respective permitted successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
23. NO ASSIGNABILITY. Neither this Agreement nor the rights of either
party hereunder shall be assignable without the prior written consent of the
other party hereto.
24. AMENDMENTS; MODIFICATION. This Agreement may only be amended,
modified or supplemented by an instrument in writing, signed by the parties
hereto.
25. COUNTERPARTS. This Agreement may be executed simultaneously 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.
30
IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to
be duly executed and delivered by its duly authorized officers as of the
date hereinabove set forth.
SELLER:
HYDROMER, INC.
By /s/ Xxxxxx X. Shuhard Jr.
------------------------------------
Name: Xxxxxx X. Shuhard Jr.
-------------------------------
Title: Vice President
-------------------------------
PURCHASER:
X.X. XXXX, INC.
By /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
-------------------------------
Title: Group President
-------------------------------
31
REGISTRATION RIGHTS AGREEMENT
February 25, 1999
To: X.X. Xxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Dear Sirs:
In accordance with the terms of the Stock Purchase Agreement dated
February 25, 1999 ("Stock Purchase Agreement") between you and Hydromer, Inc.
(the "Company"), and for other good and valuable consideration, the Company
hereby covenants and agrees with you, as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall have
the following respective meanings:
"COMMISSION" shall mean the United States Securities and Exchange
Commission, or any other federal agency at the time administering the
Securities Act (hereinafter defined).
"COMMON STOCK" shall mean the common stock, without par value, of
the Company.
"EFFECTIVE DATE" shall mean the date of this Registration Rights
Agreement.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the
Commission thereunder, as in effect
at the time on the date hereof as may be amended from time to time.
"REGISTERABLE STOCK" shall mean: (i) any shares of the Common Stock
of the Company issued to you in connection with the Stock Purchase
Agreement, together with any additional shares of Common Stock
issued or distributed to you by way of a dividend, stock split or
other distribution in respect of the shares described in clause (i)
above effected without the receipt of consideration therefor, (ii)
any additional shares of Common Stock acquired by you by way of any
rights offering or similar offering made in respect of the shares
described in clause (i) above, and (iii) any additional shares of
Common Stock issued or issuable to you upon conversion, exercise or
exchange of any capital stock, right, option, warrant, evidence of
indebtedness or other security of any type whatsoever that shall
have been issued with respect to the shares described in clause (i)
above and not transferred or otherwise disposed of by you except as
contemplated hereunder.
"REGISTRATION PERIOD" shall mean the period commencing on the
Effective Date and ending on the earlier to occur of: (i) the sale by
the holders of Registerable Stock of all the Registerable Stock
covered by the registration
2
statement referred to in Section 3 below, or (ii) the fifth (5th)
anniversary of the Effective Date.
"REGISTRATION EXPENSES" shall mean the expenses so described in
Section 4 hereof.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
or any similar federal statute, and the rules and regulations of the
Commission thereunder as in effect on the date hereof as it may be
amended from time to time
"SELLING EXPENSES" shall mean the expenses so described in Section 4
hereof.
2. INCIDENTAL REGISTRATION. If the Company at any time, and from time
to time, during the Registration Period proposes to register any of its Common
Stock under the Securities Act for sale to the public, whether for its own
account or for the account of other security holders or both (except with
respect to registration statements on Forms S-4 or S-8 or another form not
available for registering Registerable Stock for sale to the public), it will
give written notice at least thirty (30) days prior to the anticipated-filing
date to all holders of outstanding Registerable Stock of its intention to do
so, specifying the form and manner and other material facts involved in such
proposed registration. Upon the written request of any such holder(s), given
within 20 days after receipt of any such notice by the Company, to register
any of its Registerable Stock, the Company will use its best efforts to
3
cause the Registerable Stock as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale by such holder(s) to the public of such Registerable Stock so
registered. In the event that any registration pursuant to this Section 2
shall be an underwritten public offering of Common Stock, the Registerable
Stock to be included in such underwriting shall be included, insofar as
practicable, on the same terms and conditions as the shares of Common Stock
otherwise being sold through underwriters. Notwithstanding the foregoing, the
number of shares of Registerable Stock to be included in such an underwriting
may be reduced (pro rata among the selling shareholders participating in such
underwriting, including, without limitation, the requesting holders of
Registerable Stock, based upon the number of shares of Registerable Stock so
requested to be registered by the holders thereof) if and to the extent that
the managing underwriter shall have advised the Company in writing (with
copies to all holders of Registerable Stock) that, in its good faith opinion,
such inclusion would have a material adverse effect on the successful
marketing of the securities to be sold therein by the Company.
3. REGISTRATION PROCEDURES. If and whenever the Company is required by
the provisions of Section 2 hereof to use its best efforts to effect the
registration of any of the Registerable Stock under the Securities Act, the
Company will use its best efforts to
4
effect the registration and sale of such Registerable Stock in accordance
with the intended methods of disposition thereof. Without limiting the
foregoing, the Company in each such case will:
(a) prepare and file with the Commission a registration statement
with respect to such securities (which shall be on Form S-3 if the
Company is then eligible to use such form and otherwise on Form S-1
or other form of general applicability acceptable to the Company),
and shall use its best efforts to cause such registration statement
to become and remain effective for the period of distribution set
forth hereinbelow;
(b) prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective at all times
for the period of distribution set forth hereinbelow;
(c) furnish to each seller and to each underwriter, if any such
number of copies of the registration statement and the prospectus
included therein (including each preliminary prospectus) and any
amendment or supplement thereto as such persons may reasonably
request in order to facilitate the public sale or other disposition
of
5
the Registerable Stock covered by such registration statement;
(d) use its best efforts to register or qualify the Registerable
Stock covered by such registration statement under the securities or
blue sky laws of such jurisdictions as shall be reasonably required
by the holders of Registerable Stock and to prepare and file in
those jurisdictions such amendments (including post-effective
amendments) and supplements and to take such other actions as may be
necessary to maintain such registration or qualification at all
times for the period of distribution set forth hereinbelow (provided
that the Company will not be required to: (i) qualify generally to
do business in any jurisdiction where it would not otherwise be
required to qualify but for this Xxxxxxxxx 0 (x), xx (xx) subject
itself to general taxation in any such jurisdiction, or (iii)
consent to general service of process in any jurisdiction);
(e) use its best efforts to cause all Registerable Stock covered by
such registration statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary
to enable each holder thereof to consummate the disposition of such
Registerable Stock (provided that the Company will not be required to:
(i) qualify generally to do business
6
in any jurisdiction where it would not otherwise be required to
qualify but for this Paragraph; or (ii) subject itself to taxation
in any such jurisdiction, or (iii) consent to general service of
process in any jurisdiction);
(f) promptly notify each seller of Registerable Stock and the
managing underwriter, if any, and confirm such advice in writing: (i)
when such registration statement or any amendment or supplement
thereto or to the prospectus or preliminary prospectus contained
therein has been filed, (ii) of any request by the Commission for
amendments or supplements to such registration statement or
prospectus or for additional information, (iii) of the receipt by
the Company of any notification with respect to the suspension of
the qualification of the Registerable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
that purpose;
(g) promptly notify each seller under such registration statement
and each underwriter, if any, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the
happening of any event as a result of which the prospectus contained
in such registration statement, as then in effect, includes an
untrue statement of material fact or omits
7
to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of the circumstances then existing, and promptly thereafter prepare
and file with the Commission a supplement or amendment to such
prospectus, such registration statement or any document incorporated
therein by reference, or make such other filing, such that as
thereafter delivered to the purchasers of Registerable Stock, the
prospectus will not contain an untrue statement of material fact or
omit to state any material fact necessary to make the statements
therein not misleading;
(h) promptly notify each seller of Registerable Stock of the
issuance of any stop order suspending the effectiveness of the
registration statement or the initiation of any proceedings for that
purpose and the Company shall use its best efforts to prevent the
issuance of any stop order, and if any order is issued, to obtain
the withdrawal of any order suspending the effectiveness of such
registration statement;
(i) in the case of an underwritten public offering of Registerable
Stock, if requested by the managing underwriter of such offering,
promptly incorporate in a prospectus supplement or post-effective
amendment to such registration statement such information as such
8
managing underwriter shall agree should be included relating to the
plan of distribution of such Registerable Stock, including without
limitation, information with respect to the number of shares of
Registerable Stock being sold to the underwriters, the purchase
price being paid therefor by the underwriters and other material
terms of such underwriting), and file with the Commission such
supplement or post-effective amendment as promptly as practicable
after notification of the information to be incorporated therein;
(j) make available for inspection by each seller, any underwriter
participating in any distribution pursuant to such registration
statement, and any attorney, accountant or other agent retained by
such seller or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and
cause the Company's officers, directors and employees to supply all
information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such registration
statement and permit such seller, attorney, accountant or agent to
participate in the preparation of such registration statement;
(k) enter into an underwriting agreement with the underwriter of the
offering which shall contain standard
9
representations and warranties customarily contained in such
agreements;
(1) furnish to the sellers and to the underwriter of the offering,
if any, at the effective date of such registration statement: (i) a
signed counterpart of an opinion of counsel for the Company, dated
the effective date of such registration statement and, if
applicable, the date of the closing under the underwriting
agreement, covering substantially the same matters with respect to
such registration statement as are customarily covered in opinions
of issuer's counsel submitted and delivered to underwriters in
underwritten public offerings, and (ii) a signed counterpart of a
report from the independent certified public accountants of the
Company in form and substance as is customarily given by
independent certified public accountants to underwriters in
underwritten public offerings, and (iii) such other documents or
instruments as the sellers of the Registerable Stock, or their
underwriters, may reasonably request;
(m) use its best efforts to list all Registerable Stock covered by
such registration statement on any national securities exchange or
the Nasdaq Stock Market, as the case may be, on which Registerable
Stock of the same
10
class covered by such registration statement is then listed.
(n) take all actions necessary to facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend)
representing the Registrable Stock, and the transfer thereof upon resale
by the seller of such Registrable Stock; and
(o) take all other actions reasonably necessary to expedite and
facilitate the registration of the Registrable Stock.
For purposes of Section 3(a) and (b) above, the period of distribution of
Registerable Stock in a firm commitment underwritten public offering shall be
deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registerable
Stock in any other registration shall be deemed to extend until the earlier
to occur of the sale of all Registerable Stock covered thereby or two years
after the effective date thereof.
In connection with each registration hereunder, each selling holder of
Registerable Stock will furnish to the Company in writing such information
with respect to himself and the proposed distribution by him as shall be
reasonably necessary in order to assure compliance with federal and
applicable state securities laws.
11
No holder of Registrable Stock shall be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements regarding
such holder and its ownership of the securities being registered on his
behalf and any other representation required by law.
4. EXPENSES. All expenses incurred by the Company in complying with
Sections 2 and 3 hereof, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees of the applicable stock
exchange or automated quotation system, transfer taxes and fees of transfer
agents and registrars, but excluding any Selling Expenses (hereinafter
defined), are herein called "Registration Expenses." All underwriting
discounts and selling commissions applicable to the sale of Registerable
Stock are herein called "Selling Expenses."
The Company will pay all Registration Expenses in connection with the
registration statements filed pursuant to Section 2 hereof.
5. INDEMNIFICATION. In the event of a registration of any of the
Registerable Stock under the Securities Act pursuant to Section 2 hereof, the
Company will, and hereby does, indemnify and hold harmless each seller of
such Registerable Stock thereunder, each partner, officer and director of
each such seller which is an
12
entity, if any, and each underwriter of Registerable Stock thereunder and
each other person, if any, who controls such seller or underwriter within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, as incurred, joint or several, to which such seller, partner,
officer, director, underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which such Registerable Stock
was registered under the Securities Act pursuant to Section 2 hereof, any
preliminary prospectus or final prospectus contained therein, or any
amendment or supplement thereof, and (ii) the omission or alleged omission to
state therein a material fact necessary to make the statements therein not
misleading, and (iii) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act, any state securities law or any rule or
regulation promulgated under any of the same in connection with the offering
covered by such registration statement, and the Company will reimburse each
such seller, partner, officer and director, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such loss, claim,
damage, liability or action; PROVIDED, HOWEVER, that the Company will not be
liable in any such
13
case if and to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in reliance upon and in
conformity with information furnished by such seller or any of its partners,
officers, directors (if such seller is an entity), such underwriter or such
controlling person in writing specifically for use in such registration
statement or prospectus.
In the event of a registration of any of the Registrable Stock
under the Securities Act pursuant to Section 2 hereof, each seller of such
Registrable Stock thereunder, severally and not jointly, will indemnify and
hold harmless the Company and each person, if any, who controls the Company
within the meaning of the Securities Act, each officer of the Company who
signs the registration statement, each director of the Company, each person
who controls any of the foregoing within the meaning of the Securities Act,
and each underwriter, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such officer or director or
controlling person or underwriter may become subject under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of any material fact contained in the
registration statement filed pursuant to Section 2 hereof, any preliminary
prospectus or final prospectus contained therein, or
14
any amendment or supplement thereof, or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under any of the same in connection with the offering covered by such
registration statement, and each such seller will reimburse the Company and
each such officer, director, controlling person and underwriter for any legal
or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that such seller will be liable hereunder in any such case
if and only to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information furnished in writing to the Company by such
seller specifically for use in such registration statement or prospectus, and
PROVIDED FURTHER that any liability of any seller shall be limited under this
Paragraph for only that amount of losses, claims, damages and liabilities as
does not exceed the net proceeds actually received by such seller as a result
of the sale of Registrable Stock pursuant to such registration statement.
Promptly after receipt by an indemnified party hereunder of notice of the
commencement of any action, such indemnified party
15
shall, if a claim in respect thereof is to be made against the indemnifying
party hereunder, notify the indemnifying party in writing thereof, but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party other than under this
Section 5. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in and, to the extent it shall wish, to assume and undertake the defense
thereof with counsel satisfactory to such indemnified party, and after notice
from the indemnifying party to such indemnified party of its election to so
assume and undertake the defense thereof, the indemnifying party shall not be
liable to such indemnified party under this Paragraph 5 for any legal
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation and of
liaison with counsel so selected; PROVIDED, HOWEVER, that, if the defendants
in any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be reasonable defenses available to it which are different from or
additional to those available to the indemnifying party, or if the interests
of the indemnified party reasonably may be deemed to conflict with the
interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
16
otherwise to participate in the defense of such action, with the expenses and
fees of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified
party unless: (i) the indemnifying party shall have failed to retain counsel
for the indemnified party as aforesaid or shall have failed to defend such
action in accordance with the preceding paragraph, or (ii) the indemnifying
party and such indemnified party shall have mutually agreed to the retention
of such counsel. It is understood that the indemnifying party shall not, in
connection with any action or related actions in the same jurisdiction, be
liable for the fees and disbursements of more than one separate firm
qualified in such jurisdiction to act as counsel for the indemnified party.
Subject to any provision to the contrary herein, the indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent (which-consent shall not be unreasonably withheld or
delayed), but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the indemnified
party from and against any loss or liability by reason of such settlement or
judgment.
17
If the indemnification provided for in the first two paragraphs of this
Paragraph 5 is unavailable or insufficient to hold harmless an indemnified
party under such paragraphs in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or actions in such
proportion, as appropriate, to reflect the relative fault of the Company, on
the one hand, and the underwriters and the sellers of such Registerable
Stock, on the other, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or actions, as well as
any other relevant equitable considerations including the failure to give any
notice under the third paragraph of this Paragraph 5. The relative fault shall
be determined by reference to, among other things, whether the untrue or
alleged untrue statement or omission or alleged omission of a material fact
relates to information supplied by the Company, on the one hand, or the
underwriters and the sellers of such Registerable Stock, on the other, and to
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. You and the
Company agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by PRO RATA allocation (even if
all of the sellers of such Registerable Stock were treated as one
18
entity for such purpose) or by any other method of allocation which did not
take into account of the equitable considerations referred to above in this
paragraph. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages, liabilities or action in respect thereof,
referred to above in this paragraph, shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding the
provisions of this paragraph, the sellers of such Registerable Stock shall
not be required to contribute any amount in excess of the amount, if any, by
which the total price at which the Common Stock sold by each of them was
offered to the public exceeds the amount of any damages which they would have
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission. No person guilty of fraudulent misrepresentations
(within the meaning of Section 11(f) of the Securities Act), shall be
entitled to contribution from any person who is not guilty of such fraudulent
misrepresentation. No seller shall be liable for any amount of any losses,
claims, damages or liabilities in excess of the net proceeds actually
received by such seller as a result of the sale of such Registerable Stock
pursuant to such registration statement.
The indemnification of underwriters provided for in this Paragraph 5
shall be on such other terms and condition as are at the time customary and
reasonably required by such underwriters.
19
6. EFFECTIVENESS OF THIS AGREEMENT/SURVIVAL. This Agreement shall
become effective on the Effective Date. All of the representations and
covenants of the parties set forth herein shall survive the execution and
delivery of this Agreement and any registration of Common Stock hereunder.
7. MISCELLANEOUS.
(a) All covenants and agreements contained in this Agreement by or
on behalf of any of the parties hereto shall bind and inure to the benefit
of the respective successors and assigns of the parties hereto whether so
expressed or not, PROVIDED, HOWEVER, that the obligations of the Company to
register the Registerable Stock hereunder shall inure only to the benefit of
you and a person who shall become a holder of Registerable Stock or by
donation and/or pledge and the term "Registerable Stock" as used herein shall
be limited to Registerable Stock held by you or any such person.
(b) All notices, consents and other communications hereunder shall
be in writing and shall be mailed by first class registered mail, postage
prepaid, addressed as follows:
if to the Company, to it at
Hydromer, Inc.
00 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: President
if to you, at your address as set forth above;
if to any subsequent holder of Registerable
Stock pursuant to Paragraph 7(a) hereof to it
20
at such address as may have been furnished to the Company in
writing by such holder;
or, in any case, at such other address or addresses as shall have
been furnished in writing to the Company (in the case of a holder
of Registerable Stock or to such holders of Registerable Stock (in
the case of the Company).
(c) This Agreement shall be governed by and construed in accordance
with the laws of the State of New Jersey.
(d) This Agreement constitutes the entire agreement of the parties
which respect to the subject matter hereof and may not be modified or amended
except in writing signed by the holders of not less than a majority of the
Registerable Stock.
(e) 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.
(f) In the event any provision of this Agreement is deemed invalid
or unenforceable by a court of competent jurisdiction, then such provision
shall be deemed inoperative and the validity or enforceability of any other
provision in this Agreement shall be unaffected.
Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon
21
this letter (herein sometimes called "this Agreement") shall be a binding
agreement between the Company and you.
Very truly yours,
HYDROMER, INC.
By: /s/ Xxxxxx X. Ehrhed Jr.
----------------------------------
Name: Xxxxxx X. Ehrhed Jr.
----------------------------
Title: Vice President
----------------------------
AGREED TO AND ACCEPTED
as of the date first
above written.
X.X. Xxxx, Inc.
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
------------------------
Title: Group President
------------------------
22
