Exhibit 10.1
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") is entered into as of the
28 day of January, 2005 by and among BIOWELL TECHNOLOGY INC., a Taiwan
corporation, located at 00X, Xx. 000, Xxxxx Xxxxx Xxxx, Xxxxxxx Xxxx, Xxxxxx
Xxxxxx, Xxxxxx 235, ROC, ") (the "Company") and APPLIED DNA SCIENCES, INC., a
Nevada corporation, located at 0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxx
Xxxxxxx, Xxxxxxxxxx, 00000 ("APDN").
RECITALS
WHEREAS, the Company is engaged in the business of developing and
manufacturing DNA markers (such business along with any other technology now or
hereafter developed, manufactured or used by the Company, the BVI Sub (as
defined below) or any respective affiliate thereof to protect corporate and
intellectual property from counterfeiting, fraud, piracy, product diversion or
unauthorized intrusion, the "Business"); and
WHEREAS, APDN desires to acquire from the Company, and the Company desires
to sell and transfer to APDN, all of the Company's intellectual property used
in, useful to or relating to the Business; such acquisition to be completed
through (i) a sale or other transfer of such intellectual property from the
Company to a British Virgin Island (BVI) company (the "BVI Sub") to be formed by
the Company and owned on a pro-rata basis by the existing shareholders of the
Company (the "Company Shareholders" and together with the Company, the
"Sellers"), (ii) an acquisition of the stock of the BVI Sub by a wholly-owned
BVI subsidiary to be formed by APDN (the "APDN Sub" and together with APDN, the
"Buyers") on the terms and subject to the conditions hereinafter set forth (the
"Sale"); and
WHEREAS, it is the intent of the Sellers and the Buyers that the Sale
satisfy all of the applicable requirements in The Republic of China and the
United States of America.
NOW, THEREFORE, in consideration of the mutual premises, covenants,
representations, warranties and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Parties hereto agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. (a) As used in this Agreement, the following terms
have the meanings specified in this Section 1.1(a).
"Acquisition Proposal" means any inquiry, proposal or offer from any Person
relating to an Acquisition Transaction.
"Acquisition Transaction" means any transaction or series of transactions,
other than a transaction agreed to by the Sellers and the Buyers in writing,
involving any (a) direct or indirect acquisition or purchase of all or
substantially all of the Purchased Stock or Purchased Assets or any other
similar transaction that would have substantially the same result or (b) merger,
consolidation, business combination, sale of all or substantially all the
assets, recapitalization, liquidation, dissolution or similar transaction
involving either of the Company or the BVI Sub (other than the transactions
between the Parties hereto contemplated by this Agreement).
"Advanced Costs" shall have the meaning set forth in Section 7.5(d).
Agreement" shall have the meaning set forth in the paragraph immediately
prior to the Recitals.
"APDN" shall have the meaning set forth in the paragraph immediately prior
to the Recitals.
"APDN Shares" shall have the meaning set forth in Section 3.1.
"APDN Sub" shall have the meaning set forth in the Recitals.
Assumed Agreements" means any contract, agreement, commitment,
understanding or instrument which relates to the Purchased Stock or Purchased
Assets or which is listed on Exhibit A attached hereto.
"Assumed Liabilities" shall have the meaning set forth in Section 2.3.
"Assumption Agreement" means the Assumption Agreement to be executed and
delivered by the Buyers and the Sellers at the Closing.
"Business" shall have the meaning set forth in the Recitals.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which the banking institutions are required or authorized by law to be closed in
Los Angeles, California, USA.
"Buyers" shall have the meaning set forth in the Recitals.
"Buyer Representatives" means either of the Buyers' respective accountants,
employees, counsel, financial advisors and other authorized representatives.
"BVI Sub" shall have the meaning set forth in the Recitals.
"Company" shall have the meaning set forth in the paragraph immediately
prior to the Recitals.
"Closing" shall have the meaning set forth in Section 4.1.
"Closing Date" shall have the meaning set forth in Section 4.1.
"Company" shall have the meaning set forth in the paragraph immediately
prior to the Recitals.
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"Company Financial Statements" shall have the meaning set forth in Section
5.6.
"Company Interim Financial Statements" shall have the meaning set forth in
Section 5.6.
"Company Shareholders" shall have the meaning set forth in the Recitals.
"Copyrights" shall have the meaning set forth in Section 5.11.
"Employment Agreements" shall have the meaning set forth in Section 4.2(d).
"Encumbrances" means any mortgages, pledges, liens, claims, charges,
security interests, conditional and installment sale agreements, activity and
use limitations, restrictions, encumbrances and charges of any kind.
"Environmental Laws" means all Taiwanese or United States federal, state
and local laws, statutes, regulations, rules, ordinances, codes, decrees,
judgments, or judicial or administrative orders relating to pollution or
protection of the environment applicable to either of the Company's or the BVI
Sub's business.
"Governmental Authority" means any Taiwanese, BVI or United States federal,
state or local governmental or regulatory authority, department, agency,
commission or body.
"Indemnified Party" shall have the meaning set forth in Section 7.2(a).
"Indemnifying Party" shall have the meaning set forth in Section 7.5(a).
"Intellectual Property" shall have the meaning set forth in Section 5.11.
"Intellectual Property Assignment" shall mean the agreement to be executed
at Closing pursuant to which the Sellers shall assign all of their right, title
and interest in and to their Intellectual Property to the APDN Sub.
"Intellectual Property Rights" shall have the meaning set forth in Section
5.11.
"Know-how" means all information and materials owned by, or licensed to,
the Seller and any Subsidiary to the extent used by the Seller in conducting its
business, including any product specifications, technical knowledge, expertise,
skill, practice, inventions, procedures, trade secrets, confidential
information, and other data, market studies and all other experience and
know-how, in tangible or intangible form, whether or not patented or patentable;
provided, however, that Know-how shall not include (i) any plant, property,
equipment or employees, and (ii) any items to the extent that any applicable law
prohibits their transfer.
"Knowledge" means, with respect each of the Sellers or to each of the
Buyers, as to a particular matter, the knowledge of any officer of either of the
Sellers or the Buyers, as the case may be.
"License Agreement" shall mean the license to the Company from the APDN Sub
pursuant to which the Company is licensed the right to sell products using the
Intellectual Property in specified geographical areas on the terms and subject
to the conditions set forth therein.
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"Loss" or "Losses" shall have the meaning set forth in Section 7.2(a).
"Marks" shall have the meaning set forth in Section 5.11(c).
"Material Adverse Effect" means any change or changes in, or effect on,
either of the Sellers or the BVI Sub or the Purchased Stock or the Purchased
Assets that is individually, or are in the aggregate, reasonably likely to be
materially adverse to the Purchased Stock or the Purchased Assets, other than
(i) any change or effect resulting from or arising in connection with this
Agreement or any of the transactions contemplated hereby, and (ii) any change in
or effect on the Purchased Stock or the Purchased Assets which is cured
(including by the payment of money) by the Sellers before the Termination Date.
"Non-Competition Agreements" shall have the meaning set forth in Section
8.9.
"Nondisclosure Contracts" shall have the meaning set forth in Section
5.11(l).
"Parties" means the Company and APDN.
"Party" means each of the Company and APDN.
"Patent" means any patents, provisional patent applications and similar
instruments (including any divisions, continuations, continuations-in-part,
reissues, renewals, extensions or the like of any such patent, application or
instrument) as well as any foreign equivalents thereof (including certificates
of invention and any applications therefor).
"Patent Assignment" shall mean the agreement to be executed at Closing
pursuant to which the Company and the BVI Sub shall assign all of their right,
title and interest in and to their respective Patents to the APDN Sub.
"Permitted Encumbrances" means (i) any Encumbrance for Taxes not yet due or
delinquent or for those Taxes being contested in good faith by appropriate
proceedings for which adequate reserves have been established; (ii) statutory
mechanics', carriers', workers', repairers' and other similar liens arising or
incurred in the ordinary course of business relating to obligations of the
Sellers which are secured by possession of any of the Purchased Stock or the
Purchased Assets; and (iii) any minor imperfection of title or similar
Encumbrance that would not materially adversely effect the Purchased Stock or
the Purchased Assets.
"Person" means any individual, corporation, partnership, limited
partnership, limited liability company, syndicate, group, trust, association or
other organization or entity or government, political subdivision, agency or
instrumentality of a government.
"Pledge Agreement" shall have the meaning set forth in Section 7.3.
Programs" shall have the meaning set forth in Section 5.11(d).
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"Purchased Assets" shall have the meaning set forth in Section 2.1.
"Purchased Stock" shall have the meaning set forth in Section 2.1.
Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchase Price Adjustment Amount" shall have the meaning set forth in
Section 2.6.
"Related Person" shall have the meaning set forth in Section 5.17.
"Sale" shall have the meaning set forth in the Recitals.
"Sellers" shall have the meaning set forth in the Recitals.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which the outstanding securities or equity interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions of such Person are owned directly or indirectly by
such other Person.
"Tax" and "Taxes" means (i) all taxes, charges, fees, levies, penalties or
other assessments of any kind whatsoever imposed by any Taiwanese, BVI or United
States federal, state, local or foreign taxing authority, including, but not
limited to, income, excise, property, sales, transfer, franchise, payroll,
withholding, social security or other taxes, whether computed on a separate or
consolidated, unitary or combined basis or in any other manner, including any
interest, penalties or additions attributable thereto or (ii) liability for the
payment of any amounts of the type described in clause (i) above as a result of
being party to any agreement or any express or implied obligation to indemnify
or otherwise succeed to the liability of any other Person.
"Tax Return" means any return, report, information return or other document
(including any related or supporting information) required to be supplied to any
Governmental Authority with respect to Taxes.
"Termination Date" shall have the meaning set forth in Section 10.1(e).
"Third Party Claim" shall have the meaning set forth in Section 7.4.
"Trademark Assignment" shall mean the agreement to be executed at Closing
pursuant to which the Company and the BVI Sub shall each assign all of their
right, title and interest in and to their respective Marks to the APDN Sub.
"Transfer Taxes" shall have the meaning set forth in Section 8.5.
Section 1.2 Construction. The terms "hereby," "hereto," "hereunder" and any
similar terms as used in this Agreement, refer to this Agreement in its entirety
and not only to the particular portion of this Agreement where the term is used.
The term "including" when used herein without the qualifier, "without
limitation," shall mean "including, without limitation." Wherever in this
Agreement the singular number is used, the same shall include the plural, and
the masculine gender shall include the feminine and neuter genders, and vice
versa, as the context shall require. The word, "or," shall not be construed to
be exclusive. Provisions shall apply, when appropriate, to successive events and
transactions.
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ARTICLE II
PURCHASE AND SALE
Section 2.1 Purchase and Sale of Stock. Upon the terms and subject to the
satisfaction of the conditions contained in this Agreement, at the Closing, the
Company Shareholders shall sell, assign, convey, transfer and deliver to the
APDN Sub, and the APDN Sub shall, in exchange for the Purchase Price pursuant to
Article III, purchase and acquire from the Sellers, free and clear of all
Encumbrances (except for Permitted Encumbrances), all of the rights, title and
interest in and to all of the capital stock of the BVI Sub (the "Purchased
Stock"). Without limiting the effect of the foregoing, the Parties hereto
acknowledge and agree that the prior to the Closing all rights, title and
interest of either of the Sellers in, to and under all of the following items
(the "Purchased Assets") shall be sold or otherwise transferred to the BVI Sub
from the Company:
(a) the Assumed Agreements;
(b) all confidentiality, noncompete or nondisclosure agreements executed by
vendors, suppliers or employees of the Company or other third parties, in each
case, relating to the Business;
(c) originals or copies of the Company's books, operating records,
operating, safety and maintenance manuals, engineering design plans, blueprints
and as-built plans, specifications, procedures and similar items primarily
relating to the Business; all invoices, books of account, customer lists,
billing records and other customer correspondence primarily relating to the
Business manufactured and marketed by the Company in 2001, 2002 and 2003; all
vendor and supplier lists, invoices, billing records and correspondence with
vendors and suppliers in 2001, 2002 and 2003; marketing materials, price lists
and other books and records relating to the marketing, sales and services
provided by the Company in 2001, 2002 and 2003 in connection with the operation
of the Business;
(d) all of the rights, claims or causes of action of either of the Sellers
against a third party related to the Business or the Assumed Agreements arising
out of transactions occurring prior to the Closing Date; and
(e) all Intellectual Property and Intellectual Property Rights owned by, or
licensed to, either of the Sellers, together with all related income, royalties,
damages and payments due or payable at the Closing or thereafter (including
damages and payments for past or future infringements or misappropriations
thereof), the right to xxx and recover for past infringements or
misappropriations thereof, any and all corresponding rights that, now or
hereafter, may be secured throughout the world and all copies and tangible
embodiments of any such Intellectual Property.
Section 2.3 Assumed Liabilities. On the Closing Date, the APDN Sub shall
execute and deliver to the BVI Sub the Assumption Agreement, substantially in
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the form of Exhibit B attached hereto, pursuant to which the APDN Sub shall
assume and agree to pay, perform and discharge when due (i) the liabilities and
obligations of either of the BVI Sub under the Assumed Agreements (the "Assumed
Liabilities"), in accordance with the respective terms and subject to the
respective conditions thereof and (ii) all liabilities and obligations related
to the Business arising from any actions or omissions of the APDN Sub occurring
after the Closing.
Section 2.4 Assignment of Certain Contracts. Effective upon the Closing,
the BVI Sub shall assign to the APDN Sub, and the APDN Sub shall assume, the
Assumed Agreements on the following terms and conditions:
(a) The Assumed Agreements are listed on Exhibit A hereto and are
identified by the date of the Assumed Agreement (if available), the other party
or parties to the Assumed Agreement and the address of such party or parties (if
available), as the case may be. To the extent any such information is set forth
on Exhibit A and is later determined by the Company not to be available or to be
inaccurate in any material respect, the Sellers shall promptly notify the Buyers
of any such lack of availability or inaccuracy.
(b) If there exists on the Closing Date any default related to an Assumed
Agreement which relates to the Business, the Sellers shall be responsible for
any and all amounts to be cured as a condition to the assumption and assignment
of such Assumed Agreement.
Section 2.6 Assignability and Consents. Notwithstanding anything to the
contrary contained in this Agreement, if the sale, assignment, transfer,
conveyance or delivery or attempted sale, assignment, transfer, conveyance or
delivery to APDN Sub of any asset to be included in the Purchased Assets is (a)
prohibited by any applicable law or (b) would require any authorizations,
approvals, consents or waivers from a third Person or Governmental Authority and
such authorizations, approvals, consents or waivers shall not have been obtained
prior to the Closing, then in either case the Buyers shall have the option of
either (i) proceeding with the Closing without the sale, assignment, transfer,
conveyance or delivery of such asset and in such instance this Agreement shall
not constitute an agreement for the sale, assignment, transfer, conveyance or
delivery of such asset; provided, however, the Purchase Price shall be reduced
by a number of shares of APDN common stock equal in value to the fair market
value of such asset as reasonably determined by the Buyers (the "Purchase Price
Adjustment Amount"), or (ii) terminating this Agreement by notice to the
Sellers; nothing in this Section 2.6 shall be deemed to waive the rights of
Buyers not to consummate the transactions contemplated by this Agreement if the
conditions to its obligations set forth in Sections 9.1 and 9.2 have not been
satisfied. In the event that the Buyers elects to proceed with the Closing
without the sale, assignment, transfer, conveyance or delivery of any such
asset, then following the Closing, the Parties shall use their reasonable best
efforts, and cooperate with each other, to obtain promptly such authorizations,
approvals, consents or waivers; provided, however, that, except as provided for
in Section 8.3, neither the Buyers nor the Sellers shall be required to pay any
consideration to obtain any such authorization, approval, consent or waiver.
Pending such authorization, approval, consent or waiver, the Parties shall
cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to the Buyers the benefits of use of such
asset. Once authorization, approval, consent or waiver for the sale, assignment,
transfer, conveyance or delivery of any such asset not sold, assigned,
transferred, conveyed or delivered at the Closing is obtained, the Company Sub
shall assign, transfer, convey and deliver such asset to the APDN Sub and the
APDN Sub shall deliver to the Company Shareholders a number of shares of APDN
common stock equal in value to the Purchase Price Adjustment Amount.
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ARTICLE III
PURCHASE PRICE
Section 3.1 Purchase Price. In consideration for the Purchased Stock, and
subject to the terms and conditions of this Agreement, at the Closing the Buyers
shall deliver to the Sellers, 36,000,000 shares of APDN common stock, par value
$.50 per share (the "APDN Shares" or the "Purchase Price"), adjusted
proportionately in the event of any APDN Stock-Split, reclassification or stock
dividend.
ARTICLE IV
THE CLOSING
Section 4.1 Time and Place of Closing. Upon the terms and subject to the
satisfaction of the conditions contained in Article IX of this Agreement, the
closing of the sale of the Purchased Stock contemplated by this Agreement (the
"Closing") shall take place at British Virgin Islands at 10:00 A.M. (local time)
no later than the fifth (5th) Business Day following the date on which the
conditions set forth in Article IX have been satisfied (other than the
conditions with respect to actions the respective parties hereto will take at
the Closing itself) or, to the extent permitted, waived in writing, or at such
other place or time as APDN and the Company may mutually agree. The date and
time at which the Closing actually occurs is hereinafter referred to as the
"Closing Date." The parties will seek to close on or before March 21, 2005.
Section 4.2 Deliveries by the Sellers. At or prior to the Closing, the
Sellers shall deliver the following to the APDN Sub:
(a) the Purchased Stock of BVI Subsidaries, along with a stock power
endorsed in blank for all such Purchased Stock;
(b) the License Agreement, duly executed by the Company (Exhibit J);
(c) the Assumption Agreement (Exhibit B) and all such other instruments of
assignment or conveyance as shall be reasonably necessary to transfer to the
APDN Sub all of the Sellers' rights, title and interest in, to and under all of
the Purchased Assets, in accordance with this Agreement (including, without
limitation, the Intellectual Property Assignment (Exhibit D), the Patent
Assignment (Exhibit E) and the Trademark Assignment (Exhibit F));
(d) employment agreements (the "Employment Agreements") executed by the key
employees of the Sellers (as reasonably determined by APDN) on terms and
conditions satisfactory to the key employees and APDN (Exhibit I);
(e) the Non-Competition Agreements, duly executed by the stockholders,
officers, directors and key employees of each of the Company and the BVI Sub
(Exhibit H);
(f) the Pledge Agreement, duly executed by the Company (Exhibit G);
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(g) an agreement executed by the Sellers pursuant to which the Seller's
rights to transfer the APDN shares shall be delineated.
(h) all consents, waivers or approvals obtained by the Sellers with respect
to the Purchased Stock and the consummation of the transactions required in
connection with the sale of the Purchased Stock contemplated by this Agreement,
to the extent specifically required hereunder;
(i) the certificates contemplated by Section 9.2(b);
(j) a certified copy of the Certificate of Incorporation and the Bylaws or
other formation and governing documents of the Company and the BVI Sub, each as
in effect as of the Closing, together with a certificate of good standing from
appropriate office of the government of Taiwan or BVI, as applicable;
(k) certified copies of the resolutions duly adopted by the board of
directors of each of the Company and the BVI Sub authorizing the execution,
delivery and performance of this Agreement and the transactions contemplated
hereby;
(l) an opinion of legal counsel to the Sellers covering the matters usually
covered in a transaction of this nature and in form and substance reasonably
satisfactory to the legal counsel to the Buyers;
(m) an opinion of intellectual property counsel to the Sellers covering the
matters usually covered in a transaction of this nature and in form and
substance reasonably satisfactory to the legal counsel to the Buyers, including
but not limited to, the validity, enforceability and non-contravention of the
Intellectual Property and Intellectual Property Rights;
(n) all such other agreements, documents, instruments and writings as
required to be delivered by either of the Sellers or the BVI Sub at or prior to
the Closing Date pursuant to this Agreement or as reasonably requested by APDN
to fulfill the intent of the Parties hereto.
Section 4.3 Deliveries by the Buyers. At or prior to the Closing, the
Buyers shall deliver the following to the Sellers:
(a) the APDN Shares, along with a stock power endorsed in blank for all
such APDN Shares;
(b) the License Agreement, duly executed by the APDN Sub;
(c) the Employment Agreements, duly executed by APDN;
(d) a certified copy of the Certificate of Incorporation and the Bylaws or
other formation or governing documents of each of the Buyers, each as in effect
as of the Closing, together with a certificate of good standing from the
appropriate governmental office;
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(e) certified copies of the resolutions duly adopted by each of the Buyer's
board of directors authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby;
(f) the Non-Competition Agreements, duly executed by either or both of the
Buyers;
(g) the Pledge Agreement, duly executed by either or both of the Buyers;
(h) the Assumption Agreement, the Intellectual Property Assignment, the
Patent Assignment and the Trademark Assignment, duly executed by either or both
of the Buyers;
(i) the certificate contemplated by Section 9.3(b); and
(j) an opinion of legal counsel to the Buyers in form and substance
reasonably satisfactory to the legal counsel to the Sellers; and
(k) such other agreements, documents, instruments and writings as are
required to be delivered by either of the Buyers at or prior to the Closing Date
pursuant to this Agreement or as reasonably requested by the Company to fulfill
the intent of the Parties hereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to the Buyers to enter into this Agreement and to
consummate the transactions contemplated hereby, the Sellers joint and severally
represent and warrant to each of the Buyers as follows:
Section 5.1 Organization; Qualification. Each of the Company and BVI Sub is
a corporation duly incorporated or formed, validly existing and in good standing
under the laws of its jurisdiction of incorporation or formation, has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on the Business as is now being conducted.
Section 5.2 Authority Relative to this Agreement. Each of the Sellers has
all power, authority and capacity necessary to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. To the extent
required under applicable law, the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by each of the Sellers, the board of directors, managing
members or general partners of the Sellers, as the case may be, and no other
corporate or organizational proceedings on the part of the Sellers are necessary
to authorize this Agreement or to consummate the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by each
of the Sellers, and assuming that this Agreement constitutes a valid and binding
agreement of each of the Buyers constitutes a valid and binding agreement of
each of the Sellers, enforceable against each of the Sellers in accordance with
its terms, except that such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to enforcement of creditors' rights generally or general principles of equity.
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Section 5.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by the Sellers nor the sale of the Purchased Stock
pursuant to this Agreement will (a) conflict with or result in any breach of any
provision of the Certificate or Articles of Incorporation, Bylaws or other
formation or governing document, of any of the Sellers (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority which has not otherwise been obtained or made; (c) result
in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, agreement or other instrument or obligation
to which any of the Sellers is a party or by which any of the Sellers or the
Purchased Stock may be bound, except for such defaults (or rights of
termination, cancellation or acceleration) as to which requisite waivers or
consents have been obtained; or (d) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to any of the Sellers, or the Purchased
Stock.
Section 5.4 Title to Purchased Stock. Each Seller holds of record and owns
beneficially the number of shares of Purchased Stock set forth next to his, hers
or its name under Section 5.4 of the Disclosure Schedule, free and clear of any
restrictions on transfer, security interests, options, warrants, purchase
rights, contracts, commitments, equities, claims, and demands. No Seller is a
party to any option, warrant, purchase right, or other contract or commitment
that could require such Seller to sell, transfer, or otherwise dispose of any
capital stock of BVI Sub (other than this Agreement). No Seller is a party to
any voting trust, proxy, or other agreement or understanding with respect to the
voting of any capital stock of the BVI Sub
Section 5.5 Title to Assets; Licenses. At the Closing, the Buyers shall
acquire all right, title and interest in, to and under subject to such being
assumed and assigned in accordance with Section 2.5), all of the Purchased
Assets, in each case free and clear of all Encumbrances, except for Permitted
Encumbrances. Exhibit A includes a complete and correct list of all licenses
issued by either of the Sellers under any of its Patents, and all licenses
issued to either of the Sellers with respect to any technology used by either of
the Sellers in the Business that is not owned by either of the Sellers. All of
the licenses listed in Exhibit A are in full force and effect, in good standing
and are assignable to the Buyers and, unless the Buyers elect otherwise, will be
included in the Assumption Agreement.
Section 5.6 [Reserved].
Section 5.7. No Undisclosed Liabilities. Except as set forth in Section 5.7
of the Disclosure Schedule, The BVI Sub has no any material liabilities or
obligations of any nature, whether absolute, accrued, contingent, or otherwise.
Section 5.8. Taxes. The BVI Sub has properly and timely filed all Tax
returns in all necessary jurisdictions and has paid all Taxes, assessments and
penalties due and payable. All such Tax returns were complete and correct in all
respects as filed, and no claims have been assessed with respect to such
returns, except as set forth in Section 5.8 of the Disclosure Schedule.
For purposes of this Agreement, the term "Tax" shall mean any Taiwan, BVI
or United States federal, national, state, provincial, local or other
jurisdictional income, gross receipts, property, sales, use, license, excise,
franchise, employment, payroll, estimated, alternative or add-on minimum, ad
valorem, transfer or excise tax, or any other tax, custom, duty, governmental
fee or other like assessment or charge imposed by any Governmental Authority,
together with any interest or penalty imposed thereon.
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Section 5.9 [Reserved].
Section 5.10. Books and Records. Except as disclosed in Section 5.10 of the
Disclosure Schedule, the books of account and other records of each of the BVI
Sub, all of which shall be made available to the Buyers upon request, are true,
correct and complete. Except as disclosed in Section 5.10 of the Disclosure
Schedule, the minute books of the BVI Sub contain true, correct and complete
records of all meetings held of, and action taken by, the equity holders, the
Board of Directors, and committees of the Board of Directors of each of the
respective entities. The books of the Company and the BVI Sub are true, correct
and complete. At the Closing, all of those books and records will be in the
possession of the Company and the BVI Sub, as the case may be.
Section 5.11. Intellectual Property. "Intellectual Property Rights" means
all Patents, trademarks, trademark applications, trade names, service marks,
service xxxx applications, copyrights (both registered and unregistered, the
"Copyrights"), copyright applications and trade secrets of the BVI Sub assigned
to it by the Company pursuant to the Intellectual Property Assignment with
respect to Intellectual Property (as defined below). All intellectual property
(other than with respect to "off-the-shelf" or other third party software which
is generally commercially available) of the BVI Sub which has been assigned to
it by the Company pursuant to the Intellectual Property Assignment and is used
in the conduct of the Business as presently conducted or as presently proposed
to be conducted, including, computer programs and other computer software
(including, without limitation, all source and object code, algorithms,
architecture, structure, display screens, layouts and development tools),
inventions, patents, patent applications, designs, samples, specifications,
schematics, know-how, trade secrets, proprietary processes and formulae, and
development tools, promotional materials, databases, customer lists, supplier,
vendor and dealer lists and marketing research, and all documentation and media
constituting, describing or relating to the foregoing, including, without
limitation, manuals, memoranda and records, all collectively constitute the
"Intellectual Property" for purposes of this Agreement.
(a) Ownership of Intellectual Property Rights. Except as otherwise
disclosed on Section 5.11(a) of the Disclosure Schedule, the BVI Sub is the
exclusive owner of, and has good, valid and marketable title to all of the
Intellectual Property Rights and Intellectual Property free and clear of all
liens, and except as otherwise disclosed on Section 5.11(a) of the Disclosure
Schedule, has the right to use without payment to a third party all of the
Intellectual Property Rights. No claim is pending or, to the Sellers' Knowledge,
threatened against the Company or the BVI Sub and/or its respective officers,
employees, and consultants to the effect that any of the Intellectual Property
Rights is invalid or unenforceable by the BVI Sub. Except as otherwise disclosed
on Schedule 5.11(a) of the Disclosure Schedule, all former and current material
or key employees, and all current material or key consultants and contractors of
the Company and the BVI Sub have executed written instruments with the
respective entity that assigns to the respective entity all rights to any
material inventions, improvements, discoveries, or information relating to or
used in connection with the respective entity's Business. To the Knowledge of
each of the Sellers (after due inquiry of its respective employees), no employee
of the Company or the BVI Sub involved in any respect with their respective
business has entered into any agreement (other than agreements with such
entity), either before or after the commencement of employment with such entity,
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that restricts or limits in any way the scope or type of work in which the
employee is engaged by such entity or requires the employee to transfer, assign,
or disclose information concerning his or her work on behalf of such entity to
anyone other than such entity.
(b) Patents. Section 5.11(b) of the Disclosure Schedule sets forth a
complete and accurate list and summary description of all of the BVI Sub's
Patents. All of the issued Patents are currently in material compliance with
formal legal requirements (including without limitation payment of filing,
examination and maintenance fees and proofs of working or use), and are valid
and enforceable and not subject to any maintenance fees or taxes or actions
falling due within ninety (90) days after the date of the Closing. In each case
where a Patent is held by the BVI Sub by assignment, the assignment has been
duly recorded with the U.S. Patent and Trademark Office and/or all other
jurisdictions of registration. No Patent has been or is now involved in any
interference, reissue, re-examination or opposition proceeding. To the Knowledge
of each of the Sellers, there is no potentially interfering patent or patent
application of any third party.
(c) Trademarks. Section 5.11(c) of the Disclosure Schedule sets forth a
complete and accurate list and summary description of all of the BVI Sub's
registered trademarks and servicemarks (the "Marks"). All Marks that have been
registered with the United States Patent and Trademark Office and/or any other
jurisdiction are currently in material compliance with formal legal requirements
(including without limitation the timely post-registration filing of affidavits
of use and incontestability and renewal applications), and are valid and
enforceable. In each case where a Xxxx is held by the BVI Sub by assignment, the
assignment has been duly recorded with the U.S. Patent and Trademark Office
and/or all other applicable jurisdictions of registration. No Xxxx has been or
is now involved in any opposition, invalidation or cancellation proceeding and,
to the Knowledge of each of the Sellers, no such action is threatened with
respect to any of the Marks.
(d) Copyrights. Section 5.11(d) of the Disclosure Schedule sets forth a
complete and accurate list and summary description of all the BVI Sub's
Copyrights. Except as set forth in Section 5.11(d) of the Disclosure Schedule,
all Copyrights that have been registered with the United States Copyright Office
and/or other jurisdictions are currently in material compliance with formal
legal requirements, are valid and enforceable. In each case where a registered
Copyright is held by the BVI Sub by assignment, the assignment has been duly
recorded with the U.S. Copyright Office and/or all other jurisdictions of
registration. None of the source or object code, algorithms, or structure
included in the computer programs, computer databases, software, or related
systems which is relevant to the Business is copied from, based upon, or derived
from any other source or object code, algorithm or structure in violation of the
rights of any third party. Any substantial similarity of the Programs to any
computer program owned by any third party did not result from the Programs being
copied from, based upon, or derived from any such computer software program in
violation of the rights of any third party.
(e) Trade Secrets. Each of the Company and BVI Sub has taken reasonable
security measures (including, without limitation, entering into appropriate
confidentiality and nondisclosure agreements with material or key former and
present officers, directors, employees, and consultants of each of the Company
and BVI Sub and any other persons with access to the trade secrets, to the
extent deemed necessary by the Company and BVI Sub) to protect the secrecy,
confidentiality and value of each of such trade secrets. Except as disclosed on
Section 5.11(e) of the Disclosure Schedule, there has not been any breach by any
party to any such confidentiality or non-disclosure agreement. The trade secrets
have not been disclosed by either of the Company or BVI Sub to any person other
than employees or contractors thereof who had a need to know and use the trade
secrets in the course of their employment or contract performance or to third
parties bound by a confidentiality agreement. Except as otherwise disclosed in
Section 5.11(e) of the Disclosure Schedule, the Company and BVI Sub have the
right to use, free and clear of claims of third parties, all trade secrets
utilized by it. No third party has asserted that the use by either the Company
or BVI Sub of any trade secret violates the rights of any third party.
(f) Exclusivity of Rights. Except as otherwise provided in Section 5.11(f)
of the Disclosure Schedule, the BVI Sub has the exclusive right to use, license,
distribute, transfer and bring infringement actions with respect to the
Intellectual Property Rights or the Intellectual Property. Except as otherwise
provided in Section 5.11(f) of the Disclosure Schedule, neither the Company nor
BVI Sub (i) has licensed or granted to anyone rights of any nature to use any of
the Intellectual Property Rights or Intellectual Property outside of the
ordinary course of business; and (ii) is not obligated to and does not pay
royalties or other fees to anyone for such ownership, use, license or transfer
of any of its Intellectual Property Rights or Intellectual Property.
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(g) Licenses Received. All licenses or other agreements under which BVI Sub
is granted rights by others in Intellectual Property Rights or Intellectual
Property are listed in Section 5.11(g) of the Disclosure Schedule. Except as set
forth thereon, all such licenses or other agreements are in full force and
effect, neither the Company nor BVI Sub is or was in default of such license or
other agreements and, to the Knowledge of each of the Sellers, there is no
material default by any other party thereto. To the Knowledge of each of the
Sellers, the licensors under the licenses and other agreements under which such
BVI Sub is granted rights have all requisite power and authority to grant the
rights purported to be conferred thereby.
(h) Licenses Granted. All licenses or other agreements under which either
the Company or BVI Sub has granted rights to others in Intellectual Property
Rights or Intellectual Property are listed in Section 5.11(h) of the Disclosure
Schedule. Except as set forth thereon, all such licenses or other agreements are
in full force and effect, and neither the Company nor BVI Sub is or has been in
material default there under and to the Knowledge of each of the Sellers there
is no material default by any other party thereto.
(i) Sufficiency. The Intellectual Property and the Intellectual Property
Rights constitute all of the intellectual property assets of each of the Sellers
necessary for the operation of the Business as currently conducted, and
presently proposed to be conducted.
(j) Infringement. None of the Intellectual Property infringes or, to the
Knowledge of each of the Sellers, is alleged to infringe any United States of
America or other patent, trademark, service xxxx, trade name, copyright or other
proprietary right or is a derivative work based on the work of any other person.
(l) Nondisclosure Contracts. Each of the Nondisclosure Contracts (as
defined below) is a valid and binding obligation of the Company and BVI Sub, as
the case may be, enforceable against it in accordance with its terms, subject to
principles of equity and applicable bankruptcy, insolvency and similar laws
14
affecting creditors' rights generally. For purposes of this Agreement,
"Nondisclosure Contracts" means all nondisclosure and/or confidentiality
agreements entered into between the Company or BVI Sub and Persons in connection
with disclosures relating to the Business and the Intellectual Property Rights.
Section 5.12 Litigation. Except as set forth in Section 5.12 of the
Disclosure Schedule, there is no litigation or governmental or administrative
proceeding or investigation pending or, to the Knowledge of either of the
Sellers, threatened against the Company or BVI Sub or affecting the Intellectual
Property, Intellectual Property Rights, Purchased Stock or Purchased Assets, or,
as to matters related to BVI Sub, against any officer, director, stockholder or
key employee of such Seller, nor, to the Knowledge of either of the Sellers (a)
has any material event occurred, or (b) does any material condition exist, on
the basis of which any such claim may be asserted.
Section 5.13. Permits; Compliance with Laws. Except as set forth in Section
5.13 of the Disclosure Schedule, the BVI Sub has all governmental franchises,
authorizations, approvals, orders, consents, licenses, certificates, permits,
registrations, qualifications or other rights and privileges (collectively
"Permits") necessary to permit it to own its property and to conduct its
business as it is presently conducted, and all such Permits are valid and in
full force and effect, except where the failure to own or obtain such a Permit
would not have a Material Adverse Effect. No Permit is subject to termination as
a result of the execution of this Agreement or consummation of the transactions
contemplated hereby. Each of the Company and BVI Sub is now and has heretofore
been in compliance with all applicable statutes, ordinances, orders, rules and
regulations promulgated by any federal, state, municipal or other Governmental
Authority, which apply to the conduct of its business, except where the failure
to so comply would not have a Material Adverse Effect. Neither the Company nor
BVI Sub has entered into or been subject to any judgment, consent decree,
compliance order or administrative order with respect to any aspect of its
respective business, affairs, properties or assets or received any request for
information, notice, demand letter, administrative inquiry or formal or informal
complaint or claim from any regulatory agency with respect to any aspect of is
respective business, affairs, properties or assets.
Section 5.14. Absence of Certain Changes and Events. Except as set forth in
Section 5.14 of the Disclosure Schedule, since the date of the Company Interim
Financial Statements, each of the Company and BVI Sub has conducted its business
only in the ordinary course of business consistent with past practice. Without
limiting the generality of the immediately preceding sentence, since January 1,
2004, there has not been any damage to or destruction or loss of any Purchased
Asset or Intellectual Property, whether or not covered by insurance.
Section 5.15 Contracts; No Defaults. Section 5.15 of the Disclosure
Schedule contains a complete and accurate list, and the BVI Sub has delivered to
the Buyers true, correct and complete copies, of:
i. each contract that involves performance of services or delivery of
goods or materials by the BVI Sub of an amount or value in excess of $25,000;
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ii. each contract that involves performance of services or delivery of
goods or materials to either of the BVI Sub of an amount or value in excess of
$25,000;
iii. and other contract affecting any leasehold or other interest in,
any real or personal property;
iv. each licensing contract with respect to Patents, Marks,
Copyrights, trade secrets or other Intellectual Property, including contracts
with current or former employees, consultants or contractors regarding the
appropriation or the non-disclosure of any Intellectual Property Assets;
v. each joint venture, partnership and other contract involving a
sharing of profits, losses, costs or liabilities by the BVI Sub with any other
Person or requiring BVI Sub to make a capital contribution; and
vi. each contract containing covenants that in any way purport to
restrict the business activity of BVI Sub or limit the freedom of BVI Sub to
engage in any line of business or to compete with any Person or hire any Person.
Section 5.16 Absence of Certain Payments. Neither the Company nor BVI Sub
nor any director, officer, agent or employee thereof nor, to the Knowledge of
each of the Sellers, any other Person associated with or acting for or on behalf
of the Company or BVI Sub, has directly or indirectly (a) made any contribution,
gift, bribe, rebate, payoff, influence payment, kickback or other payment to any
Person, private or public, regardless of form, whether in money, property, or
services (i) to obtain favorable treatment in securing business, (ii) to pay for
favorable treatment for business secured, (iii) to obtain special concessions or
for special concessions already obtained, for or in respect of either of the
Sellers or any Affiliate of the Company or BVI Sub, or (iv) in violation of any
legal requirement, or (b) established or maintained any fund or asset that has
not been recorded in the books and records of the Company or BVI Sub.
Section 5.17. Relationships with Related Persons. Except as set forth in
Section 5.17 of the Disclosure Schedule, no officer, director or employee of the
Company or BVI Sub, nor any spouse or child of any of them or any Affiliate of,
or any Person associated with, any of them ("Related Person"), has any interest
in any property or asset used in or pertaining to the business of BVI Sub.
Except as set forth in Section 5.17 of the Disclosure Schedule, no Related
Person has owned or presently owns an equity interest or any other financial or
profit interest in a Person that has (i) had business dealings with either of
the Company or BVI Sub, or (ii) engaged in competition with the Company or BVI
Sub. Except as set forth in the Disclosure Schedule, no Related Person is a
party to any contract with, or has any claim or right against, the Company or
BVI Sub relating to the Purchased Stock or the Purchased Assets. .
Section 5.18 No Restrictions on Business Activities. There is no contract
or Governmental Order binding upon the Purchased Assets or, to the Knowledge of
the Sellers, threatened that has or could reasonably be expected to have the
effect of prohibiting or materially impairing the use of the Purchased Assets by
BVI Sub or the acquisition of the Purchased Stock by the Buyers.
16
Section 5.19 Disclosure. No representation or warranty by the Sellers in
this Agreement, nor in any certificate, schedule or exhibit delivered or to be
delivered pursuant to this Agreement, and no statement in the Disclosure
Schedule, contains or will contain any untrue statement of material fact, or
omits or will omit to state a material fact necessary to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading.
Section 5.20 Environmental Matters. There are no claims, actions or
proceedings under or relating to Environmental Laws pending or, to the Seller's
Knowledge, threatened against or relating to the BVI Sub, the Purchased Assets,
or the Business which would, individually or in the aggregate, have a Material
Adverse Effect.
Section 5.21 Brokers. No person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by either the Company
or, the BVI Sub in connection with the transactions contemplated by this
Agreement. Such fees, if any, shall be paid in full by the Sellers.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BUYER
As an inducement to the Sellers to enter this Agreement and to consummate
the transactions contemplated hereby, each of the Buyers jointly and severally
represents and warrants to each of the Sellers as follows:
Section 6.1 Organization. Each of the Buyers is a corporation duly
incorporated or formed, validly existing and in good standing under the laws of
its state or other governmental authority of incorporation or formation and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its respective business as is now being conducted.
Section 6.2 Authority Relative to this Agreement. Each of the Buyers has
full corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the respective board of directors of each of
the Buyers and no other corporate proceedings on the part of either of the
Buyers is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of the Buyers, and assuming that this Agreement
constitutes a valid and binding agreement of each of the Sellers, constitutes a
valid and binding agreement of each of the Buyers, enforceable against each of
the Buyers in accordance with its terms, except that such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally or general
principles of equity.
Section 6.3 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by each of the Buyers nor the purchase by either or
both of the Buyers of the Purchased Assets and the assumption by either or both
of the Buyers of the Assumed Agreements pursuant to this Agreement will (a)
17
conflict with or result in any breach of any provision of the Certificate of
Incorporation or Bylaws of the applicable Buyer; (b) require any consent,
approval, authorization or permit of, or filing with or notification to, any
Governmental Authority which has not been otherwise obtained or made; or (c)
result in a default (or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions of any material
note, bond, mortgage, indenture, agreement, lease or other instrument or
obligation to which either of the Buyers is a party or by which any of its
assets may be bound, except for such defaults (or rights of termination,
cancellation or acceleration) as to which requisite waivers or consents have
been obtained.
Section 6.4 Legal Proceedings and Judgments. There are no material claims,
actions, proceedings or investigations pending or, to the Knowledge of either of
the Buyers, threatened against or relating to either of the Buyers before any
court which could reasonably be expected to materially adversely affect such
Buyer's ability to consummate the transactions contemplated hereby.
Section 6.5 Brokers. No person is entitled to any brokerage, financial
advisory, finder's or similar fee or commission payable by either of the Buyers
in connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of either of the Buyers.
ARTICLE VII
SURVIVAL AND INDEMNIFICATION
Section 7.1 Survival of Representations, Warranties and Covenants. All
representations, warranties, covenants, and agreements of the Sellers and the
Buyers made in this Agreement and all agreements, documents and instruments
executed by such parties pursuant hereto shall be deemed to have been relied
upon by the party or parties to whom they are made, and shall survive the
Closing, regardless of any investigation on the part of such party or its
representatives and (b) shall bind and may be relied upon by the parties'
respective successors and assigns, whether so expressed or not, and, except as
otherwise provided in this Agreement, all such representations, warranties,
covenants and agreements shall inure to the benefit of the parties and their
respective successors and assigns, whether so expressed or not. Notwithstanding
the foregoing, the representations and warranties contained in Article V and
Article VI hereof shall expire and terminate and be of no further force and
effect after the date which is two (2) years following the Closing Date;
provided, however, the representations and warranties contained in (i) Sections
5.1, 5.2, 5.3, 5.4, 5.5, 5.21, 6.1, 6.2, 6.3 and 6.5 shall survive forever and
(ii) Sections 5.8 and 5.20 shall survive until the expiration of the applicable
statute of limitations and; provided further, that any written claim for breach
thereof made prior to any such expiration date and delivered to the party
against whom such indemnification is sought shall survive thereafter and, as to
any such claim, such applicable expiration will not effect the rights to
indemnification of the party making such claim and; provided further, that any
such written claim by the Buyer with respect to a breach of the representations
and warranties of the Seller may, with respect to fraud, intentional
misrepresentation or a deliberate or willful breach by the Seller, be given at
any time.
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Section 7.2 Indemnification.
(a) Each of the Sellers agrees to defend, indemnify and hold harmless each
of the Buyers, and their respective managers, members, partners, directors,
officers, employees and agents of each of the foregoing and each person who
controls any of them (Persons receiving the benefit of the indemnification
agreement herein shall be referred to collectively as "Indemnified Parties" and
individually as an "Indemnified Party") from and against any and all losses,
claims, damages, obligations, liens, assessments, judgments, fines, liabilities,
and other reasonable costs and expenses (including, without limitation,
interest, penalties and any reasonable investigation, legal and other expenses)
actually incurred in connection with, and any amount paid in settlement of, any
third party action, suit or proceeding or any claim asserted, as the same are
incurred, of any kind or nature whatsoever which has actually been sustained or
suffered by any such Indemnified Party (a "Loss" or "Losses"), without regard to
any investigation by any of the Indemnified Parties, based upon, arising out of,
by reason of or otherwise in respect of or in connection with (i) any material
breach of any representation, warranty, covenant or agreement made by either of
the Sellers in this Agreement or in any agreement or instrument executed by
either of the Sellers pursuant to this Agreement, or (ii) any third Party claim
as defined in Section 7.4.
(b) The indemnification and contribution provided for in this Section 7.2
will remain in full force and effect regardless of any investigation made by or
on behalf of the Indemnified Party or any officer, director, partner, member,
employee, agent or controlling person of the Indemnified Party.
Section 7.3 Security for Indemnification Claims. As security for each of
the Sellers' indemnification and contribution obligations provided in this
Article VII, the Company shall, pursuant to a pledge agreement (the "Pledge
Agreement") to be executed with the Buyers at the Closing, pledge to the Buyers
for a period of three years following the Closing Date, any of the Company's
rights in and to the License Agreement, each on terms and conditions as provided
in the Pledge Agreement. It being understood that the pledge of the Company's
rights in and to the License Agreement shall continue until the settlement of
any indemnification claim outstanding at the end of the pledge period.
Section 7.4 Third Party Claims. If any third party shall notify either of
the Buyers with respect to any matter alleging facts that, if true, would mean
that any of the Sellers has breached any of its respective representations,
warranties or covenants in this Agreement (a "Third Party Claim"), then APDN
and/or APDN Sub shall promptly notify the Company and thereof in writing in
accordance with Section 7.5.
Section 7.5 Notice; Payment of Losses; Defense of Claims.
(a) An Indemnified Party which seeks to assert its indemnification rights
pursuant to this Section 7 shall give written notice thereof to the party
required to provide such indemnification (individually and collectively, an
"Indemnifying Party") promptly after receipt of any written claim by any third
party and in any event not later than thirty (30) days after receipt of any such
written claim or not later than ten (10) business days after the receipt of any
such written claim in the event such written claim is in the form of a formal
19
complaint (or substantially equivalent pleading) filed with a court of competent
jurisdiction and served on the Indemnified Party, specifying in reasonable
detail the amount, nature and source of the claim, and including therewith
copies of any notices or other documents received from third parties with
respect to such claim; provided, however, that failure to give such notice shall
not limit the right of an Indemnified Party to recover indemnity or
reimbursement except to the extent that the Indemnifying Party suffers any
material damages or is materially prejudiced as a result of such failure. The
Indemnified Party shall also provide the Indemnifying Party with such further
information concerning any such claims as the Indemnifying Party may reasonably
request by written notice.
(b) Within thirty (30) business days after receiving notice of a claim for
indemnification or reimbursement complying with Section 7.5(a), the Indemnifying
Party shall, by written notice to the Indemnified Party, either (i) concede or
deny liability for the claim in whole or in part, or (ii) in the case of a Third
Party Claim, advise that the matters set forth in the notice are, or will be,
subject to contest or legal proceedings not yet finally resolved. If the
Indemnifying Party concedes liability in whole or in part, it shall, within ten
(10) business days of such concession, pay the amount of the claim to the
Indemnified Party to the extent of the liability conceded. Any such payment
shall be made in immediately available funds equal to the amount of such claim
so payable, except as may otherwise be agreed by the Indemnifying Party and the
relevant Indemnified Party, each acting reasonably and in good faith. If the
Indemnifying Party denies liability in whole or in part or advises that the
matters set forth in the notice are, or will be, subject to contest or legal
proceedings not yet finally resolved, then the Indemnifying Party shall make no
payment (except for the amount of any conceded liability payable as set forth
above) until the matter is resolved in accordance with this Agreement.
(c) If within twenty (20) business days after receiving the notice
described in the preceding paragraph (a) the Indemnifying Party (i) gives
written notice to the Indemnified Party stating that the Indemnifying Party
would be liable under the provisions hereof for indemnity in the amount of such
claim if such claim were valid and that the Indemnifying Party disputes and
intends to defend against such claim, liability or expense at the Indemnifying
Party's own cost and expense and (ii) provides assurance reasonably acceptable
to such Indemnified Party that such indemnification will be paid fully and
promptly if required upon the final resolution of such claim and such
Indemnified Party will not be required to incur cost or expense during the
proceeding, then counsel for the defense shall be selected by the Indemnifying
Party (subject to the consent of such Indemnified Party which consent shall not
be unreasonably withheld) and such Indemnified Party shall not be required to
make any payment with respect to such claim, liability or expense as long as the
Indemnifying Party is conducting a good faith and diligent defense at its own
expense; provided, however, that the assumption of defense of any such matters
by the Indemnifying Party shall relate solely to the claim, liability or expense
that is subject or potentially subject to indemnification. If the Indemnifying
Party assumes such defense in accordance with the preceding sentence, it shall
have the right, with the consent of such Indemnified Party, which consent shall
not be unreasonably withheld, to settle all indemnifiable matters related to
claims by third parties which are susceptible to being settled provided the
Indemnifying Party's obligation to indemnify such Indemnified Party therefor
will be fully satisfied by payment of money by the Indemnifying Party pursuant
to a settlement which includes a complete release of such Indemnified Party and
does not subject the Indemnified Party to any other adverse consequence. The
Indemnifying Party shall keep such Indemnified Party apprised of the status of
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the claim, liability or expense and any resulting suit, proceeding or
enforcement action, shall furnish such Indemnified Party with all documents and
information that such Indemnified Party shall reasonably request and shall
consult with such Indemnified Party prior to acting on major matters, including
settlement discussions. Notwithstanding anything herein stated, such Indemnified
Party shall at all times have the right to fully participate in such defense at
its own expense directly or through counsel; provided, however, if the named
parties to the action or proceeding include both the Indemnifying Party and the
Indemnified Party and representation of both parties by the same counsel would
be inappropriate under applicable standards of professional conduct, the
reasonable expense of separate counsel for such Indemnified Party shall be paid
by the Indemnifying Party, provided, that such Indemnifying Party shall be
obligated to pay for only one counsel in any jurisdiction. If no such notice of
intent to dispute and defend is given by the Indemnifying Party, or if such
diligent good faith defense is not being or ceases to be conducted, such
Indemnified Party shall, at the expense of the Indemnifying Party, undertake the
defense of (with counsel selected by such Indemnified Party), and shall have the
right to compromise or settle, such claim, liability or expense (exercising
reasonable business judgment). If such claim, liability or expense is one that
by its nature cannot be defended solely by the Indemnifying Party, as determined
in the reasonable discretion of the Indemnifying Party, then the relevant
Indemnified Party shall make available all information and assistance that the
Indemnifying Party may reasonably request and shall cooperate with the
Indemnifying Party in such defense.
(d) Notwithstanding anything to the contrary in this Section 7, no amounts,
costs or expenses to be advanced or paid by the Indemnifying Party to an
Indemnified Party, or incurred by the Indemnifying Party (including, without
limitation, the costs of defense, investigation and legal counsel incurred by
the Indemnifying Party on behalf of the relevant Indemnified Party) in advance
of a final, non-appealable determination as to the culpability, liability or
fault of the relevant Indemnified Party, or applicability of the indemnification
obligations of the Indemnifying Party pursuant to this Section 7 (collectively,
"Advanced Costs"), shall be advanced, paid, incurred or required to be advanced,
paid or incurred, unless the Indemnifying Party shall have received an
undertaking by or on behalf of the relevant Indemnified Party (including,
without limitation, the posting of a bond) in an amount and upon terms
reasonably satisfactory to the Indemnifying Party, to reimburse the Indemnifying
Party in full for Advanced Costs which are determined, by a final,
non-appealable determination, to have not been properly payable or owing to or
on behalf of the relevant Indemnified Party by the Indemnifying Party pursuant
to this Section 7.
(e) Notwithstanding anything to the contrary in this Agreement, the
indemnification provided for in this Section 7 shall be in addition to any other
claim and remedy of an Buyer and any other Indemnified Party at law or in equity
for any Loss, actually incurred by such Indemnified Party based upon, arising
out of, by reason of or otherwise in respect of or in connection with any third
party action, suit, proceeding or claim; provided, however, that any amount
received under this Section 7 by such Indemnified Party shall be deducted from
any other award received by such Indemnified Party based on such Loss.
Notwithstanding anything to the contrary in this Section 7.4(e), the limitations
on indemnification set forth in Section 7.3 hereof shall be deemed to apply with
equal force and effect with respect to any actions, suits, proceedings, claims,
causes of action, remedies or Losses which the Buyer may have in addition to the
indemnification provided for in this Section 7 at law or in equity.
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ARTICLE VIII
COVENANTS OF THE PARTIES
Section 8.1 Conduct of Business. (a) During the period commencing on the
date of this Agreement and ending on the Closing Date, other than as permitted
in writing by APDN, each of the Company and the BVI Sub shall preserve in all
material respects the Purchased Assets, and endeavor to preserve, in all
material respects, the goodwill and relationships with customers, suppliers and
others having business dealings with the Company.
(b) Prior to the Closing Date, without the prior written consent of APDN,
neither of the Sellers nor the BVI Sub shall create, incur or assume any
Encumbrance upon the Purchased Stock or the Purchased Assets. Prior to the
Closing Date, without the prior written consent of APDN, neither of the Sellers
nor the BVI Sub shall sell, lease (as lessor), license (as licensor), transfer
or otherwise dispose of, any of the Purchased Stock or the Purchased Assets.
Section 8.2 Access to Information; Maintenance of Records. (a) Between the
date of this Agreement and the Closing Date, the Company shall, during ordinary
business hours, upon reasonable notice (i) give APDN and APDN Subreasonable
access to the Company's books, records, plants, offices and other facilities
relating to the Purchased Assets or where the Purchased Assets are located, (ii)
permit APDN to make such reasonable inspections thereof as they may reasonably
request, and (iii) furnish APDN and APDN Sub with such financial and operating
data and other information with respect to the Purchased Assets as APDN and APDN
Sub may from time to time reasonably request. Notwithstanding anything in this
Section 8.2(a) to the contrary, APDN and APDN Sub shall not have access to the
Company's employee records and personnel and medical records.
(b) All information furnished to or obtained by the Buyers or any of the
Buyers' Representatives or any of the Sellers or any of the Sellers'
Representatives pursuant to this Agreement shall be treated as Confidential
Information of the disclosing party for all purposes. Each Party agrees to hold
in confidence, and protect, such Confidential Information with the same degree
of care as it uses for its own Confidential Information, and in any event at
least a reasonable degree of care.
(c) For a period of three (3) years after the Closing, the Buyers and their
respective successors and assigns shall have reasonable access to each of the
Sellers' books and records relating to the Purchased Assets, including all
information pertaining to the Assumed Agreements or other matters relating to
the Purchased Assets. Such access shall be afforded by the Party in possession
of such books and records upon receipt of reasonable advance notice and during
normal business hours; provided, however, that (i) any such access shall be
conducted in such a manner as not to interfere unreasonably with the operation
of the business of any Party, (ii) no Party shall be required to take any action
which would constitute a waiver of the attorney-client privilege, and (iii) no
Party need supply the other party with any information which such Party is under
a legal obligation not to supply. The Party exercising this right of access
shall be solely responsible for any costs or expenses incurred by it pursuant to
this Section 8.2(c). If the Party in possession of such books and records shall
desire to dispose of any such books and records upon or prior to the expiration
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of such period, such Party shall, prior to such disposition, give the other
Party a reasonable opportunity at such other Party's expense, to segregate and
remove such books and records as such other Party may select.
Section 8.3 Expenses. All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby shall be borne by the
party incurring such costs and expenses.
Section 8.4 Further Assurances. (a) Subject to the terms and conditions of
this Agreement, each of the Parties hereto shall use reasonable best efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the sale of the Purchased Stock in
accordance with this Agreement, including using reasonable best efforts to
ensure timely satisfaction of the conditions precedent to each Party's
obligations hereunder. Neither any of the Sellers nor the BVI Sub, on the one
hand, nor the Buyers, on the other hand, shall, without the prior written
consent of the other Party, take any action which would reasonably be expected
to prevent or materially impede, interfere with or delay the transactions
contemplated by this Agreement. From time to time on or after the Closing Date,
each of the Sellers and the BVI Sub shall, at its own respective expense,
execute and deliver such documents to the Buyers as the Buyers may reasonably
request in order to more effectively vest in the Buyers title to the Purchased
Assets, subject to Permitted Encumbrances. From time to time after the date
hereof, the Buyers shall, at their own expense, execute and deliver such
documents to the Sellers as the Sellers may reasonably request in order to more
effectively consummate the sale of the Purchased Stock and the assumption and
assignment of the Assumed Liabilities and the Assumed Agreements in accordance
with this Agreement.
(b) In the event that any Purchased Asset shall not have been conveyed to
the Buyers at the Closing, each of the Sellers shall, subject to Section 2.6,
use reasonable best efforts to convey such asset to the Buyers as promptly as is
practicable after the Closing.
Section 8.5 Tax Matters. All excise, sales, use, transfer, value added,
registration, stamp, recording and similar Taxes, levies, charges and recording,
filing and other fees (collectively, "Transfer Taxes") incurred in connection
with the transactions contemplated by this Agreement shall be paid equally by
APDN and or APDN Sub and the Company. The Buyers shall, at the equal expense of
the Buyers and Sellers, timely pay and file all necessary Tax returns and other
documentation with respect to all such Transfer Taxes and, if required by
applicable law, the Sellers shall join in the execution of any Tax returns and
other documentation at the Buyers' request.
Section 8.6 Litigation Support. In the event and for so long as either of
the Buyers are actively contesting or defending against any action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand in
connection with (a) any transaction contemplated under this Agreement or (b) any
fact, situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction relating to
the Purchased Stock or the Purchased Assets and either of the Buyers' rights
thereunder, the Sellers and the BVI Sub will cooperate with the Buyers and their
counsel in the contest or defense, make available its respective personnel, and
provide such testimony and access to each of the Seller's and the BVI Sub's
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books and records as shall be reasonably necessary in connection with the
contest or defense, all at the sole cost and expense of the Buyers.
Section 8.7 Notification. The Company shall notify APDN and the APDN Sub
and keep them advised of the occurrence of (a) any litigation or administrative
proceeding pending or, to the Knowledge of either of the Company or the BVI Sub,
threatened against either of the Sellers or the BVI Sub which could, if
adversely determined, have a Material Adverse Effect and (b) any material damage
or destruction of any of the Purchased Assets. The Buyers shall notify the
Sellers and keep them advised of the occurrences of any event or occurrence
which could reasonably be expected to materially adversely affect the Buyers'
ability to consummate the transactions contemplated hereby.
Section 8.9 Covenant Not to Compete. For a period of twenty (20) years from
and after the Closing Date, neither the Company nor the BVI Sub, nor any of
their respective stockholders, officers, directors or key employees shall engage
in the Business, directly or indirectly, except in accordance with the License
Agreement. Each such Person shall execute a non-competition agreement
(collectively, the "Non-Competition Agreements") with the Buyers on terms and
conditions as provided therein. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 8.9 is invalid
or unenforceable, then the Parties agree that the court making the determination
of invalidity or unforceability shall have the power to reduce the scope,
duration, or area of the term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified after the expiration of the time within which the
judgment may be appealed.
Section 8.10 Risk of Loss. Until the Closing, the risk of loss and damage
to the Purchased Assets shall be borne by the Sellers.
Section 8.11 No Acquisition Transactions. Upon execution of this Agreement
as set forth or until its termination in Article 10 below neither of the Sellers
nor the BVI Sub will directly or indirectly transfer or dispose of or encumber,
or solicit or engage in any negotiations or discussions regarding the transfer,
disposition or encumbrance of, all or any part of the Purchased Stock or the
Purchased Assets with any third party and shall not enter into any form of
agreement relating to any such transfer, disposition or encumbrance of the
Purchased Stock or the Purchased Assets. If either of the Sellers or the BVI Sub
receives any such unsolicited Acquisition Proposal from any third party, it
promptly shall notify APDN of such Acquisition Proposal, the terms thereof and
the party making the same.
Section 8.12 Compliance with the License Agreement. The Company shall
comply with the product supply and technical assistance provisions of the
License Agreement, such provisions as listed on Exhibit K attached hereto. A
breach of such provisions or of any other provisions of the License Agreement by
the Company shall also be a breach of this Agreement.
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ARTICLE IX
CONDITIONS TO CLOSING
Section 9.1 Conditions to Each Party's Obligations to Effect the Closing.
The respective obligations of each Party to effect the sale and purchase of the
Purchased Stock shall be subject to the fulfillment at or prior to the Closing
Date of the following conditions:
(a) no preliminary or permanent injunction or other order or decree by any
federal or state court which prevents the consummation of the sale of a material
part of the Purchased Stock or Purchased Assets contemplated hereby shall have
been issued and remain in effect (each Party agreeing to use its reasonable best
efforts to have any such injunction, order or decree lifted) and no statute,
rule or regulation shall have been enacted by any Governmental Authority which
prohibits the consummation of the sale of the Purchased Stock or Purchased
Assets; and
(b) no petition shall have been filed with the bankruptcy Court or any
court seeking to reorganize or liquidate either of the Company or the BVI Sub
nor shall a trustee or receiver have been appointed to take charge of either of
the Company's or the BVI Sub's assets and business.
Section 9.2 Conditions to Obligations of the Buyer. The obligation of the
Buyers to effect the purchase of the Purchased Stock contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing Date of
the following additional conditions:
(a) each of the Sellers and the BVI Sub shall have performed and complied
in all material respects with the covenants contained in this Agreement which
are required to be performed and complied with by such entity on or prior to the
Closing Date and the representations and warranties of each of the Sellers which
are set forth in this Agreement (without regard as to any qualifications therein
as to materiality) shall be true and correct in all material respects as of the
date of this Agreement and as of the Closing Date (except to the extent that any
such representation or warranty speaks as of a particular date) as though made
at and as of the Closing Date.
(b) the Buyers shall have received a certificate from the chief executive
officer of each of the Company and the BVI Sub dated as of the Closing Date, to
the effect that, to the best of such officer's knowledge, the conditions set
forth in Section 9.2(a) have been satisfied;
(c) the Purchased Stock and the Purchased Assets shall have been released
from all Encumbrances and there shall be no Encumbrances on the Purchased Stock
or the Purchased Assets (other than the Permitted Encumbrances);
(d) each of the Sellers and the BVI Sub shall have complied with the
requirements to permit the sale and transfer of the Purchased Stock and the
Purchased Assets to the Buyers on the terms of this Agreement, free and clear of
all Encumbrances (except Permitted Encumbrances);
(e) none of the Purchased Assets shall have been destroyed, lost,
confiscated, abandoned or otherwise made impossible for sale and transfer to the
Buyers under the terms of this Agreement;
(f) the Buyers' patent counsel shall have completed a due diligence review
of the Patents, patent applications and patent disclosures, continuations,
renewals and divisions; trademarks, service marks, trade dress, trade names,
corporate names, logos and Internet domain names, and trademark and service xxxx
registrations, renewals and applications therefor and issued its report thereon
in form and scope satisfactory to Buyers in their sole discretion;
(g) the Company Shareholders shall have formed the BVI Sub and the
Purchased Assets shall have been sold or otherwise transferred from the Company
to the BVI Sub; and
(h) the Buyers shall have received the other items to be delivered pursuant
to Section 4.2.
Any condition specified in this Section 9.2 may be waived by the Buyers;
provided that no such waiver shall be effective against the Buyers unless it is
set forth in a writing executed by the Buyers.
Section 9.3 Conditions to Obligations of the Seller. The obligation of each
Seller to effect the sale of the Purchased Stock contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing Date of the
following additional conditions:
25
(a) the Buyers shall have performed and complied in all material respects
with the covenants contained in this Agreement which are required to be
performed and complied with by the Buyers on or prior to the Closing Date and
the representations and warranties of the Buyers which are set forth in this
Agreement (without regard as to any qualifications therein as to materiality)
shall be true and correct in all material respects as of the date of this
Agreement and as of the Closing Date (except to the extent that any such
representation or warranty speaks as of a particular date) as though made at and
as of the Closing Date;
(b) the Sellers shall have received a certificate from an authorized
officer of the each of the Buyers, dated as of the Closing Date, to the effect
that, to the best of such officer's knowledge, the conditions set forth in
Section 9.3(a) have been satisfied;
(c) the provisions of the Engagement Agreement between Xxxxxxxx Partners
LLC and APDN dated August 3, 2004 shall be revised in a manner satisfactory to
the Company;
(d) the Board of Directors of APDN shall be reconstituted in a manner
satisfactory to the Company;
(e) the APDN Sub shall have been formed by APDN; and
(f) the Sellers shall have received the other items to be delivered to it
pursuant to Section 4.3.
Any condition specified in this Section 9.3 may be waived by the Sellers;
provided that no such waiver shall be effective against the Sellers unless it is
set forth in writing executed by the Sellers.
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ARTICLE X
TERMINATION AND ABANDONMENT
Section 10.1 Termination. This Agreement may be terminated at any time
prior to the Closing Date by:
(a) written consent of the Company and APDN;
(b) APDN, if there has been a material violation or breach by either of the
Sellers of any covenant, representation or warranty made by them contained in
this Agreement which has prevented the satisfaction of any condition to the
obligations of the Buyers to effect the Closing and such violation or breach has
not been cured by the Seller within ten (10) Business Days of receipt of written
notice thereof or waived by the Buyers;
(c) the Company, if there has been a material violation or breach by either
of the Buyers of any covenant, representation or warranty made by it contained
in this Agreement which has prevented the satisfaction of any condition to the
obligations of the Sellers to effect the Closing and such violation or breach
has not been cured by the Buyers within ten (10) Business Days of receipt of
written notice thereof or waived by the Sellers;
(d) the Company or APDN, if (i) there shall be any law or regulation that
makes consummation of the transactions contemplated hereby illegal or otherwise
prohibited or (ii) consummation of the transactions contemplated hereby would
violate any nonappealable final order, decree or judgment of the bankruptcy
court or any court or governmental body having competent jurisdiction; or
(e) the Company or APDN, if the Closing shall not have occurred on or prior
to July 31, 2005 (the "Termination Date"); provided that the neither the Company
nor APDN, as the case may be, shall be entitled to terminate this Agreement
pursuant to this Section 10.1(e) if the failure of the Closing to occur on or
prior to such date results primarily from such Party itself or its respective
affiliate breaching any representation, warranty or covenant contained in this
Agreement.
Section 10.2 Procedure and Effect of Termination. (a) In the event of
termination of this Agreement and abandonment of the transactions contemplated
hereby by either or both of the Parties pursuant to Section 10.1, written notice
thereof shall forthwith be given by the terminating Party to the other Party and
this Agreement shall terminate and the transactions contemplated hereby shall be
abandoned, without further action by any of the Parties hereto.
(b) If this Agreement is terminated as provided herein, said termination
shall not be the sole remedy of the Parties hereto with respect to any
termination not due to a Party's breach of any covenant, representation or
warranty contained in this Agreement and the non-breaching Party shall have
available all other remedies available to it at law or in equity; provided,
however, it is hereby agreed that if termination is due to a breach or default
by the other Party, then, in addition to all other remedies available to it at
law or in equity, the non-breaching Party shall be reimbursed for its
out-of-pocket expenses incurred in connection with this Agreement and actions
related thereto (including any due diligence review by the Buyers of the
Purchased Assets). In such an instance, the breaching Party shall reimburse the
non-breaching Party's expenses promptly upon receipt of an accounting of such
expenses; and
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(c) all Confidential Information from the Company or the BVI Sub shall be
returned to the Company, and all Confidential Information from either of the
Buyers shall be returned to the Buyers.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Amendment and Modification. This Agreement may be amended,
modified or supplemented only by written agreement of the Company and APDN.
Section 11.2 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the Parties to comply with any
obligation, covenant or condition herein may be waived by the Party entitled to
the benefits thereof only by a written instrument signed by the Party granting
such waiver, but such waiver or failure to insist upon strict compliance with
such obligation, covenant, or condition shall not operate as a waiver of, or
estoppel with respect to any subsequent or other failure.
Section 11.3 Survival. The Parties hereto agree that only the covenants
contained in this Agreement to be performed at or after the Closing Date shall
survive the Closing hereunder, and each Party hereto shall be liable to the
other after the Closing Date for any breach thereof.
Section 11.4 Intentionally not used.
Section 11.5 Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given (i) when personally sent/delivered, by
facsimile transmission (with hard copy to follow) or sent by express courier
(charges prepaid) or (ii) five (5) days following mailing by registered or
certified mail postage prepaid and return receipt requested. Unless another
address is specified in writing, notices, demands and communications to the
Sellers and the Buyers shall be sent to the addresses indicated below:
If to either of the Company or the BVI Sub, to:
Biowell Technology, Inc.
18F Xx 000 Xxxxx Xxxxx Xxxx
Xxxxxxx Xxxx
Xxxxxx Xxxxxx
Xxxxxx 235
ROC
with a copy to: Dr. Jun-Xxx Xxxx
Chairman & CEO
Fax: 000-000-0-00000000
28
if to the Buyers, to:
Applied DNA Sciences, Inc.
0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxx Xxxxxxxxxx
President
Fax: 000-000-0000
Section 11.6 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any party
hereto, including by operation of law, without the prior written consent of the
other Party; provided, however, each of the Buyers shall be permitted to assign
the Agreement to an affiliate without the consent of the Sellers. Any assignment
of this Agreement or any of the rights, interests or obligations hereunder in
contravention of this Section 11.6 shall be null and void and shall not bind or
be recognized by the Company or APDN.
Section 11.7 Third-Party Beneficiaries. If either of the Buyers sells any
of the Purchased Stock or the Purchased Assets within three (3) years following
the Closing Date, the Buyers may designate the purchase of such assets as a
third party beneficiary of the representations, warranties and covenants of each
of the Sellers.
Section 11.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms, conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the Parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
Section 11.9 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada (regardless of the
laws that might otherwise govern under applicable principles of conflicts of
law) as to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 11.10 Submission to Jurisdiction. Any dispute, controversy or claim
arising out of or relating to this Agreement or any other agreement or
instrument contemplated hereby or entered into in connection herewith or any of
the transactions contemplated hereby or thereby shall be resolved by binding
arbitration. The arbitration shall be conducted by the International Chamber of
Commerce which shall administer the arbitration under its commercial rules. The
arbitration shall take place in Den Xxxx, Holland. The parties hereto
irrevocably submit to the exclusive jurisdiction of such entity. The parties
hereby irrevocably waive, to the fullest extent permitted by applicable law, any
objection which they may now or hereafter have to the laying of venue of any
such dispute brought in such venue or any defense of inconvenient forum in
connection therewith.
29
Section 11.11 Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in two or more counterparts, and by the
different Parties hereto in separate counterparts, each of which, when executed
and delivered, shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement.
Section 11.12 Incorporation of Exhibits and Schedules. The Exhibits and
Schedules attached hereto and referred to herein are hereby incorporated herein
by reference and made a part of this Agreement for all purposes as if fully set
forth herein.
Section 11.13 Entire Agreement. This Agreement (including the Exhibits and
the Schedules) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings
among the parties with respect thereto.
Section 11.14 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
Section 11.15 Equitable Remedies. Each of the Sellers and each of the
Buyers hereby acknowledge and agree that money damages may not be an adequate
remedy for any breach or threatened breach of any of the provisions of this
Agreement and that, in such event, the Sellers or their respective successors or
assigns, or the Buyers or their respective successors or assigns, as the case
may be, may, in addition to any other rights and remedies existing in their
favor, apply any court of competent jurisdiction for specific performance,
injunctive and/or other relief in order to enforce or prevent any violations of
this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written by their respective officers
thereunto duly authorized.
BIOWELL TECHNOLOGY, INC.
By: /s/ XX. X.X. XXXX
-----------------
Name: Xx. X.X. Xxxx
Title: Chairman & CEO
APPLIED DNA SCIENCES, INC.
By: /s/ XXXXX X. XXXXXXXXXX
-----------------------
Name: X. Xxxxxxxxxx
Title: President
31
