SPLIT-OFF AGREEMENT
Exhibit
10.4
SPLIT-OFF
AGREEMENT,
dated
as of this ________ day of May 2007 (this “Agreement”), by and among Modigene
Inc., formerly known as LDG, Inc., a Nevada corporation (“Seller”), Xxxxxx
Xxxxxxx (“Xxxxxxx”), Xxxxxx Xxxxx (“Xxxxx”) and Xxxxxxxx
Communications, Inc. (“Xxxxxxxx”) (each of Xxxxxxx, Xxxxx and Xxxxxxxx are
sometimes referred to as a “Buyer” and collectively as the “Buyers”), Liaison
Design Group, LLC, a North Carolina limited liability company (“LLC”), and
Modigene Inc., a Delaware corporation (“Modigene”).
WHEREAS, Seller
is
the owner of all of the issued and outstanding membership units (“Units”) of
LLC. Since the organization of Seller, Seller has conducted all of its
operations through LLC. Seller has no businesses or operations other than those
it conducts through LLC;
WHEREAS,
contemporaneous with the execution of this Agreement, Seller, Modigene, and
a
newly-formed wholly-owned Delaware subsidiary of Seller, Modigene Acquisition
Corp. (“Acquisition Corp.”), are entering into an Agreement and Plan of Merger
and Reorganization (the “Merger Agreement”) pursuant to which Acquisition Corp.
merged with and into Modigene with Modigene being the surviving entity (the
“Merger”), and the equity holders of Modigene received shares of common stock in
Seller in exchange for their equity interests in Modigene;
WHEREAS,
the
execution and delivery of this Agreement was required by Modigene as a condition
to its execution of the Merger Agreement. The consummation of the purchase
and
sale transaction contemplated by this Agreement was also a condition to the
completion of the Merger pursuant to the Merger Agreement. Seller has
represented to Modigene in the Merger Agreement that the purchase and sale
transaction contemplated by this Agreement would be consummated simultaneously
with the consummation of the Merger, and Modigene relied on such representation
in entering into the Merger Agreement;
WHEREAS,
Buyers
desire to purchase the Units from Seller, and to assume, as between Seller
and
Buyers, all responsibilities for any debts, obligations and liabilities of
LLC,
on the terms and subject to the conditions specified in this Agreement;
and
WHEREAS,
Seller
desires to sell and transfer the Units to the Buyers, on the terms and subject
to the conditions specified in this Agreement;
NOW,
THEREFORE,
in
consideration of the premises and the covenants, promises, and agreements herein
set forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, agree as follows.
1.1 Purchased
Units.
Subject
to the terms and conditions provided below, Seller shall sell and transfer
to
Buyers and Buyers shall purchase from Seller, on the Closing Date (as defined
in
Section
1.3),
all
the issued and outstanding Units of LLC.
1.2 Purchase
Price.
The
purchase price for the Units shall be the transfer and delivery by Buyers to
Seller of all shares of common stock of Seller that Buyers own as set forth
below (the “Purchase Price Shares”), deliverable as provided in Section
2.2.
|
Xxxxxxx
|
13,968,253
Purchase Price Shares
|
|
Xxxxx
|
10,476,190
Purchase Price Shares
|
|
Xxxxxxxx
|
10,476,190
Purchase Price Shares
|
1.3 Closing.
The
closing of the transactions contemplated in this Agreement (the “Closing”) shall
take place as soon as practicable following the execution of this Agreement.
The
date on which the Closing occurs shall be referred to herein as the Closing
Date
(the “Closing Date”).
II.
CLOSING.
2.1 Transfer
of Units.
At the
Closing, Seller shall deliver to Buyers certificates or other evidence
representing the Units, duly endorsed to Buyers or as directed by Buyers, in
proportion to the Buyers’ respective ownership interest in the Purchase Price
Shares, which delivery shall vest Buyers with good and marketable title to
all
of the issued and outstanding Units of LLC, free and clear of all liens and
encumbrances.
2.2 Payment
of Purchase Price.
At the
Closing, Buyers shall deliver to Seller a certificate or certificates
representing the Purchase Price Shares duly endorsed to Seller, which delivery
shall vest Seller with good and marketable title to the Purchase Price Shares,
free and clear of all liens and encumbrances.
2.3 Transfer
of Records.
On or
before the Closing, Seller shall arrange for transfer to LLC all existing
corporate books and records in Seller’s possession relating to LLC and its
business, including but not limited to all agreements, litigation files, real
estate files, personnel files and filings with governmental agencies;
provided,
however,
when
any such documents relate to both Seller and LLC, only copies of such documents
need be furnished. On or before the Closing, Buyers and LLC shall transfer
to
Seller all existing corporate books and records in the possession of Buyers
or
LLC relating to Seller, including but not limited to all corporate minute books,
stock ledgers, certificates and corporate seals of Seller and all agreements,
litigation files, real property files, personnel files and filings with
governmental agencies; provided,
however,
when
any such documents relate to both Seller and LLC or its business, only copies
of
such documents need be furnished.
-2-
III.
BUYERS’
REPRESENTATIONS AND WARRANTIES.
Each
Buyer represents and warrants to Seller and Modigene that:
3.1 Capacity
and Enforceability.
Buyer
has the legal capacity to execute and deliver this Agreement and the documents
to be executed and delivered by Buyer at the Closing pursuant to the
transactions contemplated hereby. This Agreement and all such documents
constitute valid and binding agreements of Buyer, enforceable in accordance
with
their terms.
3.2 Compliance.
Neither
the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby by Buyer will result in the breach of any
term
or provision of, or constitute a default under, or violate any agreement,
indenture, instrument, order, law or regulation to which Buyer is a party or
by
which Buyer is bound.
3.3 Purchase
for Investment.
Buyer
is financially able to bear the economic risks of acquiring an interest in
LLC
and the other transactions contemplated hereby, and has no need for liquidity
in
this investment. Buyer has such knowledge and experience in financial and
business matters in general and with respect to businesses of a nature similar
to the business of LLC so as to be capable of evaluating the merits and risks
of, and making an informed business decision with regard to, the acquisition
of
the Units. Buyer is acquiring the Units solely for its own account and not
with
a view to or for resale in connection with any distribution or public offering
thereof, within the meaning of any applicable securities laws and regulations,
unless such distribution or offering is registered under the Securities Act
of
1933, as amended (the “Securities Act”), or an exemption from such registration
is available. Buyer has (i) received all the information it has deemed
necessary to make an informed investment decision with respect to the
acquisition of the Units; (ii) had an opportunity to make such
investigation as it has desired pertaining to LLC and the acquisition of an
interest therein and to verify the information which is, and has been, made
available to him; and (iii) had the opportunity to ask questions of Seller
concerning LLC. Buyer acknowledges that Buyer or an affiliate of Buyer is an
officer and/or director of Seller and LLC and, as such, has actual knowledge
of
the business, operations and financial affairs of LLC. Buyer has received no
public solicitation or advertisement with respect to the offer or sale of the
Units. Buyer realizes that the Units are “restricted securities” as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission under
the Securities Act, the resale of the Units is restricted by federal and state
securities laws and, accordingly, the Units must be held indefinitely unless
their resale is subsequently registered under the Securities Act or an exemption
from such registration is available for their resale. Buyer understands that
any
resale of the Units by him must be registered under the Securities Act (and
any
applicable state securities law) or be effected in circumstances that, in the
opinion of counsel for LLC at the time, create an exemption or otherwise do
not
require registration under the Securities Act (or applicable state securities
laws). Buyer acknowledges and consents that certificates now or hereafter issued
for the Units will bear a legend substantially as follows:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR QUALIFIED UNDER
ANY APPLICABLE STATE SECURITIES LAWS (THE “STATE ACTS”), HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO A REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION UNDER THE STATE ACTS OR EXEMPTIONS FROM SUCH REGISTRATION OR
QUALIFICATION REQUIREMENTS (INCLUDING, IN THE CASE OF THE SECURITIES ACT, THE
EXEMPTIONS AFFORDED BY SECTION 4(1) OF THE SECURITIES ACT AND RULE 144
THEREUNDER). AS A PRECONDITION TO ANY SUCH TRANSFER, THE ISSUER OF THESE
SECURITIES SHALL BE FURNISHED WITH AN OPINION OF COUNSEL OPINING AS TO THE
AVAILABILITY OF EXEMPTIONS FROM SUCH REGISTRATION AND QUALIFICATION AND/OR
SUCH
OTHER EVIDENCE AS MAY BE SATISFACTORY THERETO THAT ANY SUCH TRANSFER WILL NOT
VIOLATE THE SECURITIES LAWS.
-3-
Buyer
understands that the Units are being sold to it pursuant to the exemption from
registration contained in Section 4(1) of the Securities Act and that the Seller
is relying upon the representations made herein as one of the bases for claiming
the Section 4(1) exemption.
3.4 Liabilities.
Following the Closing, Seller will have no liability for any debts, liabilities
or obligations of LLC or its business or activities, and there are no
outstanding guaranties, performance or payment bonds, letters of credit or
other
contingent contractual obligations that have been undertaken by Seller directly
or indirectly in relation to LLC or its business and that may survive the
Closing.
3.5 Title
to Purchase Price Shares.
Buyer
is the sole record and beneficial owner of the Purchase Price Shares. At
Closing, Buyer will have good and marketable title to the Purchase Price Shares,
which Purchase Price Shares are, and at the Closing will be, free and clear
of
all options, warrants, pledges, claims, liens, and encumbrances and any
restrictions or limitations prohibiting or restricting transfer to Seller,
except for restrictions on transfer as contemplated by applicable securities
laws.
IV.
SELLER’S
REPRESENTATIONS AND WARRANTIES.
Seller
represents and warrants to LLC and Buyers that:
4.1 Organization
and Good Standing.
Seller
is a corporation duly incorporated, validly existing, and in good standing
under
the laws of the State of Nevada.
4.2 Authority
and Enforceability.
The
execution and delivery of this Agreement and the documents to be executed and
delivered at the Closing pursuant to the transactions contemplated hereby,
and
performance in accordance with the terms hereof and thereof, have been duly
authorized by Seller and all such documents constitute the valid and binding
agreements of Seller enforceable in accordance with their terms.
4.3 Title
to Units.
Seller
is the sole record and beneficial owner of the Units. At Closing, Seller will
have good and marketable title to the Units, which Units are, and at the Closing
will be, free and clear of all options, warrants, pledges, claims, liens and
encumbrances, and any restrictions or limitations prohibiting or restricting
transfer to Buyers, except for restrictions on transfer as contemplated by
Section
3.3
above.
The Units constitute all of the issued and outstanding membership units of
LLC.
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4.4 [intentionally
omitted]
V.
LLC’S
REPRESENTATIONS AND WARRANTIES.
LLC
represents and warrants to Seller and Buyers that:
5.1 Organization
and Good Standing.
LLC is
a North Carolina limited liability company.
5.2 Authority
and Enforceability.
The
execution and delivery of this Agreement and the documents to be executed and
delivered at the Closing pursuant to the transactions contemplated hereby,
and
performance in accordance with the terms hereof and thereof, have been duly
authorized by LLC and all such documents constitute the valid and binding
agreements of LLC enforceable in accordance with their terms
5.3 Representations
in Merger Agreement.
LLC
represents and warrants that all of the representations and warranties by
Seller, insofar as they relate to LLC, contained in the Merger Agreement are
true and correct.
VI.
OBLIGATIONS
OF BUYERS PENDING CLOSING.
Each
Buyer covenants and agrees that between the date hereof and the
Closing:
6.1 Not
Impair Performance.
Buyer
shall not take any intentional action that would cause the conditions upon
the
obligations of the parties hereto to effect the transactions contemplated hereby
not to be fulfilled, including, without limitation, taking or causing to be
taken any action that would cause the representations and warranties made by
any
party herein not to be true, correct and accurate as of the Closing, or in
any
way impairing the ability of Seller to satisfy its obligations as provided
in
Article
VII.
6.2 Assist
Performance.
Buyer
shall exercise its reasonable best efforts to cause to be fulfilled those
conditions precedent to Seller’s obligations to consummate the transactions
contemplated hereby which are dependent upon actions of Buyer and to make and/or
obtain any necessary filings and consents in order to consummate the sale
transaction contemplated by this Agreement.
VII.
OBLIGATIONS
OF SELLER PENDING CLOSING.
Seller
covenants and agrees that between the date hereof and the
Closing:
7.1
Business as Usual.
LLC
shall operate and Seller shall cause LLC to operate in accordance with past
practices and shall use commercially reasonable efforts to preserve its goodwill
and the goodwill of its employees, customers and others having business dealings
with LLC. Without limiting the generality of the foregoing, from the date of
this Agreement until the Closing Date, LLC shall (a) make all normal and
customary repairs to its equipment, assets and facilities, (b) keep in
force all insurance, (c) preserve in full force and effect all material
franchises, licenses, contracts and real property interests and comply in all
material respects with all laws and regulations, (d) collect all accounts
receivable and pay all trade creditors in the ordinary course of business at
intervals historically experienced, and (e) preserve and maintain LLC’s
assets in their current operating condition and repair, ordinary wear and tear
excepted. LLC shall not (i) amend, terminate or surrender any material
franchise, license, contract or real property interest, or (ii) sell or
dispose of any of its assets except in the ordinary course of business. Neither
LLC nor Buyers shall take or omit to take any action that results in Seller
incurring any liability or obligation prior to or in connection with the
Closing.
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7.2 Not
Impair Performance.
Seller
shall not take any intentional action that would cause the conditions upon
the
obligations of the parties hereto to effect the transactions contemplated hereby
not to be fulfilled, including, without limitation, taking or causing to be
taken any action which would cause the representations and warranties made
by
any party herein not to be materially true, correct and accurate as of the
Closing, or in any way impairing the ability of Buyers to satisfy their
obligations as provided in Article
VI.
7.3 Assist
Performance.
Seller
shall exercise its reasonable best efforts to cause to be fulfilled those
conditions precedent to Buyers’ obligations to consummate the transactions
contemplated hereby which are dependent upon the actions of Seller and to work
with Buyers to make and/or obtain any necessary filings and consents. Seller
shall cause LLC to comply with its obligations under this
Agreement.
VIII. SELLER’S
CONDITIONS PRECEDENT TO CLOSING.
The
obligations of Seller and LLC to close the transactions contemplated by this
Agreement are subject to the satisfaction at or prior to the Closing of each
of
the following conditions precedent (any or all of which may be waived by Seller
and Modigene in writing):
8.1 Representations
and Warranties; Performance.
All
representations and warranties of Buyers and the LLC contained in this Agreement
shall have been true and correct, in all material respects, when made and shall
be true and correct, in all material respects, at and as of the Closing, with
the same effect as though such representations and warranties were made at
and
as of the Closing. Buyers and LLC shall have performed and complied with all
covenants and agreements and satisfied all conditions, in all material respects,
required by this Agreement to be performed or complied with or satisfied by
Buyers and LLC at or prior to the Closing.
8.2 Additional
Documents.
Buyers
shall deliver or cause to be delivered such additional documents as may be
necessary in connection with the consummation of the transactions contemplated
by this Agreement and the performance of their obligations
hereunder.
8.3 Release
by LLC.
At the
Closing, each of the Buyers and LLC shall execute and deliver to Seller and
Modigene a general release which in substance and effect releases Seller and
Modigene from any and all liabilities and obligations that Seller and Modigene
may owe to LLC or Buyers in any capacity and from any and all claims that LLC
or
Buyers may have against Seller, Modigene, or their respective managers, members,
officers, directors, stockholders, employees and agents (other than those
arising pursuant to this Agreement or any document delivered in connection
with
this Agreement).
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IX. BUYERS’
CONDITIONS PRECEDENT TO CLOSING.
The
obligation of Buyers to close the transactions contemplated by this Agreement
is
subject to the satisfaction at or prior to the Closing of each of the following
conditions precedent (any and all of which may be waived by Buyers in
writing):
9.1 Representations
and Warranties; Performance.
All
representations and warranties of Seller and LLC contained in this Agreement
shall have been true and correct, in all material respects, when made and shall
be true and correct, in all material respects, at and as of the Closing with
the
same effect as though such representations and warranties were made at and
as of
the Closing. Seller and LLC shall have performed and complied with all covenants
and agreements and satisfied all conditions, in all material respects, required
by this Agreement to be performed or complied with or satisfied by them at
or
prior to the Closing.
X. OTHER
AGREEMENTS.
10.1 Expenses.
Each
party hereto shall bear its expenses separately incurred in connection with
this
Agreement and with the performance of its obligations hereunder.
10.2 Confidentiality.
The
parties hereto shall not make any public announcements concerning this
transaction other than in accordance with mutual agreement reached prior to
any
such announcement(s) and other than as may be required by applicable law or
judicial process. If for any reason the transactions contemplated hereby are
not
consummated, then Buyers shall return any information received by Buyers from
Seller or LLC, and Buyers shall cause all confidential information obtained
by
Buyers concerning Seller, LLC and its business to be treated as
such.
10.3 Brokers’
Fees.
No
party to this Agreement has employed the services of a broker and each agrees
to
indemnify the other against all claims of any third parties for fees and
commissions of any brokers claiming a fee or commission related to the
transactions contemplated hereby.
(a) Following
the Closing, Buyers and LLC shall afford to Seller and its authorized
accountants, counsel, and other designated representatives reasonable access
(and including using reasonable efforts to give access to persons or firms
possessing information) and duplicating rights during normal business hours
to
allow records, books, contracts, instruments, computer data and other data
and
information (collectively, “Information”) within the possession or control of
Buyers or LLC insofar as such access is reasonably required by Seller.
Information may be requested under this Section
10.4(a)
for,
without limitation, audit, accounting, claims, litigation and tax purposes,
as
well as for purposes of fulfilling disclosure and reporting obligations and
performing this Agreement and the transactions contemplated hereby. No files,
books or records of LLC existing at the Closing Date shall be destroyed by
Buyers or LLC after Closing but prior to the expiration of any period during
which such files, books or records are required to be maintained and preserved
by applicable law without giving the Seller at least 30 days’ prior written
notice, during which xxxx Xxxxxx shall have the right to examine and to remove
and retain any such files, books and records prior to their
destruction.
-7-
(b) Following
the Closing, Seller shall afford to LLC and its authorized accountants, counsel
and other designated representatives reasonable access (including using
reasonable efforts to give access to persons or firms possessing information)
duplicating rights during normal business hours to Information within Seller’s
possession or control relating to the business of LLC. Information may be
requested under this Section
10.4(b)
for,
without limitation, audit, accounting, claims, litigation and tax purposes
as
well as for purposes of fulfilling disclosure and reporting obligations and
for
performing this Agreement and the transactions contemplated hereby. No files,
books or records of LLC existing at the Closing Date shall be destroyed by
Seller after Closing but prior to the expiration of any period during which
such
files, books or records are required to be maintained and preserved by
applicable law without giving the Buyer at least 30 days prior written notice,
during which time Buyers shall have the right to examine and to remove and
retain any such files, books and records prior to their
destruction.
(c) At
all
times following the Closing, Seller, Buyers and LLC shall use reasonable efforts
to make available to the other party on written request, the current and former
officers, directors, employees and agents of Seller or LLC for any of the
purposes set forth in Section
10.4(a) or (b)
above or
as witnesses to the extent that such persons may reasonably be required in
connection with any legal, administrative or other proceedings in which Seller
or LLC may from time to be involved.
(d) The
party
to whom any Information or witnesses are provided under this Section
10.4
shall
reimburse the provider thereof for all out-of-pocket expenses actually and
reasonably incurred in providing such Information or witnesses.
(e) Seller,
Buyers, LLC and their respective employees and agents shall each hold in strict
confidence all Information concerning the other party in their possession or
furnished by the other or the other’s representative pursuant to this Agreement
with the same degree of care as such party utilizes as to such party’s own
confidential information (except to the extent that such Information is
(i) in the public domain through no fault of such party or (ii) later
lawfully acquired from any other source by such party), and each party shall
not
release or disclose such Information to any other person, except such party’s
auditors, attorneys, financial advisors, bankers, other consultants and advisors
or persons with whom such party has a valid obligation to disclose such
Information, unless compelled to disclose such Information by judicial or
administrative process or, as advised by its counsel, by other requirements
of
law.
(f) Seller,
Buyers and LLC shall each use their best efforts to forward promptly to the
other party all notices, claims, correspondence and other materials which are
received and determined to pertain to the other party.
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10.5 Guarantees,
Surety Bonds and Letter of Credit Obligations.
In the
event that Seller is obligated for any debts, obligations or liabilities of
LLC
by virtue of any outstanding guarantee, performance or surety bond or letter
of
credit provided or arranged by Seller on or prior to the Closing Date, Buyers
and LLC shall use best efforts to cause to be issued replacements of such bonds,
letters of credit and guarantees and to obtain any amendments, novations,
releases and approvals necessary to release and discharge fully Seller from
any
liability thereunder following the Closing. Buyers and LLC, jointly and
severally, shall be responsible for, and shall indemnify, hold harmless and
defend Seller from and against, any costs or losses incurred by Seller arising
from such bonds, letters of credits and guarantees and any liabilities arising
therefrom and shall reimburse Seller for any payments that Seller may be
required to pay pursuant to enforcement of its obligations relating to such
bonds, letters of credit and guarantees.
10.6 Filings
and Consents.
Buyers,
at their risk, shall determine what, if any, filings and consents must be made
and/or obtained prior to Closing to consummate the purchase and sale of the
Units. Buyers shall indemnify the Seller Indemnified Parties (as defined in
Section
12.1
below)
against any Losses (as defined in Section
12.1
below)
incurred by any Seller Indemnified Parties by virtue of the failure to make
and/or obtain any such filings or consents. Recognizing that the failure to
make
and/or obtain any filings or consents may cause Seller to incur Losses or
otherwise adversely affect Seller, Buyers and LLC confirm that the provisions
of
this Section
9.6
will not
limit Seller’s right to treat such failure as the failure of a condition
precedent to Seller’s obligation to close pursuant to Article
VIII
above.
10.7 Insurance.
Buyers
acknowledges that on the Closing Date, effective as of the Closing, all
insurance coverage and bonds provided by Seller for LLC, and all certificates
of
insurance evidencing that LLC maintains any required insurance by virtue of
insurance provided by Seller, will terminate with respect to any insured damages
resulting from matters occurring subsequent to Closing.
(a)
[intentionally omitted]
(b)
[intentionally omitted]
(c)
[intentionally omitted]
(d)
Cooperation
on Tax Matters.
Buyers,
Seller and LLC shall cooperate fully, as and to the extent reasonably requested
by the other party, in connection with the filing of tax returns pursuant to
this Section and any audit, litigation or other proceeding with respect to
taxes. Such cooperation shall include the retention and (upon the other party’s
request) the provision of records and information which are reasonably relevant
to any such audit, litigation or other proceeding and making employees available
on a mutually convenient basis to provide additional information and explanation
of any material provided hereunder. LLC shall (i) retain all books and
records with respect to tax matters pertinent to LLC relating to any taxable
period beginning before the Closing Date until the expiration of the statute
of
limitations (and, to the extent notified by Seller, any extensions thereof)
of
the respective taxable periods, and to abide by all record retention agreements
entered into with any taxing authority, and (ii) give Seller reasonable
written notice prior to transferring, destroying or discarding any such books
and records and, if the Seller so requests, Buyers agree to cause LLC to allow
Seller to take possession of such books and records.
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10.9 ERISA.
Effective as of the Closing Date, LLC shall terminate its participation in,
and
withdraw from, all employee benefit plans sponsored by Seller, and Seller and
Buyers shall cooperate fully in such termination and withdrawal. Without
limitation, LLC shall be solely responsible for (i) all liabilities under
those employee benefit plans notwithstanding any status as an employee benefit
plan sponsored by Seller, and (ii) all liabilities for the payment of
vacation pay, severance benefits, and similar obligations, including, without
limitation, amounts which are accrued but unpaid as of the Closing Date with
respect thereto. Buyers and LLC acknowledge that LLC is solely responsible
for
providing continuation health coverage, as required under the Consolidated
Omnibus Reconciliation Act of 1985, as amended (“COBRA”), to each person, if
any, participating in an employee benefit plan subject to COBRA with respect
to
such employee benefit plan as of the Closing Date, including, without
limitation, any person whose employment with LLC is terminated after the Closing
Date.
XI. TERMINATION.
This
Agreement may be terminated at, or at any time prior to, the Closing by mutual
written consent of Seller, Buyers and Modigene.
If
this
Agreement is terminated as provided herein, it shall become wholly void and
of
no further force and effect and there shall be no further liability or
obligation on the part of any party except to pay such expenses as are required
of such party.
XII. INDEMNIFICATION.
12.1 Indemnification
by Buyers.
Buyers
and, after the Closing, LLC covenant and agree to jointly and severally
indemnify, defend, protect and hold harmless Seller, Modigene and their
respective officers, directors, employees, stockholders, agents, representatives
and affiliates (collectively, together with Seller, the “Seller Indemnified
Parties”) at all times from and after the date of this Agreement from and
against all losses, liabilities, damages, claims, actions, suits, proceedings,
demands, assessments, adjustments, costs and expenses (including specifically,
but without limitation, reasonable attorneys’ fees and expenses of
investigation), whether or not involving a third party claim and regardless
of
any negligence of any Seller Indemnified Party (collectively, “Losses”),
incurred by any Seller Indemnified Party as a result of or arising from
(i) any breach of the representations and warranties of any Buyer set forth
herein or in certificates delivered in connection herewith, (ii) any breach
or nonfulfillment of any covenant or agreement (including any other agreement
of
any Buyer to indemnify Seller set forth in this Agreement) on the part of any
Buyer under this Agreement, (iii) any debt, liability or obligation of LLC,
(iv) the conduct and operations of the business of LLC whether before or
after Closing, (v) claims asserted against LLC whether before or after
Closing, or (vi) any federal or state income tax payable by Seller and
attributable to the business or operations of the LLC or the transaction
contemplated by this Agreement.
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12.2 Third
Party Claims.
(a) Defense.
If any
claim or liability should be asserted against any of the Seller Indemnified
Parties (the “Indemnitee”) by a third party (a “Third-Party Claim”) after the
Closing for which Buyers have an indemnification obligation under the terms
of
Section
12.1,
then
the Indemnitee shall notify Buyers and LLC (collectively referred to as the
“Indemnitor”) within 20 days after the Third-Party Claim is asserted by a third
party (said notification being referred to as a “Claim Notice”) and give the
Indemnitor a reasonable opportunity to take part in any examination of the
books
and records of the Indemnitee relating to such Third-Party Claim and to assume
the defense of such Third-Party Claim and in connection therewith and to conduct
any proceedings or negotiations relating thereto and necessary or appropriate
to
defend the Indemnitee and/or settle the Claim. The expenses (including
reasonable attorneys’ fees) of all negotiations, proceedings, contests, lawsuits
or settlements with respect to any Third-Party Claim shall be borne by the
Indemnitor. If the Indemnitor agrees to assume the defense of any Third-Party
Claim in writing within 20 days after the Claim Notice of such Third-Party
Claim
has been delivered, through counsel reasonably satisfactory to Indemnitee,
then
the Indemnitor shall be entitled to control the conduct of such defense, and
any
decision to settle such Third-Party Claim, and shall be responsible for any
expenses of the Indemnitee in connection with the defense of such Third-Party
Claim so long as the Indemnitor continues such defense until the final
resolution of such Third-Party Claim. The Indemnitor shall be responsible for
paying all settlements made or judgments entered with respect to any Third-Party
Claim the defense of which has been assumed by the Indemnitor. Except as
provided on subsection (b) below, both the Indemnitor and the Indemnitee must
approve any settlement of a Third Party Claim. A failure by the Indemnitee
to
timely give the Claim Notice shall not excuse Indemnitor from any
indemnification liability except only to the extent that the Indemnitor is
materially and adversely prejudiced by such failure.
(b) Failure
to Defend.
If the
Indemnitor shall not agree to assume the defense of any Third-Party Claim in
writing within 20 days after the Claim Notice of such Third-Party Claim has
been
delivered, or shall fail to continue such defense until the final resolution
of
such Third-Party Claim, then the Indemnitee may defend against such Third-Party
Claim in such manner as it may deem appropriate and the Indemnitee may settle
such Third-Party Claim on such terms as it may deem appropriate. The Indemnitor
shall promptly reimburse the Indemnitee for the amount of all settlement
payments and expenses, legal and otherwise, incurred by the Indemnitee in
connection with the defense or settlement of such Third-Party Claim. If no
settlement of such Third-Party Claim is made, then the Indemnitor shall satisfy
any judgment rendered with respect to such Third-Party Claim before the
Indemnitee is required to do so, and pay all expenses, legal or otherwise,
incurred by the Indemnitee in the defense against such Third-Party
Claim.
12.3 Non-Third-Party
Claims.
Upon
discovery of any claim for which Buyers have an indemnification obligation
under
the terms of Section
12.1
which
does not involve a Third Party Claim, the Indemnitee shall give prompt notice
to
Buyers of such claim and, in any case, shall give Buyers such notice within
30
days of such discovery. A failure by Indemnitee to timely give the foregoing
notice to Buyers shall not excuse Buyers from any indemnification liability
except to the extent that Buyers are materially and adversely prejudiced by
such
failure.
-11-
12.4 Survival.
Except
as otherwise provided in this Section
12.4,
all
representations and warranties made by Buyers, LLC and Seller in connection
with
this Agreement shall survive the Closing. Anything in this Agreement to the
contrary notwithstanding, the liability of all Indemnitors under this
Article
XII
shall
terminate on the third (3rd)
anniversary of the Closing Date, except with respect to (a) liability for
any item as to which, prior to the third (3rd)
anniversary of the Closing Date, any Indemnitee shall have asserted a Claim
in
writing, which Claim shall identify its basis with reasonable specificity,
in
which case the liability for such Claim shall continue until it shall have
been
finally settled, decided or adjudicated, (b) liability of any party for
Losses for which such party has an indemnification obligation, incurred as
a
result of such party’s breach of any covenant or agreement to be performed by
such party after the Closing, (c) liability of Buyers and LLC for Losses
incurred by a Seller Indemnified Party due to breaches of their representations
and warranties in Article
III
or
Article
V
of this
Agreement, and (d) liability of Buyers and LLC for Losses arising out of
Third-Party Claims for which Buyers and LLC have an indemnification obligation,
which liability shall survive until the statute of limitation applicable to
any
third party’s right to assert a Third-Party Claim bars assertion of such
claim.
XIII. MISCELLANEOUS.
13.1 Notices.
All
notices and communications required or permitted hereunder shall be in writing
and deemed given when received by means of the United States mail, addressed
to
the party to be notified, postage prepaid and registered or certified with
return receipt requested, or personal delivery, or overnight courier, as
follows:
| (a) |
If
to Seller, addressed to:
|
0000
Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxx, Chief Executive Officer
Facsimile:
703-288-0070
With
a
copy to (which shall not constitute notice hereunder):
If
on
or before May 31, 2007:
Barack
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
XX, 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
-12-
If
after May 31, 2007:
Barack
Xxxxxxxxxx Xxxxxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
| (b) |
If
to Buyers or LLC, addressed to:
|
0000
Xxxxx Xxxx Xx.
Xxxxxxx,
XX 00000
Attn:
Xxxxxx Xxxxxxx
Facsimile:
(000) 000-0000
With
a
copy to (which shall not constitute notice hereunder):
Xxxxxx
& Xxxxxx, LLP
000
Xxxxx
0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
XX 00000
Attention:
Xxxxx X. Xxxxxx, Esq.
Facsimile:
(000) 000-0000
| (c) |
If
to Modigene, addressed to:
|
0000
Xxxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx,
XX 00000
Attn:
Xxxxxxx Xxxxxx, Chief Executive Officer
Facsimile:
703-288-0070
With
a
copy to (which shall not constitute notice hereunder):
If
on
or before May 31, 2007:
Barack
Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx,
XX, 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
If
after May 31, 2007:
Barack
Xxxxxxxxxx Xxxxxxxxxx & Xxxxxxxxx LLP
000
Xxxx
Xxxxxxx, Xxxxx 0000
Xxxxxxx,
XX 00000
Attn:
Xxxxxxxx Xxxxx, Esq.
Facsimile:
(000) 000-0000
or
to
such other address as any party hereto shall specify pursuant to this
Section
13.1
from
time to time.
-13-
13.2 Exercise
of Rights and Remedies.
Except
as otherwise provided herein, no delay of or omission in the exercise of any
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in
any
such breach or default, or of any similar breach or default occurring later;
nor
shall any waiver of any single breach or default be deemed a waiver of any
other
breach or default occurring before or after that waiver.
13.3 Time.
Time is
of the essence with respect to this Agreement.
13.4 Reformation
and Severability.
In case
any provision of this Agreement shall be invalid, illegal or unenforceable,
it
shall, to the extent possible, be modified in such manner as to be valid, legal
and enforceable but so as to most nearly retain the intent of the parties,
and
if such modification is not possible, such provision shall be severed from
this
Agreement, and in either case the validity, legality and enforceability of
the
remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
13.5 Further
Acts.
Seller,
Buyers and LLC shall execute any and all documents and perform such other acts
which may be reasonably necessary to effectuate the purposes of this
Agreement.
13.6 Entire
Agreement; Amendments.
This
Agreement contains the entire understanding of the parties relating to the
subject matter contained herein. This Agreement cannot be amended or changed
except through a written instrument signed by all of the parties hereto,
including Modigene. No provisions of this Agreement or any rights hereunder
may
be waived by any party without the prior written consent of
Modigene.
13.7 Assignment.
No
party may assign its rights or obligations hereunder, in whole or in part,
without the prior written consent of the other parties.
13.8 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without giving effect to principles of conflicts or choice
of
laws thereof.
13.9 Counterparts.
This
Agreement may be executed in one or more counterparts, with the same effect
as
if all parties had signed the same document. Each such counterpart shall be
an
original, but all such counterparts taken together shall constitute a single
agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page was an original
thereof.
-14-
13.10 Section
Headings and Gender.
The
Section headings used herein are inserted for reference purposes only and shall
not in any way affect the meaning or interpretation of this Agreement. All
personal pronouns used in this Agreement shall include the other genders,
whether used in the masculine, feminine or neuter, and the singular shall
include the plural, and vice
versa,
whenever and as often as may be appropriate.
13.11 Specific
Performance; Remedies.
Each of
Seller, Buyers and LLC acknowledges and agrees that Modigene would be damaged
irreparably if any provision of this Agreement is not performed in accordance
with its specific terms or is otherwise breached. Accordingly, each of Seller,
Buyers and LLC agrees that Modigene will be entitled to seek an injunction
or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and its terms and provisions in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter, subject to Section
13.8,
in
addition to any other remedy to which they may be entitled, at law or in equity.
Except as expressly provided herein, the rights, obligations and remedies
created by this Agreement are cumulative and in addition to any other rights,
obligations or remedies otherwise available at law or in equity, and nothing
herein will be considered an election of remedies.
(a) Each
party to the Agreement hereby submits to the jurisdiction of any state or
federal court sitting in the State of New York, in any action arising out of
or
relating to this Agreement and agrees that all claims in respect of the action
may be heard and determined in any such court. Each party to the Agreement
also
agrees not to bring any action arising out of or relating to this Agreement
in
any other court. Each party to the Agreement agrees that a final judgment in
any
action so brought will be conclusive and may be enforced by action on the
judgment or in any other manner provided at law or in equity. Each party to
the
Agreement waives any defense of inconvenient forum to the maintenance of any
action so brought and waives any bond, surety, or other security that might
be
required of any other Party with respect thereto.
(b) EACH
PARTY TO THE AGREEMENT HEREBY AGREES TO WAIVE ITS RIGHTS TO JURY TRIAL OF ANY
DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT OR ANY DEALINGS AMONG THEM
RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. The scope of this waiver
is
intended to be all encompassing of any and all actions that may be filed in
any
court and that relate to the subject matter of the transactions, including,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. Each party to the Agreement hereby acknowledges that
this
waiver is a material inducement to enter into a business relationship and that
they will continue to rely on the waiver in their related future dealings.
Each
party to the Agreement further represents and warrants that it has reviewed
this
waiver with its legal counsel, and that each knowingly and voluntarily waives
its jury trial rights following consultation with legal counsel. NOTWITHSTANDING
ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT
MAY
NOT BE MODIFIED ORALLY OR IN WRITING, AND THE WAIVER WILL APPLY TO ANY
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO
ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. In the event of commencement
of
any action, this Agreement may be filed as a written consent to trial by a
court.
-15-
13.13 Construction.
The
parties hereto have participated jointly in the negotiation and drafting of
this
Agreement. If an ambiguity or question of intent or interpretation arises,
this
Agreement will be construed as if drafted jointly by the parties hereto and
no
presumption or burden of proof will arise favoring or disfavoring any party
because of the authorship of any provision of this Agreement. Any reference
to
any federal, state, local, or foreign law will be deemed also to refer to law
as
amended and all rules and regulations promulgated thereunder, unless the context
requires otherwise. The words “include,” “includes,” and “including” will be
deemed to be followed by “without limitation.” The words “this Agreement,”
“herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party
hereto has breached any representation, warranty, or covenant contained herein
in any respect, the fact that there exists another representation, warranty
or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) which that party has not breached will not detract from or
mitigate the fact that such party is in breach of the first representation,
warranty, or covenant.
[Signature
page follows this page.]
-16-
IN
WITNESS WHEREOF,
the
parties hereto have hereunto set their hands as of the day and year first above
written.
|
SELLER:
|
||
| |
|
|
| By: | ||
|
Name: Xxxxx
X. Xxxxx
|
||
|
Title: President
|
||
|
LLC:
|
||
|
LIAISON
DESIGN GROUP, LLC
|
||
| |
|
|
| By: | ||
|
Name: Xxxxxx
Xxxxxxx
|
||
|
Title Managing
Director
|
||
|
BUYERS:
|
||
|
Xxxxxx
Xxxxxxx
|
||
| |
|
|
|
Xxxxxx
Xxxxx
|
||
|
XXXXXXXX
COMMUNICATIONS, INC.
|
||
| |
|
|
|
By:
|
||
|
Name: Xxxxx
Xxxxxxxx
|
||
|
Title: President
|
||
|
MODIGENE:
|
||
| |
|
|
| By: | ||
|
Name: Xxxxxxx
Xxxxxx
|
||
|
Title: Chief
Executive
Officer
|
||
-17-
