EXHIBIT 2.3
SHARE EXCHANGE AGREEMENT
BY AND AMONG
BRIDGE ONCOLOGY PRODUCTS, INC.,
SOMANTA LIMITED,
THE SHAREHOLDERS OF SOMANTA LIMITED
AND
THE OPTIONHOLDERS OF SOMANTA LIMITED
DATED AS OF AUGUST 22, 2005
TABLE OF CONTENTS
Page No.
ARTICLE I THE SHARE EXCHANGE...................................................2
1.1. Authorization......................................................2
1.2. Agreement to Exchange..............................................2
1.3. Closing; Exchange of Certificates..................................2
1.4. Treatment of Options...............................................3
1.5. Post-Share Exchange Capitalization.................................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY.......................4
2.1. Organization and Qualification; Subsidiaries.......................4
2.2. Authority to Execute and Perform Agreement.........................4
2.3. Binding Effect.....................................................5
2.4. Capitalization.....................................................5
2.5. Financial Statements...............................................5
2.6. No Material Adverse Change.........................................6
2.7. Litigation.........................................................7
2.8. Assets; Title to Properties; Absence of Liens......................7
2.9. Compliance with Laws...............................................7
2.10. Intellectual Property..............................................7
2.11. Non-Contravention..................................................8
2.12. Consents and Approvals.............................................9
2.13. Employee Benefit Plans; ERISA......................................9
2.14. Company Material Contracts........................................10
2.15. Taxes. .........................................................11
2.16. Environmental Matters.............................................12
2.17. Real Property.....................................................13
2.18. Broker's Fees.....................................................13
2.19. Insurance.........................................................13
2.20. Labor and Employment Matters......................................13
2.21. Interested Party Transactions.....................................14
2.22. Minute Book Contents..............................................14
2.23. Full Disclosure...................................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT..........................14
3.1. Organization and Qualification; Subsidiaries......................15
3.2. Authority to Execute and Perform Agreement........................15
3.3. Binding Effect....................................................15
3.4. Capitalization....................................................15
3.5. Financial Statements..............................................16
3.6. No Material Adverse Change........................................16
3.7. Litigation........................................................17
3.8. Assets; Title to Properties; Absence of Liens.....................17
3.9. Compliance with Laws..............................................17
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3.10. Intellectual Property.............................................18
3.11. Non-Contravention.................................................18
3.12. Consents and Approvals............................................19
3.13. Employee Benefit Plans; ERISA.....................................19
3.14. Parent Material Contracts.........................................21
3.15. Taxes .........................................................21
3.16. Environmental Matters.............................................23
3.17. Real Property.....................................................23
3.18. Broker's Fees.....................................................23
3.19. Insurance.........................................................24
3.20. Labor and Employment Matters......................................24
3.21. Interested Party Transactions.....................................24
3.22. Minute Book Contents..............................................24
3.23. Full Disclosure...................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SOMANTA SHAREHOLDERS.............25
4.1. Title to Somanta Shares...........................................25
4.2. Authorization.....................................................25
4.3. Purchase for Own Account..........................................25
4.4. Disclosure of Information.........................................25
4.5. Investment Experience.............................................25
4.6. Accredited Investor Status........................................26
4.7. Restricted Securities.............................................26
4.8. Additional Representations and Warranties for
Non-U.S. Somanta Shareholders....................................26
ARTICLE V ADDITIONAL AGREEMENTS OF THE PARTIES................................26
5.1. Efforts; Consents.................................................26
5.2. Board of Directors................................................27
5.3. Change of Name....................................................27
5.4. SCO Bridge Loan...................................................27
5.5. Voting Agreement..................................................27
5.6. Employment Agreements.............................................27
5.7. Transfer of Company Assets to Parent..............................28
5.8. Reverse Merger into Public Reporting Company......................28
5.9. Additional Funding................................................28
5.10. Officers of Parent................................................29
5.11. Payment of Taxes..................................................29
5.12. Option Pool.......................................................29
5.13. Special Capitalization Indemnity..................................29
5.14. Termination of Affiliate Transactions.............................30
5.15. Repayment of Loan from Agamemnon Xxxxxxxx.........................30
5.16. Failure to Consummate PIPE Financing..............................31
ARTICLE VI CONDITIONS TO CLOSING..............................................31
6.1. Conditions to Each Party's Obligations to Consummate
the Transactions.................................................31
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6.2. Conditions to Obligations of Parent to Consummate
the Transactions.................................................32
6.3. Conditions to Obligations of the Somanta Shareholders
to Consummate the Transactions...................................33
ARTICLE VII MISCELLANEOUS.....................................................35
7.1. Certain Definitions; Rules of Construction........................35
7.2. No Survival of Representations and Warranties.....................40
7.3. Waivers and Amendments............................................40
7.4. Governing Law.....................................................41
7.5. Notices...........................................................41
7.6. Section Headings..................................................42
7.7. Counterparts......................................................42
7.8. Expenses..........................................................42
7.9. Assignments.......................................................42
7.10. Entire Agreement; Enforceability..................................42
7.11. Severability......................................................42
EXHIBIT A SOMANTA SHAREHOLDERS...............................................A-1
EXHIBIT B SOMANTA OPTIONHOLDERS AND WARRANTHOLDERS...........................B-1
EXHIBIT C FORM OF SUBSTITUTE OPTION..........................................C-1
EXHIBIT D FORM OF SCO LOAN DOCUMENTS.........................................D-1
EXHIBIT E VOTING AGREEMENT...................................................E-1
EXHIBIT F FORM OF EMPLOYMENT AGREEMENT.......................................F-1
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SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "Agreement"), dated as of August
22, 2005, is entered into by and among Bridge Oncology Products, Inc., a
Delaware corporation (the "Parent"), Somanta Limited, a corporation organized
under the laws of England (the "Company"), the shareholders of Somanta Limited
as set forth on Exhibit A hereto (each, a "Somanta Shareholder, and
collectively, the "Somanta Shareholders") and the optionholders of Somanta
Limited as set forth on Exhibit B hereto (each, a "Somanta Optionholder," and
collectively, the "Somanta Optionholders").
W I T N E S S E T H :
WHEREAS, Parent is a development stage company that holds intellectual
property and commercialization rights outside of North America to
phenylbutyrate, a histone deactylase inhibitor;
WHEREAS, Company is a development stage company that holds intellectual
property and commercialization rights to the technologies known as: Phoenix,
Alchemix, Angiolix and Prodrax.
WHEREAS, subject to the terms and conditions of this Agreement and
pursuant to Rule 506 and Regulation S promulgated under the Securities Act, the
Parent desires to issue and sell to each Somanta Shareholder, and each Somanta
Shareholder, severally and not jointly, desires to purchase from the Parent the
number of shares of Parent common stock set forth opposite such Somanta
Shareholder's name on Exhibit A hereto (collectively, the "Parent Common Stock")
in exchange for all of such Somanta Shareholder's ordinary shares each in the
capital of the Company (collectively, the "Somanta Shares") set forth opposite
such Somanta Shareholder's name on Exhibit A hereto, such that subsequent to
such transaction the Company shall be a wholly owned subsidiary of Parent;
WHEREAS, concurrent with the Share Exchange (as defined below in
Section 1.2), SCO Capital Partners LLC ("SCO") will loan to Parent $1,000,000,
such transaction to be documented in separate definitive written agreements;
WHEREAS, subsequent to the Share Exchange, all of the assets of the
Company will be transferred to Parent at which time the Parent may elect to
dissolve Company;
WHEREAS, subsequent to the Share Exchange, Parent intends to identify
an appropriate entity that is subject to the public reporting requirements of
the Securities Exchange Act of 1934, as amended for the purpose of merging with
such entity or a wholly-owned subsidiary of such entity (the "Shell Merger").
WHEREAS, concurrent with the Shell Merger, Parent intends to raise
approximately an additional $15,000,000 to $20,000,000 in a privately placed
equity financing transaction arranged through the assistance of SCO Financial
Group LLC ("SCO Financial").
NOW THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
THE SHARE EXCHANGE
1.1. Authorization. As of the Closing, the Parent will have
authorized the issuance and sale, pursuant to the terms of this Agreement, of
7,865,000 shares of common stock, $0.01 par value per share, of Parent Common
Stock.
1.2. Agreement to Exchange. The Parent agrees to issue and sell to
each Somanta Shareholder, and each Somanta Shareholder hereby agrees to
purchase, severally and not jointly, the number of shares of Parent Common Stock
set forth opposite such Somanta Shareholders' name on Exhibit A hereto in
exchange for all of such Somanta Shareholder's Somanta Shares set forth opposite
such Somanta Shareholder's name on Exhibit A. The exchange of the Parent Common
Stock for the Somanta Shares shall be referred to herein as the "Share
Exchange." The parties acknowledge and agree that neither Parent nor any Somanta
Shareholder shall be obligated to complete the Share Exchange unless the sale
and purchase of all the Somanta Shares is completed simultaneously. Each Somanta
Shareholder hereby waives any pre-emption rights that he or she may have
relating to the Somanta Shares, whether conferred by the Company's articles of
association or otherwise.
1.3. Closing; Exchange of Certificates.
---------------------------------
(a) Subject to the satisfaction or waiver of all of the
conditions to Closing contained in Article VI, the closing of the Share Exchange
(the "Closing"), shall take place at the offices of Xxxxx & Lardner LLP, 000
Xxxx Xxxxxxxx, 00xx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, as soon as practicable
(but not later than 3 Business Days) after the satisfaction or waiver of the
conditions to Closing contained in Article VI (other than those conditions that
by their nature are to be satisfied at the Closing, but subject to the
fulfillment or waiver of those conditions), unless another date or place is
agreed to in writing by the parties hereto. The date on which the Closing
actually occurs is hereinafter referred to as the "Closing Date." At the
Closing, (i) the Parent will deliver to each Somanta Shareholder a certificate
representing the number of shares of Parent Common Stock set forth opposite such
Somanta Shareholder's name on Exhibit A, (ii) each Somanta Shareholder shall
deliver to the Parent a duly executed share transfer form in favor of Parent
together with the relevant share certificate (or certificates) in respect of the
number of Somanta Shares set forth opposite such Somanta Shareholder's name on
Exhibit A, and (iii) the Company shall hold a board meeting at which there shall
be passed a resolution to approve the transfer of the Somanta Shares (subject
only to due stamping) to register, in the register of members, the Parent as the
transferee of the Somanta Shares.
(b) It is understood that the certificates evidencing the
Parent Common Stock that are issued to U.S. persons (within the meaning of
Regulation S promulgated under the Securities Act) will bear the legends set
forth below:
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(i) The Securities represented hereby have not
been registered in the United States of America under the Securities Act of
1933, as amended (the "Act"), or under the securities laws of any other
jurisdictions. These securities are subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted under the
Act and the applicable state securities laws, pursuant to registration or
exemption therefrom. Holders should be aware that they may be required to bear
the financial risks of this investment for an indefinite period of time. The
issuer of these securities may require an opinion of counsel in form and
substance satisfactory to the issuer to the effect that any proposed transfer or
resale is in compliance with the Act and any applicable state securities laws.
(ii) Any legend required by the applicable state
law.
(c) It is understood that the certificates evidencing the
Parent Common Stock that are issued to non-U.S. persons (within the meaning of
Regulation S promulgated under the Securities Act) will bear the legend set
forth below:
(i) The Securities represented hereby have not
been registered in the United States of America under the Securities Act of
1933, as amended (the "Act"), or under the securities laws of any other
jurisdictions. These securities are subject to restrictions on transferability
and resale and may not be transferred or resold except as permitted under
Regulation S promulgated under the Act or pursuant to the Act and the applicable
state securities laws, pursuant to registration or exemption therefrom. Holders
may not engage in hedging transactions with respect to the Securities
represented by this certificate unless in compliance with the Act. Holders
should be aware that they may be required to bear the financial risks of this
investment for an indefinite period of time. The issuer of these securities may
require an opinion of counsel in form and substance satisfactory to the issuer
to the effect that any proposed transfer or resale is in compliance with
Regulation S under the Act, the Act and any applicable state securities laws.
1.4. Treatment of Options. Each Somanta Optionholder hereby agrees
that at the Closing the option or options to purchase Somanta Shares
(collectively, the "Somanta Options") shall be cancelled and terminated and of
no further force or effect and shall represent only the right to receive the
corresponding Bridge Substitute Option described below. Parent hereby agrees
that at the Closing, in substitution for such cancelled and terminated Somanta
Options, Parent shall grant and issue a substitute option to purchase the number
of shares of common stock of Parent at the exercise price and upon the vesting
schedule set forth opposite such Somanta Optionholder's name on Exhibit B hereto
(each a "Bridge Substitute Option"), such number of shares, exercise price and
vesting schedule to approximate the existing number of shares, exercise price
and vesting schedule of such Somanta Optionholder's Option after taking into
account the effect the Share Exchange. The form of Bridge Substitute Option is
attached hereto as Exhibit C.
1.5. Post-Share Exchange Capitalization. Each of the parties
hereto agrees and acknowledges that it is the intent of all such parties that
immediately following the Share Exchange and the transactions contemplated by
Section 1.4 above (collectively, the "Transaction") that: (i) fifty percent
(50%) of the outstanding securities of Parent shall be held collectively by
those entities that held shares of Parent Common Stock immediately prior to the
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Share Exchange (collectively, the "Bridge Shareholders"), on the one hand, and
(ii) fifty percent (50%) of the outstanding securities of the Parent shall be
held collectively by the Somanta Shareholders and Somanta Optionholders, on the
other hand, in each case, on a fully diluted basis (the "Allocation"). In
furtherance of the foregoing, in the event that, for any reason whatsoever, the
actual ownership of outstanding securities of Parent immediately following the
Transaction does not correspond to the Allocation, each of the parties hereto
agrees to take or cause to be taken any and all actions necessary (including the
transfer or issuance of securities, as the case may be) so that the actual
ownership of outstanding securities of Parent immediately following the
Transaction corresponds to the Allocation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company hereby represents and warrants to Parent as of the date
hereof (subject to such exceptions or qualifications as are disclosed in writing
in the disclosure schedule certified by a duly authorized officer of the Company
and supplied by the Company to Parent dated as of the date hereof, which
schedules shall provide an exception to or otherwise qualify only those
representations and warranties of the Company contained in the section of this
Agreement (i) corresponding or cross-referenced to be the part or section
reference of the schedule where such disclosure appears or (ii) to which such
information set forth on such schedule reasonably relates, and such exceptions
or qualifications shall not otherwise be deemed to be an exception to, or
qualify, any other representation or warranty) as follows:
2.1. Organization and Qualification; Subsidiaries. The Company and
each Subsidiary of the Company (collectively, the "Company Subsidiaries") is a
corporation, limited liability company or other legal entity duly incorporated
or organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has requisite power and authority
and governmental approvals to own, lease and operate its properties and to carry
on its business as currently conducted. The Company and each Company Subsidiary
has delivered to the Parent true and correct copies of its organizational
documents, as amended to date. The Company and each Company Subsidiary is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the ownership or leasing of its property or the conduct of
its business requires such qualification or licensing, except where the failure
to be so qualified or licensed or in good standing would not, individually or in
the aggregate, have a Company Material Adverse Effect. "Company Material Adverse
Effect," as used in this Agreement, shall mean any change, effect, event or
occurrence that is materially adverse to the condition (financial or otherwise),
assets, properties, business, prospects or operations of the Company and the
Company Subsidiaries, taken as a whole. Notwithstanding any reference to
"Company Subsidiary" or "Company Subsidiaries" contained in this Agreement, the
Company does not have any Subsidiary or Subsidiaries, nor is it a party to any
Contract to invest in, or create, any Subsidiary.
2.2. Authority to Execute and Perform Agreement. The Company has
the requisite power and all authority required to enter into, execute and
deliver this Agreement and the Transaction Documents to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
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transactions contemplated hereby and thereby (collectively, the "Transactions").
The execution, delivery and performance by the Company of this Agreement and the
consummation by the Company of the Transactions have been duly authorized by all
necessary corporate action.
2.3. Binding Effect. This Agreement and the related Transaction
Documents to which the Company is a party, have been, or will be, validly
executed and delivered by the Company and, assuming the due execution and
delivery hereof and thereof by Parent, the Somanta Shareholders and the Somanta
Optionholders, constitutes, or will constitute, a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms.
2.4. Capitalization.
--------------
(a) As of the date hereof, 100,000,000 shares of ordinary
(common) stock, par value Great Britain pounds 0.001 each, of the Company are
authorized, of which 79,898,686 ordinary shares are issued and outstanding, all
of which have been validly issued and are fully paid and non-assessable, and
none of which is subject to preemptive rights or rights of first refusal created
by statute, the Company's articles of association or any agreement to which the
Company is a party or by which it is bound (in each case that have not been
complied with or waived). The Company has no other authorized, issued or
outstanding class of shares. All outstanding securities issued by the Company
were issued in compliance with all applicable laws. Neither the Company nor any
Company Subsidiary is bound by any contract or other agreement pursuant to which
it is or may become obligated to issue, repurchase, redeem or otherwise acquire
any outstanding shares of Company capital stock. All outstanding shares of the
company are owned free and clear, and are not subject to any Lien, by the
Somanta Shareholders set forth on Exhibit A in such amounts as set forth
thereon. Exhibit A accurately lists all of the holders of capital stock of
Somanta and the number of shares held by such persons.
(b) Except for the Somanta Options, all of which are
listed on Exhibit B, there are no existing options, rights, subscriptions,
warrants, unsatisfied preemptive rights, calls or commitments relating to (i)
the authorized and unissued capital stock of the Company or any Company
Subsidiary, or (ii) any securities or obligations convertible into or
exchangeable for, or giving any Person any right to subscribe for or acquire
from the Company or any Company Subsidiary, any shares of capital stock of the
Company or any Company Subsidiary and no such convertible or exchangeable
securities or obligations are outstanding. There are no contracts, commitments
or agreements relating to voting, purchase or sale of Company Shares between the
Company and any of its shareholders or any third party.
2.5. Financial Statements.
--------------------
(a) The Company has delivered to the Parent its unaudited
balance sheet as of April 30, 2005 and the statements of income and cash flow
for the twelve month period ended on April 30, 2005 (the "Company Financial
Statements"). The Company Financial Statements and any notes related thereto
comply as to form in all material respects with applicable accounting
requirements and have been prepared in accordance with the generally accepted
accounting principles of the United Kingdom ("UKGAAP") applied on a consistent
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basis throughout the periods involved, except as may be indicated in the notes
thereto and fairly present in all material respects the consolidated financial
position of the Company and the Company Subsidiaries as at the dates thereof and
the consolidated results of their operations and cash flows for the periods then
ended. The Company maintains a standard system of accounting and internal
controls established and administered in accordance with good business practices
sufficient to permit the preparation of consolidated financial statements in
accordance with UKGAAP.
(b) Neither the Company nor any of the Company
Subsidiaries have any direct or indirect indebtedness, liability, claim, loss,
damage, deficiency or obligation or responsibility, known or unknown, fixed or
unfixed, xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise, whether or not of a kind required by
UKGAAP to be set forth on a financial statement or in the notes thereto
("Liabilities"), that were not fully and adequately reflected or reserved
against on the Company Financial Statements. Except as set forth on Schedule
2.5(b), neither the Company nor any Company Subsidiary has any Knowledge of any
circumstance, condition, event or arrangement that may hereafter give rise to
any Liabilities which are reasonably likely to have a Company Material Adverse
Effect.
2.6. No Material Adverse Change. Except as set forth on Schedule
2.6, since April 30, 2005,
(a) the Company and the Company Subsidiaries have
conducted their respective businesses in the ordinary course, consistent with
past practice, and there has been no: (i) change in the business, properties,
assets, prospects, operations or condition (financial or otherwise) of the
Company or any of the Company Subsidiaries which has resulted or reasonably
could be expected to result in or which the Company or any Company Subsidiary
has reason to believe could result in a Company Material Adverse Effect, and
neither the Company nor any of the Company Subsidiaries has any Knowledge of any
such change that is threatened, nor has there been any damage, destruction or
loss affecting the business, properties, assets, prospects, operations or
condition (financial or otherwise) of the Company or any of the Company
Subsidiaries, whether or not covered by insurance which has resulted or
reasonably could be expected to result in or which the Company or any Company
Subsidiary has reason to believe could result in a Company Material Adverse
Effect; (ii) change in accounting methods or practices (including any change in
depreciation or amortization policies or rates) by the Company or any Company
Subsidiary or any revaluation by the Company or any Company Subsidiary of any
Company or Company Subsidiary asset; or (iii) increase in or modification or
acceleration of the compensation or benefits paid, payable or to become payable
by the Company to any of its officers, directors or employees, pursuant to any
Benefit Plan, stock option plan, stock option agreement or any other agreement
or arrangement; and
(b) neither the Company, nor any Company Subsidiary, has
(i) declared, accrued, set aside or paid any dividend or made any other
distribution in respect of any shares of capital stock, (ii) repurchased,
redeemed or otherwise reacquired any shares of capital stock or other
securities, (iii) sold, issued or granted, or authorized the issuance of, (A)
any capital stock or other security, (B) any option, warrant or right to acquire
any capital sock or any other security (except for the options held by the
Somanta Optionholders granted after such date), (C) any instrument convertible
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into or exchangeable for any capital stock or other security, (iv) made any
capital expenditure which, when added to all other capital expenditures made on
behalf of the Company and the Company Subsidiaries since April 30, 2005 exceeds
$10,000 in the aggregate, (v) made any material Tax election.
2.7. Litigation. There are no judicial, governmental,
administrative or arbitral actions, suits or proceedings or investigations
(collectively, "Legal Proceedings") pending or, to the Knowledge of the Company
or any Company Subsidiary, threatened against or involving the Company, any
Company Subsidiary, or any of their respective property, assets, officers or
directors (in their capacities as such). There are no outstanding orders,
judgments, injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against or involving the Company or any
Company Subsidiary.
2.8. Assets; Title to Properties; Absence of Liens. The assets
(whether tangible or intangible) of the Company constitute all the assets
necessary or desirable to conduct the Company's business as currently conducted.
The Company and each Company Subsidiary has good marketable, full legal and
beneficial title to all of their respective assets (whether tangible or
intangible) and properties, whether real, personal or fixed, that are used in
the conduct of the Company's business or that are reflected in the balance sheet
included in the Financial Statements, free and clear of all Liens, except (i)
for Liens set forth on Schedule 2.8 hereto, (ii) for Liens for Taxes not yet due
and payable or which the Company or any Company Subsidiary is contesting in good
faith and for which adequate reserves have been established, (iii) for such
properties and assets as may have been sold since the date hereof in the
ordinary course of business, and (iv) for Liens not securing debt that do not
materially detract from the value or materially interfere with the use of the
property subject thereto (collectively, "Company Permitted Liens"). The tangible
assets of the Company and each Company Subsidiary are in good operating
condition and repair, except for reasonable wear and tear that does not
materially affect the use or operation of such asset.
2.9. Compliance with Laws. Neither the Company nor any Company
Subsidiary is in violation of, default under, or conflict with, any applicable
order, judgment, injunction, award, decree or writ of any Governmental Body or
court of competent jurisdiction (collectively, "Orders") or any Applicable Law,
except for any such violations that would not, individually or in the aggregate,
have a Company Material Adverse Effect. The Company and each Company Subsidiary
has obtained all consents, licenses, permits, grants or other authorization from
each Governmental Agency that is required or necessary for the operation of the
Company's or such Company Subsidiary's business (the "Company Authorizations"),
and all of such Company Authorizations are in full force and effect.
2.10. Intellectual Property.
---------------------
(a) Schedule 2.10(a) sets forth separately all material
Intellectual Property owned, used, licensed or controlled by the Company or any
Company Subsidiary, all applications for any of the foregoing, and all permits,
grants and licenses relating to any of the foregoing under which the Company or
any Company Subsidiary is a licensee or a licensor, except such licenses,
sublicenses and other agreements relating to off-the-shelf software which is
commercially available on a retail basis.
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(b) Except as set forth on Schedule 2.10(b): (i) none of
the Intellectual Property owned, used, licensed or controlled by the Company, or
products or services owned, used, sold or licensed by the Company or any Company
Subsidiary infringes upon or otherwise violates any intellectual property rights
of any third party, and to the Knowledge of the Company and the Company
Subsidiaries, no other Person's operations or activities conflict with the use
and registration of the Intellectual Property owned, used, licensed or
controlled by the Company; (ii) neither the Company nor any Company Subsidiary
has received notice of any Claim contesting the right of the Company or any
Company Subsidiary to use or sell, license or make available to any Person any
of the Company's products or services, and to the Knowledge of the Company and
the Company Subsidiaries, no such Claim has been threatened against the Company
or any Company Subsidiary; (iii) neither the Company nor any of the Company
Subsidiaries has notice of any adversely held patent, invention, copyright,
trademark, service xxxx or trade name of any other Person, and neither the
Company nor any of the Company Subsidiaries has any Knowledge of or any
reasonable basis for any charge or Claim that any third party is infringing or
violating the Intellectual Property owned or controlled by the Company or any
Company Subsidiary; and (iv) the Company and the Company Subsidiaries own full
legal and beneficial title to the Intellectual Property owned by the Company
free and clear of all Liens, except for Permitted Liens.
(c) The Company and each Company Subsidiary have at all
times used reasonable efforts to protect their proprietary information and trade
secrets and to prevent the same from being released into the public domain.
Except as set forth on Schedule 2.10(c), the Company and each Company Subsidiary
have caused each person currently or formerly employed by the Company or any
Company Subsidiary, as the case may be, (including independent consultants and
contractors, if any) to execute and deliver to the Company or Company
Subsidiary, as the case may be, an employee (or consultant's) inventions and
proprietary information assignment agreement in the Company's standard form, and
no such person is in violation or breach of any such agreement, nor does any
such person have any claim, right or interest with respect to any Intellectual
Property owned by the Company.
2.11. Non-Contravention. The execution and delivery of this
Agreement and the Transaction Documents by the Company, the performance by the
Company of its obligations hereunder and thereunder, and the consummation of the
Transactions by the Company will not (with or without notice or lapse of time)
(i) violate or conflict with any provision of the organizational documents of
the Company; (ii) except as set forth on Schedule 2.11 and subject to obtaining
the consents, approvals and authorizations or making such filings or giving such
notices referred to in Section 2.14 and on Schedule 2.14, violate, conflict with
or result in the breach of any provision of, or result in a modification of or
otherwise entitle any party to terminate, accelerate, amend, cancel or
constitute (whether after the filing of notice or lapse of time or both) a
default under or impair or alter the rights of the Company, any Company
Subsidiary or any third party under, any Material Contract to which the Company
or any Company Subsidiary is a party or by which or to which any of the
Company's or any of the Company Subsidiaries' assets or properties may be bound
or subject (each, a "Company Material Contract"); (iii) subject to the
exceptions set forth in Section 2.12 and on Schedule 2.12, violate any
Applicable Laws; (iv) violate or result in the revocation or suspension of any
permit; or (v) result in the creation or imposition of any Lien upon any of the
property or assets of the Company or any of the Company Subsidiaries pursuant to
any provision of, any contract or Lien.
8
2.12. Consents and Approvals. Except for those consents, approvals,
authorizations, filings or notices set forth on Schedule 2.12, neither the
Company nor any Company Subsidiary is required to obtain or make (as applicable)
any consent, approval or authorization of, filing with, or notice to, any
Governmental Body or any third party in connection with the execution, delivery
and performance by the Company of this Agreement, each and every agreement
contemplated hereby, and the consummation by the Company of the Transactions.
2.13. Employee Benefit Plans; ERISA.
-----------------------------
(a) Set forth on Schedule 2.13(a) is a true and complete
list of each Benefit Plan sponsored, maintained, or contributed to, or required
to be contributed to by the Company or any Company Subsidiary, in which present
or former employees of the Company or any Company Subsidiary participate, or
with respect to which the Company or any of the Company Subsidiaries has any
liability, whether direct or indirect, actual or contingent, whether formal or
informal, and whether legally binding or not.
(b) Except as disclosed on Schedule 2.13(b): (A) each of
the Company's Benefit Plans and each Company Subsidiary's Benefit Plans have
been maintained and are in compliance with the terms of such Benefit Plans and
all Applicable Laws.
(c) Neither the Company nor any Company Subsidiary has
ever maintained, established, sponsored, participated in, or contributed to, any
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA (a
"Pension Plan") subject to Part 3 Subtitle B of Title I of ERISA, Title IV of
ERISA or Section 412 of the Code.
(d) Neither the Company nor any Company Subsidiary has
ever maintained, established, sponsored, participated in or contributed to any
self-insured "group health plan" (within the meaning of Section 5000(b)(i) of
the Code) that provides benefits to employees (other than medical flexible
spending account, health reimbursement arrangement or similar program, including
any such plan pursuant to which a stop-loss policy or contract applies).
(e) Neither the Company nor any Company Subsidiary has
ever contributed to or been obligated to contribute to any multiemployer plan
(as defined in Section 3(37) of ERISA). Neither the Company nor any Company
Subsidiary has ever maintained, established, sponsored, participated in or
contributed to any multiple employer plan or to any plan described in Section
413 of the Code.
(f) No Company Benefit Plan provides, or reflects or
represents any liability to provide, post-termination or retiree life insurance,
health or other employee welfare benefits to any person for any reason, except
as may be required by COBRA or other Applicable Law, and neither the Company nor
any Company Subsidiary has ever represented, promised, or contracted (whether
orally or in writing) to any employee (either individually or to employees as a
group) or any other person that such employee(s) or other persons would be
provided with life insurance, health or other employee benefits after
termination or retirement, except as required by statute.
9
(g) Schedule 2.13(g) sets forth a complete and accurate
list of each employee of the Company and each Company Subsidiary, including the
name of such employee and the salary, wage or other compensation paid to each
such employee on annual or hourly basis, as the case may be, on the date hereof,
as well as the date of employment, their position, the date of their last
increase in compensation and any other benefits or amount accrued by or owed to
such employee, including without limitation any vacation days, sick days or
holidays. To the Company's Knowledge, no such employee intends to terminate his
or her employment with the Company for any reason. Schedule 2.13(g) also sets
forth a complete and accurate list of each independent contractor or consultant
engaged by the Company or any Company Subsidiary, including such contractor's or
consultant's manner and amount of compensation, date of retention and the date
of the last increase in such compensation.
(h) Except as set forth on Schedule 2.13(h), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby or any termination of employment or service in
connection therewith will: (i) result in any payment (including severance,
golden parachute, bonus or otherwise), becoming due and payable to any employee
or former employee of the Company or any Company Subsidiary, (ii) result in any
forgiveness of indebtedness owed or payable by any employee or former employee
to the Company, (iii) materially increase any benefits otherwise payable by the
Company or any Company Subsidiary, or (iv) result in the acceleration of the
time of payment or vesting of any such benefits, except as required under
Section 411(d)(3) of the Code.
(i) Except as set forth on Schedule 2.13(i), there is no
agreement, plan, arrangement or other contract covering any employee that,
considered individually or considered collectively with any other such
agreements, plans, arrangements or other contracts, will, or could reasonably by
expected to, give rise directly or indirectly to the payment of any amount that
would be characterized as a "parachute payment" within the meaning of Section
280G(b)(1) of the Code. There is no agreement, plan, contract or other
arrangement by which the Company or any Company Subsidiary is or was bound to
compensate any employee for excise taxes paid pursuant to Section 4999 of the
Code. Schedule 2.13(i) lists all persons that the Company reasonably believes
are "disqualified persons" (within the meaning of Section 280G of the Code and
the regulations promulgated thereunder) as determined as of the date hereof.
2.14. Company Material Contracts. A complete and accurate list of
all Company Material Contracts is set forth on Schedule 2.14. Each Company
Material Contract: (i) is the legal, valid, binding and enforceable agreement of
the Company in full force and effect, except to the extent such enforceability
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicability affecting or relating to enforcement
of creditors' rights generally, and (ii) general equitable principles
(regardless of whether such enforceability is considered in equity or at law).
Neither the Company nor any Company Subsidiary is in default under any Company
Material Contract, nor to the Knowledge of the Company and the Company
Subsidiaries, does any condition exist that, with notice or lapse of time or
both, would constitute a default thereunder. To the Knowledge of the Company and
the Company Subsidiaries, no other party to any such Company Material Contract
is in default thereunder, nor does any condition exist that with notice or lapse
of time or both would constitute a default thereunder. Except as separately
identified on Schedule 2.14, no notice to, approval of or consent of any person
is needed in order that the contracts and other agreements set forth or required
10
to be set forth on Schedule 2.14 or on any other Schedule continue in full force
and effect following the consummation of the transactions contemplated by this
Agreement.
2.15. Taxes. Except as set forth in Schedule 2.15:
(a) Filing of Tax Returns. The Company and each Company
Subsidiary have timely filed, or have had timely filed on their behalf, with the
appropriate Taxing authorities all Tax Returns in respect of Taxes required to
be filed by them. The Tax Returns filed (including any amendments thereof) are
complete and accurate in all material respects. The Company and each Company
Subsidiary have not requested any extension of time within which to file any Tax
Return in respect of any Taxes, which Tax Return has not since been filed in a
timely manner. To the Knowledge of the Company, no claim has ever been made by
any Taxing authority in a jurisdiction where the Company or any Company
Subsidiary does not file Tax Returns, or has Tax Returns filed on their behalf,
that they are or may be subject to taxation by that jurisdiction, or liable for
Taxes owing to that jurisdiction.
(b) Payment of Taxes. All Taxes owed by the Company and
each Company Subsidiary (whether or not shown as due on any Tax Returns) have
been paid in full or adequate reserves on their respective books and/or records
have been established. The Company and each Company Subsidiary have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
shareholder, or other third party. The Company has made all required estimated
Tax payments sufficient to avoid any underpayment penalties. The unpaid Taxes of
the Company and each Company Subsidiary (A) do not, as of the Closing Date,
exceed the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect the timing differences between book and Tax income) set
forth on the face of the Company's and each Company Subsidiary's most recent
balance sheets (rather than any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Company and each Company
Subsidiary in filing, or having filed on their behalf, their Tax Returns. The
charges, accruals and reserves on the books of the Company and each Company
Subsidiary in respect of any liability for Taxes (x) based on or measured by net
income for any years not finally determined, (y) with respect to which the
applicable statute of limitations has not expired or (z) that has been
previously deferred, are adequate to satisfy any assessment for such Taxes for
any such years.
(c) Audits, Investigations or Claims. There is no dispute
or claim which has not been resolved concerning any Tax liability of the Company
or any Company Subsidiary either (A) claimed or raised by any Taxing authority
in writing or (B) as to which any of the directors and officers (and employees
responsible for Tax matters) of the Company or any Company Subsidiary has
Knowledge. There is no currently pending audit of any Tax Return of the Company
or any Company Subsidiary by any Taxing authority, and neither the Company nor
any Company Subsidiary has ever been notified in writing that any Taxing
authority intends to audit any Tax Return of the Company or any Company
Subsidiary. Neither the Company nor any Company Subsidiary has executed any
outstanding waivers or consents regarding the application of the statute of
limitations with respect to any Taxes or Tax Returns.
11
(d) Lien. There are no encumbrances for Taxes (other than
for current Taxes not yet due and payable) on any assets of the Company or any
Company Subsidiary.
(e) Tax Elections. The Company and each Company
Subsidiary (i) have not agreed and are not required, to make any adjustment
under Section 481(a) of the Code by reason of a change in accounting method or
otherwise; (ii) have not made an election pursuant to Code Sections 338 or
336(e) or the regulations thereunder or any comparable provisions of any foreign
or state or local income tax law; (iii) are not subject to any constructive
elections under Code Section 338 or the regulations thereunder; (iv) have not
made any payments, are not obligated to make any payments, and are not a party
to any agreement that under certain circumstances could obligate them to make
any payments that will not be deductible under ss.280G and ss.162(m) of the
Code; and (v) have not made any of the foregoing elections and are not required
to apply any of the foregoing rules under any comparable state or local income
Tax provision.
(f) Prior Affiliated Groups. The Company and each Company
Subsidiary (A) have never been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code (other than a group the common
parent of which was the Company) and (B) do not have any liability for the Taxes
of any person (other than any of the Company and the Company Subsidiaries) under
Treas. Reg. ss.1502-6 (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract or otherwise.
(g) Tax Sharing Agreements. Neither the Company nor any
Company Subsidiary is a party to any Tax allocation, indemnity or sharing or
similar agreement.
(h) Section 355. Neither the Company nor any Company
Subsidiary has distributed the stock of a "controlled corporation" (within the
meaning of that term as used in Section 355(a) of the Code) in a transaction
subject to Section 355 of the Code within the past two years.
(i) Partnerships. Neither the Company nor any Company
Subsidiary owns an interest in a partnership for Tax purposes.
2.16. Environmental Matters. Except as set forth on Schedule 2.16:
(i) the Company and each Company Subsidiary are in compliance in all material
respects with applicable Environmental Laws; (ii) the Company and each Company
Subsidiary have all Permits required pursuant to Environmental Laws and are in
compliance in all material respects with the terms thereof; (iii) there are no
past or present events, activities, practices, incidents, actions or plans in
connection with the operations of the Company or any Company Subsidiary which
have given rise to or are reasonably likely to give rise to any material
liability on the part of the Company or any Company Subsidiary under any
Environmental Law; (iv) neither the Company nor any Company Subsidiary has
generated, used, transported, treated, stored, released or disposed of, or has
suffered or permitted anyone else to generate, use, transport, treat, store,
release or dispose of any Hazardous Substance in violation of any Environmental
Laws; (v) there has not been any generation, use, transportation, treatment,
storage, release or disposal of any Hazardous Substance in connection with the
conduct of the business of the Company or any Company Subsidiary or the use of
any property or facility by the Company or any Company Subsidiary, or to the
12
Knowledge of Company or any Company Subsidiary, any nearby or adjacent
properties, in each case, which has created or might reasonably be expected to
create any material liability under any Environmental Law or which would require
reporting to or notification of any Governmental Body; and (vi) to the Knowledge
of the Company or any Company Subsidiary, no asbestos containing materials or
polychlorinated biphenyl or underground storage tank is contained in or located
at any facility now or previously owned or leased by the Company or any Company
Subsidiary.
2.17. Real Property.
-------------
(a) Neither the Company nor any Company Subsidiary owns,
or has owned, any real property or any freehold interest in any real property.
(b) Schedule 2.17(b) sets forth a true, correct and
complete list of all leases, subleases, licenses and other agreements
(collectively, the "Company Real Property Leases") under which the Company or
any Company Subsidiary uses or occupies or has the right or obligation to use or
occupy or pay rent or other fees for use thereof, now or in the future, any real
property. Each Company Real Property Lease is valid, binding and in full force
and effect, and as of the Closing, all amounts owing pursuant to the Company
Real Property Leases will have been paid in full.
2.18. Broker's Fees. No broker, finder, agent or similar
intermediary has acted on behalf of the Company or any Company Subsidiary in
connection with this Agreement or the Transactions, and there are no brokerage
commissions, finders' fees or similar fees or commissions payable in connection
therewith based on any agreement, arrangement or understanding with the Company
or Company Subsidiary.
2.19. Insurance. The Company and the Company Subsidiaries maintain
insurance policies against all risks and liabilities to an extent and in a
manner customarily insured against by persons operating comparable properties,
assets or businesses in the same geographic locations. All such insurance
policies are listed on Schedule 2.19 and are in full force and effect, all
premiums due and payable thereon have been paid and no written or oral notice of
cancellation or termination has been received and is outstanding. The insurance
coverage provided by the policies listed on Schedule 2.19 will not terminate or
lapse by reason of the transactions contemplated by this Agreement. The Company
has not received notice that any insurer under any policy listed (or that should
be listed) on Schedule 2.19 is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause. Neither the
Company nor any of the Company Subsidiaries has any Knowledge of any facts or of
the occurrence of any event that is reasonably likely to form the basis for any
material claim against the Company or any of the Company Subsidiaries which will
not be fully covered by such policies. Neither the Company nor any of the
Company Subsidiaries has received any notice from any of its insurance carriers
that any insurance premiums will be materially increased in the future.
2.20. Labor and Employment Matters. The Company and each of the
Company Subsidiaries is not now, and has not been in the last five years, bound
by or party to any collective bargaining agreement and, to the Knowledge of the
Company and the Company Subsidiaries, no application for certification of a
13
collective bargaining agent is pending. The Company and each of the Company
Subsidiaries is in compliance with all Applicable Laws applicable to the Company
and each of the Company Subsidiaries affecting employment practices and terms
and conditions of employment. The services provided by each employee of the
Company or any Company Subsidiary are terminable at will by the Company or
Company Subsidiary, as the case may be, and such termination would result in no
liability to the Company or Company Subsidiary, as the case may be.
2.21. Interested Party Transactions. Except as set forth in
Schedule 2.21, no current or former officer, director or employee of the Company
or any Company Subsidiary has any interest in: (i) any equipment or other
property or asset, real or personal, tangible or intangible, including, without
limitation, any Intellectual Property owned or controlled by the Company or any
Company Subsidiary, used in connection with the Company's or any Company
Subsidiary's business, (ii) any creditor, supplier, customer, manufacturer, or
distributor of any of the Company or any Company Subsidiary products, (iii) any
entity that competes with the Company or any Company Subsidiary, or (iv) any
agreement, obligation or commitment, written or oral, to which the Company or
any Company Subsidiary is a party.
2.22. Minute Book Contents. The Company has delivered to the
Parent, or its representative, copies of: (i) all minutes of the meetings,
resolutions or actions by written consent of the shareholders of the Company,
(ii) all minutes of the meetings, resolutions or actions by unanimous written
consent of the Company's board of directors, and (iii) the statutory books and
registers of the Company (collectively, the "Company Minute Book Contents"). The
Company Minute Book Contents are complete and accurate in all material respects
and reflect all corporate action taken to date the consummation of which
required the approval of the directors and/or the shareholders of the Company,
as the case may be.
2.23. Full Disclosure. This Agreement (including the disclosure
schedules) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or (ii) omit to state
any material fact necessary in order to make the representations, warranties and
information contained herein, in the context in which made or provided, not
false or misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF PARENT
The Parent hereby represents and warrants to the Company and each of
the Somanta Shareholders as of the date hereof (subject to such exceptions or
qualifications as are disclosed in writing in the disclosure schedule certified
by a duly authorized officer of the Parent and supplied by the Parent to the
Company and each Somanta Shareholder dated as of the date hereof, which
schedules shall provide an exception to or otherwise qualify only those
representations and warranties of the Parent contained in the section of this
Agreement (i) corresponding or cross-referenced to be the part or section
reference of the schedule where such disclosure appears or (ii) to which such
information set forth on such schedule reasonably relates, and such exceptions
14
or qualifications shall not otherwise be deemed to be an exception to, or
qualify, any other representation or warranty) as follows:
3.1. Organization and Qualification; Subsidiaries. The Parent and
each Subsidiary of the Parent (collectively, the "Parent Subsidiaries") is a
corporation, limited liability company or other legal entity duly incorporated
or organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization, has requisite power and authority
and governmental approvals to own, lease and operate its properties and to carry
on its business as currently conducted. The Parent and each Parent Subsidiary
has delivered to the Parent true and correct copies of its Articles of
Incorporation or other organizational documents, as amended to date. The Parent
and each Parent Subsidiary is duly qualified or licensed to do business and is
in good standing in each jurisdiction in which the ownership or leasing of its
property or the conduct of its business requires such qualification or
licensing, except where the failure to be so qualified or licensed or in good
standing would not, individually or in the aggregate, have a Parent Material
Adverse Effect. "Parent Material Adverse Effect," as used in this Agreement,
shall mean any change, effect, event or occurrence that is materially adverse to
the condition (financial or otherwise), assets, properties, business, prospects
or operations of the Parent and the Parent Subsidiaries, taken as a whole.
Notwithstanding any reference to "Parent Subsidiary" or "Parent Subsidiaries"
contained in this Agreement, the Parent does not have any Subsidiary or
Subsidiaries, nor is it a party to any Contract, other than this Agreement, to
invest in, or create, any Subsidiary.
3.2. Authority to Execute and Perform Agreement. The Parent has
the requisite power and all authority required to enter into, execute and
deliver this Agreement and the Transaction Documents to which it is a party, to
perform its obligations hereunder and thereunder and to consummate the
Transactions. The execution, delivery and performance by the Parent of this
Agreement and the consummation by the Parent of the Transactions have been duly
authorized by all necessary corporate action.
3.3. Binding Effect. This Agreement and the related Transaction
Documents to which Parent is a party, have been, or will be, validly executed
and delivered by the Parent and, assuming the due execution and delivery hereof
and thereof by the Company, the Somanta Shareholders and Somanta Optionholders,
constitutes, or will constitute, a valid and binding obligation of the Parent,
enforceable against the Parent in accordance with its terms.
3.4. Capitalization.
--------------
(a) As of the date hereof, a total of 18,240,000 shares
of capital stock of the Parent are authorized, consisting of (i) 18,230,000
authorized shares of common stock, par value $0.01 per share, of the Parent of
which 7,865,000 shares of common stock are issued and outstanding, all of which
have been validly issued and are fully paid and non-assessable, and none of
which is subject to preemptive rights or rights of first refusal created by
statute, the Parent's Articles of Incorporation, Bylaws or any agreement to
which the Parent is a party or by which it is bound (in each case that have not
been complied with or waived); and (ii) 10,000 authorized shares of preferred
stock, par value $0.01 per share, of which no shares are issued and outstanding.
The Parent has no other authorized, issued or outstanding class of capital
stock. All outstanding securities issued by the Parent were issued in compliance
with all applicable federal and state securities laws. Neither the Parent nor
15
any Parent Subsidiary is bound by any contract or other agreement pursuant to
which it is or may become obligated to repurchase, redeem or otherwise acquire
any outstanding shares of Parent capital stock.
(b) Except as set forth in Schedule 3.4, there are no
existing options, rights, subscriptions, warrants, unsatisfied preemptive
rights, calls or commitments relating to (i) the authorized and unissued capital
stock of the Parent or any Parent Subsidiary, or (ii) any securities or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire from the Parent or any Parent Subsidiary, any shares
of capital stock of the Parent or any Parent Subsidiary and no such convertible
or exchangeable securities or obligations are outstanding. Except as set forth
on Schedule 3.4, there are no contracts, commitments or agreements relating to
voting, purchase or sale of Parent Shares between the Parent and any of its
shareholders or any third party.
3.5. Financial Statements.
--------------------
(a) The Parent has delivered to the Company its unaudited
balance sheet as of April 30, 2005 and the statements of income and cash flow
for the twelve month period ended on April 30, 2005 (the "Parent Financial
Statements"). The Parent Financial Statements and any notes related thereto
comply as to form in all material respects with applicable accounting
requirements and have been prepared in accordance with United States generally
accepted accounting principles ("USGAAP") applied on a consistent basis
throughout the periods involved, except as may be indicated in the notes thereto
and fairly present in all material respects the consolidated financial position
of the Parent and the Parent Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended. The Parent maintains a standard system of accounting and internal
controls established and administered in accordance with good business practices
sufficient to permit the preparation of consolidated financial statements in
accordance with USGAAP.
(b) Neither the Parent nor any of the Parent Subsidiaries
have any direct or indirect Liabilities that were not fully and adequately
reflected or reserved against on the Parent Financial Statements. Except as set
forth on Schedule 3.5(b), neither the Parent nor any Parent Subsidiary has any
Knowledge of any circumstance, condition, event or arrangement that may
hereafter give rise to any Liabilities which are reasonably likely to have a
Parent Material Adverse Effect.
3.6. No Material Adverse Change. Except as set forth on Schedule
3.6, since April 30, 2005,
(a) the Parent and the Parent Subsidiaries have conducted
their respective businesses in the ordinary course, consistent with past
practice, and there has been no: (i) change in the business, properties, assets,
prospects, operations or condition (financial or otherwise) of the Parent or any
of the Parent Subsidiaries which has resulted or reasonably could be expected to
result in or which the Parent or any Parent Subsidiary has reason to believe
could result in a Parent Material Adverse Effect, and neither the Parent nor any
of the Parent Subsidiaries has any Knowledge of any such change that is
threatened, nor has there been any damage, destruction or loss affecting the
business, properties, assets, prospects, operations or condition (financial or
16
otherwise) of the Parent or any of the Parent Subsidiaries, whether or not
covered by insurance which has resulted or reasonably could be expected to
result in or which the Parent or any Parent Subsidiary has reason to believe
could result in a Parent Material Adverse Effect; (ii) change in accounting
methods or practices (including any change in depreciation or amortization
policies or rates) by the Parent or any Parent Subsidiary or any revaluation by
the Parent or any Parent Subsidiary of any Parent or Parent Subsidiary asset; or
(iii) increase in or modification or acceleration of the compensation or
benefits paid, payable or to become payable by the Parent to any of its
officers, directors or employees, pursuant to any Benefit Plan, stock option
plan, stock option agreement or any other agreement or arrangement; and
(b) Neither the Parent, nor any Parent Subsidiary, has
(i) declared, accrued, set aside or paid any dividend or made any other
distribution in respect of any shares of capital stock, (ii) repurchased,
redeemed or otherwise reacquired any shares of capital stock or other
securities, (iii) sold, issued or granted, or authorized the issuance of, (A)
any capital stock or other security, (B) any option, warrant or right to acquire
any capital sock or any other security, (C) any instrument convertible into or
exchangeable for any capital stock or other security, (iv) made any capital
expenditure which, when added to all other capital expenditures made on behalf
of the Parent and the Parent Subsidiaries since April 30, 2005 exceeds $10,000
in the aggregate, (v) made any material Tax election.
3.7. Litigation. There are no Legal Proceedings pending or, to the
Knowledge of the Parent or any Parent Subsidiary, threatened against or
involving the Parent, any Parent Subsidiary, or any of their respective
property, assets, officers or directors (in their capacities as such). There are
no outstanding orders, judgments, injunctions, awards or decrees of any court,
governmental or regulatory body or arbitration tribunal against or involving the
Parent or any Parent Subsidiary.
3.8. Assets; Title to Properties; Absence of Liens. The assets
(whether tangible or intangible) of the Parent constitute all the assets
necessary or desirable to conduct the Parent's business as currently conducted.
The Parent and each Parent Subsidiary has good marketable, full legal and
beneficial title to all of their respective assets (whether tangible or
intangible) and properties, whether real, personal or fixed, that are used in
the conduct of the Parent's business or that are reflected in the balance sheet
included in the Financial Statements, free and clear of all Liens, except (i)
for Liens set forth on Schedule 3.8 hereto, (ii) for Liens for Taxes not yet due
and payable or which the Parent or any Parent Subsidiary is contesting in good
faith and for which adequate reserves have been established, (iii) for such
properties and assets as may have been sold since the date hereof in the
ordinary course of business, and (iv) for Liens not securing debt that do not
materially detract from the value or materially interfere with the use of the
property subject thereto (collectively, "Parent Permitted Liens"). The tangible
assets of the Parent and each Parent Subsidiary are in good operating condition
and repair, except for reasonable wear and tear that does not materially affect
the use or operation of such asset.
3.9. Compliance with Laws. Neither the Parent nor any Parent
Subsidiary is in violation of, default under, or conflict with, any applicable
Order or any Applicable Law, except for any such violations that would not,
individually or in the aggregate, have a Parent Material Adverse Effect. The
Parent and each Parent Subsidiary has obtained all consents, licenses, permits,
17
grants or other authorization from each Governmental Agency that is required or
necessary for the operation of the Parent's or such Parent Subsidiary's business
(the "Parent Authorizations"), and all of such Parent Authorizations are in full
force and effect.
3.10. Intellectual Property.
---------------------
(a) Schedule 3.10(a) sets forth separately all material
Intellectual Property owned, used, licensed or controlled by the Parent or any
Parent Subsidiary, all applications for any of the foregoing, and all permits,
grants and licenses relating to any of the foregoing under which the Parent or
any Parent Subsidiary is a licensee or a licensor, except such licenses,
sublicenses and other agreements relating to off-the-shelf software which is
commercially available on a retail basis.
(b) Except as set forth on Schedule 3.10(b): (i) none of
the Intellectual Property owned, used, licensed or controlled by the Parent, or
products or services owned, used, sold or licensed by the Parent or any Parent
Subsidiary infringes upon or otherwise violates any intellectual property rights
of any third party, and to the Knowledge of the Parent and the Parent
Subsidiaries, no other Person's operations or activities conflict with the use
and registration of the Intellectual Property owned, used, licensed or
controlled by the Parent; (ii) neither the Parent nor any Parent Subsidiary has
received notice of any Claim contesting the right of the Parent or any Parent
Subsidiary to use or sell, license or make available to any Person any of the
Parent's products or services, and to the Knowledge of the Parent and the Parent
Subsidiaries, no such Claim has been threatened against the Parent or any Parent
Subsidiary; (iii) neither the Parent nor any of the Parent Subsidiaries has
notice of any adversely held patent, invention, copyright, trademark, service
xxxx or trade name of any other Person, and neither the Parent nor any of the
Parent Subsidiaries has any Knowledge of or any reasonable basis for any charge
or Claim that any third party is infringing or violating the Intellectual
Property owned or controlled by the Parent or any Parent Subsidiary; and (iv)
the Parent and the Parent Subsidiaries own full legal and beneficial title to
the Intellectual Property owned by the Parent free and clear of all Liens,
except for Permitted Liens.
(c) The Parent and each Parent Subsidiary have at all
times used reasonable efforts to protect their proprietary information and trade
secrets and to prevent the same from being released into the public domain.
Except as set forth on Schedule 3.10(c), the Parent and each Parent Subsidiary
have caused each person currently or formerly employed by the Parent or any
Parent Subsidiary, as the case may be, (including independent consultants and
contractors, if any) to execute and deliver to the Parent or Parent Subsidiary,
as the case may be, an employee (or consultant's) inventions and proprietary
information assignment agreement in the Parent's standard form, and no such
person is in violation or breach of any such agreement, nor does any such person
have any claim, right or interest with respect to any Intellectual Property
owned by the Parent.
3.11. Non-Contravention. The execution and delivery of this
Agreement and the Transaction Documents by the Parent, the performance by the
Parent of its obligations hereunder and thereunder, and the consummation of the
Transactions by the Parent will not (with or without notice or lapse of time)
(i) violate or conflict with any provision of the Articles of Incorporation or
Bylaws of the Parent or equivalent organizational documents of any Parent
18
Subsidiary; (ii) except as set forth on Schedule 3.11 and subject to obtaining
the consents, approvals and authorizations or making such filings or giving such
notices referred to in Section 3.14 and on Schedule 3.14, violate, conflict with
or result in the breach of any provision of, or result in a modification of or
otherwise entitle any party to terminate, accelerate, amend, cancel or
constitute (whether after the filing of notice or lapse of time or both) a
default under or impair or alter the rights of the Parent, any Parent Subsidiary
or any third party under, any Material Contract to which the Parent or any
Parent Subsidiary is a party or by which or to which any of the Parent's or any
of the Parent Subsidiaries' assets or properties may be bound or subject (each,
a "Parent Material Contract"); (iii) subject to the exceptions set forth in
Section 3.12 and on Schedule 3.12, violate any Applicable Laws; (iv) violate or
result in the revocation or suspension of any permit; or (v) result in the
creation or imposition of any Lien upon any of the property or assets of the
Parent or any of the Parent Subsidiaries pursuant to any provision of, any
contract or Lien.
3.12. Consents and Approvals. Except for (i) those consents,
approvals, authorizations, filings or notices set forth on Schedule 3.12; (ii)
applicable requirements of the Securities Act or state securities or "blue sky"
laws ("Blue Sky Laws"), neither Parent nor any Parent Subsidiary is required to
obtain or make (as applicable) any consent, approval or authorization of, filing
with, or notice to, any Governmental Body or any third party in connection with
the execution, delivery and performance by the Parent of this Agreement, each
and every agreement contemplated hereby, and the consummation by the Parent of
the Transactions.
3.13. Employee Benefit Plans; ERISA.
-----------------------------
(a) Set forth on Schedule 3.13(a) is a true and complete
list of each Benefit Plan sponsored, maintained, or contributed to, or required
to be contributed to by the Parent or any Parent Subsidiary, in which present or
former employees of the Parent or any Parent Subsidiary participate, or with
respect to which the Parent or any of the Parent Subsidiaries has any liability,
whether direct or indirect, actual or contingent, whether formal or informal,
and whether legally binding or not.
(b) Except as disclosed on Schedule 3.13(b): (A) each of
the Parent's Benefit Plans and each Parent Subsidiary's Benefit Plans have been
maintained and are in compliance with the terms of such Benefit Plans and all
Applicable Laws, including, without limitation, the Code and ERISA; (B) each of
the Parent's Benefit Plans and each Parent Subsidiary's Benefit Plans intended
to be "qualified" within the meaning of Section 401(a) of the Code have been
determined by the IRS to be so qualified and, to the Knowledge of the Parent,
and the Parent Subsidiaries, no event or circumstance has occurred since the
date of such determination which would jeopardize the qualification of any of
the Parent's Benefit Plans or any Parent Subsidiary's Benefit Plans; and (C)
none of the Parent's Benefit Plans or Parent Subsidiary's Benefit Plans is
subject to Title IV of ERISA.
(c) Neither the Parent nor any Parent Subsidiary has ever
maintained, established, sponsored, participated in, or contributed to, any
Pension Plan subject to Part 3 Subtitle B of Title I of ERISA, Title IV of ERISA
or Section 412 of the Code.
19
(d) Neither the Parent nor any Parent Subsidiary has ever
maintained, established, sponsored, participated in or contributed to any
self-insured "group health plan" (within the meaning of Section 5000(b)(i) of
the Code) that provides benefits to employees (other than medical flexible
spending account, health reimbursement arrangement or similar program, including
any such plan pursuant to which a stop-loss policy or contract applies).
(e) Neither the Parent nor any Parent Subsidiary has ever
contributed to or been obligated to contribute to any multiemployer plan (as
defined in Section 3(37) of ERISA). Neither the Parent nor any Parent Subsidiary
has ever maintained, established, sponsored, participated in or contributed to
any multiple employer plan or to any plan described in Section 413 of the Code.
(f) No Parent Benefit Plan provides, or reflects or
represents any liability to provide, post-termination or retiree life insurance,
health or other employee welfare benefits to any person for any reason, except
as may be required by COBRA or other Applicable Law, and neither the Parent nor
any Parent Subsidiary has ever represented, promised, or contracted (whether
orally or in writing) to any employee (either individually or to employees as a
group) or any other person that such employee(s) or other persons would be
provided with life insurance, health or other employee benefits after
termination or retirement, except as required by statute.
(g) Schedule 3.13(g) sets forth a complete and accurate
list of each employee of the Parent and each Parent Subsidiary, including the
name of such employee and the salary, wage or other compensation paid to each
such employee on annual or hourly basis, as the case may be, on the date hereof,
as well as the date of employment, their position, the date of their last
increase in compensation and any other benefits or amounts accrued by or owed to
such employee, including without limitation any vacation days, sick days or
holidays. To the Parent's Knowledge, no such employee intends to terminate his
or her employment with the Parent for any reason. Schedule 3.13(g) also sets
forth a complete and accurate list of each independent contractor or consultant
engaged by the Parent or any Parent Subsidiary, including such contractor's or
consultant's manner and amount of compensation, date of retention and the date
of the last increase in such compensation.
(h) Except as set forth on Schedule 3.13(h), neither the
execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby or any termination of employment or service in
connection therewith will: (i) result in any payment (including severance,
golden parachute, bonus or otherwise), becoming due and payable to any employee
or former employee of the Parent or any Parent Subsidiary, (ii) result in any
forgiveness of indebtedness owed or payable by any employee or former employee
to the Parent, (iii) materially increase any benefits otherwise payable by the
Parent or any Parent Subsidiary, or (iv) result in the acceleration of the time
of payment or vesting of any such benefits, except as required under Section
411(d)(3) of the Code.
(i) Except as set forth on Schedule 3.13(i), there is no
agreement, plan, arrangement or other contract covering any employee that,
considered individually or considered collectively with any other such
agreements, plans, arrangements or other contracts, will, or could reasonably by
expected to, give rise directly or indirectly to the payment of any amount that
20
would be characterized as a "parachute payment" within the meaning of Section
280G(b)(1) of the Code. There is no agreement, plan, contract or other
arrangement by which the Parent or any Parent Subsidiary is or was bound to
compensate any employee for excise taxes paid pursuant to Section 4999 of the
Code. Section 3.14(i) lists all persons that the Parent reasonably believes are
"disqualified persons" (within the meaning of Section 280G of the Code and the
regulations promulgated thereunder) as determined as of the date hereof.
3.14. Parent Material Contracts. A complete and accurate list of
all Parent Material Contracts is set forth on Schedule 3.14. Each Parent
Material Contract: (i) is the legal, valid, binding and enforceable agreement of
the Parent in full force and effect, except to the extent such enforceability
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws of general applicability affecting or relating to enforcement
of creditors' rights generally, and (ii) general equitable principles
(regardless of whether such enforceability is considered in equity or at law).
Neither the Parent nor any Parent Subsidiary is in default under any Parent
Material Contract, nor to the Knowledge of the Parent and the Parent
Subsidiaries, does any condition exist that, with notice or lapse of time or
both, would constitute a default thereunder. To the Knowledge of the Parent and
the Parent Subsidiaries, no other party to any such Parent Material Contract is
in default thereunder, nor does any condition exist that with notice or lapse of
time or both would constitute a default thereunder. Except as separately
identified on Schedule 3.14, no notice to, approval of or consent of any person
is needed in order that the contracts and other agreements set forth or required
to be set forth on Schedule 3.14 or on any other Schedule continue in full force
and effect following the consummation of the transactions contemplated by this
Agreement.
3.15. Taxes. Except as set forth in Schedule 3.15:
(a) Filing of Tax Returns. The Parent and each Parent
Subsidiary have timely filed, or have had timely filed on their behalf, with the
appropriate Taxing authorities all Tax Returns in respect of Taxes required to
be filed by them. The Tax Returns filed (including any amendments thereof) are
complete and accurate in all material respects. The Parent and each Parent
Subsidiary have not requested any extension of time within which to file any Tax
Return in respect of any Taxes, which Tax Return has not since been filed in a
timely manner. To the Knowledge of the Parent, no claim has ever been made by
any Taxing authority in a jurisdiction where the Parent or any Parent Subsidiary
does not file Tax Returns, or has Tax Returns filed on their behalf, that they
are or may be subject to taxation by that jurisdiction, or liable for Taxes
owing to that jurisdiction.
(b) Payment of Taxes. All Taxes owed by the Parent and
each Parent Subsidiary (whether or not shown as due on any Tax Returns) have
been paid in full or adequate reserves on their respective books and/or records
have been established. The Parent and each Parent Subsidiary have withheld and
paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
Shareholder, or other third party. The Parent has made all required estimated
Tax payments sufficient to avoid any underpayment penalties. The unpaid Taxes of
the Parent and each Parent Subsidiary (A) do not, as of the Closing Date, exceed
the reserve for Tax liability (rather than any reserve for deferred Taxes
established to reflect the timing differences between book and Tax income) set
forth on the face of the Parent's and each Parent Subsidiary's most recent
21
balance sheets (rather than any notes thereto) and (B) do not exceed that
reserve as adjusted for the passage of time through the Closing Date in
accordance with the past custom and practice of the Parent and each Parent
Subsidiary in filing, or having filed on their behalf, their Tax Returns. The
charges, accruals and reserves on the books of the Parent and each Parent
Subsidiary in respect of any liability for Taxes (x) based on or measured by net
income for any years not finally determined, (y) with respect to which the
applicable statute of limitations has not expired or (z) that has been
previously deferred, are adequate to satisfy any assessment for such Taxes for
any such years.
(c) Audits, Investigations or Claims. There is no dispute
or claim which has not been resolved concerning any Tax liability of the Parent
or any Parent Subsidiary either (A) claimed or raised by any Taxing authority in
writing or (B) as to which any of the directors and officers (and employees
responsible for Tax matters) of the Parent or any Parent Subsidiary has
Knowledge. There is no currently pending audit of any Tax Return of the Parent
or any Parent Subsidiary by any Taxing authority, and neither the Parent nor any
Parent Subsidiary has ever been notified in writing that any Taxing authority
intends to audit any Tax Return of the Parent or any Parent Subsidiary. Neither
the Parent nor any Parent Subsidiary has executed any outstanding waivers or
consents regarding the application of the statute of limitations with respect to
any Taxes or Tax Returns.
(d) Lien. There are no encumbrances for Taxes (other than
for current Taxes not yet due and payable) on any assets of the Parent or any
Parent Subsidiary.
(e) Tax Elections. The Parent and each Parent Subsidiary
(i) have not agreed and are not required, to make any adjustment under Section
481(a) of the Code by reason of a change in accounting method or otherwise; (ii)
have not made an election pursuant to Code Sections 338 or 336(e) or the
regulations thereunder or any comparable provisions of any foreign or state or
local income tax law; (iii) are not subject to any constructive elections under
Code Section 338 or the regulations thereunder; (iv) have not made any payments,
are not obligated to make any payments and are not party to any agreement that
under certain circumstances could obligate it to make any payments that will not
be deductible under ss.280G and ss.162(m) of the Code; and (v) have not made any
of the foregoing elections and are not required to apply any of the foregoing
rules under any comparable state or local income Tax provision.
(f) Prior Affiliated Groups. The Parent and each Parent
Subsidiary (A) have never been a member of an affiliated group of corporations
within the meaning of Section 1504 of the Code (other than a group the common
parent of which was the Parent) and (B) do not have any liability for the Taxes
of any person (other than any of the Parent and the Parent Subsidiaries) under
Treas. Reg. ss.1502-6 (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract or otherwise.
(g) Tax Sharing Agreements. Neither the Parent nor any
Parent Subsidiary is a party to any Tax allocation, indemnity or sharing or
similar agreement.
(h) Section 355. Neither the Parent nor any Parent
Subsidiary has distributed the stock of a "controlled corporation" (within the
meaning of that term as used in Section 355(a) of the Code) in a transaction
subject to Section 355 of the Code within the past two years.
22
(i) Partnerships. Neither the Parent nor any Parent
Subsidiary owns an interest in a partnership for Tax purposes.
3.16. Environmental Matters. Except as set forth on Schedule 3.16:
(i) the Parent and each Parent Subsidiary are in compliance in all material
respects with applicable Environmental Laws; (ii) the Parent and each Parent
Subsidiary have all Permits required pursuant to Environmental Laws and are in
compliance in all material respects with the terms thereof; (iii) there are no
past or present events, activities, practices, incidents, actions or plans in
connection with the operations of the Parent or any Parent Subsidiary which have
given rise to or are reasonably likely to give rise to any material liability on
the part of the Parent or any Parent Subsidiary under any Environmental Law;
(iv) neither the Parent nor any Parent Subsidiary has generated, used,
transported, treated, stored, released or disposed of, or has suffered or
permitted anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Substance in violation of any Environmental Laws; (v)
there has not been any generation, use, transportation, treatment, storage,
release or disposal of any Hazardous Substance in connection with the conduct of
the business of the Parent or any Parent Subsidiary or the use of any property
or facility by the Parent or any Parent Subsidiary, or to the Knowledge of
Parent or any Parent Subsidiary, any nearby or adjacent properties, in each
case, which has created or might reasonably be expected to create any material
liability under any Environmental Law or which would require reporting to or
notification of any Governmental Body; and (vi) to the Knowledge of the Parent
or any Parent Subsidiary, no asbestos containing materials or polychlorinated
biphenyl or underground storage tank is contained in or located at any facility
now or previously owned or leased by the Parent or any Parent Subsidiary.
3.17. Real Property.
-------------
(a) Neither the Parent nor any Parent Subsidiary owns, or
has owned, any real property or any freehold interest in any real property.
(b) Schedule 3.17(b) sets forth a true, correct and
complete list of all leases, subleases, licenses and other agreements
(collectively, the "Parent Real Property Leases") under which the Parent or any
Parent Subsidiary uses or occupies or has the right or obligation to use or
occupy or pay rent or other fees for use thereof, now or in the future, any real
property. Each Parent Real Property Lease is valid, binding and in full force
and effect, and as of the Closing, all amounts owing pursuant to the Parent Real
Property Leases will have been paid in full.
3.18. Broker's Fees. Except as set forth on Schedule 3.18, no
broker, finder, agent or similar intermediary has acted on behalf of the Parent
or any Parent Subsidiary in connection with this Agreement or the Transactions,
and there are no brokerage commissions, finders' fees or similar fees or
commissions payable in connection therewith based on any agreement, arrangement
or understanding with the Parent or Parent Subsidiary.
23
3.19. Insurance. The Parent and the Parent Subsidiaries maintain
insurance policies against all risks and liabilities to an extent and in a
manner customarily insured against by persons operating comparable properties,
assets or businesses in the same geographic locations. All such insurance
policies are listed on Schedule 3.19 and are in full force and effect, all
premiums due and payable thereon have been paid and no written or oral notice of
cancellation or termination has been received and is outstanding. The insurance
coverage provided by the policies listed on Schedule 3.19 will not terminate or
lapse by reason of the transactions contemplated by this Agreement. The Company
has not received notice that any insurer under any policy listed (or that should
be listed) on Schedule 3.19 is denying liability with respect to a claim
thereunder or defending under a reservation of rights clause. Neither the Parent
nor any of the Parent Subsidiaries has any Knowledge of any facts or of the
occurrence of any event that is reasonably likely to form the basis for any
material claim against the Parent or any of the Parent Subsidiaries which will
not be fully covered by such policies. Neither the Parent nor any of the Parent
Subsidiaries has received any notice from any of its insurance carriers that any
insurance premiums will be materially increased in the future.
3.20. Labor and Employment Matters. The Parent and each of the
Parent Subsidiaries is not now, and has not been in the last five years, bound
by or party to any collective bargaining agreement and, to the Knowledge of the
Parent and the Parent Subsidiaries, no application for certification of a
collective bargaining agent is pending. The Parent and each of the Parent
Subsidiaries is in compliance with all Applicable Laws applicable to the Parent
and each of the Parent Subsidiaries affecting employment practices and terms and
conditions of employment. The services provided by each employee of the Parent
or any Parent Subsidiary are terminable at will by the Parent or Parent
Subsidiary, as the case may be, and such termination would result in no
liability to the Parent or Parent Subsidiary, as the case may be.
3.21. Interested Party Transactions. Except as set forth on
Schedule 3.21, no current or former officer, director or employee of the Parent
or any Parent Subsidiary has any interest in: (i) any equipment or other
property or asset, real or personal, tangible or intangible, including, without
limitation, any Intellectual Property owned or controlled by the Parent or any
Parent Subsidiary, used in connection with the Parent's or any Parent
Subsidiary's business, (ii) any creditor, supplier, customer, manufacturer, or
distributor of any of the Parent or any Parent Subsidiary products, (iii) any
entity that competes with the Parent or any Parent Subsidiary, or (iv) any
agreement, obligation or commitment, written or oral, to which the Parent or any
Parent Subsidiary is a party.
3.22. Minute Book Contents. The Parent has delivered to the Parent,
or its representative, copies of: (i) all minutes of the meetings or actions by
written consent of the shareholders of the Parent, (ii) all minutes of the
meetings or actions by unanimous written consent of the Parent's board of
directors, and (iii) the stock records of the Parent (collectively, the "Parent
Minute Book Contents"). The Parent Minute Book Contents are complete and
accurate in all material respects and reflect all corporate action taken to date
the consummation of which required the approval of the directors and/or the
shareholders of the Parent, as the case may be.
3.23. Full Disclosure. This Agreement (including the disclosure
schedules) does not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or (ii) omit to state
24
any material fact necessary in order to make the representations, warranties and
information contained herein, in the context in which made or provided, not
false or misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF SOMANTA SHAREHOLDERS
Each Somanta Shareholder, severally and not jointly, represents and
warrants as of the date hereof and as of the Closing Date as follows:
4.1. Title to Somanta Shares. Such Somanta Shareholder has good
marketable, full legal and beneficial title to the Somanta Shares set forth
opposite such Somanta Shareholder's name on Exhibit A hereto. Such Somanta
Shares are free and clear of any Liens.
4.2. Authorization. This Agreement constitutes such Somanta
Shareholder's valid and legally binding obligation, enforceable in accordance
with its terms. Such Somanta Shareholder represents that the same has full power
and authority to enter into this Agreement.
4.3. Purchase for Own Account. The Parent Common Stock will be
acquired for investment for such Somanta Shareholder's own account, not as a
nominee or agent, and not with a view to the public resale or distribution
thereof within the meaning of the Securities Act, and such Somanta Shareholder
has no present intention of selling, granting any participation in, or otherwise
distributing the same. Such Somanta Shareholder also represents that it has not
been formed for the specific purpose of acquiring the Parent Common Stock.
4.4. Disclosure of Information. At no time was such Somanta
Shareholder presented with or solicited by any publicly issued or circulated
newspaper, mail, radio, television or other form of general advertising or
solicitation in connection with the offer, sale and purchase of the Parent
Common Stock. Such Somanta Shareholder has received or has had full access to
all the information it considers necessary or appropriate to make an informed
investment decision with respect to the Parent Common Stock to be purchased by
such Somanta Shareholder under this Agreement. Such Somanta Shareholder further
has had an opportunity to ask questions and receive answers from the Parent
regarding the terms and conditions of the offering of the Parent Common Stock
and to obtain additional information (to the extent the Parent possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to such Somanta Shareholder or to
which such Somanta Shareholder had access. The foregoing, however, does not in
any way limit or modify the representations and warranties made by the Parent in
Article III.
4.5. Investment Experience. Such Somanta Shareholder understands
that the Share Exchange involves substantial risk. Such Somanta Shareholder: (i)
has experience as an investor in securities of companies in the development
stage and acknowledges that such Somanta Shareholder is able to fend for itself,
can bear the economic risk of such Somanta Shareholder's investment in the
Parent Common Stock and has such knowledge and experience in financial or
business matters that such Somanta Shareholder is capable of evaluating the
merits and risks of this investment in the Parent Common Stock and protecting
its own interests in connection with this investment and/or (ii) has a
25
preexisting personal or business relationship with the Parent and certain of its
officers, directors or controlling persons of a nature and duration that enables
such Somanta Shareholder to be aware of the character, business acumen and
financial circumstances of such persons. Such Somanta Shareholder represents
that such Somanta Shareholder is a resident at the address set forth on the
signature page hereto or is an entity organized pursuant to the laws of the
jurisdiction set forth on the signature page hereto.
4.6. Accredited Investor Status. Such Somanta Shareholder is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act.
4.7. Restricted Securities. Such Somanta Shareholder understands
that the shares of Parent Common Stock are characterized as "restricted
securities" under the Securities Act inasmuch as they are being acquired from
the Parent in a transaction not involving a public offering and that under the
Securities Act and applicable regulations thereunder such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. In this connection, such Somanta Shareholder represents that such
Somanta Shareholder is familiar with Rule 144 promulgated under the Securities
Act, as presently in effect, and understands the resale limitations imposed
thereby and by the Securities Act. Such Somanta Shareholder understands that the
Parent is under no obligation to register any of the securities sold hereunder.
Such Somanta Shareholder understands that no public market now exists for any of
the Parent Common Stock and that it is uncertain whether a public market will
ever exist for the Parent Common Stock.
4.8. Additional Representations and Warranties for Non-U.S.
Somanta Shareholders. Each Somanta Shareholder who is a non-U.S. person makes
the following additional representations and warranties:
(a) Such Somanta Shareholder is not a U.S. person within
the meaning of Regulation S promulgated under the Securities Act and is not
acquiring the securities for the account or benefit of a U.S. person;
(b) Such Somanta Shareholder agrees to resell the Parent
Common Stock issued to such Somanta Shareholder only in accordance with the
provisions of Regulation S promulgated under the Securities Act, pursuant to
registration under the Securities Act, or pursuant to an available exemption
from registration and agrees not to engage in hedging transactions with regard
to such Parent Common Stock unless in compliance with the Securities Act.
ARTICLE V
ADDITIONAL AGREEMENTS OF THE PARTIES
5.1. Efforts; Consents. Each party hereto agrees to use, and shall
cause its respective Subsidiaries to use, commercially reasonable efforts to
take or cause to be taken all actions necessary, proper or advisable to
consummate the Share Exchange and the Transactions. Without limiting the
generality of the foregoing, each of the parties hereto shall use, and shall
cause its respective Subsidiaries to use, reasonable best efforts to obtain all
authorizations, consents, orders and approvals of Federal, state, local or
26
foreign regulatory bodies, that are or may become necessary for the performance
of its respective obligations pursuant to this Agreement, the Transactions
Documents and the consummation of the Transactions, and shall cooperate fully in
promptly seeking to obtain such authorizations, consents, orders and approvals
as may be necessary for the performance of its respective obligations pursuant
to this Agreement, the Transaction Documents and the Transactions. The parties
shall not take, and shall cause their respective Subsidiaries not to take, any
action which would have the effect of delaying, impairing or impeding the
receipt of any required regulatory approvals, and the parties shall use, and
shall cause their respective Subsidiaries to use, commercially reasonable
efforts to secure such approvals as promptly as possible. The parties shall use,
and shall cause their respective Subsidiaries to use, commercially reasonable
efforts not to take any action or enter into any transaction which would result
in a breach of any covenant made by such party in this Agreement.
5.2. Board of Directors. At the Closing, the sitting Board of
Directors of Parent will resign and the outgoing directors will appoint the
following individuals to fill the vacancies thereby created on the Parent Board
of Directors such that immediately following the Closing, the following persons
will constitute the Parent Board of Directors: Agamemnon X. Xxxxxxxx, Xxxxxxxx
X. Xxxxxxxxx, Xxxx X. Xxxxxx, Xxxxxxx Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxxx Xxxxx,
each to hold office from the Closing Date until their respective successors are
duly elected or appointed and qualify, or they resign or are removed.
5.3. Change of Name. The parties acknowledge and agree that
promptly after the Closing the name of Parent shall be changed to "Somanta
Incorporated" and that Parent will take all corporate action necessary to effect
such name change, including, without limitation, soliciting the approval to such
name change from the shareholders of Parent and filing with the New York
Secretary of State an amendment to Parent's Articles of Incorporation effecting
such name change.
5.4. SCO Bridge Loan. Parent acknowledges and agrees that it is a
condition to the closing of the Share Exchange and the Transactions that Parent
shall have entered into binding definitive agreements with SCO reasonably
acceptable to the Company, Company's counsel, SCO and SCO's counsel obligating
SCO to loan Parent $1,000,000 (the "Bridge Loan Amount") at the Closing (the
"SCO Loan Documents") the proceeds of such loan to be used in accordance with a
budget mutually agreed upon between SCO and Parent, and that SCO will wire such
amount into an account designated by Parent concurrent with the Closing. The SCO
Loan Documents shall be substantially in the form of Exhibit D.
5.5. Voting Agreement. The parties acknowledge and agree that it
is a condition to the Closing that the Somanta Shareholders and the existing
shareholders of Parent enter into a Voting Agreement, the form of which is
attached hereto as Exhibit E (the "Voting Agreement") for the purpose of setting
forth the manner in which such shareholders will vote their shares of Parent
capital stock in the election of the Parent Board of Directors.
5.6. Employment and Consulting Agreements.(a) The parties
acknowledge and agree that it is a condition to the Closing that the existing
Services Agreements between certain employees of the Company and the Company
(the "Services Agreements") shall be terminated at the Closing. In addition,
27
immediately prior to the closing of the PIPE Financing referenced in Section 5.9
below, each of the following persons will enter into an Employment Agreement
with the Parent acceptable to each such person and the Parent substantially in
the form attached hereto as Exhibit F, each such agreement to include the terms
set forth on Schedule 2.13(g) applicable to each such person: Agamemnon
Xxxxxxxx, Xxxxxxxx Xxxxxxxxx and Xxxxxxxx Xxx Xxxxx (each, an "Employment
Agreement, and collectively, the "Employment Agreements"); provided, however,
that if immediately prior to the PIPE Financing any such individual refuses to
enter into an Employment Agreement substantially in such form, the Parent shall
not have breached this Section 5.6.
(b) Parent hereby acknowledges and agrees that as of the
Closing, each of Agamemnon Xxxxxxxx, Xxxxxxxx Xxxxxxxxx and Xxxxxxxx Xxx Xxxxx
be, and they hereby are, engaged as employees of Parent. In consideration
therefor, Parent will reimburse each of the foregoing for travel, entertainment
and other out-of-pocket expenses that are reasonably incurred by each of the
foregoing in performing such services to Parent. In order to be reimbursed for
such expenses, however, each of the foregoing must provide Parent with the
relevant receipts detailing such expenses. Except for Xxxx. Xxxxxxxx, none of
the foregoing will receive any compensation, cash or otherwise (and no such
compensation shall accrue or otherwise be deemed deferred), unless and until the
closing of the PIPE Financing at which time each of the foregoing will receive
the bonus set forth below and shall enter into the Employment Agreements
described above. Effective June 1, 2005 and through the date of the closing of
the PIPE Financing, Xxxx. Xxxxxxxx shall be paid fifty percent (50%) of the
annual base salary applicable to Xxxx. Xxxxxxxx set forth on Schedule 2.13(g) to
this Agreement. At the closing of the PIPE Financing, each of Xx. Xxxxxxxxx and
Xx. Xxx Xxxxx will receive a bonus equal to fifty percent (50%) of one month's
base salary applicable to such person as set forth on Schedule 2.13(g) to this
Agreement multiplied by the number of months that have elapsed between June 1,
2005 and the date of the closing of such PIPE Financing, prorated for any
partial months; provided, however, that no such bonus shall exceed an amount
equal to six (6) months multiplied by fifty percent (50%) of the applicable one
month's base salary.
5.7. Transfer of Company Assets to Parent. As promptly as
practical following the Closing, Parent shall cause all of the assets of the
Company to be transferred to Parent at which time the Parent may elect to
dissolve Company.
5.8. Reverse Merger into Public Reporting Company. The parties
acknowledge and agree that as promptly as practical following the Closing, the
Parent will seek to identify an appropriate entity that is subject to the public
reporting requirements of the Securities Exchange Act of 1934, as amended for
the purpose of merging with such entity or a wholly-owned subsidiary of such
entity.
5.9. Additional Funding. In connection with the closing of the
transaction referenced in Section 5.8, Parent intends to raise approximately
$15,000,000 to $20,000,000 in a privately placed equity financing transaction
arranged through the assistance of SCO (the "PIPE Financing"), it being
understood that the timing of the consummation of such equity financing shall be
in the reasonable discretion of SCO after giving due consideration to investor
interest and the market for such securities in general.
28
5.10. Officers of Parent. At the Closing, the following individuals
shall appointed to the following offices of Parent: Agamemnon X. Xxxxxxxx, Chief
Executive Officer; Xxxxxxxx X. Xxxxxxxxx, Executive Chairman; Xxxx Xxxxx, Vice
President of Clinical Affairs; Xxxx Xxxxx, Vice President of Manufacturing and
Pre-Clinical Affairs; and Xxxxxxxx Xxx Xxxxx, Vice President and Chief Financial
Officer and Secretary, each to hold office from the Closing Date until their
respective successors are duly elected or appointed and qualify, or they resign
or are removed.
5.11. Payment of Taxes. Parent shall pay any transfer taxes due to
the United Kingdom tax authorities arising from or related to the Share
Exchange.
5.12. Option Pool. The parties acknowledge and agree that, from and
after the closing of the reverse merger described in Section 5.8 above, Parent
(or any successor entity) shall maintain under its equity incentive plan a
number of shares equal to approximately 15% of the outstanding capital stock of
Parent (or such successor entity), excluding the Bridge Substitute Options
issued to the Somanta Optionholders pursuant to this Agreement. For avoidance of
doubt, from and after the closing of the reverse merger described in Section 5.8
above and the closing of any additional financing transaction as contemplated by
Section 5.9 above, Parent shall have reserved a number of shares equal to
fifteen percent (15%) of the outstanding capital stock of Parent at such time,
and the Bridge Substitute Options shall not be included in such fifteen percent
(15%), but shall be granted under the equity incentive plan at the Closing and
shall be in addition to such fifteen percent (15%).
5.13. Special Capitalization Indemnity.(a) Subject to the
provisions of Section 5.13(e) below, Agamemnon Xxxxxxxx (the "Indemnifying
Party") agrees to indemnify and hold harmless the Parent, it's Affiliates, each
of their officers, directors, employees and agents and their respective
successors and assigns (each, an "Indemnified Party"), from and against any
losses, damages, expenses or costs (including reasonable legal fees and
expenses) (collectively, "Losses") which are caused by or arise out of (i) any
breach or inaccuracy of the representations and warranties contained in Section
2.4 of this Agreement and (ii) any and all third party actions, suits,
proceedings, claims, demands or judgments relating to, or arising out of, the
foregoing (in each such case a "Claim").
(b) An Indemnified Party under this Agreement shall, with
respect to any Claim asserted against such party by any third party, give
written notice to the Indemnifying Party of any liability which might give rise
to a claim for indemnity under this Agreement within sixty (60) business days of
the receipt of any written claim from any such third party, but not later than
twenty (20) days prior to the date any answer or responsive pleading is due, and
with respect to other matters for which the Indemnified Party may seek
indemnification, give prompt written notice to the Indemnifying Party of any
liability which might give rise to a claim for indemnity; provided, however,
that any failure to give such notice will not waive any rights of the
Indemnified Party except to the extent the rights of the Indemnifying Party are
materially prejudiced.
(c) The Parent shall conduct the defense of such Claim
through counsel of its choosing and shall be responsible for the expenses of
such defense, subject to the provisions of 5.13(d) below. If no payments
(whether in cash, transfer of shares or otherwise) are made by the Indemnifying
29
Party under the provisions of this Section 5.13 with respect to a Claim, the
Indemnifying Party will have no responsibility for the cost of the defense. The
Indemnified Party shall not settle any such Claim without prior notice to and
consultation with the Indemnifying Party, and no such settlement involving any
equitable relief or which might have an adverse effect on the Indemnified Party
may be agreed to without the written consent of the Indemnified Party (which
consent shall not be unreasonably withheld). The parties agree to cooperate in
defending such third party Claims and the Indemnified Party shall provide such
cooperation as the Indemnifying Party shall reasonably request with respect to
any matter for which indemnification is sought hereunder; and the parties hereto
agree to cooperate with each other in order to ensure the proper and adequate
defense thereof.
(d) With regard to Claims of third parties for which
indemnification is payable hereunder, such indemnification shall be paid by the
Indemnifying Party upon the earlier to occur of: (i) the entry of a judgment
against the Indemnified Party and the expiration of any applicable appeal
period, or if earlier, five (5) days prior to the date that the judgment
creditor has the right to execute the judgment; (ii) the entry of an
unappealable judgment or final appellate decision against the Indemnified Party;
or (iii) a settlement of the Claim. The reasonable expenses of counsel to the
Indemnified Party shall be reimbursed by the Indemnifying Party at the same time
a payment is made under this Section 5.13 (d). With regard to other Claims for
which indemnification is payable hereunder, such indemnification shall be paid
promptly by the Indemnifying Party upon demand by the Indemnified Party.
(e) Notwithstanding any contained in this Section 5.13 to
the contrary, the Indemnified Party and the Indemnifying Party shall use their
commercially reasonable efforts and cooperate to the extent reasonably
practicable to ensure that payment to any third party with respect to any Claim
shall be made first, in the form of shares of Parent Common Stock transferred by
the Indemnifying Party and second, in the form of cash, it being acknowledged by
the Indemnifying Party that the aforementioned priority of form of payment shall
be inapplicable to any Claim made by the Indemnified Party for Losses suffered
as a direct result of any breach or inaccuracy of the representations and
warranties set forth in Section 2.4 hereof.
(f) For purposes of this Section 5.13, the
representations and warranties contained in Section 2.4 of this Agreement shall
survive for a period of six (6) years following the date of this Agreement.
5.14. Termination of Affiliate Transactions. Other than those
Contracts set forth on Schedule 5.14, any and all Contracts and arrangements set
forth on either Schedule 2.21 or Schedule 3.21 and any Contract or arrangement
which should have been disclosed thereon, shall terminate immediately prior to
the Closing.
5.15. Repayment of Loan from Agamemnon Xxxxxxxx. The parties
acknowledge and agree that Agamemnon X. Xxxxxxxx has previously loaned to the
Company an amount equal to US$81,000, which loan has not been documented. The
parties further acknowledge and agree that (a) the obligation to repay such loan
shall be assumed by the Parent at the Closing; provided, however, that such
amount shall not bear interest and shall not become due and payable until such
time as the PIPE Financing shall have closed; and (b) notwithstanding any other
agreement to the contrary (whether written or oral, express or implied) between
30
Agamemnon X. Xxxxxxxx, on the one hand, and the Company or any of its
representatives, on the other hand, such loan shall not be convertible into any
shares of capital stock of the Company or Parent.
5.16. Failure to Consummate PIPE Financing.
------------------------------------
(a) In the event that (i) the PIPE Financing is not
consummated by the date upon which the Bridge Loan Amount is due and payable
(the "Maturity Date") and (ii) the Board of Directors of Parent determines that
it is in the best interest of Parent to unwind the Share Exchange and the other
transactions contemplated by this Agreement, then Parent shall have thirty (30)
days from the Maturity Date (the "Extended Payment Date") to repay the Bridge
Loan Amount (including any and all accrued and unpaid interest thereon) (such
aggregate amount, the "Amount Payable").
(b) In the event that full payment of the Amount Payable
is made on or prior to the Extended Payment Date, (i) all of Parent's right,
title and interest in and to any and all Intellectual Property relating to,
utilizing, or otherwise involving sodium phenyl butyrate shall be promptly
transferred to an entity designated by a majority of the Bridge Stockholders,
(ii) the Parent shall issue to the Somanta Stockholders that number of shares of
Parent Common Stock so that, immediately following such issuance, the Somanta
Stockholders and the Somanta Optionholders collectively hold 80% of the
outstanding shares of Parent Common Stock (on a fully diluted basis) and the
Bridge Stockholders collectively hold 20% of the outstanding shares of Parent
Common Stock (on a fully diluted basis), and (iii) the Voting Agreement shall
immediately terminate with no further action required.
(c) In the event that the Parent does not make full
payment of the Amount Payable on or prior to the Extended Payment Date, (i) the
Parent shall issue to the Bridge Stockholders that number of shares of Parent
Common Stock so that, immediately following such issuance, the Bridge
Stockholders collectively hold 80% of the outstanding shares of Parent Common
Stock (on a fully diluted basis) and the Somanta Stockholders and Somanta
Optionholders collectively hold 20% of the outstanding shares of Parent Common
Stock (on a fully diluted basis) and (ii) the Voting Agreement shall immediately
terminate with no further action required.
(d) Each of the parties hereto hereby covenants and
agrees to take, and agrees to the taking of, any and all actions necessary or
advisable, including, but not limited to, voting shares of Parent Common Stock
held by such party in favor of any actions necessary or advisable, in connection
with the furtherance of the transaction contemplated by this Section 5.16.
ARTICLE VI
CONDITIONS TO CLOSING
6.1. Conditions to Each Party's Obligations to Consummate the
Transactions. The respective obligations of each party to this Agreement to
consummate the Transactions shall be subject to the following conditions, unless
waived in writing prior to the Closing Date by such party:
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(a) All consents, approvals, authorizations, orders and
action of any Governmental Body required to permit the consummation of the
Transactions shall have been obtained, made or waived and shall be in full force
and effect.
(b) No action shall have been taken, and no statute,
rule, regulation, executive order, judgment, decree, or injunction shall have
been enacted, entered, promulgated or enforced (and not repealed, superseded,
lifted or otherwise made inapplicable), by any court or governmental or
regulatory agency of competent jurisdiction which restrains, enjoins or
otherwise prohibits the consummation of the Transactions (each party agreeing to
use its reasonable best efforts to avoid the effect of any such statute, rule,
regulation or order or to have any such order, judgment, decree or injunction
lifted).
(c) All of the Somanta Shareholders and Somanta
Optionholders shall have approved this Agreement as evidenced by the execution
of counterpart signature pages to this Agreement by such Somanta Shareholders
and Somanta Optionholders.
6.2. Conditions to Obligations of Parent to Consummate the
Transactions. The obligation of Parent to consummate the Transactions shall be
subject to the satisfaction of the following conditions, unless waived in
writing prior to the Closing by Parent:
(a) The representations and warranties of the Company and
each Somanta Shareholder contained herein that are qualified as to materiality
or a Company Material Adverse Effect (or similar concept) shall be true and
correct, and those not so qualified shall be true and correct in all material
respects, in each case at and as of the Closing with the same force and effect
as though made at and as of the Closing (except to the extent a representation
or warranty speaks specifically as of an earlier date, in which case as of such
date).
(b) The Company and each Somanta Shareholder shall have
performed, in all material respects, all obligations and complied with all
covenants required by this Agreement to be performed or complied with, in all
material respects, by it prior to the Closing.
(c) The Company shall have executed and delivered to the
Parent a certificate, dated the date of Closing, and signed by an officer of
Company, evidencing compliance with Sections 6.2(a) and 6.2(b) hereof.
(d) The Voting Agreement shall have been duly executed
and delivered to and by each of the other parties thereto, and each Resignation
Letter (as defined in the Voting Agreement) shall have been delivered to the
Parent.
(e) Each of the Service Agreements shall have been
terminated as evidenced by a written agreement to that effect executed by the
parties thereto.
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(f) Each Somanta Shareholder shall have delivered a duly
executed share transfer form in favor of Parent together with the share
certificate(s) in respect of such Somanta Shareholder's Somanta Shares.
(g) Each Somanta Optionholder shall have delivered its
Somanta Option for cancellation.
(h) All consents in connection with any Company Material
Contracts shall have been received and all notices thereunder shall have been
duly given so that such Company Material Contracts shall remain in full force
and effect following the consummation of the Transactions.
(i) The Company shall have delivered to the Parent a
certificate, dated the date of the Closing and signed by the secretary of the
Company with each of the following attached as exhibits: (i) the current in
effect Articles of Incorporation (or equivalent organizational document) of the
Company as amended to the Closing Date, (ii) the current in effect Bylaws (or
equivalent organizational document) of the Company as amended to the Closing
Day, and (iii) effective resolutions of the Board of Directors of the Company
approving the transactions, with the secretary of the Company certifying that
each of the attached exhibits are accurate, complete and in full force and
effect.
(j) The SCO Loan Documents shall have been duly executed
and delivered to the Parent by SCO.
(k) That certain letter dated July 25, 2005 from the
Company to Europa Partners Limited, terminating the Letter Agreement dated
February 21, 2005, between such parties, shall have been delivered by the
Company to Europa Partners Limited.
(l) A fully executed copy of that certain Patent and
Know-how Exclusive Sublicense Agreement by and between Immunodex, Inc. and
Somanta to be entered into on August 18, 2005 in form and substance satisfactory
to SCO shall have been delivered to SCO.
(m) Evidence satisfactory to SCO that the promissory note
issued by the Company in favor of Xxxxxxxx Xxxxxxxxx has been cancelled shall
have been delivered to SCO.
(n) There shall not have occurred after the date hereof
any event or events that, individually or in the aggregate, constitute a Company
Material Adverse Effect.
6.3. Conditions to Obligations of the Somanta Shareholders to
Consummate the Transactions. The obligation of the Somanta Shareholders to
consummate the Transactions shall be subject to the satisfaction of the
following conditions, unless waived in writing prior to the Closing by holders
holding a majority in interest of the Somanta Shares:
(a) The representations and warranties of Parent
contained herein that are qualified as to materiality or a Parent Material
Adverse Effect (or similar concept) shall be true and correct, and those not so
qualified shall be true and correct in all material respects, in each case at
33
and as of the Closing Date with the same force and effect as though made at and
as of the Closing Date (except to the extent a representation or warranty speaks
specifically as of an earlier date, in which case as of such date).
(b) Parent shall have performed, in all material
respects, all obligations and complied with all covenants required by this
Agreement to be performed or complied with, in all material respects, by it
prior to the Closing.
(c) Parent shall have delivered to the Somanta
Shareholders a certificate, dated the date of Closing and signed by an officer
of Parent, evidencing compliance with Sections 6.3(a) and 6.3(b) hereof.
(d) Parent shall have delivered to the Somanta
Shareholders a certificate, dated the date of the Closing and signed by the
secretary of Parent with each of the following attached as exhibits: (i) the
current in effect Articles of Incorporation of Parent as amended to the Closing
Date, (ii) the current in effect Bylaws of Parent as amended to the Closing
Date, and (iii) effective resolutions of the Board of Directors of Parent
approving the issuance of the Parent Common Stock and the appointment of the
incoming Board of Directors in accordance with Section 5.2 hereof, with the
secretary of Parent certifying that each of the attached exhibits are accurate,
complete and in full force and effect.
(e) Parent shall have delivered the resignations of the
relevant members of the Parent's Board of Directors in accordance with Section
5.2 hereof.
(f) The Voting Agreement shall have been dully executed
and delivered to and by each of the other parties thereto.
(g) Parent shall have delivered original stock
certificates representing the Parent Common Stock registered in the names and in
the denominations set forth on Exhibit A hereto.
(h) Parent shall have delivered each of the Bridge
Substitute Options.
(i) Parent and SCO shall have executed the SCO Loan
Documents and SCO shall have initiated a wire transfer of such Bridge Loan
Amount into an account designated by Parent.
(j) If required to be paid as of the Closing Date, Parent
shall have paid the transfer taxes due to the United Kingdom tax authorities
arising from or related to the Share Exchange.
(k) There shall have occurred after the date hereof any
event or events that, individually or in the aggregate, constitute a Parent
Material Adverse Effect.
(l) Parent shall have amended its Phenylbutyrate
Co-Development and Sublicense Agreement with Virium Inc. ("Virium") to provide
that should Virium be in default under its License Agreement dated May 25, 1995
with the Public Health Service and National Institute of Health, Parent shall
have the right to cure any such default and assume such license agreement.
34
ARTICLE VII
MISCELLANEOUS
7.1. Certain Definitions; Rules of Construction. Definitions shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references herein to Articles,
Sections, Exhibits and Schedules shall be deemed to be references to Articles
and Sections of, and Exhibits and Schedules to, this Agreement unless the
context shall otherwise require. All Exhibits and Schedules attached hereto
shall be deemed incorporated herein as if set forth in full herein and, unless
otherwise defined therein, all terms used in any Exhibit or Schedule shall have
the meaning ascribed to such term in this Agreement. The words "include,"
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. Unless otherwise expressly
provided herein, any agreement, plan, instrument or statute defined or referred
to herein or in any agreement or instrument that is referred to herein means
such agreement, plan, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments thereto and instruments
incorporated therein. For the purposes of this Agreement, the following terms
shall have the following meanings:
"Affiliate" shall mean, with respect to any Person, any other Person
that directly or indirectly controls, is controlled by, or is under common
control with, such first Person. The term "control" for purposes of this
definition, means possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ownership of voting securities, by contract or otherwise.
"Applicable Law" means any Federal, state, local or foreign law,
regulation, code, ordinance, statute, rule, Order, judgment, decree or other
requirement of a Governmental Body applicable to the business, operations or
property of the Company, any Company Subsidiary or Parent as the context may
require.
"Benefit Plan" means each deferred compensation, executive
compensation, incentive compensation, stock purchase or other stock-based
compensation plan, severance or termination pay, holiday, vacation or other
bonus plan or practice, hospitalization or other medical, life or other
insurance, supplemental unemployment benefits, profit sharing, pension, or
retirement plan, program, agreement, commitment or arrangement, and each other
employee Benefit Plan, program, agreement or arrangement, including, without
limitation, each "employee Benefit Plan" as such term is defined under Section
3(3) of ERISA.
"Business Day" means any day other than Saturday or Sunday or any other
day on which banks in the State of New York are permitted or obligated to be
closed for business.
35
"Claim" means any action, suit, claim, complaint, demand, litigation or
similar proceeding.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"Environmental Costs" means, without limitation, any actual or
potential investigation, cleanup, remediation, removal, or other response costs
(which without limitation shall include costs to cause a Person to come into
compliance with Environmental Laws), expenses (including without limitation fees
and disbursements of consultants, counsel, and other experts in connection with
any environmental investigation, testing, audits or studies, response actions,
or litigation), losses, liabilities or obligations (including without
limitation, liabilities or obligations under any lease or other contract),
payments, damages (including without limitation any actual, punitive or
consequential damages under any statutory laws, common law cause of action or
contractual obligations or otherwise, including without limitation damages (i)
of third parties for personal injury or property damage, or (ii) to natural
resources), civil or criminal fines or penalties, judgments, and amounts paid in
settlement arising out of or relating to or resulting from any Environmental
Matter.
"Environmental Laws" means all applicable statutes, rules, regulations,
ordinances, orders, decrees, judgments, permits, licenses, consents, approvals,
authorizations, and governmental requirements or directives or other obligations
lawfully imposed by Governmental Body under federal, state, local, foreign or
common law, indemnity agreements or other contractual obligations, in each case,
pertaining to the protection of the environment, protection of public health,
protection of worker health and safety, the treatment, emission and/or discharge
of gaseous, particulate and/or effluent pollutants, and/or the handling of
hazardous materials, including without limitation, the Clean Air Act, 42 U.S.C.
ss. 7401, et seq., the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("CERCLA"), 42 U.S.C. ss. 9601, et seq., the Federal Water
Pollution Control Act, 33 U.S.C. ss. 1321, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. ss. 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq. ("RCRA"), and the Toxic Substances
Control Act, 15 U.S.C. ss. 2601, et seq.
"Environmental Matter" means any matter arising out of, relating to, or
resulting from pollution, contamination, protection of the environment, human
health or safety, health or safety of employees, sanitation, and any matters
relating to emissions, discharges, disseminations, releases or threatened
releases, of Hazardous Substances into the air (indoor and outdoor), surface
water, groundwater, soil, land surface or subsurface, buildings, facilities,
real or personal property or fixtures or otherwise arising out of, relating to,
or resulting from the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, handling, release or threatened release of
Hazardous Substances.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Facilities" means all real property owned, leased, operated or
controlled by a Person and any buildings, facilities, machinery, equipment,
furniture, leasehold and other improvements, fixtures, vehicles, structures, any
related capital items and other tangible property located on, in, under, or
above the real property of such Person.
36
"Governmental Body" means any court, administrative or regulatory
agency or commission or other governmental authority of competent jurisdiction.
"Government Agency" means (i) the United States Government, including
all departments and agencies of any branch of the United States Government, all
independent agencies or instrumentalities and all non-appropriated fund
activities within the United States Government and United States Government
corporations, and (ii) any state or local government, including all departments,
agents, agencies, branches, independent agencies or instrumentalities,
activities, and non-appropriated fund activities of or within a state or local
government and all state or local government corporations, or (iii) any foreign
government, including all departments and agencies of any branch thereof, all
independent agencies or instrumentalities and all non-appropriated fund
activities of or within such government, each as the context may require.
"Hazardous Substances" means any pollutants, contaminants, toxic or
hazardous or extremely hazardous substances, materials, wastes, constituents,
compounds, chemicals (including, without limitation, petroleum or any
by-products or fractions thereof, any form of natural gas, Xxxxxx Amendment
materials, lead, asbestos and asbestos-containing materials ("ACM"), building
construction materials and debris, polychlorinated biphenyls ("PCBs") and
PCB-containing equipment, radon and other radioactive elements, ionizing
radiation, electromagnetic field radiation and other non-ionizing radiation,
sonic forces and other natural forces, infectious, carcinogenic, mutagenic, or
etiologic agents, pesticides, defoliants, explosives, flammables, corrosives and
urea formaldehyde foam insulation) that are regulated by any Environmental Laws.
"Intellectual Property" means all of the following:
---------------------
(a) patents, patent applications and inventions, designs
and improvements described and claimed therein, patentable inventions and other
patent rights (including any divisions, continuations, continuations-in-part,
substitutions, or reissues thereof, whether or not patents are issued on any
such applications and whether or not any such applications are modified,
withdrawn, or resubmitted);
(b) trademarks, service marks, trade dress, trade names,
brand names, designs, logos, or corporate names, whether registered or
unregistered, and all registrations and applications for registration thereof;
(c) copyrights and mask works, including all renewals and
extensions thereof, copyright registrations and applications for registration
thereof;
(d) trade secrets, confidential business information and
other proprietary information, concepts, ideas, designs, research or development
information, processes, procedures, techniques, technical information,
specifications, operating and maintenance manuals, engineering drawings,
methods, know-how, technical data and databases, discoveries, inventions,
modifications, extensions, improvements, and other proprietary rights (whether
or not patentable or subject to copyright, mask work, or trade secret
protection);
37
(e) computer software programs, including, without
limitation, all source code, object code, and documentation related thereto; and
(f) Internet addresses, domain names, web sites, web
pages and similar rights and items.
"Knowledge" with respect to any Person, means the knowledge any of the
executive officers of such Person would reasonably be expected to have with
respect to the given subject matter after diligent inquiry.
"Lien" means any mortgage, pledge, lien, charge, easement, restrictive
covenant, encumbrance, voting or transfer restriction, or security interest.
"Material Contracts" means any of the following contracts, agreements,
understanding or arrangements, whether or not in writing (each, a "Contract"):
(a) any Contract relating to the employment of any
employee or consultant;
(b) any Contract relating to the acquisition, transfer,
development, sharing or license of any Intellectual Property (except for any
Contract pursuant to which any Intellectual Property is licensed to a Person
under any third party software license generally available to the public at a
cost of no more than $10,000);
(c) any Contract which provides for indemnification of
any officer, director, employee or agent of a Person;
(d) any Contract imposing any restriction on the right or
ability of a Person to (A) compete with any other Person, (B) acquire any
material product or other material asset or any services from any other Person,
sell any material product or other material asset to or perform any services for
any other Person or transact business or deal in any other manner with any other
Person, (C) develop or distribute any material technology, (D) make, have made,
use or sell any current products or products under development, or (E) acquire
any capital stock or other security of any Person;
(e) any Contract that contemplates or involves payment or
delivery of cash or other consideration in an amount or having a value in excess
of $15,000 in the aggregate, or contemplates or involves the performance of
services having a value in excess of $15,000 in the aggregate;
(f) any other Contract, if a breach of such Contract
would reasonably be expected to have a Material Adverse Effect on a Person;
(g) any Contract requiring that a Person give any notice
or provide any information to any Person prior to considering or accepting any
Acquisition Proposal or similar proposal, or prior to entering into any
discussions, agreement, arrangement or understanding relating to any Acquisition
Transaction or similar transaction or any Contract providing for any material
future payments that are conditioned, in whole or in part, on a change of
control of the Person;
38
(h) any Contract for the lease or use of real property;
(i) any Contract guarantying the performance of any
Person or guarantying any indebtedness for borrowed money;
(j) any Contract containing any covenant limiting in any
respect the right of a Person (1) to engage in any line of business, (2) to
develop, market or distribute any products or services, or (3) to compete with
any Person or granting any exclusive distribution rights;
(k) any Contract relating to Indebtedness of a Person or
to preferred stock issued by such Person (other than Indebtedness owing to or
preferred stock owned by the such Person). As used in this Agreement the term
"Indebtedness" means, with respect to a Person, all obligations of such Person
(i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases, (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person, and (vi)
make-well or make-whole agreements entered into on behalf of any other Person;
(l) any strategic alliance, revenue sharing, joint
venture or partnership agreement of the Person;
(m) any Contract which grants any right of first or last
refusal or right of first or last offer or similar right or that limits or
purports to limit the ability of a Person to own, operate, sell, transfer,
pledge or otherwise dispose of any material amount of assets or business;
(n) any Contract with distributors, dealers,
manufacturers, manufacturer's representatives, sales agencies, franchisees, or
pre-clinical or clinical trial testing entities;
(o) any Contract relating to (A) the future disposition
or acquisition of any assets or properties of a Person, other than dispositions
or acquisitions in the ordinary course of business consistent with past
practice, and (B) any merger or other type of business combination;
(p) any Contract between or among a Person, on the one
hand, and any of such Person's officers, directors, employees or shareholders,
or any affiliate or associate of the such Person, on the other hand;
(q) any collective bargaining or similar labor Contracts;
and
(r) any Contracts that (A) limit or contain restrictions
on the ability of a Person to declare or pay dividends on, to make any other
distribution in respect of or to issue or purchase, redeem or otherwise acquire
39
its capital stock, to incur Indebtedness, to incur or suffer to exist any lien,
to purchase or sell any assets and properties, to change the lines of business
in which it participates or engages or to engage in any business combination or
(B) require the Person to maintain specified financial ratios or levels of net
worth or other indicia of financial condition.
"Person" means any individual, corporation, partnership, limited
liability company or partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government (including any agency
or political subdivision thereof).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Subsidiary" of any Person means any corporation, partnership, joint
venture or other legal entity of which such Person (either directly or through
or together with any other Subsidiary of such Person), owns, directly or
indirectly, 50% or more of the stock or other equity interests the holders of
which are generally entitled to vote for the election of the board of directors
or similar governing body of such corporation, partnership, joint venture or
other legal entity.
"Tax" or "Taxes" means any taxes, charges, fees, imposts, levies or
other assessments, including, without limitation, all net income, franchise,
profits, gross receipts, capital, sales, use, ad valorem, value added, transfer,
transfer gains, inventory, capital stock, license, withholding, payroll,
employment, social security (or similar), unemployment, excise, severance,
stamp, occupation, real or personal property, premium, windfall profits,
environmental (including taxes under Section 59A of the Code), customs duties,
registration, alternative or add-on minimum, and estimated taxes, customs
duties, fees, assessments and charges of any kind whatsoever, together with any
interest and any penalties, fines, additions to tax or additional amounts
thereon whether disputed or not, imposed by any taxing authority (Federal,
state, local or foreign) and shall include any transferee liability in respect
of Taxes.
"Tax Return" means any returns, declarations, reports, estimates,
information returns or statements relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"Transaction Documents" means this Agreement and each of the agreements
and instruments contemplated hereby or thereby, including, without limitation,
the Voting Agreement, the officer's certificate to be delivered by Parent
pursuant to Section 6.2(c), the officer's certificate to be delivered by the
Company pursuant to Section 6.3(c), and all documents, instruments or agreements
attached to or contemplated by any of the foregoing.
7.2. No Survival of Representations and Warranties. Other than as
set forth in Section 5.13, all of the representations and warranties contained
in ARTICLE II and ARTICLE III of this Agreement shall expire at the Closing, at
which time liability therefor shall cease.
7.3. Waivers and Amendments. Subject to Applicable Law, this
Agreement may be amended, superseded, canceled, renewed or extended, and the
terms hereof may be waived, only by a written instrument signed by the Company,
the Parent and holders holding [a majority in interest] of the Somanta Shares,
40
and, in the case of a waiver, by or on behalf of the party waiving compliance.
No delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any party of any such right, power or privilege, nor any single or partial
exercise of any such right, power or privilege, preclude any further exercise
thereof or the exercise of any other such right, power or privilege.
7.4. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAWS OF SUCH STATE, APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
7.5. Notices. Any notices or other communications required under
this Agreement shall be in writing and be effective upon delivery if given by
hand delivery or facsimile transmission or on the next day after given if
delivered by overnight courier, and shall be given at the addresses or facsimile
numbers set forth below, with copies provided as follows:
(a) if to the Company:
Somanta Limited
00 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxx Xxxxxxx WIN 1 DE
Attn: Xxxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx & Lardner LLP
000 X. Xxxxxxxx
00xx Xxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Fax: 000-000-0000
(b) if to Parent:
Bridge Oncology Products, Inc..
0000 Xxxxxx xx xxx Xxxxxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Fax: ______________
with a copy to:
Xxxxxx & Xxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxxxx X. Xxxxxxxx, Esq.
Fax: 000-000-0000
41
or at such other place or places or to such other person or persons as shall be
designated in writing by the parties to this Agreement in the manner herein
proved.
7.6. Section Headings. The section and paragraph headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
7.7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which,
together, shall constitute one and the same instrument. Each of the counterparts
may be signed and transmitted by facsimile with the same validity as if it were
an original document.
7.8. Expenses. All costs and expenses incurred in connection with
this Agreement and the Transactions shall be paid by the party incurring such
costs and expenses, whether or not the Share Exchange is consummated.
7.9. Assignments. This Agreement, by operation of law or
otherwise, shall be binding upon and inure to the benefit of successors and
legal representatives of the parties hereto.
7.10. Entire Agreement; Enforceability. This Agreement and the
Transaction Documents, including the Exhibits and Schedules attached hereto and
thereto: (i) constitute the entire agreement among the parties with respect to
the Transactions and supersedes all prior agreements and understandings, both
written and oral, among the parties, with respect to the subject matter hereof
and thereof; and (ii) shall be binding upon, and are solely for the benefit of
each party hereto and nothing in this Agreement is intended to confer upon any
other Person any rights or remedy of any nature whatsoever hereunder or by
reason of this Agreement or any of the Transaction Documents.
7.11. Severability. Any term or provision of this Agreement which
is invalid, illegal or unenforceable in any jurisdiction shall, as to that
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without rendering invalid, illegal or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
[Remainder of Page Intentionally Left Blank]
42
IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be duly executed as of the date first above written.
BRIDGE ONCOLOGY PRODUCTS, INC.
By: /s/ XXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Chairman
SOMANTA LIMITED
By: /s/ XXXXXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Chairman
/s/ AGAMEMNON X. XXXXXXXX
-----------------------------------------
Agamemnon X. Xxxxxxxx, an individual
[Signature Page to Share Exchange Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be duly executed as of the date first written above.
SOMANTA SHAREHOLDERS
/s/ XXXX XXXXX Address: Oakdale, Egg Pie Lane
----------------------------- Xxxxxxxxxxxxx, Xxxx XX00 0XX
Xxxx Xxxxx
Xxxxxxxxx Ltd.
By: /s/ XXXXXXX XXX-XXX LUNG Address: LongField Ltd. for and on
-------------------------------- behalf of Fides Trust Limited
Fiedes Trust Limited represented 0000 Xxxx xx Xxxxxxx Tower
by Xxxxxxx Xxx-Xxx Lung 00 Xxxxxxxx Xxxx, Xxxx Xxxx
Director
/s/ XXXXXXXX XXXX Address: Rowens, Garvald
------------------------------------ Xxxx Xxxxxxx XX00 0XX, Xxxxxxxx
Xxxxxxxx Xxxx
/s/ XXXXXX XXXXXXX Address: Garden Cottage, Riding Lane
------------------------------------ Xxxxxxxxxxxxx, Xxxx XX00 0XX
Xxxxxx Xxxxxxx
/s/ XXXXXXXX XXXXXXXX Address: Patio Palace
------------------------------------ 41 Ave Xxxxxx Xxxx
Xxxxxxxx Xxxxxxxx Monaco, MC 98000
/s/ XXXXXXX X. XXXXXX Address: 3 Ribera
------------------------------------ Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
/s/ XXXXXX X. XXXXX Address: 9 A Lansdawne Walk
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X00 0XX
Xxxxxx Xxxxxx Xxxxx
The School of Pharmacy, University
of London
By: /s/ JULIAN AXE Address: The School of Pharmacy
-------------------------------- University of London
Xx. Xxxxxx Axe 00-00 Xxxxxxxxx Xxxxxx
Clerk to the Council London, WCIN 1AX
/s/ XXXXX X. XXXXXXX Address: 00 Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------ Xxxxxx, Xxxxxxx X0 0XX
Xxxxx X. Xxxxxxx
/s/ XXXX XXXXX Address: 000 Xxxxxxxxx Xxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X0 0XX
Xxxx Xxxxx
/s/ XXXXX XXXXXXX Address: 00 Xxx Xxxx Xxxxx Xxxx
------------------------------------ Xxxxx Xxxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx
[Counterpart Signature Page to Share Exchange Agreement]
SOMANTA SHAREHOLDERS
Immunodex Inc.
By: /s/ XXXXXXX X. XXXXXXX Address: Immunodex Inc.
-------------------------------- X.X. Xxx 0000
Xxxxxxx X. Xxxxxxx Xxxxxx, XX 00000
President
/s/ XXXXXXXX XXXXXXXXX Address: 2 Xxxxx Retreat
------------------------------------ Xxxxx Xxxx, Xxxxxxxxx XX0 0XX
Xxxxxxxx Xxxxxxxxx
Cinnabar Consulting Limited
By: /s/ VIJAY CURTHAN Address: Cinnabar Consulting
-------------------------------- 00 Xxxxxxx Xxxxx
Vijay Curthan Xxxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxx XX00 0XX
Xxxxx & Co. Limited
By: /s/ XXXXX XXXXXX Address: Xxxxx & Co. Limited
-------------------------------- 00 Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx XX0 0XX
Managing Director
VTD Trust
By: /s/ XXXXX XXXX-XXX Address: VTD Trust
-------------------------------- 0000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx-Xxx Xxxxxxx Xxxxx, XX 00000
Trustee for the VTD Trust
/s/ X.X. XXXXXXXX Address: 00 Xxxxx Xxxxxx
------------------------------------ 10556 Plaka
X.X. Xxxxxxxx Athens, Greece
Papas United Software Association
Limited
By: /s/ PAULINA GUBIEHDEA Address: Papas United Software
-------------------------------- Association Limited
Paulina Gubiehdea 284 Arch Makarios III Avenue
Managing Director Xxxxxxx Xxxxx, Xxxxx X, 0xx
Xxxxx
0000 Xxxxxxxx, Xxxxxx
Xxxx Family Trust
By: /s/ XXXXXX X. XXXX Address: Xxxx Family Trust
-------------------------------- 00000 Xxxx Xxxxxx Xxxxx
Xxxxxx X. Xxxx Laguna Hills, CA 92653
Trustee
/s/ XXXX XXXXX XXXXXX Address: 0000 Xxxxxxxxx Xxxxxx
------------------------------------ Xxxxxx Xxxxx, XX 00000
Xxxx Xxxxx Xxxxxx
[Counterpart Signature Page to Share Exchange Agreement]
SOMANTA SHAREHOLDERS
Walbrook Trustees (Jersey) Limited
re k33
By: /s/ XXXX XXXXX Address: Walbrook Trustees (Jersey)
-------------------------------- Limited re k33
Xxxx Xxxxx P.O. Box 248, Lord Coutanche
Director, for Walbrook Trustees House
00-00 Xxxxxxxxx
Xx. Xxxxxx, Xxxxxx XX0 0XX
/s/ COSTAS LOS Address: Villa Eden Azur
------------------------------------ 00 Xxxxxxxxx x'Xxxxxx XX-00000,
Xxxxxx Xxx Xxxxxx
De Montfort University
By: /s/ XXXX XXXXXX Address: De Montfort University
-------------------------------- The Innovation Centre
Xxxx Xxxxxx Oxford Street
Director of International Property Leicester, UK XX0 0XX
/s/ MARIOS ST. XXXXXXXXX Address: Tamasoy 27
------------------------------------ Latsia Nicoia Cyprus
Marios St. Xxxxxxxxx
/s/ XXXXX KARNABAKOU Address: Xxxxxxxx Xxxx 22
------------------------------------ Xxxxxxx, Xxxxxx 00000 Xxxxxx
Eleni Karnabakou
[Counterpart Signature Page to Share Exchange Agreement]
IN WITNESS WHEREOF, the parties hereto have caused this Share Exchange
Agreement to be duly executed as of the date first written above.
SOMANTA OPTIONHOLDERS
/s/ XXXXX X. XXXXXX Address: 00 Xxxxx Xxxxx
------------------------------------ Xxxxxx, XX XX0 0XX
Xxxxx X. Xxxxxx
/s/ XXXXXXX X.X. XXXXXX Address: 0/00 Xxxxx Xxxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx SWIX 8DF
Xxxxxxx X.X. Xxxxxx
/s/ X.X. XXXXX Address: 00 Xxxxxxxxxx Xxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X00 0XX
X.X. Xxxxx
OCTANe
By: /s/ XXXX AUGUSTA Address: OCTANe (Orange County
-------------------------------- Technology Action Network Inc.)
Xxxx Augusta 0000 Xxxxx Xx., Xxxxx 0000
Executive Director New Xxxx Xxxxx, XX 00000
/s/ XXXXXX XXXXXXX Address: 22741 Xxxxxx
------------------------------------ Xxxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxxxx
/s/ XXXXXXXX X. XXXXXXXXX Address: 00 Xxx Xxxxxx Xxxxx
------------------------------------ Xxxxxxx Xxxxx, XX 00000
Xxxxxxxx X. Xxxxxxxxx
[Counterpart Signature Page to Share Exchange Agreement]
Exhibit A
Somanta Shareholders
-------------------------------------------------------------------------------------------
Number of shares of Parent
Name and Address of Number of Somanta Common Stock to be issued
Somanta Shareholder Shares Held in the Share Exchange *
-------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxxx
Patio Palace, 41 Ave. Xxxxxx Xxxx 500,000 36,501
MC98000, Monaco
-------------------------------------------------------------------------------------------
Xx. Xxxxxx X. Xxxx Trustee
00000 Xxxx Xxxxxx Xxxxx 540,000 39,422
Xxxxxx Xxxxx, XX 00000
-------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X
3 Xxxxxx 487,600 35,596
Xxxxxx, XX 00000
-------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx Xxxxxx
00 Xxxxxxxx Xxxx 50,000 3,650
Xxxxxx X0 0XX
-------------------------------------------------------------------------------------------
Cinnabar Consulting Limited
00 Xxxxxxx Xxxxx, Xxxxxxx Xxxxxxxxx 300,000 21,901
Xxxxxx Xxxxx, Xxxxxx XX00 0XX
-------------------------------------------------------------------------------------------
De Montfort University
Xxx Xxxxxxx, Xxxxxxxxx XX0 0XX 4,200,000 306,612
-------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx
000 Xxxxx Xx, Xxxx 0000 1,060,000 77,383
Xxxxxxxx, Xxxxxxxxxxx 00000
-------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx Xxxxxx
0x Xxxxxxxxx Xxxx 1,650,000 120,455
Xxxxxx X00 0XX
-------------------------------------------------------------------------------------------
Xxxxxx, Xxxx Xxxxx
0000 Xxxxxxxxx Xxxxxx 1,350,000 98,554
Xxxxxx Xxxxx, XX 00000
-------------------------------------------------------------------------------------------
Immunodex Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 4,000,000 292,012
Xxxxxxxxxx, XX 00000
-------------------------------------------------------------------------------------------
Karnabakou, Eleni
Xxxx 0, Xxxxxx Xxxxx Xxxx 200,000 14,601
Xxxxxxx Xxxx, Xxxxxx X00 1 EA
-------------------------------------------------------------------------------------------
Xxxxx, Xxxx
Oakdale, Egg Pie Lane 200,000 14,601
Xxxxxxxxxxxxx, Xxxx XX00 0XX
-------------------------------------------------------------------------------------------
King, J
Rowans, Garvald 200,000 14,601
Xxxx Xxxxxxx XX00 0XX, Xxxxxxxx
-------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxxxx
00 Xxxxx Xxxxxx 1,191,086 86,953
000 00 Xxxxx, Xxxxxx, Xxxxxx
-------------------------------------------------------------------------------------------
Longfield Ltd
c/o Commence Co. Ltd 1,060,000 77,383
0000 Xxxx xx Xxxxxxx Tower
00 Xxxxxxxx Xxxx, Xxxxxxx, Xxxx Xxxx
-------------------------------------------------------------------------------------------
X-0
-------------------------------------------------------------------------------------------
Xxx, Xxxxxx
Xxxxx Xxxx Xxxx 000,000 36,501
00 Xxxxxxxxx x'Xxxxxx XX-00000, Xxxxxx
-------------------------------------------------------------------------------------------
Papas United Software Association
Limited 500,000 36,501
284 Arch. Makarios III Avenue
Fortuna Court, Xxxxx X, 0xx Xxxxx
0000 Xxxxxxxx, Xxxxxx
-------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxxxx
2 Xxxxx Retreat 2,000,000 146,006
Xxxxx Xxxx, Xxxxxxxxx XX0 0XX
-------------------------------------------------------------------------------------------
Xxxxx, Xxxx
000 Xxxxxxxxx Xxxx 2,000,000 000,000
Xxxxxxxx, Xxxxxx X0 0XX
-------------------------------------------------------------------------------------------
Xxxxx & Co.
00 Xxxxxx Xxxxx 50,000 3,650
Xxxxxx XX0 0XX
-------------------------------------------------------------------------------------------
The School of Pharmacy
University of London 1,800,000 131,405
00/00 Xxxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
-------------------------------------------------------------------------------------------
Xx. Xxxxxxxxx, Xxxxxx
Xxxxxxxx 00, Xxxxxx 500,000 36,501
Nicosia, Cyprus
-------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx Xxxxx
Xxxxxx Cottage, Riding Lane 1,500,000 109,504
Xxxxxxxxxxxxx, Xxxx XX00 0XX
-------------------------------------------------------------------------------------------
VTD Trust
0000 Xxxxxxxxxx Xxxxxx 1,060,000 77,383
Xxxxxxx Xxxxx, XX 00000
-------------------------------------------------------------------------------------------
Walbrook Trustees (Jersey Ltd REK33)
XX Xxx 000, Xxxx Xxxxxxxxx Xxxxx 53,000,000 3,869,152
00-00 Xxxxxxxxx, Xx Xxxxxx
Xxxxxx XX0 0XX, Channel Islands
-------------------------------------------------------------------------------------------
Total 79,898,686 5,832,834
-------------------------------------------------------------------------------------------
* Calculated based on a post-closing 50/50 share ownership split between the
Somanta Shareholders and Somanta Optionholders, on one hand, and the holders of
Bridge capital stock or rights to acquire such capital stock, on the other hand
(i.e., on a fully diluted basis, including the shares underlying the substitute
options to be issued to the Somanta Optionholders)
A-2
Exhibit B
Somanta Optionholders and Warrantholders
--------------------------------------------------------------------------------------------------
Name of Somanta Shares Exercise Price of Number of Exercise Vesting
Optionholder/ Subject to Somanta Shares Price of Schedule
Warrantholder Option/Warrant Option/Warrant subject to Substitute of
Substitute Bridge Substitute
Bridge Option(2) Bridge
Option(1) Option(3)
--------------------------------------------------------------------------------------------------
X. Xxxxxxxxx 1,000,000 5p 73,003 $1.232828 See
1,000,000 5p 73,003 Footnote 3
1,000,000 5p 73,003
1,000,000 5p 73,003
1,000,000 5p 73,003
1,000,000 5p 73,002
--------------------------------------------------------------------------------------------------
X. Xxxx 3,000,000 5p 219,009 $1.232828 See
3,000,000 1 Aug 05 price 219,008 Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxx 3,000,000 5p 219,009 $1.232828 See
2,000,000 1 Aug 05 price 146,005 Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxxx 2,000,000 5p 146,006 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxx 500,000 5p 36,501 $1.232828 See
500,000 1 Sep 05 price 36,502 Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxxx 500,000 5p 36,501 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxx 500,000 5p 36,501 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxxx 500,000 5p 36,501 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxx 200,000 5p 14,601 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
X. Xxxxxxxxx 3,000,000 5p 219,009 $1.232828 See
3,000,000 1 Aug 05 price 219,009 Footnote 3
--------------------------------------------------------------------------------------------------
OCTANe 136,800 5p 9,987 $1.232828 See
Footnote 3
--------------------------------------------------------------------------------------------------
Total 27,836,800 2,032,166
--------------------------------------------------------------------------------------------------
---------------------
(1) Calculated by multiplying the number of shares in column 1 by the Exchange
Ratio.
(2) Calculated by dividing by US$0.09 (5p multiplied by the exchange rate in
effect on June 13, 2005) by the Exchange Ratio.
(3) Vesting Schedule to remain the same as option to purchase Somanta Limited
shares.
B-1
Exhibit C
Form of Substitute Option
FORM OF STOCK OPTION
BRIDGE ONCOLOGY PRODUCTS, INC.
2005 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted the following option to purchase shares of the
Common Stock of Bridge Oncology Products, Inc. (the "Company").
Name of Optionee: _______________________________________
Total Number of Shares: _______________________________________
Type of Option: _______________________________________
Exercise Price Per Share: $______________________________________
Date of Grant: _______________________________________
Vesting Commencement Date: _______________________________________
Vesting Schedule: This option becomes exercisable with
respect to 100% of the Shares on
August __, 2005.
Expiration Date: August __, 2010. This option expires
earlier if your Service terminates
earlier, as described in the Stock
Option Agreement.
You and the Company agree that this option is granted under and governed by the
terms and conditions of the 2005 Equity Incentive Plan (the "Plan") and the
Stock Option Agreement, both of which are attached to and made a part of this
document.
You further agree that the Company may deliver by email all documents relating
to the Plan or this option (including, without limitation, prospectuses required
by the Securities and Exchange Commission) and all other documents that the
Company is required to deliver to its security holders (including, without
limitation, annual reports and proxy statements). You also agree that the
Company may deliver these documents by posting them on a web site maintained by
the Company or by a third party under contract with the Company. If the Company
posts these documents on a web site, it will notify you by email.
OPTIONEE: BRIDGE ONCOLOGY PRODUCTS, INC.
_____________________________ By: ___________________________________
Title:_________________________________
C-1
THE OPTION GRANTED PURSUANT TO THIS AGREEMENT AND THE SHARES ISSUABLE UPON THE
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED.
BRIDGE ONCOLOGY PRODUCTS, INC.
2005 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
1. Tax Treatment. This option is intended to be an incentive
stock option under section 422 of the Internal Revenue Code or a nonstatutory
stock option, as provided in the Notice of Stock Option Grant.
2. Vesting. This option becomes exercisable in installments, as
shown in the Notice of Stock Option Grant.
3. Term. This option expires in any event at the close of
business at Company headquarters on the day before August 22, 2010, as shown in
the Notice of Stock Option grant. (It will expire earlier if your Service
terminates, as described below.)
4. Regular Termination. If your Service terminates for any reason
except death or total and permanent disability, then this option will expire at
the close of business at Company headquarters on the date three months after
your termination date. The Company determines when your Service terminates for
this purpose.
5. Death. If you die before your Service terminates, then this
option will expire at the close of business at Company headquarters on the date
12 months after the date of death.
6. Disability. If your Service terminates because of your total
and permanent disability, then this option will expire at the close of business
at Company headquarters on the date 12 months after your termination date. For
all purposes under this Agreement, "total and permanent disability" means that
you are unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or which has lasted, or can be expected to last, for a
continuous period of not less than one year.
7. Leaves of Absence and Part-Time Work. For purposes of this
option, your Service does not terminate when you go on a military leave, a sick
leave or another bona fide leave of absence, if the leave was approved by the
Company in writing and if continued crediting of Service is required by the
terms of the leave or by applicable law. But your Service terminates when the
approved leave ends, unless you immediately return to active work. If you go on
a leave of absence, then the vesting schedule specified in the Notice of Stock
Option Grant may be adjusted in accordance with the Company's leave of absence
policy or the terms of your leave. If you commence working on a part-time basis,
then the vesting schedule specified in the Notice of Stock Option Grant may be
adjusted in accordance with the Company's part-time work policy or the terms of
an agreement between you and the Company pertaining to your part-time schedule.
C-2
8. Restrictions on Exercise. The Company will not permit anyone
to exercise this option if the issuance of shares at the time would violate any
law or regulation.
9. Notice of Exercise. When you wish to exercise this option, you
must notify the Company by filing the proper "Notice of Exercise" form at the
address given on the form. Your notice must specify how many shares you wish to
purchase. Your notice must also specify how your shares should be registered.
The notice will be effective when the Company receives it. If another person
wants to exercise this option after it has been transferred to him or her, that
person must prove to the Company's satisfaction that he or she is entitled to
exercise this option. The person must also complete the proper "Notice of
Exercise" form (as described above) and pay the exercise price (as described
below).
10. Form of Payment. When you submit your notice of exercise, you
must include payment of the option exercise price for the shares that you are
purchasing. Payment may be made on one (or a combination of two or more) of the
following forms:
(a) Your personal check, a cashier's check or a money
order.
(b) Certificates for shares of Company stock that you
own, along with any forms needed to effect a transfer of those shares to the
Company. The value of the shares, determined as of the effective date of the
option exercise, will be applied to the option exercise price. Instead of
surrendering shares of Company stock, you may attest to the ownership of those
shares on a form provided by the Company and have the same number of shares
subtracted from the shares issued to you. However, you may not surrender, or
attest to the ownership of, shares of Company stock in payment of the exercise
price if your action would cause the Company to recognize compensation expense
(or additional compensation expense) with respect to this option for financial
reporting purposes.
(c) Irrevocable directions to a securities broker
approved by the Company to sell all or part of your option shares and to deliver
to the Company from the sale proceeds an amount sufficient to pay the option
exercise price and any withholding taxes. (The balance of the sale proceeds, if
any, will be delivered to you.) The directions must be given by signing a
special "Notice of Exercise" form provided by the Company.
11. Withholding Taxes and Stock Withholding. You will not be
allowed to exercise this option unless you make arrangements acceptable to the
Company to pay any withholding taxes that may be due as a result of the option
exercise. With the Company's consent, these arrangements may include withholding
shares of Company stock that otherwise would be issued to you when you exercise
this option. The value of these shares, determined as of the effective date of
the option exercise, will be applied to the withholding taxes.
12. Restrictions on Resale. You agree not to sell any option
shares at a time when applicable laws, Company policies or an agreement between
the Company and its underwriters prohibit a sale. This restriction will apply as
long as your Service continues and for such period of time after the termination
of your Service as the Company may specify.
C-3
13. Transfer of Option. In general, only you may exercise this
option prior to your death. You may not transfer or assign this option, except
as provided below. For instance, you may not sell this option or use it as
security for a loan. If you attempt to do any of these things, this option will
immediately become invalid. You may, however, dispose of this option in your
will or in a beneficiary designation. However, if this option is designated as a
nonstatutory stock option in the Notice of Stock Option Grant, then the
"Committee" (as defined in the Plan) may, in its sole discretion, allow you to
transfer this option as a gift to one or more family members. For purposes of
this Agreement, "family member" means a child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or
sister-in-law (including adoptive relationships), any individual sharing your
household (other than a tenant or employee), a trust in which one or more of
these individuals have more than 50% of the beneficial interest, a foundation in
which you or one or more of these persons control the management of assets, and
any entity in which you or one or more of these persons own more than 50% of the
voting interest. In addition, if this option is designated as a nonstatutory
stock option in the Notice of Stock Option Grant, then the Committee may, in its
sole discretion, allow you to transfer this option to your spouse or former
spouse pursuant to a domestic relations order in settlement of marital property
rights. The Committee will allow you to transfer this option only if both of you
and the transferee(s) execute the forms prescribed by the Committee, which
include the consent of the transferee(s) to be bound by this Agreement.
14. Retention Rights. Your option or this Agreement does not give
you the right to be retained by the Company or a subsidiary of the Company in
any capacity. The Company and its subsidiaries reserve the right to terminate
your Service at any time, with or without cause.
15. Stockholder Rights. You (or your estate, heirs or transferee)
have no rights as a stockholder of the Company until you (or your estate, heirs
or transferee) have exercised this option by giving the required notice to the
Company and paying the exercise price. No adjustments are made for dividends or
other rights if the applicable record date occurs before this option is
exercised, except as described in the Plan.
16. Adjustments. In the event of a stock split, a stock dividend
or a similar change in Company stock, the number of shares covered by this
option and the exercise price per share may be adjusted pursuant to the Plan.
17. Applicable Law. This Agreement will be interpreted and
enforced under the laws of the State of New York (without regard to their
choice-of-law provisions).
18. The Plan and Other Agreements. The text of the Plan is
incorporated in this Agreement by reference. This Agreement and the Plan
constitute the entire understanding between you and the Company regarding this
option. In the event of any conflict between this Agreement and the Plan, the
provisions of the Plan shall control. Any prior agreements, commitments or
negotiations concerning this option are superseded. This Agreement may be
amended only by another written agreement between the parties.
BY SIGNING THE COVER SHEET OF THIS AGREEMENT, YOU AGREE TO ALL OF
THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.
C-4
Exhibit D
Form of SCO Loan Documents
(Omitted)
D-1
Exhibit E
Voting Agreement
SOMANTA INCORPORATED
VOTING AGREEMENT
This Voting Agreement (the "Agreement") is made and entered into as of
August 22, 2005, by and among Somanta Incorporated, a Delaware corporation,
formerly Bridge Oncology Products, Inc. (the "Company"), the persons and
entities listed on Exhibit A hereto (the "Bridge Holders"), and the persons and
entities listed on Exhibit B hereto (the "Somanta Holders" and, together with
the Bridge Holders, the "Stockholders").
Recitals
WHEREAS, the Bridge Holders and the Somanta Holders desire to provide
for the future voting of their respective shares of the Company's capital stock
with respect to the election of directors as set forth below.
NOW, THEREFORE, in consideration of these premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. VOTING
1.1. Agreement to Vote Shares.
------------------------
(a) The Bridge Holders agree to hold all shares of voting
capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof and any and all other
securities of the Company legally or beneficially acquired by each of the Bridge
Holders after the date hereof (hereinafter collectively referred to as the
"Bridge Holder Shares") subject to, and to vote the Bridge Holder Shares in
accordance with, the provisions of this Agreement.
(b) The Somanta Holders agree to hold all shares of
voting capital stock of the Company registered in their respective names or
beneficially owned by them as of the date hereof and any and all other
securities of the Company legally or beneficially acquired by each of the
Somanta Holders after the date hereof (hereinafter collectively referred to as
the "Xxxxxxx Xxxxxx Shares") subject to, and to vote the Xxxxxxx Xxxxxx Shares
in accordance with, the provisions of this Agreement.
1.2. Size of Board. The current size of the board of directors of
the Company (the "Board of Directors") is six (6). The Bridge Holders and the
Somanta Holders each agree to vote their Bridge Holder Shares and Xxxxxxx Xxxxxx
Shares, respectively, so as to maintain a board of directors with six (6)
members.
E-1
1.3. Board Composition. Each Stockholder agrees to vote all of
his, her or its Bridge Holder Shares or Xxxxxxx Xxxxxx Shares (as applicable)
having voting power (and any other shares over which he, she or it exercises
voting control), in connection with the election of directors of the Company
("Directors") and to take such other actions as are necessary so as to elect and
continue in office as Directors the following:
(a) three persons (the "Somanta Designees"), who will be
nominated by holders of a majority of the Xxxxxxx Xxxxxx Shares, which Somanta
Designees shall initially be Agamemnon X. Xxxxxxxx, Xxxxxxxx X. Xxxxxxxxx and
Xxxx X. Xxxxxx; and
(b) three persons (the "Bridge Designees"), who will be
nominated by holders of a majority of the Bridge Holder Shares, which Bridge
Designees shall initially be Xxxxxxx Xxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxx.
1.4. Removal; Vacancies.
------------------
(a) Each Stockholder agrees to vote all of his, her or
its Bridge Holder Shares or Xxxxxxx Xxxxxx Shares (as applicable) having voting
power (and any other shares over which he, she or it exercises voting control),
for the removal of any Director upon the request of the persons entitled to
nominate such Director as set forth in Section 1.3 above, and for the election
to the Board of Directors of a substitute nominated by such parties in
accordance with the provisions hereof and of the Certificate of Incorporation of
the Company. Each Stockholder further agrees to vote all of his, her or its
Bridge Holder Shares or Xxxxxxx Xxxxxx Shares (as applicable) having voting
power (and any other shares over which he, she or it exercises voting control)
in such manner as shall be necessary or appropriate to ensure that any vacancy
on the Board of Directors occurring for any reason shall be filled only in
accordance with the provisions of Sections 1.3 and 1.4.
(b) Each Of Xx. Xxxxxx and Xx. Xxxxxx shall execute a
resignation letter (each a "Resignation Letter") addressed to the Company, which
letter shall remain undated and held in escrow by the secretary of the Company,
subject to the following. Without limitation to the rights of the Bridge Holders
under Section 1.4(a), if at any time during the term of this Agreement, holders
of a majority of the Bridge Holder Shares provide notice to the Company that
they desire to remove Xx. Xxxxxx and Xx. Xxxxxx from the Board of Directors (a
"Board Election Notice"), each such Resignation Letter shall be dated the date
of such Board Election Notice and deemed delivered to the Company and substitute
Directors shall be elected as promptly as practicable in accordance with
Sections 1.3 and 1.4.
1.5. No Liability for Election of Designated Director. None of the
parties hereto and no officer, director, stockholder, partner, employee or agent
of any party makes any representation or warranty as to the fitness or
competence of the nominee of any party hereunder to serve on the Board of
Directors by virtue of such party's execution of this Agreement or by the act of
such party in voting for such nominee pursuant to this Agreement.
E-2
1.6. Legend.
------
(a) Concurrently with the execution of this Agreement,
there shall be imprinted or otherwise placed, on certificates representing the
Bridge Holder Shares and the Xxxxxxx Xxxxxx Shares, as the case may be, the
following restrictive legend (the "Legend"):
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF A VOTING
AGREEMENT WHICH PLACES CERTAIN RESTRICTIONS ON THE
VOTING OF THE SHARES REPRESENTED HEREBY. ANY PERSON
ACCEPTING ANY INTEREST IN SUCH SHARES SHALL BE
DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL
THE PROVISIONS OF SUCH AGREEMENT. A COPY OF SUCH
VOTING AGREEMENT WILL BE FURNISHED TO THE RECORD
HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON
WRITTEN REQUEST TO THE COMPANY AT ITS PRINCIPAL
PLACE OF BUSINESS."
(b) The Company agrees that, during the term of this
Agreement, it will not remove, and will not permit to be removed (upon
registration of transfer, reissuance of otherwise), the Legend from any such
certificate and will place or cause to be placed the Legend on any new
certificate issued to represent Bridge Holder Shares or Xxxxxxx Xxxxxx Shares
theretofore represented by a certificate carrying the Legend.
1.7. Successors. The provisions of this Agreement shall be binding
upon the successors in interest to any of the Bridge Holder Shares or Xxxxxxx
Xxxxxx Shares, as the case may be. The Company shall not permit the transfer of
any of the Bridge Holder Shares or Xxxxxxx Xxxxxx Shares on its books or issue a
new certificate representing any of the Bridge Holder Shares or Xxxxxxx Xxxxxx
Shares unless and until the person to whom such security is to be transferred
shall have executed a written agreement, substantially in the form of this
Agreement, pursuant to which such person becomes a party to this Agreement and
agrees to be bound by all the provisions hereof.
1.8. Other Rights. Except as provided by this Agreement, the
Bridge Holders and the Somanta Holders shall exercise the full rights of a
holder of capital stock of the Company with respect to the Bridge Holder Shares
and Xxxxxxx Xxxxxx Shares, as the case may be.
1.9. Irrevocable Proxy. Should the provisions of this Agreement be
construed to constitute the granting of proxies, such proxies shall be deemed
coupled with an interest and are irrevocable for the term of this Agreement.
2. TERMINATION.
2.1. This Agreement shall continue in full force and effect from
the date hereof through the earliest of the following dates, on which date it
shall terminate in its entirety:
(a) the date of the closing of a sale, lease, or other
disposition of all or substantially all of the Company's assets or the Company's
merger into or consolidation with any other corporation or other entity, or any
other corporate reorganization, in which the holders of the Company's
E-3
outstanding voting stock immediately prior to such transaction own, immediately
after such transaction, securities representing less than fifty percent (50%) of
the voting power of the corporation or other entity surviving such transaction,
provided that this Section 2.1(a) shall not apply to a merger effected
exclusively for the purpose of changing the domicile of the Company;
(b) the date as of which the parties hereto terminate
this Agreement by written consent of Somanta Holders holding at least a majority
in interest of the Xxxxxxx Xxxxxx Shares and Bridge Holders holding at least a
majority in interest of the Bridge Holder Shares;
(c) upon such time as the Company (or a parent of the
Company) becomes subject to the reporting requirements of the Exchange Act of
1934, as amended; or
(d) in accordance with and pursuant to the provisions of
Section 5.16 of the Share Exchange Agreement, dated as of even date herewith,
among the Company, the Stockholders and the other signatories thereto.
3. MISCELLANEOUS.
3.1. Ownership. Each Bridge Holder represents and warrants to the
Company that (a) such Bridge Holder now owns the Bridge Holder Shares (or rights
to acquire such shares), free and clear of liens or encumbrances, and, except
for the Voting Agreement, has not, prior to or on the date of this Agreement,
executed or delivered any proxy or entered into any other voting agreement or
similar arrangement other than one which has expired or terminated prior to the
date hereof, and (b) such Bridge Holder has full power and capacity to execute,
deliver and perform this Agreement, which has been duly executed and delivered
by, and evidences the valid and binding obligation of, such Holder enforceable
in accordance with its terms. Each Xxxxxxx Xxxxxx represents and warrants to the
Company that (a) such Xxxxxxx Xxxxxx now owns the Xxxxxxx Xxxxxx Shares (or
rights to acquire such shares), free and clear of liens or encumbrances, and,
except for the Voting Agreement, has not, prior to or on the date of this
Agreement, executed or delivered any proxy or entered into any other voting
agreement or similar arrangement other than one which has expired or terminated
prior to the date hereof, and (b) such Xxxxxxx Xxxxxx has full power and
capacity to execute, deliver and perform this Agreement, which has been duly
executed and delivered by, and evidences the valid and binding obligation of,
such Holder enforceable in accordance with its terms.
3.2. Further Action. If and whenever the Bridge Holder Shares (or
rights to acquire such shares) are sold, the Bridge Holders shall do all things
and execute and deliver all documents and make all transfers, and cause any
transferee of the Bridge Holder Shares to do all things and execute and deliver
all documents, as may be necessary to consummate such sale consistent with this
Agreement. If and whenever the Xxxxxxx Xxxxxx Shares (or rights to acquire such
shares) are sold, the Somanta Holders shall do all things and execute and
deliver all documents and make all transfers, and cause any transferee of the
Xxxxxxx Xxxxxx Shares to do all things and execute and deliver all documents, as
may be necessary to consummate such sale consistent with this Agreement.
E-4
3.3. Additional Shares. In the event that subsequent to the date
of this Agreement any shares or other securities are issued on, or in exchange
for, any of the Bridge Holder Shares or Xxxxxxx Xxxxxx Shares by reason of any
stock dividend, stock split, combination of shares, reclassification or the
like, such shares or securities shall be deemed to be Bridge Holder Shares or
Xxxxxxx Xxxxxx Shares, as the case may be, for purposes of this Agreement.
3.4. Specific Performance. The parties hereto hereby declare that
it is impossible to measure in money the damages which will accrue to a party
hereto or to their heirs, personal representatives, or assigns by reason of a
failure to perform any of the obligations under this Agreement and agree that
the terms of this Agreement shall be specifically enforceable. If any party
hereto or his heirs, personal representatives, or assigns institutes any action
or proceeding to specifically enforce the provisions hereof, any person against
whom such action or proceeding is brought hereby waives the claim or defense
therein that such party or such personal representative has an adequate remedy
at law, and such person shall not offer in any such action or proceeding the
claim or defense that such remedy at law exists.
3.5. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York in all respects as such laws
are applied to agreements among New York residents entered into and performed
entirely within New York.
3.6. Successors and Assigns. The provisions hereof shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
successors, assigns, heirs, executors and administrators and other legal
representatives.
3.7. Entire Agreement. This Agreement and the other agreements
contemplated therein and documents delivered pursuant thereto constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof and no party shall be liable or bound to any
other in any manner by any oral or written representations, warranties,
covenants and agreements except as specifically set forth herein and therein.
Each party expressly represents and warrants that it is not relying on any oral
or written representations, warranties, covenants or agreements outside of this
Agreement and the other agreements contemplated therein.
3.8. Severability. In the event one or more of the provisions of
this Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.9. Amendment or Waiver. This Agreement may be amended or
modified (or provisions of this Agreement waived) only upon the written consent
of (i) the Company, (ii) a majority in interest of the Bridge Holders and (iii)
a majority in interest of the Somanta Holders. Any amendment or waiver so
effected shall be binding upon the Company, each of the parties hereto and any
assignee of any such party.
3.10. Delays or Omissions. It is agreed that no delay or omission
to exercise any right, power, or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair any
E-5
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any party's part of any breach, default or noncompliance under this Agreement or
any waiver on such party's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
3.11. Notices. All notices required in connection with this
Agreement shall be in writing and shall be deemed effectively given: (a) upon
personal delivery to the party to be notified, (b) when sent by confirmed
electronic mail or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (c) five (5) days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written notification of receipt. All
communications shall be sent to the party to be notified at the address as set
forth on the signature page hereof or at such address as such party may
designate by ten (10) days advance written notice to the other parties hereto.
3.12. Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
3.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one instrument. Each of the counterparts may be signed
and transmitted by facsimile with the same validity as if it were an original
document.
3.14. Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
[Remainder of Page Intentionally Left Blank]
E-6
IN WITNESS WHEREOF, the parties hereto have caused this VOTING
AGREEMENT to be duly executed as of the date first above written.
SOMANTA INCORPORATED
By: /s/ XXXXXXXX X. XXXXXXXXX
-------------------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Chairman
[Signature Page to Voting Agreement]
IN WITNESS WHEREOF, the parties hereto have executed this VOTING
AGREEMENT as of the date first above written.
If the party hereto is an individual, please sign and print your name to the
right and print your address below.
/s/ XXXXXXX X. XXXXXX Address: 3 Ribera
------------------------------------ Xxxxxx, XX 00000
Xxxxxxx X. Xxxxxx
/s/ XXXXXX X. XXXXX Address: 9 A Lansdawne Walk
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X00 0XX
Xxxxxx Xxxxxx Xxxxx
/s/ X.X. XXXXX Address: 00 Xxxxxxxxxx Xxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X00 0XX
X.X. Xxxxx
/s/ XXXXX X. XXXXXXX Address: 00 Xxxxxxxx Xxxx Xxxxxxxx
------------------------------------ Xxxxxx, Xxxxxxx X0 0XX
Xxxxx X. Xxxxxxx
/s/ XXXX XXXXX Address: 000 Xxxxxxxxx Xxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx X0 0XX
Xxxx Xxxxx
/s/ XXXXX XXXXXXX Address: 00 Xxx Xxxx Xxxxx Xxxx
------------------------------------ Xxxxx Xxxxx, Xxx Xxxx 00000
Xxxxx Xxxxxxx
/s/ XXXXXXX X.X. XXXXXX Address: 0/00 Xxxxx Xxxxx
------------------------------------ Xxxxxx, Xxxxxx Xxxxxxx SWIX 8DF
Xxxxxxx X.X. Xxxxxx
/s/ XXXXXXXX XXXXXXXXX Address: 2 Xxxxx Retreat
------------------------------------ Xxxxx Xxxx, Xxxxxxxxx XX0 0XX
Xxxxxxxx Xxxxxxxxx
/s/ XXXXXXXXX X. XXXXXXXX Address: 00 Xxxxx Xxxxxx
------------------------------------ 10556 Plaka
Xxxxxxxxx X. Xxxxxxxx Athens, Greece
/s/ XXXX XXXXX XXXXXX Address: 0000 Xxxxxxxxx Xxxxxx
------------------------------------ Xxxxxx Xxxxx, XX 00000
Xxxx Xxxxx Xxxxxx
/s/ XXXXXXXX X. XXXXXXXXX Address: 00 Xxx Xxxxxx Xxxxx
------------------------------------ Xxxxxxx Xxxxx, XX 00000
Xxxxxxxx X. Xxxxxxxxx
[Counterpart Signature Page to Voting Agreement]
/s/ XXXX XXXXX Address: Oakdale, Egg Pie Lane
------------------------------------ Xxxxxxxxxxxxx, Xxxx XX00 0XX
Xxxx Xxxxx
/s/ XXXXXXXX XXXX Address: Rowens, Garvald
------------------------------------ Xxxx Xxxxxxx XX00 0XX, Xxxxxxxx
Xxxxxxxx Xxxx
/s/ XXXXXX XXXXXXX Address: Xxxxxx Xxxxxxx, Xxxxxx Xxxx
------------------------------------ Xxxxxxxxxxxxx, Xxxx XX00 0XX
Xxxxxx Xxxxxxx
/s/ XXXXXX XXXXXXX Address: 22741 Xxxxxx
------------------------------------ Xxxxxxx Xxxxx, XX 00000
Xxxxxx Xxxxxxx
/s/ XXXXXXXX XXXXXXXX Address: Patio Palace
------------------------------------ 41 Ave Xxxxxx Xxxx
Xxxxxxxx Xxxxxxxx Monaco, MC 00000
/x/ XXXXXX XXX Xxxxxxx: Xxxxx Xxxx Xxxx
------------------------------------ 00 Xxxxxxxxx x'Xxxxxx XX-00000,
Xxxxxx Xxx Xxxxxx
/s/ MARIOS ST. XXXXXXXXX Address: Tamasoy 27
------------------------------------ Latsia Nicoia Cyprus
Marios St. Xxxxxxxxx
/s/ XXXXX X. XXXXXX Address: 00 Xxxxx Xxxxx
------------------------------------ Xxxxxx, XX XX0 0XX
Xxxxx X. Xxxxxx
/s/ XXXXX KARNABAKOU Address: Xxxxxxxx Xxxx 22
------------------------------------ Kalivia, Xxxxxx 00000 Xxxxxx
Eleni Karnabakou
If the party hereto is an
organization or entity, please
print the name of the organization
or entity and have an authorized
person sign to the right and print
the organization's or entity's
address below.
OCTANe
By: /s/ XXXX AUGUSTA Address: OCTANe (Orange County
-------------------------------- Technology Action Network Inc.)
Xxxx Augusta 0000 Xxxxx Xx., Xxxxx 0000
Executive Director New Xxxx Xxxxx, XX 00000
[Counterpart Signature Page to Voting Agreement]
2
The School of Pharmacy
University of London
By: /s/ JULIAN AXE Address: The School of Pharmacy
-------------------------------- University of London
Xx. Xxxxxx Axe 00-00 Xxxxxxxxx Xxxxxx
Clerk to the Council London, WCIN 1AX
Immunodex Inc.
By: /s/ XXXXXXX X. XXXXXXX Address: Immunodex Inc.
-------------------------------- X.X. Xxx 0000
Xxxxxxx X. Xxxxxxx Xxxxxx, XX 00000
President
Cinnabar Consulting Limited
By: /s/ VIJAY CURTHAN Address: Cinnabar Consulting
-------------------------------- 00 Xxxxxxx Xxxxx
Vijay Curthan Xxxxxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxxx Xxxxxxx XX00 0XX
Xxxxx & Co. Limited
By: /s/ XXXXX XXXXXX Address: Xxxxx & Co. Limited
-------------------------------- 00 Xxxxxx Xxxxx
Xxxxx Xxxxxx Xxxxxx, Xxxxxx Xxxxxxx
Managing Director XX0 0XX
VTD Trust
By: /s/ XXXXX XXXX-XXX Address: VTD Trust
-------------------------------- 0000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx-Xxx Xxxxxxx Xxxxx, XX 00000
Trustee for the VTD Trust
Papas United Software
Association Limited
By: /s/ XXXXXX GUBIEHDEA Address: Papas United Software
-------------------------------- Association Limited
Paulina Gubiehdea 284 Arch Makarios III Avenue
Managing Director Xxxxxxx Xxxxx, Xxxxx X,
0xx Xxxxx
0000 Xxxxxxxx, Xxxxxx
Xxxx Family Trust
By: /s/ XXXXXX X. XXXX Address: Xxxx Family Trust
-------------------------------- 00000 Xxxx Xxxxxx Xxxxx
Xxxxxx X. Xxxx Xxxxxx Xxxxx, XX 00000
Trustee
Walbrook Trustees (Jersey) Limited
re k33
By: /s/ XXXX XXXXX Address: Walbrook Trustees (Jersey)
-------------------------------- Limited
Xxxx Xxxxx re k33
Director for Walbrook Trustees X.X. Xxx 000,
Xxxx Xxxxxxxxx Xxxxx
00-00 Xxxxxxxxx
St. Helier, Jersey JE4 5PS
De Montfort University
By: /s/ XXXX XXXXXX Address: De Montfort University
-------------------------------- The Innovation Centre
Xxxx Xxxxxx Oxford Street
Director of International Property Leicester, UK XX0 0XX
3
Longfield Ltd.
By: /s/ XXXXXXX XXX-XXX LUNG Address: LongField Ltd. for and on
-------------------------------- behalf of Fides Trust Limited
Fides Trust Limited represented 0000 Xxxx xx Xxxxxxx Tower
by Xxxxxxx Xxx-Xxx Lung 00 Xxxxxxxx Xxxx, Xxxx Xxxx
Director
[Counterpart Signature Page to Voting Agreement]
4
Exhibit A
BRIDGE ONCOLOGY PRODUCTS INC. STOCKHOLDERS
SCO Capital Partners LLC
The Xxxxxx X. Xxxxxxxxx Trust
The Xxxxx X. Xxxxxxxxx Trust
The Xxxxxx X. Xxxxxxxxx Trust
Lake End Capital LLC
A-1
Exhibit B
--------------------------------------------------------------------------------
The Somanta Holders
--------------------------------------------------------------------------------
Ashiotis, Xxxxxxxx Xxxxxxx, D.
--------------------------------------------------------------------------------
Xx. Xxxxxx X. Xxxx Trustee King, J.
--------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. Xxxxxxxx, Xxxxxxxxx
--------------------------------------------------------------------------------
Xxxxxxx, Xxxxx Xxxxxx Xxxxxxxxx Ltd c/o Commence Co. Ltd
--------------------------------------------------------------------------------
Cinnabar Consulting Limited Los, Costas
--------------------------------------------------------------------------------
De Montfort University Papas United Software Association
Limited
--------------------------------------------------------------------------------
Fellows, Xxxxx Xxxxxxxxx, Xxxxxxxx
--------------------------------------------------------------------------------
Xxxxx, Xxxxxx Xxxxxx Xxxxx, Xxxx
--------------------------------------------------------------------------------
Xxxxxx, Xxxx Xxxxx Xxxxx & Co.
--------------------------------------------------------------------------------
Immunodex, Inc. The School of Pharmacy,
University of London
--------------------------------------------------------------------------------
Karnabakou, Eleni St. Xxxxxxxxx, Xxxxxx
--------------------------------------------------------------------------------
Ashton, X. Xxxxxxx, Xxxxxx Xxxxx
--------------------------------------------------------------------------------
Xxxxx, Xxxx VTD Trust
--------------------------------------------------------------------------------
Xxxxxxxxx, L. Wallbrook Trustees
(Jersey Ltd REK33)
--------------------------------------------------------------------------------
Camrass, X. Xxxxxx, B.
--------------------------------------------- ----------------------------------
Tivenan, X. Xxxxx, P.
--------------------------------------------- ----------------------------------
Xxxxxxxxx, T. OCTANe
--------------------------------------------- ----------------------------------
B-1
Exhibit F
Form of Employment Agreement
(Omitted)
F-1
