Exhibit 99.1
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
by and between
LIGHTSPACE EMAGIPIX CORPORATION
("Buyer")
and
ILLUMINATION DESIGN WORKS, INC.
("Seller")
March 29, 2007
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS........................................................1
ARTICLE 2. PURCHASE AND SALE OF ASSETS........................................4
2.1. Sale And Transfer Of Assets....................................4
2.2. Excluded Liabilities...........................................5
2.3. Consideration From Buyer.......................................5
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER...........................5
3.1. Organization, Standing, and Authority of Seller; No
Subsidiaries..................................................5
3.2. Authorization of Transaction...................................5
3.3. Binding Obligation.............................................5
3.4. Noncontravention...............................................5
3.5. Intellectual Property..........................................6
3.6. Other Intangible Property......................................7
3.7. Title to Assets; Sufficiency of Assets.........................7
3.8. Litigation.....................................................7
3.9. Tax Matters....................................................7
3.10. Legal Compliance...............................................8
3.11. Brokers' Fees..................................................8
3.12. Full Disclosure................................................8
ARTICLE 4. BUYER'S WARRANTIES.................................................8
4.1. Organization, Standing and Qualification.......................8
4.2. Authority and Consents.........................................8
4.3. Binding Obligation.............................................8
4.4. Noncontravention...............................................8
4.5. Brokers' Fees..................................................8
4.6. Financial Wherewithal..........................................9
ARTICLE 5. OBLIGATIONS PRIOR TO CLOSING.......................................9
5.1. Pre-Closing Covenants..........................................9
ARTICLE 6. THE CLOSING........................................................9
6.1. Time and Place.................................................9
6.2. Conditions to Obligation of Buyer..............................9
6.3. Conditions to Obligation of Seller............................10
ARTICLE 7. TERMINATION.......................................................11
7.1. Termination of Agreement......................................11
7.2. Effect of Termination; Downpayment............................12
ARTICLE 8. OBLIGATIONS AFTER CLOSING.........................................12
8.1. Competition...................................................12
8.2. Information to be Held in Confidence..........................12
8.3. Further Assurances............................................13
ARTICLE 9. NATURE AND SURVIVAL OF REPRESENTATIONS AND OBLIGATIONS...........13
9.1. Survival of Representations and Warranties....................13
9.2. Indemnification by Seller.....................................13
9.3. Indemnification by Buyer......................................14
9.4. Notice of Claim...............................................14
9.5. Procedure.....................................................14
ARTICLE 10. COSTS AND TAXES...................................................15
10.1. Costs and Taxes...............................................15
ARTICLE 11. MISCELLANEOUS.....................................................15
11.1. Effect of Headings............................................15
11.2. Word Usage....................................................15
11.3. Entire Agreement; Modification; Waiver........................16
11.4. Counterparts; Delivery........................................16
11.5. Press Releases and Public Announcements.......................16
11.6. Parties In Interest...........................................16
11.7. Assignment....................................................16
11.8. Notices.......................................................16
11.9. Governing Law; Venue..........................................17
11.10.Severability..................................................17
11.11.Incorporation of Exhibits and Schedules.......................18
00.00.Xxxxxxxxxxxx..................................................18
11.13.Force Majeure.................................................18
Schedules and Exhibits
Schedules
---------
Schedule 1(a) Description of emagipix
Schedule 1(b) Emagipix Assets
Schedule 3.5 Emagipix IP Assets
Schedule 3.6 Intangible Assets
Exhibits
--------
Exhibit A Form of Xxxx of Sale
Exhibit B Form of Employment Agreements
Exhibit C Form of Invention Assignment and Non-Disclosure/Non-Compete
Agreements
Exhibit D Form of Trademark Assignment Agreement
Exhibit E Form of Note
Exhibit F Form of Registration Rights Agreement
Exhibit G Form of Stockholder Pledge Agreement
Exhibit H Form of Stock Option Agreements
AGREEMENT FOR PURCHASE AND SALE OF ASSETS
This Agreement for Purchase and Sale of Assets ("Agreement") is made as of
March 29, 2007, between LIGHTSPACE EMAGIPIX CORPORATION ("Buyer"), a Delaware
corporation, having its principal office at 000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx,
XX 00000 and ILLUMINATION DESIGN WORKS, INC. ("Seller"), a Delaware corporation,
having its principal office at 00 Xxxxxx Xx, Xxxxxxx, XX 00000. Buyer and Seller
are referred to collectively herein as the "Parties" and individually as a
"Party."
RECITALS
WHEREAS, Buyer desires to purchase from Seller and Seller desires to sell
to Buyer, on the terms and subject to the conditions of this Agreement, all of
the Emagipix Assets (as defined below) of Seller in exchange for the cash and
other consideration of Buyer described in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations, and warranties contained in this Agreement, the parties agree
as follows:
AGREEMENT
ARTICLE 1. DEFINITIONS
As used in this Agreement, the following defined terms have the following
meanings:
"Affiliate" means with respect to any Person, a Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person specified.
"Ancillary Documents" means the Note, Employment Agreements, Stock Pledge
Agreement, Xxxx of Sale, the Trademark Assignment Agreement, the Stock Option
Agreements and all other documentation necessary to facilitate the transfer of
the Emagipix Assets to Buyer.
"Xxxx of Sale" means the xxxx of sale providing for the transfer of the
Emagipix Assets, in substantially the form attached hereto as Exhibit A, duly
executed by the Seller.
"Buyer Indemnitees" has the meaning set forth in Section 9.2 below.
"Buyer Material Adverse Effect" shall mean any change, effect, event,
circumstance, occurrence or state of facts that materially impairs the ability
of Buyer to consummate the transactions contemplated by this Agreement or
perform its obligations hereunder.
"Cash Payment" has the meaning set forth in Section 2.3 below.
"Claiming Party" has the meaning set forth in Section 9.4 below.
"Closing" has the meaning set forth in Section 6.1 below.
"Closing Date" has the meaning set forth in Section 6.1 below.
"Contaminant" means any substance regulated under any Environmental Law as
a pollutant, hazardous substance or toxic waste.
"Damages" has the meaning set forth in Section 9.2 below.
"emagipix" has the meaning set forth in Schedule 1(a) hereto.
"Emagipix Assets" means Intellectual Property, technology and other assets
of Seller relating to emagipix, including without limitation the Emagipix
Technology, the Emagipix IP Assets, and all assets and technology listed on
Schedule 1(b) or Schedule 3.5 hereto, whether tangible, intangible, real,
personal, or mixed, and wherever located.
"Emagipix IP Assets" has the meaning set forth in Section 3.5 below.
"Emagipix Technology" means any ideas, disclosures, or inventions for
interactive lighting technology including related software, hardware, power
supplies, circuitry, panels, assembly tools, methods, and techniques, any
technology related to or developed in part for object sensing including
software, hardware, power supplies, circuitry, panels, assembly tools, methods,
and techniques, and any technology related to or developed in part for
electroluminescence including software, hardware, power supplies, circuitry,
panels, assembly tools, methods, and techniques.
"Employment Agreements" means the employment agreements between Administaff
and each of the Key Employees, in the forms attached hereto as Exhibit B.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage, deed
of trust, security interest, encumbrance, claim, infringement, option, right of
first refusal, preemptive right, community property interest, or restriction of
any nature on any asset.
"Environmental Law" means any law, statute, regulation, rule or order of,
or administered or enforced by, a Governmental Authority which is related to or
otherwise imposes liability or standards of conduct concerning discharges,
releases or threatened releases of Contaminants into ambient air, water or land,
or otherwise relating to the manufacture, processing, generation, distribution,
use, treatment, storage, disposal, cleanup, transport or handling of
Contaminants.
"Excluded Liabilities" has the meaning set forth in Section 2.2 below.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any regulatory agency or body and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Indemnitee" shall mean a Buyer Indemnitee or Seller Indemnitee, as the
case may be.
"Indemnitor" has the meaning set forth in Section 9.4 below.
"Intellectual Property" means, all of the following in any jurisdiction
throughout the world: (a) all inventions and designs (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
re-examinations thereof, (b) all registered and unregistered trademarks, service
marks, trade dress, logos, slogans, trade names, corporate names, Internet
domain names and rights in telephone numbers, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, and all applications, registrations, and renewals in
connection therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all mask
works and all applications, registrations, and renewals in connection therewith,
(e) all trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing and
production processes and techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (f) all computer software
(including source code, executable code, data, databases and related
documentation), (g) all advertising and promotional materials, (h) all other
proprietary rights, (i) all copies and tangible embodiments thereof (in whatever
form or medium), and (j) all rights to xxx or make any claims for any past,
present, or future misappropriation or unauthorized use of any of the foregoing
rights and the right to receive income, royalties, damages, or payments that are
now or will later become due with regard to the foregoing rights.
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"Invention Assignment Agreements" means the invention assignment agreements
between Lightspace and each of the Key Employees of IDW, in the forms attached
hereto as Exhibit C.
"Key Employees of IDW" means each of Xxxx Xxxx and Ed Desparant.
"Lightspace" means Lightspace Corporation, a Delaware corporation and owner
of all of the outstanding common stock of Buyer.
"Note" means the non-recourse promissory note in the principal amount of
$950,000 from Lightspace, in the form attached hereto as Exhibit E.
"Non-Compete and Confidentiality Agreements" means the non-compete and
confidentiality agreements between Lightspace and each of the Key Employees of
IDW, in the forms attached hereto as Exhibit C.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice.
"Parties" and "Party" have the meanings set forth in the preface above.
"Person" means any individual, corporation, joint venture, partnership,
estate, trust, company (including any limited liability company), firm, other
enterprise, association, organization, or Governmental Authority.
"Proceeding" means any claim, action, suit, investigation, or
administrative or other proceeding before any Governmental Authority or any
arbitration or mediation.
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"Purchase Price" has the meaning set forth in Section 2.3 below.
"Registration Rights Agreement" means the registration rights agreement
dated the Closing Date, between Lightspace and each of the Key Employees of IDW,
in the form attached hereto as Exhibit F.
"Seller Indemnitees" has the meaning set forth in Section 9.3 below.
"Seller Material Adverse Effect" shall mean any change, effect, event,
circumstance, occurrence or state of facts that (a) causes a diminution in the
value of the Emagipix Assets, individually or in the aggregate, of more than ten
thousand US dollars (US $10,000), regardless of whether covered by insurance, or
(b) materially impairs the ability of Seller to consummate the transactions
contemplated by this Agreement or perform its obligations hereunder or under any
Ancillary Document.
"Seller's Knowledge" means (i) the actual knowledge of the Key Employees of
IDW and (ii) knowledge that could be obtained after reasonable inquiry and
investigation of the matter in question.
"Stockholder Pledge Agreement" means the stockholder pledge agreement,
dated the Closing Date, between Lightspace and the Seller, in the form attached
hereto as Exhibit G.
"Stock Option Agreements" means the stock option agreements between
Lightspace and each of the Key Employees of IDW, in the forms attached hereto as
Exhibit H.
"Tax" or "Taxes" means taxes of any kind payable to any federal, state,
local or foreign taxing authority, including, without limitation, (a) income,
gross receipts, ad valorem, value added, sales, use, service, franchise,
profits, real or personal property, capital stock, license, payroll,
withholding, employment, social security, workers compensation, unemployment
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, transfer and gains taxes, (b) customs duties,
imposts, charges, levies, or other assessments of any kind, (c) interest,
penalties, and additions to tax imposed with respect to the above taxes, and (d)
any damages, costs, expenses, fees or other liability arising from such Tax or
Taxes.
"Third Party Claim" has the meaning set forth in Section 9.4 below.
"Trademark Assignment Agreement" means the trademark assignment agreement
in the form attached hereto as Exhibit D.
ARTICLE 2. PURCHASE AND SALE OF ASSETS
2.1. Sale And Transfer Of Assets. Subject to the terms and conditions set
forth in this Agreement, at the Closing, Seller will sell, convey, transfer,
assign, and deliver to Buyer, and Buyer will purchase from Seller, all Seller's
rights and title to, and interest in, the Emagipix Assets, free and clear of all
Encumbrances.
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2.2. Excluded Liabilities. All liabilities of the Seller (the "Excluded
Liabilities"), whether arising prior to or after the Closing Date, shall be
retained by and remain obligations of the Seller, and Buyer shall not assume any
Excluded Liabilities. In furtherance and not in limitation of the foregoing, the
Excluded Liabilities include, but are not limited to: (i) any liability or
obligation of Seller incurred under or in connection with this Agreement, (ii)
any liability or obligation for borrowings or other indebtedness incurred by
Seller, (iii) Seller's accounts payable, (iv) any liability or obligation of
Seller under to employees of Seller; (v) any liability or obligation arising out
of any action, suit or proceeding against Seller (including any infringement
action) whether or not pending on the Closing Date, (vi) any liability or
obligation of Seller arising out of or relating to Environmental Laws or
Contaminants, (vii) any and all Taxes of the Seller, and (viii) any liability or
obligation of Seller arising out of or related to the Emagipix Assets.
2.3. Consideration From Buyer.
Upon execution of this Agreement, Buyer shall deliver to Seller $45,000
(the "Downpayment") by check or wire transfer.
At the Closing, as full payment for the transfer of the Emagipix Assets to
Buyer, (a) Buyer shall pay to Seller $255,000 (referred to together with the
Downpayment, as the "Cash Payment") by wire transfer of immediately available
funds to an account designated in writing by Seller and (b) Lightspace shall
deliver to Seller the Note (the Note and the Cash Payment collectively, the
"Purchase Price").
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer, subject to the disclosure
schedules annexed hereto, as follows as of the date hereof and as of the Closing
Date:
3.1. Organization, Standing, and Authority of Seller; No Subsidiaries.
Seller is a Delaware Corporation duly organized, validly existing, and in good
standing under the laws of Delaware and has all requisite corporate power and
authority to own and use the Emagipix Assets and to carry on its business as
presently being conducted. Seller has no subsidiaries.
3.2. Authorization of Transaction. Seller has the corporate power and
authority to execute and deliver this Agreement and the Ancillary Documents and
to perform its obligations hereunder and thereunder. The execution and delivery
of this Agreement and the Ancillary Documents, and the consummation of the
transactions contemplated hereby or thereby, have been duly authorized by all
necessary corporate action on the part of the Seller.
3.3. Binding Obligation. This Agreement and the Ancillary Documents
constitute valid and binding obligations of Seller, enforceable by Buyer against
Seller in accordance with their respective terms.
3.4. Noncontravention. Neither the execution and the delivery of this
Agreement and the Ancillary Documents, nor the consummation of the transactions
contemplated hereby or thereby will (i) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge, or other
restriction of any Governmental Authority to which Seller is subject or any
provision of the charter or bylaws of Seller or (ii) conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any Person the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Seller is a party or by which it is bound or to which any
of its assets is subject (or result in the imposition of any Encumbrance upon
any of its assets). Seller is not required to give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any Person in
order to consummate the transactions contemplated by this Agreement and the
Ancillary Documents.
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3.5. Intellectual Property.
Seller owns all Intellectual Property included in the Emagipix Assets (the
"Emagipix IP Assets") free and clear of any Encumbrances, and none of the
Emagipix IP Assets are subject to any third party license, agreement or other
permission. The Emagipix IP Assets constitute all Intellectual Property owned by
Seller and used at any time by Seller or which Seller has a right to use in
connection with emagipix.
The use of the Emagipix IP Assets by Seller does not infringe on,
misappropriate, or otherwise conflict with any Intellectual Property right of
any third party and no third party has asserted or threatened to assert against
Seller any claim of infringement or misappropriation of any Intellectual
Property rights. Seller has the full right to transfer to Buyer the Emagipix IP
Assets at the Closing, and the transfer of the Emagipix IP Assets to Buyer will
not infringe on any Intellectual Property right of any third party. No third
party has interfered with, infringed on, or misappropriated any Intellectual
Property rights of the Seller in the Emagipix IP Assets.
Schedule 3.5 identifies all of the following Emagipix IP Assets: (i) each
patent, copyright, mask work, trademark, or service xxxx (or registration of
such) that has been granted or registered and issued to Seller in any
jurisdiction, (ii) each pending patent application and each application for
registration of a copyright, mask work, trademark, service xxxx, or similar
right that Seller has made in any jurisdiction together with all associated
filing or serial numbers, (iii) all unregistered copyrights, (iv) all
unregistered trademarks, trade names, or service marks used by Seller, and (v)
ideas and disclosures related to Emagipix Technology. Seller has not granted any
license or other permission in the Emagipix IP Assets to any third party. Seller
has delivered to Buyer true, correct, and complete copies of all registrations,
applications, licenses, agreements, and permissions related to the Emagipix IP
Assets. For each of the Emagipix IP Assets identified on Schedule 3.5: (i)
Seller possesses all right and title to, and interest in, such assets free and
clear of any Encumbrance; (ii) such assets are not subject to any outstanding
judgment, order, or charge; and (iii) no proceeding is pending or, to Seller's
Knowledge, threatened that challenges the legality, validity, enforceability,
use, or ownership of such assets.
All employees, contractors, and consultants of Seller or any other third
parties who have been involved in the development of any Emagipix IP Assets,
have executed invention assignment and confidentiality agreements in the form
delivered to Buyer's counsel, and all employees and consultants of Seller who
have access to confidential information or trade secrets related to or
comprising the Emagipix IP Assets have executed appropriate nondisclosure
agreements in the form delivered to Buyer's counsel. Seller has taken reasonable
steps, consistent with industry standards, to protect the secrecy and
confidentiality of all of the Emagipix IP Assets. To Seller's Knowledge, no
third party is in possession of any confidential information pertaining to any
of the Emagipix IP Assets, except under a written confidentiality agreement in a
form disclosed in writing to Buyer.
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3.6. Other Intangible Property. Schedule 3.6 to this Agreement is a
complete and accurate list of all intangible assets, other than those
specifically referred to elsewhere in this Agreement, relating to or included in
the Emagipix Assets.
3.7. Title to Assets; Sufficiency of Assets. Seller has good and marketable
title to all of the Emagipix Assets and Emagipix Technology, whether real,
personal, mixed, tangible, or intangible. All of the Emagipix Assets are owned
by the Seller free and clear of any Encumbrances. At the Closing, Buyer shall
acquire good and marketable title to all of the Emagipix Assets, whether real,
personal, mixed, tangible, or intangible. The Emagipix Assets constitute all of
the assets, rights and properties of the Seller owned or used or held for use
exclusively or primarily in connection with emagipix and constitute all the
assets, rights and properties necessary for the lawful conduct of the emagipix
business in a manner consistent with such activities as heretofore conducted by
the Seller. All of the tangible assets, property and equipment included in the
Emagipix Assets are described in Schedule 2.1(a), are in good operating
condition, reasonable wear and tear excepted, and are in compliance with all
applicable laws.
3.8. Litigation. (i) There is no pending or threatened Proceeding against
the Seller concerning or relating to the Emagipix Assets or any of Seller's
Intellectual Property, (ii) there is not pending against the Seller, any
judgment, order, writ, injunction, or decree of any federal, state, local, or
foreign Governmental Authority concerning or relating to the Emagipix Assets,
and (iii) the Seller is not in default with respect to, nor has an event
occurred that, with notice, lapse of time, or both, would be a default under,
any judgment, order, writ, injunction, or decree of any federal, state, local,
or foreign court, or Governmental Authority with respect to the Emagipix Assets.
3.9. Tax Matters.
Seller has timely paid or will timely pay all Taxes due prior to the
Closing, including all Taxes shown as due on all Tax Returns and all estimated
Tax payments due on or before the Closing Date and has filed all Tax Returns
that it was required to file, and has paid all Taxes shown thereon as owing.
None of Seller's Tax Returns have been audited by the relevant taxing
authorities. To Seller's Knowledge, no audit or examination, or claim or
proposed assessment, by any taxing authority is pending or threatened against
Seller.
Seller has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency.
Seller is not a party to any Tax allocation or sharing agreement.
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3.10. Legal Compliance. Seller has complied in all material respects with
all applicable laws (including rules, regulations, codes, injunctions,
judgments, orders, decrees, and rulings thereunder) of Governmental Authorities.
3.11. Brokers' Fees. Seller has no liability or obligation to pay any fees
or commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Buyer could become liable or obligated.
3.12. Full Disclosure. None of the representations and warranties made by
Seller in this Agreement (including the Schedules to this Agreement) contains
any untrue statement of a material fact, or omits to state a material fact
necessary to prevent the statements from being misleading.
ARTICLE 4. BUYER'S WARRANTIES
Buyer represents and warrants to Seller, as follows as of the date hereof
and as of the Closing Date:
4.1. Organization, Standing and Qualification. Buyer is a corporation duly
organized, existing, and in good standing under the laws of Delaware.
4.2. Authority and Consents. Buyer has the corporate power and authority to
execute and deliver this Agreement and the Ancillary Documents and to perform
its obligations hereunder and thereunder. The execution, delivery, and
performance of this Agreement and the Ancillary Documents by Buyer and the
consummation of the transactions contemplated have been duly authorized by all
necessary corporate action on the part of Buyer.
4.3. Binding Obligation. This Agreement and the Ancillary Documents
constitute valid and binding obligations of Buyer, enforceable by Seller against
Buyer in accordance with their respective terms.
4.4. Noncontravention. Neither the execution and the delivery of each of
this Agreement and the Ancillary Documents, nor the consummation of the
transactions contemplated hereby or thereby will (i) violate any constitution,
statute, regulation, rule, injunction, judgment, order, decree, ruling, charge,
or other restriction of any Governmental Authority to which Buyer is subject or
any provision of the charter or bylaws of Buyer or (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any Person the right to accelerate, terminate, modify, or cancel, or require
any notice under any agreement, contract, lease, license, instrument, or other
arrangement to which Buyer is a party or by which it is bound or to which any of
its assets is subject (or result in the imposition of any Encumbrance upon any
of its assets). Buyer is not required to give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any Person in order
to consummate the transactions contemplated by this Agreement and the Ancillary
Documents.
4.5. Brokers' Fees. Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which Seller could become liable or
obligated.
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4.6. Financial Wherewithal. Buyer has sufficient cash resources to pay the
Cash Payment and the Closing is not subject to any financing conditions.
ARTICLE 5. OBLIGATIONS PRIOR TO CLOSING
5.1. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
General. Each of the Parties will use its reasonable best efforts to take
all actions and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
and the Ancillary Documents (including satisfaction, but not waiver, of the
closing conditions set forth in Article 6 below).
Operation of Business; Emagipix Assets. Seller will conduct its business in
the Ordinary Course of Business and in compliance in all material respects with
all applicable laws and shall use commercially reasonable efforts to preserve
the goodwill associated with the emagipix business and maintain satisfactory
relations with those having business relationships with Seller. Seller shall not
sell, lease or transfer any of the Emagipix Assets, subject any of the Emagipix
Assets to any Encumbrance or grant any rights to or under any of the Emagipix IP
Assets.
Notice of Developments. Each Party will give prompt written notice to the
other Party of any development causing a breach of any of its own
representations and warranties in Section 3 or Section 4 above, as the case may
be. No disclosure by any Party pursuant to this Section 5.1(c), however, shall
be deemed to amend or supplement any disclosure schedule or to prevent or cure
any misrepresentation or breach of warranty.
ARTICLE 6. THE CLOSING
6.1. Time and Place. The sale and transfer of the Emagipix Assets by Seller
to Buyer (the "Closing") shall take place at the offices of the Buyer, 000 Xxxx
Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx, on April 16, 2007 or such other date
as the parties may mutually agree (the "Closing Date"); provided, however, that
the Closing Date shall be no later than April 30, 2007.
6.2. Conditions to Obligation of Buyer. The obligation of Buyer to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
the representations and warranties set forth in Section 3 above shall be
true and correct at and as of the Closing Date;
Seller shall have performed and complied with all of its covenants
hereunder through the Closing;
there shall not be any injunction, judgment, order, decree or ruling in
effect preventing consummation of any of the transactions contemplated by this
Agreement; nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby which makes the consummation of such transactions illegal or
that has had, or is reasonably likely to have, a Seller Material Adverse Effect;
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Seller shall have delivered to Buyer a certificate to the effect that each
of the conditions specified above in Section 6.2(a) through (c) is satisfied in
all respects;
Seller shall have delivered or caused to be delivered to Buyer:
(i) the Trademark Assignment Agreement;
(ii) the Xxxx of Sale;
(iii) the Employment Agreements;
(iv) the Invention Assignment Agreements;
(v) the Non-Compete and Confidentiality Agreements;
(vi) the Stockholder Pledge Agreement;
(vii) the Stock Option Agreements;
(viii) the Registration Rights Agreement; and
(ix) copies of written consents or minutes of meetings of the board of
directors and the shareholders of Seller, certified by an officer of Seller,
authorizing and approving the Seller's execution and delivery of, and the
performance of its obligations under, this Agreement and the Ancillary
Documents, and the transactions contemplated hereunder (including the sale of
the Emagipix Assets to Buyer under this Agreement);
Simultaneously with the consummation of the transfer, Seller, through its
officers, agents, and employees, will put Buyer into full possession and
enjoyment of all the Emagipix Assets to be conveyed and transferred by this
Agreement; and
all actions to be taken by Seller in connection with consummation of the
transactions contemplated hereby and all certificates, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Buyer.
Buyer may waive any condition specified in this Section 6.2 if it executes
a writing so stating at or prior to the Closing.
6.3. Conditions to Obligation of Seller. The obligation of Seller to
consummate the transactions to be performed by it in connection with the Closing
is subject to satisfaction of the following conditions:
the representations and warranties set forth in Section 4 above shall be
true and correct at and as of the Closing Date;
10
Buyer shall have performed and complied with all of its covenants hereunder
through the Closing;
there shall not be any injunction, judgment, order, decree or ruling in
effect preventing consummation of any of the transactions contemplated by this
Agreement; nor shall there be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby which makes the consummation of such transactions illegal or
that has had, or is reasonably likely to have, a Buyer Material Adverse Effect;
Buyer shall have delivered to Seller a certificate to the effect that each
of the conditions specified above in Section 6.3(a) through (c) is satisfied in
all respects;
Buyer shall have delivered or caused to be delivered to Seller:
(i) the Cash Payment;
(ii) the Note;
(iii) the Stockholder Pledge Agreement;
(iv) the Employment Agreements;
(v) the Invention Assignment Agreements;
(vi) the Non-Compete and Confidentiality Agreements;
(vii) the Stock Option Agreements;
(viii) the Registration Rights Agreement; and
all actions to be taken by Buyer in connection with consummation of the
transactions contemplated hereby and all certificates, instruments, and other
documents required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to Seller.
ARTICLE 7. TERMINATION
7.1. Termination of Agreement. This Agreement may be terminated prior to
the Closing as provided below:
Buyer and Seller may terminate this Agreement by mutual written consent at
any time prior to the Closing;
Buyer may terminate this Agreement by giving written notice to Seller at
any time prior to the Closing (A) in the event Seller has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, Buyer has notified Seller of the breach, and the breach has
continued without cure for a period of five days after the notice of breach or
(B) if the Closing shall not have occurred on or before April 30, 2007, by
reason of the failure of any condition precedent under Section 6.2 hereof
(unless the failure results primarily from Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); and
11
Seller may terminate this Agreement by giving written notice to Buyer at
any time prior to the Closing (A) in the event Buyer has breached any
representation, warranty, or covenant contained in this Agreement in any
material respect, Seller has notified Buyer of the breach, and the breach has
continued without cure for a period of five days after the notice of breach or
(B) if the Closing shall not have occurred on or before April 30, 2007, by
reason of the failure of any condition precedent under Section 6.3 hereof
(unless the failure results primarily from Seller itself breaching any
representation, warranty, or covenant contained in this Agreement).
7.2. Effect of Termination; Downpayment. If either Party terminates this
Agreement pursuant to Section 7.1 above, this Agreement shall immediately become
void and have no effect and there shall be no liability or obligation on the
part of Buyer, Seller or their respective officers, directors, stockholders or
Affiliates, except for any liability of any Party then in breach. Without
limitation on the foregoing, Seller shall immediately repay the Downpayment to
Buyer in the event of a termination pursuant to Section 7.1(a) or 7.1(b), and
Seller may retain the Downpayment in the event of a termination pursuant to
Section 7.1(c)
ARTICLE 8. OBLIGATIONS AFTER CLOSING
8.1. Competition. In consideration for the payment by Buyer of the Purchase
Price, to be made on the Closing, Seller will not, at any time within the three
(3) year period immediately following the Closing, directly or indirectly engage
in, or have any interest in any Person (whether as an employee, officer,
director, agent, security holder, creditor, consultant, or otherwise) that
engages in, any activity worldwide that is the same as, similar to, or
competitive with emagipix. Seller acknowledges that Lightspace and the Buyer may
market and sell the Emagipix Assets and products incorporating the Emagipix
Assets worldwide and accordingly that is a reasonable territory for this
restriction on competition. In the event of foreclosure by Seller on the Note,
Seller's obligations under this Section 8.1 shall terminate in respect of the
Buyer's products and services using the Emagipix Technology.
8.2. Information to be Held in Confidence. From and after the Closing,
Seller and its respective officers, directors, and other representatives will
each hold in strict confidence all information of a confidential nature and not
generally known to the public with respect to the Emagipix Assets, except when
disclosure of such information is required by law or legal process. If the
Seller believes that such disclosure is required, it will give Buyer advance
notice of the disclosure and the basis for it, and permit Buyer a reasonable
opportunity to eliminate the need for or to narrow such disclosure. In addition,
Seller will not use to the detriment of Buyer or for the benefit of any other
Person, or misuse in any way, any confidential information or trade secrets
related to or included in the Emagipix Assets. Notwithstanding anything herein
to the contrary, in the event of foreclosure by Seller on the Note, Seller's
obligations not to disclose such information related to the Emagipix Technology
shall terminate.
12
8.3. Further Assurances. Seller, at any time on or after the Closing, will
execute, acknowledge, and deliver any further deeds, assignments, conveyances,
and other assurances, documents, and instruments of transfer, reasonably
requested by Buyer, and will take any other action consistent with the terms of
this Agreement that may reasonably be requested by Buyer for the purpose of
assigning, transferring, granting, conveying, and confirming to Buyer, or
reducing to possession, any or all property (tangible and intangible) to be
conveyed and transferred under this Agreement. If requested by Buyer, Seller
will prosecute or otherwise enforce in its own name for the benefit and under
the direction of Buyer, any claims, rights, or benefits that are transferred to
Buyer under this Agreement and that require prosecution or enforcement in
Seller's name.
ARTICLE 9. NATURE AND SURVIVAL OF REPRESENTATIONS
AND OBLIGATIONS
9.1. Survival of Representations and Warranties. The representations and
warranties of the parties and any related causes of action will survive the
Closing until 5:00 p.m. New York time on the third anniversary following the
Closing, except (i) those representations and warranties made by the Seller in
Section 3.9 (Tax Matters), which representations and warranties and any related
causes of action shall survive the Closing until 5:00 p.m. New York time on the
fifth anniversary following the Closing and (ii) those representation and
warranties made by the Seller in Sections 3.5 (Intellectual Property) and 3.7
(Title to Assets; Sufficiency of Assets), which representations and warranties
and any related causes of action shall survive the Closing forever. All
covenants and agreements set forth in this Agreement and any Ancillary Document
that are to be performed following the Closing Date shall survive the Closing
and continue in full force and effect until such covenants and agreements are
performed in accordance with the terms of this Agreement and such Ancillary
Document.
9.2. Indemnification by Seller. Seller will indemnify and hold harmless
Buyer and Lightspace and their respective shareholders, directors, officers,
employees, agents or other Affiliates ("Buyer Indemnitees") for any loss,
liability, claim, damage, expense, cost (including, without limitation, costs of
investigation and defense and reasonable fees and expenses of counsel and other
experts) or diminution of value, whether or not involving a third-party claim
(collectively, "Damages"), arising from or in connection with:
any breach of any representation or warranty made by Seller in this
Agreement (including the Schedules to this Agreement);
any breach of any covenant or obligation of Seller in this Agreement
(including the Schedules to this Agreement); and
the Excluded Liabilities.
In furtherance and not in limitation of the foregoing rights to indemnity
and in addition to any remedies the Buyer may have under this Agreement against
the Seller, if the Buyer is entitled to any indemnification or other payment
from Seller under this Agreement, Buyer may assign such right to Lightspace, and
Lightspace may offset the amount of any such indemnification or other payment
against any payments that are due to the Seller under the Note, in the order of
their maturity.
13
9.3. Indemnification by Buyer. Buyer will indemnify and hold harmless
Seller and its shareholders, directors, officers, employees, agents or other
Affiliates ("Seller Indemnitees") for any Damages arising from or in connection
with:
any breach of any representation or warranty made by Buyer in this
Agreement; and
any breach of any covenant or obligation of Buyer in this Agreement.
9.4. Notice of Claim.
If any Person other than a Seller Indemnitee or a Buyer Indemnitee
commences litigation or asserts a demand (a "Third-Party Claim") against a Party
("Claiming Party") to the Agreement, in respect of which the Claiming Party
proposes to demand indemnification hereunder, the Claiming Party shall provide
written notice to the Party from whom indemnification is sought (the
"Indemnitor") within fifteen (15) days of the Claiming Party becoming aware of
such Third-Party Claim.
If the Claiming Party should have a claim against the Indemnitor that is
not a Third-Party Claim, the Claiming Party shall deliver a written notice
thereof as promptly as practicable to the Indemnitor specifying the nature and
specific basis for the claim and, to the extent then determinable, the amount or
the estimated amount of the claim.
Notwithstanding anything contained in this Section, the failure by the
Claiming Party to timely notify the Indemnitor of a Third-Party Claim does not
relieve the Indemnitor of any indemnification responsibility under this Article
9 unless and only to the extent that such failure adversely prejudices the
ability of the Indemnitor to defend such claim.
9.5. Procedure.
Promptly after receipt by the Indemnitor of written notice pursuant to
Section 9.4 of the assertion or the commencement of any Third-Party Claim with
respect to any matter referred to in Sections 9.2 and 9.3 hereof, the Indemnitor
shall be entitled to assume the defense thereof, by giving written notice of its
intention to do so to the Indemnitee within twenty (20) days after receipt of
the notice described in Section 9.4(a), with counsel reasonably satisfactory to
the Indemnitee at the Indemnitor's expense.
If the Indemnitor shall assume the defense of such Third-Party Claim, it
shall not settle such Third-Party Claim unless such settlement (i) includes as
an unconditional term thereof the giving by the claimant or the plaintiff of a
release of the Indemnitee, reasonably satisfactory to the Indemnitee, from all
liability with respect to such Third-Party Claim and (ii) does not impose
injunctive or other equitable relief on the Indemnitee. Notwithstanding the
assumption by the Indemnitor of the defense of any Third-Party Claim as provided
in this subsection, the Indemnitee shall be permitted to join in the defense of
such Third-Party Claim and to employ counsel at its own expense. If requested by
the Indemnitor, the Indemnitee shall cooperate, at the sole expense of the
Indemnitor, with the Indemnitor and its counsel in contesting the Third-Party
Claim or, if appropriate, in asserting any counterclaims or cross-claims.
14
If the Indemnitor shall fail to notify the Indemnitee of its desire to
assume the defense of any such Third-Party Claim within the prescribed period of
time, or shall notify the Indemnitee that it will not assume the defense of any
such Third-Party Claim, then the Indemnitee may assume the defense of any such
Third-Party Claim at the Indemnitor's expense, in which event it may do so in
such manner as it may reasonably deem appropriate. The Indemnitee shall not
settle any Third-Party Claim without the prior written consent of the
Indemnitor, which consent shall not be unreasonably withheld. The Indemnitor
shall be permitted to join in the defense of such Third-Party Claim and to
employ counsel at its own expense.
ARTICLE 10. COSTS AND TAXES
10.1. Costs and Taxes. Each Party will pay all costs and expenses,
including its attorney fees and expenses, incurred or to be incurred by it in
negotiating and preparing this Agreement and in Closing and carrying out the
transactions contemplated in this Agreement. Seller shall pay all sales, use,
stamp, transfer and like taxes, if any, required to be paid in connection with
the sale of the Emagipix Assets hereunder.
ARTICLE 11. MISCELLANEOUS
11.1. Effect of Headings. The subject headings of the Sections and
subsections of this Agreement are included for convenience only and will not
affect the construction or interpretation of any of its provisions.
11.2. Word Usage. Unless the context clearly requires otherwise:
Plural and singular numbers will each be considered to include the other;
The masculine, feminine, and neuter genders will each be considered to
include the others;
"Will," "must," "agree," and "covenants" are each mandatory;
"May" is permissive;
"Or" is not exclusive; and
"Includes" and "including" are not limiting.
Reference to any statute is a reference to that statute as amended to the
date of this Agreement.
Reference to any document is to that document, as amended to the date of
this Agreement, including all exhibits and schedules, if any.
15
11.3. Entire Agreement; Modification; Waiver. This Agreement constitutes
the entire agreement between the Parties pertaining to the subject matter
contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the Parties. No supplement, modification,
or amendment of this Agreement will be binding unless executed in writing by all
the parties. No waiver of any of the provisions of this Agreement will be
considered, or will constitute, a waiver of any other provision, and no waiver
will constitute a continuing waiver. No waiver will be binding unless executed
in writing by the Party making the waiver.
11.4. Counterparts; Delivery. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Signature pages transmitted electronically (e.g., by facsimile or in
Portable Document Format (.pdf) as an attachment to an e-mail) shall have the
full force and effect of original signatures.
11.5. Press Releases and Public Announcements. No Party shall issue any
press release or make any public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Party; provided, however, that either Party may make any public disclosure
it believes in good faith is required by applicable law or any listing or
trading agreement concerning the publicly-traded securities of any Affiliate (in
which case the disclosing Party will use its best efforts to advise the other
Party prior to making the disclosure).
11.6. Parties In Interest. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under, or by reason of,
this Agreement on any Persons other than the parties to it and their respective
successors and assigns (other than rights granted to indemnified parties under
Section 9); nothing in this Agreement is intended to relieve or discharge the
obligation or liability of any third party to any Party to this Agreement; and
no provision will give any third party any right of subrogation or claim against
any Party to this Agreement.
11.7. Assignment. This Agreement will be binding on, and will inure to the
benefit of, the Parties and their respective heirs, legal representatives,
successors, and assigns, provided that the Seller may not assign its obligations
under this Agreement, and before the Closing, Buyer may not assign any of its
rights under this Agreement.
11.8. Notices. All notices, requests, consents and other communications
under this Agreement shall be in writing, shall be addressed to the receiving
Party's address set forth below or to any other address a Party may designate by
notice under this Agreement, and shall be either (i) delivered by hand, (ii)
sent by facsimile, and mailed promptly by first class mail, (iii) sent by
nationally recognized overnight courier, or (iv) sent by certified mail, return
receipt requested, postage prepaid:
16
To Seller at: Illumination Design Works, Inc.
00 Xxxxxx Xx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxx, CEO
Fax: 000-000-0000
To Buyer at: Lightspace Emagipix Corporation
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx, President & CEO
Fax: 000-000-0000
with a copy to: Xxxx & Hessen LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax: 000-000-0000
All notices, requests, consents and other communications under this Agreement
shall be deemed to have been given either (i) if by hand, at the time of the
delivery of the notice to the receiving Party, (ii) if by facsimile, at the time
that receipt of the facsimile has been acknowledged by electronic confirmation
or otherwise, or if no confirmation is received, on the fifth day following the
day a hard copy of the transmission is mailed by first-class mail, (iii) if by
overnight courier, on the next Business Day following the day the notice is
delivered to the courier service, or (iv) if by certified mail, on the fifth
Business Day following the day of the mailing. Any Party may change the address
to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Party notice in the manner herein set
forth.
11.9. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts
without regard to principles of conflicts of law. Each party hereby irrevocably
consents and submits to the jurisdiction of any Massachusetts or United States
Federal Court sitting in the Commonwealth of Massachusetts, County of Suffolk,
over any action or proceeding arising out of or relating to this Agreement and
irrevocably consents to the service of any and all process in any such action or
proceeding by registered mail addressed to such party at its address specified
in Section 11.8 (or as otherwise noticed to the other party). Each party further
waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue on the basis of forum non conveniens. Each party also waives any right to
trial by jury.
11.10. Severability. If any term or provision of this Agreement is or
becomes invalid, illegal or unenforceable in any situation in any jurisdiction,
such provision shall be fully severable and shall not affect the validity,
legality or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. In such a case, the Parties will work
together to draft provisions which can replace the invalid or unenforceable
provision with one that is valid and enforceable and has an economic effect as
similar as possible to that of the invalid or unenforceable provision.
17
11.11. Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
11.12. Construction. Seller and Buyer acknowledge and agree that: (i) each
Party and such Party's counsel has reviewed and negotiated, or has had the
opportunity to review and negotiate, the terms and provisions of this Agreement
and have contributed to its review and revision; (ii) any rule of construction
to the effect that any ambiguities are resolved against the drafting Party shall
not be used to interpret this Agreement; and (iii) the terms and provisions of
this Agreement shall be construed fairly as to Seller and Buyer and not in favor
of or against either Party, regardless of which Party was generally responsible
for the preparation of this Agreement.
11.13. Force Majeure. Neither Party will be deemed to be in default or
otherwise responsible for delays or failures in performance resulting from acts
of God; acts of war, terrorism or civil disturbance; governmental action or
inaction; fires; earthquakes; or other causes beyond such Party's reasonable
control.
IN WITNESS WHEREOF, the Parties to this Agreement have duly executed it on
the day and year first above written.
LIGHTSPACE EMAGIPIX CORPORATION
By: /s/ Xxxx Xxxxxxxx
------------------------------
Xxxx Xxxxxxxx, President & CEO
ILLUMINATION DESIGN WORKS, INC.
By: /s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx, CEO
18
Schedule 1(a)
-------------
emagipix consists of interactive lighting technology and products including
related software, hardware, power supplies, circuitry, panels, assembly tools,
methods, and techniques, any technology related to or developed in part for
object sensing including software, hardware, power supplies, circuitry, panels,
assembly tools, methods, and techniques. and any technology related to or
developed in part for electroluminescence including software, hardware, power
supplies, circuitry, panels, assembly tools, methods, and techniques.
19
Schedule 1(b) Emagipix Assets
-----------------------------
Schematics, drawings of the EL panel PCB
Schematic, drawings of the Power Supply PCB
Schematic, drawings of the US0 to LVDS converter
Components to make subsequent units and power supplies
Electrical test results and lab notebooks
Detailed description of Emagipix design
URL - domain: xxx.xxxxxxxxx.xxx
Firmware for power supply and main EL panel board
Names and contacts of Asian manufacturers for EL panels and PCBS
Demo unit
Emagipix communication protocols
PCB layouts (done in Pads PCB) far all Emagipix products
Test and lab notebooks
Materials including Shielding, rubber dielectrics, hardware, ICs
Xxxx of materials for every Emagipix component
All existing EL panel PCBs, EL panels, dielectrics, etc.
All existing CAD drawings
Vendor list for Emagipix components (Domestic and Asian)
Lamination machine t0 adhere conductor the EL panels
Emagipix Business plan (47 pages)
All mock-ups and photography, and video demos
20
Schedule 3.5 - Emagipix IP
--------------------------
Trademark "emagipix" including common law rights, associated good will, and
US Trademark application No. 77/105.464.
Any ideas or disclosures for interactive lighting technology including
related software, hardware, power supplies, circuitry, panels, assembly tools,
methods, and techniques.
Any ideas or disclosures for object sensing including any technology
related to or developed in part for object sensing and software, hardware, power
supplies, circuitry, panels, assembly tools, methods, and techniques.
Any ideas or disclosures for electroluminescence including any technology
related to ordeveloped in part for electroluminescence and software, hardware,
power supplies, circuitry, panels, assembly tools, methods, and techniques.
Patent descriptions and claim list.
All trade secrets related to the Emagipix Product.
21
SCHEDULE 3.6
None.
22
