EXHIBIT 99.5
Assignment and Assumption Agreement for Novaeon Transaction
This Assignment and Assumption Agreement for Novaeon Transaction
(together with all the exhibits hereto, the "Agreement") is made between Xxxx
North America Holding, Inc., a California corporation ("Xxxx"), and Anchor
Pacific Underwriters, Inc., a Delaware corporation ("Anchor"), effective as of
January 12, 2001 ("Effective Date").
RECITALS
WHEREAS, Anchor has entered into that certain asset purchase agreement to
acquire the business assets of Novaeon, Inc., a Delaware corporation, dated
effective as of December 28, 2000 and the ancillary documents thereto (attached
as Exhibit A);
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WHEREAS, Anchor has borrowed $2,000,000 from Legion Insurance Company
("Legion") pursuant to a Note (the "Note") dated January 12, 2001 and under
certain circumstances Legion has the right to cause Xxxx to purchase the Note
from Legion, which circumstances include the event that Anchor fails to complete
an offering of its common stock resulting in $3,000,000 of gross proceeds by
June 30, 2001 (the "Financing");
WHEREAS, Anchor has agreed to contribute the business assets of Novaeon,
Inc. to capitalize a wholly owned subsidiary of Anchor known as Spectrum Managed
Care of California, Inc., a Delaware corporation ("Spectrum"); and
WHEREAS, in the event Legion causes Xxxx to purchase the Note, then Anchor
shall assign its interest in Spectrum to Xxxx, in exchange for Xxxx canceling
the Note and assuming Anchor's liability under the promissory note owed by
Anchor to Novaeon, Inc.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants and agreements contained herein, the parties hereto, intending to be
legally bound, do hereby agree as follows:
AGREEMENT
ARTICLE I
ASSIGNMENT AND ASSUMPTION
1.1 If Anchor fails to complete the Financing by June 30, 2001, and Legion
causes Xxxx to purchase the Note, then Xxxx shall have thirty (30) days to give
Anchor written notice that Xxxx has elected to acquire Spectrum in exchange for
cancellation of the Note. Within ten (10) days of receipt of such written
notice Anchor shall assign all the capital stock of Spectrum to Xxxx.
1.2 Upon the transfer of the Spectrum capital stock to Xxxx, Xxxx shall
cancel the Note and shall assume all obligations of Anchor under the note of
Anchor payable to Novaeon, Inc.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Corporate Power. Each party hereby represents and warrants that such
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party is duly organized and validly existing under the laws of the state of its
incorporation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof.
2.2 Due Authorization. Each party hereby represents and warrants that
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such party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder.
2.3 Binding Obligation. Each party hereby represents and warrants that
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this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.
2.4 Compliance with Laws. Each party represents and warrants that each
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party's performance under this Agreement shall comply with all applicable laws,
rules and regulations.
2.5 Limitation of Liability. NEITHER PARTY SHALL BE ENTITLED TO RECOVER
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FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES
IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.
ARTICLE III
DISPUTE RESOLUTION
3.1 Arbitration. The parties recognize that disputes as to certain
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matters may from time to time arise which relate to either party's rights and/or
obligations hereunder. It is the objective of the parties to establish
procedures to facilitate the resolution of such disputes in an expedient manner
by mutual cooperation and without resort to litigation. To accomplish this
objective, the parties agree to follow the procedures set forth below if and
when such a dispute arises between the parties.
If any dispute arises between the parties relating to the interpretation,
breach or performance of this Agreement or the grounds for the termination
thereof, and the parties cannot resolve the dispute within thirty (30) days of a
written request by either party to the other party, the parties agree to hold a
meeting, attended by the Chief Executive Officer or President of each party, or
their executive level designees, to attempt in good faith to negotiate a
resolution of the dispute prior to pursuing other available remedies. If, within
sixty (60) days after such written request, the parties have not succeeded in
negotiating a resolution of the dispute, such dispute shall be submitted to
final and binding arbitration under the then current commercial rules and
regulations of the American Arbitration Association ("AAA") relating to
voluntary arbitration. The arbitration proceedings shall be held in San Diego,
California. The arbitrators shall be knowledgeable in the subject matter at
issue in the dispute. The arbitration shall be conducted in accordance with the
following time schedule unless otherwise mutually agreed to in writing by the
parties: (i) parties to the arbitration
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proceeding shall each appoint their respective arbitrator within fifteen (15)
business days after the date the dispute is submitted to arbitration; (ii)
within five (5) business days thereafter, such arbitrators shall appoint the
third arbitrator; (iii) within ten (10) business days after the appointment of
the third arbitrator, the parties to the arbitration proceeding shall provide
all documents, records and supporting information reasonably necessary to
resolve the dispute; (iv) within fifteen (15) business days after the date the
above records are due, the arbitrators shall hold a hearing; and (v) within
fifteen (15) days thereafter, the arbitrators shall render their decision. Each
party shall initially bear its own costs and legal fees associated with such
arbitration. The prevailing party in any such arbitration shall be entitled to
recover from the other party the reasonable attorney's fees, costs and expenses
incurred by such prevailing party in connection with such arbitration. The
decision of the arbitrator shall be final and binding on the parties. The
arbitrator shall prepare and deliver to the parties a written, reasoned opinion
conferring its decision. Judgment on the award so rendered may be entered in any
court having competent jurisdiction thereof and shall be enforceable under the
Federal Arbitration Act.
ARTICLE IV
GENERAL PROVISIONS
4.1 Commercially Reasonable Efforts. Each party shall use commercially
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reasonable and diligent efforts to perform its responsibilities under this
Agreement.
4.2 Assignment. Except as expressly provided hereunder, neither this
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Agreement nor any rights or obligations hereunder may be assigned or otherwise
transferred by either party without the prior written consent of the other
party, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, any such assignment shall not relieve the assigning party of its
responsibilities for performance of its obligations under this Agreement. The
rights and obligations of the parties under this Agreement shall be binding upon
and inure to the benefit of the successors and permitted assigns of the parties.
Any assignment not in accordance with this Agreement shall be void.
4.3 Force Majeure. Neither party shall be held liable or responsible to
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the other party nor be deemed to have defaulted under or breached this Agreement
for failure or delay in fulfilling or performing any term of this Agreement
(other than non-payment) when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected party, including, but not
limited to, fire, floods, embargoes, war, acts of war (whether war be declared
or not), insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting by any
governmental authority or the other party.
4.4 Governing Law. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of California, except that no
conflict of laws provision shall be applied to make the laws of any other
jurisdiction applicable to this Agreement.
4.5 Waiver. Except as specifically provided for herein, the waiver from
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time to time by either of the parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such party's rights or remedies provided in this
Agreement.
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4.6 Severability. In case any provision of this Agreement shall be
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invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
4.7 Notices. All notices and other communications provided for hereunder
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shall be in writing and shall be mailed by first-class, registered or certified
mail, postage paid, or delivered personally, by overnight delivery service or by
facsimile, computer mail or other electronic means, with confirmation of
receipt, addressed as follows:
If to Anchor: Anchor Pacific Underwriters, Inc. If to Xxxx: Xxxx North America Holding, Inc.
------------ 000 X. Xxx Xxxxxx, Xxxxx 0000 ---------- 000 X. Xxx Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000 Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Copies to: Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
--------- 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 0000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Either party may by like notice specify or change an address to which
notices and communications shall thereafter be sent. Notices sent by facsimile,
computer mail or other electronic means shall be effective upon confirmation of
receipt, notices sent by mail or overnight delivery service shall be effective
upon receipt, and notices given personally shall be effective when delivered.
4.8 Rules of Construction. The parties hereto agree that they have been
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represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
4.9 Entire Agreement; Amendment. This Agreement (including the exhibits
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attached hereto) sets forth all of the covenants, promises, agreements,
warranties, representations, conditions and understandings between the parties
hereto with respect to the subject matter hereof and supersedes and terminates
all prior agreements and understandings between the parties. There are no
covenants, promises, agreements, warranties, representations conditions or
understandings, either oral or written, between the parties other than as set
forth herein. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by the respective authorized officers of the parties.
4.10 Headings. The captions contained in this Agreement are not a part of
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this Agreement, but are merely guides or labels to assist in locating and
reading the several articles hereof.
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4.11 Publicity. The Parties shall consult with each other before issuing
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any press release with respect to this Agreement or the transactions
contemplated hereby and neither shall issue any such press release or make any
such public statement without the prior consent of the other, which consent
shall not be unreasonably withheld; provided, however, (i) that a party may,
without the prior consent of the other party, issue such press release or make
such public statement as may upon the advice of counsel be required by law, if
it has used reasonable efforts to consult with the other party prior thereto,
and (ii) such consent shall be deemed to have been given if the recipient of the
press release or public statement fails to respond to the other party within
forty-eight (48) hours after the recipient's receipt of such press release or
public statement. No such consent of the other party shall be required to
release information which has previously been made public.
4.12 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
4.13 Bankruptcy Matters. All licenses granted under this Agreement are
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deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of right to "intellectual property" as defined in Section 101 of such
Code. The parties agree that either party may fully exercise all of its rights
and elections under the Bankruptcy Code. The parties further agree that, in the
event that either party elects to retain its rights as a licensee under such
Code, such party shall be entitled to complete access to the intellectual
property licensed to it hereunder and all embodiments of such intellectual
property, but only as necessary for the purposes of exploitation of the licenses
granted under this Agreement. Such embodiments of the intellectual property
shall be delivered to the other party not later than: (i) the commencement of
bankruptcy proceedings against the other party, upon written request, unless
such party elects to perform its obligations under the Agreement, or (ii) if not
delivered under (i) above, upon the rejection of this Agreement by or on behalf
of the party, upon written request.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their duly authorized officers as of the Effective
Date.
XXXX NORTH AMERICA HOLDING, INC. ANCHOR PACIFIC UNDERWRITERS, INC.
/s/ XXXXXXX X. XXXX /s/ XXXXXXX X. XXXX
________________________________ _________________________________
Signature Signature
XXXXXXX X. XXXX XXXXXXX X. XXXX
________________________________ _________________________________
Printed Name Printed Name
Chief Executive Officer Chief Executive Officer
________________________________ _________________________________
Title Title
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EXHIBIT A
NOTE PURCHASE AGREEMENT
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