CONSENT AGREEMENT
THIS
CONSENT AGREEMENT (this “Agreement”) is made as of this 29th day of May 2007, by
and among PRESSURE BIOSCIENCES, INC., a Massachusetts corporation formerly
known
as Boston Biomedica, Inc. (“PBI”), PBI SOURCE SCIENTIFIC, INC., a Massachusetts
corporation formerly known as BBI Source Scientific, Inc. and a wholly-owned
subsidiary of PBI (“PBI Source”), SOURCE SCIENTIFIC, LLC, a California limited
liability company (the “Company”), BIT ANALYTICAL INSTRUMENTS, INC., a
Massachusetts corporation (”BIT”), XXXXXXX X. XXXXXX, an individual (“Xxxxxx”),
and XXXXX X. XXXXXXXX, an individual (“Xxxxxxxx”). Xxxxxx and Xxxxxxxx are
sometimes individually referred to herein as a “Transferor” and are collectively
referred to herein as the “Transferors”.
Background
WHEREAS,
PBI Source transferred, sold and assigned 35 units of limited liability company
membership interests (the “Units”) in the Company to each Transferor, and
retained the remaining 30 Units (the “Retained Units”), pursuant to that certain
LLC Membership Interest Purchase Agreement dated June 2, 2004 (the “Effective
Date”), by and among PBI Source, PBI and the Transferors (the “Original Purchase
Agreement”); and
WHEREAS,
each Transferor, in consideration of his purchase and acquisition from PBI
Source of his 35 Units, executed and delivered to PBI Source that certain
Secured Nonrecourse Term Promissory Note dated June 2, 2004, executed by such
Transferor in favor of PBI Source in the original principal amount of $450,000
(each, a “Transferor Note”); and
WHEREAS,
in connection with the Original Purchase Agreement, PBI Source and the
Transferors entered into that certain Amended and Restated Operating Agreement
of the Company, dated as of the Effective Date (the “Operating Agreement”),
providing for the governance of the Company and the conduct of its business
immediately after the consummation of the transactions contemplated by the
Original Purchase Agreement; and
WHEREAS,
since the Effective Date, the Company has been providing certain manufacturing
services to PBI, and in connection therewith, PBI has made available to the
Company and each of the Transferors certain information concerning PBI which
is
non-public, confidential or proprietary in nature; and
WHEREAS,
pursuant to that certain Call Option Agreement dated June 2, 2004, by and among
the Transferors and PBI Source (the “Call Option Agreement”), the Transferors
have the option to purchase the Retained Units (the “Call Option”); and
WHEREAS,
each of the Transferors desires to transfer, assign, sell and deliver (the
“Transfer”) to BIT all of his right, title and interest in and to 25 of his 35
Units (collectively, the “Transferred Units”), pursuant to the terms of that
certain LLC Membership Interest Purchase Agreement, dated as of May 29, 2007
(the “Transfer Agreement”), by and among each of the Transferors and BIT;
and
WHEREAS,
BIT desires to be admitted as a member of the Company and to be bound by the
terms of that certain Second Amended and Restated Operating Agreement, dated
as
of May 29, 2007 (the “Restated Operating Agreement”), by and among each of the
Transferors and BIT; and
WHEREAS,
each of PBI and PBI Source has determined that it is appropriate and in PBI
Source’s best interest to approve the Transfer and certain of the other
transactions contemplated by the Transfer Agreement.
Agreement
NOW,
THEREFORE, intending to be legally bound, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged,
the
parties agree as follows:
1. Consent
and Waiver.
Pursuant to Section 7.1 of the Operating Agreement, PBI Source hereby consents
to the Transfer of the Transferred Units to BIT pursuant to the Transfer
Agreement. PBI Source also hereby waives its right of first refusal to purchase
any of the Transferred Units as set forth in Section 7.6 of the Operating
Agreement and any other right it may have in connection with the Transfer of
the
Transferred Units to BIT. Finally, pursuant to Section 11.10 of the Operating
Agreement, PBI Source hereby consents to the amendment and restatement of the
Operating Agreement, on the terms and subject to the conditions of the Restated
Operating Agreement (the “Restatement”). Each of PBI Source, BIT and Transferors
hereby acknowledge and agree that the Restatement shall be deemed to be
effective concurrently with the closing of the purchase and sale of the Retained
Units pursuant to Section 2.c. of this Agreement, and that upon the
effectiveness of the Restatement, the Operating Agreement shall be superseded
in
its entirety by the Restated Operating Agreement such that the Operating
Agreement shall thereafter be null and void without any further force or
effect.
2. Exercise
of Call Option.
Pursuant to Section 5 of the Call Option Agreement, Transferors are hereby
making the election to exercise their Call Option and intend for this Agreement
to serve as the Notice of Election referenced in Section 5 of the Call Option
Agreement.
a. Call
Option Exercise Price.
Pursuant to Sections 2(f) and 5 of the Call Option Agreement, Transferors and
PBI Source acknowledge and agree that the Option Exercise Price with respect
to
all of the Retained Units is $578,572.50, or $289,286.25 per Transferor.
Pursuant to Sections 2.2(b) and 5.1 of the Transfer Agreement, each Transferor
hereby requests and instructs BIT, and BIT hereby accepts and agrees, to
withhold $289,286.25 of the Purchase Price, as a Third Party Payment (as defined
in the Transfer Agreement), and tender such amount directly to PBI Source by
wire transfer of immediately available funds to an account designated by PBI
Source as payment in full of the Option Exercise Price.
b. Closing
of Purchase and Sale.
PBI
Source hereby acknowledges and confirms that the Call Option is hereby being
validly exercised by Transferors. Pursuant to Section 6 of the Call Option
Agreement, PBI Source acknowledges and confirms its obligation to sell to
Transferors the Retained Units, subject only to delivery by Transferors of
the
full amount of the Option Exercise Price, in the manner contemplated by Section
2.a. of this Agreement, and Transferors’ satisfaction of the Transferor Notes,
in the manner contemplated by Section 3 of this Agreement. Upon its receipt
of
the Option Exercise Price, PBI Source shall immediately deliver to each
Transferor a certificate evidencing one-half (1/2) of the Retained Units, duly
endorsed in blank or accompanied by written instruments of transfer in form
satisfactory to Transferors, duly executed by PBI Source, free and clear of
any
Encumbrances (as defined in the Original Purchase Agreement).
c. Effective
Time of Purchase and Sale.
The
consummation of the purchase and sale of the Retained Units pursuant to this
Section 2 shall take place by remote location coordinated from the offices
of
Manatt, Xxxxxx & Xxxxxxxx, LLP, 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000 on the Closing Date, but with an effective time
immediately after the Closing (as such capitalized terms are defined in the
Transfer Agreement).
3. Payment
of Transferor Notes.
Each of
the Transferors and PBI Source acknowledge and agree that the Transferors’
exercise of the Call Option is, pursuant to Section 4 of the Call Option
Agreement, expressly conditioned upon the satisfaction in full of all of the
Transferors’ obligations under their respective Transferor Note. Pursuant to
Sections 2.2(b) and 5.1 of the Transfer Agreement, each Transferor hereby
requests and instructs BIT, and BIT hereby accepts and agrees, to withhold
$600,766.80 of the Purchase Price, as a Third Party Payment (as defined in
the
Transfer Agreement), and tender such amount on the Closing Date directly to
PBI
Source by wire transfer of immediately available funds to an account designated
by PBI Source as payment in full of such Transferor’s Transferor Note and PBI
Source agrees that the payment of such amount by BIT on behalf of each
Transferor shall (a) satisfy all of such Transferor’s obligations under his
Transferor Note, (b) terminate that certain LLC Membership Interest Pledge
Agreement dated the Effective Date (the “Pledge Agreement”), by and between the
Transferors, PBI Source and the Company, and (c) terminate the lien on the
Retained Units created by the Pledge Agreement.
4. Additional
Acknowledgements.
PBI
Source acknowledges and agrees that except for the payments of the amounts
set
forth in Sections 2 and 3 of this Agreement, all conditions to closing on the
purchase and sale of the Retained Units to the Transferors pursuant to the
exercise of the Call Option pursuant to Section 2 of the Call Option Agreement
have been satisfied, and that no other action other than the payments of the
amounts set forth in Sections 2 and 3 of this Agreement is required with respect
to the closing of the purchase and sale of the Retained Units to the Transferors
pursuant to the exercise of the Call Option pursuant to Section 2 of the Call
Option Agreement.
5. Ownership
of Certain Intellectual Property.
a. Each
of
the Transferors, BIT and the Company hereby acknowledges and agrees that all
right, title and interest in and to the Intellectual Property (as defined in
Section 5.b.) are owned, and shall continue to be owned, exclusively by PBI,
free and clear of any encumbrances, and no other person shall have any right
or
interest in or license to use or right to license others to use any of the
Intellectual Property, except as specifically authorized by PBI. Notwithstanding
the foregoing, PBI hereby duly grants the Company a fully-paid, royalty-free,
perpetual non-exclusive license (the “Retained License”) to reuse, modify,
display or extract any tools and know-how utilized by the Company in connection
with work performed in connection with the Intellectual Property including,
but
not limited to source code, scripts, graphics, HTML code, class files, pseudo
code, executable code, database schemas, or other related structures to be
used
in any manner the Company sees fit other than in connection with, directly
or
indirectly, the development, manufacture, marketing, sale, license or
distribution of products or services which could reasonably be expected to
compete with PBI’s products or services incorporating or utilizing the
Intellectual Property.
b. For
purposes of this Section 5, the term “Intellectual Property” shall mean any
patent, patent application, trademark or service xxxx, trademark or service
xxxx
application, trade name or copyright relating to or associated with the
“Pressure Cycling Technology” of PBI or any instrument or equipment utilizing
such Pressure Cycling Technology, and all discoveries, developments, designs,
improvements, inventions, formulas, software programs, processes, techniques,
know-how, data, drawings, sketches, data, whether or not subject to any patent,
patent application or copyright, relating to or associated with such Pressure
Cycling Technology or any instrument or equipment utilizing such Pressure
Cycling Technology. Any Intellectual Property developed by the Company or any
Transferor shall be considered “works made for hire” and shall be owned
exclusively by PBI.
c. To
the
extent that any Intellectual Property does not qualify as “works made for hire”,
or to the extent any jurisdictions should fail to deem the Intellectual Property
to be owned exclusively by PBI, subject to the Retained License, each of the
Company and Transferors does hereby irrevocably and unconditionally assign
to
PBI all rights (including, without limitation, moral and sublicensing rights),
title and interest in and to all such Intellectual Property. Each of the Company
and Transferors shall execute and deliver to PBI such additional instruments
(including patent applications, certificates of authorship, and other
instruments appropriate for the protection and enforcement of intellectual
property rights to PBI throughout the world), and take such other actions,
as
PBI may reasonably request to confirm, evidence or carry out the grants of
rights contemplated under this Section 5. Each of the Company and Transferors
hereby irrevocably appoints PBI and its duly authorized officers and agents
as
the Company’s and Transferors’ agent and attorney-in fact, to execute,
acknowledge, verify and deliver any such document with the same legal force
and
effect as if done by each of the Company or any Transferor, as the case may
be.
6. Indemnification.
a. Each
of
the Transferors and the Company shall, jointly and severally, indemnify, hold
harmless and defend PBI and PBI Source, their stockholders, directors, officers,
employees and agents and their heirs, successors and assigns (collectively,
the
“Indemnified Parties”) from and against any and all Damages that are incurred by
the Indemnified Parties on or after the Effective Date and arise out of or
are
based upon, in whole or in part, the operation of the Company commencing on
the
Effective Date and any time thereafter. Notwithstanding the foregoing, neither
the Transferors nor the Company shall have any obligations under this Section
6.a. to indemnify, hold harmless or defend the Indemnified Parties to the extend
that any such Damages result from the gross negligence, recklessness or willful
misconduct of an Indemnified Party. For purposes of this Section 6, the term
“Damages” shall mean all liabilities, damages, losses, taxes, assessments, costs
and expenses (including, without limitation, reasonable attorneys’ and
accountants’ fees and expenses) and any judgments or assessments, fines or
penalties incurred, or settlements reached by any of the Indemnified Parties
on
or after the Effective Date, whether arising in contract, tort or otherwise,
and
whether or not arising from or incurred in or as a result of any demand, claim,
action, suit, assessment or other proceeding.
b. Whenever
any claim shall arise for indemnification hereunder, the Indemnified
Party
shall
promptly notify the other parties from whom indemnity may be sought under this
Section 6 (the "Indemnifying
Party"),
of
the claim and, when known, the facts constituting the basis for such claim;
provided that the Indemnified Party's failure to give such notice shall not
affect any rights or remedies of such Indemnified Party hereunder with respect
to indemnification for Damages except to the extent that the Indemnifying Party
is materially prejudiced thereby. In the event of any claim for indemnification
hereunder resulting from or in connection with any claim or legal proceeding
by
a third party, the notice to the Indemnifying Party shall specify, if known,
the
amount or any estimate of the amount of the liability arising therefrom. Neither
the Indemnified Party nor any Indemnifying Party shall settle or compromise
any
claim by a third party for which the Indemnified Party is entitled to
indemnification hereunder, without the prior written consent of the other party
(which shall not be unreasonably withheld).
7. Competitive
Products.
Each of
the Transferors, BIT and the Company agrees that he or it shall not, for a
period of three (3) years following the date hereof, without the express prior
written consent of PBI, (a) directly or indirectly, develop, manufacture or
market any products, instruments or equipment for itself or anyone other than
PBI and PBI Source that utilize PBI’s Pressure Cycling Technology, (b) directly
or indirectly, develop, manufacture or market any products, instruments or
equipment for itself of for any other person that extracts DNA, RNA, protein
and
small molecules from samples and/or inactivates pathogens that are competitive
with any of PBI’s products, instruments or equipment utilizing PBI's Pressure
Cycling Technology, and (c) directly or indirectly, whether alone or as an
employee, officer, director, shareholder, agent, security holder, creditor,
consultant or otherwise, solicit, attempt to solicit or otherwise influence
or
attempt to influence any of PBI’s customers or personnel (including but not
limited to PBI’s employees, contractors, consultants or agents), with knowledge
that such person is then one of PBI’s customers or personnel, not to do business
with PBI and/or to apply for or accept any employment or consulting positions
with a competitor of PBI.
8. Confidentiality.
a. For
purposes of this Agreement, “Confidential Information” means any financial,
statistical, business, technical, scientific, medical, copyrightable, and/or
confidential or proprietary information relating to PBI’s business and includes,
without limitation, the structure, composition, properties or activity of any
of
PBI’s products, processes or inventions, unpublished patent applications,
marketing methods and plans, pricing information, manufacturing information
and
other unpublished information related to the business or the financial condition
of PBI and its affiliates and business partners. Confidential Information shall
include any of the foregoing information received by the Company, BIT or any
Transferor since the Effective Date.
b. Each
of
the Company, BIT and Transferors shall not disclose to any third party any
Confidential Information or use any such Confidential Information other than
as
explicitly agreed by PBI. Each of the Company, BIT and Transferors shall
obligate their respective personnel to keep such Confidential Information
confidential by using the same care and discretion that it uses for its own
confidential information, but no less than reasonable care.
c. The
obligations set forth in this Section 8 shall not apply to any information
which
(i) is published or otherwise becomes available to the general public through
no
fault of the receiving party; (ii) has been obtained by the receiving party
from
another party that had the right to disclose it; (iii) was in the receiving
party’s possession without proprietary restrictions prior to the date of
disclosure; (iv) the receiving party establishes that such information was
developed without reference to or use of the Confidential Information or (v)
is
required to be disclosed pursuant to applicable law, provided that the receiving
party shall, if feasible, give to PBI prior notice of such proposed disclosure
and a reasonable opportunity to contest such disclosure and obtain a protective
order against such disclosure.
d. At
any
time upon PBI’s request, the receiving party shall, at PBI’s discretion,
promptly return to PBI or destroy all of the Confidential Information furnished
to the receiving party by or on behalf of PBI, including all copies,
reproductions, summaries or extracts thereof in any media whatsoever in the
receiving party’s possession or control.
e. Each
of
the Company, BIT and Transferors acknowledges that monetary damages may not
be a
sufficient remedy or protection for PBI in the event of a breach of these
confidentiality obligations, and PBI shall be entitled to an injunction or
other
equitable relief prohibiting any such breach, in addition to such other rights
and remedies as the aggrieved party may have as a result of any such
breach.
9. Releases.
a. Each
of
the Company and Transferors (the “Company Releasors”), jointly and severally, on
their own behalf, and on behalf of their respective successors, affiliates,
heirs and assigns, as applicable, hereby fully releases, remises, acquits,
and
discharges forever, irrevocably and unconditionally, PBI and its affiliates,
successors and assigns and its present and former directors, officers, members,
securityholders, employees, agents, attorneys, representatives, successors,
partners and assigns, as applicable (collectively, the “PBI Parties”) from,
against and with respect to any and all actions, accounts, agreements, causes
of
action, complaints, charges, claims, covenants, contracts, costs, damages,
demands, debts, defenses, duties, expenses, executions, fees, injuries,
interest, judgments, liabilities, losses, obligations, penalties, promises,
reimbursements, remedies, suits, sums of money, and torts of any kind and nature
whatsoever, whether in law, equity, or otherwise, direct or indirect, fixed
or
contingent, foreseeable or unforeseeable, liquidated or unliquidated, known
or
unknown, matured or unmatured, absolute or contingent, determined or
determinable (collectively, a “Claim”) which, except for fraud by PBI, PBI
Source or any of their respective affiliates, the Company Releasors, and their
respective successors, affiliates, heirs and assigns, as applicable, or anyone
claiming through or under any of the Company Releasors, ever had or now has,
or
may hereafter have or acquire, against any of the PBI Parties arising out of
or
based upon (i) the Transferors’ purchase of interests in the Company pursuant to
the Original Purchase Agreement, (ii) the operation of the Company since the
Effective Date, (iii) the exercise of the Call Option as set forth in the Call
Option Agreement, or (iv) the Operating Agreement. Nothing in this Section
9.a.,
however, shall alter, modify or otherwise affect any right of Transferors or
the
Company under and pursuant to that certain Non-Competition Agreement dated
the
Effective Date, by and among the Transferors, PBI and PBI Source.
b. Each
of
PBI and PBI Source (the “PBI Releasors”), jointly and severally, on their own
behalf, and on behalf of their respective successors, affiliates, heirs and
assigns, as applicable, hereby fully releases, remises, acquits, and discharges
forever, irrevocably and unconditionally, the Company and the Transferors and
their respective affiliates, successors and assigns and their respective present
and former directors, officers, members, securityholders, employees, agents,
attorneys, representatives, successors, partners and assigns, as applicable
(collectively, the “Company Parties”) from, against and with respect to any and
all Claims which the PBI Releasors, and their respective successors, affiliates,
heirs and assigns, as applicable, or anyone claiming through or under any of
the
PBI Releasors, ever had or now has, or may hereafter have or acquire, against
any of the Company Parties arising out of or based upon (i) the Transferors’
purchase of interests in the Company pursuant to the Original Purchase
Agreement, (ii) the operation of the Company, except for fraud or to the extent
the basis of any such Claim would require PBI to restate any of its financial
statements as determined by PBI’s registered public accounting firm, (iii) under
the Operating Agreement, except for fraud or to the extent the basis of any
such
Claim would require PBI to restate any of its financial statements as determined
by PBI’s registered public accounting firm or (iv) the exercise of the Call
Option as set forth in the Call Option Agreement; provided, however, this
release does not cover any Claims which the PBI Releasors, or their respective
successors, affiliates, heirs and assigns, as applicable, or anyone claiming
through or under any of the PBI Releasors, ever had or now has, or may hereafter
have or acquire, against any of the Company Parties arising out of or based
upon
any services the Company has provided or may provide to PBI or PBI
Source.
c. Notwithstanding
anything in this Section 9 to the contrary, neither the PBI Releasors nor the
Company Releasors is releasing claims relating to the enforcement,
interpretation, or breach of this Agreement.
10. Miscellaneous.
a. This
Agreement, together with the agreements expressly referenced herein, constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersedes any and all prior written or oral communications and agreements,
and all contemporaneous oral communications among the parties concerning the
subject matter hereof.
b. No
provision of this Agreement may be amended, changed or modified in any manner,
orally or otherwise, except by an instrument in writing signed by all of the
parties.
c. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and assigns. No party may assign any of their
respective rights or obligations under this Agreement without the express prior
written consent of all of the other parties.
d. This
Agreement shall be governed by and construed in accordance with the laws of
the
Commonwealth of Massachusetts, without giving effect to principles of conflicts
of law of any jurisdiction.
e. This
Agreement may be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument,
and in pleading or proving any provision of this Agreement, it shall be
necessary to produce more than one such counterpart.
f. If
any
term or provision of this Agreement or the application thereof to any person
or
circumstances shall to any extent be invalid or unenforceable, then the
remainder of this Agreement or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforced to the fullest extent permitted
by
law.
g. As
used
in this Agreement, all pronouns and any variations thereof shall refer to the
masculine, feminine or neuter, singular or plural, as the identity of the person
or entity may require.
h. Headings
and captions herein are inserted for convenience, do not constitute a part
of
this Agreement, and shall not be admissible for the purpose of proving the
intent of the parties.
i. Each
party shall take such actions as any other party reasonably may request to
evidence or effectuate the purpose of this Agreement.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first above written.
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PBI
SOURCE SCIENTIFIC, INC.,
a
Massachusetts corporation
By: /s/
Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
President and CEO
|
|
PRESSURE
BIOSCIENCES, INC.
a
Massachusetts corporation
By: /s/
Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxxxx
Title:
President and CEO
|
|
SOURCE
SCIENTIFIC, LLC,
a
California Limited Liability Company
By: /s/
Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
CEO
|
|
BIT
ANALYTICAL INSTRUMENTS, INC.,
a
Massachusetts corporation
By: /s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
President
|
|
“TRANSFERORS”:
/s/
Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx
|
|
|
/s/
Xxxxx X. Xxxxxxxx
Xxxxx
X. Xxxxxxxx
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