EXHIBIT 2
AGREEMENT
dated as of October 19, 1998
by and among
Select Therapeutics Inc.
and
the Stockholders of
Sierra Diagnostics, Inc.
AGREEMENT (the "Agreement") dated as of October 19, 1998 (the "Closing
Date") by and between SELECT THERAPEUTICS INC. ("Select"), and the persons
listed on Exhibit A hereto (collectively, the "Stockholders").
WHEREAS, (i) Select is a corporation organized and existing under the laws
of the State of Delaware; (ii) SIERRA DIAGNOSTICS, INC. ("Sierra") is a
corporation organized and existing under the laws of the State of California and
(iii) XXXX X. XXXXX ("Xxxxx") is an executive officer and the principal
stockholder of Sierra; and
WHEREAS, the Stockholders wish to sell to Select, and Select wishes to
purchase from the Stockholders, all of the issued and outstanding capital stock
of Sierra upon the terms and conditions hereinafter set forth (the
"Acquisition"); and
WHEREAS, the respective parties desire to make certain representations,
warranties and agreements in connection with the Acquisition.
NOW, THEREFORE, in consideration of the foregoing, the representations,
warranties, covenants and agreements set forth herein and such other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
Article I. Sale and Purchase of Sierra Shares.
1.1 Sale of Sierra Shares. Each Stockholder does hereby sell and deliver to
Select, and Select does hereby purchase from
each Stockholder, the number of shares of Sierra common stock owned by such
Stockholder as set forth on Exhibit A hereto (the "Sierra Shares") by delivering
to Sierra stock certificates representing his Sierra Shares, accompanied by a
stock power executed by such Stockholder, with his signature Medallion
Guaranteed, together with all applicable stock transfer tax stamps relative to
said certificates.
1.2 Payment of Purchase Price. Simultaneous with its receipt of all of the
Sierra Shares from the Stockholders, Select hereby delivers to each Stockholder
that number of shares of Select common stock (the "Select Shares") set forth
opposite his name on Exhibit A (collectively, the "Purchase Price").
Article II. Representations, Warranties, Covenants, and Acknowledgments of
Stockholders. Each Stockholder severally (but not jointly) represents, warrants
covenants, acknowledges and agrees as follows:
2.1 Investment. Such Stockholder is acquiring the Select Shares for his own
account, and not for the account of any other person. Such Stockholder is
acquiring the Select Shares for investment and not with a view to distribution
or resale thereof except in compliance with applicable laws regarding the sale
of securities.
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2.2 Business Experience. Such Stockholder is capable of evaluating the
merits and risks of his investment in Select by acquiring the Select Shares
pursuant to this Agreement.
2.3 Access to Information. Such Stockholder has had the opportunity to ask
questions of, and to receive answers from, Xxxxxx Xxxxxx, the Chairman of
Select, with respect to the terms and conditions of the transactions
contemplated by this Agreement and with respect to the business, affairs,
financial condition, results and prospects of operations of Select. Such
Stockholder has received from Sierra's counsel and has read Select's April 15,
1998 Offering Materials (comprising a Subscription Agreement, Risk Factors and
Select's Consolidated June 30, 1997 (audited) and December 31, 1997 (unaudited)
Financial Statements, pursuant to which Select sold 762,534 shares of Common
Stock not registered under the Securities Act of 1933, as amended (the
"Securities Act"), at a price of $3.00 each) and Select's press release dated
June 11, 1998 (re: Institut Xxxxx Agreement) and has had access to such
financial and other information as he has deemed necessary for him to make a
fully-informed decision to invest in Select by acquiring Select Shares pursuant
to this Agreement; and he has had the opportunity to obtain any additional
information necessary to verify any of such information to which he has had
access.
2.4 Speculative Investment. Such Stockholder's investment in Select by
acquiring the Select Shares pursuant to
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this Agreement is highly speculative in nature and is subject to a high degree
of risk of loss in whole or in part. The amount of such potential total
investment loss is within such Stockholder's risk capital means and is not so
great in relation to his total financial resources as to jeopardize his personal
financial needs or those of his family in the event such investment were to be
lost in whole.
2.5 Select Shares Unregistered. Such Stockholder must bear the economic
risk of his investment in the Select Shares for an indefinite period of time,
because the Select Shares being issued to him pursuant to this Agreement have
not been registered under the Securities Act and therefore such Shares cannot be
sold or otherwise transferred by such Stockholder unless such Shares are
registered under the Securities Act or an exemption from such registration is
available. None of Select nor any of its officers, employees, agents or
representatives has made any agreements, covenants or undertakings whatsoever
either (i) to register the Select Shares, or any of them, or (ii) except as set
forth in Section 7.14(b) as to whether any exemption will be available from the
registration requirements of the Securities Act for the future sale of any
Select Shares, including without limitation for sales thereof under Rule 144
promulgated under the Securities Act. Such Stockholder acknowledges that the
exemption under Rule 144 as currently in effect would not be available until at
least one year after the Closing Date and not then unless: (i) a public trading
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market then exists for Select's Common Stock; (ii) adequate current information
as to Select's financial and other affairs and operations is then available to
the public; and (iii) all other applicable terms and conditions of Rule 144 have
been satisfied by Select and such Stockholder.
2.6. Stock Certificate Restrictive Legend. Stock certificates evidencing
the Select Shares shall bear a restrictive legend for securities not registered
under the Securities Act, substantially as follows:
THE OFFERING AND SALE OF THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1993 ("SECURITIES ACT") OR UNDER ANY STATE
SECURITIES ACT ("STATE ACT"). ANY TRANSFER OF SUCH
SECURITIES WILL BE INVALID UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT IS IN EFFECT AS TO
SUCH TRANSFER OR IN THE OPINION OF COUNSEL FOR THE
ISSUER SUCH REGISTRATION IS UNNECESSARY IN ORDER FOR
SUCH TRANSFER TO COMPLY WITH THE SECURITIES ACT AND
THE STATE ACT.
2.7 Questionnaire. Such Stockholder has truthfully completed the
Questionnaire in the form of Exhibit 2.7 hereof.
2.8 Tax Advice. Select has made no warranties or representations to such
Stockholder with respect to the income tax consequences of the transactions
contemplated by this Agreement and such Stockholder is in no manner relying on
Select or Sierra or their respective representatives for an assessment of such
tax consequences.
2.9 Authorization.
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(a) Such Stockholder has full power and authority and legal capacity to enter
into this Agreement and to perform this Agreement in accordance with its terms;
and the execution, delivery and performance of this Agreement by such
Stockholder has been duly authorized by all necessary corporate or other action.
Such Stockholder is not bound by any contractual or other obligation that would
be violated by his execution and performance of this Agreement; and this
Agreement is a valid and binding obligation of such Stockholder enforceable in
accordance with its terms.
(b) Neither the execution and delivery of this Agreement nor the
consummation by such Stockholder of any of the transactions contemplated herein
nor compliance by such Stockholder with the terms, conditions and provisions
hereof or of any agreement or instrument contemplated hereby will (i) conflict
with, result in a breach of, or constitute an event of default under (1) any
material instrument, agreement, lease, license, franchise, permit, or other
authorization, right, or obligation to which such Stockholder is a party or any
of his properties is subject or by which they are bound, or (2) any statute,
ordinance, rule, regulation, judgment, order, award or decree applicable to such
Stockholder, or (ii) require the approval, consent or authorization of, or the
making of any declaration, filing or registration with, any third party or any
foreign, federal, state or local court, governmental authority or regulatory
body.
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2.10 Ownership of Sierra's Shares. Such Stockholder is the record owner and
the beneficial owner of the capital stock of Sierra set forth opposite his name
on Exhibit A. Such Stockholder owns his Sierra Shares free and clear of all
liens and encumbrances, and he has the full and complete right and power to
dispose of his Sierra Shares in accordance with the terms of this Agreement.
Such Stockholder will transfer his Sierra Shares to Select free and clear of all
liens and encumbrances. There are no existing arrangements that require or
permit any of such Stockholder's Sierra Shares to be voted by or at the
discretion of anyone other than such Stockholder.
2.11 Confidentiality. Such Stockholder, if he has not executed and
delivered to Sierra a Proprietary Information Agreement in the form of Exhibit
3.13 hereto, agrees to maintain as confidential and not use for his own benefit
or for the benefit of any third party, all material information and knowledge of
Sierra not generally known or available to the public, including, without
limitation, its business, affairs, research and development, strategic and
operating plans, products and prospects (the "Confidential Information"), except
(i) with respect to those governmental agencies to which disclosure is required
by law or applicable regulation, (ii) pursuant to subpoena or other compulsory
process, or (iii) as may otherwise be required by law. In the event disclosure
of Confidential Information is required under subsections (i) through (iii)
above, such Stockholder will,
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to the extent lawfully possible, give Select at least five (5) days prior
written notice before his disclosure and will provide Select with copies of any
responsive materials.
2.12 Non-Solicitation. (a) For a period of three years after the Closing
Date such Stockholder will not either directly or indirectly for himself or any
third party, (a) solicit, induce, recruit, or cause any person who was, is or
hereafter becomes an employee of Sierra to terminate his employment for the
purpose of joining, associating or becoming employed by any business or activity
(i) which is in competition with any product sold, or any business or activity
now or hereafter engaged in, by Sierra or Select or (ii) in which such
Stockholder is an officer or director or directly or indirectly has any
ownership interest or to which he provides any services or (b) interfere or harm
the contractual or business relationships of Sierra or Select with any person,
firm or entity which was, is or hereafter becomes a licensor, licensee or
independent contractor of Sierra or Select.
2.13 Release of Sierra. (a) As a material inducement to Select to enter
into this Agreement and deliver the Select Shares hereunder, such Shareholder
hereby irrevocably and unconditionally releases, acquits, and forever discharges
Sierra and each of its stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, subsidiaries,
affiliates (and agents, directors, officers, employees, representatives, and
attorneys of such divisions, subsidiaries, and
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affiliates), and all persons acting by, through, under, or in concert with any
of them (Sierra and each of its stockholders, etc. are collectively the "Sierra
Releasees"), or any of them, from any and all charges, complaints, claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses
which such Stockholder now has, owns, or holds, or claims to have, own, or hold,
or which he at any time heretofore had, owned, or held, or claimed to have, own
or hold, or which he at any time hereafter may have, own, or hold, or claim to
have, own, or hold, against each or any of the Sierra Releasees with respect to
any events which occurred prior to the date of this Agreement; provided,
however, that the foregoing shall in no event apply, with respect to any
Stockholder who is also an officer, director or employee of Sierra, to claims by
the Stockholder (i) relating to vested rights under any Sierra employee benefit
plans to which such Stockholder was entitled as of the Closing Date, (ii)
relating to medical or health insurance coverage to which such Stockholder was
entitled as of the Closing Date, including COBRA benefits, (iii) arising from a
failure on the part of Sierra to make and pay any required employee tax
withholdings for periods of employment prior to the Closing Date, or (iv) for
which Sierra would otherwise have an indemnity obligation under applicable law
to such Stockholder with respect to third party claims brought against the
Stockholder for matters relating to the performance (or nonperformance) of the
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Stockholder's duties as an employee of Sierra prior to the Closing Date.
(b) For the purposes of implementing a full and complete release and
discharge of the Sierra Releasees, such Stockholder expressly acknowledges that
this Agreement is intended to include in its effect, without limitation, all
claims, other than those for indemnification, which he does not know or suspect
to exist in his favor as of the date of this Agreement, and that this Agreement
contemplates the extinguishment of any such claim or claims.
(c) The foregoing provisions of Section 2.13(a) and (b) shall not in any
way be construed as any claim or admission by any Sierra Releasee that Sierra
has acted wrongfully with respect to such Stockholder or to any other person, or
that such Stockholder has any rights whatsoever against Sierra.
Article III. Representations and Warranties of Xxxxx. Xxxxx represents and
warrants to Select as follows:
3.1 Corporate Organization. Sierra is a corporation duly organized, validly
existing and in good standing under the laws of the State of California and is
duly authorized to carry on its business where and as now conducted and to own,
lease and operate its properties and assets as it now does. Sierra is qualified
or licensed to do business as a foreign corporation, and is in good standing, in
each jurisdiction in which the nature of the business conducted by it or its
ownership or leasing of the
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properties owned or leased by it requires such qualification or licensing and
where the failure to be so qualified or licensed would have a material adverse
effect on Sierra. The copies of the certificate of incorporation and by-laws of
Sierra that have been delivered to Select are complete and correct as of the
date of this Agreement, and the duplicate minute book of Sierra which has been
furnished to Select is complete and accurately reflects all material actions or
consents to action taken prior to the date of this Agreement by the Board of
Directors and stockholders of Sierra.
3.2 Authorization.
(a) Sierra is not bound by any contractual or other obligation that would be
violated by the execution, delivery, consummation and performance of this
Agreement.
(b) Neither the execution and delivery of this Agreement nor the
consummation of any of the transactions contemplated herein, nor the performance
of the terms, conditions and provisions hereof or of any agreement or instrument
contemplated hereby, will (i) conflict with, result in a breach of, or
constitute an event of default under (1) the certificate of incorporation or
by-laws of Sierra, (2) any material instrument, agreement, lease, license,
franchise, permit, or other authorization, right, or obligation to which Sierra
is a party or any of its properties is subject or by which and is bound, or (3)
any statute, ordinance, rule, regulation, judgment, order, award or
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decree applicable to Sierra, or (ii) require the approval, consent or
authorization of, or the making of any declaration, filing or registration with,
any third party or any foreign, federal, state or local court, governmental
authority or regulatory body.
3.3 Capitalization. The authorized, issued and outstanding capital stock of
Sierra is as set forth on Schedule 3.3. All the issued and outstanding shares of
Sierra were duly authorized for issuance and are validly issued, fully-paid and
non-assessable, have not been issued in violation of the preemptive rights of
any Sierra stockholder and were issued in full compliance with all federal and
state securities laws. All prior sales of securities of Sierra were either
registered under the Securities Act and applicable state securities laws or
exempt from such registration, and no Stockholder or other security holder has
any rescission rights with respect thereto. There are no outstanding
subscriptions, options, warrants, agreements, convertible securities, preemptive
or other rights, calls, commitments or other rights or agreements of any kind to
subscribe for, purchase or otherwise acquire any issued or unissued capital
stock or equity interests of Sierra. Sierra is not obligated to purchase, redeem
or otherwise acquire any securities of Sierra or of any other person or entity.
3.4 Subsidiaries. Sierra does not own any capital stock or other interest
in any corporation or other business entity.
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3.5 Joint Ventures. For purposes of this Agreement, a "Joint Venture" means
an entity in which Sierra, either jointly or individually, is, directly or
indirectly, the beneficial owner of any class of capital stock or other equity
security or any profit participation interest. Sierra is not a participant in
any Joint Venture.
3.6 Financial Statements. The following financial statements of Sierra,
which are set forth on Schedule 3.6, have been prepared in United States Dollars
and present fairly the financial condition of Sierra at the dates indicated and
the consolidated results of its operations for the periods indicated:
(a) balance sheets of Sierra as at December 31, 1997 and June 30,
1998; and
(b) the liabilities of Sierra existing as of the Closing Date are set
forth on Schedule 3.6. Xxxxx represents and warrants that Schedule 3.6
contains a true and complete list as of the Closing Date of all
indebtedness or liabilities of Sierra of every nature and description,
absolute, contingent or otherwise, except for (i) costs related to employee
compensation accrued on or after October __, 1998 in the ordinary course,
(ii) legal fees and expenses of the Stockholders to be borne by Sierra
pursuant to Section 7.2 hereof relating to the negotiation and
documentation of this Agreement and (iii) miscellaneous items ordered from
vendors and not yet invoiced or other amounts not exceeding $5,000.00 in
the aggregate.
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3.7 Absence of Undisclosed Liabilities; Books of Account. Except to the
extent fully reflected in Schedule 3.6, Sierra has no liabilities of any nature,
whether accrued, absolute, contingent or otherwise, including, but not limited
to, any tax or other liabilities of any nature that were unknown or undetermined
as of the Closing Date. There is no basis for the assertion against Sierra of
any liability of any nature as of the Closing Date not fully reflected in
Schedule 3.6 except those expressly permitted by Section 3.6(b) hereof to be
omitted therefrom. All the books of account of Sierra have been exhibited or
made available to Select and accurately record all material transactions of
Sierra during the periods covered by them.
3.8 Absence of Certain Changes. Since June 30, 1998 and except as disclosed
on Schedule 3.8, Sierra has operated its business in the ordinary course and
consistent with past practices and there has not been any material adverse
change in the consolidated financial condition of Sierra, results of operations
or businesses of Sierra, and it has not taken any of the following actions which
individually or in the aggregate involved more than US$5,000:
(a) entered into any transaction or incurred any liability or obligation other
than in the ordinary course of its business;
(b) made any declaration, set aside or paid any dividend or other
distribution in respect of any shares of capital
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stock of Sierra, nor purchased, redeemed or otherwise acquired any outstanding
shares of capital stock or other securities of, or other ownership interests in,
Sierra;
(c) paid any dividends or made any other distributions on, or acquired, any
shares of its capital stock or, directly or indirectly, made any other payments
or loans of any kind to the Stockholder, except compensation for services
rendered and reimbursement for expenses in amounts consistent with past
practices;
(d) incurred any indebtedness for borrowed money, other than short term
borrowing in the ordinary course of business;
(e) issued any capital stock or other securities, granted any options or
agreed to any amendment of any material term of any outstanding Sierra
securities;
(f) sustained any material damage, destruction or other casualty loss
(whether or not covered by insurance) affecting the business or assets of
Sierra;
(g) made any material change in any method of accounting or accounting
practice;
(h) (1) granted any severance or termination pay to, or increased any
compensation, bonus or other benefits payable to, or entered into any written
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with, any officer or director of Sierra, or any
other employee of Sierra whose 1998 base annual salary exceeded $50,000,
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or (2) increased any benefit payable under any existing severance or termination
pay policies or employment agreements; or (3) granted or agreed to grant any
general increase in any rate or rates of salaries or compensation to its
employees or any specific increase in the salary or compensation to any employee
or agent, or paid or agreed to pay any bonus to any employee of Sierra, other
than in the ordinary course of business.
3.9 Ownership of Properties. Sierra does not own any real estate or
interest therein other than a leasehold interest in property in Sonora,
California identified on Schedule 3.16. Sierra owns outright, free and clear of
any claim, lien, security interest, pledge, restriction, charge or encumbrance,
all leasehold improvements, equipment, inventory and other personal property
used in its business or presently located in any of its premises, except for the
lien, if any, of current taxes not yet due and payable (the lien of Xxxxxxx
Capital Associates under the Security Agreement dated November 26, 1996 having
been extinguished by virtue of Sierra's satisfaction in full of all its
obligations thereto and its receipt therefrom of a General Release). Sierra does
not use or lease any property that is owned by any officer, director or
affiliate of Sierra or any relative of any thereof.
3.10 Real Property and Other Leases. All leases of real property and all
material leases of other property, and amendments and modifications thereof, are
in full force and effect and have not been modified or amended in any material
respect, all rents and
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additional rents due to date under each such lease have been paid, Sierra has
been in peaceable possession since the commencement of the original term of such
lease, and Sierra does not have any knowledge of an uncured default under such
leases by Sierra or by the lessor under any of such leases nor of any event
which with notice or lapse of time or both would constitute a default thereunder
by Sierra.
3.11 Inventory. All of the inventory of Sierra is carried on its books at
cost (on the basis of FIFO and average cost).
3.12 Machinery and Equipment. All machinery and equipment owned or leased
by Sierra is in good operating condition, normal wear and tear excepted, and the
use thereof is in material conformance with all applicable ordinances and
regulations, and all building, zoning and other laws.
3.13 Intellectual Property.
(a) Schedule 3.13 contains a true and complete list of all patents issued,
assigned to or licensed by, and trademarks registered to, Sierra and all pending
applications therefor (the "Scheduled IP"). Except as set forth on said
Schedule, Sierra owns or has an exclusive right or license to use the Scheduled
IP free and clear of all liens and encumbrances. No consent of any third party
is or will be required for the use by Select of any of the Scheduled IP or the
transfer of Sierra's rights therein to Select. Except as set forth on said
Schedule, Sierra is not obligated to
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pay any royalties or fees with respect to the Scheduled IP. Said Schedule also
contains a true and complete list of all licenses of or rights to any
intellectual property rights granted by Sierra to others.
(b) Except as may be disclosed in the Gonostat Trademark Search Report
dated September 1, 1993, Sierra does not have knowledge of any infringement by
it upon the patents, trademarks, trade names, service marks, trade secrets,
copyrights or other intellectual property rights of others. Sierra has not
received any notice of, nor has it been a defendant or plaintiff in any suit,
action or proceeding which involves, any claim that Sierra has infringed or is
infringing any intellectual property rights of others. Sierra has taken all
measures as it has deemed necessary and appropriate in the circumstances to
maintain the confidentiality of the process and formulae, research and
development results and other know-how of Sierra. Sierra has obtained from its
current employees and consultants written confidentiality agreements in the form
of the Proprietary Information Agreement attached hereto as Exhibit 3.13.
3.14 Accounts Receivable. All of the accounts receivable of Sierra arose
from bona fide transactions in the ordinary course of business, and, to Xxxxx'x
knowledge, none is subject to any defense, set-off or counterclaim.
3.15 Taxes.
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(a) For the purposes of this Agreement, "Tax" (and, with correlative
meaning, "Taxes" and "Taxable") means, for any entity, (i) any net income,
alternative or add-on minimum tax, gross income, gross receipts, sales, use, ad
valorem, transfer, franchise, profits, license, withholding on amounts paid to
or by such entity or any subsidiary thereof, payroll, employment, excise,
severance, stamp, occupation, property, environmental or windfall profit tax, or
other tax, together with any interest or any penalty, addition to tax or
additional amount imposed by any governmental authority responsible for the
imposition of any such tax (domestic or foreign) (a "Taxing Authority"), and
(ii) liability of such entity or any subsidiary thereof for the payment of any
amounts of the type described in (i) as a result of being a member of an
affiliated, consolidated, combined or unitary group for any taxable period, and
(iii) liability of such entity or any subsidiary thereof for the payment of any
amounts of the type described in clauses (i) or (ii) as a result of any express
or implied obligation to indemnify any other person.
(b) Except as set forth in Schedule 3.15:
(i) all Tax returns, statements, reports and forms (including
estimated Tax returns and reports and information returns and reports)
required to be filed with any Taxing Authority with respect to any Taxable
period ending on or before the Closing Date by or on behalf of Sierra (the
"Sierra Tax Returns"), have been or will be filed when due (subject to
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any extensions of such due date) and, to Sierra's knowledge, each Sierra
Tax Return is materially correct and complete as filed;
(ii) Sierra has timely paid, withheld or made provision on its books
for all Taxes shown as due and payable on Sierra Tax Returns that have been
filed, except that payroll taxes were, in some instances, paid late but are
currently paid when due with no outstanding delinquency;
(iii) no Sierra Tax Returns relating to income or franchise Taxes
filed with respect any Taxable years of Sierra has been examined by
appropriate income tax authorities;
(iv) Sierra has not granted any extension or waiver of the limitation
period applicable to any Sierra Tax Returns;
(v) there is no claim, audit, action, suit, proceeding, or
investigation now pending or threatened in a writing received by Sierra
against or with respect to Sierra in respect of any Tax or assessment;
(vi) there are no requests for rulings in respect of any Tax pending
between Sierra and any Taxing Authority;
(vii) there are no liens for Taxes upon the assets of Sierra except
liens for current Taxes not yet due;
(viii) to Xxxxx'x knowledge and except for the effect of a change from
cash to accrual method reporting as may be required as a result of the
transactions contemplated by this Agreement, Sierra will not be required to
include any
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adjustment in Taxable income for any Tax period (or portion thereof) ending
after the Closing Date as a result of a change in method of accounting for
any Tax period (or portion thereof) ending on or before the Closing Date or
pursuant to the provisions of any agreement entered into with any Taxing
Authority with regard to the Tax liability of Sierra for any Tax period (or
portion thereof) ending on or before the Closing Date;
(ix) Sierra has not been a member of an affiliated group other than
one of which Sierra was the common parent, or filed or been included in a
combined, consolidated or unitary Tax return other than one filed by
Sierra, or a return for a group consisting solely of its predecessors, or
participated in any other similar arrangement whereby any income, revenues,
receipts, gains, losses, deductions, credits or other Tax items of Sierra
was determined or taken into account for Tax purposes with reference to or
in conjunction with any such items of another person other than Sierra or
any such predecessor;
(x) Sierra is not currently under any contractual obligation to pay to
a Taxing Authority the income or franchise tax obligations of, or with
respect to transactions relating to, any other person or to indemnify any
other person with respect to any income or franchise tax; and
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(xi) Sierra has not signed any letter or entered into any agreement or
arrangement in writing consenting to the surrender or sharing of any
deductions, credits or other Tax attributes with any other person or
transferred or assigned to any other person for Tax purposes any such
items.
3.16 Agreements, etc. Schedule 3.16 contains a true and complete list of:
(a) all material agreements and other commitments of Sierra for the purchase of
any materials, supplies or inventory; (b) all notes and agreements relating to
any outstanding indebtedness of Sierra for borrowed money, (c) all leases or
other rental agreements under which Sierra is either lessor or lessee which call
for annual lease payments in excess of US$5,000 individually, (d) all other
agreements (including, but not limited to, employment agreements, commitments
and understandings, written or oral) to which Sierra is a party or by which it
or its assets or properties is bound which require payment by Sierra of more
than US$5,000 in any calendar year and which cannot be terminated by Sierra,
without liability, on notice of 30 days or less, and (e) all product liability,
fire, commercial and other insurance carried by Sierra with respect to its
business and properties. Except as set forth on such Schedule, all such
scheduled documents, commitments and understandings of Sierra (including, but
not limited to, commitments for the purchase of inventory) were entered into in
the ordinary course of business and were entered into on an arm's-length basis.
True and complete copies of all scheduled
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documents, commitments and understandings have been delivered to Select.
3.17 Agreements Regarding Employees. (a) Sierra is not a party to or bound
by any employment agreement, or any collective bargaining or other labor
agreement, or any pension, retirement, stock option, stock purchase, savings,
profit sharing, deferred compensation, retainer, consultant, bonus, group
insurance or other incentive or welfare agreement, plan or arrangement, written
or oral, except as set forth on Schedule 3.17. True and complete copies of each
written agreement, plan or arrangement listed on Schedule 3.17 have been
delivered to Select.
(b) All officers and directors have resigned from Sierra effective as of
the Closing Date. Sierra has not received notice from Xxxxx or Xxx Xxxxx that
either intends to terminate his employment following the Closing Date.
(c) Except as set forth on Schedule 3.17, Sierra does not maintain any
employee benefit plans.
3.18 Absence of Defaults. Except as disclosed on Schedule 3.18, Sierra does
not have knowledge of any material existing default by any party under any
lease, agreement, commitment or understanding to which Sierra is a party is
bound or by which it or to which its assets or properties are subject.
3.19 Compliance with Laws. Sierra does not have knowledge that it is in
violation of or has violated, in any material respect, any applicable provisions
of any laws, statutes,
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ordinances or regulations or any term of any judgment, decree, injunction or
order binding against it.
3.20 Compliance with Laws-Environmental.
(a) For purposes of this Section 3.20:
"Hazardous Material" shall mean any material or substance that, whether by
its nature or use, is now or hereafter defined as hazardous waste, hazardous
substance, pollutant or contaminant under any Environmental Law (defined below),
or which is toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and which is now or hereafter
regulated under any Environmental Law, or which is or contains petroleum,
gasoline, diesel fuel or another petroleum hydrocarbon product, lead paint,
asbestos, asbestos-containing materials or polychlorinated biphenyls;
"Environmental Laws" means those United States, provincial or local laws,
statutes, ordinances, rules, regulations, orders and decrees (including any
amendments thereto) relating to pollution or protection of the environment,
including laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials, pollutants, wastewater (other than non-contact
cooling or process water), or wastes constituting hazardous substances in, into,
onto or upon the environment (including, without limitation, ambient air,
surface water, groundwater, or land), or otherwise relating to the processing,
distribution, use,
-24-
treatment, collection, accumulation, storage, disposal, transport, or handling
of Hazardous Materials.
(b) The operations of Sierra have been and are now in material compliance
with all Environmental Laws. All approvals of government authorities required to
be held by Sierra concerning the environment have been obtained, are valid and
are in full force and effect, have been and are being complied with in all
material respects and there are no proceedings commenced or threatened to revoke
or amend any such approvals. The business operations of Sierra have not and are
not now the subject of any remedial order (being any administrative complaint,
direction, order or sanction issued, filed or imposed by any governmental
authority pursuant to any Environmental Laws). To Xxxxx'x knowledge, no part of
any premises occupied by Sierra in the operation of its business has ever been
used as a landfill or for the disposal of waste or, except for the operations of
Sierra conducted in material compliance with Environmental Laws, for the
storage, treatment or disposal of Hazardous Material. Sierra neither uses nor
stores in or on the premises occupied by it in the operation of its business any
Hazardous Material other than in material compliance with Environmental Laws.
Sierra has no knowledge of any Hazardous Material in, on or under the premises
occupied by it in the operation of its business other than those used in the
ordinary course of Sierra's business.
-25-
3.21 Regulatory and Product Matters.
(a) Schedule 3.21(a) contains a true and complete list of (1) all Forms FDA
483, "warning letters" from the U.S. Food and Drug Administration ("FDA") and
Field Alerts, as defined in the Federal Food, Drug, and Cosmetic Act, as amended
(the "FDA Act"), received by Sierra and (2) all reports filed by Sierra with
respect to adverse drug experiences relating to its products.
(b) Sierra has not received any notice from the FDA or the U.S. Drug
Enforcement Administration ("DEA") that any of its products is either (1) an
unapproved new drug or an adulterated or misbranded drug within the meaning of
the FDA Act or any other similar law, or (2) an article which may not, pursuant
to the FDA Act, be introduced into interstate commerce at the time of delivery.
As used above, "notice" includes (1) written correspondence from the FDA or DEA
alleging the foregoing, (2) an order or request from the FDA or DEA that Sierra
cease to market any of its products, or (3) a lawsuit by the FDA or DEA filed
against any of its products or against Sierra or any of its officers, directors
or employees alleging any of the foregoing. True, complete and accurate copies
of each such notice and other written correspondence, if any, from the FDA in
which the FDA asserted that the business may not be in material compliance with
the FDA Act, and Sierra's written response, if any, thereto have been furnished
to Select. True, correct and complete copies of all
-26-
Forms FDA 483 and "warning letters", if any, received by Sierra with respect to
its products have been furnished to Select.
(c) To Sierra's knowledge, Sierra has filed with the FDA and, if required,
the DEA, all reports required to be filed by Sierra with respect to adverse drug
experiences relating to its products (to the extent Sierra had knowledge of such
adverse drug experiences) or shortages or unaccounted for amounts of controlled
substances in connection with its products, except where the failure to make
such filings could not reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the ability of Select to sell after the
Closing Date the Sierra product to which the experience relates.
(d) Except as set forth on Schedule 3.21(b):
(1) Sierra has all product licenses and Establishment Registrations
necessary to manufacture and market its products in the United States, as
listed on such Schedule. All such Product Licenses and Establishment
Registrations are valid and in full force and effect, and true, complete
and correct copies thereof, including all supplements, amendments and
annual and periodic reports relating to the Products, have been made
available to Select.
(2) Sierra has filed in a timely manner all annual reports required to
be filed with the FDA and the DEA relating to Sierra's products.
-27-
(e) No Sierra product has been recalled, withdrawn, suspended or
discontinued by Sierra in the United States, and no action (whether completed or
pending) has been commenced in or outside the United States of which Sierra has
knowledge seeking the recall, withdrawal, suspension or seizure of any Sierra
products.
(f) As to each Sierra product and except for prior instances of
non-compliance which have been cured as of the Closing Date, (i) Sierra has
complied with 21 U.S.C. Sections 355 and 357 and 21 C.F.R. Parts 312, 314,
430-448, 452, 453, 455 and 460, as applicable; (ii) Sierra has complied with all
registration and listing requirements set forth in 21 U.S.C. Section 360 and 21
C.F.R. Part 207, as applicable; (iii) the manufacture, labeling, packaging and
marketing is in compliance with the FDA Act; (iv) it has been manufactured in
material compliance with the good manufacturing practice regulations set forth
in 21 C.F.R. Parts 210 and 211.
(g) To Xxxxx'x knowledge, no Sierra employee has made an untrue statement
of a material fact or fraudulent statement to the FDA or provided a basis for
the FDA to invoke its policy respecting "Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities", set forth in 56 Fed. Reg. 46191
(September 10, 1991). Neither Sierra, nor, to its knowledge, any employee has
been convicted of any crime under the FDA Act or, to Sierra's knowledge, engaged
in any conduct for which debarment is mandated
-28-
by 21 U.S.C. Section 335(a) or authorized by 21 U.S.C. Section 335a(b).
(h) All Drug Master Files ("DMFs") submitted to the FDA by Sierra with
respect to its products are current and accurately represent in all material
respects Sierra's current manufacturing operations to the extent required by the
Act; and, to Sierra's knowledge, all persons authorized to reference the DMFs
and the FDA have been notified of any changes of information in the DMFs in
accordance with 21 C.F.R. Section 314.420(c).
3.22 Principal Customers and Suppliers.
(a) Schedule 3.22(a) contains a true and complete list of the top 10
purchasers (by dollar volume) of Sierra's products during the 12 months ended
September 30, 1998 and the aggregate dollar amount of their purchases thereof
during such period. Since January 1, 1998 and except with respect to the pending
settlement of the Sanofi litigation, no such purchaser has terminated its
relationship with Sierra or notified Sierra in writing of its intention (for any
reason) to terminate its relationship or reduce its purchases of Products by
more than 50%.
(b) Schedule 3.22(b) contains a true and complete list of Sierra's top 15
suppliers (by dollar volume) during the 12 months ended September 30, 1998 and
the aggregate dollar amount of purchases from such suppliers during such period.
Since January 1, 1998 and except as disclosed on Schedule 3.22(b), no such
supplier
-29-
has terminated its relationship with Sierra or notified Sierra in writing of its
intention (for any reason) to terminate such relationship or reduce its sales to
Sierra from the level during the six months ended December 30, 1997.
3.23 Product Returns. Schedule 3.23 hereto contains a true and complete
description of the product return experience of Sierra for the two years ended
September 30, 1998.
3.24 Product Liability. Schedule 3.24 hereto contains a true and complete
description of Sierra's product liability experience with respect to its
business since its inception.
3.25 Questionable Payments. Neither Sierra nor any active employee acting
on Sierra's behalf has used any corporate funds for: (i) illegal contributions,
entertainment or gifts for purposes of influencing the activities or decision
making of a political official; or (ii) illegal payments, bribes or kickbacks to
any United States government official or employee or foreign government official
or employee or other third party. Neither Sierra nor, to the best knowledge of
Xxxxx, any director, officer or other employee of Sierra has: (i) made any
payments or provided services or other favors in the United States of America or
in any other country in order to obtain preferential treatment or consideration
by any governmental entity with respect to any aspect of the business of Sierra;
or (ii) made any political contributions which would not be lawful under the
laws of the United States and the foreign country in which such payments were
made. Neither
-30-
Sierra nor, to the best knowledge of Xxxxx, any director, officer or other
employee of Sierra or any customer or supplier of Sierra has been the subject of
any inquiry or investigation by any governmental entity in connection with
payments or benefits or other favors to or for the benefit of any governmental
or armed services official, agent, representative or employee with respect to
any aspect of the business of Sierra or with respect to any political
contribution.
3.26 Litigation. Except as set forth on Schedule 3.26, there is no
litigation, proceeding or governmental investigation pending or threatened, or
any order, injunction, decree or judgment outstanding, against or relating to
Sierra or its properties or business. Such Schedule contains a true and complete
description of each named item and Sierra's potential liability thereunder.
3.27 Violations. To Xxxxx'x knowledge, the improvements located on real
estate owned or leased by Sierra and the continuation of the present use,
occupancy and operation of said improvements comply in full with all current
zoning requirements and do not depend on or require, to any extent, any further
ordinance, variance, special exception or other special governmental approval
for its continuing legality. To Xxxxx'x knowledge, there is no violation of any
recorded restriction, condition or agreement affecting said real estate. Sierra
has not received notice of any violation of, and to Xxxxx'x knowledge,
continuation of the present uses, occupancies and operations will
-31-
not result in a violation of, building, health, safety, environmental pollution
control, fire or similar law, ordinance, order or regulation respecting said
real estate. Except as set forth on Schedule 3.27, no notice has been received
by Sierra alleging any such violation.
3.28 Labor Matters.
(a) With respect to Sierra's employees, (1) no unfair labor practice charge
or complaint against Sierra with respect to its employees ever has been brought
or filed before the National Labor Relations Board, and to Sierra's knowledge
none has been threatened; (2) there is no labor strike, dispute, arbitration,
request for representation, slowdown or stoppage actually pending against or
affecting Sierra and, to Sierra's knowledge, none is threatened or has been
threatened or has occurred within the last three years; and (3) no employees
employed by Sierra at any time during the last three years have been represented
by a labor union or governed by a collective bargaining agreement in respect of
such employment. To Sierra's knowledge, no union or other labor organization has
attempted to organize any of its employees of the business.
(b) To Xxxxx'x knowledge, Sierra is in compliance in all material respects
with Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act, the National Labor Relations Act, the Labor
Management Relations Act, the Fair Labor Standards Act, as amended, the
Immigration Reform
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and Control Act of 1986, the Americans with Disabilities Act, the Family Medical
Leave Act, and all other Laws governing illegal discrimination, equal employment
opportunity, civil rights and payment of minimum wages and overtime rates. There
are no current claims or suits, nor have there been any written threats of
claims or suits, against Sierra arising out of, or relating to, or alleging any
violation of any of the foregoing.
3.29 Finders' Fees. Neither Sierra nor any Stockholder has employed or
utilized the services of any broker, finder or other intermediary in connection
with this Agreement or the transaction contemplated by this Agreement.
3.30 Restrictions on Business Activities. Except as disclosed on Schedule
3.30, there is no agreement, judgment, injunction, order or decree binding upon
Sierra which has or could reasonably be expected to have the effect of
prohibiting or materially impairing
(a) the ability of Sierra to conduct its business in any geographic area or
field of use, (b) any acquisition of property by Sierra, or
(c) the conduct of business by Sierra as currently conducted or as currently
proposed to be conducted by Sierra.
3.31 Accuracy of Representations and Warranties. No representation or
warranty by Xxxxx in this Agreement, and no written statement made to Select by
Xxxxx or Sierra or contained in any certificate or instrument delivered or to be
delivered to Select by Xxxxx or Sierra pursuant to this Agreement, or in
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connection with the transactions contemplated by this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements contained therein not misleading.
Article IV. Representations and Warranties of Select. Select represents and
warrants to Sierra as follows:
4.1 Organization. Select is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is duly
authorized to carry on its business where and as now conducted and to own, lease
and operate properties as it now does.
4.2 Corporate Authority, Etc.
(a) Select has full power and authority to enter into this Agreement and to
perform this Agreement in accordance with its terms; the execution, delivery and
performance of this Agreement by Select and the consummation of the Acquisition
have been duly authorized by its Board of Directors and Select is not bound by
any contractual or other obligation that would be violated by the execution or
performance of this Agreement; and this Agreement is a valid and binding
obligation of Select enforceable in accordance with its terms; and
(b) Neither the execution and delivery of this Agreement nor the
consummation by Select of any of the transactions contemplated herein nor
compliance by Select with the terms, conditions and provisions hereof or of any
agreement or instrument
-34-
contemplated hereby will (i) conflict with, result in a breach of, or constitute
an event of default under the certificate of incorporation or by-laws of Select,
or any material instrument, agreement, lease, license, franchise, permit,
judgment, order, award, decree or other authorization, right, or obligation to
which Select is a party or any of its properties is subject or by which they are
bound, or any statute, ordinance, rule or regulation applicable to Select, or
(ii) require the approval, consent or authorization of, or the making of any
declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental authority or regulatory body.
4.3 Governmental Consents and Approvals. The execution, delivery and
performance by Select of this Agreement and the consummation of the Acquisition
by Select requires no action by or in respect of, or filing with, any United
States, state or local governmental body, agency, official or authority.
4.4 Capitalization. Select's authorized capitalization is 11,000,000 shares
of capital stock, consisting of 10,000,000 shares of common stock and 1,000,000
shares of preferred stock. There are issued and outstanding 4,929,531 shares of
common stock and no shares of preferred stock. All the outstanding shares of
Select were duly authorized for issuance and are validly issued, fully-paid and
non-assessable.
4.5 Litigation. There is no litigation, proceeding or governmental
investigation pending or, so far as is known to
-35-
Select, threatened, or any order, injunction or decree outstanding, against or
relating to Select or any of its properties or businesses.
4.6 Finders' Fee. Select has not employed or utilized the services of any
broker, finder or other intermediary in connection with this Agreement or the
transactions contemplated by this Agreement.
4.7 Absence of Undisclosed Liabilities. Except to the extent fully
reflected or reserved against in its June 30, 1998 balance sheet, Select has no
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
including, but not limited to, any tax or other liabilities of any nature that
were unknown or undetermined as of that date but that, if then known or
determined, would have been required to be reflected in a balance sheet prepared
in accordance with generally accepted accounting principles applied on a
consistent basis. There is no basis for the assertion against Select of any
liability of any nature (and in any amount) not fully reflected or reserved
against in the June 30, 1998 balance sheet or not incurred in the ordinary
course of business thereafter.
4.8 Litigation. There is no litigation, proceeding or governmental
investigation pending or, so far as is known to Select, threatened, or any
order, injunction or decree outstanding, against or relating to Select or any of
its properties or businesses.
-36-
4.9 Select Shares. The Select Shares issued to the Stockholders under this
Agreement, when so issued, will be duly and validly issued, fully paid and
non-assessable.
Article V. Survival of Representations and Indemnity.
5.1 Survival. The representations, warranties, covenants and agreements by
the parties shall survive the Closing Date for a period of two (2) years.
Article VI. Indemnification.
(a) Select does hereby agree to indemnify, defend and hold harmless each
Stockholder from and against any and all claims, demands, damages, losses,
injuries, liabilities, penalties, costs, expenses (including without limitation
reasonable attorneys' fees), suits, actions, investigations, judgments and fees
which may be imposed upon, incurred or suffered by or asserted against it
arising out of or in connection with any one or more of the following:
(i) any failure to perform or comply with any agreements, obligations
or undertakings to be performed by Select, pursuant to this Agreement; and
(ii) any breach of any representation, warranty, covenant or agreement
made in this Agreement, or in respect of the facts associated therewith, by
Select.
(b) Each Stockholder (severally but not jointly) does hereby agree to
indemnify, defend and hold harmless Select
-37-
from and against any and all claims, demands, damages, losses, injuries,
liabilities, penalties, costs, expenses (including without limitation reasonable
attorneys' fees), suits, actions, investigations, judgments and fees which may
be imposed upon, incurred or suffered by or asserted against it arising out of
or in connection with any one or more of the following:
(i) any failure to perform or comply with any agreements, obligations
or undertakings to be performed by such Stockholder pursuant to this
Agreement; and
(ii) any breach of any representation, warranty, covenant or agreement
made in this Agreement, or in respect of the facts associated therewith, by
such Stockholder.
(c) Notwithstanding any other term of this Article VI, (i) an indemnifying
party shall have no liability to any indemnified party for any claim made under
this Article VI (a "Claim") unless a written notice specifying the Claim in
reasonable detail is provided by the indemnified party to the indemnifying party
within two years after the Closing Date, and (ii) Xxxxx shall have no liability
to any indemnified party for any Claim made in respect of Article III of this
Agreement unless either (x) such Claim is for more than $5,000 or (y) the sum of
the aggregate amount of all prior Claims made against Xxxxx in respect of
Article III plus the amount of the subject Claim exceeds $5,000; provided,
however, that Xxxxx shall only have liability under clauses (x) and
-38-
(y) to the extent, and for the amount by which, such Claim or Claims exceed
$5,000.
(d) In no event shall the cumulative liability of any Stockholder to Select
as an indemnifying party under Section 6(b) exceed the aggregate value of the
Select Shares he receives pursuant to Exhibit A hereof. The obligations of a
Stockholder under Seciton 6(b) may, at such Stockholder's election, be paid
either in cash or by transfer of Select Shares to the indemnified party. For
purposes of this subsection (d), Select Shares shall be valued at their National
Quotation Bureau "Pink Sheet" closing price on the Closing Date.
(e) Each party hereto acknowledges and agrees that, from and after the
Closing Date, its sole and exclusive remedy with respect to any and all claims
against another party hereto relating to the subject matter of this Agreement
shall be pursuant to the indemnification provisions set forth in this Article
VI, except that nothing in this Agreement shall be deemed to constitute a waiver
of any tort claims of, or causes of action arising from, fraudulent
misrepresentation or deceit. In furtherance of the foregoing, each party hereto
hereby waives, from and after the Closing Date, to the fullest extent permitted
under applicable law, any and all rights, claims and causes of action (other
than tort claims of, or causes of action arising from, fraudulent
misrepresentation or deceit or claims arising under Article VI of this
agreement) it may have relating to the subject matter of this
-39-
Agreement arising under or based upon any federal, state, local or foreign
statute, law, ordinance, rule or regulation or otherwise.
(f) A party seeking indemnification shall notify the indemnifying parties
within a reasonable time in writing of any action, claim or liability in respect
of which it intends to claim such indemnification, provided that, subject to
Article VI(c)(i), the failure to give timely notice shall not release any of the
indemnifying parties from any liability to the extent the indemnifying parties
are not prejudiced thereby. The indemnifying parties shall have the right, by
prompt notice to the party seeking indemnification to assume the defense of such
claim with counsel reasonably satisfactory to the party seeking indemnification,
and at the sole cost of the indemnifying parties. If the indemnifying parties do
not so assume the defense of such claim, the party seeking indemnification may
assume such defense with counsel of its choice and at the sole cost of the
indemnifying parties. If the indemnifying parties so assume such defense, the
party seeking indemnification may participate therein through counsel of its
choice, but at its sole cost. The party not assuming the defense of any such
claim shall render all reasonable assistance to the party assuming such defense,
and all out-of-pocket costs of such assistance shall be for the account of the
Indemnifying Parties. No such claim shall be settled other than by the party
defending the same, and then only with the consent of the other party, which
shall not be unreasonably withheld; provided that the party seeking
-40-
indemnification shall have no obligation to consent to any settlement of any
such claim which imposes on Select any liability or obligation which cannot be
assumed and performed in full by the Indemnifying Parties.
Article VII. Miscellaneous.
7.1 Schedules. Any information furnished in a schedule to this Agreement
shall be deemed to be furnished under any other schedule which calls for the
furnishing of the same information whether or not that information is separately
stated in such other schedule.
7.2 Expenses. Each party shall bear its own expenses incurred in connection
with the negotiation and preparation of this Agreement and in connection with
all duties and obligations required to be performed by it under this Agreement;
provided that Sierra may bear $10,000 of the expenses of the Stockholders.
7.4 Further Assurances. Each party agrees to cooperate fully with the other
parties and to execute such further instructions, documents and agreements and
to give such further written assurances as may be reasonably requested by any
other party to better evidence and reflect the transactions described herein and
contemplated hereby and to carry into effect the intents and purposes of this
Agreement.
7.5 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed given when delivered
personally or by reputable overnight
-41-
courier or mailed by registered or certified mail, return receipt requested, to
the parties at the following addresses (or to such other address as a party may
have specified by notice to the other parties pursuant to this provision):
(a) if to Sierra, at:
Sierra Diagnostics, Inc.
00000 Xxxxxxxx, #X
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxx
with a copy to:
Dudnick, Detwiler, Xxxxx & Stikker, LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
(b) if to Select, at:
Select Therapeutics Inc.
00 X'Xxxxxx Xxxxxx - Xxxxx 000
Xxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attn: Mr. Xxxxxx Xxxxxx, Chairman
with a copy to:
Hofheimer Gartlir & Gross, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
(c) if to any Stockholder, at his address set forth on
Exhibit A.
7.6 No Assignment. This Agreement is personal to each of the parties and
may not be assigned without the written consent of the other parties.
7.7 Entire Agreement. This Agreement (with its schedules and exhibits)
contains, and is intended as, a complete
-42-
statement of all the terms of the agreements among the parties with respect to
the matters provided for, supersedes any previous agreements and understanding
among the parties with respect to those matters, and cannot be changed or
terminated except by a writing signed by the parties.
7.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of New York, without respect
to its choice of law principles.
7.9 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation."
7.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
7.11 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors and assigns, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
7.12 Choice of Language. The parties declare that at their request, the
present Agreement, along with all notices,
-43-
schedules, etc. has been drawn up in the English language and henceforth, all
communications between them are to be in the English language.
7.13 Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms or provisions of this
Agreement in any other jurisdiction. If any provision of this Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as is enforceable.
7.14 Certain Post Closing Covenants.
(a) Select shall pay all accounts payable of Sierra listed on Schedule
3.6 and existing on the Closing Date within 60 days after the Closing Date.
(b) Commencing as of the first anniversary of the Closing Date, and
for one year thereafter, Select shall use its reasonable efforts to (i)
make and keep available current pubic information about Select as defined
in Rule 144 of the Securities Act, (ii) file with the Commission in a
timely manner all reports and other documents required of Select under the
Securities Act and the Securities Exchange Act of 1934; and (iii) furnish
to a Stockholder on written request a copy of the most recent annual or
quarterly report of Select, and such other reports and documents of Select
and other information in the possession of or reasonably obtainable by
Select as a Stockholder may reasonably request in
-44-
availing himself of any rule or regulation of the Commission allowing a
Stockholder to sell any Select Shares without registration.
-45-
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as
of the date first written above.
SELECT THERAPEUTICS INC.
By:/s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: CEO
STOCKHOLDERS:
/s/ Xxxxxx XxXxxxxx
-------------------------------
Xxxxxx XxXxxxxx
/s/ Xxx Xxxxx
-------------------------------
Xxx Xxxxx
/s/ Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxx Xxxxxxx
/s/ Marino Polestra
-------------------------------
Marino Polestra
/s/ Xxxxxxx Xxxxxx
-------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxx
-------------------------------
Xxxxxxx Xxxx
/s/ Xxxxx Xxxx
-------------------------------
Xxxxx Xxxx
/s/ Xxxxxx Xxxxxx
-------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Xxxxxx Xxxxxxxxxx
/s/ Xxxx Xxxxxxx
-------------------------------
Xxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxxx
-------------------------------
Xxxxx Xxxxxxxxxx
/s/ W. Xxxxxxxx Xxxxxxx
-------------------------------
W. Xxxxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxxx
/s/ Xxxx Xxxxx
-------------------------------
Xxxx Xxxxx
-46-
