Exhibit 2.1
AGREEMENT FOR
PURCHASE AND SALE OF
PARTNERSHIP INTERESTS
IN
USET ACQUISITION PARTNERS, L.P.
THIS AGREEMENT is made and entered into this 31st day of
January, 1996, by and between UPAT SERVICES, INC., a Delaware
corporation ("UPAT"), TEXAS RESEARCH AND TECHNOLOGY FOUNDATION., a
Texas non-profit corporation ("TRTF") and UNITED SERVICES
AUTOMOBILE ASSOCIATION, a reciprocal interinsurance exchange
("USAA").
BACKGROUND
UPAT, TRTF and USAA are all of the partners of USET
ACQUISITION PARTNERS, L.P., a Texas limited partnership (the
"Partnership") formed pursuant to an Agreement of Limited
Partnership dated as of June 28, 1990, as amended as of July 30,
1990, April 19, 1991 and March 24, 1993 (the "Partnership
Agreement"). TRTF and USAA are each a limited partner in the
Partnership with a Percentage Interest (as defined in the
Partnership Agreement) of 5/24 of 80% and 7/12 of 80%,
respectively, and UPAT is both a general partner and a limited
partner in the Partnership with Percentage Interests in those
capacities of 20% and 5/24 of 80%, respectively.
TRTF and USAA each desire to sell their entire interest in the
Partnership (the "Partnership Interests"), and UPAT desires to
purchase the Partnership Interests, all upon the terms and
conditions set forth below.
AGREEMENT
The parties hereby agree as follows:
(1) Purchase and Sale of Partnership Interests. On the
Closing Date (as defined below), TRTF and USAA shall each sell to
UPAT, and UPAT shall purchase from TRTF and USAA, the Partnership
Interests.
(2) Purchase Price. The purchase price to be paid by UPAT to
TRTF and USAA for the Partnership Interests shall be (i) $500,000,
payable 5/19 to TRTF and 14/19 to USAA (the Base Price"), plus (ii)
up to an additional $1,335,000 in the aggregate, without interest,
payable to TRTF and USAA in the same ratios as the Base Price (the
"Additional Price").
(a) The Base Price shall be paid to TRTF and USAA on the
Closing Date.
(b)(i) The Additional Price shall be paid to each TRTF
and USAA as their interests may arise, as described in the
Partnership Agreement, on January 31 of each year (the "Annual
Payment"), beginning on January 31, 1997, and shall equal at
least 60% of USET Annual Revenues (as defined below)for the
preceding calendar year, until the total of such Annual
Payments equals $1,335,000. Should any such Annual Payment to
USAA and TRTF be less than a combined total of $400,000, USET
will pay USAA and TRTF in such proportion as described in
Section 2 of this Agreement an additional 20% of USET Annual
Revenues up to a total of $400,000 or the remaining unpaid
balance of the Additional Price, whichever is lesser.
(ii) As used in the agreement, "Annual Revenue" of USET
shall mean, for any year, the revenues earned during such year
by University Science, Engineering and Technology, Inc., a
Delaware corporation ("USET"), determined in accordance with
generally accepted accounting principles applied on a basis
consistent with USET's past audited financial statement,
excluding payments to USET as agent for other persons sharing
in rights to royalties or other payments in respect of
options, licenses or assignments of technology rights. If at
any time UPAT and its Affiliates pursuant to a transaction
that resulted in the reduction of equity ownership shall be
included in the Net Revenues of USET, and thereafter, Net
Revenues of USET shall mean the amount determined in
accordance with the preceding sentence multiplied by the new
percentage of equity ownership of USET owned by UPAT and its
Affiliates. Legal fees and expenses attributable to
activities of the partnership for which USAA or TRTF receive
no benefit shall not be deducted in the computation of Annual
Revenues. Furthermore, the parties agree that the annual
$400,000 partnership management fee ordinarily due to USET
will be discontinued until the $1,335,000 amount referred to
above has been distributed to USAA and TRTF.
(3) Termination of Partnership. The parties recognize that
upon the purchase of the Partnership Interests of TRTF and USAA by
UPAT, UPAT will be the only partner of the Partnership and, as a
result, the Partnership will be dissolved and UPAT will become the
owner of all of the assets of the Partnership, including 100% of
the outstanding shares of USET, subject to all of the liabilities
of the Partnership. Thereafter, UPAT shall cause a certificate of
cancellation to be filed with the Secretary of State of the State
of Texas as provided by Section 2.03 of the Texas Revised Limited
Partnership Act.
(4) Representations and Warranties of TRTF and USAA. TRTF
and USAA each represent and warrant to UPAT that:
(a) It has the right, power and authority to enter into
and perform this agreement, and this agreement constitutes a
valid and legally binding obligation, enforceable against it
in accordance with its terms;
(b) It owns its Partnership Interest, free and clear of
all liens, claims, encumbrances or security interests; and
(C) It has obtained sufficient information and has such
knowledge and experience in matters of this sort that is
capable of evaluating the business and prospects of the
Partnership and USET and the fairness of the purchase price
being paid to it for its Partnership Interest and the terms of
such payment.
(5) Representations and Warranties of UPAT. UPAT represents
and warrants to TRTF and USAA that it has the right, power and
authority to enter into this agreement, and this agreement
constitutes a valid and legally binding obligation, enforceable
against it in accordance with its terms.
(6) Continuation and Survival of Representations and
Warranties. All of the representations and warranties by the
parties shall continue to be true and correct up to and as of the
Closing Date and shall survive the consummation of the purchase and
sale of the Partnership Interests provided for herein.
(7) Closing. The closing of the purchase and sale of the
Partnership Interest shall take place at such time and place as
agreed to by the parties hereto. At the closing:
(a) TRTF and USAA shall each deliver to UPAT an
assignment in form and substance reasonably satisfactory to
UPAT, assigning its Partnership Interest to UPAT free and
clear of all liens.
(b) UPAT shall deliver certified checks (or wire
transfer) to TRTF and USAA in the amount of the Base Price.
(8) Notices. Any notice or other communication to any party
shall be in writing and shall be deemed to have been given or
delivered when hand-delivered or mailed by registered or certified
mail, postage prepaid, and addressed to the party for whom intended
as follows:
If to TRTF, at: c/o Texas Research and Technology
Foundation
00000 Xxxxxxx Xxxxx
Xxx Xxxxxxx, Xxxxx 00000
If to USAA, at: c/o USAA Investment Management
Company
USAA Building
Xxx Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx
If to UPAT, at: 0000 Xxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, XX 00000
or to such other address as any party may designate for itself by
written notice to the other parties in the above manner, except
that any notice of a change of address shall not be effective until
received.
(9) Entire Agreement. This agreement supersedes all prior
negotiations and agreements, if any, between the parties with
respect to the purchase and sale of the Partnership Interests, and
there are no representations, warranties or agreements with respect
to such transaction other than as expressly set forth herein.
(10) Successors and Assigns. This agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns.
(11) Miscellaneous. The invalidity of any part of this
agreement shall not impair or affect in any manner the
enforceability of the remainder of this agreement. If any
provision of this agreement is so broad as to be unenforceable,
such provision shall be interpreted to be only so broad as is
enforceable. Headings are used in this agreement for convenience
only and shall not affect the meaning of any provision hereof.
This agreement shall be construed and enforced in accordance with
the internal laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be duly executed, all on this day and year first above
written.
UPAT SERVICES, INC.
By: Xxxxx X. XxXxxx, Xx.
Vice President
TEXAS RESEARCH AND
TECHNOLOGY FOUNDATION
By: Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx,
President
UNITED SERVICES AUTOMOBILE
ASSOCIATION
By: Xxxxx Xxxxxxx
Vice President
GUARANTY
COMPETITIVE TECHNOLOGIES, INC., the owner of all of the
outstanding stock of UPAT SERVICES, INC., ("UPAT"), in order to
induce TEXAS RESEARCH AND TECHNOLOGY FOUNDATION and UNITED SERVICES
AUTOMOBILE ASSOCIATION to enter into the foregoing agreement,
hereby guarantees the payment when due of all amounts owed to each
of them by UPAT.
February 1 , 1996.
COMPETITIVE TECHNOLOGIES, INC.
By: Xxxxx X. XxXxxx, Xx.
Vice President
