AGREEMENT AND PLAN OF MERGER
among
A.C.T. HOLDINGS, INC.
a Nevada Corporation
AND
A.C.T. ACQUISITION CORP., INC.,
a Delaware Corporation
AND
ADVANCED CELL TECHNOLOGY, INC.,
a Delaware Corporation
AGREEMENT AND PLAN OF MERGER
This Merger Agreement (this "Agreement"), entered into on December 31,
2004, by and among A.C.T. Holdings, Inc., a Nevada corporation ("Parent");
A.C.T. Acquisition Corp., Inc., a Delaware corporation and a subsidiary of
Parent ("Sub"); and Advanced Cell Technology, Inc., a Delaware corporation
("Company"). Parent, Sub and Company are referred to, collectively, as the
"Parties."
RECITALS
A. Parent, Sub and Company intend to effect a Merger of Company into Sub
in accordance with this Agreement and the Delaware General Corporation Law.
Upon consummation of the Merger, the Sub will cease to exist and Company will
continue as a wholly-owned subsidiary of the Parent.
B. This Agreement has been approved by the respective boards of directors
of Parent, Sub and Company and by shareholders owning more than 51% of the
outstanding voting stock of Company.
C. The parties intend that the Merger will be treated as a tax free
reorganization as described in Section 368 of the Internal Revenue Code of
1986, as amended (the "Code").
AGREEMENT
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. DEFINITIONS
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Certificate of Merger" has the meaning set forth in Section 2(c) below.
"Closing" has the meaning set forth in Section 2(b) below.
"Closing Date" has the meaning set forth in Section 2(b) below.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the common stock, $.001 par value per
share, of Company.
"Company Stockholder" means any Person who or which holds any Company
Shares.
"Confidential Information" means any information concerning the
businesses and affairs of Company and its Subsidiaries that is not already
generally available to the public.
"Conversion Ratio" has the meaning set forth in Section 2(d)(iv) below.
"Definitive Company Proxy Materials" means the definitive proxy materials
or equivalent thereof relating to the Special Company Meeting or the execution
and delivery of written consents in lieu thereof.
"Delaware General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Dissenting Share" means any Company Share held of record by any
stockholder who or which has exercised his, her, or its appraisal rights, if
any, under the applicable sections of the Delaware General Corporation Law.
"Effective Time" has the meaning set forth in Section 2(d)(i) below.
"Exchange Agent" has the meaning set forth in Section 2(e) below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, consistently applied.
"IRS" means the Internal Revenue Service.
"Joint Disclosure Document" means the disclosure document combining the
Definitive Parent Proxy Materials and the Definitive Company Proxy Materials.
"Knowledge" means actual knowledge after reasonable investigation.
"Lien" means any mortgage, pledge, lien, encumbrance, charge, or other
security interest other than (a) liens for Taxes not yet due and payable or
for taxes that the taxpayer is contesting in good faith through appropriate
proceedings, (b) purchase money liens and liens securing rental payments under
capital lease arrangements, and (c) other liens arising in the Ordinary Course
of Business and not incurred in connection with the borrowing of money.
"Material Adverse Effect" or "Material Adverse Change" means any effect
or change that would be materially adverse to the business, assets, condition
(financial or otherwise), operating results, operations, or business prospects
of Company and its Subsidiaries, taken as a whole, or on the ability of
Company to consummate timely the transactions contemplated hereby.
"Merger" has the meaning set forth in Section 2(a) below.
"Most Recent Fiscal Quarter End" has the meaning set forth in Section
3(f) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity
and frequency) and as to Company shall also include sales and issuances of
securities, contracts, purchases and dispositions of equipment and other
transactions referenced or contemplated by the PPM.
"Parent" has the meaning set forth in the preface above.
"Parent Share" means any share of the common stock, $.001 par value per
share, of Parent.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, any other business entity, or a
governmental entity (or any department, agency, or political subdivision
thereof).
"PPM" means that certain Confidential Private Placement Memorandum of
Company dated as of November 10, 2004 relating to the offering of up to
2,941,176 units at $1.70 per unit with each unit consisting of (i) two shares
of Series A Convertible Preferred Stock and (ii) one callable warrant allowing
the holder thereof to purchase a share of common stock of Company at $1.27 per
share as amended by that certain PPM Supplement containing revisions to the
PPM as of December 24, 2004. As amended the PPM relates to the offering of up
to 4,705,883 units for gross proceeds of up to $8,000,000.
"Public Report" has the meaning set forth in Section 3(e) below.
"Requisite Company Stockholder Approval" means the affirmative vote of
the holders of a majority of Company Shares in favor of this Agreement and the
Merger.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Sub" has the meaning set forth in the preface above.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association, or business entity of which (i)
if a corporation, a majority of the total voting power of shares of stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers, or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof or (ii) if a limited
liability company, partnership, association, or other business entity (other
than a corporation), a majority of partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more Subsidiaries of that Person or a combination
thereof and for this purpose, a Person or Persons owns a majority ownership
interest in such a business entity (other than a corporation) if such Person
or Persons shall be allocated a majority of such business entity's gains or
losses or shall be or control any managing director or general partner of such
business entity (other than a corporation). The term "Subsidiary" shall
include all Subsidiaries of such Subsidiary.
"Surviving Corporation" has the meaning set forth in Section 2(a) below.
2. REORGANIZATION TRANSACTION
(a) The Merger. Upon the terms and subject to the conditions set forth
in this Agreement, and in accordance with the Delaware General Corporation
Law, the Sub shall be merged into Company. At the Effective Time, the
separate existence of the Sub shall cease, and Company shall continue as the
surviving corporation (the "Surviving Corporation") under the name Advanced
Cell Technology, Inc.
(b) The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices designated by
Company at 000 Xxxxxxx Xxxxxx, Xxxxx 000, Santa Xxxxxx Boulevard, Santa
Monica, California 90401 on the second business day following the satisfaction
or waiver of all conditions to the obligations of the Parties to consummate
the transactions contemplated hereby (other than conditions with respect to
actions the respective Parties will take at the Closing itself) or such other
date as the parties may mutually determine (the "Closing Date").
(c) Actions at the Closing. At the Closing, (i) Company will deliver to
Parent and Sub the various certificates, instruments, and documents referred
to in Section 6(a) below, (ii) Parent and Sub will deliver to Company the
various certificates, instruments, and documents referred to in Section 6(b)
below, (iii) Parent, Sub and Company will file with the Secretary of State of
the State of Delaware a Certificate of Merger in the form attached hereto as
Exhibit A (the "Certificate of Merger"), and (iv) Company will deliver to the
Exchange Agent in the manner provided below in this Section 2 the
certificate(s) evidencing the Parent Shares to be issued in the Merger.
(d) Effect of Merger.
(i) General. The Merger shall become effective at the time (the
"Effective Time") Sub and Company file the Certificate of Merger with the
Secretary of State of the State of Delaware. The Merger shall have the effect
set forth in the Delaware General Corporation Law. The Surviving Corporation
may, at any time after the Effective Time, take any action (including
executing and delivering any document) in the name and on behalf of either Sub
or Company in order to carry out and effectuate the transactions contemplated
by this Agreement.
(ii) Certificate of Incorporation. The Certificate of Incorporation
of Company in effect at and as of the Effective Time will remain the
Certificate of Incorporation of Surviving Corporation without any modification
or amendment in the Merger.
(iii) By-laws. The By-laws of Company in effect at and as of the
Effective Time will remain the By-laws of Surviving Corporation without any
modification or amendment in the Merger.
(iv) Conversion of Company Shares. At and as of the Effective Time,
(A) each Company Share (other than any Dissenting Share) shall be converted
into the right to receive one Parent Share (the ratio of one Parent Share to
one Company Share is referred to herein as the "Conversion Ratio"),
constituting up to 17,736,175 Parent Shares, after giving effect to the sale
and issuance of all 4,705,883 units being offered under the PPM as amended
(the "Merger Consideration"), and (B) each Dissenting Share, if any, shall be
converted into the right to receive payment from Parent with respect thereto
in accordance with the provisions of the Delaware General Corporation Law;
provided, however, that the Conversion Ratio shall be subject to equitable
adjustment in the event of any stock split, stock dividend, reverse stock
split, or other change in the number of Company Shares outstanding. Except for
Company Shares issued to the Parent in connection with the Merger, no other
Company Share or other securities of Company shall be deemed to be outstanding
or to have any rights other than those set forth above in this Section
2(d)(iv) after the Effective Time.
(v) Conversion of Company Options and Warrants. At the Effective
Time, each outstanding option to purchase shares of Company Common Stock
(each, a "Company Stock Option") under Company Option Plans, whether or not
vested, shall by virtue of the Merger be assumed by Parent. Each Company Stock
Option so assumed by Parent under this Agreement will continue to have, and be
subject to, the same terms and conditions of such options immediately prior to
the Effective Time (including, without limitation, any repurchase rights or
vesting provisions and provisions regarding the acceleration of vesting on
certain transactions, except that (i) each Company Stock Option will be
exercisable (or will become exercisable in accordance with its terms) for a
number of shares of Parent Common Stock equal to that number of shares of
Company Common Stock that were subject to such Company Stock Option
immediately prior to the Effective Time multiplied by the Conversion Ratio,
rounded down to the nearest whole number of shares of Parent Common Stock, and
(ii) the per share exercise price for the shares of Parent Common Stock
issuable upon exercise of such assumed Company Stock Option will be equal to
the quotient determined by dividing the exercise price per share of Company
Common Stock at which such Company Stock Option was exercisable immediately
prior to the Effective Time by the Conversion Ratio, rounded up to the nearest
whole cent. Each outstanding convertible instrument currently outstanding in
Company, including, but not limited to, all other options, warrants and
debentures shall be converted into the right to acquire Parent Shares upon the
same terms and conditions as specified in those convertible instruments and at
the same Conversion Ratio imposed on holders of Company Shares pursuant to the
transactions contemplated hereby.
(vi) Parent Shares. Each Parent Share issued and outstanding at and
as of the Effective Time will remain issued and outstanding.
(e) Conversion Procedures.
(i) Immediately after the Effective Time, (A) Parent and Sub will
furnish to Interwest Transfer Co., Inc., 0000 Xxxxxx-Xxxxxxxx Xxxx, Xxxx Xxxx
Xxxx, Xxxx 00000 (the "Exchange Agent") a stock certificate (issued in the
name of the Exchange Agent or its nominee) representing that number of Parent
Shares equal to the product of (i) the Conversion Ratio times (ii) the number
of outstanding Company Shares (other than any Dissenting Shares) not to exceed
17,736,175 Parent Shares after giving effect to conversion of all shares of
Series A Convertible Preferred Stock offered under the PPM , and (B) Parent
will cause the Exchange Agent to mail a letter of transmittal (with
instructions for its use) to each record holder of outstanding Company Shares
for the holder to use in surrendering the certificates which represented his,
her, or its Company Shares in exchange for a certificate representing the
number of Parent Shares to which he, she, or it is entitled.
(ii) Fractional shares shall not be issued, but cash shall be paid
by the Parent for any such fraction in an amount proportionate to the fair
value of a whole share as determined by the Board of Directors of Company.
(iii) Parent shall pay all charges and expenses of the Exchange
Agent.
3. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company represents and warrants to Parent that the statements contained
in this Section 3 and the PPM are, to the best of Company's knowledge and
belief, correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this Section 3), except as set forth in the PPM. The Parent and Sub
acknowledge that the following representations and warranties are made by
Company, to the best of Company's knowledge and belief, in conjunction with
and with reference to the PPM. In the event there are any inconsistencies
between the following representations and warranties and the PPM, the
information presented in the PPM shall control.
(a) Organization, Good Standing and Qualification. Company is a
corporation duly incorporated, duly organized, validly existing and in good
standing under the laws of Delaware. Company and has all requisite corporate
power and authority to own and operate its properties and assets, to execute
and deliver this Agreement and to carry on its business as presently conducted
and as presently proposed to be conducted. Company is duly qualified and is
authorized to do business and is in good standing as a foreign corporation in
Massachusetts and all other jurisdictions in which the nature of its
activities and of its properties (both owned and leased) makes such
qualification necessary and in which failure to so qualify would have a
Material Adverse Effect.
(b) Capitalization. The authorized capital stock of Company, immediately
prior to the Closing, is (A) 15,000,000 shares of common stock, $0.001 par
value per share, of which 8,324,409 (the "Company Shares") are issued and
outstanding and (B) 10,000,000 shares of preferred stock, $.001 par value per
share. All of the issued and outstanding Company Shares and Series A
Convertible Preferred Stock have been duly authorized and are (and, as to the
Series A Convertible Preferred Stock, upon payment therefor following the
Company's acceptance of subscriptions as described in the PPM, will be)
validly issued, fully paid and nonassessable, are free of any Liens, and were
(and, as to the Series A Convertible Preferred Stock, will be) issued in
compliance with all applicable laws concerning the offer, sale and issuance of
securities. Each share of Series A Convertible Preferred Stock may be
converted into one Company Share. Options, warrants and other rights presently
issued and outstanding to acquire Company Shares are set forth within the PPM.
Except as may be described in the PPM, the Company Shares are not subject to
any pre-emptive rights or rights of first refusal created by statute, the
Certificate of Incorporation or Bylaws of Company or any agreement to which
Company is a party or by which it is bound.
(c) Authorization; Binding Obligations. Company has all requisite
corporate power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby; provided, however, that the Company
cannot complete the Merger unless and until it obtains the necessary
shareholder approval. This Agreement has been duly executed and delivered by
Company and constitutes the valid and binding obligation of Company
enforceable against Company in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(d) No Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
violate any constitution, statute, regulation, rule to which Company is
subject or any provision of the charter or bylaws of Company. Other than in
connection with the provisions of any applicable state law, Company does not
need to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government or governmental agency in order for the
Parties to consummate the transactions contemplated by this Agreement.
(e) Financial Statements. Company delivered to Parent its unaudited
Statement of Income and Balance Sheets for the two fiscal years ended December
31, 2002 and 2003 (collectively, the "Unaudited Financial Statements") and its
unaudited Statement of Income and Balance Sheets as of and for the nine-month
period ended September 30, 2004 (collectively, the "Interim Financial
Statements" and together with the Unaudited Financial Statements, the "Company
Financial Statements"). The Company Financial Statements are in accordance
with the books and records of Company, have been derived from the books and
records of Company, (for the periods covered and at September 30, 2004 (the
"Company Statement Date"); provided that the Company Financial Statements have
not been audited or compiled by an independent accountant and are not prepared
in accordance with generally accepted accounting principles ("GAAP")
(including the accrual of expenses or liabilities) and provided further that
the unaudited interim financial statements are subject to normal recurring
year-end adjustments and the Company Financial Statements do not contain all
footnotes required under GAAP. The Company knows of no reason why its
financial statements cannot be audited by its independent accountants within
seventy-five (75) days following the Closing Date.
(f) No Undisclosed Liabilities. Except as may be set forth in the PPM or
elsewhere in this Agreement, Company to its Knowledge has no obligations or
liabilities that are material and that are not disclosed or reflected in the
Company Financial Statements, except current liabilities incurred, and
obligations entered into, in the Ordinary Course of Business subsequent to the
Company Statement Date.
(g) Title to Properties and Assets; Liens. Except as may be otherwise
described in the PPM, Company has good and valid right and title to the
personal property, tangible and intangible (other than intellectual property
licenses described in paragraph (h) below), reflected in the Interim Financial
Statements (except assets, interests in assets sold or otherwise disposed of
since the Company Statement Date in the Ordinary Course of Business).
(h) Intellectual Property. Company owns, or is licensed or otherwise
possesses rights to patents, applications for patents, licenses and other
intellectual property (collectively "Company Intellectual Property") as set
forth and described within the PPM.
(i) Litigation. Except for (i) an action brought by the University of
Massachusetts ("UMASS") against Xxxxx Xxxxx arising out of claims by UMASS
that he unlawfully appropriated certain intellectual property, including
intellectual property licensed to Company, (ii) threatened claims arising out
of alleged wrongful discharge by a former part time member of management and
(iii) except as set forth in the PPM, there is no action, suit, arbitration,
audit or other proceeding or investigation pending, threatened against Company
or any of its properties or any of its officers or directors (in their
capacity as such) before any agency, court or tribunal, foreign or domestic.
(j) Employment Matters.
(i) To the Knowledge of Company, Company is in compliance in all
material respects with all currently applicable laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment, alien employment and hiring, and is not engaged in any unfair
labor practice.
(ii) Company has no collective bargaining agreement with any of its
employees. There is no labor union organizing activity pending or, to
Company's Knowledge, threatened with respect to Company. Except as set forth
in the PPM, no employee has any agreement or contract, written or verbal,
regarding such employee's continued employment by Company.
(k) Registration Rights. Except as set forth in the PPM, Company is
currently not under any obligation, and has not granted any rights, to
register any of Company's presently outstanding securities.
(l) Compliance with Laws; Governmental Consents; Permits. No
governmental orders, permissions, consents, approvals or authorizations are
required to be obtained and no registrations or declarations are required to
be filed in connection with the execution and delivery of this Agreement and
the Merger, except for (A) the filing of the Certificates of Merger, together
with the required officers' certificates; (B) such governmental consents,
approvals, orders, authorizations, registrations, declarations and filings as
may be required under applicable state securities laws and the securities laws
of any foreign country; and (C) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not have a
Material Adverse Effect on Company and would not prevent, or materially alter
or delay any of the transactions contemplated by this Agreement.
(m) Information to Company Shareholders. Company represents and warrants
that the Company shareholders have been or will be advised by Company of the
following:
The issuance of the Parent Shares will not be registered under the Securities
Act of 1933. The Parent Shares will be acquired for the issuee's own account
and not with a view to distribute them to the public. The Parent Shares are
"restricted securities" that may not be pledged or hypothecated and may not be
sold or transferred unless they are registered under the Securities Act of
1933, or unless, in the opinion of Parent's counsel or counsel satisfactory to
Parent, such registration is not required. A legend confirming the foregoing
shall be prominently affixed to each certificate evidencing the Parent Shares.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to Company, each to its Knowledge,
that the statements contained in this Section 4 are correct and complete as of
the date of this Agreement and will be correct and complete as of
the Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 3), except
as set forth in the various filings made by the Parent with the Securities and
Exchange Commission or except as set forth on any schedule attached as part of
Exhibit C hereto (the "Parent/Sub Disclosure Schedule").
(a) Organization, Good Standing and Qualification. Each of Parent and
Sub is a corporation duly incorporated, duly organized, validly existing and
in good standing under the laws of the State of Nevada and State of Delaware,
respectively. Each of Parent and Sub has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement and to carry on its business as presently conducted and as
presently proposed to be conducted. Each of Parent and Sub is duly qualified
and is authorized to do business and is in good standing as a foreign
corporation in all jurisdictions in which the nature of its activities and of
its properties (both owned and leased) makes such qualification necessary and
in which failure to so qualify might reasonably be expected, individually, or
in the aggregate, to have a Materially Adverse Effect.
(b) Capitalization.
(i) The authorized capital stock of the Parent, immediately prior to
the Closing, is (A) 50,000,000 shares of common stock, $0.001 par value per
share, of which 5,480,490 (the "Parent Shares") are issued and outstanding and
(B) 5,000,000 shares of preferred stock, $.001 par value per share, of which
none is issued and outstanding. Except for warrants to issue an aggregate of
1,833,260 shares of common stock at a strike price of $0.85 per share (allows
for cashless exercise) and for warrants to issue an aggregate of 1,291,615
shares of common stock at a strike price of $2.00 per share, there are no
authorized or outstanding subscriptions, warrants, options, contracts, rights
(pre-emptive or otherwise), puts, calls, exchangeable or convertible
securities, commitments or demands of any character relating to any authorized
and issued or unissued shares of the capital stock of the Parent or other
instruments convertible into or exchangeable for such stock, or which obligate
the Parent to seek authorization to issue additional shares of any class of
stock or to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of capital stock of the
Parent or obligating the Parent to grant, extend, accelerate the vesting of,
change the price of, or otherwise amend or enter into any such option,
warrant, call, right, commitment or agreement, other than created by virtue of
this Agreement or the transactions contemplated hereby. The outstanding
warrants of the Parent have a term of ten years commencing from the Closing
Date and will be canceled in the event this Agreement is terminated without
Closing.
(ii) The Merger does not constitute and will not constitute an event
under any capital stock or convertible security or any anti-dilution or
similar provision of any agreement to which Parent or Sub is a party or by
which it is bound or affected, which shall either increase the number of
shares or units of capital stock issuable upon conversion of any securities or
upon exercise of any warrant or right to subscribe to or purchase any stock or
similar security, or decrease the consideration per share or unit of capital
stock to be received by Parent or by Sub upon such conversion or exercise.
(c) Authorization; Binding Obligations. Each of the Parent and Sub has
all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate
action on the part of each of the Parent and Sub. No ratification or other
approval by the shareholders of Parent is required to enter into this
Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by each of the Parent and Sub
and constitutes the valid and binding obligation of each of the Parent and Sub
enforceable against the Parent and Sub in accordance with its terms subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(d) No Contravention. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Parent or Sub are subject or any
provision of the charter or bylaws of Parent or Sub or (ii) conflict with,
result in a breach of, constitute a default under, result in the acceleration
of, create in any party the right to accelerate, terminate, modify, or cancel,
or require any notice under any agreement, contract, lease, license,
instrument or other arrangement to which Parent or Sub is a party or by which
Parent or Sub is bound or to which any of Parent or Sub's assets is subject
(or result in the imposition of any Lien upon any of its assets), except where
the violation, conflict, breach, default, acceleration, termination,
modification, cancellation, failure to give notice, or Lien would not have a
Material Adverse Effect. Other than in connection with the provisions of the
any applicable state law, neither Parent nor Sub needs to give any notice to,
make any filing with, or obtain any authorization, consent, or approval of any
government or governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement.
(e) SEC Documents. As of the dates when filed and of the Closing, each
Annual Report, Quarterly Report and each other document filed with the
Securities and Exchange Commission ("SEC") pursuant to Sections 13 or 15(d) of
the Securities Exchange Act of 1934 (other than any document which is not
deemed to be filed under applicable SEC rules and regulations) (collectively,
"SEC Documents") does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances in which they were made,
not misleading.
(f) Financial Statements. The Parent has delivered to Company, which are
included in the Parent's SEC Documents, its audited Statement of Operations
and Balance Sheets for the fiscal year ended December 31, 2003 and unaudited
statement of operations and balance sheets for the nine-month period ended
September 30, 2004 (collectively, the "Parent Financial Statements"). The
Parent Financial Statements are in accordance with the books and records of
the Parent, are complete and correct in all material respects, and present
fairly the financial condition and position of Parent for the periods covered
and as of September 30, 2004 (the "Parent Statement Date"), and other dates
therein specified and the results of its operations for the periods therein
specified. The Parent Financial Statements have been audited by an independent
accountant and the Parent Financial Statements are prepared in accordance with
GAAP.
(g) No Undisclosed Liabilities. Neither Parent nor Sub has any
obligations or liabilities that are not disclosed or reflected in the Parent
Financial Statements, except current liabilities incurred, and obligations
entered into, in the Ordinary Course of Business subsequent to the Company
Statement Date.
(h) No Assets and No Liabilities. Except as may be contemplated by this
Agreement, as of the Closing Date Parent shall have no operating assets and no
liabilities.
(i) Compliance with Other Instruments. Parent and Sub are not in
violation or default of any term of their respective Articles or Certificate
of Incorporation or their respective By-laws, or of any provision of any
mortgage, indenture, contract, agreement, instrument or contract to which it
is a party or by which it is bound or of any statute, rule or regulation
applicable to Parent or Sub. The execution and delivery of and compliance
with this Agreement pursuant hereto will not result in any such violation, or
be in conflict with or constitute a default under any such term, or result in
the creation of any mortgage, pledge, lien, encumbrance or charge upon any of
conflict with, or result in any violation of, or default under (with or
without notice or lapse of time, or both), or give rise to a right of
termination, cancellation or acceleration of any obligation (including, but
not limited to, any increase in payments due to any entity or person) or loss
of any benefit under (i) any provision of the Articles or Certificate of
Incorporation or By-laws of the Parent or Sub, as amended, or (ii) any
material mortgage, indenture, lease, contract or other material agreement or
instrument, permit, concession, franchise, license, judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Parent or any of
its properties or assets.
(j) Offering Valid. The Merger Consideration will be restricted
securities. The Merger Consideration, as of the Effective Time, (i) will have
been duly authorized and validly issued to Company Shareholders and (ii) will
be fully paid and nonassessable and will be free of any liens or encumbrances.
(k) Sub Formed for the Purpose of this Transaction. Sub was formed
solely for the purpose of engaging in the transaction contemplated hereby and
has not engaged in any business activities or conducted any operations other
than in connection with the transaction contemplated hereby. Any and all
outstanding Sub capital stock has been validly authorized and issued. All of
the issued and outstanding shares of capital stock of Sub are owned of record
or beneficially by Parent free and clear of any Liens.
(l) Compliance with Laws; Governmental Consents; Permits. Neither Parent
nor Sub is in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of
its properties, which alone or together with any other violations would have a
Material Adverse Effect. No governmental orders, permissions, consents,
approvals or authorizations are required to be obtained and no registrations
or declarations are required to be filed in connection with the execution and
delivery of this Agreement and the Merger except for (i) the filing of the
Certificates of Merger, together with the required officers' certificates;
(ii) such consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable state securities
laws and the securities laws of any foreign country; and (iii) such other
consents, authorizations, filings, approvals and registrations which, if not
obtained or made, would not have a Material Adverse Effect on the Parent or
Sub and would not prevent, or materially alter or delay any of the
transactions contemplated by this Agreement.
(m) Litigation. There is no action, suit, arbitration, audit or other
proceeding or investigation pending, or to Parent's knowledge, threatened
against Parent or any of its properties or any of its officers or directors
(in their capacity as such) before any agency, court or tribunal, foreign or
domestic. Parent is not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or government agency or
instrumentality.
(n) Tax Returns and Payments.
(i) For purposes of this Agreement, "Tax" or "Taxes" shall mean all
taxes imposed by any governmental authority, including, but not limited to,
income, capital gains, license, gross receipts, net worth, capital stock,
profits, stamp, occupation, transfer, value added, excise, franchise, sales,
use, property (whether real, personal or mixed), employment, unemployment,
disability, withholding, social security and workers' compensation taxes and
estimated income and franchise tax payments, and interest, penalties, fines
costs and assessments.
(ii) Parent has filed or caused to be filed on a timely basis all
federal, state, local, foreign and other tax returns, reports and declarations
(collectively, "Tax Returns") required to be filed by Parent and has paid all
Taxes due and payable with respect to the periods covered by such Tax Returns
(whether or not reflected thereon). All Tax Returns filed by Parent are true,
complete and correct in all material respects. No deficiency in Taxes for any
period has been asserted by any taxing authority that remains unpaid at the
date hereof. No written inquiries or notices have been received by Parent
from a taxing authority with respect to possible claims for Taxes which have
not been resolved prior to the date hereof. There are no liens for Taxes on
any of the assets of Parent or any of the shares of stock of Parent. No Tax
Return of Parent has ever been audited. There is no liability for any Tax to
be imposed upon Parent's properties or assets as of the date of this Agreement
that is not adequately provided for. Parent has withheld and, except for
amounts not yet due, paid all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee. Parent has properly
classified its service providers as independent contractors for tax purposes.
(o) Employment Matters.
(i) To the Knowledge of Parent, Parent is in compliance in all
material respects with all currently applicable laws and regulations
respecting employment, discrimination in employment, terms and conditions of
employment, wages, hours and occupational safety and health and employment
practices, alien employment and hiring, and is not engaged in any unfair labor
practice.
(ii) Parent has no collective bargaining agreement with any of its
employees. There is no labor union organizing activity pending or, to
Parent's Knowledge, threatened with respect to Parent. No employee has any
agreement or contract, written or verbal, regarding such employee's continued
employment by Parent. As of the Closing, Parent will not be a party to or
bound by any currently effective employment contract, deferred compensation
arrangement, bonus plan, incentive plan, profit sharing plan, retirement
agreement or other material employee compensation plan or agreement. To the
Knowledge of Parent, no employee of Parent, nor any consultant with whom
Parent has contracted, is in material violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with,
Parent because of the nature of the business to be conducted by Parent; and
the continued employment by Parent of its present employees, and the
performance of Parent's contracts with its independent contractors, will not
result in any such violation. Parent has not received any notice alleging
that any such violation has occurred.
(p) Registration Rights. Except for the warrants described under
paragraph 4.(b)(i) above, which have "piggyback" registration rights, Parent
is currently not under any obligation, and has not granted any rights, to
register any of Parent's presently outstanding securities with the SEC under
the Securities Act.
(q) Certain Agreements Affected by the Merger. Neither the execution and
delivery of this Agreement nor the consummation of the transaction
contemplated hereby will (i) result in any payment (including, without
limitation, severance, unemployment compensation, golden parachute, bonus or
otherwise) becoming due to any director or employee of Parent, (ii) materially
increase any benefits otherwise payable by Parent to its employees, agents,
consultants and directors, or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
(r) Books and Records; Organizational Documents. The minute books and
stock record books and other similar records of Parent and Sub have been
provided or made available to Company or its counsel before the execution of
this Agreement, are complete and correct in all respects and have been
maintained in accordance with reasonable and consistent business practices.
Such minute books contain a true and complete record of all actions taken at
all meetings and by all written consents in lieu of meetings of the directors,
stockholders and committees of the Board of Directors of Parent and Sub from
the date of Parent and Sub's incorporation through the date hereof. Parent and
Sub have, before the execution of this Agreement, delivered to Company true
and complete copies of its Certificate of Incorporation and Bylaws, both as
amended through the date hereof. Parent and Sub are not in violation of any
provision of its Certificate of Incorporation or Bylaws.
(s) Representations Complete. None of the representations or warranties
made by the Parent and the Sub herein or in the Parent/Sub Disclosure
Schedule, or certificate furnished by Parent pursuant to this Agreement, when
all such documents are read together in their entirety, contains or will
contain at the Effective Time any untrue statement of a material fact, or
omits or will omit at the Effective Time to state any material fact necessary
in order to make the statements contained herein or therein, in the light of
the circumstances under which made, not misleading.
5. Covenants. The Parties agree as follows with respect to the period from
and after the execution of this Agreement.
(a) General. Each of the Parties will use its reasonable best efforts to
take all action and to do all things necessary, proper, or advisable in order
to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions
set forth in Section 6 below).
(b) Notices and Consents. Each of the Parties will give any notices (and
will cause each of its Subsidiaries to give any notices) to third parties, and
will use its reasonable best efforts to obtain (and will cause each of its
Subsidiaries to use its reasonable best efforts to obtain) any third party
consents referred to in Section 3 and Section 4 above.
(c) Regulatory Matters and Approvals. Each of the Parties will (and
Company will cause each of its Subsidiaries to) give any notices to, make any
filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental
agencies in connection with the matters referred to in Section 3 and Section 4
above. Without limiting the generality of the foregoing:
(i) Compliance with Securities Laws. The parties shall endeavor to
comply with applicable federal securities laws regarding the transactions
contemplated by this Agreement including the timely filing of a Current Report
on Form 8-K 12g-3. following the Closing Date.
(ii) Compliance with Delaware General Corporation Law. Company will
cause a majority in interest of its shareholders to approve and adopt this
Agreement and the approval of the Merger in accordance with the Delaware
corporation law to be effective concurrently with the execution of this
Agreement.
(d) Operation of Business. The Parties hereto will not (and will not
cause or permit any of its Subsidiaries to) engage in any practice, take any
action, or enter into any transaction outside the Ordinary Course of Business.
(e) Full Access. The Parties will (and will cause each of its
Subsidiaries to) permit representatives of the Parties (including legal
counsel and accountants) to have full access to all premises, properties,
personnel, books, records (including tax records), contracts, and documents of
or pertaining to each Party. Parent acknowledges that it has had the
opportunity to review the PPM and to make such further inquiries of Company
concerning its business, operations and prospects as Parent deemed to be
appropriate. Company acknowledges that it has had the opportunity to review
filings made by the Parent with the SEC, with the State of Nevada and with the
Nasdaq Bulletin Board and to make such further inquiries of the Parent
concerning its business, operations and prospects as Company deemed
appropriate. The Parties will treat and hold as such any Confidential
Information it receives from another Party in the course of the reviews
contemplated by this Section 5(e), will not use any of the Confidential
Information except in connection with this Agreement, and, if this Agreement
is terminated for any reason whatsoever, agrees to return to the disclosing
Party all tangible embodiments (and all copies) thereof which are in its
possession.
(f) Notice of Developments. Each Party will give prompt written notice
to the other of any material adverse development causing a breach of any of
its own representations and warranties in Section 3 and Section 4 above.
(g) Exclusivity. The Parties will not (and will not cause or permit any
of its Subsidiaries to) solicit, initiate, or encourage the submission of any
proposal or offer from any Person relating to a transaction similar to the
transactions contemplated herein (including any acquisition structured as a
merger, consolidation, or share exchange); provided, however, the Parties and
their directors and officers will remain free to participate in any
discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing to the extent their
fiduciary duties may require. The Parties shall notify the other Parties
immediately if any Person makes any proposal, offer, inquiry, or contact with
respect to any of the foregoing.
(h) "Quiet Period". For at least ninety (90) days from the Closing Date
the Parties will limit public press releases to the type information that a
company in the registration process with the SEC can disseminate so that
promotional types of releases are avoided during this period.
(i) Stock Option Plan. The Parties intend that Parent shall adopt
and cause shareholders to ratify and approve a stock option plan for the
benefit of, and to provide further incentives to, employees, directors and
other service providers of Company and that this stock option plan will
contain "evergreen provisions" deemed appropriate and beneficial by the boards
of directors of Parent and Company.
6. Conditions to Obligation to Close.
(a) Conditions to Parent's Obligation. The obligation of Parent to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) this Agreement and the Merger shall have received the Requisite
Company Stockholder Approval;
(ii) Company and its Subsidiaries shall have procured all of the
third party consents specified in Section 5(b) above;
(iii) the representations and warranties set forth in Section 3
above shall be true and correct in all material respects at and as of the
Closing Date, except to the extent that such representations and warranties
are qualified by terms such as "material" and "Material Adverse Effect," in
which case such representations and warranties shall be true and correct in
all respects at and as of the Closing Date;
(iv) Company shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except to
the extent that such covenants are qualified by terms such as "material" and
"Material Adverse Effect," in which case Company shall have performed and
complied with all of such covenants in all respects through the Closing;
(v) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, (C) affect adversely the right of
Surviving Corporation to own the former assets, to operate the former
businesses, and to control the former Subsidiaries of Company, or (D) affect
adversely the right of any of the former Subsidiaries of Company to own its
assets and to operate its businesses (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(vi) Company shall have delivered to Parent a certificate to the
effect that each of the conditions specified above in Section 6(a)(i)-(v) is
satisfied in all respects;
(vii) Company shall have received subscriptions under the PPM for
gross proceeds of at least $3,000,000;
(viii) all applicable waiting periods (and any extensions thereof)
under the securities laws shall have expired or otherwise been terminated and
the Parties shall have received all other authorizations, consents, and
approvals of governments and governmental agencies referred to in Section 3
and Section 4 above; and
(ix) all actions to be taken by Company in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Parent.
Parent may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Company's Obligation. The obligation of Company to
consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) Parent and Sub shall have procured all of the third party
consents specified in Section 5(b) above;
(ii) the representations and warranties set forth in Section 4 above
shall be true and correct in all material respects at and as of the Closing
Date, except to the extent that such representations and warranties are
qualified by terms such as "material" and "Material Adverse Effect," in which
case such representations and warranties shall be true and correct in all
respects at and as of the Closing Date;
(iii) Parent shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing, except to
the extent that such covenants are qualified by terms such as "material" and
"Material Adverse Effect," in which case Parent shall have performed and
complied with all of such covenants in all respects through the Closing;
(iv) no action, suit, or proceeding shall be pending or threatened
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator wherein an
unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this
Agreement, (B) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation, (C) affect adversely the right of
Surviving Corporation to own the former assets, to operate the former
businesses, and to control the former Subsidiaries of Parent, or (D) affect
adversely the right of any of the former Subsidiaries of Parent to own its
assets and to operate its businesses (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);
(v) Parent shall have delivered to Company a certificate to the
effect that each of the conditions specified above in Section 6(b)(i)-(iv) is
satisfied in all respects;
(vi) Company shall have received subscriptions under the PPM for
gross proceeds of at least $3,000,000 and such proceeds shall be ready for
unconditional release to Company upon the execution of this Agreement;
(vii) all applicable waiting periods (and any extensions thereof)
under the securities laws shall have expired or otherwise been terminated and
the Parties shall have received all other authorizations, consents, and
approvals of governments and governmental agencies referred to in Section 3
and Section 4 above;
(viii) all actions to be taken by Parent and Sub in connection with
consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be reasonably satisfactory in form and substance to
Company;
(ix) Company shall have received executed share purchase agreements
and lock-up/leak-out agreements from certain principal stockholders of Parent
as required by the Company (such lock-up/leak-out agreements shall be in form
the same as approved by counsel for Parent and Company, and shall provide that
any such holder of Parent common stock is permitted to sell a maximum of only
one-twelfth (1/12) of holdings within every 30 day period) relating to at
least ninety percent (90%) of the currently outstanding Parent common stock.
(x) Parent shall have discharged all of its existing liabilities
before or simultaneously with the Closing Date; and
(xi) except as otherwise disclosed in writing, Company shall have
received representations and warranties from Parent shareholders holding at
least eighty five percent (85%) of Parent's unrestricted stock that such
shareholders are not and will not act in concert or otherwise act as a group
with respect to the sale of Parent stock.
(c) Resignations and Appointment of Officers and Directors. Concurrent
with the Closing, the officers and directors of the Parent and Sub shall
resign and from and after the Effective Time, the officers and directors of
the Parent shall be:
Officers:
Xxxxxxx X. Xxxx, PhD, Chairman, President and Chief Scientific Officer
Xxxxxxx Xxxxxxxx, Chief Executive Officer
Directors:
Xxxxxxx X. Xxxx, PhD
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxxx
Xxxxxx Xxxxxxx
Xxxxxxxxx Xxxxxxxxxxxx
The officers and directors of the Surviving Corporation shall be as
constituted by Company. blahCompany may waive any condition specified in
Section 6(b) if it executes a writing so stating at or prior to the Closing.
7. Termination.
(a) Termination of Agreement. Either of the Parties may terminate this
Agreement with the prior authorization of its board of directors (whether
before or after stockholder approval) as provided below:
(i) the Parties may terminate this Agreement by mutual written
consent at any time prior to the Effective Time;
(ii) Parent may terminate this Agreement by giving written notice to
Company at any time prior to the Effective Time (A) in the event Company has
breached any material representation, warranty, or covenant contained in this
Agreement in any material respect, Parent has notified Company of the breach,
and the breach has continued without cure for a period of twenty (20) days
after the notice of breach or (B) if the Closing shall not have occurred on or
before January 18, 2005, by reason of the failure of any condition precedent
under Section 6(a) hereof (unless the failure results primarily from Parent
breaching any representation, warranty, or covenant contained in this
Agreement);
(iii) Company may terminate this Agreement by giving written notice
to Parent at any time prior to the Effective Time (A) in the event Parent has
breached any material representation, warranty, or covenant contained in this
Agreement in any material respect, Company has notified Parent of the breach,
and the breach has continued without cure for a period of twenty (20) days
after the notice of breach or (B) if the Closing shall not have occurred on or
before January 18, 2005, by reason of the failure of any condition precedent
under Section 6(b) hereof (unless the failure results primarily from Company
breaching any representation, warranty, or covenant contained in this
Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
pursuant to Section 7(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other
Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained in Section 5(e) above
shall survive any such termination.
8. General Provisions.
(a) Press Releases and Public Announcements. Prior to the Closing, no
Party shall issue any press release or make any public announcement relating
to the subject matter of this Agreement without the prior written approval of
the other Party; provided, however, that any Party may make any public
disclosure it believes in good faith is required by applicable law or any
listing or trading agreement concerning its publicly-traded securities (in
which case the disclosing Party will use its reasonable best efforts to advise
the other Party prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns; provided, however, that the provisions in
Section 2 above concerning issuance of the Parent Shares are intended for the
benefit of Company Stockholders.
(c) Entire Agreement. This Agreement (including the documents referred
to herein) constitutes the entire agreement between the Parties and supersedes
any prior understandings, agreements, or representations by or between the
Parties, written or oral, to the extent they relate in any way to the subject
matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party.
(e) Counterparts. This Agreement may be executed in one or more
counterparts (including by means of facsimile), each of which shall be deemed
an original but all of which together will constitute one and the same
instrument.
(f) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) when
delivered personally to the recipient, (ii) one business day after being sent
to the recipient by reputable overnight courier service (charges prepaid),
(iii) one business day after being sent to the recipient by facsimile
transmission or electronic mail, or (iv) four business days after being mailed
to the recipient by certified or registered mail, return receipt requested and
postage prepaid, and addressed to the intended recipient as set forth below:
If to Parent or Sub, to:
A.C.T. Holdings, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile: 000-000-0000
If to Company to:
Advanced Cell Technology, Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxx, Esq.
Xxxxxx Xxxxxxxxx Xxxxxxxx Xxxxxxx, LLP
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth
above using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Party notice in the manner herein set forth.
(h) Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the domestic laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware. Any controversy over the terms and conditions of this Agreement
shall be resolved in the appropriate court located in the County of Los
Angeles, State of California. Each of the Parties specifically waives any
right to argue lack of jurisdiction or inconvenient forum.
(i) Amendments and Waivers. The Parties may mutually amend any provision
of this Agreement at any time prior to the Effective Time with the prior
authorization of their respective boards of directors; provided, however, that
any amendment effected subsequent to stockholder approval will be subject to
the restrictions contained in the Delaware General Corporation Law. No
amendment of any provision of this Agreement shall be valid unless the same
shall be in writing and signed by both of the Parties. No waiver by any Party
of any provision of this Agreement or any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
valid unless the same shall be in writing and signed by the Party making such
waiver nor shall such waiver be deemed to extend to any prior or subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent such
default, misrepresentation, or breach of warranty or covenant.
(j) Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Expenses. Each of the Parties will bear its own costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules
and regulations promulgated thereunder, unless the context otherwise requires.
The word "including" shall mean including without limitation.
(m) Incorporation of Exhibits and Schedules. The Exhibits and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
(n) Indemnification. From and after the Closing Date, Xxxxx X. Xxxxxxx
in his individual capacity, shall indemnify and hold harmless each and every
other party to this Agreement, jointly and severally, and (if any) each other
party's respective successors and assigns, and their respective officers,
directors, employees, stockholders, agents, affiliates and any person who
controls any of such persons within the meaning of the Securities Act or the
Securities Exchange Act of 1934 (each, an "Indemnified Person") from and
against any liabilities, claims, demands, judgments, losses, costs, damages or
expenses whatsoever (including reasonable attorneys', consultants' and other
professional fees and disbursements of every kind, nature and description
incurred by such Indemnified Person in connection therewith, including
consequential and punitive damages) (collectively, "Damages") that such
Indemnified Person may sustain, suffer or incur and that result from, arise
out of or relate to any action or omission of the Parent through Closing Date
or that result from a material breach of any of the respective
representations, warranties, covenants or agreements of Parent contained in
this Agreement. For the purposes hereunder "a material breach" shall be one
that results in Damages of at least $5,000. The indemnity provisions set forth
in this Section 8(ln), shall survive the Closing and continue for one year.
Any Indemnified Person who desires to seek indemnification under any part
of this Section 8(ln) shall give written notice in accordance with this
section in reasonable detail (a "Claim Notice") to each party responsible or
alleged to be responsible for indemnification hereunder (an "Indemnitor") and
to the Company's corporate counsel. Such notice shall briefly explain the
nature of the claim and the parties known to be involved, and shall specify
the amount thereof. If the matter to which a claim relates shall not have
been resolved as of the date of the Claim Notice, the Indemnified Person shall
estimate the amount of the claim in the Claim Notice, but also specify therein
that the claim has not yet been liquidated (an "Unliquidated Claim"). If an
Indemnified Party gives a Claim Notice for an Unliquidated Claim, the
Indemnified Party shall also give a second Claim Notice (the "Liquidated Claim
Notice") within sixty (60) days after the matter giving rise to the claim
becomes finally resolved, and the Second Claim Notice shall specify the amount
of the claim. Each Indemnitor to which a Claim Notice is given shall respond
to any Indemnified Party that has given a Claim Notice (a "Claim Response")
within thirty (30) days (the "Response Period") after the later of (i) the
date that the Claim Notice is given or (ii) if a Claim Notice is first given
with respect to an Unliquidated Claim, the date on which the Liquidated Claim
Notice is given. Any Claim Response shall specify whether or not the
Indemnitor giving the Claim Response disputes the claim described in the Claim
Notice. If any Indemnitor fails to give a Claim Response within the Response
Period, such Indemnitor shall be deemed not to dispute the claim described in
the related Claim Notice. If any Indemnitor elects not to dispute a claim
described in a Claim Notice, whether by failing to give a timely Claim
Response in accordance with the terms hereof or otherwise, then the amount of
such claim shall be conclusively deemed to be an obligation of such
Indemnitor.
If any Indemnitor shall be obligated to indemnify an Indemnified Person
pursuant to this section, such Indemnitor shall pay to such Indemnified Person
the amount to which such Indemnified Person shall be entitled within fifteen
(15) Business Days after (i) a disputed claim is determined in favor of the
Indemnified Person pursuant to this section of this Agreement, or (ii) the
Response Period has expired without a response which satisfies the provisions
of this section from an Indemnitor. If any Indemnitor fails to pay all or
part of any indemnification obligation when due, then such Indemnitor shall
also be obligated to pay to the applicable Indemnified Person interest on the
unpaid amount for each day during which the obligation remains unpaid at an
annual rate equal to the Prime Rate plus five percent (5%).
An Indemnified Person that desires to seek indemnification under any part
of this section with respect to any actions, suits or other administrative or
judicial proceedings (each, an "Action") that may be instituted by a third
party shall give each Indemnitor prompt notice of a third party's institution
of such Action. After such notice, any Indemnitor may, or if so requested by
such Indemnified Person, any Indemnitor shall, participate in such Action or
assume the defense thereof, with counsel satisfactory to such Indemnified
Person; provided, however, that such Indemnified Person shall have the right
to participate, at its own expense, in the defense of such Action; and
provided, further, that the Indemnified Person shall not consent to the entry
of any judgment or enter into any settlement, except with the written consent
of the Indemnitor (which consent shall not be unreasonably withheld). Any
failure to give prompt notice under this section shall not bar an Indemnified
Party's right to claim indemnification under this section, except to the
extent that an Indemnitor shall have been harmed by such failure.
Any claim by any party for indemnification shall not be adversely
affected by any investigation by, or opportunity to, investigate afforded to
any such person, nor shall such a claim be adversely affected by any such
person's knowledge on or before the Closing Date of any breach or of any state
of facts that may give rise to such a breach. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of, or compliance with, any covenant or obligation, will not adversely affect
the right to indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants or obligations.
Nothing herein shall be deemed to prevent an Indemnified Person from
making a claim hereunder for potential or contingent claims or demands (a
"Contingent Claim") provided the Claim Notice sets forth the specific basis
for any such Contingent Claim to the extent then feasible and the Indemnified
Person has reasonable grounds to believe that such a claim may be made.
The indemnification rights under this section are independent of and in
addition to such rights and remedies as the parties may have at law or in
equity or otherwise for any misrepresentation, breach of warranty or failure
to fulfill any agreement or covenant hereunder on the part of any party,
including the right to seek specific performance, rescission or restitution,
none of which rights or remedies shall be affected or diminished by this
section.
(o) Further Assurances; Post-Closing Cooperation. At any time or from
time to time after the Closing, the Parties shall execute and deliver to the
other party such other documents and instruments, provide such materials and
information and take such other actions as the other party may reasonably
request to consummate the transactions contemplated by this Agreement and
otherwise to cause the other Party to fulfill its obligations under this
Agreement and the transactions contemplated hereby, including, but not
limited to, all reporting obligations. Each Party agrees to use commercially
reasonable efforts to cause the conditions to its obligations to consummate
the transactions contemplated herein.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, Parent, Sub and Company have caused this
Agreement, to be signed by their respective officers thereunto duly
authorized, all as of the date first above written.
A.C.T. HOLDINGS, INC.,
a Nevada corporation
By:
Name: Xxxxx X. Xxxxxxx
Title: President
A.C.T. ACQUISITION CORP., INC.,
a Delaware corporation
By:
Name: Xxxxx X. Xxxxxxx
Title: President
XXXXX X. XXXXXXX
ADVANCED CELL TECHNOLOGY, INC.,
a Delaware corporation
By:
Name: Xxxxxxx X. Xxxx
Title: President, Chairman &
Chief Executive Officer
EXHIBITS
Exhibit A Certificate of Merger
Exhibit B PPM, including PPM Supplement--Disclosure Schedule of Advanced
Cell Technology, Inc.
Exhibit C SEC Filings--Disclosure Schedule of A.C.T. Holdings, Inc.
