EXECUTION COPY
TECHNOLOGY PURCHASE AGREEMENT
This Technology Purchase Agreement (this "AGREEMENT"), dated as of June
29, 2003, is between General Electric Company, a New York corporation acting
through its GE Medical Systems Division (the "COMPANY"), and Positron
Corporation, a Texas corporation ("SELLER"). Each of Company and Seller may be
referred to individually as a "PARTY" and collectively as the "PARTIES".
WITNESSETH:
WHEREAS, the Company and Seller have determined that it is in their
respective best interests to enter into an agreement whereby the Company agrees
to cancel Seller's indebtedness to the Company pursuant to the Note (as defined
herein) and surrender the 9,000,000 shares of Seller's common stock held by the
Company as of the date hereof (the "SURRENDERED SHARES") and the warrant to
purchase 6,000,000 shares of Seller's common stock held by the Company as of the
date hereof (the "SURRENDERED WARRANT") in exchange for Seller's transfer of
certain assets as described herein; and
WHEREAS, the Company and Seller understand that it is vital to Seller's
business for Seller to obtain certain irrevocable rights to use the assets
transferred hereunder in perpetuity and have agreed to enter into a Software
License Agreement of even date herewith in order to provide the Seller with such
rights.
NOW THEREFORE, in consideration of the foregoing premises, the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"ACQUISITION DOCUMENTS" means this Agreement, the Software License
Agreement, the Services Agreement, the Xxxx of Sale and any other document or
agreement executed in connection with any of the foregoing, together with any
Exhibits and Schedules thereto, and in each case as modified, amended,
supplemented, restated or renewed from time to time.
"AFFILIATE" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person.
"APPLICABLE LAW" means, with respect to any Person, any federal, state,
local or foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree or other
requirement of any governmental Authority applicable to
such Person or any of its Affiliates or any of their respective properties,
assets, officers, directors, employees, consultants or agents.
"XXXX OF SALE" means that certain Xxxx of Sale dated as of the Closing
Date, to be executed by Seller in favor of the Company, in substantially the
form attached hereto as EXHIBIT 1.01B.
"BUSINESS DAY" means each day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York are authorized or required by
law to close.
"CARDIAC PET SOFTWARE" means the software programs in object and source
code that perform the functions set forth on EXHIBIT 1.01C.
"CLAIM" means any action, claim, arbitration, proceeding, review, audit,
hearing, investigation, litigation or suit, regardless of whether civil,
criminal, administrative, investigative or informal.
"CLOSING" means the execution of this Agreement and the simultaneous
consummation of the transactions contemplated hereby.
"CLOSING DATE" means the date hereof.
"CONTRACT" means each contract, agreement, option, lease, license, sale
and purchase order, commitment and other instrument of any kind, whether written
or oral, to which Seller is a party or is otherwise bound.
"COPYRIGHTS" means (a) any copyright in any original works of authorship
fixed in any tangible medium of expression as set forth in 17 U.S.C. Section 101
et. seq., whether registered or unregistered, including any applications for
registration thereof, (b) any corresponding foreign copyrights under the laws of
any jurisdiction, in each case, whether registered or unregistered, and any
applications for registration thereof and (c) moral rights under the laws of any
jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America applied on a consistent basis.
"GOVERNMENTAL APPROVAL" means an authorization, consent, approval, permit
or license issued by, or a registration or filing with, or notice to, or waiver
from, any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any foreign or domestic federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization,
commission, tribunal or organization or any regulatory, administrative or other
agency, or any political or other subdivision, department or branch of any of
the foregoing.
"IMATRON" means Imatron Inc., a New Jersey corporation that was a wholly
owned subsidiary of the Company before it was merged with and into the Company
on June 27, 2003.
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"INFRINGE" means infringe, impair, dilute, misappropriate or otherwise
violate any Intellectual Property Right.
"INTELLECTUAL PROPERTY RIGHTS" means all rights in or to, or arising
under or out of, any (a) Copyrights, (b) Patents, (c) Trademarks, (d) Trade
Secrets and (e) all other intellectual or industrial property of any kind or
nature, in each case arising under or protected by the laws of any country
anywhere in the world.
"IRS" means the Internal Revenue Service.
"KNOWLEDGE" means, with respect to any Person, the actual knowledge of
such Person. Without limiting the generality of the foregoing, with respect to
any Person that is a corporation, limited liability company, partnership or
other business entity, actual knowledge shall be deemed to include the actual
knowledge of all directors, officers, partners and members of any such person.
"LIABILITY" means, with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the Financial Statements of such
Person.
"LICENSED-IN TRANSFERRED IP" means the Transferred IP that a third party
owns but licenses to Seller under a Licensed-In Transferred IP Agreement.
"LICENSED-IN TRANSFERRED IP AGREEMENTS" means the licenses, permits,
sublicenses and other agreements or permissions under which Seller is a licensee
or otherwise authorized to make, use, practice, sell, import, copy, adapt,
distribute, sublicense or otherwise exploit the Licensed-In Transferred IP.
"LICENSED-OUT TRANSFERRED IP AGREEMENTS" means the licenses, permits,
sublicenses and other agreements or permissions under which Seller has licensed
or otherwise authorized a third party to make, use, practice, sell, import,
copy, adapt, distribute, sublicense or otherwise exploit any Transferred IP.
"LIEN" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, encumbrance or hypothecation
in respect of such asset.
"MATERIAL ADVERSE EFFECT" means, (i) with respect to any Person, any
circumstance of, change in, or effect on, or group of such circumstances of,
changes in or effects on, the operations, financial condition, earnings, or
results of operations, assets, or Liabilities of the Person that results in or
would reasonably be expected to result in, a material adverse effect on, or a
material adverse change in, the operations, financial condition, earnings,
results of operations, assets or Liabilities of such Person or (ii) with respect
to the Transferred Assets, any circumstance of, change in, or effect on, or
group of such circumstances of, changes in or effects on, the Transferred
Assets, that results in or would reasonably be expected to result in, a material
adverse effect on, or a material adverse change in the Transferred Assets.
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"NOTE" means the note in the aggregate principal amount of $2,000,000
issued by the Seller dated June 29, 2001 and payable to Imatron, and became an
obligation of Seller to the Company upon the merger of Imatron and the Company.
"PATENTS" means all classes or types of patents, utility models and
design patents (including originals, divisions, continuations,
continuations-in-part, re-examinations, extensions or reissues), and
applications for these classes or types of patent rights in all countries of the
world (and any patents issuing thereon).
"PERMITTED LIENS" means (a) Liens for Taxes the payment of which is not
yet due, (b) Liens for governmental assessments, charges or claims, other than
Taxes, the payment of which is not yet due and none of which is material in
amount and (c) statutory Liens of landlords and Liens imposed by Applicable Law
incurred in the ordinary course of business which are either for immaterial sums
not yet delinquent or are immaterial in amount and being contested in good faith
and which, in case of either (b) or (c), do not in any material respect impair
the ability to use the Transferred Assets in the manner in which they were used
by Seller.
"PERSON" means an individual, corporation, partnership, association,
limited liability company, trust, estate or other similar business entity or
organization, including a Governmental Authority.
"REGISTERED IP" means any of theTransferred IP owned by Seller that has
been registered by Seller with a governmental patent office, trademark office or
copyright office anywhere in the world.
"SERVICES AGREEMENT" means the Services Agreement dated as of the date
hereof, and executed by the Company and Seller in connection with the execution
of this Agreement.
"SOFTWARE LICENSE AGREEMENT" means the Software License Agreement dated
as of the date hereof, and executed by the Company and Seller in connection with
the execution of this agreement.
"SOLVENT" means, with respect to the Seller, that as of the date of
determination both (i) (a) the sum of Seller's debt (including contingent
liabilities) does not exceed the present fair saleable value of Seller's present
assets; (b) Seller's capital is not unreasonably small in relation to its
business as contemplated on the Closing Date or with respect to any transaction
contemplated or undertaken after the Closing Date; and (c) Seller has not
incurred and does not intend to incur, or believe (nor should it reasonably
believe) that it will incur, debts beyond its ability to pay such debts as they
become due (whether at maturity or otherwise); and (ii) the Seller is "solvent"
within the meaning given that term and similar terms under applicable laws
relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standards
No. 5).
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"TAXES" means (a) all foreign, federal, state, local and other net
income, gross income, gross receipts, sales, use AD VALOREM, value added,
intangible, unitary, capital gain, transfer, franchise, profits, license, lease,
service, service use, withholding, backup withholding, payroll, employment,
estimated, excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (b)
any Liability for payment of amounts described in clause (a) whether as a result
of transferee Liability, or being a member of an Affiliated, consolidated,
combined or unitary group for any period, or otherwise through operation of law
and (c) any Liability for the payment of amounts described in clause (a) or (b)
as a result of any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to indemnify any other person for Taxes; and
the term "TAX" means any one of the foregoing Taxes.
"TAX RETURNS" means all returns, declarations, reports, statements,
information statement, forms or other documents filed or required to be filed
with respect to any Tax.
"TRADEMARKS" means any registered and common law trademarks and trade
names, service marks and service names, and registrations and applications for
registrations thereof and foreign counterparts thereof, Internet domain names
and associated content, logos, designs, slogans, trade dress and general
intangibles of like nature, including without limitation all associated
goodwill.
"TRADE SECRETS" means any trade secrets, know-how, engineering,
production and other designs, inventions, discoveries, concepts, ideas, methods,
processes (including design and manufacturing processes), drawings,
specifications, formulae, data bases and documentation thereof, technological
models, algorithms, behavioral models, logic diagrams, schematics, test vectors,
technical information, documentation, websites, data and other commercial or
technical information that derives economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper means
by, other Persons who can obtain economic value from its disclosure or use and
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy and any other information that is proprietary or
confidential, in each case excluding any rights in respect of any of the
foregoing that comprise or are protected by Copyrights or Patents.
"TRANSFERRED ASSETS" means both the Transferred Technology and the
Transferred IP (both defined below).
"TRANSFERRED IP" means the Intellectual Property Rights that are both (a)
owned by the Seller or in the case of rights licensed in to Seller by a third
party under a Licensed-In Transferred IP Agreement, all of the rights Seller has
under such agreement, and (b) embodied in the Transferred Technology.
"TRANSFERRED TECHNOLOGY" means the Cardiac PET Software, including the
software package as currently released and under development, and the source and
object code and documentation related thereto, as each of such items exist on
the Closing Date of this Agreement. For the avoidance of doubt, the defined term
"Transferred Technology" as used
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herein shall not include any Intellectual Property Rights (the relevant
Intellectual Property Rights being dealt with in the definition of "Transferred
IP").
ARTICLE II
TRANSFER OF ASSETS
2.01. ACQUIRED ASSETS. On the date hereof and upon the terms and subject to the
conditions of this Agreement and the Xxxx of Sale, the Company hereby acquires
from Seller and Seller hereby assigns, sells, transfers and conveys to the
Company, free and clear of all Liens other than Permitted Liens, all right,
title and interest, on a worldwide basis, in and to the Transferred Assets;
provided, however, that Seller shall be permitted retain copies of the
Transferred Technology for its continued use under the license granted in the
Software License Agreement.
2.02. CONSIDERATION. The aggregate consideration paid by the Company to
Seller in exchange for the Transferred Assets (the "CONSIDERATION") on the date
hereof consists of:
(a) surrender of the Surrendered Shares; plus
(b) surrender of the Surrendered Warrants; plus
(c) cancellation of all obligations under the Note, including any
interest accrued thereunder, and termination of the associated security
interests in Seller's assets;
(d) execution and delivery of the Software License Agreement; and
(e) execution and delivery of the Services Agreement.
In connection with the execution of this Agreement, the Company has delivered,
to Seller for cancellation a certificate representing the Surrendered Shares, a
certificate representing the Surrendered Warrants, and the Note. Upon
cancellation, the Surrendered Shares, the Surrendered Warrant, and the Note
shall be of no further force or effect and none of the rights, obligations,
terms conditions, representations, warranties, covenants or other terms of any
of them or of the Security Agreement, dated June 29, 2001 between Seller and
Imatron (the "Security Agreement"), shall survive. The Company shall deliver
such UCC termination statements as Seller may request to terminate the security
interest granted pursuant to the Security Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
3.01. EXISTENCE AND GOOD STANDING. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Texas and has all corporate power and authority required to carry on its
business as now conducted and to own and operate the business as now conducted
and operated by it. Seller is qualified to conduct business and is in good
standing in each jurisdiction in which it conducts its business other than such
jurisdictions where the failure to be so qualified, whether singly or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Transferred Assets or Seller's ability to
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consummate the transactions contemplated by this Agreement and the other
Acquisition Documents.
3.02. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance by Seller of this Agreement and the other Acquisition Documents, and
the consummation of the transactions contemplated hereby and thereby, are within
Seller's powers and have been duly authorized by all necessary corporate action
on its part. This Agreement and the other Acquisition Documents have been, duly
and validly executed by Seller and, assuming the due execution and delivery of
this Agreement and the other Acquisition Documents to which it is a party by the
Company, will constitute the legal, valid and binding agreements of Seller,
enforceable against it in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally or to general
principles of equity.
3.03. GOVERNMENTAL OR OTHER AUTHORIZATION. The execution, delivery and
performance by Seller of this Agreement and the other Acquisition Documents, and
the consummation by it of the transactions contemplated hereby and thereby,
require no Governmental Approval from any Governmental Authority or any consent,
waiver or approval of any other Person.
3.04. NON-CONTRAVENTION. The execution, delivery and performance of this
Agreement and the other Acquisition Documents by Seller, and the consummation of
the transactions contemplated hereby and thereby, do not and will not (a)
contravene or conflict with the certificate of incorporation or bylaws of
Seller, (b) contravene or conflict with or constitute a material violation of
any provision of any Applicable Law binding upon or applicable to Seller or the
Transferred Assets, or (c) (i) result in the creation or imposition of any
material Lien (other than Liens for Sales Taxes) on the Transferred Assets, or
(ii) constitute a breach, default or violation of any commitment, judgment,
injunction or decree which would have a Material Adverse Effect on the
Transferred Assets.
3.05. FINANCIAL STATEMENTS.
(a) Seller has furnished the Company with copies of the following
(collectively, the "FINANCIAL STATEMENTS"): (i) an audited balance sheet of
Seller as of December 31, 2002, (ii) an unaudited balance sheet of Seller as of
Xxxxx 00, 0000, (xxx) an unaudited balance sheet for the Seller as of May 31,
2003, and (iv) the related statements of income and of changes in financial
position for such periods. The balance sheet of Seller as of March 31, 2003 is
referred to herein as the "SELLER BALANCE SHEET" and the date thereof is
referred to herein as the "FINANCIAL INFORMATION DATE".
(b) The Financial Statements: (i) are correct and complete in all
material respects and have been prepared in accordance with the books and
records of Seller; (ii) have been prepared in accordance with GAAP consistently
applied throughout the periods covered, except as noted in the Financial
Statements and except with respect to the Financial Statements as of and for the
period ended May 31, 2003, which do not include all information and footnotes
required by GAAP, but nevertheless reflect all adjustments, which are of a
normal recurring nature, necessary for a fair presentation of the Seller's
financial position and the results of its operations; (iii) reflect and provide
in accordance with GAAP, in the aggregate, adequate reserves in respect
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of all known liabilities of Seller, including all known contingent liabilities,
as of such dates; and (iv) present fairly the financial condition of Seller at
such dates and the results of their operations for the fiscal periods then
ended.
(c) Seller keeps books, records and accounts that, in reasonable
detail, accurately and fairly reflect (i) the transactions and dispositions of
assets of Seller and (ii) the value of inventory calculated in accordance with
GAAP. Seller has, and no employee, agent or shareholder of Seller (in their
capacity as such as purporting to act in such capacity or on behalf of or in
connection with the business or affairs of Seller), directly or indirectly has
made any payment of funds of any such entity or received or retained any funds
in violation of any applicable law.
3.06. ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 3.06,
since the Financial Information Date, the business of the Seller has been
conducted in the ordinary course consistent with past practice, and there has
not been:
(a) any creation, assumption or sufferance of (whether by action or
omission) the existence of any Lien on any of the Transferred Assets, other than
Permitted Liens;
(b) any material change by Seller in its accounting principles,
methods or practices or in the manner it keeps its accounting books and records
relating to Seller's business, except any such change required by a change in
GAAP;
(c) any material damage, destruction or other casualty loss with
respect to any Transferred Asset;
(d) any sale, encumbrance, assignment or transfer of any assets or
properties which would have been included in the Transferred Assets if the
Closing had been held on the Financial Information Date or on any date
thereafter, except in the ordinary course of business consistent with past
practice or as contemplated by this Agreement; or
(e) any agreement for Seller to take any of the actions specified in
paragraphs (a) through (d) above.
3.07. LITIGATION. Except as set forth on SCHEDULE 3.07, there are no
actions, suits, claims, charges, hearings, arbitrations, audits, proceedings
(public or private) or, to the Knowledge of Seller, investigations
(collectively, "PROCEEDINGS") pending or, to the Knowledge of Seller, threatened
(a) by or against Seller relating to any of the Transferred Assets or (b) that
seek to prevent, enjoin, alter or delay the transactions contemplated by this
Agreement or any of the other Acquisition Documents. There are no existing
orders, judgments or decrees of any Governmental Authority against Seller
relating to any of the Transferred Assets.
3.08. MATERIAL CONTRACTS.
(a) SCHEDULE 3.08 lists each material Contract by which the
Transferred Assets are bound. True and complete copies of each of such Contracts
have been delivered to the Company.
3.09. INTENTIONALLY OMITTED.
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3.10. COMPLIANCE WITH APPLICABLE LAWS. Seller has complied in all
respects with any Applicable Laws relating to the Transferred Assets, except
where the failure to comply would not, singly or in the aggregate, have a
Material Adverse Effect on the Transferred Assets. Seller is not subject to any
order, writ, injunction or decree of any Governmental Authority relating to the
Transferred Assets.
3.11. TAX MATTERS. To the extent that the failure to do so would
adversely affect the Company's ownership of the Transferred Assets or result in
successor liability, Seller has filed on a timely basis all Tax Returns required
to have been filed by it with respect to the Transferred Assets and has paid on
a timely basis all Taxes shown thereon as due. Additionally, with respect to
those Taxes described in the preceding sentence of this Section 3.12, Seller has
not received any notice that it is or may be subject to additional Tax with
respect to the Transferred Assets. There are no Liens for Taxes (other than for
current Taxes not yet due and payable) upon any of the Transferred Assets.
3.12. SUFFICIENCY. The Transferred Assets constitute all of the software
(other than software embedded in Seller's PET scanners that is not
cardiac-specific) necessary to utilize the Transferred Technology and
Transferred IP as Seller utilized the same prior to the Closing Date, except for
such technology and intellectual property rights as are commercially available.
3.13. INTELLECTUAL PROPERTY. Seller represents and warrants that, unless
otherwise set forth on SCHEDULE 3.13:
(a) except for the Licensed-In Transferred IP, if any, Seller is the
sole and exclusive owner, free and clear of all Liens (other than Permitted
Liens), of all right, title and interest in and to all of the Transferred IP;
(b) except for the Licensed-In Transferred IP, if any, each present or
past employee, officer, consultant or any other person who developed or created
any part of the Transferred IP on behalf of Seller has assigned to has vested in
Seller any and all right, title and interest in and to all such Transferred IP;
(c) to Seller's Knowledge, the Transferred Technology does not
incorporate without authorization, permission or right to use, (i) any
inventions of any employees of Seller that were made, or any confidential
information (including trade secrets) of another Person to which such employees
were exposed, prior to their employment by Seller, or (ii) any confidential
information (including trade secrets) of another Person to which any independent
contractors or consultants have been exposed;
(d) except for the Licensed-In Transferred IP, if any, Seller has the
right to assign all right, title and interest in and to its Transferred IP
without seeking the approval or consent of any third party and without payments
to any third party;
(e) Seller has provided true and accurate copies of all Licensed-In
Transferred IP Agreements, if any, to the Company, all of which Licensed-In
Transferred IP Agreements are listed in SCHEDULE 3.13;
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(f) the Licensed-In Transferred IP Agreements, if any, are binding
against Seller and in full force and effect in accordance with their terms and
provide Seller with all rights, licenses and authorizations, including without
limitation the rights to make, use, practice, sell, import, copy, adapt,
distribute, sublicense or otherwise exploit all Licensed-In Transferred IP
embodied in the Transferred Technology as set forth in such Licensed-In
Transferred IP Agreements;
(g) Seller has the right to assign all Licensed-In Transferred IP
Agreements, if any, to the Company without seeking the approval or consent of
any third party and without payments to any third party;
(h) the rights licensed under each Licensed-In Transferred IP
Agreement, if any, will be exercisable by the Company on and after the Closing
to the same extent as by the Seller prior to the Closing;
(i) Seller has provided true and accurate copies of all Licensed-Out
Transferred IP Agreements, if any, to the Company, all of which Licensed-Out
Transferred IP Agreements are listed in SCHEDULE 3.13;
(j) to Seller's Knowledge, no Transferred IP Infringes any third party
Intellectual Property Rights;
(k) to Seller's Knowledge, no Claim has been brought or is threatened
by any third party that alleges that any Transferred IP Infringes the rights of
others;
(l) no Transferred IP (other than the Licensed-In Transferred IP) is
subject to any outstanding order, judgment, decree or stipulation restricting
the use thereof by Seller or restricting the sale, transfer, assignment or
licensing thereof by Seller to any person;
(m) Seller has not threatened or initiated any Claim against any third
party alleging that such third party Infringes any Transferred IP and, to
Seller's Knowledge, no third party is Infringing any Transferred IP;
(n) to Seller's Knowledge, all of the Transferred IP owned by Seller
immediately prior to execution of this Agreement is valid and enforceable;
(o) Seller has not taken any action, or failed to take any action,
that would result in the abandonment, cancellation, forfeiture, relinquishment,
invalidation or unenforceability of any of the Registered IP;
(p) to Seller's Knowledge, all Registered IP has been registered or
has been filed and obtained, in accordance with all applicable legal
requirements and the registrations for such Registered IP are currently in
effect and in compliance with all applicable legal requirements and, without
limiting the generality of any of the foregoing, all filing, examination,
issuance, post registration and maintenance fees, annuities and the like
associated with or required with respect to any of the Registered IP has been
timely paid;
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(q) to Seller's Knowledge, no Registered IP has been or is now
involved in any interference, reissue, reexamination, opposition or cancellation
proceeding and, to Seller's Knowledge, no such action is or has been threatened
with respect to any of the Registered IP;
(r) to Seller's Knowledge, there has been no prior use of any of the
registered trademarks or servicemarks, if any, included in the Registered IP by
any other person that would confer upon such person superior rights in such
marks;
(s) Seller has taken reasonable measures to protect and preserve the
security, confidentiality of the trade secrets contained within Transferred IP
and, without limiting the foregoing, Seller has and enforces a policy requiring
each of the employees, consultants and contractors to enter into proprietary
information, confidentiality and assignment agreements substantially in Seller's
standard forms (which have previously been provided to the Company) and all
current and former employees, consultants and contractors of Seller have
executed such an agreement.
(t) Seller is receiving reasonable equivalent value for the
Transferred Assets.
3.14 FINANCIAL CONDITION OF SELLER; THE NOTE.
(a) Upon giving effect to the transactions contemplated by this
Agreement, Seller will be Solvent.
(b) Seller shall provide the Company with a Solvency Certificate,
dated as of the Closing Date and attached hereto as Exhibit 3.14(b), executed by
the Chief Financial Officer of Seller, stating that upon giving effect to the
transactions contemplated by this Agreement, Seller will be Solvent.
(c) Seller represents and warrants with regard to the Note that: (i)
Seller received $2,000,000 in cash from Imatron under the terms of the Note;
(ii) the Note is a legal, valid and binding obligation of the Seller in full
force and effect and is enforceable in accordance with its terms; (iii) Seller
has no valid defenses to the payment of the Note.
(d) Before giving effect to the transactions contemplated by this
agreement: (i) the Seller's obligations under the Note were secured by a lien on
all of the assets of Seller; (ii) Seller was in default under the terms of the
Note; (iii) as a result of Seller's default under the Note, Imatron or,
following the merger of Imatron with and into the Company, the Company would
have been permitted to foreclose on the Transferred Assets; and (iv) the
Transferred Asset constitute collateral that was subject to the lien in favor of
the Company pursuant to the Security Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated herein, the Company hereby represents and warrants
to Seller as of the date of this Agreement as follows:
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4.01. EXISTENCE AND GOOD STANDING. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
New York and has all corporate power and authority required to carry on its
business as now conducted and to own and operate the business as now conducted
and operated by it. The Company is not required to be qualified to conduct
business in any state other than such states where the failure to be so
qualified, whether singly or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on it.
4.02. AUTHORIZATION; ENFORCEABILITY. The execution, delivery and
performance by the Company of this Agreement and the other Acquisition
Documents, and the consummation of the transactions contemplated hereby and
thereby are within the Company's powers and have been duly authorized by all
necessary corporate action on its part. This Agreement has been and, when
executed at the Closing, the other Acquisition Documents to which it is a party
will have been, duly and validly executed by the Company and, assuming the due
execution and delivery of this Agreement and the other Acquisition Documents by
Seller, will constitute the legal, valid and binding agreements of the Company,
enforceable against it in accordance with their respective terms, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights generally or to general
principles of equity.
4.03. LITIGATION. There are no Proceedings pending or, to the Company's
Knowledge, threatened: (a) against the Company, its respective activities,
properties or assets, or (b) that seek to prevent, enjoin, alter or delay the
transactions contemplated by this Agreement or any of the other Acquisition
Documents. Neither the Company nor any of its Subsidiaries is a party to or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality. There are no existing orders,
judgments or decrees of any Governmental Authority against the Company.
ARTICLE V
COVENANTS
5.01. MUTUAL FURTHER ASSURANCES. Each Party hereto agrees to execute and
deliver such other documents, certificates, agreements and other writings and to
take such other commercially reasonable actions as may be reasonably necessary
or desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and the other Acquisition Documents.
5.02. FURTHER ASSURANCES OF THE SELLER.
(a) Upon each reasonable request by the Company, without additional
consideration, Seller agrees to promptly execute any documents reasonably
requested by the Company and provide reasonable assistance to the Company in
accordance with the terms of the Services Agreement, as the Company may deem
necessary to procure, maintain, perfect, and enforce the full benefits,
enjoyment, rights, title and interest, on a worldwide basis of the Transferred
Assets, and render all necessary assistance in making application for and
obtaining original, divisional, renewal, or reissued utility and design patents,
copyrights, mask works, trademarks, trade secrets
12
contained in the Transferred IP, in the Company's name and for its benefit. In
the event the Company is unable for any reason, after reasonable effort, to
secure Seller's signature on any document needed in connection with the actions
specified herein, Seller hereby irrevocably designates and appoints the Company
and its duly authorized officers and agents as its agent and attorney in fact,
which appointment is coupled with an interest, to act for and in its behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of this paragraph with the same legal
force and effect as if executed by Seller. Seller hereby waives and quitclaims
to the Company any and all claims, of any nature whatsoever, that Seller now or
may hereafter have for infringement of any Transferred Assets by any third
party.
(b) Upon each reasonable request by Seller, without additional
consideration, the Company agrees to execute any necessary documents and provide
reasonable and necessary assistance to Seller in confirming the rights licensed
to Seller pursuant to the Software License Agreement. The Company agrees not to
take any action to challenge or contest any of Seller's the rights licensed to
Seller pursuant to the Software License Agreement.
5.03. TAX MATTERS.
(a) ALLOCATION OF PROPERTY TAXES. All personal property taxes and
similar AD VALOREM obligations levied with respect to the Transferred Assets for
a taxable period that includes (but does not end on) the Closing Date shall be
apportioned between Seller and the Company as of the Closing Date based on the
number of days of such taxable period included in the Pre-Closing Tax Period and
the number of days of such taxable period included in the Post-Closing Tax
Period. Seller shall be liable for the proportionate amount of such Taxes that
is attributable to the Pre-Closing Tax Period, and the Company shall be liable
for the proportionate amount of such Taxes that is attributable to the
Post-Closing Tax Period. Within a reasonable period after the Closing, Seller
and the Company shall present a statement to the other setting forth the amount
of reimbursement to which each is entitled under this Section 5.03(a), together
with such supporting evidence as is reasonably necessary to calculate the
proration amount. The proration amount shall be paid by the Party owing it to
the other within ten days after delivery of such statement. Thereafter, Seller
shall notify the Company upon receipt of any xxxx for personal property taxes
relating to the Transferred Assets, part or all of which are attributable to the
Post-Closing Tax Period, and shall promptly deliver such xxxx to the Company who
shall pay the same to the appropriate taxing authority, provided that if such
xxxx covers any part of the Pre-Closing Tax Period, Seller shall also remit
prior to the due date of assessment to the Company payment for the proportionate
amount of such xxxx that is attributable to the Pre-Closing Tax Period. In the
event that either Seller or the Company shall thereafter make a payment for
which it is entitled to reimbursement under this Section 5.03(a), the other
Party shall make such reimbursement promptly, but in no event later than thirty
days after the presentation of a statement setting forth the amount of
reimbursement to which the presenting party is entitled along with such
supporting evidence as is reasonably necessary to calculate the amount of
reimbursement. Any payment required under this Section 5.03(a) and not made when
due shall bear interest at the rate of ten percent per annum.
(b) COOPERATION. As to the Taxes that are subject to section 5.03(a)
from and after the Closing Date, the parties hereto agree to furnish or cause to
be furnished to one another, upon
13
request, as promptly as practicable, such information and assistance relating to
the Transferred Assets as is reasonably necessary for the filing of all Tax
Returns, the preparation for any audit by any taxing authority, and the
prosecution or defense of any claim or Proceeding relating to any Tax Return.
The parties hereto shall cooperate with each other in the conduct of any audit
or other Proceeding related to Taxes involving the Transferred Assets and each
shall execute and deliver such powers of attorney and other documents as are
necessary to carry out the intent of this Section 5.03(b).
(c) RESPONSIBILITY FOR PAYMENT OF TAXES. Taxes attributable to the
Transferred Assets other than those treated specifically in Sections 5.03(a) and
(e), shall be borne by the Party incurring such Taxes (other than solely by
reason of successor liability or similar provisions of law) under Applicable
Law, and each Party shall indemnify, defend and hold the other Party harmless
from and against all Taxes for which such Party is liable pursuant to this
Section 5.03(c). The Company shall prepare and file (or cause to be prepared and
filed) on a timely basis all Tax Returns for all taxable periods beginning after
the Closing Date, shall pay all taxes shown to be due on such Tax Returns, and
shall indemnify and hold Seller harmless against, from and respect of all Taxes
(i) for any taxable year or period commencing after the Closing Date, and (ii)
for any taxable period beginning before and ending after the Closing Date, other
than Taxes attributable to the Pre-Closing Period. The provisions of Section
5.03(b) regarding payment, verification, and interest shall apply to the Taxes
that are subject to this Section 5.03(c).
(d) SALES TAX CERTIFICATES. The Company will provide Seller with an
appropriate resale certificate for sales tax purposes.
(e) SALES AND USE TAXES. The sales, use and any other Taxes arising
out of the transfer of the Transferred Assets (the "SALES TAX") shall be
determined at Closing based on the allocation described in Section 5.04 and
shall be paid by the Company. To the extent permitted by Applicable Law, the
Company and Seller shall cooperate fully in minimizing the Sales Tax. To the
extent a taxing authority provides notice to Seller of an audit of the Sales
Tax, Seller shall immediately notify the Company and the Company shall assume
responsibility for such audit and shall pay when due any additional Sales Tax
ultimately assessed with respect to the transactions contemplated by this
Agreement. The Company shall have complete authority to control, settle or
defend any proposed adjustment to the Sales Tax, and Seller shall cooperate
fully with the Company, in its defense or settlement of any proposed adjustment
to the Sales Tax.
5.04. ALLOCATION OF CONSIDERATION. The Consideration shall be allocated
in accordance with SCHEDULE 5.04, which Schedule shall be drafted by the Company
and agreed to by the parties within 10 days of the date hereof. Each of the
parties hereto agrees to report the transactions contemplated hereby for state
and federal Tax purposes in accordance with such allocation of the
Consideration.
5.05. SOFTWARE LICENSE AGREEMENT. The Company and the Seller shall
execute, on the date hereof, the Software License Agreement.
5.06. MUTUAL RELEASE. By executing this Agreement each Party agrees to
accept and grant the following mutual releases. The following mutual releases
shall not release any Party from its respective obligations hereunder or under
any other documents executed by the parties
14
on the date hereof or from any claims accruing hereunder, thereunder or after
the date hereof (collectively, the "Unreleased Obligations").
(a) In consideration of the mutual covenants contained herein, and
subject to all terms and conditions of this Agreement, the Company hereby
releases Seller, its affiliates and subsidiaries and their respective attorneys,
agents, successors, assigns, employees, officers, shareholders, representatives,
and predecessors (the "SELLER RELEASED PARTIES") for any and all claims, causes
of action, suits, contracts, counterclaims, demands and/or liabilities, both in
law and in equity, known or unknown, contingent or otherwise, other than the
unreleased obligations, which the Company may have against the Seller Released
Parties (or any of them) as of the date of this Agreement.
(b) In consideration of the mutual covenants contained herein, and
subject to all terms and conditions of this Agreement, Seller hereby releases
the Company, its affiliates and subsidiaries and their respective attorneys,
agents, successors, assigns, employees, officers, shareholders, representatives,
and predecessors (the "COMPANY RELEASED PARTIES") for any and all claims, causes
of action, suits, contracts, counterclaims, demands and/or liabilities, both in
law and in equity, known or unknown, contingent or otherwise, other than the
unreleased obligations which Seller may have against the Company Released
Parties (or any of them) as of the date of this Agreement.
ARTICLE VI
INDEMNIFICATION
6.01. GENERAL SURVIVAL. The parties agree that, regardless of any
investigation made by the parties, the representations and warranties of the
parties contained in this Agreement or in any schedule, or certificate furnished
pursuant hereto shall survive the execution and delivery of this Agreement for a
period beginning on the date hereof and ending at 5:00 p.m., New York time, on
the date that is eighteen months after the Closing Date. Upon the expiration of
a representation or warranty pursuant to this Section 6.01, unless written
notice of a claim based on such representation or warranty specifying in
reasonable detail the facts on which the claim is based shall have been
delivered to the Indemnitor prior to the expiration of such representation or
warranty, such representation or warranty shall be deemed to be of no further
force or effect, as if never made, and no action may be brought based on the
same, whether for indemnification, breach of contract, tort or under any other
legal theory. The covenants and agreements of the parties set forth in this
Agreement shall survive indefinitely to the extent necessary to give effect to
their terms.
6.02. INDEMNIFICATION.
(a) INDEMNIFICATION PROVISIONS FOR THE COMPANY. Subject to the
provisions of Section 6.01, from and after the Closing Date, the Company and its
Affiliates, officers, directors, stockholders, representatives and agents
(collectively the "COMPANY INDEMNITEES") shall be indemnified and held harmless
by Seller from and against and in respect of any and all Losses (as defined
below) incurred by any the Company Indemnitee resulting from any inaccuracy in
or
15
breach of any of Seller's representations and warranties contained in this
Agreement or in any schedule or certificate to be furnished pursuant hereto.
(b) INDEMNIFICATION PROVISIONS FOR SELLER. Subject to the provisions
of Section 6.01, from and after the Closing Date, Seller and its Affiliates,
officers, directors, stockholders, representatives and agents (collectively, the
"SELLER INDEMNITEES") shall be indemnified and held harmless by the Company from
and against and in respect of any and all Losses (as defined below) incurred by
any Seller Indemnitee, resulting from any inaccuracy in or breach of any of the
Company's representations or warranties contained in this Agreement or in any
schedule or certificate furnished pursuant to this Agreement or arising from the
Company's use of the Transferred Assets (assuming the accuracy of the
representations and warranties given by the Seller in Article III of this
Agreement).
For purposes of this Agreement, the term "INDEMNITEE" shall mean either
the Company Indemnitee or a Seller Indemnitee, as the case may be, and the term
"INDEMNITOR" shall mean either the Company Indemnitor or a Seller Indemnitor, as
the case may be.
(c) For purposes of this Agreement, the term "LOSSES" means any and
all deficiencies, judgments, settlements, demands, claims, suits, actions or
causes of action, assessments, liabilities, losses, damages (excluding indirect,
incidental or consequential damages, except to the extent that such damages are
awarded to a third party for which an Indemnitee is liable), interest, fines,
penalties, costs and expenses (including reasonable legal, accounting and other
costs and expenses) incurred in connection with investigating, defending,
settling or satisfying any and all demands, claims, actions, causes of action,
suits, proceedings, assessments, judgments or appeals, and in seeking
indemnification therefor.
(d) No Indemnitee shall be entitled to indemnification for any Losses
arising from the breach of any representations and warranties until the
aggregate amount of all Losses under all claims of all Indemnities for all such
breaches shall exceed fifty thousand Dollars ($50,000) (the "BASKET"), at which
time all Losses incurred shall be subject to indemnification hereunder from the
first dollar of such Losses.
(e) The amount of any Losses otherwise recoverable under this Section
6.02 shall be reduced by any amounts that the Indemnitees are entitled to
receive under insurance policies (net of any costs incurred in connection with
the collection thereof including any increases in insurance premiums, any
retrospective premium adjustments and experience-based premium adjustments that
are directly attributable to such Losses).
6.03. MANNER OF INDEMNIFICATION.
(a) Each indemnification claim shall be made only in accordance with
this Article VI.
(b) If an Indemnitee wishes to make a claim for Losses under Article
VI of this Agreement, Indemnitee shall deliver a written notice (a "NOTICE OF
CLAIM") to the applicable Indemnitor promptly after becoming aware of the facts
giving rise to such claim. The Notice of Claim shall (i) specify in reasonable
detail the nature of the claim being made, and (ii) state the aggregate dollar
amount of such claim or, if such amount is not known, an estimate of the
16
amount of such Losses (provided that such estimate shall not limit the Losses
that are subject to indemnification).
(c) Following receipt by Indemnitor of a Notice of Claim, the parties
shall promptly meet to agree on the rights of the respective parties with
respect to each of such claims. If the parties should so agree, a memorandum
setting forth such agreement shall be prepared and signed by both parties and
amounts agreed upon shall be promptly paid. Any unresolved dispute between the
parties shall be resolved in accordance with Section 7.11 and the other
applicable provisions of this Agreement.
6.04. THIRD-PARTY CLAIMS. If the Company becomes aware of a claim of a
third party (including for all purposes of this Section 6.04, any Governmental
Authority) that the Company believes, in good faith, may result in a claim by it
against Seller, the Company shall notify Seller of such claim as promptly as
practicable; provided, however, that failure to give prompt notice will not
relieve Seller from liability for such indemnification, except if and to the
extent that either or both of Seller or the defense or action pursued is
actually prejudiced thereby. Seller shall have the right to assume and conduct
the defense of such claim. Seller shall conduct such defense in a commercially
reasonable manner, and shall be authorized to settle any such claim without the
consent of the Company (which consent shall not be unreasonably withheld),
provided, however, that: (a) Seller shall not be authorized to encumber any
assets of the Company or agree to any restriction that would apply to the
Company or the conduct of the Company's business; (b) Seller shall have paid or
caused to be paid any amounts arising out of such settlement; and (c) a
condition to any such settlement shall be a complete release of the Company with
respect to such third party claim. The Company shall be entitled to participate
in (but not control) the defense of any third party claim, with its own counsel
and at its own expense. The Company shall reasonably cooperate with Seller in
the defense of any third party claim. If Seller does not assume the defense of
any third party claim in accordance with the provisions hereof, the Company may,
but shall have no obligation to, defend such third party claim in a commercially
reasonable manner and may settle such third party claim after giving written
notice of the terms thereof to Seller
6.05. EXCLUSIVE REMEDY.
(a) Notwithstanding any other provision of this Agreement to the
contrary, the provisions of this Article VI shall be the sole and exclusive
remedy of the Indemnitees from and after the Closing Date for any deficiencies,
judgments, settlements, demands, claims, suits, actions or causes of action,
assessments, Liabilities, losses, damages, interest, fines, penalties, costs and
expenses arising under this Agreement or relating to the transactions
contemplated by this Agreement, including claims of breach of any
representation, warranty or covenant in this Agreement; PROVIDED, HOWEVER, that
the foregoing clause of this sentence shall not be deemed a waiver by any Party
of any right to specific performance or injunctive relief nor shall it be deemed
a waiver of any claim for fraud. Nothing in this Agreement limits, expands or
otherwise affects in any way the rights and remedies of either Party with
respect to causes of action arising under the Software License Agreement, or any
rights and remedies of Seller or the Company with respect to any infringement or
misappropriation of any Intellectual Property of Seller or the Company, as the
case may be (including any right of Seller or the Company to seek equitable or
17
injunctive relief in connection therewith), all of which rights and remedies are
expressly reserved.
6.06. SUBROGATION. If the Indemnitor makes any payment under this
Article VI in respect of any Losses, the Indemnitor shall be subrogated, to the
extent of such payment, to the rights of the Indemnitee against any insurer or
third party with respect to such Losses; provided, however, that the Indemnitor
shall not have any rights of subrogation with respect to the other Party hereto
or any of its Affiliates or any of its or its Affiliates' officers, directors,
agents or employees.
6.06 LIMITATIONS ON INDEMNIFICATION. Notwithstanding anything herein to
the contrary, in seeking indemnification for Losses under this Article VI:
(i) The maximum cumulative aggregate total liability of Seller for its
indemnification liabilities under Section 6.02(a) shall not exceed $2,000,000.
(ii) The foregoing limitation shall not apply to any indemnification
claim by any Indemnitee relating to, or that arises from or as a result of any
breach of a covenant set forth in Article V hereof in effect following the
Closing Date, or any fraudulent conduct or willful misrepresentation on the part
of the Indemnitor.
ARTICLE VII
MISCELLANEOUS
7.01. NOTICES. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
Parties at the addresses set forth below or to such other address as the Party
to whom notice is to be given may have furnished to the other parties hereto in
writing in accordance herewith. Any such notice or communication shall be deemed
to have been delivered and received (a) in the case of personal delivery, on the
date of such delivery, (b) in the case of telecopier, on the date sent if
confirmation of receipt is received and such notice is also promptly mailed by
registered or certified mail (return receipt requested), (c) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next Business Day delivery, on the next Business Day after
the date when sent and (d) in the case of mailing, on the third Business Day
following that on which the piece of mail containing such communication is
posted:
If to the Company:
General Electric Medical Systems
0000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
Facsimile:
18
With a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxx Xx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telecopy: (000) 000-0000
If to Seller:
Positron Corporation
0000 Xxxxxxx Xxxxx Xxxxx #000
Xxxxxxx, Xxxxx 00000
Attn: Xx. Xxxx Xxxxxx, President
With a copy to:
Xxxxx Xxxxxxx Xxxx Xxxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx
Telecopy: (000)000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. Any
Party hereto may give any notice, request, demand, claim or other communication
hereunder using any other means (including 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
individual for whom it is intended.
7.02. AMENDMENTS; WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by all parties hereto, or in the case of a waiver, by the Party
against whom the waiver is to be effective.
(b) No waiver by a Party of any default, misrepresentation or breach
of a warranty or covenant hereunder, whether intentional or not, shall be deemed
to extend to any prior or subsequent default, misrepresentation or breach of a
warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent occurrence. No failure or delay by a Party hereto in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive of
any rights or remedies provided under Applicable Law.
7.03. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the other Acquisition Documents and in closing and carrying out
the transactions contemplated hereby and thereby shall be paid by the Party
incurring such cost or expense.
19
7.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, personal representatives and permitted assigns. No Party hereto may
transfer or assign either this Agreement or any of its rights, interests or
obligations hereunder, whether directly or indirectly, by operation of law,
merger or otherwise, without the prior written approval of each other Party. No
such transfer or assignment shall relieve the transferring or assigning Party of
its obligations hereunder if such transferee or assignee does not perform such
obligations.
7.05. GOVERNING LAW. This Agreement shall be construed in accordance
with and this Agreement and any disputes or controversies related hereto shall
be governed by the internal laws of the State of New York without giving effect
to the conflicts of laws principles thereof that would apply the laws of any
other jurisdiction.
7.06. COUNTERPARTS: EFFECTIVENESS. This Agreement may be signed in any
number of counterparts and the signatures delivered by telecopy, each of which
shall be an original, with the same effect as if the signatures were upon the
same instrument and delivered in person. This Agreement shall become effective
when each Party hereto shall have received a counterpart hereof signed by the
other parties hereto.
7.07. ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits referred to herein, which are hereby incorporated by reference) and the
other Acquisition Documents constitute the entire agreement between and among
the parties with respect to the subject matter hereof and thereof and supersede
all prior and contemporaneous agreements, understandings, representations,
statements and negotiations, both written and oral, between and among the
parties with respect to the subject matter of this Agreement. Neither this
Agreement nor any provision hereof is intended to confer upon any Person other
than the parties hereto any rights or remedies hereunder.
7.08. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article, Section, Exhibit or Schedule are
references to an Article, Section, Exhibit or Schedule of this Agreement, unless
otherwise specified, and include all subparts thereof.
7.09. SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
7.10. CONSTRUCTION. The parties hereto intend that each representation,
warranty, and covenant contained herein shall have independent significance. If
any Party has breached any representation, warranty or covenant contained herein
in any respect, the fact that there exists another representation, warranty or
covenant relating to the same subject matter (regardless of the relative levels
of specificity) that the Party has not breached shall not detract from or
mitigate the fact that the Party is in breach of the first representation,
warranty or covenant.
20
7.11. DISPUTE RESOLUTION.
(a) Any dispute, controversy or claim arising out of or relating to
this Agreement or any Acquisition Document or the validity, interpretation,
breach or termination thereof (a "DISPUTE"), including claims seeking redress or
asserting rights under Applicable Law, shall be resolved in accordance with the
procedures set forth in this Section except as expressly set forth in such
Acquisition Document. Until completion of such procedures, no Party may take any
action not contemplated herein to force a resolution of the Dispute by any
judicial, arbitral or similar process, except to the limited extent necessary to
(i) avoid expiration of a claim that might eventually be permitted hereby or
(ii) obtain interim relief, including injunctive relief, to preserve the STATUS
QUO or prevent irreparable harm.
(b) All communications between the Parties or their representatives in
connection with the attempted resolution of any Dispute shall be deemed to have
been delivered in furtherance of a Dispute settlement and shall be exempt from
discovery and production, and shall not be admissible in evidence (whether as an
admission or otherwise), in any judicial or other proceeding for the resolution
of the Dispute.
(c) If a Dispute cannot be resolved at an operational level, either
Party may submit the Dispute for resolution by mediation pursuant to the Center
for Public Resources (the "CPR") Model Procedure for Mediation of Business
Disputes as then in effect. Mediation will continue for at least 30 days from
the date such mediation commences unless the mediator chooses to withdraw
sooner. At the request of either Party at commencement of the mediation, the
mediator will be asked to provide at conclusion an evaluation of the Dispute and
the Parties' relative positions.
(i) After completion of any prior procedures required hereby,
either Party may submit the Dispute for resolution by arbitration pursuant to
the Rules of the CPR as in effect at the time of the arbitration. The Parties
consent to a single, consolidated arbitration for all Disputes for which
arbitration is permitted.
(ii) The arbitral tribunal shall be composed of one arbitrator
selected by agreement of the Parties or, in the absence of such agreement within
21 days after either Party first proposes an arbitrator, by the CPR. The
arbitration proceedings shall be conducted in the English language, and all
documents not in English submitted by any Party must be accompanied by an
English translation. The arbitration shall be conducted in Denver, Colorado.
Each Party shall be permitted to present its case, witnesses and evidence, if
any, in the presence of the other Party. A written transcript of the proceedings
shall be made and furnished to the Parties. The arbitrators shall determine the
Dispute in accordance with the law of New York, without giving effect to any
conflict of laws rules or other rules that might render such law inapplicable or
unavailable, and shall apply this Agreement according to its terms.
(iii) The Parties agree to be bound by any award or order
resulting from any arbitration conducted hereunder and further agree that:
(A) any monetary award shall include pre-award interest,
to the extent appropriate, and shall be made and payable in Dollars through a
bank selected by the recipient of
21
such award, free of any withholding tax or other deduction, together with
interest thereon at the 6-month London Interbank Offered Rate in effect at such
bank on the date of the award, from the date the award is granted to the date it
is paid in full;
(B) in the context of an attempt by either Party to
enforce an arbitral award or order, any defenses relating to the Parties'
capacity or the validity of this Agreement or any of the Acquisition Documents
under any law are hereby waived; and
(C) judgment on any award or order resulting from an
arbitration conducted under this Section may be entered and enforced in any
court, in any country, having jurisdiction thereof or having jurisdiction over
any of the Parties or any of their assets.
(iv) Except as expressly permitted by this Agreement, no Party
will commence or voluntarily participate in any court action or proceeding
concerning a Dispute, except (A) for enforcement as contemplated by paragraph
(c)(iii)(D) above, (B) to restrict or vacate an arbitral decision based on the
grounds specified under applicable law and not waived in paragraph (c)(iii)(C)
above, or (C) for interim relief as provided in paragraph (v) below. For
purposes of the foregoing or enforcement of any undisputed obligation, the
Parties hereto submit to the non-exclusive jurisdiction of the federal or state
courts of the State of New York.
(v) In addition to the authority otherwise conferred on the
arbitral tribunal, the tribunal shall have the authority to make such orders for
interim relief, including injunctive relief, as it may deem just and equitable.
If the tribunal shall not have been appointed, either Party may seek interim
relief from a court having jurisdiction if the award to which the applicant may
be entitled may be rendered ineffectual without such interim relief. Upon
appointment of the tribunal following any grant of interim relief by a court,
the tribunal may affirm or disaffirm such relief, and the Parties will seek
modification or rescission of the court action as necessary to accord with the
tribunal's decision.
(vi) The prevailing Party in any arbitration conducted under
this Section shall recover from the other Party (as part of the arbitral award
or order) its reasonable attorneys' fees and other costs of arbitration.
(vii) The Parties agree that, in so far as it is within their
control, and notwithstanding anything to the contrary in the applicable
arbitration rules:
(A) the arbitrator shall be selected within 21 days
after commencement of the arbitration;
(B) any discovery that may be permitted will be
completed within 60 days and will be not exceed single depositions of no more
than three individuals per side who are directly involved and a single,
reasonable request for directly relevant documents;
(C) any hearing that may be held will take place within
90 days after completion of discovery, and each Party's presentation at the
hearing will not require more than three full days;
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(D) any written briefs submitted to the arbitrator(s)
will not exceed a total of 25 pages prior to the hearing and 15 pages
subsequently, in each case excluding exhibits; and
(E) the decision will be issued within 30 days after the
hearing.
(d) In connection with any Dispute, the Parties expressly waive and
forego any right to (i) punitive, exemplary, statutorily-enhanced or similar
damages in excess of compensatory damages and (ii) trial by jury.
7.12. MEANING OF INCLUDE AND INCLUDING. Whenever in this Agreement the
word "INCLUDE" or "INCLUDING" is used, it shall be deemed to mean "INCLUDE,
WITHOUT LIMITATION" or "INCLUDING, WITHOUT LIMITATION," as the case may be, and
the language following "INCLUDE" or "INCLUDING" shall not be deemed to set forth
an exhaustive list.
7.13. THIRD PARTY BENEFICIARIES. No provision of this Agreement shall
create any third party beneficiary rights in any Person other than the
Indemnitees, including any employee or former employee of Seller or any
Affiliate of Seller (including any beneficiary or dependent thereof).
7.14. SPECIFIC PERFORMANCE. The parties hereby acknowledge and agree
that the failure of any Party to perform its agreements and covenants hereunder,
including its failure to take all actions as are necessary on its part to the
consummation of the transactions contemplated herein, may cause irreparable
injury to the other parties, for which damages, even if available, may not be an
adequate remedy. Accordingly, each Party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel performance
of such Party's obligations and to the granting by any court of the remedy of
specific performance of its obligations hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Technology
Purchase Agreement to be duly executed by their respective authorized officers
as of the day and year first above written.
SELLERS:
POSITRON CORPORATION,
a Texas corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
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Title: Chief Executive Officer
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COMPANY:
GENERAL ELECTRIC COMPANY,
a New York corporation
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxx
-----------------------------------
Title: Vice President
-----------------------------------
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